1934 Act Registration No. 1-31731
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Dated March 11, 2016
Chunghwa
Telecom Co., Ltd.
(Translation of Registrants Name into English)
21-3 Hsinyi Road Sec. 1,
Taipei, Taiwan, 100 R.O.C.
(Address of Principal Executive Office)
(Indicate by
check mark whether the registrant files or will file annual reports under cover of form 20-F or Form 40-F.)
Form 20-F x
Form 40-F ¨
(Indicate by check mark whether the registrant by
furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes ¨ No
x
(If Yes is marked, indicated below the file number assigned to
the registrant in connection with Rule 12g3-2(b): Not applicable )
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant Chunghwa Telecom Co., Ltd. has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: 2016/03/11
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Chunghwa Telecom Co., Ltd. |
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By: |
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/s/ Bo Yung Chen |
Name: |
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Bo Yung Chen |
Title: Chief Financial Officer |
2
Exhibit
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Exhibit |
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Description |
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99.1 |
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Financial Statements for the Year Ended December 31, 2015 pursuant to International Financial Reporting Standards adopted by ROC (Taiwan-IFRSs) and Independent Auditors Report (Parent Company Only) |
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99.2 |
|
Consolidated Financial Statements for the Year Ended December 31, 2015 pursuant to International Financial Reporting Standards adopted by ROC (Taiwan-IFRSs) and Independent Auditors Report |
3
Exhibit 99.1
Chunghwa Telecom Co., Ltd.
Financial Statements for
the
Years Ended December 31, 2015 and 2014 and
Independent Auditors Report
INDEPENDENT AUDITORS REPORT
The Board of Directors and Stockholders
Chunghwa Telecom Co.,
Ltd.
We have audited the accompanying balance sheets of Chunghwa Telecom Co., Ltd. as of December 31, 2015 and 2014 and January 1, 2014, the
related statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2015 and 2014. These financial statements are the responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation
of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of
December 31, 2015 and 2014 and January 1, 2014, and the results of its financial performance and its cash flows for the years ended December 31, 2015 and 2014, in conformity with the Regulations Governing the Preparation of Financial
Reports by Securities Issuers.
|
/s/ DELOITTE & TOUCHE |
Deloitte & Touche |
Taipei, Taiwan |
The Republic of China |
March 11, 2016
Notice to Readers
The
accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other
jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.
For the convenience of readers, the independent auditors report and the accompanying financial statements have been translated into English from the
original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent
auditors report and financial statements shall prevail.
- 1 -
CHUNGHWA TELECOM CO., LTD.
BALANCE SHEETS
(In Thousands of New Taiwan Dollars)
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December 31, 2015 |
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December 31, 2014 (Adjusted) (Note 5) |
|
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January 1, 2014 (Adjusted) (Note 5) |
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|
|
Amount |
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% |
|
|
Amount |
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% |
|
|
Amount |
|
|
% |
|
ASSETS |
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|
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|
|
|
|
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CURRENT ASSETS |
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|
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|
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Cash and cash equivalents (Notes 3 and 6) |
|
$ |
24,183,536 |
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|
|
6 |
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|
$ |
19,005,916 |
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|
|
4 |
|
|
$ |
11,590,905 |
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|
|
3 |
|
Financial assets at fair value through profit or loss (Notes 3 and 7) |
|
|
14 |
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|
|
|
|
|
|
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|
|
|
|
|
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Held-to-maturity financial assets (Notes 3 and 8) |
|
|
1,880,739 |
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|
|
|
|
|
|
3,456,747 |
|
|
|
1 |
|
|
|
4,264,104 |
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|
|
1 |
|
Hedging derivative assets (Notes 3 and 20) |
|
|
498 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade notes and accounts receivable, net (Notes 3, 4 and 9) |
|
|
24,733,620 |
|
|
|
6 |
|
|
|
24,465,210 |
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|
|
6 |
|
|
|
21,647,860 |
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|
|
5 |
|
Accounts receivable from related parties (Note 35) |
|
|
850,925 |
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|
|
|
|
|
|
694,170 |
|
|
|
|
|
|
|
676,870 |
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|
|
|
|
Inventories (Notes 3, 4 and 10) |
|
|
3,715,936 |
|
|
|
1 |
|
|
|
1,421,242 |
|
|
|
|
|
|
|
1,940,305 |
|
|
|
|
|
Prepayments (Notes 11 and 35) |
|
|
1,804,103 |
|
|
|
|
|
|
|
1,870,752 |
|
|
|
|
|
|
|
1,655,940 |
|
|
|
|
|
Other current monetary assets (Notes 12 and 25) |
|
|
2,546,371 |
|
|
|
1 |
|
|
|
2,315,131 |
|
|
|
1 |
|
|
|
3,652,337 |
|
|
|
1 |
|
Other current assets (Note 19) |
|
|
2,121,398 |
|
|
|
|
|
|
|
3,075,076 |
|
|
|
1 |
|
|
|
3,600,113 |
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|
|
1 |
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|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
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|
|
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Total current assets |
|
|
61,837,140 |
|
|
|
14 |
|
|
|
56,304,244 |
|
|
|
13 |
|
|
|
49,028,434 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
NONCURRENT ASSETS |
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets (Notes 3 and 13) |
|
|
3,163,466 |
|
|
|
1 |
|
|
|
3,822,521 |
|
|
|
1 |
|
|
|
2,886,662 |
|
|
|
1 |
|
Held-to-maturity financial assets (Notes 3 and 8) |
|
|
2,139,801 |
|
|
|
|
|
|
|
4,027,522 |
|
|
|
1 |
|
|
|
7,501,743 |
|
|
|
2 |
|
Financial assets carried at cost (Notes 3 and 14) |
|
|
2,135,647 |
|
|
|
|
|
|
|
2,221,260 |
|
|
|
|
|
|
|
2,271,293 |
|
|
|
1 |
|
Investments accounted for using equity method (Notes 3 and 15) |
|
|
13,072,205 |
|
|
|
3 |
|
|
|
13,008,272 |
|
|
|
3 |
|
|
|
12,079,981 |
|
|
|
3 |
|
Property, plant and equipment (Notes 3, 4, 16 and 35) |
|
|
290,072,562 |
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|
|
67 |
|
|
|
296,206,403 |
|
|
|
68 |
|
|
|
296,558,810 |
|
|
|
68 |
|
Investment properties (Notes 3, 4 and 17) |
|
|
7,827,630 |
|
|
|
2 |
|
|
|
7,546,079 |
|
|
|
2 |
|
|
|
7,331,372 |
|
|
|
2 |
|
Intangible assets (Notes 3, 4 and 18) |
|
|
49,798,429 |
|
|
|
11 |
|
|
|
42,517,247 |
|
|
|
10 |
|
|
|
44,139,498 |
|
|
|
10 |
|
Deferred income tax assets (Notes 3 and 29) |
|
|
1,608,111 |
|
|
|
|
|
|
|
1,431,901 |
|
|
|
|
|
|
|
1,229,994 |
|
|
|
|
|
Prepayments (Notes 11 and 35) |
|
|
2,259,583 |
|
|
|
1 |
|
|
|
2,225,340 |
|
|
|
1 |
|
|
|
2,435,609 |
|
|
|
1 |
|
Other noncurrent assets (Note 19) |
|
|
5,273,925 |
|
|
|
1 |
|
|
|
5,405,439 |
|
|
|
1 |
|
|
|
4,695,978 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncurrent assets |
|
|
377,351,359 |
|
|
|
86 |
|
|
|
378,411,984 |
|
|
|
87 |
|
|
|
381,130,940 |
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
TOTAL |
|
$ |
439,188,499 |
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|
|
100 |
|
|
$ |
434,716,228 |
|
|
|
100 |
|
|
$ |
430,159,374 |
|
|
|
100 |
|
|
|
|
|
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|
|
|
|
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|
|
|
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|
|
|
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|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative liabilities (Notes 3 and 20) |
|
$ |
|
|
|
|
|
|
|
$ |
283 |
|
|
|
|
|
|
$ |
|
|
|
|
|
|
Trade notes and accounts payable (Note 21) |
|
|
12,414,507 |
|
|
|
4 |
|
|
|
14,753,882 |
|
|
|
4 |
|
|
|
12,326,921 |
|
|
|
3 |
|
Payables to related parties (Note 35) |
|
|
4,085,634 |
|
|
|
1 |
|
|
|
4,016,403 |
|
|
|
1 |
|
|
|
3,978,417 |
|
|
|
1 |
|
Current tax liabilities (Notes 3 and 29) |
|
|
4,531,290 |
|
|
|
1 |
|
|
|
3,265,300 |
|
|
|
1 |
|
|
|
3,807,043 |
|
|
|
1 |
|
Other payables (Note 22) |
|
|
22,932,024 |
|
|
|
5 |
|
|
|
22,347,429 |
|
|
|
5 |
|
|
|
24,656,238 |
|
|
|
6 |
|
Provisions (Notes 3 and 23) |
|
|
20,572 |
|
|
|
|
|
|
|
7,037 |
|
|
|
|
|
|
|
778 |
|
|
|
|
|
Advance receipts (Note 24) |
|
|
8,497,065 |
|
|
|
2 |
|
|
|
9,005,858 |
|
|
|
2 |
|
|
|
9,025,212 |
|
|
|
2 |
|
Other current liabilities |
|
|
1,512,012 |
|
|
|
|
|
|
|
1,618,959 |
|
|
|
|
|
|
|
1,598,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
53,993,104 |
|
|
|
13 |
|
|
|
55,015,151 |
|
|
|
13 |
|
|
|
55,392,625 |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities (Notes 3 and 29) |
|
|
96,931 |
|
|
|
|
|
|
|
129,217 |
|
|
|
|
|
|
|
94,986 |
|
|
|
|
|
Provisions (Notes 3 and 23) |
|
|
58,158 |
|
|
|
|
|
|
|
92,660 |
|
|
|
|
|
|
|
123,463 |
|
|
|
|
|
Customers deposits (Note 35) |
|
|
4,642,735 |
|
|
|
1 |
|
|
|
4,698,206 |
|
|
|
1 |
|
|
|
4,809,692 |
|
|
|
1 |
|
Net defined benefit liabilities (Notes 3, 4 and 25) |
|
|
7,026,445 |
|
|
|
1 |
|
|
|
6,400,692 |
|
|
|
1 |
|
|
|
5,411,459 |
|
|
|
1 |
|
Deferred revenue (Note 3) |
|
|
3,590,685 |
|
|
|
1 |
|
|
|
3,441,751 |
|
|
|
1 |
|
|
|
3,659,029 |
|
|
|
1 |
|
Other noncurrent liabilities (Note 35) |
|
|
1,040,513 |
|
|
|
|
|
|
|
484,401 |
|
|
|
|
|
|
|
352,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncurrent liabilities |
|
|
16,455,467 |
|
|
|
3 |
|
|
|
15,246,927 |
|
|
|
3 |
|
|
|
14,450,886 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
70,448,571 |
|
|
|
16 |
|
|
|
70,262,078 |
|
|
|
16 |
|
|
|
69,843,511 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY (Note 26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stocks |
|
|
77,574,465 |
|
|
|
18 |
|
|
|
77,574,465 |
|
|
|
18 |
|
|
|
77,574,465 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
|
168,095,615 |
|
|
|
38 |
|
|
|
168,047,935 |
|
|
|
39 |
|
|
|
184,620,065 |
|
|
|
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve |
|
|
77,574,465 |
|
|
|
18 |
|
|
|
76,893,722 |
|
|
|
18 |
|
|
|
74,819,380 |
|
|
|
17 |
|
Special reserve |
|
|
2,675,419 |
|
|
|
|
|
|
|
2,819,899 |
|
|
|
|
|
|
|
2,675,894 |
|
|
|
1 |
|
Unappropriated earnings |
|
|
42,551,245 |
|
|
|
10 |
|
|
|
38,231,982 |
|
|
|
9 |
|
|
|
20,770,064 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retained earnings |
|
|
122,801,129 |
|
|
|
28 |
|
|
|
117,945,603 |
|
|
|
27 |
|
|
|
98,265,338 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other equity interest |
|
|
268,719 |
|
|
|
|
|
|
|
886,147 |
|
|
|
|
|
|
|
(144,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
368,739,928 |
|
|
|
84 |
|
|
|
364,454,150 |
|
|
|
84 |
|
|
|
360,315,863 |
|
|
|
84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
439,188,499 |
|
|
|
100 |
|
|
$ |
434,716,228 |
|
|
|
100 |
|
|
$ |
430,159,374 |
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
- 2 -
CHUNGHWA TELECOM CO., LTD.
STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of
New Taiwan Dollars, Except Earnings Per Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 (Adjusted) (Note 5) |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
REVENUES (Notes 27 and 35) |
|
$ |
201,993,986 |
|
|
|
100 |
|
|
$ |
194,068,381 |
|
|
|
100 |
|
OPERATING COSTS (Notes 10 and 35) |
|
|
123,128,370 |
|
|
|
61 |
|
|
|
120,454,885 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
78,865,616 |
|
|
|
39 |
|
|
|
73,613,496 |
|
|
|
38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES (Note 35) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
|
23,142,382 |
|
|
|
11 |
|
|
|
23,302,452 |
|
|
|
12 |
|
General and administrative |
|
|
3,495,107 |
|
|
|
2 |
|
|
|
3,482,977 |
|
|
|
1 |
|
Research and development |
|
|
3,455,604 |
|
|
|
2 |
|
|
|
3,483,405 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
30,093,093 |
|
|
|
15 |
|
|
|
30,268,834 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND EXPENSES (Note 28) |
|
|
(28,898 |
) |
|
|
|
|
|
|
70,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS |
|
|
48,743,625 |
|
|
|
24 |
|
|
|
43,415,456 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING INCOME AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
260,885 |
|
|
|
|
|
|
|
254,636 |
|
|
|
|
|
Other income (Notes 28 and 35) |
|
|
532,527 |
|
|
|
|
|
|
|
390,989 |
|
|
|
|
|
Other gains and losses (Notes 28 and 35) |
|
|
(128,279 |
) |
|
|
|
|
|
|
115,241 |
|
|
|
|
|
Interest expenses |
|
|
|
|
|
|
|
|
|
|
(6,268 |
) |
|
|
|
|
Share of the profit of subsidiaries, associates and joint ventures accounted for using equity method (Note 15) |
|
|
1,385,675 |
|
|
|
1 |
|
|
|
1,611,147 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-operating income and expenses |
|
|
2,050,808 |
|
|
|
1 |
|
|
|
2,365,745 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAX |
|
|
50,794,433 |
|
|
|
25 |
|
|
|
45,781,201 |
|
|
|
24 |
|
INCOME TAX EXPENSE (Notes 3 and 29) |
|
|
7,988,705 |
|
|
|
4 |
|
|
|
7,169,145 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
|
42,805,728 |
|
|
|
21 |
|
|
|
38,612,056 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of defined benefit pension plans (Note 25) |
|
|
(226,028 |
) |
|
|
|
|
|
|
(491,047 |
) |
|
|
|
|
(Continued)
- 3 -
CHUNGHWA TELECOM CO., LTD.
STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of
New Taiwan Dollars, Except Earnings Per Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 (Adjusted) (Note 5) |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
Share of remeasurements of defined benefit pension plans of subsidiaries, associates and joint ventures (Note 15) |
|
$ |
(27,038 |
) |
|
|
|
|
|
$ |
1,336 |
|
|
|
|
|
Income tax benefit relating to items that will not be reclassified to profit or loss (Note 29) |
|
|
38,425 |
|
|
|
|
|
|
|
83,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(214,641 |
) |
|
|
|
|
|
|
(406,233 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences arising from the translation of the foreign operations |
|
|
26,254 |
|
|
|
|
|
|
|
128,325 |
|
|
|
|
|
Unrealized gain (loss) on available-for-sale financial assets (Note 26) |
|
|
(659,055 |
) |
|
|
|
|
|
|
935,859 |
|
|
|
|
|
Cash flow hedges (Note 20) |
|
|
781 |
|
|
|
|
|
|
|
(283 |
) |
|
|
|
|
Share of exchange differences arising from the translation of the foreign operations of subsidiaries, associates and joint ventures
(Note 15) |
|
|
4,561 |
|
|
|
|
|
|
|
12,375 |
|
|
|
|
|
Share of unrealized gain (loss) on available-for-sale financial assets of subsidiaries, associates and joint ventures (Note
15) |
|
|
10,031 |
|
|
|
|
|
|
|
(46,124 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(617,428 |
) |
|
|
|
|
|
|
1,030,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income (loss), net of income tax |
|
|
(832,069 |
) |
|
|
|
|
|
|
623,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME |
|
$ |
41,973,659 |
|
|
|
21 |
|
|
$ |
39,235,975 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE (Note 30) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
5.52 |
|
|
|
|
|
|
$ |
4.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
5.50 |
|
|
|
|
|
|
$ |
4.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements. |
|
(Concluded) |
- 4 -
CHUNGHWA TELECOM CO., LTD.
STATEMENTS OF CHANGES IN EQUITY
(In Thousands of New
Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Adjustments (Notes 20 and 26) |
|
|
|
|
|
|
|
|
|
Retained Earnings (Note 26) |
|
|
Exchange Differences Arising from the Translation
of the Foreign Operations |
|
|
Unrealized Gain (Loss) on
Available-for-sale Financial Assets |
|
|
|
|
|
|
|
|
|
Common Stocks (Note 26) |
|
|
Additional
Paid-in Capital (Note 26) |
|
|
Legal Reserve |
|
|
Special Reserve |
|
|
Unappropriated Earnings |
|
|
|
|
Cash Flow Hedges |
|
|
Total Equity |
|
BALANCE, JANUARY 1, 2014 |
|
$ |
77,574,465 |
|
|
$ |
184,620,065 |
|
|
$ |
74,819,380 |
|
|
$ |
2,675,894 |
|
|
$ |
20,744,024 |
|
|
$ |
5,742 |
|
|
$ |
(149,747 |
) |
|
$ |
|
|
|
$ |
360,289,823 |
|
Effect of retrospective application |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 1, 2014 AS ADJUSTED |
|
|
77,574,465 |
|
|
|
184,620,065 |
|
|
|
74,819,380 |
|
|
|
2,675,894 |
|
|
|
20,770,064 |
|
|
|
5,742 |
|
|
|
(149,747 |
) |
|
|
|
|
|
|
360,315,863 |
|
Appropriation of 2013 earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve |
|
|
|
|
|
|
|
|
|
|
2,074,342 |
|
|
|
|
|
|
|
(2,074,342 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,005 |
|
|
|
(144,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,525,558 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,525,558 |
) |
Cash distributed from additional paid-in capital |
|
|
|
|
|
|
(16,577,663 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,577,663 |
) |
Change in additional paid-in capital from investments in subsidiaries, associates and joint ventures accounted for using equity
method |
|
|
|
|
|
|
5,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,533 |
|
Net income for the year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,612,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,612,056 |
|
Other comprehensive income (loss) for the year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(406,233 |
) |
|
|
140,700 |
|
|
|
889,735 |
|
|
|
(283 |
) |
|
|
623,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,205,823 |
|
|
|
140,700 |
|
|
|
889,735 |
|
|
|
(283 |
) |
|
|
39,235,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, DECEMBER 31, 2014 |
|
|
77,574,465 |
|
|
|
168,047,935 |
|
|
|
76,893,722 |
|
|
|
2,819,899 |
|
|
|
38,231,982 |
|
|
|
146,442 |
|
|
|
739,988 |
|
|
|
(283 |
) |
|
|
364,454,150 |
|
Appropriation of 2014 earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve |
|
|
|
|
|
|
|
|
|
|
680,743 |
|
|
|
|
|
|
|
(680,743 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(144,005 |
) |
|
|
144,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,673,263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,673,263 |
) |
Reversal of special reserve recognized from land disposal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(475 |
) |
|
|
475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in additional paid-in capital from investments in subsidiaries, associates and joint ventures accounted for using equity
method |
|
|
|
|
|
|
47,680 |
|
|
|
|
|
|
|
|
|
|
|
(62,298 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,618 |
) |
Net income for the year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,805,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,805,728 |
|
Other comprehensive income (loss) for the year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(214,641 |
) |
|
|
30,815 |
|
|
|
(649,024 |
) |
|
|
781 |
|
|
|
(832,069 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,591,087 |
|
|
|
30,815 |
|
|
|
(649,024 |
) |
|
|
781 |
|
|
|
41,973,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, DECEMBER 31, 2015 |
|
$ |
77,574,465 |
|
|
$ |
168,095,615 |
|
|
$ |
77,574,465 |
|
|
$ |
2,675,419 |
|
|
$ |
42,551,245 |
|
|
$ |
177,257 |
|
|
$ |
90,964 |
|
|
$ |
498 |
|
|
$ |
368,739,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
- 5 -
CHUNGHWA TELECOM CO., LTD.
STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan
Dollars)
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Income before income tax |
|
$ |
50,794,433 |
|
|
$ |
45,781,201 |
|
Adjustments to reconcile income before income tax to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
29,800,486 |
|
|
|
31,292,222 |
|
Amortization |
|
|
3,029,335 |
|
|
|
2,189,300 |
|
Provision for doubtful accounts |
|
|
498,610 |
|
|
|
311,281 |
|
Interest expenses |
|
|
|
|
|
|
6,268 |
|
Interest income |
|
|
(260,885 |
) |
|
|
(254,636 |
) |
Dividend income |
|
|
(207,419 |
) |
|
|
(67,441 |
) |
Share of the profit of subsidiaries, associates and joint ventures accounted for using equity method |
|
|
(1,385,675 |
) |
|
|
(1,611,147 |
) |
Gain on disposal of investments accounted for using equity method |
|
|
(7,409 |
) |
|
|
|
|
Provision for inventory and obsolescence |
|
|
163,221 |
|
|
|
234,765 |
|
Impairment loss on property, plant and equipment |
|
|
138,093 |
|
|
|
|
|
Reversal of impairment loss on investment properties |
|
|
(142,047 |
) |
|
|
|
|
Impairment loss on financial assets carried at cost |
|
|
77,018 |
|
|
|
|
|
Loss (gain) on disposal of property, plant and equipment |
|
|
32,852 |
|
|
|
(70,794 |
) |
Valuation gain on financial assets and liabilities at fair value through profit or loss, net |
|
|
(14 |
) |
|
|
|
|
Loss (gain) on foreign exchange, net |
|
|
67,702 |
|
|
|
(164,040 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Decrease (increase) in: |
|
|
|
|
|
|
|
|
Trade notes and accounts receivable |
|
|
(732,636 |
) |
|
|
(3,094,209 |
) |
Accounts receivable from related parties |
|
|
(156,755 |
) |
|
|
(17,300 |
) |
Inventories |
|
|
(2,457,915 |
) |
|
|
284,298 |
|
Other current monetary assets |
|
|
(282,052 |
) |
|
|
1,357,793 |
|
Prepayments |
|
|
32,406 |
|
|
|
(4,543 |
) |
Other current assets |
|
|
953,678 |
|
|
|
525,037 |
|
Increase (decrease) in: |
|
|
|
|
|
|
|
|
Trade notes and accounts payable |
|
|
(2,336,022 |
) |
|
|
2,469,273 |
|
Payables to related parties |
|
|
69,231 |
|
|
|
37,986 |
|
Other payables |
|
|
1,196,476 |
|
|
|
(1,714,013 |
) |
Provisions |
|
|
(20,967 |
) |
|
|
(24,544 |
) |
Advance receipts |
|
|
210,089 |
|
|
|
(19,354 |
) |
Other current liabilities |
|
|
(101,748 |
) |
|
|
12,957 |
|
Deferred revenue |
|
|
148,934 |
|
|
|
(217,278 |
) |
Net defined benefit liabilities |
|
|
399,725 |
|
|
|
498,186 |
|
|
|
|
|
|
|
|
|
|
Cash generated from operations |
|
|
79,520,745 |
|
|
|
77,741,268 |
|
Interest paid |
|
|
|
|
|
|
(6,268 |
) |
Income tax paid |
|
|
(6,892,786 |
) |
|
|
(7,795,086 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
72,627,959 |
|
|
|
69,939,914 |
|
|
|
|
|
|
|
|
|
|
(Continued)
- 6 -
CHUNGHWA TELECOM CO., LTD.
STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan
Dollars)
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Acquisition of negotiable certificate of deposits with maturities of more than three months |
|
$ |
(11,200,000 |
) |
|
$ |
|
|
Proceeds from disposal of negotiable certificate of deposits with maturities of more than three months |
|
|
11,200,000 |
|
|
|
|
|
Acquisition of held-to-maturity financial assets |
|
|
(1,002,167 |
) |
|
|
|
|
Proceeds from disposal of held-to-maturity financial assets |
|
|
4,450,000 |
|
|
|
4,257,500 |
|
Acquisition of financial assets carried at cost |
|
|
(29,077 |
) |
|
|
(33,859 |
) |
Capital reduction of financial assets carried at cost |
|
|
37,672 |
|
|
|
83,892 |
|
Acquisition of investments accounted for using equity method |
|
|
|
|
|
|
(261,918 |
) |
Proceeds from disposal of investments accounted for using equity method |
|
|
10,848 |
|
|
|
|
|
Acquisition of property, plant and equipment |
|
|
(24,626,617 |
) |
|
|
(31,682,294 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
|
|
|
|
121,883 |
|
Acquisition of intangible assets |
|
|
(10,310,517 |
) |
|
|
(567,049 |
) |
Decrease (increase) in other noncurrent assets |
|
|
118,315 |
|
|
|
(725,469 |
) |
Interest received |
|
|
302,462 |
|
|
|
308,361 |
|
Cash dividends received from others |
|
|
207,419 |
|
|
|
|
|
Cash dividends received from subsidiaries, associates and joint ventures accounted for using equity method |
|
|
1,317,493 |
|
|
|
1,046,219 |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(29,524,169 |
) |
|
|
(27,452,734 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Increase in repurchase agreement collateralized by bonds |
|
|
|
|
|
|
13,000,000 |
|
Decrease in repurchase agreement collateralized by bonds |
|
|
|
|
|
|
(13,000,000 |
) |
Decrease in customers deposits |
|
|
(90,137 |
) |
|
|
(103,499 |
) |
Increase (decrease) in other noncurrent liabilities |
|
|
(162,770 |
) |
|
|
134,551 |
|
Cash dividends and cash distributed from additional paid-in capital |
|
|
(37,673,263 |
) |
|
|
(35,103,221 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(37,926,170 |
) |
|
|
(35,072,169 |
) |
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
5,177,620 |
|
|
|
7,415,011 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR |
|
|
19,005,916 |
|
|
|
11,590,905 |
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF THE YEAR |
|
$ |
24,183,536 |
|
|
$ |
19,005,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements. |
|
(Concluded) |
- 7 -
CHUNGHWA TELECOM CO., LTD.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER
31, 2015 AND 2014
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Chunghwa Telecom Co., Ltd. (the Company) was incorporated on
July 1, 1996 in the Republic of China (ROC) pursuant to the Article 30 of the Telecommunications Act. The Company is a company limited by shares and, prior to August 2000, was wholly owned by the Ministry of Transportation and
Communications (MOTC). Prior to July 1, 1996, the current operations of the Company were carried out under the Directorate General of Telecommunications (DGT). The DGT was established by the MOTC in June 1943 to take
primary responsibility in the development of telecommunications infrastructure and to formulate policies related to telecommunications. On July 1, 1996, the telecom operations of the DGT were spun-off as the Company which continues to carry out
the business and the DGT continues to be the industry regulator.
As the dominant telecommunications service provider of domestic and
international fixed-line, Global System for Mobile Communications (GSM), and Third Generation (3G) in the ROC, the Company is subject to additional regulations imposed by the ROC.
Effective August 12, 2005, the MOTC completed the process of privatizing the Company by reducing the government ownership to below 50% in
various stages. In July 2000, the Company received approval from the Securities and Futures Commission (the SFC) for a domestic initial public offering and its common stocks were listed and traded on the Taiwan Stock Exchange (the
TWSE) on October 27, 2000. Certain of the Companys common stocks were sold, in connection with the foregoing privatization plan, in domestic public offerings at various dates from August 2000 to July 2003. Certain of the
Companys common stocks were also sold in an international offering of securities in the form of American Depository Shares (ADS) on July 17, 2003 and were listed and traded on the New York Stock Exchange (the
NYSE). The MOTC sold common stocks of the Company by auction in the ROC on August 9, 2005 and completed the second international offering on August 10, 2005. Upon completion of the share transfers associated with these
offerings on August 12, 2005, the MOTC owned less than 50% of the outstanding shares of the Company and completed the privatization plan.
The financial statements are presented in the Companys functional currency, New Taiwan dollars.
2. |
APPROVAL OF FINANCIAL STATEMENTS |
The financial statements were approved and authorized
for issue by the Board of Directors on March 11, 2016.
3. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Statement of Compliance
The accompanying financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by
Securities Issuers (the Regulations).
- 8 -
Basis of Preparation
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at revalued
amounts or fair values.
When preparing the accompanying financial statements, the Company used equity method to account for its investment
in subsidiaries, associates and joint ventures. In order for the amounts of the net profit, other comprehensive income and total equity in the parent company only financial statements to be the same with those amounts attributable to the owner of
the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatment between parent company only basis and consolidated basis were made to the captions of investments accounted for using equity
method, share of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method, share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity
method and related equity items, as appropriate, in the parent company only financial statements.
Current and Noncurrent Assets
and Liabilities
Current assets include:
|
a. |
Assets held primarily for the purpose of trading; |
|
b. |
Assets expected to be realized within twelve months after the reporting period; and |
|
c. |
Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. |
Current liabilities include:
|
a. |
Liabilities held primarily for the purpose of trading; |
|
b. |
Liabilities due to be settled within twelve months after the reporting period; and |
|
c. |
Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period. |
Assets and liabilities that are not classified as current are classified as noncurrent.
Foreign Currencies
In
preparing the Companys financial statements, transactions in currencies other than the Companys functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.
Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when
the fair value was determined and related exchange differences are recognized in profit or loss. Conversely, when the fair value changes were recognized in other comprehensive income, related exchange difference shall be recognized in other
comprehensive income.
Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.
- 9 -
For the purposes of presenting financial statements, the assets and liabilities of the
Companys foreign operations (including of the subsidiaries, associates and joint ventures in other countries or currencies used different with the Company) are translated into New Taiwan dollars using exchange rates prevailing at the end of
each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income.
Cash Equivalents
Cash
equivalents include commercial paper, time deposits and negotiable certificate of deposit with original maturities within three months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.
Inventories
Inventories
are stated at the lower of cost (weighted-average cost) or net realizable value item by item, except for those that may be appropriate to group items of similar or related inventories. Net realizable value is the estimated selling price of
inventories less all estimated costs of completion and costs necessary to make the sale. The calculation of the cost of inventory is derived using the weighted-average method.
Investments Accounted for Using Equity Method
Investments in subsidiaries, associates and joint ventures are accounted for using equity method.
|
a. |
Investment in subsidiaries |
Subsidiaries are the entities controlled by the Company.
Under the equity method, the investment in subsidiaries is initially recognized at cost and the increase or decrease of carrying amount
reflects the recognition of the Companys share of the profit or loss and other comprehensive income of the subsidiaries after the date of acquisition. Besides, the Company also recognizes the Companys share of the change in other equity
of the subsidiaries.
Changes in the Companys ownership interests in subsidiaries that do not result in the Companys loss of
control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the investment of the subsidiaries and the fair value of the consideration paid or received is recognized directly in equity.
The acquisition cost in excess of the acquisition-date fair value of the identifiable net assets acquired is recognized as goodwill, which is
included within the carrying amount of the investment and shall not be amortized. The acquisition-date fair value of the net identifiable assets acquired in excess of the acquisition cost is recognized immediately in profit or loss.
Unrealized profits and losses from downstream transactions with a subsidiary are eliminated in full. Profits and losses from upstream
transactions with a subsidiary and sidestream transactions between subsidiaries are recognized in the Companys financial statements only to the extent of interests in the subsidiary that are not related to the Company.
|
b. |
Investments in associates and joint ventures |
An associate is an entity over which the Company
has significant influence and that is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of
the arrangement.
- 10 -
Investments accounted for using the equity method include investments in associates and interests
in joint ventures. Under the equity method, an investment in an associate or a joint venture is initially recognized at cost and adjusted thereafter to recognize the Companys share of the profit or loss and other comprehensive income of the
associate and joint venture as well as the distribution received. The Company also recognizes its share in changes in the associates and joint ventures.
When the Company subscribes for additional new shares of the associate and joint venture at a percentage different from its existing ownership
percentage, the resulting carrying amount of the investment differs from the amount of the Companys proportionate interest in the associate and joint venture. The Company records such a difference as an adjustment to investments with the
corresponding amount charged or credited to additional paid-in capital. When the adjustment should be debited to additional paid-in capital but the additional paid-in capital recognized from investments accounted for using equity method is
insufficient, the shortage is debited to retained earnings.
Any excess of the cost of acquisition over the Companys share of the
fair value of the identifiable net assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and shall not be amortized. Any excess
of the Companys share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.
When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its
recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment
subsequently increases.
When the Company transacts with its associate and joint venture, profits and losses resulting from the
transactions with the associate and joint venture are recognized in the Companys financial statements only to the extent of interests in the associate and joint venture that are not related to the Company.
Property, Plant and Equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated
impairment loss.
Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is
depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.
On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is
recognized in profit or loss.
Investment Properties
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a
currently undetermined future use.
Investment properties are measured initially at cost, including transaction costs. Subsequent to
initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.
- 11 -
On derecognition of the investment properties, the difference between the net disposal proceeds
and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.
Intangible
Assets
Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently
measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period,
with the effect of any changes in estimate being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset
before the end of its economic life.
Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
Impairment of Tangible and Intangible Assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating
unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.
When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate
of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in
profit or loss.
Financial Instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
- 12 -
All regular way purchases or sales of financial assets are recognized and
derecognized on a trade date basis.
|
a) |
Financial assets at fair value through profit and loss (FVTPL) |
Financial assets are
classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.
Financial assets at FVTPL are
stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset.
|
b) |
Held-to-maturity financial assets |
The Company invests in bank debentures and corporate bonds
with specific credit ratings and the Company has positive intent and ability to hold to maturity, are classified as held-to-maturity investments.
Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method less
any impairment loss.
|
c) |
Available-for-sale financial assets (AFS financial assets) |
AFS financial assets are
non-derivatives that are either designated as AFS or are not classified as loans and receivables, held-to-maturity financial assets or financial assets at fair value through profit or loss.
The Company invests in listed stocks and unlisted stocks. Among these investments, those that have a quoted market price in an active market
are classified as AFS and measured at fair value at the end of each reporting period; the others that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less any identified
impairment losses at the end of each reporting period by presenting in a separate line item as financial assets carried at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are
remeasured at fair value. The difference between the carrying amount and the fair value is recognized in other comprehensive income. Any impairment losses are recognized in profit or loss.
Changes in the carrying amount of AFS monetary financial assets relating to changes in foreign currency exchange rates, interest income
calculated using the effective interest method and dividends on AFS equity investments are recognized in profit or loss. Other changes in the carrying amount of AFS financial assets are recognized in other comprehensive income and will be
reclassified to profit or loss when the investment is disposed of or is determined to be impaired.
Dividends on AFS equity instruments
are recognized in profit or loss when the Companys right to receive the dividends is established.
- 13 -
Loans and receivables (including cash and cash equivalents, trade notes
and accounts receivable, accounts receivable from related parties, other financial assets and refundable deposits) are measured at amortized cost using the effective interest method, less any impairment loss, except for short-term receivables when
the effect of discounting is immaterial.
|
2) |
Impairment of financial assets |
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset,
the estimated future cash flows of the investment have been affected.
For financial assets carried at amortized cost, such as
held-to-maturity financial assets, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis.
For financial assets carried at amortized cost, the amount of the impairment loss recognized is mainly based on the difference between the
assets carrying amount and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate.
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is
reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
For AFS equity investments, a
significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.
When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are
reclassified to profit or loss in the period.
In respect of AFS equity securities, impairment losses previously recognized in profit or
loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income.
For financial assets that are carried at cost, the amount of the impairment loss is mainly measured as the difference between the assets
carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss is not reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
notes and accounts receivable and other receivables, where the carrying amount is reduced through the use of an allowance account. When a trade note and accounts receivable and other receivables are considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible
trade notes and accounts receivable and other receivables that are written off against the allowance account.
- 14 -
|
3) |
Derecognition of financial assets |
The Company derecognizes a financial asset only when the
contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.
|
1) |
Subsequent measurement |
Except for financial liabilities at FVTPL, all the financial
liabilities are subsequently measured at amortized cost using the effective interest method.
|
2) |
Derecognition of financial liabilities |
The difference between the carrying amount of the
financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
|
c. |
Derivative financial instruments |
The Company enters into a variety of derivative financial
instruments to manage its exposure to foreign exchange rate risks, including forward exchange contracts.
Derivatives are initially
measured at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the
derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the
derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.
Hedge Accounting
The
Company designates some derivatives instruments as cash flow hedges.
The effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a
reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a
non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and are included in the initial cost of the non-financial asset or non-financial liability.
- 15 -
Hedge accounting is discontinued prospectively when the Company revokes the designated hedging
relationship, or when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been previously recognized in
other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is
recognized immediately in profit or loss.
Provisions
Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the best estimate of
the expenditure required to settle the Companys obligation by the management of the Company.
Revenue Recognition
Revenue from the sale of goods is recognized when all the following conditions are satisfied:
|
a. |
The Company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
|
b. |
The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
|
c. |
The amount of revenue can be measured reliably; |
|
d. |
It is probable that the economic benefits associated with the transaction will flow to the Company; and |
|
e. |
The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Revenue is measured at the fair value of the consideration received or receivable and represents amounts for goods sold in the normal course of
business, net of sales discounts and volume rebates. For trade notes and accounts receivable due within one year from the balance sheet date, as the nominal value of the consideration to be received approximates its fair value and transactions are
frequent, fair value of the consideration is not determined by discounting all future receipts using an imputed rate of interest.
Usage
revenues from fixed-line services (including local, domestic long distance and international long distance telephone services), cellular services, Internet and data services, and interconnection and call transfer fees from other telecommunications
companies and carriers are billed in arrears and are recognized based upon seconds or minutes of traffic processed when the services are provided in accordance with contract terms.
Other revenues are recognized as follows: (a) one-time subscriber connection fees (on fixed-line services) are deferred and recognized
over the average expected customer service periods, (b) monthly fees (on fixed-line services, mobile, Internet and data services) are accrued every month, and (c) prepaid services (fixed-line, mobile, Internet and data services) are
recognized as income based upon actual usage by customers.
Where the Company enters into transactions which involve both the provision of
air time bundled with products such as 3G data card and handset, total consideration received from products and air time in these arrangements are allocated and measured using units of accounting within the arrangement based on their relative fair
values limited to the amount that is not contingent upon the delivery of products.
Services revenue is recognized when service provided.
Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract.
- 16 -
Dividend income from investments is recognized when the shareholders right to receive
payment has been established under the premises when it is probable that the economic benefit related to the transactions will flow to the Company and that the revenue can be reasonably measured.
Interest income from a financial asset is recognized when it is probable that the economic benefits related to the transactions will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.
Leasing
Rental income from operating leases is recognized on a straight-line
basis over the term of the relevant lease.
Operating lease payments are recognized as an expense on a straight-line
basis over the lease term.
Employee Benefits
|
a. |
Short-term employee benefits |
Liabilities recognized in respect of short-term employee benefits
are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Payments to defined contribution retirement benefit plans are recognized
as an expense when employees have rendered service entitling them to the contributions.
Defined benefit costs (including service cost, net
interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and gains or losses on settlements) and net interest on the net
defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising (a) actuarial gains and losses; and (b) the return on plan assets, excluding amounts included in net interest
on the net defined benefit liability (asset), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be
reclassified to profit or loss.
Net defined benefit liability (asset) represents the actual deficit (surplus) in the Companys
defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.
|
c. |
Other long-term employee benefits |
Other long-term employee benefits are accounted for in the
same way as the accounting required for defined benefit plan except that remeasurement is recognized in profit or loss.
- 17 -
Income Tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
According to the Income Tax Law, an additional tax at 10% of unappropriated
earnings is provided for as income tax in the year the shareholders approve to retain the earnings.
Adjustments of prior years tax
liabilities are added to or deducted from the current years tax provision.
Deferred tax is recognized on temporary differences between the carrying amounts
of assets and liabilities in the Companys financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences and unused tax credits from purchases of machinery, equipment and technology and research and development expenditures to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated
with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to
utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of
deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously
unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or
the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
|
c. |
Current and deferred tax for the year |
Current and deferred tax are recognized in profit or
loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.
- 18 -
4. |
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY AND ASSUMPTION |
In the application of the Companys accounting policies, the management is required to make judgments, estimates and assumptions which are
based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period. Actual results may differ from these estimates.
|
a. |
Impairment of trade notes and accounts receivable |
When there is objective evidence showed
indications of impairment, the Company considers the estimation of future cash flows. The amount of impairment will be measured at the difference between the carrying amount and the present value of estimated future cash flows discounted by the
original effective interest rates of the financial assets. However, as the impact from the discount of short-term receivables is not material, the impairment of short-term receivables is measured at the difference between the carrying amount and the
estimated undiscounted future cash flows. Where the actual future cash flows are less than expected, a material impairment loss may arise.
|
b. |
Provision for inventory valuation and obsolescence |
Inventories are stated at the lower of cost
or net realizable value. Net realizable value is calculated as the estimated selling price less the estimated selling costs. Comparison of net realizable value and cost is determined on an item by item basis, except those similar items which could
be categorized into the same groups. The Company uses the inventory holding period and turnover as the evaluation basis for inventory obsolescence losses.
|
c. |
Impairment of tangible and intangible assets |
When an indication of impairment is assessed with
objective evidence, the Company considers whether the recoverable amount of an asset is less than its carrying amount and recognizes the impairment loss based on difference between the recoverable amount and its carrying amount. The estimate of
recoverable amount would impact on the timing and the amount of impairment loss recognition.
|
d. |
Useful lives of property, plant and equipment |
As discussed in Note 3, Summary of
Significant Accounting Policies Property, Plant and Equipment, the Company reviews estimated useful lives of property, plant and equipment at the end of each year.
|
e. |
Recognition and measurement of defined benefit plans |
Accrued pension liabilities and the
resulting pension expense under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, and long-term average future salary increase. Changes
in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.
- 19 -
5. |
APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS |
|
a. |
Initial application of the revised Guidelines Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting
Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the Financial Supervisory Commission (FSC) (collectively, 2013 Taiwan-IFRSs version) in issue. |
According to Rule No. 1030029342 and Rule No. 1030010325 issued by the FSC, the 2013 Taiwan-IFRS version endorsed by the FSC and the
related amendments to the Guidelines Governing the Preparation of Financial Reports by Securities Issuers should be adopted by the Company starting 2015.
The Company believes that as a result of the adoption of aforementioned 2013 Taiwan-IFRSs version and the related amendments to the revised
Guidelines Governing the Preparation of Financial Reports by Securities Issuers, the following items have impacted the Companys financial statements:
|
1) |
IFRS 12 Disclosure of Interests in Other Entities |
IFRS 12 is a new disclosure
standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the previous
standards. Refer to Note 15 for related disclosures.
|
2) |
IFRS 13 Fair Value Measurement |
IFRS 13 establishes a single source of guidance
for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than the previous guidance. For
example, quantitative and qualitative disclosures based on the three-level fair value hierarchy previously required for financial instruments only before the adoption of IFRS 13 is extended by IFRS 13 to cover all assets and liabilities within its
scope. Refer to Notes 17 and 34 for related disclosures.
|
3) |
Amendments to IAS 1 Presentation of Items of Other Comprehensive Income |
The
amendments to IAS 1 requires items of other comprehensive income to be grouped into those items that (1) will not be reclassified subsequently to profit or loss; and (2) may be reclassified subsequently to profit or loss. Income taxes on
related items of other comprehensive income are grouped on the same basis. Previously, there were no such requirements.
The Company
retrospectively applied the above amendments starting in 2015. The items that will not be reclassified subsequently to profit or loss include remeasurements of defined benefit pension plans, the share of remeasurements of defined benefit pension
plans of subsidiaries, associates and joint ventures as well as the related income tax on such items. Items that may be reclassified subsequently to profit or loss include exchange differences arising on translation of foreign operations, changes in
fair value of available-for-sale financial assets, cash flow hedges, the share of other comprehensive income of subsidiaries, associates and joint ventures as well as the related income tax on items of other comprehensive income (except for the
share of remeasurements of defined benefit pension plans of subsidiaries, associates and joint ventures). However, the application of the above amendments did not have any impact on the net income, other comprehensive income (net of income tax), and
total comprehensive income.
- 20 -
|
4) |
Revision to IAS 19 Employee Benefits |
The revised IAS 19 change the accounting for
defined benefit plans, which require the Company to recognize changes in defined benefit obligations or assets and to disclose the components of the defined benefit costs. According to the revision, the past service cost is expensed immediately when
incurred and no longer amortized over the average period before vested on a straight-line basis. In addition, the revised IAS 19 introduces certain changes in the presentation of the defined benefit cost, and also includes more extensive
disclosures.
On initial application of the revised IAS 19, the cumulative adjustments in employee benefit costs on and before
December 31, 2013 resulting from the retrospective application are adjusted to net defined benefit liabilities, deferred tax assets and retained earnings as of January 1, 2014.
On initial application of the revised IAS 19, the Companys deferred income tax assets increased by $829 thousand, investments accounted
for using equity method decreased by $72 thousand and net defined benefit liabilities increased by $4,877 thousand as of December 31, 2015. For the year ended December 31, 2015, pension cost increased by $4,877 thousand which caused an
increase in operating expenses, share of the profit of subsidiaries, associates and joint ventures accounted for using equity method decreased by $72 thousand and income tax expenses decreased by $829 thousand.
As a result of the retrospective application of the revised IAS 19, the Companys deferred income tax asset decreased by $4,208 thousand
and $5,037 thousand, investments accounted for using equity method increased by $1,373 thousand and $1,445 thousand, net defined benefit liabilities decreased by $24,755 thousand and $29,632 thousand, and retained earnings increased by $21,920
thousand and $26,040 thousand as of December 31, 2014 and January 1, 2014, respectively. For the year ended December 31, 2014, pension cost increased by $4,877 thousand, which caused an increase in operating expenses, share of the
profit of subsidiaries, associates and joint ventures accounted for using equity method decreased by $72 thousand and income tax expenses decreased by $829 thousand.
|
b. |
The IFRSs issued by International Accounting Standard Board (IASB) but not endorsed by FSC |
The Company has not applied the following IFRSs issued by the IASB but not endorsed by the FSC. As of the date that the financial statements
were authorized for issue, the initial adoption to the following standards and interpretations is still subject to the effective date to be published by the FSC.
|
|
|
|
|
New, Revised or Amended Standards and Interpretations |
|
Effective Date Issued by IASB (Note 1) |
|
|
|
Amendments to IFRSs |
|
Annual Improvements to IFRSs 2010-2012 Cycle |
|
July 1, 2014 (Note 2) |
|
|
|
Amendments to IFRSs |
|
Annual Improvements to IFRSs 2011-2013 Cycle |
|
July 1, 2014 |
|
|
|
Amendments to IFRSs |
|
Annual Improvements to IFRSs 2012-2014 Cycle |
|
January 1, 2016 (Note 3) |
|
|
|
IFRS 9 |
|
Financial Instruments |
|
January 1, 2018 |
|
|
|
Amendments to IFRS 9 and IFRS 7 |
|
Mandatory Effective Date of IFRS 9 and Transition Disclosures |
|
January 1, 2018 |
|
|
|
Amendments to IFRS 10 and IAS 28 |
|
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
|
To be determined by IASB |
|
|
|
Amendments to IFRS 10, IFRS 12 and
IAS 28 |
|
Investment Entities: Applying the Consolidation Exception |
|
January 1, 2016 |
(Continued)
- 21 -
|
|
|
|
|
New, Revised or Amended Standards and Interpretations |
|
Effective Date Issued by IASB (Note 1) |
|
|
|
Amendment to IFRS 11 |
|
Acquisitions of Interests in Joint Operations |
|
January 1, 2016 |
|
|
|
IFRS 14 |
|
Regulatory Deferral Accounts |
|
January 1, 2016 |
|
|
|
IFRS 15 |
|
Revenue from Contracts with Customers |
|
January 1, 2018 |
|
|
|
IFRS 16 |
|
Leases |
|
January 1, 2019 |
|
|
|
Amendment to IAS 1 |
|
Disclosure Initiative |
|
January 1, 2016 |
|
|
|
Amendment to IAS 7 |
|
Disclosure Initiative |
|
January 1, 2017 |
Amendment to IAS 12 |
|
Deferred Tax: Recovery of Underlying Assets |
|
January 1, 2017 |
|
|
|
Amendments to IAS 16 and IAS 38 |
|
Clarification of Acceptable Methods of Depreciation and Amortization |
|
January 1, 2016 |
|
|
|
Amendments to IAS 16 and IAS 41 |
|
Agriculture: Bearer Plants |
|
January 1, 2016 |
Amendment to IAS 19 |
|
Defined Benefit Plans: Employee Contributions |
|
July 1, 2014 |
|
|
|
Amendment to IAS 27 |
|
Equity Method in Separate Financial Statements |
|
January 1, 2016 |
|
|
|
Amendment to IAS 36 |
|
Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets |
|
January 1, 2014 |
|
|
|
Amendment to IAS 39 |
|
Novation of Derivatives and Continuation of Hedge Accounting |
|
January 1, 2014 |
|
|
|
IFRIC 21 |
|
Levies |
|
January 1, 2014 |
(Concluded)
|
|
|
|
|
Note 1: |
|
Unless stated otherwise, the above amendments and interpretations are effective for annual periods beginning on or after their respective effective dates. |
|
|
Note 2: |
|
The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the
amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014. |
|
|
Note 3: |
|
The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods beginning on or
after January 1, 2016. |
Except for the following, the initial application of the above new standards and interpretations will
not have any material impact on the Companys financial statements:
|
1) |
IFRS 15 Revenue from Contracts with Customers |
IFRS 15 establishes principles for
recognizing revenue that apply to all contracts with customers, and will supersedes IAS 18 Revenue, IAS 11 Construction Contracts and a number of revenue-related interpretations.
- 22 -
When applying IFRS 15, an entity shall recognize revenue by applying the following steps:
|
a) |
Identify the contract with the customer; |
|
b) |
Identify the performance obligations in the contract; |
|
c) |
Determine the transaction price; |
|
d) |
Allocate the transaction price to the performance obligations in the contracts; and |
|
e) |
Recognize revenue when the entity satisfies a performance obligation. |
Upon the application of
IFRS 15, the Company will allocate the transaction price to each performance obligation identified in the contract on a relative stand-alone selling price basis.
Incremental costs of obtaining a contract will be recognized as an asset to the extent the Company expects to recover those costs. Such asset
will be amortized on a basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. This will lead to the later recognition of charges for certain customer-obtaining costs.
When IFRS 15 is effective, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or
retrospectively with the cumulative effect of initially applying this Standard recognized at the date of initial application.
IFRS 16 sets out the accounting standards for leases that will
supersede IAS 17 and a number of related interpretations.
Under IFRS 16, if the Company is a lessee, it shall recognize right-of-use
assets and lease liabilities for all leases on the balance sheets except for low-value and short-term leases. The Company may elect to apply the accounting method similar to the accounting for operating lease under IAS 17 to the low-value and
short-term leases. On the statements of comprehensive income, the Company should present the depreciation expense charged on the right-of-use asset separately from interest expense accrued on the lease liability and discloses such amounts in the
footnotes; interest is computed by using effective interest method. On the statements of cash flows, cash payments for the principal portion of the lease liability are classified within financing activities; cash payments for interest portion are
classified within operating activities.
The application of IFRS 16 is not expected to have a material impact on the accounting of the
Company as lessor.
When IFRS 16 becomes effective, the Company may elect to apply this Standard either retrospectively to each prior
reporting period presented or retrospectively with the cumulative effect of the initial application of this Standard recognized at the date of initial application.
Except for the abovementioned impact, as of the date the financial statements were authorized for issue, the Company is continuously assessing
the possible impact that the application of other standards and interpretations will have on the Companys financial position and operating result, and will disclose the relevant impact when the assessment is completed.
- 23 -
6. |
CASH AND CASH EQUIVALENTS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Cash |
|
|
|
|
|
|
|
|
Cash on hand |
|
$ |
209,612 |
|
|
$ |
197,004 |
|
Bank deposits |
|
|
3,349,514 |
|
|
|
2,869,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
3,559,126 |
|
|
|
3,066,470 |
|
|
|
|
|
|
|
|
|
|
Cash equivalents (investments with maturities of less than three months) |
|
|
|
|
|
|
|
|
Commercial paper |
|
|
10,955,160 |
|
|
|
13,339,446 |
|
Time deposits |
|
|
2,069,250 |
|
|
|
|
|
Negotiable certificate of deposit |
|
|
7,600,000 |
|
|
|
2,600,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
20,624,410 |
|
|
|
15,939,446 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24,183,536 |
|
|
$ |
19,005,916 |
|
|
|
|
|
|
|
|
|
|
The annual yield rates of bank deposits, commercial paper, time deposits and negotiable certificate of deposit
were as follows:
|
|
|
|
|
|
|
December 31 |
|
|
2015 |
|
2014 |
Bank deposits |
|
0.00%-0.32% |
|
0.00%-0.22% |
Commercial paper |
|
0.37%-0.41% |
|
0.58%-0.65% |
Time deposits |
|
0.60%-0.79% |
|
|
Negotiable certificate of deposit |
|
0.36%-0.45% |
|
0.72%-0.80% |
7. |
FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Financial assets held for trading |
|
|
|
|
|
|
|
|
Derivatives (not designated for hedge) |
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
$ |
14 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Outstanding forward exchange contracts not designated for hedge as of balance sheet dates were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount |
|
|
|
Currency |
|
|
Maturity Period |
|
|
(In Thousands) |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contractsbuy |
|
EUR/NT$ |
|
|
|
|
2016.03-06 |
|
|
EUR18,301/NT$ |
658,545 |
|
The Company entered into the above forward exchange contracts to manage its exposure to foreign currency risk
due to fluctuations in exchange rates. However, the aforementioned derivatives did not meet the criteria for hedge accounting and were classified as financial assets or financial liabilities held for trading.
- 24 -
8. |
HELD-TO-MATURITY FINANCIAL ASSETS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Corporate bonds |
|
$ |
3,870,540 |
|
|
$ |
6,533,527 |
|
Bank debentures |
|
|
150,000 |
|
|
|
950,742 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,020,540 |
|
|
$ |
7,484,269 |
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
1,880,739 |
|
|
$ |
3,456,747 |
|
Noncurrent |
|
|
2,139,801 |
|
|
|
4,027,522 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,020,540 |
|
|
$ |
7,484,269 |
|
|
|
|
|
|
|
|
|
|
The related information of corporate bonds and bank debentures as of balance sheet dates was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Corporate bonds |
|
|
|
|
|
|
|
|
Par value |
|
$ |
3,865,000 |
|
|
$ |
6,515,000 |
|
|
|
|
|
|
|
|
|
|
Nominal interest rate |
|
|
1.18%-2.49% |
|
|
|
1.15%-2.49% |
|
Effective interest rate |
|
|
1.15%-1.54% |
|
|
|
1.15%-1.58% |
|
Average remaining maturity life |
|
|
1.04 years |
|
|
|
1.34 years |
|
Bank debentures |
|
|
|
|
|
|
|
|
Par value |
|
$ |
150,000 |
|
|
$ |
950,000 |
|
|
|
|
|
|
|
|
|
|
Nominal interest rate |
|
|
1.25% |
|
|
|
1.25%-1.60% |
|
Effective interest rate |
|
|
1.25% |
|
|
|
1.15%-1.40% |
|
Average remaining maturity life |
|
|
1.41 years |
|
|
|
0.75 year |
|
9. |
TRADE NOTES AND ACCOUNTS RECEIVABLE, NET |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Trade notes and accounts receivable |
|
$ |
26,015,189 |
|
|
$ |
25,481,402 |
|
Less: Allowance for doubtful accounts |
|
|
(1,281,569 |
) |
|
|
(1,016,192 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
24,733,620 |
|
|
$ |
24,465,210 |
|
|
|
|
|
|
|
|
|
|
The average credit terms range from 30 to 90 days. In determining the recoverability of trade notes and
accounts receivable, the Company considers significant change in the credit quality of the trade notes and accounts receivable from the date credit was initially granted up to the end of the reporting period. In general, with few exceptional cases,
it is unlikely for the notes and accounts receivable due longer than 180 days to be collected, therefore the Company recognized 100% allowance of notes and accounts receivable overdue longer than 180 days. For the notes and accounts receivable less
than 180 days, the allowance for doubtful accounts was estimated based on the Companys historical recovery experience.
The Company
serves a large consumer base; therefore, the concentration of credit risk is limited.
- 25 -
The aging analysis for trade notes and accounts receivable as of balance sheet dates were as
follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Non-overdue |
|
$ |
23,857,773 |
|
|
$ |
22,825,568 |
|
Less than 30 days |
|
|
595,876 |
|
|
|
603,081 |
|
31-60 days |
|
|
329,734 |
|
|
|
155,068 |
|
61-90 days |
|
|
142,252 |
|
|
|
73,612 |
|
91-120 days |
|
|
132,684 |
|
|
|
65,084 |
|
121-180 days |
|
|
116,772 |
|
|
|
62,678 |
|
More than 181 days |
|
|
840,098 |
|
|
|
1,696,311 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,015,189 |
|
|
$ |
25,481,402 |
|
|
|
|
|
|
|
|
|
|
The above aging analysis was based on days overdue.
The Company did not have the receivables that were past due but not impaired as of December 31, 2015 and 2014.
Movements of the allowance for doubtful accounts were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually Assessed for Impairment |
|
|
Collectively Assessed for Impairment |
|
|
Total |
|
Balance on January 1, 2014 |
|
$ |
221,164 |
|
|
$ |
666,648 |
|
|
$ |
887,812 |
|
Add: Provision for doubtful accounts |
|
|
43,024 |
|
|
|
234,951 |
|
|
|
277,975 |
|
Deduct: Amounts written off |
|
|
|
|
|
|
(149,595 |
) |
|
|
(149,595 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
264,188 |
|
|
|
752,004 |
|
|
|
1,016,192 |
|
Add: Provision for doubtful accounts |
|
|
60,330 |
|
|
|
399,950 |
|
|
|
460,280 |
|
Deduct: Amounts written off |
|
|
|
|
|
|
(194,903 |
) |
|
|
(194,903 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
324,518 |
|
|
$ |
957,051 |
|
|
$ |
1,281,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Merchandise |
|
$ |
2,995,984 |
|
|
$ |
625,471 |
|
Project in process |
|
|
719,952 |
|
|
|
795,771 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,715,936 |
|
|
$ |
1,421,242 |
|
|
|
|
|
|
|
|
|
|
The operating costs related to inventories were $21,767,819 thousand (including the valuation loss on
inventories of $163,221 thousand) and $13,394,462 thousand (including the valuation loss on inventories of $234,765 thousand) for the years ended December 31, 2015 and 2014, respectively.
- 26 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Prepaid rents |
|
$ |
3,218,442 |
|
|
$ |
3,177,338 |
|
Others |
|
|
845,244 |
|
|
|
918,754 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,063,686 |
|
|
$ |
4,096,092 |
|
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
|
Prepaid rents |
|
$ |
958,859 |
|
|
$ |
951,998 |
|
Others |
|
|
845,244 |
|
|
|
918,754 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,804,103 |
|
|
$ |
1,870,752 |
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
|
Prepaid rents |
|
$ |
2,259,583 |
|
|
$ |
2,225,340 |
|
|
|
|
|
|
|
|
|
|
12. |
OTHER CURRENT MONETARY ASSETS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Negotiable certificates of deposit with maturities of more than three months |
|
$ |
1,650,000 |
|
|
$ |
1,650,000 |
|
Others |
|
|
896,371 |
|
|
|
665,131 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,546,371 |
|
|
$ |
2,315,131 |
|
|
|
|
|
|
|
|
|
|
The annual yield rates of negotiable certificates of deposit with maturities of more than three months at
balance sheet dates were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Negotiable certificate of deposit with maturities of more than three months |
|
|
0.81 |
% |
|
|
0.86 |
% |
13. |
AVAILABLE-FOR-SALE FINANCIAL ASSETSNONCURRENT |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Equity securities |
|
|
|
|
|
|
|
|
Domestic listed stocks |
|
$ |
3,163,466 |
|
|
$ |
3,822,521 |
|
|
|
|
|
|
|
|
|
|
- 27 -
14. |
FINANCIAL ASSETS CARRIED AT COST |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Non-listed stocks |
|
|
|
|
|
|
|
|
Domestic |
|
$ |
1,884,716 |
|
|
$ |
1,987,406 |
|
Foreign |
|
|
250,931 |
|
|
|
233,854 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,135,647 |
|
|
$ |
2,221,260 |
|
|
|
|
|
|
|
|
|
|
The above non-listed stocks are classified as available-for-sale financial assets based on financial assets
categories (see Note 34). Since the fair value cannot be reliably measured due to the range of reasonable fair value estimates was so significant, the above non-listed stocks investments owned by the Company were carried at costs less any impairment
losses at the balance sheet dates.
After the Company evaluated the financial positions and future operating results of aforementioned
investments, the Company concluded some of its investments that have ceased operations were fully impaired, and recognized an impairment loss of $77,018 thousand for the year ended December 31, 2015. There was no indication of impairment during
the year ended December 31, 2014.
15. |
INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Investments in subsidiaries |
|
$ |
11,378,071 |
|
|
$ |
11,470,867 |
|
Investments in associates |
|
|
1,466,755 |
|
|
|
1,280,739 |
|
Investments in joint ventures |
|
|
227,379 |
|
|
|
256,666 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
13,072,205 |
|
|
$ |
13,008,272 |
|
|
|
|
|
|
|
|
|
|
|
a. |
Investments in subsidiaries |
Investments in subsidiaries were as follows:
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Listed |
|
|
|
|
|
|
|
|
Senao International Co., Ltd. (SENAO) |
|
$ |
1,667,980 |
|
|
$ |
1,633,098 |
|
Non-listed |
|
|
|
|
|
|
|
|
Light Era Development Co., Ltd. (LED) |
|
|
3,849,489 |
|
|
|
4,351,696 |
|
Donghwa Telecom Co., Ltd. (DHT) |
|
|
1,608,311 |
|
|
|
1,570,679 |
|
Chunghwa Investment Co., Ltd. (CHI) |
|
|
764,488 |
|
|
|
567,677 |
|
Chunghwa Telecom Singapore Pte., Ltd. (CHTS) |
|
|
745,854 |
|
|
|
781,368 |
|
(Continued)
- 28 -
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
CHIEF Telecom Inc. (CHIEF) |
|
$ |
742,049 |
|
|
$ |
665,287 |
|
Chunghwa System Integration Co., Ltd. (CHSI) |
|
|
677,017 |
|
|
|
717,640 |
|
Honghwa International Co., Ltd. (HHI) |
|
|
389,321 |
|
|
|
221,762 |
|
Prime Asia Investments Group Ltd. (B.V.I.) (Prime Asia) |
|
|
250,952 |
|
|
|
280,813 |
|
Chunghwa International Yellow Pages Co., Ltd. (CHYP) |
|
|
187,239 |
|
|
|
183,186 |
|
Chunghwa Telecom Global, Inc. (CHTG) |
|
|
155,145 |
|
|
|
135,478 |
|
Chunghwa Telecom Vietnam Co., Ltd. (CHTV) |
|
|
140,627 |
|
|
|
137,819 |
|
Spring House Entertainment Tech. Inc. (SHE) |
|
|
95,007 |
|
|
|
123,523 |
|
Smartfun Digital Co., Ltd. (SFD) |
|
|
64,255 |
|
|
|
60,769 |
|
Chunghwa Telecom Japan Co., Ltd. (CHTJ) |
|
|
38,648 |
|
|
|
30,679 |
|
Chunghwa Sochamp Technology Inc. (CHST) |
|
|
1,689 |
|
|
|
9,393 |
|
New Prospect Investments Holdings Ltd. (B.V.I.) (New Prospect) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,378,071 |
|
|
$ |
11,470,867 |
|
|
|
|
|
|
|
|
|
|
(Concluded)
At the end of the reporting periods, the percentages of ownership and voting rights in subsidiaries held by the Company were as follows:
|
|
|
|
|
|
|
|
|
|
|
% of Ownership and Voting Right |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Senao International Co., Ltd. (SENAO) |
|
|
29 |
|
|
|
28 |
|
Light Era Development Co., Ltd. (LED) |
|
|
100 |
|
|
|
100 |
|
Donghwa Telecom Co., Ltd. (DHT) |
|
|
100 |
|
|
|
100 |
|
Chunghwa Investment Co., Ltd. (CHI) |
|
|
89 |
|
|
|
89 |
|
Chunghwa Telecom Singapore Pte., Ltd. (CHTS) |
|
|
100 |
|
|
|
100 |
|
CHIEF Telecom Inc. (CHIEF) |
|
|
69 |
|
|
|
69 |
|
Chunghwa System Integration Co., Ltd. (CHSI) |
|
|
100 |
|
|
|
100 |
|
Honghwa International Co., Ltd. (HHI) |
|
|
100 |
|
|
|
100 |
|
Prime Asia Investments Group Ltd. (B.V.I.) (Prime Asia) |
|
|
100 |
|
|
|
100 |
|
Chunghwa International Yellow Pages Co., Ltd. (CHYP) |
|
|
100 |
|
|
|
100 |
|
Chunghwa Telecom Global, Inc. (CHTG) |
|
|
100 |
|
|
|
100 |
|
Chunghwa Telecom Vietnam Co., Ltd. (CHTV) |
|
|
100 |
|
|
|
100 |
|
Spring House Entertainment Tech. Inc. (SHE) |
|
|
56 |
|
|
|
56 |
|
Smartfun Digital Co., Ltd. (SFD) |
|
|
65 |
|
|
|
65 |
|
Chunghwa Telecom Japan Co., Ltd. (CHTJ) |
|
|
100 |
|
|
|
100 |
|
Chunghwa Sochamp Technology Inc. (CHST) |
|
|
51 |
|
|
|
51 |
|
New Prospect Investments Holdings Ltd. (B.V.I.) (New Prospect) |
|
|
100 |
|
|
|
100 |
|
The Company owns 29% equity shares of SENAO. However, the Company has four out of seven seats of the Board of
Directors of SENAO through the support of large beneficial shareholders. Therefore, the Company has control over SENAO and the accounts of SENAO are included in the consolidated financial statements. The Companys equity ownership of SENAO
increased due to SENAOs purchase of its treasury stock in June 2015 and July 2015.
- 29 -
The Company increased its investment in Prime Asia by $27,185 thousand and $10,000 thousand in
January 2014 and May 2014, respectively. Prime Asia is operating as an investment company.
The Company increased its investment in CHTV by
$45,248 thousand in April 2014. CHTV engages mainly in providing information and communications technology, international circuit and intelligent energy network service.
The Company established New Prospect in March 2006. The holding company plans to operate as an investment company and the Company has invested
US$1 in the holding company as of December 31, 2015.
For the details of the subsidiaries indirectly held by the Company, please refer
to Note 38.
The Companys share of profit (loss) and other comprehensive income (loss) of the subsidiaries was recognized based on
the audited financial statements.
|
b. |
Investments in associates |
Investments in associates were as follows:
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Non-listed |
|
|
|
|
|
|
|
|
Taiwan International Standard Electronics Co., Ltd. (TISE) |
|
$ |
374,487 |
|
|
$ |
237,097 |
|
Viettel-CHT Co., Ltd. (Viettel-CHT) |
|
|
315,762 |
|
|
|
277,700 |
|
International Integrated System, Inc. (IISI) |
|
|
301,861 |
|
|
|
293,809 |
|
Skysoft Co., Ltd. (SKYSOFT) |
|
|
137,792 |
|
|
|
138,868 |
|
KingwayTek Technology Co., Ltd. (KWT) |
|
|
119,419 |
|
|
|
89,527 |
|
So-net Entertainment Taiwan Limited (So-net) |
|
|
105,844 |
|
|
|
99,525 |
|
Taiwan International Ports Logistics Corporation (TIPL) |
|
|
68,927 |
|
|
|
78,981 |
|
Dian Zuan Intergrating Marketing Co., Ltd. (DZIM) |
|
|
27,327 |
|
|
|
44,942 |
|
Alliance Digital Tech Co., Ltd. (ADT) |
|
|
15,336 |
|
|
|
20,290 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,466,755 |
|
|
$ |
1,280,739 |
|
|
|
|
|
|
|
|
|
|
At the end of the reporting periods, the percentages of ownership and voting rights in associates held by the
Company were as follows:
|
|
|
|
|
|
|
|
|
|
|
% of Ownership and Voting Right |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Taiwan International Standard Electronics Co., Ltd. (TISE) |
|
|
40 |
|
|
|
40 |
|
Viettel-CHT Co., Ltd. (Viettel-CHT) |
|
|
30 |
|
|
|
30 |
|
International Integrated System, Inc. (IISI) |
|
|
33 |
|
|
|
33 |
|
Skysoft Co., Ltd. (SKYSOFT) |
|
|
30 |
|
|
|
30 |
|
KingwayTek Technology Co., Ltd. (KWT) |
|
|
26 |
|
|
|
27 |
|
So-net Entertainment Taiwan Limited (So-net) |
|
|
30 |
|
|
|
30 |
|
Taiwan International Ports Logistics Corporation (TIPL) |
|
|
27 |
|
|
|
27 |
|
Dian Zuan Intergrating Marketing Co., Ltd. (DZIM) |
|
|
18 |
|
|
|
18 |
|
Alliance Digital Tech Co., Ltd. (ADT) |
|
|
13 |
|
|
|
13 |
|
- 30 -
None of the above associates is considered individually material to the Company. Aggregate
information of associates that are not individually material was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
The Companys share of the profit |
|
$ |
586,769 |
|
|
$ |
448,316 |
|
The Companys share of other comprehensive income |
|
|
(21,317 |
) |
|
|
2,563 |
|
|
|
|
|
|
|
|
|
|
The Companys share of total comprehensive income |
|
$ |
565,452 |
|
|
$ |
450,879 |
|
|
|
|
|
|
|
|
|
|
The Company did not participate in the capital increase of KWT in August 2014 and November 2014 and the
ownership interest decreased to 27% after the capital increase of KWT. The Company sold its partial ownership interest in KWT in January 2015. The gain on disposal of KWT was $7,409 thousand and the ownership interest decreased to 26% after the
disposal.
The Company and Taiwan International Ports Corporation, Ltd. established TIPL in October, 2014. The Company invested $80,000
thousand cash and held 27% ownership of TIPL. TIPL engages mainly in logistics service of increasing cargo movement efficiency.
The
Company, President Chain Store Corporation and EasyCard Corporation established DZIM in May 2011. DZIM increased its capital in April 2014 and June 2014. The Company participated in the capital increase of DZIM by investing $49,485 thousand in April
2014 and the ownership interest increased to 18%. DZIM engages mainly in information technology service and general advertisement service.
The Company, Taiwan Mobile Corporation, Asia Pacific Telecom, Vibo Telecom, EasyCard Corporation and Far EasTone Telecommunications established
an associate, ADT, in November 2013. The Company invested $30,000 thousand cash and held 19% ownership of ADT. Based on the share of capital commitments, the Company has one out of five seats in the Board of Directors; therefore it has significant
influence over ADT. The Company did not participate in the capital increase of ADT in April 2014 and October 2014 and the ownership interest decreased to 13% after the capital increase of ADT. The Company still has one out of five seats in the Board
of Directors; therefore it remains significant influence over ADT. ADT engages mainly in the development of mobile payments and information processing service.
The Companys share of profit (loss) and other comprehensive income (loss) of the associates was recognized based on the audited financial
statements.
|
c. |
Investments in joint ventures |
Investments in joint ventures were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
|
% of Ownership and Voting Rights |
|
|
|
December 31 |
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Non-listed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huada Digital Corporation (HDD) |
|
$ |
206,737 |
|
|
$ |
218,825 |
|
|
|
50 |
|
|
|
50 |
|
Chunghwa Benefit One Co., Ltd (CBO) |
|
|
20,642 |
|
|
|
37,841 |
|
|
|
50 |
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
227,379 |
|
|
$ |
256,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 31 -
The Company invested in CBO in February 2014 at $50,000 thousand cash to acquire 50% of its
shares and the rest of 50% ownership interest was held by Benefit One Asia Pte. Ltd. (BOA), and each obtained half of director seats. Thus, neither the Company nor BOA obtained control over CBO. CBO engages mainly in e-commerce business
for employees of corporate members and personal customers.
None of the above joint ventures is considered individually material to the
Company. Summarized financial information of joint ventures that was not material to the Company was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
The Companys share of loss |
|
$ |
(29,499 |
) |
|
$ |
(20,838 |
) |
The Companys share of other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys share of total comprehensive loss |
|
$ |
(29,499 |
) |
|
$ |
(20,838 |
) |
|
|
|
|
|
|
|
|
|
The Companys share of losses of the joint ventures was recognized based on the audited financial
statements.
16. |
PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
|
|
Land Improvements |
|
|
Buildings |
|
|
Computer Equipment |
|
|
Telecommuni-
cations Equipment |
|
|
Transportation Equipment |
|
|
Miscellaneous Equipment |
|
|
Construction in
Progress and
Advances Related to
Acquisition of Equipment |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
100,386,480 |
|
|
$ |
1,546,906 |
|
|
$ |
65,483,192 |
|
|
$ |
15,578,765 |
|
|
$ |
680,109,597 |
|
|
$ |
3,740,107 |
|
|
$ |
7,270,725 |
|
|
$ |
22,841,104 |
|
|
$ |
896,956,876 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,115 |
|
|
|
1,064 |
|
|
|
985 |
|
|
|
23,423 |
|
|
|
31,177,523 |
|
|
|
31,208,110 |
|
Disposal |
|
|
(26,103 |
) |
|
|
(12,397 |
) |
|
|
(11,211 |
) |
|
|
(1,793,267 |
) |
|
|
(19,187,964 |
) |
|
|
(75,601 |
) |
|
|
(394,322 |
) |
|
|
|
|
|
|
(21,500,865 |
) |
Other |
|
|
228,752 |
|
|
|
23,035 |
|
|
|
(111,784 |
) |
|
|
1,116,557 |
|
|
|
30,955,611 |
|
|
|
154,341 |
|
|
|
529,717 |
|
|
|
(33,123,546 |
) |
|
|
(227,317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
100,589,129 |
|
|
$ |
1,557,544 |
|
|
$ |
65,360,197 |
|
|
$ |
14,907,170 |
|
|
$ |
691,878,308 |
|
|
$ |
3,819,832 |
|
|
$ |
7,429,543 |
|
|
$ |
20,895,081 |
|
|
$ |
906,436,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
|
|
|
$ |
(1,104,399 |
) |
|
$ |
(21,571,531 |
) |
|
$ |
(11,275,315 |
) |
|
$ |
(559,239,106 |
) |
|
$ |
(1,669,138 |
) |
|
$ |
(5,538,577 |
) |
|
$ |
|
|
|
$ |
(600,398,066 |
) |
Depreciation expenses |
|
|
|
|
|
|
(53,421 |
) |
|
|
(1,190,680 |
) |
|
|
(1,426,803 |
) |
|
|
(27,450,039 |
) |
|
|
(597,752 |
) |
|
|
(559,420 |
) |
|
|
|
|
|
|
(31,278,115 |
) |
Disposal |
|
|
|
|
|
|
12,397 |
|
|
|
9,916 |
|
|
|
1,790,918 |
|
|
|
19,175,721 |
|
|
|
75,596 |
|
|
|
382,820 |
|
|
|
|
|
|
|
21,447,368 |
|
Other |
|
|
|
|
|
|
(11 |
) |
|
|
32,817 |
|
|
|
(32,932 |
) |
|
|
18,185 |
|
|
|
(12,511 |
) |
|
|
(7,136 |
) |
|
|
|
|
|
|
(1,588 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
|
|
|
$ |
(1,145,434 |
) |
|
$ |
(22,719,478 |
) |
|
$ |
(10,944,132 |
) |
|
$ |
(567,495,239 |
) |
|
$ |
(2,203,805 |
) |
|
$ |
(5,722,313 |
) |
|
$ |
|
|
|
$ |
(610,230,401 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014, net |
|
$ |
100,386,480 |
|
|
$ |
442,507 |
|
|
$ |
43,911,661 |
|
|
$ |
4,303,450 |
|
|
$ |
120,870,491 |
|
|
$ |
2,070,969 |
|
|
$ |
1,732,148 |
|
|
$ |
22,841,104 |
|
|
$ |
296,558,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014, net |
|
$ |
100,589,129 |
|
|
$ |
412,110 |
|
|
$ |
42,640,719 |
|
|
$ |
3,963,038 |
|
|
$ |
124,383,069 |
|
|
$ |
1,616,027 |
|
|
$ |
1,707,230 |
|
|
$ |
20,895,081 |
|
|
$ |
296,206,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
100,589,129 |
|
|
$ |
1,557,544 |
|
|
$ |
65,360,197 |
|
|
$ |
14,907,170 |
|
|
$ |
691,878,308 |
|
|
$ |
3,819,832 |
|
|
$ |
7,429,543 |
|
|
$ |
20,895,081 |
|
|
$ |
906,436,804 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,819 |
|
|
|
777 |
|
|
|
|
|
|
|
11,334 |
|
|
|
23,952,164 |
|
|
|
23,977,094 |
|
Disposal |
|
|
|
|
|
|
(94 |
) |
|
|
(10,607 |
) |
|
|
(1,044,796 |
) |
|
|
(12,990,341 |
) |
|
|
(69,237 |
) |
|
|
(312,156 |
) |
|
|
|
|
|
|
(14,427,231 |
) |
Other |
|
|
(45,688 |
) |
|
|
17,820 |
|
|
|
124,607 |
|
|
|
679,945 |
|
|
|
23,132,082 |
|
|
|
59,878 |
|
|
|
348,360 |
|
|
|
(24,472,929 |
) |
|
|
(155,925 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
100,543,441 |
|
|
$ |
1,575,270 |
|
|
$ |
65,474,197 |
|
|
$ |
14,555,138 |
|
|
$ |
702,020,826 |
|
|
$ |
3,810,473 |
|
|
$ |
7,477,081 |
|
|
$ |
20,374,316 |
|
|
$ |
915,830,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
|
|
|
$ |
(1,145,434 |
) |
|
$ |
(22,719,478 |
) |
|
$ |
(10,944,132 |
) |
|
$ |
(567,495,239 |
) |
|
$ |
(2,203,805 |
) |
|
$ |
(5,722,313 |
) |
|
$ |
|
|
|
$ |
(610,230,401 |
) |
Depreciation expenses |
|
|
|
|
|
|
(53,432 |
) |
|
|
(1,199,629 |
) |
|
|
(1,424,239 |
) |
|
|
(26,023,104 |
) |
|
|
(598,083 |
) |
|
|
(483,636 |
) |
|
|
|
|
|
|
(29,782,123 |
) |
Disposal |
|
|
|
|
|
|
94 |
|
|
|
10,171 |
|
|
|
1,039,586 |
|
|
|
12,977,588 |
|
|
|
69,237 |
|
|
|
297,703 |
|
|
|
|
|
|
|
14,394,379 |
|
Impairment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(138,093 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(138,093 |
) |
Other |
|
|
|
|
|
|
(4,637 |
) |
|
|
40,955 |
|
|
|
(471 |
) |
|
|
(1,174 |
) |
|
|
(13,353 |
) |
|
|
(23,262 |
) |
|
|
|
|
|
|
(1,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
|
|
|
$ |
(1,203,409 |
) |
|
$ |
(23,867,981 |
) |
|
$ |
(11,329,256 |
) |
|
$ |
(580,680,022 |
) |
|
$ |
(2,746,004 |
) |
|
$ |
(5,931,508 |
) |
|
$ |
|
|
|
$ |
(625,758,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015, net |
|
$ |
100,589,129 |
|
|
$ |
412,110 |
|
|
$ |
42,640,719 |
|
|
$ |
3,963,038 |
|
|
$ |
124,383,069 |
|
|
$ |
1,616,027 |
|
|
$ |
1,707,230 |
|
|
$ |
20,895,081 |
|
|
$ |
296,206,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015, net |
|
$ |
100,543,441 |
|
|
$ |
371,861 |
|
|
$ |
41,606,216 |
|
|
$ |
3,225,882 |
|
|
$ |
121,340,804 |
|
|
$ |
1,064,469 |
|
|
$ |
1,545,573 |
|
|
$ |
20,374,316 |
|
|
$ |
290,072,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to technology upgrade, some telecommunications equipment became obsolete. The Company evaluated and
concluded the recoverable amount determined on the basis of value in use of aforementioned telecommunications equipment was nil and recognized an impairment loss of $138,093 thousand for the year ended December 31, 2015. The impairment loss was
included in other income and expenses in the statements of comprehensive income. There was no indication of impairment during the year ended December 31, 2014.
- 32 -
Depreciation expense is computed using the straight-line method over the following estimated
service lives:
|
|
|
|
|
Land improvement |
|
|
8-30 years |
|
Buildings |
|
|
|
|
Main building |
|
|
35-60 years |
|
Other building facilities |
|
|
4-10 years |
|
Computer equipment |
|
|
5-6 years |
|
Telecommunications equipment |
|
|
|
|
Telecommunication circuits |
|
|
9-15 years |
|
Telecommunication machinery and antennas equipment |
|
|
5-10 years |
|
Transportation equipment |
|
|
3-10 years |
|
Miscellaneous equipment |
|
|
|
|
Leasehold improvements |
|
|
2-6 years |
|
Mechanical and air conditioner equipment |
|
|
8-16 years |
|
Others |
|
|
3-10 years |
|
17. |
INVESTMENT PROPERTIES |
|
|
|
|
|
|
|
Investment Properties |
|
Cost |
|
|
|
|
Balance on January 1, 2014 |
|
$ |
8,561,743 |
|
Reclassification |
|
|
246,533 |
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
8,808,276 |
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
Balance on January 1, 2014 |
|
$ |
(1,230,371 |
) |
Depreciation expense |
|
|
(14,107 |
) |
Reclassification |
|
|
(17,719 |
) |
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
(1,262,197 |
) |
|
|
|
|
|
Balance on January 1, 2014, net |
|
$ |
7,331,372 |
|
|
|
|
|
|
Balance on December 31, 2014, net |
|
$ |
7,546,079 |
|
|
|
|
|
|
Cost |
|
|
|
|
Balance on January 1, 2015 |
|
$ |
8,808,276 |
|
Disposal |
|
|
(126 |
) |
Reclassification |
|
|
175,066 |
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
8,983,216 |
|
|
|
|
|
|
(Continued)
- 33 -
|
|
|
|
|
|
|
Investment Properties |
|
Accumulated depreciation and impairment |
|
|
|
|
Balance on January 1, 2015 |
|
$ |
(1,262,197 |
) |
Depreciation expense |
|
|
(18,363 |
) |
Disposal |
|
|
126 |
|
Reclassification |
|
|
(17,199 |
) |
Reversal of impairment loss |
|
|
142,047 |
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
(1,155,586 |
) |
|
|
|
|
|
Balance on January 1, 2015, net |
|
$ |
7,546,079 |
|
|
|
|
|
|
Balance on December 31, 2015, net |
|
$ |
7,827,630 |
|
|
|
|
|
|
(Concluded)
After the evaluation of land and buildings, the Company concluded the recoverable amount which represented the fair value less costs to sell
of some land and buildings was higher than the carrying amount. Therefore, the Company recognized a reversal of impairment loss of $142,047 thousand for the year ended December 31, 2015 and the amount was recognized only to the extent of the
impairment losses that had been recognized in prior years. The reversal of impairment loss was included in other income and expenses in the statements of comprehensive income.
Depreciation expense is computed using the straight-line method over the following estimated service lives:
|
|
|
|
|
Land improvements |
|
|
8-30 years |
|
Buildings |
|
|
|
|
Main buildings |
|
|
35-60 years |
|
Other building facilities |
|
|
4-10 years |
|
The fair value of the Companys investment properties as of December 31, 2015 and 2014 was determined
by Level 3 fair value measurements inputs based on the appraisal reports conducted by independent appraisers. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as
follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Fair value |
|
$ |
17,456,849 |
|
|
$ |
16,939,399 |
|
|
|
|
|
|
|
|
|
|
Overall capital interest rate |
|
|
1.49%-2.28% |
|
|
|
1.54%-2.36% |
|
Profit margin ratio |
|
|
10%-20% |
|
|
|
10%-20% |
|
Discount rate |
|
|
1.21% |
|
|
|
1.36% |
|
Capitalization rate |
|
|
0.44%-1.69% |
|
|
|
0.44%-1.65% |
|
All of the Companys investment properties are held under freehold interest.
- 34 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3G and 4G Concession |
|
|
Computer Software |
|
|
Others |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
49,254,000 |
|
|
$ |
2,492,296 |
|
|
$ |
5,758 |
|
|
$ |
51,752,054 |
|
Additionsacquired separately |
|
|
|
|
|
|
566,057 |
|
|
|
992 |
|
|
|
567,049 |
|
Disposal |
|
|
|
|
|
|
(55,895 |
) |
|
|
(29 |
) |
|
|
(55,924 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
49,254,000 |
|
|
$ |
3,002,458 |
|
|
$ |
6,721 |
|
|
$ |
52,263,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
(6,435,956 |
) |
|
$ |
(1,173,456 |
) |
|
$ |
(3,144 |
) |
|
$ |
(7,612,556 |
) |
Amortization expenses |
|
|
(1,667,877 |
) |
|
|
(520,682 |
) |
|
|
(741 |
) |
|
|
(2,189,300 |
) |
Disposal |
|
|
|
|
|
|
55,895 |
|
|
|
29 |
|
|
|
55,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
(8,103,833 |
) |
|
$ |
(1,638,243 |
) |
|
$ |
(3,856 |
) |
|
$ |
(9,745,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014, net |
|
$ |
42,818,044 |
|
|
$ |
1,318,840 |
|
|
$ |
2,614 |
|
|
$ |
44,139,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014, net |
|
$ |
41,150,167 |
|
|
$ |
1,364,215 |
|
|
$ |
2,865 |
|
|
$ |
42,517,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
49,254,000 |
|
|
$ |
3,002,458 |
|
|
$ |
6,721 |
|
|
$ |
52,263,179 |
|
Additionsacquired separately |
|
|
9,955,000 |
|
|
|
354,285 |
|
|
|
1,232 |
|
|
|
10,310,517 |
|
Disposal |
|
|
|
|
|
|
(371,700 |
) |
|
|
(1,983 |
) |
|
|
(373,683 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
59,209,000 |
|
|
$ |
2,985,043 |
|
|
$ |
5,970 |
|
|
$ |
62,200,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
(8,103,833 |
) |
|
$ |
(1,638,243 |
) |
|
$ |
(3,856 |
) |
|
$ |
(9,745,932 |
) |
Amortization expenses |
|
|
(2,503,967 |
) |
|
|
(524,599 |
) |
|
|
(769 |
) |
|
|
(3,029,335 |
) |
Disposal |
|
|
|
|
|
|
371,700 |
|
|
|
1,983 |
|
|
|
373,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
(10,607,800 |
) |
|
$ |
(1,791,142 |
) |
|
$ |
(2,642 |
) |
|
$ |
(12,401,584 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015, net |
|
$ |
41,150,167 |
|
|
$ |
1,364,215 |
|
|
$ |
2,865 |
|
|
$ |
42,517,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015, net |
|
$ |
48,601,200 |
|
|
$ |
1,193,901 |
|
|
$ |
3,328 |
|
|
$ |
49,798,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For long-term business development, the Company participated in mobile broadband license (4G license) in 2.5
and 2.6 GHz bands bidding process announced by NCC and obtained certain spectrums. The Company paid the 4G concession fee amounting to $9,955,000 thousand in December 2015.
The concessions are granted and issued by the NCC. The concession fees are amortized using the straight-line method from the date operations
commence through the date the license expires. The carrying amount of 3G concession fee will be fully amortized by December 2018, and 4G concession fees will be fully amortized by December 2030 and December 2033.
- 35 -
The computer software is amortized using the straight-line method over the estimated useful lives
of 1 to 10 years. Other intangible assets are amortized using the straight-line method over the estimated useful lives of 3 to 10 years.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Spare parts |
|
$ |
1,875,285 |
|
|
$ |
2,977,585 |
|
Refundable deposits |
|
|
2,042,200 |
|
|
|
2,569,689 |
|
Other financial assets |
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Others |
|
|
2,477,838 |
|
|
|
1,933,241 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,395,323 |
|
|
$ |
8,480,515 |
|
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
|
Spare parts |
|
$ |
1,875,285 |
|
|
$ |
2,977,585 |
|
Others |
|
|
246,113 |
|
|
|
97,491 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,121,398 |
|
|
$ |
3,075,076 |
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
|
Refundable deposits |
|
$ |
2,042,200 |
|
|
$ |
2,569,689 |
|
Other financial assets |
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Others |
|
|
2,231,725 |
|
|
|
1,835,750 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,273,925 |
|
|
$ |
5,405,439 |
|
|
|
|
|
|
|
|
|
|
Other financial assetsnoncurrent was Piping Fund. As part of the governments effort to upgrade the
existing telecommunications infrastructure, the Company and other public utility companies were required by the ROC government to contribute to a Piping Fund administered by the Taipei City Government. This fund was used to finance various
telecommunications infrastructure projects. Net assets of this fund will be returned proportionately after the project is completed.
20. |
HEDGING DERIVATIVE INSTRUMENTS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Hedge on derivative financial assets |
|
|
|
|
|
|
|
|
Cash flow hedgeforward exchange contracts |
|
$ |
498 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Hedge on derivative financial liabilities |
|
|
|
|
|
|
|
|
Cash flow hedgeforward exchange contracts |
|
$ |
|
|
|
$ |
283 |
|
|
|
|
|
|
|
|
|
|
The Companys hedge strategy is to enter forward exchange contractsbuy to avoid its foreign
currency exposure to certain foreign currency denominated payments in the following six months. In addition, the Companys management considers the market condition to determine the hedge ratio, and enters into forward exchange contracts with
the banks to avoid the foreign currency risk.
- 36 -
The Company signed equipment purchase contracts with suppliers, and entered into forward exchange
contracts to avoid foreign currency risk exposure to Euro-denominated purchase commitments. Those forward exchange contracts were designated as cash flow hedges. For the years ended December 31, 2015 and 2014, gain (loss) arising from changes
in fair value of the hedged items recognized in other comprehensive income was $781 thousand and $(283) thousand, respectively. Upon the completion of the purchase transaction, the amount deferred and recognized in equity initially will be
reclassified into equipment as its carrying value.
As of December 31, 2015, the Company expected part of the equipment purchase
transactions will not occur and reclassified the related loss of $741 thousand arising from the forward exchange contracts of the aforementioned transactions from equity to profit or loss.
The outstanding forward exchange contracts at the balance sheet dates were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount |
|
|
|
Currency |
|
|
Maturity Period |
|
|
(Thousands) |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contractsbuy |
|
EUR/NT$ |
|
|
|
|
2016.03-06 |
|
|
EUR8,532/NT$ |
306,435 |
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contractsbuy |
|
EUR/NT$ |
|
|
|
|
2015.03 |
|
|
EUR2,341/NT$ |
90,509 |
|
Gains and losses arising from the hedging derivative instruments that have been reclassified from equity to
initial cost of the property, plant and equipment were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Construction in progress and advances related to acquisition of equipment |
|
$ |
(18,805 |
) |
|
$ |
18,435 |
|
|
|
|
|
|
|
|
|
|
21. |
TRADE NOTES AND ACCOUNTS PAYABLE |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Trade notes and accounts payable |
|
$ |
12,414,507 |
|
|
$ |
14,753,882 |
|
|
|
|
|
|
|
|
|
|
Trade notes and accounts payable were attributable to operating activities and the trading conditions were
agreed separately.
- 37 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Accrued salary and compensation |
|
$ |
9,113,313 |
|
|
$ |
8,335,468 |
|
Accrued remuneration to employees, bonus to employees and remuneration to directors |
|
|
1,972,370 |
|
|
|
1,549,291 |
|
Payables to equipment suppliers |
|
|
1,502,816 |
|
|
|
1,160,298 |
|
Payables to contractors |
|
|
1,451,584 |
|
|
|
2,628,892 |
|
Accrued franchise fees |
|
|
1,401,490 |
|
|
|
1,585,174 |
|
Amounts collected for others |
|
|
1,329,646 |
|
|
|
1,304,538 |
|
Accrued maintenance costs |
|
|
996,187 |
|
|
|
867,694 |
|
Others |
|
|
5,164,618 |
|
|
|
4,916,074 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
22,932,024 |
|
|
$ |
22,347,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Warranties |
|
$ |
43,940 |
|
|
$ |
39,296 |
|
Employee benefits |
|
|
30,108 |
|
|
|
55,569 |
|
Others |
|
|
4,682 |
|
|
|
4,832 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
78,730 |
|
|
$ |
99,697 |
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
20,572 |
|
|
$ |
7,037 |
|
Noncurrent |
|
|
58,158 |
|
|
|
92,660 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
78,730 |
|
|
$ |
99,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warranties |
|
|
Employee Benefits |
|
|
Others |
|
|
Total |
|
Balance on January 1, 2014 |
|
$ |
72,930 |
|
|
$ |
47,265 |
|
|
$ |
4,046 |
|
|
$ |
124,241 |
|
Additional provisions recognized |
|
|
8,364 |
|
|
|
8,304 |
|
|
|
790 |
|
|
|
17,458 |
|
Used during the period |
|
|
(41,694 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
(41,698 |
) |
Reversed during the period |
|
|
(304 |
) |
|
|
|
|
|
|
|
|
|
|
(304 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
39,296 |
|
|
$ |
55,569 |
|
|
$ |
4,832 |
|
|
$ |
99,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
39,296 |
|
|
$ |
55,569 |
|
|
$ |
4,832 |
|
|
$ |
99,697 |
|
Additional provisions recognized |
|
|
17,752 |
|
|
|
11,423 |
|
|
|
150 |
|
|
|
29,325 |
|
Used during the period |
|
|
(13,108 |
) |
|
|
(36,884 |
) |
|
|
(300 |
) |
|
|
(50,292 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
43,940 |
|
|
$ |
30,108 |
|
|
$ |
4,682 |
|
|
$ |
78,730 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
The provision for warranties claims represents the present value of the managements best estimate of the future outflow of economic benefits that will be required under the Companys obligation for warranties
in sales agreements. The estimate has been made based on the historical warranty experience. |
|
b. |
The provision for employee benefits represents vested long-term service compensation accrued. |
- 38 -
Advance receipts are mainly from advance telecommunication charges. In
accordance with NCCs regulation named Mandatory and Prohibitory Provisions To Be Included In Standard Contracts for Telecommunication Goods (Services) Coupons, the Company entered into a contract with Bank of Taiwan to provide a
performance guarantee for advance receipts from selling prepaid cards, as of December 31, 2015 amounting to $1,172,382 thousand.
25. |
RETIREMENT BENEFIT PLANS |
|
a. |
Defined contribution plans |
The pension plan under the Labor Pension Act of ROC (the
LPA) is considered as a defined contribution plan. Based on the LPA, the Company makes monthly contributions to employees individual pension accounts at 6% of monthly salaries and wages.
The Company completed its privatization plans on August 12, 2005.
The Company is required to pay all accrued pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization in accordance with the
Statute Governing Privatization of Stated-owned Enterprises. After paying all pension obligations for privatization, the plan assets of the Company should be transferred to the Fund for Privatization of Government-owned Enterprises (the
Privatization Fund) under the Executive Yuan. On August 7, 2006, the Company transferred the remaining balance of fund to the Privatization Fund. However, according to the instructions of MOTC, the Company was requested to
administer the distributions to employees for pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization and recognized in other
current monetary assets.
The Company with the pension mechanism under the Labor Standards Law is considered as defined benefit plans.
These pension plans provide benefits based on an employees length of service and average six-month salary prior to retirement. The Company contributes an amount no more than 15% of salaries paid each month to their respective pension funds
(the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the names of the Committees in the Bank of Taiwan. The plan assets are held in a commingled fund which is operated and managed by
the governments designated authorities; as such, the Company does not have any right to intervene in the investments of the funds. According to the Article 56 of the Labor Standards Law revised in February 2015, entities are required to
contribute the difference in one appropriation to the Funds before the end of next March when the balance of the Funds is insufficient to pay employees who will meet the retirement eligibility criteria within next year.
The amounts included in the balance sheets arising from the Companys obligation in respect of its defined benefit plans were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Present value of funded defined benefit obligation |
|
$ |
30,618,983 |
|
|
$ |
27,704,891 |
|
Fair value of plan assets |
|
|
(23,592,538 |
) |
|
|
(21,304,199 |
) |
|
|
|
|
|
|
|
|
|
Funded status |
|
$ |
7,026,445 |
|
|
$ |
6,400,692 |
|
|
|
|
|
|
|
|
|
|
Net defined benefit liabilities |
|
$ |
7,026,445 |
|
|
$ |
6,400,692 |
|
|
|
|
|
|
|
|
|
|
- 39 -
Movements in the defined benefit obligation as adjusted and the fair value of plan assets were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Funded Defined Benefit Obligation |
|
|
Fair Value of Plan Assets |
|
|
Net Defined Benefit Liabilities (Assets) |
|
Balance on January 1, 2014 |
|
$ |
25,210,943 |
|
|
$ |
19,799,484 |
|
|
$ |
5,411,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost |
|
|
2,917,733 |
|
|
|
|
|
|
|
2,917,733 |
|
Loss on settlements |
|
|
75,668 |
|
|
|
|
|
|
|
75,668 |
|
Interest expense/interest income |
|
|
504,572 |
|
|
|
412,350 |
|
|
|
92,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in profit or loss |
|
|
3,497,973 |
|
|
|
412,350 |
|
|
|
3,085,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement on the net defined benefit liability |
|
|
|
|
|
|
|
|
|
|
|
|
Return on plan assets (excluding amounts included in net interest) |
|
|
|
|
|
|
51,981 |
|
|
|
(51,981 |
) |
Actuarial losses recognized from experience adjustments |
|
|
543,028 |
|
|
|
|
|
|
|
543,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in other comprehensive income |
|
|
543,028 |
|
|
|
51,981 |
|
|
|
491,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions from employer |
|
|
|
|
|
|
2,478,467 |
|
|
|
(2,478,467 |
) |
Benefits paid |
|
|
(452,871 |
) |
|
|
(452,871 |
) |
|
|
|
|
Settlements |
|
|
(993,912 |
) |
|
|
(985,212 |
) |
|
|
(8,700 |
) |
Benefits paid directly by the Company |
|
|
(100,270 |
) |
|
|
|
|
|
|
(100,270 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
27,704,891 |
|
|
|
21,304,199 |
|
|
|
6,400,692 |
|
Current service cost |
|
|
2,882,171 |
|
|
|
|
|
|
|
2,882,171 |
|
Interest expense/interest income |
|
|
540,878 |
|
|
|
439,713 |
|
|
|
101,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in profit or loss |
|
|
3,423,049 |
|
|
|
439,713 |
|
|
|
2,983,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement on the net defined benefit liability |
|
|
|
|
|
|
|
|
|
|
|
|
Return on plan assets (excluding amounts included in net interest) |
|
|
|
|
|
|
134,527 |
|
|
|
(134,527 |
) |
Actuarial losses recognized from experience adjustments |
|
|
360,555 |
|
|
|
|
|
|
|
360,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in other comprehensive income |
|
|
360,555 |
|
|
|
134,527 |
|
|
|
226,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions from employer |
|
|
|
|
|
|
2,427,349 |
|
|
|
(2,427,349 |
) |
Benefits paid |
|
|
(713,250 |
) |
|
|
(713,250 |
) |
|
|
|
|
Benefits paid directly by the Company |
|
|
(156,262 |
) |
|
|
|
|
|
|
(156,262 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
30,618,983 |
|
|
$ |
23,592,538 |
|
|
$ |
7,026,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 40 -
Relevant pension costs recognized in profit and loss for defined benefit plans were as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Operating costs |
|
$ |
1,793,388 |
|
|
$ |
1,848,582 |
|
Marketing expenses |
|
|
854,035 |
|
|
|
886,022 |
|
General and administrative expenses |
|
|
162,004 |
|
|
|
169,134 |
|
Research and development expenses |
|
|
101,729 |
|
|
|
106,100 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,911,156 |
|
|
$ |
3,009,838 |
|
|
|
|
|
|
|
|
|
|
The Company is exposed to following risks for the defined benefits plans under the Labor Standards Law:
Under the Labor Standards Law, the rate of return on assets shall not be less
than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. The plan assets are held in a
commingled fund mainly invested in foreign and domestic equity and debt securities and bank deposits which is operated and managed by the governments designated authorities; as such, the Company does not have any right to intervene in the
investments of the funds.
The decline in government bond interest rate will increase the present
value of the obligation on the defined benefit plan, while the return on plan assets will increase. The net effect on the present value of the obligation on defined benefit plan is partially offset by the return on plan assets.
The calculation of the present value of defined benefit obligation is referred to
the plan participants future salary. Hence, the increase in plan participants salary will increase the present value of the defined benefit obligation.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out by the independent
actuary. The principal assumptions used for the purpose of the actuarial valuations were as follows:
|
|
|
|
|
|
|
|
|
|
|
Measurement Date |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Discount rates |
|
|
2.00 |
% |
|
|
2.00 |
% |
Expected rates of salary increase |
|
|
1.00 |
% |
|
|
1.00 |
% |
- 41 -
If reasonably possible changes of the respective significant actuarial assumptions occur at the
end of reporting periods, while holding all other assumptions constant, the present value of the defined benefit obligation would increase (decrease) as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Discount rates |
|
|
|
|
|
|
|
|
0.5% increase |
|
$ |
(960,697 |
) |
|
$ |
(1,045,109 |
) |
|
|
|
|
|
|
|
|
|
0.5% decrease |
|
$ |
1,243,506 |
|
|
$ |
1,114,504 |
|
|
|
|
|
|
|
|
|
|
Expected rates of salary increase |
|
|
|
|
|
|
|
|
0.5% increase |
|
$ |
1,314,659 |
|
|
$ |
1,117,604 |
|
|
|
|
|
|
|
|
|
|
0.5% decrease |
|
$ |
(1,036,472 |
) |
|
$ |
(1,112,814 |
) |
|
|
|
|
|
|
|
|
|
The sensitivity analysis presented above may not be representative of the actual change in the present value
of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
The expected contributions to the plan for the next year |
|
$ |
11,294,547 |
|
|
$ |
2,503,252 |
|
|
|
|
|
|
|
|
|
|
The average duration of the defined benefit obligation |
|
|
7 years |
|
|
|
8 years |
|
The Companys maturity analysis of the undiscounted benefit payments was as follows:
|
|
|
|
|
Year |
|
Amount |
|
2016 |
|
$ |
1,792,172 |
|
2017 |
|
|
3,223,550 |
|
2018 |
|
|
5,077,153 |
|
2019 |
|
|
6,763,732 |
|
2020 and thereafter |
|
|
41,221,540 |
|
|
|
|
|
|
|
|
$ |
58,078,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Number of authorized shares (thousand) |
|
|
12,000,000 |
|
|
|
12,000,000 |
|
|
|
|
|
|
|
|
|
|
Authorized shares |
|
$ |
120,000,000 |
|
|
$ |
120,000,000 |
|
|
|
|
|
|
|
|
|
|
Number of shares issued and collected proceeds (thousand) |
|
|
7,757,447 |
|
|
|
7,757,447 |
|
|
|
|
|
|
|
|
|
|
Issued shares |
|
$ |
77,574,465 |
|
|
$ |
77,574,465 |
|
|
|
|
|
|
|
|
|
|
The issued common stocks of a par value at $10 per share entitled the right to vote and receive dividends.
- 42 -
|
2) |
Global depositary receipts |
For the purpose of privatizing the Company, the MOTC sold
1,109,750 thousand common stocks of the Company in an international offering of securities in the form of American Depositary Shares (ADS) amounting to 110,975 thousand units (one ADS represents 10 common stocks) on the New
York Stock Exchange on July 17, 2003. Afterwards, the MOTC sold 1,350,682 thousand common stocks in the form of ADS amounting to 135,068 thousand units on August 10, 2005. Subsequently, the MOTC and Taiwan Mobile Co., Ltd. sold
505,389 thousand and 58,959 thousand common stocks of the Company, respectively, in the form of ADS totally amounting to 56,435 thousand units on September 29, 2006. The MOTC and Taiwan Mobile Co., Ltd. have sold
3,024,780 thousand common stocks in the form of ADS amounting to 302,478 thousand units. As of December 31, 2015, the outstanding ADSs were 345,367 thousand common stocks, which equaled 34,537 thousand units and represented
4.45% of the Companys total outstanding common stocks.
The ADS holders generally have the same rights and obligations as other
common stockholders, subject to the provision of relevant laws. The exercise of such rights and obligations shall comply with the related regulations and deposit agreement, which stipulate, among other things, that ADS holders can, through deposit
agents:
|
a) |
Exercise their voting rights, |
|
c) |
Receive dividends declared and subscribe to the issuance of new shares. |
|
b. |
Additional paid-in capital |
The adjustment of additional paid-in capital for the years ended
December 31, 2015 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Premium |
|
|
Movements of Additional Paid-in Capital for Associates and Joint Ventures Accounted for Using Equity Method |
|
|
Movements of Additional Paid-in Capital Arising from Changes in Equities of Subsidiaries |
|
|
Difference between Consideration Received and Carrying Amount of the Subsidiaries Net Assets upon Disposal |
|
|
Donated Capital |
|
|
Stockholders Contribution Due to Privatization |
|
|
Total |
|
Balance on January 1, 2014 |
|
$ |
163,907,049 |
|
|
$ |
41,396 |
|
|
$ |
10,372 |
|
|
$ |
|
|
|
$ |
13,170 |
|
|
$ |
20,648,078 |
|
|
$ |
184,620,065 |
|
Cash distributed from additional paid-in capital |
|
|
(16,577,663 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,577,663 |
) |
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
|
|
|
|
2,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,252 |
|
Change in additional paid-in capital for not participating in the capital increase of a subsidiary |
|
|
|
|
|
|
|
|
|
|
2,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,988 |
|
Employee stock bonus issued by a subsidiary |
|
|
|
|
|
|
|
|
|
|
293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
147,329,386 |
|
|
|
43,648 |
|
|
|
13,653 |
|
|
|
|
|
|
|
13,170 |
|
|
|
20,648,078 |
|
|
|
168,047,935 |
|
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
|
|
|
|
34,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,405 |
|
Partial disposal of interests in subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,644 |
|
|
|
|
|
|
|
|
|
|
|
26,644 |
|
Change in additional paid-in capital from share subscription not based on original ownership of a subsidiary |
|
|
|
|
|
|
|
|
|
|
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(412 |
) |
Other changes in additional paid-in capital in subsidiaries |
|
|
|
|
|
|
|
|
|
|
1,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,064 |
|
Subsidiary purchased its treasury stock |
|
|
|
|
|
|
|
|
|
|
(14,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
147,329,386 |
|
|
$ |
78,053 |
|
|
$ |
284 |
|
|
$ |
26,644 |
|
|
$ |
13,170 |
|
|
$ |
20,648,078 |
|
|
$ |
168,095,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 43 -
Additional paid-in capital may be utilized to offset deficits. However, the additional paid-in
capital from share premium, donated capital and the difference between consideration received and the carrying amount of the subsidiaries net assets upon disposal may be distributed in cash or capitalized when a company has no deficit, which
however is limited to a certain percentage of the Companys paid-in capital.
The additional paid-in capital from movements of paid-in
capital arising from changes in equities of subsidiaries may only be utilized to offset deficits. Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method may not be used for any
purpose.
|
c. |
Retained earnings and dividends policy |
Before distributing a dividend or making any other
distribution to stockholders, the Company must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10% of its net income, except when the accumulated amount of such legal reserve equals to the
Companys total authorized capital, and depending on its business needs or requirements, may also set aside or reverse special reserves. In accordance with the Companys Articles of Incorporation, no less than 50% of the remaining earnings
comprising remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed in the following order: (a) from 2% to 5% of distributable earnings shall be distributed to employees as employee bonus; (b) no
more than 0.2% of distributable earnings shall be distributed to board of directors as remuneration; and (c) cash dividends to be distributed shall not be less than 50% of the total amount of dividends to be distributed. If cash dividend to be
distributed is less than $0.10 per share, such cash dividend shall be distributed in the form of common stocks.
In accordance with the
amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The consequential amendments to the Companys Articles of Incorporation had been proposed by the
Companys Board of Directors on March 11, 2016 and are subject to the resolution of the shareholders in their meeting to be held on June 24, 2016. Information on the employee remuneration, employee bonus, and remuneration for the
directors for the years ended December 31, 2015 and 2014, and the actual distribution for 2014 and 2013, please refer to Note 28.a.7Employee benefit expenses.
The Company should appropriate or reverse a special reserve in accordance with Rule No. 1010012865 and Rule No. 1010047490 issued by
the FSC and the directive entitled Questions and Answers on Special Reserves Appropriated Following the Adoption of Taiwan-IFRSs. Distributions can be made out of any subsequent reversal of the debit to other equity items.
The appropriation for legal reserve shall be made until the accumulated reserve equals the aggregate par value of the outstanding capital stock
of the Company. This reserve can only be used to offset a deficit, or, when the legal reserve has exceeded 25% of the Companys paid-in capital, the excess may be transferred to capital or distributed in cash.
Except for non-ROC resident shareholders, all shareholders receiving the dividends are entitled a tax credit equal to their proportionate share
of the income tax paid by the Company.
- 44 -
The appropriations of the 2014 earnings of the Company have been approved by the
stockholders meeting on June 26, 2015 and the appropriations of the 2013 earnings of the Company approved by the stockholders meeting on June 24, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appropriation of Earnings |
|
|
Dividends Per Share (NT$) |
|
|
|
For Fiscal Year 2014 |
|
|
For Fiscal Year 2013 |
|
|
For Fiscal Year 2014 |
|
|
For Fiscal Year 2013 |
|
Legal reserve |
|
$ |
680,743 |
|
|
$ |
2,074,342 |
|
|
|
|
|
|
|
|
|
Special reserve |
|
|
(144,005 |
) |
|
|
144,005 |
|
|
|
|
|
|
|
|
|
Cash dividends |
|
|
37,673,263 |
|
|
|
18,525,558 |
|
|
$ |
4.86 |
|
|
$ |
2.39 |
|
In addition, the stockholders of the Company resolved to distribute cash of $2.14 per share and the total
amount of $16,577,663 thousand from additional paid-in capital on June 24, 2014.
The appropriations of earnings for 2015 had been
proposed by the Companys Board of Directors on March 11, 2016. The appropriations and dividends per share were as follows:
|
|
|
|
|
|
|
|
|
|
|
Appropriation of Earnings |
|
|
Dividends Per Share (NT$) |
|
Cash dividends |
|
$ |
42,551,146 |
|
|
$ |
5.49 |
|
The appropriations of earnings for 2015 are subject to the resolution of the shareholders meeting to be
held on June 24, 2016. Information of the appropriation of the Companys earnings proposed by the Board of Directors and approved by the stockholders is available on the Market Observation Post System website.
|
1) |
Exchange differences arising from the translation of the foreign operations |
The exchange
differences arising from the translation of the foreign operations from their functional currency to New Taiwan dollars were recognized as exchange differences arising from the translation of the foreign operations in other comprehensive income.
|
2) |
Unrealized gain (loss) on available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Beginning balance |
|
$ |
739,988 |
|
|
$ |
(149,747 |
) |
Unrealized gain (loss) on available-for-sale financial assets |
|
|
(659,055 |
) |
|
|
935,859 |
|
Share of unrealized gain (loss) on available-for-sale financial assets of subsidiaries, associates and joint ventures accounted for
using equity method |
|
|
10,031 |
|
|
|
(46,124 |
) |
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
90,964 |
|
|
$ |
739,988 |
|
|
|
|
|
|
|
|
|
|
- 45 -
The main source of revenue of the Company includes various telecommunications
services in many different streams, and the related information was as discussed in Note 39.
28. |
NET INCOME AND OTHER COMPREHENSIVE INCOME (LOSS) |
|
1) |
Other income and expenses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Gain (loss) on disposal of property, plant and equipment |
|
$ |
(32,852 |
) |
|
$ |
70,794 |
|
Impairment loss on property, plant and equipment |
|
|
(138,093 |
) |
|
|
|
|
Reversal of impairment loss on investment properties |
|
|
142,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(28,898 |
) |
|
$ |
70,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Dividend income |
|
$ |
207,419 |
|
|
$ |
67,441 |
|
Income from Piping Fund |
|
|
202,492 |
|
|
|
200,000 |
|
Others |
|
|
122,616 |
|
|
|
123,548 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
532,527 |
|
|
$ |
390,989 |
|
|
|
|
|
|
|
|
|
|
|
3) |
Other gains and losses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Net foreign currency exchange gains |
|
$ |
45,699 |
|
|
$ |
182,547 |
|
Gain on disposal of investments accounted for using equity method |
|
|
7,409 |
|
|
|
|
|
Valuation gain on financial assets and liabilities at fair value through profit or loss, net |
|
|
14 |
|
|
|
|
|
Impairment loss on financial assets carried at cost |
|
|
(77,018 |
) |
|
|
|
|
Others |
|
|
(104,383 |
) |
|
|
(67,306 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(128,279 |
) |
|
$ |
115,241 |
|
|
|
|
|
|
|
|
|
|
|
4) |
Impairment loss on financial instruments |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Notes and accounts receivable |
|
$ |
460,280 |
|
|
$ |
277,975 |
|
|
|
|
|
|
|
|
|
|
Other receivables |
|
$ |
38,330 |
|
|
$ |
33,306 |
|
|
|
|
|
|
|
|
|
|
Financial assets carried at cost |
|
$ |
77,018 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
- 46 -
|
5) |
Impairment loss (reversal of impairment loss) on non-finacial assets |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Inventories |
|
$ |
163,221 |
|
|
$ |
234,765 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
$ |
138,093 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Investment properties |
|
$ |
(142,047 |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
6) |
Depreciation and amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Property, plant and equipment |
|
$ |
29,782,123 |
|
|
$ |
31,278,115 |
|
Investment properties |
|
|
18,363 |
|
|
|
14,107 |
|
Intangible assets |
|
|
3,029,335 |
|
|
|
2,189,300 |
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization expenses |
|
$ |
32,829,821 |
|
|
$ |
33,481,522 |
|
|
|
|
|
|
|
|
|
|
Depreciation expenses summarized by functions |
|
|
|
|
|
|
|
|
Operating costs |
|
$ |
27,938,184 |
|
|
$ |
29,379,313 |
|
Operating expenses |
|
|
1,862,302 |
|
|
|
1,912,909 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
29,800,486 |
|
|
$ |
31,292,222 |
|
|
|
|
|
|
|
|
|
|
Amortization expenses summarized by functions |
|
|
|
|
|
|
|
|
Operating costs |
|
$ |
2,733,234 |
|
|
$ |
1,910,199 |
|
Marketing expenses |
|
|
171,572 |
|
|
|
159,279 |
|
General and administrative expenses |
|
|
84,586 |
|
|
|
77,116 |
|
Research and development expenses |
|
|
39,943 |
|
|
|
42,706 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,029,335 |
|
|
$ |
2,189,300 |
|
|
|
|
|
|
|
|
|
|
|
7) |
Employee benefit expenses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Post-employment benefit |
|
|
|
|
|
|
|
|
Defined contribution plans |
|
$ |
214,517 |
|
|
$ |
204,694 |
|
Defined benefit plans |
|
|
2,911,156 |
|
|
|
3,009,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
3,125,673 |
|
|
|
3,214,532 |
|
|
|
|
|
|
|
|
|
|
Other employee benefit |
|
|
|
|
|
|
|
|
Salaries |
|
|
20,672,267 |
|
|
|
20,834,944 |
|
Insurance |
|
|
2,114,742 |
|
|
|
2,132,037 |
|
Others |
|
|
14,582,874 |
|
|
|
14,550,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
37,369,883 |
|
|
|
37,517,896 |
|
|
|
|
|
|
|
|
|
|
Total employee benefit expenses |
|
$ |
40,495,556 |
|
|
$ |
40,732,428 |
|
|
|
|
|
|
|
|
|
|
Summary by functions |
|
|
|
|
|
|
|
|
Operating costs |
|
$ |
23,858,896 |
|
|
$ |
24,050,794 |
|
Operating expenses |
|
|
16,636,660 |
|
|
|
16,681,634 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
40,495,556 |
|
|
$ |
40,732,428 |
|
|
|
|
|
|
|
|
|
|
- 47 -
As of December 31, 2015 and 2014, the Company had 23,141 and 23,535 employees,
respectively.
The bonus to employees and the remuneration to directors as of December 31, 2014 were accrued based on past
experiences and the probable amount to be paid in accordance with the Companys Articles of Incorporation and Implementation Guidance for the Employees Bonus Distribution of the Company. In order to compliance with the Company Act as
amended in May 2015, the amendments to the Companys Articles of Incorporation was proposed by the Companys Board of Directors on March 11, 2016 which stipulated to distribute employees compensation at the rates from 1.7% to
4.3% and remuneration to directors at the rate no higher than 0.17%, respectively, of pre-tax income. As of December 31, 2015, the payables of the employees compensation and of the remuneration to directors were $1,927,518 thousand and
$44,852 thousand, respectively. Such amounts have been proposed by the Companys Board of Directors on March 11, 2016 and are subject to the resolution of the shareholders in their meeting to be held on June 24, 2016.
Material differences between such estimated amounts and the amounts proposed by the Board of Directors on or before the annual financial
statements are authorized for issue are adjusted in the year the bonus and remuneration were recognized. If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are recorded as a
change in accounting estimate.
The appropriations of the 2014 bonuses to employees and remuneration to directors of the Company have been
approved by the stockholders meeting on June 26, 2015 and the appropriations of the 2013 bonuses to employees and remuneration to directors of the Company approved by the stockholders meeting on June 24, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
Cash Bonus |
|
|
Cash Bonus |
|
Bonus distributed to the employees |
|
$ |
1,510,068 |
|
|
$ |
758,627 |
|
Remuneration paid to the directors |
|
|
39,223 |
|
|
|
19,304 |
|
There was no difference between the initial accrual amounts and the amounts resolved in shareholders
meeting on June 26, 2015 and June 24, 2014 of the aforementioned bonuses to employees and the remuneration to directors.
Information of the appropriation of the Companys employees bonuses and remuneration to directors and approved by the Board of Directors
and stockholders is available on the Market Observation Post System website.
|
b. |
Reclassification adjustments of other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Cash flow hedges |
|
|
|
|
|
|
|
|
Gain (loss) arising during the year |
|
$ |
18,845 |
|
|
$ |
(18,718 |
) |
Reclassification adjustments for losses included in profit or loss |
|
|
741 |
|
|
|
|
|
Adjusted against the carrying amount of hedged items |
|
|
(18,805 |
) |
|
|
18,435 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
781 |
|
|
$ |
(283 |
) |
|
|
|
|
|
|
|
|
|
- 48 -
|
a. |
Income tax recognized in profit or loss |
The major components of income tax expense were as
follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Current tax |
|
|
|
|
|
|
|
|
Current tax expenses recognized for the year |
|
$ |
8,236,116 |
|
|
$ |
7,229,587 |
|
Tax on unappropriated earnings |
|
|
|
|
|
|
12 |
|
Income tax adjustments on prior years |
|
|
(88,767 |
) |
|
|
10,158 |
|
Others |
|
|
11,427 |
|
|
|
13,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
8,158,776 |
|
|
|
7,253,343 |
|
Deferred tax |
|
|
|
|
|
|
|
|
Deferred tax expenses recognized for the year |
|
|
(170,071 |
) |
|
|
(84,198 |
) |
|
|
|
|
|
|
|
|
|
Income tax recognized in profit or loss |
|
$ |
7,988,705 |
|
|
$ |
7,169,145 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of accounting profit and income tax expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Income before income tax |
|
$ |
50,794,433 |
|
|
$ |
45,781,201 |
|
|
|
|
|
|
|
|
|
|
Income tax expense calculated at the statutory rate (17%) |
|
$ |
8,635,054 |
|
|
$ |
7,782,804 |
|
Nondeductible revenues and expenses in determining taxable income |
|
|
17,801 |
|
|
|
44,090 |
|
Unrecognized deductible temporary differences |
|
|
|
|
|
|
(67,260 |
) |
Tax-exempt income |
|
|
(261,400 |
) |
|
|
(302,042 |
) |
Income tax on unappropriated earnings |
|
|
|
|
|
|
12 |
|
Investment credits |
|
|
(325,410 |
) |
|
|
(312,203 |
) |
Adjustments of tax expense on prior years |
|
|
(88,767 |
) |
|
|
10,158 |
|
Others |
|
|
11,427 |
|
|
|
13,586 |
|
|
|
|
|
|
|
|
|
|
Income tax expense recognized in profit or loss |
|
$ |
7,988,705 |
|
|
$ |
7,169,145 |
|
|
|
|
|
|
|
|
|
|
The applicable tax rate used above is the corporate tax rate of 17% payable by the Company subject to the
Income Tax Law of the Republic of China.
|
b. |
Income tax benefit recognized in other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Deferred tax |
|
|
|
|
|
|
|
|
Remeasurement on defined benefit plan |
|
$ |
(38,425 |
) |
|
$ |
(83,478 |
) |
|
|
|
|
|
|
|
|
|
- 49 -
|
c. |
Current tax liabilities |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Current tax liabilities |
|
|
|
|
|
|
|
|
Income tax payable |
|
$ |
4,531,290 |
|
|
$ |
3,265,300 |
|
|
|
|
|
|
|
|
|
|
|
d. |
Deferred income tax assets and liabilities |
The movements of deferred income tax assets and
liabilities were as follows:
For the year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2015 |
|
|
Recognized in Profit or Loss |
|
|
Recognized in Other Comprehensive Income |
|
|
December 31, 2015 |
|
Deferred tax assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit obligation |
|
$ |
1,088,118 |
|
|
$ |
67,953 |
|
|
$ |
38,425 |
|
|
$ |
1,194,496 |
|
Allowance for doubtful receivables over quota |
|
|
113,439 |
|
|
|
52,841 |
|
|
|
|
|
|
|
166,280 |
|
Deferred revenue |
|
|
155,614 |
|
|
|
(19,211 |
) |
|
|
|
|
|
|
136,403 |
|
Impairment loss on property, plant and equipment |
|
|
31,209 |
|
|
|
12,955 |
|
|
|
|
|
|
|
44,164 |
|
Accrued award credits liabilities |
|
|
28,431 |
|
|
|
(6,461 |
) |
|
|
|
|
|
|
21,970 |
|
Valuation loss on inventory |
|
|
8,410 |
|
|
|
12,252 |
|
|
|
|
|
|
|
20,662 |
|
Estimated warranty liabilities |
|
|
6,680 |
|
|
|
790 |
|
|
|
|
|
|
|
7,470 |
|
Unrealized foreign exchange loss, net |
|
|
|
|
|
|
16,666 |
|
|
|
|
|
|
|
16,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,431,901 |
|
|
$ |
137,785 |
|
|
$ |
38,425 |
|
|
$ |
1,608,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land value incremental tax |
|
$ |
94,986 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
94,986 |
|
Unrealized foreign exchange gain, net |
|
|
29,215 |
|
|
|
(29,215 |
) |
|
|
|
|
|
|
|
|
Others |
|
|
5,016 |
|
|
|
(3,071 |
) |
|
|
|
|
|
|
1,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
129,217 |
|
|
$ |
(32,286 |
) |
|
$ |
|
|
|
$ |
96,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 50 -
For the year ended December 31, 2014 (Adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2014 |
|
|
Recognized in Profit or Loss |
|
|
Recognized in Other Comprehensive Income |
|
|
December 31, 2014 |
|
Deferred tax assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit obligation |
|
$ |
919,949 |
|
|
$ |
84,691 |
|
|
$ |
83,478 |
|
|
$ |
1,088,118 |
|
Deferred revenue |
|
|
187,125 |
|
|
|
(31,511 |
) |
|
|
|
|
|
|
155,614 |
|
Allowance for doubtful receivables over quota |
|
|
|
|
|
|
113,439 |
|
|
|
|
|
|
|
113,439 |
|
Impairment loss on property, plant and equipment |
|
|
58,647 |
|
|
|
(27,438 |
) |
|
|
|
|
|
|
31,209 |
|
Accrued award credits liabilities |
|
|
20,823 |
|
|
|
7,608 |
|
|
|
|
|
|
|
28,431 |
|
Valuation loss on inventory |
|
|
20,147 |
|
|
|
(11,737 |
) |
|
|
|
|
|
|
8,410 |
|
Estimated warranty liabilities |
|
|
12,398 |
|
|
|
(5,718 |
) |
|
|
|
|
|
|
6,680 |
|
Unrealized foreign exchange loss, net |
|
|
10,759 |
|
|
|
(10,759 |
) |
|
|
|
|
|
|
|
|
Others |
|
|
146 |
|
|
|
(146 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,229,994 |
|
|
$ |
118,429 |
|
|
$ |
83,478 |
|
|
$ |
1,431,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land value incremental tax |
|
$ |
94,986 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
94,986 |
|
Unrealized foreign exchange gain, net |
|
|
|
|
|
|
29,215 |
|
|
|
|
|
|
|
29,215 |
|
Others |
|
|
|
|
|
|
5,016 |
|
|
|
|
|
|
|
5,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
94,986 |
|
|
$ |
34,231 |
|
|
$ |
|
|
|
$ |
129,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
e. |
All deductible temporary differences were recognized as deferred tax assets in the balance sheets. |
- 51 -
|
f. |
The related information under the Integrated Income Tax System was as follows: |
Unappropriated earnings information
As of December 31, 2015 and 2014, all the Companys unappropriated earnings are generated after the Integrated Income Tax System.
Imputation credit account
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Balance of Imputation Credit Account (ICA) |
|
$ |
7,576,622 |
|
|
$ |
8,269,010 |
|
|
|
|
|
|
|
|
|
|
The creditable ratios for distribution of earnings of 2015 and 2014 were 20.48% (expected ratio) and 20.48%,
respectively. Effective from January 1, 2015, the creditable ratio for individual shareholders residing in the Republic of China is half of the original creditable ratio according to the revised Article 66-6 of the Income Tax Law.
|
g. |
Income tax examinations |
The Companys income tax returns has been examined by the tax
authorities through 2012.
Net income and weighted average number of common stocks used in the
calculation of earnings per share were as follows:
Net Income
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Net income used to compute the basic earnings per share |
|
$ |
42,805,728 |
|
|
$ |
38,612,056 |
|
Assumed conversion of all dilutive potential common stocks |
|
|
|
|
|
|
|
|
Employee stock options, bonus and remunerations of subsidiaries |
|
|
(921 |
) |
|
|
(386 |
) |
|
|
|
|
|
|
|
|
|
Net income used to compute the diluted earnings per share |
|
$ |
42,804,807 |
|
|
$ |
38,611,670 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Stocks
|
|
|
|
|
|
|
|
|
|
|
(Thousand Shares) Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Weighted average number of common stocks used to compute the basic earnings per share |
|
|
7,757,447 |
|
|
|
7,757,447 |
|
Assumed conversion of all dilutive potential common stocks |
|
|
|
|
|
|
|
|
Employee bonus or employee remuneration |
|
|
18,231 |
|
|
|
12,339 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common stocks used to compute the diluted earnings per share |
|
|
7,775,678 |
|
|
|
7,769,786 |
|
|
|
|
|
|
|
|
|
|
- 52 -
If the Company may settle the employee bonus or employee remuneration in shares or cash, the
Company shall presume that it will be settled in shares and takes those shares into consideration when calculating the weighted average number of outstanding shares used in the calculation of diluted EPS if the shares have a dilutive effect. The
dilutive effect of the shares needs to be considered until the stockholders approve the number of shares to be distributed to employees in their meeting in the following year.
31. |
NON-CASH TRANSACTIONS |
For the years ended December 31, 2015 and 2014, the Company
entered into the following non-cash investing activities:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Increase in property, plant and equipment |
|
$ |
23,977,094 |
|
|
$ |
31,208,110 |
|
Other payables |
|
|
649,523 |
|
|
|
474,184 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24,626,617 |
|
|
$ |
31,682,294 |
|
|
|
|
|
|
|
|
|
|
32. |
OPERATING LEASE ARRANGEMENTS |
Except for the ST-2 satellite referred in Note 35 to the financial
statement, the Company entered into several lease agreements for base stations located all over in Taiwan. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Within one year |
|
$ |
3,185,743 |
|
|
$ |
2,955,821 |
|
Longer than one year but within five years |
|
|
5,143,295 |
|
|
|
5,174,956 |
|
Longer than five years |
|
|
1,242,844 |
|
|
|
1,475,793 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,571,882 |
|
|
$ |
9,606,570 |
|
|
|
|
|
|
|
|
|
|
The Company leases out some land and buildings. The future aggregate
minimum lease collection under non-cancellable operating leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Within one year |
|
$ |
432,071 |
|
|
$ |
437,542 |
|
Longer than one year but within five years |
|
|
549,676 |
|
|
|
533,129 |
|
Longer than five years |
|
|
374,400 |
|
|
|
395,675 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,356,147 |
|
|
$ |
1,366,346 |
|
|
|
|
|
|
|
|
|
|
- 53 -
The Company manages its capital to ensure that the Company will be
able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.
The capital structure of the Company consists of debt and the equity of the Company.
The Company is required to maintain minimum paid-in capital amount as prescribed by the applicable laws.
The management reviews the capital structure of the Company as needed. As part of this review, the management considers the cost of capital and
the risks associated with each class of capital.
According to the managements suggestion, the Company maintains a balanced capital
structure through paying cash dividends, increasing its share capital, purchasing treasury stock, and proceeds from new debt or repayment of debt.
34. |
FINANCIAL INSTRUMENTS |
Fair Value Information
The fair value measurement guidance establishes a framework for measuring fair value and expands disclosure about fair value measurements. The
standard describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. These levels are:
Level
1 fair value measurements: These measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 fair value measurements: These measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value
measurements: These measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
a. |
Financial instruments that are not measured at fair value but for which fair value is disclosed |
Except for what disclosed in the following table, the Company considers that the carrying amounts of finanal assets and liablities not measured
at fair value approximate their fair values or the fair values cannot be reliable estimated:
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying |
|
|
Fair Value |
|
|
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
$ |
3,870,540 |
|
|
$ |
|
|
|
$ |
3,890,730 |
|
|
$ |
|
|
Bank debentures |
|
|
150,000 |
|
|
|
|
|
|
|
149,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,020,540 |
|
|
$ |
|
|
|
$ |
4,040,727 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 54 -
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying |
|
|
Fair Value |
|
|
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
$ |
6,533,527 |
|
|
$ |
|
|
|
$ |
6,564,145 |
|
|
$ |
|
|
Bank debentures |
|
|
950,742 |
|
|
|
|
|
|
|
951,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,484,269 |
|
|
$ |
|
|
|
$ |
7,515,530 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Level 2 fair values are estimated using discounted cash flow models. The models use market-based
observable inputs including duration, yield rate and credit rating.
|
b. |
Financial instruments measured at fair value |
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Financial assets at FVTPL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets |
|
$ |
|
|
|
$ |
14 |
|
|
$ |
|
|
|
$ |
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial assets |
|
$ |
|
|
|
$ |
498 |
|
|
$ |
|
|
|
$ |
498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic and foreign listed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments |
|
$ |
3,163,466 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
3,163,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic and foreign listed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments |
|
$ |
3,822,521 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
3,822,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial liabilities |
|
$ |
|
|
|
$ |
283 |
|
|
$ |
|
|
|
$ |
283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between Levels 1 and 2 for the years ended December 31, 2015 and 2014.
The fair values of financial assets and financial liabilities are determined as follows:
|
1) |
The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices. |
|
2) |
For derivative financial assets and liabilities of forward exchange contracts, fair values are estimated using discounted cash flow model. The model uses market-based observable inputs including foreign exchange rates,
and forward and spot prices for currencies to project fair value. |
- 55 -
Categories of Financial Instruments
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
Measured at FVTPL |
|
|
|
|
|
|
|
|
Held for trading |
|
$ |
14 |
|
|
$ |
|
|
Hedging derivative financial assets |
|
|
498 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
4,020,540 |
|
|
|
7,484,269 |
|
Loans and receivables (Note a) |
|
|
55,356,652 |
|
|
|
50,050,116 |
|
Available-for-sale financial assets (Note b) |
|
|
5,299,113 |
|
|
|
6,043,781 |
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial liabilities |
|
|
|
|
|
|
283 |
|
Measured at amortized cost (Note c) |
|
|
32,989,217 |
|
|
|
35,931,161 |
|
|
|
|
|
|
Note a: |
|
The balances included cash and cash equivalents, trade notes and accounts receivable, accounts receivable from related parties, other current monetary assets, other financial assets and refundable deposits (classified as other
noncurrent assets) which were loans and receivables. |
|
|
Note b: |
|
The balances included financial assets carried at cost which were classified as available-for-sale financial assets. |
|
|
Note c: |
|
The balances included trade notes and accounts payable, payables to related parties, partial other payables and customers deposits
which were financial liabilities carried at amortized cost. |
Financial Risk Management Objectives
The main financial instruments of the Company include equity and debt investments, accounts receivable and accounts payables. The
Companys Finance Department provides services to its business units, co-ordinates access to domestic and international capital markets, monitors and manages the financial risks relating to the operations of the Company through internal risk
reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk, and liquidity risk.
The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of
financial derivatives is governed by the Companys policies approved by the Board of Directors. Those derivatives are used to hedge the risks of exchange rate fluctuation arising from operating or investment activities. Compliance with policies
and risk exposure limits is audited by the Companys Finance Department on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
The Company reports the significant risk exposures and related action plans timely and actively to the audit committee and if needed to the
Board of Directors.
The Company is exposed to market risks of changes in foreign currency exchange
rates and interest rates. The Company uses forward exchange contracts to hedge the exchange rate risk arising from assets and liabilities denominated in foreign currencies.
There were no changes to the Companys exposure to market risks or the manner in which these risks are managed and measured.
- 56 -
The carrying amounts of the Companys foreign currency denominated
monetary assets and monetary liabilities at the end of the reporting periods are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Assets |
|
|
|
|
|
|
|
|
USD |
|
$ |
4,296,283 |
|
|
$ |
5,163,948 |
|
EUR |
|
|
45,756 |
|
|
|
16,579 |
|
SGD |
|
|
106,383 |
|
|
|
72,882 |
|
JPY |
|
|
242,336 |
|
|
|
17 |
|
Liabilities |
|
|
|
|
|
|
|
|
USD |
|
|
4,125,794 |
|
|
|
5,074,225 |
|
EUR |
|
|
1,291,884 |
|
|
|
763,499 |
|
SGD |
|
|
2,657 |
|
|
|
1,976 |
|
JPY |
|
|
3,704 |
|
|
|
4,844 |
|
The carrying amount of the Companys derivatives with exchange rate risk exposures at the end of the
reporting periods are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Assets |
|
|
|
|
|
|
|
|
EUR |
|
$ |
512 |
|
|
$ |
|
|
Liabilities |
|
|
|
|
|
|
|
|
EUR |
|
|
|
|
|
|
283 |
|
Foreign currency sensitivity analysis
The Company is mainly exposed to the fluctuations of the currencies listed above.
The following table details the Companys sensitivity to a 5% increase and decrease in the functional currency against the relevant
foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managements assessment of the reasonably possible changes in foreign exchange rates. The sensitivity
analysis includes only outstanding foreign currency denominated monetary items and forward exchange contracts. A positive number below indicates an increase in pre-tax profit or equity where the functional currency weakens 5% against the relevant
currency.
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Profit or loss |
|
|
|
|
|
|
|
|
Monetary assets and liabilities (a) |
|
|
|
|
|
|
|
|
USD |
|
$ |
8,524 |
|
|
$ |
4,486 |
|
EUR |
|
|
(62,306 |
) |
|
|
(37,346 |
) |
SGD |
|
|
5,186 |
|
|
|
3,545 |
|
JPY |
|
|
11,932 |
|
|
|
241 |
|
Derivatives (b) |
|
|
|
|
|
|
|
|
EUR |
|
|
32,832 |
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Derivatives (c) |
|
|
|
|
|
|
|
|
EUR |
|
|
15,306 |
|
|
|
(4,502 |
) |
- 57 -
|
a) |
This is mainly attributable to the exposure to foreign currency denominated receivables and payables of the Company outstanding at the end of the reporting period; |
|
b) |
This is mainly attributable to the forward exchange contracts; and |
|
c) |
This is mainly attributable to the changes in the fair value of derivatives that are designated as cash flow hedges. |
For a 5% strengthening of the functional currency against the relevant currencies, there would be a comparable impact on the pre-tax profit or
equity, and the balances above would be negative.
The carrying amounts of the Companys exposures to interest rates on
financial assets are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Fair value interest rate risk |
|
|
|
|
|
|
|
|
Financial assets |
|
$ |
23,763,200 |
|
|
$ |
18,683,143 |
|
Cash flow interest rate risk |
|
|
|
|
|
|
|
|
Financial assets |
|
|
2,254,920 |
|
|
|
2,869,466 |
|
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the
reporting period. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents managements assessment of the reasonably possible change in interest rates.
If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Companys pre-tax income for the
year ended December 31, 2015 would increase/decrease by $5,637 thousand. This is mainly attributable to the Companys exposure to floating rates on its financial assets.
If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Companys pre-tax income for the
year ended December 31, 2014 would increase/decrease by $7,174 thousand. This is mainly attributable to the Companys exposure to floating interest rates on its financial assets.
The Company is exposed to equity price risks arising from equity
investments. Equity investments are held for strategic rather than trading purposes. The management managed the risk through holding various risk portfolios. Further, the Company assigned finance and investment departments to monitor the price risk.
Equity price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices of listed equity securities had been 5% higher/lower:
Other comprehensive income would increase/decrease by $158,173 thousand as a result of the changes in fair value of available-for-sale
financial assets in 2015.
- 58 -
Other comprehensive income would increase/decrease by $191,126 thousand as a result of the
changes in fair value of available-for-sale financial assets in 2014.
Credit risk refers to the risk that counterparty would default on its contractual
obligations resulting in financial loss to the Company. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in balance sheet as of the balance sheet date.
The Company serves a large consumer base, and the concentration of credit risk was limited.
The Company manages and contains sufficient cash and cash equivalent position
to support the operations and reduce the impact on fluctuation of cash flow.
|
1) |
Liquidity and interest risk tables |
The following tables detailed the Companys remaining
contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required
to pay.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Effective
Interest Rate (%) |
|
|
Less Than
1 Month |
|
|
1-3 Months |
|
|
3 Months to
1 Year |
|
|
1-5 Years |
|
|
More Than
5 Years |
|
|
Total |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
|
|
|
|
$ |
37,459,795 |
|
|
$ |
|
|
|
$ |
1,972,370 |
|
|
$ |
4,642,735 |
|
|
$ |
|
|
|
$ |
44,074,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
|
|
|
|
$ |
39,568,423 |
|
|
$ |
|
|
|
$ |
1,549,291 |
|
|
$ |
4,698,206 |
|
|
$ |
|
|
|
$ |
45,815,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table detailed the Companys liquidity analysis for its derivative financial instruments.
The table has been drawn up based on the undiscounted gross inflows and outflows on those derivatives that require gross settlement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less Than 1 Month |
|
|
1-3 Months |
|
|
3 Months to
1 Year |
|
|
1-5 Years |
|
|
Total |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflow |
|
$ |
|
|
|
$ |
473,437 |
|
|
$ |
492,056 |
|
|
$ |
|
|
|
$ |
965,493 |
|
Outflow |
|
|
|
|
|
|
476,337 |
|
|
|
488,644 |
|
|
|
|
|
|
|
964,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
(2,900 |
) |
|
$ |
3,412 |
|
|
$ |
|
|
|
$ |
512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflow |
|
$ |
|
|
|
$ |
90,226 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
90,226 |
|
Outflow |
|
|
|
|
|
|
90,509 |
|
|
|
|
|
|
|
|
|
|
|
90,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
(283 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
(283 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 59 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Unsecured bank loan facility |
|
|
|
|
|
|
|
|
Amount used |
|
$ |
|
|
|
$ |
|
|
Amount unused |
|
|
39,328,250 |
|
|
|
30,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
39,328,250 |
|
|
$ |
30,500,000 |
|
|
|
|
|
|
|
|
|
|
35. |
RELATED PARTIES TRANSACTIONS |
The ROC Government, one of the Companys customers
has significant equity interest in the Company. The Company provides fixed-line services, wireless services, Internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and
at arms-length prices. The transactions with the ROC government bodies have not been provided because the transactions are not individually or collectively significant. However, the related revenues and operating costs have been appropriately
recorded.
|
a. |
The Company engages in business transactions with the following related parties: |
|
|
|
Company |
|
Relationship |
|
|
Senao International Co., Ltd. (SENAO) |
|
Subsidiary |
Light Era Development Co., Ltd. |
|
Subsidiary |
Donghwa Telecom Co., Ltd. |
|
Subsidiary |
Chunghwa Telecom Singapore Pte., Ltd. (CHTS) |
|
Subsidiary |
Chunghwa System Integration Co., Ltd. (CHSI) |
|
Subsidiary |
Chunghwa Investment Co., Ltd. (CHI) |
|
Subsidiary |
CHIEF Telecom, Inc. (CHIEF) |
|
Subsidiary |
Chunghwa International Yellow Pages Co., Ltd. (CHYP) |
|
Subsidiary |
Prime Asia Investments Group Ltd. (B.V.I.) (Prime Asia) |
|
Subsidiary |
Spring House Entertainment Tech. Inc. (SHE) |
|
Subsidiary |
Chunghwa Telecom Global, Inc. |
|
Subsidiary |
Chunghwa Telecom Vietnam Co., Ltd. |
|
Subsidiary |
Smartfun Digital Co., Ltd. |
|
Subsidiary |
Chunghwa Telecom Japan Co., Ltd. |
|
Subsidiary |
Chunghwa Sochamp Technology Inc. |
|
Subsidiary |
Honghwa International Co., Ltd. |
|
Subsidiary |
New Prospect Investments Holdings Ltd. (B.V.I.) |
|
Subsidiary |
Senao International (Samoa) Holding Ltd. (SIS) |
|
Subsidiary of SENAO |
Youth Co., Ltd. |
|
Subsidiary of SENAO |
Aval Technologies Co., Ltd. |
|
Subsidiary of SENAO |
ISPOT Co., Ltd. |
|
Subsidiary of SENAO |
Youyi Co., Ltd. |
|
Subsidiary of SENAO |
Unigate Telecom Inc. |
|
Subsidiary of CHIEF |
Chief International Corp. |
|
Subsidiary of CHIEF |
Shanghai Chief Telecom Co., Ltd. |
|
Subsidiary of CHIEF |
Concord Technology Co., Ltd. (Concord) |
|
Subsidiary of CHSI |
Ceylon Innovation Co., Ltd. |
|
Subsidiary of SHE |
Chunghwa Precision Test Tech. Co., Ltd. (CHPT) |
|
Subsidiary of CHI |
Chunghwa Investment Holding Co., Ltd. (CIHC) |
|
Subsidiary of CHI |
(Continued)
- 60 -
|
|
|
Company |
|
Relationship |
Glory Network System Service (Shanghai) Co., Ltd. |
|
Subsidiary of Concord |
Chunghwa Precision Test Tech. USA Corporation |
|
Subsidiary of CHPT |
CHPT Japan Co., Ltd. |
|
Subsidiary of CHPT |
Chunghwa Precision Test Tech. International, Ltd. (CHPT (International)) |
|
Subsidiary of CHPT |
Senao International HK Limited (SIHK) |
|
Subsidiary of SIS |
CHI One Investment Co., Limited. (COI) |
|
Subsidiary of CIHC |
Senao Trading (Fujian) Co., Ltd. |
|
Subsidiary of SIHK |
Senao International Trading (Shanghai) Co., Ltd. |
|
Subsidiary of SIHK |
Senao International Trading (Jiangsu) Co., Ltd. |
|
Subsidiary of SIHK |
Senao International Trading (Shanghai) Co., Ltd. |
|
Subsidiary of SIHK |
Chunghwa Hsingta Co., Ltd. (CHC) |
|
Subsidiary of Prime Asia |
Chunghwa Telecom (China) Co., Ltd. |
|
Subsidiary of CHC |
Jiangsu Zhenhua Information Technology Company, LLC. |
|
Subsidiary of CHC |
Hua-Xiong Information Technology Co., Ltd. |
|
Subsidiary of CHC |
Shanghai Taihua Electronic Technology Limited |
|
Subsidiary of CHPT (International) |
Taiwan International Standard Electronics Co., Ltd. |
|
Associate |
So-net Entertainment Taiwan Limited |
|
Associate |
Skysoft Co., Ltd. |
|
Associate |
KingwayTek Technology Co., Ltd. |
|
Associate |
Dian Zuan Integrating Marketing Co., Ltd. |
|
Associate |
Viettel-CHT Co., Ltd. |
|
Associate |
International Integrated System, Inc. |
|
Associate |
Taiwan International Ports Logistics Corporation |
|
Associate |
Click Force Co., Ltd. |
|
Associate of CHYP |
Xiamen Sertec Business Technology Co., Ltd. |
|
Associate of COI |
ST-2 Satellite Ventures Pte., Ltd. |
|
Associate of CHTS |
Huada Digital Corporation |
|
Joint venture |
Chunghwa Benefit One Co., Ltd. |
|
Joint venture |
Other related parties |
|
|
Chunghwa Telecom Foundation |
|
A nonprofit organization of which the funds donated by the Company exceeds one third of its total funds |
(Concluded)
|
b. |
Terms of the foregoing transactions with related parties were not significantly different from transactions with non-related parties. When no similar transactions with non-related parties can be referenced, terms were
determined in accordance with mutual agreements. Details of transactions between the Company and other related parties are disclosed below: |
|
1) |
Operating transactions |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
1,660,277 |
|
|
$ |
1,522,705 |
|
Associates |
|
|
326,008 |
|
|
|
313,959 |
|
Joint ventures |
|
|
8,707 |
|
|
|
6,751 |
|
Others |
|
|
3,997 |
|
|
|
3,329 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,998,989 |
|
|
$ |
1,846,744 |
|
|
|
|
|
|
|
|
|
|
- 61 -
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses |
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
15,607,502 |
|
|
$ |
15,714,426 |
|
Associates |
|
|
1,192,948 |
|
|
|
1,324,033 |
|
Joint ventures |
|
|
16,919 |
|
|
|
34,393 |
|
Others |
|
|
45,001 |
|
|
|
45,003 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
16,862,370 |
|
|
$ |
17,117,855 |
|
|
|
|
|
|
|
|
|
|
|
2) |
Non-operating transactions |
|
|
|
|
|
|
|
|
|
|
|
Non-operating Income and Expenses |
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
3,265 |
|
|
$ |
1,218 |
|
Associates |
|
|
2 |
|
|
|
|
|
Others |
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,267 |
|
|
$ |
1,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
822,720 |
|
|
$ |
634,066 |
|
Associates |
|
|
27,663 |
|
|
|
60,024 |
|
Joint ventures |
|
|
542 |
|
|
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
850,925 |
|
|
$ |
694,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
3,512,159 |
|
|
$ |
3,632,119 |
|
Associates |
|
|
568,626 |
|
|
|
384,272 |
|
Joint ventures |
|
|
4,849 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,085,634 |
|
|
$ |
4,016,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
9,434 |
|
|
$ |
23,717 |
|
Associates |
|
|
10,965 |
|
|
|
9,419 |
|
Others |
|
|
|
|
|
|
247 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
20,399 |
|
|
$ |
33,383 |
|
|
|
|
|
|
|
|
|
|
- 62 -
|
6) |
Acquisition of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Subsidiaries |
|
$ |
566,387 |
|
|
$ |
791,602 |
|
Associates |
|
|
313,346 |
|
|
|
521,360 |
|
Joint ventures |
|
|
11,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
891,078 |
|
|
$ |
1,312,962 |
|
|
|
|
|
|
|
|
|
|
The Company entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on
March 12, 2010 to lease capacity on the ST-2 satellite. This lease term is for 15 years which should start from the official operation of ST-2 satellite and the total contract value is approximately $6,000,000 thousand (SG$260,723 thousand),
including a prepayment of $3,067,711 thousand, and the rest of amount should be paid annually when ST-2 satellite starts its official operation. ST-2 satellite was launched in May 2011, and began its official operation in August 2011. The total
rental expense for the year ended December 31, 2015 was $404,120 thousand, which consisted of an offsetting credit of the prepayment of $204,398 thousand and an additional accrual of $199,722 thousand. The prepaid rents (classified as
prepayments) as of December 31, 2015 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Prepaid rentscurrent |
|
$ |
204,398 |
|
|
$ |
204,398 |
|
Prepaid rentsnoncurrent |
|
|
1,958,817 |
|
|
|
2,163,215 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,163,215 |
|
|
$ |
2,367,613 |
|
|
|
|
|
|
|
|
|
|
The Company sold the land with a carrying value of $936,016 thousand to LED at the consideration of
$2,421,932 thousand in 2008. However, since the gain on disposal of land amounting to $1,485,916 thousand is unrealized, the gain was recognized as deferred creditprofit on intercompany transactions. Gains arising from disposal of land
recognized in 2015 and 2014 were nil and $2,408 thousand, respectively. The unrealized gain on disposal of land amounted to $83,859 thousand (classified as other noncurrent liabilities) as of December 31, 2015.
|
c. |
Compensation of key management personnel |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Short-term benefits |
|
$ |
67,301 |
|
|
$ |
68,654 |
|
Post-employment benefits |
|
|
5,499 |
|
|
|
5,803 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
72,800 |
|
|
$ |
74,457 |
|
|
|
|
|
|
|
|
|
|
The remuneration of directors and key executives is mainly determined by the compensation committee having
regard to the performance of individual and market trends.
- 63 -
36. |
SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS |
At the balance sheet
date, the Companys remaining commitments under non-cancelable contracts with various parties, excluding those disclosed in other notes, were as follows:
|
a. |
Acquisitions of land and buildings of $646,517 thousand. |
|
b. |
Acquisitions of telecommunications equipment of $14,328,438 thousand. |
|
c. |
A commitment to contribute $2,000,000 thousand to a Piping Fund administered by the Taipei City Government, of which $1,000,000 thousand was contributed by the Company on August 15, 1996 (classified as other
monetary assetsnoncurrent). If the fund is not sufficient, the Company will contribute the remaining $1,000,000 thousand upon notification from the Taipei City Government. |
37. |
SIGNIFICANT INFORMATION OF FOREIGN ASSETS AND LIABILITIES |
The significant information
of foreign assets and liabilities is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
|
|
Foreign Currencies (Thousands) |
|
|
Exchange Rate |
|
|
New Taiwan Dollars (Thousands) |
|
Foreign assets |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
$ |
6,974 |
|
|
|
32.825 |
|
|
$ |
228,936 |
|
EUR |
|
|
1,268 |
|
|
|
35.88 |
|
|
|
45,484 |
|
SGD |
|
|
4,576 |
|
|
|
23.25 |
|
|
|
106,383 |
|
JPY |
|
|
887,679 |
|
|
|
0.273 |
|
|
|
242,336 |
|
Accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
123,910 |
|
|
|
32.825 |
|
|
|
4,067,347 |
|
EUR |
|
|
8 |
|
|
|
35.88 |
|
|
|
272 |
|
Non-monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using equity method |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
27,449 |
|
|
|
32.825 |
|
|
|
900,999 |
|
HKD |
|
|
379,766 |
|
|
|
4.235 |
|
|
|
1,608,311 |
|
JPY |
|
|
141,568 |
|
|
|
0.273 |
|
|
|
38,648 |
|
VND |
|
|
323,680,142 |
|
|
|
0.00141 |
|
|
|
456,389 |
|
RMB |
|
|
50,412 |
|
|
|
4.978 |
|
|
|
250,952 |
|
Foreign liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
125,691 |
|
|
|
32.825 |
|
|
|
4,125,794 |
|
EUR |
|
|
36,006 |
|
|
|
35.88 |
|
|
|
1,291,884 |
|
SGD |
|
|
114 |
|
|
|
23.25 |
|
|
|
2,657 |
|
JPY |
|
|
13,569 |
|
|
|
0.273 |
|
|
|
3,704 |
|
- 64 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
|
|
Foreign Currencies (Thousands) |
|
|
Exchange Rate |
|
|
New Taiwan Dollars (Thousands) |
|
Foreign assets |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
$ |
2,617 |
|
|
|
31.65 |
|
|
$ |
82,833 |
|
EUR |
|
|
344 |
|
|
|
38.47 |
|
|
|
13,221 |
|
SGD |
|
|
3,044 |
|
|
|
23.94 |
|
|
|
72,882 |
|
JPY |
|
|
63 |
|
|
|
0.2646 |
|
|
|
17 |
|
Accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
160,541 |
|
|
|
31.65 |
|
|
|
5,081,115 |
|
EUR |
|
|
87 |
|
|
|
38.47 |
|
|
|
3,358 |
|
Non-monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using equity method |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
28,968 |
|
|
|
31.65 |
|
|
|
916,846 |
|
HKD |
|
|
384,970 |
|
|
|
4.08 |
|
|
|
1,570,679 |
|
JPY |
|
|
115,770 |
|
|
|
0.265 |
|
|
|
30,679 |
|
VND |
|
|
290,572,727 |
|
|
|
0.00143 |
|
|
|
415,519 |
|
RMB |
|
|
55,218 |
|
|
|
5.09 |
|
|
|
280,813 |
|
Foreign liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
160,323 |
|
|
|
31.65 |
|
|
|
5,074,225 |
|
EUR |
|
|
19,847 |
|
|
|
38.47 |
|
|
|
763,499 |
|
SGD |
|
|
83 |
|
|
|
23.94 |
|
|
|
1,976 |
|
JPY |
|
|
18,280 |
|
|
|
0.2646 |
|
|
|
4,844 |
|
The unrealized foreign exchange gains and losses were loss of $72,188 thousand and gain of $175,929 thousand
for the years ended December 31, 2015 and 2014, respectively. Due to the various foreign currency transactions of the Company, foreign exchange gains and losses cannot be disclosed on the respective significant foreign currency.
38. |
ADDITIONAL DISCLOSURES |
Following are the additional disclosures required by the SFC for
the Company:
|
a. |
Financing provided: None. |
|
b. |
Endorsement/guarantee provided: Please see Table 1. |
|
c. |
Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see Table 2. |
- 65 -
|
d. |
Marketable securities acquired and disposed of at costs or prices at least $300 million or 20% of the paid-in capital: Please see Table 3. |
|
e. |
Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: None. |
|
f. |
Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None. |
|
g. |
Total purchases from or sales to related parties amounting to at least $100 million or 20% of the paid-in capital: Please see Table 4. |
|
h. |
Receivables from related parties amounting to $100 million or 20% of the paid-in capital: Please see Table 5. |
|
i. |
Names, locations, and other information of investees on which the Company exercises significant influence (excluding investment in Mainland China): Please see Table 6. |
|
j. |
Financial transactions: Please see Notes 7, 20 and 34. |
|
k. |
Investment in Mainland China: Please see Table 7. |
The Company has the following reportable segments that provide
different products or services. The reportable segments are managed separately because each segment represents a strategic business unit that serves different markets. Segment information is provided to CEO who allocates resources and assesses
segment performance. The Companys measure of segment performance is mainly based on revenues and income before tax. The Companys reportable segments are as follows:
|
a. |
Domestic fixed communications businessthe provision of local telephone services, domestic long distance telephone services, broadband access, and related services; |
|
b. |
Mobile communications businessthe provision of mobile services, sales of mobile handsets and data cards, and related services; |
|
c. |
Internet businessthe provision of HiNet services and related services; |
|
d. |
International fixed communications businessthe provision of international long distance telephone services and related services; |
|
e. |
Othersthe provision of non-telecom services and the corporate related items not allocated to reportable segments. |
There was no material difference between the accounting policies of the operating segments and the accounting policies described in Note 3.
- 66 -
Segment Revenues and Operating Results
Analysis by reportable segment of revenues and operating results of continuing operations are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Fixed Communications Business |
|
|
Mobile Communications Business |
|
|
Internet Business |
|
|
International Fixed Communications Business |
|
|
Others |
|
|
Total |
|
Year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From external customers |
|
$ |
72,937,270 |
|
|
$ |
90,022,635 |
|
|
$ |
24,494,544 |
|
|
$ |
14,210,412 |
|
|
$ |
329,125 |
|
|
$ |
201,993,986 |
|
Intersegment revenues |
|
|
20,995,967 |
|
|
|
3,284,685 |
|
|
|
4,523,457 |
|
|
|
1,672,343 |
|
|
|
9,129 |
|
|
|
30,485,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues |
|
$ |
93,933,237 |
|
|
$ |
93,307,320 |
|
|
$ |
29,018,001 |
|
|
$ |
15,882,755 |
|
|
$ |
338,254 |
|
|
|
232,479,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment elimination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,485,581 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
201,993,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income (loss) before income tax |
|
$ |
23,230,601 |
|
|
$ |
18,721,024 |
|
|
$ |
9,607,825 |
|
|
$ |
1,092,457 |
|
|
$ |
(1,857,474 |
) |
|
$ |
50,794,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From external customers |
|
$ |
72,431,221 |
|
|
$ |
82,038,766 |
|
|
$ |
24,821,544 |
|
|
$ |
14,483,118 |
|
|
$ |
293,732 |
|
|
$ |
194,068,381 |
|
Intersegment revenues |
|
|
19,358,122 |
|
|
|
5,201,641 |
|
|
|
4,557,519 |
|
|
|
2,129,767 |
|
|
|
11,661 |
|
|
|
31,258,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues |
|
$ |
91,789,343 |
|
|
$ |
87,240,407 |
|
|
$ |
29,379,063 |
|
|
$ |
16,612,885 |
|
|
$ |
305,393 |
|
|
|
225,327,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment elimination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31,258,710 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
194,068,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income (loss) before income tax |
|
$ |
19,535,157 |
|
|
$ |
18,919,647 |
|
|
$ |
9,191,389 |
|
|
$ |
226,442 |
|
|
$ |
(2,091,434 |
) |
|
$ |
45,781,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Segment Information
Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Fixed Communications Business |
|
|
Mobile Communications Business |
|
|
Internet Business |
|
|
International Fixed Communications Business |
|
|
Others |
|
|
Total |
|
Year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of the profit of subsidiaries, associates and joint ventures accounted for using equity method |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
1,385,675 |
|
|
$ |
1,385,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue |
|
$ |
18,881 |
|
|
$ |
173 |
|
|
$ |
2,642 |
|
|
$ |
1,524 |
|
|
$ |
237,665 |
|
|
$ |
260,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expenses |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
$ |
17,486,804 |
|
|
$ |
10,238,384 |
|
|
$ |
3,462,309 |
|
|
$ |
1,410,497 |
|
|
$ |
231,827 |
|
|
$ |
32,829,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
$ |
10,196,172 |
|
|
$ |
8,565,151 |
|
|
$ |
4,739,234 |
|
|
$ |
842,367 |
|
|
$ |
283,693 |
|
|
$ |
24,626,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on property, plant and equipment |
|
$ |
22,193 |
|
|
$ |
115,900 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
138,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of impairment loss on investment properties |
|
$ |
142,047 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
142,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of the profit of subsidiaries, associates and joint ventures accounted for using equity method |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
1,611,147 |
|
|
$ |
1,611,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue |
|
$ |
24,079 |
|
|
$ |
169 |
|
|
$ |
3,486 |
|
|
$ |
1,631 |
|
|
$ |
225,271 |
|
|
$ |
254,636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expenses |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
6,268 |
|
|
$ |
6,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
$ |
18,540,170 |
|
|
$ |
9,644,394 |
|
|
$ |
3,278,772 |
|
|
$ |
1,705,011 |
|
|
$ |
313,175 |
|
|
$ |
33,481,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
$ |
16,164,526 |
|
|
$ |
9,472,148 |
|
|
$ |
4,371,471 |
|
|
$ |
1,371,741 |
|
|
$ |
302,408 |
|
|
$ |
31,682,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on property, plant and equipment |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of impairment loss on investment properties |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 67 -
Main Products and Service Revenues
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Mobile services revenue |
|
$ |
80,802,200 |
|
|
$ |
77,349,514 |
|
Local telephone and domestic long distance telephone services revenue |
|
|
36,722,500 |
|
|
|
38,914,299 |
|
Broadband access and domestic leased line services revenue |
|
|
23,759,760 |
|
|
|
23,744,561 |
|
Internet services revenue |
|
|
17,543,162 |
|
|
|
17,310,688 |
|
International network and leased telephone services revenue |
|
|
11,067,518 |
|
|
|
11,700,763 |
|
Others |
|
|
32,098,846 |
|
|
|
25,048,556 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
201,993,986 |
|
|
$ |
194,068,381 |
|
|
|
|
|
|
|
|
|
|
Geographic Information
The users of the Companys services are mainly from Taiwan, ROC. The revenues it derived outside Taiwan are mainly revenues from
international long distance telephone and leased line services. The geographic information for revenues was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Taiwan, ROC |
|
$ |
194,059,618 |
|
|
$ |
186,357,991 |
|
Overseas |
|
|
7,934,368 |
|
|
|
7,710,390 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
201,993,986 |
|
|
$ |
194,068,381 |
|
|
|
|
|
|
|
|
|
|
The Company does not have material noncurrent assets in foreign operations.
Major Customers
The
Company did not have any single customer whose revenue exceeded 10% of the total revenue.
- 68 -
TABLE 1
CHUNGHWA TELECOM CO., LTD.
ENDORSEMENTS/GUARANTEES
PROVIDED
YEAR ENDED DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No.
(Note 1) |
|
Endorsement/ Guarantee Provider |
|
Guaranteed Party |
|
Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party |
|
|
Maximum Balance for the Period |
|
|
Ending Balance |
|
|
Actual Borrowing Amount |
|
|
Amount of Endorsement/ Guarantee Collateralized by Properties |
|
|
Ratio of Accumulated Endorsement/ Guarantee to Net Equity Per Latest Financial Statements |
|
|
Maximum Endorsement/ Guarantee Amount Allowable |
|
|
Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries |
|
|
Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent |
|
|
Endorsement/ Guarantee Given on Behalf of Companies in Mainland China |
|
|
Note |
|
|
|
Name |
|
Nature of Relationship (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Senao International Co., Ltd. |
|
ISPOT Co., Ltd.
|
|
c
|
|
$
|
572,212
|
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
2.62
|
|
|
$
|
2,861,062
|
|
|
|
Yes
|
|
|
|
No
|
|
|
|
No
|
|
|
|
Notes 3 and 4
|
|
|
|
|
|
Youth Co., Ltd. |
|
b |
|
|
572,212 |
|
|
|
200,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
3.50 |
|
|
|
2,861,062 |
|
|
|
Yes |
|
|
|
No |
|
|
|
No |
|
|
|
Notes 3 and 4 |
|
|
|
|
|
|
Note 1: |
|
Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as follows: |
|
|
|
|
|
a. |
|
0 for the Company. |
|
|
|
|
|
b. |
|
Subsidiaries are numbered from 1. |
|
|
Note 2: |
|
Relationships between the endorsement/guarantee provider and the guaranteed party: |
|
|
|
|
|
a. |
|
Trading partner. |
|
|
|
|
|
b. |
|
Majority owned subsidiary. |
|
|
|
|
|
c. |
|
The Company and subsidiary owns over 50% ownership of the investee company. |
|
|
|
|
|
d. |
|
A subsidiary jointly owned by the Company and the Companys directly-owned subsidiary. |
|
|
|
|
|
e. |
|
Guaranteed by the Company according to the construction contract. |
|
|
|
|
|
f. |
|
An investee company. The guarantees were provided based on the Companys proportionate share in the investee company. |
|
|
Note 3: |
|
The limits on endorsement or guarantee amount provided to each guaranteed party is up to 10% of the net assets value of the latest financial statements of Senao International Co., Ltd. |
|
|
Note 4: |
|
The total amount of endorsement or guarantee that the Company is allowed to provide shall not exceed 50% of the net assets value of the latest financial statements of Senao International Co., Ltd. |
- 69 -
TABLE 2
CHUNGHWA TELECOM CO., LTD.
MARKETABLE SECURITIES
HELD
DECEMBER 31, 2015
(Amounts in Thousands
of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held Company Name |
|
Marketable Securities Type and Name |
|
Relationship with the Company |
|
|
Financial Statement Account |
|
December 31, 2015 |
|
|
Note |
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Carrying Value (Note 1) |
|
|
Percentage of Ownership |
|
|
Fair Value |
|
|
Chunghwa Telecom Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taipei Financial Center Corp. |
|
|
|
|
|
Financial assets carried at cost |
|
|
172,927 |
|
|
$ |
1,789,530 |
|
|
|
12 |
|
|
$ |
|
|
|
|
- |
|
|
|
Innovation Works Development Fund, L.P. |
|
|
|
|
|
Financial assets carried at cost |
|
|
|
|
|
|
219,541 |
|
|
|
4 |
|
|
|
|
|
|
|
- |
|
|
|
Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II) |
|
|
|
|
|
Financial assets carried at cost |
|
|
7,569 |
|
|
|
75,686 |
|
|
|
17 |
|
|
|
|
|
|
|
- |
|
|
|
Global Mobile Corp. |
|
|
|
|
|
Financial assets carried at cost |
|
|
7,617 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
- |
|
|
|
iD Branding Ventures |
|
|
|
|
|
Financial assets carried at cost |
|
|
750 |
|
|
|
7,500 |
|
|
|
8 |
|
|
|
|
|
|
|
- |
|
|
|
Innovation Works Limited |
|
|
|
|
|
Financial assets carried at cost |
|
|
1,000 |
|
|
|
31,390 |
|
|
|
2 |
|
|
|
|
|
|
|
- |
|
|
|
RPTI Intergroup International Ltd. |
|
|
|
|
|
Financial assets carried at cost |
|
|
4,765 |
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
- |
|
|
|
Essence Technology Solution, Inc. |
|
|
|
|
|
Financial assets carried at cost |
|
|
200 |
|
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
- |
|
|
|
Taiwan mobile payment Co., Ltd. |
|
|
|
|
|
Financial assets carried at cost |
|
|
1,200 |
|
|
|
12,000 |
|
|
|
2 |
|
|
|
|
|
|
|
- |
|
|
|
China Airlines Ltd. |
|
|
|
|
|
Available-for-sale financial assets |
|
|
263,622 |
|
|
|
3,163,466 |
|
|
|
5 |
|
|
|
3,163,466 |
|
|
|
Note 2 |
|
|
|
Bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Petroleum Corporation 1st Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
50,464 |
|
|
|
|
|
|
|
50,794 |
|
|
|
Note 3 |
|
|
|
China Petroleum Corporation 1st Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,946 |
|
|
|
|
|
|
|
101,589 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 2nd Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
201,421 |
|
|
|
|
|
|
|
202,435 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 3rd Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
202,095 |
|
|
|
|
|
|
|
203,096 |
|
|
|
Note 3 |
|
|
|
China Steel Corporation 1st Unsecured Corporate Bonds-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
50,043 |
|
|
|
|
|
|
|
50,274 |
|
|
|
Note 3 |
|
|
|
China Steel Corporation 1st Unsecured Corporate Bonds-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
150,248 |
|
|
|
|
|
|
|
150,822 |
|
|
|
Note 3 |
|
|
|
FRFC 1st Unsecured Corporate Bonds Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
149,963 |
|
|
|
|
|
|
|
150,450 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
299,950 |
|
|
|
|
|
|
|
301,772 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,146 |
|
|
|
|
|
|
|
100,591 |
|
|
|
Note 3 |
|
|
|
Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
300,386 |
|
|
|
|
|
|
|
301,351 |
|
|
|
Note 3 |
|
(Continued)
- 70 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held Company
Name |
|
Marketable Securities Type and Name |
|
Relationship with the Company |
|
Financial Statement Account |
|
December 31, 2015 |
|
|
Note |
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Carrying Value (Note 1) |
|
|
Percentage of Ownership |
|
|
Fair Value |
|
|
|
|
Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond Issue in 2011 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
$ |
100,120 |
|
|
|
|
|
|
$ |
100,450 |
|
|
|
Note 3 |
|
|
|
Formosa Petrochemical Corporation 1st Unsecured Corporate Bonds Issue in 2011 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
74,987 |
|
|
|
|
|
|
|
75,163 |
|
|
|
Note 3 |
|
|
|
Formosa Petrochemical Corporation 3rd Unsecured Corporate Bonds Issue in 2011 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,969 |
|
|
|
|
|
|
|
100,494 |
|
|
|
Note 3 |
|
|
|
Chinese Petroleum Corporation 2nd unsecured Corporate Bonds-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,930 |
|
|
|
|
|
|
|
201,085 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,972 |
|
|
|
|
|
|
|
100,492 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
39,989 |
|
|
|
|
|
|
|
40,197 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 2nd Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,969 |
|
|
|
|
|
|
|
100,488 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,959 |
|
|
|
|
|
|
|
201,200 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,979 |
|
|
|
|
|
|
|
100,600 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
200,081 |
|
|
|
|
|
|
|
201,200 |
|
|
|
Note 3 |
|
|
|
TSMC 2nd Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,934 |
|
|
|
|
|
|
|
201,364 |
|
|
|
Note 3 |
|
|
|
TSMC 3rd Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,929 |
|
|
|
|
|
|
|
201,118 |
|
|
|
Note 3 |
|
|
|
Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
300,000 |
|
|
|
|
|
|
|
301,822 |
|
|
|
Note 3 |
|
|
|
China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
150,016 |
|
|
|
|
|
|
|
150,807 |
|
|
|
Note 3 |
|
|
|
China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,022 |
|
|
|
|
|
|
|
100,538 |
|
|
|
Note 3 |
|
|
|
China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,022 |
|
|
|
|
|
|
|
100,538 |
|
|
|
Note 3 |
|
|
|
Eximbank 19-2nd unsecured Financial Debenture |
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
150,000 |
|
|
|
|
|
|
|
149,997 |
|
|
|
Note 3 |
|
Senao International Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.T.U. Innovation Incubation Corporation |
|
|
|
Financial assets carried at cost |
|
|
1,200 |
|
|
|
12,000 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
CHIEF Telecom Inc. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Link Information Service Co., Ltd. |
|
|
|
Financial assets carried at cost |
|
|
374 |
|
|
|
3,450 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
(Continued)
- 71 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held Company
Name |
|
Marketable Securities Type and Name |
|
Relationship with the Company |
|
Financial Statement Account |
|
December 31, 2015 |
|
|
Note |
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Carrying Value (Note 1) |
|
|
Percentage of Ownership |
|
|
Fair Value |
|
|
Chunghwa Investment Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tatung Technology Inc. |
|
|
|
Financial assets carried at cost |
|
|
4,571 |
|
|
$ |
73,964 |
|
|
|
11 |
|
|
$ |
|
|
|
|
|
|
|
|
iD Branding Ventures |
|
|
|
Financial assets carried at cost |
|
|
250 |
|
|
|
2,500 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
VisEra Technologies Company Ltd. |
|
|
|
Financial assets carried at cost |
|
|
629 |
|
|
|
13,495 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PChome Store Inc. |
|
|
|
Available-for-sale financial assets |
|
|
280 |
|
|
|
32,247 |
|
|
|
1 |
|
|
|
32,247 |
|
|
|
Note 2 |
|
|
|
Tons Lightology Inc. |
|
|
|
Available-for-sale financial assets |
|
|
1,318 |
|
|
|
47,114 |
|
|
|
3 |
|
|
|
47,114 |
|
|
|
Note 2 |
|
Chunghwa Hsingta Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cotech Engineering Fuzhou Corp. |
|
|
|
Financial assets carried at cost |
|
|
|
|
|
|
26,861 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: |
|
Showing at carrying amounts with adjustments for fair value and deducted accumulated impairment loss; otherwise, showing at their original carrying amounts on amortized cost deducted the accumulated impairment loss. |
|
|
Note 2: |
|
Fair value was based on the closing price of December 31, 2015. |
|
|
Note 3: |
|
Fair value was based on the average trading price on December 31, 2015. |
(Concluded)
- 72 -
TABLE 3
CHUNGHWA TELECOM CO., LTD.
MARKETABLE SECURITIES
ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
YEAR ENDED DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name |
|
Marketable Securities Type
and Name |
|
Financial Statement Account |
|
Counter- party |
|
|
Nature of Relationship |
|
|
Beginning Balance |
|
|
Acquisition |
|
|
Disposal |
|
|
Ending Balance |
|
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount (Note 1) |
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount |
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount |
|
|
Carrying Value (Note 1) |
|
|
Gain (Loss) on Disposal |
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount (Note 1) |
|
Chunghwa Telecom Co., Ltd. |
|
Bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taiwan Power Co. 4th Unsecured Corporate Bond-A Issue in 2010 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
300,000 (Note 2 |
) |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
300,000 (Note 2 |
) |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
KGI Securities Co., Ltd. 1st Unsecured Corporate Bonds in 2012 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taipei Fubon Bank 5th Financial Debentures-A Issue in 2010 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fubon Financial Holding Co., Ltd. 3rd Unsecured Corporate Bond Issue in 2010 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
1,000,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Senao International Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Youth Co., Ltd. |
|
Investments accounted for using equity method |
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,780 |
|
|
|
335,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,780 |
|
|
|
318,070 (Note 3 |
) |
|
|
|
Note 1: |
|
Showing at their original investing amounts without adjustments for fair values. |
|
|
Note 2: |
|
Showing at their nominal amounts. |
|
|
Note 3: |
|
The ending balance includes share of the profit or loss of investments accounted for using equity method and adjustment of share subscription not based on original ownership. |
- 73 -
TABLE 4
CHUNGHWA TELECOM CO., LTD.
TOTAL PURCHASES FROM OR
SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
YEAR ENDED DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name |
|
Related Party |
|
Nature of Relationship |
|
Transaction Details |
|
Abnormal Transaction |
|
|
Notes/Accounts Payable or Receivable |
|
|
|
|
Purchase/Sales (Note 1) |
|
Amount (Note 2) |
|
|
% to Total |
|
|
Payment Terms |
|
Units Price |
|
|
Payment Terms |
|
|
Ending Balance (Note 3) |
|
|
% to Total |
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
Subsidiary |
|
Sales |
|
$ |
869,657 |
|
|
|
|
|
|
30 days |
|
$ |
|
|
|
|
|
|
|
$ |
125,237 |
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
10,104,577 |
|
|
|
8 |
|
|
30-90 days |
|
|
|
|
|
|
|
|
|
|
(1,107,421 |
) |
|
|
(7 |
) |
|
|
Chunghwa System Integration Co., Ltd. |
|
Subsidiary |
|
Purchase |
|
|
646,821 |
|
|
|
1 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(563,901 |
) |
|
|
(3 |
) |
|
|
CHIEF Telecom Inc. |
|
Subsidiary |
|
Sales |
|
|
282,065 |
|
|
|
|
|
|
60 days |
|
|
|
|
|
|
|
|
|
|
38,438 |
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
327,708 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(42,862 |
) |
|
|
|
|
|
|
Donghwa Telecom Co., Ltd. |
|
Subsidiary |
|
Sales |
|
|
160,069 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
64,672 |
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
293,984 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(74,290 |
) |
|
|
|
|
|
|
Chunghwa Telecom Global, Inc. |
|
Subsidiary |
|
Purchase |
|
|
366,459 |
|
|
|
|
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
(116,744 |
) |
|
|
(1 |
) |
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Subsidiary |
|
Sales |
|
|
151,639 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
143,960 |
|
|
|
1 |
|
|
|
|
|
|
|
Purchase |
|
|
119,766 |
|
|
|
|
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
(207,991 |
) |
|
|
(1 |
) |
|
|
Honghwa International Co., Ltd. |
|
Subsidiary |
|
Purchase |
|
|
3,484,888 |
|
|
|
3 |
|
|
30-60 days |
|
|
|
|
|
|
|
|
|
|
(744,708 |
) |
|
|
(5 |
) |
|
|
ST-2 Satellite Ventures Pte. Ltd. |
|
Associate |
|
Purchase |
|
|
404,120 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(49,364 |
) |
|
|
|
|
|
|
Taiwan International Standard Electronics Co., Ltd. |
|
Associate |
|
Purchase |
|
|
560,732 |
|
|
|
|
|
|
30-90 days |
|
|
|
|
|
|
|
|
|
|
(341,508 |
) |
|
|
(2 |
) |
|
|
So-net Entertainment Taiwan Limited |
|
Associate |
|
Sales |
|
|
211,854 |
|
|
|
|
|
|
60 days |
|
|
|
|
|
|
|
|
|
|
91 |
|
|
|
|
|
|
|
International Integrated System, Inc. |
|
Associate |
|
Purchase |
|
|
127,458 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(64,121 |
) |
|
|
|
|
Senao International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
10,115,519 |
|
|
|
28 |
|
|
30-90 days |
|
|
|
|
|
|
|
|
|
|
1,127,672 |
|
|
|
57 |
|
|
|
|
|
|
|
Purchase |
|
|
550,665 |
|
|
|
2 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(108,095 |
) |
|
|
(4 |
) |
|
|
HopeTech Technologies Limited |
|
Associate |
|
Purchase |
|
|
246,635 |
|
|
|
1 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(26,542 |
) |
|
|
(1 |
) |
Chunghwa System Integration Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
1,488,372 |
|
|
|
73 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
563,901 |
|
|
|
64 |
|
CHIEF Telecom Inc. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
327,708 |
|
|
|
19 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
42,862 |
|
|
|
29 |
|
|
|
|
|
|
|
Purchase |
|
|
282,065 |
|
|
|
23 |
|
|
60 days |
|
|
|
|
|
|
|
|
|
|
(38,438 |
) |
|
|
(32 |
) |
Donghwa Telecom Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
293,984 |
|
|
|
35 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
74,290 |
|
|
|
49 |
|
|
|
|
|
|
|
Purchase |
|
|
160,069 |
|
|
|
19 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(64,672 |
) |
|
|
(53 |
) |
Chunghwa Telecom Global, Inc. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
366,459 |
|
|
|
59 |
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
116,744 |
|
|
|
94 |
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
119,766 |
|
|
|
12 |
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
207,991 |
|
|
|
42 |
|
|
|
|
|
|
|
Purchase |
|
|
151,639 |
|
|
|
16 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(143,960 |
) |
|
|
(43 |
) |
Honghwa International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
3,484,888 |
|
|
|
100 |
|
|
30-60 days |
|
|
|
|
|
|
|
|
|
|
744,708 |
|
|
|
100 |
|
|
|
|
Note 1: |
|
Purchase included acquisition of services costs. |
|
|
Note 2: |
|
The differences were because Chunghwa Telecom Co., Ltd. and subsidiaries classified the amount as inventories, property, plant and equipment, intangible assets, and operating expenses. |
|
|
Note 3: |
|
Notes and accounts receivable did not include the amount as amounts collected for others and other receivables. |
|
|
Note 4: |
|
Transaction terms with the related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly different
from those with third parties. |
- 74 -
TABLE 5
CHUNGHWA TELECOM CO., LTD.
RECEIVABLES FROM RELATED
PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name |
|
Related Party |
|
Nature of Relationship |
|
Ending Balance |
|
|
Turnover Rate (Note) |
|
|
Overdue |
|
|
Amounts Received in Subsequent Period |
|
|
Allowance for Bad Debts |
|
|
|
|
|
|
Amounts |
|
|
Action Taken |
|
|
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
Subsidiary |
|
$ |
513,703 |
|
|
|
13.50 |
|
|
$ |
|
|
|
|
|
|
|
$ |
513,052 |
|
|
$ |
|
|
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Subsidiary |
|
|
143,960 |
|
|
|
3.68 |
|
|
|
|
|
|
|
|
|
|
|
82,062 |
|
|
|
|
|
Senao International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
1,590,564 |
|
|
|
8.03 |
|
|
|
|
|
|
|
|
|
|
|
1,220,391 |
|
|
|
|
|
Chunghwa System Integration Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
563,901 |
|
|
|
4.67 |
|
|
|
|
|
|
|
|
|
|
|
418,184 |
|
|
|
|
|
Chunghwa International Yellow Pages Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
108,321 |
|
|
|
5.42 |
|
|
|
|
|
|
|
|
|
|
|
88,532 |
|
|
|
|
|
Chunghwa Telecom Global, Inc. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
116,744 |
|
|
|
5.47 |
|
|
|
|
|
|
|
|
|
|
|
73,679 |
|
|
|
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
207,991 |
|
|
|
3.40 |
|
|
|
|
|
|
|
|
|
|
|
116,541 |
|
|
|
|
|
Honghwa International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
744,708 |
|
|
|
6.50 |
|
|
|
|
|
|
|
|
|
|
|
504,209 |
|
|
|
|
|
|
|
|
Note: |
|
Payments and receipts collected in trust for others are excluded from the accounts receivable for calculating the turnover rate. |
- 75 -
TABLE 6
CHUNGHWA TELECOM CO., LTD.
NAMES, LOCATIONS, AND
OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)
YEAR ENDED DECEMBER
31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Company |
|
Investee Company |
|
Location |
|
Main Businesses and Products |
|
Original Investment Amount |
|
|
Balance as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
Recognized Gain (Loss) (Notes 1 and 2) |
|
|
Note |
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
Shares (Thousands) |
|
|
Percentage of Ownership (%) |
|
|
Carrying Value |
|
|
|
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
Taiwan |
|
Selling and maintaining mobile phones and its peripheral products |
|
$ |
1,065,813 |
|
|
$ |
1,065,813 |
|
|
|
71,773 |
|
|
|
29 |
|
|
$ |
1,667,980 |
|
|
$ |
813,094 |
|
|
$ |
225,663 |
|
|
Subsidiary |
|
|
Light Era Development Co., Ltd. |
|
Taiwan |
|
Housing, office building development, rent and sale services |
|
|
3,000,000 |
|
|
|
3,000,000 |
|
|
|
300,000 |
|
|
|
100 |
|
|
|
3,849,489 |
|
|
|
5,605 |
|
|
|
5,676 |
|
|
Subsidiary |
|
|
Donghwa Telecom Co., Ltd. |
|
Hong Kong |
|
International telecommunications IP fictitious internet and internet transfer services |
|
|
1,567,453 |
|
|
|
1,567,453 |
|
|
|
402,590 |
|
|
|
100 |
|
|
|
1,608,311 |
|
|
|
(21,305 |
) |
|
|
(21,305 |
) |
|
Subsidiary |
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Singapore |
|
International telecommunications IP fictitious internet and internet transfer services |
|
|
574,112 |
|
|
|
574,112 |
|
|
|
26,383 |
|
|
|
100 |
|
|
|
745,854 |
|
|
|
107,302 |
|
|
|
107,302 |
|
|
Subsidiary |
|
|
Chunghwa System Integration Co., Ltd. |
|
Taiwan |
|
Providing communication and information aggregative services |
|
|
838,506 |
|
|
|
838,506 |
|
|
|
60,000 |
|
|
|
100 |
|
|
|
677,017 |
|
|
|
(50,717 |
) |
|
|
(6,112 |
) |
|
Subsidiary |
|
|
CHIEF Telecom Inc. |
|
Taiwan |
|
Internet communication and internet data center (IDC) service |
|
|
482,165 |
|
|
|
482,165 |
|
|
|
41,357 |
|
|
|
69 |
|
|
|
742,049 |
|
|
|
258,235 |
|
|
|
180,365 |
|
|
Subsidiary |
|
|
Chunghwa Investment Co., Ltd. |
|
Taiwan |
|
Investment |
|
|
639,559 |
|
|
|
639,559 |
|
|
|
68,085 |
|
|
|
89 |
|
|
|
764,488 |
|
|
|
178,706 |
|
|
|
159,214 |
|
|
Subsidiary |
|
|
Prime Asia Investments Group Ltd. (B.V.I.) |
|
British Virgin Islands |
|
Investment |
|
|
385,274 |
|
|
|
385,274 |
|
|
|
1 |
|
|
|
100 |
|
|
|
250,952 |
|
|
|
(24,235 |
) |
|
|
(24,234 |
) |
|
Subsidiary |
|
|
Honghwa International Co., Ltd. |
|
Taiwan |
|
Telecommunication constructions, telecommunication service agencies and other services |
|
|
180,000 |
|
|
|
180,000 |
|
|
|
18,000 |
|
|
|
100 |
|
|
|
389,321 |
|
|
|
189,023 |
|
|
|
189,023 |
|
|
Subsidiary |
|
|
Chunghwa International Yellow Pages Co., Ltd. |
|
Taiwan |
|
Yellow pages sales and advertisement services |
|
|
150,000 |
|
|
|
150,000 |
|
|
|
15,000 |
|
|
|
100 |
|
|
|
187,239 |
|
|
|
20,748 |
|
|
|
20,746 |
|
|
Subsidiary |
|
|
Chunghwa Telecom Vietnam Co., Ltd. |
|
Vietnam |
|
Information and communications technology, international circuit, and intelligent energy network service |
|
|
148,275 |
|
|
|
148,275 |
|
|
|
|
|
|
|
100 |
|
|
|
140,627 |
|
|
|
4,702 |
|
|
|
4,702 |
|
|
Subsidiary |
|
|
Chunghwa Telecom Global, Inc. |
|
United States |
|
International data and internet services and long distance call wholesales to carriers |
|
|
70,429 |
|
|
|
70,429 |
|
|
|
6,000 |
|
|
|
100 |
|
|
|
155,145 |
|
|
|
11,689 |
|
|
|
13,944 |
|
|
Subsidiary |
|
|
Spring House Entertainment Tech. Inc. |
|
Taiwan |
|
Network services, producing digital entertainment contents and broadband visual sound terrace development |
|
|
62,209 |
|
|
|
62,209 |
|
|
|
10,277 |
|
|
|
56 |
|
|
|
95,007 |
|
|
|
(52,503 |
) |
|
|
(29,125 |
) |
|
Subsidiary |
|
|
Smartfun Digital Co., Ltd. |
|
Taiwan |
|
Software retail |
|
|
65,000 |
|
|
|
65,000 |
|
|
|
6,500 |
|
|
|
65 |
|
|
|
64,255 |
|
|
|
5,363 |
|
|
|
3,486 |
|
|
Subsidiary |
|
|
Chunghwa Telecom Japan Co., Ltd. |
|
Japan |
|
International telecommunications IP fictitious internet and internet transfer services |
|
|
17,291 |
|
|
|
17,291 |
|
|
|
1 |
|
|
|
100 |
|
|
|
38,648 |
|
|
|
6,764 |
|
|
|
6,764 |
|
|
Subsidiary |
(Continued)
- 76 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Company |
|
Investee Company |
|
Location |
|
Main Businesses and Products |
|
Original Investment Amount |
|
|
Balance as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
Recognized Gain (Loss) (Notes 1 and 2) |
|
|
Note |
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
Shares (Thousands) |
|
|
Percentage of Ownership (%) |
|
|
Carrying Value |
|
|
|
|
|
|
Chunghwa Sochamp Technology Inc. |
|
Taiwan |
|
License plate recognition system |
|
|
20,400 |
|
|
|
20,400 |
|
|
|
2,040 |
|
|
|
51 |
|
|
|
1,689 |
|
|
|
(8,247 |
) |
|
|
(7,704 |
) |
|
Subsidiary |
|
|
New Prospect Investments Holdings Ltd. (B.V.I.) |
|
British Virgin Islands |
|
Investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary (Note 3) |
|
|
International Integrated System, Inc. |
|
Taiwan |
|
IT solution provider, IT application consultation, system integration and package solution |
|
|
283,500 |
|
|
|
283,500 |
|
|
|
22,498 |
|
|
|
33 |
|
|
|
301,861 |
|
|
|
62,778 |
|
|
|
23,990 |
|
|
Associate |
|
|
Viettel-CHT Co., Ltd. |
|
Vietnam |
|
IDC services |
|
|
288,327 |
|
|
|
288,327 |
|
|
|
|
|
|
|
30 |
|
|
|
315,762 |
|
|
|
181,807 |
|
|
|
54,567 |
|
|
Associate |
|
|
Taiwan International Standard Electronics Co., Ltd. |
|
Taiwan |
|
Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment |
|
|
164,000 |
|
|
|
164,000 |
|
|
|
1,760 |
|
|
|
40 |
|
|
|
374,487 |
|
|
|
1,231,717 |
|
|
|
515,435 |
|
|
Associate |
|
|
Skysoft Co., Ltd. |
|
Taiwan |
|
Providing of music on-line, software, electronic information, and advertisement services |
|
|
67,025 |
|
|
|
67,025 |
|
|
|
4,438 |
|
|
|
30 |
|
|
|
137,792 |
|
|
|
60,291 |
|
|
|
19,300 |
|
|
Associate |
|
|
So-net Entertainment Taiwan Limited |
|
Taiwan |
|
Online service and sale of computer hardware |
|
|
120,008 |
|
|
|
120,008 |
|
|
|
9,429 |
|
|
|
30 |
|
|
|
105,844 |
|
|
|
21,062 |
|
|
|
6,318 |
|
|
Associate |
|
|
Kingway Technology Co., Ltd. |
|
Taiwan |
|
Publishing books, data processing and software services |
|
|
69,013 |
|
|
|
71,770 |
|
|
|
4,256 |
|
|
|
26 |
|
|
|
119,419 |
|
|
|
5,810 |
|
|
|
1,112 |
|
|
Associate |
|
|
Taiwan International Ports Logistics Corporation |
|
Taiwan |
|
Import and export storage, logistic warehouse, and ocean shipping service |
|
|
80,000 |
|
|
|
80,000 |
|
|
|
8,000 |
|
|
|
27 |
|
|
|
68,927 |
|
|
|
(37,456 |
) |
|
|
(10,054 |
) |
|
Associate |
|
|
Dian Zuan Integrating Marketing Co., Ltd. |
|
Taiwan |
|
Information technology service and general advertisement service |
|
|
97,598 |
|
|
|
97,598 |
|
|
|
5,400 |
|
|
|
18 |
|
|
|
27,327 |
|
|
|
(97,861 |
) |
|
|
(17,615 |
) |
|
Associate |
|
|
Alliance Digital Tech Co., Ltd. |
|
Taiwan |
|
Development of mobile payments and information processing service |
|
$ |
30,000 |
|
|
$ |
30,000 |
|
|
|
3,000 |
|
|
|
13 |
|
|
$ |
15,336 |
|
|
$ |
(47,144 |
) |
|
$ |
(6,284 |
) |
|
Associate |
|
|
Huada Digital Corporation |
|
Taiwan |
|
Providing software service |
|
|
250,000 |
|
|
|
250,000 |
|
|
|
25,000 |
|
|
|
50 |
|
|
|
206,737 |
|
|
|
(21,027 |
) |
|
|
(12,088 |
) |
|
Joint venture |
|
|
Chunghwa Benefit One Co., Ltd. |
|
Taiwan |
|
E-commerce of employee benefits |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
5,000 |
|
|
|
50 |
|
|
|
20,642 |
|
|
|
(34,822 |
) |
|
|
(17,411 |
) |
|
Joint venture |
Senao International Co., Ltd. |
|
Senao Networks, Inc. |
|
Taiwan |
|
Telecommunication facilities manufactures and sales |
|
|
202,758 |
|
|
|
202,758 |
|
|
|
16,579 |
|
|
|
34 |
|
|
|
866,696 |
|
|
|
811,958 |
|
|
|
274,848 |
|
|
Associate |
|
|
Senao International (Samoa) Holding Ltd. |
|
Samoa Islands |
|
International investment |
|
|
2,416,645 |
|
|
|
2,416,645 |
|
|
|
81,175 |
|
|
|
100 |
|
|
|
654,346 |
|
|
|
(279,770 |
) |
|
|
(279,294 |
) |
|
Subsidiary |
|
|
Dian Zuan Integrating Marketing Co., Ltd. |
|
Taiwan |
|
Information technology service and general advertisement service |
|
|
24,000 |
|
|
|
24,000 |
|
|
|
2,400 |
|
|
|
8 |
|
|
|
14,595 |
|
|
|
(97,861 |
) |
|
|
(7,816 |
) |
|
Associate |
|
|
Youth Co., Ltd. |
|
Taiwan |
|
Sale of computer software, hardware and related products |
|
|
335,450 |
|
|
|
|
|
|
|
13,780 |
|
|
|
89 |
|
|
|
318,070 |
|
|
|
(17,823 |
) |
|
|
(15,954 |
) |
|
Subsidiary |
|
|
Aval Technologies Co., Ltd. |
|
Taiwan |
|
Agency and sale of communication products |
|
|
60,000 |
|
|
|
|
|
|
|
6,000 |
|
|
|
100 |
|
|
|
59,204 |
|
|
|
(796 |
) |
|
|
(796 |
) |
|
Subsidiary |
CHIEF Telecom Inc. |
|
Unigate Telecom Inc. |
|
Taiwan |
|
Telecommunication and internet service |
|
|
2,000 |
|
|
|
2,000 |
|
|
|
200 |
|
|
|
100 |
|
|
|
1,301 |
|
|
|
(126 |
) |
|
|
(126 |
) |
|
Subsidiary |
|
|
Chief International Corp. |
|
Samoa Islands |
|
Investment |
|
|
6,068 |
|
|
|
6,068 |
|
|
|
200 |
|
|
|
100 |
|
|
|
33,788 |
|
|
|
6,441 |
|
|
|
6,441 |
|
|
Subsidiary |
Chunghwa System Integrated Co., Ltd. |
|
Concord Technology Co., Ltd. |
|
Brunei |
|
Investment |
|
|
47,321 |
|
|
|
47,321 |
|
|
|
1,500 |
|
|
|
100 |
|
|
|
19,594 |
|
|
|
(131 |
) |
|
|
(131 |
) |
|
Subsidiary |
Spring House Entertainment Tech. Inc. |
|
Ceylon Innovation Co., Ltd. |
|
Taiwan |
|
International trading, general advertisement and book publishing service |
|
|
10,000 |
|
|
|
10,000 |
|
|
|
|
|
|
|
100 |
|
|
|
10,275 |
|
|
|
232 |
|
|
|
232 |
|
|
Subsidiary |
Chunghwa Telecom Singapore Pte., Ltd. |
|
ST-2 Satellite Ventures Pte., Ltd. |
|
Singapore |
|
Operation of ST-2 telecommunication satellite |
|
|
409,061 |
|
|
|
409,061 |
|
|
|
18,102 |
|
|
|
38 |
|
|
|
494,727 |
|
|
|
231,837 |
|
|
|
88,098 |
|
|
Associate |
(Continued)
- 77 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Company |
|
Investee Company |
|
Location |
|
Main Businesses and Products |
|
Original Investment Amount |
|
|
Balance as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
Recognized Gain (Loss) (Notes 1 and 2) |
|
|
Note |
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
Shares (Thousands) |
|
|
Percentage of Ownership (%) |
|
|
Carrying Value |
|
|
|
|
Chunghwa Investment Co., Ltd. |
|
Chunghwa Precision Test Tech. Co., Ltd. |
|
Taiwan |
|
Semiconductor testing components and printed circuit board industry production and marketing of electronic products |
|
|
203,443 |
|
|
|
212,226 |
|
|
|
12,791 |
|
|
|
46 |
|
|
|
512,840 |
|
|
|
413,483 |
|
|
|
188,921 |
|
|
Subsidiary |
|
|
Chunghwa Investment Holding Co., Ltd. |
|
Brunei |
|
Investment |
|
|
46,035 |
|
|
|
46,035 |
|
|
|
1,432 |
|
|
|
100 |
|
|
|
14,694 |
|
|
|
(1,543 |
) |
|
|
(1,543 |
) |
|
Subsidiary |
|
|
Panda Monium Company Ltd. |
|
Cayman |
|
The production of animation |
|
|
|
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associate |
|
|
CHIEF Telecom Inc. |
|
Taiwan |
|
Internet communication and internet data center (IDC) service |
|
|
20,000 |
|
|
|
20,000 |
|
|
|
2,000 |
|
|
|
4 |
|
|
|
35,694 |
|
|
|
258,235 |
|
|
|
9,317 |
|
|
Associate |
|
|
Senao International Co., Ltd. |
|
Taiwan |
|
Selling and maintaining mobile phones and its peripheral products |
|
|
49,731 |
|
|
|
49,731 |
|
|
|
1,001 |
|
|
|
|
|
|
|
44,180 |
|
|
|
813,094 |
|
|
|
1,443 |
|
|
Associate |
Chunghwa Precision Test Tech. Co., Ltd. |
|
Chunghwa Precision Test Tech. USA Corporation |
|
United States |
|
Semiconductor testing components and printed circuit board industry production and marketing of electronic products |
|
|
12,636 |
|
|
|
12,636 |
|
|
|
400 |
|
|
|
100 |
|
|
|
15,667 |
|
|
|
1,028 |
|
|
|
1,028 |
|
|
Subsidiary |
|
|
CHPT Japan Co., Ltd. |
|
Japan |
|
Sale and maintenance of electronic parts and machinery processed products, and design of printed circuit board |
|
|
2,008 |
|
|
|
2,008 |
|
|
|
1 |
|
|
|
100 |
|
|
|
1,831 |
|
|
|
87 |
|
|
|
87 |
|
|
Subsidiary |
|
|
Chunghwa Precision Test Tech. International, Ltd. |
|
Samoa Islands |
|
Electronic materials wholesale and retail and investments |
|
|
2,970 |
|
|
|
2,970 |
|
|
|
100 |
|
|
|
100 |
|
|
|
2,420 |
|
|
|
323 |
|
|
|
323 |
|
|
Subsidiary |
Prime Asia Investments Group, Ltd. (B.V.I.) |
|
Chunghwa Hsingta Co., Ltd. |
|
Hong Kong |
|
Investment |
|
|
375,274 |
|
|
|
375,274 |
|
|
|
1 |
|
|
|
100 |
|
|
|
250,951 |
|
|
|
(15,262 |
) |
|
|
(15,262 |
) |
|
Subsidiary |
|
|
MeWorks Limited (HK) |
|
Hong Kong |
|
Investment |
|
|
10,000 |
|
|
|
10,000 |
|
|
|
|
|
|
|
20 |
|
|
|
|
|
|
|
(3,792 |
) |
|
|
(758 |
) |
|
Associate |
Senao International (Samoa) Holding Ltd. |
|
Senao International HK Limited |
|
Hong Kong |
|
International investment |
|
|
2,393,646 |
|
|
|
2,393,646 |
|
|
|
80,440 |
|
|
|
100 |
|
|
|
616,726 |
|
|
|
(282,531 |
) |
|
|
(282,531 |
) |
|
Subsidiary |
|
|
HopeTech Technologies Limited |
|
Hong Kong |
|
Information technology and telecommunication products sales |
|
|
21,177 |
|
|
|
21,177 |
|
|
|
5,240 |
|
|
|
45 |
|
|
|
37,189 |
|
|
|
6,197 |
|
|
|
2,789 |
|
|
Associate |
Chunghwa Investment Holding Co., Ltd. |
|
CHI One Investment Co., Limited |
|
Hong Kong |
|
Investment |
|
$ |
|
|
|
$ |
26,035 |
|
|
|
|
|
|
|
100 |
|
|
$ |
|
|
|
$ |
(1,330 |
) |
|
$ |
(1,330 |
) |
|
Subsidiary (Note 5) |
Youth Co., Ltd. |
|
ISPOT Co., Ltd. |
|
Taiwan |
|
Sale of computer and related products |
|
|
23,021 |
|
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
4,391 |
|
|
|
(5,262 |
) |
|
|
(5,418 |
) |
|
Subsidiary |
|
|
Youyi Co., Ltd. |
|
Taiwan |
|
Maintenance of computer and related products |
|
|
6,920 |
|
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
2,201 |
|
|
|
(560 |
) |
|
|
(628 |
) |
|
Subsidiary |
Chunghwa International Yellow Pages Co., Ltd. |
|
Click Force Marketing Company |
|
Taiwan |
|
Advertising services |
|
|
44,607 |
|
|
|
39,000 |
|
|
|
1,078 |
|
|
|
49 |
|
|
|
38,914 |
|
|
|
(3,977 |
) |
|
|
(4,993 |
) |
|
Associate |
|
|
|
Note 1: |
|
The equity in net income (loss) of investees was based on audited financial statements. |
|
|
Note 2: |
|
The equity in net income (loss) of investees includes amortization of differences between the investment cost and net value and elimination of unrealized transactions. |
|
|
Note 3: |
|
New Prospect Investments Holdings Ltd. (B.V.I.) was incorporated in March 2006, but have not yet begun operation as of December 31, 2015. |
|
|
Note 4: |
|
Investment in mainland China is included in Table 7. |
|
|
Note 5: |
|
CHI One Investment Co., Limited was liquidated in August 2015. Chunghwa Investment Holding Co., Ltd. received part of the proceeds from disposal. |
(Concluded)
- 78 -
TABLE 7
CHUNGHWA TELECOM CO., LTD.
INVESTMENT IN MAINLAND
CHINA
YEAR ENDED DECEMBER 31, 2015
(Amounts
in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investee |
|
Main Businesses and Products |
|
Total Amount of Paid-in Capital |
|
|
Investment Type (Note 1) |
|
|
Accumulated Outflow of Investment from Taiwan as of January 1, 2015 |
|
|
Investment Flows |
|
|
Accumulated Outflow of Investment from Taiwan as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
% Ownership of Direct or Indirect Investment |
|
|
Investment Gain (Loss) (Note 2) |
|
|
Carrying Value as of December 31, 2015 |
|
|
Accumulated Inward Remittance of Earnings as of December 31, 2015 |
|
|
Note |
|
|
|
|
|
|
Outflow |
|
|
Inflow |
|
|
|
|
|
|
|
|
Glory Network System Service (Shanghai) Co., Ltd. |
|
Providing advanced business solutions to telecommunications |
|
$ |
47,321 |
|
|
|
2 |
|
|
$ |
47,321 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
47,321 |
|
|
$ |
(131 |
) |
|
|
100 |
|
|
$ |
(131 |
) |
|
$ |
19,594 |
|
|
$ |
|
|
|
|
|
|
Xiamen Sertec Business Technology Co., Ltd. |
|
Customer services and platform rental activities |
|
|
51,552 |
|
|
|
2 |
|
|
|
25,414 |
|
|
|
|
|
|
|
(3,191 |
) |
|
|
|
|
|
|
(2,779 |
) |
|
|
49 |
|
|
|
(2,011 |
) |
|
|
|
|
|
|
|
|
|
|
Note 4 |
|
Senao Trading (Fujian) Co., Ltd. |
|
Information technology services and sale of communication products |
|
|
1,073,170 |
|
|
|
2 |
|
|
|
1,073,170 |
|
|
|
|
|
|
|
|
|
|
|
1,073,170 |
|
|
|
(188,745 |
) |
|
|
100 |
|
|
|
(188,745 |
) |
|
|
213,467 |
|
|
|
|
|
|
|
|
|
Senao International Trading (Shanghai) Co., Ltd. |
|
Information technology services and sale of communication products |
|
|
955,838 |
|
|
|
2 |
|
|
|
955,838 |
|
|
|
|
|
|
|
|
|
|
|
955,838 |
|
|
|
(97,874 |
) |
|
|
100 |
|
|
|
(97,874 |
) |
|
|
227,890 |
|
|
|
|
|
|
|
|
|
Senao International Trading (Shanghai) Co., Ltd. (Note 8) |
|
Information technology services and maintenance of communication products |
|
|
87,540 |
|
|
|
2 |
|
|
|
87,540 |
|
|
|
|
|
|
|
|
|
|
|
87,540 |
|
|
|
1,653 |
|
|
|
100 |
|
|
|
1,653 |
|
|
|
77,825 |
|
|
|
|
|
|
|
|
|
Senao International Trading (Jiangsu) Co., Ltd. |
|
Information technology services and sale of communication products |
|
|
263,736 |
|
|
|
2 |
|
|
|
263,736 |
|
|
|
|
|
|
|
|
|
|
|
263,736 |
|
|
|
2,581 |
|
|
|
100 |
|
|
|
2,581 |
|
|
|
94,143 |
|
|
|
|
|
|
|
|
|
Chunghwa Telecom (China) Co., Ltd. |
|
Energy conserving and providing installation, design and maintenance services |
|
|
177,176 |
|
|
|
2 |
|
|
|
177,176 |
|
|
|
|
|
|
|
|
|
|
|
177,176 |
|
|
|
(12,965 |
) |
|
|
100 |
|
|
|
(12,965 |
) |
|
|
67,815 |
|
|
|
|
|
|
|
|
|
Jiangsu Zhenghua Information Technology Company, LLC |
|
Intelligent energy serving and intelligent building services |
|
|
189,410 |
|
|
|
2 |
|
|
|
142,057 |
|
|
|
|
|
|
|
|
|
|
|
142,057 |
|
|
|
607 |
|
|
|
75 |
|
|
|
456 |
|
|
|
134,929 |
|
|
|
|
|
|
|
|
|
Hua-Xiong Information Technology Co., Ltd. |
|
Intelligent system and energy saving system services in buildings |
|
|
56,386 |
|
|
|
2 |
|
|
|
28,855 |
|
|
|
|
|
|
|
|
|
|
|
28,855 |
|
|
|
(5,402 |
) |
|
|
51 |
|
|
|
(2,754 |
) |
|
|
21,346 |
|
|
|
|
|
|
|
|
|
(Continued)
- 79 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investee |
|
Main Businesses and Products |
|
Total Amount of Paid- in Capital |
|
|
Investment Type (Note 1) |
|
|
Accumulated Outflow of Investment from Taiwan as of January 1, 2015 |
|
|
Investment Flows |
|
|
Accumulated Outflow of Investment from Taiwan as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
% Ownership of Direct or Indirect Investment |
|
|
Investment Gain (Loss) (Note 2) |
|
|
Carrying Value as of December 31, 2015 |
|
|
Accumulated Inward Remittance of Earnings as of December 31, 2015 |
|
|
Note |
|
|
|
|
|
|
Outflow |
|
|
Inflow |
|
|
|
|
|
|
|
|
Shanghai Taihua Electronic Technology Limited |
|
Design of printed circuit board and related consultation service |
|
$ |
2,970 |
|
|
|
2 |
|
|
$ |
2,970 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
2,970 |
|
|
$ |
323 |
|
|
|
100 |
|
|
$ |
323 |
|
|
$ |
2,420 |
|
|
$ |
|
|
|
|
|
|
Shanghai Chief Telecom Co., Ltd. |
|
Internet technology and software technology consulting, and wholesale telecommunication products and related services |
|
|
10,150 |
|
|
|
1 |
|
|
|
|
|
|
|
4,973 |
|
|
|
|
|
|
|
4,973 |
|
|
|
(2,059 |
) |
|
|
49 |
|
|
|
(1,009 |
) |
|
|
3,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investee |
|
Accumulated Investment in Mainland China as of December 31, 2015 |
|
|
Investment Amounts Authorized by Investment Commission, MOEA |
|
|
Upper Limit on Investment Stipulated by Investment Commission, MOEA |
|
Glory Network System Service (Shanghai) Co., Ltd. (Note 3) |
|
$ |
47,321 |
|
|
$ |
47,321 |
|
|
$ |
364,906 |
|
Xiamen Sertec Business Technology Co., Ltd. (Note 4) |
|
|
|
|
|
|
|
|
|
|
|
|
SENAO and its subsidiaries (Note 7) |
|
|
2,380,284 |
|
|
|
2,380,284 |
|
|
|
|
|
Chunghwa Telecom (China) Co., Ltd. (Note 7) |
|
|
177,176 |
|
|
|
177,176 |
|
|
|
|
|
Jiangsu Zhenghua Information Technology Company, LLC (Note 7) |
|
|
142,057 |
|
|
|
142,057 |
|
|
|
|
|
Hua-Xiong Information Technology Co., Ltd. (Note 7) |
|
|
28,855 |
|
|
|
44,653 |
|
|
|
|
|
Shanghai Taihua Electronic Technology Limited (Note 5) |
|
|
2,970 |
|
|
|
2,970 |
|
|
|
932,568 |
|
Shanghai Chief Telecom Co., Ltd. (Note 6) |
|
|
4,973 |
|
|
|
4,973 |
|
|
|
592,408 |
|
Note 1: |
Investments are divided into three categories as follows: |
|
b. |
Investments through a holding company registered in a third region. |
Note 2: |
Recognition of investment gains (losses) was calculated based on the investees audited financial statements. |
Note 3: |
The amount was calculated based on the net assets value of Chunghwa System Integration Co., Ltd. |
Note 4: |
Xiamen Sertec Business Technology Co., Ltd. was liquidated in June 2015. Chunghwa Investment Holding Co., Ltd. received partial proceeds from the liquidation in July 2015. |
Note 5: |
Shanghai Taihua Electronic Technology Limited was calculated based on the consolidated net assets value of Chunghwa Investment Co., Ltd. |
Note 6: |
Shanghai Chief Telecom Co., Ltd. was calculated based on the consolidated net assets value of CHIEF Telecom Inc. |
Note 7: |
Based on Principle of investment or Technical Cooperation in Mainland China, Chunghwa and SENAO are not subjective to the limited amount due to the operating headquarters documents issued by Industrial
Development Bureau. |
Note 8: |
The English name is the same as the above entity; however the Chinese name included in the respective Articles of Incorporations is different from the above entity. |
(Concluded)
- 80 -
Exhibit 99.2
Chunghwa Telecom Co., Ltd. and Subsidiaries
Consolidated Financial Statements for the
Years Ended
December 31, 2015 and 2014 and
Independent Auditors Report
REPRESENTATION LETTER
The entities that are required to be included in the consolidated financial statements of affiliates in accordance with the Criteria Governing
Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises for the year ended December 31, 2015 are all the same as those included in the consolidated financial
statements of Chunghwa Telecom Co., Ltd. and its subsidiaries prepared in conformity with the International Financial Reporting Standard 10 Consolidated Financial Statements. Relevant information that should be disclosed in the
consolidated financial statements of affiliates is included in the consolidated financial statements of Chunghwa Telecom Co., Ltd. and its subsidiaries. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.
|
Very truly yours, |
|
CHUNGHWA TELECOM CO., LTD. |
|
By |
|
/s/ LIH-SHYNG TSAI |
LIH-SHYNG TSAI |
Chairman |
|
March 11, 2016 |
- 1 -
INDEPENDENT AUDITORS REPORT
The Board of Directors and Stockholders
Chunghwa Telecom Co.,
Ltd.
We have audited the accompanying consolidated balance sheets of Chunghwa Telecom Co., Ltd. and its subsidiaries (the Company) as of
December 31, 2015 and 2014 and January 1, 2014, the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2015 and 2014. These consolidated financial statements are
the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and
auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 2015 and 2014 and January 1, 2014, and the results of their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2015 and 2014, in conformity with the
Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed
by the Financial Supervisory Commission of the Republic of China.
We have also audited the parent company only financial statements of Chunghwa Telecom
Co., Ltd., as of December 31, 2015 and 2014 and January 1, 2014 and for the years ended December 31, 2015 and 2014 on which we have issued an unqualified report.
|
/s/ DELOITTE & TOUCHE |
Deloitte & Touche |
Taipei, Taiwan |
The Republic of China |
March 11, 2016
Notice to Readers
The
accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China
and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.
For the convenience of readers, the independent auditors report and the accompanying consolidated financial statements have been translated into
English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the
Chinese-language independent auditors report and consolidated financial statements shall prevail.
- 2 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of New
Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 (Adjusted) (Note 5) |
|
|
January 1, 2014 (Adjusted) (Note 5) |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (Notes 3 and 6) |
|
$ |
30,271,423 |
|
|
|
7 |
|
|
$ |
23,559,603 |
|
|
|
5 |
|
|
$ |
14,585,105 |
|
|
|
3 |
|
Financial assets at fair value through profit or loss (Notes 3 and 7) |
|
|
163 |
|
|
|
|
|
|
|
1,163 |
|
|
|
|
|
|
|
337 |
|
|
|
|
|
Hedging derivative assets (Notes 3 and 21) |
|
|
498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets (Notes 3 and 8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,267 |
|
|
|
|
|
Held-to-maturity financial assets (Notes 3 and 9) |
|
|
1,880,739 |
|
|
|
|
|
|
|
3,456,747 |
|
|
|
1 |
|
|
|
4,264,104 |
|
|
|
1 |
|
Trade notes and accounts receivable, net (Notes 3, 4 and 10) |
|
|
26,926,050 |
|
|
|
6 |
|
|
|
26,227,999 |
|
|
|
6 |
|
|
|
22,900,902 |
|
|
|
5 |
|
Accounts receivable from related parties (Note 39) |
|
|
42,056 |
|
|
|
|
|
|
|
81,008 |
|
|
|
|
|
|
|
69,304 |
|
|
|
|
|
Inventories (Notes 3, 4, 11 and 40) |
|
|
8,780,190 |
|
|
|
2 |
|
|
|
7,096,509 |
|
|
|
2 |
|
|
|
7,848,087 |
|
|
|
2 |
|
Prepayments (Notes 12 and 39) |
|
|
2,669,021 |
|
|
|
1 |
|
|
|
2,444,458 |
|
|
|
|
|
|
|
2,224,130 |
|
|
|
1 |
|
Other current monetary assets (Notes 13 and 28) |
|
|
3,300,783 |
|
|
|
1 |
|
|
|
3,325,354 |
|
|
|
1 |
|
|
|
4,636,305 |
|
|
|
1 |
|
Other current assets (Notes 20, 32 and 40) |
|
|
2,335,921 |
|
|
|
|
|
|
|
3,219,399 |
|
|
|
1 |
|
|
|
3,960,798 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
76,206,844 |
|
|
|
17 |
|
|
|
69,412,240 |
|
|
|
16 |
|
|
|
60,513,339 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets (Notes 3 and 8) |
|
|
3,242,827 |
|
|
|
1 |
|
|
|
3,914,212 |
|
|
|
1 |
|
|
|
3,046,182 |
|
|
|
1 |
|
Held-to-maturity financial assets (Notes 3 and 9) |
|
|
2,139,801 |
|
|
|
|
|
|
|
4,027,522 |
|
|
|
1 |
|
|
|
7,501,743 |
|
|
|
2 |
|
Financial assets carried at cost (Notes 3 and 14) |
|
|
2,267,869 |
|
|
|
1 |
|
|
|
2,366,530 |
|
|
|
|
|
|
|
2,423,646 |
|
|
|
|
|
Investments accounted for using equity method (Notes 3, 4 and 16) |
|
|
3,145,004 |
|
|
|
1 |
|
|
|
2,953,625 |
|
|
|
1 |
|
|
|
2,562,293 |
|
|
|
|
|
Property, plant and equipment (Notes 3, 4, 17, 39 and 40) |
|
|
296,399,146 |
|
|
|
65 |
|
|
|
302,650,343 |
|
|
|
68 |
|
|
|
302,714,116 |
|
|
|
69 |
|
Investment properties (Notes 3, 4 and 18) |
|
|
7,902,405 |
|
|
|
2 |
|
|
|
7,620,854 |
|
|
|
2 |
|
|
|
8,018,031 |
|
|
|
2 |
|
Intangible assets (Notes 3, 4 and 19) |
|
|
50,446,778 |
|
|
|
11 |
|
|
|
42,824,626 |
|
|
|
9 |
|
|
|
44,398,888 |
|
|
|
10 |
|
Deferred income tax assets (Notes 3 and 32) |
|
|
2,061,577 |
|
|
|
|
|
|
|
1,828,586 |
|
|
|
|
|
|
|
1,509,305 |
|
|
|
|
|
Prepayments (Notes 12 and 39) |
|
|
3,611,818 |
|
|
|
1 |
|
|
|
3,504,338 |
|
|
|
1 |
|
|
|
3,608,487 |
|
|
|
1 |
|
Other noncurrent assets (Notes 20, 28 and 40) |
|
|
5,597,023 |
|
|
|
1 |
|
|
|
5,601,736 |
|
|
|
1 |
|
|
|
4,882,974 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncurrent assets |
|
|
376,814,248 |
|
|
|
83 |
|
|
|
377,292,372 |
|
|
|
84 |
|
|
|
380,665,665 |
|
|
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
453,021,092 |
|
|
|
100 |
|
|
$ |
446,704,612 |
|
|
|
100 |
|
|
$ |
441,179,004 |
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term loans (Note 22) |
|
$ |
110,000 |
|
|
|
|
|
|
$ |
564,400 |
|
|
|
|
|
|
$ |
254,357 |
|
|
|
|
|
Financial liabilities at fair value through profit or loss (Notes 3 and 7) |
|
|
|
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
|
246 |
|
|
|
|
|
Hedging derivative liabilities (Notes 3 and 21) |
|
|
|
|
|
|
|
|
|
|
283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade notes and accounts payable (Note 24) |
|
|
16,300,993 |
|
|
|
4 |
|
|
|
18,518,977 |
|
|
|
4 |
|
|
|
15,589,108 |
|
|
|
4 |
|
Payables to related parties (Note 39) |
|
|
611,100 |
|
|
|
|
|
|
|
407,965 |
|
|
|
|
|
|
|
556,809 |
|
|
|
|
|
Current tax liabilities (Notes 3 and 32) |
|
|
4,751,181 |
|
|
|
1 |
|
|
|
3,361,907 |
|
|
|
1 |
|
|
|
4,144,076 |
|
|
|
1 |
|
Other payables (Note 25) |
|
|
25,486,966 |
|
|
|
6 |
|
|
|
24,334,992 |
|
|
|
6 |
|
|
|
26,791,769 |
|
|
|
6 |
|
Provisions (Notes 3 and 26) |
|
|
189,746 |
|
|
|
|
|
|
|
179,374 |
|
|
|
|
|
|
|
129,341 |
|
|
|
|
|
Advance receipts (Note 27) |
|
|
9,567,140 |
|
|
|
2 |
|
|
|
9,912,864 |
|
|
|
2 |
|
|
|
9,463,535 |
|
|
|
2 |
|
Current portion of long-term loans (Notes 23 and 40) |
|
|
7,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 |
|
|
|
|
|
Other current liabilities |
|
|
1,501,269 |
|
|
|
|
|
|
|
1,618,957 |
|
|
|
|
|
|
|
1,598,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
58,526,087 |
|
|
|
13 |
|
|
|
58,899,740 |
|
|
|
13 |
|
|
|
58,827,258 |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term loans (Notes 23 and 40) |
|
|
1,742,308 |
|
|
|
|
|
|
|
1,900,000 |
|
|
|
|
|
|
|
1,400,000 |
|
|
|
1 |
|
Deferred income tax liabilities (Notes 3 and 32) |
|
|
147,975 |
|
|
|
|
|
|
|
132,406 |
|
|
|
|
|
|
|
101,379 |
|
|
|
|
|
Provisions (Notes 3 and 26) |
|
|
58,158 |
|
|
|
|
|
|
|
92,660 |
|
|
|
|
|
|
|
123,464 |
|
|
|
|
|
Customers deposits (Note 39) |
|
|
4,725,826 |
|
|
|
1 |
|
|
|
4,757,547 |
|
|
|
1 |
|
|
|
4,834,580 |
|
|
|
1 |
|
Net defined benefit liabilities (Notes 3, 4 and 28) |
|
|
7,098,510 |
|
|
|
2 |
|
|
|
6,469,890 |
|
|
|
2 |
|
|
|
5,483,205 |
|
|
|
1 |
|
Deferred revenue (Note 3) |
|
|
3,615,602 |
|
|
|
1 |
|
|
|
3,398,087 |
|
|
|
1 |
|
|
|
3,700,949 |
|
|
|
1 |
|
Other noncurrent liabilities |
|
|
3,097,623 |
|
|
|
1 |
|
|
|
1,514,947 |
|
|
|
|
|
|
|
1,334,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncurrent liabilities |
|
|
20,486,002 |
|
|
|
5 |
|
|
|
18,265,537 |
|
|
|
4 |
|
|
|
16,977,797 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
79,012,089 |
|
|
|
18 |
|
|
|
77,165,277 |
|
|
|
17 |
|
|
|
75,805,055 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT (Notes 15 and 29) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stocks |
|
|
77,574,465 |
|
|
|
17 |
|
|
|
77,574,465 |
|
|
|
17 |
|
|
|
77,574,465 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
|
168,095,615 |
|
|
|
37 |
|
|
|
168,047,935 |
|
|
|
38 |
|
|
|
184,620,065 |
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve |
|
|
77,574,465 |
|
|
|
17 |
|
|
|
76,893,722 |
|
|
|
17 |
|
|
|
74,819,380 |
|
|
|
17 |
|
Special reserve |
|
|
2,675,419 |
|
|
|
1 |
|
|
|
2,819,899 |
|
|
|
1 |
|
|
|
2,675,894 |
|
|
|
|
|
Unappropriated earnings |
|
|
42,551,245 |
|
|
|
9 |
|
|
|
38,231,982 |
|
|
|
9 |
|
|
|
20,770,064 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retained earnings |
|
|
122,801,129 |
|
|
|
27 |
|
|
|
117,945,603 |
|
|
|
27 |
|
|
|
98,265,338 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other equity interest |
|
|
268,719 |
|
|
|
|
|
|
|
886,147 |
|
|
|
|
|
|
|
(144,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity attributable to stockholders of the parent |
|
|
368,739,928 |
|
|
|
81 |
|
|
|
364,454,150 |
|
|
|
82 |
|
|
|
360,315,863 |
|
|
|
82 |
|
NONCONTROLLING INTERESTS (Notes 15 and 29) |
|
|
5,269,075 |
|
|
|
1 |
|
|
|
5,085,185 |
|
|
|
1 |
|
|
|
5,058,086 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
374,009,003 |
|
|
|
82 |
|
|
|
369,539,335 |
|
|
|
83 |
|
|
|
365,373,949 |
|
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
453,021,092 |
|
|
|
100 |
|
|
$ |
446,704,612 |
|
|
|
100 |
|
|
$ |
441,179,004 |
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements.
- 3 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In
Thousands of New Taiwan Dollars, Except Earnings Per Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 (Adjusted) (Note 5) |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
REVENUES (Notes 30 and 39) |
|
$ |
231,795,104 |
|
|
|
100 |
|
|
$ |
226,608,686 |
|
|
|
100 |
|
OPERATING COSTS (Notes 11 and 39) |
|
|
148,126,213 |
|
|
|
64 |
|
|
|
148,379,560 |
|
|
|
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
83,668,891 |
|
|
|
36 |
|
|
|
78,229,126 |
|
|
|
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES (Note 39) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
|
25,071,317 |
|
|
|
11 |
|
|
|
26,144,969 |
|
|
|
11 |
|
General and administrative |
|
|
4,514,352 |
|
|
|
2 |
|
|
|
4,414,439 |
|
|
|
2 |
|
Research and development |
|
|
3,616,778 |
|
|
|
1 |
|
|
|
3,503,665 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
33,202,447 |
|
|
|
14 |
|
|
|
34,063,073 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND EXPENSES (Note 31) |
|
|
(105,106 |
) |
|
|
|
|
|
|
630,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS |
|
|
50,361,338 |
|
|
|
22 |
|
|
|
44,796,618 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING INCOME AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
306,167 |
|
|
|
|
|
|
|
288,134 |
|
|
|
|
|
Other income (Notes 31 and 39) |
|
|
650,073 |
|
|
|
|
|
|
|
586,899 |
|
|
|
|
|
Other gains and losses (Notes 31 and 39) |
|
|
(224,209 |
) |
|
|
|
|
|
|
130,972 |
|
|
|
|
|
Interest expenses |
|
|
(33,144 |
) |
|
|
|
|
|
|
(46,148 |
) |
|
|
|
|
Share of the profit of associates and joint ventures accounted for using equity method (Note 16) |
|
|
907,988 |
|
|
|
|
|
|
|
797,473 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-operating income and expenses |
|
|
1,606,875 |
|
|
|
|
|
|
|
1,757,330 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAX |
|
|
51,968,213 |
|
|
|
22 |
|
|
|
46,553,948 |
|
|
|
21 |
|
INCOME TAX EXPENSE (Notes 3 and 32) |
|
|
8,303,868 |
|
|
|
3 |
|
|
|
7,392,577 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
|
43,664,345 |
|
|
|
19 |
|
|
|
39,161,371 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of defined benefit pension plans (Note 28) |
|
|
(231,451 |
) |
|
|
|
|
|
|
(492,358 |
) |
|
|
|
|
Share of remeasurements of defined benefit pension plans of associates and joint ventures (Note 16) |
|
|
(25,360 |
) |
|
|
|
|
|
|
740 |
|
|
|
|
|
Income tax benefit relating to items that will not be reclassified to profit or loss (Notes 28 and 32) |
|
|
39,347 |
|
|
|
|
|
|
|
83,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(217,464 |
) |
|
|
|
|
|
|
(407,917 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
- 4 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In
Thousands of New Taiwan Dollars, Except Earnings Per Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 (Adjusted) (Note 5) |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences arising from the translation of the foreign operations |
|
$ |
24,357 |
|
|
|
|
|
|
$ |
163,629 |
|
|
|
|
|
Unrealized gain (loss) on available-for-sale financial assets (Note 31) |
|
|
(645,475 |
) |
|
|
|
|
|
|
878,203 |
|
|
|
|
|
Cash flow hedges (Notes 21 and 31) |
|
|
781 |
|
|
|
|
|
|
|
(283 |
) |
|
|
|
|
Share of exchange differences arising from the translation of the foreign operations of associates and joint ventures (Note
16) |
|
|
6,340 |
|
|
|
|
|
|
|
4,454 |
|
|
|
|
|
Income tax benefit (expense) relating to items that may be reclassified subsequently (Note 32) |
|
|
(2,309 |
) |
|
|
|
|
|
|
3,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(616,306 |
) |
|
|
|
|
|
|
1,049,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income (loss), net of income tax |
|
|
(833,770 |
) |
|
|
|
|
|
|
641,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME |
|
$ |
42,830,575 |
|
|
|
19 |
|
|
$ |
39,802,799 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders of the parent |
|
$ |
42,805,728 |
|
|
|
19 |
|
|
$ |
38,612,056 |
|
|
|
18 |
|
Noncontrolling interests (Note 15) |
|
|
858,617 |
|
|
|
|
|
|
|
549,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
43,664,345 |
|
|
|
19 |
|
|
$ |
39,161,371 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders of the parent |
|
$ |
41,973,659 |
|
|
|
19 |
|
|
$ |
39,235,975 |
|
|
|
18 |
|
Noncontrolling interests |
|
|
856,916 |
|
|
|
|
|
|
|
566,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
42,830,575 |
|
|
|
19 |
|
|
$ |
39,802,799 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE (Note 33) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
5.52 |
|
|
|
|
|
|
$ |
4.98 |
|
|
|
|
|
Diluted |
|
$ |
5.50 |
|
|
|
|
|
|
$ |
4.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements. |
|
|
(Concluded |
) |
- 5 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In
Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Stockholders of the Parent (Notes 15, 21 and 29) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arising |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from the |
|
|
Unrealized Gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Retained Earnings |
|
|
Translation |
|
|
(Loss) on |
|
|
|
|
|
|
|
|
Noncontrolling |
|
|
|
|
|
|
Common |
|
|
Paid-in |
|
|
Legal |
|
|
Special |
|
|
Unappropriated |
|
|
of the Foreign |
|
|
Available-for-sale |
|
|
Cash Flow |
|
|
|
|
|
Interests |
|
|
|
|
|
|
Stocks |
|
|
Capital |
|
|
Reserve |
|
|
Reserve |
|
|
Earnings |
|
|
Operations |
|
|
Financial Assets |
|
|
Hedges |
|
|
Total |
|
|
(Notes 15 and 29) |
|
|
Total Equity |
|
BALANCE, JANUARY 1, 2014 |
|
$ |
77,574,465 |
|
|
$ |
184,620,065 |
|
|
$ |
74,819,380 |
|
|
$ |
2,675,894 |
|
|
$ |
20,744,024 |
|
|
$ |
5,742 |
|
|
$ |
(149,747 |
) |
|
$ |
|
|
|
$ |
360,289,823 |
|
|
$ |
5,054,331 |
|
|
$ |
365,344,154 |
|
Effect of retrospective application |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,040 |
|
|
|
3,755 |
|
|
|
29,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 1, 2014 AS ADJUSTED |
|
|
77,574,465 |
|
|
|
184,620,065 |
|
|
|
74,819,380 |
|
|
|
2,675,894 |
|
|
|
20,770,064 |
|
|
|
5,742 |
|
|
|
(149,747 |
) |
|
|
|
|
|
|
360,315,863 |
|
|
|
5,058,086 |
|
|
|
365,373,949 |
|
Appropriation of 2013 earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve |
|
|
|
|
|
|
|
|
|
|
2,074,342 |
|
|
|
|
|
|
|
(2,074,342 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,005 |
|
|
|
(144,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends distributed by Chunghwa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,525,558 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,525,558 |
) |
|
|
|
|
|
|
(18,525,558 |
) |
Cash dividends distributed by subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(796,770 |
) |
|
|
(796,770 |
) |
Cash distributed from additional paid-in capital |
|
|
|
|
|
|
(16,577,663 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,577,663 |
) |
|
|
|
|
|
|
(16,577,663 |
) |
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
|
|
|
|
2,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,252 |
|
|
|
(4,060 |
) |
|
|
(1,808 |
) |
Change in additional paid-in capital for not participating in the capital increase of a subsidiary |
|
|
|
|
|
|
2,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,988 |
|
|
|
369 |
|
|
|
3,357 |
|
Net income for the year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,612,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,612,056 |
|
|
|
549,315 |
|
|
|
39,161,371 |
|
Other comprehensive income for the year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(406,233 |
) |
|
|
140,700 |
|
|
|
889,735 |
|
|
|
(283 |
) |
|
|
623,919 |
|
|
|
17,509 |
|
|
|
641,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,205,823 |
|
|
|
140,700 |
|
|
|
889,735 |
|
|
|
(283 |
) |
|
|
39,235,975 |
|
|
|
566,824 |
|
|
|
39,802,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation cost of employee stock options of a subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,287 |
|
|
|
93,287 |
|
Stock bonus issued by a subsidiary |
|
|
|
|
|
|
293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
293 |
|
|
|
5,451 |
|
|
|
5,744 |
|
Increase in noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
161,998 |
|
|
|
161,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
- 6 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In
Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Stockholders of the Parent (Notes 15, 21 and 29) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arising |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from the |
|
|
Unrealized Gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Retained Earnings |
|
|
Translation |
|
|
(Loss) on |
|
|
|
|
|
|
|
|
Noncontrolling |
|
|
|
|
|
|
Common |
|
|
Paid-in |
|
|
Legal |
|
|
Special |
|
|
Unappropriated |
|
|
of the Foreign |
|
|
Available-for-sale |
|
|
Cash Flow |
|
|
|
|
|
Interests |
|
|
|
|
|
|
Stocks |
|
|
Capital |
|
|
Reserve |
|
|
Reserve |
|
|
Earnings |
|
|
Operations |
|
|
Financial Assets |
|
|
Hedges |
|
|
Total |
|
|
(Notes 15 and 29) |
|
|
Total Equity |
|
BALANCE, DECEMBER 31, 2014 |
|
|
77,574,465 |
|
|
|
168,047,935 |
|
|
|
76,893,722 |
|
|
|
2,819,899 |
|
|
|
38,231,982 |
|
|
|
146,442 |
|
|
|
739,988 |
|
|
|
(283 |
) |
|
|
364,454,150 |
|
|
|
5,085,185 |
|
|
|
369,539,335 |
|
Appropriation of 2014 earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve |
|
|
|
|
|
|
|
|
|
|
680,743 |
|
|
|
|
|
|
|
(680,743 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(144,005 |
) |
|
|
144,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends distributed by Chunghwa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,673,263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,673,263 |
) |
|
|
|
|
|
|
(37,673,263 |
) |
Cash dividends distributed by subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(350,003 |
) |
|
|
(350,003 |
) |
Reversal of special reserve recognized from land disposal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(475 |
) |
|
|
475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
|
|
|
|
34,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,405 |
|
|
|
(2,688 |
) |
|
|
31,717 |
|
Partial disposal of interests in subsidiaries |
|
|
|
|
|
|
26,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,644 |
|
|
|
18,484 |
|
|
|
45,128 |
|
Other changes in additional paid-in capital in subsidiaries |
|
|
|
|
|
|
1,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,064 |
|
|
|
1,559 |
|
|
|
2,623 |
|
Change in additional paid-in capital from share subscription not based on original ownership of a subsidiary |
|
|
|
|
|
|
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(412 |
) |
|
|
412 |
|
|
|
|
|
Net income for the year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,805,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,805,728 |
|
|
|
858,617 |
|
|
|
43,664,345 |
|
Other comprehensive income for the year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(214,641 |
) |
|
|
30,815 |
|
|
|
(649,024 |
) |
|
|
781 |
|
|
|
(832,069 |
) |
|
|
(1,701 |
) |
|
|
(833,770 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,591,087 |
|
|
|
30,815 |
|
|
|
(649,024 |
) |
|
|
781 |
|
|
|
41,973,659 |
|
|
|
856,916 |
|
|
|
42,830,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation cost of employee stock options of subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,326 |
|
|
|
36,326 |
|
Subsidiary purchased its treasury stock |
|
|
|
|
|
|
(14,021 |
) |
|
|
|
|
|
|
|
|
|
|
(62,298 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(76,319 |
) |
|
|
(416,451 |
) |
|
|
(492,770 |
) |
Increase in noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,335 |
|
|
|
39,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, DECEMBER 31, 2015 |
|
$ |
77,574,465 |
|
|
$ |
168,095,615 |
|
|
$ |
77,574,465 |
|
|
$ |
2,675,419 |
|
|
$ |
42,551,245 |
|
|
$ |
177,257 |
|
|
$ |
90,964 |
|
|
$ |
498 |
|
|
$ |
368,739,928 |
|
|
$ |
5,269,075 |
|
|
$ |
374,009,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements.
(Concluded)
- 7 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands
of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Income before income tax |
|
$ |
51,968,213 |
|
|
$ |
46,553,948 |
|
Adjustments to reconcile income before income tax to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
30,368,178 |
|
|
|
31,896,394 |
|
Amortization |
|
|
3,079,912 |
|
|
|
2,218,298 |
|
Provision for doubtful accounts |
|
|
518,507 |
|
|
|
325,691 |
|
Interest expenses |
|
|
33,144 |
|
|
|
46,148 |
|
Interest income |
|
|
(306,167 |
) |
|
|
(288,134 |
) |
Dividend income |
|
|
(218,232 |
) |
|
|
(77,658 |
) |
Compensation cost of employee stock options |
|
|
36,326 |
|
|
|
93,287 |
|
Share of the profit of associates and joint ventures accounted for using equity method |
|
|
(907,988 |
) |
|
|
(797,473 |
) |
Impairment loss on financial assets carried at cost |
|
|
81,269 |
|
|
|
23,334 |
|
Impairment loss on available-for-sale financial assets |
|
|
25,910 |
|
|
|
|
|
Impairment loss on investments accounted for using equity method |
|
|
8,213 |
|
|
|
|
|
Provision for inventory and obsolescence |
|
|
198,312 |
|
|
|
288,364 |
|
Impairment loss on property, plant and equipment |
|
|
138,093 |
|
|
|
64 |
|
Reversal of impairment loss on investment properties |
|
|
(142,047 |
) |
|
|
|
|
Loss on disposal of intangible assets |
|
|
20 |
|
|
|
|
|
Loss (gain) on disposal of financial instruments |
|
|
449 |
|
|
|
(45,795 |
) |
Loss (gain) on disposal of property, plant and equipment |
|
|
109,040 |
|
|
|
(25,276 |
) |
Gain on disposal of investment properties |
|
|
|
|
|
|
(605,353 |
) |
Gain on disposal of investments accounted for using equity method |
|
|
(8,058 |
) |
|
|
|
|
Valuation gain on financial assets and liabilities at fair value through profit or loss, net |
|
|
(163 |
) |
|
|
(1,142 |
) |
Loss (gain) on foreign exchange, net |
|
|
53,870 |
|
|
|
(164,039 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Decrease (increase) in: |
|
|
|
|
|
|
|
|
Financial assets held for trading |
|
|
1,142 |
|
|
|
91 |
|
Trade notes and accounts receivable |
|
|
(1,171,880 |
) |
|
|
(3,618,366 |
) |
Accounts receivable from related parties |
|
|
38,952 |
|
|
|
(11,705 |
) |
Inventories |
|
|
(1,852,049 |
) |
|
|
463,214 |
|
Other current monetary assets |
|
|
(357,402 |
) |
|
|
1,268,003 |
|
Prepayments |
|
|
(326,494 |
) |
|
|
(116,179 |
) |
Other current assets |
|
|
889,213 |
|
|
|
741,399 |
|
Increase (decrease) in: |
|
|
|
|
|
|
|
|
Trade notes and accounts payable |
|
|
(2,223,264 |
) |
|
|
2,972,181 |
|
Payables to related parties |
|
|
203,135 |
|
|
|
(148,844 |
) |
Other payables |
|
|
1,643,582 |
|
|
|
(1,867,671 |
) |
Provisions |
|
|
(24,130 |
) |
|
|
19,229 |
|
Advance receipts |
|
|
1,134,218 |
|
|
|
449,329 |
|
Other current liabilities |
|
|
(112,490 |
) |
|
|
12,955 |
|
(Continued)
- 8 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands
of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Deferred revenue |
|
$ |
217,515 |
|
|
$ |
(302,862 |
) |
Net defined benefit liabilities |
|
|
438,821 |
|
|
|
494,341 |
|
|
|
|
|
|
|
|
|
|
Cash generated from operations |
|
|
83,535,670 |
|
|
|
79,795,773 |
|
Interest paid |
|
|
(33,179 |
) |
|
|
(42,718 |
) |
Income tax paid |
|
|
(7,177,502 |
) |
|
|
(8,372,656 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
76,324,989 |
|
|
|
71,380,399 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from disposal of available-for-sale financial assets |
|
|
|
|
|
|
81,229 |
|
Acquisition of time deposits and negotiable certificate of deposit with maturities of more than three months |
|
|
(11,493,807 |
) |
|
|
(411,000 |
) |
Proceeds from disposal of time deposits and negotiable certificate of deposit with maturities of more than three months |
|
|
11,824,317 |
|
|
|
470,666 |
|
Acquisition of held-to-maturity financial assets |
|
|
(1,002,167 |
) |
|
|
|
|
Proceeds from disposal of held-to-maturity financial assets |
|
|
4,450,000 |
|
|
|
4,257,500 |
|
Acquisition of financial assets carried at cost |
|
|
(29,077 |
) |
|
|
(59,583 |
) |
Proceeds from disposal of financial assets carried at cost |
|
|
1,684 |
|
|
|
3,489 |
|
Capital reduction of financial assets carried at cost |
|
|
43,921 |
|
|
|
83,892 |
|
Acquisition of investments accounted for using equity method |
|
|
(5,607 |
) |
|
|
(252,485 |
) |
Proceeds from disposal of investments accounted for using equity method |
|
|
16,156 |
|
|
|
|
|
Net cash outflow on acquisition of subsidiaries |
|
|
(113,983 |
) |
|
|
|
|
Acquisition of property, plant and equipment |
|
|
(25,083,954 |
) |
|
|
(32,559,459 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
3,549 |
|
|
|
149,260 |
|
Acquisition of intangible assets |
|
|
(10,380,167 |
) |
|
|
(644,165 |
) |
Proceeds from disposal of investment properties |
|
|
|
|
|
|
1,214,908 |
|
Decrease (increase) in other noncurrent assets |
|
|
72,133 |
|
|
|
(718,670 |
) |
Interest received |
|
|
336,873 |
|
|
|
339,846 |
|
Cash dividends received |
|
|
906,697 |
|
|
|
667,067 |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(30,453,432 |
) |
|
|
(27,377,505 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from short-term loans |
|
|
2,750,000 |
|
|
|
895,000 |
|
Repayment of short-term loans |
|
|
(3,258,111 |
) |
|
|
(584,957 |
) |
Proceeds from long-term loans |
|
|
|
|
|
|
348,000 |
|
Repayment of long-term loans |
|
|
(189,655 |
) |
|
|
(148,000 |
) |
Increase in repurchase agreement collateralized by bonds |
|
|
|
|
|
|
13,000,000 |
|
Decrease in repurchase agreement collateralized by bonds |
|
|
|
|
|
|
(13,000,000 |
) |
Decrease in customers deposits |
|
|
(36,919 |
) |
|
|
(69,047 |
) |
Increase in other noncurrent liabilities |
|
|
12,240 |
|
|
|
180,728 |
|
Cash dividends and cash distributed from additional paid-in capital |
|
|
(37,673,263 |
) |
|
|
(35,103,221 |
) |
(Continued)
- 9 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands
of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Partial disposal of interest in subsidiaries without losing control |
|
$ |
45,128 |
|
|
$ |
|
|
Cash dividends paid to noncontrolling interests |
|
|
(350,003 |
) |
|
|
(796,770 |
) |
Other change in noncontrolling interests |
|
|
(485,048 |
) |
|
|
161,998 |
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(39,185,631 |
) |
|
|
(35,116,269 |
) |
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
25,894 |
|
|
|
87,873 |
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
6,711,820 |
|
|
|
8,974,498 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR |
|
|
23,559,603 |
|
|
|
14,585,105 |
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF THE YEAR |
|
$ |
30,271,423 |
|
|
$ |
23,559,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements. |
|
(Concluded) |
- 10 -
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2015 AND 2014
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Chunghwa Telecom Co., Ltd. (Chunghwa) was incorporated on
July 1, 1996 in the Republic of China (ROC) pursuant to the Article 30 of the Telecommunications Act. Chunghwa is a company limited by shares and, prior to August 2000, was wholly owned by the Ministry of Transportation and
Communications (MOTC). Prior to July 1, 1996, the current operations of Chunghwa were carried out under the Directorate General of Telecommunications (DGT). The DGT was established by the MOTC in June 1943 to take
primary responsibility in the development of telecommunications infrastructure and to formulate policies related to telecommunications. On July 1, 1996, the telecom operations of the DGT were spun-off as Chunghwa which continues to carry out
the business and the DGT continues to be the industry regulator.
As the dominant telecommunications service provider of domestic and
international fixed-line, Global System for Mobile Communications (GSM), and Third Generation (3G) in the ROC, Chunghwa is subject to additional regulations imposed by the ROC.
Effective August 12, 2005, the MOTC completed the process of privatizing Chunghwa by reducing the government ownership to below 50% in
various stages. In July 2000, Chunghwa received approval from the Securities and Futures Commission (the SFC) for a domestic initial public offering and its common stocks were listed and traded on the Taiwan Stock Exchange (the
TWSE) on October 27, 2000. Certain of Chunghwas common stocks were sold, in connection with the foregoing privatization plan, in domestic public offerings at various dates from August 2000 to July 2003. Certain of
Chunghwas common stocks were also sold in an international offering of securities in the form of American Depository Shares (ADS) on July 17, 2003 and were listed and traded on the New York Stock Exchange (the
NYSE). The MOTC sold common stocks of Chunghwa by auction in the ROC on August 9, 2005 and completed the second international offering on August 10, 2005. Upon completion of the share transfers associated with these offerings
on August 12, 2005, the MOTC owned less than 50% of the outstanding shares of Chunghwa and completed the privatization plan.
Chunghwa
together with its subsidiaries are hereinafter referred to collectively as the Company.
The consolidated financial statements
are presented in Chunghwas functional currency, New Taiwan dollars.
2. |
APPROVAL OF FINANCIAL STATEMENTS |
The consolidated financial statements were approved
and authorized for issue by the Board of Directors on March 11, 2016.
- 11 -
3. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Statement of Compliance
The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial
Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), the International Financial Reporting Interpretations Committee (IFRIC) and SIC Interpretations (SIC) endorsed by the
Financial Supervisory Commission (FSC) (the Taiwan-IFRS).
Basis of Preparation
The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are
measured at revalued amounts or fair values.
Current and Noncurrent Assets and Liabilities
Current assets include:
|
a. |
Assets held primarily for the purpose of trading; |
|
b. |
Assets expected to be realized within twelve months after the reporting period; and |
|
c. |
Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. |
Current liabilities include:
|
a. |
Liabilities held primarily for the purpose of trading; |
|
b. |
Liabilities due to be settled within twelve months after the reporting period; and |
|
c. |
Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period. |
Assets and liabilities that are not classified as current are classified as noncurrent.
Light Era Development Co., Ltd. (LED) engages mainly in development of property for rent and sale. The assets and liabilities of LED related to
property development within its operating cycle, which is over one year, are classified as current items.
Basis of Consolidation
|
a. |
Principles for preparing consolidated financial statements |
The consolidated financial
statements incorporate the financial statements of Chunghwa and entities controlled by Chunghwa (its subsidiaries).
Income and expenses of
subsidiaries acquired during the period are included in the consolidated statement of comprehensive income from the acquisition date.
When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Company.
All intra-company transactions, balances, income and expenses are eliminated in full upon consolidation.
- 12 -
Attribution of total comprehensive income to noncontrolling interests
Total comprehensive income of subsidiaries is attributed to the stockholders of the parent and to the noncontrolling interests even if this
results in the noncontrolling interests having a deficit balance.
Changes in the Companys ownership interests in subsidiaries
Changes in the Companys ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries
are accounted for as equity transactions. The carrying amounts of the Companys interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by
which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to stockholders of the parent.
|
b. |
The subsidiaries in the consolidated financial statements |
The detail information of the
subsidiaries at the end of reporting period was as follows:
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Percentage of Ownership |
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|
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December 31 |
|
|
|
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Name of Investor |
|
Name of Investee |
|
Main Businesses and Products |
|
2015 |
|
|
2014 |
|
|
Note |
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. (SENAO) |
|
Selling and maintaining mobile phones and its peripheral products |
|
|
29 |
|
|
|
28 |
|
|
|
a. |
|
|
|
Light Era Development Co., Ltd. (LED) |
|
Housing, office building development, rent and sale services |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Donghwa Telecom Co., Ltd. (DHT) |
|
International telecommunications, fictitious IP internet and internet transfer services |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Chunghwa Telecom Singapore Pte., Ltd. (CHTS) |
|
International telecommunications, fictitious IP internet and internet transfer services |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Chunghwa System Integration Co., Ltd. (CHSI) |
|
Providing communication and information aggregative services |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Chunghwa Investment Co., Ltd. (CHI) |
|
Investment |
|
|
89 |
|
|
|
89 |
|
|
|
|
|
|
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CHIEF Telecom Inc. (CHIEF) |
|
Internet communication and internet data center (IDC) service |
|
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69 |
|
|
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69 |
|
|
|
b. |
|
|
|
Chunghwa International Yellow Pages Co., Ltd. (CHYP) |
|
Yellow pages sales and advertisement services |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Prime Asia Investments Group Ltd. (B.V.I.) (Prime Asia) |
|
Investment |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Spring House Entertainment Tech. Inc. (SHE) |
|
Network services, producing digital entertainment contents and broadband visual sound terrace development |
|
|
56 |
|
|
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56 |
|
|
|
|
|
|
|
Chunghwa Telecom Global, Inc. (CHTG) |
|
International data and internet services and long distance call wholesales to carriers |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Chunghwa Telecom Vietnam Co., Ltd. (CHTV) |
|
Information and communications technology, international circuit, and intelligent energy network service |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
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Smartfun Digital Co., Ltd. (SFD) |
|
Software retail |
|
|
65 |
|
|
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65 |
|
|
|
|
|
|
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Chunghwa Telecom Japan Co., Ltd. (CHTJ) |
|
International telecommunications, fictitious IP internet and internet transfer services |
|
|
100 |
|
|
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100 |
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|
|
|
|
|
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Chunghwa Sochamp Technology Inc. (CHST) |
|
License plate recognition system |
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51 |
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51 |
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|
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|
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Honghwa International Co., Ltd. (HHI) |
|
Telecommunication engineering, acting as agents to apply mobile phone plan and other services |
|
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100 |
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100 |
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|
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c. |
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|
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New Prospect Investments Holdings Ltd. (B.V.I.) (New Prospect) |
|
Investment |
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100 |
|
|
|
100 |
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|
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|
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(Continued)
- 13 -
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|
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Percentage of Ownership |
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|
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|
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|
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December 31 |
|
|
|
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Name of Investor |
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Name of Investee |
|
Main Businesses and Products |
|
2015 |
|
|
2014 |
|
|
Note |
|
Senao International Co., Ltd. |
|
Senao International (Samoa) Holding Ltd. (SIS) |
|
International investment |
|
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100 |
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|
|
100 |
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|
|
|
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|
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Youth Co., Ltd. (Youth) |
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Sale of computer software, hardware and related products |
|
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89 |
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|
|
|
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|
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d. |
|
|
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Aval Technologies Co., Ltd. (Aval) |
|
Agency and sale of communication products |
|
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100 |
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|
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|
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|
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e. |
|
Youth Co., Ltd. |
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ISPOT Co., Ltd. (ISPOT) |
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Sale of computer and related products |
|
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100 |
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|
|
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|
|
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d. |
|
|
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Youyi Co., Ltd. (Youyi) |
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Maintenance of computer and related products |
|
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100 |
|
|
|
|
|
|
|
d. |
|
CHIEF Telecom Inc. |
|
Unigate Telecom Inc. (Unigate) |
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Telecommunication and internet service |
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100 |
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|
|
100 |
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|
|
|
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|
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Chief International Corp. (CIC) |
|
Investment |
|
|
100 |
|
|
|
100 |
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|
|
|
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|
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Shanghai Chief Telecom Co., Ltd. (SCT) |
|
Internet technology and software technology consulting and related services |
|
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49 |
|
|
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|
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f. |
|
Chunghwa System Integrated Co., Ltd. |
|
Concord Technology Co., Ltd. (Concord) |
|
Investment |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
Spring House Entertainment Tech. Inc. |
|
Ceylon Innovation Co., Ltd. (CEI) |
|
General advertisement and book publishing service |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
Light Era Development Co., Ltd. |
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Yao Yong Real Property Co., Ltd. (YYRP) |
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Real estate management and leasing business |
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|
|
|
|
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|
|
g. |
|
Chunghwa Investment Co., Ltd. |
|
Chunghwa Precision Test Tech. Co., Ltd. (CHPT) |
|
Semiconductor testing components and printed circuit board industry production and marketing of electronic products |
|
|
46 |
|
|
|
48 |
|
|
|
h. |
|
|
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Chunghwa Investment Holding Co., Ltd. (CIHC) |
|
Investment |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
Concord Technology Co., Ltd. |
|
Glory Network System Service (Shanghai) Co., Ltd. (GNSS (Shanghai)) |
|
Planning and design of software and hardware system services and integration of information system |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
Chunghwa Precision Test Tech. Co., Ltd. |
|
Chunghwa Precision Test Tech. USA Corporation (CHPT (US)) |
|
Semiconductor testing components and printed circuit board industry production and marketing of electronic products |
|
|
100 |
|
|
|
100 |
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|
|
|
|
|
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CHPT Japan Co., Ltd. (CHPT (JP)) |
|
Sale and maintenance of electronic parts and machinery processed products, and design of printed circuit board |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Chunghwa Precision Test Tech. International, Ltd. (CHPT (International)) |
|
Electronic materials wholesale and retail and investment |
|
|
100 |
|
|
|
100 |
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|
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|
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Senao International (Samoa) Holding Ltd. |
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Senao International HK Limited (SIHK) |
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International investment |
|
|
100 |
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|
|
100 |
|
|
|
|
|
Chunghwa Investment Holding Co., Ltd. |
|
CHI One Investment Co., Limited (COI) |
|
Investment |
|
|
100 |
|
|
|
100 |
|
|
|
i. |
|
Senao International HK Limited |
|
Senao Trading (Fujian) Co., Ltd. (STF) |
|
Information technology services and sale of communication products |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Senao International Trading (Shanghai) Co., Ltd. (SITS) |
|
Information technology services and sale of communication products |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Senao International Trading (Shanghai) Co., Ltd. (SEITS) |
|
Information technology services and maintenance of communication products |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
Senao International Trading (Jiangsu) Co., Ltd. (SITJ) |
|
Information technology services and sale of communication products |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
(Continued)
- 14 -
|
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|
|
|
Percentage of Ownership |
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
Name of Investor |
|
Name of Investee |
|
Main Businesses and Products |
|
2015 |
|
|
2014 |
|
|
Note |
Prime Asia Investments Group Ltd. (B.V.I.) |
|
Chunghwa Hsingta Co., Ltd. (CHC) |
|
Investment |
|
|
100 |
|
|
|
100 |
|
|
|
Chunghwa Hsingta Company Ltd. |
|
Chunghwa Telecom (China) Co., Ltd. (CTC) |
|
Planning and design of energy conservation and software and hardware system services, and integration of information system |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
Jiangsu Zhenhua Information Technology Company, LLC. (JZIT) |
|
Intelligent energy conserving and intelligent building services |
|
|
75 |
|
|
|
75 |
|
|
|
|
|
Hua-Xiong Information Technology Co., Ltd. (HXIT) |
|
Intelligent system and energy saving system services in buildings |
|
|
51 |
|
|
|
51 |
|
|
|
Chunghwa Precision Test Tech. International, Ltd. |
|
Shanghai Taihua Electronic Technology Limited (STET) |
|
Design of printed circuit board and related consultation service |
|
|
100 |
|
|
|
100 |
|
|
|
(Concluded)
a. |
The Company owns 29% equity shares of SENAO. However, the Company has four out of seven seats of the Board of Directors of SENAO through the support of large beneficial shareholders. Therefore, the Company has control
over SENAO and the accounts of SENAO are included in the consolidated financial statements. The Companys equity ownership of SENAO increased due to SENAOs purchase of its treasury stock in June 2015 and July 2015. The Company owned
28.18% and 29.31% equity shares of SENAO as of December 31, 2014 and December 31, 2015, respectively. |
b. |
The Companys equity ownership of CHIEF decreased due to CHIEF issued employee stock bonus in July 2014. The Company owned 72.51% equity shares of CHIEF as of December 31, 2015. |
c. |
Chunghwa established 100% owned subsidiary of Honghwa Human Resources Co., Ltd. in January 2013. Honghwa Human Resources Co., Ltd. changed its name to Honghwa International Co., Ltd. from July 4, 2014.
|
d. |
SENAO acquired 70% of Youth in September 2015. SENAO participated in Youths cash capital increase in December 2015; therefore the ownership interests of Youth increased. SENAO owned 89.48% equity shares of Youth
as of December 31, 2015. Youyi and ISPOT are 100%-owned subsidiaries of Youth. |
e. |
SENAO established 100% owned subsidiary of Aval in October 2015. Aval mainly engages in agency and sale of communication products. |
f. |
CHIEF invested 49% of SCT in August 2015. Based on the written agreement between the stockholders, CHIEF has two out of three seats of the Board of Directors. Therefore, CHIEF has control over SCT and the accounts of
SCT are included in the consolidated financial statements. |
g. |
LED merged YYRP by absorption in October 2014. |
h. |
CHI disposed of some shares of CHPT in January 2015, so the ownership interest of CHI decreased. The Company owned 47.65% and 45.68% equity shares of CHPT as of December 31, 2014 and December 31, 2015,
respectively. In addition, considering Companys absolute size, the relative size and dispersion of the shareholdings owned by the other shareholders, the management concluded that the Company has a sufficiently dominant voting interest to
direct the relevant activities; hence, CHPT is deemed as a subsidiary of the Company. |
i. |
COI was liquidated in August 2015. CIHC received part of the proceeds from the liquidation. |
- 15 -
The following diagram presents information regarding the relationship and ownership percentages
between Chunghwa and its subsidiaries as of December 31, 2015:
Business Combination
Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are recognized in profit or loss as
incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in
the acquiree, and the fair value of the acquirers previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Noncontrolling interests that are present ownership interests and entitle their holders to a proportionate share of the entitys net
assets in the event of liquidation may be initially measured either at fair value or at the present ownership instruments proportionate share in the recognized amounts of the acquirees identifiable net assets. The choice of measurement
basis is made on a transaction-by-transaction basis. Other types of noncontrolling interests are measured at fair value.
If the initial
accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports its financial statements provisional amounts for the items for which the accounting is incomplete. During the
measurement period, the Company retrospectively adjusts the provisional amounts recognized at the acquisition date or recognizes additional assets or liabilities to reflect new information obtained about facts and circumstances that existed as of
the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date.
- 16 -
Foreign Currencies
In preparing the financial statements of each individual entity, transactions in currencies other than the entitys functional currency
(foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting
period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which
they arise.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing
at the date when the fair value was determined and related exchange differences are recognized in profit or loss. Conversely, when the fair value changes were recognized in other comprehensive income, related exchange difference shall be recognized
in other comprehensive income.
Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.
For the purposes of presenting consolidated financial statements, the assets and liabilities of the Companys foreign operations
(including of the subsidiaries and associates in other countries or currencies used different with Chunghwa) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are
translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and attributed to stockholders of the parent and noncontrolling interests as appropriate.
Cash Equivalents
Cash
equivalents include commercial paper, time deposits and negotiable certificate of deposit with original maturities within three months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.
Inventories
Inventories
are stated at the lower of cost (weighted-average cost) or net realizable value item by item, except for those that may be appropriate to group items of similar or related inventories. Net realizable value is the estimated selling price of
inventories less all estimated costs of completion and costs necessary to make the sale. The calculation of the cost of inventory is derived using the weighted-average method.
Buildings and Lands Consigned to Constructing Firm
Inventories of LED are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group as
similar items or related inventories. Land acquired before construction is classified as land held for development, and then reclassified as land held under development after LED begins its construction project.
When using the completed-contract method for its construction projects, LED recognizes the proceeds from customers as advances from customers
for land and building before the construction project is completed. After completion of the construction project and ownership is transferred to the customers, LED recognizes the relevant revenues.
- 17 -
Investments in Associates and Joint Ventures
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture.
A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.
Investments accounted for using the equity method include investments in associates and interests in joint ventures. Under the equity method,
an investment in an associate or a joint venture is initially recognized at cost and adjusted thereafter to recognize the Companys share of the profit or loss and other comprehensive income of the associate and joint venture as well as the
distribution received. The Company also recognizes its share in changes in the associates and joint ventures.
When the Company subscribes
for additional new shares of the associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Companys proportionate interest in
the associate and joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to additional paid-in capital. When the adjustment should be debited to additional paid-in
capital but the additional paid-in capital recognized from investments accounted for using equity method is insufficient, the shortage is debited to retained earnings.
Any excess of the cost of acquisition over the Companys share of the fair value of the identifiable net assets and liabilities of an
associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and shall not be amortized. Any excess of the Companys share of the net fair value of the
identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.
When
necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of
the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.
When the Company transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and
joint venture are recognized in the Companys consolidated financial statements only to the extent of interests in the associate and joint venture that are not related to the Company.
Property, Plant and Equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated
impairment loss.
Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is
depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.
On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is
recognized in profit or loss.
- 18 -
Investment Properties
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a
currently undetermined future use.
Investment properties are measured initially at cost, including transaction costs. Subsequent to
initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.
On derecognition of the investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is
recognized in profit or loss in the period in which the property is derecognized.
Goodwill
Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less
accumulated impairment loss.
For the purpose of impairment testing, goodwill is allocated to each of the Companys cash-generating
units or groups of cash-generating units (referred to as cash-generating unit) that are expected to benefit from the synergies of the business combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired, by comparing its carrying amount, including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current
annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss
recognized for goodwill is not reversed in subsequent periods.
Intangible Assets Other Than Goodwill
Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less
accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of
any changes in estimate being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its
economic life. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.
Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at
the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.
Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the
carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
- 19 -
Impairment of Tangible and Intangible Assets Other Than Goodwill
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not
possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and
whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and
value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting
impairment loss recognized in profit or loss.
When an impairment loss is subsequently reversed, the carrying amount of the asset or
cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior
years. A reversal of an impairment loss is recognized in profit or loss.
Financial Instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
All regular way purchases or sales of financial assets are recognized and
derecognized on a trade date basis.
|
a) |
Financial assets at fair value through profit and loss (FVTPL) |
Financial assets are
classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.
Financial assets at FVTPL are
stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset.
|
b) |
Held-to-maturity financial assets |
The Company invests in bank debentures and corporate bonds
with specific credit ratings and the Company has positive intent and ability to hold to maturity, are classified as held-to-maturity investments.
- 20 -
Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized
cost using the effective interest method less any impairment loss.
|
c) |
Available-for-sale financial assets (AFS financial assets) |
AFS financial assets are
non-derivatives that are either designated as AFS or are not classified as loans and receivables, held-to-maturity financial assets or financial assets at fair value through profit or loss.
The Company invests in listed stocks, emerging market stocks and unlisted stocks. Among these investments, those that have a quoted market
price in an active market are classified as AFS and measured at fair value at the end of each reporting period; the others that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at
cost less any identified impairment losses at the end of each reporting period by presenting in a separate line item as financial assets carried at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured,
the financial assets are remeasured at fair value. The difference between the carrying amount and the fair value is recognized in other comprehensive income. Any impairment losses are recognized in profit or loss.
Changes in the carrying amount of AFS monetary financial assets relating to changes in foreign currency exchange rates, interest income
calculated using the effective interest method and dividends on AFS equity investments are recognized in profit or loss. Other changes in the carrying amount of AFS financial assets are recognized in other comprehensive income and will be
reclassified to profit or loss when the investment is disposed of or is determined to be impaired.
Dividends on AFS equity instruments
are recognized in profit or loss when the Companys right to receive the dividends is established.
Loans and receivables (including cash and cash equivalents, trade notes
and accounts receivable, accounts receivable from related parties, other financial assets and refundable deposits) are measured at amortized cost using the effective interest method, less any impairment loss, except for short-term receivables when
the effect of discounting is immaterial.
|
2) |
Impairment of financial assets |
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset,
the estimated future cash flows of the investment have been affected.
For financial assets carried at amortized cost, such as
held-to-maturity financial assets, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis.
For financial assets carried at amortized cost, the amount of the impairment loss recognized is mainly based on the difference between the
assets carrying amount and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate.
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is
reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
- 21 -
For AFS equity investments, a significant or prolonged decline in the fair value of the security
below its cost is considered to be objective evidence of impairment.
When an AFS financial asset is considered to be impaired, cumulative
gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.
In respect of AFS
equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income.
For financial assets that are carried at cost, the amount of the impairment loss is mainly measured as the difference between the assets
carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss is not reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
notes and accounts receivable and other receivables, where the carrying amount is reduced through the use of an allowance account. When a trade note and accounts receivable and other receivables are considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible
trade notes and accounts receivable and other receivables that are written off against the allowance account.
|
3) |
Derecognition of financial assets |
The Company derecognizes a financial asset only when the
contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.
|
1) |
Subsequent measurement |
Except for financial liabilities at FVTPL, all the financial
liabilities are subsequently measured at amortized cost using the effective interest method.
|
2) |
Derecognition of financial liabilities |
The difference between the carrying amount of the
financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
|
c. |
Derivative financial instruments |
The Company enters into a variety of derivative financial
instruments to manage its exposure to foreign exchange rate risks, including forward exchange contracts.
- 22 -
Derivatives are initially measured at fair value at the date the derivative contracts are entered
into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which
event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of
derivative financial instruments is negative, the derivative is recognized as a financial liability.
Hedge Accounting
The Company designates some derivatives instruments as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for
as cash flow hedges.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a
reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a
non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and are included in the initial cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued prospectively when the Company revokes the designated hedging relationship, or when the hedging instrument
expires or is sold, terminated, or exercised, or when it no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when
the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.
Provisions
Provisions
for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the best estimate of the expenditure required to settle the Companys obligation by the management of the Company.
Revenue Recognition
Revenue from the sale of goods is recognized when all the following conditions are satisfied:
|
a. |
The Company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
|
b. |
The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
|
c. |
The amount of revenue can be measured reliably; |
|
d. |
It is probable that the economic benefits associated with the transaction will flow to the Company; and |
|
e. |
The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
- 23 -
Revenue is measured at the fair value of the consideration received or receivable and represents
amounts for goods sold in the normal course of business, net of sales discounts and volume rebates. For trade notes and accounts receivable due within one year from the balance sheet date, as the nominal value of the consideration to be received
approximates its fair value and transactions are frequent, fair value of the consideration is not determined by discounting all future receipts using an imputed rate of interest.
Usage revenues from fixed-line services (including local, domestic long distance and international long distance telephone services), cellular
services, Internet and data services, and interconnection and call transfer fees from other telecommunications companies and carriers are billed in arrears and are recognized based upon seconds or minutes of traffic processed when the services are
provided in accordance with contract terms.
Other revenues are recognized as follows: (a) one-time subscriber connection fees (on
fixed-line services) are deferred and recognized over the average expected customer service periods, (b) monthly fees (on fixed-line services, mobile, Internet and data services) are accrued every month, and (c) prepaid services
(fixed-line, mobile, Internet and data services) are recognized as income based upon actual usage by customers.
Where the Company enters
into transactions which involve both the provision of air time bundled with products such as 3G data card and handset, total consideration received from products and air time in these arrangements are allocated and measured using units of accounting
within the arrangement based on their relative fair values limited to the amount that is not contingent upon the delivery of products.
Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract.
Dividend income from investments is recognized when the shareholders right to receive payment has been established under the premises
when it is probable that the economic benefit related to the transactions will flow to the Company and that the revenue can be reasonably measured.
Interest income from a financial asset is recognized when it is probable that the economic benefits related to the transactions will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.
Leasing
Rental income from operating leases is recognized on a straight-line
basis over the term of the relevant lease.
Operating lease payments are recognized as an expense on a straight-line
basis over the lease term.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale.
Other than stated above, all other borrowing
costs are recognized in profit or loss in the period in which they are incurred.
- 24 -
Employee Benefits
|
a. |
Short-term employee benefits |
Liabilities recognized in respect of short-term employee
benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Payments to defined contribution retirement benefit plans are recognized
as an expense when employees have rendered service entitling them to the contributions.
Defined benefit costs (including service cost,
net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and gains or losses on settlements) and net interest on the net
defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising (a) actuarial gains and losses; and (b) the return on plan assets, excluding amounts included in net interest
on the net defined benefit liability (asset), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be
reclassified to profit or loss.
Net defined benefit liability (asset) represents the actual deficit (surplus) in the Companys
defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.
|
c. |
Other long-term employee benefits |
Other long-term employee benefits are accounted for in the
same way as the accounting required for defined benefit plan except that remeasurement is recognized in profit or loss.
Share-based
Payment ArrangementsEmployee Stock Options
Equity-settled share-based payments to employees are measured at the fair value of
the equity instruments at the grant date.
The fair value determined at the grant date of the employee share options is expensed on a
straight-line basis over the vesting period, based on the Companys estimate of employee share options that are expected to ultimately vest, with a corresponding increase in additional paid-in capitalemployee share options. If the equity
instruments granted vest immediately at the grant date, expenses are recognized in full in profit or loss.
At the end of each reporting
period, the Company revises its estimate of the number of employee share options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to additional paid-in capitalemployee stock options.
- 25 -
Income Tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
According to the Income Tax Law, an additional tax at 10% of unappropriated
earnings is provided for as income tax in the year the shareholders approve to retain the earnings.
Adjustments of prior years tax
liabilities are added to or deducted from the current years tax provision.
Deferred tax is recognized on temporary differences between the carrying amounts
of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. If the temporary difference arises from the initial recognition (other than in a business combination) of
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit, the resulting deferred tax asset or liability is not recognized. In addition, a deferred tax liability is not recognized on taxable temporary
difference arising from initial recognition of goodwill.
Deferred tax liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carry forward and unused tax credits from purchases of machinery, equipment and technology and research and development expenditures to
the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences
and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of
each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or
the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
|
c. |
Current and deferred tax for the year |
Current and deferred tax are recognized in profit or
loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.
Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting
for the business combination.
- 26 -
4. |
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY AND ASSUMPTION |
In the application of the Companys accounting policies, which are described in Note 3, the management is required to make judgments,
estimates and assumptions which are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period. Actual results may differ from these estimates.
|
a. |
Impairment of trade notes and accounts receivable |
When there is objective evidence showed
indications of impairment, the Company considers the estimation of future cash flows. The amount of impairment will be measured at the difference between the carrying amount and the present value of estimated future cash flows discounted by the
original effective interest rates of the financial assets. However, as the impact from the discount of short-term receivables is not material, the impairment of short-term receivables is measured at the difference between the carrying amount and the
estimated undiscounted future cash flows. Where the actual future cash flows are less than expected, a material impairment loss may arise.
|
b. |
Provision for inventory valuation and obsolescence |
Inventories are stated at the lower of cost
or net realizable value. Net realizable value is calculated as the estimated selling price less the estimated selling costs. Comparison of net realizable value and cost is determined on an item by item basis, except those similar items which could
be categorized into the same groups. The Company uses the inventory holding period and turnover as the evaluation basis for inventory obsolescence losses.
|
c. |
Impairment of tangible and intangible assets |
When an indication of impairment is assessed with
objective evidence, the Company considers whether the recoverable amount of an asset is less than its carrying amount and recognizes the impairment loss based on difference between the recoverable amount and its carrying amount. The estimate of
recoverable amount would impact on the timing and the amount of impairment loss recognition.
|
d. |
Useful lives of property, plant and equipment |
As discussed in Note 3, Summary of
Significant Accounting Policies Property, Plant and Equipment, the Company reviews estimated useful lives of property, plant and equipment at the end of each year.
|
e. |
Recognition and measurement of defined benefit plans |
Accrued pension liabilities and the
resulting pension expense under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, and long-term average future salary increase. Changes
in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.
- 27 -
|
f. |
Control over subsidiaries |
As discussed in Note 3, some entities are subsidiaries of the
Company although the Company only owns less than 50% ownership interest in these entities. After considering the Companys absolute size of holding in the entity and the relative size of and dispersion of the shareholdings owned by the other
shareholders, and the contractual arrangements between the Company and other investors, potential voting interests and the written agreement between shareholders, the management concluded that the Company has a sufficiently dominant voting interest
to direct the relevant activities of the entity and therefore the Company has control over these entities.
5. |
APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS |
|
a. |
Initial application of the revised Guidelines Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the IFRS, IAS, IFRIC, and SIC endorsed by the FSC (collectively, 2013
Taiwan-IFRSs version) in issue |
According to Rule No. 1030029342 and Rule No. 1030010325 issued by the FSC,
the 2013 Taiwan-IFRS version endorsed by the FSC and the related amendments to the Guidelines Governing the Preparation of Financial Reports by Securities Issuers should be adopted by the Company starting 2015.
The Company believes that as a result of the adoption of aforementioned 2013 Taiwan-IFRSs version and the related amendments to the revised
Guidelines Governing the Preparation of Financial Reports by Securities Issuers, the following items have impacted the Companys consolidated financial statements:
|
1) |
IFRS 12 Disclosure of Interests in Other Entities |
IFRS 12 is a new disclosure
standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the previous
standards. Refer to Notes 15 and 16 for related disclosures.
|
2) |
IFRS 13 Fair Value Measurement |
IFRS 13 establishes a single source of guidance
for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than the previous guidance. For
example, quantitative and qualitative disclosures based on the three-level fair value hierarchy previously required for financial instruments only before the adoption of IFRS 13 is extended by IFRS 13 to cover all assets and liabilities within its
scope. Refer to Notes 18 and 38 for related disclosures.
|
3) |
Amendments to IAS 1 Presentation of Items of Other Comprehensive Income |
The
amendments to IAS 1 requires items of other comprehensive income to be grouped into those items that (1) will not be reclassified subsequently to profit or loss; and (2) may be reclassified subsequently to profit or loss. Income taxes on
related items of other comprehensive income are grouped on the same basis. Previously, there were no such requirements.
The Company
retrospectively applied the above amendments starting in 2015. The items that will not be reclassified subsequently to profit or loss include remeasurements of defined benefit pension plans, the share of remeasurements of defined benefit pension
plans of associates and joint ventures as well as the related income tax on such items. Items that may be reclassified subsequently to profit or loss include exchange differences arising on translation of foreign operations, changes in fair value of
available-for-sale financial assets, cash flow hedges, the share of other comprehensive income of associates and joint ventures as well as the related income tax on items of other comprehensive income (except for the share of remeasurements of
defined benefit pension plans of associates and joint ventures). However, the application of the above amendments did not have any impact on the net income, other comprehensive income (net of income tax), and total comprehensive income.
- 28 -
|
4) |
Revision to IAS 19 Employee Benefits |
The revised IAS 19 change the accounting for
defined benefit plans, which require the Company to recognize changes in defined benefit obligations or assets and to disclose the components of the defined benefit costs. According to the revision, the past service cost is expensed immediately when
incurred and no longer amortized over the average period before vested on a straight-line basis. In addition, the revised IAS 19 introduces certain changes in the presentation of the defined benefit cost, and also includes more extensive
disclosures.
On initial application of the revised IAS 19, the cumulative adjustments in employee benefit costs on and before
December 31, 2013 resulting from the retrospective application are adjusted to net defined benefit liabilities, deferred tax assets, retained earnings, and noncontrolling interests as of January 1, 2014.
On initial application of the revised IAS 19, the Companys deferred income tax assets increased by $883 thousand, net defined benefit
liabilities increased by $5,192 thousand as of December 31, 2015. For the year ended December 31, 2015 pension cost increased by $5,192 thousand which caused an increase in operating expenses, and income tax expenses decreased by $883
thousand.
As a result of the retrospective application of the revised IAS 19, the Companys deferred income tax asset decreased by
$5,220 thousand and $6,103 thousand, net defined benefit liabilities decreased by $30,708 thousand and $35,898 thousand, retained earnings increased by $21,920 thousand and $26,040 thousand and noncontrolling interests increased by $3,568 thousand
and $3,755 thousand as of December 31, 2014 and January 1, 2014, respectively. For the year ended December 31, 2014, pension cost increased by $5,190 thousand, which caused an increase in operating expenses, and income tax expenses
decreased by $883 thousand.
|
b. |
The IFRSs issued by International Accounting Standard Board (IASB) but not endorsed by FSC |
The Company has not applied the following IFRSs issued by the IASB but not endorsed by the FSC. As of the date that the consolidated financial
statements were authorized for issue, the initial adoption to the following standards and interpretations is still subject to the effective date to be published by the FSC.
|
|
|
|
|
New, Revised or Amended Standards and
Interpretations |
|
Effective Date
Issued by IASB (Note 1) |
|
|
|
Amendments to IFRSs |
|
Annual Improvements to IFRSs 2010-2012 Cycle |
|
July 1, 2014 (Note 2) |
|
|
|
Amendments to IFRSs |
|
Annual Improvements to IFRSs 2011-2013 Cycle |
|
July 1, 2014 |
|
|
|
Amendments to IFRSs |
|
Annual Improvements to IFRSs 2012-2014 Cycle |
|
January 1, 2016 (Note 3) |
|
|
|
IFRS 9 |
|
Financial Instruments |
|
January 1, 2018 |
|
|
|
Amendments to IFRS 9 and IFRS 7 |
|
Mandatory Effective Date of IFRS 9 and Transition Disclosures |
|
January 1, 2018 |
(Continued)
- 29 -
|
|
|
|
|
New, Revised or Amended Standards and
Interpretations |
|
Effective Date
Issued by IASB (Note 1) |
|
|
|
Amendments to IFRS 10 and IAS 28 |
|
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
|
To be determined by IASB |
|
|
|
Amendments to IFRS 10, IFRS 12 and IAS 28 |
|
Investment Entities: Applying the Consolidation Exception |
|
January 1, 2016 |
|
|
|
Amendment to IFRS 11 |
|
Acquisitions of Interests in Joint Operations |
|
January 1, 2016 |
|
|
|
IFRS 14 |
|
Regulatory Deferral Accounts |
|
January 1, 2016 |
|
|
|
IFRS 15 |
|
Revenue from Contracts with Customers |
|
January 1, 2018 |
|
|
|
IFRS 16 |
|
Leases |
|
January 1, 2019 |
|
|
|
Amendment to IAS 1 |
|
Disclosure Initiative |
|
January 1, 2016 |
|
|
|
Amendment to IAS 7 |
|
Disclosure Initiative |
|
January 1, 2017 |
|
|
|
Amendment to IAS 12 |
|
Deferred Tax: Recovery of Underlying Assets |
|
January 1, 2017 |
|
|
|
Amendments to IAS 16 and IAS 38 |
|
Clarification of Acceptable Methods of Depreciation and Amortization |
|
January 1, 2016 |
|
|
|
Amendments to IAS 16 and IAS 41 |
|
Agriculture: Bearer Plants |
|
January 1, 2016 |
|
|
|
Amendment to IAS 19 |
|
Defined Benefit Plans: Employee Contributions |
|
July 1, 2014 |
|
|
|
Amendment to IAS 36 |
|
Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets |
|
January 1, 2014 |
|
|
|
Amendment to IAS 39 |
|
Novation of Derivatives and Continuation of Hedge Accounting |
|
January 1, 2014 |
|
|
|
IFRIC 21 |
|
Levies |
|
January 1, 2014 |
(Concluded)
|
Note |
1: Unless stated otherwise, the above amendments and interpretations are effective for annual periods beginning on or after their respective effective dates. |
|
Note |
2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after
July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014. |
|
Note |
3: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods
beginning on or after January 1, 2016. |
Except for the following, the initial application of the above new standards and
interpretations will not have any material impact on the Companys consolidated financial statements:
|
1) |
IFRS 15 Revenue from Contracts with Customers |
IFRS 15 establishes principles for
recognizing revenue that apply to all contracts with customers, and will supersedes IAS 18 Revenue, IAS 11 Construction Contracts and a number of revenue-related interpretations.
- 30 -
When applying IFRS 15, an entity shall recognize revenue by applying the
following steps:
|
a) |
Identify the contract with the customer; |
|
b) |
Identify the performance obligations in the contract; |
|
c) |
Determine the transaction price; |
|
d) |
Allocate the transaction price to the performance obligations in the contracts; and |
|
e) |
Recognize revenue when the entity satisfies a performance obligation. |
Upon the application of
IFRS 15, the Company will allocate the transaction price to each performance obligation identified in the contract on a relative stand-alone selling price basis.
Incremental costs of obtaining a contract will be recognized as an asset to the extent the Company expects to recover those costs. Such asset
will be amortized on a basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. This will lead to the later recognition of charges for certain customer-obtaining costs.
When IFRS 15 is effective, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or
retrospectively with the cumulative effect of initially applying this Standard recognized at the date of initial application.
IFRS 16 sets out the accounting standards for leases that will
supersede IAS 17 and a number of related interpretations.
Under IFRS 16, if the Company is a lessee, it shall recognize right-of-use
assets and lease liabilities for all leases on the consolidated balance sheets except for low-value and short-term leases. The Company may elect to apply the accounting method similar to the accounting for operating lease under IAS 17 to the
low-value and short-term leases. On the consolidated statements of comprehensive income, the Company should present the depreciation expense charged on the right-of-use asset separately from interest expense accrued on the lease liability and
discloses such amounts in the footnotes; interest is computed by using effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of the lease liability are classified within financing
activities; cash payments for interest portion are classified within operating activities.
The application of IFRS 16 is not expected to
have a material impact on the accounting of the Company as lessor.
When IFRS 16 becomes effective, the Company may elect to apply this
Standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the initial application of this Standard recognized at the date of initial application.
Except for the abovementioned impact, as of the date the consolidated financial statements were authorized for issue, the Company is
continuously assessing the possible impact that the application of other standards and interpretations will have on the Companys financial position and operating result, and will disclose the relevant impact when the assessment is completed.
- 31 -
6. |
CASH AND CASH EQUIVALENTS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Cash |
|
|
|
|
|
|
|
|
Cash on hand |
|
$ |
333,544 |
|
|
$ |
310,189 |
|
Bank deposits |
|
|
7,615,595 |
|
|
|
5,588,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
7,949,139 |
|
|
|
5,899,159 |
|
|
|
|
|
|
|
|
|
|
Cash equivalents (investments with maturities of less than three months) |
|
|
|
|
|
|
|
|
Commercial paper |
|
|
11,914,066 |
|
|
|
13,999,986 |
|
Negotiable certificate of deposit |
|
|
7,600,000 |
|
|
|
3,100,000 |
|
Time deposits |
|
|
2,808,218 |
|
|
|
560,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
22,322,284 |
|
|
|
17,660,444 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
30,271,423 |
|
|
$ |
23,559,603 |
|
|
|
|
|
|
|
|
|
|
The annual yield rates of bank deposits, commercial paper, negotiable certificate of deposit and time deposits
were as follows:
|
|
|
|
|
|
|
December 31 |
|
|
2015 |
|
2014 |
Bank deposits |
|
0.00%-1.10% |
|
0.00%-0.95% |
Commercial paper |
|
0.35%-0.41% |
|
0.58%-0.65% |
Negotiable certificate of deposit |
|
0.36%-0.45% |
|
0.50%-0.80% |
Time deposits |
|
0.55%-3.80% |
|
0.38%-5.45% |
7. |
FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Financial assets held for trading |
|
|
|
|
|
|
|
|
Derivatives (not designated for hedge) |
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
$ |
163 |
|
|
$ |
1,163 |
|
|
|
|
|
|
|
|
|
|
Financial liabilities held for trading |
|
|
|
|
|
|
|
|
Derivatives (not designated for hedge) |
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
$ |
|
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
Outstanding forward exchange contracts not designated for hedge as of balance sheet dates were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount |
|
|
Currency |
|
Maturity Period |
|
(In Thousands) |
December 31, 2015 |
|
|
|
|
|
|
Forward exchange contractsbuy |
|
EUR/NT$ |
|
2016.03-06 |
|
EUR18,301/NT$658,545 |
Forward exchange contractsbuy |
|
US$/NT$ |
|
2016.01 |
|
US$803/NT$26,403 |
December 31, 2014 |
|
|
|
|
|
|
Forward exchange contractsbuy |
|
US$/NT$ |
|
2015.01 |
|
US$6,948/NT$218,993 |
- 32 -
The Company entered into the above forward exchange contracts to manage its exposure to foreign
currency risk due to fluctuations in exchange rates. However, the aforementioned derivatives did not meet the criteria for hedge accounting and were classified as financial assets or financial liabilities held for trading.
8. |
AVAILABLE-FOR-SALE FINANCIAL ASSETS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Equity securities |
|
|
|
|
|
|
|
|
Domestic and foreign listed stocks |
|
$ |
3,242,827 |
|
|
$ |
3,914,212 |
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
|
|
|
$ |
|
|
Noncurrent |
|
|
3,242,827 |
|
|
|
3,914,212 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,242,827 |
|
|
$ |
3,914,212 |
|
|
|
|
|
|
|
|
|
|
CHI evaluated and concluded its available-for-sale financial assets were partially impaired, and recorded an
impairment loss of $25,910 thousand for the year ended December 31, 2015. There was no impairment loss recognized for the year ended December 31, 2014.
9. |
HELD-TO-MATURITY FINANCIAL ASSETS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Corporate bonds |
|
$ |
3,870,540 |
|
|
$ |
6,533,527 |
|
Bank debentures |
|
|
150,000 |
|
|
|
950,742 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,020,540 |
|
|
$ |
7,484,269 |
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
1,880,739 |
|
|
$ |
3,456,747 |
|
Noncurrent |
|
|
2,139,801 |
|
|
|
4,027,522 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,020,540 |
|
|
$ |
7,484,269 |
|
|
|
|
|
|
|
|
|
|
The related information of corporate bonds and bank debentures as of balance sheet dates was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Par value |
|
$ |
3,865,000 |
|
|
$ |
6,515,000 |
|
|
|
|
|
|
|
|
|
|
Nominal interest rate |
|
|
1.18%-2.49% |
|
|
|
1.15%-2.49% |
|
Effective interest rate |
|
|
1.15%-1.54% |
|
|
|
1.15%-1.58% |
|
Average remaining maturity life |
|
|
1.04 years |
|
|
|
1.34 years |
|
Bank debentures |
|
|
|
|
|
|
|
|
Par value |
|
$ |
150,000 |
|
|
$ |
950,000 |
|
|
|
|
|
|
|
|
|
|
Nominal interest rate |
|
|
1.25% |
|
|
|
1.25%-1.60% |
|
Effective interest rate |
|
|
1.25% |
|
|
|
1.15%-1.40% |
|
Average remaining maturity life |
|
|
1.41 years |
|
|
|
0.75 year |
|
- 33 -
10. |
TRADE NOTES AND ACCOUNTS RECEIVABLE, NET |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Trade notes and accounts receivable |
|
$ |
28,260,527 |
|
|
$ |
27,277,401 |
|
Less: Allowance for doubtful accounts |
|
|
(1,334,477 |
) |
|
|
(1,049,402 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
26,926,050 |
|
|
$ |
26,227,999 |
|
|
|
|
|
|
|
|
|
|
The average credit terms range from 30 to 90 days. In determining the recoverability of trade notes and
accounts receivable, the Company considers significant change in the credit quality of the trade notes and accounts receivable from the date credit was initially granted up to the end of the reporting period. In general, with few exceptional cases,
it is unlikely for the notes and accounts receivable due longer than 180 days to be collected, therefore the Company recognized 100% allowance of notes and accounts receivable overdue longer than 180 days. For the notes and accounts receivable less
than 180 days, the allowance for doubtful accounts was estimated based on the Companys historical recovery experience.
The Company
serves a large consumer base; therefore, the concentration of credit risk is limited.
The aging analysis for trade notes and accounts
receivable as of balance sheet dates were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Non-overdue |
|
$ |
25,707,830 |
|
|
$ |
24,453,887 |
|
Less than 30 days |
|
|
732,711 |
|
|
|
680,131 |
|
31-60 days |
|
|
346,275 |
|
|
|
171,167 |
|
61-90 days |
|
|
241,097 |
|
|
|
90,564 |
|
91-120 days |
|
|
192,601 |
|
|
|
75,839 |
|
121-180 days |
|
|
121,705 |
|
|
|
63,966 |
|
More than 181 days |
|
|
918,308 |
|
|
|
1,741,847 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
28,260,527 |
|
|
$ |
27,277,401 |
|
|
|
|
|
|
|
|
|
|
The above aging analysis was based on days overdue.
At balance sheet dates, the receivables that were past due but not impaired were considered recoverable by the management of the Company. The
aging of these receivables as of December 31, 2015 and 2014 was as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Less than 30 days |
|
$ |
127,884 |
|
|
$ |
114,155 |
|
31-60 days |
|
|
16,091 |
|
|
|
20,282 |
|
61-90 days |
|
|
95,329 |
|
|
|
19,656 |
|
91-120 days |
|
|
57,939 |
|
|
|
19,084 |
|
121-180 days |
|
|
1,762 |
|
|
|
634 |
|
More than 181 days |
|
|
19,823 |
|
|
|
16,768 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
318,828 |
|
|
$ |
190,579 |
|
|
|
|
|
|
|
|
|
|
The above aging analysis was based on days overdue.
- 34 -
Movements of the allowance for doubtful accounts were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually Assessed for Impairment |
|
|
Collectively Assessed for Impairment |
|
|
Total |
|
Balance on January 1, 2014 |
|
$ |
221,164 |
|
|
$ |
700,938 |
|
|
$ |
922,102 |
|
Add: Provision for doubtful accounts |
|
|
55,495 |
|
|
|
236,890 |
|
|
|
292,385 |
|
Deduct: Amounts written off |
|
|
|
|
|
|
(165,085 |
) |
|
|
(165,085 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
276,659 |
|
|
|
772,743 |
|
|
|
1,049,402 |
|
Add: Provision for doubtful accounts |
|
|
88,600 |
|
|
|
391,543 |
|
|
|
480,143 |
|
Deduct: Amounts written off |
|
|
(418 |
) |
|
|
(194,650 |
) |
|
|
(195,068 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
364,841 |
|
|
$ |
969,636 |
|
|
$ |
1,334,477 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Merchandise |
|
$ |
5,848,527 |
|
|
$ |
4,163,434 |
|
Project in process |
|
|
697,181 |
|
|
|
821,644 |
|
Work in process |
|
|
100,445 |
|
|
|
13,307 |
|
Raw materials |
|
|
70,792 |
|
|
|
52,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,716,945 |
|
|
|
5,050,550 |
|
Land held under development |
|
|
1,998,733 |
|
|
|
1,998,733 |
|
Construction in progress |
|
|
64,512 |
|
|
|
47,226 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,780,190 |
|
|
$ |
7,096,509 |
|
|
|
|
|
|
|
|
|
|
The operating costs related to inventories were $52,665,569 thousand (including the valuation loss on
inventories of $198,312 thousand) and $51,341,054 thousand (including the valuation loss on inventories of $288,364 thousand) for the years ended December 31, 2015 and 2014, respectively.
As of December 31, 2015 and 2014, inventories of $2,063,245 thousand and $2,061,297 thousand, respectively, were expected to be recovered
after more than twelve months. The aforementioned amount of inventories is mainly related to property development owned by LED.
Land held
under development and construction in progress on December 31, 2015 and 2014 was for Qingshan Sec., Dayuan Township, Taoyuan County project.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Prepaid rents |
|
$ |
3,275,192 |
|
|
$ |
3,330,118 |
|
Others |
|
|
3,005,647 |
|
|
|
2,618,678 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,280,839 |
|
|
$ |
5,948,796 |
|
|
|
|
|
|
|
|
|
|
(Continued)
- 35 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Current |
|
|
|
|
|
|
|
|
Prepaid rents |
|
$ |
1,032,869 |
|
|
$ |
1,104,778 |
|
Others |
|
|
1,636,152 |
|
|
|
1,339,680 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,669,021 |
|
|
$ |
2,444,458 |
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
|
Prepaid rents |
|
$ |
2,242,323 |
|
|
$ |
2,225,340 |
|
Others |
|
|
1,369,495 |
|
|
|
1,278,998 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,611,818 |
|
|
$ |
3,504,338 |
|
|
|
|
|
|
|
|
|
|
(Concluded)
13. |
OTHER CURRENT MONETARY ASSETS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Time deposits and negotiable certificates of deposit with maturities of more than three months |
|
$ |
2,285,682 |
|
|
$ |
2,616,192 |
|
Others |
|
|
1,015,101 |
|
|
|
709,162 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,300,783 |
|
|
$ |
3,325,354 |
|
|
|
|
|
|
|
|
|
|
The annual yield rates of time deposits and negotiable certificates of deposit with maturities of more than
three months were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Time deposits and negotiable certificate of deposit with maturities of more than three months |
|
|
0.11%-3.50% |
|
|
|
0.11%-4.95% |
|
14. |
FINANCIAL ASSETS CARRIED AT COST |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Non-listed stocks |
|
|
|
|
|
|
|
|
Domestic |
|
$ |
1,990,077 |
|
|
$ |
2,105,235 |
|
Foreign |
|
|
277,792 |
|
|
|
261,295 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,267,869 |
|
|
$ |
2,366,530 |
|
|
|
|
|
|
|
|
|
|
The above non-listed stocks are classified as available-for-sale financial assets based on financial assets
categories (see Note 38). Since the fair value cannot be reliably measured due to the range of reasonable fair value estimates was so significant, the above non-listed stocks investments owned by the Company were carried at costs less any impairment
losses at the balance sheet dates.
- 36 -
CHI disposed financial assets carried at cost with carrying amounts of $2,133 thousand and $5,922
thousand and recognized the losses from the disposal of $449 thousand and $789 thousand for the years ended December 31, 2015 and 2014, respectively.
After the Company evaluated the financial positions and future operation results of aforementioned investments, the Company concluded some of
its investments that have ceased their operations were fully impaired, and recognized an impairment loss of $77,018 thousand and $8,976 thousand for the years ended December 31, 2015 and 2014, respectively. In addition, some of its investments
are encountering profit recession or deficit. The Company concluded the recoverable amount of such investments which represented present value of estimated future cash flows discounted at the current market rate of return for a similar financial
asset or based on the market approach using financial indicators such as PE ratios of the comparable listed companies was lower than the carrying amount. Therefore, the Company recognized impairment losses of $4,251 thousand and $14,358 thousand for
the years ended December 31, 2015 and 2014, respectively.
|
a. |
Information on significant noncontrolling interest subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proportion of Ownership Interests and Voting Rights Held by Noncontrolling Interests |
|
|
|
Principal Place
of Business |
|
December 31 |
|
Subsidiaries |
|
|
2015 |
|
|
2014 |
|
SENAO |
|
Taiwan |
|
|
71 |
% |
|
|
72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit Allocated to Noncontrolling Interests |
|
|
Accumulated Noncontrolling Interests |
|
|
|
Year Ended December 31 |
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
SENAO |
|
$ |
575,368 |
|
|
$ |
382,194 |
|
|
$ |
4,116,412 |
|
|
$ |
4,165,910 |
|
Individually immaterial subsidiaries with noncontrolling interests |
|
|
283,249 |
|
|
|
167,121 |
|
|
|
1,152,663 |
|
|
|
919,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
858,617 |
|
|
$ |
549,315 |
|
|
$ |
5,269,075 |
|
|
$ |
5,085,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summarized financial information in respect of SENAO and its subsidiaries that has material noncontrolling
interests is set out below. The summarized financial information below represents amounts before intracompany eliminations.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Current assets |
|
$ |
7,422,739 |
|
|
$ |
7,943,537 |
|
Noncurrent assets |
|
|
2,783,123 |
|
|
|
2,497,896 |
|
Current liabilities |
|
|
(4,324,620 |
) |
|
|
(4,594,998 |
) |
Noncurrent liabilities |
|
|
(137,661 |
) |
|
|
(93,597 |
) |
|
|
|
|
|
|
|
|
|
Equity |
|
$ |
5,743,581 |
|
|
$ |
5,752,838 |
|
|
|
|
|
|
|
|
|
|
(Continued)
- 37 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Equity attributable to the parent |
|
$ |
1,627,169 |
|
|
$ |
1,586,928 |
|
Equity attributable to noncontrolling interests |
|
|
4,116,412 |
|
|
|
4,165,910 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,743,581 |
|
|
$ |
5,752,838 |
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Revenues and income |
|
$ |
35,949,748 |
|
|
$ |
41,755,175 |
|
Costs and expenses |
|
|
35,141,453 |
|
|
|
41,224,624 |
|
|
|
|
|
|
|
|
|
|
Profit for the year |
|
$ |
808,295 |
|
|
$ |
530,551 |
|
|
|
|
|
|
|
|
|
|
Profit attributable to the parent |
|
$ |
232,927 |
|
|
$ |
148,357 |
|
Profit attributable to the noncontrolling interests |
|
|
575,368 |
|
|
|
382,194 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
808,295 |
|
|
$ |
530,551 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income attributable to the parent |
|
$ |
(925 |
) |
|
$ |
8,008 |
|
Other comprehensive income attributable to the noncontrolling interests |
|
|
(2,274 |
) |
|
|
21,292 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(3,199 |
) |
|
$ |
29,300 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to the parent |
|
$ |
232,002 |
|
|
$ |
156,365 |
|
Total comprehensive income attributable to the noncontrolling interests |
|
|
573,094 |
|
|
|
403,486 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
805,096 |
|
|
$ |
559,851 |
|
|
|
|
|
|
|
|
|
|
Net cash flow from operating activities |
|
$ |
1,739,155 |
|
|
$ |
1,232,574 |
|
Net cash flow from investing activities |
|
|
65,411 |
|
|
|
(105,189 |
) |
Net cash flow from financing activities |
|
|
(1,530,168 |
) |
|
|
(533,076 |
) |
|
|
|
|
|
|
|
|
|
Net cash inflow |
|
$ |
274,398 |
|
|
$ |
594,309 |
|
|
|
|
|
|
|
|
|
|
Dividends distributed to noncontrolling interest |
|
$ |
273,821 |
|
|
$ |
741,929 |
|
|
|
|
|
|
|
|
|
|
|
b. |
Equity transactions with noncontrolling interests |
SENAO participated in share subscription of
Youth in December 2015 at a percentage different from its original ownership interest. Therefore, the ownership interest of Youth increased from 70% to 89.48%.
SENAO purchased its treasury stock in June 2015 and July 2015, and the ownership interest of SENAO increased from 28.18% to 29.31%.
- 38 -
CHI disposed of partial shares of CHPT in January 2015, and the ownership interest of CHPT
decreased from 47.65% to 45.68%.
The above transactions were accounted for as equity transactions since the Company did not cease to have
control over these subsidiaries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHI Disposed Some Shares Of CHPT |
|
|
SENAO Purchased Its Treasury Stock |
|
|
SENAO Participated in Youths Share Subscription |
|
Cash consideration received (paid) from (to) noncontrolling interest |
|
$ |
45,128 |
|
|
$ |
(492,770 |
) |
|
$ |
|
|
The proportionate share of the carrying amount of the net assets of the subsidiary transferred from (to) noncontrolling
interests |
|
|
(18,484 |
) |
|
|
416,451 |
|
|
|
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Differences arising from equity transaction |
|
$ |
26,644 |
|
|
$ |
(76,319 |
) |
|
$ |
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Line items for equity transaction adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capitaldifference between consideration received and the carrying amount of the subsidiaries net assets
upon actual disposal |
|
$ |
26,644 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capitalarising from changes in equities of subsidiaries |
|
$ |
|
|
|
$ |
(14,021 |
) |
|
$ |
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unappropriated earnings |
|
$ |
|
|
|
$ |
(62,298 |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Activity |
|
Date of Acquisition |
|
|
Proportion of Voting Equity Interests Acquired
(%) |
|
|
Consideration Transferred |
|
Youth Co., Ltd. and its subsidiaries |
|
Sale of computer software, hardware and related products |
|
|
September 2, 2015 |
|
|
|
70 |
|
|
$ |
135,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Youth and its subsidiaries were acquired in order to continue the expansion of SENAOs activities in
selling telecommunication products. Youth and its subsidiaries were acquired by cash.
- 39 -
|
2) |
Assets acquired and liabilities assumed at the date of acquisition |
|
|
|
|
|
|
|
Youth and Its Subsidiaries |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
21,467 |
|
Accounts and other receivables |
|
|
10,260 |
|
Inventories |
|
|
29,944 |
|
Prepayments |
|
|
5,549 |
|
Other current assets |
|
|
5,735 |
|
Noncurrent assets |
|
|
|
|
Property, plant and equipment |
|
|
35,600 |
|
Intangible assets |
|
|
259,000 |
|
Refundable deposits |
|
|
21,800 |
|
Deferred income tax assets |
|
|
3,678 |
|
Other noncurrent assets |
|
|
32,209 |
|
Current liabilities |
|
|
|
|
Short-term loans |
|
|
(53,711 |
) |
Trade notes payable |
|
|
(8,633 |
) |
Accounts and other payable |
|
|
(74,603 |
) |
Other current liabilities |
|
|
(80,494 |
) |
Noncurrent liabilities |
|
|
|
|
Long-term loans |
|
|
(39,655 |
) |
Deferred income tax liabilities |
|
|
(44,030 |
) |
Other noncurrent liabilities |
|
|
(10,000 |
) |
|
|
|
|
|
|
|
$ |
114,116 |
|
|
|
|
|
|
|
3) |
Goodwill arising on acquisition |
|
|
|
|
|
|
|
Youth and Its Subsidiaries |
|
Consideration transferred |
|
$ |
135,450 |
|
Add: Noncontrolling interest (30% of the recognized amounts of Youth and its subsidiaries identifiable net assets) |
|
|
34,235 |
|
Less: Fair value of identifiable net assets acquired |
|
|
(114,116 |
) |
|
|
|
|
|
Goodwill arising on acquisition |
|
$ |
55,569 |
|
|
|
|
|
|
Goodwill that arose in the acquisition of Youth and its subsidiaries mainly included the amount in relation to
the benefit of expected synergies from integrating the businesses of Youth and its subsidiaries that operate sales and maintenance of Apples products for many years. These benefits are not recognized separately from goodwill because they do
not meet the recognition criteria for identifiable intangible assets.
Goodwill arising from business combinations is not deductible for
tax purposes.
- 40 -
|
4) |
Net cash outflow on acquisition of subsidiaries |
|
|
|
|
|
|
|
Youth and Its Subsidiaries |
|
Consideration paid in cash |
|
$ |
135,450 |
|
Less: Cash and cash equivalents acquired |
|
|
(21,467 |
) |
|
|
|
|
|
|
|
$ |
113,983 |
|
|
|
|
|
|
|
5) |
Impact of acquisitions on the results of the Company |
The results of the acquired subsidiaries
since the date of acquisition were as follows:
|
|
|
|
|
|
|
Youth and Its Subsidiaries |
|
Revenue |
|
$ |
187,793 |
|
|
|
|
|
|
Net loss |
|
$ |
17,823 |
|
|
|
|
|
|
Had these business combinations been in effect at the beginning of the annual reporting period, the
Companys revenue and net income would have been $232,186,877 thousand and $43,586,076 thousand for the year ended December 31, 2015. This pro-forma information is for illustrative purposes only and is not necessarily an indication of
revenue and results of operations of the Company that actually would have been achieved had the acquisition been completed on January 1, 2015, nor is it intended to be a projection of future results.
In determining the pro-forma revenue and net income of the Company had Youth and its subsidiaries been acquired at the beginning of the current
reporting period, management calculated depreciation of property, plant and equipment and amortization of intangible assets acquired on the basis of the fair values arising in the initial accounting for the business combination rather than the
carrying amounts recognized in the pre-acquisition financial statements.
16. |
INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Investments in associates |
|
$ |
2,917,625 |
|
|
$ |
2,696,959 |
|
Investments in joint ventures |
|
|
227,379 |
|
|
|
256,666 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,145,004 |
|
|
$ |
2,953,625 |
|
|
|
|
|
|
|
|
|
|
- 41 -
|
a. |
Investments in associates |
Investments in associates were as follows:
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Listed |
|
|
|
|
|
|
|
|
Senao Networks, Inc. (SNI) |
|
$ |
866,696 |
|
|
$ |
750,918 |
|
Non-listed |
|
|
|
|
|
|
|
|
ST-2 Satellite Ventures Pte., Ltd. (STS) |
|
|
494,727 |
|
|
|
558,379 |
|
Taiwan International Standard Electronics Co., Ltd. (TISE) |
|
|
374,487 |
|
|
|
237,097 |
|
Viettel-CHT Co., Ltd. (Viettel-CHT) |
|
|
315,762 |
|
|
|
277,700 |
|
International Integrated System, Inc. (IISI) |
|
|
301,861 |
|
|
|
293,809 |
|
Skysoft Co., Ltd. (SKYSOFT) |
|
|
137,792 |
|
|
|
138,868 |
|
KingwayTek Technology Co., Ltd. (KWT) |
|
|
119,419 |
|
|
|
89,527 |
|
So-net Entertainment Taiwan Limited (So-net) |
|
|
105,844 |
|
|
|
99,525 |
|
Taiwan International Ports Logistics Corporation (TIPL) |
|
|
68,927 |
|
|
|
78,981 |
|
Dian Zuan Intergrating Marketing Co., Ltd. (DZIM) |
|
|
41,922 |
|
|
|
67,352 |
|
Click Force Co., Ltd. (CF) |
|
|
38,914 |
|
|
|
39,028 |
|
HopeTech Technologies Limited (HopeTech) |
|
|
35,938 |
|
|
|
31,211 |
|
Alliance Digital Tech Co., Ltd. (ADT) |
|
|
15,336 |
|
|
|
20,290 |
|
MeWorks LIMITED (HK) (MeWorks) |
|
|
|
|
|
|
8,965 |
|
Xiamen Sertec Business Technology Co., Ltd. (Sertec) |
|
|
|
|
|
|
5,309 |
|
Panda Monium Company Ltd. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,917,625 |
|
|
$ |
2,696,959 |
|
|
|
|
|
|
|
|
|
|
At the end of the reporting periods, the percentages of ownership and voting rights in associates held by the
Company were as follows:
|
|
|
|
|
|
|
|
|
|
|
% of Ownership and Voting Right |
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Senao Networks, Inc. (SNI) |
|
|
34 |
|
|
|
34 |
|
ST-2 Satellite Ventures Pte., Ltd. (STS) |
|
|
38 |
|
|
|
38 |
|
Taiwan International Standard Electronics Co., Ltd. (TISE) |
|
|
40 |
|
|
|
40 |
|
Viettel-CHT Co., Ltd. (Viettel-CHT) |
|
|
30 |
|
|
|
30 |
|
International Integrated System, Inc. (IISI) |
|
|
33 |
|
|
|
33 |
|
Skysoft Co., Ltd. (SKYSOFT) |
|
|
30 |
|
|
|
30 |
|
KingwayTek Technology Co., Ltd. (KWT) |
|
|
26 |
|
|
|
27 |
|
So-net Entertainment Taiwan Limited (So-net) |
|
|
30 |
|
|
|
30 |
|
Taiwan International Ports Logistics Corporation (TIPL) |
|
|
27 |
|
|
|
27 |
|
Dian Zuan Integrating Marketing Co., Ltd. (DZIM) |
|
|
26 |
|
|
|
26 |
|
Click Force Co., Ltd. (CF) |
|
|
49 |
|
|
|
49 |
|
HopeTech Technologies Limited (HopeTech) |
|
|
45 |
|
|
|
45 |
|
Alliance Digital Tech Co., Ltd. (ADT) |
|
|
13 |
|
|
|
13 |
|
MeWorks LIMITED (HK) (MeWorks) |
|
|
20 |
|
|
|
20 |
|
Xiamen Sertec Business Technology Co., Ltd. (Sertec) |
|
|
|
|
|
|
49 |
|
Panda Monium Company Ltd. |
|
|
|
|
|
|
43 |
|
- 42 -
None of the above associates is considered individually material to the Company. Aggregate
information of associates that are not individually material was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
The Companys share of the profit |
|
$ |
937,487 |
|
|
$ |
818,311 |
|
The Companys share of other comprehensive income |
|
|
(19,020 |
) |
|
|
5,194 |
|
|
|
|
|
|
|
|
|
|
The Companys share of total comprehensive income |
|
$ |
918,467 |
|
|
$ |
823,505 |
|
|
|
|
|
|
|
|
|
|
The Level 1 fair values based on the closing market prices of SNI as of the balance sheet dates were as
follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
SNI |
|
$ |
3,556,203 |
|
|
$ |
2,868,173 |
|
|
|
|
|
|
|
|
|
|
Chunghwa did not participate in the capital increase of KWT in August 2014 and November 2014 and the ownership
interest decreased to 27% after the capital increase of KWT. Chunghwa sold its partial ownership interest in KWT in January 2015. The gain on disposal of KWT was $7,409 thousand and the ownership interest decreased to 26% after the disposal.
Chunghwa and Taiwan International Ports Corporation, Ltd. established TIPL in October 2014. Chunghwa invested $80,000 thousand cash and held
27% ownership of TIPL. TIPL engages mainly in logistics service of increasing cargo movement efficiency.
Chunghwa, President Chain Store
Corporation and EasyCard Corporation established DZIM in May 2011. DZIM increased its capital in April 2014 and June 2014. Chunghwa participated in the capital increase of DZIM by investing $49,485 thousand in April 2014. SENAO participated in the
capital increase of DZIM by investing $24,000 thousand in April 2014. As of December 31, 2015, the Company held 26% ownership of DZIM. DZIM engages mainly in information technology service and general advertisement service.
CHYP participated in the capital increase of CF by investing $39,000 thousand and $5,607 thousand in November 2014 and April 2015,
respectively. CHYP held 49% ownership. CF engages mainly in general advertisement services.
Chunghwa, Taiwan Mobile Corporation, Asia
Pacific Telecom, Vibo Telecom, EasyCard Corporation and Far EasTone Telecommunications established an associate, ADT, in November 2013. Chunghwa invested $30,000 thousand cash and held 19% ownership of ADT. Based on the share of capital commitments,
Chunghwa has one out of five seats in the Board of Directors; therefore it has significant influence over ADT. Chunghwa did not participate in the capital increase of ADT in April 2014 and October 2014 and the ownership interest decreased to 13%
after the capital increase of ADT. Chunghwa still has one out of five seats in the Board of Directors; therefore it remains significant influence over ADT. ADT engages mainly in the development of mobile payments and information processing service.
- 43 -
Prime Asia participated in the capital increase of MeWorks by investing $10,000 thousand and held
20% ownership in May 2014. Based on the share of capital commitments, Prime Asia has two seats out of five seats in the Board of Directors; therefore it has significant influence over MeWorks. MeWorks engages mainly in investment business. As the
operation of MeWorks had ceased, the Company concluded that this investment was fully impaired. The Company recognized an impairment loss of $8,213 thousand for the year ended December 31, 2015.
Sertec completed its liquidation in June 2015. CHI recognized the gain on disposal of Sertec of $649 thousand and received the proceeds from
disposal in July 2015.
CHI disposed all shares of Panda Monium Company Ltd. in September 2015.
The Companys share of profit (loss) and other comprehensive income (loss) of associates was recognized based on the audited financial
statements.
|
b. |
Investments in joint ventures |
Investments in joint ventures were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
|
% of Ownership and Voting Rights |
|
|
|
December 31 |
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Non-listed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huada Digital Corporation (HDD) |
|
$ |
206,737 |
|
|
$ |
218,825 |
|
|
|
50 |
|
|
|
50 |
|
Chunghwa Benefit One Co., Ltd. (CBO) |
|
|
20,642 |
|
|
|
37,841 |
|
|
|
50 |
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
227,379 |
|
|
$ |
256,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chunghwa invested in CBO in February 2014 at $50,000 thousand cash to acquire 50% of its shares and the rest of
50% ownership interest was held by Benefit One Asia Pte. Ltd. (BOA), and each obtained half of director seats. Thus, neither Chunghwa nor BOA obtained control over CBO. CBO engages mainly in e-commerce business for employees of corporate
members and personal customers.
None of the above joint ventures is considered individually material to the Company. Summarized financial
information of joint ventures that was not material to the Company was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
The Companys share of loss |
|
$ |
(29,499 |
) |
|
$ |
(20,838 |
) |
The Companys share of other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys share of total comprehensive loss |
|
$ |
(29,499 |
) |
|
$ |
(20,838 |
) |
|
|
|
|
|
|
|
|
|
The Companys share of losses of the joint ventures was recorded based on the audited financial
statements.
- 44 -
17. |
PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
|
|
Land Improvements |
|
|
Buildings |
|
|
Computer Equipment |
|
|
Telecommuni- cations Equipment |
|
|
Transportation Equipment |
|
|
Miscellaneous Equipment |
|
|
Construction in Progress and Advances Related to Acquisition of Equipment |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
102,263,330 |
|
|
$ |
1,546,906 |
|
|
$ |
67,557,865 |
|
|
$ |
15,995,696 |
|
|
$ |
683,118,379 |
|
|
$ |
3,745,148 |
|
|
$ |
8,415,325 |
|
|
$ |
22,852,887 |
|
|
$ |
905,495,536 |
|
Additions |
|
|
307,807 |
|
|
|
|
|
|
|
136,332 |
|
|
|
30,399 |
|
|
|
130,125 |
|
|
|
1,034 |
|
|
|
265,464 |
|
|
|
31,212,941 |
|
|
|
32,084,102 |
|
Disposal |
|
|
(26,103 |
) |
|
|
(12,397 |
) |
|
|
(14,353 |
) |
|
|
(1,804,358 |
) |
|
|
(19,208,201 |
) |
|
|
(75,758 |
) |
|
|
(538,568 |
) |
|
|
|
|
|
|
(21,679,738 |
) |
Effect of foreign exchange differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,747 |
|
|
|
101,721 |
|
|
|
21 |
|
|
|
4,713 |
|
|
|
|
|
|
|
108,202 |
|
Other |
|
|
228,752 |
|
|
|
23,035 |
|
|
|
(79,428 |
) |
|
|
1,094,703 |
|
|
|
30,933,648 |
|
|
|
154,338 |
|
|
|
496,970 |
|
|
|
(33,136,097 |
) |
|
|
(284,079 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
102,773,786 |
|
|
$ |
1,557,544 |
|
|
$ |
67,600,416 |
|
|
$ |
15,318,187 |
|
|
$ |
695,075,672 |
|
|
$ |
3,824,783 |
|
|
$ |
8,643,904 |
|
|
$ |
20,929,731 |
|
|
$ |
915,724,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
|
|
|
$ |
(1,104,400 |
) |
|
$ |
(21,971,843 |
) |
|
$ |
(11,600,999 |
) |
|
$ |
(560,313,927 |
) |
|
$ |
(1,671,798 |
) |
|
$ |
(6,118,453 |
) |
|
$ |
|
|
|
$ |
(602,781,420 |
) |
Depreciation Expenses |
|
|
|
|
|
|
(53,421 |
) |
|
|
(1,252,134 |
) |
|
|
(1,472,958 |
) |
|
|
(27,703,388 |
) |
|
|
(598,673 |
) |
|
|
(799,384 |
) |
|
|
|
|
|
|
(31,879,958 |
) |
Disposal |
|
|
|
|
|
|
12,397 |
|
|
|
13,058 |
|
|
|
1,800,113 |
|
|
|
19,193,545 |
|
|
|
75,681 |
|
|
|
460,960 |
|
|
|
|
|
|
|
21,555,754 |
|
Impairment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(64 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(64 |
) |
Effect of foreign exchange differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,053 |
) |
|
|
(15,057 |
) |
|
|
(16 |
) |
|
|
(3,970 |
) |
|
|
|
|
|
|
(20,096 |
) |
Other |
|
|
|
|
|
|
(10 |
) |
|
|
8,750 |
|
|
|
(33,042 |
) |
|
|
71,768 |
|
|
|
(12,594 |
) |
|
|
17,232 |
|
|
|
|
|
|
|
52,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
|
|
|
$ |
(1,145,434 |
) |
|
$ |
(23,202,169 |
) |
|
$ |
(11,307,939 |
) |
|
$ |
(568,767,123 |
) |
|
$ |
(2,207,400 |
) |
|
$ |
(6,443,615 |
) |
|
$ |
|
|
|
$ |
(613,073,680 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014, net |
|
$ |
102,263,330 |
|
|
$ |
442,506 |
|
|
$ |
45,586,022 |
|
|
$ |
4,394,697 |
|
|
$ |
122,804,452 |
|
|
$ |
2,073,350 |
|
|
$ |
2,296,872 |
|
|
$ |
22,852,887 |
|
|
$ |
302,714,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014, net |
|
$ |
102,773,786 |
|
|
$ |
412,110 |
|
|
$ |
44,398,247 |
|
|
$ |
4,010,248 |
|
|
$ |
126,308,549 |
|
|
$ |
1,617,383 |
|
|
$ |
2,200,289 |
|
|
$ |
20,929,731 |
|
|
$ |
302,650,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
102,773,786 |
|
|
$ |
1,557,544 |
|
|
$ |
67,600,416 |
|
|
$ |
15,318,187 |
|
|
$ |
695,075,672 |
|
|
$ |
3,824,783 |
|
|
$ |
8,643,904 |
|
|
$ |
20,929,731 |
|
|
$ |
915,724,023 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
59,041 |
|
|
|
37,158 |
|
|
|
158,751 |
|
|
|
|
|
|
|
202,530 |
|
|
|
23,993,190 |
|
|
|
24,450,670 |
|
Disposal |
|
|
|
|
|
|
(94 |
) |
|
|
(10,607 |
) |
|
|
(1,073,310 |
) |
|
|
(13,047,249 |
) |
|
|
(69,337 |
) |
|
|
(510,568 |
) |
|
|
|
|
|
|
(14,711,165 |
) |
Effect of foreign exchange differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(221 |
) |
|
|
69,663 |
|
|
|
47 |
|
|
|
(309 |
) |
|
|
|
|
|
|
69,180 |
|
Acquisitions through business combinations |
|
|
19,042 |
|
|
|
|
|
|
|
6,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,260 |
|
|
|
|
|
|
|
65,064 |
|
Other |
|
|
(45,688 |
) |
|
|
17,820 |
|
|
|
134,130 |
|
|
|
714,076 |
|
|
|
23,114,750 |
|
|
|
59,879 |
|
|
|
362,081 |
|
|
|
(24,520,593 |
) |
|
|
(163,545 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
102,747,140 |
|
|
$ |
1,575,270 |
|
|
$ |
67,789,742 |
|
|
$ |
14,995,890 |
|
|
$ |
705,371,587 |
|
|
$ |
3,815,372 |
|
|
$ |
8,736,898 |
|
|
$ |
20,402,328 |
|
|
$ |
925,434,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
|
|
|
$ |
(1,145,434 |
) |
|
$ |
(23,202,169 |
) |
|
$ |
(11,307,939 |
) |
|
$ |
(568,767,123 |
) |
|
$ |
(2,207,400 |
) |
|
$ |
(6,443,615 |
) |
|
$ |
|
|
|
$ |
(613,073,680 |
) |
Depreciation Expenses |
|
|
|
|
|
|
(53,432 |
) |
|
|
(1,268,490 |
) |
|
|
(1,467,217 |
) |
|
|
(26,290,623 |
) |
|
|
(598,712 |
) |
|
|
(671,341 |
) |
|
|
|
|
|
|
(30,349,815 |
) |
Disposal |
|
|
|
|
|
|
94 |
|
|
|
10,171 |
|
|
|
1,060,632 |
|
|
|
13,032,923 |
|
|
|
69,283 |
|
|
|
425,473 |
|
|
|
|
|
|
|
14,598,576 |
|
Impairment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(138,093 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(138,093 |
) |
Effect of foreign exchange differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
127 |
|
|
|
(13,508 |
) |
|
|
(47 |
) |
|
|
57 |
|
|
|
|
|
|
|
(13,371 |
) |
Acquisitions through business combinations |
|
|
|
|
|
|
|
|
|
|
(1,115 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28,349 |
) |
|
|
|
|
|
|
(29,464 |
) |
Other |
|
|
|
|
|
|
(4,637 |
) |
|
|
41,044 |
|
|
|
(472 |
) |
|
|
(28,624 |
) |
|
|
(13,354 |
) |
|
|
(23,191 |
) |
|
|
|
|
|
|
(29,234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
|
|
|
$ |
(1,203,409 |
) |
|
$ |
(24,420,559 |
) |
|
$ |
(11,714,869 |
) |
|
$ |
(582,205,048 |
) |
|
$ |
(2,750,230 |
) |
|
$ |
(6,740,966 |
) |
|
$ |
|
|
|
$ |
(629,035,081 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015, net |
|
$ |
102,773,786 |
|
|
$ |
412,110 |
|
|
$ |
44,398,247 |
|
|
$ |
4,010,248 |
|
|
$ |
126,308,549 |
|
|
$ |
1,617,383 |
|
|
$ |
2,200,289 |
|
|
$ |
20,929,731 |
|
|
$ |
302,650,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015, net |
|
$ |
102,747,140 |
|
|
$ |
371,861 |
|
|
$ |
43,369,183 |
|
|
$ |
3,281,021 |
|
|
$ |
123,166,539 |
|
|
$ |
1,065,142 |
|
|
$ |
1,995,932 |
|
|
$ |
20,402,328 |
|
|
$ |
296,399,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to technology upgrade, some telecommunications equipment became obsolete. The Company evaluated and
concluded the recoverable amount determined on the basis of value in use of aforementioned telecommunications equipment was nil and recognized impairment losses of $138,093 thousand and $64 thousand for the years ended December 31, 2015 and
2014, respectively. The impairment loss was included in other income and expenses in the statements of comprehensive income.
- 45 -
Depreciation expense is computed using the straight-line method over the following estimated
service lives:
|
|
|
|
|
Land improvement |
|
|
8-30 years |
|
Buildings |
|
|
|
|
Main building |
|
|
35-60 years |
|
Other building facilities |
|
|
2-20 years |
|
Computer equipment |
|
|
2-8 years |
|
Telecommunications equipment |
|
|
|
|
Telecommunication circuits |
|
|
2-30 years |
|
Telecommunication machinery and antennas equipment |
|
|
2-30 years |
|
Transportation equipment |
|
|
3-10 years |
|
Miscellaneous equipment |
|
|
|
|
Leasehold improvements |
|
|
1-6 years |
|
Mechanical and air conditioner equipment |
|
|
3-16 years |
|
Others |
|
|
2-10 years |
|
18. |
INVESTMENT PROPERTIES |
|
|
|
|
|
Cost |
|
|
|
|
Balance on January 1, 2014 |
|
$ |
9,260,015 |
|
Disposal |
|
|
(623,498 |
) |
Reclassification |
|
|
246,534 |
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
8,883,051 |
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
Balance on January 1, 2014 |
|
$ |
(1,241,984 |
) |
Depreciation expense |
|
|
(16,436 |
) |
Disposal |
|
|
13,943 |
|
Reclassification |
|
|
(17,720 |
) |
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
(1,262,197 |
) |
|
|
|
|
|
Balance on January 1, 2014, net |
|
$ |
8,018,031 |
|
|
|
|
|
|
Balance on December 31, 2014, net |
|
$ |
7,620,854 |
|
|
|
|
|
|
Cost |
|
|
|
|
Balance on January 1, 2015 |
|
$ |
8,883,051 |
|
Disposal |
|
|
(126 |
) |
Reclassification |
|
|
175,067 |
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
9,057,992 |
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
Balance on January 1, 2015 |
|
$ |
(1,262,197 |
) |
Depreciation expense |
|
|
(18,363 |
) |
Disposal |
|
|
126 |
|
Reclassification |
|
|
(17,200 |
) |
Reversal of impairment loss |
|
|
142,047 |
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
(1,155,587 |
) |
|
|
|
|
|
Balance on January 1, 2015, net |
|
$ |
7,620,854 |
|
|
|
|
|
|
Balance on December 31, 2015, net |
|
$ |
7,902,405 |
|
|
|
|
|
|
- 46 -
Depreciation expense is computed using the straight-line method over the following estimated
service lives:
|
|
|
|
|
Land improvements |
|
|
8-30 years |
|
Buildings |
|
|
|
|
Main buildings |
|
|
35-60 years |
|
Other building facilities |
|
|
4-10 years |
|
After the evaluation of land and buildings, the Company concluded the recoverable amount which represented the
fair value less costs to sell of some land and buildings was higher than the carrying amount. Therefore, the Company recognized a reversal of impairment loss of $142,047 thousand for the year ended December 31, 2015 and the amount was
recognized only to the extent of impairment losses that had been recognized in prior years. The reversal of impairment loss was included in other income and expenses in the statements of comprehensive income.
Light Era Development Co., Ltd. disposed its investment property in October 2014. The disposal price was $1,230,000 thousand, related cost was
$624,647 thousand (including carrying amount of $609,555 thousand and related disposal expense of $15,092 thousand), and the disposal gain was $605,353 thousand.
The fair value of the Companys investment properties as of December 31, 2015 and 2014 was determined by Level 3 fair value
measurements inputs based on the appraisal reports conducted by independent appraisers. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Fair value |
|
$ |
17,694,498 |
|
|
$ |
17,179,780 |
|
|
|
|
|
|
|
|
|
|
Overall capital interest rate |
|
|
1.49%-2.28% |
|
|
|
1.54%-2.36% |
|
Profit margin ratio |
|
|
10%-20% |
|
|
|
10%-20% |
|
Discount rate |
|
|
1.21%-1.28% |
|
|
|
1.36% |
|
Capitalization rate |
|
|
0.44%-1.73% |
|
|
|
0.44%-1.65% |
|
All of the Companys investment properties are held under freehold interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3G and 4G Concession |
|
|
Computer Software |
|
|
Goodwill |
|
|
Others |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
49,254,000 |
|
|
$ |
2,637,454 |
|
|
$ |
180,631 |
|
|
$ |
117,887 |
|
|
$ |
52,189,972 |
|
Additions-acquired separately |
|
|
|
|
|
|
611,458 |
|
|
|
|
|
|
|
32,707 |
|
|
|
644,165 |
|
Disposal |
|
|
|
|
|
|
(56,401 |
) |
|
|
|
|
|
|
(29 |
) |
|
|
(56,430 |
) |
Effect of foreign exchange difference |
|
|
|
|
|
|
141 |
|
|
|
|
|
|
|
|
|
|
|
141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
49,254,000 |
|
|
$ |
3,192,652 |
|
|
$ |
180,631 |
|
|
$ |
150,565 |
|
|
$ |
52,777,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2014 |
|
$ |
(6,435,956 |
) |
|
$ |
(1,306,473 |
) |
|
$ |
(18,055 |
) |
|
$ |
(30,600 |
) |
|
$ |
(7,791,084 |
) |
Amortization expenses |
|
|
(1,667,877 |
) |
|
|
(543,128 |
) |
|
|
|
|
|
|
(7,293 |
) |
|
|
(2,218,298 |
) |
Disposal |
|
|
|
|
|
|
56,401 |
|
|
|
|
|
|
|
29 |
|
|
|
56,430 |
|
Effect of foreign exchange difference |
|
|
|
|
|
|
(270 |
) |
|
|
|
|
|
|
|
|
|
|
(270 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
$ |
(8,103,833 |
) |
|
$ |
(1,793,470 |
) |
|
$ |
(18,055 |
) |
|
$ |
(37,864 |
) |
|
$ |
(9,953,222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
- 47 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3G and 4G Concession |
|
|
Computer Software |
|
|
Goodwill |
|
|
Others |
|
|
Total |
|
Balance on January 1, 2014, net |
|
$ |
42,818,044 |
|
|
$ |
1,330,981 |
|
|
$ |
162,576 |
|
|
$ |
87,287 |
|
|
$ |
44,398,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014, net |
|
$ |
41,150,167 |
|
|
$ |
1,399,182 |
|
|
$ |
162,576 |
|
|
$ |
112,701 |
|
|
$ |
42,824,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
49,254,000 |
|
|
$ |
3,192,652 |
|
|
$ |
180,631 |
|
|
$ |
150,565 |
|
|
$ |
52,777,848 |
|
Additions-acquired separately |
|
|
9,955,000 |
|
|
|
423,868 |
|
|
|
|
|
|
|
1,299 |
|
|
|
10,380,167 |
|
Disposal |
|
|
|
|
|
|
(375,214 |
) |
|
|
|
|
|
|
(1,983 |
) |
|
|
(377,197 |
) |
Effect of foreign exchange difference |
|
|
|
|
|
|
108 |
|
|
|
|
|
|
|
|
|
|
|
108 |
|
Acquisitions through business combinations |
|
|
|
|
|
|
|
|
|
|
55,569 |
|
|
|
259,000 |
|
|
|
314,569 |
|
Other |
|
|
|
|
|
|
7,214 |
|
|
|
|
|
|
|
|
|
|
|
7,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
59,209,000 |
|
|
$ |
3,248,628 |
|
|
$ |
236,200 |
|
|
$ |
408,881 |
|
|
$ |
63,102,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015 |
|
$ |
(8,103,833 |
) |
|
$ |
(1,793,470 |
) |
|
$ |
(18,055 |
) |
|
$ |
(37,864 |
) |
|
$ |
(9,953,222 |
) |
Amortization expenses |
|
|
(2,503,967 |
) |
|
|
(564,742 |
) |
|
|
|
|
|
|
(11,203 |
) |
|
|
(3,079,912 |
) |
Disposal |
|
|
|
|
|
|
375,194 |
|
|
|
|
|
|
|
1,983 |
|
|
|
377,177 |
|
Effect of foreign exchange difference |
|
|
|
|
|
|
(76 |
) |
|
|
|
|
|
|
|
|
|
|
(76 |
) |
Other |
|
|
|
|
|
|
102 |
|
|
|
|
|
|
|
|
|
|
|
102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
(10,607,800 |
) |
|
$ |
(1,982,992 |
) |
|
$ |
(18,055 |
) |
|
$ |
(47,084 |
) |
|
$ |
(12,655,931 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1, 2015, net |
|
$ |
41,150,167 |
|
|
$ |
1,399,182 |
|
|
$ |
162,576 |
|
|
$ |
112,701 |
|
|
$ |
42,824,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015, net |
|
$ |
48,601,200 |
|
|
$ |
1,265,636 |
|
|
$ |
218,145 |
|
|
$ |
361,797 |
|
|
$ |
50,446,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
For long-term business development, Chunghwa participated in mobile broadband license (4G license) in 2.5 and 2.6 GHz bands bidding process
announced by NCC and obtained certain spectrums. Chunghwa paid the 4G concession fee amounting to $9,955,000 thousand in December 2015.
The concessions are granted and issued by the NCC. The concession fees are amortized using the straight-line method from the date operations
commence through the date the license expires. The carrying amount of 3G concession fee will be fully amortized by December 2018, and 4G concession fees will be fully amortized by December 2030 and December 2033.
The computer software is amortized using the straight-line method over the estimated useful lives of 1 to 10 years. Other intangible assets are
amortized using the straight-line method over the estimated useful lives of 3 to 20 years. Goodwill is not amortized.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Spare parts |
|
$ |
1,875,759 |
|
|
$ |
2,977,585 |
|
Refundable deposits |
|
|
2,198,378 |
|
|
|
2,738,789 |
|
Other financial assets |
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Others |
|
|
2,858,807 |
|
|
|
2,104,761 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,932,944 |
|
|
$ |
8,821,135 |
|
|
|
|
|
|
|
|
|
|
(Continued)
- 48 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Current |
|
|
|
|
|
|
|
|
Spare parts |
|
$ |
1,875,759 |
|
|
$ |
2,977,585 |
|
Others |
|
|
460,162 |
|
|
|
241,814 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,335,921 |
|
|
$ |
3,219,399 |
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
|
Refundable deposits |
|
$ |
2,198,378 |
|
|
$ |
2,738,789 |
|
Other financial assets |
|
|
1,000,000 |
|
|
|
1,000,000 |
|
Others |
|
|
2,398,645 |
|
|
|
1,862,947 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,597,023 |
|
|
$ |
5,601,736 |
|
|
|
|
|
|
|
|
|
|
(Concluded)
Other financial assets - noncurrent was Piping Fund. As part of the governments effort to upgrade the existing telecommunications
infrastructure, Chunghwa and other public utility companies were required by the ROC government to contribute to a Piping Fund administered by the Taipei City Government. This fund was used to finance various telecommunications infrastructure
projects. Net assets of this fund will be returned proportionately after the project is completed.
21. |
HEDGING DERIVATIVE INSTRUMENTS |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Hedge on derivative financial assets |
|
|
|
|
|
|
|
|
Cash flow hedge - forward exchange contracts |
|
$ |
498 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Hedge on derivative financial liabilities |
|
|
|
|
|
|
|
|
Cash flow hedge - forward exchange contracts |
|
$ |
|
|
|
$ |
283 |
|
|
|
|
|
|
|
|
|
|
The Companys hedge strategy is to enter forward exchange contractsbuy to avoid its foreign
currency exposure to certain foreign currency denominated payments in the following six months. In addition, the Companys management considers the market condition to determine the hedge ratio, and enters into forward exchange contracts with
the banks to avoid the foreign currency risk.
The Company signed equipment purchase contracts with suppliers, and entered into forward
exchange contracts to avoid foreign currency risk exposure to Euro-denominated purchase commitments. Those forward exchange contracts were designated as cash flow hedges. For the years ended December 31, 2015 and 2014, gain (loss) arising from
changes in fair value of the hedged items recognized in other comprehensive income was $781 thousand and $(283) thousand, respectively. Upon the completion of the purchase transaction, the amount deferred and recognized in equity initially will be
reclassified into equipment as its carrying value.
As of December 31, 2015, Chunghwa expected part of the equipment purchase
transactions will not occur and reclassified the related loss of $741 thousand arising from the forward exchange contracts of the aforementioned transactions from equity to profit or loss.
- 49 -
The outstanding forward exchange contracts at the balance sheet dates were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount |
|
|
|
Currency |
|
|
Maturity Period |
|
|
(Thousands) |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts - buy |
|
EUR/NT$ |
|
|
|
|
2016.03-06 |
|
|
EUR8,532/NT$ |
306,435 |
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts - buy |
|
EUR/NT$ |
|
|
|
|
2015.03 |
|
|
EUR2,341/NT$ |
90,509 |
|
Gains and losses arising from the hedging derivative instruments that have been reclassified from equity to
initial cost of the property, plant and equipment were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Construction in progress and advances related to acquisition of equipment |
|
$ |
(18,805 |
) |
|
$ |
18,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Unsecured loans |
|
$ |
110,000 |
|
|
$ |
564,400 |
|
|
|
|
|
|
|
|
|
|
Annual interest rates |
|
|
1.29%-2.40% |
|
|
|
1.25%-2.40% |
|
23. |
LONG-TERM LOANS (INCLUDING LONG-TERM LOANS - CURRENT PORTION) |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Secured loans (Note 40) |
|
$ |
1,750,000 |
|
|
$ |
1,900,000 |
|
Less: Current portion of long-term loans |
|
|
(7,692 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,742,308 |
|
|
$ |
1,900,000 |
|
|
|
|
|
|
|
|
|
|
The annual interest rates of loans were as follows:
|
|
|
|
|
|
|
December 31 |
|
|
2015 |
|
2014 |
Secured loans |
|
1.11%-1.36% |
|
1.13%-2.35% |
LED obtained a secured loan from Chang Hwa Bank in September 2010. Interest is paid monthly. $300,000 thousand
and $1,350,000 thousand were originally due in December 2014 and September 2015, respectively. In October 2014, the bank borrowing mentioned above was extended to September 2018 for one time repayment. LED has made an early repayment of $50,000
thousand in April 2015. LED obtained another secured loan from Chang Hwa Bank in December 2012 in the amount of $400,000 thousand which will be due in December 2017; LED has made an early repayment of $350,000 thousand and $50,000 thousand in 2013
and January 2015, respectively.
- 50 -
CHPT entered into a secured loan contract of $348,000 thousand with Bank of Taiwan in April 2014,
interest will be paid monthly, amortization of principle will begin in June 2016, and the contract will expire in April 2029. CHPT made early repayments of $148,000 thousand and $50,000 thousand from September to December 2014 and in November 2015,
respectively.
24. |
TRADE NOTES AND ACCOUNTS PAYABLE |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Trade notes and accounts payable |
|
$ |
16,300,993 |
|
|
$ |
18,518,977 |
|
|
|
|
|
|
|
|
|
|
Trade notes and accounts payable were attributable to operating activities and the trading conditions were
agreed separately.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Accrued salary and compensation |
|
$ |
10,429,648 |
|
|
$ |
9,122,156 |
|
Accrued remuneration to employees, bonus to employees and remuneration to directors |
|
|
2,190,085 |
|
|
|
1,679,756 |
|
Payables to equipment suppliers |
|
|
1,540,532 |
|
|
|
1,181,777 |
|
Payables to contractors |
|
|
1,451,584 |
|
|
|
2,628,892 |
|
Accrued franchise fees |
|
|
1,401,490 |
|
|
|
1,585,174 |
|
Amounts collected for others |
|
|
1,406,000 |
|
|
|
1,330,695 |
|
Accrued maintenance costs |
|
|
997,833 |
|
|
|
867,708 |
|
Others |
|
|
6,069,794 |
|
|
|
5,938,834 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
25,486,966 |
|
|
$ |
24,334,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Warranties |
|
$ |
213,114 |
|
|
$ |
211,633 |
|
Employee benefits |
|
|
30,108 |
|
|
|
55,569 |
|
Others |
|
|
4,682 |
|
|
|
4,832 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
247,904 |
|
|
$ |
272,034 |
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
189,746 |
|
|
$ |
179,374 |
|
Noncurrent |
|
|
58,158 |
|
|
|
92,660 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
247,904 |
|
|
$ |
272,034 |
|
|
|
|
|
|
|
|
|
|
- 51 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warranties |
|
|
Employee Benefits |
|
|
Others |
|
|
Total |
|
Balance on January 1, 2014 |
|
$ |
201,494 |
|
|
$ |
47,265 |
|
|
$ |
4,046 |
|
|
$ |
252,805 |
|
Additional provisions recognized |
|
|
192,259 |
|
|
|
8,304 |
|
|
|
790 |
|
|
|
201,353 |
|
Used during the period |
|
|
(174,794 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
(174,798 |
) |
Reversed during the period |
|
|
(7,326 |
) |
|
|
|
|
|
|
|
|
|
|
(7,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
211,633 |
|
|
|
55,569 |
|
|
|
4,832 |
|
|
|
272,034 |
|
Additional provisions recognized |
|
|
99,958 |
|
|
|
11,423 |
|
|
|
150 |
|
|
|
111,531 |
|
Used during the period |
|
|
(98,477 |
) |
|
|
(36,884 |
) |
|
|
(300 |
) |
|
|
(135,661 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
213,114 |
|
|
$ |
30,108 |
|
|
$ |
4,682 |
|
|
$ |
247,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
The provision for warranties claims represents the present value of the managements best estimate of the future outflow of economic benefits that will be required under the Companys obligation for warranties
in sales agreements. The estimate has been made based on the historical warranty experience. |
|
b. |
The provision for employee benefits represents vested long-term service compensation accrued. |
Advance receipts are mainly from advance telecommunication charges. In
accordance with NCCs regulation named Mandatory and Prohibitory Provisions To Be Included In Standard Contracts for Telecommunication Goods (Services) Coupons, the Company entered into a contract with Bank of Taiwan to provide a
performance guarantee for advance receipts from selling prepaid cards, as of December 31, 2015 amounting to $1,173,309 thousand.
28. |
RETIREMENT BENEFIT PLANS |
|
a. |
Defined contribution plans |
The pension plan under the Labor Pension Act of ROC (the
LPA) is considered as a defined contribution plan. Based on the LPA, Chunghwa and its domestic subsidiaries make monthly contributions to employees individual pension accounts at 6% of monthly salaries and wages. Its foreign
subsidiaries would make monthly contributions based on the local pension requirements.
Chunghwa completed its privatization plans on August 12, 2005.
Chunghwa is required to pay all accrued pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization in accordance with the Statute
Governing Privatization of Stated-owned Enterprises. After paying all pension obligations for privatization, the plan assets of Chunghwa should be transferred to the Fund for Privatization of Government-owned Enterprises (the Privatization
Fund) under the Executive Yuan. On August 7, 2006, Chunghwa transferred the remaining balance of fund to the Privatization Fund. However, according to the instructions of MOTC, Chunghwa was requested to administer the distributions to
employees for pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization and recognized in other current monetary assets.
- 52 -
Chunghwa and its subsidiaries SENAO, CHIEF, CHSI, and SHE with the pension mechanism under the
Labor Standards Law are considered as defined benefit plans. These pension plans provide benefits based on an employees length of service and average six-month salary prior to retirement. Chunghwa and its subsidiaries contribute an amount no
more than 15% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the names of the Committees in the Bank of Taiwan. The
plan assets are held in a commingled fund which is operated and managed by the governments designated authorities; as such, the Company does not have any right to intervene in the investments of the funds. According to the Article 56 of the
Labor Standards Law revised in February 2015, entities are required to contribute the difference in one appropriation to the Funds before the end of next March when the balance of the Funds is insufficient to pay employees who will meet the
retirement eligibility criteria within next year.
The amounts included in the consolidated balance sheets arising from the Companys
obligation in respect of its defined benefit plans were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Present value of funded defined benefit obligation |
|
$ |
30,882,113 |
|
|
$ |
27,958,086 |
|
Fair value of plan assets |
|
|
(23,794,280 |
) |
|
|
(21,496,222 |
) |
|
|
|
|
|
|
|
|
|
Funded status |
|
$ |
7,087,833 |
|
|
$ |
6,461,864 |
|
|
|
|
|
|
|
|
|
|
Net defined benefit liabilities |
|
$ |
7,098,510 |
|
|
$ |
6,469,890 |
|
Net defined benefit assets (included in other noncurrent assets - others) |
|
|
(10,677 |
) |
|
|
(8,026 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
7,087,833 |
|
|
$ |
6,461,864 |
|
|
|
|
|
|
|
|
|
|
Movements in the defined benefit obligation as adjusted and the fair value of plan assets were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Funded Defined Benefit Obligation |
|
|
Fair Value of Plan Assets |
|
|
Net Defined Benefit Liabilities (Assets) |
|
Balance on January 1, 2014 |
|
$ |
25,458,306 |
|
|
$ |
19,981,837 |
|
|
$ |
5,476,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost |
|
|
2,919,397 |
|
|
|
|
|
|
|
2,919,397 |
|
Loss on settlements |
|
|
75,668 |
|
|
|
|
|
|
|
75,668 |
|
Interest expense/interest income |
|
|
509,518 |
|
|
|
416,079 |
|
|
|
93,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in profit or loss |
|
|
3,504,583 |
|
|
|
416,079 |
|
|
|
3,088,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement on the net defined benefit liability |
|
|
|
|
|
|
|
|
|
|
|
|
Return on plan assets (excluding amounts included in net interest) |
|
|
|
|
|
|
52,441 |
|
|
|
(52,441 |
) |
Actuarial losses recognized from changes in demographic assumptions |
|
|
4,138 |
|
|
|
|
|
|
|
4,138 |
|
(Continued)
- 53 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Funded Defined Benefit Obligation |
|
|
Fair Value of Plan Assets |
|
|
Net Defined Benefit Liabilities (Assets) |
|
Actuarial gains recognized from changes in financial assumptions |
|
$ |
(5,216 |
) |
|
$ |
|
|
|
$ |
(5,216 |
) |
Actuarial losses recognized from experience adjustments |
|
|
545,877 |
|
|
|
|
|
|
|
545,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in other comprehensive income |
|
|
544,799 |
|
|
|
52,441 |
|
|
|
492,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions from employer |
|
|
|
|
|
|
2,486,497 |
|
|
|
(2,486,497 |
) |
Benefits paid |
|
|
(455,420 |
) |
|
|
(455,420 |
) |
|
|
|
|
Settlements |
|
|
(993,912 |
) |
|
|
(985,212 |
) |
|
|
(8,700 |
) |
Benefits paid directly by the Company |
|
|
(100,270 |
) |
|
|
|
|
|
|
(100,270 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
27,958,086 |
|
|
|
21,496,222 |
|
|
|
6,461,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost |
|
|
2,883,634 |
|
|
|
|
|
|
|
2,883,634 |
|
Interest expense/interest income |
|
|
545,942 |
|
|
|
443,636 |
|
|
|
102,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in profit or loss |
|
|
3,429,576 |
|
|
|
443,636 |
|
|
|
2,985,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement on the net defined benefit liability |
|
|
|
|
|
|
|
|
|
|
|
|
Return on plan assets (excluding amounts included in net interest) |
|
|
|
|
|
|
135,776 |
|
|
|
(135,776 |
) |
Actuarial losses recognized from changes in demographic assumptions |
|
|
10,923 |
|
|
|
|
|
|
|
10,923 |
|
Actuarial gains recognized from changes in financial assumptions |
|
|
(406 |
) |
|
|
|
|
|
|
(406 |
) |
Actuarial losses recognized from experience adjustments |
|
|
356,710 |
|
|
|
|
|
|
|
356,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts recognized in other comprehensive income |
|
|
367,227 |
|
|
|
135,776 |
|
|
|
231,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions from employer |
|
|
|
|
|
|
2,435,160 |
|
|
|
(2,435,160 |
) |
Benefits paid |
|
|
(716,514 |
) |
|
|
(716,514 |
) |
|
|
|
|
Benefits paid directly by the Company |
|
|
(156,262 |
) |
|
|
|
|
|
|
(156,262 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
30,882,113 |
|
|
$ |
23,794,280 |
|
|
$ |
7,087,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
Relevant pension costs recognized in profit and loss for defined benefit plans were as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Operating costs |
|
$ |
1,793,607 |
|
|
$ |
1,848,881 |
|
Marketing expenses |
|
|
856,108 |
|
|
|
888,260 |
|
General and administrative expenses |
|
|
162,317 |
|
|
|
169,477 |
|
Research and development expenses |
|
|
101,729 |
|
|
|
106,100 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,913,761 |
|
|
$ |
3,012,718 |
|
|
|
|
|
|
|
|
|
|
- 54 -
The Company is exposed to following risks for the defined benefits plans under the Labor
Standards Law:
Under the Labor Standards Law, the rate of return on assets shall not be less
than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. The plan assets are held in a
commingled fund mainly invested in foreign and domestic equity and debt securities and bank deposits which is operated and managed by the governments designated authorities; as such, the Company does not have any right to intervene in the
investments of the funds.
The decline in government bond interest rate will increase the present
value of the obligation on the defined benefit plan, while the return on plan assets will increase. The net effect on the present value of the obligation on defined benefit plan is partially offset by the return on plan assets.
The calculation of the present value of defined benefit obligation is referred to
the plan participants future salary. Hence, the increase in plan participants salary will increase the present value of the defined benefit obligation.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out by the independent
actuary.
The principal assumptions used for the purpose of the actuarial valuations were as follows:
|
|
|
|
|
|
|
Measurement Date |
|
|
December 31 |
|
|
2015 |
|
2014 |
Discount rates |
|
2.00% |
|
2.00% |
Expected rates of salary increase |
|
1.00%-2.00% |
|
1.00%-2.00% |
If reasonably possible changes of the respective significant actuarial assumptions occur at the end of
reporting periods, while holding all other assumptions constant, the present value of the defined benefit obligation would increase (decrease) as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Discount rates |
|
|
|
|
|
|
|
|
0.5% increase |
|
$ |
(976,675 |
) |
|
$ |
(1,061,090 |
) |
|
|
|
|
|
|
|
|
|
0.5% decrease |
|
$ |
1,261,032 |
|
|
$ |
1,131,341 |
|
|
|
|
|
|
|
|
|
|
Expected rates of salary increase |
|
|
|
|
|
|
|
|
0.5% increase |
|
$ |
1,331,860 |
|
|
$ |
1,134,156 |
|
|
|
|
|
|
|
|
|
|
0.5% decrease |
|
$ |
(1,052,310 |
) |
|
$ |
(1,128,612 |
) |
|
|
|
|
|
|
|
|
|
- 55 -
The sensitivity analysis presented above may not be representative of the actual change in the
present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
The expected contributions to the plan for the next year |
|
$ |
11,302,013 |
|
|
$ |
2,507,885 |
|
|
|
|
|
|
|
|
|
|
The average duration of the defined benefit obligation |
|
|
6-15 years |
|
|
|
8-14 years |
|
The Companys maturity analysis of the undiscounted benefit payments was as follows:
|
|
|
|
|
Year |
|
Amount |
|
2016 |
|
$ |
1,797,727 |
|
2017 |
|
|
3,256,746 |
|
2018 |
|
|
5,086,460 |
|
2019 |
|
|
6,768,980 |
|
2020 and thereafter |
|
|
41,288,729 |
|
|
|
|
|
|
|
|
$ |
58,198,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Number of authorized shares (thousand) |
|
|
12,000,000 |
|
|
|
12,000,000 |
|
|
|
|
|
|
|
|
|
|
Authorized shares |
|
$ |
120,000,000 |
|
|
$ |
120,000,000 |
|
|
|
|
|
|
|
|
|
|
Number of shares issued and collected proceeds (thousand) |
|
|
7,757,447 |
|
|
|
7,757,447 |
|
|
|
|
|
|
|
|
|
|
Issued shares |
|
$ |
77,574,465 |
|
|
$ |
77,574,465 |
|
|
|
|
|
|
|
|
|
|
The issued common stocks of a par value at $10 per share entitled the right to vote and receive dividends.
|
2) |
Global depositary receipts |
For the purpose of privatizing Chunghwa, the MOTC sold
1,109,750 thousand common stocks of Chunghwa in an international offering of securities in the form of American Depositary Shares (ADS) amounting to 110,975 thousand units (one ADS represents 10 common stocks) on the New York
Stock Exchange on July 17, 2003. Afterwards, the MOTC sold 1,350,682 thousand common stocks in the form of ADS amounting to 135,068 thousand units on August 10, 2005. Subsequently, the MOTC and Taiwan Mobile Co., Ltd. sold
505,389 thousand and 58,959 thousand common stocks of Chunghwa, respectively, in the form of ADS totally amounting to 56,435 thousand units on September 29, 2006. The MOTC and Taiwan Mobile Co., Ltd. have sold
3,024,780 thousand common stocks in the form of ADS amounting to 302,478 thousand units. As of December 31, 2015, the outstanding ADSs were 345,367 thousand common stocks, which equaled 34,537 thousand units and represented
4.45% of Chunghwas total outstanding common stocks.
- 56 -
The ADS holders generally have the same rights and obligations as other common stockholders,
subject to the provision of relevant laws. The exercise of such rights and obligations shall comply with the related regulations and deposit agreement, which stipulate, among other things, that ADS holders can, through deposit agents:
|
a) |
Exercise their voting rights, |
|
c) |
Receive dividends declared and subscribe to the issuance of new shares. |
|
b. |
Additional paid-in capital |
The adjustment of additional paid-in capital for the years ended
December 31, 2015 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Premium |
|
|
Movements of Additional Paid-in Capital for Associates and Joint Ventures Accounted for Using Equity Method |
|
|
Movements of Additional Paid-in Capital Arising from Changes in Equities of Subsidiaries |
|
|
Difference between Consideration Received and Carrying Amount of the Subsidiaries Net Assets upon Disposal |
|
|
Donated Capital |
|
|
Stockholders Contribution Due to Privatization |
|
|
Total |
|
Balance on January 1, 2014 |
|
$ |
163,907,049 |
|
|
$ |
41,396 |
|
|
$ |
10,372 |
|
|
$ |
|
|
|
$ |
13,170 |
|
|
$ |
20,648,078 |
|
|
$ |
184,620,065 |
|
Cash distributed from additional paid-in capital |
|
|
(16,577,663 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,577,663 |
) |
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
|
|
|
|
2,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,252 |
|
Change in additional paid-in capital for not participating in the capital increase of a subsidiary |
|
|
|
|
|
|
|
|
|
|
2,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,988 |
|
Employee stock bonus issued by a subsidiary |
|
|
|
|
|
|
|
|
|
|
293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2014 |
|
|
147,329,386 |
|
|
|
43,648 |
|
|
|
13,653 |
|
|
|
|
|
|
|
13,170 |
|
|
|
20,648,078 |
|
|
|
168,047,935 |
|
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
|
|
|
|
34,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,405 |
|
Partial disposal of interests in subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,644 |
|
|
|
|
|
|
|
|
|
|
|
26,644 |
|
Change in additional paid-in capital from share subscription not based on original ownership of a subsidiary |
|
|
|
|
|
|
|
|
|
|
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(412 |
) |
Other changes in additional paid-in capital in subsidiaries |
|
|
|
|
|
|
|
|
|
|
1,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,064 |
|
Subsidiary purchased its treasury stock |
|
|
|
|
|
|
|
|
|
|
(14,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2015 |
|
$ |
147,329,386 |
|
|
$ |
78,053 |
|
|
$ |
284 |
|
|
$ |
26,644 |
|
|
$ |
13,170 |
|
|
$ |
20,648,078 |
|
|
$ |
168,095,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital may be utilized to offset deficits. However, the additional paid-in capital from
share premium, donated capital and the difference between consideration received and the carrying amount of the subsidiaries net assets upon disposal may be distributed in cash or capitalized when a company has no deficit, which however is
limited to a certain percentage of Chunghwas paid-in capital.
The additional paid-in capital from movements of paid-in capital
arising from changes in equities of subsidiaries may only be utilized to offset deficits. Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method may not be used for any purpose.
- 57 -
|
c. |
Retained earnings and dividends policy |
Before distributing a dividend or making any other
distribution to stockholders, Chunghwa must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10% of its net income, except when the accumulated amount of such legal reserve equals to the Companys
total authorized capital, and depending on its business needs or requirements, may also set aside or reverse special reserves. In accordance with Chunghwas Articles of Incorporation, no less than 50% of the remaining earnings comprising
remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed in the following order: (a) from 2% to 5% of distributable earnings shall be distributed to employees as employee bonus; (b) no more than
0.2% of distributable earnings shall be distributed to board of directors as remuneration; and (c) cash dividends to be distributed shall not be less than 50% of the total amount of dividends to be distributed. If cash dividend to be
distributed is less than $0.10 per share, such cash dividend shall be distributed in the form of common stocks.
In accordance with the
amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The consequential amendments to Chunghwas Articles of Incorporation had been proposed by
Chunghwas Board of Directors on March 11, 2016 and are subject to the resolution of the shareholders in their meeting to be held on June 24, 2016. Information on the employee remuneration, employee bonus, and remuneration for the
directors for the years ended December 31, 2015 and 2014, and the actual distribution for 2014 and 2013, please refer to Note 31.a.7Employee benefit expenses.
The Company should appropriate or reverse a special reserve in accordance with Rule No. 1010012865 and Rule No. 1010047490 issued by
the FSC and the directive entitled Questions and Answers on Special Reserves Appropriated Following the Adoption of Taiwan-IFRSs. Distributions can be made out of any subsequent reversal of the debit to other equity items.
The appropriation for legal reserve shall be made until the accumulated reserve equals the aggregate par value of the outstanding capital stock
of Chunghwa. This reserve can only be used to offset a deficit, or, when the legal reserve has exceeded 25% of the Chunghwas paid-in capital, the excess may be transferred to capital or distributed in cash.
Except for non-ROC resident shareholders, all shareholders receiving the dividends are entitled a tax credit equal to their proportionate share
of the income tax paid by the Company.
The appropriations of the 2014 earnings of Chunghwa have been approved by the stockholders
meeting on June 26, 2015 and the appropriations of the 2013 earnings of Chunghwa approved by the stockholders meeting on June 24, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appropriation of Earnings |
|
|
Dividends Per Share (NT$) |
|
|
|
For Fiscal Year 2014 |
|
|
For Fiscal Year 2013 |
|
|
For Fiscal Year 2014 |
|
|
For Fiscal Year 2013 |
|
Legal reserve |
|
$ |
680,743 |
|
|
$ |
2,074,342 |
|
|
|
|
|
|
|
|
|
Special reserve |
|
|
(144,005 |
) |
|
|
144,005 |
|
|
|
|
|
|
|
|
|
Cash dividends |
|
|
37,673,263 |
|
|
|
18,525,558 |
|
|
$ |
4.86 |
|
|
$ |
2.39 |
|
In addition, the stockholders of Chunghwa resolved to distribute cash $2.14 per share and the total amount of
$16,577,663 thousand from additional paid-in capital on June 24, 2014.
- 58 -
The appropriations of earnings for 2015 had been proposed by the Chunghwas Board of
Directors on March 11, 2016. The appropriations and dividends per share were as follows:
|
|
|
|
|
|
|
|
|
|
|
Appropriation of Earnings |
|
|
Dividends Per Share (NT$) |
|
Cash dividends |
|
$ |
42,551,146 |
|
|
$ |
5.49 |
|
The appropriations of earnings for 2015 are subject to the resolution of the shareholders meeting to be
held on June 24, 2016. Information of the appropriation of Chunghwas earnings proposed by the Board of Directors and approved by the stockholders is available on the Market Observation Post System website.
|
1) |
Exchange differences arising from the translation of the foreign operations |
The exchange
differences arising from the translation of the foreign operations from their functional currency to New Taiwan dollars were recognized as exchange differences arising from the translation of the foreign operations in other comprehensive income.
|
2) |
Unrealized gain (loss) on available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Beginning balance |
|
$ |
739,988 |
|
|
$ |
(149,747 |
) |
Unrealized gain (loss) on available-for-sale financial assets |
|
|
(670,029 |
) |
|
|
925,495 |
|
Income tax relating to unrealized gain (loss) on available-for-sale financial assets |
|
|
(2,055 |
) |
|
|
2,974 |
|
Amount reclassified from equity to profit or loss on disposal |
|
|
|
|
|
|
(38,734 |
) |
Amount reclassified from equity to profit or loss on impairment |
|
|
23,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
90,964 |
|
|
$ |
739,988 |
|
|
|
|
|
|
|
|
|
|
|
e. |
Noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Beginning balance |
|
$ |
5,085,185 |
|
|
$ |
5,058,086 |
|
Shares attributed to noncontrolling interests |
|
|
|
|
|
|
|
|
Net income of the year |
|
|
858,617 |
|
|
|
549,315 |
|
Exchange differences arising from the translation of the net investment in foreign operations |
|
|
(1,972 |
) |
|
|
24,167 |
|
Unrealized gain (loss) on available-for-sale financial assets |
|
|
1,494 |
|
|
|
(8,558 |
) |
Income tax relating to unrealized gain (loss) on available-for-sale financial assets |
|
|
(254 |
) |
|
|
368 |
|
Actuarial loss arising from defined benefit plans |
|
|
(3,219 |
) |
|
|
(2,673 |
) |
(Continued)
- 59 -
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Income tax relating to actuarial losses arising from defined benefit plan |
|
$ |
549 |
|
|
$ |
455 |
|
Share of other comprehensive income of associates accounted for using equity method |
|
|
1,701 |
|
|
|
3,750 |
|
Cash dividends distributed by subsidiaries |
|
|
(350,003 |
) |
|
|
(796,770 |
) |
Change in additional paid-in capital for not participating in the capital increase of a subsidiary |
|
|
|
|
|
|
369 |
|
Change in additional paid-in capital from share subscription not based on original ownership of a subsidiary |
|
|
412 |
|
|
|
|
|
Changes in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |
|
|
(2,688 |
) |
|
|
(4,060 |
) |
Partial disposal of interests in subsidiaries |
|
|
18,484 |
|
|
|
|
|
Employee stock bonus issued by a subsidiary |
|
|
|
|
|
|
5,451 |
|
Compensation cost of employee stock options of subsidiaries |
|
|
36,326 |
|
|
|
93,287 |
|
Other changes in additional paid-in capital in subsidiaries |
|
|
1,559 |
|
|
|
|
|
Subsidiary purchased its treasury stock |
|
|
(416,451 |
) |
|
|
|
|
Increase in noncontrolling interests |
|
|
39,335 |
|
|
|
161,998 |
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
5,269,075 |
|
|
$ |
5,085,185 |
|
|
|
|
|
|
|
|
|
|
(Concluded)
The main source of revenue of the Company includes various telecommunications
services in many different streams, and the related information was as discussed in Note 44.
31. |
NET INCOME AND OTHER COMPREHENSIVE INCOME (LOSS) |
|
1) |
Other income and expenses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Gain (loss) on disposal of property, plant and equipment |
|
$ |
(109,040 |
) |
|
$ |
25,276 |
|
Gain on disposal of investment properties |
|
|
|
|
|
|
605,353 |
|
Impairment loss on property, plant and equipment |
|
|
(138,093 |
) |
|
|
(64 |
) |
Reversal gain on investment properties |
|
|
142,047 |
|
|
|
|
|
Loss on disposal of intangible assets |
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(105,106 |
) |
|
$ |
630,565 |
|
|
|
|
|
|
|
|
|
|
- 60 -
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Dividend income |
|
$ |
218,232 |
|
|
$ |
77,658 |
|
Income from Piping Fund |
|
|
202,492 |
|
|
|
200,000 |
|
Rental income |
|
|
37,611 |
|
|
|
45,308 |
|
Others |
|
|
191,738 |
|
|
|
263,933 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
650,073 |
|
|
$ |
586,899 |
|
|
|
|
|
|
|
|
|
|
|
3) |
Other gains and losses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Net foreign currency exchange gains |
|
$ |
62,645 |
|
|
$ |
201,209 |
|
Gain (loss) on disposal of financial instruments |
|
|
(449 |
) |
|
|
45,795 |
|
Gain on disposal of investments accounted for using equity method |
|
|
8,058 |
|
|
|
|
|
Valuation gain on financial assets and liabilities at fair value through profit or loss, net |
|
|
163 |
|
|
|
1,142 |
|
Impairment loss on investments accounted for using equity method |
|
|
(8,213 |
) |
|
|
|
|
Impairment loss on financial assets carried at cost |
|
|
(81,269 |
) |
|
|
(23,334 |
) |
Impairment loss on available-for-sale financial assets |
|
|
(25,910 |
) |
|
|
|
|
Others |
|
|
(179,234 |
) |
|
|
(93,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(224,209 |
) |
|
$ |
130,972 |
|
|
|
|
|
|
|
|
|
|
|
4) |
Impairment loss on financial instruments |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Notes and accounts receivable |
|
$ |
480,143 |
|
|
$ |
292,385 |
|
|
|
|
|
|
|
|
|
|
Other receivables |
|
$ |
38,364 |
|
|
$ |
33,306 |
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
$ |
25,910 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Financial assets carried at cost |
|
$ |
81,269 |
|
|
$ |
23,334 |
|
|
|
|
|
|
|
|
|
|
|
5) |
Impairment loss (reversal of impairment loss) on non-finacial assets |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Inventories |
|
$ |
198,312 |
|
|
$ |
288,364 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
$ |
138,093 |
|
|
$ |
64 |
|
|
|
|
|
|
|
|
|
|
Investments accounted for using equity method |
|
$ |
8,213 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Investment properties |
|
$ |
(142,047 |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
- 61 -
|
6) |
Depreciation and amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Property, plant and equipment |
|
$ |
30,349,815 |
|
|
$ |
31,879,958 |
|
Investment properties |
|
|
18,363 |
|
|
|
16,436 |
|
Intangible assets |
|
|
3,079,912 |
|
|
|
2,218,298 |
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization expenses |
|
$ |
33,448,090 |
|
|
$ |
34,114,692 |
|
|
|
|
|
|
|
|
|
|
Depreciation expenses summarized by functions |
|
|
|
|
|
|
|
|
Operating costs |
|
$ |
28,292,112 |
|
|
$ |
29,682,079 |
|
Operating expenses |
|
|
2,076,066 |
|
|
|
2,214,315 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
30,368,178 |
|
|
$ |
31,896,394 |
|
|
|
|
|
|
|
|
|
|
Amortization expenses summarized by functions |
|
|
|
|
|
|
|
|
Operating costs |
|
$ |
2,742,237 |
|
|
$ |
1,915,507 |
|
Marketing expenses |
|
|
177,739 |
|
|
|
161,201 |
|
General and administrative expenses |
|
|
115,531 |
|
|
|
96,754 |
|
Research and development expenses |
|
|
44,405 |
|
|
|
44,836 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,079,912 |
|
|
$ |
2,218,298 |
|
|
|
|
|
|
|
|
|
|
|
7) |
Employee benefit expenses |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Post-employment benefit |
|
|
|
|
|
|
|
|
Defined contribution plans |
|
$ |
488,521 |
|
|
$ |
440,523 |
|
Defined benefit plans |
|
|
2,913,761 |
|
|
|
3,012,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
3,402,282 |
|
|
|
3,453,241 |
|
|
|
|
|
|
|
|
|
|
Share-based payment |
|
|
|
|
|
|
|
|
Equity-settled share-based payment |
|
|
36,326 |
|
|
|
93,287 |
|
|
|
|
|
|
|
|
|
|
Other employee benefit |
|
|
|
|
|
|
|
|
Salaries |
|
|
25,525,536 |
|
|
|
24,856,939 |
|
Insurance |
|
|
2,642,982 |
|
|
|
2,565,058 |
|
Others |
|
|
15,717,146 |
|
|
|
15,658,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
43,885,664 |
|
|
|
43,080,513 |
|
|
|
|
|
|
|
|
|
|
Total employee benefit expenses |
|
$ |
47,324,272 |
|
|
$ |
46,627,041 |
|
|
|
|
|
|
|
|
|
|
Summary by functions |
|
|
|
|
|
|
|
|
Operating costs |
|
$ |
25,320,099 |
|
|
$ |
26,362,254 |
|
Operating expenses |
|
|
22,004,173 |
|
|
|
20,264,787 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
47,324,272 |
|
|
$ |
46,627,041 |
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015 and 2014, the Company had 32,734 and 32,596 employees, respectively.
- 62 -
The bonus to employees and the remuneration to directors as of December 31, 2014 were
accrued based on past experiences and the probable amount to be paid in accordance with Chunghwas Articles of Incorporation and Implementation Guidance for the Employees Bonus Distribution of Chunghwa Telecom Co., Ltd. In order to
compliance with the Company Act as amended in May 2015, the amendments to Chunghwas Articles of Incorporation was proposed by the Chunghwas Board of Directors on March 11, 2016 which stipulated to distribute employees
compensation at the rates from 1.7% to 4.3% and remuneration to directors at the rate no higher than 0.17%, respectively, of pre-tax income. As of December 31, 2015, the payables of the employees compensation and of the remuneration to
directors were $1,927,518 thousand and $44,852 thousand, respectively. Such amounts have been proposed by the Chunghwas Board of Directors on March 11, 2016 and are subject to the resolution of the shareholders in their meeting to be held
on June 24, 2016.
Material differences between such estimated amounts and the amounts proposed by the Board of Directors on or
before the annual financial statements are authorized for issue are adjusted in the year the bonus and remuneration were recognized. If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the
differences are recorded as a change in accounting estimate.
The appropriations of the 2014 bonuses to employees and remuneration to
directors of Chunghwa have been approved by the stockholders meeting on June 26, 2015 and the appropriations of the 2013 bonuses to employees and remuneration to directors of Chunghwa approved by the stockholders meeting on
June 24, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
Cash Bonus |
|
|
Cash Bonus |
|
Bonus distributed to the employees |
|
$ |
1,510,068 |
|
|
$ |
758,627 |
|
Remuneration paid to the directors |
|
|
39,223 |
|
|
|
19,304 |
|
There was no difference between the initial accrual amounts and the amounts resolved in shareholders
meeting on June 26, 2015 and June 24, 2014 of the aforementioned bonuses to employees and the remuneration to directors.
Information of the appropriation of Chunghwas employees bonuses and remuneration to directors and approved by the Board of Directors and
stockholders is available on the Market Observation Post System website.
|
b. |
Reclassification adjustments of other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Unrealized gain (loss) on available-for-sale financial assets |
|
|
|
|
|
|
|
|
Arising during the year |
|
$ |
(671,385 |
) |
|
$ |
924,742 |
|
Reclassification adjustments |
|
|
|
|
|
|
|
|
Upon disposal |
|
|
|
|
|
|
(46,539 |
) |
Upon impairment |
|
|
25,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(645,475 |
) |
|
$ |
878,203 |
|
|
|
|
|
|
|
|
|
|
Cash flow hedges |
|
|
|
|
|
|
|
|
Gain (loss) arising during the year |
|
$ |
18,845 |
|
|
$ |
(18,718 |
) |
Reclassification adjustments for losses included in profit or loss |
|
|
741 |
|
|
|
|
|
Adjusted against the carrying amount of hedged items |
|
|
(18,805 |
) |
|
|
18,435 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
781 |
|
|
$ |
(283 |
) |
|
|
|
|
|
|
|
|
|
- 63 -
|
a. |
Income tax recognized in profit or loss |
The major components of income tax expense were as
follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Current tax |
|
|
|
|
|
|
|
|
Current tax expenses recognized for the year |
|
$ |
8,571,999 |
|
|
$ |
7,516,277 |
|
Tax on unappropriated earnings |
|
|
21,627 |
|
|
|
33,009 |
|
Income tax adjustments on prior years |
|
|
(82,722 |
) |
|
|
4,078 |
|
Others |
|
|
13,700 |
|
|
|
40,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
8,524,604 |
|
|
|
7,593,788 |
|
Deferred tax |
|
|
|
|
|
|
|
|
Deferred tax expenses recognized for the year |
|
|
(220,736 |
) |
|
|
(201,211 |
) |
|
|
|
|
|
|
|
|
|
Income tax recognized in profit or loss |
|
$ |
8,303,868 |
|
|
$ |
7,392,577 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of accounting profit and income tax expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Income before income tax |
|
$ |
51,968,213 |
|
|
$ |
46,553,948 |
|
|
|
|
|
|
|
|
|
|
Income tax expense calculated at the statutory rate (17%) |
|
$ |
8,834,596 |
|
|
$ |
7,914,170 |
|
Nondeductible revenues and expenses in determining taxable income |
|
|
27,801 |
|
|
|
47,664 |
|
Imputed income on tax |
|
|
|
|
|
|
1,168 |
|
Unrecognized deductible temporary differences |
|
|
11,367 |
|
|
|
(66,659 |
) |
Unrecognized loss carryforwards |
|
|
83,479 |
|
|
|
161,671 |
|
Tax-exempt income |
|
|
(183,221 |
) |
|
|
(398,828 |
) |
Income tax on unappropriated earnings |
|
|
21,627 |
|
|
|
33,009 |
|
Investment credits |
|
|
(329,756 |
) |
|
|
(314,384 |
) |
Effect of different tax rates of group entities operating in other jurisdictions |
|
|
(94,366 |
) |
|
|
(25,317 |
) |
Adjustments of tax expense on prior years |
|
|
(82,722 |
) |
|
|
4,078 |
|
Others |
|
|
15,063 |
|
|
|
36,005 |
|
|
|
|
|
|
|
|
|
|
Income tax expense recognized in profit or loss |
|
$ |
8,303,868 |
|
|
$ |
7,392,577 |
|
|
|
|
|
|
|
|
|
|
The applicable tax rate used above is the corporate tax rate of 17% payable by the entities subject to the
Income Tax Law of the Republic of China, while the applicable tax rate used by subsidiaries in China is 25%. Tax rates used by other entities in the Company operating in other jurisdictions are based on the tax laws in those jurisdictions.
- 64 -
|
b. |
Income tax expense (benefit) recognized in other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Deferred tax expense (benefit) |
|
|
|
|
|
|
|
|
Unrealized (gain) loss on available-for-sale financial assets |
|
$ |
2,309 |
|
|
$ |
(3,342 |
) |
Remeasurement on defined benefit plan |
|
|
(39,347 |
) |
|
|
(83,701 |
) |
|
|
|
|
|
|
|
|
|
Total income tax benefit recognized in other comprehensive income |
|
$ |
(37,038 |
) |
|
$ |
(87,043 |
) |
|
|
|
|
|
|
|
|
|
|
c. |
Current tax assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Current tax assets |
|
|
|
|
|
|
|
|
Tax refund receivable (included as other current assets - other) |
|
$ |
7,977 |
|
|
$ |
333,313 |
|
|
|
|
|
|
|
|
|
|
Current tax liabilities |
|
|
|
|
|
|
|
|
Income tax payable |
|
$ |
4,751,181 |
|
|
$ |
3,361,907 |
|
|
|
|
|
|
|
|
|
|
|
d. |
Deferred income tax assets and liabilities |
The movements of deferred income tax assets and
liabilities were as follows:
For the year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2015 |
|
|
Recognized in Profit or Loss |
|
|
Recognized in Other Comprehensive Income |
|
|
Acquisition Through Business Combinations |
|
|
December 31, 2015 |
|
Deferred tax assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit obligation |
|
$ |
1,099,003 |
|
|
$ |
67,315 |
|
|
$ |
39,342 |
|
|
$ |
|
|
|
$ |
1,205,660 |
|
Share of the profit of associates and joint ventures accounted for using equity method |
|
|
277,227 |
|
|
|
48,004 |
|
|
|
|
|
|
|
|
|
|
|
325,231 |
|
Allowance for doubtful receivables over quota |
|
|
113,892 |
|
|
|
54,864 |
|
|
|
|
|
|
|
|
|
|
|
168,756 |
|
Deferred revenue |
|
|
155,614 |
|
|
|
(19,211 |
) |
|
|
|
|
|
|
|
|
|
|
136,403 |
|
Impairment loss on property, plant and equipment |
|
|
31,521 |
|
|
|
12,885 |
|
|
|
|
|
|
|
|
|
|
|
44,406 |
|
Valuation loss on inventory |
|
|
41,142 |
|
|
|
(7,819 |
) |
|
|
|
|
|
|
|
|
|
|
33,323 |
|
Accrued award credits liabilities |
|
|
28,543 |
|
|
|
(6,573 |
) |
|
|
|
|
|
|
|
|
|
|
21,970 |
|
Unrealized foreign exchange loss, net |
|
|
|
|
|
|
18,479 |
|
|
|
|
|
|
|
|
|
|
|
18,479 |
|
Estimated warranty liabilities |
|
|
19,025 |
|
|
|
(1,441 |
) |
|
|
|
|
|
|
|
|
|
|
17,584 |
|
(Continued)
- 65 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2015 |
|
|
Recognized in Profit or Loss |
|
|
Recognized in Other Comprehensive Income |
|
|
Acquisition Through Business Combinations |
|
|
December 31, 2015 |
|
Property, plant and equipment |
|
$ |
|
|
|
$ |
(58 |
) |
|
$ |
|
|
|
$ |
2,085 |
|
|
$ |
2,027 |
|
Others |
|
|
33,607 |
|
|
|
5,895 |
|
|
|
|
|
|
|
|
|
|
|
39,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,799,574 |
|
|
|
172,340 |
|
|
|
39,342 |
|
|
|
2,085 |
|
|
|
2,013,341 |
|
Loss carryforwards |
|
|
29,012 |
|
|
|
17,631 |
|
|
|
|
|
|
|
1,593 |
|
|
|
48,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,828,586 |
|
|
$ |
189,971 |
|
|
$ |
39,342 |
|
|
$ |
3,678 |
|
|
$ |
2,061,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land value incremental tax |
|
$ |
94,986 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
94,986 |
|
Intangible assets |
|
|
|
|
|
|
(657 |
) |
|
|
|
|
|
|
44,030 |
|
|
|
43,373 |
|
Valuation gain (loss) on financial instruments, net |
|
|
3,187 |
|
|
|
(170 |
) |
|
|
2,309 |
|
|
|
|
|
|
|
5,326 |
|
Defined benefit obligation |
|
|
|
|
|
|
619 |
|
|
|
(5 |
) |
|
|
|
|
|
|
614 |
|
Unrealized foreign exchange gain (loss), net |
|
|
29,216 |
|
|
|
(28,674 |
) |
|
|
|
|
|
|
|
|
|
|
542 |
|
Others |
|
|
5,017 |
|
|
|
(1,883 |
) |
|
|
|
|
|
|
|
|
|
|
3,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
132,406 |
|
|
$ |
(30,765 |
) |
|
$ |
2,304 |
|
|
$ |
44,030 |
|
|
$ |
147,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
For the year ended December 31, 2014 (Adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2014 |
|
|
Recognized in Profit or Loss |
|
|
Recognized in Other Comprehensive Income |
|
|
December 31, 2014 |
|
Deferred tax assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit obligation |
|
$ |
931,258 |
|
|
$ |
84,044 |
|
|
$ |
83,701 |
|
|
$ |
1,099,003 |
|
Share of the profit of associates and joint ventures accounted for using equity method |
|
|
175,007 |
|
|
|
102,220 |
|
|
|
|
|
|
|
277,227 |
|
Allowance for doubtful receivables over quota |
|
|
2,353 |
|
|
|
111,539 |
|
|
|
|
|
|
|
113,892 |
|
Deferred revenue |
|
|
187,126 |
|
|
|
(31,512 |
) |
|
|
|
|
|
|
155,614 |
|
Impairment loss on property, plant and equipment |
|
|
59,015 |
|
|
|
(27,494 |
) |
|
|
|
|
|
|
31,521 |
|
Valuation loss on inventory |
|
|
56,553 |
|
|
|
(15,411 |
) |
|
|
|
|
|
|
41,142 |
|
Accrued award credits liabilities |
|
|
20,823 |
|
|
|
7,720 |
|
|
|
|
|
|
|
28,543 |
|
Unrealized foreign exchange loss, net |
|
|
10,869 |
|
|
|
(10,869 |
) |
|
|
|
|
|
|
|
|
Estimated warranty liabilities |
|
|
23,764 |
|
|
|
(4,739 |
) |
|
|
|
|
|
|
19,025 |
|
Others |
|
|
15,415 |
|
|
|
18,192 |
|
|
|
|
|
|
|
33,607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,482,183 |
|
|
|
233,690 |
|
|
|
83,701 |
|
|
|
1,799,574 |
|
Loss carryforwards |
|
|
27,122 |
|
|
|
1,890 |
|
|
|
|
|
|
|
29,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,509,305 |
|
|
$ |
235,580 |
|
|
$ |
83,701 |
|
|
$ |
1,828,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
- 66 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2014 |
|
|
Recognized in Profit or Loss |
|
|
Recognized in Other Comprehensive Income |
|
|
December 31, 2014 |
|
Deferred tax liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land value incremental tax |
|
$ |
94,986 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
94,986 |
|
Valuation gain (loss) on financial instruments, net |
|
|
6,388 |
|
|
|
141 |
|
|
|
(3,342 |
) |
|
|
3,187 |
|
Unrealized foreign exchange gain, net |
|
|
5 |
|
|
|
29,211 |
|
|
|
|
|
|
|
29,216 |
|
Others |
|
|
|
|
|
|
5,017 |
|
|
|
|
|
|
|
5,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
101,379 |
|
|
$ |
34,369 |
|
|
$ |
(3,342 |
) |
|
$ |
132,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
e. |
Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets |
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Loss carryforwards |
|
|
|
|
|
|
|
|
Expire in 2016 |
|
$ |
37,484 |
|
|
$ |
38,393 |
|
Expire in 2017 |
|
|
67,200 |
|
|
|
65,142 |
|
Expire in 2018 |
|
|
126,429 |
|
|
|
130,053 |
|
Expire in 2019 |
|
|
156,456 |
|
|
|
164,340 |
|
Expire in 2020 |
|
|
80,245 |
|
|
|
8 |
|
Expire in 2021 |
|
|
23 |
|
|
|
23 |
|
Expire in 2022 |
|
|
1,610 |
|
|
|
1,129 |
|
Expire in 2023 |
|
|
592 |
|
|
|
21 |
|
Expire in 2024 |
|
|
20 |
|
|
|
20 |
|
Expire in 2025 |
|
|
14,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
484,600 |
|
|
$ |
399,129 |
|
|
|
|
|
|
|
|
|
|
Deductible temporary differences |
|
$ |
11,968 |
|
|
$ |
601 |
|
|
|
|
|
|
|
|
|
|
|
f. |
Information about unused loss carryforwards |
As of December 31, 2015, information about
loss carryforwards was as follows:
|
|
|
|
|
|
|
Remaining Creditable Amount |
|
|
Expiry Year |
|
$ |
37,484 |
|
|
|
2016 |
|
|
67,200 |
|
|
|
2017 |
|
|
126,429 |
|
|
|
2018 |
|
|
158,879 |
|
|
|
2019 |
|
|
88,202 |
|
|
|
2020 |
|
|
10,481 |
|
|
|
2021 |
|
|
1,610 |
|
|
|
2022 |
|
(Continued)
- 67 -
|
|
|
|
|
|
|
Remaining Creditable Amount |
|
|
Expiry Year |
|
$ |
2,670 |
|
|
|
2023 |
|
|
4,462 |
|
|
|
2024 |
|
|
35,419 |
|
|
|
2025 |
|
|
|
|
|
|
|
|
$ |
532,836 |
|
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
g. |
The related information under the Integrated Income Tax System was as follows: |
Unappropriated earnings information
As of December 31, 2015 and 2014, all Chunghwas unappropriated earnings are generated after the Integrated Income Tax System.
Imputation credit account
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Balance of Imputation Credit Account (ICA) |
|
$ |
7,576,622 |
|
|
$ |
8,269,010 |
|
|
|
|
|
|
|
|
|
|
The creditable ratios for distribution of earnings of 2015 and 2014 were 20.48% (expected ratio) and 20.48%,
respectively. Effective from January 1, 2015, the creditable ratio for individual shareholders residing in the Republic of China is half of the original creditable ratio according to the revised Article 66-6 of the Income Tax Law.
|
h. |
Income tax examinations |
Chunghwas income tax returns has been examined by the tax
authorities through 2012. SENAO, CHIEF, CHSI, SHE, CEI, CHPT, CHI, CHYP, Unigate, LED, SFD, HHI, Youth, ISPOT and Youyis, income tax returns have been examined by the tax authorities through 2013. CHSTs income tax returns has been
examined by the tax authorities through 2014.
Net income and weighted average number of common stocks used in the
calculation of earnings per share were as follows:
Net Income
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014
(Adjusted) |
|
Net income used to compute the basic earnings per share |
|
|
|
|
|
|
|
|
Net income attributable to the parent |
|
$ |
42,805,728 |
|
|
$ |
38,612,056 |
|
Assumed conversion of all dilutive potential common stocks |
|
|
|
|
|
|
|
|
Employee stock options, bonus and remunerations of subsidiaries |
|
|
(921 |
) |
|
|
(386 |
) |
|
|
|
|
|
|
|
|
|
Net income used to compute the diluted earnings per share |
|
$ |
42,804,807 |
|
|
$ |
38,611,670 |
|
|
|
|
|
|
|
|
|
|
- 68 -
Weighted Average Number of Common Stocks
(Thousand Shares)
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Weighted average number of common stocks used to compute the basic earnings per share |
|
|
7,757,447 |
|
|
|
7,757,447 |
|
Assumed conversion of all dilutive potential common stocks |
|
|
|
|
|
|
|
|
Employee bonus or employee remuneration |
|
|
18,231 |
|
|
|
12,339 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common stocks used to compute the diluted earnings per share |
|
|
7,775,678 |
|
|
|
7,769,786 |
|
|
|
|
|
|
|
|
|
|
If Chunghwa may settle the employee bonus or employee remuneration in shares or cash, Chunghwa shall presume
that it will be settled in shares and takes those shares into consideration when calculating the weighted average number of outstanding shares used in the calculation of diluted EPS if the shares have a dilutive effect. The dilutive effect of the
shares needs to be considered until the stockholders approve the number of shares to be distributed to employees in their meeting in the following year.
34. |
SHARE-BASED PAYMENT ARRANGEMENT |
|
a. |
SENAO share-based compensation plan (SENAO Plan) described as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Date for Plan Registration |
|
Resolution Date by SENAOs Board of Directors |
|
|
Stock Options Units (Thousand) |
|
|
Exercise Price
(NT$) |
|
2012.05.28 |
|
|
2013.04.29 |
|
|
|
10,000 |
|
|
$ |
81.40 |
|
|
|
|
|
|
|
|
|
|
|
(Original price $ |
93.00 |
) |
Each option is eligible to subscribe for one common share when exercisable. Under the terms of the SENAO Plan,
the options are granted at an exercise price equal to the closing price of the SENAOs common stocks listed on the TSE on the higher of closing price or par value. The SENAO Plan have exercise price adjustment formula upon the changes in common
stocks equity or distribution of cash dividends. The options of SENAO Plan are valid for six years and the graded vesting schedule will vest two years after the grant date.
Stock options granted on May 7, 2013 applied IFRS 2. The recognized compensation cost was $35,562 thousand and $93,287 thousand for the
years ended December 31, 2015 and 2014, respectively.
SENAO modified the plan terms of the outstanding stock options in August, 2015,
the exercise price changed from $84.30 to $81.40 per share. The modification did not cause any incremental fair value granted.
SENAO
modified the plan terms of the outstanding stock options in July 2014, the exercise price changed from $89.40 to $84.30 per share. The modification did not cause any incremental fair value granted.
- 69 -
Information about SENAOs outstanding stock options for the years ended December 31,
2015 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
|
|
Granted on May 7, 2013 |
|
|
Granted on May 7, 2013 |
|
|
|
Number of
Options
(Thousand) |
|
|
Weighted Average Exercise Price (NT$) |
|
|
Number of
Options
(Thousand) |
|
|
Weighted Average Exercise Price (NT$) |
|
Employee stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on January 1 |
|
|
9,027 |
|
|
$ |
84.30 |
|
|
|
9,872 |
|
|
$ |
89.40 |
|
Options exercised |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options forfeited |
|
|
(1,240 |
) |
|
|
|
|
|
|
(845 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31 |
|
|
7,787 |
|
|
|
81.40 |
|
|
|
9,027 |
|
|
|
84.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option exercisable at end of the year |
|
|
4,049 |
|
|
|
81.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015, information about employee stock options outstanding was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Outstanding |
|
|
Options Exercisable |
|
Range of Exercise Price (NT$) |
|
|
Number of Options
(Thousand) |
|
|
Weighted Average Remaining Contractual Life (Years) |
|
|
Weighted Average Exercise
Price (NT$) |
|
|
Number of Options
(Thousand) |
|
|
Weighted Average Exercise
Price (NT$) |
|
$ |
81.40 |
|
|
|
7,787 |
|
|
|
3.35 |
|
|
$ |
81.40 |
|
|
|
4,049 |
|
|
$ |
81.40 |
|
As of December 31, 2014, information about employee stock options outstanding was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Outstanding |
|
|
Options Exercisable |
|
Range of Exercise Price (NT$) |
|
|
Number of Options
(Thousand) |
|
|
Weighted Average Remaining Contractual Life (Years) |
|
|
Weighted Average Exercise
Price (NT$) |
|
|
Number of Options
(Thousand) |
|
|
Weighted Average Exercise
Price (NT$) |
|
$ |
84.30 |
|
|
|
9,027 |
|
|
|
4.35 |
|
|
$ |
84.30 |
|
|
|
|
|
|
$ |
|
|
SENAO used the fair value method to evaluate the options using the Black-Scholes model and the related
assumptions and the fair value of the options were as follows:
|
|
|
|
|
|
|
Stock Options Granted as of
May 7, 2013 |
|
Grant-date share price (NT$) |
|
$ |
93.00 |
|
Dividends yield |
|
|
|
|
Risk-free interest rate |
|
|
0.91 |
% |
Expected life |
|
|
4.375 years |
|
Expected volatility |
|
|
36.22 |
% |
Weighted average fair value of grants (NT$) |
|
$ |
28.72 |
|
- 70 -
Expected volatility was based on the historical share price volatility of SENAO over the period
equal to the expected life of SENAO Plan.
|
b. |
CHIEF share-based compensation plan (CHIEF Plan) described as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Date
for Plan
Registration |
|
Resolution Date by CHIEFs Board of Directors |
|
|
Stock Options Units |
|
|
Exercise Price
(NT$) |
|
2015.10.22 |
|
|
2015.10.22 |
|
|
|
2,000 |
|
|
$ |
43.00 |
|
Each option is eligible to subscribe for one thousand common stocks when exercisable. Under the terms of the
CHIEF Plan, the options are granted at an exercise price equal to $43.00. The options are granted to specific employees that meet the vesting conditions. The CHIEF Plan has exercise price adjustment formula upon the changes in common stocks or
distribution of cash dividends. The options of CHIEF Plan are valid for five years and the graded vesting schedule will vest two years after the grant date.
Stock options granted on October 22, 2015 applied IFRS 2. The recognized compensation cost was $764 thousand for the year ended
December 31, 2015.
Information about CHIEFs outstanding stock options for the year ended December 31, 2015 was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015 |
|
|
|
Granted on October 22, 2015 |
|
|
|
Number of
Options |
|
|
Weighted Average Exercise Price (NT$) |
|
Employee stock options |
|
|
|
|
|
|
|
|
Balance on January 1 |
|
|
|
|
|
$ |
|
|
Options granted |
|
|
2,000 |
|
|
|
43.00 |
|
|
|
|
|
|
|
|
|
|
Balance on December 31 |
|
|
2,000 |
|
|
|
43.00 |
|
|
|
|
|
|
|
|
|
|
Option exercisable at end of the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015, information about employee stock options outstanding was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Outstanding |
|
Options Exercisable |
|
Range of
Exercise Price
(NT$) |
|
Number of Options |
|
Weighted Average Remaining Contractual Life (Years) |
|
Weighted Average Exercise
Price (NT$) |
|
Number of Options |
|
|
Weighted Average Exercise
Price (NT$) |
|
$43.00 |
|
2,000 |
|
4.81 |
|
$43.00 |
|
|
|
|
|
$ |
|
|
- 71 -
CHIEF used the fair value method to evaluate the options using the binomial option pricing model
and the related assumptions and the fair value of the options were as follows:
|
|
|
|
|
|
|
Stock Options Granted as of October 22, 2015 |
|
Grant-date share price (NT$) |
|
$ |
39.55 |
|
Dividends yield |
|
|
|
|
Risk-free interest rate |
|
|
0.86 |
% |
Expected life |
|
|
5 years |
|
Expected volatility |
|
|
21.02 |
% |
Weighted average fair value of grants (NT$) |
|
$ |
4,863 |
|
Expected volatility was based on the average annualized historical share price volatility of CHIEFs
comparable companies before the grant date.
35. |
NON-CASH TRANSACTIONS |
For the years ended December 31, 2015 and 2014, the Company
entered into the following non-cash investing activities:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Increase in property, plant and equipment |
|
$ |
24,450,670 |
|
|
$ |
32,084,102 |
|
Other payables |
|
|
633,284 |
|
|
|
475,357 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
25,083,954 |
|
|
$ |
32,559,459 |
|
|
|
|
|
|
|
|
|
|
36. |
OPERATING LEASE ARRANGEMENTS |
Except for the ST-2 satellite referred in Note 39 to the consolidated
financial statement, the Company entered into several lease agreements for base stations located all over in Taiwan. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Within one year |
|
$ |
3,172,484 |
|
|
$ |
3,050,119 |
|
Longer than one year but within five years |
|
|
5,614,320 |
|
|
|
5,807,675 |
|
Longer than five years |
|
|
1,185,763 |
|
|
|
1,513,894 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,972,567 |
|
|
$ |
10,371,688 |
|
|
|
|
|
|
|
|
|
|
- 72 -
The Company leases out some land and buildings. The future aggregate
minimum lease collection under non-cancellable operating leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Within one year |
|
$ |
398,832 |
|
|
$ |
410,921 |
|
Longer than one year but within five years |
|
|
526,686 |
|
|
|
524,697 |
|
Longer than five years |
|
|
374,400 |
|
|
|
395,675 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,299,918 |
|
|
$ |
1,331,293 |
|
|
|
|
|
|
|
|
|
|
The Company manages its capital to ensure that entities in the
Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.
The capital structure of the Company consists of debt of the Company and the equity attributable to the parent.
The management reviews the capital structure of the Company as needed. As part of this review, the management considers the cost of capital and
the risks associated with each class of capital.
According to the managements suggestion, the Company maintains a balanced capital
structure through paying cash dividends, increasing its share capital, purchasing treasury stock, and proceeds from new debt or repayment of debt.
38. |
FINANCIAL INSTRUMENTS |
Fair Value Information
The fair value measurement guidance establishes a framework for measuring fair value and expands disclosure about fair value measurements. The
standard describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. These levels are:
Level
1 fair value measurements: These measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 fair value measurements: These measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value
measurements: These measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
- 73 -
|
a. |
Financial instruments that are not measured at fair value but for which fair value is disclosed |
Except for what disclosed in the following table, the Company considers that the carrying amounts of finanal assets and liablities not measured
at fair value approximate their fair values or the fair values cannot be reliable estimated:
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying |
|
|
Fair Value |
|
|
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
$ |
3,870,540 |
|
|
$ |
|
|
|
$ |
3,890,730 |
|
|
$ |
|
|
Bank debentures |
|
|
150,000 |
|
|
|
|
|
|
|
149,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,020,540 |
|
|
$ |
|
|
|
$ |
4,040,727 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying |
|
|
Fair Value |
|
|
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
$ |
6,533,527 |
|
|
$ |
|
|
|
$ |
6,564,145 |
|
|
$ |
|
|
Bank debentures |
|
|
950,742 |
|
|
|
|
|
|
|
951,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,484,269 |
|
|
$ |
|
|
|
$ |
7,515,530 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Level 2 fair values are estimated using discounted cash flow models. The models use market-based observable
inputs including duration, yield rate and credit rating.
|
b. |
Financial instruments measured at fair value |
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Financial assets at FVTPL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets |
|
$ |
|
|
|
$ |
163 |
|
|
$ |
|
|
|
$ |
163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial assets |
|
$ |
|
|
|
$ |
498 |
|
|
$ |
|
|
|
$ |
498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic and foreign listed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments |
|
$ |
3,242,827 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
3,242,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 74 -
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Financial assets at FVTPL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets |
|
$ |
|
|
|
$ |
1,163 |
|
|
$ |
|
|
|
$ |
1,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic and foreign listed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments |
|
$ |
3,914,212 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
3,914,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivative financial liabilities |
|
$ |
|
|
|
$ |
283 |
|
|
$ |
|
|
|
$ |
283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at FVTPL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities |
|
$ |
|
|
|
$ |
21 |
|
|
$ |
|
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between Levels 1 and 2 for the years ended December 31, 2015 and 2014.
The fair values of financial assets and financial liabilities are determined as follows:
|
1) |
The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices. |
|
2) |
For derivative financial assets and liabilities of forward exchange contracts, fair values are estimated using discounted cash flow model. The model uses market-based observable inputs including foreign exchange rates,
and forward and spot prices for currencies to project fair value. |
Categories of Financial Instruments
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Financial assets |
|
|
|
|
|
|
|
|
Measured at FVTPL |
|
|
|
|
|
|
|
|
Held for trading |
|
$ |
163 |
|
|
$ |
1,163 |
|
Hedging derivatives financial assets |
|
|
498 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
4,020,540 |
|
|
|
7,484,269 |
|
Loans and receivables (Note a) |
|
|
63,738,690 |
|
|
|
56,932,753 |
|
Available-for-sale financial assets (Note b) |
|
|
5,510,696 |
|
|
|
6,280,742 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
Measured at FVTPL |
|
|
|
|
|
|
|
|
Held for trading |
|
|
|
|
|
|
21 |
|
Hedging derivative financial liabilities |
|
|
|
|
|
|
283 |
|
Measured at amortized cost (Note c) |
|
|
36,365,152 |
|
|
|
39,681,969 |
|
|
Note a: |
The balances included cash and cash equivalents, trade notes and accounts receivable, accounts receivable from related parties, other current monetary assets, other financial assets and refundable deposits (classified
as other noncurrent assets) which were loans and receivables. |
- 75 -
|
Note b: |
The balances included financial assets carried at cost which were classified as available-for-sale financial assets. |
|
Note c: |
The balances included short-term loans, trade notes and accounts payable, payables to related parties, partial other payables, customers deposits and long-term loans which were financial liabilities carried at
amortized cost. |
Financial Risk Management Objectives
The main financial instruments of the Company include equity and debt investments, accounts receivable, accounts payables and loans. The
Companys Finance Department provides services to its business units, co-ordinates access to domestic and international capital markets, monitors and manages the financial risks relating to the operations of the Company through internal risk
reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk, and liquidity risk.
The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of
financial derivatives is governed by the Companys policies approved by the Board of Directors. Those derivatives are used to hedge the risks of exchange rate fluctuation arising from operating or investment activities. Compliance with policies
and risk exposure limits is audited by the Companys Finance Department on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Chunghwa reports the significant risk exposures and related action plans timely and actively to the audit committee and if needed to the Board
of Directors.
The Company is exposed to market risks of changes in foreign currency exchange
rates and interest rates. The Company uses forward exchange contracts to hedge the exchange rate risk arising from assets and liabilities denominated in foreign currencies.
There were no changes to the Companys exposure to market risks or the manner in which these risks are managed and measured.
The carrying amounts of the Companys foreign currency denominated
monetary assets and monetary liabilities at the end of the reporting periods are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Assets |
|
|
|
|
|
|
|
|
USD |
|
$ |
4,596,220 |
|
|
$ |
5,308,244 |
|
EUR |
|
|
47,066 |
|
|
|
16,579 |
|
SGD |
|
|
109,520 |
|
|
|
77,349 |
|
RMB |
|
|
40,689 |
|
|
|
112,158 |
|
JPY |
|
|
245,289 |
|
|
|
2,783 |
|
Liabilities |
|
|
|
|
|
|
|
|
USD |
|
|
4,171,693 |
|
|
|
5,365,620 |
|
EUR |
|
|
1,292,838 |
|
|
|
766,955 |
|
SGD |
|
|
2,553 |
|
|
|
1,976 |
|
RMB |
|
|
67 |
|
|
|
|
|
JPY |
|
|
13,983 |
|
|
|
5,555 |
|
- 76 -
The carrying amount of the Companys derivatives with exchange rate risk exposures at the
end of the reporting period are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Assets |
|
|
|
|
|
|
|
|
USD |
|
$ |
149 |
|
|
$ |
1,163 |
|
EUR |
|
|
512 |
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
USD |
|
|
|
|
|
|
21 |
|
EUR |
|
|
|
|
|
|
283 |
|
Foreign currency sensitivity analysis
The Company is mainly exposed to the fluctuations of the currencies listed above.
The following table details the Companys sensitivity to a 5% increase and decrease in the functional currency against the relevant
foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managements assessment of the reasonably possible changes in foreign exchange rates. The sensitivity
analysis includes only outstanding foreign currency denominated monetary items and forward exchange contracts. A positive number below indicates an increase in pre-tax profit or equity where the functional currency weakens 5% against the relevant
currency.
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Profit or loss |
|
|
|
|
|
|
|
|
Monetary assets and liabilities (a) |
|
|
|
|
|
|
|
|
USD |
|
$ |
21,226 |
|
|
$ |
(2,869 |
) |
EUR |
|
|
(62,289 |
) |
|
|
(37,519 |
) |
SGD |
|
|
5,348 |
|
|
|
3,769 |
|
RMB |
|
|
2,031 |
|
|
|
5,608 |
|
JPY |
|
|
11,565 |
|
|
|
(139 |
) |
Derivatives (b) |
|
|
|
|
|
|
|
|
USD |
|
|
1,318 |
|
|
|
10,995 |
|
EUR |
|
|
32,832 |
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Derivatives (c) |
|
|
|
|
|
|
|
|
EUR |
|
|
15,306 |
|
|
|
(4,502 |
) |
|
a) |
This is mainly attributable to the exposure to foreign currency denominated receivables and payables of the Company outstanding at the end of the reporting period; |
|
b) |
This is mainly attributable to the forward exchange contracts; and |
|
c) |
This is mainly attributable to the changes in the fair value of derivatives that are designated as cash flow hedges. |
For a 5% strengthening of the functional currency against the relevant currencies, there would be a comparable impact on the pre-tax profit or
equity, and the balances above would be negative.
- 77 -
The carrying amounts of the Companys exposures to interest rates on
financial assets and financial liabilities are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Fair value interest rate risk |
|
|
|
|
|
|
|
|
Financial assets |
|
$ |
26,237,631 |
|
|
$ |
21,270,570 |
|
Financial liabilities |
|
|
110,000 |
|
|
|
564,400 |
|
Cash flow interest rate risk |
|
|
|
|
|
|
|
|
Financial assets |
|
|
6,461,493 |
|
|
|
4,625,384 |
|
Financial liabilities |
|
|
1,750,000 |
|
|
|
1,900,000 |
|
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the
reporting period. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents managements assessment of the reasonably possible change in interest rates.
If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Companys pre-tax income in 2015
would increase/decrease by $11,779 thousand. This is mainly attributable to the Companys exposure to floating rates on its financial instruments and short-term and long-term loan.
If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Companys pre-tax income in 2014
would increase/decrease by $6,318 thousand. This is mainly attributable to the Companys exposure to floating interest rates on its financial instruments and short-term and long-term loan.
The Company is exposed to equity price risks arising from equity
investments. Equity investments are held for strategic rather than trading purposes. The management managed the risk through holding various risk portfolios. Further, the Company assigned finance and investment departments to monitor the price risk.
Equity price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices of listed equity securities had been 5% higher/lower:
Other comprehensive income would increase/decrease by $162,141 thousand as a result of the changes in fair value of available-for-sale
financial assets in 2015.
Other comprehensive income would increase/decrease by $195,711 thousand as a result of the changes in fair
value of available-for-sale financial assets in 2014.
- 78 -
Credit risk refers to the risk that counterparty would default on its contractual
obligations resulting in financial loss to the Company. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in consolidated balance sheet as of the balance sheet date.
The Company serves a large consumer base, and the concentration of credit risk was limited.
The Company manages and contains sufficient cash and cash equivalent position
to support the operations and reduce the impact on fluctuation of cash flow.
|
1) |
Liquidity and interest risk tables |
The following tables detailed the Companys remaining
contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required
to pay.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Effective
Interest Rate (%) |
|
|
Less Than 1 Month |
|
|
1-3 Months |
|
|
3 Months to
1 Year |
|
|
1-5 Years |
|
|
More Than 5 Years |
|
|
Total |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
|
|
|
|
$ |
40,208,974 |
|
|
$ |
|
|
|
$ |
2,190,085 |
|
|
$ |
4,725,826 |
|
|
$ |
|
|
|
$ |
47,124,885 |
|
Floating interest rate instruments |
|
|
1.13 |
|
|
|
|
|
|
|
|
|
|
|
7,692 |
|
|
|
1,646,154 |
|
|
|
96,154 |
|
|
|
1,750,000 |
|
Fixed interest rate instruments |
|
|
1.82 |
|
|
|
50,000 |
|
|
|
|
|
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
110,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
40,258,974 |
|
|
$ |
|
|
|
$ |
2,257,777 |
|
|
$ |
6,371,980 |
|
|
$ |
96,154 |
|
|
$ |
48,984,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
|
|
|
|
$ |
41,582,178 |
|
|
$ |
|
|
|
$ |
1,679,756 |
|
|
$ |
4,757,547 |
|
|
$ |
|
|
|
$ |
48,019,481 |
|
Floating interest rate instruments |
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,755,128 |
|
|
|
144,872 |
|
|
|
1,900,000 |
|
Fixed interest rate instruments |
|
|
1.37 |
|
|
|
|
|
|
|
500,000 |
|
|
|
64,400 |
|
|
|
|
|
|
|
|
|
|
|
564,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
41,582,178 |
|
|
$ |
500,000 |
|
|
$ |
1,744,156 |
|
|
$ |
6,512,675 |
|
|
$ |
144,872 |
|
|
$ |
50,483,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table detailed the Companys liquidity analysis for its derivative financial instruments.
The table has been drawn up based on the undiscounted gross inflows and outflows on those derivatives that require gross settlement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less Than 1 Month |
|
|
1-3 Months |
|
|
3 Months to
1 Year |
|
|
1-5 Years |
|
|
Total |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflow |
|
$ |
26,552 |
|
|
$ |
473,437 |
|
|
$ |
492,056 |
|
|
$ |
|
|
|
$ |
992,045 |
|
Outflow |
|
|
26,403 |
|
|
|
476,337 |
|
|
|
488,644 |
|
|
|
|
|
|
|
991,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
149 |
|
|
$ |
(2,900 |
) |
|
$ |
3,412 |
|
|
$ |
|
|
|
$ |
661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflow |
|
$ |
220,135 |
|
|
$ |
90,226 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
310,361 |
|
Outflow |
|
|
218,993 |
|
|
|
90,509 |
|
|
|
|
|
|
|
|
|
|
|
309,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,142 |
|
|
$ |
(283 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 79 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Unsecured bank loan facility |
|
|
|
|
|
|
|
|
Amount used |
|
$ |
110,000 |
|
|
$ |
564,400 |
|
Amount unused |
|
|
41,278,250 |
|
|
|
35,314,880 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
41,388,250 |
|
|
$ |
35,879,280 |
|
|
|
|
|
|
|
|
|
|
Secured bank loan facility |
|
|
|
|
|
|
|
|
Amount used |
|
$ |
1,750,000 |
|
|
$ |
1,900,000 |
|
Amount unused |
|
|
200,000 |
|
|
|
818,000 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,950,000 |
|
|
$ |
2,718,000 |
|
|
|
|
|
|
|
|
|
|
39. |
RELATED PARTIES TRANSACTIONS |
The ROC Government, one of Chunghwas customers has
significant equity interest in Chunghwa. Chunghwa provides fixed-line services, wireless services, Internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and at
arms-length prices. The transactions with the ROC government bodies have not been provided because the transactions are not individually or collectively significant. However, the related revenues and operating costs have been appropriately
recorded.
|
a. |
The Company engages in business transactions with the following related parties: |
|
|
|
Company |
|
Relationship |
Taiwan International Standard Electronics Co., Ltd. |
|
Associate |
So-net Entertainment Taiwan Limited |
|
Associate |
Skysoft Co., Ltd. |
|
Associate |
KingwayTek Technology Co., Ltd. |
|
Associate |
Dian Zuan Integrating Marketing Co., Ltd. |
|
Associate |
Viettel-CHT Co., Ltd. |
|
Associate |
Taiwan International Ports Logistics Corporation |
|
Associate |
Huada Digital Corporation |
|
Joint venture |
Chunghwa Benefit One Co., Ltd. |
|
Joint venture |
International Integrated System, Inc. |
|
Associate |
Senao Networks, Inc. |
|
Associate |
HopeTech Technologies Limited |
|
Associate |
ST-2 Satellite Ventures Pte., Ltd. |
|
Associate |
Xiamen Sertec Business Technology Co., Ltd. |
|
Associate |
Click Force Co., Ltd. |
|
Associate |
Other related parties |
|
|
Chunghwa Telecom Foundation |
|
A nonprofit organization of which the funds donated by Chunghwa exceeds one third of its total
funds |
Senao Technical and Cultural Foundation |
|
A nonprofit organization of which the funds donated by SENAO exceeds one third of its total
funds |
Sochamp Technology Co., Ltd. |
|
Investor of significant influence over CHST |
E-Life Mall Co., Ltd. |
|
One of the directors of E-Life Mall and a director of SENAO are members of an immediate family |
United Daily News Co., Ltd. |
|
Investor of significant influence over SFD |
- 80 -
|
b. |
Balances and transactions between Chunghwa and its subsidiaries, which are related parties of Chunghwa, have been eliminated on consolidation and are not disclosed in this note. Terms of the foregoing transactions with
related parties were not significantly different from transactions with non-related parties. When no similar transactions with non-related parties can be referenced, terms were determined in accordance with mutual agreements. Details of transactions
between the Company and other related parties are disclosed below: |
|
1) |
Operating transactions |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
332,788 |
|
|
$ |
328,631 |
|
Joint ventures |
|
|
8,811 |
|
|
|
7,181 |
|
Others |
|
|
81,190 |
|
|
|
97,394 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
422,789 |
|
|
$ |
433,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses |
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
1,450,782 |
|
|
$ |
1,662,952 |
|
Joint ventures |
|
|
16,931 |
|
|
|
34,393 |
|
Others |
|
|
62,423 |
|
|
|
69,302 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,530,136 |
|
|
$ |
1,766,647 |
|
|
|
|
|
|
|
|
|
|
|
2) |
Non-operating transactions |
|
|
|
|
|
|
|
|
|
|
|
Non-operating Income and Expenses |
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
36,296 |
|
|
$ |
34,396 |
|
Others |
|
|
|
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
36,296 |
|
|
$ |
34,441 |
|
|
|
|
|
|
|
|
|
|
- 81 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
28,763 |
|
|
$ |
61,964 |
|
Joint ventures |
|
|
542 |
|
|
|
80 |
|
Others |
|
|
12,751 |
|
|
|
18,964 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
42,056 |
|
|
$ |
81,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
601,730 |
|
|
$ |
402,372 |
|
Joint ventures |
|
|
4,849 |
|
|
|
12 |
|
Others |
|
|
4,521 |
|
|
|
5,581 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
611,100 |
|
|
$ |
407,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
10,965 |
|
|
$ |
9,419 |
|
Others |
|
|
|
|
|
|
247 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,965 |
|
|
$ |
9,666 |
|
|
|
|
|
|
|
|
|
|
|
6) |
Acquisition of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Associates |
|
$ |
313,346 |
|
|
$ |
521,360 |
|
Joint ventures |
|
|
11,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
324,691 |
|
|
$ |
521,360 |
|
|
|
|
|
|
|
|
|
|
Chunghwa entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on
March 12, 2010 to lease capacity on the ST-2 satellite. This lease term is for 15 years which should start from the official operation of ST-2 satellite and the total contract value is approximately $6,000,000 thousand (SG$260,723 thousand),
including a prepayment of $3,067,711 thousand, and the rest of amount should be paid annually when ST-2 satellite starts its official operation. ST-2 satellite was launched in May 2011, and began its official operation in August 2011. The total
rental expense for the year ended December 31, 2015 was $404,120 thousand, which consisted of an offsetting credit of the prepayment of $204,398 thousand and an additional accrual of $199,722 thousand. The prepaid rents (classified as
prepayments) as of December 31, 2015 and 2014, were as follows:
- 82 -
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Prepaid rents - current |
|
$ |
204,398 |
|
|
$ |
204,398 |
|
Prepaid rents - noncurrent |
|
|
1,958,817 |
|
|
|
2,163,215 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,163,215 |
|
|
$ |
2,367,613 |
|
|
|
|
|
|
|
|
|
|
|
c. |
Compensation of key management personnel |
The remuneration of directors and members of key
management personnel for the years ended December 31, 2015 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Short-term benefits |
|
$ |
211,836 |
|
|
$ |
221,846 |
|
Share-based payment |
|
|
3,435 |
|
|
|
9,776 |
|
Post-employment benefits |
|
|
8,476 |
|
|
|
8,446 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
223,747 |
|
|
$ |
240,068 |
|
|
|
|
|
|
|
|
|
|
The remuneration of directors and key executives is mainly determined by the compensation committee having
regard to the performance of individual and market trends.
The following assets are pledged as collaterals for long-term bank loans
and custom duties of the imported materials.
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2015 |
|
|
2014 |
|
Property, plant and equipment, net |
|
$ |
3,101,079 |
|
|
$ |
3,079,179 |
|
Land held under development (included in inventories) |
|
|
1,998,733 |
|
|
|
1,998,733 |
|
Restricted assets (included in other assets others) |
|
|
2,018 |
|
|
|
1,041 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,101,830 |
|
|
$ |
5,078,953 |
|
|
|
|
|
|
|
|
|
|
41. |
SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS |
At the balance sheet
date, the Companys remaining commitments under non-cancelable contracts with various parties, excluding those disclosed in other notes, were as follows:
|
a. |
Acquisitions of land and buildings of $646,517 thousand. |
|
b. |
Acquisitions of telecommunications equipment of $13,951,536 thousand. |
|
c. |
Unused letters of credit amounting to $50,000 thousand. |
- 83 -
|
d. |
A commitment to contribute $2,000,000 thousand to a Piping Fund administered by the Taipei City Government, of which $1,000,000 thousand was contributed by Chunghwa on August 15, 1996 (classified as other monetary
assetsnoncurrent). If the fund is not sufficient, Chunghwa will contribute the remaining $1,000,000 thousand upon notification from the Taipei City Government. |
42. |
SIGNIFICANT INFORMATION OF FOREIGN ASSETS AND LIABILITIES |
The following information
summarizes the disclosure of the currency which is other than functional currency of Chunghwa and its subsidiaries. The following exchange rates are the exchange rates used to translate to the presentation currency in the consolidated financial
statements, which is NTD:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
|
|
Foreign Currencies (Thousands) |
|
|
Exchange Rate |
|
|
New Taiwan Dollars (Thousands) |
|
Foreign assets |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
$ |
12,860 |
|
|
|
32.825 |
|
|
$ |
422,132 |
|
EUR |
|
|
1,304 |
|
|
|
35.88 |
|
|
|
46,793 |
|
SGD |
|
|
4,656 |
|
|
|
23.25 |
|
|
|
108,244 |
|
RMB |
|
|
8,174 |
|
|
|
4.978 |
|
|
|
40,689 |
|
JPY |
|
|
888,019 |
|
|
|
0.273 |
|
|
|
242,429 |
|
Accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
127,162 |
|
|
|
32.825 |
|
|
|
4,174,088 |
|
EUR |
|
|
8 |
|
|
|
35.88 |
|
|
|
273 |
|
SGD |
|
|
55 |
|
|
|
23.25 |
|
|
|
1,276 |
|
JPY |
|
|
10,477 |
|
|
|
0.273 |
|
|
|
2,860 |
|
Non-monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using equity method |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
1,133 |
|
|
|
32.825 |
|
|
|
35,938 |
|
SGD |
|
|
21,279 |
|
|
|
23.25 |
|
|
|
494,727 |
|
VND |
|
|
223,944,681 |
|
|
|
0.00141 |
|
|
|
315,762 |
|
Foreign liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
127,089 |
|
|
|
32.825 |
|
|
|
4,171,693 |
|
EUR |
|
|
36,032 |
|
|
|
35.88 |
|
|
|
1,292,838 |
|
SGD |
|
|
110 |
|
|
|
23.25 |
|
|
|
2,553 |
|
RMB |
|
|
14 |
|
|
|
4.978 |
|
|
|
67 |
|
JPY |
|
|
51,219 |
|
|
|
0.273 |
|
|
|
13,983 |
|
- 84 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
|
|
Foreign Currencies (Thousands) |
|
|
Exchange Rate |
|
|
New Taiwan Dollars (Thousands) |
|
Foreign assets |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
$ |
5,076 |
|
|
|
31.65 |
|
|
$ |
160,666 |
|
EUR |
|
|
344 |
|
|
|
38.47 |
|
|
|
13,221 |
|
SGD |
|
|
3,175 |
|
|
|
23.94 |
|
|
|
76,019 |
|
RMB |
|
|
22,035 |
|
|
|
5.09 |
|
|
|
112,158 |
|
JPY |
|
|
1,571 |
|
|
|
0.265 |
|
|
|
416 |
|
Accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
162,641 |
|
|
|
31.65 |
|
|
|
5,147,578 |
|
EUR |
|
|
87 |
|
|
|
38.47 |
|
|
|
3,358 |
|
SGD |
|
|
56 |
|
|
|
23.94 |
|
|
|
1,330 |
|
JPY |
|
|
8,933 |
|
|
|
0.265 |
|
|
|
2,367 |
|
Non-monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using equity method |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
986 |
|
|
|
31.65 |
|
|
|
31,211 |
|
SGD |
|
|
23,324 |
|
|
|
23.94 |
|
|
|
558,379 |
|
VND |
|
|
194,195,804 |
|
|
|
0.00143 |
|
|
|
277,700 |
|
Foreign liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
169,530 |
|
|
|
31.65 |
|
|
|
5,365,620 |
|
EUR |
|
|
19,936 |
|
|
|
38.47 |
|
|
|
766,955 |
|
SGD |
|
|
83 |
|
|
|
23.94 |
|
|
|
1,976 |
|
JPY |
|
|
20,963 |
|
|
|
0.265 |
|
|
|
5,555 |
|
The unrealized foreign exchange gains and losses were loss of $68,257 thousand and gain of $182,953 thousand
for the years ended December 31, 2015 and 2014, respectively. Due to the various foreign currency transactions and the functional currency of each individual entity of the Company, foreign exchange gains and losses cannot be disclosed on the
respective significant foreign currency.
43. |
ADDITIONAL DISCLOSURES |
Following are the additional disclosures required by the SFC for
the Company:
|
a. |
Financing provided: None. |
|
b. |
Endorsement/guarantee provided: Please see Table 1. |
|
c. |
Marketable securities held (excluding investments in subsidiaries and associates and joint ventures): Please see Table 2. |
|
d. |
Marketable securities acquired and disposed of at costs or prices at least $300 million or 20% of the paid-in capital: Please see Table 3. |
- 85 -
|
e. |
Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: None. |
|
f. |
Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None. |
|
g. |
Total purchases from or sales to related parties amounting to at least $100 million or 20% of the paid-in capital: Please see Table 4. |
|
h. |
Receivables from related parties amounting to $100 million or 20% of the paid-in capital: Please see Table 5. |
|
i. |
Names, locations, and other information of investees on which the Company exercises significant influence (excluding investment in Mainland China): Please see Table 6. |
|
j. |
Financial transactions: Please see Notes 7, 21 and 38. |
|
k. |
Investment in Mainland China: Please see Table 7. |
|
l. |
Intercompany relationships and significant intercompany transaction: Please see Table 8. |
The Company has the following reportable segments that provide
different products or services. The reportable segments are managed separately because each segment represents a strategic business unit that serves different markets. Segment information is provided to CEO who allocates resources and assesses
segment performance. The Companys measure of segment performance is mainly based on revenues and income before tax. The Companys reportable segments are as follows:
|
a. |
Domestic fixed communications business - the provision of local telephone services, domestic long distance telephone services, broadband access, and related services; |
|
b. |
Mobile communications business - the provision of mobile services, sales of mobile handsets and data cards, and related services; |
|
c. |
Internet business - the provision of HiNet services and related services; |
|
d. |
International fixed communications business - the provision of international long distance telephone services and related services; |
|
e. |
Others - the provision of non-telecom services and the corporate related items not allocated to reportable segments. |
There was no material differences between the accounting policies of the operating segments and the accounting policies described in Note 3.
- 86 -
Segment Revenues and Operating Results
Analysis by reportable segment of revenue and operating results of continuing operations are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Fixed Communi-
cations Business |
|
|
Mobile Communi-
cations Business |
|
|
Internet Business |
|
|
International Fixed Communi-
cations Business |
|
|
Others |
|
|
Total |
|
Year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From external customers |
|
$ |
72,535,267 |
|
|
$ |
114,877,285 |
|
|
$ |
25,777,154 |
|
|
$ |
15,459,942 |
|
|
$ |
3,145,456 |
|
|
$ |
231,795,104 |
|
Intersegment revenues |
|
|
21,400,729 |
|
|
|
3,475,183 |
|
|
|
4,701,195 |
|
|
|
2,119,555 |
|
|
|
3,213,876 |
|
|
|
34,910,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues |
|
$ |
93,935,996 |
|
|
$ |
118,352,468 |
|
|
$ |
30,478,349 |
|
|
$ |
17,579,497 |
|
|
$ |
6,359,332 |
|
|
|
266,705,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment elimination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(34,910,538 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
231,795,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income (loss) before income tax |
|
$ |
23,230,601 |
|
|
$ |
19,394,029 |
|
|
$ |
9,918,147 |
|
|
$ |
1,119,751 |
|
|
$ |
(1,694,315 |
) |
|
$ |
51,968,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From external customers |
|
$ |
72,062,697 |
|
|
$ |
110,664,916 |
|
|
$ |
25,997,008 |
|
|
$ |
15,313,039 |
|
|
$ |
2,571,026 |
|
|
$ |
226,608,686 |
|
Intersegment revenues |
|
|
19,727,732 |
|
|
|
5,323,950 |
|
|
|
4,705,037 |
|
|
|
2,256,543 |
|
|
|
2,422,128 |
|
|
|
34,435,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues |
|
$ |
91,790,429 |
|
|
$ |
115,988,866 |
|
|
$ |
30,702,045 |
|
|
$ |
17,569,582 |
|
|
$ |
4,993,154 |
|
|
|
261,044,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment elimination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(34,435,390 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
226,608,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income (loss) before income tax |
|
$ |
19,535,157 |
|
|
$ |
19,321,873 |
|
|
$ |
9,546,583 |
|
|
$ |
191,096 |
|
|
$ |
(2,040,761 |
) |
|
$ |
46,553,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Segment Information
Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Fixed Communi-
cations Business |
|
|
Mobile Communi-
cations Business |
|
|
Internet Business |
|
|
International Fixed Communi-
cations Business |
|
|
Others |
|
|
Total |
|
Year ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of the profit of associates and joint ventures accounted for using equity method |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
907,988 |
|
|
$ |
907,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue |
|
$ |
18,880 |
|
|
$ |
19,469 |
|
|
$ |
10,502 |
|
|
$ |
2,061 |
|
|
$ |
255,255 |
|
|
$ |
306,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expenses |
|
$ |
|
|
|
$ |
10,067 |
|
|
$ |
279 |
|
|
$ |
|
|
|
$ |
22,798 |
|
|
$ |
33,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
$ |
17,486,804 |
|
|
$ |
10,444,149 |
|
|
$ |
3,610,983 |
|
|
$ |
1,536,400 |
|
|
$ |
369,754 |
|
|
$ |
33,448,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
$ |
10,196,172 |
|
|
$ |
8,596,075 |
|
|
$ |
4,794,785 |
|
|
$ |
967,566 |
|
|
$ |
529,356 |
|
|
$ |
25,083,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on property, plant and equipment |
|
$ |
22,193 |
|
|
$ |
115,900 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
138,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of impairment loss on investment properties |
|
$ |
142,047 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
142,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of the profit of associates and joint ventures accounted for using equity method |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
797,473 |
|
|
$ |
797,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue |
|
$ |
24,079 |
|
|
$ |
11,861 |
|
|
$ |
10,019 |
|
|
$ |
2,326 |
|
|
$ |
239,849 |
|
|
$ |
288,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expenses |
|
$ |
|
|
|
$ |
13,766 |
|
|
$ |
568 |
|
|
$ |
|
|
|
$ |
31,814 |
|
|
$ |
46,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
$ |
18,540,170 |
|
|
$ |
9,908,696 |
|
|
$ |
3,422,151 |
|
|
$ |
1,819,839 |
|
|
$ |
423,836 |
|
|
$ |
34,114,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
$ |
16,164,526 |
|
|
$ |
9,618,961 |
|
|
$ |
4,425,406 |
|
|
$ |
1,458,272 |
|
|
$ |
892,294 |
|
|
$ |
32,559,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on property, plant and equipment |
|
$ |
|
|
|
$ |
|
|
|
$ |
64 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 87 -
Main Products and Service Revenues
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Mobile services revenue |
|
$ |
80,866,956 |
|
|
$ |
77,468,472 |
|
Local telephone and domestic long distance telephone services revenue |
|
|
36,690,049 |
|
|
|
38,904,763 |
|
Broadband access and domestic leased line services revenue |
|
|
23,710,759 |
|
|
|
23,680,978 |
|
Internet services revenue |
|
|
17,455,259 |
|
|
|
17,241,218 |
|
International network and leased telephone services revenue |
|
|
11,318,721 |
|
|
|
11,951,054 |
|
Others |
|
|
61,753,360 |
|
|
|
57,362,201 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
231,795,104 |
|
|
$ |
226,608,686 |
|
|
|
|
|
|
|
|
|
|
Geographic Information
The users of the Companys services are mainly from Taiwan, ROC. The revenues it derived outside Taiwan are mainly revenues from
international long distance telephone and leased line services. The geographic information for revenues was as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
|
|
|
2015 |
|
|
2014 |
|
Taiwan, ROC |
|
$ |
220,916,554 |
|
|
$ |
216,172,810 |
|
Overseas |
|
|
10,878,550 |
|
|
|
10,435,876 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
231,795,104 |
|
|
$ |
226,608,686 |
|
|
|
|
|
|
|
|
|
|
The Company has long-lived assets in U.S., Singapore, Hong Kong, China, Vietnam, and Japan and except for
$4,041,245 thousand and $4,086,581 thousand at December 31, 2015 and 2014, respectively, in the aforementioned areas, the other long-lived assets are located in Taiwan, ROC.
Major Customers
For the
years ended December 31, 2015 and 2014, the Company did not have any single customer whose revenue exceeded 10% of the total revenue.
- 88 -
TABLE 1
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
YEAR ENDED DECEMBER
31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No.
(Note 1) |
|
Endorsement/ Guarantee Provider |
|
Guaranteed Party |
|
Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party |
|
|
Maximum Balance for the Period |
|
|
Ending Balance |
|
|
Actual Borrowing Amount |
|
|
Amount of Endorsement/ Guarantee Collateralized by Properties |
|
|
Ratio of Accumulated Endorsement/ Guarantee to Net Equity Per Latest Financial Statements |
|
|
Maximum Endorsement/ Guarantee Amount Allowable |
|
|
Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries |
|
|
Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent |
|
|
Endorsement/ Guarantee Given on Behalf of Companies in Mainland China |
|
|
Note |
|
|
|
Name |
|
Nature of Relationship (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Senao International Co., |
|
ISPOT Co., Ltd. |
|
c |
|
$ |
572,212 |
|
|
$ |
150,000 |
|
|
$ |
150,000 |
|
|
$ |
|
|
|
$ |
|
|
|
|
2.62 |
|
|
$ |
2,861,062 |
|
|
|
Yes |
|
|
|
No |
|
|
|
No |
|
|
|
Notes 3 and 4 |
|
|
|
Ltd. |
|
Youth Co., Ltd. |
|
b |
|
|
572,212 |
|
|
|
200,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
3.50 |
|
|
|
2,861,062 |
|
|
|
Yes |
|
|
|
No |
|
|
|
No |
|
|
|
Notes 3 and 4 |
|
Note 1: |
Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as follows: |
|
b. |
Subsidiaries are numbered from 1. |
Note 2: |
Relationships between the endorsement/guarantee provider and the guaranteed party: |
|
b. |
Majority owned subsidiary. |
|
c. |
The Company and subsidiary owns over 50% ownership of the investee company. |
|
d. |
A subsidiary jointly owned by the Company and the Companys directly-owned subsidiary. |
|
e. |
Guaranteed by the Company according to the construction contract. |
|
f. |
An investee company. The guarantees were provided based on the Companys proportionate share in the investee company. |
Note 3: |
The limits on endorsement or guarantee amount provided to each guaranteed party is up to 10% of the net assets value of the latest financial statements of Senao International Co., Ltd. |
Note 4: |
The total amount of endorsement or guarantee that the Company is allowed to provide shall not exceed 50% of the net assets value of the latest financial statements of Senao International Co., Ltd. |
- 89 -
TABLE 2
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held Company Name |
|
Marketable Securities Type and Name |
|
Relationship with the Company |
|
|
Financial Statement Account |
|
December 31, 2015 |
|
|
Note |
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Carrying Value (Note 1) |
|
|
Percentage of Ownership |
|
|
Fair Value |
|
|
Chunghwa Telecom Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taipei Financial Center Corp. |
|
|
|
|
|
Financial assets carried at cost |
|
|
172,927 |
|
|
$ |
1,789,530 |
|
|
|
12 |
|
|
$ |
|
|
|
|
|
|
|
|
Innovation Works Development Fund, L.P. |
|
|
|
|
|
Financial assets carried at cost |
|
|
|
|
|
|
219,541 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II) |
|
|
|
|
|
Financial assets carried at cost |
|
|
7,569 |
|
|
|
75,686 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
Global Mobile Corp. |
|
|
|
|
|
Financial assets carried at cost |
|
|
7,617 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
iD Branding Ventures |
|
|
|
|
|
Financial assets carried at cost |
|
|
750 |
|
|
|
7,500 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
Innovation Works Limited |
|
|
|
|
|
Financial assets carried at cost |
|
|
1,000 |
|
|
|
31,390 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
RPTI Intergroup International Ltd. |
|
|
|
|
|
Financial assets carried at cost |
|
|
4,765 |
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
Essence Technology Solution, Inc. |
|
|
|
|
|
Financial assets carried at cost |
|
|
200 |
|
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
Taiwan mobile payment Co., Ltd. |
|
|
|
|
|
Financial assets carried at cost |
|
|
1,200 |
|
|
|
12,000 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
China Airlines Ltd. |
|
|
|
|
|
Available-for-sale financial assets |
|
|
263,622 |
|
|
|
3,163,466 |
|
|
|
5 |
|
|
|
3,163,466 |
|
|
|
Note 2 |
|
|
|
Bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Petroleum Corporation 1st Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
50,464 |
|
|
|
|
|
|
|
50,794 |
|
|
|
Note 3 |
|
|
|
China Petroleum Corporation 1st Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,946 |
|
|
|
|
|
|
|
101,589 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 2nd Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
201,421 |
|
|
|
|
|
|
|
202,435 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 3rd Unsecured Corporate Bond-C Issue in 2006 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
202,095 |
|
|
|
|
|
|
|
203,096 |
|
|
|
Note 3 |
|
|
|
China Steel Corporation 1st Unsecured Corporate Bonds-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
50,043 |
|
|
|
|
|
|
|
50,274 |
|
|
|
Note 3 |
|
|
|
China Steel Corporation 1st Unsecured Corporate Bonds-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
150,248 |
|
|
|
|
|
|
|
150,822 |
|
|
|
Note 3 |
|
|
|
FRFC 1st Unsecured Corporate Bonds Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
149,963 |
|
|
|
|
|
|
|
150,450 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
299,950 |
|
|
|
|
|
|
|
301,772 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,146 |
|
|
|
|
|
|
|
100,591 |
|
|
|
Note 3 |
|
|
|
Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
300,386 |
|
|
|
|
|
|
|
301,351 |
|
|
|
Note 3 |
|
(Continued)
- 90 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held Company Name |
|
Marketable Securities Type and Name |
|
Relationship with the Company |
|
|
Financial Statement Account |
|
December 31, 2015 |
|
|
Note |
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Carrying Value (Note 1) |
|
|
Percentage of Ownership |
|
|
Fair Value |
|
|
|
|
Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
$ |
100,120 |
|
|
|
|
|
|
$ |
100,450 |
|
|
|
Note 3 |
|
|
|
Formosa Petrochemical Corporation 1st Unsecured Corporate Bonds Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
74,987 |
|
|
|
|
|
|
|
75,163 |
|
|
|
Note 3 |
|
|
|
Formosa Petrochemical Corporation 3rd Unsecured Corporate Bonds Issue in 2011 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,969 |
|
|
|
|
|
|
|
100,494 |
|
|
|
Note 3 |
|
|
|
Chinese Petroleum Corporation 2nd unsecured Corporate Bonds-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,930 |
|
|
|
|
|
|
|
201,085 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,972 |
|
|
|
|
|
|
|
100,492 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
39,989 |
|
|
|
|
|
|
|
40,197 |
|
|
|
Note 3 |
|
|
|
Taiwan Power Co. 2nd Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,969 |
|
|
|
|
|
|
|
100,488 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,959 |
|
|
|
|
|
|
|
201,200 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
99,979 |
|
|
|
|
|
|
|
100,600 |
|
|
|
Note 3 |
|
|
|
TSMC 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
200,081 |
|
|
|
|
|
|
|
201,200 |
|
|
|
Note 3 |
|
|
|
TSMC 2nd Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,934 |
|
|
|
|
|
|
|
201,364 |
|
|
|
Note 3 |
|
|
|
TSMC 3rd Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
199,929 |
|
|
|
|
|
|
|
201,118 |
|
|
|
Note 3 |
|
|
|
Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
300,000 |
|
|
|
|
|
|
|
301,822 |
|
|
|
Note 3 |
|
|
|
China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
150,016 |
|
|
|
|
|
|
|
150,807 |
|
|
|
Note 3 |
|
|
|
China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,022 |
|
|
|
|
|
|
|
100,538 |
|
|
|
Note 3 |
|
|
|
China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012 |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
100,022 |
|
|
|
|
|
|
|
100,538 |
|
|
|
Note 3 |
|
|
|
Eximbank 19-2nd unsecured Financial Debenture |
|
|
|
|
|
Held-to-maturity financial assets |
|
|
|
|
|
|
150,000 |
|
|
|
|
|
|
|
149,997 |
|
|
|
Note 3 |
|
Senao International Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.T.U. Innovation Incubation Corporation |
|
|
|
|
|
Financial assets carried at cost |
|
|
1,200 |
|
|
|
12,000 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
CHIEF Telecom Inc. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Link Information Service Co., Ltd. |
|
|
|
|
|
Financial assets carried at cost |
|
|
374 |
|
|
|
3,450 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
(Continued)
- 91 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held Company Name |
|
Marketable Securities Type and Name |
|
Relationship with the Company |
|
|
Financial Statement Account |
|
December 31, 2015 |
|
|
Note |
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Carrying Value (Note 1) |
|
|
Percentage of Ownership |
|
|
Fair Value |
|
|
Chunghwa Investment Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tatung Technology Inc. |
|
|
|
|
|
Financial assets carried at cost |
|
|
4,571 |
|
|
$ |
73,964 |
|
|
|
11 |
|
|
$ |
|
|
|
|
|
|
|
|
iD Branding Ventures |
|
|
|
|
|
Financial assets carried at cost |
|
|
250 |
|
|
|
2,500 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
VisEra Technologies Company Ltd. |
|
|
|
|
|
Financial assets carried at cost |
|
|
629 |
|
|
|
13,495 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PChome Store Inc. |
|
|
|
|
|
Available-for-sale financial assets |
|
|
280 |
|
|
|
32,247 |
|
|
|
1 |
|
|
|
32,247 |
|
|
|
Note 2 |
|
|
|
Tons Lightology Inc. |
|
|
|
|
|
Available-for-sale financial assets |
|
|
1,318 |
|
|
|
47,114 |
|
|
|
3 |
|
|
|
47,114 |
|
|
|
Note 2 |
|
Chunghwa Hsingta Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cotech Engineering Fuzhou Corp. |
|
|
|
|
|
Financial assets carried at cost |
|
|
|
|
|
|
26,861 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
Note 1: |
Showing at carrying amounts with adjustments for fair value and deducted accumulated impairment loss; otherwise, showing at their original carrying amounts on amortized cost deducted the accumulated impairment loss.
|
Note 2: |
Fair value was based on the closing price of December 31, 2015. |
Note 3: |
Fair value was based on the average trading price on December 31, 2015. |
(Concluded)
- 92 -
TABLE 3
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
YEAR ENDED DECEMBER 31, 2015
(Amounts in Thousands of
New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name |
|
Marketable Securities
Type and Name |
|
Financial Statement
Account |
|
Counter-party |
|
|
Nature of Relationship |
|
|
Beginning Balance |
|
|
Acquisition |
|
|
Disposal |
|
|
Ending Balance |
|
|
|
|
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount (Note 1) |
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount |
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount |
|
|
Carrying Value (Note 1) |
|
|
Gain (Loss) on Disposal |
|
|
Shares (Thousands/ Thousand Units) |
|
|
Amount (Note 1) |
|
Chunghwa Telecom Co., Ltd. |
|
Bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taiwan Power Co. 4th Unsecured Corporate Bond-A Issue in 2010 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
300,000 (Note 2 |
) |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
300,000 (Note 2 |
) |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
KGI Securities Co., Ltd. 1st Unsecured Corporate Bonds in 2012 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taipei Fubon Bank 5th Financial Debentures-A Issue in 2010 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fubon Financial Holding Co., Ltd. 3rd Unsecured Corporate Bond Issue in 2010 |
|
Held-to-maturity financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
1,000,000 (Note 2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Senao International Co., Ltd. |
|
Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Youth Co., Ltd. |
|
Investments accounted for using equity method |
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,780 |
|
|
|
335,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,780 |
|
|
|
318,070 (Notes 3 and 4 |
) |
Note 1: |
Showing at their original investing amounts without adjustments for fair values. |
Note 2: |
Showing at their nominal amounts. |
Note 3: |
The ending balance includes share of the profit or loss of investments accounted for using equity method and adjustment of share subscription not based on original ownership. |
Note 4: |
The amount was eliminated upon consolidation. |
- 93 -
TABLE 4
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
TOTAL
PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
YEAR ENDED DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name |
|
Related Party |
|
Nature of Relationship |
|
Transaction Details |
|
Abnormal Transaction |
|
|
Notes/Accounts Payable or Receivable |
|
|
|
|
Purchase/Sales (Note 1) |
|
Amount (Notes 2 and 5) |
|
|
% to Total |
|
|
Payment Terms |
|
Units Price |
|
|
Payment Terms |
|
|
Ending Balance (Notes 3 and 5) |
|
|
% to Total |
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
Subsidiary |
|
Sales |
|
$ |
869,657 |
|
|
|
|
|
|
30 days |
|
$ |
|
|
|
|
|
|
|
$ |
125,237 |
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
10,104,577 |
|
|
|
8 |
|
|
30-90 days |
|
|
|
|
|
|
|
|
|
|
(1,107,421 |
) |
|
|
(7 |
) |
|
|
Chunghwa System Integration Co., Ltd. |
|
Subsidiary |
|
Purchase |
|
|
646,821 |
|
|
|
1 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(563,901 |
) |
|
|
(3 |
) |
|
|
CHIEF Telecom Inc. |
|
Subsidiary |
|
Sales |
|
|
282,065 |
|
|
|
|
|
|
60 days |
|
|
|
|
|
|
|
|
|
|
38,438 |
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
327,708 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(42,862 |
) |
|
|
|
|
|
|
Donghwa Telecom Co., Ltd. |
|
Subsidiary |
|
Sales |
|
|
160,069 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
64,672 |
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
293,984 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(74,290 |
) |
|
|
|
|
|
|
Chunghwa Telecom Global, Inc. |
|
Subsidiary |
|
Purchase |
|
|
366,459 |
|
|
|
|
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
(116,744 |
) |
|
|
(1 |
) |
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Subsidiary |
|
Sales |
|
|
151,639 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
143,960 |
|
|
|
1 |
|
|
|
|
|
|
|
Purchase |
|
|
119,766 |
|
|
|
|
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
(207,991 |
) |
|
|
(1 |
) |
|
|
Honghwa International Co., Ltd. |
|
Subsidiary |
|
Purchase |
|
|
3,484,888 |
|
|
|
3 |
|
|
30-60 days |
|
|
|
|
|
|
|
|
|
|
(744,708 |
) |
|
|
(5 |
) |
|
|
ST-2 Satellite Ventures Pte. Ltd. |
|
Associate |
|
Purchase |
|
|
404,120 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(49,364 |
) |
|
|
|
|
|
|
Taiwan International Standard Electronics Co., Ltd. |
|
Associate |
|
Purchase |
|
|
560,732 |
|
|
|
|
|
|
30-90 days |
|
|
|
|
|
|
|
|
|
|
(341,508 |
) |
|
|
(2 |
) |
|
|
So-net Entertainment Taiwan Limited |
|
Associate |
|
Sales |
|
|
211,854 |
|
|
|
|
|
|
60 days |
|
|
|
|
|
|
|
|
|
|
91 |
|
|
|
|
|
|
|
International Integrated System, Inc. |
|
Associate |
|
Purchase |
|
|
127,458 |
|
|
|
|
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(64,121 |
) |
|
|
|
|
Senao International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
10,115,519 |
|
|
|
28 |
|
|
30-90 days |
|
|
|
|
|
|
|
|
|
|
1,127,672 |
|
|
|
57 |
|
|
|
|
|
|
|
Purchase |
|
|
550,665 |
|
|
|
2 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(108,095 |
) |
|
|
(4 |
) |
|
|
HopeTech Technologies Limited |
|
Associate |
|
Purchase |
|
|
246,635 |
|
|
|
1 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(26,542 |
) |
|
|
(1 |
) |
Chunghwa System Integration Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
1,488,372 |
|
|
|
73 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
563,901 |
|
|
|
64 |
|
CHIEF Telecom Inc. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
327,708 |
|
|
|
19 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
42,862 |
|
|
|
29 |
|
|
|
|
|
|
|
Purchase |
|
|
282,065 |
|
|
|
23 |
|
|
60 days |
|
|
|
|
|
|
|
|
|
|
(38,438 |
) |
|
|
(32 |
) |
Donghwa Telecom Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
293,984 |
|
|
|
35 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
74,290 |
|
|
|
49 |
|
|
|
|
|
|
|
Purchase |
|
|
160,069 |
|
|
|
19 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(64,672 |
) |
|
|
(53 |
) |
Chunghwa Telecom Global, Inc. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
366,459 |
|
|
|
59 |
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
116,744 |
|
|
|
94 |
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
119,766 |
|
|
|
12 |
|
|
90 days |
|
|
|
|
|
|
|
|
|
|
207,991 |
|
|
|
42 |
|
|
|
|
|
|
|
Purchase |
|
|
151,639 |
|
|
|
16 |
|
|
30 days |
|
|
|
|
|
|
|
|
|
|
(143,960 |
) |
|
|
(43 |
) |
Honghwa International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
Sales |
|
|
3,484,888 |
|
|
|
100 |
|
|
30-60 days |
|
|
|
|
|
|
|
|
|
|
744,708 |
|
|
|
100 |
|
Note 1: |
Purchase included acquisition of services costs. |
Note 2: |
The differences were because Chunghwa Telecom Co., Ltd. and subsidiaries classified the amount as inventories, property, plant and equipment, intangible assets, and operating expenses. |
Note 3: |
Notes and accounts receivable did not include the amount as amounts collected for others and other receivables. |
Note 4: |
Transaction terms with the related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly
different from those with third parties. |
Note 5: |
All intra-company transactions, balances, income and expenses are eliminated in full upon consolidation. |
- 94 -
TABLE 5
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan
Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name |
|
Related Party |
|
Nature of Relationship |
|
Ending Balance |
|
|
Turnover Rate (Note 1) |
|
|
Overdue |
|
|
Amounts Received in Subsequent Period |
|
|
Allowance for Bad Debts |
|
|
|
|
|
|
Amounts |
|
|
Action Taken |
|
|
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
Subsidiary |
|
$ |
513,703 (Note 2) |
|
|
|
13.50 |
|
|
$ |
|
|
|
|
|
|
|
$ |
513,052 |
|
|
$ |
|
|
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Subsidiary |
|
|
143,960 (Note 2) |
|
|
|
3.68 |
|
|
|
|
|
|
|
|
|
|
|
82,062 |
|
|
|
|
|
Senao International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
1,590,564 (Note 2) |
|
|
|
8.03 |
|
|
|
|
|
|
|
|
|
|
|
1,220,391 |
|
|
|
|
|
Chunghwa System Integration Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
563,901 (Note 2) |
|
|
|
4.67 |
|
|
|
|
|
|
|
|
|
|
|
418,184 |
|
|
|
|
|
Chunghwa International Yellow Pages Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
108,321 (Note 2) |
|
|
|
5.42 |
|
|
|
|
|
|
|
|
|
|
|
88,532 |
|
|
|
|
|
Chunghwa Telecom Global, Inc. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
116,744 (Note 2) |
|
|
|
5.47 |
|
|
|
|
|
|
|
|
|
|
|
73,679 |
|
|
|
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
207,991 (Note 2) |
|
|
|
3.40 |
|
|
|
|
|
|
|
|
|
|
|
116,541 |
|
|
|
|
|
Honghwa International Co., Ltd. |
|
Chunghwa Telecom Co., Ltd. |
|
Parent company |
|
|
744,708 (Note 2) |
|
|
|
6.50 |
|
|
|
|
|
|
|
|
|
|
|
504,209 |
|
|
|
|
|
Note 1: |
Payments and receipts collected in trust for others are excluded from the accounts receivable for calculating the turnover rate. |
Note 2: |
The amount was eliminated upon consolidation. |
- 95 -
TABLE 6
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
NAMES,
LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)
YEAR
ENDED DECEMBER 31, 2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Company |
|
Investee Company |
|
Location |
|
Main Businesses
and Products |
|
Original Investment Amount |
|
|
Balance as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
Recognized Gain (Loss) (Notes 1 and 2) |
|
|
Note |
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
Shares (Thousands) |
|
|
Percentage of Ownership (%) |
|
|
Carrying Value |
|
|
|
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
Taiwan |
|
Selling and maintaining mobile phones and its peripheral products |
|
$ |
1,065,813 |
|
|
$ |
1,065,813 |
|
|
|
71,773 |
|
|
|
29 |
|
|
$ |
1,667,980 |
|
|
$ |
813,094 |
|
|
$ |
225,663 |
|
|
Subsidiary (Note 6) |
|
|
Light Era Development Co., Ltd. |
|
Taiwan |
|
Housing, office building development, rent and sale services |
|
|
3,000,000 |
|
|
|
3,000,000 |
|
|
|
300,000 |
|
|
|
100 |
|
|
|
3,849,489 |
|
|
|
5,605 |
|
|
|
5,676 |
|
|
Subsidiary (Note 6) |
|
|
Donghwa Telecom Co., Ltd. |
|
Hong Kong |
|
International telecommunications IP fictitious internet and internet transfer services |
|
|
1,567,453 |
|
|
|
1,567,453 |
|
|
|
402,590 |
|
|
|
100 |
|
|
|
1,608,311 |
|
|
|
(21,305 |
) |
|
|
(21,305 |
) |
|
Subsidiary (Note 6) |
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Singapore |
|
International telecommunications IP fictitious internet and internet transfer services |
|
|
574,112 |
|
|
|
574,112 |
|
|
|
26,383 |
|
|
|
100 |
|
|
|
745,854 |
|
|
|
107,302 |
|
|
|
107,302 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa System Integration Co., Ltd. |
|
Taiwan |
|
Providing communication and information aggregative services |
|
|
838,506 |
|
|
|
838,506 |
|
|
|
60,000 |
|
|
|
100 |
|
|
|
677,017 |
|
|
|
(50,717 |
) |
|
|
(6,112 |
) |
|
Subsidiary (Note 6) |
|
|
CHIEF Telecom Inc. |
|
Taiwan |
|
Internet communication and internet data center (IDC) service |
|
|
482,165 |
|
|
|
482,165 |
|
|
|
41,357 |
|
|
|
69 |
|
|
|
742,049 |
|
|
|
258,235 |
|
|
|
180,365 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Investment Co., Ltd. |
|
Taiwan |
|
Investment |
|
|
639,559 |
|
|
|
639,559 |
|
|
|
68,085 |
|
|
|
89 |
|
|
|
764,488 |
|
|
|
178,706 |
|
|
|
159,214 |
|
|
Subsidiary (Note 6) |
|
|
Prime Asia Investments Group Ltd. (B.V.I.) |
|
British Virgin Islands |
|
Investment |
|
|
385,274 |
|
|
|
385,274 |
|
|
|
1 |
|
|
|
100 |
|
|
|
250,952 |
|
|
|
(24,235 |
) |
|
|
(24,234 |
) |
|
Subsidiary (Note 6) |
|
|
Honghwa International Co., Ltd. |
|
Taiwan |
|
Telecommunication constructions, telecommunication service agencies and other services |
|
|
180,000 |
|
|
|
180,000 |
|
|
|
18,000 |
|
|
|
100 |
|
|
|
389,321 |
|
|
|
189,023 |
|
|
|
189,023 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa International Yellow Pages Co., Ltd. |
|
Taiwan |
|
Yellow pages sales and advertisement services |
|
|
150,000 |
|
|
|
150,000 |
|
|
|
15,000 |
|
|
|
100 |
|
|
|
187,239 |
|
|
|
20,748 |
|
|
|
20,746 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Telecom Vietnam Co., Ltd. |
|
Vietnam |
|
Information and communications technology, international circuit, and intelligent energy network service |
|
|
148,275 |
|
|
|
148,275 |
|
|
|
|
|
|
|
100 |
|
|
|
140,627 |
|
|
|
4,702 |
|
|
|
4,702 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Telecom Global, Inc. |
|
United States |
|
International data and internet services and long distance call wholesales to carriers |
|
|
70,429 |
|
|
|
70,429 |
|
|
|
6,000 |
|
|
|
100 |
|
|
|
155,145 |
|
|
|
11,689 |
|
|
|
13,944 |
|
|
Subsidiary (Note 6) |
|
|
Spring House Entertainment Tech. Inc. |
|
Taiwan |
|
Network services, producing digital entertainment contents and broadband visual sound terrace development |
|
|
62,209 |
|
|
|
62,209 |
|
|
|
10,277 |
|
|
|
56 |
|
|
|
95,007 |
|
|
|
(52,503 |
) |
|
|
(29,125 |
) |
|
Subsidiary (Note 6) |
(Continued)
- 96 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Company |
|
Investee Company |
|
Location |
|
Main Businesses
and Products |
|
Original Investment Amount |
|
|
Balance as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
Recognized Gain (Loss) (Notes 1 and 2) |
|
|
Note |
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
Shares (Thousands) |
|
|
Percentage of Ownership (%) |
|
|
Carrying Value |
|
|
|
|
|
|
Smartfun Digital Co., Ltd. |
|
Taiwan |
|
Software retail |
|
|
65,000 |
|
|
|
65,000 |
|
|
|
6,500 |
|
|
|
65 |
|
|
|
64,255 |
|
|
|
5,363 |
|
|
|
3,486 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Telecom Japan Co., Ltd. |
|
Japan |
|
International telecommunications IP fictitious internet and internet transfer services |
|
|
17,291 |
|
|
|
17,291 |
|
|
|
1 |
|
|
|
100 |
|
|
|
38,648 |
|
|
|
6,764 |
|
|
|
6,764 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Sochamp Technology Inc. |
|
Taiwan |
|
License plate recognition system |
|
|
20,400 |
|
|
|
20,400 |
|
|
|
2,040 |
|
|
|
51 |
|
|
|
1,689 |
|
|
|
(8,247 |
) |
|
|
(7,704 |
) |
|
Subsidiary (Note 6) |
|
|
New Prospect Investments Holdings Ltd. (B.V.I.) |
|
British Virgin Islands |
|
Investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary (Notes 3 and 6) |
|
|
International Integrated System, Inc. |
|
Taiwan |
|
IT solution provider, IT application consultation, system integration and package solution |
|
|
283,500 |
|
|
|
283,500 |
|
|
|
22,498 |
|
|
|
33 |
|
|
|
301,861 |
|
|
|
62,778 |
|
|
|
23,990 |
|
|
Associate |
|
|
Viettel-CHT Co., Ltd. |
|
Vietnam |
|
IDC services |
|
|
288,327 |
|
|
|
288,327 |
|
|
|
|
|
|
|
30 |
|
|
|
315,762 |
|
|
|
181,807 |
|
|
|
54,567 |
|
|
Associate |
|
|
Taiwan International Standard Electronics Co., Ltd. |
|
Taiwan |
|
Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment |
|
|
164,000 |
|
|
|
164,000 |
|
|
|
1,760 |
|
|
|
40 |
|
|
|
374,487 |
|
|
|
1,231,717 |
|
|
|
515,435 |
|
|
Associate |
|
|
Skysoft Co., Ltd. |
|
Taiwan |
|
Providing of music on-line, software, electronic information, and advertisement services |
|
|
67,025 |
|
|
|
67,025 |
|
|
|
4,438 |
|
|
|
30 |
|
|
|
137,792 |
|
|
|
60,291 |
|
|
|
19,300 |
|
|
Associate |
|
|
So-net Entertainment Taiwan Limited |
|
Taiwan |
|
Online service and sale of computer hardware |
|
|
120,008 |
|
|
|
120,008 |
|
|
|
9,429 |
|
|
|
30 |
|
|
|
105,844 |
|
|
|
21,062 |
|
|
|
6,318 |
|
|
Associate |
|
|
KingwayTek Technology Co., Ltd. |
|
Taiwan |
|
Publishing books, data processing and software services |
|
|
69,013 |
|
|
|
71,770 |
|
|
|
4,256 |
|
|
|
26 |
|
|
|
119,419 |
|
|
|
5,810 |
|
|
|
1,112 |
|
|
Associate |
|
|
Taiwan International Ports Logistics Corporation |
|
Taiwan |
|
Import and export storage, logistic warehouse, and ocean shipping service |
|
|
80,000 |
|
|
|
80,000 |
|
|
|
8,000 |
|
|
|
27 |
|
|
|
68,927 |
|
|
|
(37,456 |
) |
|
|
(10,054 |
) |
|
Associate |
|
|
Dian Zuan Integrating Marketing Co., Ltd. |
|
Taiwan |
|
Information technology service and general advertisement service |
|
|
97,598 |
|
|
|
97,598 |
|
|
|
5,400 |
|
|
|
18 |
|
|
|
27,327 |
|
|
|
(97,861 |
) |
|
|
(17,615 |
) |
|
Associate |
|
|
Alliance Digital Tech Co., Ltd. |
|
Taiwan |
|
Development of mobile payments and information processing service |
|
$ |
30,000 |
|
|
$ |
30,000 |
|
|
|
3,000 |
|
|
|
13 |
|
|
$ |
15,336 |
|
|
$ |
(47,144 |
) |
|
$ |
(6,284 |
) |
|
Associate |
|
|
Huada Digital Corporation |
|
Taiwan |
|
Providing software service |
|
|
250,000 |
|
|
|
250,000 |
|
|
|
25,000 |
|
|
|
50 |
|
|
|
206,737 |
|
|
|
(21,027 |
) |
|
|
(12,088 |
) |
|
Joint venture |
|
|
Chunghwa Benefit One Co., Ltd. |
|
Taiwan |
|
E-commerce of employee benefits |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
5,000 |
|
|
|
50 |
|
|
|
20,642 |
|
|
|
(34,822 |
) |
|
|
(17,411 |
) |
|
Joint venture |
Senao International Co., Ltd. |
|
Senao Networks, Inc. |
|
Taiwan |
|
Telecommunication facilities manufactures and sales |
|
|
202,758 |
|
|
|
202,758 |
|
|
|
16,579 |
|
|
|
34 |
|
|
|
866,696 |
|
|
|
811,958 |
|
|
|
274,848 |
|
|
Associate |
|
|
Senao International (Samoa) Holding Ltd. |
|
Samoa Islands |
|
International investment |
|
|
2,416,645 |
|
|
|
2,416,645 |
|
|
|
81,175 |
|
|
|
100 |
|
|
|
654,346 |
|
|
|
(279,770 |
) |
|
|
(279,294 |
) |
|
Subsidiary (Note 6) |
|
|
Dian Zuan Integrating Marketing Co., Ltd. |
|
Taiwan |
|
Information technology service and general advertisement service |
|
|
24,000 |
|
|
|
24,000 |
|
|
|
2,400 |
|
|
|
8 |
|
|
|
14,595 |
|
|
|
(97,861 |
) |
|
|
(7,816 |
) |
|
Associate |
|
|
Youth Co., Ltd. |
|
Taiwan |
|
Sale of computer software, hardware and related products |
|
|
335,450 |
|
|
|
|
|
|
|
13,780 |
|
|
|
89 |
|
|
|
318,070 |
|
|
|
(17,823 |
) |
|
|
(15,954 |
) |
|
Subsidiary (Note 6) |
|
|
Aval Technologies Co., Ltd. |
|
Taiwan |
|
Agency and sale of communication products |
|
|
60,000 |
|
|
|
|
|
|
|
6,000 |
|
|
|
100 |
|
|
|
59,204 |
|
|
|
(796 |
) |
|
|
(796 |
) |
|
Subsidiary (Note 6) |
CHIEF Telecom Inc. |
|
Unigate Telecom Inc. |
|
Taiwan |
|
Telecommunication and internet service |
|
|
2,000 |
|
|
|
2,000 |
|
|
|
200 |
|
|
|
100 |
|
|
|
1,301 |
|
|
|
(126 |
) |
|
|
(126 |
) |
|
Subsidiary (Note 6) |
|
|
Chief International Corp. |
|
Samoa Islands |
|
Investment |
|
|
6,068 |
|
|
|
6,068 |
|
|
|
200 |
|
|
|
100 |
|
|
|
33,788 |
|
|
|
6,441 |
|
|
|
6,441 |
|
|
Subsidiary (Note 6) |
Chunghwa System Integrated Co., Ltd. |
|
Concord Technology Co., Ltd. |
|
Brunei |
|
Investment |
|
|
47,321 |
|
|
|
47,321 |
|
|
|
1,500 |
|
|
|
100 |
|
|
|
19,594 |
|
|
|
(131 |
) |
|
|
(131 |
) |
|
Subsidiary (Note 6) |
(Continued)
- 97 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Company |
|
Investee Company |
|
Location |
|
Main Businesses
and Products |
|
Original Investment Amount |
|
|
Balance as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
Recognized Gain (Loss) (Notes 1 and 2) |
|
|
Note |
|
|
|
|
December 31, 2015 |
|
|
December 31, 2014 |
|
|
Shares (Thousands) |
|
|
Percentage of Ownership (%) |
|
|
Carrying Value |
|
|
|
|
Spring House Entertainment Tech. Inc. |
|
Ceylon Innovation Co., Ltd. |
|
Taiwan |
|
International trading, general advertisement and book publishing service |
|
|
10,000 |
|
|
|
10,000 |
|
|
|
|
|
|
|
100 |
|
|
|
10,275 |
|
|
|
232 |
|
|
|
232 |
|
|
Subsidiary (Note 6) |
Chunghwa Telecom Singapore Pte., Ltd. |
|
ST-2 Satellite Ventures Pte., Ltd. |
|
Singapore |
|
Operation of ST-2 telecommunication satellite |
|
|
409,061 |
|
|
|
409,061 |
|
|
|
18,102 |
|
|
|
38 |
|
|
|
494,727 |
|
|
|
231,837 |
|
|
|
88,098 |
|
|
Associate |
Chunghwa Investment Co., Ltd. |
|
Chunghwa Precision Test Tech. Co., Ltd. |
|
Taiwan |
|
Semiconductor testing components and printed circuit board industry production and marketing of electronic products |
|
|
203,443 |
|
|
|
212,226 |
|
|
|
12,791 |
|
|
|
46 |
|
|
|
512,840 |
|
|
|
413,483 |
|
|
|
188,921 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Investment Holding Co., Ltd. |
|
Brunei |
|
Investment |
|
|
46,035 |
|
|
|
46,035 |
|
|
|
1,432 |
|
|
|
100 |
|
|
|
14,694 |
|
|
|
(1,543 |
) |
|
|
(1,543 |
) |
|
Subsidiary (Note 6) |
|
|
Panda Monium Company Ltd. |
|
Cayman |
|
The production of animation |
|
|
|
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associate |
|
|
CHIEF Telecom Inc. |
|
Taiwan |
|
Internet communication and internet data center (IDC) service |
|
|
20,000 |
|
|
|
20,000 |
|
|
|
2,000 |
|
|
|
4 |
|
|
|
35,694 |
|
|
|
258,235 |
|
|
|
9,317 |
|
|
Associate (Note 6) |
|
|
Senao International Co., Ltd. |
|
Taiwan |
|
Selling and maintaining mobile phones and its peripheral products |
|
|
49,731 |
|
|
|
49,731 |
|
|
|
1,001 |
|
|
|
|
|
|
|
44,180 |
|
|
|
813,094 |
|
|
|
1,443 |
|
|
Associate (Note 6) |
Chunghwa Precision Test Tech. Co., Ltd. |
|
Chunghwa Precision Test Tech. USA Corporation |
|
United States |
|
Semiconductor testing components and printed circuit board industry production and marketing of electronic products |
|
|
12,636 |
|
|
|
12,636 |
|
|
|
400 |
|
|
|
100 |
|
|
|
15,667 |
|
|
|
1,028 |
|
|
|
1,028 |
|
|
Subsidiary (Note 6) |
|
|
CHPT Japan Co., Ltd. |
|
Japan |
|
Sale and maintenance of electronic parts and machinery processed products, and design of printed circuit board |
|
|
2,008 |
|
|
|
2,008 |
|
|
|
1 |
|
|
|
100 |
|
|
|
1,831 |
|
|
|
87 |
|
|
|
87 |
|
|
Subsidiary (Note 6) |
|
|
Chunghwa Precision Test Tech. International, Ltd. |
|
Samoa Islands |
|
Electronic materials wholesale and retail and investments |
|
|
2,970 |
|
|
|
2,970 |
|
|
|
100 |
|
|
|
100 |
|
|
|
2,420 |
|
|
|
323 |
|
|
|
323 |
|
|
Subsidiary (Note 6) |
Prime Asia Investments Group, |
|
Chunghwa Hsingta Co., Ltd. |
|
Hong Kong |
|
Investment |
|
|
375,274 |
|
|
|
375,274 |
|
|
|
1 |
|
|
|
100 |
|
|
|
250,951 |
|
|
|
(15,262 |
) |
|
|
(15,262 |
) |
|
Subsidiary (Note 6) |
Ltd. (B.V.I.) |
|
MeWorks Limited (HK) |
|
Hong Kong |
|
Investment |
|
|
10,000 |
|
|
|
10,000 |
|
|
|
|
|
|
|
20 |
|
|
|
|
|
|
|
(3,792 |
) |
|
|
(758 |
) |
|
Associate |
Senao International (Samoa) |
|
Senao International HK Limited |
|
Hong Kong |
|
International investment |
|
|
2,393,646 |
|
|
|
2,393,646 |
|
|
|
80,440 |
|
|
|
100 |
|
|
|
616,726 |
|
|
|
(282,531 |
) |
|
|
(282,531 |
) |
|
Subsidiary (Note 6) |
Holding Ltd. |
|
HopeTech Technologies Limited |
|
Hong Kong |
|
Information technology and telecommunication products sales |
|
|
21,177 |
|
|
|
21,177 |
|
|
|
5,240 |
|
|
|
45 |
|
|
|
37,189 |
|
|
|
6,197 |
|
|
|
2,789 |
|
|
Associate |
Chunghwa Investment Holding Co., Ltd. |
|
CHI One Investment Co., Limited |
|
Hong Kong |
|
Investment |
|
|
|
|
|
|
26,035 |
|
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
(1,330 |
) |
|
|
(1,330 |
) |
|
Subsidiary (Notes 5 and 6) |
Youth Co., Ltd. |
|
ISPOT Co., Ltd. |
|
Taiwan |
|
Sale of computer and related products |
|
$ |
23,021 |
|
|
$ |
|
|
|
|
|
|
|
|
100 |
|
|
$ |
4,391 |
|
|
$ |
(5,262 |
) |
|
$ |
(5,418 |
) |
|
Subsidiary (Note 6) |
|
|
Youyi Co., Ltd. |
|
Taiwan |
|
Maintenance of computer and related products |
|
|
6,920 |
|
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
2,201 |
|
|
|
(560 |
) |
|
|
(628 |
) |
|
Subsidiary (Note 6) |
Chunghwa International Yellow Pages Co., Ltd. |
|
Click Force Marketing Company |
|
Taiwan |
|
Advertising services |
|
|
44,607 |
|
|
|
39,000 |
|
|
|
1,078 |
|
|
|
49 |
|
|
|
38,914 |
|
|
|
(3,977 |
) |
|
|
(4,993 |
) |
|
Associate |
Note 1: |
The equity in net income (loss) of investees was based on audited financial statements. |
Note 2: |
The equity in net income (loss) of investees includes amortization of differences between the investment cost and net value and elimination of unrealized transactions. |
Note 3: |
New Prospect Investments Holdings Ltd. (B.V.I.) was incorporated in March 2006, but have not yet begun operation as of December 31, 2015. |
Note 4: |
Investment in mainland China is included in Table 7. |
Note 5: |
CHI One Investment Co., Limited was liquidated in August 2015. Chunghwa Investment Holding Co., Ltd. received part of the proceeds from disposal. |
Note 6: |
The amount was eliminated upon consolidation. |
(Concluded)
- 98 -
TABLE 7
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
INVESTMENT IN MAINLAND CHINA
YEAR ENDED DECEMBER 31,
2015
(Amounts in Thousands of New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investee |
|
Main Businesses and Products |
|
Total Amount of Paid-in Capital |
|
|
Investment Type (Note 1) |
|
|
Accumulated Outflow of Investment from Taiwan as of January 1, 2015 |
|
|
Investment Flows |
|
|
Accumulated Outflow of Investment from Taiwan as of December 31, 2015 |
|
|
Net Income (Loss) of the Investee |
|
|
% Ownership of Direct or Indirect Investment |
|
|
Investment Gain (Loss) (Note 2) |
|
|
Carrying Value as of December 31, 2015 |
|
|
Accumulated Inward Remittance of Earnings as of December 31, 2015 |
|
|
Note |
|
|
|
|
|
|
Outflow |
|
|
Inflow |
|
|
|
|
|
|
|
|
Glory Network System Service (Shanghai) Co., Ltd. |
|
Providing advanced business solutions to telecommunications |
|
$ |
47,321 |
|
|
|
2 |
|
|
$ |
47,321 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
47,321 |
|
|
$ |
(131 |
) |
|
|
100 |
|
|
$ |
(131 |
) |
|
$ |
19,594 |
|
|
$ |
|
|
|
|
Note 9 |
|
Xiamen Sertec Business Technology Co., Ltd. |
|
Customer services and platform rental activities |
|
|
51,552 |
|
|
|
2 |
|
|
|
25,414 |
|
|
|
|
|
|
|
(3,191 |
) |
|
|
|
|
|
|
(2,779 |
) |
|
|
49 |
|
|
|
(2,011 |
) |
|
|
|
|
|
|
|
|
|
|
Note 4 |
|
Senao Trading (Fujian) Co., Ltd. |
|
Information technology services and sale of communication products |
|
|
1,073,170 |
|
|
|
2 |
|
|
|
1,073,170 |
|
|
|
|
|
|
|
|
|
|
|
1,073,170 |
|
|
|
(188,745 |
) |
|
|
100 |
|
|
|
(188,745 |
) |
|
|
213,467 |
|
|
|
|
|
|
|
Note 9 |
|
Senao International Trading (Shanghai) Co., Ltd. |
|
Information technology services and sale of communication products |
|
|
955,838 |
|
|
|
2 |
|
|
|
955,838 |
|
|
|
|
|
|
|
|
|
|
|
955,838 |
|
|
|
(97,874 |
) |
|
|
100 |
|
|
|
(97,874 |
) |
|
|
227,890 |
|
|
|
|
|
|
|
Note 9 |
|
Senao International Trading (Shanghai) Co., Ltd. (Note 8) |
|
Information technology services and maintenance of communication products |
|
|
87,540 |
|
|
|
2 |
|
|
|
87,540 |
|
|
|
|
|
|
|
|
|
|
|
87,540 |
|
|
|
1,653 |
|
|
|
100 |
|
|
|
1,653 |
|
|
|
77,825 |
|
|
|
|
|
|
|
Note 9 |
|
Senao International Trading (Jiangsu) Co., Ltd. |
|
Information technology services and sale of communication products |
|
|
263,736 |
|
|
|
2 |
|
|
|
263,736 |
|
|
|
|
|
|
|
|
|
|
|
263,736 |
|
|
|
2,581 |
|
|
|
100 |
|
|
|
2,581 |
|
|
|
94,143 |
|
|
|
|
|
|
|
Note 9 |
|
Chunghwa Telecom (China) Co., Ltd. |
|
Energy conserving and providing installation, design and maintenance services |
|
|
177,176 |
|
|
|
2 |
|
|
|
177,176 |
|
|
|
|
|
|
|
|
|
|
|
177,176 |
|
|
|
(12,965 |
) |
|
|
100 |
|
|
|
(12,965 |
) |
|
|
67,815 |
|
|
|
|
|
|
|
Note 9 |
|
Jiangsu Zhenghua Information Technology Company, LLC |
|
Intelligent energy serving and intelligent building services |
|
|
189,410 |
|
|
|
2 |
|
|
|
142,057 |
|
|
|
|
|
|
|
|
|
|
|
142,057 |
|
|
|
607 |
|
|
|
75 |
|
|
|
456 |
|
|
|
134,929 |
|
|
|
|
|
|
|
Note 9 |
|
Hua-Xiong Information Technology Co., Ltd. |
|
Intelligent system and energy saving system services in buildings |
|
|
56,386 |
|
|
|
2 |
|
|
|
28,855 |
|
|
|
|
|
|
|
|
|
|
|
28,855 |
|
|
|
(5,402 |
) |
|
|
51 |
|
|
|
(2,754 |
) |
|
|
21,346 |
|
|
|
|
|
|
|
Note 9 |
|
Shanghai Taihua Electronic Technology Limited |
|
Design of printed circuit board and related consultation service |
|
|
2,970 |
|
|
|
2 |
|
|
|
2,970 |
|
|
|
|
|
|
|
|
|
|
|
2,970 |
|
|
|
323 |
|
|
|
100 |
|
|
|
323 |
|
|
|
2,420 |
|
|
|
|
|
|
|
Note 9 |
|
Shanghai Chief Telecom Co., Ltd. |
|
Internet technology and software technology consulting, and wholesale telecommunication products and related services |
|
$ |
10,150 |
|
|
|
1 |
|
|
$ |
|
|
|
$ |
4,973 |
|
|
$ |
|
|
|
$ |
4,973 |
|
|
$ |
(2,059 |
) |
|
|
49 |
|
|
$ |
(1,009 |
) |
|
$ |
3,890 |
|
|
$ |
|
|
|
|
Note 9 |
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
Investee |
|
Accumulated Investment in Mainland China as of December 31, 2015 |
|
|
Investment Amounts Authorized by Investment Commission, MOEA |
|
|
Upper Limit on Investment Stipulated by Investment Commission, MOEA |
|
Glory Network System Service (Shanghai) Co., Ltd. (Note 3) |
|
$ |
47,321 |
|
|
$ |
47,321 |
|
|
$ |
364,906 |
|
Xiamen Sertec Business Technology Co., Ltd. (Note 4) |
|
|
|
|
|
|
|
|
|
|
|
|
SENAO and its subsidiaries (Note 7) |
|
|
2,380,284 |
|
|
|
2,380,284 |
|
|
|
|
|
Chunghwa Telecom (China) Co., Ltd. (Note 7) |
|
|
177,176 |
|
|
|
177,176 |
|
|
|
|
|
Jiangsu Zhenghua Information Technology Company, LLC (Note 7) |
|
|
142,057 |
|
|
|
142,057 |
|
|
|
|
|
Hua-Xiong Information Technology Co., Ltd. (Note 7) |
|
|
28,855 |
|
|
|
44,653 |
|
|
|
|
|
Shanghai Taihua Electronic Technology Limited (Note 5) |
|
|
2,970 |
|
|
|
2,970 |
|
|
|
932,568 |
|
Shanghai Chief Telecom Co., Ltd. (Note 6) |
|
|
4,973 |
|
|
|
4,973 |
|
|
|
592,408 |
|
Note 1: |
Investments are divided into three categories as follows: |
|
b. |
Investments through a holding company registered in a third region. |
Note 2: |
Recognition of investment gains (losses) was calculated based on the investees audited financial statements. |
Note 3: |
The amount was calculated based on the net assets value of Chunghwa System Integration Co., Ltd. |
Note 4: |
Xiamen Sertec Business Technology Co., Ltd. was liquidated in June 2015. Chunghwa Investment Holding Co., Ltd. received partial proceeds from the liquidation in July 2015. |
Note 5: |
Shanghai Taihua Electronic Technology Limited was calculated based on the consolidated net assets value of Chunghwa Investment Co., Ltd. |
Note 6: |
Shanghai Chief Telecom Co., Ltd. was calculated based on the consolidated net assets value of CHIEF Telecom Inc. |
Note 7: |
Based on Principle of investment or Technical Cooperation in Mainland China, Chunghwa and SENAO are not subjective to the limited amount due to the operating headquarters documents issued by Industrial
Development Bureau. |
Note 8: |
The English name is the same as the above entity; however the Chinese name included in the respective Articles of Incorporations is different from the above entity. |
Note 9: |
The amount was eliminated upon consolidation. |
- 100 -
TABLE 8
CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS
YEAR ENDED DECEMBER 31, 2015
(Amounts in Thousands of
New Taiwan Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
No. (Note 1) |
|
Company Name |
|
Related Party |
|
Nature of Relationship (Note 2) |
|
Transaction Details |
|
|
|
|
|
|
Financial Statement Account |
|
Amount (Note 5) |
|
|
Payment Terms (Note 3) |
|
|
% to Total Sales or Assets (Note 4) |
|
2015 |
|
0 |
|
Chunghwa Telecom Co., Ltd. |
|
Senao International Co., Ltd. |
|
a |
|
Accounts receivable |
|
$ |
125,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued custodial receipts |
|
|
388,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
1,107,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts collected for others |
|
|
483,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
869,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
10,104,577 |
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
CHIEF Telecom Inc. |
|
a |
|
Accounts receivable |
|
|
38,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
42,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
282,065 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
327,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chunghwa International Yellow Pages Co., Ltd. |
|
a |
|
Accounts payable |
|
|
38,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts collected for others |
|
|
70,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
28,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
84,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chunghwa System Integration Co., Ltd. |
|
a |
|
Accounts receivable |
|
|
20,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
563,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
16,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
646,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance payment |
|
|
115,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
519,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
142,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
11,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spare parts |
|
|
78,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chunghwa Telecom Global Inc. |
|
a |
|
Accounts payable |
|
|
116,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
54,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
366,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donghwa Telecom Co., Ltd. |
|
a |
|
Property, plant and equipment |
|
|
36,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
64,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
74,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
160,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
293,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spring House Entertainment Tech. Inc. |
|
a |
|
Revenues |
|
|
13,754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
25,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chunghwa Telecom Japan Co., Ltd. |
|
a |
|
Revenues |
|
|
35,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
67,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light Era Development Co., Ltd. |
|
a |
|
Operating costs and expenses |
|
|
30,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work in process |
|
|
40,429 |
|
|
|
|
|
|
|
|
|
(Continued)
- 101 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
No. (Note 1) |
|
|
Company Name |
|
Related Party |
|
Nature of Relationship (Note 2) |
|
Transaction Details |
|
|
|
|
|
|
Financial Statement Account |
|
Amount (Note 5) |
|
|
Payment Terms (Note 3) |
|
|
% to Total Sales or Assets (Note 4) |
|
|
|
|
|
|
|
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
a |
|
Accounts receivable |
|
$ |
143,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
207,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
151,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
119,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chunghwa Sochamp Technology Inc. |
|
a |
|
Accounts payable |
|
|
25,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work in process |
|
|
36,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Honghwa International Co., Ltd. |
|
a |
|
Accounts payable |
|
|
744,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
37,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
3,484,888 |
|
|
|
|
|
|
|
2 |
|
|
|
|
1 |
|
|
Light Era Development Co., Ltd. |
|
CHIEF Telecom Inc. |
|
c |
|
Revenues |
|
|
93,020 |
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
Chunghwa System Integration Co., Ltd. |
|
Honghwa International Co., Ltd. |
|
c |
|
Revenues |
|
|
11,663 |
|
|
|
|
|
|
|
|
|
|
|
|
3 |
|
|
Donghwa Telecom Co., Ltd. |
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
c |
|
Advance payment |
|
|
17,931 |
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
Chunghwa Telecom Singapore Pte., Ltd. |
|
Donghwa Telecom Co., Ltd. |
|
c |
|
Advance payment |
|
|
24,735 |
|
|
|
|
|
|
|
|
|
Note 1: |
Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as follows: |
|
b. |
Subsidiaries are numbered from 1. |
Note 2: |
Related party transactions are divided into three categories as follows: |
|
a. |
The Company to subsidiaries. |
|
b. |
Subsidiaries to the Company. |
|
c. |
Subsidiaries to subsidiaries. |
Note 3: |
Transaction terms with the related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly
different from those with third parties. |
Note 4: |
For assets and liabilities, amount is shown as a percentage to consolidated total assets as of December 31, 2015, while revenues, costs and expenses are shown as a percentage to consolidated total operating
revenues for the year ended December 31, 2015. |
Note 5: |
The amount was eliminated upon consolidation. |
(Concluded)
- 102 -
Chunghwa Telecom (NYSE:CHT)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Chunghwa Telecom (NYSE:CHT)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024