Tatung 2013 Annual Report
Stock Code 2371
Published on April 30, 2014
Website for reference: http://mops.twse.com.tw/index.htm
SPOKESPERSON
Mr. Lung-chieh Wang
Department chief
(02)25925252 ext. 2259
tatungstock@tatung.com
DEPUTY SPOKESPERSON
Mr. Wen-chieh Peng
Director-General of finance department
(02)25925252 ext. 3246
tatungstock@tatung.com
SHARE REGISTRAR
Securities Management Section of Tatung
Company
No. 22, Sec. 3, Chungshan N. Road, Taipei
(02)25925252 ext. 3258 / 3259
www.tatung.com
INDEPENDENT AUDITOR
Su-Wen, Lin
Lan-ching Chang
Ernst & Young Taiwan
9F, No. 333, Sec. 1, KeelungRoad, Taipei
(02)27578888
www.ey.com/tw/zh_tw
OVERSEAS SECURITIES EXCHANGE
Luxembourg stock exchange
Disclosed information can be found at
BLOOMBERG.
WEBSITE FOR REFERENCE
Market Observation Post System
http://mops.twse.com.tw/index.htm
CORPORATE WEBSITE
www.tatung.com
MANUFACTURING PLANTS
HEADQUARTERS
No. 22, Sec. 3, Chungshan N. Road, Taipei
T e l : (02) 25925252 (100 lines)
Fax: (02) 25915185 / 25921813
www.tatung.com
■ POWER BUSINESS GROUP
• Power Equipment Business Unit
* Industrial Appliance Plant
No. 102, Min Sheng Road, Neihai Village, Tayuan,
Taoyuan County
Te l : (03) 3863123 / Fax: (03) 3867707
* Wire & Cable Plant
No. 106, Min Sheng Road, Neihai Village, Tayuan,
Taoyuan County
Te l : (03) 3863111 / Fax: (03) 3863116
• Motor Business Unit
No. 352, His Tung Road, Sanhsia, New Taipei City
T e l : (02) 86766888 / Fax: (02) 86762264
■ SYSTEM BUSINESS GROUP
• Smart Grid Business Unit
No. 22, Sec. 3, Chungshan N. Road, Taipei
Tel: (02)25925252 / Fax: (02) 25970877
* Watt Hour Meter Center
No. 102, Min Sheng Road, Neihai Village, Tayuan,
Taoyuan County
Tel: (03) 3863123 / Fax: (03) 3863123 ext.1860
* Crystal Growing Center
No. 352, His Tung Road, Sanhsia, New Taipei City
Tel: (02) 86766801 / Fax: (02) 86768806
• System Solutions Business Unit
No. 22, Sec. 3, Chungshan N. Road, Taipei
Tel: (02) 25984299 / Fax: (02) 25984238
■ CONSUMER BUSINESS GROUP
• Advanced Electronics Business Unit
No. 22, Sec. 3, Chungshan N. Road, Taipei
Tel: (02) 25925252
• Appliance Business Unit
No. 38, Lane 1119, Takuan Road, Tayuan, Taoyuan
County
Tel: (03) 3861111 / Fax: (03) 3866866
• Notice to readers
This document is an English translation
of a report originally written in
Chinese.
If there is any difference between the
two versions, the Chinese one shall
prevail.
■ EXPORT DEPARTMENT
No.22, Sec.3, Chungshan N. Road, Taipei
Tel: (02) 25925252
• Export Department of Industrial Appliance Plant
Fax: (03) 3863123 ext.1380
• Export Department of Wire & Cable Plant
Fax: (02) 25850262
• Export Department of Motor
Fax: (02) 25984427
• Export Department of Appliance
Published on April 30, 2014
Fax: (02) 25924569
CONTENTS
01
02
04
Letter to Shareholders
Bussiness Report of 2013
Corporate Chronicle
04 Corporate Value
04 Company Milestones
07 Global Network
09
Corporate Governance
09
11
20
33
34
35
36
36
37
Financial Information
37
37
38
38
39
40
40
41
42
45
45
45
46
Source of capital
Shareholder structure
Distribution profile of shareholder ownership
Major shareholders
Major institutional shareholders
Market price, net worth, earnings and dividends per common share
Dividend policy and implementation status
Employee bonuses and remuneration to directors
Issuance of corporate bonds
Issuance of global depository receipt
Status of employee stock option plan (ESOP)
Financial plans and implementation
Operation Overview
47
55
61
65
66
66
67
69
72
Organization Chart
Profile of board of directors, supervisors, and management
Status of corporate governance
Information on independent auditors
Information on change of independent auditors
Change of shareholding by directors, management, and major shareholders
Information on the top 10 shareholders who are related parties to each other
Long-term investments ownership
Power business group
System business group
Consumer business group
Operation summary
Workforce structure
Expenditure on environmental protection
Labor relations
Important contracts
Financial Overview
72
79
83
85
231
Condensed balance sheet and income statement
Financial analysis
Audit Committee's review report
Consolidated statements
Parent company only statements
298 Analysis on Financia Status and Financial Performance and Risk
as Sessment
298
298
299
299
299
Financial status
Financial performance
Cash flow
Investment policies and plans
Risk assessment and analysis
302 Special Disclosures
302 Information on Investees
316 Holdings and sale of shares by subsidiaries
Letter to Shareholders
Dear shareholders,
2013 was a challenging year for Tatung’s continuous transformation as world economy was
still volatile. Nevertheless, we still mobilized our management team in strategy formation,
organization restructuring, business focus, and effectively integrate resources; meanwhile, we
build up the future growth foundation and continue to improve management performance as well
as corporate governance for shareholders.
I. 2013 Business Results
2013 Tatung standalone revenue was NT$24.1 billion, operating loss was NT$0.26 billion, together with non-operating loss from
investments, the net loss after tax was NT$1.6 billion which was NT$0.7 loss per share. Compared to 2012, we incurred revenue
was NT$ 32.2 billion with net losses after tax of NT$ 4.0 billion which was significant improvements. As for Tatung 2013 consolidated
revenue was NT$112.9 billion, the net loss after tax was NT$ 5.3 billion. Compared to 2012, consolidated revenue was NT$106.1 billion
with net loss after tax of NT$ 15.2 billion, it was also significant improvement.
II. Direction and Strategy for 2014 and beyond
The Company’s strategies for the future development are as below:
1. Transforming into Smart Power Management and Energy Saving solution provider
Energy-saving and environmental-friendly have always been the key emphasis of Tatung. Therefore, energysaving and carbon-reduction are not only the major concern of the societies, but also are the focus that Tatung
would like to invest the most into now and the future. With the combination of our innovative technology,
integration of hardware manufacturing and software services, we will provide a full line of home appliance
products with “energy-saving, environmental-friendly and health consciousness” in consumer market; with smart
energy management and power system integration, we expect to serve the government infrastructures and
enterprises with energy saving initiatives and the smart solution to create a more efficient and friendly environment
to customers, furthermore, to enhance the brand value and corporate reputation.
2. Expanding into global market
Re-position our overseas affiliates to strengthen marketing and service capabilities by conducting regional
mergers of manufacturing facilities and reallocation of the resources.
3. Restructuring investment portfolio
A.The Company will continue to reshape the investment portfolio and drive the investment companies
which are in losses to improve operations and turn around in the short term; and to look for strategic
partners for win-win solutions in the longer term. Tatung Group will achieve its management focus and
investment portfolio in the near future.
B.The Company will be cautious in investment into businesses which require huge CAPEX to achieve
economy of scale in the future.
C.The Company will promote Tatung brand into global market. We will devote group focus in Smart Energy
Saving, Power and Smart Energy Management solutions, and medical and health care solutions to pursue
growth of revenues and profits.
D.Increase ROA by speeding up the asset development continuously.
At last but not the least, we are sincerely thankful for the long-term contribution of fellow colleagues, the support
and recognition of clients, suppliers and bankers. The Company will continue to enhance corporate governance;
pursue growth in revenue and earnings to maximize shareholders’ interest. With our deepest sincerity, we would
like to thank you, all shareholders, for the long-term support to Tatung.
Wish you joyful and healthy prosperous.
Sincerely yours,
Chairman
1
TATUNG 2012 Annual Report
Bussiness Report of 2013
Letter to Shareholders
Bussiness Report of 2012
Tatung Business Report
2013 remained challenging to Tatung with volatile world economy as well as weak economic growth in Taiwan. It was regrettable
that the management team did not achieve the turnaround target. The business report is divided into two parts, core businesses and
investments.
I. 2013 Business Review
2013 Tatung standalone revenue was NT$24.1 billion, operating loss was NT$0.26 billion, together with non-operating loss from
investments, the net loss after tax was NT$1.6 billion which was NT$0.7 loss per share. Compared to 2012, we incurred revenue was NT$
32.2 billion with net losses after tax of NT$ 4.0 billion which was significant improvements. As for Tatung 2013 consolidated revenue was
NT$112.9 billion, the net loss after tax was NT$ 5.3 billion. Compared to 2012, consolidated revenue was NT$106.1 billion with net loss
after tax of NT$ 15.2 billion, it was also significant improvement.
1. Although the revenue achievement of Tatung was below target, but the gross margin rate was increased by almost 1% YoY. The
operation losses were mainly due to delayed sales recognition in long-term project business, reserves for delayed accounts
receivables of projects in disputes, and non-recurring product exchange expenses of mechanical meters in one project.
2. The investment losses mostly came from Chunghwa Picture Tubes and Green Energy Technologies, but showed major improvements
from 2012. CPT turned profitable in 2H of 2013 and GET reduced its losses by NT$3 billion from 2012.
Other invested companies, such as Shan-Chih Assets Development achieved their annual targets of revenue and profits based on ROC
but Tatung would not recognize profits until 2014 based on IFRS. ECS’ achievement of its operating profits plus the sale and rent-back
of its headquarter building allowed Tatung to recognize huge investment income for 2013.
◆2014 Strategies for Core Business
• Consumer BG:
Tatung will focus on developing smart appliances integrated with energy-saving, IoT technology to provide better service. Other
than existing channels, the Company will continue to broaden partnership with on-line shopping players with differentiated and
well-designed products to strengthen our brand. We will march into international market starting with China and Southeast Asia
first.
• System BG:
Tatung will strongly focus on promoting system solutions on energy saving, smart grid, mechatronics systems, water treatment
projects and public construction projects.
• Power BG:
Power BG contributes the majority of the Tatung’s revenue and profit. For motors and transformers, we will focus on promoting high
efficiency and energy saving models. For those which the cost structures are not competitive, we will move manufacturing to our
subsidiaries in China and Thailand. Export sales is the major focus for continued growth.
II. Major investments:
Major investments are described as below:
1. Chunghwa Pictures Tubes Co., Ltd (CPT)
CPT turned around in the second half of 2013 by focused on smart phones, tablets, car electronic panels and touch panels. In 2014, CPT
will keep focusing on product mix improvement, equipment upgrade for better margin products, and increase capacity utilization rate to
maintain its profitability in 2014 and beyond. From Q1, 2014 results, CPT is in the right track.
2. Green Energy Technologies (GET)
GET’s performance got improvement since solar industry showed slight upward trend in the second half of 2013. GET remains top 3
solar wafer manufacturers on global basis with outstanding technologies, management and efficiency. In 2014, GET will endeavor
to develop even higher efficiency wafer and expand the market by integrated its subsidiary company, Apollo Solar Energy Co., to
reach turn around in the future.
3. San Chih Assets Development Co., Ltd. (SCAD)
“Tatung Palace mansion” was completed in the end of 2013 and its revenues and profits will be recognized by Tatung in 2014.
The detailed plan of Ban-chiao project was ratified by New Taipei City Government. We will launch the Ban-chiao project after
getting construction approval which is expected to be by end of 2014. Other projects are being planned and will be announced
according to the regulations.
2
Bussiness Report of 2012
III. Enforcement of Corporate Governance
Independent directors have helped to strengthen internal control systems, including revisions of Operation Procedures, reviews
of investment strategies and executions, etc. The Compensation Committee has also established better linkage between
performance KPI and the compensation system for directors and management teams. The management team has strengthened
management in internal control and investment according to the above guidelines.
IV. Refocus to create shareholders’ value
1. Continuously reduce non-core investment portfolio:
In 2013, we sold the shares of Tatung Home Appliance (Wujiang) Co., Ltd. and Shan-Chih Container Terminal Co. Ltd. We
determined to cease operation for Tatung Vietnam by the end of Q1, 2014. Tatung will continue to downsize the investments which
are non-core businesses as well as continuous losers.
2. Vision and Strategy:
Future focus of Tatung will be:
(1) Enhancement of Tatung Brand value
(2) Smart Grid, energy-saving, mechatronics systems and public construction projects
(3) medical and health care solutions or services
(4) Asset development
Looking forward, we will keep on reducing the Company’s and the Group’s liabilities. We will expand global markets and improve
margin rates for all companies in the Group. We will expedite the Company’s and Group’s transformation to enhance shareholders’
value. We sincerely appreciate all shareholders’ continued support.
President
3
TATUNG 2012 Annual Report
Corporate Chronicle
Corporate Chronicle
Corporate Value
Company Milestones
Established in 1918, Tatung Company (formerly known
as Xie Chih Business Enter pr ise) has evolved and
grown over the decades into one of Taiwan’s leading
conglomerates.The foundation of the Company is
built on four fundamental values—Integrity, Honesty,
Industry, and Frugality. Developed by Tatung’s founder
and former chairman, Mr. Shan-chih Lin, they represent
the essence of the Company’s commitments to our
customers, shareholders, and employees.
1918
Mr. T. S. Lin, Chairman Emeritus of Tatung, fur ther
extended the precepts behind these core values to
serve as the guidelines for the Company’s continued
success and prosperity.
1949
∆ Industry - education cooperation
To cultivate young engineering talent and to lend
ef fo r ts to resea rch and development th rough
cooperation between the Company and Tatung
High School as well as Tatung University. Realizing
the importance of education in a society with a
knowledge-based economy, Tatung sponsors the
schools’ major projects while also contributing
i n d u s t r i a l ex p e r i e n ce to t h e te a ch i n g . A s a
responsible corporate citizen, Tatung regards its
dedication to education as a manifestation of longterm commitment to social well being.
∆ Shareholder responsibility
To pursue maximum returns for our shareholders and
to maintain a stable dividend policy.
∆ Employee harmony
To encourage self-motivation and cooperation
amongst employees th rough the organization
of prof it centers to ensu re fai r compensation,
incentives, welfare benefits, as well as to provide
on-the-job training.
∆ Customer satisfaction
To re-invest profits in pursuit of better product quality
so as to create value for our customers.
• Establishment of Xie Chih Business Enterprise, the forerunner of
Tatung Company, by Founder and Chairman, Mr. Shan-chih Lin
Completed over 600 constructions, including the Sindian River
embankment project and the Executive Yuan building
1942
• Mr. T. S. Lin succeeded as chairman of Tatung and also acted as
principal of both Tatung High School and Tatung University
• Establishment of Tatung High School
• Pioneered production of electric fans under the name Tatung
• Mass production of electric fans & motors
(Pioneering in Home Appliance & Motor industries)
1956
• Establishment of Tatung University
1960
• Mass production of Tatung rice cookers, a revolutionary step for
housewives in Taiwan
1962
• The Company became publicly listed on the Taiwan Stock Exchange
1963
• Mass production of transformers & switchgears (Pioneering in
Industrial Appliance industry)
1964
• Mass production of black-and-white TVs
1966
• Establishment of Wire & Cable Plant in Taoyuan County
1968
• The Company renamed from Tatung Steel and Machinery
Company to Tatung Company and officially registered as so
1969
• Company mascot (Tatung Boy) and song were launched
• Mass production of coloured TVs
1970
• Revenues exceeded NT$2.2 billion, making Tatung
Taiwan’s foremost private company
• Establishment of Forward Electronics Company
1972
• Mr. W. S. Lin appointed as president of Tatung
1977
• Participated in the Ten Major Infrastructure Projects with the
construction of a slag treatment facility for China Steel Corp. and
provision of the turnkey solution for the CKS International Airport’s
power control station
1980
• Ranked as Taiwan’s No. 1 exporter of electric and electronics
products
4
Company Chronicle
• Recipient of the “Premier’s Award for Outstanding Export
Performance”
• CRT plant by Chunghwa Picture Tubes ramped up
1990
• Constructed Communication Cable Plant and Power Cable Plant
1994
• Establishing computerized system of household registration &
conscription for the Ministry of the Interior
1998
• Tatung (Shanghai) Co., Ltd. was established to manufacture
motors, generators, transformers, and switchgears
1999
• Tatung Institute of Technology renamed as Tatung University
2001
• Chunghwa Picture Tubes was listed on the Taiwan Stock Exchange
2004
• Set up a new subsidiary Toes Opto-Mechatronics Company
• Green Energy Co. signed a contract with GT Solar Technologies of
the US for the manufacturing of poly silicon wafers to be used in
solar batteries
• Established SeQual Technologies Co. to produce the oxygen
concentrator for clinical therapy and home health care uses
• Established Tatung Compressors (Zhongshan) Co. in China
• First housing project for up-scale market by Shan Chih Asset
Development sold out
2005
• Consolidated Tatung’s Desktop PC Business Unit with Elitegroup
Computer Systems (ECS), making Tatung the largest shareholder of
ECS
• Established Tatung Wire & Cable Technology (Wujiang) Co. in
China
• The second housing project by Shan Chih Asset Development for
urban renewal was approved by Taipei City Government, which
contributed significantly to the urbanization of Datong district
2006
• Mr. T. S. Lin, Chairman Emeritus, passed away on 10 May and aged 88
• Mr. W. S. Lin was elected as chairman and president of Tatung
• Green Energy Technology started trading on the emerging stock
market
• Tatung Consumer Product Co. initiated the “Flagship Plan”
nationwide for big outlets and diversified products that centered
upon its unparalleled professional service
• The Urban Renewal Project by Shan Chih Asset Development was
approved by Taipei City Government for its contribution towards
Datong District, in which a community activity center would be
built for the locals
2007
• The Industrial Appliance Business Unit was rewarded the “Corporate
Sustainability and Excellence Award” by Taoyuan County
Government
• Tatung Vietnam Co. began mass production of big and small
home appliances
• Shan Chih Semiconductor Co. started trading on the emerging
stock market on 15th October
• Forward Electronics invested in Apollo Solar Energy Co. to expand
5
its scope into the market of solar cell modules
• Chunghwa Picture Tubes invested in Giantplus Technology Co. to
extend its business further into panels and modules of small and
medium sizes for a total solution service
2008
• Tatung Company celebrated its 90th anniversary of establishment
in November
• Green Energy Technology was listed on the Taiwan Stock
Exchange on 25th January
• Ranked No.1 in Taiwan by the Environmental Protection
Administration as the most proactive corporation for the promotion
of green consumption
• Shan Chih Semiconductor Co. invested For mosa Epitaxy
Incorporation for an effective collaboration in LED development
• Shan Chih Asset Development Co. introduced its luxury
condominium, “Tatung Tomorrow World”, a masterpiece of green
architecture, to commemorate Tatung’s 90th anniversary
• Established Tatung Electric Technology (Vietnam) Co. for the
manufacturing and sales of wires and cables
2009
• Establishing Fast Maintenance Centre to provide customers onsite quality service for home appliance items by state qualified
technicians
• CPT and Compal Group entered into partnership
• To help the victims of typhoon Morakot, Tatung initiated a Special
Service Project in which 1,000 technicians and 70 service trucks
were mobilized in and around the affected areas to help handle
damaged home appliance items. The employees of Tatung
Group together with the staff of Tatung University and Tatung High
School also donated their one-day earnings totaling to 10 million
Taiwanese dollars to those in need
• Tatung Fine Chemicals started trading on the emerging stock
market in September
• Ultra Energy (Weifang) Technology, an investee of Green Energy
Technology, established a wafer slicing factory in Shandong,
China, to expand wafer capacity
• Green Energy Technology’s thin-film module packaging factory in
Weifang was under construction
• Shan Chih Semiconductor Co. was listed on the Taiwan Stock
Exchange on 23th December
2010
• Tatung electric fan, a classic of its kind nationwide, is enjoying its
60th anniversary
• Tatung Boy, the mascot of Tatung Co., is celebrating its 40th birthday
• New Energy Business Unit set up a crystal growth center to
manufacture multi-crystalline silicon bricks, a milestone for HQ’s
involvement in the crystal growing business
• Groundbreaking for lithium iron phosphate battery materials
factory and green office building by Tatung Fine Chemicals
• Groundbreaking for the factory of ingot growing and wafer slicing
in Southern Taiwan Science Park by Green Energy Technology
• Luxury condominium, “Tatung Noble Residences”, the 2nd
project in Nangang by Shan Chih Asset Development , was under
construction
• Tatung 21.5” LED backlight display was awarded 2011 iF design
award in audio and video category
• Cooperated with China Steel, Tatung NEMA Premium AC Motor
(3HP4P) acquired the world’s first certificate of PAS2050 carbon
footprint verification for motors alike by DNV
2011
• Ms. W.Y. Lin was appointed President of Tatung
TATUNG 2012 Annual Report
Corporate Chronicle
• 999 sets of designer limited edition rice cookers, winner of
IDEA “Gold” for packaging and graphics, were introduced to
commemorate its 50th anniversary. A series of rice cookers in
colours of indigenous Taiwanese fruits, watermelon red (Siluo),
banana yellow (Cishan), and guava green (Yenchao), were also
introduced to celebrate the centenary foundation of the R.O.C.
and as the Company’s attempt to relate the touch of Taiwan’s
local specialities into CE product line
• Crystal growth center (Sanshia) ramped up
• As in the resolutions of the 2010 General Shareholders’ Meeting,
the Company had its capital reduction by 57.86868536%, i.e.
per thousand common shares would have 578.6868536 shares
cancelled and exchanged 421.3131464 new shares. The trading
suspension period of the old common shares started from 24th
March 2011 to 10th April 2011. The date of the listing of the new
shares was on 11th April 2011
• Issued US$150,000,000 of the credit-enhanced overseas convertible
bonds (ECB) with denomination of US$100,000 and 0% coupon
rate. The issuing date was on 25th March 2011 and the maturity
date was on 25th March 2014. The bonds were listed on Singapore
Stock Exchange. The conversion price of the ECB was set at
NT$7.74 (at 20% premium ), and, the conversion price would be
adjusted to NT$18.3711 on share relisting date on 11th April 2011.
The exchange rate from USD to NTD for conversion was set at
29.57. Oversubscription of the ECB reached tenfold.
• Initiated brand innovation plan
• Winner of “Top Green Brand 2011” and “Quality award” in the
category of home appliance by Business Next magazine
• Winner of “Yahoo! Emotive Brand Awards”
• Winner of “Top 100 Taiwan Brand” by the Ministry of Economic
Affairs
• An open bidding was held over the original Beitou Plant to pursue
the greatest value for shareholders
2012
• Renovation completed turning Fu Nan store into Tatung’s first 3C
concept outlet
• “The Tatung Journey”, series of Tatung Boy’s new creation, made
its debut in Taipei Lantern Festival
• Tatung set foot on Mainland China for asset development with the
first project landed in Suqian City of Jiangsu province
• Winner of “Top Green Brand 2012” by Business Next magazine
awarded “Advanced Award” in the category of home appliance
• Tatung InfoComm was sold to Vee
• Winner of Taiwan Excellence Award 2012 (Silver Award) & Good
Design Award 2012 for the rice cooker of 50th anniversary limited
edition. Both the product and its packaging were selected as 2012
Good Design Best 100.
• New Energy BU won Taiwan Power Company’s first bid of Low
Voltage AMI Pilot Project, a revolutionary milestone for the
intelligent management system of electricity usage for households
in Taiwan
• Won the bid of Hualien-Taitung Railway Electrification Project by
the Ministry of Transportation and Communications taking part
in the national momentous infrastructure project for the green
transportation of the East
• High efficient motor was qualified for state subsidies in an energy
saving project in China
• Tatung 3C obtained Gold Award in the category of 3C retail
channel in the contest of the Best Service in Taiwan 2012
• Lithium iron phosphate cathode material by Tatung Fine Chemicals
successfully entered into Japanese market of energy storage
• Winner of the 13th “Golden Quality Award for Public Construction”
in design and construction
• Tatung and Chunghwa Picture Tubes(CPT) were both awarded
Honorable Mention in the 2013 Taiwan Top 50 CSR Awards in the
category of manufacturing industry
• Winner of “Top Green Brand 2013” by Business Next Magazine
awarded ”Advanced Award” in the category of home appliance
• Won the bid for New Taipei City’s Green Campus Project, in which
solar panel system and intelligent energy management system are
to be installed in 16 selected schools in New Taipei City
• To celebrate its 95th anniversary of establishment, the Company
held an open-air charity concert in Pinxi district where Tatung Boy
Flying Lanterns made their debut
• Series of Tatung Boy Robots made their debut in Taipei Lantern
Festival
• Tatung Consumer Products Co.(TCPC), Tatung’s brand channel,
set up an official account on LINE along with the release of Tatung
Boy character stickers and emoticons which, within 24 hours of
online introduction, attracted more than one million active users
and the download volume it created broke the record to become
No.1 in the official account category of LINE
• Tatung-branded AI rice cookers were introduced to the market to
mark the first rice cooker of artificial intelligence by Taiwan own
brand maker
• Chunghwa Picture Tubes(CPT) launched a public tender offer of
Giantplus Technology’s common shares to enhance its competitive
edge in small and medium-size mobile modules expending its
business scale to total solution service
• CPT sold 100% stake of CPT Display Technology (Shenxhen), a
china-based subsidiary, to China Star Optoelectronics International
(CSOT) to activate its assets
2014
• Winner of “Top Green Brand 2014” by Business Next Magazine
awarded ”Advanced Award” in the category of home appliance
• As the only local brand winning Power Brands 2014 award in the
category of home appliances, Tatung was awarded Bronze Medal
Award by the magazine of MANAGER today
• Won the bid for New Taipei City’s Green Market and Campus
Project, in which smart meters and energy saving monitoring
system are installed to the energy management system setting the
project the best example to PV-ESCO rooftop solar system alike in
Northern Taiwan
• Unveiling “Tatung Boy Halley Rider” Lantern in the 2014 Taiwan
Lantern Festival
• Co-organizing “Smart City Summit and Expo” to promote Tatung’s
unique total solution for smart energy saving system
2013
• Awarded Best Corporate Governance, Taiwan, 2013 by World
Finance, a financial magazine by World News Media based in the UK
6
Global Network
China
Tatung Information Technology (Jiangsu) Co., Ltd.
Singapore
Tatung (Shanghai) Co., Ltd.
Tatung Electronics (Singapore) Pte. Ltd.
Tatung Wire and Cable (Wujiang) Co., Ltd.
Tatung Information (Singapore) Pte. Ltd.
Tatung Compressors (Zhongshan) Co., Ltd.
Tatung Electrics (Singapore) Pte. Ltd.
Czech
Tatung Czech s.r.o
Thailand
Tatung (Thailand) Co., Ltd.
Tatung Wire and Cable (Thailand) Co., Ltd.
Vietnam
Tatung Vietnam Co., Ltd.
Tatung Electric Technology
(Vietnam) Co., Ltd.
7
Japan
Tatung Company of Japan, Inc.
TATUNG 2012 Annual Report
Corporate Chronicle
Taiwan Tatung Co.
Power Business Group
System Business Group
Consumer Business Group
Investments
Chunghwa Picture Tubes, Ltd.
Forward Electronics Co., Ltd.
Shan Chih Semiconductor Co., Ltd. (Reinvest GET)
U.S.A
TMX Technologies, Inc.
Shan Chih Asset Development Co., Ltd.
Tatung Co. of America, Inc.
Tatung Consumer Products (Taiwan) Co., Ltd.
Tatung Electric Co., of America, Inc.
Chunghwa Electronics Development Co., Ltd.
TMX Logistics Inc.
Tatung System Technologies Inc.
Mexico
Tatung Fine Chemicals Co., Ltd.
Tatung Mexico S.A. de C.V
Toes Opto-Mechatronics Co., Ltd.
Tatung Medical & Healthcare Technologies Co., Ltd.
Shan Chih Investment Co., Ltd.
Chih Sheng Investment Co., Ltd.
Others
POWER BUSINESS GROUP
Power Equipment BU
SYSTEM BUSINESS GROUP
Smart Grid BU
CONSUMER BUSINESS GROUP
Motor BU
System Solutions BU
Advanced Electronics BU
Appliance BU
INVESTMENTS
8
Corporate Governance
Organization Chart
Tatung Company devotes to business of green energy and energy
saving-related products, systems, and service. Three business groups
(BGs) provide every kind of energy-saving and high efficiency
products and systems (consumer electronics and home appliances,
motors, power facilities and automatic control equipments, as well
as ICT-integrated systems) for smart home, smart community, and
smart grid. Additionally, the BGs also provide complete and in-time
service for all of our products and system solutions.
For smart home business, Consumer BG provides energy-saving
and environmental friendly products and service, from green home
appliances, 3D and internet-connected TV, household roof-top PV
systems, as well as HEMS, the total solution which combined energy
management and health-care.
For smart community business, System BG provides solutions and
service for renewable energy systems which integrated micro-wind
turbine, PV and energy storage, BEMS for community security and
health-care, as well as enterprise AMI systems for communities,
industry parks and factories.
For smart grid business, Power BG and System BG work together to
provide products, system solutions and service for all kinds of smart
meters, communication modules and concentrators, FTU/FRTUs, high
efficiency/energy-saving motors and transformers, switchgears, as
well as AMI communication systems and control centers, advanced
distribution automation systems, as well as smart substations and
generation.
Tatung Company is capable of providing system solutions and
service, with all kinds of core technologies and key products.
And we will cooperate closely with strategic partners to serve the
worldwide market.
9
Shareholders'
Meeting
Board of Directors
Audit
Committee
Chairman
President
TATUNG 2012 Annual Report
Corporate Governance
Administration
General Administration Division, Finance & Accounting Division, Operation Support Division,
Human Resources Division, Environment & Safety Division
POWER BUSINESS GROUP
SYSTEM BUSINESS GROUP
CONSUMER BUSINESS GROUP
Power
Equipment
BU
Industrial Appliance: Researching, developing and manufacturing all kinds of transformers rated 345kV
1000MVA and under, all kinds of reactors rated 345kV 100MVAR and under, 161kV class of gas insulated
switchgears and gas circuit breakers.
Wire & Cable: Responsible for manufacturing and sale of various wires, cables, optical fiber cables, and
busway.
Motor BU
Responsible for designing, manufacturing, and selling of electric motors, immersible pump motors,
PM motors, EV motors, drives, water jacket, generator sets, and power systems.
Smart Grid
BU
Develop and manufacture smart grid related products and systems, such as the revenue meters,
including multi-function electronic meters, prepayment meters and card readers, ANSI/ IEC/ MID/
JEMIC smart meters, and meter interface units (MIU), all of which meet the national metrology
regulations in worldwide. In addition, Smart Grid BU (SGBU) is capable of AMI system integration for
worldwide power utilities. We also get involving in the advanced distribution automation system (ADAS);
the related products, FTU/ FRTU/ LTU, are ready for the market, and the micro grid system integration is
aggressively developed. Furthermore, SGBU incorporates internal resources in Tatung Group to provide
supervisory control and data acquisition (SCADA) system solutions for diverse industrial applications.
Regarding clean energy, we have solar-silicon ingot OEM business in Ingot-Growing Center.
System
Solutions BU
With large-scale system integration capabilities including 161kV GIS (Gas Insulated Switchgear) and gas circuit
breakers; 36kV series of switchgear, power distribution equipment, and other industrial equipment; thermal and
hydro generation systems, transmission and distribution systems, substation systems, water treatment systems, as
well as electro-mechanical systems, and involved projects throughout the government departments, schools and
enterprises, BU primarily focus on ICT (Information Communication Technology) system integration services, energy
saving and generation management, mechatronics integration services and software development, including
Tatung smart energy management system, document management system, attendance management system,
enterprise resource management system and various information management systems, etc. It is worth mentioning
that she has already won the software development certification of the Capability Maturity Model Integration
(CMMI) maturity Level 3. The Public Works division newly established in 2014, provides high-quality total solution
to customers, combined with multidisciplinary professionals which consists of the fields of power, electronics,
mechanics, smart control, information, communication, transportation and project management, coordinates
cross interface and integrated design, implementation, project management with related technical support.
Advanced
Electronics
BU
The Advanced Electronics Business Unit (AEBU) focuses on providing global ODM customers
with design and manufacturing of smart home products. The product lines include 2 main lines:
digital entertainment, and home area networks (HAN). The digital entertainment line includes
electronic gaming and imaging accessories. The home area network (HAN) includes smart energy
management and cloud-service devices. Tatung’s customers can benefit from Tatung’s fast reaction
to accommodate market needs and flexibility in design customization. The on-going research and
development will further enhance the customers’ competitiveness in their products.
Appliance
BU
Tatung launches Smart Home Energy Management System to provide efficient, convenient and
comfortable green life. Tatung Smart HEMS is useful for anyone who wants to reduce home energy
consumption and save money to offer users total management of home energy consumption with
appliance control, energy consumption monitoring, and self-monitoring functions anytime, anywhere,
through any internet-enabled personal device.
For new product development: LCD TV provides a better way of Hybrid Home interface, and multiple
video contents to provide superior entertainment enjoyment. In large home appliances, Tatung majors
in the development of air-conditioners, refrigerators and washing machines which comply with energy
label and water-saving label. Especially the 2014 air-conditioner new model – “Beauty Light” series
adopts R410A refrigerant, 3D airflow function and LED backlight display to enhance overall home
decoration while enjoying the comfortable life.
In small home appliances, Tatung launched a series of DC inverter fan products, which provides
consumers more choices of energy-saving appliances to create high-quality and green life! Tatung
home appliances products have been awarded the TAIWAN Excellence for over 25 years to
demonstrate superior design and innovation capability.
10
Corporate Governance
Profile of board of directors, supervisors, and management
(I) Board of directors and supervisors
11
Title
Name
Date of
Term of
appointment office
(assumption
of post)
Date of initial Shares held upon
appointment appointment
Shares held currently
Chairman
Wei-shan Lin
2011.06.24
3 years
Shares held by
spouse and underage
children currently
Number of Shareholding Number of Shareholding Number of Shareholding
shares
percentage shares
percentage shares
percentage
(%)
(%)
(%)
1972.04.14 10,505,173
0.45 10,505,173
0.45
3,052,173
0.13
Director
Wen-yen K. Lin
2011.06.24
3 years
1996.06.06
1,448,173
0.06
3,052,173
0.13
10,505,173
0.45
Director
Wei-tung Lin
2011.06.24
3 years
1996.06.06
10,097,352
0.43
10,192,401
0.44
373,788
0.01
Director
I-hua Chang
2011.06.24
3 years
1997.07.17
227,615
0.01
227,615
0.01
8,038
-
Director
Lung-ta Lee
2011.06.24
3 years
2011.06.24
367
-
367
-
-
-
TATUNG 2012 Annual Report
Corporate Governance
As of April 30, 2014
Shares held in another Work / educational experience
person’s name
Number Shareholding
of shares percentage
(%)
- Master of Management, Washington
University
President of Tatung Company,
Job title assumed in the Company and any other
company
Other head, director, or supervisor
who is his/her spouse or is within 2nd
degree of kinship
Job title
Name
Chairman of Tatung Company,
Chairman of Chunghwa Picture Tubes, Ltd.
Chairman of Forward Electronics Co., Ltd.
Chairman of Shan Chih Semiconductor Co., Ltd.
Chairman of Green Energy Technology Inc.,
Chairman of Tatung Consumer Products (Taiwan) Co., Ltd.,
Chairman of Shan Chih Asset Development Co.,
Chairman of Tatung Fine Chemicals Co., Ltd.,
Chairman of Toes Opto-Mechatronics Co.
Chairman of Tatung SM-Cyclo Co., Ltd.
Chairman of Chunghwa Electronics Development Co., Ltd.
Chairman of Tatung Die Casting Co., Ltd.
Chairman of Tatung Medical & Healthcare Technologies
Co., Ltd.
Chairman of Shan Chih Investment Co., Ltd.
Chairman of Tatung Company of Japan, Inc.
Chairman of Tatung Electronics(Singapore) Ptd. Ltd.
Chairman & President of Tatung Wire and
Cable(Thailand) Co., Ltd.
Chairman of Tatung Electrics(Singapore)Pte. Ltd.
Chairman of Taiwan Telecommunication Industry Co., Ltd.
Chairman of TISNet Technology Inc.
Director
Wen-yen K. Spouse
Lin
Wei-tung
2nd degree
Lin
of kinship
- Master of Economics, Maryland University
Assistant Professor of Maryland University
Lecturer of National Taiwan University
Lecturer of Tatung University
Chairman’s Special Assistant of Tatung
Co.,Ltd.
Executive Vice President of Tatung
Company
- Ph.D. of Education, Pepperdine University
President of Tatung (U.K.) Ltd.
President of Tatung Company,
Chairman of Tatung System Technologies Inc.
Chairman of Tatung Information(Singapore)Pte. Ltd.
Chairman of Tatung Mexico S.A. de C.V,
Chairman of Tatung Czech s.r.o.
Chairman of Elitegroup Computer Systems Co., Ltd.
Chairman Wei-shan
Lin
Director
Wei-tung
Lin
Spouse
Direct of Tatung Industry Company.
Chairman of Wan-Heng Investment Co., Ltd.
Chairman of Heng-Sheng Investment Co., Ltd.
Chief advisor of Adelaide Pacific Co., Ltd.
2nd degree
of kinship
2nd degree
of kinship
-
- Bachelor of Mechanical
Engineering, Tatung University
President of Tatung Consumer
Products (Taiwan) Company
Secretary general of Tatung company’s
Secretariat
Chairman & President of Shan Chih Asset
Development Co., Ltd.
Director of Tatung Industry Company
Director of Tatung Forestry and Construction
Company
Director of Cheng Sheng Broadcasting Corp.
Director of Chunghwa Electronics Development Co., Ltd.
Chairman of HEDA Biotechnology Co., Ltd.
Chairman & President of Chih Sheng Realty Co., Ltd.
Chairman Wei-shan
Lin
Director
Wen- yen K.
Lin
No
No
-
- Ph.D. of Chemical Engineering, Tatung
University
R&D Section Manager of Tatung Fine
Chemicals Co., Ltd.
President of Shang Chih Chemical Industry
Co., Ltd.
-
-
Director
Relationship
2nd Degree
of kinship
No
Director of Kuender Co., Ltd.
Director & President of Shan Chih Semiconductor Co., Ltd.
Director of Tatung Fine Chemicals Co., Ltd.,
Director of Green Energy Technology Inc.,
Director of Greater Power Ltd.
Director of Tatung Company of Japan, Inc.
Director of Formosa Epitaxy Inc.
Chairman & President of Chih De Investment Co., Ltd.
Chairman of Ultra Energy Holdings Ltd.
Director of Ultra Energy (Weifang) Technology Co. Ltd.
Chairman of Shang Chih International Chemical
Industry Co., Ltd.
Chairman of Huaian Tatung Advanced Technology
Materials Co., Ltd.
Chairman of Wujiang Shanghua Material Technology Co., Ltd.
Chairman of Wujiang Shang Huah Plastic Co., Ltd.
Chairman of Dongguan Tongli Trading Co., Ltd.
Director of Chih Sheng Investment Co., Ltd.
12
Corporate Governance
Title
Name
Date of
Term of
appointment office
(assumption
of post)
Date of initial Shares held upon
appointment appointment
Shares held currently
Director
Tatung Unviersity
2011.06.24
3 years
Shares held by
spouse and underage
children currently
Number of Shareholding Number of Shareholding Number of Shareholding
shares
percentage shares
percentage shares
percentage
(%)
(%)
(%)
1987.05.24 144,798,047
6.19 144,798,047
6.19
-
Director
Representative of
Tatung University
Huo-yen Chen
2011.06.24
3 years
2007.02.15
13,604
-
13,604
-
-
-
Independent
Director
Peng-fei Su
2011.06.24
3 years
2011.06.24
-
-
-
-
-
-
Independent
Director
Tzong-der Liou
2012.06.12
3 years
2012.06.12
-
-
-
-
-
-
Independent
Director
Chi-ming Wu
2013.06.13
3 years
2013.06.13
-
-
-
-
-
-
Note 1: Independent Director Chi-ming Wu was elected on June 13, 2013
Note 2: Please refer to pages 309-315 for the job assumed by the directors and supervisors in other investees concurrently.
(II) Major institutional shareholders
As of April 30, 2014
Note :
13
Institutional shareholder
Major shareholders
Tatung University
None
The school has no shareholders.
TATUNG 2012 Annual Report
Corporate Governance
As of April 30, 2014
Shares held in another Work / educational experience
person’s name
Number Shareholding
of shares percentage
(%)
--
-
Job title assumed in the Company and any other
company
-
Other head, director, or supervisor
who is his/her spouse or is within 2nd
degree of kinship
Job title
Name
Relationship
-
-
-
-
- Ph.D. of Mathematics, National Taiwan President of Tatung High School
Normal University
Applied Mathematics Associate Professor of Tatung
Applied Mathematics Chairperson of University
Tatung University
No
No
No
-
- B.S. in Department of Electrical and
Vice General Manager in Investment Department, Cheng No
Control Engineering, National Chiao- Ye Assets Management Co., Ltd.
Tung University.
Independent Director, San Chih Semiconductor Co., Ltd.
M.S. in Graduate Institute of Business
Administration, National Chengchi
University.
Department of Enterprises and
Finance.
Director of SUNNET Co.,Ltd.
AVP of Investment Department,
Development Technology Consultant
Co., Ltd.
No
No
-
- Ph. D., Nagoya University, Japan
Chair Professor, Nagoya University,
Japan.
Vice Commissioner, National
Communications Commission.
Chairperson, Department of Law,
National Chengchi University.
Dean, College of Law, National
Chengchi University.
Dean of Academic Affairs, National
Chengchi University.
No
No
- BBA, Department of Business
Administration, National Chengchi
University
MBA, Graduate Institute of Business
Administration, National Taiwan
University
Ph.D. in Finance, University of
Mississippi, U.S.A.
Non-Member Director, Securities
Investment
Trust & Consulting Association of the
R.O.C.
Member of Management Board,
Public Service Pension Fund Chartered
Financial Analyst, CFA
Chief of Training Section, Center
of Public & Business Administration
Education, National Chengchi
University
Distinguished Professor, College of Law, National
Chengchi University.
Director of Taiwan Administrative Law Association.
No
Associate Professor, Department of Finance, National
Chengchi University
Independent Director, TSC Auto ID Technology
Independent Director, Ennoconn Corporation
14
Corporate Governance
(III) Professional qualifications and independence analysis of directors
As of April 30, 2014
Qualification
Whether they possess work experience of more than five
years and the following professional qualifications
An instructor or
higher position
in a department
of commerce,
law, finance,
accounting, or
other academic
department
related to
company business
in a public or
private junior
college, college,
or university
Name (Note 1)
Wei-shan Lin
A judge, public
prosecutor,
attorney,
certified public
accountant, or
other professional
or technical
specialist who has
passed a national
examination and
has been awarded
a certificate in
a professional
capacity
necessary for
company business
Having work
experience in the
area of commerce,
law, finance or
accounting,
or otherwise
necessary for
company business
1
2
3
4
5
6
√
Wen-yen K. Lin
√
√
Wei-tung Lin
√
√
Number of
other public
companies
in which he/
she serves
concurrently
as
independent
director
Independence criteria (Note 2)
√
√
√
7
8
9
10
√
√
√
0
√
√
√
0
√
√
√
0
I-hua Chang
√
√
√
√
√
√
√
0
Lung-ta Lee
√
√
√
√
√
√
√
0
√
√
√
√
√
√
Huo-yen Chen
√
Peng-fei Su
√
√
0
√
√
√
√
√
√
√
√
√
√
√
1
Tzong-der Liou
√
√
√
√
√
√
√
√
√
√
√
√
0
Chi-ming Wu
√
√
√
√
√
√
√
√
√
√
√
√
2
Note 1: Independent Director Chi-ming Wu was elected on June 13, 2013.
Note 2: Please tick the corresponding boxes if directors or supervisors have been any of the following during the two years prior to being
elected or during the term of office:
(1) Not an employee of the Company or any of its affiliates;
(2) Not a director or supervisor of the Company or its affiliates (excluding being an independent director of the Company or its
parent company, or subsidiaries in which the Company holds, directly or indirectly, more than 50% of the shares with voting
rights);
(3) Neither a shareholder who holds shares, together with those held by the person’s spouse or underage children, or held by the
person under others’ name in an aggregate amount of 1% or more than the total number of issued shares of the Company,
nor one of the Company’s top 10 individual shareholders;
(4) Not a spouse, relative within the 2nd degree of kinship, or lineal relative within the 5th degree of kinship of any of the people
specified in the preceding three subparagraphs;
(5) Neither a director, supervisor or an employee of the institutional shareholders directly holding 5% or more of the Company’s
total issued shares, nor a director, supervisor or an employee of the Company’s top five institutional shareholders;
(6) Not a director, supervisor, manager or shareholder holding 5% or more of the shares of any specific companies or
organizations which have financial or business relationship with the Company;
(7) Not personally or married to an owner, a partner, professional individual, director, supervisor, or manager of a sole
proprietorship, partnership, company or an organization which provides commercial, legal, financial, or accounting services
or consultation to the Company or any of its affiliates;
(8) Not a spouse or relative within the 2nd degree of kinship to any other directors of the Company;
(9) Not in contravention of Article 30 of the Company Law;
(10) Not any governments, institutional shareholders or their representatives pursuant to Article 27 of the Company Law.
15
TATUNG 2012 Annual Report
Corporate Governance
(IV) The management
As of April 30, 2014
Manager who is his/her
spouse or is within 2nd
degree of kinship
Shares held by his/her
Shares held in another
spouse and minor children
person’s name
currently
3,052,173
0.13
10,505,173
0.45
-
- Master of Economics,
Maryland University
Assistant Professor of
Maryland University
Lecturer of National Taiwan
University
Lecturer of Tatung University
Chairman’s Special
Assistant of Tatung Co., Ltd
Executive Vice President of
Tatung Company
Chairman of Tatung System None None None
Technologies Inc.
Chairman of Elitegroup
Computer Systems Co., Ltd
Chairman of Tatung Mexico
S.A. de C.V,
Chairman of Tatung Czech
s.r.o.
Chairman of Tatung
Information (Singapore) Pte.
Ltd.
Vice
President
Ying-che
Huang
2006.01.11
85,697
-
3,998
-
-
- Master of Electrical
Engineering, Missouri
University
General manager of
Computer R&D Division
Senior General Manager
of 3CBG
Director of Tatung Mexico
S.A. de C.V.
Director of Tatung Czech
s.r.o.
Vice Chairman of Tatung
Company of Japan, Inc.
None None None
Chief
Strategy
Officer
Tai-ji Pan
2012.1.20
39,779
-
-
-
-
- Ph.D. of Electrical
Engineering, North
Carolina State University
Senior General
Manager of Tatung
Company’s Digital
Consumer BG
Senior General
Manager of Tatung
Company’s DCBG
Digital Audio BU
Director of Tatung
Technologies, Inc.
Director of Tatung
Information
Technologies, Corp.
None None None
Senior
General
Manager
Wen-chieh
Peng
2013.06.24
10,000
-
-
-
-
- Master of insurance, Feng
Chia University
General Manager of
Tatung Company’s
Investment Division &
President’s Special Assistan
None None None
Director of Chunghwa
Picture Tubes, Ltd.
Chairman of Chih Sheng
Investment Co., Ltd.
Director of Tatung Medical
& Healthcare Technologies
Co., Ltd.
Director of Tatung Global
Strategy investment and
Trading (BVI) Inc.
Director of Absolute Alpha
Limited
Director of Chih Sheng
Realty Co.,Ltd.
Director of Wu-jiang Tatung
Electronics Trading Co., Ltd.
Financial
Officer
Ruei-kai Jhang 2013.06.24
-
-
-
-
-
- EMBA, Tamkang
University
Assistant Manager of
Chinfon Bank
Manager of JihSun
Bank
Senior Manager of
Tatung Company’s
Accounting Division
Director & President of None None None
Chih Sheng Investment
Co., Ltd.
Director & President of
Chunghwa Electronics
Development Co., Ltd.
23,330
-
-
-
-
- Bachelor of Management, Director of Tatung
None None None
Tatung University
Electronics (Singapore) Pte.
Senior Manager of Tatung Ltd.
Company’s Accounting
Division
Accounting Shu-fen Chen
Officer
2011.01.27
Shareholding
percentage (%)
Shareholding
percentage (%)
Relationship
2011.7.5
Job title assumed in any other
company
Name
Number of shares
Wen-yen K. Lin
Work / educational
experience
Job title
Shareholding
percentage (%)
President
Title
Number of shares
Name
Number of shares
Shareholding
Date of
appointment
(assumption
of post)
Note 1: Chung-jung Kung, vice president and financial officer, was resigned on June 15, 2013.
Wen-chieh Peng, senior general manager, was inducted on June 24, 2013.
Ruei-kai Jhang, financial officer, was inducted on June 24, 2013.
Jin-dian Lu, senior vice president, was resigned on June 30, 2013.
Chi-an Hsiao, vice president, was resigned on September 21, 2013.
Note 2: Please refer to pages 309-315 itemed (IV) Information about directors, supervisors and presidents of affiliates for the job assumed by the
managers in other investees concurrent.
16
Corporate Governance
(V) Remuneration paid to directors, president and vice presidents in 2013
1. Remuneration to directors
Remuneration to directors
Remuneration (A)
The Company
All companies
included in Financial
statements
The Company
All companies
included in Financial
statements
The Company
All companies
included in Financial
statements
The Company
All companies
included in Financial
statements
Chairman Wei-shan Lin
All companies
included in Financial
statements
Name
Percentage of the total of
A, B, C and D to income
after tax (%)
Business execution
expenses (D)
The Company
Job title
Retirement pension (B)
Remuneration allocated
from earnings (C)
11,059
11,359
–
–
0
100
0
1,014
–
–
Director
Wen-yen K. Lin
0
300
–
–
–
–
120
2,490
–
–
Director
Wei-tung Lin
–
–
–
–
–
–
120
140
–
–
Director
I-hua Chang
–
–
–
–
–
–
120
140
–
–
Director
Lung-ta Lee
0
60
–
–
–
–
120
550
–
–
Director
Huo-yen Chen
120
120
–
–
–
–
120
120
–
–
Independent-Director
Peng-fei Su
2,700
3,132
–
–
–
–
–
–
–
–
Independent-Director
Tzong-der Liou
2,000
2,000
–
–
–
–
–
–
–
–
Independent-Director
Chi-ming Wu (Note 1)
660
660
–
–
–
–
–
–
–
–
(Representative of Tatung University)
Note 1: Independent-Director Chi-ming Wu had elected on June 13, 2013.
Note 2: Provision for expensed retirement pension: NT$125,000 by the Company (NT$233,000 by all companies under the consolidated financial
statements).
Note 3: Remuneration allocated from earnings and Employees' bonus allocated from earnings are a proposed figure.
–
–
–
–
Unit: NT$ Thousand
Number
of new
restricted
employee
Whether
shares
remuneration
from any
reinvested
companies
other than
subsidiaries is
received?
All companies included in
Financial statements
–
All companies included in
Financial statements
–
The Company
–
All companies included in
Financial statements
–
The Company
–
Stock dividend
–
Cash dividend
478
All
companies
included in
Financial
statements
Stock dividend
443
The
Company
Cash dividend
All companies included in
Financial statements
Jin-dian Lu
The Company
Wen-yen K. Lin
Senior Vice
President
Employees’ bonus
allocated
from earnings (D)
Bonus and special
allowance (C)
All companies included in
Financial statements
President
Retirement
pension (B)
The Company
Name
The Company
Job title
All companies included in
Financial statements
Salary (A)
Percentage
Number of
of total of A,
ESOP
B, C and D to
exercisable
income after
shares
tax (%)
The Company
2. Remuneration to the management team
–
–
Vice President Fu-hsin Yen
Vice President Ying-che Huang
23,900 26,088
–
Vice President Chung-jung Kung
Vice President Chi-an Hsiao
Chief Strategy Officer Tai-ji Pan
Note 1: Independent-Director, Chi-ming Wu, was elected on June 13, 2013.
Jin-dian Lu, senior vice president, was resigned on June 30, 2013.
Chi-an Hsiao, vice president, was resigned on September 21, 2013.
Fu-hsin Yen, vice president, was resigned on February 28, 2013.
Chung-jung Kung, vice president, was resigned on June 15, 2013.
Note 2: Provision for expensed retirement pension: NT$443,000 by the Company (NT$478,000 by all companies under the consolidated financial
statements).
17
TATUNG 2012 Annual Report
Corporate Governance
Unit: NT$ Thousand
Relevant remuneration received by directors who are also employees
Salary, bonus and special Retirement pension (F) Employees’ bonus allocated from earnings
allowance (E)
(G)
Number of ESOP
exercisable shares
The Company
All companies
included in Financial
statements
Cash
dividend
Stock
dividend
Stock
dividend
The Company
All companies
included in Financial
statements
The Company
All companies
included in Financial
statements
The Company
All companies
included in Financial
statements
0
2,400
–
–
–
–
10
–
–
–
–
–
–
–
–
9,529
9,529
125
125
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0
7,715
0
108
–
–
6,300
–
–
–
–
–
–
–
–
0
2,927
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The Company
Remuneration to individual presidents and vice
presidents of the Company
Cash
dividend
All companies
included in Financial
statements
Percentage of total
of A, B, C, D, E, F
and G to income Whether
remuneration
after tax (%)
from any
reinvested
companies
other than
subsidiaries is
received?
The Company
All companies
included in Financial
statements
Number of
new restricted
employee
shares
Name of presidents and vice presidents
The Company
All companies included in Financial
statements
Under NT$ 2,000,000
Chi-an Hsiao, Fu-hsin Yen
Fu-hsin Yen
From NT$2,000,000 to NT$5,000,000
Jin-dian Lu, Chung-jung Kung,
Ying-che Huang, Tai-ji Pan
Jin-dian Lu, Chung-jung Kung,
Ying-che Huang, Tai-ji Pan,
Chi-an Hsiao
From NT$5,000,000 to NT$10,000,000
Wen-yen K. Lin
Wen-yen K. Lin,
FromNT$10,000,000 to NT$15,000,000
–
–
FromNT$15,000,000 to NT$30,000,000
–
–
FromNT$30,000,000 to NT$50,000,000
–
–
FromNT$50,000,000 to NT$100,000,000
–
–
Over NT$100,000,000
–
–
7
7
Total
18
Corporate Governance
3. Employee bonus granted to the management team
As of April 30, 2014
Job title
Managers
Name
President
Wen-yen K. Lin
Vice President
Ying-che Huang
Chief Strategy Officer
Tai-ji Pan
Vice President
Fu-hsin Yen
Vice President
Chung-jung Kung
Vice President
Chi-an Hsiao
Senior Vice President
Jin-dian Lu
Stock dividend
Cash dividend
Total
Percentage of
total to income
after tax (%)
-
-
-
-
4. The percentage of total remuneration paid by the company and by all companies included in the
consolidated financial statements for the most recent two fiscal years to directors, presidents and vice
presidents of the Company, to the income after tax, and the policies, standards, and portfolios for the
payment of remuneration, the procedures for determining remuneration, and the correlation with business
performance.
Job title
Percentage of total remuneration, which is paid by the Company and
by all companies included in the consolidated financial statements to
directors, presidents and vice presidents of the
Company, to the income after tax
2012
2013
(0.52%)
(1.28%)
Directors
President / Vice President
The Board of Directors is authorized to determine the transportation allowance and remuneration to directors of the Company based
on their contribution to the Company’s operation and by taking into consideration the local and foreign standards as applied in the
same industry. Presidents and vice presidents manage the Company’s business on the order of the Board of Directors. The appointment,
dismissal and remuneration of presidents and vice presidents shall be subject to the Company Law. Furthermore, remuneration will also be
allocated from the company’s earnings, if any, in accordance with Article 24 of the Company Regulations.
19
TATUNG 2012 Annual Report
Corporate Governance
Status of corporate governance
(I) Status of Board of Directors’meeting
The Board of Directors has held 10 meetings in 2013. The status for the attendance of directors is as follows:
Title
Attendance Attendance Attendance
in person
by proxy
rate (%)
Name
Notes
Chairman
Wei-shan Lin
10
0
100
Director
Wen-yen K. Lin
10
0
100
Director
Wei-tung Lin
6
3
60
Actual attendance rate: 90%
Director
I-hua Chang
7
2
70
Actual attendance rate: 90%
Director
Lung-ta Lee
10
0
100
Director
Tatung University / Huo-yen Chen
9
1
90
Actual attendance rate: 100%
Peng-fei Su
9
1
90
Actual attendance rate: 100%
Tzong-der Liou
10
0
100
Chi-Ming Wu
5
0
50
Independent
Director
Independent
Director
Independent
Director
Elected on June 13, 2013
Actual attendance rate: 100%
Other notes to be specified:
I. In the case of the circumstances referred to in Article 14-3 of the Securities and Exchange Law and other resolutions made
by the Board of Directors, toward which any independent director has a dissenting or qualified opinion, either by recorded
statement or in writing, the date and session of the directors’ meeting, contents of motions, all independent directors’ opinions
and the Company’s reaction to the opinions shall be specified: None.
II. With reference to directors’ withdrawing from any motion due to conflict of interest, the directors’ names, contents of motions,
causes for the withdrawal, and participation in voting shall be specified: the Board of Directors did not encounter any motions
with conflicting interests against the company in the year: None.
III. Objectives to strengthen the functions of the Board of Directors in the current year and most recent year (e.g., establishment
of Audit Committee and upgrading information transparency) and evaluation of the execution thereof:
1. In compliance with the competent authority's promotion of robust corporate governance policies, the company had
established independent directors and Audit Committee.
2. The company has amended its "Rules for Board of Directors Meetings" in compliance with the relevant regulations and
enforced accordingly.
(II) Participation by Audit Committee
A total of 9 Audit Committee meetings were held in the previous period. Independent director attendance was as follows:
Title
Name
Attendance Attendance Attendance
in person
by proxy
rate (%)
Independent Director
Peng-fei Su
9
0
100
Independent Director
Tzong-der Liou
9
0
100
Independent Director
Chi-Ming Wu
4
0
44.44
Notes
Elected on June 13, 2013
Actual attendance rate: 80%
Other mentionable items:
1. If there are the circumstances referred to in Article 14-5 of Securities and Exchange Act and resolutions which were not
approved by the Audit Committee but were approved by two thirds or more of all directors, the dates of meetings, sessions,
contents of motions, resolutions of Audit Committee and the Company’s response to Audit Committee’s opinion should be
specified: N/A
2. If there is Independent Directors’ avoidance of motions in conflict of interest, the Independent Directors’ names, contents of
motions, causes for avoidance and voting should be specified: N/A
3. Communications between the independent directors, the Company's Chief Internal Auditor and CPAs (e.g. the items,
methods and results of audits of corporate finance or operations, etc.):
For the CAE (Chief Audit Executive): In addition to submitting the audit report to the Chairman, it is also needed to hand
over the audit report to the individual directors who can discuss and communicate with the CAE directly with regard to the
contents of the audit report while needed. If the individual directors have any comments on the audit report, the internal
audit unit has to follow up and reply to the individual directors with the countermeasures, moreover, if the individual directors
have any instructions, the CAE has to report to the individual directors accordingly after the audit project is finalized.
For the CPA: After the quarter, half-year and annual financial statements are finalized, the individual directors call a closed
meeting to invite the CPA only to the meeting for fully discussions and for interchanging opinions with regard to the issues
which the CPA has discovered from the internal control systems or from the financial statements during the auditing period.
20
Corporate Governance
(III) Corporate governance practices as required by the Corporate Governance Best-Practice
Principles for TSE / GTSM Listed Companies:
Item
Reasons for noncompliance
Execution
(I) Shareholding structure and shareholders’
rights
1. Handling of shareholders’ suggestions or Shareholders’ suggestions or questions are directly addressed N/A
disputes
to the departments held accountable as well as taken care of
by our company’s spokesman or deputy spokesman.
2. Presiding over the list of key shareholders
who have management control of the
company and the major parties behind
such shareholders
Fair Interaction bet ween our company and its major shareholders; reporting any changes to the Company in
accordance with the Rules Governing Disclosure of Information
for TSE/GTSM Listed Companies.
3. How a risk control mechanism and firewall
for Tatung Company as a conglomerate
work
Our company has set up rules for supervising subsidiaries and periodic reviews of their operations.
(II) Organization and operations of the Board of
Directors
1. Installation of independent directors
Our company elected independent directors and established N/A
audit committees in the 2011 ordinary shareholders’ meeting as
dictated by the government regulations.
The Subsidiar y Company does comply with establish
independent directors and audit committees requirements set
out by the Competent Authority, had established independent
directors and audit committees.
2. Periodic evaluation of how independent
its auditors are
The Board regular ly assesses the independence and
impartiality of the external auditors, who will be replaced
after a few years of service to assure their independence and
impartiality.
-
Our company has different departments in charge of investor
relations, public relations, and stock affairs when it comes to
communicating with stakeholders. In addition, we set up a
“contact us” link on the company's website providing detailed
contact information including telephone numbers and email
addresses.
N/A
(III) Communication channels with shareholders
(IV) Information disclosure
21
1. Setting up a corporate website where
information regarding the Company’s
f inancial, business and cor porate
governance status is released
Our company and its subsidiaries has set up a website where N/A
related information is disclosed. (http://www.tatung.com/b5/
investors.asp)
2. Other information disclosure channels
(e.g., setting up an English website,
assigning personnel to handle
information collection and disclosure,
appointing a spokesperson, and posting
information about institutional investor
forums on the Company website)
Our company has installed an English website and appointed
personnel to gather and disclose information in relation to the
company. Besides, the system of a spokesperson and deputy
spokesperson is in place to speak for the company.
Information about institutional investor forums is released on the
company’s website.
-
TATUNG 2012 Annual Report
Corporate Governance
Item
Execution
(V) H o w n o m i n a t i o n s a n d f u n c t i o n a l
committees operate in the company
Our company established audit committees in the 2011 ordinary
shareholders’ meeting, and compensation committees on July
11, 2011, in accordance with the government regulations of
establishing audit committees and compensation committees.
Reasons for noncompliance
N/A
(VI) If the Company had instituted internal rules for corporate governance in accordance with the “Corporate Governance BestPractice Principles for TSE/GTSM Listed Companies,” please specify its implementation and reasons for non-conformity, if any.
The Company and its subsidiaries conduct its business in accordance with the guidelines set forth in the “Corporate Governance
Best-Practice Principles for TSE/GTSM Listed Companies” and we are considering drawing up corporate governance best-practice
principles on our own by taking the company’s specific operations into account.
(VII) Other essential information to get hold of the Company’s corporate governance practices (e.g. rights and treatment of employees,
investor relations, supplier management, training for directors, implementation of risk management policies and risk assessment
measures, enforcement of consumers’ protection policies, and purchase of liability insurance for directors).
1. Rights and treatment of employees:
Tatung treats all employees, applicants and contract workers with dignity, fairness and respect regardless of their races, religions,
skin colors, and nationalities, etc. Based on the regulations on labor and sexual equality by the government, the Company has
enacted its rules and regulations on work standards, welfare, salary and allowances in a better standard than dictated by the
Labor Management Regulations. The Company also reviews employees’ performance annually to ensure reasonable alignment
between employees’ salary and labor.
2. Investor relations:
The company has appointed Investor Relations department to collect and disclose information and to communicate
with stakeholders, investors and the public. The company also attends domestic and oversea investor forums sporadically to
deliver information regarding corporate financials, business strategies and operation directions. Moreover, the company has set
up the investor service on the corporate website for stakeholders, investors and the public to download material information of
monthly sales revenues, financial statements, annual reports and conference booklets, financial ratios and investor conference
presentations, etc. Financial and business information of the company would be released on Taiwan Stock Exchange Market
Observation Post System.
3. Supplier management:
Tatung is an environmentally friendly company with a calling to uphold the global environmentalism, so that we request suppliers
to sign contracts in which they would abide by the government’s environmental protection laws and regulations in reducing
waste, preventing pollution, and disposing wastes. The suppliers will be audited upon Tatung’s request and Tatung has the right to
suspend or terminate the partnership, should any matters violating the law be found. Besides, in order to comply with customers’
green procurement demand and international legal requirements such as RoHS directive, Tatung has been actively promoting
the green supply chain. Through building up the green supply chain, we can review our suppliers’ performance and to strengthen
the existing supply chain. As for the safety of suppliers’ working environment, Tatung has also implemented evaluation indicators
in the supplier reviews/evaluations. In addition, “Tatung health and safety management method for construction suppliers” has
been established to reduce the probability of an accident.
4. Directors and managers’ training records:
The Company and its subsidiaries have been continually offering training courses for the directors and managers. From 2013 to
March 31, 2014, we had directors and managers who attended various training programs for about 97 hours in total.
5. Liability insurance for directors:
The Company and its subsidiaries has purchased liability insurance for its directors.
(VIII) If the Company had conducted an internal assessment of its corporate governance practices or hired professionals to issue the
report on its behalf, please specify the result of the self-assessment (or external expert’s assessment), major flaws (or suggestions) and
corrective measures taken: N/A.
22
Corporate Governance
(IV) The composition, duties, and operation of the Compensation Committee:
(1) Members of the Remuneration Committee
As of April 30, 2014
Title
Whether they possess work experience
Independence criteria (Note 1)
Qualification of more than five years and the following
professional qualifications
An instructor or A judge, public Having work
higher position prosecutor,
experience in
the
in a
attorney,
department
area of
certified
commerce,
of commerce, public
law, finance, accountant, or law, finance or
accounting,
accounting, or other
professional
or otherwise
other
academic
or technical
necessary for
department
specialist who company
has
business
related to
passed a
company
1 2 3 4 5 6 7 8
national
business
examination
in a public or
private junior and
has been
college,
awarded
college,
a certificate in
or university
a professional
capacity
necessary for
company
Name
business
Independent
Director
Peng-fei Su
Independent
Director
Tzong-der Liou
Director
(Representative
Huo-yen Chen
of Tatung
University)
Number of
Notes
other public
companies
in which he/
she serves
concurrently
as
Compensation
Committee
√
√
√
√
√
√
√
√
√
1
√
√
√
√
√
√
√
√
√
√
0
√
√
√
√
√
√
√
√
0
(Note2)
Note 1: Please tick the corresponding boxes if Compensation Committee have been any of the following during the two years prior to being
elected or during the term of office:
(1) Not an employee of the Company or any of its affiliates;
(2) Not a director or supervisor of the Company or its affiliates (excluding being an independent director of the Company or its parent
company, or subsidiaries in which the Company holds, directly or indirectly, more than 50% of the shares with voting rights);
(3) Neither a shareholder who holds shares, together with those held by the person’s spouse or underage children, or held by the person
under others’ name in an aggregate amount of 1% or more than the total number of issued shares of the Company, nor one of the
Company’s top 10 individual shareholders;
(4) Not a spouse, relative within the 2nd degree of kinship, or lineal relative within the 3rd degree of kinship of any of the people
specified in the preceding three subparagraphs;
(5) Neither a director, supervisor or an employee of the institutional shareholders directly holding 5% or more of the Company’s total
issued shares, nor a director, supervisor or an employee of the Company’s top five institutional shareholders;
(6) Not a director, supervisor, manager or shareholder holding 5% or more of the shares of any specific companies or organizations
which have financial or business relationship with the Company;
(7) Not personally or married to an owner, a partner, professional individual, director, supervisor, or manager of a sole proprietorship,
partnership, company or an organization which provides commercial, legal, financial, or accounting services or consultation to the
Company or any of its affiliates;
(8) Not in contravention of Article 30 of the Company Law;
Note 2: Mr. Huo-yen Chen was resigned on March 19, 2014.
23
TATUNG 2012 Annual Report
Corporate Governance
(2) Operation of Compensation Committee
1. The compensation committee consists of three members.
2. The term for the members of the compensation committee lasts from July 5, 2011 to June 23, 2014. The committee convened for three
times last year (See the following list of their attendance).
Attendance in
person (B)
Attendance by proxy
Attendance rate(%)
(B/A)
Peng-fei Su
3
0
100
Committee
Tzong-der Liou
3
0
100
Committee
Huo-yen Chen
3
0
100
Title
Name
Convenor
Notes
Resigned on March 19,
2014
Other notable items:
1. If the board of directors decline to adopt or modify a recommendation of the compensation committee, it is imperative
to note down the board meeting’s date, session, motion, resolution as well as Tatung Company’s disposition of the
compensation committee’s recommendation. (If the remuneration passed by the board exceeds the recommendation of
the compensation committee, the circumstances and causes for the difference shall be specified): N/A.
2. As to a resolution of the compensation committee, if a committee member expresses any objection or reservation recorded
or in a written statement, it is imperative to specify the committee’s date, session, disposition of the comments: N/A.
(V) How Tatung Company Fulfills its Social Responsibility:
Item
Implementation
Reasons for noncompliance
1. Corporate Governance
(1) The company assumes its social (1) Tatung Co. publishes “Tatung Corporate Sustainability Report” every (1) N/A
respons i b i l it y by es tab l i sh i ng
year, disclosing its efforts at and contributions to management, quality
related policies and reviewing its
services, social responsibility, and the environment. Meanwhile,
implementation.
Tatung has also formulated policies beneficial to society, laborers,
quality control, research and development, the environment, safety
and health, and dividend, as the highest principle.
(2) T h e c o m p a n y h a s s p e c i f i c (2) Tatung Co. established the “Environment and Safety Division” to (2) N/A
departments to see to it that social
monitor such an execution of social responsibility as protecting the
responsibility has been well taken
environment or maintaining safety and health in every business group.
care of.
Besides, the company has had “Human Resources Division” take
care of the labor policy while “Operation Support Division” has been
working on the quality policy and “Finance and Accounting Division”
on the dividend policy.
(3) T h e c o m p a n y h a s r e g u l a r (3) The Company has always kept its directors informed of training (3) N/A
educational training and
programs held by the government or institutes; they could sign up for
p ro m ot i o n fo r d i re c to r s a n d
them as they wish. Also, a statement of “Tatung Corporate Code of
employees in ter ms of the
Ethics” has been announced to all the staff, who will be periodically
c o m p a n y ’s c o d e o f e t h i c s ;
evaluated by the company’s performance appraisal system.
thei r pa r tici pation i s taken
The assessment would serve as a basis for the human resources
into consideration for their key
department to make decisions about giving a reward, making
performance index.
improvement plans, and many others.
24
Corporate Governance
Item
Implementation
Reasons for noncompliance
2. D e v e l o p i n g E n v i r o n m e n t a l
Sustainability
(1) The company endeavors to utilize (1) Tatung Co. has implemented the corporate-wide “Pollution (1) N/A
all resources more efficiently and
Prevention Pays, 3P” program since 1993. 3P program helps
use recyclable materials for the
the factories and subsidiaries with the improvements in the
sake of the environment.
process technology, operation management, raw materials,
product designing as well as the recycling of wastes with a view
to producing greener products in a cleaner way. In particular,
Power Equipment BU was awarded “18th The Annual Enterprises
Environmental Protection Award” by EPA with many products from
the company acquiring such a green certification seal as “Green
Mark” or “Energy Label.”
(2) The company establishes proper (2) Tatung Co. has implemented ISO14001 environmental management (2) N/A
environmental management systems
system in the factories and subsidiaries since 1996 to continually
suited to the characteristics of the
improve their environmental performances. So far, all the factories
industries per se.
have established the management system certified by the third
parties. Tatung’s subsidiaries such as CPT, GET, Forward Electronics
and others also established the management system certified by
the third parties. In 2005 “Tatung Electrical and Electronic Equipment
Restriction of Hazardous Substance (RoHS) Test Laboratory” (testing
and analyzing the hazardous substances in materials, parts and
products) was established to assist in building up a “Green Supply
Chain” with products exported to EU, USA, Japan and other countries.
(3) The company has assigned specific (3) The headquarters of Tatung Co. has “Environment and Safety (3) N/A
units or staff responsible for taking
Division” responsible for promoting environmental protection policies;
care of the environment.
the company’s every business unit and subsidiaries all have offices or
staff taking care of the matter as legally dictated.
(4) The company has been monitoring (4) Tatung’s ever y business unit continues to enhance energy (4) N/A
the impact of climate change
management and raise energy efficiency in order to reduce GHG
on its operations, so as to come
emissions. Tatung Co. has been carrying out corporate-wide GHG
up w ith strateg ies fo r ene rgy
management education since 2009 and has been keeping track
conservation as well as carbon
of GHG emissions with a third-party verification according to the
and greenhouse gas reduction.
requirements of ISO14064-1. Currently, three of our factories, CPT, and
GET are continually having their GHG inventories every year.
3. Maintaining Public Welfare
(1) The company complies with relevant (1) All Tatung Company’s employees, applicants, and contract workers (1) N/A
labor laws and regulations, observes
are equally treated with dignity regardless of their races, religions,
internationally recognized principles
colors, genders, and nationalities. The company has set up working
of fundamental human rights for
regulations, welfare, salary, and subsidies according to or even better
workers, protects the legal rights
than the labor and gender-equality related regulations promulgated
and interests of employees without
by the government. The Company also reviews employees’
employment discrimination of any
performance annually to ensure reasonable alignment between
forms, and has in place appropriate
employees’ salary and labor, so that they will be contended with their
management in terms of its methods,
jobs.
procedures, and implementation.
25
TATUNG 2012 Annual Report
Corporate Governance
Item
Implementation
Reasons for noncompliance
(2) The company not only provides (2)
(2) N/A
safe and healthy work environment
1. Carrying out education training in health and safety education
for its employees but regularly gives
and promoting related latest regulations to enhance the
them educational training in safety
employees’ knowledge on health and safety issues.
2. Tatung Company established “Tatung Environment Research
and health.
Center” and “Tatung Sampling Center,” both of which have
been certified by the government and TAF, to regularly check on
and improve the work environment and to ensure that working
conditions have been fully monitored so as to keep employees
from any hazards.
3. Ensuring a better management of the machines that might
be hazardous if poorly operated; providing a solid training for
workers so that they will obtain related licenses for operating
those machines safely in accordance with the government’s
requirements of training workers in safety and health.
4. Reinforcing automatic management and inspection as well as
supervisor monitoring in the factories and subsidiaries.
5. Having educational training in work safety for workers in the
factories and subsidiaries and executing the standard operating
procedure for all the work.
6. Raising the awareness of labeled hazardous and poisonous
materials as well as increasing the general knowledge of them.
7. Establishing the OHSAS 18001 and TOSHMS management system to
continually improve the health and safety performances.
8. Regularly raising and checking the staff’s ability and awareness in
the case of a fire or accident in the factories and subsidiaries with
the educational training in tackling a fire or accident.
(3) N/A
(3) The company has a mechanism of (3)
1. The company set up a tangible “Board Chairman Mail Box”
communication with employees
and electronic “Human Resource Services Mail Box” for employees
on a regular basis including a
to communicate with supervisors directly and get swift feedbacks.
reasonable way to notify them any
2. According to the “Regulations for Implementing Labormajor changes to the company’s
Management Meeting,” the company holds a labor-management
management that might greatly
meeting regularly, hoping to have a better communication and
affect them.
resolve differences with one another.
3. The company has a mechanism of processing complaints of
employees—setting up the Regulations of Processing Complaints
of Employees as well as publishing a bi-weekly e-paper to
communicate with employees.
(4) N/A
(4) The company establishes and (4)
1. “Customer First” and full participation are the focal spirit for our
discloses policies on consumer
quality policy.
rights and interests, providing a
2. Service available to customers at our nation-wide Service Centers.
clear and effective procedure for
3. Customers can use our customer’s hotline or on-line repair booking
dealing with consumer complaints.
for services needed.
(5) The company wor k s together (5-1)With the calling to strengthen Taiwan-based products, we have been (5) N/A
dedicated to producing more environmentally friendly products,
with its suppliers to elevate a
several of which have been certified by the Ministry of Economic
stronger sense of corporate social
Affairs with a MIT logo.
responsibility.
a. We have more than 140 products with a “Green Mark” including
3 types of amorphous cast-resin dry type transformers, 1 type of
high efficiency amorphous transformer and 136 types of Tatung’s
air- conditioners.
b. We have 353 products officially credited with energy-saving labels
by the government including cold-warm-hot water dispensers,
warm and hot water dispensers, electric fans, dehumidifiers,
refrigerators, Washing machines, monitors, rice cookers,
Illuminating apparatuses, air conditioners.
(5-2)Our contracts with our suppliers would guarantee that workers are
fairly and legally treated in terms of their universal human rights,
favorable labor conditions, and employment laws and regulations.
26
Corporate Governance
Item
Implementation
Reasons for noncompliance
(6) N/A
(6) The company, through commercial (6)
activities, non - cash p roper t y
1. Inviting more than 450 underprivileged children from 14 charitable
endowments, volunteer service
foundations to participate in Tatung Charity Soccer Summer
or other free professional services,
Camp held in Taipei City, New Taipei City, Taoyuan County,
par ticipates in communit y
Hsinchu County, and Miaoli County where children were taught
development and charities events.
skill and knowledge of soccer in the field by the Company’s
professional team. Tatung organizes this charitable event annually
with an intention to inspire the disadvantaged children with sport
playing hoping to help them to cultivate spirit of team work and
sportsmanship.
2. Donating rice cookers to the Institute for the Blind of Taiwan to
help people with visual disability to learn cooking skill so that they
are able to take care of their daily life.
3. Donating 12,500 cups of instant rice porridge to the Genesis
Social Welfare Foundation for the old people who live alone with
convenient nutritious diet supplements.
4. As an attempt to improve the quality of life for the underprivileged
living in children’s homes, Tatung donated 1,000 units of energysaving electric fans to 79 social welfare organizations nationwide.
These energy-saving cooling appliances help to bring down
the heat in the rooms thus also help to calm children’s emotion
reducing violent behaviour from happening.
5. To help physical and intellectual disabled people to develop
confidence and sense of achievement in their jobs, Tatung
3C cooperated with Syinlu Social Welfare Foundation to sell
5,000 gift boxes of egg roll, made by people with physical
and developmental retardation, in 240 stores nationwide. All
proceeds were donated to Syinlu Social Welfare Foundation.
6. Fundraising for disadvantaged children’s lunch box and all
proceeds were donated to the Child Welfare League Foundation.
7. To support Autism Society Taiwan for its job training and
community service programmes, Tatung invited members of
Autism Society Taiwan to the Company’s staff restaurant to sell
their handmade steamed bread. The event was well-received by
the Company’s personnel as the goods were quickly sold out.
8. Tatung boy, the ambassador of Tatung Company, participated
in summer activities by the Taipei Expo Foundation in Taipei EXPO
Park to promote the development of MICE (Meeting, Incentives,
Conventions, and Exhibitions) industry in Taiwan.
9. To support local marketplace development and community
empowerment in Taipei Cit y, Tatung sponsored Tianmu
Marketplace Development Association with 1,000 pumpkin
buckets for Tianmu district’s Halloween celebration --- ” 2013
Halloween Party”.
10. When it comes to support performing arts in Taiwan, Tatung
takes its initiative in collaborating with IfKids Theatre to produce
“Tatung Boy Loves the Earth” --- a children’s drama. The drama
was showcased to nearly 6,000 students of 3 primary schools in
Greater Taipei. Concepts of energy saving, healthy living, and
environmental protection were infused in the plot of the play to
educate youngsters for correct daily practice.
11. To celebrate its 95th anniversary of establishment, Tatung held an
open-air charitable concert in Pinxi inviting Taipei Opera Chorus
and IfKids Theatre to perform for the general public. The people
drawn by the activity also helped to contribute to Pinxi’s local
economy.
12. Providing Tatung home appliance products for the filming of
“Rhythm of the Rain” to support Taiwan’s cultural and creative
industry.
13. Participating in “Taiwan Excellence Cares”, an annual charity
event by the Bureau of Foreign Trade, Tatung sponsored award
27
TATUNG 2012 Annual Report
Corporate Governance
Item
Implementation
Reasons for noncompliance
winning rice cookers to deliver message of love and caring.
14. Long-term commitment to help finding missing children by posting
search posters in 240 stores of Tatung 3C nationwide while setting
up hyperlink for a easy access to the Missing Children Data
Resource Centre of Child Welfare League Foundation.
15. Blood donation in every summer and winter holidays ---112 bags
of blood were donated in 2013.
16. Setting up receipt donation boxes in the complex for the benefit
of Genesis social welfare foundation and Noordhoff Craniofacial
foundation.
4. Increasing the level of Information
disclosure
(1) H ow t h e co m p a ny d i s c l o s e s
relevant and reliable information
in relation to the corporate social
responsibility.
(1) Tatung Company issues the Tatung Corporate Sustainability (1) N/A
Annual Report as a communication forum to present its business
operations, quality services, social responsibility and overall
performances. The "2013 Tatung Corporate Sustainability Annual
Report" was released in December 2013. Tatung’s subsidiaries
like CPT and GET also publish their reports on corporate social
responsibility on their websites every year.
(2) T h e c o m p a n y p r o d u c e s i t s
corporate social responsibility
reports, disclosing the
implementation of the corporate
social responsibility.
(2) The 2007 Tatung Business Environment Report was awarded a silver (2) N/A
medal in the category of "Taiwan Corporate Sustainability Report
Award,” whereas the 2012 Tatung Corporate Sustainability Report
was shortlisted on Taiwan Top 50 in the “2013 Taiwan Corporate
Sustainability Awards.”
5. If the Company has established the principles for the corporate social responsibility in accordance with the “Corporate Social
Responsibility Best Practice Principles for TWSE/GTSM Listed Companies,” please specify any discrepancies between the principles
and their implementation:
The Company has set up and implemented the principles as dictated by laws.
6. Other essential information to facilitate a better understanding of the company’s assuming its corporate social responsibility (e.g., the
company’s dedication to environmental protection, community participation, social welfare, voluntary work, consumer rights, human
rights, health and safety and other corporate responsibility related activities and work).
Tatung Company’s website: http:// www.tatung.com.
7. If the company’s products or reports on the corporate social responsibility have been officially certified, they should be specified
accordingly.
(1) The company’s home air conditioners, amorphous cast-resin dry type transformers and amorphous oil-immersed type
transformers have been certified with a Green Mark by the Environmental Protection Administration, the Executive Yuan, Taiwan.
(2) The energy label has been given by the Bureau of Energy, the Ministry of Economic Affairs, to the company’s many products
including air conditioners, dehumidifiers, washing machines, electric cookers, electric fans, refrigerators, monitors, indoor lighting
equipments, water dispensers, etc.
(3) NEMA Premium AC Motors (3HP4P) have acquired the PAS 2050 carbon footprint verification issued by DNV.
(4) The "2013 Tatung Corporate Sustainability Report" has been written in accordance with the requirements of AA1000AS: 2008
and Global Reporting Initiative (GRI) Guidelines (G3.1) and has been verified by TÜV Asia Pacific Ltd., Taiwan Branch, with the
disclosure level of A+.
28
Corporate Governance
(VI) The circumstance of corporate had carried out Ethical Corporate Management:
Item
Implementation
Reasons for noncompliance
1. Establishment of the Company’s
ethical corporate management
policies and programs
(1) The Company’s specification of (1) The Company continues to enhance core corporate philosophy (1) N/A
– “Integrity, Honesty, Industry, and Frugality,” and states that the
ethical corporate management
employees are prohibited to perform malpractices or accept gifts of
policies in its rules and external
others in regarding to their jobs on Company Rules and Business Ethics
documents, and the board of
Statement for Group Employees.
directors and the management
level’s undertaking to rigorously
and thoroughly enforce such
policies.
(2) E s t a b l i s h m e n t o f u n e t h i c a l (2) The Company periodically organizes training and awareness (2) N/A
programs for directors, managers and employees, so that they
conducts prevention programs,
understand the companies’ resolve to implement ethical corporate
t h e o p e rat i o n a l p ro ced u res,
management, the related policies, prevention program and the
guidelines, and training programs.
consequences of committing unethical conduct.
(3) Wh e n es ta b l i s h i n g u n et h i ca l (3) The Company stipulates and promulgates Company Rules and (3) N/A
Business Ethic Statement for Group Employees, and also establishes
conduct prevention programs,
rigorous and effective accounting system and internal control system
regarding business activities within
to prevent bribery and acceptance of bribes, illegal campaign
the business scope which may be
contributions.
at a higher risk of being involved
in an unethical conduct, the
Company’s preventive measures
against offering and acceptance
of bribes, and illegal political
donations.
2. I m p l e m e n t a t i o n o f e t h i c a l
corporate management
(1) The Company shall prevent its (1) The Company establishes the “Supplier Ethics Declaration” to specify (1) N/A
not to engage in any bribery or any improper payment.
commercial activities from any
dealings with persons who have
any records of unethical conduct,
and include provisions demanding
ethical conducts in commercial
contracts.
(2) F o r m a t i o n o f a d e d i c a t e d (2) Each department of the Company in accordance with their duties to (2) N/A
fulfill Corporate Social Responsibility.
(concurrently serving) unit to be
in charge of establishing and
e n fo rc i n g et h i ca l co r p o ra te
management, and the status
of supervision by the board of
directors.
(3) P ro m u l g a t i o n of p o l i c i e s fo r (3) The Company establishes the ”Conflicts of Interests Prevention (3) N/A
Clause” on Company Rules and the Rules Governing Procedure for
preventing conflicts of interests,
Board of Directors Meetings, and has stipulated and promulgated the
and provision of an appropriate
“Internal Significant Information Processing Operational Procedures”
channel for presenting opinions.
for directors, managers and employees in order to avoid insider
trading.
29
TATUNG 2012 Annual Report
Corporate Governance
Item
Implementation
Reasons for noncompliance
(4) E x e c u t i o n o f t h e e f f i c i e n t (4) In addition to the establishment of a rigorous and effective (4) N/A
accounting system and internal control system, internal audit staffs
accounting systems and internal
periodically execute each audit operations. The Company also
control systems for implementing
establishes the Internal Control Committee to monitor corporate
ethical corporate management,
governance persistently.
and the examination by internal
auditors.
3. Establishment of a channel for The Company has stipulated and promulgated reporting and penalty N/A
receiving reports on unethical systems to all employees.
co n d u ct, a n d a d i s c i p l i n a r y
and complaint system handling
violation of the ethical corporate
management rules.
4. Enhancement of disclosure on
information
(1) Establishment of a website to (1) The Company has set up a website to disclosure the core corporate (1) N/A
philosophy – “Integrity, Honesty, Industry, and Frugality.”
disclose information relevant to
ethical corporate management.
(2) Oth e r i nfo r m at i o n d i scl os u re (2) The Company has installed a website in English and appointed (2) N/A
personnel to gather, disclose and update information.
m e a s u r e s (s u c h a s c r e a t i n g
an English- language website,
d es i g n at i n g s ta f f s to h a n d l e
info r mation col lection and
disclosure on the website).
5. If the Company, according to “Ethical Corporate Management Best Practice Principles”, has promulgated its own principles, please
specify its implementation and the deviation from its own principles: None.
6. Other important information to facilitate better understanding of the Company's implementation of ethical corporate management
(such as making commercial transaction counterparties aware of the Company’s resolve to implement ethical corporate
management and policies, inviting them to participate training programs, and reviewing and adjusting the Company’s Ethical
Corporate Management Best Practice Principles):
(1) Awarded Best Corporate Governance, Taiwan, 2013 by World Finance, a financial magazine by World News Media based in the
UK.
(2) The company at all times takes notice of the development of relevant local and international regulations concerning ethical
corporate management so as to review and improve its ethical corporate management best practice principles and achieves
better results from implementing the principles.
(3) The company complies with the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations
Act, Anti-Corruption Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, TWSE/GTSMlistening rules, or other laws or regulations regarding commercial activities, as the underlying basic premise to facilitate ethical
corporate management.
(VII) Corporate governance best-practice principles and relevant regulations:
1. The company had established independent directors at the 2011 ordinary shareholders meeting, establish audit committee, formulate
compensation committee articles, audit committee charter and independent directors articles.
2. The company has scheduled the internal significant information processing operational procedure.
3. The Subsidiary Company's Corporate governance best-practice principles and relevant regulations, please refer to the Subsidiary
Company website.
(VIII) Other vital information to facilitate understanding of corporate governance:
1. For information on TATUNG's corporate governance, please refer to the TATUNG website at http:// www.tatung.com.
2. The Subsidiary Company's facilitate understanding of corporate governance, please refer to the Subsidiary Company website.
30
Corporate Governance
(IX) Execution of internal control system
1. Internal control statement
Tatung Company Limited by Shares
Internal Control System Statement
Date: March 18, 2014
The Company states the following with regard to its internal control system during fiscal year 2013, based on the findings of a selfevaluation:
I. The Company is fully aware that establishing, operating and maintaining an internal control system are the responsibilities of
its Board of Directors and management. The Company has established such a system to provide reasonable assurance of the
effectiveness and efficiency of its operations (including profitability, performance and safeguarding of assets security), reliability of
its financial reporting, and compliance with applicable laws and regulations.
II. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can
provide only reasonable assurance of accomplishing the three goals mentioned above. Furthermore, the effectiveness of an
internal control system may vary along with changes in the operating environment or circumstances. The Company’s internal
control system features a self-monitoring mechanism, however, and the Company takes corrective actions as soon as a deficiency
is identified.
III. The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the
Regulations Governing the Establishment of Internal Control Systems by Public Companies (hereinbelow, “the Regulations”).
The internal control system judgment criteria adopted by the Regulations divide internal control into five key elements based
on the process of management control: 1) control environment, 2) risk assessment, 3) control operation, 4) information and
communication, and 5) monitoring, each of these elements in turn contains certain audit items. Please refer to the Regulations for
details.
IV. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid
criteria.
V. Based on the aforementioned audit findings, the Company believes that on December 31, 2013, its internal control system
(including supervision of subsidiaries), as well as internal controls to monitor the attainment of its objectives concerning operational
effectiveness and efficiency, reliability of its financial reporting, and compliance with applicable laws and regulations were
effective in design and operation and reasonably assured the achievement of the above-stated objectives.
VI. This Statement will become a major part of the content of the Company’s Annual Report and Prospectus, and will be publicized.
Any falsehood, concealment, or other illegality in the publicized content will entail legal liability under Articles 20, 32, 171 and 174
of the Securities and Exchange Act.
VII. This Statement has been unanimously approved by the 9 attending directors in the Board of Directors Meeting of the Company on
March 18, 2014.
Tatung Company Limited by Shares
W. S. Lin
Chairman
Wen-yen K. Lin
President
2. This statement is issued in accordance with the criteria for “Regulations Governing the Establishment of
Internal Control Systems of Public Companies” promulgated by the Financial Supervisory Commission
(“FSC”), Executive Yuan.
3. Where CPAs are retained to audit the internal control systems as required by the FSC, please disclose the
CPAs' audit report: N/A.
31
TATUNG 2012 Annual Report
Corporate Governance
(X) Any penalties imposed upon the Company or its in-house personnel in accordance with the
law, or punishment imposed by the Company on its in-house personnel for violation of the
Company’s internal control system regulations, and the major defects and corrective action
thereof: None.
(XI) Major resolutions of the Shareholders’ Meeting
Summary of major motions
Resolution
Subsequent development
1. Resolution on ratification of the 2012 business
report and financial statements.
1,684,600,245 (96.63%) shares in favor.
Motion passed as proposed.
Completed.
2. Resolution on ratification of the appropriation
of profit and loss for 2012.
1,690,851,998 (96.99%) shares in favor.
Motion passed as proposed.
Completed.
3. Discussion on the Long-term fund-raising plans.
1,495,971,312 (85.81%) shares in favor.
Motion passed as proposed.
For market reason and actually requires,
fund-raising plans has been terminated.
4. Amendment of the Articles of Incorporation.
1,690,848,796 (96.99%) shares in favor.
Motion passed as proposed.
Completed in accordance with the
resolution.
5. Procedures for Lending Funds to Others—
Cur rent Procedures and Proposed
Amendments.
1,690,848,590 (96.99%) shares in favor.
Motion passed as proposed.
Completed in accordance with the
resolution.
6. Procedures for Endorsement & Guarantee—
Cur rent Procedures and Proposed
Amendments.
1,690,845,447 (96.99%) shares in favor.
Motion passed as proposed.
Completed in accordance with the
resolution.
7. Procedures for Acquisition and Disposal of
Assets—Current Procedures and Proposed
Amendments.
1,690,845,447 (96.99%) shares in favor.
Motion passed as proposed.
Completed in accordance with the
resolution.
8. P roced u res fo r Sh a reh o l d e r s' M eet i n g
— Cur rent Procedures and Proposed
Amendments.
1,690,883,590 (96.99%) shares in favor.
Motion passed as proposed.
Completed in accordance with the
resolution.
9. By-election for an independent director.
Elected shares: 1,688,316,151
Completed the by-election of
Independent Director, and registration to
the Department of Commerce, Ministry of
Economic Affairs.
10. To release the di recto r s f rom the non competition restrictions.
1,681,113,284 (96.43%) shares in favor.
Motion passed as proposed.
Completed.
(XII) Major resolutions of the Board of Directors
Date
2013 / 3 / 25
Major resolutions
Approved the plans of Tatung Consumer Products (Taiwan) Co., Ltd. capital reduction and capital increase.
The Board of Directors resolved to convene the 2013 Regular Shareholder’s Meeting.
The plan for long-term fund-raising
2013 / 4 / 30
To get approval from the shareholders' meeting to authorize the Board to execute a private placement as
an alternative fund-raising plan
Supplementary information on the Company's 2013 Annual General Shareholders' Meeting.
Directors' resolved no dividend distribution in year 2013
2013 / 5 / 13
Resolved to approve the syndication loan.
The change of financial officer.
2013 / 6 / 24
2014 / 3 / 18
2014 / 4 / 25
The release of managers' non-competition restrictions.
The Board of Directors resolved to convene the 2014 Regular Shareholder’s Meeting.
Directors' resolved no dividend distribution in year 2014
Supplementary information on the Company's 2014 Annual General Shareholders' Meeting.
32
Corporate Governance
(XIII) Major issues of record or written statements made by any director dissenting to important
resolutions passed by the Board of Directors: None.
(XIV) Resigned or discharged officers relating to financial statements
As of April 30, 2014
Job title
Name
Date of election
Date of termination
Cause
Financial Officer
Chung-jung Kung
May 14, 2010
June 15, 2013
Career Planning
Note:
Parties relating to financial statements, namely chairman, president, financial and accounting managers, and internal auditing
managers, etc.
Information on independent auditors
Accounting firm
CPA’s name
CPA’s audit period
Remark (Note)
Su-Wen Lin
Ernst & Young Taiwan
2013
Lan Ching Chang
Unit NT$ Thousand
Title
Range
Audit fees
Non-audit fees
Total amount
1
Under NT$2,000
–
–
–
2
From NT$2,000 to NT$4,000
–
2,362
2,362
3
From NT$4,000 to NT$6,000
–
–
–
4
From NT$6,000 to NT$8,000
–
–
–
5
From NT$8,000 to NT$10,000
–
–
–
6
Over NT$10,000
13,940
–
13,940
1. The non-audit professional fees paid to CPAs, CPAs’ offices and affiliates accounting for more than one-quarter of total audit professional
fees should be disclosed. The disclosure items should include the amounts of audit and non-audit professional fees as well as non-audit
service content.
Unit NT$ Thousand
Non-audit fees
Accounting firm
CPA’s name
Audit
CPA’s audit
fees Management Company HR Others Subtotal
period
system design registration
Su-Wen Lin
Ernst & Young Taiwan
13,940
Lan Ching Chang
0
0
0
2,362
2,362
2013
Remark (Note)
Non-audit fees
include consultant
fee (NT$2,362
thousand dollars).
2. The audit professional fees of replacing CPAs’ firm within the current fiscal year less than that of the previous fiscal year should be disclosed.
The disclosure items should include the reduction amount, percentage and reason for the replacement: None.
3. The audit professional fee within the current fiscal year that is 15% less than that of the previous fiscal year should be disclosed. The
disclosure items should include the reduction amount, percentage and reason: None.
33
TATUNG 2012 Annual Report
Corporate Governance
Information on change of independent auditors
1. Regarding the former CPA
Replacement date
Reason for replacement
December, 2012
Ernst & Young, the accounting firm, replaced Mr. Yi Chang Liang and Ms. Lan Ching
Chang with Ms. Su Wen Lin and Ms. Lan Ching Chang in the first quarter of 2013 as a result
of its reshuffle.
The Board of Directors also passed the resolution for the change of certified public
accountants for the company.
Title
CPA
The Company
Voluntarily ended the engagement
N/A
N/A
Discontinued the engagement
N/A
N/A
Situation
Specif y i ng whethe r the Company
terminated or the CPA declined further
engagement
Issued an audit report expressing other than
an unqualified opinion during the two most
recent years, furnish the opinion and reason
None
Accounting principles or practices
Whether there was any disagreement
between the Company and the former
CPA
Financial report disclosure
Disagreement
Auditing scope or procedure
Others
Agreement
√
Explanation
Other matters that shall be disclosed
None
2. Regarding the successor CPA
Replacement date
December, 2012
Accounting firm
Ernst & Young Taiwan
CPA,s name
Ms. Su Wen Lin and
Ms. Lan Ching Chang
Date of engagement
December, 2012
If prior to the formal engagement of the successor CPA, the Company consulted the newly engaged
accountant regarding the accounting treatment of or application of accounting principles to a specified
transaction, or the type of audit opinion that might be rendered on the Company’s financial report, the
Company shall state and identify the subjects discussed during those consultations and consultation results
N/A
Written views of the discrepancy between former CPA and successor CPA
N/A
3. Information on the Company’s chairman, president, financial or accounting managers holding
positions in the auditor’s firm or its affiliates within the previous year: None
34
Corporate Governance
Change of shareholding by directors, management, and major
shareholders
2013
Title
Name
Chairman
Wei-shan Lin
Director & President
Wen-yen K. Lin
Director
Increase
(decrease) in
shares held (note1)
As of April 30, 2014
Increase
(decrease) in
pledged shares
(note1)
Increase
(decrease) in
shares held
Increase
(decrease) in
pledged shares
--
--
--
--
600,000
--
--
--
Wei-tung Lin
--
7,200,000
--
--
Director
I-hua Chang
--
--
--
--
Director
Lung-ta Lee
--
--
--
--
Director
Representative of Tatung
University: Huo-yen Chen
--
--
--
--
Independent Director
Tzong-der Liou
--
--
--
--
Independent Director
Peng-fei Su
--
--
--
--
Independent Director
Chi-ming Wu
--
--
--
--
Vice President
Ying-che Huang
--
--
--
--
Chief strategy Officer
Tai-ji Pan
--
--
--
--
Senior General
Manager
Wen-chieh Peng
--
--
--
--
Financial officer
Ruei-kai Jhang
--
--
--
--
Accounting Officer
Shu-fen Chen
--
--
--
--
Note 1: Independent Director Chi-ming Wu was elected on June 13, 2012.
Chung-jung Kung, vice president and financial officer, was resigned on June 15, 2013.
Wen-chieh Peng, senior general manager, was inducted on June 24, 2013.
Ruei-kai Jhang, financial officer, was inducted on June 24, 2013.
Jin-dian Lu, senior vice president, was resigned on June 30, 2013.
Chi-an Hsiao, vice president, was resigned on September 21, 2013.
Note 2: The Company has no major shareholders owning more than 10% of its total shares.
Note 3: The counterparts of transfer or pledge of the Company’s equity are not related parties.
35
TATUNG 2012 Annual Report
Corporate Governance
Information on the top 10 shareholders who are related parties to
each other
Shares held personally
Name
Share(s)
Shareholding
(%)
Tatung University
Representative:
Liang-De Li
144,798,047
6.19
China Trust Commercial
Bank’s trust division
in custody for Tatung
Company’s employee
stockholding
trust account
Representative:
Hui-jing Ji
125,178,257
5.35
Sunplus Technology
Co., Ltd.
Representative: Zhou-jie
Huang
46,094,400
Hsiu-luan Chen
Information on top 10
shareholders in proportion
of shareholding and
who are related to one
Total shares held in
another person’s name another under Financial
Remark
Accounting Standard
No. 6 - their names and
Relationship.
Shares held by spouse
and minor children
Shareholding
Shareholding
Share(s)
(%)
(%)
Share(s)
Name
Relationship
None
None
None
None
-
-
-
-
-
-
-
-
1.97
-
-
-
-
None
None
43,443,192
1.86
-
-
-
-
Wei-shan
Lin
1st degree of
consanguinity
Dimensional Emerging
Markets Value Fund
37,255,342
1.59
-
-
-
-
None
None
Tatung High School
Representative:
Liang-De Li
32,050,074
1.37
-
-
-
-
None
None
Tatung Joint Workers’
Welfare Commission
Representative:
Wei-shan Lin
31,863,298
1.36
-
-
-
-
Hsiu-luan
Chen
1st degree of
consanguinity
Global Life Insurance
Co., Ltd.
Chairman: Jia-ying Ye
31,118,090
1.33
-
-
-
-
None
None
JPMorgan Chase Bank
N.A. Taipei Branch in
custody for Norges
Bank
26,317,444
1.12
-
-
-
-
None
None
Li-ching Chen
25,711,440
1.10
-
-
-
-
None
None
Long-term investments ownership
As of April 14, 2014 Unit: share; %
Reinvested
companies
Shares
Chunghwa
Picture Tubes, Ltd.
Direct / indirect investments by the
Company’s directors, supervisors,
and management
Invested by the Company
548,385,630
%
Shares
8.46
918,891,704
%
Total ownership
Shares
14.18
1,467,277,334
%
22.65
36
Financial Information
Source of capital
(I)Capitalization
As of April 30, 2014
Authorized capital
Month /
year
Par
alue
February
2011
NT$10
Share(s)
Paid-in capital
Amount (NT$)
Capital
increase
assets
Amount (NT$) Sources of capital by
other
than
cash
Share(s)
10,000,000,000 100,000,000,000
Remark
2,339,536,685
23,395,366,850 Conversion
of shares by
stock option
NT$8,545,000
capital reduction
NT$32,134,271,970
No
Others
Official letter
under ChingShou-Sheng-Tze
No. 10001035060
dated February
22, 2011 of Ministry
of Economic
Affairs
(II) Type of stock
Authorized capital
Type of stock
Common stock
Remark
Outstanding shares
Un-issued shares
Total
2,339,536,685 shares
7,660,463,315 shares
10,000,000,000 shares
Listed company’s stock
(III) Shelf registration: None.
Shareholder structure
As of April 8, 2014
Type of
shareholders
Quantity
Number of shareholders
Shareholding
Holding percentage (%)
37
Government
agencies
Domestic
financial
institutions
Other domestic
institutions
Individuals
Foreign
institutions and
individuals
Total
5
12
248
211,829
261
212,355
3,206,446
171,513,925
328,308,613
1,467,851,568
368,656,133
2,339,536,685
0.14
7.33
14.03
62.74
15.76
100.00
TATUNG 2012 Annual Report
Financial Information
Distribution profile of shareholder ownership
As of April 8, 2014
Range of shareholding
(unit :share)
Number of shareholders
Ownership
Holding percentage (%)
1 ~ 999
120,896
35,369,188
1.51
1,000 ~ 5,000
59,519
142,587,267
6.09
5,001 ~ 10,000
13,976
107,059,486
4.58
10,001 ~ 15,000
5,077
62,732,050
2.68
15,001 ~ 20,000
3,099
56,250,368
2.40
20,001 ~ 30,000
3,407
83,979,822
3.59
30,001 ~ 50,000
2,830
113,083,557
4.84
50,001 ~ 100,000
1,903
135,462,225
5.79
100,001 ~ 200,000
874
123,670,905
5.29
200,001 ~ 400,000
361
101,025,019
4.32
400,001 ~ 600,000
120
58,566,567
2.50
600,001 ~ 800,000
60
41,934,844
1.79
800,001 ~ 1,000,000
44
39,957,780
1.71
1,000,001 above
189
1,237,857,607
52.91
212,355
2,339,536,685
100.00
Total
Note: The Company does not issue preferred stock.
Major shareholders
As of April 8, 2014
Name
Shares
Total shares owned
Ownership (%)
Tatung University
144,798,047
6.19
China Trust Commercial Bank’s trust division in custody for Tatung Company’s employee
stockholding trust account
125,178,227
5.35
Sunplus Technology Co., Ltd.
46,094,400
1.97
Hsiu-luan Chen
43,443,192
1.86
Dimensional Emerging Markets Value Fund
37,255,342
1.59
Tatung High School
32,050,074
1.37
Tatung Joint Workers’ Welfare Commission
31,863,298
1.36
Global Life Insurance Co., Ltd.
31,118,090
1.33
JPMorgan Chase Bank N.A. Taipei Branch in custody for Norges Bank
26,317,444
1.12
Li-ching Chen
25,711,440
1.10
38
Financial Information
Major institutional shareholders
Institutional shareholder
Major shareholders
Zhou-jie Huang
Ownership
15.67%
De-jhong Liu
2.20%
Global View Co.,Ltd.
1.70%
Jhih-hao Kung
1.47%
Wen-chin Li
1.20%
Dimensional Emerging Markets Value Fund
1.17%
JPMorgan Chase Bank N.A. Taipei Branch in custody for Norges
Bank
0.82%
Bing-huang Shih
0.65%
Syner Investment Co.,Ltd
0.60%
China Trust Commercial Bank’s trust division in custody for Sunplus
Technology Company’s employee stockholding trust account
0.53%
Sunplus Technology Co.,Ltd.
Cheng Wei Investment Co., Ltd.
81.03%
Fu Zuo Development Co., Ltd.
14.92%
Global Service Co., Ltd.
2.13%
Qi-hong Ceng
0.15%
Yu-lian Ji
0.07%
Cheng-kun Xie
0.07%
Ming-yu Ying
0.06%
Hua Ji
0.05%
Hai Ji
0.05%
Huei-wun Siao
0.03%
Global Life Insurance Co., Ltd.
39
TATUNG 2012 Annual Report
Financial Information
Market price, net worth, earnings and dividends per common share
Fiscal year
Item
Market price (Note 1)
Net worth per share
(Note 2)
Earnings per share
As of April 30, 2014
2013
(Note 8)
High
10.30
8.47
10.5
Low
5.62
7.03
8.19
Average
7.43
7.72
9.39
Before distribution
13.83
14.68
15.16
After distribution
13.83
14.68
15.16
2,309,101,135
2,318,432,969
2,322,997,585
(1.52)
(0.70)
0.3
No
No
No
Retained earnings
No
No
No
Additional paid-in capital
No
No
No
No
No
No
(4.89)
(11.03)
31.3
No
No
No
No
No
No
Weighted average of shares
Earnings per share (Note 3)
Cash dividends
Dividends per share
2012
Stock dividends
Accumulated undistributed dividends (Note 4)
Price to earnings (P/E) ratio (Note 5)
Return on investment Price to dividend (P/D) ratio (Note 6)
Cash dividend yield (Note 7)
* Information on retroactive adjustments in market price and cash dividends shall be disclosed if any dividends were distributed due to an
increase in retained earnings or capital surplus.
Note 1: Pertains to the highest and lowest market prices of each common share in the fiscal year specified. The average market price for each
fiscal year is calculated based on the transaction value and volume for the year.
Note 2: Figures based on the number of shares issued at the end of the previous fiscal year and the resolution passed at the shareholders’
meeting in the following fiscal year.
Note 3: Earnings per share before and after adjustment shall be disclosed if stock dividends were distributed.
Note 4: Regulations governing the issuance of securities provide that un-appropriated dividends in the current year may be accumulated and
distributed when the Company posts a profit, and only the accumulated amount of dividends needs to be disclosed.
Note 5: P/E ratio = Average closing price per share/Earnings per share
Note 6: P/D ratio = Average closing price per share/Cash dividend per share
Note 7: Cash dividend yield = Cash dividend per share/Average closing price per share in the current year
Note 8: Audited net worth per share and earnings per share figures based on the latest quarter preceding the publication of the annual report; other
figures based on the latest data available prior to the publication of the annual report.
Dividend policy and implementation status
(I) Dividend policy
1. The Company is committed to ensure steady business growth in order to provide stable profits for its shareholders and greater returns
for its long-term shareholders.
2. If the Company’s audited financial statements show a profit, the earnings shall first be used to pay its income tax and recoup previous
losses pursuant to the law, after which 10% shall be set aside as legal and special reserves and the remainder, if any, shall be allocated
for distribution.
3. The Company shall allocate no more than 1% of earnings available for distribution as a bonus to directors and not less than 1% as a
profit-sharing bonus to employees in accordance with the law.
4. Total distributed earnings shall not be less than 60% of accumulated distributable earnings.
5. Stock and cash dividend distribution ratios shall be determined based on the Company’s profits and funding plans in the
current year, with the proviso that the cash dividend ratio shall be no less than 10% of distributable earnings.
(II) Implementation
1. To recoup losses, no dividends were distributed in 2013.
2. To recoup losses, no dividends were distributed in 2014. A breakdown on recouping losses in 2014 follows:
40
Financial Information
(III) Recouping losses
Unit: NT$ Thousand
Item
Fiscal year
Accumulated deficits brought forward
1. Adjustment of retained earnings under first-time adopted IFRSs
2. Net loss after the tax
3. Other comprehensive income
4. Net value of the obtained or disposed subsidiaries’ shares
5. Shares disposed by subsidiaries treated as treasury share transactions
The total amount of the deficit yet to be compensated
Item for compensating the deficit:
Special reserve to compensate the accumulated deficits
2013
(6,377,504)
2,497,595
(1,611,408)
(23,593)
178,222
(583,002)
(5,919,690)
5,919,690
Accumulated deficits carried forward
0
Dividend distribution
0
Impact of stock dividend distribution on business performance and EPS: Not
applicable.
Employee bonuses and remuneration to directors
(I) Percentage and scope of employee bonuses and remuneration to directors as contained in
the Company’s Articles of Incorporation.
The Company operates in a rapidly changing but steadily growing industry. In consideration of its long-term financial plans and future
funding requirements, as well as to protect shareholders’ equity, the Company shall employ earnings for the year, if any, to recoup the
previous year’s losses and then set aside 10% as legal and special reserves and allocate the remainder for distribution. The Company
shall allocate no more than 1% as remuneration to directors and no less than 1% as employee bonuses. Total distributed earnings shall be
no less than 60% of accumulated distributable earnings. The ratios of stock and cash dividend distribution shall be determined based
on the Company’s profit and funding plans in the current year, provided that the ratio of cash dividend shall be no less than 10% of the
distributed earnings.
(II) The basis for estimating the amount of employee bonuses and director compensation, for
calculating the number of shares to be distributed as stock bonuses, and the accounting
treatment of the discrepancy, if any, between the actual distributed amount and the
estimated figure, for the current period.
The Company did not distribute any employee bonuses and director compensation in 2013. Due to the Company’s losses to be
recouped, it did not estimate employee bonuses and director compensation and distribute stock bonuses.
(III) Employee bonuses and remuneration to directors distributed from earnings of the previous
year: None.
(IV) The actual distribution of employee bonuses and director compensation for the previous
fiscal year (with an indication of the number, dollar amount, and stock price, of the shares
distributed), and, if there is any discrepancy between the actual distribution and the
recognized employee bonuses and director compensation, additionally the discrepancy,
cause, and how it is treated:
The company decided not to distribute employee bonuses and director compensation after the resolution of shareholders’ meeting in
2013 because of the net losses in 2012.
Share buyback: None.
41
TATUNG 2012 Annual Report
Financial Information
Issuance of corporate bonds
As of April 30, 2014
Type of corporate bond
1st credit-enhanced overseas convertible corporate bond
Issuing date
March 25, 2011
Denomination
USD$100,000
Issuance and listing
Offering price
USD$100
Total amount
USD$150,000,000
Coupon rate
0%
Tenure
Three years Maturity: March 25, 2014
Guarantor
JPMorgan Chase Bank, N.A.,
Trustee
Citicorp International Limited
Underwriter
J. P. Morgan Securities Ltd.
Legal counsel
Jones Day
Auditor
Ernst & Young Taiwan
Repayment
Made in full amount upon expiration of the Three-year term
Outstanding
0
Redemption or early repayment clause
The price of exchanged stock has exceeded by 130% of
the exchange price for 20 consecutive days after the first
anniversary of issuance before maturity.
Covenants
No
Name of credit rating institute, rating date and results
an irrevocable standby letter of credit to be issued by
JPMorgan Chase Bank, N.A., which is rated Aa1 by Moody's
and AA- by S&P
Other rights of
bondholders
Amount of converted (exchanged or subscribed)
common shares, overseas depositary receipts or any
other securities as of the date of publication of the
annual report
No
Rules for issuance and conversion (exchange or stock
option)
Appendix 1
Dilution effect and other adverse effects on existing shareholders
No
Custodian
Securities Management Section of the Company
(I) Convertible corporate bond
Type of corporate bond
Fiscal year
1st credit-enhanced overseas convertible corporate bond
Item
2011
2012
2013
Maturity:
March 25, 2014
Highest
107.45
96.844
99.608
99.879
Lowest
90.33
90.992
96.262
98.877
Average
98.661
94.192
98.062
99.426
Conversion price (NT$)
18.3711
18.3711
18.3711
18.3711
Issuing date and conversion price upon
issuance
March 25,2011
NT$7.74
March 25,2011
NT$7.74
March 25,2011
NT$7.74
March 25,2011
NT$7.74
Method of conversion
Issuing new shares
Issuing new shares
Issuing new shares
Issuing new shares
Market price of convertible
corporate bond
42
Financial Information
* Notice to readers
This document is an English translation of a report whose
governing language is Chinese. 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 version shall prevail.
Appendix 1: Tatung Co., Ltd. Offering Plan for the First Issuance of
Credit-Enhanced Overseas Convertible Corporate Bonds
I. Issuer:
Tatung Co. (“Tatung” or the “Issuer”).
II. Use of Proceeds:
The proceeds w i l l be used fo r over seas raw mater ials
procurement and repayment of bank loans.
III. Total Offering Amount:
US$150,000,000
IV. Form of Offering:
All of the overseas convertible bonds of the Issuer (the “Bonds”)
are expected to be issued and offered publicly outside the
Republic of China (the “ROC”) in accordance with applicable
laws and regulations.
V. Bond Category, Denomination and Issue Price:
The Bonds are unsubordinated, convertible bonds in registered
form having the benefit of a standby letter of credit issued
by JPMorgan Chase Bank, N.A. The Bonds will be issued in
denomination of US$100,000 or an integral multiple of US$100,000
at 100% of the Bonds’ principal amount.
VI. Issue Date (“Issue Date”):
March 25, 2011
VII. Maturity Date (“Maturity Date”):
On the third anniversary of the Issue Date
VIII. Listing:
Singapore Stock Exchange
IX. Coupon Rate:
The coupon rate for the Bonds is 0% per annum. Issuer will not pay
interest to the holders of the Bonds (the “Bondholders”) annually.
X. Form of Guarantee or Security:
The Bonds will have the benefit of an irrevocable standby letter of
credit to be issued by JPMorgan Chase Bank, N.A., which is rated
Aa1 by Moody's and AA- by S&P.
XI. Redemption on the Maturity Date:
Unless previously redeemed, repurchased and cancelled or
converted, the Bonds will be redeemed by the Issuer on the
Maturity Date at 100% of the principal amount of the Bonds.
XII. Redemption at the Option of the Bondholders:
A. In the event that the common shares of Tatung cease to
be listed on the Taiwan Stock Exchange (“TWSE”), each
Bondholder shall have the right to require the Issuer to redeem
the Bonds, in whole or in part, at 100% of the principal amount
of the Bonds
B. In the event that a Change of Control as defined in the Trust
Deed and the Terms and Conditions of the Bonds occurs to
the Issuer, the Bondholders shall have the right to require the
Issuer to redeem the Bonds, in whole or in part, at 100% of the
principal amount.
C. The Bondholders should follow the redemption procedure
as specified in the Trust Deed and the Terms and Conditions
when exercising the aforementioned repurchase option. The
Issuer should follow the redemption procedure as specified
in the Trust Deed and the Terms and Conditions when
dealing with Bondholders¡¦ redemption requests. The Issuer
will redeem the Bonds with cash on the Payment Date as
specified in the Trust Deed and the Terms and Conditions.
XIII. Redemption at the Option of the Issuer:
A. The Issuer may redeem the Bonds, before the Maturity Date,
in whole or in part at any time after the first anniversary of the
Issue Date at 100% of the principal amount, if the closing price
of the common shares of Tatung traded on TWSE (translated
43
into U.S. dollars at the then prevailing exchange rate on the
relevant trading day) on each trading day during a period
of 20 consecutive trading days reaches 130% or above of the
then applicable Conversion Price (translated into U.S. dollars
at a fixed exchange rate determined on the pricing date).
B. The Issuer may redeem all of the outstanding Bonds at 100%
of the principal amount, in the event that more than 90%
of the Bonds have been cancelled after being redeemed,
repurchased or converted.
C. If as a result of changes to the relevant tax laws and
regulations in the ROC, the Issuer becomes obligated to pay
any additional taxes or other costs, the Issuer may redeem
all of the outstanding Bonds at 100% of the principal amount
pursuant to the terms of the Trust Deed and the Terms and
Conditions. Bondholders may elect not to have their bonds
redeemed but with no entitlement to any additional amounts
or reimbursement of additional tax.
XIV. Conversion Rules:
A. Subject of Conversion
Newly issued common shares of Tatung (“Common Shares”)
B. Conversion Procedures
The Bondholders may, after having provided the conversion
notice required under the Trust Deed and other documents or
certificates required by ROC laws and regulations, apply for
conversion of the Bonds with the conversion agent located
outside the ROC.
The Issuer will deliver the relevant Shares through bookentry transfer to an account registered in the name of the
converting holder or its local agent at Taiwan Depositary
& Clearing Corporation (“TDCC”) within five (5) business
days after receipt of the conversion notice; if the converting
Bondholder is overseas Chinese or non-ROC citizen and
has not opened an account with the TDCC pursuant to
applicable ROC law and regulation, the Issuer will transfer
such Common Shares after such account has been set up by
the Bondholder.
C. Conversion Period
Except for Bonds that have previously been redeemed or
repurchased or except during the Closed Period (as defined
below), the Bondholders shall have the right to request the
Issuer to convert the Bonds into Common Shares pursuant to
applicable laws and regulations and the Indenture at any
time during the period starting from the 41st day after the
issuance of the Bonds and ending on the date 10 days prior
to the Maturity Date.
For purposes hereof, the “Closed Period” shall include:
(1) The period of sixty (60) days prior to the date of annual
shareholders meeting, and the period of thirty (30) days
prior to the special shareholders meeting.
(2) The period starting on the 15th trading day prior to the first
day of any closure period (i.e. the period during which
Tatung’s shareholders’ register is closed) for determining
shareholders entitled to receive stock or cash dividends or
subscription of new shares in a capital increase for cash to
the relevant record date.
(3) In the event of capital reduction of Tatung, the period from
the record date for such capital reduction to one (1) day
prior to the trading of the shares reissued after the capital
reduction.
(4) Such other periods during which Tatung may be required
to close its shareholders’ register pursuant to the ROC laws
and TWSE rules.
D. Conversion Price
The Conversion Price shall initially be NT$7.74. The Conversion
Price will be adjusted to NT$18.3711 on share relisting date.
E. Adjustment of Conversion Price
After the issuance of the Bonds, the Conversion Price shall
be adjusted in accordance with the following anti-dilution
formula:
(1) After the issuance of the Bonds, upon the occurrence of
any event which will increase the number of the issued
Common Shares of the Issuer (including, but not limited
TATUNG 2012 Annual Report
Financial Information
to, issue of new shares in a capital increase for cash
(including the shares issued by way of private placement)
, recapitalization of retained earnings or capital surplus,
issue of employee bonus shares, stock splits, issue of new
shares to sponsor the issue of global depositary receipts
and any other events specified in the Indenture), and
where the consideration per share receivable by the
Issuer is less than the Market Value per Common Share (as
defined in the Indenture), the Conversion Price shall be
adjusted in accordance with following formula (subject
to the provisions of the Indenture). The adjustment of the
Conversion Price shall be made downwards, not upwards,
to the nearest cent of a dollar.
Adjusted Conversion Price = Then Conversion Price ×
[ENS+(NNS×PNI)/P]/[ENS+NNS]
ENS = Number of shares outstanding before issue (Note 1);
NNS = Number of new shares to be issued;
PNI = Per share offering price of the new issue (Note 2);
P = Market Value per Common Share (as defined in the
Indenture) on relevant record date
Note 1: ENS means the number of total issued and outstanding
common shares (including the common shares issued
by way of private placement), minus the number of
treasury shares which have been repurchased by the
Issuer but have not been cancelled or transferred.
Note 2: In the event of free distribution of shares or stock splits,
PNI shall be zero.
(2) The Conversion Price shall not be adjusted in the event of
capital reduction for cancellation of treasury shares of the
Issuer.
After the issuance of the Bonds, upon the occurrence of
any capital reduction (other than capital reduction for
cancellation of treasury shares) which will decrease the
number of the issued Common Shares of the Issuer, the
Conversion Price shall be adjusted in accordance with
following formula, effective on the record date of such
capital reduction:
Adjusted Conversion Price = Then Conversion Price ×
Number of outstanding shares before capital reduction
(Note 1) / Number of outstanding shares after capital
reduction
Note 1: “Outstanding shares” means the number of total
issued and outstanding common shares (including
the common shares issued by way of public offering
and private placement), minus the number of treasury
shares which have been repurchased by the Issuer but
have not been cancelled or transferred.
(3) After the issuance of the Bonds, if the Issuer shall
distribute any cash dividends or other form of cash to its
shareholders, subject to the criteria in the Indenture, the
Conversion Price shall be adjusted in accordance with the
following formula: (adjustment method should be subject
to detailed terms in the Indenture. The Conversion Price
shall be adjusted downward, not upward, and made to
the nearest cent of a dollar)
Adjusted conversion Price = Then Conversion Price x [1-(C/
P)]
C = Amount of cash per share;
P = Market Value per Common Share (as defined in the
Indenture);
(4) After the issuance of the Bonds, upon the occurrence of
certain dilutive or other analogous events as specified in
the Indenture, the Conversion Price shall also be adjusted
in the manner as prescribed in the Indenture.
XV. Entitlement of Dividends:
Bondholders do not have the right to receive stock or cash
dividends prior to conversion. After exercising the conversion
right, the converting Bondholders may enjoy the same rights to
receive dividend distribution as those available to the holders of
Common Shares.
Cash and Stock dividends
(1) In each calendar year, during the period from January 1
to the 15th trading day (exclusive) prior to the first day of
the closure period for determining shareholders entitled to
receive dividends, if a Bondholder applies to convert the
Bonds into Common Shares, the converting Bondholder may
be entitled to any cash or stock dividend distributions for the
preceding year and approved in the current year’s annual
shareholders’ meeting.
In each calendar year, during the period from the day
immediately after the record date to December 31, if a
Bondholder applies to convert the Bonds into Common
Shares, the converting Bondholder may only be entitled to
any cash or stock dividend distributions for the current year
and approved in the succeeding year’s annual shareholders’
meeting.
(2) In each calendar year, the Bonds may not be converted
during the period starting on the 15th trading day prior to the
first day of the closure period for determining shareholders
entitled to receive stock or cash dividends to the relevant
record date.
XVI. Cancellation:
The Bonds, after being repurchased (including the repurchase by
the Issuer from secondary market), redeemed, or converted, will
be cancelled and will not be re-issued.
XVII. Taxation:
A. Withholding Taxes: The payment of interest and premium (if
any) on the Bonds to non-resident individuals and institutions
having no permanent business places or agent in the ROC is
currently subject to a withholding tax at the rate of 15% with
respect to the gross amount of interest and premium (if any).
The Issuer will pay such tax so that the net amount received by
the Bondholders after such withholding or deduction equals
to the amount which would otherwise have been received
by them had no such withholding or deduction occurred.
B. Securities Transaction Tax: When Common Shares are sold by
a shareholder, a securities transaction tax equal to 0.3% of the
transaction price shall be levied.
The above descriptions of withholding tax and securities
transaction tax are based on the laws and regulations
currently in effect in the ROC.If there is any change in the
future with respect to the relevant laws and regulations, the
laws and regulations then in effect shall apply.
XVIII. Selling Restrictions:
No public offering, sale or delivery of the Bonds is permitted
within the ROC.
XIX. Governing Law:
The sale, administration and relevant terms and conditions of
the Bonds shall be governed by the laws of England and Wales.
The Bonds shall not be issued until after the effective registration
with the FSC in accordance with ROC laws and regulations. The
Bondholders’ conversion right shall be exercised in accordance
with the ROC laws and regulations and subject to the restrictions
or limitations provided hereunder.
XX. Amendment:
The terms and conditions of the Bonds are subject to such
changes and amendments as may be agreed to by the
Company and the Lead Underwriter after taking into account
future changes in market conditions and applicable local laws
and regulations; provided that any such amendments shall be
subject to the approval of the relevant authority in the ROC.
XXI. Underwriting Syndicate:
Lead Underwriter: J. P. Morgan Securities Ltd.
Local Lead Underwriter: Grand Cathay Securities Corporation
Trustee: Citicorp International Limited
Paying & Conversion Agent: Citibank, N.A., London Branch
LC Issuing Bank: JPMorgan Chase Bank, N.A.
Issuance of preferred shares: None.
44
Financial Information
Issuance of global depository receipt:
Issuing Date
10/2/2009
Issuance & Listing
Luxembourg Stock Exchange
Total Amount
US$197,500,000
Offering Price Per GDR
US$3.95
Units Issued
50,000,000
Underlying Securities
Capital increase for cash by issuing new common shares
Common Shares Represented
1,000,000,000
Rights & Obligation of GDR Holders
Same as those of Common Share Holders
Trustee
Not Applicable
Depositary Bank
The Bank of New York Mellon
Custodian Bank
Mega International Commercial Bank
GDRs Outstanding
45,669
Apportionment of Expenses for Issuance & Maintenance
Tatung
Terms and Conditions in the Deposit Agreement & Custody Agreement
Highest
US$ 5.726
Lowest
US$ 4.711
Average
US$ 5.586
Highest
US$ 6.699
Lowest
US$ 5.454
Highest
US$ 6.254
2013
Closing Price Per GDR
1/1/2014 - 4/30/2014
Status of employee stock option plan (ESOP): None.
Status of new restricted employee shares plan: None.
ESOP granted to management team and to the top 10 employees: None.
New restricted employee shares plan granted to management team and to the
top 10 employees: None.
Status of new share issuance in connection with mergers and acquisitions: None.
Financial plans and implementation : None.
45
TATUNG 2012 Annual Report
Operation Overview
Operation Overview
Revenue breakdown
For management purposes, the Group is organized into business units based
on their products and services and has four reportable operating segments as
follows:
(1) Optical sector: This sector is responsible for CRT, TFT-LCD backlight module manufacturing and production, development of liquid
crystal display modules, electronic switches and sensors and solar modules virus, manufacturing and sales.
(2) Energy efficiency and solar energy sector: This sector is responsible for the manufacturing of semiconductor materials, wafers,
polycrystalline solar silicon ingots, polycrystalline solar silicon, polycrystalline silicon ingot and non-film solar modules.
(3) Consumer products sector: This sector is responsible for digital television, flat panel display manufacturing, digital media devices,
digital audio-visual and home appliances, etc..
(4) Power sector: This sector is responsible for transformers, distribution panels, cables, motors, etc. manufacturing.
No operating segments have been aggregated to form the above reportable operating segments.
Optical Department of energy efficiency and solar energy Consumer products Power Other operating segments Consolidated
Revenue
Optical sector
Energy efficiency
and solar energy
sector
Consumer
products sector
Power sector
Others
Total
$60,004,399
$9,893,596
$12,303,835
$14,890,503
$15,834,537
$112,926,870
Revenue distribution of Tatung
Category
%
POWER BUSINESS GROUP
53.00 %
SYSTEM BUSINESS GROUP
19.03 %
CONSUMER BUSINESS GROUP
27.83 %
OTHER
0.14 %
46
Operation Overview
compliance with the highest requirement of Japan
and the online partial discharge diagnosis device
for power transformers.
POWER BUSINESS GROUP
Power Equipment Business Unit
- Industrial Appliance
Business Activities
I. Business scope
(I) Main lines of business and sales breakdown
Category
%
Transformers
50 %
Switchgears & System Engineering
50 %
III.Industry overview
(I) Current status and development
1. The global economy is still negatively affected
by the soaring prices of raw material and oil
and Europe debt crisis. In Taiwan, several public
projects have been executing, such as, new-build
MRT (International airport access, metropolitan
areas), Hualien-Taidong railway electrification of
Taiwan railway administration (TRA), distribution
feeder automation of Taipower Co. and etc. The
overall economic therefore was expanded stably.
The annual growth rate of GDP was 2.11%.
2. Lo o k i nto t h e ye a r 2 014 , a cco rd i n g to t h e
Directorate General of Budget Accounting and
Statistics of Executive Yuan, the GDP growth rate is
predicted to be 2.82%, 0.71% higher than 2013. The
domestic economy will keep on growing stably.
(II) Relationship between the upstream, midstream,
and downstream sectors of the industry
(II) Current products
1. Transformers
Al l k i nds of powe r t ransfo r me r s, d i st r i bution
transformers, shunt reactors, transformer partial
d i s c h a rg e d i a g n o s i s d ev i ce a n d te s t i n g &
certification services of transformers.
2. Switchgears & System Engineering Switchgears,
control panels, gas insulated switchgears
(GIS), underground 2-way and 4-way switches,
switchgear components, capacitors, reactors,
potential transformers, current transformers
and system engineering.
Upstream: Important components/parts, insulating
material, switchgear components and
raw material of metal.
Midstream: Design & manufacturing of the industrial
appliance.
Downstream: Government and private enterprises.
(III)Product development trend and competition
status
In the future, Taiwan will still be affected by the
factors of industry offshore migration and global
competition. The industrial appliance has shown a
status of small quantity and special specification.
P ro d u ct d i f fe re nt i at i o n i s t h e fo cu s of f ut u re
development.
II. Technology and R&D
(I) Product development
1. Transformers
• 245kV-400MVA Power Transformers / Expected
time to hit the market: 2015
• Online partial discharge diagnosis device for
transformers / Expected time to hit the market:
2014
• Super top-runner transformers for Japanese
market / Expected time to hit the market: 2014
2. Switchgears
• U nde rg round 4 - way Auto m at i c s w itches /
Expected time to hit the market: 2014
• Overhead switches / Expected time to hit the
market: 2014
(II) Research & development
As for transformer products, the company has
been developing high-capacity shunt reactors,
main transformers with ultra-high-voltage & ultrahigh-capacity, super top-runner transformers in
47
(IV)
Important certifications
2306
China Compulsory
Certification
Taiwan Excellence
Award from
Ministry of
Economic Affairs
TIPS
Certification
CED
ISO9001
ISO14001
OHSAS 18001
CNS Mark
TAF
Certification
IV. Long-term and short-term business
development plans
(I) Short-term plan
To utilize the newly built electric plant to reinforce
the manufactur ing abilit y and the production
capability of power transformers to win over the
orders of extra-high voltage and capacity of power
transformers.
TATUNG 2012 Annual Report
Operation Overview
(II) Long-term plan
By taking Taiwan as an R&D base, Tatung will build
its worldwide marketing networks of the industrial
p r o d u c t s by e n h a n c i n g t h e i n n ova t i o n a n d
upgrading the quality.
Market and product status
I. Market analysis
(I) Domestic market share, future supply and
demand, and growth potential in year 2013
1. Market share: Transformers accounted for 35%;
Switchgears & System engineering accounted for
10%.
2. Future supply and demand conditions and growth
potential: Tatung’s industrial appliance products
are selling domestically and internationally and
having an excellent reputation for their quality,
performance and service. These products are
selling directly in potential overseas markets such
as, the Americas, Australia, Japan, South-East
Asia, Mainland China, and the Middle East.
(II) Favorable and unfavorable factors and
countermeasures
1. Vision plan of Industrial Appliance BU
In response to the trend of global environmental
protection, we will continue to develop new
products with high-efficiency, energy-saving, low
noise level and meet RoHS-conscious to enhance
its green product image.
2. Favorable factors
(1) Ta t u n g h a s a n e n t i r e s e r i e s o f i n d u s t r i a l
appliance products including the equipment
for power generations, power transmission
and distribution, power cables, electric motors
and solar power plant, and is able to provide
turnkey system solutions.
(2) Ta i wa n e s e g ove r n m e nt h a s co nt i n u o u s l y
released various public infrastructure projects.
All of these will bring business opportunities to
heavy electrical industry in Taiwan.
(3) Japanese government has carried out a policy
of ex p a n d i n g d o m es t i c d e m a n d s fo r t h e
purpose of boosting the sluggish economics. It
is conducive to the promotion of Japan market.
(4) T h e p ro d u c t s o f p owe r t ra n s m i s s i o n a n d
distribution are listed in ECFA early harvest; the
tariffs will be gradually reduced to zero. It helps
in exporting them to Chinese market.
3. Unfavorable factors
(1) Pr ices of raw mate r ial s wo r ldw ide l i ke oi l,
co ppe r, a l u m i n u m, s tee l, etc. s t i l l rem a i n
relatively high, which resulted in having higher
costs and less room for profits.
(2) Due to the impact of continuous losses of
Taiwan Power Co., the plans of investing in
equipment for power generation, transmission
and distribution have slowed down. And the
global economic recovery was not evident, so
private investments tend to be conservative.
4. Countermeasures
(1) For lower the production costs, the globalization
of raw mater ial procurement will continue
to play a significant role in the integration of
searching and development.
(2) To develop compact, low-cost, high-efficiency
and energy-saving new products to increase
products’ competition edges.
(3) To strengthen the integration of vertical and
horizontal cooperation capability to undertake
the turnkey projects.
(4) To undertake customization of products and
to improve service quality to fulfill customer’s
needs as the top priority.
II. Purpose and manufacturing processes of
main products
(I) Purpose
Industr ial appliance products are mainly used
in the government’s major public infrastructure
projects such as, power plants, transmission and
distribution systems; and in private enterprises such
as, engineering of plant constructions, building
industries and traditional mechanical & electrical
manufacturing industries.
(II) Manufacturing processes
Through Tatung’s procurement system, raw materials
a n d p a r t s/co m p o n e nt s a r e p u rc h a s e d f r o m
suppliers worldwide. Low-cost and standardized
products have been developed and widely used
and trusted by customers at home and abroad.
III. Procurement of major materials
(I) Items of major materials
S i l i co n Ste e l , Co p p e r Co n d u cto r s , I n s u l at i n g
Oil, Bushing, Insulating material, Mild steel, Tap
Changers, Radiators, Circuit breakers and Protection
relays.
(II) Major suppliers
(1) Overseas supplies: ABB, NGK, MR, JFE, Siemens,
Kitashiba, Toshiba, Hitachi Metal, Mitsubishi, and
so on.
(2) Domestic Suppliers: China Steel Corporation, Yi
Chiu Chemical & Technical Co., Ltd., Minchali
Metal Industry Co., Ltd., Tatung Wire and Cable
Business Unit, etc.
(III)Various manufacturers and suppliers are at
reasonable prices, good quality and appropriate
delivery time. Through B2B procurement, it
improves the ability of both strains.
48
Operation Overview
Power Equipment Business Unit
- Wire & Cable
Business Activities
I. Business scope
(I) Main lines of business and sales breakdown
Category
E na m e l ed w i re, t i n ned w i re & ba re
copper wire
%
64 %
solderable evenly-thick lead-free tinned copper clad
steel wire, Rectangular wire, and 0.05mm or below
extremely fine self-bonding enameled wire.
2. Power cable
15kV high voltage weather-proof XLPE power cable
type test certified by Taipower, 3ψ3W plug-in box,
Flame retardant EPRN instrumental cables, 600V WRNCT
welding cable, WNCT-S welding cables, 600V IK silicone
rubber wire, 600V LK silicone rubber wire, Cable and
flexible cords for electrical equipment of ships.
3. Communication cable & electronic wire
Bend-Insensitive optical fiber cable, micro bundle optical
cable, flat optical cable and HCV solar cable.
III. Industry overview
(I) Current status and development
Power cable
19 %
Communication cable, electronic cable,
optical fiber cable
17 %
(II) Current products
1. Enameled wire, tinned wire, bare copper wire
Enameled wire: inverter duty motor wire (PEIV), compressor
wire, enameled copper wire for 300°C-level & 400°C-level
smoke and heat exhaust ventilators motor. Stranded
enameled wire, enameled aluminum wire, enameled
copper clad aluminum wire, enameled rectangular wire.
Tinned copper wire: Highly solderable evenly-thick
leadfree tinned copper wire, Highly solderable evenlythick lead-free tinned copper clad steel wire.
Bare copper wire: Bare copper wire, oxygen-free copper
wire, copper-alloy wire of all varieties.
2. Power cable
Power cable: 60 0V~161KV high & low-voltage XLPE
cab l e, PVC w i re and cab l e, Rubbe r cab l e (E PR,
Hypalon, Neoprene), Fire-resistant cable, Heat-resistant
cable, Low smoke halogen-free cable.
Busway distribution system: Insulation type, water proof
type and fire-resistant type busway distribution system.
3. Communication cable, electronic wire, optical fiber
cable Communication cable, electronic wire products:
Communication cable, LAN cable, Teflon wire, laptop wire, RG type,
CNS, JIS etc. high frequency coaxial cable and electronic wire.
Optical fiber cable: Slotted, single-mode optical loose
tube BJF SM optical cable, optical fiber patch cord /
pigtail, single loose tube optical fiber c able, jellyfilled
optical drop cable, Bend-Insensitive optical fiber cable,
micro bundle optical cable, flat optical cable and
Corrugated Steel Tape Armored optical Cable.
II. Technology and R&D
(I) Product development
1. Enameled wire & tinned wire
Enameled copper wire for inverter duty motor, highly
49
1. Enameled wire :
The prospects for enameled wire are increasing with
upgrades in the industry and the requirement for high
frequency transmission, improvements in heat resistance,
developments of inverter surge resistant magnet wire
used in eco-friendly, power-efficient, inverter-driven
home appliances, and the diversification of enameled
coils such as enameled rectangular wire and litz wire.
Market demand for enameled wire stays stable.
2. Power cable:
Demand increases steadily in major public infrastructure
projects, such as Taipower Linkou, Dalin, Tunghsiao,
Shenao updated works of power plant units, Taipei and
Taichung mass rapid transit railway project and the
country's various civil construction work.
3. Communication cable:
To meet the demand of Chunghwa Telecom Co. and
other Telecom Co. in constructing next generation
network (NGN) and 4G, procurement of communication
cable and optical cable gradually increases.
(II) Relationship between the upstream, midstream, and
downstream sectors of the industry
Upstream:
Suppliers of raw materials such as plastic pellets,
copper aluminum, tin optic fiber, steel wire, etc.
Midstream: Wire & Cable manufacturers
Downstream: Power, electrical engineering, and communication
electronics providers.
(III) Product development trend and competition status
1. Enameled wire:
The trend of enameled wire is becoming extremely fine,
self-bonding, high heat resistant, rectangular wire, and
surge resistant.
2. Power cable:
In response to the TPC localization policy of EHV
underground transmission power cable and 69/161KV
a nt ite r m ite XLPE ca b l e, TAT U N G ha s pa s sed th e
69K V antite r m ite cab l e t ype test. Fo r the t rends
of envi ronmental p rotection, cables that a re
environmentally friendly, eco cable and LSHF cable have
all acquired certifications. Regarding green energy,
TATUNG 2012 Annual Report
Operation Overview
TATUNG develops the PV wire and cable for solar energy
generation system and gets the third party certification
successively.
3. Communication cables:
Broadband optic fiber and indoor optic fiber have been
adopted by Chunghwa Telecom. Micro bundle optical
cable and flat optical cable certified by Chunghwa
Telecom and got order from Chunghwa Telecom. We
hope to enlarge the scale so that sales and profits would
increase.
electric products, motors, compressors, voice coils, smart
card and choke coil, etc.
The application of oxygen-free copper wire: solar ribbon
wire, electronic flexible flat cable, rectangular copper
wire, High-speed LAN cable, quality stereo wire, extremely
fine drawn wire copper materials, and diode pins.
Purpose of tinned wire: resistor and capacitor wire.
2. Production process:
copper rod → drawing → annealing → varnish (or tin)
coating → finished product test → packaging → delivery
Power cable
(IV) Important certifications
China Compulsory
Certification
Environmental Protection Label
from the Environmental
Protection Department
EU network system
verification
ETL verification
Japan PSE Certification
UL Certification
IV. Long-term and short-term business development
plans
(I) Short-term plan
Expanding markets in the Philippines, India, China, and
Middle-East
(II) Long-term plan
To strengthen product quality and marketing networks for
the Thai, Chinese and Vietnamese plants, and expanding
markets in Europe, the United States, Japan, Russia, and
Southeast Asia as well as constructing deeper and wider
product lines. The integrated operation of “4 sites, 4
plants” makes the most profitable investment.
Market and product status
I. Market analysis
1. Demand from Taipower Linkou, Dalin, Tunghsiao, Shenao
updated works of power plant units, Taipei and Taichung
mass rapid transit railway project and the country's various
civil construction works.
2. Demand for bare copper wire and enameled wire is stable
in Asia. Currently the Company adopts the integrated
operation of “3 sites, 3 plants” and strategy of flexible
delivery.
3. Favorable factors: Demand for EPR cable from Taipower
Linkou, Dalin, Tunghsiao, Shenao updated works of power
plant units, demand for, 25 & 15kV XLPE cable from
Taipower.
4. Unfavorable factors: Under the pressure of oil & electric
fees increase and public opinion about reducing capital
expenditures, the total demand of Taipower power cables
is greatly reduced compared with previous years and costs
of raw materials increase as prices of copper and oil rise.
II. Applications and manufacturing processes of
main products
Enameled wire, tinned wire and bare copper wire
1. The application of enameled wire: transformers, vehicle
1. Various types of power cables, from 600V to 161KV, supplied
to TPC, military, the public, and private sectors and exported
to other countries around the world.
2. Production process:
copper rod drawing → stranding → insulated extrusion →
wrapping → sheath extrusion → finished product test →
packaging → delivery
Communication cable
1. Purpose:
3C products for indoor voice and data communication,
electronic device connection, signal transmission, power
supply, (LAN) cables, broadband for high frequency data
transmission, and cable for long-distance high-capacity
transmission.
2. Production process:
Drawing → insulation → stranding → sheath extrusion
→inspection → packaging → delivery
III. Procurement of major materials
Enameled wire, tinned wire and bare copper wire
1. Main materials: Copper plates, copper wire, varnish, tin,
aluminum wire, and copper clad steel wire.
2. Sources: Contractors at home and abroad.
Power cable
1. Main materials: Copper, cross-linked PE, rubber, PVC
pellets, LSHF compound.
2. Sources: Contractors at home and abroad
Communication cable
1. Main materials: Copper wire, PE pellets, PVC pellets,
petroleum jelly and optical fiber, LSHF compound, etc.
2. Sources: Contractors at home and abroad
IV. Development strategy
1. Environmental protection is a responsibility for all. Tatung
is making an all-out effort to develop its products in the
direction of being low-lead, cadmium-free, low-smoke,
and halogen-free.
2. Continuing to develop a wide variety of LAN cables,
laptop wires, cell phone cables, satellite communication
cables, and fiber-optic image transmission modules.
3. Enameled wire, bare copper wire and tinned wire are
being developed to be heat-resistant, extremely fine, selfbonding, surge-resistant, and high-frequency transmission;
which are suitable for heat-resistant and humidity-resistant
surroundings.
50
Operation Overview
Motor Business Unit
Description of Business
I. Business scope
(I) Main lines of business and sales breakdown
Category
%
Motors
84 %
Generators
15 %
Other products
1%
(II) Current products
1. Motors
With 60 years of techniques and experience in
R&D and producing for all kinds of energy-saving
high-efficiency, single-phase, and three-phase
high-low-voltage motor from 1/8 ~ 30,000 HP, full
specification included a variety of special motor
and application of the system such as premium
high-efficiency motors, high-temperature resistant
motors, electric vehicle motors, explosion proof
m oto r, n ew a uto m at i c b r u s h l i f t i n g d ev i ce
eq u i pped wound roto r m oto r, ve r t i ca l h i g h
thrust pump motor, gear reducer, inverter motor,
aluminum frame motor, brake motor, oil well
pump motor, water pump motor, immersible
pump motor, built-in type spindle motor, rolling
motor, elevator motors, crane motors, permanent
magnet motors, traction motors, inverters, control
panel, each type of ventilators, etc; as well as
providing full solutions to serve for whole plant
powe r equi pment and systems eng i nee r i ng
industries.
2. Generators
Diesel generator set for land and marine uses,
hydroelectric power group, motor generator sets
for special purposes.
3. Other products
A variety of castings, etc.
II. Technology and R&D
(I) Product development
In order to meet with development of emerging
clean energy industr y, we actively involved in
51
new product research and development of lowenergy consumption and using less material. The
high-voltage motors continued to move towards
a s e r i e s o f l a r g e - s ca l e, c u s to m i z e d , h i g h e refficiency, energy-saving, low noise, low vibration
development, and the development of high value
added products to enhance the competitiveness.
1. Motors :
A. D eve l op i ng 24 0 0 kW/ 75 0 kW 6 P/8 P; l a rg e
Low-Voltage inverter Motor for marine duty.
(European market)
B. Developing 4500kW 4P large vertical wound
rotor motor. (European market)
C. High-efficiency series development: Taiwan \
Japan \ Europe IE3 All series (New to market
2014)
D. E x plosion - p roof se r ies development: high
voltage IEC Exd (To be certified and on the
market in 2014)
E. Machinery industry and motor energy saving,
such as ultra-high efficiency motors, ser ver
permanent magnet motors, EV motors.
F. Wa te r j a c ket h i g h vo l ta g e m oto r s s e r i e s
development (Europe \ Russia). (2014)
2. Generators:
D evel opment of 106 0 kW 14 P hyd ro - el ect r ic
turbine driven generator (For Japan, Thailand,
etc.)
3. Others:
Cast iron castings, reducer, and gearbox
III. Industry overview
(I) Current status and development
1. A review of the economy in 2013, according to
Directorate-General of Budget, Accounting and
Statistics (DGBAS), published on 2013/2/18, the
economic growth rate of 2.11%. It shows moderate
recove r y i n the domes ti c economy but s ti l l
weak demand in developed countries in recent
years, and thus it dragged down our expor t
performance. Beside, the increase of the Crossstrait industrial competition also caused weak
export and slow growth. The Financial Tsunami
of 2 0 0 8 l ed to the seve re g l oba l econom ic
re ce s s i o n . G ove r n m e nt s a c t i ve l y a d o pte d
Q u a n t i t a t i ve E a s i n g M o n e t a r y Po l i c y a n d
Expansionary Fiscal Policy, the global economy
se e m s to g ra d ua l l y recove red b ut g row i n g
slowly. The main reason is that the demographic
dividend disappear gradually, the productivity
gains limited, all countries in the positive effects
del-leverage debt, investment weakness, weak
demand caused by high unemployment rate,
dif f icult wage adjustment, which led to the
decline in global trade growth, the growth rate
of the economy has not yet rebounded to precrisis levels. American QE exit, China adjusts its
economic structural so growth slowdown, China
urges independent industry which endangers the
Cross-strait competitiveness; And Japan raised
TATUNG 2012 Annual Report
Operation Overview
its consumption tax which may endanger their
economy. All the uncertainties affect the global
economy this year.
2. A look ahead to 2014, Directorate-General of
B udg et, Accou nt i ng a nd Stat i s t i cs (D G BA S)
published Economic Growth Rate Newest forecast
on 2013/2/18. 2014 Economic Growth Rate will
be 2.82%. We will be affected by the global
economic and financial turmoil, especially the
foreign demand will have the most impact on our
country’s economic development. Fai-Nan Perng
reported, because the global economic recovery
will be steady this year, our exports and private
consumption growth is expected to increase,
however, the import and export growth is still slow.
In recent years, the exports to the developed
countries have decreased, and China actively
promotes the localization industry supply chain,
both sides of industr y competition intensified,
which resulting in our expor t momentum
weakened. After the Financial crisis, our export
growth had declined 9% compared with obvious
p re - cr isis. Among them, the cont r ibution of
exports in China fell 5.9 percent. 2014 economic
performance will be better than 2013, the overall
economic recovery is in the soft surface, but the
growth momentum is still insufficient. The regional
economic has to integrate with the international
t rend, Ta i wan must accele rate the pace of
liberalization reforms, to participate in regional
economic integration neighboring countries to
catch up and accelerate industrial restructuring,
in order to maintain our export competitiveness.
(II) Relationship between the upstream, midstream,
and downstream sectors of the industry
Upstream: Impor tant par ts, insulation materials,
and metal raw materials, and power
distribution equipment.
Midstream: motor product design and manufacturing.
B2B system, SAP system and PDM system.
Downstream: Government, private enterprises. (Power
plant, Steel plant, Petrochemical, Mining,
Water treatment, ship, etc.)
(III) Product development trend and competition status
E ne rgy savi ng and envi ronmenta l p rotection,
high-end equipment manufacturing, new energy,
n e w m a te r i a l s ; n e w e n e r g y ca r s a n d g r e e n
environmental protection as a core value of the
common pursuit in recent years, energy saving is
the main issue nowadays, new energy-saving and
electricity saving products are popular (such as
injection molding industry, electric vehicle).
(IV)
China Compulsory
Certification
Compliance with
American safety
standards
TAF
Certification
IV. Long-term and short-term business
development plans
(I) Short-term plan
20 0 0 KW and below Medium and high voltage
motor in Shanghai Plant has launched to produce.
Operating and layout for medium and small sized
motor can gradually improve the Tatung motor
product system. And we are striving for new product
research and development, such as industr ial
motors, carbon footprint certified high-efficiency
motors, high-temperature resistant motor, electric
vehicle motors, high efficiency motors will account
fo r mo re than 6 0 pe rcent w h ich can i mp rove
manufacturing capabilities and capacity.
(II) Long-term plan
1. To integrate global production resources, to
strengthen the basis of the manufacturing cost
and to combine global service network. Taiwan
as the R&D headquarters for the main product
development, to creating worldwide marketing
network for motor products.
2. High efficiency series development: Taiwan \
Japan \ Europe IE3 series (Launch in the market in
2014)
3. Explosion-proof series development: High voltage
IEC Exd Explosion-proof series (To be certified and
to launch in the market in 2014)
4. To i m p r o v e p r o c e s s c a p a b i l i t y ( i n c l u d i n g
equipment investment and layout improve) and
large motor winding process layout. To upgrade
8 0 0 -ton die - casting machine for large scale
allocation of large motor process.
5. Coping with China for the 12th Five-Year Plan
(2011-2015) seven emerging industries:
(1) Energy saving and environmental protection:
t h e e l i m i n at i o n of b a ck wa rd p ro d u ct i o n
capacity of enterprises in the steel, construction
materials, industrial, and increase the intensity
of the "old to be renewed” for automotive and
home appliances. Supplying energy-saving
motors, participating in projects that benefit
the real contribution to industrial energy saving!
Divide the works and collaborate each other
between Tatung Taiwan and Tatung Shanghai.
(2) New energy vehicles: fuel cell vehicles, hybrid
vehicles, hydrogen-powered cars, solar cars.
Market and product status
Important certifications
Canadian Standards
Association (CSA)
2613
Compliance with
American
safety standards
I. Market analysis
Taiwan Excellence
Award from
Ministry of
Economic Affairs
Compliance with
the
European Directives
(I) Year 2013, future supply and demand conditions
with growth for domestic and overseas market
share:
1. . Cur rently domestic mar ket share for major
52
Operation Overview
products: Motor 30%, Generator 25%.
2. Amer ican mar ket had g row th of 2.5% in the
second qua r te r of 2 013, but revi sed g row th
forecast for the fourth quarter. It estimates to
appear a gradual decline in the unemployment
rate, the economy continues to recover, but its
momentum is quite limited.
3. The unemployment rate of 2013 remains high
i n Eu rope, the re’s no cl ea r phenomenon of
economic improvement and only way to deal
with it is by increasing domestic demand to break
through the current situation, GDP growth must
be counted on the second half of 2014.
4. China had slowdown its economic growth to
only 7.6% due to the transformation in 2013. By
restructuring the world's factor y for the world
market, it changed to domestic demand to drive
economic growth, it is still expected to remain the
growth rate of 7% or more.
5. The annual economic growth rate was 2.11% in
2013, the economic recover y momentum was
stronger. But the machinery exports compared to
last year was negative growth by 4.9%. The overall
economic recovery in the soft surface, but the
growth momentum is still insufficient, the overall
economic environment remains quite uncertain.
(II) The vision of the favorable and unfavorable factors
and countermeasures
1. Motor Business Unit vision planning
Motor Business Unit vision planning: In response to
the global trend of environmental protection. We
will develop premium high efficiency products
and meet the standards of RoHS products in order
to enhance the eco-friendly image of products.
2. Favorable factors
(I) Change of preference: the demand is high for
energy saving high efficiency. Tatung motor
products included power generation, power
motor system equipment, the supply of the
entire series complete.
(II) Improving product development to attract
customers: high efficiency series development,
e x p l o s i o n - p r o o f s e r i e s d eve l o p m e n t ; i n
response to the Mainland China’s 12th FiveYear Plan (2011-2015), supply and development
for energy saving, environmental protection
and new energy vehicles to continue the
hybrid power electric car case EV motor of P
project, mechanical industry, energy saving
and environmental protection motor such as
Premium efficient motors, permanent magnet
motors, EV motors, petrochemical industr y,
steel industry, power plants, cement industry,
p rov i d i n g s u p po r t to th e ren ovat i o n a n d
renewal of the old industrial bases of China
Steel Co.
(III)For other emerging markets expansion strategies,
we will focus on sales area expansion, we plan to
combine the strength of the three plants of Power
Business Group. Three plants will participate in
53
exhibition and seeking for regional distributors, firstly
in Vietnam, India, the Middle East, Central and South
America, establish a beachhead to cut into the
market, and then offer competitive products and
services to expand the markets sales.
3. Unfavorable factors
(I) The economic entity of Southeast Asian Nations
(ASEAN) plus China, Japan, and South Korea
is formed, which will affect Taiwan's export
competitiveness.
(II) The international crude oil, copper, aluminum,
steel and other raw material prices continued
to be high, resulting in cost increase and profit
compression.
(III) Take forward integration of supplier chain and
take backward integration of customers
(IV) T he r i se of eme rg i ng manufactu re r s f rom
countries such as South Korea, China, and
Eastern Europe, which rely on the advantages
of economies of large scale and low-cost that
intrude our domestic and export market shares.
(V) T a i w a n w i l l e n t e r T h e T r a n s - P a c i f i c
Partnership (TPP), it should increase product
competitiveness.
4. Countermeasure
(I) Small motor product transformation is ongoing.
This year has been a successful year for new
customers and new markets development.
EV, PM and aluminum frame grinder motor
has been put into the market, will aggressively
d eve l o p t h e m a r ket. We w i l l ex p a n d o u r
medium sized series, to enhance the market
competitiveness of the motor.
(II) In order to meet demand for global energy
t re n d s , we d evote o u r s e l ve s to d eve l o p
efficient standard motor series and expand
different countries’ market share.
(III) A g g r e s s i ve l y l a u n c h fo r c e r t i f i c a t i o n o f
explosion-proof motor, pilot run and submit for
approval.
(IV) To build overseas offices or distr ibutors to
consolidate the domestic market. To meet
cus tome r demands by usi ng ex pansion
strategy: domestic sales through the district
stations as well as dealers, export, such as in
China, the United States, the European region
through overseas bases or invested companies.
In the Middle East, we can manage through
the representative in Saudi Arabia as well
as local dealers, and the remaining areas
can be reached through export sales staff.
We participate regularly in the international
exhibitions, new product launch press release,
a n d t h e N a t i o n a l E l e c t r i c a l Te c h n i c i a n
Association academic conference; which
enables us to assist custome r s in p roduct
selection, recommendation and training.
(V) Raw materials procurement continued toward
globalization, integrated search development,
low cost of production is horizontal divided
by Sansha and Shanghai plants, ver tically
TATUNG 2012 Annual Report
Operation Overview
integ rated way to achieve max imum
efficiency.
(VI) T h e p ro d u c t i o n p ro ce s s to b e i m p rove d
with the development of high value-added
products to supplement equipment for the
accuracy upgrade is the primary focus of work
next year in order to optimize the competitive
basis for future sustainable development so
that we can achieve the goal of maximizing
management profit.
(VII)Expanding production range of mid –small
m oto r p l a nt u t i l i z i n g l a rg e m oto r p l a nt ' s
equipment / fixtures for production / testing,
scheduled to increase production capability
of fo r m wou nd, re l eva nt p roces s such a s
winding coiling, assembly, etc. tooling, fixture
and testing equipment shall be fitted and
coordinated with each other. We expected to
improve mid-sized motor product line in order
to improve sales and gross profit of medium size
motor.
II. Purpose and manufacturing processes of
main products
Motor products are mainly used in power plants,
transmissions, distribution systems, private enterprises
to engage in factor y bui lt up, and const r uction
industries. Small and medium sized motor is mainly
used in the mechanical industries, water pumps, liquid
pumps, fans, air compressors, refrigerant compressors,
elevators, forklifts, cranes, lifts, lift ladders. Large motor
is mainly used for power plants, cement, chemical, and
industrial equipment, etc.
III. Procurement of major materials
(I) Main material for motor:
1. Magnetic material and conductive material:
silicon steel, copper, wire, insulating material, iron
material.
2. Cast iron motor parts
3. Motor peripheral: the control electronics, each
kind of accessories for temperature control and
peripherals.
4. Other materials: packaging wood and paper.
(II) Purchased the main raw materials from domestic
and overseas excellent suppliers through
procurement system, mainly suppliers:
1. Foreign manufacturers: Sumitomo ISOVOLTA,
VONROLL, SKF, NSK, Japan physicochemical, NTN,
FAG..... and other vendors.
2. Domestic manufacturers: China Steel, Tung Pei,
Sanford, Cummins and other manufacturers.
54
Operation Overview
SYSTEM BUSINESS GROUP
Smart Grid Business Unit
Business Activities
I. Business scope
(I) Main lines of business and sales breakdown
Category
%
Meter + Energy Management System
+ Micro Grid System
42.45%
Ingot-Growing
57.55%
(II) Current products
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center:
1. Electricity Meters, AMI System and Distribution Automation
System Full series of ANSI and IEC smart meters, prepayment
meters, electronic meters, meter interface unit (MIU),
data concentrator unit, and meter data collection and
management system software; FTU (Feeder Terminal Unit) and
FRTU (Feeder Remote Terminal Unit).
2. Energy Management System / Enterprise AMI / SCADA
Energy monitoring and management systems which could
be applied to power plant, communities, factories, offices,
schools, dormitories and etc.
3. Micro Grid System
Micro-grid EMS which could be applied to grids, cities,
communities, factories, military, off-shore islands and etc.,
smart inverter, renewable energy and energy storage system.
Ingot-Growing
• Ingot-Growing Center Solar poly-silicon ingot OEM business
II. Technology and R&D
(I) Product development
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
Specializing in electricity control, metrology technology and
communication protocol, products include smart meters,
communication module, MIU, data concentrator unit,
communication server, as well as meter data collection and
management system software; FTU, iFTU and LTU; SCADA;
energy diagnosis, monitoring and management system,
prepayment metering system, and micro-grid EMS.
Ingot-Growing
• Ingot-Growing Center
Various types of ingot OEM business
III.Industry overview
(I) Current status and development
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
55
1. Marketing research shows that smart meters are continuing
to replace electronic and mechanical ones in coming
years.
2. Governments around the world all include smart grid in
national energy policies; among which AMI is the most
critical infrastructure.
Ingot-Growing
• Ingot-Growing Center
Demands of high-efficiency solar wafer in America and
Japan are increasing. Our Ingot-Growing Center has been
in full-loaded operating during last six months, and would be
continued to the 1st half of this year.
(II) Relationship between the upstream, midstream, and
downstream sectors of the industry
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
Upstream: Metering IC, MCU, communication module,
inverter and energy storage
Midstream: F TU, smar t meters, energy management
system, SCADA and micro-grid EMS
Downstream: Utilities, factories, enterprises, residential and
military areas
Ingot-Growing
• Ingot-Growing Center
Upstream: Poly-silicon raw material supplier
Midstream: Poly-silicon wafer slicing supplier
Downstream: Solar cell module supplier
(III) Product development trend and competition status
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
1. Full series of electronic meters are developed in order
to meet the market demands. The basic type of meter
takes the advantage of competitiveness. High-level type
ones equipped with the communication module can be
applied to EMS.
2. SGBU had already built up high-voltage AMI system for
TPC (Taiwan Power Company). This year, our aim is to
fulfill TPC’s requirements of low-voltage AMI system and
smart meters. In order to meet customers’ requirements,
we develop various customized applications to further
improve the performance and efficiency.
3. SGBU is the only AMI system supplier for TPC in Taiwan,
which suppor ts the deployment of HV and LV AMI
systems. We are also the dominant smart meter supplier
in Taiwan.
4. In the meantime, we devote ourselves to providing high
quality, competitive AMI, related products and services
for overseas demands.
5. Micro grid is an emerging smart grid market, which has
significant growth over the next decade.
Ingot-Growing
• Ingot-Growing Center
Market has increasing demands for high-efficiency solar wafer.
The A4-plus ingot of high-efficiency solar wafer is scheduled to
mass production.
(IV) Important certifications and awards
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
ANSI certificate in 2011; IEC certificate, and DLMS/COSEM
TATUNG 2012 Annual Report
Operation Overview
Conformance test in 2012. Tatung is the only meter supplier in
Taiwan which owns those international certificates.
DLMS User Association
TEST REPORT
device
language
message
specification
IEC 62052.11 Electricity metering equipment (AC) – General requirements, tests and
test conditions – Metering equipment
IEC 62053.21 Electricity metering equipment (AC)—Particular requirements
Part 21: Static meters for active energy (classes 1 and 2)
IEC 62053.23 Electricity metering equipment(ac) – Particular requirements – Static
meters for reactive energy (classes 2 and 3)
Test Report
Reference No. .................................... :
13CA09125-MA03
Tested by (+ signature) ...................... : Marwa Alkaisi
UL METER PERFORMANCE COMPLIANCE REPORT FOR:
Tatung Co.
22 Chungshan N Rd, Sec 3, Taipei, 104, TW
Approved by (+ signature) ................. : R A Hills
manufactured by:
SECTION MANAGER
Date of issue ...................................... : 17 April 2013
Product: E3 Electricity Meter New Nic
Contents ............................................. : 63 pages
Laboratory details
Name .................................................. :
UL International New Zealand Ltd
Physical Address ............................... : 10 Vanadium Place, Middleton, Christchurch 8024, New Zealand
Contact Details ................................... : Telephone (+64) 3 940 4400 Facsimile (+64) 3 940 4411
Date: July 12, 2012
Project: 11CA59939
Job: 1001448768
Report: R11CA59939
NATIONALLY RECOGNIZED TESTING
LABORATORY:
Tel. +36 28 514065
Fax +36 28 514066
dlms@dlms.com
TATUNG
has successfully passed the DLMS/COSEM Conformance test, under the following conditions:
 CTT version: CTT version 2.5
 Licensed to: ITRI_Taiwan (2011/06/28)
 COSEM object definitions file version: Object_defs_v2.6_120912.dat
 Media identifiers used: [ABSTRACT, ELECTRICITY]
Date of testing .................................... : February 2013 – April 2013
American National Standard Institute, Inc.
Bahnhofstrasse 28
CH-6304 Zug
Switzerland
Certification No. 1285
Type: ETD-21
Mgmt. SAP = 1, "54415445544432313030303030303031" (TATETD2100000001)
PROJECT ENGINEER
ANSI C12.20 0.2 and 0.5 Accuracy Classes for Static Meter Test Report

This is to certify that the metering equipment identified as:
Test specification
Standard ............................................. : IEC 62052-11 : 2003 (Ed 1.0), IEC 62053-21 : 2003 (Ed 1.0) and
IEC 62053-23 : 2003 (Ed 1.0), IEC 62055-31 : 2005 (Ed 1.0)
Test
performed
Communication
profile
Test 1
3-layer HDLC
Opening mode
Application
context
DIRECT_HDLC
LN
Date and time
29th Nov 2012
Digital signature of the test report
1FF5757E12FAD54ED20A0A5726EA5B4B
The authenticity of the test report(s) has been verified by the DLMS User Association and the
metering equipment identified above is listed on its web site at: http://www.dlms.com.
With this, the manufacturer is entitled to display the DLMS/COSEM Compliant mark – shown below
– on its product duly identified and on its product literature.
Client details
Applicant ............................................. : Tatung Co.
rd
Address .............................................. : 22, Chungshan N. Rd., 3 Sec., Taipei, Taiwan
Underwriters Laboratories Inc.
12 Laboratory Drive, RTP, NC 27709
Product details
COSEM
Compliant
(see additional details on page 3)
Type of test object .............................. : Energy meter
Model/type reference ......................... : ETD-21AWEB
The test reports are filed by the DLMS UA. Copies are available from the manufacturer.
This Certificate is only valid for the functions successfully tested. The test has been executed on one
specimen of the product, as identified by the Management Logical Device Name reported. Results
may not be applicable for other test specimens.
Rating ................................................. : 230V, 5(100)A, 50Hz
Accreditation details
Date: Zug, the 30th November 2012
TRF revision 130130
03-EM-F0404 Issue: 1.0
Copyright UL LLC. All rights reserved. May not be reproduced without permission. UL PROPRIETARY AND CONFIDENTIAL. FOR UL
INTERNAL USE ONLY. This document is controlled and has been released electronically. The version on the UL intranet is the up-to-date document.
Hard copies are uncontrolled and may not be up-to-date. Users of hard copies should confirm the revision by comparing it with the electronically
controlled version.
The issuance of this report in no way implies Listing, Classification or Recognition by UL and does not authorize the use of UL Listing, Classification or
Recognition Marks or any other reference to UL on or in connection with the product or system. You cannot use this test data or UL's name or marks in
connection with any product, packaging, advertising, promotion or marketing without UL's prior written permission. Please be informed that UL neither
selected the sample nor determined whether the sample was representative of production samples. The test results apply only to the actual samples
tested.
ANSI
IEC
Paul Fuchs
General Secretary
DLMS/COSEM
Ingot-Growing
• Ingot-Growing Center
Certificates of ISO9001, ISO14001 and OHSAS18001.
ISO9001
ISO14001
OHSAS 18001
IV. Long-term and short-term business development
plans
(I) Short-term plan
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
To strengthen the relationship with main customers, build
effective retail channel for domestic market, and develop
Southeast Asia, Middle East, Japan, Europe and Americas’
markets.
Ingot-Growing
• Ingot-Growing Center
Continuously producing high-efficiency ingot and keep low
cost to increase the competitiveness.
(II) Long-term plan
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
Actively participate the domestic smart grid plan, and
expand to the overseas markets at the same time.
In addition to AMI system, SGBU also devotes to the
development of distribution automation systems and micro
grids.
Ingot-Growing
• Ingot-Growing Center
Co nt i n uo us l y p rod uci ng h i g h - ef f i ci en cy i ng ot, a nd
p ro a c t i ve l y to a d o pt n ew te c h n o l o g i e s fo r b et te r
performance.
Market and product status
I. Market analysis
(I) Domestic market
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
Low-voltage (LV) AMI plan by TPC
• 2012-2014: Complete the installation of LV AMI system and
10,000 LV AMI smart meters
• 2015-2016: Complete the installation of 100,000 LV AMI
smart meters
• 2016-2020: Install 6,000,000 LV AMI smart meters
(II) Overseas market
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
1. Global smart grid markets are steadily growing, and are
included in the national long-term policies, among which
AMI is the most significant one.
2. The European Union has announced the development and
promotion of smart grid vision by 2020, and required 80% of
customers to be provided with smart meters. The market in
EU is in growing.
3. In 2009, American Recovery and Reinvestment Act (ARRA),
which called for US$3.4 billion in smart grid funding, plans
to deploy the smart meters.
4. Smart meters have the significant growth in China, and the
demands are also increasing in Southeast Asia and Middle
East. South America is expected to be the next booming
market.
5. Global micro-grid market has a potential to reach up-to
US$27 billion and is expected to have a steady growth by
2022.
II. Purpose and manufacturing processes of main
products
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
1. Purpose
Electricity revenue meter for utilities, enterprise energy
saving monitoring and off-loading control system.
2. Manufacturing processes
Currently, design, mold making, assembly, testing and
packaging, all are performed in Taiwan locally.
Ingot-Growing
• Ingot-Growing Center
1. Purpose
Poly-silicon solar cells
2. Manufacturing process
Silicon are loaded into crucible container and sent to the
Ingot-Growing furnace, so as to produce the ingot for
slicing.
III. Supply of main raw materials
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
Materials are manufactured either in-house or from qualified
domestic or international suppliers to ensure product stability
and reliability.
Ingot-Growing
• Ingot-Growing Center
Materials are offered by foundry.
IV. Development strategy
Meter + Energy Management System + Micro Grid System
• R&D / Meter Center
We remain to be the leadership in design and development of
AMI system and smart meters, we devote ourselves to R&D of
new smart grid technologies. We cooperate with the strategic
partners, as well as make efforts to cost down to ensure our
anufacturing process competitiveness. In addition to AMI, SGBU
aims to develop the FTU / FRTU in ADAS and micro grid system.
Ingot-Growing
• Ingot-Growing Center
Keep cooperating with OEM customer for more high-efficiency.
56
Operation Overview
System Solutions Business Unit
Business Activities
I. Business scope
(I) Main lines of business and sales breakdown
Category
%
Information & Communication system
53.13%
Energy- Saving system
5.98%
Electromechanical system
Infrastructure system
20.90%
20%
(II) Current products
Sales areas are all located in Taiwan. Main product
categories are:
1. Information & Communication System:
D i s t r i b ute m a j o r b ra n d s of se r ve r s, n et wo r k
e q u i p m e nt, p e r i p h e ra l s, N E C I P/ PBX s y s te m
and telecommunication equipment. Develop
smart energy management system, document
management system and a variety of information
systems.
2. Energy- Saving System:
Ta t u n g ' s S E M S (S m a r t E n e rg y M a n a g e m e nt
Sy s te m), E SCO e n e rg y - s a v i n g p e r fo r m a n ce
g u a ra nte e, s o l a r p owe r s y s te m , s m a l l w i n d
power system and water quality monitoring &
management system, etc.
3. Electromechanical System:
Provide H uatung ra i l way elect r if ication and
electromechanical integration services, and install
pressure-relief related pumping system and its subunit at ShinJuang’s pumping station.
4. Infrastructure System:
Provide mechanical and electrical transportation
integration services, such as the first phase of a
cyclic mechanical and electrical engineering
for Kaohsiung’s Light Rapid Transit construction,
the f i rst phase of envi ronmental control and
hyd ro p owe r p ro g ra m fo r Ta i p e i M R T s y s te m
loop line construction project, and intelligent
identification with automatic monitoring control
system for Snow Mountain Tunnel, etc.
57
II. Technology and R&D
(I) Product development
1. Information & Communication system
V i r t u a l i za t i o n , c l o u d co m p u t i n g , WA N/ L A N
i m p l e m e ntat i o n, h ete ro g e n e o u s i nte g rated
systems, document management system, social
welfare management system, the BLI information
management system, accounting system, and
logistic management system
2. Energy-Saving system
Tatung’s smart energy management system, solar
monitoring system, and water quality monitoring
and management system
3. Electromechanical system
Electromechanical planning and integ ration
services.
4. Infrastructure system
E l e ct ro m e ch a n i ca l s y s te m, co m m u n i cat i o n
s y s te m s, j u n ct i o n p r i o r it y s i g n a l i n g s y s te m s,
automated toll collection systems, and intelligent
identification systems, etc.
(II) Research & Development
Doing resea rch on sof t wa re development has
always been an important work to our department,
and it is also the key to increase the total revenue
and gross profit. In addition to the large -scale
software product-Document Management System,
which has been operated for over ten years, the
department has developed Tatung’s SEMS (Smart
Energy Management System) in response to “energy
conservation and carbon reduction” policy during
these years. Star ting from demand for energysaving, Tatung's SEMS is combined with smart grid,
visualizing information of the power system and
equipment, providing the intelligent, friendly, and
long - distanced power energy with monitor ing
cont ro l, and i nteg rates a l l k i nds of upst ream gateway facilities to reduce the merged barriers
between SEMS and existing environmental devices.
And the ultimate goal is to develop a set of cloud
solutions which integrates IoT (Internet of Things),
information, power management, tele-diagnosis,
f ra n ch i se se r v i ces a nd p rofes s i o n a l cus to m e r
se r v i ces th ro ug h i nfo r m at i o n co m m u n i cat i o n
technologies.
The development direction of infrastructure is mainly
focused on traffic electromechanical integration,
especially in the integration of power supply systems
for LRT(light rail transmit),communication systems,
automated toll collection systems and signaling
systems. In addition to integrating electrical and
mechanical facilities with SCADA systems, the
division will be working on an effective integration
of information technology, digital communication
technology, IOT(Internet of Things) technology
and remote sensing techniques(such as laser and
radar technology). The division will also develop
i nte l l e ct u a l co nt ro l s y s te m s to i nte g rate w it h
TATUNG 2012 Annual Report
Operation Overview
intelligent transportation systems for coping with the
fast-growing transportation needs, while providing
more energy-efficient, safer and more comfortable
transportation services.
III. Industry overview
(I) Current status and development
Since the government set year 2010 as the "Energy
C o n s e r va t i o n a n d C a r b o n Re d u c t i o n Ye a r ",
Taiwan has initiated her nationally appropriate
mitigation actions (NAMAs) in order to accelerate
the expansion of the Green New Deal, to develop
green energy industry, to increase green jobs and
to promote green lives after reviewing the related
strategies about climate changes. According to the
“Sustainable Energy Policy Convention” issued by
the Executive Yuan on June 5, 2008, the emissions
are expected to be reduced to 2005’s level in 2020
and then to 2000’s level in 2025. In the long term,
they will be cut down to 50% of 2000's level by 2050
to be in line with international trends.
In order to achieve the milestone target mentioned
above, the Executive Yuan set up the "Executive
Yuan Steering Committee on Energy Conservation
and Carbon Reduction" in 2009 to lead Taiwan's
transition towards low carbon society.
In addition, the government proposed tariff discount
scheme and strengthened energy saving & carbon
reduction counseling for related industries. Also the
government required all government agencies and
schools to implement energy saving and carbon
reduction measures comprehensively. It claimed
government agencies and schools at all levels
to have negative growth on the consumption of
electricity and fuel each year so as to achieve
the goal of a 7% cumulative overall energy saving
target by 2015. Apparently, the government tries to
take the lead in the implementation of measures
to reduce carbon emissions for winning universal
common responses from the public. In the future,
the government will utilize the market economic
tools, plan a green tax system, increase the financial
and tax incentives, and construct carbon market
mechanisms with international standards step by
step. On the other hand, in order to help domestic
enterprises reduce carbon emissions, Bureau of
Energy, MOEA (Ministr y of Economic Affairs) has
announced the draft of Voluntary Green Pricing
System Pilot Project, which will come into operation
on July1, 2014. Energy Bureau indicated that green
pricing system is one of the promotion measures,
just like the Golden Decade, the new electricity
policy, renewable energy promotion program, etc.
This pilot project will be entrusted to Taipower for
implementation.
The public can purchase additional green electricity
voluntarily and Taipower will provide green power
purchase certificates based on customers’ needs.
This project will be piloted for 3 years. An evaluation
of implementing effectiveness will help determine if
the execution duration will be extended.
The total subscription amount is 310 million degree
in the first year. With rising issues of nuclear-free
homeland, whether to suspend the construction
of the Fourth Nuclear Power Plan or not, domestic
electricity price is ready to fly. The driven impact is
to initiate the energy-saving measures at all levels
of society. From this perspective, Tatung's SEMS is
virtually a strategic product that is integrated with its
own AMI (Advanced Meter reading Infrastructure)
and is in line with energy-saving needs.
Transpo r tation in infrastr uctu re is quite a
complicated system which involves an integration of
various elements such as electricity with machinery,
i nte r sect i o n w ith road s, veh i cl es w ith d r i ve r s,
vehicles with facilities, etc. The integration will
have to communicate the needs of environment,
vehicles and the back-end management system,
and it is closely related to the system framework.
The refo re, p rovid i ng i ntel l igent t ranspo r tation
integrated solutions is an important direction for
industr y development. In order to achieve the
traf f ic safet y goal, it is necessa r y to integ rate
various modes of transport information and employ
intelligent transport technologies to make use of
the information effectively. Objectives of intelligent
transportation can then be thoroughly presented.
(II) Relationship between the upstream, midstream,
and downstream sectors of the industry
Upstream: •Suppliers for PCs, mainframes, network
facilities, and developing tools
•SCADA for power monitoring system
Midstream: Sgents / providers for network infrastructure,
systems integration, application software,
hyd ro p o w e r e nv i ro n m e nta l co nt r o l
integration and construction industry, etc.
Downstream: End users for government institutions, schools,
public / private sectors and so on
(III)Product development trend and competition
status
Tatung has been a power product expert for a long
time. In recent years, due to green consumption
concept widely disseminated and the pressure of
carbon footprint & carbon labeling issues, Tatung
h a s s w i tch e d h e r ro l e f ro m a p owe r p ro d u ct
expert to an energy solutions provider. We invest
much capital as well as human resources on the
development of smart grid energy management.
B y c o n n e c t i n g w i t h T a i p o w e r, T a t u n g h a s
accumulated considerable rich experience in the
field of AMI. Our practical experience in smar t
grid AMI helps lay the stable foundation for the
subsequent development of smart energy-saving
system fo r enter pr ises and facto r ies. Being an
energy solutions provider, we insist on using the best
SEMS (Smart Energy Management System) to fulfill
three objectives: to make energy conservation in
facilities, to make energy efficiency in all systems
and to get green energy creation. The superiority of
Tatung is that facilities ranging from the electricity or
58
Operation Overview
energy equipment, energy saving control modules,
transmission and distribution of electric facilities to
smart energy management platform, including the
integration of renewable energy systems, are all
made by Tatung herself. It can be rarely found in the
smart energy market worldwide that a company
who can own a dual identity of total solution and
product provider at the same time. In other words,
it represents that planning, manufacturing and
supply, just like a whip, is systematic and coherent.
The customers can enjoy one-stop window and
sustainable management services.
(IV) Development strategy
1. Differentiate goods and services
2. Strengthen the existing customer relationships, and gain
new clients / new business opportunities
3. Provide a broader product line to meet customers' needs
4. Increase the high gross-profit portfolios
5. Replicate solutions, and stimulate customers' demand
6. Develop cloud services and information security solutions
7. Build good relationships with suppliers to extend the
product services
Market and product status
I. Market analysis
United States, Japan, etc., strongly promote smart
city and make the energy management system
to become the standard configuration of the new
buildings, which motivates the market value of energy
management system to grow up gradually. MIC
(Market Intelligence & Consulting) estimates that the
market value of energy management system will grow
from $2.1 billion 60 million in 2012 up to $3.8 billion in
2016, and a compound annual growth rate is by 14%.
Taiwan's market value of the energy management
system will be doubled in seven years. Although it is
slower than that of the United States and Japan, it
can still be motivated and grow gradually. Addressed
to the potential of energy saving, commercial office
buildings, chemical, steel and renewable energy
industries all occupy considerable market scales.
Driven by the opportunities of energy-saving demands
and smart grid, ICT hardware manufacturers will
develop related components and facilities. At the
same time, software vendors and system integrators
will be motivated to implement more precise and realtime information analysis technology. However, since
HEMS (Home Energy Management System) and BEMS
(Building and Energy Management System) belong
to customers' energy management applications, the
main application will be on the business clients (high
power consumption and high electricity bills) before
the construction of AMI is completed.
(I) Domestic market
The ICT market is forecast to grow by 2.4 percent in
2014, down from a growth rate of 2.6 percent in 2013,
according to latest forecasts from IDC (International
Data Corporation). Generally, IT services and software
industries have good performance among overall
Taiwan's ICT market. However, the hardware industry is
only contributed to a 0.2 percent growth due to weak
PC market.
In 2013, the strongest growth in enterprise IT spending
is Tablet PC, and its growth rate is still more than 20
percent in 2014. In addition, other products like servers,
storage, software, services and telecommunication
services in 2014 also have good growth, too.
IDC predicts that Taiwan's ICT market in 2014 is mainly
affected by four driving forces, namely, cloud, mobility,
big data and social network. In cloud, enterprises
will gradually adopt software-defined data center
approach to build hybrid cloud. Mobility like 4G LTE
stimulates the mobile data market and the mobile
device platform intensifies competition. On the other
hand, the demand for community's big data analysis is
increasing by degrees.
The main energy-saving products applied in home,
buildings and industry are the energy management
system. The functions and services provided by the
system include energy sensing measurement, data
analysis, database management, reporting system
and system services like software and hardware facility
services, etc. Applied areas focus on residential and
commercial building energy management.
The market value of the Energy Management System
will be doubled in four years. Some countries, like the
59
(II) Factors for Development Visions and Response
Strategies
Looking forward to 2014, IDC Taiwan studies point
out that the enterprises will continue to increase
their information technology spending. However, in
face of global economic uncertainties, they have
become more strategically focused on IT planning.
Taiwan's ICT market is expected to grow 2.4%, a
slight decline compared to the rate in 2013. The
market in 2014 will be affected by the following
trends :
Smart city applications make IoT (Internet of Things)
flourish. 4G LTE will further increase the value of
mobile data market. The big data issue remains a
hot topic. The competition among mobile device
platforms turns white-hot. And the adoption of
hybrid cloud becomes the key for enterprises to
getting into cloud journey.
The future development of the energy management
system:
1. Advantages:
• D e m a n d fo r h i g h - ef f i ci e nt e n e rg y - s a v i n g
solutions is increasing.
• Strengthen and shorten the product cycle by
standardized design.
2. Disadvantages
• The market tends to be saturated, and the price
becomes competitive.
3. Response Strategies
• Reinforce the marketing strategies, and select
the potential market to invest.
TATUNG 2012 Annual Report
Operation Overview
• Continually improve the technical level and
develop high-efficient difference products to
mitigate the impact of price competition.
• According to the different target customers'
needs, plan ma r ket segmentation by
corresponding products.
(III) Competitive niche and Growth Strategy
1. Competitive niche
• Be a well-known brand-–it is easier to win the trust
from customers
• Possess r ich large -scale system integ ration
experience in the public sector
• Provide nationwide services
analyzing, designing, developing, installing and
launching the system, high-valued products and
services are delivered to customers via nationwide
service network.
III. Supply Overview
The main products are all supplied by well-known
manufacturers to ensure high- quality outputs, on-time
delivery and post-sale services.
2. Growth Strategy
• Increase revenue profits
• Lean customer services
• Reinforce professional project technologies
• Strengthen the brand image and fulfill the
enterprise’s responsibilities
(IV) Mission, Core Values and Vision
1. Mission: Provide comprehensive system integration
solutions.
2. Core Values: Suit the action to the word with
cautious commitment.
3. Vision: Become the most professional and largest
system integration strategic partner for the public
sector in the domestic market.
II. Development Direction and Processes
Control
(I) Development Direction
1. System Integration Ser vices— Help customers
integrate heterogeneous information systems.
2. Information Security Services— Help customers
employ information securit y technology and
install information security system in order to
protect important information assets.
3. Network Establishment Services— Help customers
plan network infrastructure, and set up routers,
switches, wireless routers, intrusion prevention
system and firewalls, etc.
4. C u s t o m i z e d A p p l i c a t i o n S o f t w a r e — H e l p
customers improve the operating efficiency,
red u ce m a n a g e m e nt co s t, a n d p rov i d e
innovative services.
5. Governmental Document Management System—
Assist government department in increasing the
management efficiency of official document.
6. Tatung’ Smar t Energy Management System —
Assist enterpr ises to implement energy
management and to make the most efficient
usage of electricity / energy.
(II) Processes Control
Through the processes of assessing needs and
60
Operation Overview
CONSUMER BUSINESS GROUP
Advanced Electronics
Business Unit
Business Activities
I. Business scope
(I) Main lines of business and sales breakdown
Category
%
Wired and wireless headsets
64.76 %
TV and IP cameras
15.14 %
Smart devices and multimedia products
20.10 %
(II) Research & development
1. H e a d s e t p r o d u c t l i n e s a r e d e s i g n e d w i t h
e rgonom ic and mod i sh fo r m facto r s and
equipped with wide band audio and ultimate
sound quality.
2. Develop high definition built- in and add- on
cameras for smart TV. Products are certified by
Skype and leading ser vice providers. Support
leading features including high definition video
shooting, high compressed video format, noise
suppression, ease-of-use, and interoperability.
3. Incorporated with cloud services, smart devices
focus on energy-saving management, comfort
& co nven i en ce, secu r it y & safet y, a n d we l l
living applications. Products are environmental
friendly, low power consuming, and compliant to
international standards.
4. Multimedia products integrate advanced features
suppor ting video-on-demand, high definition
video/audio/photo playback of wide variet y
formats, digital right management mechanisms,
wireless broadband connection, cloud video/
audio services, etc.
(III)Important certifications
(II) Current products
1. Wired and wireless headsets
Wi red & w i rel es s headsets fo r gam i ng, Sk ype
certified wired & wireless headsets and VoIP.
2. TV and IP cameras
Smart TV camera, camera module, IP camera, and
Skype certified USB camera, etc.
3. Smart devices and multimedia products
IoT services gateway, smart module, sensor, smart
LED Lighting, OTT STB, smart TV STB, digital media
player, etc.
II. Technology and R&D
(I) Product development
1. Wired and wireless headsets
Develop wired and wireless headsets for game
consoles, PC, T V and mobile devices. The headsets
are with stylish designs, high definition audio, and
wide-band audio performance.
2. TV and IP cameras
Develop high definition cameras and modules
for smart TV, PC, Blue- ray player, and STB to be
integrated with cloud ser vices and networking.
Camera product l ines a re cer tif ied by global
leading cloud service providers to provide best
audio and video performance.
3. Smart devices and multimedia products
E m b e d d e d l e a d i n g - e d g e te c h n o l o g i e s a n d
incorporated with cloud services, series of Tatung
smart devices include IoT services gateway, smart
module, sensor, smart LED lighting which innovate
u s e r e x p e r i e n ce s a n d a re t h e co re d ev i ce s
suppo r ti ng sma r t l ivi ng. Multi med ia p roducts
include smart TV box, OTT STB, and digital media
player.
61
Compliance with
the
European Directives
WEEE
Compliance with
American
safety standards
China Compulsory
Certification
Compliance with U.S. Product Inspection
Federal
Label from BSMI,
Communications
Ministry of
Commission
Economic Affairs
for telecommunications
Compliance with
Compliance with
German
Japanese emissions
& European safety control standards
requirements
by VCCI
RoHS
Energy
Conservation
Label
Energy Star
III. Industry overview
(I) Current status and development
As the penetration rates of smart phones, smart TV
and digital STB are going high, broad band Internet
accesses becoming ubiquitous, and cloud services
getting mature, these factors pull high the demands
of smart devices and multimedia products. New
business models and application are innovated
by a l l i a n ces a m o n g b ra n d e r s, ch a n n e l s a n d
operators for new applications. Foreseen emerging
a pp l i cat i o n s & p rod uct s i n cl ud e acces so r i es
for smar t hand-held devices & T V, home area
networking (HAN) devices, automation devices,
home care services, security surveillance devices,
energy-saving products and smart devices.
(II)Relationship between the upstream, midstream,
and downstream sectors of the industry
Upstream: System-on-a-chip, memory, communication
IC/module, digital signal processor, sensor
component, power IC/module, mechanical
parts, and software venders.
Midstream: Headset, TV & IP camera, multimedia
device, and smart device designers and
TATUNG 2012 Annual Report
Operation Overview
manufacturers.
Downstream: ODM/OEM customers include branders,
chan nel s and ope rato r s. E nd use r s
a re h o m e, of f i ce, co r po rate, a nd
government users.
(III)Product development trend and competition
status
1. Multimedia accessories
To echo the trend of environmental protection,
the on-going product development will enable
w ideband aud io, H D video, RF techno l og ies,
fashion designs, and power saving features for
multimedia product lines to provide customers best
price/performance products in line with the most
updated and standardized model required by the
core cloud service clients.
2. Smart devices
Products a re designed w ith easy i nsta l lation,
bundled w ith cloud ser vices o r p r ivate cloud
projects, and incorporated with smart hand-held
devices, TV & PC for easy use. Their smart energy
relevant applications can be extended from homes,
offices, buildings, communities to cities.
3. Multimedia products
I n t e g r a t e d i g i t a l v i d e o /a u d i o p r o c e s s i n g ,
networking and information technology through
cl o ud se r v i ces to d e l i ve r th e i n n ovat i ve use r
experiences and business models on infotainment
applications.
(IV) Plans for developments
1. Allied with global leading platform and solution
providers, Tatung engages its efforts on advanced
technology research and development to provide
new products with cutting edged features and
enhanced competiveness.
2. To ada pt th e m os t updated tech n o l og y a nd
application, Tatung has long-term partnerships
with key component venders for co-developing
time-to-market products to boost profits and sales
performance.
3. Ad va n ce d te ch n o l o g i es a re d eve l o p e d a n d
a p p l i e d to p rov i d e u s e r s s m a r t, co nve n i e nt,
energysaving, safe, and envi ronment fr iendly
lifestyles.
Market and product status
I. Market analysis
(I) Future supply & demand conditions and growth
potential
1. According to a market research company, the
penetration rate of networked TV in global markets
is expected to reach 40% in 2014. The estimated
bundle rate of IP cameras in networked TV will
be about 5%. The demands for TV cameras are
estimated over 5.6 millions sets in 2014. TV camera
will be built in as a standard accessory for mid/highend networked TV.
2. The market research company estimates that there
will be over 12 billion connected devices worldwide
in 2014. Demands of cloud based devices with
energy-saving features for IoT applications keep
tremendous growth.
3. The real -time, abundant, diverse, and readi ly
available digital premium contents have driven
a rapid increase of on-line on-demand viewers
in multimedia ser vices. The forecasted market
demands on OTT STB & media players in 2014 will be
over 25 million sets.
(II) Favorable & unfavorable factors and countermeasures
1. Favorable factors
With in - house experienced R&D teams, Tatung
leverages global leading platforms for advanced
solutions to deliver products with competitiveness
and fulfill market needs.
2. Unfavorable factors
Products suffer from the short lifecycle and intense
price competition.
3. Countermeasures
Efforts & investments are continuously to be made to
enhance product planning capability, development
expertise, product quality, manufacturing efficiency,
and global operating.
(III) Competitive niches and strategies for growth
With effective and flexible designs, customizations,
and manufacturing services on digital entertainment
and smart home niche products, Tatung provides
customers fast reactions to accommodate market
needs. Customers and Tatung benefit from this
strategy and have tightly partnerships for continuous
growth on business.
(IV) Mission, core values, and vision
1. Mission: To facilitate wor k and enr ich life with
advanced technologies.
2. Core values: Innovation, teamwork, quality, and
humanity.
3. Vision: To be consumers’ best choice by integrating
p roduct s and so l utions w ith va l ue - added
applications and services.
II. Purpose and manufacturing processes of
main products
(I) Purpose
Product lines mainly focus on digital entertainment
and smar t living applications including video &
audio enter tainment, net wo r k ing, automation,
energy management, assisted living and security
surveillance.
(II) Manufacturing processes
Ta t u n g o f f e r s g l o b a l c u s t o m e r s c o m p e t i t i ve
products and complete services through product
research, design, validation, manufacturing, testing,
packaging, warehousing, deliver y, logistics and
service.
III. Supply of main raw materials
To assure product quality and deliver y, Tatung has
long-term partnership with raw material venders for
timely supplies. Tatung mainly manufactures in-house,
and also out-sources some components/parts from
qualified venders.
62
Operation Overview
Appliance Business Unit
Business Activities
I. Business scope
(I) Main lines of business and sales breakdown
Category
Air conditioners
%
34.24 %
TV technology, while adding superior crystal image
technology to enhance the performance of display
products.
5. LED lighting: Improve the luminous efficiency of LED
l ighti ng and develop omnid i rectional p roducts;
meanwhile, Tatung develops a series of LED lighting
p ro d u c t s w i t h d i m m a b l e f u n c t i o n a n d ca n b e
controlled wirelessly by hand-held devices.
6. Compressors: Refrigerant compressors of environmental
protection standard, inverter-controlled energy-saving
compressors and oil-less compressors.
III. Industry overview
(I) Current status and development
Small home appliances
25.43 %
Large home appliances
13.89 %
LCD TVs
19.29 %
1. Strengthen the function of brand operation; use
innovative product designs and quality products
to enhance brand value.
2. E xpand overseas sales and China marketing
activities.
3. Improve the manufacturing process capability,
quality capability and product competitiveness.
(II) Relationship between the upstream, midstream, and
downstream sectors of the industry
Upstream:
LED lighting
4.82 %
Compressors
2.33 %
(II) Current products
1. Air conditioners: Window-type air conditioners, split
type air conditioners, commercial air conditioners,
chillers for central air conditioning, heat pump, covert
dehumidifier, dehumidifiers and air-purifiers,
2. Home appliances: Refrigerators, washers, coolers /
freezers, electric fans, electric thermal kettles, steaming
irons, hair dryers and electric kettles.
3. Kitchen appliances: Multi-functional cookers, hot pots,
induction cookers, ovens, microwave ovens, blenders.
4. LCD TVs: Digital TV with embedded Hi-HD tuner, LED
backlight LCD TV, 3D TV and smart TV.
5. LED lighting: Bulbs, lamps, MR16/PAR, energy-saving
table lamps, candle lights.
6. Compressors: Compressors for various appliances such
as refrigerators and dehumidifiers.
II. Technology and R&D
(I) Product development
1. A i r co n d i t i o n e r s: R&D of i nve r te r- co nt ro l l ed a i r
conditioning driver modules, APP smart kit, remote
monitor system.
2 . H o m e a p p l i a n c e s : R& D o f i n v e r t e r - c o n t r o l l e r
technologies, development of environmental-friendly
coolant systems, plasma sterilization and deodorization
systems.
3. Kitchen appliances: Develop a wide range of unique
and multi-functional products based on energy- saving,
environmental -friendly and healthy concepts.
4. LCD T Vs: Increase the ratio of energy-saving LED
backlight product lines with innovative 3D and smart
63
Memo r y, integ rated IC processo r s, LCD
panels, software / hardware development,
plastic resin, copper, aluminum, iron, packing
mater ial s, electronic substrates, moto r,
compressors.
Midstream: LCD TV, home appliance products manufacturers.
Downstream: Retailers, franchise stores, service stations,
wholesalers, clients, businesses, public places,
government agencies, medical, educational,
financial and insurance institutions.
(III) Product development trend and competition status
1. LCD TVs:
LED backlight TV has completely replaced traditional
CCFL TV model since 2013 in response to energy-saving
policy. There’ll be two trends for the future development
on LCD TV: larger size and higher resolution technology
(ex: ultra-high definition). The penetration rate of
smart TV predicts to reach 40% market share in 2014,
and Tatung will try to provide more video contents
and improve a better user interface to enhance our
products’ competitiveness.
2. Home appliances:
As home appliance field is a mature market, facing the
severe competition from overseas and local vendors,
Tatung needs to focus its product development on
designing smart, innovative, multi-functional, refined,
and energy saving products . Tatung Smar t HEMS
App creates a more efficient and effective way of
managing the electrical appliances and devices
without sacrificing current living comforts. Tatung Smart
HEMS is useful for anyone who wants to reduce home
energy consumption and save money; it offers users
total management of home energy consumption with
appliance control, energy consumption monitoring,
and self-monitoring functions anytime, any where,
through any internet-enabled personal device.
(IV) Important certifications
TATUNG 2012 Annual Report
Operation Overview
conditioners 2%; washing machines -2%; refrigerators 3%;
multi-functional cookers 4%; microwaves -2%.
Compliance with
the
European Directives
Compliance with
American
safety standards
Energy
Conservation
Label
Certification
Bodies'
Schemer
China Compulsory
Certification
Saudi Arabian
Standards
Organization
ISO9001
GMP certification
from the Department
of Health, Executive
Yuan
Environmental
Protection Label
from the
Environmental
Protection
Department
WEEE
Compliance with
German
& European safety
requirements
Taiwan Excellence Compliance with U.S. Product Inspection
Award from
Federal
Label from BSMI,
Communications
Ministry of
Ministry of
Commission
Economic Affairs
Economic Affairs
for
telecommunications
Compliance with
Japanese emissions
control standards
by VCCI
RoHS
ISO14001
Energy Star
MIT
IV. Long-term and short-term business development
plans
(I) Tatung’s Innovation R&D Center recruits overseas and local
experts to provide technical assistance and guidance,
and devotes itself to the in-depth development of forwardlooking technologies to distinguish features of forthcoming
new products.
(II) Tatung will continue to reinforce its collaboration with
major suppliers of key parts and components for raising the
profits.
(III) LCD TV and home appliance industry both are saturated
and mature. Tatung will improve the manufacturing
p rocess, reduce manufactu r ing cost, and develop
innovative products to enhance its overall competitiveness.
Market and product status
I. Market analysis
(I) Domestic market
LCD TVs and home appliances market in Taiwan in 2013:
1170K units of LCD TVs; 678K units of air conditioners;
547K units of washers; 487K units of refrigerators; 465K of
multifunctional cookers; 238K units of microwaves.
(II) Overseas market
The overseas sales of home appliances in 2013: 36K units
of refrigerators sold to Middle East, Southeast Asia and
America; 41K units of multi-functional cookers sold to
America, China, Malaysia; 100K units of compressors for
fridges and water coolers; sales amount US$6.26M of air
conditioners including residential type and commercial
type.
(III) Market share
Market share across Taiwan in 2013: LCD TVs 4.6%; air
conditioners 6%; washing machines 5.1%; refrigerators 8%;
multi-functional cookers 90%; microwaves 12.2%.
(IV) Future demand and growth potential
E x p e c t e d g r o w t h r a t e i n 2 014 : LC D T Vs - 2 % ; a i r
(V) Competitive niches
1. Good brand reputation, superb logistic system, fast and
excellent service network.
2. Automated production, products with high stability and
reliability.
3. Outstanding R&D capability.
4. Tatung owns distribution channels and global supply
chain system.
(VI) Favorable / unfavorable factors and countermeasures
1. Favorable factors: With the sign of improving economy,
Tatung aggressively works on both domestic and
overseas projects to seize business oppor tunities.
Meanwhile, we keep improving the ser vices of all
d i st r i bution channel s to fu r the r enhance b rand
reputation.
2. Unfavorable factors: The short life cycle and intense
price competition of consumer electronic products;
traditional stores face fierce competition from IT shops,
chain stores, discount stores, on-line shopping and
television shopping channels.
3. Countermeasures: Efficient human resource planning,
strengthening R&D and production capabi l ities,
providing innovative and differentiated products to
boost sales. Strategic alliances with major wholesalers
to increase sales.
(VII) Mission, core values, and vision
1. Mission: To enrich people’s work and life with cutting
edge technologies.
2. Core values: Innovation, teamwork, qualit y, and
humanity.
3. Vision: To become consumer’s best choice by delivering
quality products with value-added application and
customer service.
II. Purpose and manufacturing processes of main
products
(I) Purpose
Tutung offers convenient, healthy, comfortable, energysaving and environmental-friendly household electric
appliances to customers. The products are used by
businesses, public locations, government agencies,
educational institutions for displaying, information
transmitting, enhancing efficient working, and providing
entertainment.
(II) Production processes
From R&D, design, molding, manufacturing, testing,
packaging, warehousing to transpor tation, Tatung
provides customers complete product line and after-sales
service through its nationwide sales/service network and
logistics systems.
III. Supply of main raw materials
Main raw materials are purchased from and supplied
by reputable overseas or domestic vendors. Tatung
established steady supply-demand relationship with
them to ensure product stability and, through the B2B
system, to further lower its inventories and material
costs.
64
Operation Overview
Operation summary
(I) Suppliers / customers accounting for 10% or more of the Company’s total purchase / sales
amount in 2012 and 2013
1. Procurement
2012
Percentage
of total net
procurement
Procurement
amount
Name
Unit: NT$ Thousand
As of March 31, 2014
2013
Relationship
with the
Company
Percentage
of total net
procurement
Procurement
amount
Name
Relationship
with the
Company
Percentage
of total net
procurement
Procurement
amount
Name
Relationship
with the
Company
Others
105,258,778
100% Inapplicable
Others
99,521,100
100% Inapplicable
Others
22,270,858
100% Inapplicable
Net purchases
105,258,778
100%
Net purchases
99,521,100
100%
Net purchases
22,270,858
100%
Note: These customers purchase less than the current year as a result of its net purchase more than 10% of company, it will not be disclosed.
2. Sales
2012
Name
Sales amount
Unit: NT$ Thousand
As of March 31, 2014
2013
Percentage of
total net sales
Relationship
with the
Company
Name
Percentage of
total net sales
Sales amount
Relationship
with the
Company
of
Sales amount Percentage
total net sales
Name
Relationship
with the
Company
Others
106,098,543
100% Inapplicable
Others
112,926,870
100% Inapplicable
Others
29,466,131
100% Inapplicable
Net sales
106,098,543
100%
Net sales
112,926,870
100%
Net sales
29,466,131
100%
Note: Net income for the year on these customers as a result of its net operating income less than 10% of the company, it will not be disclosed.
(II) Production in 2012 and 2013
Major products
(or by departments)
Output
Output: Set
[Unit]Amount: NT$Thousand
Fiscal year
Optical sector
Energy efficiency and solar energy sector
2012
2013
Capacity
Output
Amount
Capacity
1,249,254
563,671
57,597,829
1,245,464
624,048
56,590,701
325,063
241,285
12,914,943
278,332
261,605
13,035,001
10,899
1,569,610
9,186
767,070
1,245,095
1,776,250
819,204
1,407,825
Consumer products sector
Power sector
Others
Output
Amount
54,689
Total
1,574,317
2,060,951
73,913,320
57,691
1,523,796
1,714,043
71,858,288
(III) Shipments and sales amount in 2012 and 2013
Fiscal year
Shipments & sales
Major products (or by departments)
[Unit]Amount: NT$Thousand
2013
Export
2012
Domestic
Quantity
Export
Domestic
Amount
Quantity
Amount
1,076,234 50,709,400
Quantity
Amount
Quantity
Amount
Optical sector
91,338
2,534,496
154,353
2,875,371
Energy efficiency and solar energy sector
131,119
5,903,370
100,095
4,372,419
197,979
7,615,766
108,362
5,534,989
Consumer products sector
11,767,521
8,882,618
3,366,876
1,911,889
11,203
7,243,731
1,960
1,395,297
Power sector
2,258,078
483,591 1,232,078,755
2,557,661
1,870
478,319
774,267
1,946,669
1,745,313
28,455
1,026,809
1,943
1,174,371
Others
5,229
Total
1,104,476
1,457
14,253,285 18,642,096 1,236,623,417 61,296,682
393,860 20,020,018
957,174 60,432,440
1,843,707 70,483,766
(IV) Tatung and Subsidiaries, R&D expenses totaled NT$7,508,118 thousand dollars in 2013 up to the publishing
date of the annual report
65
TATUNG 2012 Annual Report
Operation Overview
Workforce structure
Fiscal year
2012
Management & staff
April 30, 2014
1702
1699
1679
2350
2237
2136
4052
3936
3815
Average age
40.02
40.05
41.04
Average years of service
12.08
12.09
13.03
Ph.D.
13
14
13
Master
414
401
420
Bachelor & other higher education
1999
1987
1916
Senior high school
1000
954
903
Number of employees Technicians
Total
The Company
2013
Education level
Below senior high school
All companies included in Financial statements
626
580
563
32222
35879
35355
Expenditure on environmental protection
To cope with the trend of international environmental protection
and g ove r n ment l a w s and reg u l ati ons, the Com pany i s
dedicated to the prevention of pollution and environmental
protection for the better working environment of employees,
better living environment for the public and better fulfillment of
social responsibilities.
(I) Environmental protection measures
1. Actions:
RoHS Test
Environmental
Performance
Evaluation
Eco-Efficiency
Life Cycle
Assessment
Corporate
Sustainability
Report
Disposal of
Waste
Design for
the Environment
(DfE)
(II) Losses incurred from environmental
pollution in the recent year and up to the
publishing date of the annual report
Product Carbon
Footprint
Green
Supply Chain
Electronic Industry
Code of Conduct
(EICC)
Green Mark/
ISO 14001
Energy Label
ISO 14064
Green Products
Energy Saving
Pollution
Prevention
Pays (3P)
Promotion of
Education and
Training
and transformers. The company also has completed the
establishment of Taiwan EPA carbon footprint PCRs for “Rice
Cookers” and “Electric Cookers”.
(3) T h e Co m p a ny h a s b e e n a wa rd e d w i t h n u m e ro u s
governmental environmental protection prizes in recent
years, including “Industrial Excellence Award”, “National
Sustainable Development Award”, and “Enterpr ises
Environmental Protection Award”.
Implement
Pollution
Prevention
Environmental
Test
Energy Auditing
From 2013 and up to the publishing date of the annual report,
Power Equipment Business Unit was fined NTD$34,000 due to
violations of “Toxic Chemical Substances Control Act” and was
fined NTD$200,000 due to violations of “Air Pollution Control
Act”. System Solution Business Unit was fined NTD$6,000 due to
violation of “Waste Disposal Act”. All the violations have been
corrected and improved in accordance to the regulation and
accepted by the authority.
(III) Information about RoHS
2. Results:
(1) All manufacturing factories have received and maintained
ISO 14001 certification for environmental management
system.
(2) Most of models of air conditioners, amorphous castresin dry type transformer and amorphous oil-immersed
type transformer have acquired the Green Mark by the
Environmental Protection Administration of Executive
Yuan. Meanwhile, many models of air conditioners,
dehumidifiers, washing machines, electric cookers, electric
fans, refrigerators, monitors, indoor lighting equipments,
water fountain machines have been acquired the Energy
Label by the Bureau of Energy of Ministry of Economic
Affairs. In addition, one model of A.C. motors (3hp)
completed product carbon footprint calculation and the
result was verified by DNV in 2010. Starting from 2012, the
Company started to carry out product carbon footprint
inventory on most signature products such as rice cooker
In order to comply with the customers’ green procurement
and EU’s RoHS requirements to ensure successful domestic
and export markets, the Company’s factories, starting from
the year 2004, have been dedicated to promoting a green
supply chain which covers product design, procurement
and production, and has also avoided using hazardous
substances for making the Company a well –established
green supply enterprise. In 2005, the Company established
“Tatung Electrical and Electronic Equipment Restriction of
Hazardous Substance (RoHS) Test Laboratory” to assist in the
test and analysis of hazardous substances by various factories
and related industry as well as to provide related professional
te ch n o l o g i e s . T h e Ro H S Te s t La b o rato r y s u cces s f u l l y
completed certification for both the Authenticated Chemical
test Laboratory of the TAF and the Electrical and Electronic
Equipment Test Laborator y of the Bureau of Standards,
Metrology and Inspection of Ministry of Economic Affairs in
2007. On 24th October 2013, the Laboratory passed the annual
audit conducted by the TAF.
66
Operation Overview
Labor relations
(I) Tatung pioneered the “labor and management united as one” concept to promote operational
autonomy
The Company set up the Tatung Employees’ Welfare Committee in 1947 and the “Tatung United Welfare Committee” in 1969 as part of the
Company’s efforts to promote the delegation of responsibility to lower hierarchies in the organizations and to develop new management
talent.
Employees’ welfare
Providing interest-free housing loans to key managers and employees. This program benefited
more than 2,000 employees and their families.
2. Stock ownership
The Company subsidized employees to buy corporate stocks since 1992 as part of their savings.
3. Subsidies
Education subsidies for employees’ children in senior high school and college/university; funeral
subsidies for colleagues or their spouses and immediate relatives; financial gifts for death of
colleagues; subsidies for employees’ birthday, travel, and retirement; cash gifts for weddings of
employees or their children as well as for birth of employees’ children.
4. Benefits
Employees can purchase Company products via zero-interest installments and price discounts on
groceries in corporate stores. Free movie shows and special trains in Spring Festival.
5. Club activities
Education, recreation, physical education, languages, hiking/mountain climbing and
photography
6. Health and safety plan
Labor insurance, health insurance, group insurance, retirement pension, free annual health checkup
Education and training
Implementation
1. Continuous education
Encouraging employees to study and to become a talent of “intelligence, integrity and ability”.
Offering training in multi-dimensions to new comers and employees. Constructing organizational
and lifelong learning culture. Efficiently strengthening talent development by systematic
management.
2. Establishing “Recruiting &
Development Department,
Human Resources Division”
Constructing competency-based talent development; designing and executing annual training
projects.
New employee’s training
A total of 350 employees attended 5,437 hours of training (average of 15.5 hours/person) in 2013.
Management training
A total of 854 employees attended 7,552 hours of training (average of 8.84 hours/person) in 2013.
Other types of professional
training
A total of 7,928 employees attended22,951 hours of training (average of 2.89 hours/person) in 2013.
Tatung Knowledge
Management Training
A total of 3,391 employees attended 3,391 hours of training (average of 99.7 hours/34 classes) in
2013.
Management workshop
A total of 630 employees attended 28,914 hours of training (average of 45.9 hours/person) in 2013.
3. Outside training
67
Implementation
1. Housing loan program
A total of 246 employees attended 3,675 hours of training (average of 14.9 hours/person) in 2013.
TATUNG 2012 Annual Report
Operation Overview
Retirement system
Retirement plans
Implementation
Retirement compensations subject to the Labor Law and Labor Insurance Act or other bonus case
by case.
Management / labor relations
Measures
Channel for employees to voice
dissent or communicate with
management
“Employees’ Suggestion Mail Box” is set up at company website, along with “Regulations of
Processing Employees’ Complaints.” Employees can voice out their opinions during training at the
Recruiting & Development Department, or present their proposals during QC activities. Regular
and special meetings between management and the labor unions are also held to facilitate
communications.
Protection of employees’
interests and rights
Measures
Safe and happy working
environment
Implemented in accordance with the Labor Law, Gender Equality in Employment Act and in
some cases better than regulations for workers.
(II) Strategy and objective: Developing the Company’s most valuable asset - people
Labor and management are committed to working together for the good of the Company and its workers. Both sides operate on the
principle of promoting a harmonious, safe and happy working environment. Serious losses due to labor and management disputes from
2013 up to the publication of the annual report: None. Estimate of current and potential losses due to labor and management serious
disputes and preventive policies: Losses due to labor and management major disputes not foreseen in the near future.
(III) Employees’ code of ethics
The Company’s employees abide by Company rules which are designed to uphold the principles of “honesty, integrity and diligence.”
All employees follow a code of ethics and are dedicated to contributing to the stability, continuity and prosperity of the Company and
workers alike. Management leads under the principle “Do not do unto others what you do not want others do unto you,” treating workers
like their own family and guiding them by personal example. (Please refer to Page 4 for detailed information.)
(IV) The protection measures on the working environment and the health and safety of the employees
Tatung Co., as a global high-tech industrial company, takes pride in building a comfortable, safe, healthy, and hygienic working
environment and ensuring employees’ security as the foundation of sustainable operation. Tatung Co. promotes “Disaster Prevention Pays”
program in the factories and subsidiaries, and looks forward to the target of “Disaster Free” by reviewing its performances and conducting
the continual improvements.
Regarding to labor health and safety issues, Tatung Co. not only requires all the activities must be complied with labor health and
safety regulations but also sets up “Environment and Safety Division” in the company headquarter to be responsible for supervising and
evaluating the health and safety work carried out in the company. The works which continually improves the company’s health and safety
performances are carrying out the regular health examinations, giving education and training courses to new recruits and employees,
conducting regular working environmental analysis and drinking water quality analysis, organizing emergency drills, firefighting drills and
first aid trainings, carrying out “Inspection” and “Supervisor Monitoring”, conducting “Job Safety Analysis” and “Safety Evaluations on the
Manufacturing Processes”, enhancing management on hazardous machines and equipments, enforcing the labeling of dangerous and
harmful materials, establishing OHSAS18001 and TOSHMS management system, and enhancing the employees’ ability and awareness on
prevention of fire accident.
In addition, Tatung Co. promotes “Contractor health and safety management method” to give education and training in the subject of
health and safety every year to the suppliers and conducts irregular site inspection during the operation period. Tatung Co. also,. All these
efforts result in a rise of the Company’s health and safety performances.
Tatung Co. strengthens factory's safety inspection and has promoted the “Visitor Safety Guideline” to ensure the safety among visitors. All
visitors must read this guideline and wear proper safety gears according to the requirements of the factory or subsidiary. Tatung Co. sees
our employee’s health and safety issues as our perpetual duty and advances the goals of "Disaster Free" and sustainable development.
68
Operation Overview
Important contracts
Important contracts up to the publishing date of the annual report
Nature
Duration
Description
Restriction clause
Investment
cooperation
Japan
Sumitomo Heavy
Industries, Ltd.
October 13, 1995
Incorporation of Tatung SM-Cyclo
Co., Ltd. under joint venture
Production of gear-reducers
No
Investment
cooperation
Japan
Okuma
December 12, 1996
Incorporation of Tatung Okuma
Co., Ltd. under joint venture
Production of working machines
No
Investment
cooperation
Japan
Mitsui Mining &
Smelting Co, Ltd.
October 13, 1975
Incorporation of Tatung Die
Casting Co. under joint venture
Production of die casting
products
Technology
cooperation
U.S.A.
IBM Corporation
Novemberr 28, 1992
Patent license of information
processing systems
Technology
cooperation
U.S.A.
Landis + Gyr Inc.
March 11, 2011~
March 11, 2016
Technology transfer of threephase and four-line digital watt
hour meters
Technology
cooperation
Oman
Voltamp Energy L.L.C.
March 31, 2008~
March 30, 2015
Technology transfer of Power
Transformers
NO
Technology
cooperation
Japan
Nissin Electric CO., Ltd.
May 28, 2013~
May 28, 2018
Technology transfer of 25.8kV GIS
NO
Patent License
U.S.A.
Rovi International
Solutions
SarlCorporation
November 15, 2005
Patent license of Detect and
Encode copy protection
technology
NO
Patent License
U.S.A.
Rovi International
Solutions
SarlCorporation
December 07, 2008
Patent license of copy protection
process
NO
Patent License
U.S.A.
Rovi International
Solutions
SarlCorporation
December 07, 2008
Patent license of RTLA Products (1)
Non-video O/P
(2)analog video O/P without
copy protection process
NO
Patent License
U.S.A.
Dolby Laboratories
Licensing
Corporation
January 30, 2008
Patent license of ATSC AC-3
audio signal demultiplexing
NO
October 01, 2005~
September 30, 2015
Patent license of ISO/IEC 11172-3
and 13818-3 (MP3) technology
NO
Patent License
69
Counterpart
U.S.A., Italy Audio MPEG & Sisvel
No
NO
Activities of sales are limited
to the R.O.C.
Patent License
Japan
Hitachi Consumer
Electronics Co.,LTD
January 01, 2010~
December 31, 2013
Patent license of LCM - VESA DDC
Standard
NO
Patent License
Japan
Funai Electric Co.,LTD
January 01, 2007~
December 31, 2016
Patent license of ATSC standard
(A/65B) and TV
NO
Patent License
Japan
Sony Corporation
January 01, 2014~
December 31, 2018
Patent license of TV (on- screen
display/4K TV)
NO
Patent License
Japan
Sony Corporation
January 01, 2013~
December 31, 2017
Patent license of PC Monitor
(HDMI, HDCP, on- screen display)
NO
Patent License
U.S.A.
Thomson Licensing
LLC
January 01, 2012~
December 31, 2014
Patent license of ATSC standard
(A/65 A/53B)
NO
TATUNG 2012 Annual Report
Operation Overview
Nature
Counterpart
Duration
Description
Restriction clause
Patent License
U.S.A.
Thomson Licensing
LLC
January 01, 2012~
December 31, 2014
Patent license of Analog TV
NO
Patent License
U.S.A.
Thomson Licensing
LLC
January 01, 2011~
December 31, 2014
Patent license of LCD Monitor
NO
Patent License
U.S.A.
Thomson Licensing
LLC
January 01, 2009~
December 31, 2013
Patent license of DVB-T
NO
December 31, 2007~
December 04, 2016
Patent license of V-chip 2.0
NO
Patent License
Canada Wi-LAN V-CHIP CORP.
Patent License
U.S.A.
MPEG LA, L.L.C.
June 01, 1994
Patent license of MPEG-2 Codec
NO
Patent License
U.S.A.
MPEG LA, L.L.C.
January 01, 2006~
December 31, 2015
Patent license of MPEG-2 Systems
NO
Patent License
U.S.A.
MPEG LA, L.L.C.
August 01, 2002~
December 31, 2015
Patent license of AVC/H.264
(MPEG-4 Part 10)
NO
Patent License
U.S.A.
MPEG LA, L.L.C.
January 01, 2006~
December 31, 2017
Patent license of VC-1
NO
Patent License
U.S.A.
HDMI Licensing LLC
December 12, 2003~ Patent license of HDMI (HighDefinition Multimedia Interface)
December 11, 2018
Patent License
U.S.A.
Digital Content
Protection, LLC
January 14, 2004
Patent license of HDCP (HighBandwidth Digital Content
Protection)
NO
Patent License
U.S.A.
Microsoft Licensing,
GP
November 01, 2004~
December 31, 2017
Patent license of WMA / WMV
NO
Patent License
U.S.A.
FERGASON PATENT
PROPERTIES LLC
May 30, 2010~
December 31, 2014
Patent license of DCR
NO
Patent License
Ireland
DTS Licensing Limited September 02, 2010
Patent license of DTS
NO
Patent License
U.S.A.
Digital Transmission
May 03, 2004~
Licensing Administrator,
May 02, 2014
LLC (DTLA)
Patent license of Digital content
protection method
NO
Hua-Nan Commercial November 08, 2013~
Bank
November 08, 2015
Revolving limit (2 years) Limit of
NT$3,400,000,000
NO
Mid-term loan
contract
NO
Mid-term loan
contract
Taishin International
Bank
October 24, 2013~
October 24, 2015
Revolving limit (2 years) Limit of
NT$200,000,000
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
than 95%.
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
Mid-term loan
contract
Chang Hwa Bank
October 04, 2013~
October 04, 2015
Revolving limit (2 years) Limit of
NT$1,500,000,000
NO
Mid-term loan
contract
Mega International
Commercial Bank
January 12, 2013~
January 11, 2015
Revolving limit (2 years) Limit
of NT$2,500,000,000 and
US$25,000,000
NO
70
Operation Overview
Nature
Duration
Description
Mid-term loan
contract
First Bank (to sponsor)
September 16, 2013~ Syndicated credit extension (3
September 16, 2016
years) Limit of NT$2,750,000,000
Mid-term loan
contract
Taishin International
Bank (to sponsor)
June 15, 2010~
June 15, 2014
Mid-term loan
contract
Mid-term loan
contract
Mid-term loan
contract
Mid-term loan
contract
71
Counterpart
Syndicated credit extension (4
years) Limit of NT$3,600,000,000
Taishin International
Bank (to sponsor)
December 15, 2010~
December 15, 2014
Cooperative Bank
December 06, 2013~ Revolving limit (2 years) Limit of
December 06, 2015
NT$1,300,000,000
King's Town Bank
Bank Sinopac (to
sponsor)
Syndicated credit extension (4
years) Limit of NT$2,650,000,000
Restriction clause
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
than 95%.
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
than 95%.
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
than 95%.
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
NO
February 17, 2011~
February 17, 2016
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
Non-revolving limit (5 years) Limit
than 95%.
of NT$1,150,000,000
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
October 28, 2013~
October 28, 2015
Syndicated credit extension (2
years) Limit of NT$700,000,000
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
than 95%.
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
Non-consolidated financial
statement of the issuing
company:
a. Current ratio shall be no less
than 95%.
b. Percentage of liability shall
be no more than 140%.
c. Net worth shall be no less
than 30 billion NTD.
Mid-term loan
contract
China Commicial
bank
March 25, 2011~
March 25, 2014
Guaranty by ECB for a limit of
US$150,000,000
Mid-term loan
contract
Bank of Taiwan
August 04, 2011~
July 28, 2016
Non-revolving limit (5 years) Limit
of NT$480,000,000
NO
Mid-term loan
contract
The Export-Import
November 13, 2013~
Bank of the Republic
May 13, 2016
of China
Revolving limit (2.5 years) Limit of
NT$300,000,000
NO
TATUNG 2012 Annual Report
Financial Overview
Financial Overview
Condensed balance sheet and income statement
(I) Condensed balance sheet - IFRSs - Tatung And Subsidiaries
Unit: NT$ Thousand
Year
Item
2012
As of 31 March 2014
2013
(Note 3)
Current assets
70,582,506
78,618,067
86,609,515
Property, plant and equipment (Note 2)
101,027,526
94,621,225
90,661,316
2,665,773
2,207,785
2,159,161
31,866,838
28,207,914
31,477,639
206,142,643
203,654,991
210,907,631
Before distribution
91,224,586
104,943,233
100,604,955
After distribution
91,224,586
(Note 5)
(Note 5)
51,944,292
36,462,038
46,041,707
Before distribution
143,168,878
141,405,271
146,646,662
After distribution
143,168,878
(Note 5)
(Note 5)
Equity attributable to shareholders of the parent
33,910,253
33,301,195
34,395,167
Capital stock
23,395,367
23,395,367
23,395,367
727,529
767,970
821,697
Before distribution
12,014,781
9,975,000
10,660,578
After distribution
12,014,781
(Note 5)
(Note 5)
(733,594)
(30,272)
324,395
Treasury stock
(1,493,830)
(806,870)
(806,870)
Non-controlling interests
29,063,512
28,948,525
29,865,802
Before distribution
62,973,765
62,249,720
64,260,969
After distribution
62,973,765
(Note 5)
(Note 5)
Intangible assets
Other assets
(Note 2)
Total assets
Current liabilities
Liabilities
Total liabilities
Capital surplus
Retained earnings
Unrealized gain or loss on financial instruments
Total shareholders’ equity
Note 1: The company's financial statements for the two years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2009-2012 can consult Condensed balance sheet-The Domestic Financial Accounting Principle-Tatung and Subsidiaries.
Note 2: The Company did not carry out land vale re-appraisal in 2013.
Note 3: The financial statements for Q1 of 2014 have been duly audited by independent auditors.
Note 4: The appropriation proposals are subject to a resolution of the shareholders' meeting in the following year.
Note 5: Not yet distributed.
72
Financial Overview
(I) Condensed balance sheet - IFRSs - Tatung
Unit: NT$ Thousand
Year
Item
2012
2013
Current assets
20,146,521
20,790,760
Property, plant and equipment (Note 2)
2,235,284
2,156,405
114,109
83,100
52,093,950
49,907,133
74,589,864
72,937,398
Before distribution
17,870,761
21,719,482
After distribution
17,870,761
(Note 5)
22,808,850
17,916,721
Before distribution
40,679,611
39,636,203
After distribution
40,679,611
(Note 5)
Owners' equity
33,910,253
33,301,195
Capital stock
23,395,367
23,395,367
727,529
767,970
Before distribution
12,014,781
9,975,000
After distribution
12,014,781
(Note 5)
(733,594)
(30,272)
(1,493,830)
(806,870)
-
-
Before distribution
33,910,253
33,301,195
After distribution
33,910,253
(Note 5)
Intangible assets
Other assets
(Note 2)
Total assets
Current liabilities
Liabilities
Total liabilities
Capital surplus
Retained earnings
Unrealized gain or loss on financial instruments
Treasury stock
Non-controlling interests
Total shareholders’ equity
Note 1: The company's financial statements for the two years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2009-2012 can consult Condensed balance sheet-The Domestic Financial Accounting Principle-Tatung.
Note 2: The Company did not carry out land vale re-appraisal in 2013.
Note 3: 2014 Q1 only provide consolidation report.
Note 4: The appropriation proposals are subject to a resolution of the shareholders' meeting in the following year.
Note 5: Not yet distributed.
73
TATUNG 2012 Annual Report
Financial Overview
(I) Condensed balance sheet - The Domestic Financial Accounting Principle - Tatung And Subsidiaries
Unit: NT$ Thousand
Year
Item
2009
2010
2011
2012
Current assets
90,456,986
90,522,496
84,300,246
72,061,452
Funds and long-term investments
13,391,281
12,852,207
13,320,272
13,205,688
136,409,288
124,205,185
116,270,641
105,993,886
Intangible assets
6,634,604
3,936,380
3,062,541
3,480,839
Other assets
6,354,261
6,533,666
7,582,159
6,540,177
253,246,420
238,049,934
224,535,859
201,282,042
Before distribution
102,202,194
93,015,822
86,778,033
92,103,576
After distribution
102,202,194
93,015,822
86,778,033
92,103,576
Long-term liabilities
47,247,242
47,445,282
46,681,242
35,984,942
Other liabilities
13,768,796
15,403,963
14,979,321
13,440,074
Before distribution
163,218,232
155,865,067
148,438,596
141,528,592
After distribution
163,218,232
155,865,067
148,438,596
141,528,592
Capital stock
55,517,314
55,527,604
23,395,367
23,395,367
Capital surplus
10,919,098
11,480,671
5,958,455
5,944,602
Before distribution
(32,134,272)
(36,111,637)
(2,595,800)
(6,377,504)
After distribution
(32,134,272)
(36,111,637)
(2,595,800)
(6,377,504)
(1,163,164)
(1,114,786)
(1,060,569)
(812,988)
1,249,807
495,547
1,060,477
622,884
(1,077,084)
(1,167,660)
(1,089,054)
(1,113,251)
(491,571)
1,753,590
7,089,690
8,881,813
57,208,060
51,321,538
43,338,697
29,212,527
Before distribution
90,028,188
82,184,867
76,097,263
59,753,450
After distribution
90,028,188
82,184,867
76,097,263
59,753,450
Fixed assets (Note 2)
Total assets
Current liabilities
Total liabilities
Retained earnings
Unrealized gain or loss on financial instruments
Cumulative translation adjustments
Net loss unrecognized as pension cost
Other stockholder's equity
Minority stockholder's interest
Total shareholders’ equity
Note 1: The company's financial statements for the five years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2012-2013 can consult Condensed balance sheet-IFRSs-Tatung and Subsidiaries.
Note 2: The Company did not carry out land vale re-appraisal in 2012.
Note 3: The appropriation proposals are subject to a resolution of the shareholders' meeting in the following year.
74
Financial Overview
(I) Condensed balance sheet - The Domestic Financial Accounting Principle - Tatung
Unit: NT$ Thousand
Year
Item
2009
2010
2011
2012
Current assets
22,374,854
20,465,003
21,447,593
20,146,521
Funds and long-term investments
50,450,121
51,150,561
52,831,043
47,213,674
Fixed assets (Note 2)
4,120,362
1,539,314
2,443,957
2,248,129
Intangible assets
303,559
25,557
70,782
114,109
1,177,025
748,244
1,653,147
1,846,278
78,425,921
73,928,679
78,446,522
71,568,711
Before distribution
24,619,342
18,316,651
18,585,187
17,806,636
After distribution
24,619,342
18,316,651
18,585,187
17,806,636
15,232,722
18,955,860
21,922,516
17,402,416
5,750,311
5,792,839
5,176,835
5,815,318
Before distribution
45,605,793
43,065,350
45,687,956
41,027,788
After distribution
45,605,793
43,065,350
45,687,956
41,027,788
Capital stock
55,517,314
55,527,604
23,395,367
23,395,367
Capital surplus
10,919,098
11,480,671
5,958,455
5,944,602
Before distribution
(32,134,272)
(36,111,637)
(2,595,800)
(6,377,504)
After distribution
(32,134,272)
(36,111,637)
(2,595,800)
(6,377,504)
(1,163,164)
(1,114,786)
(1,060,569)
(812,988)
1,249,807
495,547
1,060,477
622,884
(1,077,084)
(1,167,660)
(1,089,054)
(1,113,251)
(491,571)
1,753,590
7,089,690
8,881,813
Before distribution
32,820,128
30,863,329
32,758,566
30,540,923
After distribution
32,820,128
30,863,329
32,758,566
30,540,923
Other assets
Total assets
Current liabilities
Long-term liabilities
Other liabilities
Total liabilities
Retained earnings
Unrealized gain or loss on financial instruments
Cumulative translation adjustments
Net loss unrecognized as pension cost
Minority stockholder's interest
Total shareholders’ equity
Note 1: The company's financial statements for the five years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2012-2013 can consult Condensed balance sheet-IFRSs-Tatung.
Note 2: The Company did not carry out land vale re-appraisal in 2012.
Note 3: The appropriation proposals are subject to a resolution of the shareholders' meeting in the following year.
75
TATUNG 2012 Annual Report
Financial Overview
(II) Condensed income statement - IFRSs - Tatung And Subsidiaries
Unit: NT$ Thousand
Item
Year
Operating revenue
2012
As of 31 March
2014 (Note 2)
2013
106,098,543
112,926,870
29,466,131
524,985
12,278,166
5,623,859
(15,393,847)
(3,766,105)
1,557,694
125,032
(1,178,070)
(630,683)
Loss before income tax
(15,268,815)
(4,944,175)
927,011
Net loss from operations of continued segments
(15,208,626)
(5,319,552)
884,571
-
-
-
(15,208,626)
(5,319,552)
884,571
(1,290,912)
830,492
700,640
Realized Gross profit
Income from operations
Non-operating income and expenses
Income from discontinued departments
Net loss
Other comprehensive income (net of tax)
Total comprehensive income
(16,499,538)
(4,489,060)
1,585,211
Net loss attribute to equity attributable to owners of parent
(4,018,631)
(1,611,408)
685,578
Net loss attribute to non controlling interest
(11,189,995)
(3,708,144)
198,993
Total comprehensive income attribute to equity attributable to owners of parent
(4,415,092)
(1,364,192)
1,040,245
(12,084,446)
(3,124,868)
544,966
(1.74)
(0.70)
0.30
Total comprehensive income attribute to non controlling interest
Loss per share(Note 3)
Note 1: The company's financial statements for the two years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2009-2012 can consult Condensed Income statement-The Domestic Financial Accounting Principle-Tatung and Subsidiaries.
Note 2: The financial statements for Q1 of 2014 have been duly audited by independent auditors.
Note 3: All information of the earnings per share for the previous years is calculated on a fully diluted basis.
(II) Condensed income statement - IFRSs - Tatung
Unit: NT$ Thousand
Item
Year
2012
2013
Operating revenue
32,185,089
24,087,818
Realized Gross profit
2,960,479
2,394,002
160,055
(257,408)
Non-operating income and expenses
(4,200,912)
(1,490,473)
Loss before income tax
(4,040,857)
(1,747,881)
Net loss from operations of continued segments
(4,018,631)
(1,611,408)
-
-
(4,018,631)
(1,611,408)
(396,461)
247,216
Total comprehensive income
(4,415,092)
(1,364,192)
Net loss attribute to equity attributable to owners of parent
(4,018,631)
(1,611,408)
-
-
(4,415,092)
(1,364,192)
-
-
(1.74)
(0.70)
Income from operations
Income from discontinued departments
Net loss
Other comprehensive income (net of tax)
Net loss attribute to non controlling interest
Total comprehensive income attribute to equity attributable to owners of parent
Total comprehensive income attribute to non controlling interest
Loss per share(Note 3)
Note 1: The company's financial statements for the two years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2009-2012 can consult Condensed Income statement-The Domestic Financial Accounting Principle-Tatung.
Note 2: 2014 Q1 only provide consolidation report.
Note 3: All information of the earnings per share for the previous years is calculated on a fully diluted basis.
76
Financial Overview
(II) Condensed income statement - The Domestic Financial Accounting Principle - Tatung And Subsidiaries
Unit: NT$ Thousand
Year
2009
2010
Operating revenue
118,732,661
157,911,390
146,250,179
107,356,308
Realized Gross profit
(11,662,216)
5,324,718
7,126,742
611,851
Income from operations
(33,298,151)
(13,802,719)
(11,550,490)
(15,338,203)
5,075,398
4,687,414
8,637,807
4,947,664
Non-operating expenses and losses
(12,228,460)
(5,209,596)
(8,277,959)
(4,751,131)
Income from operations of continued segments - before tax
(40,451,213)
(14,324,901)
(11,190,642)
(15,141,670)
Income from operations of continued segments - after tax
(40,749,581)
(15,502,666)
(11,993,514)
(15,084,036)
Income from discontinued departments
-
-
-
-
Extraordinary gain or loss
-
-
-
-
Cumulative effect of accounting principle changes
-
-
-
-
(40,749,581)
(15,502,666)
(11,993,514)
(15,084,036)
(9,917,010)
(3,480,765)
1,379,850
(3,512,312)
(30,832,571)
(12,021,901)
(13,373,364)
(11,571,724)
(2.10)
(0.63)
0.60
(1.52)
Item
Non-operating income and gains
Net income
Minority interest
Shareholders of the parent
Earnings (loss) per share (Note 2)
2011
2012
Note 1: The company's financial statements for the five years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2012-2013 can consult Condensed Income statement-IFRSs-Tatung and Subsidiaries.
Note 2: All information of the earnings per share for the previous years is calculated on a fully diluted basis.
77
TATUNG 2012 Annual Report
Financial Overview
(II) Condensed income statement - The Domestic Financial Accounting Principle - Tatung
Unit: NT$ Thousand
Year
2009
2010
2011
2012
Operating revenue
30,263,971
38,608,612
38,408,478
32,185,089
Realized Gross profit
2,728,515
3,233,134
3,180,288
2,866,708
Income from operations
(992,298)
234,697
378,650
(64,092)
Non-operating income and gains
1,788,921
1,330,159
2,002,871
885,385
Non-operating expenses and losses
10,734,007
5,069,780
1,136,354
4,355,831
Income from operations of continued segments - before tax
(9,937,384)
(3,504,924)
1,245,167
(3,534,538)
Income from operations of continued segments - after tax
(9,917,010)
(3,480,765)
1,379,850
(3,512,312)
Income from discontinued departments
-
-
-
-
Extraordinary gain or loss
-
-
-
-
Cumulative effect of accounting principle changes
-
-
-
-
(9,917,010)
(3,480,765)
1,379,850
(3,512,312)
(2.10)
(0.63)
0.60
(1.52)
Item
Net income
Earnings (loss) per share (Note 2)
Note 1: The company's financial statements for the five years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2012-2013 can consult Condensed Income statement-IFRSs-Tatung.
Note 2: All information of the earnings per share for the previous years is calculated on a fully diluted basis.
(III) Auditors’ opinions from 2009 to 2013:
Year
Firm
2009
Ernst & Young
2010
Ernst & Young
2011
Ernst & Young
2012
Ernst & Young
2013
Ernst & Young
CPA
Kevin Chang
Ming-yu Lee
Yi-chang Liang
Lan-ching Chang
Yi-chang Liang
Lan-ching Chang
Yi-chang Liang
Lan-ching Chang
Su-Wen Lin
Lan-ching Chang
Opinion
An unqualified opinion with
explanatory
An unqualified opinion with
explanatory
An unqualified opinion with
explanatory
An unqualified opinion with
explanatory
An unqualified opinion with
explanatory
78
Financial Overview
Financial analysis
Financial analysis - IFRSs - Tatung And Subsidiaries
Year
Item (Note 2)
Financial structure Debt ratio
(%)
Long-term funds to Property, plant and equipment ratio
Liquidity Analysis
(%)
69.43
69.53
113.75
104.32
121.66
Current ratio
77.37
74.91
86.09
Quick ratio
48.29
49.9
61.29
-
-
2.15
6.55
6.61
6.06
56
55
60
Average inventory turnover (times)
4.51
4.44
4.47
Average payment turnover (times)
5.2
4.72
4.37
Average inventory turnover days
81
82
82
0.99
1.15
1.27
Times interest earned
Days sales outstanding
Fixed assets turnover (times)
Total assets turnover (times)
0.48
0.55
0.57
(5.75)
(1.31)
0.75
Return on equity (%)
(21.06)
(8.50)
1.40
Incom before tax Percentage to paid-in capital (%)
(65.26)
(21.13)
3.96
Net margin (%)
(14.33)
(4.71)
3.00
(1.74)
(0.70)
0.30
5.98
5.53
0.54
75.04
93.28
91.30
Return on total assets (%)
Profitability
Earnings per share (NT$)
Cash flow ratio (%)
Cash flow
Cash flow adequacy ratio (%)
Cash flow reinvestment ratio (%)
Leverage
As of 31 March
2014 (Note 1)
2013
69.45
Average collection turnover (times)
Operating
performance
2012
1.92
2.03
0.18
Operating leverage
(5.64)
(25.15)
16.20
Financial leverage
0.83
0.54
2.07
Note 1: The financial statements for Q1 of 2014 have been duly audited by independent auditors. Since 2014 use IFRSs, Data 2009~2012 can
consult Financial analysis The Domestic Financial Accounting Principle - Tatung And Subsidiaries.
Note 2: Formulas for the above table are specified as follows:
1. Capital structure analysis
(1) Debts ratio = Total liabilities / Total assets
(2) Long-term funds to Property, plant and equipment, net =
(Shareholders’ equity + long-term liabilities) / Net Property,
plant and equipment
2. Liquidity analysis
(1) Current ratio = Current assets / Current liabilities
(2) Quick ratio = (Current assets - inventories - prepayment) /
Current liabilities
(3) Times interest earned = Earnings before interest and taxes /
Interest expenses
3. Operating performance analysis
(1) Average collection turnover (including account receivables
and notes receivables from operation) = Net sales / Average
trade receivables (including accounts receivables and
notes receivables from operation)
(2) Days sales outstanding = 365 / Average collection turnover
(3) Average inventory turnover = Cost of sales / Average
inventory
(4) Average payment turnover (including account payables
and notes payables from operation) = Cost of sales /
Average trade payables (including account payables and
notes payables from operation)
(5) Average inventory turnover days = 365 / Average inventory
turnover
(6) Property, plant and equipment turnover = Net sales /
Property, plant and equipment net.
(7) Total assets turnover = Net sales / Total assets
79
4. Profitability analysis
(1) Return on total assets = [Net income + interest expenses * (1 –
effective tax rate)] / Average total assets
(2) Return on equity = Net income / Average shareholders’
equity
(3) Percentage to paid-in capital ~ operating income =
Operating income / Paid-in capital
(4) Percentage to paid-in capital ~ income before tax = Income
before tax / Paid-in capital
(5) Net margin = Net income / Net sales
(6) Earnings per share = (Net income - preferred stock dividends)
/ Weighted average number of shares outstanding
5. Cash flow
(1) Cash flow ratio = Net cash from operating activities / Current
liabilities
(2) Cash flow adequacy ratio = Five-year sum of cash from
operation / Five-year sum of capital expenditures, inventory
additions, and cash dividends
(3) Cash flow reinvestment ratio = (Cash from operating
activities - cash dividends) / (Gross fixed assets + long-term
investment + other assets + working capital)
6. Leverage
(1) Operating leverage = (Net sales – variable costs + expenses)
/
Operating income
(2) Financial leverage = Operating income / (Operating income
- interest expenses)
TATUNG 2012 Annual Report
Financial Overview
Financial analysis - IFRSs - Tatung
Year
Item (Note 2)
Financial structure
(%)
Debt ratio
54.34
2,537.45
2,375.15
112.73
95.72
82.69
74.87
-
-
4.24
3.13
86
117
Average inventory turnover (times)
4.93
4.69
Average payment turnover (times)
5.51
4.73
74
78
Fixed assets turnover (times)
13.83
10.97
Total assets turnover (times)
0.41
0.33
Return on total assets (%)
(4.05)
(1.11)
Return on equity (%)
(11.07)
(4.80)
Incom before tax Percentage to paid-in capital (%)
(17.27)
(7.47)
Net margin (%)
(12.49)
(6.69)
Earnings per share (NT$)
(1.74)
(0.70)
Cash flow ratio (%)
27.73
14.20
298.29
298.62
8.11
5.52
Operating leverage
168.18
(74.50)
Financial leverage
(0.20)
0.21
Long-term funds to Property, plant and equipment ratio
Quick ratio
Times interest earned
Average collection turnover (times)
Days sales outstanding
Operating
performance
Average inventory turnover days
Profitability
Cash flow
Cash flow adequacy ratio (%)
Cash flow reinvestment ratio (%)
Leverage
2013
54.54
Current ratio
Liquidity Analysis
(%)
2012
Note 1: The financial statements for Q1 of 2013 have been duly audited by independent auditors. Since 2014 use IFRSs, Data 2009~2012 can
consult Financial analysis The Domestic Financial Accounting Principle - Tatung.
Note 2 : 2014 Q1 only provide consolidation report.
Note 3: Formulas for the above table are specified as follows:
1. Capital structure analysis
(7) Total assets turnover = Net sales / Total assets
(1) Debts ratio = Total liabilities / Total assets
4. Profitability analysis
(2) Long-term funds to Property, plant and equipment, net =
(1) Return on total assets = [Net income + interest expenses * (1 –
(Shareholders’ equity + long-term liabilities) / Net Property,
effective tax rate)] / Average total assets
plant and equipment
(2) Return on equity = Net income / Average shareholders’ equity
2. Liquidity analysis
(3) Percentage to paid-in capital ~ operating income = Operating
(1) Current ratio = Current assets / Current liabilities
income / Paid-in capital
(2) Quick ratio = (Current assets - inventories - prepayment) /
(4) Percentage to paid-in capital ~ income before tax = Income
Current liabilities
before tax / Paid-in capital
(3) Times interest earned = Earnings before interest and taxes /
(5) Net margin = Net income / Net sales
Interest expenses
(6) Earnings per share = (Net income - preferred stock dividends) /
3. Operating performance analysis
Weighted average number of shares outstanding
(1) Average collection turnover (including account receivables
5. Cash flow
and notes receivables from operation) = Net sales / Average
(1) Cash flow ratio = Net cash from operating activities / Current
trade receivables (including accounts receivables and notes
liabilities
receivables from operation)
(2) Cash flow adequacy ratio = Five-year sum of cash from
(2) Days sales outstanding = 365 / Average collection turnover
operation / Five-year sum of capital expenditures, inventory
(3) Average inventory turnover = Cost of sales / Average inventory
additions, and cash dividends
(4) Average payment turnover (including account payables and
(3) Cash flow reinvestment ratio = (Cash from operating activities
notes payables from operation) = Cost of sales / Average trade
- cash dividends) / (Gross fixed assets + long-term investment +
payables (including account payables and notes payables
other assets + working capital)
from operation)
6. Leverage
(5) Average inventory turnover days = 365 / Average inventory
(1) Operating leverage = (Net sales – variable costs + expenses) /
turnover
Operating income
(6) Property, plant and equipment turnover = Net sales / Property,
(2) Financial leverage = Operating income / (Operating income plant and equipment net.
interest expenses)
80
Financial Overview
Financial analysis - The Domestic Financial Accounting Principle - Tatung And Subsidiaries
Year
Item (Note 2)
Financial structure (%)
Liquidity Analysis (%)
Debt ratio
70.31
100.63
104.37
105.60
90.32
Current ratio
88.51
97.32
97.14
78.24
Quick ratio
61.68
65.27
64.97
48.12
-
-
-
-
5.67
8.00
7.95
6.84
64
46
46
53
Average inventory turnover (times)
5.25
6.29
5.56
4.39
Average payment turnover (times)
5.50
6.60
6.21
5.26
70
58
66
83
Fixed assets turnover (times)
0.81
1.21
1.22
0.97
Total assets turnover (times)
0.44
0.64
0.63
0.5
Return on total assets (%)
(14.21)
(5.50)
(4.15)
(5.91)
Return on equity (%)
(42.23)
(18.00)
(15.15)
(22.21)
Operating income
(59.98)
(24.86)
(49.37)
(65.56)
Income before tax
(72.86)
(25.80)
(47.83)
(64.72)
(34.32)
(9.82)
(8.20)
(14.05)
Earnings per share (NT$)
(8.64)
(2.82)
(5.19)
(6.53)
Cash flow ratio (%)
(0.72)
14.38
(2.61)
4.75
Cash flow adequacy ratio (%)
44.19
76.87
70.2
53.23
Cash flow reinvestment ratio (%)
(0.24)
4.22
(0.74)
1.50
Operating leverage
(2.81)
(9.76)
(10.72)
(5.77)
Financial leverage
0.91
0.84
0.80
0.84
Long-term funds to fixed assets ratio
Average inventory turnover days
Percentage to paid-in
capital (%)
Net margin (%)
Leverage
2012
66.11
Days sales outstanding
Cash flow
2011
65.48
Average collection turnover (times)
Profitability
2010
64.45
Times interest earned
Operating performance
2009
Note 1: The Company’s financial statements for the past five years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2012~2013 can consult Financial analysis - IFRSs - Tatung And Subsidiaries.
Note 2: Formulas for the above table are specified as follows:
1. Capital structure analysis
(1) Debts ratio = Total liabilities / Total assets
(2) Long-term funds to fixed assets = (Shareholders’ equity + longterm liabilities) / Net fixed assets
2. Liquidity analysis
(1) Current ratio = Current assets / Current liabilities
(2) Quick ratio = (Current assets - inventories - prepayment) /
Current liabilities
(3) Times interest earned = Earnings before interest and taxes /
Interest expenses
3. Operating performance analysis
(1) Average collection turnover (including account receivables
and notes receivables from operation) = Net sales / Average
trade receivables (including accounts receivables and notes
receivables from operation)
(2) Days sales outstanding = 365 / Average collection turnover
(3) Average inventory turnover = Cost of sales / Average inventory
(4) Average payment turnover (including account payables and
notes payables from operation) = Cost of sales / Average trade
payables (including account payables and notes payables
from operation)
(5) Average inventory turnover days = 365 / Average inventory
turnover
(6) Fixed assets turnover = Net sales / Fixed assets
(7) Total assets turnover = Net sales / Total assets
81
4. Profitability analysis
(1) Return on total assets = [Net income + interest expenses * (1 –
effective tax rate)] / Average total assets
(2) Return on equity = Net income / Average shareholders’ equity
(3) Percentage to paid-in capital ~ operating income = Operating
income / Paid-in capital
(4) Percentage to paid-in capital ~ income before tax = Income
before tax / Paid-in capital
(5) Net margin = Net income / Net sales
(6) Earnings per share = (Net income - preferred stock dividends) /
Weighted average number of shares outstanding
5. Cash flow
(1) Cash flow ratio = Net cash from operating activities / Current
liabilities
(2) Cash flow adequacy ratio = Five-year sum of cash from
operation / Five-year sum of capital expenditures, inventory
additions, and cash dividends
(3) Cash flow reinvestment ratio = (Cash from operating activities
- cash dividends) / (Gross fixed assets + long-term investment +
other assets + working capital)
6. Leverage
(1) Operating leverage = (Net sales – variable costs + expenses) /
Operating income
(2) Financial leverage = Operating income / (Operating income interest expenses)
TATUNG 2012 Annual Report
Financial Overview
Financial analysis - The Domestic Financial Accounting Principle ﹣ Tatung
Year
Item (Note 2)
Financial structure (%)
Liquidity Analysis (%)
Debt ratio
57.33
1,166.23
3,236.45
2,237.40
2,132.59
Current ratio
90.88
111.73
115.4
113.14
Quick ratio
68.45
74.66
77.26
82.99
-
-
2.57
-
4.70
5.89
5.21
4.27
78
62
70
85.48
Average inventory turnover (times)
5.00
6.12
5.23
4.83
Average payment turnover (times)
5.13
6.60
6.22
5.00
73
60
70
76
Fixed assets turnover (times)
7.04
13.64
19.28
13.72
Total assets turnover (times)
0.37
0.51
0.50
0.43
(11.41)
(3.86)
2.67
(3.72)
(28.33)
(10.93)
4.34
(11.10)
Operating income
(1.79)
0.42
1.62
(0.27)
Income before tax
(17.90)
(6.31)
5.32
(15.11)
(32.77)
(9.02)
3.59
(10.91)
(2.10)
(0.63)
0.60
(1.52)
6.62
(4.36)
(0.99)
23.60
(8.46)
(6.10)
3.52
49.48
2.75
(1.31)
(0.28)
7.12
(28.19)
157.32
95.46
(474.59)
0.57
(0.56)
(0.92)
0.07
Long-term funds to fixed assets ratio
Average inventory turnover days
Return on total assets (%)
Return on equity (%)
Percentage to paid-in
capital (%)
Net margin (%)
Earnings per share (NT$)
Cash flow ratio (%)
Cash flow adequacy ratio (%)
Cash flow reinvestment ratio (%)
Leverage
2012
58.24
Days sales outstanding
Cash flow
2011
58.25
Average collection turnover (times)
Profitability
2010
58.15
Times interest earned
Operating performance
2009
Operating leverage
Financial leverage
Note 1: The Company’s financial statements for the past five years have been duly audited by independent auditors. Since 2014 use IFRSs, Data
2012~2013 can consult Financial analysis - IFRSs - Tatung.
Note 2: Formulas for the above table are specified as follows:
1. Capital structure analysis
(1) Debts ratio = Total liabilities / Total assets
(2)Long-term funds to fixed assets = (Shareholders’ equity + longterm liabilities) / Net fixed assets
2. Liquidity analysis
(1) Current ratio = Current assets / Current liabilities
(2)Quick ratio = (Current assets - inventories - prepayment) /
Current liabilities
(3)Times interest earned = Earnings before interest and taxes /
Interest expenses
3. Operating performance analysis
(1) Average collection turnover (including account receivables
and notes receivables from operation) = Net sales / Average
trade receivables (including accounts receivables and notes
receivables from operation)
(2)Days sales outstanding = 365 / Average collection turnover
(3)Average inventory turnover = Cost of sales / Average inventory
(4)Average payment turnover (including account payables and
notes payables from operation) = Cost of sales / Average trade
payables (including account payables and notes payables
from operation)
(5)Average inventory turnover days = 365 / Average inventory
turnover
(6)Fixed assets turnover = Net sales / Fixed assets
(7)Total assets turnover = Net sales / Total assets
4. Profitability analysis
(1) Return on total assets = [Net income + interest expenses * (1 –
effective tax rate)] / Average total assets
(2)Return on equity = Net income / Average shareholders’ equity
(3)Percentage to paid-in capital ~ operating income = Operating
income / Paid-in capital
(4)Percentage to paid-in capital ~ income before tax = Income
before tax / Paid-in capital
(5)Net margin = Net income / Net sales
(6)Earnings per share = (Net income - preferred stock dividends) /
Weighted average number of shares outstanding
5. Cash flow
(1) Cash flow ratio = Net cash from operating activities / Current
liabilities
(2)Cash flow adequacy ratio = Five-year sum of cash from
operation / Five-year sum of capital expenditures, inventory
additions, and cash dividends
(3)Cash flow reinvestment ratio = (Cash from operating activities
- cash dividends) / (Gross fixed assets + long-term investment +
other assets + working capital)
6.Leverage
(1) Operating leverage = (Net sales – variable costs + expenses) /
Operating income
(2)Financial leverage = Operating income / (Operating income interest expenses)
82
Financial Overview
Audit Committee's review report
The Board of Directors has prepared and submitted the Company’s 2013 Business Report, Financial Statements (including
Consolidated Financial Statements), and loss make-up proposal. The CPA firm, Ernst & Young, has audited the Financial Statements
and issued an audit opinion report. We, the Audit Committee, has agreed upon the CPA’s audit opinion, and duly reviewed the
Business Report and loss make-up proposal. We hereby submit this report according to Article 14-4 of the Securities and Exchange
Act and Article 219 of the Company Act.
Sincerely,
To Tatung Co. 2014 Annual General Shareholders’ Meeting
The convener of the Audit Committee
25th April, 2014
83
TATUNG 2012 Annual Report
Financial Overview
Representation Letter
The entities included in the consolidated financial statements as of 31 December 2013 and for the year then ended prepared under
the International Accounting Standards No.27 “Consolidated and Separate Financial Statement” (referred to as “Consolidated
Financial Statements”) are the same as the entities to be included in the combined financial statements of the Company, if any to
be prepared, pursuant to the Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated
Financial Statements of Affiliated Enterprises (referred to as “Combined Financial Statements”). Also, the footnotes disclosed in
the Consolidated Financial Statements have fully covered the required information in such Combined Financial Statements.
Accordingly, the Company did not prepare any other set of Combined Financial Statements than the Consolidated Financial
Statements.
Very truly yours,
Tatung Co., Ltd.
By
W. S. Lin
Chairman
18 March 2014
84
Financial Overview
Consolidated statements
Report of Independent Auditors
To Tatung Co., Ltd.
We have audited the accompanying consolidated balance sheets of Tatung Co., Ltd. (“the Company”) and its subsidiaries as
of December 31, 2013, December 31, 2012 and January 1, 2012, the related consolidated statements of comprehensive income,
consolidated statements of changes in equity and cash flows for the years ended December 31, 2013 and 2012. These consolidated
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
consolidated financial statement based on our audits. Certain consolidated subsidiaries were audited by the other auditors. Our audit
insofar as it relates to the total assets amounted to 3,683,885 thousand, 4,062,726 thousand and 7,553,078 thousand which represented
1.81%, 1.97% and 3.24% of total consolidated assets as of December 31, 2013, December 31 ,2012 and January 1, 2012, respectively, and
the related net operation revenue amounted to 2,837,605 thousand and 5,498,950 thousand which represented 2.51% and 5.18% of
net consolidated operation revenue for the years ended December 31, 2013 and 2012, respectively, are based solely on the reports of
the other auditors. Besides, certain investments accounted for using equity method based on financial statements as of December 31,
2013, December 31, 2012 and January 1, 2012 of the investees, which were audited by the other auditors. Our audit, insofar as it related
to the investments accounted to 5,742,420 thousand, 9,106,792 thousand and 9,993,303 thousand, which represented 2.82%, 4.42% and
4.28% of the total consolidated assets as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively, and the related
share of profits (losses) of associates and joint ventures of 905,342 thousand and (69,405) thousand which represented (18.31)% and 0.45%
of loss before income tax for the years ended December 31, 2013 and 2012, respectively, and the related share of other comprehensive
income (loss) of associates and joint ventures of 155,880 thousand and 88,993 thousand which represented 18.77% and (6.89)% of
consolidated total comprehensive income (loss) for the years ended December 31, 2013 and 2012, respectively.
We conducted our audits in accordance with generally accepted auditing standards in the Republic of China on Taiwan and
“Guidelines for Certified Public Accountants’ Examination and Reports on Financial Statements”. Those 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
consolidated financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Tatung Co., Ltd. and its subsidiaries as of December 31, 2013,
December 31, 2012 and January 1, 2012 and the results of its consolidated operations and its cash flows for the years ended December
31, 2013 and 2012, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers.
We have audited and expressed a modified unqualified opinion on the parent company only financial statements of Tatung Co., Ltd.
as of and for the years ended December 31, 2013 and 2012.
Ernst & Young
Taipei, Taiwan
Republic of China
March 18, 2014
Notice to Readers
The accompanying financial statements are intended only to present the financial position and results of operations and cash flows in
accordance with accounting principles and practices generally accepted in the Republic of China on Taiwan and not those of any other
jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and
applied in the Republic of China on Taiwan.
85
TATUNG 2012 Annual Report
Financial Overview
TATUNG CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2013 and 2012
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)
Contents
Operating revenues
For the Year Ended
December 31, 2013
Amount
%
For the Year Ended
December 31, 2012
Amount
%
$114,501,453
102
$107,524,498
Less: Sales returns
(761,962)
(1)
(765,833)
-
Less: Sales allowances
(812,621)
(1)
(660,122)
(1)
Net operating revenues
101
112,926,870
100
106,098,543
100
Operating cost
(100,648,704)
(89)
(105,573,558)
(100)
Net gross profit
12,278,166
11
524,985
-
Operating expenses
Sales and marketing
(5,022,250)
(4)
(5,106,976)
(5)
General and administrative
(5,355,641)
(5)
(5,516,659)
(5)
Research and development
(5,666,380)
(5)
(5,295,197)
(5)
Total operating expense
(16,044,271)
(14)
(15,918,832)
(15)
(3,766,105)
(3)
(15,393,847)
(15)
1,995,188
2
3,257,731
3
Operating loss
Non-operating income and expense
Other income
Other (losses) and gains
(1,572,524)
(1)
91,379
-
Finance cost
(3,179,873)
(3)
(3,108,781)
(3)
Share of profits (losses) of associates and joint ventures
80,669
-
(115,297)
-
1,498,470
1
-
-
(1,178,070)
(1)
125,032
-
(4,944,175)
(4)
(15,268,815)
(15)
(375,377)
(1)
60,189
-
(5,319,552)
(5)
(15,208,626)
(15)
884,448
1
(1,168,562)
(1)
(209,532)
-
96,416
-
93,970
-
(252,253)
-
Share of other comprehensive income (loss) of associates and joint ventures
141,010
-
(88,395)
-
Income tax expense related to components of other comprehensive income
(79,404)
-
121,882
-
Bargain purchase gain
Total Non-operating income and expense
Loss before income tax
Income tax (expense) benefit
Net Loss
Other comprehensive income
Exchange differences on translation of foreign operation
Unrealized gain or loss on financial instruments
Actuarial loss from defined benefit plans
Other comprehensive income (loss) , net of income tax
Total comprehensive loss
830,492
1
(1,290,912)
(1)
$(4,489,060)
(4)
$(16,499,538)
(16)
Net loss attribute to:
Shareholders of the parent
$(1,611,408)
$(4,018,631)
Non-controlling interests
(3,708,144)
$(5,319,552)
(11,189,995)
$(15,208,626)
Total comprehensive loss attribute to:
Shareholders of the parent
$(1,364,192)
$(4,415,092)
(3,124,868)
(12,084,446)
$(4,489,060)
$(16,499,538)
Basic loss per share (NT$)
$(0.70)
$(1.74)
Diluted loss per share (NT$)
$(0.70)
$(1.74)
Non-controlling interests
Loss per share
86
Financial Overview
TATUNG CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
As of December 31, 2013, December 31, 2012 and January 1, 2012
Assets
Contents
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss, current
Available-for-sale financial assets, current
Financial assets carried at cost, current
Investment in debt security with no active accounted, current
Notes receivable, net
Accounts receivable, net
Accounts receivable - related parties, net
Construction receivables
Other receivables, net
Other receivables - related parties, net
Current tax asset
Inventories
Prepayments
Non-current assets held for sale (net)
Other current assets
Total current assets
Non-current assets
Financial assets at fair value through profit or loss, non-current
Available-for-sale financial assets, non-current
Financial assets in held-to-maturity, non-current
Financial assets carried at cost, non-current
Investment in debt security with no active accounted, non-current
Investments accounted for under the equity method
Property, plant and equipment
Investment property, net
Intangible assets
Deferred tax assets
Other non-current assets
Long-term receivables
Total non-current assets
Total assets
87
December 31, 2013
Amount
%
December 31, 2012
Amount
%
January 1, 2012
Amount
%
$23,193,105
73,347
622,384
29,238
7,243,975
709,813
14,872,589
232,798
2,205,139
2,377,319
33,746
62,931
22,097,965
4,152,728
109,784
601,206
78,618,067
12
4
8
1
1
11
2
39
$24,401,022
120,739
679,977
138,328
2,581,938
811,055
11,811,584
462,832
1,006,157
1,174,700
38,395
23,225,569
3,308,071
822,139
70,582,506
12
1
6
1
11
2
1
34
$30,902,466
103,516
493,015
185,960
4,293,641
1,096,973
13,037,510
498,880
307,058
1,444,539
2,616,575
23,540,349
3,802,419
565,782
82,888,683
13
2
1
6
1
1
10
2
36
783,783
2,019,820
20,000
172,908
33,167
6,922,773
94,621,225
10,502,868
2,207,785
2,616,832
4,552,368
583,395
125,036,924
1
4
47
5
1
1
2
61
1,149,953
20,000
206,201
622,244
11,813,078
101,027,526
10,539,820
2,665,773
1,934,906
4,929,931
650,705
135,560,137
1
1
6
49
5
1
1
2
66
2,069
1,128,570
20,000
243,789
1,536,313
11,804,559
112,839,412
10,576,770
2,067,331
3,760,728
6,381,469
46,436
150,407,446
1
5
48
4
1
2
3
64
$203,654,991
100
$206,142,643
100
$233,296,129
100
TATUNG 2012 Annual Report
Financial Overview
Liabilities and Equity
Contents
Current liabilities
Short-term loans
Short-term notes and bills payable
Financial liabilities at fair value through profit or loss, current
Derivative financial liabilities for hedging, current
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Current tax liabilities
Provision, current
Advanced receipts
Current portion of bonds payable
Current portion of long-term loans
Other current liabilities - others
Total current liabilities
Non-current liabilities
Financial liability at fair value through profit or loss, non-current
Bonds payable
Long-term loans
Provision, non-current
Deferred tax liabilities
Long-term payables
Long-term deferred revenues
Accrued pension liabilities
Deposits in
Deferred credit for investments accounted for under the equity method
Other non-current liabilities, others
Total non-current libilities
Total liabilities
Equity attributable to shareholders of the parent
Capital stock
Common stock
Capital reserve
Retained earnings
Special reserve
(Accumulated deficits) Unappropriated Earnings
Total retained earnings
Other equities
Exchange differences on translation of foreign operation
Unrealized gain or loss on financial instruments
Cash flow hedges contributed to losses of effective hedges
Total other equities
Treasury stock
Equity attributable to shareholders of the parent
Non-controlling interests
Total equity
Total liabilities and equity
December 31, 2013
Amount
%
(Expressed in Thousands of New Taiwan Dollars)
December 31, 2012
January 1, 2012
Amount
%
Amount
%
$40,373,734
4,941,588
29,137
199,437
21,769,450
478,027
9,696,119
238,752
210,613
4,512,304
5,918,437
14,977,016
1,598,619
104,943,233
20
3
11
5
2
3
7
1
52
$38,170,205
1,551,694
109,031
99,604
19,750,087
381,103
8,866,461
297,977
84,241
4,460,921
16,104,949
1,348,313
91,224,586
18
1
10
4
2
8
1
44
$40,317,299
698,917
767,233
15,652
250,040
19,896,972
202,591
8,448,530
324,987
120,350
2,443,720
998,900
9,527,389
2,004,979
86,017,559
17
9
4
1
1
4
1
37
320,959
20,457,189
539,926
7,589,457
214
266,185
6,212,552
118,200
21,639
935,717
36,462,038
141,405,271
10
4
3
1
18
70
5,381,573
30,149,086
975,992
7,148,351
337,032
6,691,444
90,876
22,847
1,147,091
51,944,292
143,168,878
3
15
3
3
1
25
69
5,309,020
40,266,010
917,961
9,307,165
70,332
726,518
6,998,719
234,489
21,335
1,956,569
65,808,118
151,825,677
2
17
1
4
3
1
28
65
23,395,367
767,970
11
-
23,395,367
727,529
11
1
23,395,367
719,378
10
-
15,894,690
(5,919,690)
9,975,000
8
(3)
5
15,894,690
(3,879,909)
12,014,781
8
(2)
6
15,978,036
664,947
16,642,983
8
8
(188,770)
158,498
(30,272)
(806,870)
33,301,195
28,948,525
62,249,720
16
14
30
(428,502)
(305,092)
(733,594)
(1,493,830)
33,910,253
29,063,512
62,973,765
(1)
17
14
31
(558,299)
(5,280)
(563,579)
(1,493,429)
38,700,720
42,769,732
81,470,452
(1)
17
18
35
$203,654,991
100
$206,142,643
100
$233,296,129
100
88
Financial Overview
TATUNG CO., LTD.AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2013 and 2012
Contents
Balance as of January 1, 2012
Retained Earnings
Capital Stock
Capital Reserve
Special Reserve Unappropriated
Earnings
$23,395,367
$719,378
$15,978,036
$664,947
Reverse of special reserve
-
-
(83,346)
-
Capital reserve used to cover accumulated deficits
-
(70,000)
-
70,000
Net loss on January 1 to December 31, 2012
-
-
-
(4,018,631)
Other comprehensive income on January 1 to December 31, 2012
-
-
-
(226,446)
Total comprehensive income on January 1 to December 31, 2012
-
-
-
(4,245,077)
Changes in treasury stocks
-
-
-
-
Acquisition or disposal on subsidiary shares
-
78,151
-
(369,779)
Changes in non-controlling interests
-
-
-
-
Balance as of December 31, 2012
$23,395,367
$727,529
$15,894,690
$(3,879,909)
Balance as of January 1, 2013
$23,395,367
$727,529
$15,894,690
$(3,879,909)
Net loss on January 1 to December 31, 2013
-
-
-
(1,611,408)
Other comprehensive income on January 1 to December 31, 2013
-
-
-
(23,593)
Total comprehensive income on January 1 to December 31, 2013
-
-
-
(1,635,001)
Disposal of treasury stocks held by subsidiaries
-
-
-
(583,002)
Acquisition or disposal on subsidiary shares
-
40,441
-
178,222
Changes in non-controlling interests
-
-
-
-
$23,395,367
$767,970
$15,894,690
$(5,919,690)
Balance as of December 31, 2013
89
TATUNG 2012 Annual Report
Financial Overview
Attributed to Equity Holders of the Parent
Other Capital Reserves
Exchange Differences
on Translation of
Foreign Operation
Unrealized Gain or
Loss on Financial
Instruments
Cash Flow Hedges
Treasury Stock
"Non-controlling
Interests"
Total
Total Equity
$-
$(558,299)
$(5,280)
$(1,493,429)
$38,700,720
$42,769,732
$81,470,452
-
-
-
-
(83,346)
-
(83,346)
-
-
-
-
-
-
-
-
-
-
-
(4,018,631)
(11,189,995)
(15,208,626)
(428,502)
253,207
5,280
-
(396,461)
(894,451)
(1,290,912)
(428,502)
253,207
5,280
-
(4,415,092)
(12,084,446)
(16,499,538)
-
-
-
(401)
(401)
-
(401)
-
-
-
-
(291,628)
291,628
-
-
-
-
-
-
(1,913,402)
(1,913,402)
$(428,502)
$(305,092)
$-
$(1,493,830)
$33,910,253
$29,063,512
$62,973,765
$(428,502)
$(305,092)
$-
$(1,493,830)
$33,910,253
$29,063,512
$62,973,765
-
-
-
-
(1,611,408)
(3,708,144)
(5,319,552)
239,732
31,077
-
-
247,216
583,276
830,492
239,732
31,077
-
-
(1,364,192)
(3,124,868)
(4,489,060)
-
-
-
686,960
103,958
346,618
450,576
-
432,513
-
-
651,176
(651,176)
-
-
-
-
-
-
3,314,439
3,314,439
$(188,770)
$158,498
$-
$(806,870)
$33,301,195
$28,948,525
$62,249,720
90
Financial Overview
TATUNG CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2013 and 2012
Contents
(Expressed in Thousands of New Taiwan Dollars)
For the Year Ended
December 31, 2013
For the Year Ended
December 31, 2012
Amount
Amount
Cash flows from operating activities:
Net loss before income tax
$(4,944,175)
$(15,268,815)
Depreciation expense
13,141,041
16,075,719
Amortization expense
1,029,246
948,821
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
(Gain) Loss from Financial asset or financial liability at fair value through profit or loss
(92,670)
97,940
Interest expenses
3,179,873
3,108,781
Interest income
(362,090)
(461,675)
Dividends income
(57,164)
(68,151)
Share of profit of associates and joint ventures
(80,669)
(115,297)
(Gain) Loss on disposal of property, plant and equipment
(61,918)
246,387
(1,040,387)
(451,868)
Loss (Gain) on disposal of investments
17,444
-
Impairment loss on non-financial assets
Impairment loss on financial assets
1,390,264
332,703
Gain on redemption of bonds payable
-
652
(1,498,470)
-
Bargain purchase gain
Changes in assets and liabilities from operating activities:
Decrease in notes receivable
101,242
285,918
(195,818)
1,225,926
469,383
36,048
Increase in construction receivables
(1,198,982)
(699,099)
(Increase) Decrease in other receivables
(1,117,185)
269,839
4,649
(348,947)
(Increase) Decrease in accounts receivable
Decrease in accounts receivable - related parties
Decrease (Increase) in other receivables - related parties
Decrease in inventory
Decrease in prepayments
Decrease (Increase) in other current assets
(Increase) Decrease in financial assets at fair value through profit or loss
Decrease other non-current assets - others
Transfer of inventory into property, plant and equipment
Increase (Decrease) in notes payable
Increase (Decrease) in accounts payable
Increase in accounts payable - related parties
Increase in other payables
Increase (Decrease) in provision
Increase in advanced receipts
Increase (Decrease) in other current liabilities - others
Decrease in accrued pension liability
771,681
59,510
49,908
494,348
220,933
(256,357)
(366,670)
575,416
377,563
1,451,538
(141,903)
255,270
99,833
(150,436)
734,902
(146,885)
96,924
178,512
120,695
417,931
(268,315)
(36,109)
51,383
2,017,201
250,306
(656,666)
(569,273)
(55,022)
(70,847)
(389,486)
Decrease in other liabilities
(211,374)
(809,478)
Cash provided by operations
9,829,360
8,164,169
Interest received
368,175
499,325
Dividend received
219,810
69,651
(3,754,807)
(2,927,861)
Decrease in long-term deferred revenues
Interest paid
Income taxes paid
Net cash provided by operating activities
91
(854,366)
(347,415)
5,808,172
5,457,869
TATUNG 2012 Annual Report
Financial Overview
For the Years Ended December 31, 2013 and 2012
Contents
(Expressed in Thousands of New Taiwan Dollars)
For the Year Ended
December 31, 2013
For the Year Ended
December 31, 2012
Amount
Amount
Cash flows from investing activities:
Acquisition of available-for-sale financial assets
Disposal of available-for-sale financial assets
Acquisition of investment in debt security with no active accounted
Disposal of investment in debt security with no active accounted
Acquisition of financial assets carried at cost
Disposal of financial assets carried at cost
Acquisition of investments accounted for under the equity method
(131,440)
(47,293)
626,296
86,329
(11,809,812)
(2,004,567)
7,844,957
4,630,339
(3,721)
(67,240)
171,589
52,527
-
(758,802)
Acquisition of subsidiaries (deducted the cash received)
1,556,521
926,190
Disposal of subsidiaries
1,896,290
(46,616)
Capital reduction by cash from investee for under the equity method
1,236,112
-
Acquisition of non-current assets held for sale
(109,784)
-
Acquisition of property, plant and equipment
(4,804,130)
(6,514,147)
Disposal of property, plant and equipment
292,953
522,211
(321,376)
(1,619,850)
Disposal of intangible assets
41,831
72,587
Acquisition of investment property
(2,501)
-
Acquisition of intangible assets
Decrease (Increase) in long-term receivables
Net cash used in investing activities
67,310
(46,289)
(3,448,905)
(4,814,621)
2,203,529
-
Cash flows from financing astivities:
Increase in short-term loans
-
(2,147,094)
Increase in short-term notes and bills payable
Decrease in short-term loans
4,291,170
852,777
Decrease in short-term notes and bills payable
(901,276)
-
-
(1,127,667)
12,363,463
8,708,284
(23,361,989)
(12,148,375)
23,735
-
-
(143,613)
Repayment from bonds payable
Proceeds from long-term loans
Repayment from long-term loans
Increase in deposits-in
Decrease in deposits-in
Increase in long-term payable
Decrease in long-term payable
Non-controlling interest
Net cash used in financing astivities
Effects of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of periods
Cash and cash equivalents at the end of periods
214
-
-
(70,332)
611,153
(2,516,225)
(4,770,001)
(8,592,245)
1,202,817
1,447,553
(1,207,917)
(6,501,444)
24,401,022
30,902,466
$23,193,105
$24,401,022
92
Financial Overview
TATUNG CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2013 and 2012
(Expressed in Thousands of New Taiwan Dollars unless
otherwise Specified)
1. Organization Operations
Established in 1918, Tatung Company (the “Company”) was
incorporated under the Company Act of the Republic of China (“R.
O.C.”) and underwent reorganization in 1939. The total capital at
that time was Taiwan Yuan $180,000, later increased to Taiwan Yuan
$20,000,000 after several capital injections. After the reformation
of monetary system in 1949, the total capital was converted to the
equivalent of New Taiwan dollars (“NTD ”) 200,000. As of December
31, 2013, the issued capital and registered was NTD 23,395,367
thousand. The main activities of the Company are as follows:
(1) The design, manufacture, sale, installation, network system,
automation system, lease, maintenance service, import, export
and agency of the following products:
1. Steel manufacturing machinery 2. Industrial appliances
3. Household appliances
4. Refrigerator
5. Air conditioners
6. Metal processing machinery
7. Electronic products
8. Wire and cable
9. Chemical industry
10. Cookware
11. Wood-made products
12. Plastic products
13. Office equipment
14. Audio products
15. Precision meter
16. Transmission equipment
17. Transportation facilities
18. Healthcare products
19. Microbe fermentation
20. Construction
21. Furniture
22. Solar wafers
23. Water treatment engineering 24. Telecommunication equipment
25. Parking facilities
26. Automation machinery
27. Automobiles
28. Semiconductor
(2) Magazine publishing
(3) Customs brokerage
(4) General import/export (excluding permitted business)
(5) Development and leasing (excluding construction industry) of
industrial parks on behalf of the competent authority.
The investment plans should be resolved by the Board of Directors, but
the total amount of investment is not limited to the amount provided
by Article 13 of Company Act, which states that the total amount of
investment shall not exceed 40% of the amount of its own paid-in
capital.
The Company’s common shares were publicly listed on the Taiwan Stock
Exchange (TWSE) in 9 February 1962. The Company’s registered office and
the main business location is at No. 22, section 3, Zhongshan North Road,
Taipei, Republic of China (R.O.C.).
2. Date and procedures of authorization of financial
statements for issue
The consolidated financial statements of the Company and its
subsidiaries (“the Group”) for the year ended 31 December 2013 and
2012 were authorized for issue in accordance with a resolution of the
Board of Directors’ meeting on 18 March 2014.
3. Newly issued or revised standards and
interpretations
(1) Standards or interpretations issued, revised or amended, which
are recognized by Financial Supervisory Commission (“FSC”),
93
but not yet adopted by the Group at the date of issuance of the
Group’s financial statements are listed below.
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments which is divided in three distinct
phases is designed by the International Accounting Standards
Board (“IASB”) to eventually replace IAS 39 Financial Instruments:
Recognition and Measurement in its entirety. The first phase
relates to the classification and measurement of financial
assets and liabilities that must be applied for annual periods
beginning on or after 1 January 2015. The IASB will work on the
remaining phases relate to impairment methodology and hedge
accounting. However companies adopting International Financial
Reporting Standards, International Accounting Standards, and
Interpretations developed by the International Financial Reporting
Interpretations Committee or the former Standing Interpretations
Committee as recognized by the FSC (collectively referred to as
“TIFRS”) may not early adopt IFRS 9. FSC will announce the local
effective date for IFRS 9 in the future. Adopting the first phase of
IFRS 9 will have an impact on the classification and measurement
of financial assets. The impact of adopting the remaining two
phases of IFRS 9 on the Group could not be determined at this
stage.
(2) Standards issued by IASB but not yet recognized by FSC at the
date of issuance of the Group’s financial statements are listed
below.
(a) Improvements to International Financial Reporting Standards
(issued in 2010):
IFRS 1 “First-time Adoption of International Financial Reporting
Standards”
The annual improvements to International Financial Reporting
Standards (“IFRS”) issued in 2010 made the following
amendments to IFRS 1: If a first-time adopter changes its
accounting policies or its use of the exemptions in IFRS 1 after
it has published an interim financial report, it needs to explain
those changes and update the reconciliations between
previous GAAP and IFRS in accordance with paragraph 23 of
IFRS 1.
Furthermore, the amendment allows first-time adopters to
use an event-driven fair value as deemed cost, even if the
event occurs after the date of transition, but before the first
IFRS financial statements are issued. The amendment also
expands the scope of ‘deemed cost’ for property, plant
and equipment or intangible assets to include items used
subject to rate regulated activities. The exemption will be
applied on an item-by-item basis. All such assets will also
need to be tested for impairment at the date of transition.
The amendment allows entities with rate-regulated activities
to use the carrying amount of their property, plant and
equipment and intangible balances from their previous GAAP
as its deemed cost upon transition to IFRS. These amendments
became effective for annual periods beginning on or after 1
January 2011.
IFRS 3 “Business Combinations”
Under the amendment, IFRS 3 (as revised in 2008) do not
apply to contingent consideration that arose from business
combinations whose acquisition dates precede the
application of IFRS 3 (as revised in 2008). Furthermore, the
amendment limits the scope of the measurement choices
for non-controlling interest. Only the components of noncontrolling interests that are present ownership interests that
entitle their holders to a proportionate share of the entity's
net assets, in the event of liquidation could be measured
at either fair value or at the present ownership instruments'
proportionate share of the acquiree's identifiable net assets.
Other components of non-controlling interest are measured
at their acquisition date fair value.
The amendment also requires an entity in a business
combination to account for the replacement of the
acquiree's share-based payment transactions (when the
acquirer is not obliged to do so) as new share-based payment
awards in the post-combination financial statements.
Outstanding share-based payment transactions that the
acquirer does not exchange for its share-based payment
transactions: if vested — they are part of non-controlling
interest; if unvested — they are measured at market based
value as if granted at acquisition date, and allocated
between NCI and post-combination expense.
These amendments became effective for annual periods
TATUNG 2012 Annual Report
Financial Overview
(b)
(c)
(d)
(e)
(f)
beginning on or after 1 July 2010.
IFRS 7 “Financial Instruments: Disclosures”
The amendment emphasizes the interaction between
quantitative and qualitative disclosures and the nature and
extent of risks associated with financial instruments. The
amendment became effective for annual periods beginning
on or after 1 January 2011.
IAS 1 “Presentation of Financial Statements”
The amendment clarifies that an entity will present an analysis
of other comprehensive income for each component of
equity, either in the statement of changes in equity or in the
notes to the financial statements. The amendment became
effective for annual periods beginning on or after 1 January
2011.
IAS 34 “Interim Financial Reporting”
The amendment clarifies that if a user of an entity's interim
financial report have access to the most recent annual
financial report of that entity, it is unnecessary for the notes
to an interim financial report to provide relatively insignificant
updates to the information that was reported in the notes
in the most recent annual financial report. Furthermore the
amendment adds disclosure requirements around disclosures
of financial instruments and contingent liabilities/assets. The
amendment is effective for annual periods beginning on or
after 1 January 2011.
IFRIC 13 “Customer Loyalty Programmes”
The amendment clarifies that when the fair value of award
credits is measured based on the value of the awards for
which they could be redeemed, the amount of discounts or
incentives otherwise granted to customers not participating
in the award credit scheme is to be taken into account. The
amendment is effective for annual periods beginning on or
after 1 January 2011.
IFRS 1 “First-time Adoption of International Financial Reporting
Standards” — Limited Exemption from Comparative IFRS 7
Disclosures for First-time Adopters
IFRS 1 has been amended to allow first-time adopters to
utilize the transitional provisions of IFRS 7 Financial Instruments:
Disclosures. These provisions give relief from providing
comparative information in the disclosures required by
amendments to IFRS 1 in the first year of application. The
amendment is effective for annual periods beginning on or
after 1 July 2010.
IFRS 1 “First-time Adoption of International Financial Reporting
Standards” — Severe Hyperinflation and Removal of Fixed
Dates for First-time Adopters
The amendment has provided guidance on how an entity
should resume presenting IFRS financial statements when
its functional currency ceases to be subject to severe
hyperinflation. The amendment also removes the legacy fixed
dates in IFRS 1 relating to derecognition and day one gain
or loss transactions. The amended standard has these dates
coinciding with the date of transition to IFRS. The amendment
is effective for annual periods beginning on or after 1 July
2011.
IFRS 7 “Financial Instruments: Disclosures” (Amendment)
The amendment requires additional quantitative and
qualitative disclosures relating to transfers of financial assets,
when financial assets are derecognised in their entirety, but
the entity has a continuing involvement in them, or financial
assets are not derecognised in their entirety. The amendment
is effective for annual periods beginning on or after 1 July
2011.
IAS 12 “Income Taxes” — Deferred Taxes: Recovery of
Underlying Assets
The amendment to IAS 12 introduce a rebuttable presumption
that deferred tax on investment properties measured at fair
value will be recognized on a sale basis, unless an entity
has a business model that would indicate the investment
property will be consumed in the business. The amendment
also introduces the requirement that deferred tax on nondepreciable assets measured using the revaluation model
in IAS 16 should always be measured on a sale basis. As a
result of this amendment, SIC 21 Income Taxes — Recovery of
Revalued Non-Depreciable Assets has been withdrawn. The
amendment is effective for annual periods beginning on or
after 1 January 2012.
IFRS 10 “Consolidated Financial Statements”
(g)
(h)
(i)
(j)
(k)
(l)
(m)
IFRS 10 replaces the portion of IAS 27 that addresses the
accounting for consolidated financial statements and SIC12. The changes introduced by IFRS 10 primarily relate to the
elimination of the perceived inconsistency between IAS 27
and SIC-12 by introducing a new integrated control model.
That is, IFRS 10 primarily relates to whether to consolidate
another entity, but does not change how an entity is
consolidated. The standard is effective for annual periods
beginning on or after 1 January 2013.
IFRS 11 “Joint Arrangements”
IFRS 11 replaces IAS 31 and SIC-13. The changes introduced
by IFRS 11 primarily relate to increase comparability within
IFRS by removing the choice for jointly controlled entities to
use proportionate consolidation, so that the structure of the
arrangement is no longer the most important factor when
determining the classification as a joint operation or a joint
venture, which then determines the accounting. The standard
is effective for annual periods beginning on or after 1 January
2013.
IFRS 12 “Disclosures of Interests in Other Entities”
IFRS 12 primarily integrates and makes consistent the
disclosure requirements for subsidiaries, joint arrangements,
associates and unconsolidated structured entities and
present those requirements in a single IFRS. The standard is
effective for annual periods beginning on or after 1 January
2013.
IFRS 13“Fair Value Measurement”
IFRS 13 primarily relates to defining fair value, setting out
in a single IFRS a framework for measuring fair value and
requiring disclosures about fair value measurements to
reduce complexity and improve consistency in application
when measuring fair value. However, IFRS 13 does not change
existing requirements in other IFRS as to when the fair value
measurement or related disclosure is required. The standard is
effective for annual periods beginning on or after 1 January
2013.
IAS 1 “Presentation of Financial Statements” — Presentation of
Items of Other Comprehensive Income
The amendments to IAS 1 change the grouping of items
presented in Other Comprehensive Income. Items that would
be reclassified (or recycled) to profit or loss in the future
would be presented separately from items that will never be
reclassified. The amendment is effective for annual periods
beginning on or after 1 July 2012.
IAS 19 “Employee Benefits” (Revised)
The revision includes: (1) For defined benefit plans, the ability
to defer recognition of actuarial gains and losses (i.e., the
corridor approach) has been removed. Actuarial gains and
losses are now recognized in Other Comprehensive Income.
(2) Amounts recorded in profit or loss are limited to current
and past service costs, gains or losses on settlements, and
net interest income (expense). (3) New disclosures include
quantitative information about the sensitivity of the defined
benefit obligation to a reasonably possible change in each
significant actuarial assumption. (4) Termination benefits will
be recognized at the earlier of when the offer of termination
cannot be withdrawn, or when the related restructuring costs
are recognized under IAS 37 Provisions, Contingent Liabilities
and Contingent Assets, etc.. The revised standard is effective
for annual periods beginning on or after 1 January 2013.
IFRS 1 “First-time Adoption of International Financial Reporting
Standards” — Government Loans
The IASB has added an exception to the retrospective
application of IFRS 9 (or IAS 39) and IAS 20. These amendments
require first-time adopters to apply the requirements of IAS
20 prospectively to government loans existing at the date of
transition to IFRS. However, entities may choose to apply the
requirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to
government loans retrospectively if the information needed
to do so had been obtained at the time of initially accounting
for those loans. The amendment is effective for annual
periods beginning on or after 1 January 2013.
IFRS 7 “Financial Instruments: Disclosures” — Disclosures —
Offsetting Financial Assets and Financial Liabilities
These amendments require an entity to disclose information
about rights of set-off and related arrangements. The
disclosures would provide users with information that is useful
in evaluating the effect of netting arrangements on an
94
Financial Overview
entity’s financial position. The new disclosures are required
for all recognized financial instruments that are set off in
accordance with IAS 32 Financial Instruments: Presentation.
The disclosures also apply to recognized financial instruments
that are subject to an enforceable master netting
arrangement or ‘similar agreement’. The amendment is
effective for annual periods beginning on or after 1 January
2013.
(n) IAS 32 “Financial Instruments: Presentation” — Offsetting
Financial Assets and Financial Liabilities
The amendment clarifies the meaning of “currently has a
legally enforceable right to set-off” in IAS 32. The amendment
is effective for annual periods beginning on or after 1 January
2014.
(o) IFRIC 20 “Stripping Costs in the Production Phase of a Surface
Mine”
This Interpretation applies to waste removal (stripping) costs
incurred in surface mining activity, during the production
phase of the mine. If the benefit from the stripping activity
will be realized in the current period, an entity is required to
account for the stripping activity costs as part of the cost
of inventory. When the benefit is the improved access to
ore, the entity recognizes these costs as a non-current asset
(“stripping activity asset”), only if certain criteria are met. The
stripping activity asset is accounted for as an addition to, or
as an enhancement of, an existing asset. The interpretation is
effective for annual periods beginning on or after 1 January
2013.
(p) Improvements to International Financial Reporting Standards
(2009-2011 cycle):
IFRS 1 “First-time Adoption of International Financial Reporting
Standards”
The amendment clarifies that an entity that has stopped
applying IFRS may choose to either: Re-apply IFRS 1, even
if the entity applied IFRS 1 in a previous reporting period;
or Apply IFRS retrospectively in accordance with IAS 8 (i.e.,
as if it had never stopped applying IFRS) in order to resume
reporting under IFRS. The amendment is effective for annual
periods beginning on or after 1 January 2013.
IAS 1 “Presentation of Financial Statements”
The amendment clarifies the difference between voluntary
additional comparative information and the minimum
required comparative information. Generally, the minimum
required comparative period is the previous period. An
entity must include comparative information in the related
notes to the financial statements when it voluntarily provides
comparative information beyond the minimum required
comparative period. The additional comparative period
does not need to contain a complete set of financial
statements. The opening statement of financial position
(known as ’the third balance sheet’) must be presented
when an entity changes its accounting policies (making
retrospective restatements or reclassifications) and those
changes have a material effect on the statement of financial
position. The opening statement would be at the beginning
of the preceding period. However, unlike the voluntary
comparative information, the related notes are not required
to include comparatives as of the date of the third balance
sheet. The amendment is effective for annual periods
beginning on or after 1 January 2013.
IAS 16 “Property, Plant and Equipment” (Amendment)
The amendment clarifies that major spare parts and servicing
equipment that meet the definition of property, plant and
equipment are not inventory. The amendment is effective for
annual periods beginning on or after 1 January 2013.
IAS 32 “Financial Instruments: Presentation” (Amendment)
The amendment removes existing income tax requirements
from IAS 32 and requires entities to apply the requirements in
IAS 12 to any income tax arising from distributions to equity
holders. The amendment is effective for annual periods
beginning on or after 1 January 2013.
IAS 34 “Interim Financial Reporting” (Amendment)
The amendment clarifies the requirements in IAS 34 relating
to segment information for total assets and liabilities for
each reportable segment to enhance consistency with the
requirements in IFRS 8 Operating Segments. Besides, total
95
(q)
(r)
(s)
(t)
(u)
(v)
(w)
assets and liabilities for a particular reportable segment
need to be disclosed only when the amounts are regularly
provided to the chief operating decision maker and there
has been a material change in the total amount disclosed
in the entity’s previous annual financial statements for that
reportable segment. The amendment is effective for annual
periods beginning on or after 1 January 2013.
IFRS 10 “Consolidated Financial Statements” (Amendment)
The Investment Entities amendments provide an exception
to the consolidation requirements in IFRS 10 and require
investment entities to measure particular subsidiaries at fair
value through profit or loss, rather than consolidate them.
The amendments also set out disclosure requirements for
investment entities. The amendment is effective for annual
periods beginning on or after 1 January 2014.
IAS 36 “Impairment of Assets” (Amendment)
This amendment relates to the amendment issued in May
2011 and requires entities to disclose the recoverable amount
of an asset (including goodwill) or a cash-generating unit
when an impairment loss has been recognized or reversed
during the period. The amendment also requires detailed
disclosure of how the fair value less costs of disposal has been
measured when an impairment loss has been recognized
or reversed, including valuation techniques used, level of
fair value hierarchy of assets and key assumptions used
in measurement. The amendment is effective for annual
periods beginning on or after 1 January 2014.
IFRIC 21 “Levies”
This interpretation provides guidance on when to recognize
a liability for a levy imposed by a government (both for levies
that are accounted for in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets and those
where the timing and amount of the levy is certain). The
interpretation is effective for annual periods beginning on or
after 1 January 2014.
IAS 39 “Financial Instruments: Recognition and Measurement”
(Amendment)
Under the amendment, there would be no need to
discontinue hedge accounting if a hedging derivative was
novated, provided certain criteria are met. The interpretation
is effective for annual periods beginning on or after 1 January
2014.
IFRS 9 “Financial Instruments” (Hedge accounting and
amendments to IFRS 9, IFRS 7 and IAS 39)
The IASB announced amendments to the accounting
requirements for financial instruments, which include: (1)
bring into effect a substantial overhaul of hedge accounting
that will allow entities to better reflect their risk management
activities in the financial statements; (2) allow the changes to
address the ‘own credit’ not to be recognized in profit or loss
that were already included in IFRS 9 Financial Instruments to
be applied in isolation without the need to change any other
accounting for financial instruments; and (3) remove the 1
January 2015 mandatory effective date of IFRS 9.
IAS 19 “Employee Benefits” (Defined benefit plans: employee
contributions)
The amendments apply to contributions from employees or
third parties to defined benefit plans. The objective of the
amendments is to provide a policy choice for a simplified
accounting for contributions that are independent of the
number of years of employee service, for example, employee
contributions that are calculated according to a fixed
percentage of salary. The amendment is effective for annual
periods beginning on or after 1 July 2014.
Improvements to International Financial Reporting Standards
(2010-2012 cycle):
IFRS 2 “Share-based Payment”
The annual improvements amend the definitions of 'vesting
condition' and 'market condition' and adds definitions for
'performance condition' and 'service condition' (which were
previously part of the definition of 'vesting condition'). The
amendment prospectively applies to share-based payment
transactions for which the grant date is on or after 1 July 2014.
IFRS 3 “Business Combinations”
The amendments include: (1) deleting the reference to
"other applicable IFRSs" in the classification requirements;
TATUNG 2012 Annual Report
Financial Overview
(2) deleting the reference to "IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or other IFRSs as appropriate",
other contingent consideration that is not within the scope
of IFRS 9 shall be measured at fair value at each reporting
date and changes in fair value shall be recognized in profit
or loss; (3) amending the classification requirements of IFRS 9
Financial Instruments to clarify that contingent consideration
that is a financial asset or financial liability can only be
measured at fair value, with changes in fair value being
presented in profit or loss depending on the requirements
of IFRS 9. The amendments apply prospectively to business
combinations for which the acquisition date is on or after 1
July 2014.
IFRS 8 “Operating Segments”
The amendments require an entity to disclose the judgments
made by management in applying the aggregation criteria
to operating segments. The amendments also clarify that
an entity shall only provide reconciliations of the total of
the reportable segments' assets to the entity's assets if the
segment assets are reported regularly. The amendment is
effective for annual periods beginning on or after 1 July 2014.
IFRS 13 “Fair Value Measurement”
The amendment to the Basis for Conclusions of IFRS 13
clarifies that when deleting paragraph B5.4.12 of IFRS 9
Financial Instruments and paragraph AG79 of IAS 39 Financial
Instruments: Recognition and Measurement as consequential
amendments from IFRS 13 Fair Value Measurement, the IASB
did not intend to change the measurement requirements for
short-term receivables and payables.
IAS 16 “Property, Plant and Equipment”
The amendment clarifies that when an item of property, plant
and equipment is revalued, the accumulated depreciation
at the date of revaluation is adjusted to equal the difference
between the gross carrying amount and the carrying amount
of the asset. The amendment is effective for annual periods
beginning on or after 1 July 2014.
IAS 24 “Related Party Disclosures”
The amendment clarifies that an entity providing key
management personnel services to the reporting entity
or to the parent of the reporting entity is a related party of
the reporting entity. The amendment is effective for annual
periods beginning on or after 1 July 2014.
IAS 38 “Intangible Assets”
The amendment clarifies that when an intangible asset is
revalued, the accumulated amortization at the date of
revaluation is adjusted to equal the difference between the
gross carrying amount and the carrying amount of the asset.
The amendment is effective for annual periods beginning on
or after 1 July 2014.
(x) Improvements to International Financial Reporting Standards
(2011-2013 cycle):
IFRS 1 “First-time Adoption of International Financial Reporting
Standards”
The amendment clarifies that an entity, in its first IFRS financial
statements, has the choice between applying an existing and
currently effective IFRS or applying early a new or revised IFRS
that is not yet mandatorily effective, provided that the new or
revised IFRS permits early application.
IFRS 3 “Business Combinations”
This amendment clarifies that paragraph 2(a) of IFRS 3
Business Combinations excludes the formation of all types of
joint arrangements as defined in IFRS 11 Joint Arrangements
from the scope of IFRS 3; and the scope exception only
applies to the financial statements of the joint venture or the
joint operation itself. The amendment is effective for annual
periods beginning on or after 1 July 2014.
IFRS 13 “Fair Value Measurement”
The amendment clarifies that paragraph 52 of IFRS 13
includes a scope exception for measuring the fair value of a
group of financial assets and financial liabilities on a net basis.
The objective of this amendment is to clarify that this portfolio
exception applies to all contracts within the scope of IAS 39
Financial Instruments: Recognition and Measurement or IFRS
9 Financial Instruments, regardless of whether they meet the
definitions of financial assets or financial liabilities as defined
in IAS 32 Financial Instruments: Presentation. The amendment
is effective for annual periods beginning on or after 1 July
2014.
IAS 40 “Investment Property”
The amendment clarifies the interrelationship of IFRS 3 and
IAS 40 when classifying property as investment property
or owner-occupied property; in determining whether a
specific transaction meets the definition of both a business
combination as defined in IFRS 3 Business Combinations and
investment property as defined in IAS 40 Investment Property,
separate application of both standards independently of
each other is required. The amendment is effective for annual
periods beginning on or after 1 July 2014.
(y) IFRS 14 “Regulatory Deferral Accounts”
IFRS 14 permits first-time adopters to continue to recognize
amounts related to rate regulation in accordance with their
previous GAAP requirements when they adopt IFRS. However,
to enhance comparability with entities that already apply
IFRS and do not recognize such amounts, the Standard
requires that the effect of rate regulation must be presented
separately from other items. IFRS 14 is effective for annual
periods beginning on or after 1 January 2016.
The abovementioned standards and interpretations issued by IASB
have not yet recognized by FSC at the date of issuance of the
Group’s financial statements, the local effective dates are to be
determined by FSC. As the Group is still currently determining the
potential impact of the standards and interpretations listed under
(a)~(b), (d)~(k),(m)~(n), and (p)~(x) it is not practicable to estimate
their impact on the Group at this point in time. All other standards
and interpretations have no material impact on the Group.
4. Summary of significant accounting policies
(1) Statement of compliance
The financial statements of the Group for the years ended 31
December 2013 and 2012 have been prepared in accordance
with the Regulations Governing the Preparation of Financial
Reports by Securities Issuers (“the Regulations”) and TIFRS as
endorsed by the FSC.
(2) Basis of preparation
The consolidated financial statements have been prepared
on a historical cost basis, except for financial instruments that
have been measured at fair value. The consolidated financial
statements are expressed in thousands of New Taiwan Dollars
(“NTD ”) unless otherwise stated.
(3) Basis of consolidation
Preparation principle of consolidated financial statements
Subsidiaries are fully consolidated from the acquisition date, being
the date on which the Group obtains control, and continue to be
consolidated until the date that such control ceases. The financial
statements of the subsidiaries are prepared for the same reporting
period as the parent company, using uniform accounting policies.
All intra-group balances, income and expenses, unrealized gains
and losses and dividends resulting from intra-group transactions
are eliminated in full.
A change in the ownership interest of a subsidiary, without a
change of control, is accounted for as an equity transaction.
Total comprehensive income of the subsidiaries is attributed to the
owners of the parent and to the non-controlling interests even if
this results in the non-controlling interests having a deficit balance.
If the Group loses control of a subsidiary, it:
(a) derecognizes the assets (including goodwill) and liabilities of
the subsidiary;
(b) derecognizes the carrying amount of any non-controlling
interest;
(c) recognizes the fair value of the consideration received;
(d) recognizes the fair value of any investment retained;
(e) recognizes any surplus or deficit in profit or loss; and
(f) reclassifies the parent’s share of components previously
recognized in other comprehensive income to profit or loss.
96
Financial Overview
1 The consolidated entities are listed as follows:
Investor
Subsidiary
Chunghwa Picture
The Company, Chunghwa
Tubes, Ltd. (“CPT”)
Electronics Development Co.,
Ltd., Green Energy Technology
Inc., Shan-Chih Asset
Development Co. and Tatung
Global Strategy Investment and
Trading (BVI) Inc.
Main businesses
The manufacturing and sale
of picture tubs and TFT-LCD
products
The Company, Shan Chih
Investment Co., Ltd. and ShanChih Asset Development Co.
Tatung System
The manufacturing of data
Technologies Inc. (“TSTI”) storage
54.40%
54.40%
54.40%
The Company, Chunghwa
Picture Tubes, Ltd., San Chih
Semiconductor Co., Ltd.
and Chunghwa Electronics
Development Co., Ltd
Forward Electronics Co., The manufacturing and sale
Ltd. ("FD")
of electronics
41.35%
41.35%
41.35%
The Company
Taiwan
Telecommunication
Industry Company Ltd.
100.00%
100.00%
100.00%
The Company and Chunghwa
Electronics Development Co.,
Ltd.
San Chih Semiconductor The manufacturing and sale
Co., Ltd.(“SCSC”)
of semiconductors and chips
58.20%
58.21%
58.31%
The Company
Central Research
Technology Co.
Offering EMCIRF testing and
certification services
100.00%
100.00%
100.00%
The Company
Tatung Consumer
Products (Taiwan) Co.,
Ltd.
Sales, installation and service
of home appliances and
digital computer products
99.10%
100.00%
100.00%
The Company
Tatung SM-Cycle Co.
Speed reducers, speed
Variators
85.33%
85.33%
85.33%
Tatung Fine Chemicals
The Company, Chunghwa
Co., Ltd.
Electronics Development Co.,
Ltd. And Chih Sheng Investment
Co., Ltd.
Industrial coatings,
electrocution coatings resistor
coatings, photo-catalyst,
inkjet ink
54.63%
46.62%
46.84%
The Company
The development and leasing
of real estate
100.00%
100.00%
100.00%
99.86%
99.85%
99.80%
51.00%
51.00%
51.00%
Shan-Chih Asset
Development Co.
(“SCAD”)
The Company, Shan-Chih Asset Chunghwa Electronics
Development Co. And Chih
Development Co., Ltd.
Sheng Investment Co., Ltd.
The Company
Telecommunication
Investment holding
Tatung Precise Meter Co. Speedometer
Chih Sheng Investment Co., Ltd. Tatung Atherton Co., Ltd. The sale and purchase of
imported liquor
97
Percentage of ownership
31
31
1January
December December
2012
2013
2012
24.22%
24.22%
24.22%
-
(Note 1)
(Note 1)
-
30.00%
-
100.00%
100.00%
The Company
Shan Chih International
Express Co., Ltd.
International storage and
transportation
The Company
Tatung (Thailand) Co.,
Ltd.
The manufacturing of IT
products
100.00%
100.00%
100.00%
The Company
Tatung Co. of Japan,
Inc.
The sale and purchase of
electronic parts
100.00%
100.00%
100.00%
The Company
Tatung Electronics (S)
Pte. Ltd.
The sales and services of
Tatung products in Singapore
90.00%
90.00%
90.00%
The Company
Tatung Wire & Cable
(Thailand) Co., Ltd.
The manufacturing and sales
of wire and cable
100.00%
100.00%
100.00%
The Company
Tatung Information
(Singapore) Pte. Ltd.
Investment holding
100.00%
100.00%
100.00%
(Note 2)
TATUNG 2012 Annual Report
Financial Overview
Investor
Subsidiary
Main businesses
Percentage of ownership
31
31
1January
December December
2012
2013
2012
100.00%
100.00%
100.00%
The Company
Tatung Electric
(Singapore) Pte. Ltd.
Investment holding
The Company
Tatung Co. of America
Inc.
The sale and servicing of IT
and household electronics
products in the US
50.00%
50.00%
50.00%
The Company
Tatung Mexico S.A de
C.V.
The manufacturing of IT
products in South America
100.00%
100.00%
100.00%
The Company
Tatung Co. of Canada
Inc.
The sale and purchase of IT
products
The Company
Tatung Science and
Technology, Inc.
The sale and purchase of IT
products
The Company
Tatung Visual Display
(Mexico) S.A. de C.V.
The manufacturing of LCD TV
and PDP TV
The Company
The Company
Tatung Electric
Company of America,
Inc.
Tatung Netherlands B.V.
The Company
-
(Note 3)
(Note 3)
-
100.00%
100.00%
100.00%
100.00%
(Note 4)
(Note 4)
-
100.00%
The manufacturing and sales
of motor products in America
100.00%
100.00%
100.00%
The sales of digital information
products
100.00%
100.00%
100.00%
Tatung (U.K.) Ltd.
The sales of digital Information
peripherals
100.00%
100.00%
100.00%
The Company
TATUNG CZECH s.r.o
The manufacturing of IT
products
100.00%
100.00%
100.00%
The Company
The design and sales of
Tatung Medical
Healthcare Technologies medical appliances
Co., Ltd. (SeQual
Technologies. Co., Ltd.
has Renamed Tatung
Medical Healthcare
Technologies Co., Ltd. in
Jan.2013 )
95.72%
92.87%
92.87%
The Company
Toes Opto-Mechatronics The manufacturing of various
Co.
automatic equipment
85.00%
85.00%
85.00%
The Company
Tatung Vietnam Co., Ltd. The manufacturing and sales
of home appliances
100.00%
100.00%
100.00%
The Company
Tatung Electric
Technology (VN) Co.,
Ltd.
Tatung InfoComm Co.,
Ltd.
100.00%
100.00%
100.00%
The Company
The manufacturing and sales
of wire and cable
-
Communication engineering,
satellite communication used
Ku band
Investment holding
(Note 5)
(Note 5)
-
100.00%
100.00%
100.00%
100.00%
-
The Company
Chih Sheng Investment
Co., Ltd.
The Company and Chunghwa
Electronics Development Co.,
Ltd.
Shan Chih Investment
Co., Ltd.
Investment holding
100.00%
100.00%
100.00%
The Company and Chunghwa
Electronics Development Co.,
Ltd.
Tisnet Technology Inc.
Design and development
of computer software and
equipment
100.00%
100.00%
100.00%
The Company
Tatung Global Strategy
Investment and trading
(BVI) Inc.
Absolute Alpha Limited
Investment holding
100.00%
100.00%
100.00%
Investment holding
100.00%
100.00%
100.00%
Research, development,
production and sales of LCD
Display
53.68%
-
-
The Company
CPT
Giantplus Technology
Co., Ltd. (“Giantplus”)
98
Financial Overview
Investor
Main businesses
CPT
Chunghwa Picture Tubes Investment holding
(Bermuda) Ltd. (“CPTB”)
CPT and CPTB
Chunghwa Picture Tubes Investment Holding And Sales
(Labuan) Ltd. (“CPTL”)
of TFT-LCD
CPTB and CPTL
Chunghwa Picture Tubes Investment holding
Technology (Group) Co.,
Ltd. (“CPTTG”)
CPTB
Dalemont Investment
Ltd.
CPTB
Dalemont Investment
Ltd.
100.00%
100.00%
100.00%
75.06%
75.06%
75.06%
Investment holding
100.00%
100.00%
100.00%
Investment holding
100.00%
100.00%
100.00%
CPTB
Bangalor Investment Ltd. Investment holding
100.00%
100.00%
100.00%
CPTB
Bensaline Investment
Ltd.
Investment holding
100.00%
100.00%
100.00%
CPTB
New Kingston Enterprises Investment holding
Limited (“NKEL”)
100.00%
100.00%
100.00%
CPTB,CPTL,CPTM and CPTTG
Chunghwa Picture Tubes Assembly final module of TFT(Wujiang) Ltd. (“CPTW”) LCD
100.00%
100.00%
100.00%
CPTB ,CPTL and CPTTG
Chunghwa Pictures
Display Technology
(Fujian) Ltd.(“FDT”)
Assembly final module of TFTLCD
100.00%
100.00%
100.00%
CPTB,CPTL and CPTTG
Chunghwa Picture
Display Technology
(Shen-Zhen) Ltd.
CPTF Optronics Co., Ltd.
Assembly final module of TFTLCD
-
100.00%
100.00%
Assembly final module of TFTLCD
100.00%
98.31%
98.31%
Chunghwa Picture Tubes
(Malaysia) Sdn. Bhd.
(“CPTM”)
Chunghwa Picture Tubes
(Kampar) Sdn. Bhd.
(“CPTK”)
CPTF Visual Display
(Fuzhou) Ltd. (“FVD”)
Manufacture and sale of
CCRT
100.00%
100.00%
100.00%
Manufacture and sale of
CCRT
-
100.00%
100.00%
Manufacture components of
TFT-LCD
100.00%
100.00%
100.00%
CPTF Optronics Co., Ltd.
Huallar Optronics
(Fuzhou) Co. Ltd.
Manufacture components of
TFT-LCD
51.00%
51.00%
51.00%
CPTTG
Chunghwa Picture Tubes Investment holding and sales
(Labuan) Ltd. (“CPTL”)
of TFT-LCD
100.00%
100.00%
100.00%
CPTB and CPTTG
CPT TPV Optical (Fujian)
Co., Ltd.
Manufacture components of
TFT-LCD
80.00%
80.00%
80.00%
CPTB
Makolin Electronics (M)
Sdn. Bhd.
Manufacture and sale of
deflection yokes
100.00%
100.00%
100.00%
CPTTG and Goldmax Asia
Pacific Ltd
Kornerstone Materials
Technology Co. Ltd.
Manufacture components of
TFT-LCD
100.00%
100.00%
100.00%
CPTTG
CPTF Optronics (ShenZhen) Co., Ltd.
Sales and service of
100.00%
-
-
CPTF Optronics Co., Ltd
CPTF Optronics (HK) Co., Sales of TFT-LCD
Ltd.
100.00%
-
-
Giantplus Technology Co., Ltd.
Giantplus (Samoa)
Holding Co., Ltd.
100.00%
-
-
CPTB, CPTL and CPTTG
CPTB
CPTM
CPTFO , NKEL and Forward
Development Co., Ltd.
99
Subsidiary
Percentage of ownership
31
31
1January
December December
2012
2013
2012
100.00%
100.00%
100.00%
Investment
(Note 13)
(Note 14)
TATUNG 2012 Annual Report
Financial Overview
Investor
Giantplus Technology Co., Ltd.
Subsidiary
Hsh Heng Investment
Co., Ltd.
Main businesses
Investment
Percentage of ownership
31
31
1January
December December
2012
2013
2012
100.00%
-
Giantplus (Samoa) Holding Co., Giantplus Holding L.L.C
Ltd.
Investment
100.00%
-
-
Giantplus Holding L.L.C
Manufacture Components of
LCD Display
100.00%
-
-
Manufacture Components of
LCD Display
100.00%
-
-
Sales of Touch Panel
100.00%
-
-
Investment holding
100.00%
100.00%
100.00%
Giantplus Holding L.L.C
Giantplus Holding L.L.C
Forward Electronics Co., Ltd.
Kunshan Giantplus
Optoelectronics
Technology Co., Ltd.
Shenzhen Giantplus
Optoelectronics Display
Co., Ltd.
Kunshan Giantplus
Optronics Display
Technology Co., Ltd
Forward Development
Co., Ltd.
Apollo Solar Energy Co.,
Forward Electronics Co., Ltd.,
Green Energy Technology Inc. Ltd.
and Toes Opto-Mechatronics
Co.
Forward Development Co., Ltd. Forward Electronics
Equipment (Dong Guan)
Co., Ltd
The manufacturing and sale
of solar module and related
component
71.83%
48.62%
48.62%
The manufacturing and sale
of tuner, keyboard, mouse,
remote controller, switch,
socket, potentiometer and
gaming mouse.
100.00%
100.00%
100.00%
Forward Development Co., Ltd. Suzhou Forward
Electronics Technology
Co., Ltd.
The manufacturing and
sale of backlight unit for TFTLCD, driving board, tuner,
keyboard, mouse, switch,
socket and connector.
100.00%
100.00%
100.00%
Forward Development Co., Ltd. Wujiang Tatung Opronics The manufacturing and sale
& Energy Co., Ltd.
of HDTV, HD TFT-LCD, High
brightness LED display, High
brightness LED and solar cell.
-
(Note 6)
(Note 6)
-
100.00%
Suzhou Forward Electronics
Technology Co., Ltd.
Hefei Fuying Optoelectronic Co., Ltd.
The manufacturing and sale
of backlight unit for TFT-LCD
35.00%
35.00%
-
Taiwan Telecommunication
Industry Company Ltd.
Taiwan
Telecommunication
Investments Limited.
Investment holding
100.00%
100.00%
100.00%
Taiwan Telecommunication
Investments Limited.
Taiwan
Telecommunication
(Fujian) Company Ltd.
The manufacturing of fax and
printers
60.00%
60.00%
60.00%
Taiwan Telecommunication
Investments Limited.
Shan Chih (Hong Kong)
Co., Ltd.
International trade
100.00%
100.00%
100.00%
San Chih Semiconductor Co.,
Ltd., Shan Chih Investment
Co., Ltd .and Shan-Chih Asset
Development Co., Chih Sheng
Investment Co., Ltd.
San Chih Semiconductor Co.,
Ltd.
Green Energy
Technology Inc. (“GET”)
Solar photovoltaic
multicrystalline silicon wafers
29.09%
33.11%
29.79%
Greater Power Limited
Investment holding
100.00%
100.00%
100.00%
San Chih Semiconductor Co.,
Ltd.
Chih De Investment Co., Investment holding
Ltd.
100.00%
100.00%
100.00%
Green Energy Technology Inc.
Energy Well International Investment holding
Limited
100.00%
100.00%
100.00%
Green Energy Technology Inc.
Green Energy Global
Investment
100.00%
100.00%
100.00%
Green Energy Technology Inc.
Green VALUE Investment Investment holding
Co., Ltd.
-
100.00%
Investment holding
-
(Note 7)
(Note 7)
100
Financial Overview
Investor
Subsidiary
Main businesses
Greater Power Limited and
Energy Well International
Limited
Ultra Energy Holdings
Limited
Investment holding
Energy Well International
Limited
Golden Sunny Limited
Investment holding
100.00%
100.00%
100.00%
Ultra Energy Holdings Limited
Ultra Energy (WEIFANG)
Technology Co. Ltd
Solar wafer slicing
100.00%
100.00%
100.00%
Tatung Fine Chemicals Co., Ltd. Tatung Coatings
(Kunshan) Co., Ltd.
The manufacturing and
sale of industry coating and
electrodeposition Coating
100.00%
100.00%
100.00%
Tatung Fine Chemicals Co., Ltd. Huaian Tatung
Advanced Technology
Materials Co., Ltd.
The manufacturing and sale
of positive material of lithium
battery, printer ink, electrodeposition high performance
coating.
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
The manufacturing and sale
of ABS plastic
100.00%
100.00%
100.00%
The whole sale of painting,
coating and chemical
products
100.00%
100.00%
100.00%
The manufacturing and sales
of TV, Monitor and PCs.
100.00%
100.00%
100.00%
-
100.00%
100.00%
Tatung Fine Chemicals Co., Ltd. Shang Chih International Investment holding
Chemical Indastry Co.,
Ltd.
Tatung Fine Chemicals Co., Ltd. Wujiang Shang Huah
ABS plastic, color dyes
Plastic Co., Ltd.
Shang Chih International
Chemical Industry Co., Ltd.
Shang Chih International
Chemical Industry Co., Ltd.
Wujiang Shanghua
Material Technology
Co., Ltd
Dongguan Tongli Trading
Co., Ltd.
Tatung Information (Singapore) Tatung Information
Pte. Ltd.
Technology (Jiangsu)
Co., Ltd.
Tatung Information (Singapore) Tatung Home Appliance The manufacturing and sales
(Wujiang) Co., Ltd.
of home appliances
Pte. Ltd. and Shan-Chih
International Holding
Corporation
101
Percentage of ownership
31
31
1January
December December
2012
2013
2012
100.00%
100.00%
96.72%
(Note 8)
Tatung Information (Singapore) Tatung Wire And Cable
Pte. Ltd.
Technology (Wujiang)
Co., Ltd.
The manufacturing and sales
of wire and cable
100.00%
100.00%
100.00%
Tatung Information (Singapore) Tatung Compressors
(ZHONGSHAN) Co., Ltd.
Pte. Ltd. and Shan-Chih
International Holding
Corporation
The manufacturing and sales
of reciprocating compressors
for freezing and refrigeration
100.00%
100.00%
100.00%
Tatung Electric (Singapore)
Pte. Ltd. and Shan-Chih
International Holding
Corporation
Tatung (Shanghai)
Co.,Ltd
The manufacturing and sales
of AC motor, DC motors, AC
generators, diesel engine
generators, variable speed
motors, inverters and PLCs,
transformers, switchboards
100.00%
100.00%
100.00%
Tatung Mexico S.A de C.V.
TMX Logistics, Inc.
Hub Service
100.00%
100.00%
100.00%
Tatung Mexico S.A de C.V.
TMX Technologies Inc.
Technologies & Business
Development
100.00%
100.00%
100.00%
Shan Chin Investment Co. Ltd
Nature Worldwide
Technology Corp.
Computer peripherals spare
parts
Shan Chin Investment Co.Ltd
Shan-Chih International
Holding Corporation
Investment holding
-
-
-
(Note 9)
(Note 9)
(Note 9)
100.00%
100.00%
100.00%
Shan-Chih International Holding SHAN-CHIH WIRE&CABLE The manufacturing and sales
Corporation
TECHNOLOGY
of wire and cable
(WUJIANG) CO. , LTD
100.00%
100.00%
100.00%
Chih Sheng Investment Co., Ltd. Chih Sheng Investment
(BVI) Co., Ltd.
100.00%
100.00%
100.00%
Investment holding
TATUNG 2012 Annual Report
Financial Overview
Investor
Subsidiary
Main businesses
Percentage of ownership
31
31
1January
December December
2012
2013
2012
100.00%
100.00%
100.00%
Tatung System Technologies
Inc.
Chyun Huei Health
Technology Inc.
Information software Service
Tatung System Technologies
Inc.
Tatung System
Technologies Holding
Ltd.
Investment Holding
100.00%
-
-
Tatung System Technologies
Holding Ltd.
TSTI Technologies
(Shanghai) Co., Ltd.
Information software
Service
100.00%
-
-
Chih Sheng Investment Co., Ltd. HEDA Biotechnology
Co., Ltd.
Produce, Food Retail and
Wholesale Industry
52.00%
52.00%
52.00%
Chih Sheng Holding Co., Ltd.
Goldmax Asia Pacific
Ltd
Investment Holding
55.05%
55.05%
74.04%
Chih Sheng Holding HK Limited
WTE-niche Ltd.
Sales of Panel
100.00%
100.00%
100.00%
Chih sheng Investment (BVI)
Co., Ltd
Chih Sheng Holding Co., Investment
Ltd.
100.00%
100.00%
100.00%
Chih Sheng Holding HK Limited
Wu-jiang Tatung
Electronics Trading Co.
LTD
Sales of Information
Production
100.00%
100.00%
100.00%
Chih Sheng Holding Co., Ltd.
Chih Sheng Holding HK
Limited
Investment Holding
100.00%
100.00%
100.00%
Tatung Co. of America Inc.
Sea Bridges, Inc.
Major contact with Taiwanese
companies for sale and
quality control
(Note 10)
(Note 10)
-
100.00%
Absolute Alpha Limited
Tatung Information
Technologies Corp.
The sale of electronic Products
100.00%
100.00%
100%
Shan-Chih Asset Development
Co. and Taipei Industry
Corporation
Tatung Forestry and
Construction Co.
The design and construction
of structural engineering
99.62%
99.62%
99.62%
Shan-Chih Asset Development
Co.
Taipei Industry
Corporation
The production and sales of
mixing concrete
50.61%
50.61%
50.61%
Shan-Chih Asset Development
Co.
Chih Sheng Realty Co.,
Ltd.
Realty management
100.00%
100.00%
100.00%
Shan-Chih Asset Development
Co.
Shan-Chih Asset
International Holding
Corporation
Investment Holding
100.00%
100.00%
Shan-Chih Asset International
Holding Corporation
Tatung Real Estate
Consultant (Shanghai)
Co., Ltd.
Realty and Leasing Service
100.00%
100.00%
Shan-Chih Asset International
Holding Corporation
Shan-Chih Asset
International (Hong
Kong) Holding Limited
Realty and Leasing Service
100.00%
100.00%
(Note 11)
(Note 11)
Shan-Chih Asset International
(Hong Kong) Holding Limited
Suqian Zhiwei Real Estate Realty management
Co., Ltd
100.00%
-
-
-
(Note 11)
(Note 11)
(Note 11)
(Note 12)
(Note 11)
(Note 11)
-
(Note 11)
-
(Note 11)
-
Note 1: Chih Sheng Holding Co., Ltd. disposed of partial shareholdings of Tatung Atherton Co., Ltd. on 24 April 2012 and the shareholding percentage was decreased to
10%, which resulted in losing significant influence of Tatung Atherton Co., Ltd. Therefore, Tatung Atherton Co., Ltd. was no longer consolidated after the second
quarter of 2012.
Note 2: The Company disposed the shareholding of Shan Chih International Express Co., Ltd. Therefore, Shan Chih International Express Co., Ltd. was not consolidated in
the financial statements.
Note 3: Tatung Co. of Canada Inc. has liquidated in October, 2012. Therefore, Tatung Co. of Canada Inc. was not consolidated in the financial statements.
Note 4: Tatung Visual Display (Mexico) S.A. de C.V. and Tatung Mexico S.A de C.V. have merged in December, 2012. Tatung Visual Display (Mexico) S.A. de C.V. is an
extinguishing company.
102
Financial Overview
Note 5: On 23 March 2012, the board of directors resolved to dispose of the common shares of Tatung InfoComm Co., Ltd. to Vee Telecom Multimedia Co., Ltd. Both
parties have signed a share purchase contract to transfer the shares by three installments. As of 31 December 2012, the Company has completed the transfer of
all shares and no longer consolidated in the financial statements.
Note 6: On 14 April 2011, the board of directors resolved to liquidate Wujiang Tatung Opronics & Energy Co., Ltd. and complete the progress of liquidation on 24 May 2012.
Note 7: To combine the group’s resources and reduce operating costs, GET and Green Value Investment Co., Ltd. executed short-form merger in accordance with
Business Mergers And Acquisitions Act on 6 December 2012. GET is the surviving company and succeed all assets and liabilities of the dissolved company,
Green Value Investment Co., Ltd. As the dissolved company was the surviving company’s subsidiary, the short-form merger was recognized as organizational
restructuring.
Note 8: Tatung Information (Singapore) Pte. Ltd. and Shan-Chih International Holding Corporation are disposed all share in July 2013 Tatung Home Appliance (Wujiang)
Co., Ltd. Therefore, Tatung Home Appliance (Wujiang) Co., Ltd was not consolidated in the financial statements
Note 9: In April 2010, the board of directors resolved that Shan Chin Investment Co., .Ltd is no longer support Nature Worldwide Technology Corp. As of 31 December
2013, Nature Worldwide Technology Corp is still in liquidation and not consolidated in the financial statements.
Note 10: Sea Bridges, Inc. has liquidated on 21 September 2012.Therefore, Sea Bridges, Inc. was not consolidated in the financial statements.
Note 11: Because the total assets and operating income of Shan-Chih Asset International Holding Corporation, Tatung Real Estate Consultant (Shanghai) Co., Ltd. and
Shan-Chih Asset International (Hong Kong) Holding Limited are significant to the Company’s total assets and operating income as of the year end of 2012.
Therefore, these companies were consolidated in the financial statement since 2012.
Note 12: In 2012, the Group and other investors in China invested in Suqian Zhiwei Real Estate Co., Ltd by the cooperative of Chinese-foreign.
Therefore, Suqian Zhiwei Real Estate Co., Ltd is not consolidated in the financial statements. As of 31 December 2013, the Group has released the cooperation with
the investors and began to listing in the financial statements.
Note 13: Chunghwa P.T.(Bermuda) Ltd., Chunghwa P.T.(Labuan) Ltd. and Chunghwa Picture Tubes Technology (Group) Co., Ltd. disposed all shares of Chunghwa Picture
Display Technology (Shen-Zhen) Ltd. in July 2013. Therefore, Chunghwa Picture Display Technology (Shen-Zhen) Ltd. was not consolidated in the financial
statements
Note 14: Chunghwa Picture Tubes (Kampar) Sdn. Bhd. has been liquidated on 15 July 2013 and was not consolidated in the financial statements.
2
3
Although the percentage of ownership interests in the Chunghwa Picture Tubes, Ltd., Forward Electronics Co., Ltd., Tatung Fine Chemicals
Co., Green Energy Technology Inc. and other subsidiaries are less than 50%, the Group has power over above Companies by mutual
agreement with other investors. Based on the aforementioned facts and circumstances, management is of the view that the Group
controls those companies and therefore those companies have been consolidated.
The subsidiaries that are not included in the consolidated financial statement are as follow:
As of 31 December 2013
Investor
The Company, Shan-Chih Asset
Development Co., Tatung
Forestry and Construction Co.
and Tatung Fine Chemicals Co.,
Ltd.
Subsidiary
Hsieh Chih Industrial Library
Publishing Co.
Business nature
The publishing and sales of Hsieh
Chih Industrial Library
The Company
Lansong International Co., Ltd.
Forestry
Percentage of ownership
31 December 2013
98.80%
98.33%
As of 31 December 2012
Investor
Subsidiary
Hsieh Chih Industrial Library
The Company, Shan Chih
Publishing Co.
International Express Co., Ltd.,
Tatung Forestry and Construction
Co. and Tatung Fine Chemicals
Co., Ltd.
Business nature
The publishing and sales of Hsieh
Chih Industrial Library
The Company
Forestry
Lansong International Co., Ltd.
Percentage of ownership
31 December 2012
98.80%
98.33%
As of 1 January 2012
Percentage of ownership
1 January 2012
98.80%
Investor
Subsidiary
Hsieh Chih Industrial Library
The Company, Shan Chih
Publishing Co.
International Express Co., Ltd.,
Tatung Forestry and Construction
Co. and Tatung Fine Chemicals
Co., Ltd.
Business nature
The publishing and sales of Hsieh
Chih Industrial Library
The Company
Lansong International Co., Ltd.
Forestry
98.33%
Shan-Chih Asset Development
Co.
Shan-Chih Asset International
Holding Corporation
Investment holding
100.00%
All the above subsidiaries were of insignificant percentage to the Company’s total assets and operating revenue and therefore not
consolidated by the Company.
Although the Company directly or indirectly possess more than 50% of the voting rights of Tatung Telecom Corporation, as the Company
does not have over 50% of representation of the Board, the Company does not have control over those entities as such they are not
consolidated.
103
TATUNG 2012 Annual Report
Financial Overview
(4) Foreign currency transactions
The Group’s consolidated financial statements are presented in
NTD , which is also the Company’s functional currency. Each entity
in the Group determines its own functional currency and items
included in the financial statements of each entity are measured
using that functional currency.
Transactions in foreign currencies are initially recorded by the
Group entities at their respective functional currency rates
prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the functional currency closing rate of exchange ruling at the
reporting date. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the
date when the fair value is determined. Non-monetary items
that are measured at historical cost in a foreign currency are
translated using the exchange rates as at the dates of the initial
transactions.
All exchange differences arising on the settlement of monetary
items or on translating monetary items are taken to profit or loss in
the period in which they arise except for the following:
(a) Exchange differences arising from foreign currency
borrowings for an acquisition of a qualifying asset to the
extent that they are regarded as an adjustment to interest
costs are included in the borrowing costs that are eligible for
capitalization.
(b) Foreign currency items within the scope of IAS 39 Financial
Instruments: Recognition and Measurement are accounted
for based on the accounting policy for financial instruments.
(c) Exchange differences arising on a monetary item that
forms part of a reporting entity’s net investment in a foreign
operation is recognized initially in other comprehensive
income and reclassified from equity to profit or loss on
disposal of the net investment.
When a gain or loss on a non-monetary item is recognized
in other comprehensive income, any exchange component
of that gain or loss is recognized in other comprehensive
income. When a gain or loss on a non-monetary item is
recognized in profit or loss, any exchange component of that
gain or loss is recognized in profit or loss.
(5) Translation of financial statements in foreign currency
The assets and liabilities of foreign operations are translated into
NTD at the closing rate of exchange prevailing at the reporting
date and their income and expenses are translated at an
average rate for the period. The exchange differences arising on
the translation are recognized in other comprehensive income.
On the disposal of a foreign operation, the cumulative amount
of the exchange differences relating to that foreign operation,
recognized in other comprehensive income and accumulated in
the separate component of equity, is reclassified from equity to
profit or loss when the gain or loss on disposal is recognized.
The following are accounted for as disposals even if an interest
in the foreign operation is retained by the Group: the loss of
control over a foreign operation, the loss of significant influence
over a foreign operation, or the loss of joint control over a foreign
operation.
On the partial disposal of a subsidiary that includes a foreign
operation that does not result in a loss of control, the proportionate
share of the cumulative amount of the exchange differences
recognized in other comprehensive income is re-attributed to
the non-controlling interests in that foreign operation. In partial
disposal of an associate or jointly controlled entity that includes
a foreign operation that does not result in a loss of significant
influence or joint control, only the proportionate share of the
cumulative amount of the exchange differences recognized in
other comprehensive income is reclassified to profit or loss.
Any goodwill and any fair value adjustments to the carrying
amounts of assets and liabilities arising on the acquisition of a
foreign operation are treated as assets and liabilities of the foreign
operation and expressed in its functional currency.
(6) Current and non-current distinction
An asset is classified as current when:
(a) The Group expects to realize the asset, or intends to sell or
consume it, in its normal operating cycle
(b) The Group holds the asset primarily for the purpose of trading
(c) The Group expects to realize the asset within twelve months
after the reporting period
(d) The asset is cash or cash equivalent unless the asset is
restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.
A liability is classified as current when:
(a) The Group expects to settle the liability in its normal operating
cycle
(b) The Group holds the liability primarily for the purpose of
trading
(c) The liability is due to be settled within twelve months after the
reporting period
(d) The Group does not have an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting period. Terms of a liability that could, at the option
of the counterparty, result in its settlement by the issue of
equity instruments do not affect its classification.
(7) Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand
deposits and short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value (include fixed-term
deposits that have maturities of 12 months from the date of
acquisition).
(8) Financial instruments
Financial assets and financial liabilities are recognized when
the Group becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities within the scope of
IAS 39 Financial Instruments: Recognition and Measurement
are recognized initially at fair value plus or minus, in the case
of investments not at fair value through profit or loss, directly
attributable transaction costs.
(a) Financial assets
The Group accounts for regular way purchase or sales of
financial assets on the trade date.
Financial assets of the Group are classified as financial
assets at fair value through profit or loss, held-to-maturity
investments, available-for-sale financial assets and loans and
receivables. The Group determines the classification of its
financial assets at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include
financial assets held for trading and financial assets
designated upon initial recognition at fair value through profit
or loss.
A financial asset is classified as held for trading if:
i. it is acquired or incurred principally for the purpose of
selling or repurchasing it in the near term;
ii. on initial recognition it is part of a portfolio of identified
financial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term profit-taking; or
iii. it is a derivative (except for a derivative that is a financial
guarantee contract or a designated and effective
hedging instrument).
If a contract contains one or more embedded derivatives, the
entire hybrid (combined) contract may be designated as a
financial asset at fair value through profit or loss; or a financial
asset may be designated as at fair value through profit or loss
when doing so results in more relevant information, because
either:
i. it eliminates or significantly reduces a measurement or recognition
inconsistency; or
ii. a group of financial assets, financial liabilities or both is
managed and its performance is evaluated on a fair value
basis, in accordance with a documented risk management or
investment strategy, and information about the group is
provided internally on that basis to the key management
personnel.
Financial assets at fair value through profit or loss are
measured at fair value with changes in fair value recognized
in profit or loss. Dividends or interests on financial assets at
fair value through profit or loss are recognized in profit or
loss (including those received during the period of initial
investment). If financial assets do not have quoted prices
104
Financial Overview
in an active market and their far value cannot be reliably
measured, then they are classified as financial assets
measured at cost on balance sheet and carried at cost net
of accumulated impairment losses, if any, as at the reporting
date.
Available-for-sale financial assets
Available-for-sale investments are non-derivative financial
assets that are designated as available-for-sale or those not
classified as financial assets at fair value through profit or loss,
held-to-maturity financial assets, or loans and receivables.
Foreign exchange gains and losses and interest calculated
using the effective interest method relating to monetary
available-for-sale financial assets, or dividends on an
available-for-sale equity instrument, are recognized in profit or
loss. Subsequent measurement of available-for-sale financial
assets at fair value is recognized in equity until the investment
is derecognized, at which time the cumulative gain or loss is
recognized in profit or loss.
If equity instrument investments do not have quoted prices
in an active market and their far value cannot be reliably
measured, then they are classified as financial assets
measured at cost on balance sheet and carried at cost net
of accumulated impairment losses, if any, as at the reporting
date.
Held-to-maturity financial assets
Non-derivative financial assets with fixed or determinable
payments and fixed maturities are classified as held-tomaturity when the Group has the positive intention and ability
to hold it to maturity, other than those that are designated as
available-for-sale, classified as financial assets at fair value
through profit or loss, or meet the definition of loans and
receivables.
After initial measurement held-to-maturity financial assets
are measured at amortized cost using the effective interest
method, less impairment. Amortized cost is calculated by
taking into account any discount or premium on acquisition
and fee or transaction costs. The effective interest method
amortization is recognized in profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market other than those that the Group upon initial
recognition designates as available for sale, classified as at
fair value through profit or loss, or those for which the holder
may not recover substantially all of its initial investment.
Loans and receivables are separately presented on the
balance sheet as receivables or bond investments for which
no active market exists. After initial measurement, such
financial assets are subsequently measured at amortized
cost using the effective interest rate method, less impairment.
Amortized cost is calculated by taking into account any
discount or premium on acquisition and fee or transaction
costs. The effective interest method amortization is
recognized in profit or loss.
Impairment of financial assets
The Group assesses at each reporting date whether there
is any objective evidence that a financial asset other than
the financial assets at fair value through profit or loss is
impaired. A financial asset is deemed to be impaired if, and
only if, there is objective evidence of impairment as a result
of one or more loss events that has occurred after the initial
recognition of the asset and that loss event has an impact
on the estimated future cash flows of the financial asset. The
carrying amount of the financial asset impaired, other than
receivables impaired which are reduced through the use of
an allowance account, is reduced directly and the amount
of the loss is recognized in profit or loss.
A significant or prolonged decline in the fair value of
an available-for-sale equity instrument below its cost is
considered a loss event.
Other loss events include:
i significant financial difficulty of the issuer or obligor; or
ii. a breach of contract, such as a default or delinquency in
interest or principal payments; or
iii. it becoming probable that the borrower will enter
bankruptcy or other financial reorganisation; or
iv. the disappearance of an active market for that financial
asset because of financial difficulties.
105
For held-to-maturity financial assets and loans and
receivables measured at amortized cost, the Group
first assesses individually whether objective evidence of
impairment exists individually for financial asset that are
individually significant, or collectively for financial assets that
are not individually significant. If the Group determines that
no objective evidence of impairment exits for an individually
assessed financial asset, whether significant or not, it includes
the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses them for impairment.
If there is objective evidence that an impairment loss has
been incurred, the amount of the loss is measured as the
difference between the assets carrying amount and the
present value of estimated future cash flows. The present
value of the estimated future cash flows is discounted at
the financial assets original effective interest rate. If a loan
has a variable interest rate, the discount rate for measuring
any impairment loss is the current effective interest rate.
Interest income is accrued based on the reduced carrying
amount of the asset, using the rate of interest used to discount
the future cash flows for the purpose of measuring the
impairment loss. Receivables together with the associated
allowance are written off when there is no realistic prospect
of future recovery. If, in a subsequent year, the amount of the
estimated impairment loss increases or decreases because of
an event occurring after the impairment was recognized, the
previously recognized impairment loss is increased or reduced
by adjusting the allowance account. If a future write-off is
later recovered, the recovery is credited to profit or loss.
In the case of equity investments classified as available-forsale, where there is evidence of impairment, the cumulative
loss - measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on
that investment previously recognized in profit or loss - is
removed from other comprehensive income and recognized
in profit or loss. Impairment losses on equity investments
are not reversed through profit or loss; increases in their fair
value after impairment are recognized directly in other
comprehensive income.
In the case of debt instruments classified as available-forsale, the amount recorded for impairment is the cumulative
loss measured as the difference between the amortized
cost and the current fair value, less any impairment loss
on that investment previously recognized in profit or loss.
Future interest income continues to be accrued based on
the reduced carrying amount of the asset, using the rate of
interest used to discount the future cash flows for the purpose
of measuring the impairment loss. The interest income is
recognized in profit or loss. If, in a subsequent year, the fair
value of a debt instrument increases and the increase can be
objectively related to an event occurring after the impairment
loss was recognized in profit or loss, the impairment loss is
reversed through profit or loss.
Derecognition of financial assets
A financial asset is derecognized when:
i. The rights to receive cash flows from the asset have
expired
ii. The Group has transferred the asset and substantially all
the risks and rewards of the asset have been transferred
iii. The Group has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred
control of the asset.
On derecognition of a financial asset in its entirety,
the difference between the carrying amount and the
consideration received or receivable including any
cumulative gain or loss that had been recognized in other
comprehensive income, is recognized in profit or loss.
(b) Financial liabilities and equity
Classification between liabilities or equity
The Group classifies the instrument issued as a financial
liability or an equity instrument in accordance with the
substance of the contractual arrangement and the definitions
of a financial liability, and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. The transaction costs of an equity transaction are
accounted for as a deduction from equity (net of any related
TATUNG 2012 Annual Report
Financial Overview
income tax benefit) to the extent they are incremental costs
directly attributable to the equity transaction that otherwise
would have been avoided.
Compound instruments
The Group evaluates the terms of the convertible bonds
issued to determine whether it contains both a liability and
an equity component. Furthermore, the Group assesses if the
economic characteristics and risks of the put and call options
contained in the convertible bonds are closely related to the
economic characteristics and risk of the host contract before
separating the equity element.
For the liability component excluding the derivatives, its fair
value is determined based on the rate of interest applied at
that time by the market to instruments of comparable credit
status. The liability component is classified as a financial
liability measured at amortized cost before the instrument is
converted or settled.
For the embedded derivative that is not closely related to
the host contract (for example, if the exercise price of the
embedded call or put option is not approximately equal
on each exercise date to the amortized cost of the host
debt instrument), it is classified as a liability component
and subsequently measured at fair value through profit or
loss unless it qualifies for an equity component. The equity
component is assigned the residual amount after deducting
from the fair value of the instrument as a whole the amount
separately determined for the liability component. Its
carrying amount is not remeasured in the subsequent
accounting periods. If the convertible bond issued does not
have an equity component, it is accounted for as a hybrid
instrument in accordance with the requirements under IAS 39
Financial Instruments: Recognition and Measurement.
Transaction costs are apportioned between the liability and
equity components of the convertible bond based on the
allocation of proceeds to the liability and equity components
when the instruments are initially recognized.
On conversion of a convertible bond before maturity, the
carrying amount of the liability component being the
amortized cost at the date of conversion is transferred to
equity.
Financial liabilities
Financial liabilities within the scope of IAS 39 Financial
Instruments: Recognition and Measurement are classified as
financial liabilities at fair value through profit or loss or financial
liabilities measured at amortized cost upon initial recognition.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss.
A financial liability is classified as held for trading if:
i. it is acquired or incurred principally for the purpose of
selling or repurchasing it in the near term;
ii. on initial recognition it is part of a portfolio of identified
financial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term profit-taking; or
iii. it is a derivative (except for a derivative that is a financial
guarantee contract or a designated and effective
hedging instrument).
If a contract contains one or more embedded derivatives,
the entire hybrid (combined) contract may be designated
as a financial liability at fair value through profit or loss;
or a financial liability may be designated as at fair value
through profit or loss when doing so results in more relevant
information, because either:
i. it eliminates or significantly reduces a measurement or
recognition inconsistency; or
ii. a group of financial assets, financial liabilities or both is
managed and its performance is evaluated on a fair
value basis, in accordance with a documented risk
management or investment strategy, and information
about the group is provided internally on that basis to the
key management personnel.
Gains or losses on the subsequent measurement of liabilities
at fair value through profit or loss, including interest paid, are
recognized in profit or loss.
If the financial liabilities at fair value through profit or loss do
not have quoted prices in an active market and their far
value cannot be reliably measured, then they are classified
as financial liabilities measured at cost on balance sheet and
carried at cost as at the reporting date.
Financial liabilities at amortized cost
Financial liabilities measured at amortized cost include
interest bearing loans and borrowings that are subsequently
measured using the effective interest rate method after initial
recognition. Gains and losses are recognized in profit or loss
when the liabilities are derecognized as well as through the
effective interest rate method amortization process.
Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or transaction
costs.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under
the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms
of an existing liability are substantially modified (whether or
not attributable to the financial difficulty of the debtor), such
an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and
the difference in the respective carrying amounts and the
consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognized in profit or loss.
(c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net
amount reported in the balance sheet if, and only if, there is
a currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net basis, or to
realize the assets and settle the liabilities simultaneously.
(d) Fair value of financial instruments
The fair value of financial instruments that are traded in active
markets at each reporting date is determined by reference to
quoted market prices, without any deduction for transaction
costs.
For financial instruments not traded in an active market,
the fair value is determined using appropriate valuation
techniques. Such techniques may include using recent
arm’s length market transactions; reference to the current fair
value of another instrument that is substantially the same; a
discounted cash flow analysis or other valuation models.
(9) Derivative financial instrument
The Group uses derivative financial instruments to hedge its
foreign currency risks and interest rate risks. A derivative is
classified in the balance sheet as financial assets or liabilities at fair
value through profit or loss (held for trading) except for derivatives
that are designated effective hedging instruments which are
classified as derivative financial assets or liabilities for hedging.
Derivative financial instruments are initially recognized at fair value
on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative. Any gains or losses arising
from changes in the fair value of derivatives are taken directly to
profit or loss, except for the effective portion of cash flow hedges,
which is recognized in equity.
Derivatives embedded in host contracts are accounted for as
separate derivatives and recorded at fair value if their economic
characteristics and risks are not closely related to those of the
host contracts and the host contracts are not held for trading or
designated at fair value though profit or loss. These embedded
derivatives are measured at fair value with changes in fair value
recognized in profit or loss.
(10) Inventories
Inventories are valued at lower of cost and net realizable value
item by item.
Costs incurred in bringing each inventory to its present location
and condition are accounted for as follows:
Raw materials – purchase cost on weighted average cost formula.
Work in progress and finished goods – cost of direct materials and
labor and a proportion of manufacturing overheads based on
normal operating capacity on weighted average cost formula.
Net realizable value is the estimated selling price in the ordinary
106
Financial Overview
course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.
(11) Construction contract
When the outcome of a construction contract can be estimated
reliably, contract revenue and contract costs associated with
the construction contract shall be recognised as revenue and
expenses respectively by reference to the stage of completion
of the contract activity at the end of the reporting period. The
recognition of revenue and expenses by reference to the stage
of completion of a contract is often referred to as the percentage
of completion method. Under this method, contract revenue is
matched with the contract costs incurred in reaching the stage
of completion, resulting in the reporting of revenue, expenses
and profit which can be attributed to the proportion of work
completed.
When the outcome of a construction contract cannot be
estimated reliably, revenue shall be recognised only to the extent
of contract costs.
When it is probable that total contract costs will exceed total
contract revenue, the expected loss shall be recognised as an
expense immediately.
(12) Non-current assets held for sale and discontinued operations
Non-current assets and disposal groups are classified as held for
sale if their carrying amounts will be recovered through a sale
transaction that is highly probable within one year from the date
of classification and the asset or disposal group is available for
immediate sale in its present condition. Non-current assets and
disposal groups classified as held for sale are measured at the
lower of their carrying amount and fair value less costs to sell.
In the consolidated statement of comprehensive income of the
reporting period, and of the comparable period of the previous
year, income and expenses from discontinued operations are
reported separately from income and expenses from continuing
operations, down to the level of profit after taxes, even when the
Group retains a non-controlling interest in the subsidiary after the
sale. The resulting profit or loss (after taxes) is reported separately
in the statement of comprehensive income.
Property, plant and equipment and intangible assets once
classified as held for sale are not depreciated or amortized.
(13) Investments accounted for using the equity method
The Group’s investment in its associate is accounted for using
the equity method other than those that meet the criteria to be
classified as held for sale. An associate is an entity over which the
Group has significant influence.
Under the equity method, the investment in the associate is
carried in the balance sheet at cost and adjusted thereafter for
the post-acquisition change in the Group’s share of net assets of
the associate. After the interest in the associate is reduced to zero,
additional losses are provided for, and a liability is recognized, only
to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the associate.
Unrealized gains and losses resulting from transactions between
the Group and the associate are eliminated to the extent of the
Group’s related interest in the associate.
When changes in the net assets of an associate occur and not
those that are recognized in profit or loss or other comprehensive
income and do not affects the Group’s percentage of ownership
interests in the associate, the Group recognizes such changes
in equity based on its percentage of ownership interests. The
resulting capital surplus recognized will be reclassified to profit or
loss at the time of disposing the associate on a pro-rata basis.
When the associate issues new stock, and the Group’s interest
in an associate is reduced or increased as the Group fails to
acquire shares newly issued in the associate proportionately to
its original ownership interest, the increase or decrease in the
interest in the associate is recognized in Additional Paid in Capital
and Investment in associate. When the interest in the associate
is reduced, the cumulative amounts previously recognized in
other comprehensive income are reclassified to profit or loss or
other appropriate items. The aforementioned capital surplus
recognized is reclassified to profit or loss on a pro rata basis when
the Group disposes the associate.
The financial statements of the associate are prepared for
the same reporting period as the Group. Where necessary,
adjustments are made to bring the accounting policies in line with
107
those of the Group.
The Group determines at each reporting date whether there
is any objective evidence that the investment in the associate
is impaired in accordance with IAS 39 Financial Instruments:
Recognition and Measurement. If this is the case the Group
calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying
value and recognizes the amount in the ‘share of profit or loss
of an associate’ in the statement of comprehensive income in
accordance with IAS 36 Impairment of Assets. In determining the
value in use of the investment, the Group estimates:
(a) Its share of the present value of the estimated future cash
flows expected to be generated by the associate, including
the cash flows from the operations of the associate and the
proceeds on the ultimate disposal of the investment; or
(b) The present value of the estimated future cash flows expected
to arise from dividends to be received from the investment
and from its ultimate disposal.
Because goodwill that forms part of the carrying amount of
an investment in an associate is not separately recognized,
it is not tested for impairment separately by applying the
requirements for impairment testing goodwill in IAS 36
Impairment of Assets.
Upon loss of significant influence over the associate, the
Group measures and recognizes any retaining investment at
its fair value. Any difference between the carrying amount
of the associate upon loss of significant influence and the fair
value of the retaining investment and proceeds from disposal
is recognized in profit or loss.
The Group recognizes its interest in the jointly controlled
entities using the equity method other than those that meet
the criteria to be classified as held for sale. A jointly controlled
entity is a joint venture that involves the establishment of a
corporation, partnership or other entity.
(14) Property, plant and equipment
Proper ty, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment losses,
if any. Such cost includes the cost of dismantling and removing
the item and restoring the site on which it is located and borrowing
costs for construction in progress if the recognition criteria are
met. Each part of an item of property, plant and equipment with
a cost that is significant in relation to the total cost of the item
is depreciated separately. When significant parts of property,
plant and equipment are required to be replaced in intervals,
the Group recognized such parts as individual assets with specific
useful lives and depreciation, respectively. The carrying amount
of those parts that are replaced is derecognized in accordance
with the derecognition provisions of IAS 16 Property, plant and
equipment. When a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognized in profit or loss as
incurred.
Depreciation is calculated on a straight-line basis over the
estimated economic lives of the following assets:
Buildings
3 ~ 50 year
Machinery and equipment
1 ~ 35 year
Transportation equipment
2 ~ 10 year
Office equipment
2 ~ 10 year
Leased assets
3 ~ 50 year
Leasehold improvements
The shorter of lease terms or
economic useful lives
Other equipment
2 ~ 10 year
An item of property, plant and equipment and any significant
part initially recognized is derecognized upon disposal or when
no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset is recognized
in profit or loss.
The assets’ residual values, useful lives and methods of
depreciation are reviewed at each financial year end and
adjusted prospectively, if appropriate.
(15) Investment property
Investment properties are measured initially at cost, including
transaction costs. The carrying amount includes the cost of
replacing part of an existing investment property at the time
TATUNG 2012 Annual Report
Financial Overview
that cost is incurred if the recognition criteria are met and
excludes the costs of day-to-day servicing of an investment
property. Subsequent to initial recognition, investment properties
are measured using the cost model in accordance with the
requirements of IAS 16 for that model, other than those that meet
the criteria to be classified as held for sale (or are included in a
disposal group that is classified as held for sale) in accordance
with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations.
Depreciation is calculated on a straight-line basis over the
estimated economic lives of the following assets:
Buildings
30 ~ 50 years
Investment properties are derecognized when either they have
been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected
from its disposal. The difference between the net disposal
proceeds and the carrying amount of the asset is recognized in
profit or loss in the period of derecognition.
Assets are transferred to or from investment properties when there
is a change in use.
(16) Leases
Group as a lessee
Finance leases which transfer to the Group substantially all the
risks and benefits incidental to ownership of the leased item, are
capitalized at the commencement of the lease at the fair value
of the leased property or, if lower, at the present value of the
minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as
to achieve a constant rate of interest on the remaining balance of
the liability. Finance charges are recognized in profit or loss.
A leased asset is depreciated over the useful life of the asset.
However, if there is no reasonable certainty that the Group
will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful life of the
asset and the lease term.
Operating lease payments are recognized as an expense on a
straight-line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer substantially all
the risks and benefits of ownership of the asset are classified as
operating leases. Initial direct costs incurred in negotiating an
operating lease are added to the carrying amount of the leased
asset and recognized over the lease term on the same basis as
rental income. Rental revenue generated from operating lease
is recognized over the lease term using the straight line method.
Contingent rents are recognized as revenue in the period in which
they are earned.
(17) Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired in a
business combination is its fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at
cost less any accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in profit or loss for the year in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or
indefinite.
Intangible assets with finite lives are amortized over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortization period and the amortization method for an
intangible asset with a finite useful life is reviewed at least at the
end of each financial year. Changes in the expected useful life
or the expected pattern of consumption of future economic
benefits embodied in the asset is accounted for by changing the
amortization period or method, as appropriate, and are treated
as changes in accounting estimates.
Intangible assets with indefinite useful lives are not amortized,
but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life
is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in profit or loss when the asset is derecognized.
Research and development costs
Research costs are expensed as incurred. Development
expenditures, on an individual project, are recognized as an
intangible asset when the Group can demonstrate:
(a) The technical feasibility of completing the intangible asset so
that it will be available for use or sale
(b) Its intention to complete and its ability to use or sell the asset
(c) How the asset will generate future economic benefits
(d) The availability of resources to complete the asset
(e) The ability to measure reliably the expenditure during
development
Following initial recognition of the development expenditure as an
asset, the cost model is applied requiring the asset to be carried
at cost less any accumulated amortization and accumulated
impairment losses. During the period of development, the asset is
tested for impairment annually. Amortization of the asset begins
when development is complete and the asset is available for use.
It is amortized over the period of expected future benefit.
Patents
The patent is amortized over the period of useful life.
Technology cooperation costs
Technical cooperation costs depending on the project have
been granted the use of right 3 to 10 years.
Computer software
The cost of computer software is amortized on a straight-line basis
over the estimated useful life (3 years).
A summary of the policies applied to the Group’s intangible assets
is as follows:
Patents
Technology
Cooperation Costs
Computer
software
Useful lives
Finite
Amortization Amortized on
method used a straight-line
basis over the
period of the
patent
Finite
Amortized on
a straight-line
basis over the
period of the
technology
cooperation
terms
Finite
Amortized
on a straightline basis over
the estimated
useful life
Internally
Acquired
generated or
acquired
Acquired
Acquired
(18) Impairment of non-financial assets
The Group assesses at the end of each reporting period whether
there is any indication that an asset in the scope of IAS 36
Impairment of Assets may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group estimates the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or cash-generating
unit’s (“CGU”) fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those
from other assets or groups of assets. Where the carrying amount
of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable
amount.
For assets excluding goodwill, an assessment is made at each
reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates
the asset’s or cash-generating unit’s recoverable amount. A
previously recognized impairment loss is reversed only if there has
been an increase in the estimated service potential of an asset
which in turn increases the recoverable amount. However, the
reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation, had no
impairment loss been recognized for the asset in prior years.
A cash generating unit, or groups of cash-generating units, to
which goodwill has been allocated is tested for impairment
annually at the same time, irrespective of whether there is
108
Financial Overview
any indication of impairment. If an impairment loss is to be
recognized, it is first allocated to reduce the carrying amount
of any goodwill allocated to the cash generating unit (group
of units), then to the other assets of the unit (group of units) pro
rata on the basis of the carrying amount of each asset in the unit
(group of units). Impairment losses relating to goodwill cannot be
reversed in future periods for any reason.
An impairment loss of continuing operations or a reversal of such
impairment loss is recognized in profit or loss.
(19) Provisions
Provisions are recognized when the Group has a present
obligation (legal or constructive) as a result of a past event, it is
probably that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where
the Group expects some or all of a provision to be reimbursed,
the reimbursement is recognized as a separate asset but only
when the reimbursement is virtually certain. If the effect of the
time value of money is material, provisions are discounted using
a current pre-tax rate that reflects the risks specific to the liability.
Where discounting is used, the increase in the provision due to the
passage of time is recognized as a finance cost.
Provision for decommissioning, restoration and rehabilitation costs
The provision for decommissioning, restoration and rehabilitation
costs arose on construction of a property, plant and equipment.
Decommissioning costs are provided at the present value of
expected costs to settle the obligation using estimated cash flows
and are recognized as part of the cost of that particular asset. The
cash flows are discounted at a current pre-tax rate that reflects
the risks specific to the decommissioning liability. The unwinding
of the discount is expensed as incurred and recognized as a
finance cost. The estimated future costs of decommissioning are
reviewed annually and adjusted as appropriate. Changes in the
estimated future costs or in the discount rate applied are added
to or deducted from the cost of the asset.
Maintenance warranties
A provision is recognized for expected warranty claims on
products sold, based on past experience, management’s
judgement and other known factors.
Sales returns and allowances
A provision has been recognized for sales returns and allowances
based on past experience and other known factors.
(20)Treasury shares
Own equity instruments which are reacquired (treasury shares)
are recognized at cost and deducted from equity. Any
difference between the carrying amount and the consideration is
recognized in equity.
(21) Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can
be reliably measured. Revenue is measured at the fair value
of the consideration received or receivable. The following
specific recognition criteria must also be met before revenue is
recognized:
Sale of goods
Revenue from the sale of goods is recognized when all the
following conditions have been satisfied:
(a) the significant risks and rewards of ownership of the goods
have passed to the buyer;
(b) neither continuing managerial involvement nor effective
control over the goods sold have been retained;
(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 entity; and
(e) the costs incurred in respect of the transaction can be
measured reliably.
Rendering of Services
Revenue from Information systems integration services is
recognized by reference to the stage of completion. Stage of
completion is measured by reference to the proportion that
contract cost incurred for work performed to date bear to the
estimated total contract costs. Where the contract outcome
cannot be measured reliably, revenue is recognized only to the
extent that the expenses incurred are eligible to be recovered.
109
Interest income
For all financial assets measured at amortized cost (including
loans and receivables and held-to-maturity financial assets) and
available-for-sale financial assets, interest income is recorded
using the effective interest rate method and recognized in profit or
loss.
Dividends
Revenue is recognized when the Group’s right to receive the
payment is established.
Rent Income
Rental income from operating lease is accounted by straight-line
basis on the period of lease.
(22) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the cost of the respective assets. All
other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
(23) Government grants
Government grants are recognized where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. Where the grant relates to an
asset, it is recognized as deferred income and released to income
in equal amounts over the expected useful life of the related
asset. When the grant relates to an expense item, it is recognized
as income over the period necessary to match the grant on a
systematic basis to the costs that it is intended to compensate.
Where the Group receives non-monetary grants, the asset and the
grant are recorded gross at nominal amounts and released to the
statement of comprehensive income over the expected useful life
and pattern of consumption of the benefit of the underlying asset
by equal annual installments. Where loans or similar assistance are
provided by governments or related institutions with an interest
rate below the current applicable market rate, the effect of this
favorable interest is regarded as additional government grant.
(24) Post-employment benefits
All regular employees of the Company and its domestic
subsidiaries are entitled to a pension plan that is managed by
an independently administered pension fund committee. Fund
assets are deposited under the committee’s name in the specific
bank account and hence, not associated with the Company and
its domestic subsidiaries. Therefore fund assets are not included in
the Group’s consolidated financial statements. Pension benefits
for employees of the overseas subsidiaries and the branches are
provided in accordance with the respective local regulations.
For the defined contribution plan, the Company and its domestic
subsidiaries will make a monthly contribution of no less than 6%
of the monthly wages of the employees subject to the plan. The
Company recognizes expenses for the defined contribution plan
in the period in which the contribution becomes due. Overseas
subsidiaries and branches make contribution to the plan based on
the requirements of local regulations. Post-employment benefit
plan that is classified as a defined benefit plan uses the Projected
Unit Credit Method to measure its obligations and costs based
on actuarial assumptions. The Group recognizes all actuarial
gains and losses in the period in which they occur in other
comprehensive income. Actuarial gains and losses recognized
in other comprehensive income are recognized immediately in
retained earnings.
(25)Share-based payment transactions
The cost of equity-settled transactions between the Group and
its employees is recognized based on the fair value of the equity
instruments granted. The fair value of the equity instruments is
determined by using an appropriate pricing model.
The cost of equity-settled transactions is recognized, together with
a corresponding increase in other capital reserves in equity, over
the period in which the performance and/or service conditions
are fulfilled. The cumulative expense recognized for equitysettled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and
the Group’s best estimate of the number of equity instruments
that will ultimately vest. The income statement expense or credit
TATUNG 2012 Annual Report
Financial Overview
for a period represents the movement in cumulative expense
recognized as at the beginning and end of that period.
No expense is recognized for awards that do not ultimately vest,
except for equity-settled transactions where vesting is conditional
upon a market or non-vesting condition, which are treated as
vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
Where the terms of an equity-settled transaction award are
modified, the minimum expense recognized is the expense as
if the terms had not been modified, if the original terms of the
award are met. An additional expense is recognized for any
modification that increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the employee
as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it
vested on the date of cancellation, and any expense not yet
recognized for the award is recognized immediately. This includes
any award where non-vesting conditions within the control of
either the entity or the employee are not met. However, if a new
award is substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the cancelled
and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional
share dilution in the computation of diluted earnings per share
The cost of restricted stocks issued is recognized as salary expense
based on the fair value of the equity instruments on the grant
date, together with a corresponding increase in other capital
reserves in equity, over the vesting period. The Group recognized
unearned employee salary which is a transitional contra equity
account; the balance in the account will be recognized as salary
expense over the passage of vesting period.
IFRS 1 First-Time Adoption of International Financial Reporting
Standards allows first-time adopters certain exemptions from the
retrospective application of certain IFRS. As such, IFRS 2 Share
based Payment has not been applied to equity instruments
in share-based payment transactions that were granted on
or before 7 November 2002, nor has it been applied to equity
instruments granted after 7 November 2002 that vested before
1 January 2012 (the date of transition to TIFRS). For cash settled
share based payment transactions, the Group has not applied
IFRS 2 to liabilities that were settled before 1 January 2012.
(26) Income taxes
Income tax expense (income) is the aggregate amount included
in the determination of profit or loss for the period in respect of
current tax and deferred tax.
Current income tax
Current income tax assets and liabilities for the current and prior
periods are measured at the amount expected to be recovered
from or paid to the taxation authorities, using the tax rates and
tax laws that have been enacted or substantively enacted by the
end of the reporting period. Current income tax relating to items
recognized in other comprehensive income or directly in equity is
recognized in other comprehensive income or equity and not in
profit or loss.
The 10% income tax for undistributed earnings is recognized as
income tax expense in the subsequent year when the distribution
proposal is approved by the Shareholders’ meeting.
Deferred tax
Deferred tax is provided on temporary differences at the reporting
date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary
differences, except:
(a) Where the deferred tax liability arises from the initial
recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit
nor taxable profit or loss
(b) In respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint
ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable
future.
Deferred tax assets are recognized for all deductible temporary
differences, carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences,
and the carry forward of unused tax credits and unused tax losses
can be utilized, except:
(a) Where the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss
(b) In respect of deductible temporary differences associated
with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognized only to the extent
that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilized.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the year when the asset is realized
or the liability is settled, based on tax rates and tax laws that have
been enacted or substantively enacted at the reporting date.
The measurement of deferred tax assets and deferred tax liabilities
reflects the tax consequences that would follow from the manner
in which the Group expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax relating to items recognized outside profit or loss
is recognized outside profit or loss. Deferred tax items are
recognized in correlation to the underlying transaction either in
other comprehensive income or directly in equity. Deferred tax
assets are reassessed at each reporting date and are recognized
accordingly.
Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current income tax assets against
current income tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
(27) Business combinations and goodwill
Business combinations are accounted for using the acquisition
method. The consideration transferred, the identifiable assets
acquired and liabilities assumed are measured at acquisition
date fair value. For each business combination, the acquirer
measures any non-controlling interest in the acquiree either at
fair value or at the non-controlling interest’s proportionate share
of the acquiree’s identifiable net assets. Acquisition-related costs
are accounted for as expenses in the periods in which the costs
are incurred and are classified under administrative expenses.
When the Group acquires a business, it assesses the assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances
and pertinent conditions as at the acquisition date. This includes
the separation of embedded derivatives in host contracts by the
acquiree.
If the business combination is achieved in stages, the acquisition
date fair value of the acquirer’s previously held equity interest in
the acquiree is remeasured to fair value at the acquisition date
through profit or loss.
Any contingent consideration to be transferred by the acquirer
will be recognized at the acquisition-date fair value. Subsequent
changes to the fair value of the contingent consideration
which is deemed to be an asset or liability, will be recognized
in accordance with IAS 39 Financial Instruments: Recognition
and Measurement either in profit or loss or as a change to other
comprehensive income. However, if the contingent consideration
is classified as equity, it should not be remeasured until it is finally
settled within equity.
Goodwill is initially measured as the amount of the excess of
the aggregate of the consideration transferred and the noncontrolling interest over the net fair value of the identifiable assets
acquired and the liabilities assumed. If this aggregate is lower
than the fair value of the net assets acquired, the difference is
recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. Goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units. Each unit or
group of units to which the goodwill is so allocated represents the
lowest level within the Group at which the goodwill is monitored
110
Financial Overview
for internal management purpose and is not larger than an
operating segment before aggregation.
Where goodwill forms part of a cash-generating unit and part
of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the
carrying amount of the operation. Goodwill disposed of in this
circumstance is measured based on the relative recoverable
amounts of the operation disposed of and the portion of the cashgenerating unit retained.
5. Significant accounting judgements, estimates and
assumptions
The preparation of the Group’s consolidated financial statements
require management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent liabilities, at
the end of the reporting period. However, uncertainty about these
assumption and estimate could result in outcomes that require a
material adjustment to the carrying amount of the asset or liability
affected in future periods.
(1) Judgement
In the process of applying the Group’s accounting policies,
management has made the following judgements, which have
the most significant effect on the amounts recognized in the
consolidated financial statements:
(a) Investment properties
Certain properties of the Group comprise a portion that is
held to earn rentals or for capital appreciation and another
portion that is owner-occupied. If these portions could
be sold separately, the Group accounts for the portions
separately as investment properties and property, plant and
equipment. If the portions could not be sold separately, the
property is classified as investment property in its entirety only
if the portion that is owner-occupied is under 10% of the total
property.
(b) Operating lease commitment-Group as the lessor
The Group has entered into commercial property leases on
its investment property portfolio. The Group has determined,
based on an evaluation of the terms and conditions of
the arrangements, that it retains all the significant risks and
rewards of ownership of these properties and accounts for
the contracts as operating leases.
(2) Estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
discussed below.
(a) Fair value of financial instruments
Where the fair value of financial assets and financial
liabilities recorded in the balance sheet cannot be derived
from active markets, they are determined using valuation
techniques including the income approach (for example the
discounted cash flows model) or market approach. Changes
in assumptions about these factors could affect the reported
fair value of the financial instruments. Please refer to Note 12
for more details.
(b) Impairment of non-financial assets
An impairment exists when the carrying value of an asset
or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs to sell and its
value in use. The fair value less costs to sell calculation is
based on available data from binding sales transactions in
an arm’s length transaction of similar assets or observable
market prices less incremental costs that would be directly
attributable to the disposal of the asset. The value in use
calculation is based on a discounted cash flow model. The
cash flows projections are derived from the budget for the
next five years and do not include restructuring activities
that the Group is not yet committed to or significant future
investments that will enhance the asset’s performance of the
cash generating unit being tested. The recoverable amount
is most sensitive to the discount rate used for the discounted
cash flow model as well as the expected future cash-inflows
111
and the growth rate used for extrapolation purposes.
(c) Pension benefits
The cost of post-employment benefit and the present value
of the pension obligation under defined benefit pension
plans are determined using actuarial valuations. An actuarial
valuation involves making various assumptions. These include
the determination of the discount rate, future salary increases,
mortality rates and future pension increases. Please refer to
Note 6 for more details.
(d) Share-based payment transactions
The Company measures the cost of equity-settled transactions
with employees based on reference to the fair value of the
equity instruments at the date at which they are granted.
Estimating fair value for share-based payment transactions
requires determination of the most appropriate valuation
model, which is dependent on the terms and conditions of
the grant. This estimate also requires determination of the
most appropriate inputs to the valuation model including
the expected life of the share option, volatility and dividend
yield and making assumptions about them. The assumptions
and models used for estimating fair value for share-based
payment transactions are disclosed in Note 6.
(e) Revenue recognition - sales returns and allowance
The Group estimates sales returns and allowance based on
historical experience and other known factors at the time of
sale, which reduces the operating revenue.
(f) Income tax
Uncertainties exist with respect to the interpretation of
complex tax regulations and the amount and timing of future
taxable income. Given the wide range of international
business relationships and the long-term nature and
complexity of existing contractual agreements, differences
arising between the actual results and the assumptions
made, or future changes to such assumptions, could
necessitate future adjustments to tax income and expense
already recorded. The Group establishes provisions, based
on reasonable estimates, for possible consequences of
audits by the tax authorities of the respective counties in
which it operates. The amount of such provisions is based
on various factors, such as experience of previous tax audits
and differing interpretations of tax regulations by the taxable
entity and the responsible tax authority. Such differences
of interpretation may arise on a wide variety of issues
depending on the conditions prevailing in the respective
Group company's domicile.
Deferred tax assets are recognized for all carryforward
of unused tax losses, unused tax credits and deductible
temporary differences to the extent that it is probable that
future taxable profit will be available or there are sufficient
taxable temporary differences against which the unused tax
losses, unused tax credits or deductible temporary differences
can be utilized. The amount of deferred tax assets determined
to be recognized is based upon the likely timing and the level
of future taxable profits and taxable temporary differences
together with future tax planning strategies. Please refer to
Note 6 for more details on unrecognized deferred tax assets
as of 31 December 2013.
TATUNG 2012 Annual Report
Financial Overview
6. Contents of significant accounts
(1) Cash and cash equivalents
As at
31 December 2013
Cash on hand & demand deposits
Cash in banks
Fixed-term deposits
Cash in transit
Total
31 December 2012
1 January 2012
$484,446
$297,679
$808,736
21,500,425
16,206,308
15,182,839
1,182,469
7,863,064
14,845,304
25,765
33,971
65,587
$23,193,105
$24,401,022
$30,902,466
(2) Financial assets at fair value through profit or loss
As at
31 December 2013
31 December 2012
1 January 2012
Held for trading:
Derivatives not designated as hedging instruments
Forward foreign exchange contracts
$25,723
$998
$70,732
-
-
2,069
25,723
998
72,801
47,624
119,741
32,769
Stock
783,783
-
15
Subtotal
831,407
119,741
32,784
$857,130
$120,739
$105,585
Current
$73,347
$120,739
$103,516
Non-current
783,783
-
2,069
$857,130
$120,739
$105,585
Embedded derivatives
Subtotal
Non-derivative financial assets
Open-end funds
Total
Total
Please refer to Note 8 for more details on financial assets at fair value through profit or loss under pledged.
(3) Available-for-sale financial assets
As at
31 December 2013
Stocks
31 December 2012
1 January 2012
$2,642,204
$1,829,930
$1,621,585
Current
$622,384
$679,977
$493,015
Non-current
2,019,820
1,149,953
1,128,570
$2,642,204
$1,829,930
$1,621,585
Total
Please refer to Note 8 for more details on financial assets available for sale under pledged.
(4) Held-to-maturity financial assets
As at
Bonds
31 December 2013
31 December 2012
1 January 2012
$20,000
$20,000
$20,000
Financial assets held-to-maturity were not pledged.
112
Financial Overview
(5) Financial assets measured at cost
As at
31 December 2013
31 December 2012
1 January 2012
Stocks
$202,146
$344,529
$429,749
Current
$29,238
$138,328
$185,960
Non-current
172,908
206,201
243,789
$202,146
$344,529
$429,749
Total
Financial assets measured at cost were not pledged.
The fair value of the above investments in unlisted entities are not reliably measurable as the variability in the range of reasonable fair value
measurements is significant for the instrument and the probabilities of the various estimates within the range cannot be reasonably assessed
and used when measuring fair value. Therefore these investments were measured at cost.
One of the investee companies, Nanjing Global Technology Co., Ltd., continued to suffer operating losses, which indicated impairment losses.
Accordingly, the Group recognized impairment losses amounted to NTD 17,444 thousand and NTD 51,137 thousand, respectively, for the years
ended 31 December 2013 and 2012 in accordance with IAS 39 “Financial Instruments: Recognition and Measure”.
The Group disposed of financial assets measured at cost in the carrying amount of NTD 119,680 thousand and NTD 42,519 thousand in the
years ended 31 December 2013 and 2012, respectively. The resulting disposal gain or loss recognized was NTD 51,909 thousand and NTD 10,008
thousand in the years ended 31 December 2013 and 2012, respectively.
(6) Bond investments for which no active market exists
As at
31 December 2013
31 December 2012
1 January 2012
Cash in banks-Reserve Account
$1,297,194
$1,753,116
$1,621,526
Fixed-term deposits (Note1)
5,979,948
1,451,066
3,421,116
-
-
787,312
$7,277,142
$3,204,182
$5,829,954
Deposit-out (Note2)
Total
As at
31 December 2013
Current
Non-current
Total
31 December 2012
1 January 2012
$7,243,975
$2,581,938
$4,293,641
33,167
622,244
1,536,313
$7,277,142
$3,204,182
$5,829,954
Please refer to Note 8 for more details on bond investments under pledge for which no active market exists.
Note 1: Chunghwa Electronics Development Co., Ltd. transferred its shares of CPT to Credit Suisse in January 2010 and acquired proceeds of NTD 1,047,800 thousand. The
Group then pledged the above amount to Credit Suisse and guaranteed to buy-back the above shares in a certain period. The above amount was recognized
in bonds investments for which no active market exists – current and other current liabilities – other as of 31 December 2013, 2012 and 1 January 2012.
Note 2: The Group had provided a contract security deposit to Credit Suisse AG as guarantee for the trading of Tatung Global Strategy Investment and Trading (BVI) Inc.
on derivative financial instrument. The deposit amounted to NTD 787,312 thousand as of 1 January 2012. The guarantee expired and was settled on May 2012.
(7) Notes receivables
As at
31 December 2013
Notes receivables arising from operating activities
1 January 2012
$709,870
$811,120
$1,097,066
(57)
(65)
(195)
709,813
811,055
1,096,871
Notes receivables-related parties
-
-
102
Less: allowance for doubtful debts
-
-
-
Subtotal
-
-
102
$709,813
$811,055
$1,096,973
Less: allowance for doubtful debts
Subtotal
Total
Please refer to Note 8 for more details on notes receivables were pledged.
113
31 December 2012
TATUNG 2012 Annual Report
Financial Overview
(8) Accounts receivable and Accounts receivable-related parties
As at
31 December 2013
Accounts receivable
31 December 2012
1 January 2012
$14,785,101
$12,600,115
$14,537,567
(562,382)
(1,430,884)
(1,799,628)
(6,285)
(18,607)
(97,484)
14,216,434
11,150,624
12,640,455
662,564
671,530
410,189
-
-
-
Unrealized interest revenue - trade receivables
from installment sales
(6,409)
(10,570)
(13,134)
Net
656,155
660,960
397,055
14,872,589
11,811,584
13,037,510
Accounts receivable-related parties
236,190
464,111
509,556
Less: allowance for doubtful debts
(3,392)
(1,279)
(10,676)
232,798
462,832
498,880
$15,105,387
$12,274,416
$13,536,390
Less:allowance for doubtful debts
Allowance for sales returns and discounts
Net
Installment accounts receivable
Less: allowance for doubtful debts
Subtotal
Net
Total
The expected recovery of the accounts receivables from installment sales is as follows:
As at
31 December 2013
Not later than one year
31 December 2012
1 January 2012
$266,513
$384,292
$248,480
Later than one year and not later than two years
162,679
128,697
126,013
Later than two years
233,372
158,541
35,696
$662,564
$671,530
$410,189
Please refer to note 8 on trade receivables were pledged.
Accounts receivable are generally on 30-180 day terms. The movements in the provision for impairment of accounts receivable and accounts
receivable-related parties are as follows:
Individually impaired
As at 1 January 2013
Collectively impaired
Total
$1,119,463
$312,700
$1,432,163
163,430
79,006
242,436
(944,952)
(216,827)
(1,161,779)
-
51,222
51,222
5,541
(3,809)
1,732
As at 31 December 2013
$343,482
$222,292
$565,774
As at 1 January 2012
$1,087,309
$722,995
$1,810,304
31,740
54,759
86,499
-
(460,146)
(460,146)
414
(4,908)
(4,494)
$1,119,463
$312,700
$1,432,163
Charge (reversal) for the current period
Write off
Acquired in a business combination
Effect of exchange rate changes
Charge(reversal) for the current period
Write off
Effect of exchange rate changes
As at 31 December 2012
Impairment loss that was individually determined for the years ended 31 December 2013 and 2012, arose due to the fact that the counterparty
was in financial difficulties. The amount of impairment loss recognized was the difference between the carrying amount of the trade
114
Financial Overview
receivable and the present value of its expected recoverable amount. The Group does not hold any collateral for such trade receivables.
Ageing analysis of account receivables and account receivables-related parties that were past due as at the end of the reporting period but
not impaired is as follows:
Past due but not impaired
6 months to 1 year
More than 1 year
Neither past due nor
impaired
1 to 6 months
31 December 2013
$13,845,535
$1,185,644
$26,094
$60,808
$15,118,081
31 December 2012
11,524,536
705,116
66,627
7,314
12,303,593
1 January 2012
12,069,460
1,305,960
265,641
5,947
13,647,008
As at
Total
In order to improve working capital, the Group entered into accounts receivable factoring agreements, without recourse, together with
Chinatrust Commercial Bank and Taishin International Bank. The related information with respect to these agreements was as follows:
31 December 2013
Prepaid proceeds from factor
31 December 2012
1 January 2012
$240,703
$119,592
$561,370
42,477
21,105
84,947
$283,180
$140,697
$646,317
The range of interest rate of prepaid proceeds
2.70%~3.52%
2.00%~2.64%
2.29%~3.56%
Promissory note (in USD’000 or NTD ’000) (Note)
USD 2,000 thousand
Due from factor (recorded in accounts receivable
- others)
Amounts derecognized of accounts receivable
USD 10,000 thousand
NTD 697,500 thousand
USD 4,000 thousand
The primary transfer criteria of due from factor:
The remainder accounts receivable factoring is without recourse, but the debtor is responsible to for the risk other than the credit risk of debtor.
Note: The promissory note was issued as the security of future commercial dispute.
(9) Construction receivables
As at
31 December 2013
31 December 2012
$4,550,067
$1,994,452
$319,076
511,051
308,202
75,558
Accumulated billed amounts based on construction progress
(2,855,979)
(1,296,497)
(87,576)
Construction receivables
$2,205,139
$1,006,157
$307,058
Accumulated cost incurred
Accumulated recognized project profit (loss)
1 January 2012
As at 31 December 2013
Items
Contract
proceeds
Contract costs
incurred
Accumulated
recognized
total project
profit(loss)
Percentage of
completion
Amounts billed
based on
Construction
progress
Construction
contracts
receivable
Retained
amount of
construction
contracts
Percentage
of completion
method
Category A
$2,140,148
$1,521,626
$151,004
5~99%
$811,835
$860,795
$-
Category B
1,739,117
1,277,279
232,087
0~99%
1,052,511
456,855
-
Category C
2,417,152
1,751,162
127,960
77~85%
991,633
887,489
-
$6,296,417
$4,550,067
$511,051
$2,855,979
$2,205,139
$-
Construction
contracts
receivable
Retained
amount of
construction
contracts
Total
As at 31 December 2012
Items
Contract
proceeds
Contract costs
incurred
Accumulated
recognized
total project
profit(loss)
Percentage of
completion
Amounts billed
based on
Construction
progress
Percentage
of completion
method
Category A
$1,136,687
$760,774
$54,792
0~99%
$268,283
$547,283
$-
Category B
1,704,040
1,233,678
253,410
0~99%
1,028,214
458,874
-
$2,840,727
$1,994,452
$308,202
$1,296,497
$1,006,157
$-
Total
115
TATUNG 2012 Annual Report
Financial Overview
As at 1 January 2012
Contract
proceeds
Items
Contract costs
incurred
Accumulated
recognized
total project
profit(loss)
Percentage of
completion
Amounts billed
based on
Construction
progress
Construction
contracts
receivable
Retained
amount of
construction
contracts
Percentage
of completion
method
Category A
$349,372
$74,695
$33,765
1~99%
$7,900
$100,560
$-
Category B
1,139,087
244,381
41,793
0~99%
79,676
206,498
-
$1,488,459
$319,076
$75,558
$87,576
$307,058
$-
Total
(10) Inventory
(a) The details of inventories are as follows:
As at
31 December 2013
Raw materials
31 December 2012
1 January 2012
$4,832,209
$9,246,549
$8,548,252
4,962,392
5,380,586
6,930,122
11,492,038
9,760,873
9,118,861
Inventories in transit
251,492
244,348
368,954
Buildings and land held for sale
289,122
416,964
194,610
3,656,472
1,455,146
1,206,343
Total
25,483,725
26,504,466
26,367,142
Less: allowance for inventory valuation losses
(3,385,760)
(3,278,897)
(2,826,793)
Net
$22,097,965
$23,225,569
$23,540,349
Work in progress
Finished good
Buildings and lands in construction
(b) Buildings and lands in construction:
As at
Name of developing projects
31 December 2013
Project D
31 December 2012
1 January 2012
$65,225
$19,487
$16,486
Project E2
-
-
610,686
Project E3
2,260,932
1,435,659
579,171
Project F1
1,330,315
-
-
$3,656,472
$1,455,146
$1,206,343
Total
The buildings and lands in construction as of 31 December 2013, 31 December 2012 and 1 January 2012 are as follows:
31 December 2013
Projects
Project E3
Accounting
method
Completed
contract
method
Total value of contract
$5,762,790
Total estimated
costs
$2,727,047
Completed
percentage
82.91%
Scheduled years of
completion
2014
Advanced
receipts
$1,591,647
31 December 2012
Projects
Project E3
Accounting
method
Completed
contract
method
Total value of contract
$5,762,790
Total estimated
costs
$2,909,047
Completed
percentage
49.35%
Scheduled years of
completion
2013
Advanced
receipts
$1,352,530
116
Financial Overview
1 January 2012
Accounting
method
Projects
Total value of contract
Total estimated
costs
Completed
percentage
Advanced
receipts
Scheduled years of
completion
Project E2
Completed
contract method
$522,482
$618,327
98.67%
2012
$522,481
Project E3
Completed
contract method
5,762,790
3,079,727
18.81%
2013
995,903
$6,285,272
$3,698,054
Total
$1,518,384
The cost of inventories recognized in expenses amounted to NTD 96,580,086 thousand and NTD 103,038,536 thousand, including the
recognition of allowance for inventory valuation lossess of NTD 106,863 thousand and NTD 452,104 thousand for the years ended 31 December
2013 and 2012, respectively.
Inventories were not pledged.
(11) Investments accounted for using the equity method
(a) The following table lists the investments accounted for using the equity method of the Group:
As at
31 December 2013
Investees
31 December 2012
Percentage of
ownership (%)
Carrying
amount
Carrying
amount
1 January 2012
Percentage of
ownership (%)
Carrying
amount
Percentage of
ownership (%)
Investments in associates:
Listed companies
Elitegroup Computer Systems Co., Ltd.
$5,611,995
27.49
$5,889,503
27.49
$6,672,580
27.49
Giantplus Technology Co., Ltd (Note1)
-
-
3,073,418
29.64
3,246,732
29.64
Xiamen Overseas Chinese Electronic Co., Ltd. (Note2)
-
-
993,704
39.16
-
27.00
Subtotal
5,611,995
9,956,625
9,919,312
Unlisted companies
Tatung Okuma Co., Ltd.
715,265
49.00
539,991
49.00
422,200
49.00
Kuender Co., Ltd.
143,308
50.00
163,232
50.00
182,092
50.00
Hsieh-Chih Industrial Library Publishing Co.
11,711
98.80
11,159
98.80
10,128
98.80
Chung-Tai Technology Development Engineering Co.
16,226
22.00
15,869
22.00
15,675
22.00
-
98.33
-
98.33
-
98.33
Tatung Telecom Corporation
(1,669)
55.00
(2,877)
55.00
(1,364)
55.00
Tatung Cranes (Shanghai) Co., Ltd
31,003
45.00
29,666
45.00
34,331
45.00
Lansong International Co., Ltd.
San-chih Asset International Holding Corp.
-
-
-
-
926,190
100.00
Tatung Chugai Precious Metals Co., Ltd
19,189
49.00
24,389
49.00
31,127
49.00
Taiwan Nissei Display System Co., Ltd
40,362
20.00
39,497
20.00
36,725
20.00
Laster Tech Corporation Ltd.
151,614
20.19
131,178
20.14
124,254
21.09
35,216
40.00
31,461
40.00
28,534
40.00
(19,970)
85.36
(19,970)
85.36
(19,971)
85.36
-
-
726,140
100.00
-
-
16,459
18.35
-
-
-
-
-
-
-
-
-
-
Ufeco (Wujiang) Technology Inc
Nature Worldwide Technology Corp.
Suqian Zhiwei Real Estate Co.,Ltd (Note4)
D&Y Intelligent Co., Ltd. (Note 5)
Advanced Touch Optics Technology (Samoa) Inc. (Note 6)
Subtotal
1,158,714
1,689,735
1,789,921
Jointly Controlled Entity:
Green Energy Technology Holding Co., Ltd.(GETH) (Note3)
Net of long-term investments accounted for under equity
method
Add: Long-term equity investments, credit balance
Total
130,425
50.00
143,871
50.00
73,991
6,901,134
11,790,231
11,783,224
21,639
22,847
21,335
$6,922,773
$11,813,078
$11,804,559
50.00
Note 1: To improve vertical integration in operation and enhance industry competitiveness, CPT acquired NTD 84,000 thousand shares of Giantplus by public acquisition
and NTD 22,116 thousand shares by private placement in April 2013. Through the acquisition, CPT’s shareholding percentage of Giantplus rose from 29.64% to
117
TATUNG 2012 Annual Report
Financial Overview
53.68%. The Group started to consolidate Giantplus from 30 April, 2013. Please refer to Item 35, Note 6 for details.
Note 2: CPT’s subsidiary, CPTW, resolved by the board of directors to dispose of NTD 100,121,068 shares of Xiamen Overseas Chinese Electronic Co., Ltd. in November 2013.
After this disposal, the Group’s holdings of Xiamen Overseas Chinese Electronic Co., Ltd. reduced to NTD 104,761,903 shares. Since then the Group no longer has
controlling power over Xiamen Overseas Chinese Electronic Co., Ltd’s operation. Accordingly, the Group doesn’t have significant influence over CPTW.
As of 1 January, 2012, the long-term investment credit balance in Xiamen Overseas Chinese Electronic Co., Ltd. amounted to NTD 271,386 thousand. The credit
balance has been offset by other receivables due from Xiamen Oversea Chinese Electronics Co., Ltd.
Note 3: In September 2011, to engage in the operations of solar power plants in Thailand, GET co-founded GETH, which was defined as a joint-venture company, with
other investors through its subsidiary, Green Value Investment Co., Ltd. As of December 31, 2012 and 2011, GET invested THB 147,862 and THB73,500 thousand
(equivalent to NTD 146,670 thousand and NTD 73,991 thousand) in GETH. In addition, prepayments for long-term investment in GETH amounting to NTD 2,140
thousand were recognized as other non-current assets. since the issuance date of the new common stocks has not been resolved by GETH.
Note 4: Please refer to note 4, Summary of significant accounting policies, item 3, Basis of consolidation note 12.
Note 5: CPT group has acquired on seat of director in D&Y Intelligent Co., Ltd., and has significant influence, therefore, the investee should be accounted for under equity
method.
Note 6: Giantplus’board of directors resolved to dispose of the shares of Advanced Touch Optics Technology (Samoa) Inc., and completed the transaction in December
2013. The proceeds amounted to HK$5,000 thousand.
(b) Investments in associates:
The carrying amount of investments accounted for using the equity method for which were published price quotations amounted to NTD
5,611,995 thousand, NTD 9,956,625 thousand and NTD 9,919,312 thousand, as of 31 December 2013, 31 December 2012 and 1 January 2012,
respectively. The fair value of these investments were NTD 3,529,425 thousand, NTD 8,978,439 thousand and NTD 5,882,952 thousand, as of
31 December 2013, 31 December 2012 and 1 January 2012, respectively.
The balances of certain investments accounted for under the equity method that were audited by other independent accountants were
NTD 5,742,420 thousand, NTD 9,106,792 thousand and NTD 9,993,303 thousand as of December 31, 2013, December 31, 2012 and January 1,
2012, respectively.
Please refer to note 8 on investment in the associate was pledged.
The following table illustrates summarized financial information of the Group’s investment in associate:
As at
31 December 2013
31 December 2012
1 January 2012
Total assets (100%)
$35,393,521
$52,862,591
$62,153,184
Total liabilities (100%)
$14,193,280
$22,409,716
$32,843,994
For the years ended 31 December
2013
2012
Revenue (100%)
$58,003,097
$80,523,344
Profit (loss) (100%)
$4,051,843
$1,277,700
(c) Investments in jointly controlled entities
The Group’s share of the assets, liabilities, income and expenses which are accounted for using the equity method in the consolidated
financial statements, are as follows:
(Unit:Baht Thousand)
As at
31 December 2013
31 December 2012
1 January 2012
Share of the jointly controlled entity’s balance sheet:
Current assets
Non-current assets
Current liabilities
$514,611
$8,269
$32,079
96,041
115,670
36,009
9,004
10,524
8
-
-
-
Non-current liabilities
2013
2012
Share of the jointly controlled entity’s income and expenses:
Revenue
$(10,826)
$10,207
(3,786)
(5,381)
4,577
23
Profit(Loss) before tax
(10,035)
4,849
Income tax expense
(797)
-
$(10,832)
$4,849
$-
$-
Operating expenses
Non-operating revenue & expenses
Net Income(Loss)
Other comprehensive income
The Group has not provided any guarantee for its jointly controlled entities.
118
Financial Overview
(12) Property, plant and equipment
(a) The details of property, plant and equipment are as follows:
Land
and land
Improvements
Construction
in progress
Office
Transportation Leased assets Leasehold
and
equipment equipment
improvements equipment
awaiting
examination
Buildings
Machinery
and
equipment
$24,919,723
$44,558,907
$158,621,124
$2,767,510
$577,382
$168,985
$4,826,650
$5,000,760
Additions
80,618
404,079
1,021,148
208,457
17,273
-
83,156
1,751,243
1,238,156
4,804,130
Disposals
-
(56,822)
(314,803)
(59,699)
(161,729)
(1,617)
(534,984)
(6,453)
(576,317)
(1,712,424)
(7,429)
1,680,451
1,879,046
44,794
5,592
27,328
17,897
(1,543,957)
292,221
2,395,943
346,867
3,579,518
6,292,433
462,488
10,608
-
274,466
22,195
76,975
11,065,550
Disposals of subsidiaries
-
(1,196,650)
(2,371,085)
(96,986)
(9,909)
-
(50,189)
-
(370,536)
(4,095,355)
As of 31 December 2013
$25,339,779
$48,969,483
$165,127,863
$3,326,564
$439,217
$194,696
$4,616,996
$5,223,788
$48,112,661
$301,351,047
As at 1 January 2012
$24,754,051
$44,409,281
$158,013,418
$2,768,600
$644,126
$531,955
$4,946,074
$4,188,972
$43,999,154
$284,255,631
Additions
68,123
231,403
1,021,522
117,586
12,638
20,535
569,869
2,219,640
2,252,831
6,514,147
Disposals
-
(246,365)
(689,108)
(56,090)
(54,482)
(541)
(9,344)
-
(399,604)
(1,455,534)
97,549
164,588
275,292
(62,586)
(24,900)
(382,964)
(679,949)
(1,407,852)
1,599,781
(421,041)
$24,919,723
$44,558,907
$158,621,124
$2,767,510
$577,382
$168,985
$4,826,650
$5,000,760
$(13,751,345) $(133,238,632)
$(2,237,852)
$(429,322)
$(100,247)
$(1,489,345)
Other
Equipment
Total
Cost:
As of 1 January 2013
Other changes (Note)
Acquisitions through
business combinations
Other changes
(Note)
As of 31 December 2012
$47,452,162 $288,893,203
$47,452,162 $288,893,203
Depreciation and
impairment:
As at 1 January 2013
$-
$- $(36,618,934) $(187,865,677)
Depreciation
-
(1,406,446)
(7,872,835)
(169,917)
(61,649)
(21,298)
(421,544)
-
(3,187,352)
(13,141,041)
Disposals
-
52,667
281,646
55,424
145,305
1,469
25,062
-
919,815
1,481,388
Other changes (Note)
-
(1,704,799)
(261,566)
(209,289)
11,045
(1,039)
178,282
-
(888,812)
(2,876,178)
Acquisitions through
business combinations
-
(1,244,049)
(4,691,945)
(270,238)
(8,500)
-
(116,973)
-
(64,269)
(6,395,974)
Disposals of subsidiaries
-
358,265
1,392,068
80,928
5,563
-
29,774
-
201,062
2,067,660
As of 31 December 2013
$-
$(17,695,707) $(144,391,264)
$(2,750,944)
$(337,558)
$(121,115)
$(1,794,744)
$- $(39,638,490) $(206,729,822)
As at 1 January 2012
$-
$(12,338,158) $(124,141,474)
$(2,634,086)
$(445,794)
$(197,497)
$(1,008,403)
$- $(30,650,807) $(171,416,219)
Depreciation
-
(1,459,279)
(9,535,567)
(190,179)
(58,317)
(42,322)
(514,047)
-
(4,276,008)
(16,075,719)
Disposals
-
70,760
324,227
54,849
16,273
541
31,886
-
188,400
686,936
Other changes (Note)
-
(24,668)
114,182
531,564
58,516
139,031
1,219
-
(1,880,519)
(1,060,675)
$(13,751,345) $(133,238,632)
$(2,237,852)
$(429,322)
$(100,247)
$(1,489,345)
As of 31 December 2012
$-
$- $(36,618,934) $(187,865,677)
Net carrying amount as at:
31 December 2013
$25,339,779
$31,273,776
$20,736,599
$575,620
$101,659
$73,581
$2,822,252
$5,223,788
$8,474,171
$94,621,225
31 December 2012
$24,919,723
$30,807,562
$25,382,492
$529,658
$148,060
$68,738
$3,337,305
$5,000,760
$10,833,228
$101,027,526
1 January 2012
$24,754,051
$32,071,123
$33,871,944
$134,514
$198,332
$334,458
$3,937,671
$4,188,972
$13,348,347
$112,839,412
Note:
119
Other changes including transfer from advance payments in equipment, changes in exchange rates, reclassification, impairment losses and changes in the
combined effects of the individual.
TATUNG 2012 Annual Report
Financial Overview
a. Capitalized borrowing costs of property, plant and equipment are as follows:
For the years ended 31 December
Item
Construction in progress
Capitalisation rate of borrowing costs
2013
2012
$279,659
$-
5.48%~8.00%
-
b. Components of buildings, including main building structure, electronic engineering, electrical engineering, fire engineering, air
conditioning units and elevators, which are depreciated by useful lives.
c. Leased assets under finance leases are pledged solely as security for the bank loans.
d. Please refer to Note 8 for more details on property, plant and equipment under pledge.
e. Certain consolidated subsidiaries of the Group located in Wujiang, Jiansu entered into agreements and property demolition
resettlement compensation contracts with Development General Company of Wujiang Economic Technological Development
Zone(“Headquarters”) and agreed to relocate to other places by 2014, while the Headquarters will compensate each subsidiary
for the resettlement. Pursuant to the agreement, the Group will receive NTD 1,954,956 thousand (RMB399,906 thousand) in return as
compensation. Since the relocation work was not completed, the Group had recorded an net amount of NTD 902,945 thousand
(RMB$184,706 thousand) under advance receipts for the compensation that they had received and related relocation expenses that
occurred as of 31 December 2013.
f. In the year ended 31 December 2013, impairment losses of certain property, plant and equipment, and prepayments for equipment
were NTD 1,339,042 thousand and NTD 32,785 thousand, respectively, which were written down to the recoverable amount. This
has been recognized in the statement of comprehensive income. The recoverable amount was based on value in use and was
determined at the level of the cash generating unit. The projected cash flows that were used to calculate value in use reflected the
demand for products and services. In determining value in use for the cash-generating unit, the cash flows were discounted at a rate of
12.40~15.06% on a pre-tax basis.
(b) The related fixed assets transactions between the Company and Tatung University are summarized as follows:
a. With respect to the dispute concerning Shan-Chih Hall and New-De-Hui Building, according to the arbitration award made by the
Arbitration Association on June 2, 2010, the ownership of the aforementioned buildings belonged to Tatung University. Tatung University
was ordered to pay NTD 794,772 thousand plus interest to the Company for the construction costs of the two buildings. Tatung University
paid the full payment of NTD 839,775 thousand to the Company on February 10, 2011.
Since the Company has lost the prescriptive rights, and Tatung University had claimed the counterplea for prescriptive rights in the
arbitration, the Company wouldn’t be entitled to monetary claims if it takes legal actions against Tatung University. In addition,
the Company has already taken advantage of substantial benefits from the cooperation of both parties. On June 12, 2012, the
shareholders’ meeting resolved that the Company shall discontinue the actions against Tatung University in matters relating to the real
estate issues and the related expenses.
b. In order to obtain parcels of lands with lot numbers No. 207 et al. of Niu-Pu Section, on December 26, 1968, the Company entered into a
contract with Tatung University by paying off NTD 116,207 thousand in advance. However as the Company failed to pay the remaining
amount of consideration, the title remained with Tatung University. Since this event happened 40 years ago and obviously the contract
had expired, the Company had written off the prepayment of NTD 116,207 thousand as Non-operating expense—Other losses account
in 2004. However, the Ministry of Education hoped that Tatung University can resort to other judicial means than an arbitration to resolve
this dispute. As stated in the letter dated August 12, 2011 from Tatung University, according to its board meeting resolution dated July
4, 2011, Tatung University would not be participating in the arbitration process. On June 12, 2012, the shareholders’ meeting resolved
that the Company shall discontinue the actions against Tatung University in matters relating to the real estate issues and the related
expenses.
c. In 1972, the Company and Tatung University co-built the Experiment Building and Engineering Building located on Tatung University
campus. Accordingly, Tatung University applied to the Ministry of Education to register the ownership of the aforementioned buildings.
However, based on conservatism and prudent accounting considerations, the Company had decided to write off the amount
capitalized to non-operating expense – other losses in 1996. The Company filed an application to the Arbitration Association of the
Republic of China for resolution of the matter on July 26, 2010. However, the Ministry of Education hoped that Tatung University can
resort to other judicial means than an arbitration to resolve this dispute. As stated in the letter dated August 12, 2011 from Tatung
University, according to its board meeting resolution dated July 4, 2011, Tatung University would not be participating in the arbitration
process. On June 12, 2012, the shareholders’ meeting resolved that the Company shall discontinue the actions against Tatung University
in matters relating to the real estate issues and the related expenses.
(c) As of December 31, 2010, the carrying amount of New-She-Gong Building was NTD 149,784 thousand. As of the issue date of the audit
report, the ownership registration is still in progress, however, pursuant to R.O.C. Civil Code, the ownership belongs to the Company.
Execution of specific development plan
The Company and Tatung University have not yet reached a consensus for overall development strategy. When they do, the two parties
will then appoint a consultancy company to provide feasibility studies on the overall development strategy of the whole case based on
the analog configuration of the buildings.
(d) The Company built De-Hui Building which was booked in SCAD for the use by Tatung University and Tatung High School. However, the title
was not transferred to the Company, and the title remained with Tatung University and Tatung High School. Both sides filed applications
to the Arbitration Association of the Republic of China for resolution of the matter. However, the Ministry of Education hoped that Tatung
University may resort to other judicial means than arbitration to resolve this dispute. As stated in the letter dated August 12, 2011 from
Tatung University, according to the board meeting resolution dated July 4, 2011, Tatung University will not be participating in the arbitration
process. Moreover, the Shang-chih Building, Operating Building, Experiment Building’s maintenance expense and Engineering Building’s
maintenance have similar disputes. On June 12, 2012, the shareholders’ meeting resolved that the Company shall discontinue the actions
against Tatung University in matters relating to the property issues and the related expenses. Accordingly, the Company wrote off the
balances of the related property of NTD 169,258 thousand as non-operating expense.
120
Financial Overview
(13) Investment property
Land
Buildings
Total
Cost:
102.1.1
$9,564,653
$1,265,627
$10,830,280
-
2,502
2,502
31 December 2013
$9,564,653
$1,268,129
$10,832,782
1 January 2012
$9,562,218
$1,264,964
$10,827,182
2,435
663
3,098
$9,564,653
$1,265,627
$10,830,280
$-
$(290,461)
$(290,461)
-
(39,453)
(39,453)
31 December 2013
$-
$(329,914)
$(329,914)
1 January 2012
$-
$(250,412)
$(250,412)
-
(40,049)
(40,049)
$-
$(290,461)
$(290,461)
31 December 2013
$9,564,653
$938,215
$10,502,868
31 December 2012
$9,564,653
$975,167
$10,539,820
1 January 2012
$9,562,218
$1,014,552
$10,576,770
Additions from subsequent expenditure
Others
31 December 2012
Depreciation and impairment:
102.1.1
Depreciation
Depreciation
31 December 2012
Net carrying amount as at:
2013
2012
Rental income from investment property
$197,642
$118,846
Less:Direct operating expenses from investment property generating rental income (not
including depreciation)
(44,088)
(40,980)
Direct operating expenses from investment property not generating rental income (not
including depreciation)
-
-
$153,554
$77,866
Total
No investment property was pledged.
The fair values of investment properties were NTD 13,186,267 thousand, NTD 11,089,378 thousand, and NTD 10,745,538 thousand as at 31
December 2013, 31 December 2012, and 1 January 2012, respectively. The fair value has been determined based on valuations performed by
an independent. The valuation method used is direct capitalized method, and the inputs used are as follows:
31 December 2013
Discount rate
Growth rate
121
31 December 2012
1 January 2012
1.248%~3.03%
1.248%~3.03%
1.248%~3.03%
0.2%~5%
0.2%~5%
0.2%~5%
TATUNG 2012 Annual Report
Financial Overview
(14) Intangible assets
Patents and
licences
Goodwill
Computer
software
Others
Total
Cost:
102.1.1
$314,781
$5,186,041
$648,012
$16,594
$6,165,428
Addition-acquired separately
-
128,161
125,848
67,367
321,376
Disposals
-
-
(93,320)
-
(93,320)
Acquisitions through business combinations
-
-
113,085
212,163
325,248
Exchange differences
-
896
(3,785)
(6,952)
(9,841)
Other
-
(907,800)
(330,824)
-
(1,238,624)
Disposals of subsidiary
-
-
(822)
-
(822)
31 December 2013
$314,781
$4,407,298
$458,194
$289,172
$5,469,445
1 January 2012
$314,781
$4,227,461
$450,645
$28,690
$5,021,577
Addition-acquired separately
-
1,424,102
195,748
-
1,619,850
Disposals
-
(646,089)
(237,204)
(445)
(883,738)
Exchange differences
-
180,567
227,007
(11,651)
395,923
Other
-
-
11,816
-
11,816
$314,781
$5,186,041
$648,012
$16,594
$6,165,428
$-
$3,066,802
$430,607
$2,246
$3,499,655
Amortization
-
799,823
211,884
17,539
1,029,246
Impairment
-
-
-
-
-
Disposals
-
-
(51,489)
-
(51,489)
Acquisitions through business combinations
-
-
51,338
-
51,338
Exchange differences
-
172
(5,717)
-
(5,545)
Other
-
(907,800)
(353,745)
-
(1,261,545)
$-
$2,958,997
$282,878
$19,785
$3,261,660
$-
$2,698,725
$243,870
$11,651
$2,954,246
Amortization
-
752,962
193,613
2,246
948,821
Disposals
-
(585,266)
(225,885)
-
(811,151)
Exchange differences
-
200,381
218,696
(11,651)
407,426
Other
-
-
313
-
313
$-
$3,066,802
$430,607
$2,246
$3,499,655
31 December 2013
$314,781
$1,448,301
$175,316
$269,387
$2,207,785
31 December 2012
$314,781
$2,119,239
$217,405
$14,348
$2,665,773
1 January 2012
$314,781
$1,528,736
$206,775
$17,039
$2,067,331
31 December 2012
Amortization and impairment:
102.1.1
31 December 2013
Amortization and impairment:
1 January 2012
31 December 2012
Net carrying amount as at:
122
Financial Overview
Amortization expense of intangible assets under the statement of comprehensive income:
Operating costs
Operating expense (including research and development costs)
2013
2012
$68,380
$114,623
$960,866
$834,198
(15) Other non-current assets
31 December 2013
Long-term prepaid rent
31 December 2012
1 January 2012
$853,090
$703,184
$949,354
753,092
536,089
677,260
1,915,543
2,672,044
3,568,183
Refundable deposits
500,766
592,994
632,839
Other non-current assets - other
529,877
425,620
553,833
$4,552,368
$4,929,931
$6,381,469
Advance payments in equipment
Advance payments in materials
Total
Long-term prepaid rents are for land use rights.
Among the above other non-current assets – other, some lands and land prepayment in the amount of NTD 110,497 thousand were held
temporarily under third parties because of regulatory or other reasons as of 31 December 2013, 2012 and 1 January 2012. In order to secure the
Group’s right over the lands, the Group have been adopting possible means, including having the lands pledged to the Group.
(16) Long-term receivables-net
31 December 2013
Tatung InfoComm Co., Ltd.
Others
Total
31 December 2012
1 January 2012
$557,980
$557,980
$-
25,415
92,725
46,436
$583,395
$650,705
$46,436
On March 30, 2012, the Company entered into a share purchase contract with Vee Telecom Multimedia Co., Ltd. Under the contract, the
Company would sell all of its shares of its subsidiary, Tatung InfoComm Co., Ltd., to Vee Telecom Multimedia Co., Ltd., Moreover, the original
amount of NTD 557,980 thousand that the Company has financed to Tatung InfoComm Co., Ltd will be repaid by Tatung InfoComm co., Ltd. in
five years. For the first two years, the interests will be paid quarterly at 2%. In the third year, the interests and principals of NTD 15,000 thousand
would be paid quarterly. In the fourth year, the interests and principals of NTD 30,000 thousand would be paid quarterly. In the fifth year, the
interests and principals would be paid quarterly in equal installments.
(17) Short-term loans
Interest Rates (%)
31 December 2013 31 December 2012
1 January 2012
Unsecured bank loans
1.08%~6.60%
$36,377,607
$29,402,184
$25,756,980
L/C loans
0.94%~4.71%
1,436,597
2,464,017
4,484,062
Short-term loans in foreign currency
0.97%~6.90%
1,908,050
1,177,680
3,694,465
Secured bank loans
1.56%~5.52%
630,710
5,093,119
6,307,583
40,352,964
38,137,000
40,243,090
20,770
33,205
74,209
$40,373,734
$38,170,205
$40,317,299
Subtotal
Due to employees
Total
0.92%~1.70%
The Group’s unused short-term lines of credits amounted to NTD 15,156,162 thousand, NTD 14,072,706 thousand, and NTD 16,329,635 thousand,
as at 31 December 2013, 31 December 2012, and 1 January 2012, respectively.
Please refer to Note 8 for more details on available-for-sale financial assets and property, plant and equipment pledged as security for shortterm borrowings.
123
TATUNG 2012 Annual Report
Financial Overview
(18) Short-term notes and bills payable
Guarantors
Interest Rates (%)
Unsecured domestic bills payable
0.85%~6.05%
31 December 2013 31 December 2012
Less: Unamortized discount
Net
1 January 2012
$4,946,413
$1,555,040
$700,000
(4,825)
(3,346)
(1,083)
$4,941,588
$1,551,694
$698,917
(19) Financial liabilities at fair value through profit or loss - current
31 December 2013
31 December 2012
1 January 2012
Designated financial liabilities at fair value through profit or loss:
Derivatives financial liabilities
$320,959
$-
$-
320,959
-
-
Foreign currency option
$9,346
$-
$-
Foreign exchange forward contracts
16,793
109,031
10,196
2,998
-
10,328
-
-
746,709
29,137
109,031
767,233
$350,096
$109,031
$767,233
Current
$29,137
$109,031
$767,233
Non-current
320,959
-
-
$350,096
$109,031
$767,233
Subtotal
Held for trading:
Derivatives not designated as hedging Instruments
Embedded derivatives
Equity swap
Subtotal
Total
Total
CPT entered into a voting trust agreement with Xiamen Xinhui Co. Ltd (hereinafter referred to as Xiamen Xinhui Co. Ltd) on 6 November 2013 to
entrust Xiamen Xinhui Co. Ltd to exercise voting rights of the 41,977,942 shares of Xiamen Overseas Chinese Electronic Co., Ltd. (“XOCE”) it holds.
In addition, to implement risk management, CPT also entered into a shareholding corporation agreement with Xiamen Xinhui Co. Ltd. Pursuant
to the agreement, Xiamen Xinhui Co. Ltd provided market value management services based on XOCE’s underlying 104,761,903 shares. On 31
December 2015, if the projected market value of the underlying shares is higher than the target value of the shares, CPT shall pay Xiamen Xinhui
Co. Ltd 40% of the total difference as service fee; and CPT charges Xiamen Xinhui Co. Ltd 40% of the total different as compensation if vice
versa. Therefore, the shares CPT entrusted Xiamen Xinhui Co. Ltd to exercise voting rights were recognized under financial assets at fair value
through profit or loss in the amount of NTD 783,783 thousand. And an amount of NTD 320,959 thousand resulting from the derivatives factor
embedded in the market value management service agreement was recognized under financial liabilities at fair value through profit or loss.
(20)Long-term deferred revenue
(a) Government grants
2013
2012
Beginning balance
$77,730
$461,323
Received during the period
194,083
28,110
(5,715)
(409,482)
87
(2,221)
$266,185
$77,730
Released to the statement of comprehensive income
Exchange differences
Ending balance
Non-current deferred revenue - government grants
related to assets
31 December 2013
31 December 2012
1 January 2012
$266,185
$77,730
$461,323
124
Financial Overview
Government grants have been received for the purchase of certain items of property, plant and equipment and to be amortized during
the useful life of the acquired assets.
(b) Intercompany transactions
2013
Beginning balance
Released to the statement of comprehensive income
Business combination-settlement of existing relationship
Ending balance
31 December 2013
Current
$265,195
$271,088
(2,947)
(5,893)
(262,248)
-
$-
$265,195
31 December 2012
1 January 2012
$-
$5,893
$5,893
-
259,302
265,195
$-
$265,195
$271,088
Non-current
Total
2012
(21) Bonds payable
The Company
31 December 2013
The second domestic secured convertible bonds payable
31 December 2012
1 January 2012
$-
$762,400
$762,400
4,470,750
4,356,000
4,543,500
Less: discount on the second domestic secured convertible
bonds payable
-
-
(44,845)
Discount on the first overseas secured convertible
bonds payable
(98,280)
(378,967)
(581,885)
-
(762,400)
-
4,372,470
3,977,033
4,679,170
(4,372,470)
-
(717,555)
Bonds payable, net of current portion
$-
$3,977,033
$3,961,615
Embedded derivatives (Note 1)
$-
$-
$-
The first overseas secured convertible bonds payable
Repayment
Subtotal
Less: current portion
CPT
Liability component:
31 December 2013
Domestic unsecured convertible bond payable
Less: discount on bonds payable
Subtotal
Less: current portion
Bonds payable, net of current portion
Equity component (Note 1)
125
31 December 2012
1 January 2012
$1,500,000
$1,500,000
$1,500,000
(35,901)
(95,460)
(152,595)
1,464,099
1,404,540
1,347,405
(1,464,099)
-
-
$-
$1,404,540
$1,347,405
$175,710
$175,710
$175,710
TATUNG 2012 Annual Report
Financial Overview
Giantplus
Liability component:
31 December 2013
Domestic convertible bond payable
$85,400
Less: discount on bonds payable
(3,532)
Subtotal
81,868
Less: current portion
(81,868)
Bonds payable, net of current portion
$-
Embedded derivatives
$(2,997)
Equity component (Note 1)
$6,296
SCSC
Liability component:
31 December 2013
31 December 2012
1 January 2012
The first domestic unsecured convertible bonds payable (Note 3)
$-
$-
$293,400
Less: discount on first domestic unsecured convertible bonds
payable
-
-
(12,055)
Subtotal
-
-
281,345
Less: current portion (Note 2)
-
-
(281,345)
Bonds payable, net of current portion
$-
$-
$-
Embedded derivatives (Note 1)
$-
$-
$10,328
Less: current portion (Note 2)
-
-
(10,328)
Embedded derivatives, net of current portion
$-
$-
$-
Equity component
$-
$-
$14,918
Note 1: Including the conversion option value, bondholder’s put option value, the entity’s call option value and the entity’s reset value.
Note 2: On or at any time 2 years after the issue date, bondholders have the right to require SCSC to redeem the bonds. Therefore, SCSC reclassified the balances of
convertible bonds and the related embedded derivatives as of 1 January 2012 and 31 December 2012 to current liabilities.
Note 3: From October to December 2012, all of the first domestic unsecured convertible bonds of SCSC have been transferred or redeemed.
The Company
A. On 10 December 2007, the Company issued second domestic zero secured convertible bonds. The terms and conditions of the bonds are
as follows:
(a) Issue Amount: NTD 2,500,000 thousand, each with a face value of NTD 100 thousand, issued at par value.
(b) Period: from 10 December 2007 to 10 December 2012
(c) Guarantors: China Development Industrial Bank. According to the contract, the Company has provided some stocks to China
Development Industrial Bank as security . As of 31 December 2013 and 2012, and 1 January 2012, the Company has provided 0
thousand shares, 0 thousand shares, and 187,190 thousand shares of Chunghwa Picture Tubes Ltd., 0 thousand shares, 0 thousand
shares, and 18,400 thousand shares of Forward Electronics Co., Ltd., and 0 thousand shares, 0 thousand shares and 24,000 thousand
shares of Tatung System Technologies Inc. to China Development Industrial Bank.
(d) Conversion:
i. Underlying securities: The Company’s Common shares.
The Company will issue common shares for conversion.
ii. Conversion Period: Except for the closed period, bondholders may convert the bonds to the Company’s common shares during a
period 30 days after the issuance and 10 days before the maturity.
iii. Conversion Price and Adjustment: The conversion price is NTD 19.75 per share according to the issue terms. The applicable
conversion price will be subject to adjustment upon the occurrence of certain events set out in the indenture. The conversion price
was adjusted to NTD 18.49 per share, NTD 15.80 per share, and NTD 14.11 per share on 11 June 2008, and 5 January 2009, and 2
October 2009, respectively. The conversion price was again adjusted to NTD 33.49 per share on 10 February 2011
(e) Redemption:
i. On or at any time 30 days after the issue date and 40 days prior to the maturity date, if the closing price of the Company’s share
on TSE has been at least 150% of either the conversion price or the last adjusted conversion price, for 30 consecutive days, the
Company may redeem all, but not some of the bonds.
ii. If at least 90% principal of the bonds have already been redeemed, repurchased, cancelled or converted, at any time on or after
30 days after the issue date and 40 days prior to the maturity date, the Company may redeem all, but not some of the bonds.
126
Financial Overview
B.
127
(f) On 10 December 2010, the bondholders have the right to
require the Company’s underwriter to redeem the bonds
at a price equal to par value of the principal amount.
As of 31 December 2012, the Company has redeemed all
of the bonds.
The second domestic secured conver tible bonds
mentioned above reached maturity on 10 December
2012 and had been terminated of trading. (Please refer to
M.O.P.S)
On 25 March 2011, the Company issued first overseas zero
coupon secured convertible bonds. The terms and conditions
of the bonds are as follows:
(a) Issue Amount: USD150,000 thousand, each with a face
value of USD100 thousand, issued at par value.
(b) Period: from 25 March 2011 to 25 March 2014.
(c) Guarantors: J.P. Morgan
(d) Conversion:
i. Underlying securities: The Company’s common shares.
The Company will issue common shares for conversion.
ii Procedure: The bondholders may, after having
provided the conversion notice required under the trust
deed and other documents or certificates required by
R.O.C. laws and regulations, apply for conversion of the
bonds with the conversion agent located outside the
R.O.C..
The issuer will deliver the relevant shares through bookentry transfer to an account registered in the name
of the converting holder or its local agent at Taiwan
Depositary & Clearing Corporation (”TDCC”) within five
business days after receipt of the conversion notice;
if the converting bondholder is overseas Chinese or
non-ROC citizen and has not opened an account
with the TDCC pursuant to applicable R.O.C. laws and
regulations, the issuer will transfer such common shares
after such account has been set up by the bondholder.
iii. Conversion Period: Except for bonds that have
previously been redeemed or repurchased or except
during the closed period (as defined below), the
bondholders shall have the right to request the issuer
to convert the bonds into common shares pursuant to
applicable laws and regulations and the indenture at
any time during the period starting from the 41st day
after the issuance of the bonds and ending on the
date 10 days prior to the maturity date. For purposes
hereof, the “closed period” shall include:
1 The period of sixty days prior to the date of annual
shareholders’ meeting, and the period of thirty days
prior to the special shareholders’ meeting.
2 The period starting on the 15th trading day prior to the
first day of any closure period (i.e. the period during
which Tatung’s shareholders’ registeration is closed)
for determining shareholders entitled to receive stock
or cash dividends or subscription of new shares in a
capital increase for cash to the relevant record date.
3 In the event of capital reduction of Tatung, the period
from the record date for such capital reduction to one
day prior to the trading of the shares reissued after the
capital reduction.
4 Such other periods during which Tatung may be
required to close its shareholders’ registeration pursuant
to the ROC laws and TWSE rules.
iv. Conversion Price and Adjustment: The conversion price
shall initially be NTD 7.74. The conversion price will be
adjusted to NTD 18.3711 on share relisting date.
After the issuance of the bonds, the Conversion Price
shall be adjusted in accordance with the following
anti-dilution formula:
1 After the issuance of the bonds, upon the occurrence
of any event which will increase the number of the
issued common shares of the issuer (including, but not
limited to, issue of new shares in a capital increase for
cash (including the shares issued by way of private
placement), recapitalization of retained earnings or
capital surplus, issue of employee bonus shares, stock
splits, issue of new shares to sponsor the issue of global
depositary receipts and any other events specified in
the indenture), and where the consideration per share
receivable by the issuer is less than the market value
per common share (as defined in the indenture), the
conversion price shall be adjusted in accordance
with following formula (subject to the provisions of the
indenture). The adjustment of the conversion price shall
be made downwards, not upwards, to the nearest
cent of a dollar. Adjusted Conversion Price = Then
Conversion Price × [ENS+(NNS × PNI)/P]/ [ENS+NNS].
ENS = Number of shares outstanding before issue (Note
1); NNS = Number of new shares to be issued; PNI =
Per share offering price of the new issue (Note 2); P =
Market Value per Common Share (as defined in the
Indenture) on relevant record date.
Remark 1: ENS means the number of total issued and
outstanding common shares (including the common
shares issued by way of private placement), minus
the number of treasury shares which have been
repurchased by the issuer but have not been cancelled
or transferred.
Remark 2: In the event of free distribution of shares or
stock splits, PNI shall be zero.
2 The conversion price shall not be adjusted in the
event of capital reduction for cancellation of treasury
shares of the Issuer. After the issuance of the bonds,
upon the occurrence of any capital reduction (other
than capital reduction for cancellation of treasury
shares) which will decrease the number of the issued
common shares of the issuer, the conversion price shall
be adjusted in accordance with following formula,
effective on the record date of such capital reduction:
Adjusted Conversion Price = Then Conversion Price ×
Number of outstanding shares before capital reduction
(Note 1) Number of outstanding shares after capital
reduction.
Remark 1: “Outstanding shares” means the number of
total issued and outstanding common shares (including
the common shares issued by way of public offering
and private placement), minus the number of treasury
shares which have been repurchased by the Issuer but
have not been cancelled or transferred.
3 After the issuance of the bonds, if the issuer shall
distribute any cash dividends or other form of cash to
its shareholders, subject to the criteria in the indenture,
the conversion price shall be adjusted in accordance
with the following formula: (adjustment method should
be subject to detailed terms in the Indenture. The
conversion price shall be adjusted downward, not
upward, and made to the nearest cent of a dollar)
Adjusted conversion Price = Then Conversion Price x [1(C/P)] C = Amount of cash per share; P = Market Value
per Common Share (as defined in the Indenture).
4 After the issuance of the bonds, upon the occurrence
of certain dilutive or other analogous events as
specified in the indenture, the conversion price shall
also be adjusted in the manner as prescribed in the
indenture.
(e) The issuer will redeem the bonds which are not redeemed
before the maturity date, or required and cancelled, or
converted, at a price equal to par value of the principal
amount upon maturity.
(f) Redemption:
i. The issuer may redeem the bonds, before the maturity
date, in whole or in part at any time after the first
anniversary of the issue date at 100% of the principal
amount, if the closing price of the common shares
of Tatung traded on TWSE (translated into U.S. dollars
at the then prevailing exchange rate on the relevant
trading day) on each trading day during a period of
20 consecutive trading days reaches 130% or above of
the then applicable conversion price (translated into
U.S. dollars at a fixed exchange rate determined on the
pricing date).
ii. The issuer may redeem all of the outstanding bonds at
100% of the principal amount, in the event that more
than 90% of the bonds have been cancelled after
being redeemed, repurchased or converted.
iii. If as a result of changes to the relevant tax laws and
regulations in the R.O.C., the issuer becomes obligated
to pay any additional taxes or other costs, the issuer
may redeem all of the outstanding bonds at 100%
TATUNG 2012 Annual Report
Financial Overview
of the principal amount pursuant to the terms of the
trust deed and the terms and conditions. Bondholders
may elect not to have their bonds redeemed but
with no entitlement to any additional amounts or
reimbursement of additional tax.
(g) Redemption at the option of the bondholders:
i. In the event that the common shares of Tatung cease
to be listed on the Taiwan Stock Exchange (”TWSE”),
each bondholder shall have the right to require the
issuer to redeem the bonds, in whole or in part, at 100%
of the principal amount of the bonds.
ii. In the event that a change of control as defined in the
trust deed and the terms and conditions of the bonds
occurs to the issuer, the bondholders shall have the
right to require the issuer to redeem the bonds, in whole
or in part, at 100% of the principal amount.
iii. The bondholders should follow the redemption
procedure as specified in the trust deed and the terms
and conditions when exercising the aforementioned
repurchase option. The issuer should follow the
redemption procedure as specified in the trust deed
and the terms and conditions when dealing with
bondholders’ redemption requests. The issuer will
redeem the bonds with cash on the payment date
as specified in the trust deed and the terms and
conditions.
As of 31 December 2013, there was no bond converted.
C. In accordance with IAS 39, the first overseas zero coupon
convertible bonds, consists of embedded derivatives, which
are recorded as financial assets at fair value through profit
or loss – noncurrent, and of pure bond values, which are
recorded as bonds payable.
CPT
On 19 July 2012, the Board of Directors of CPT has resolved to issue
first domestic private placement unsecured convertible bonds.
The terms and conditions of the bonds are as follows:
A. Amount: NTD 1,500,000 thousand.
B. Coupon rate: 0%
C. Duration: 2012.7.22 to 2014.7.22
D. Conversion:
(a) Conversion Period: E xcept for the closed period,
bondholders may convert the bonds to the Company’s
common stocks at any time.
(b) Conversion Price and Adjustment: The conversion price is
NTD 3.25 per share. The applicable conversion price will
be subject to adjustment upon the occurrence of certain
events set out in the indenture.
E. The method of compulsory conversion
CPT may convert the bonds into common stocks by notifying
the bondholders in writing, before the Maturity Date, in whole
or in part at any time after the first six months of the Issue
Date until seven days before the Maturity Date at 100% of the
principal amount, if the closing price of the common stocks
of CPT traded on TWSE on each trading day during a period
of 30 consecutive trading days reaches 100% or above of the
applicable Conversion Price.
As of 31 December 2013, there was no bond converted.
Giantplus
On 21 March 19 2011, Giantplus issued domestic unsecured
convertible bonds. The terms and conditions of the bonds are as
follows:
A. Amount: NTD 1,000,000 thousand.
B. Coupon rate: 0%
C. Duration: 2011.3.21 to 2016.3.31
D. Redemption at the option of the bondholders:
After 2 or 3 years after the issuance of the bonds, each
bondholder shall have the right to require the issuer to
redeem the bonds, in whole or in part, at 100.5% or 101.51% of
the principal amount of the bonds.
From 22 April 2011 to 9 February 2016, the issuer may redeem
the bonds, before the maturity date, in whole or in part at
any time after the first anniversary of the issue date at 100%
of the principal amount, if the closing price of the common
shares of Giantplus traded on each trading day during a
period of 30 consecutive trading days reaches 130% of the
then applicable conversion price or below of 10% of the total
conversion price of unconverted bonds.
Conversion:
Conversion Period: Except for the closed period, bondholders
may convert the bonds to the Company’s common stocks at
any time from 22 April 2011 to 11 May 2016.
F. Conversion Price and Adjustment:
The conversion price is NTD 23.2 per share. The applicable
conversion price will be subject to adjustment upon the
occurrence of certain events set out in the indenture.
G. Redeem upon maturity:
The issuer will redeem the bonds which are not settled at
a price equal to par value of the principal amount upon
maturity.
As of 31 December 2013, the total converted and redeemed
bonds was NTD 914,600 thousand and resulted in a gain of
NTD 1,483 thousand.
E.
SCSC
A. On 29 June 2010, the Board of Directors of SCSC has resolved
to issue first domestic unsecured convertible bonds. The terms
and conditions of the bonds are as follows:
(a) Issue Amount: NTD 1,000,000 thousand, each with a face
value of NTD 100 thousand, issued at par value.
(b) Coupon rate: 0%
(c) Duration:2010.10.4 to 2013.10.4
(d) Conversion:
Conversion Period: Except for bonds that have previously
been redeemed or repurchased or except during the
closed period (as defined below), the bondholders shall
have the right to request the issuer to convert the bonds
into common shares pursuant to applicable laws and
regulations and the indenture at any time during the
period starting from the 1st day after one month of the
issuance of the bonds and ending on the date 10 days
prior to the maturity date. For purposes hereof, the “closed
period” shall include:
1 The period starting on the 15th trading day prior to
the first day of any closure period for determining
shareholders entitled to receive stock or cash dividends
or subscription of new shares in a capital increase for
cash to the relevant record date.
2 In the event of capital reduction of SCSC, the period
from the record date for such capital reduction to one
day prior to the trading of the shares reissued after the
capital reduction.
3 Such other periods during which SCSC may be required
to close its shareholders’ register pursuant to the ROC
laws and TWSE rules.
4 Conversion Price and Adjustment: The conversion
price shall be set up based on a basic date which is
24 September 2010. The formula is taking the stock
price on the 1st business date, 3rd business date and
5th business date prior the basic date, and multiply by
104.8%. After the issuance of the bonds, the conversion
price shall be adjusted in accordance with the
formula. The conversion price shall initially be NTD 105.
The conversion price will be adjusted to NTD 91.72 on
share relisting date.
B. In accordance with IAS 39, the convertible bonds, consists
of embedded derivatives, which are recorded as financial
assets at fair value through profit or loss – noncurrent,
additional paid-in capital and of pure bond values, which
are recorded as bonds payable. The equity component
amounted to NTD 61,300 thousand and is recognized in
additional paid-in capital. The following change in fair value
is not recognized.
C. As of 31 December 2012 and 1 January 2012, SCSC’s
convertible bonds have been converted by NTD 1,000,000
thousand and NTD 704,200 thousand, respectively.
D. For 2012, SCSC’s recognized an amortization of discount
of bonds payable for NTD 5,033 thousand and loss from
financial at fair value through profit or loss for NTD 1,468
thousand, which were booked in finance cost and nonoperating income and expense – other income, respectively.
(22) Long-term loans
Details of long-term loans as of 31 December 2013, 31 December
2012 and 1 January 2012 are as follows:
128
Financial Overview
(a) The Company
31 December 2013
Lenders
31 December Interest rate
2013
(%)
Effective from 17 February 2011 to 17 February 2016. The first repayment
date is 2 years after the date of this agreement and interest is paid
monthly. Principal is repaid in 7 repayments. The 1st repayment is 20% of
amount drawn, the 2nd repayment is 10%, the following 4 repayments are
15% each, and the remaining repayment is 10% of principal.
Effective from 4 August 2011 to 27 July 2016. The first repayment date is
2 years after the date of this agreement and interest is paid monthly.
Principal is repaid in 6 semi-annually. Interest is paid monthly.
Effective 12 January 2013 to 11 January 2015. The principal will be repaid
upon maturity.
Effective 24 October 2013 to 24 October 2015. The principal will be repaid
upon maturity.
Effective 4 October 2013 to 4 October 2015. The principal will be repaid
upon maturity.
Effective 8 November 2013 to 8 November 2015. The principal will be
repaid upon maturity.
Effective 12 October 2013 to 6 December 2015. The principal will be
repaid upon maturity.
Effective 31 December 2013 to 31 December 2016.The principal will be
repaid upon maturity.
Effective 13 November 2013 to 13 May 2016. The 1st repayment of
principal is in 6 months after first draw. The remaining principal is repaid
in 5 semi-annually payments. The last repayment is no longer than 2 year
and 6 months after execution date of the loan agreement.
Effective 15 June 2007 to 15 June 2014. The 1st repayment of principal is
in 36 months after loaned. The remaining principal is repaid in 2 annually
payments. The 1st repayment will be one of third and the remaining will
be repaid in the 2nd payment.
Effective 15 January 2010 to 15 December 2014. The 1st repayment of
principal is in 36 months after first draw. The remaining principal is repaid
in 3 semi-annually payments. The 1st and 2nd repayments will be both at
20%and the remaining 60% will be repaid in the 3th repayment.
Effective 16 September 2013 to 19 September 2016. The 1st repayment of
principal is in 18 months after first draw. The remaining principal is repaid
in 4 semi-annually repayments. The 1st to 3rd payments will be 10%and
the remaining 70% will be repaid in the 4th repayment.
Effective 28 October 2013 to 28 October 2015. The 1st repayment of
principal is in 18 months after first draw. The remaining principal is repaid
in 3 quarterly payments. The 1st and 2nd repayments will decrease the
credit by 30% each, and the remaining 40% will be repaid in the 3rd
repayment.
Secured Long-term loans from King's
Town Bank
$480,000
2.6700
Secured long-Term loans from Bank of
Taiwan
450,000
2.2950
Unsecured long-term loans from
Mega International Commercial Bank
Unsecured long-term loans from
Taishin International Bank
Unsecured long-term loans from
Chang Hwa Bank
Unsecured long-term loans from Hua
Nan Bank
Unsecured long-term loans from
Taiwan Cooperative Bank
Unsecured long-term loans from Far
Eastern International
1,400,000
2.2450
200,000
3.2000
1,000,000
2.3400
2,000,000
2.4150
1,300,000
2.3450
1,000,000
2.2400
300,000
2.3904
Secured Syndicated loans from Taishin
International Bank
$2,400,000
2.4905
Secured Syndicated loans from Taishin
Internation Bank
2,120,000
2.4905
Secured Syndicated loans from First
Bank
2,750,000
2.5432
Secured Syndicated loans from Bank
SinoPac
700,000
2.6617
Hua Nan Bank L/C loans (USD7,937
thousand)
Hua Nan Bank L/C loans (EUR 1,330
thousand)
Hua Nan Bank L/C loans (JPY1,690
thousand)
Chang Hwa Bank L/C loans (USD9,261
thousand)
Chang Hwa Bank L/C loans (JPY468
thousand)
Mega Bank L/C loans (USD12,861
thousand)
Hua Nan Bank secured loans in a
foreign currency (USD4,387 thousand)
Mega Bank secured loans in a foreign
currency (USD804 thousand)
Two-year loans due to stockholders
and employees
236,572
1.797~2.3784 Principal is repaid in 180 days after first draw.
54,649
1.5418~1.7191 Principal is repaid in 180 days after first draw.
480
1.2957 Principal is repaid in 180 days after first draw.
276,034
1.4228~1.78 Principal is repaid in 180 days after first draw.
133
1.3015 Principal is repaid in 180 days after first draw.
383,326
2.22~2.907 Principal is repaid in 180 days after first draw.
130,757
1.9027~1.9556 Principal is repaid in 180 days after first draw.
23,971
2.22 Principal is repaid in 180 days after first draw.
The Export-Import Bank Of the ROC
Subtotal
Less: unamortized issuing cost
18,163
17,224,085
(29,288)
17,194,797
Less: current portion
Total
129
Maturity date and terms of repayment
(4,828,163)
$12,366,634
TATUNG 2012 Annual Report
Financial Overview
31 December 2012
Lenders
Secured long-term loan from King's
Town Ban
Secured long-term loan from Bank of
Taiwan
Unsecured long-term loan from Mega
International Commercial Bank
Unsecured long-term loan from
Taishin International Bank
Unsecured long-term loan from
Chang Hwa Bank
Unsecured long-term loan from Hwa
Nan Bank
Unsecured long-term loan from
Taiwan Cooperative Bank
Unsecured long-term loan from Far
Eastern International
31 December Interest rate
2012
(%)
Maturity date and terms of repayment
$850,000
Effective from 17 February 2011 to 17 February 2016. The first repayment
date is 2 years after the date of this agreement and interest is paid
2.67 monthly. Principal is repaid in 7 repayments. The 1st repayment is 20%,
the 2nd repayment is 10%, the following 4 repayments are 15%, and the
remaining repayment is 10% of principal.
450,000
Effective from 4 August 2011 to 27 July 2016. The first repayment date is
2.045 2 years after the date of this agreement and interest is paid monthly.
Principal is repaid in 6 semi-annually. Interest is paid monthly.
1,500,000
200,000
900,000
2,000,000
1,300,000
250,000
12 January 2012 to 1 January 2014. The principal will be repaid
2.245 Effective
upon maturity.
26 October 2011 to 31 October 2014. The principal will be repaid
3.94 Effective
upon maturity.
September 28, 2012 to 28 September 2014. The principal will be
2.315~2.34 Effective
repaid upon maturity .
2 May 2012 to 2 May 2014. The principal will be repaid upon
2.43 Effective
maturity.
4 June 2012 to 4 June 2014. The principal will be repaid upon
2.345 Effective
maturity.
22 September 2011 to 22 September 2013. The principal will be
2.345 Effective
repaid upon maturity.
3,600,000
Effective 15 June 2010 to 15 June 2014. The 1st repayment of principal is in
months after first draw. The remaining principal is repaid in 2 annually
2.6316 36
payments. The 1st repayment will be one of three repayments and the
remaining will be repaid in the 2nd payment.
Secured Syndicated loan from Taishin
International Bank
2,650,000
Effective 15 January 2010 to 15 December 2014. The 1st repayment of
is in 36 months after first draw. The remaining principal is repaid
2.6316 principal
in 3 semi-annually payments. The 1st and 2nd repayments will be both
20%,and the remaining 60% will be repaid in the 3th repayment.
Secured Syndicated loan from First
Bank
3,300,000
16 September 2008 to 16 September 2013. The principal will be
1.7105 Effective
repaid upon maturity.
Secured Syndicated loan from Bank
SinoPac
750,000
Effective 30 January 2012 to 30 January 2014. The 1st repayment of
2.6121 principal is in 15 months after first draw. The remaining principal is repaid
in 4 quarterly payments.
Hua Nan bank L/C loans (USD6,303
thousand)
183,029
1.5328~2.2199 Principal is repaid in 180 days after first draw.
25,977
0.9853~1.1193 Principal is repaid in 180 days after first draw.
Chang Hwa Bank L/C loans (USD11,750
thousand)
341,215
1.3552~1.6305 Principal is repaid in 180 days after first draw.
Mega Bank L/C loans (USD17,524
thousand)
508,884
1.7441~2.22 Principal is repaid in 180 days after first draw.
Hua Nan Bank secured loans in a
foreign currency (USD 2,381 thousand)
69,155
1.723~2.0613 Principal is repaid in 180 days after first draw.
Mega Bank secured loans in a foreign
currency (USD 10,253 thousand)
297,744
1.7442~2.252 Principal is repaid in 180 days after first draw.
Secured Syndicated loan s from
Taishin International Bank
Hua Nan bank L/C loans (EUR675
thousand)
Two-year loans due to stockholders
and employees
25,094
Subtotal
19,201,098
Less: current portion
(5,912,594)
Total
0.48~0.92
$13,288,504
130
Financial Overview
1 January 2012
Lenders
Secured long-term loan from King's
Town Bank
$1,150,000
Maturity date and terms of repayment
Effective from 17 February 2011 to 17 February 2016. The first repayment
date is 2 years after the date of this agreement and interest is paid
2.5 monthly. Principal is repaid in 7 repayments. The 1st repayment is 20%,
the 2nd repayment is 10%, the following 4 repayments are 15%, and the
remaining repayment is 10% of principal.
Secured long-term loan from Bank of
Taiwan
450,000
Effective from 4 August 2011 to 27 July 2016. The first repayment date is
2.045 2 years after the date of this agreement and interest is paid monthly.
Principal is repaid in 6 semi-annually. Interest is paid monthly.
Unsecured long-term loan from Mega
International Commercial Bank
1,700,000
12 January 2011 to1 January 2013. The principal will be repaid
2.145 Effective
upon maturity.
Unsecured long-term loan from
Chang Hwa Bank
950,000
Unsecured long-term loan from TC
Bank
400,000
31 October 2011 to 31 October 2013. The principal will be repaid
2.269~2.312 Effective
upon maturity.
26 January 2011 to 30 November 2012. The principal will be
2.3 Effective
repaid upon maturity.
Unsecured Long-Term Loan from Hua
Nan Bank
2,050,000
14 September 2011 to14 September 2013. The principal will be
2.34 Effective
repaid upon maturity.
Unsecured long-term loan from
Taiwan Cooperative Bank
1,300,000
16 April 2010 to 16 April 2012. The principal will be repaid upon
2.175 Effective
maturity.
300,000
22 September 2011 to 22 September 2013. The principal will be
2.25 Effective
repaid upon maturity.
Unsecured long-term loan from Far
Eastern International
3,600,000
Effective 15 June 2010 to 15 June 2014. The 1st repayment of principal is in
months after first draw. The remaining principal is repaid in 2 annually
2.6474 36
payments. The 1st repayment will be one of three repayments and the
remaining will be repaid in the 2nd payment.
Secured Syndicated loan from Taishin
International Bank
2,650,000
Effective 15 January 2010 to 15 December 2014. The 1st repayment of
principal is in 36 months after first draw. The remaining principal is repaid
2.6558 in 3 semi-annually payments. The 1st and 2nd
repayments will be 20%, and the remaining 60% will be repaid in the 3th
repayment.
Secured Syndicated loan from First
Bank
3,300,000
16 September 2008 to 16 September 2013. The principal will be
1.5695 Effective
repaid upon maturity.
Hua Nan bank L/C loans (USD4,905
thousand)
148,566
1.5856~2.7378 Principal is repaid in 180 days after first draw.
5,896
2.4411~2.4908 Principal is repaid in 180 days after first draw.
25,970
0.882~1.0954 Principal is repaid in 180 days after first draw.
Chang Hwa Bank L/C loans (USD7,272
thousand)
220,273
1.694~2.0752 Principal is repaid in 180 days after first draw.
Mega Bank L/C loans (USD17,101
thousand)
517,998
1.279~1.945 Principal is repaid in 180 days after first draw.
Hua Nan Bank secured loans in a
foreign currency (USD 7,439 thousand)
225,340
2.2199~2.6744 Principal is repaid in 180 days after first draw.
Mega Bank secured loans in a foreign
currency (USD8,726 thousand)
264,313
1.905~1.971 Principal is repaid in 180 days after first draw.
TC Bank secured loans in a foreign
currency (USD3,263 thousand)
98,851
3.3~3.35 Principal is repaid in 180 days after first draw.
Two-year loans due to stockholders
and employees
56,856
Secured Syndicated loan from Taishin
International Bank
Hua Nan bank L/C loans (EUR150
thousand)
Hua Nan bank L/C loans (JPY66,540
thousand)
131
1 January 2012 Interest rate (%)
Subtotal
19,414,063
Less: Current portion
(1,756,856)
Total
$17,657,207
0.48~0.92
TATUNG 2012 Annual Report
Financial Overview
Shan-Chih Asset Development Co. guaranteed the Company’s long-term loans, the second domestic secured convertible bonds payable,
and the first Euro-convertible bonds. As of 31 December 2013, 31 December 2012, and 1 January 2012, the balance of guarantees was NTD
15,358,006 thousand, NTD 16,142,300 thousand and NTD 19,331,363 thousand, respectively; the Company’s Chairman, W.S. Lin, guaranteed
some of the Company’s bank loans and the second domestic secured convertible bonds payable.
For the years ended 31 December 2013, 31 December 2012, and 1 January 2012, certain long term loans of the Company included debt
covenants requiring minimum levels of liquidity ratio, liability to equity ratio, and net assets value. For the years ended 31 December 2013,
31 December 2012, and 1 January 2012, the Company did not breach any such covenants, therefore there was no immediate repayment
of the loans triggered by breach of covenants.
(b) CPT and its subsidiaries
31 December 2013
Lenders
31 December
Interest rate (%)
2013
Maturity date and terms of repayment
Administered by Mega International
Commercial Bank (syndicated loans)
$395,000
The first repayment date is two years and six months after the date of
2.4218% this agreement, and each of the eight successive semi-annual dates
thereafter.
Administered by Bank of
Taiwan(syndicated loans)
8,070,000
The first repayment date is six months after the date of this agreement,
and each of the ten successive semi-annual dates thereafter. The
3.3224% repayment percentages are 5% for the first repayment, 7.5% for the
second and third repayments, 10% for the fourth and the fifth repayments,
12% of the remaining repayments on the amount outstanding.
106,636
Extend annually beginning one year after the first used day. Credit limit
is gradually reduced on a semi-annual basis beginning six months after
first used day. Credit limit is reduced by 5% first six months after the first
2.8830% the
used day, then 7.5% for the second and third six months periods, 10%, for
the fourth and fifth six months periods, 12% for the remaining six months
period.
Secured long-term loan from Mega
Bills Finance Co. Ltd.
Secured long-term loan from Bank of
Taiwan
(Note 1)
(Note 2)
1,200,000
first repayment date is six months after the date of this agreement,
3.3450% The
and each of the six successive quarter-annual dates thereafter.
Secured long-term loan from China
Development Bank
429,191
The repayment is divided into nine successive dates. USD 0.6 million will
be repaid on 9 November 2013. USD 0.21 million will be repaid on 30 April
USD 0.31 million will be repaid on 30 October 2014. USD 1.49 million
5.5098% 2014.
will be repaid on 30 April and 30 October 2015. USD 2.37 million will be
repaid on 30 April and 30 October 2016. USD 3.08 million will be repaid on
30 April and 8 November 2017.
Secured long-term loan from
Agricultural Bank of China
977,710
The repayment is divided into six successive dates. RMB 30 million will be
8.0000% repaid per six months from 31 July 2014 to 31 January 2016. RMB 40 million
will be repaid per six months from 31 July 2016 to 16 January 2017.
Secured long-term loan from China
Everbright Bank
195,542
Secured long-term loan from China
Minsheng Bank
195,542
Secured Long-term loan from China
Merchant Bank
456,846
Secured long-term loan from ExportImport Bank of China Fujian branch
244,428
Administered by Mega International
Commercial Bank (syndicated loans)
499,587
from April 2012, principal is repaid in 8 semi-annually payments in
2.0100% Started
the amount of NTD 125,000 thousand each payment.
Unsecured long-term loan from
Taiwan Cooperative Bank
107,635
from October 2011, principal is repaid in 60 monthly payments in
1.8000% Started
the amount of NTD 3,262 thousand each payment.
Secured long-term loan from Taiwan
Cooperative Bank
40,865
from October 2011, principal is repaid in 60 monthly payments in
1.8000% Started
the amount of NTD 1,238 thousand each payment.
(Note 3)
Subtotal
12,918,982
Less: current portion
(7,811,260)
Total
$5,107,722
The repayment is divided into five successive dates. RMB 5 million will be
before 20 September and 20 December 20 2013. RMB 15 million
7.6800% repaid
will be repaid before 20 June 2014. RMB 15 million will be repaid before 20
December 2014. RMB 10 million will be repaid before19 January 2015.
The repayment is divided into six successive dates. RMB 2.5 million will be
repaid before 25 January and 25 April 2013. RMB 5 million will be repaid
7.0725% before 25 October 2013 and 25 April 2014. RMB 10 million will be repaid
before 25 October 2014. RMB 2.5 million will be repaid before 25 March
2015.
The repayment is divided into eight successive dates. RMB 1 million will
be repaid before 21 June and 21 December 2014. RMB 6 million will
8.0000% be repaid before 21 June and 21 December 2015. RMB 8 million will be
repaid before 21 June and 21 December 2016. RMB 10 million will be
repaid before 21 June and 21 December 2017.
The repayment is divided into four successive dates. RMB 5 million will be
6.7200% repaid semi-annually. RMB 30 million will be repaid before 18 September
2017.
Note 1: Administrative expenses amounted to NTD 30,000 thousand from syndicated loans was deducted.
Note 2: Administrative expenses amounted to NTD 400 thousand from syndicated loans and a discount on commercial paper amounting to NTD 964 thousand
were deducted.
Note 3: Administrative expenses amounted to NTD 413 thousand from syndicated loans was deducted.
132
Financial Overview
31 December 2012
Lenders
31 December Interest rate
2012
(%)
Maturity date and terms of repayment
Administered by Mega International
Commercial Bank (syndicated loans)Item A
$790,000
The first repayment date is two years and six months after the date of
2.5793 this agreement, and each of the eight successive semi-annual dates
thereafter.
Administered by Mega International
Commercial Bank (syndicated loans)Item B
567,500
The term of the loan is five years. The first repayment date is one year
3.3721 and six months after the date of this agreement, and each of the eight
successive semi-annual dates thereafter.
13,447,500
The first repayment date is six months after the date of this agreement,
and each of the ten successive semi-annual dates thereafter. The
3.3256 repayment percentages are 5% for the first repayment, 7.5% for the
second and third repayments, 10% for the fourth and the fifth repayments,
12% of the remaining repayments on the amount outstanding.
177,608
Extend annually beginning one year after the first used day. Credit limit
is gradually reduced on a semi-annual basis beginning six months after
first used day. Credit limit is reduced by 5% first six months after the first
2.9080 the
used day, then 7.5% for the second and third six months periods, 10%, for
the fourth and fifth six months periods, 12% for the remaining six months
period.
1,800,000
first repayment date is six months after the date of this agreement,
3.3450 The
and each of the six successive quarter-annual dates thereafter.
Secured Long-Term Loan from China
Development Bank
116,160
The repayment is divided into nine successive dates. USD 0.6 million will
be repaid on 9 November 2013. USD 0.21 million will be repaid on 30 April
USD 0.31 million will be repaid on 30 October 2014. USD 1.49 million
5.5098 2014.
will be repaid on 30 April and 30 October 2015. USD 2.37 million will be
repaid on 30 April and 30 October 2016. USD 3.08 million will be repaid on
30 April and 8 November 2017.
Secured long-term loan from Bank of
Nova Scotia
275,880
1.0200 Principal is repaid upon maturity.
Secured Long-Term Loan from
Agricultural Bank of China
924,032
The repayment is divided into six successive dates. RMB 30 million will
8.6250 be repaid every six months from 31 July 2014 to 31 January 2016. RMB 40
million will be repaid every six months from 31 July 2016 to 16 January 2017.
Secured long-term loan from China
Everbright Bank
231,008
The repayment is divided into five successive dates. RMB 5 million will be
before 20 September and 20 December 20 2013. RMB 15 million
7.9800 repaid
will be repaid before 20 June 2014. RMB 15 million will be repaid before 20
December 2014. RMB 10 million will be repaid before19 January 2015.
205,828
The repayment is divided into six successive dates. RMB 2.5 million will be
repaid before 25 January and 25 April 2013. RMB 5 million will be repaid
7.0725 before 25 October 2013 and 25 April 2014. RMB 10 million will be repaid
before 25 October 2014. RMB 2.5 million will be repaid before 25 March
2015.
Secured long-term loan from China
Merchant Bank
138,605
The repayment is divided into ten successive dates. 5% of principal will be
repaid semi-annually in the first two years.10% of principal will be repaid
8.0000 semi-annually in the following two years. RMB 4.8 million will be repaid
before 28 February 2013. RMB21 millions will be repaid on 24 March 2013.
RMB 2.79 million will be repaid before 6 June 2013.
Secured long-term loan from Fujian
Haixia Bank
207,907
The repayment is divided into four successive dates. RMB 5 million will be
6.4000 repaid semi-annually from 18 June 2016 to 18 June 2017. RMB 30 million will
be repaid before 18 September 2017.
Administered by Bank of
Taiwan(syndicated loans)-Item A
Secured long-term loan from Mega
Bills Finance Co. Ltd.-Item B
Secured long-term loan from Bank of
Taiwan
Secured long-term loan from China
Minsheng Bank
(Note 1)
(Note 2)
Subtotal
18,882,028
Less: current portion
(7,310,380)
Total
$11,571,648
Note 1: Administrative expenses amounted to NTD 52,500 thousand from syndicated loans has been deducted.
Note 2: Administrative expenses amounted to NTD 700 thousand from syndicated loans and a discount on commercial paper amounting to NTD 1,692 thousand
were deducted.
133
TATUNG 2012 Annual Report
Financial Overview
1 January 2012
Lenders
1 January
2012
Interest rate
(%)
Maturity date and terms of repayment
Administered by Mega International
Commercial Bank (syndicated loans)Item A
$1,185,000
The first repayment date is two years and six months after the date of
2.5793 this agreement, and each of the eight successive semi-annual dates
thereafter.
Administered by Mega International
Commercial Bank (syndicated loans)-Item B
1,135,000
The term of the loan is five years. The first repayment date is one year
3.3721 and six months after the date of this agreement, and each of the eight
successive semi-annual dates thereafter.
17,925,000
The first repayment date is six months after the date of this agreement,
and each of the ten successive semi-annual dates thereafter. The
3.3721 repayment percentages are 5% for the first repayment, 7.5% for the
second and third repayments, 10% for the fourth and the fifth repayments,
12% of the remaining repayments on the amount outstanding.
236,684
Extend annually beginning one year after the first used day. Credit limit
is gradually reduced on a semi-annual basis beginning six months after
first used day. Credit limit is reduced by 5% first six months after the first
2.8410 the
used day, then 7.5% for the second and third six months periods, 10%, for
the fourth and fifth six months periods, 12% for the remaining six months
period.
Secured long-term loan from DBS
Bank
151,368
First payment: to pay 5% of the loan at the date which is eighteen months
after the date of this agreement.
Second payment: to pay 5% of the loan at the date which is six months
after the first payment.
0.5537~1.3037
Third to sixth payment: to pay 10% of the loan at the date which is six
months after the second payment.
Seven to eight payment: to pay 25% of the loan at the date which is six
months after the sixth payment.
Secured long-term loan from China
Development Bank
151,368
repayment is divided into five successive dates. USD 5 million will be
1.1031 The
repaid annually from 20 June 2008 to 2012.
Secured Long-Term Loan from Bank of
Nova Scotia
287,599
0.6516 Principal will be repaid upon maturity.
Administered by Bank of
Taiwan(syndicated loans)-Item A
Secured long-term loan from Mega
Bills Finance Co. Ltd.-Item B
Subtotal
(Note 1)
(Note 2)
21,072,019
Less: current portion
(5,825,236)
Total
$15,246,783
Note 1: Administrative expenses amounted to NTD 75,000 thousand from syndicated loans has been deducted.
Note 2: Administrative expenses amounting to NTD 1,000 thousand from syndicated loans and a discount on commercial paper amounting to NTD 2,316
thousand were deducted.
According to terms of loan agreements, CPT was subject to maintain certain annual and semi-annual financial ratio and position, such as
current ratio, debit ratio, interest coverage ratio, tangible net worth and so on. For the year 2013 and 2012, CPT and its subsidiaries did not
contravene any loan contract conditions that could result in CPT and its subsidiaries settling the loan, subject to acceptance by the loan
contract.
134
Financial Overview
(c) SCSC and its subsidiaries
31 December 2013
Lenders
Maturity date and terms of repayment
Unsecured long-term loan from Bank
of Taiwan
$110,000
from 31 December 2011, principal is repaid in 20 quarterly
1.90 Started
payments in the amount of NTD 1,000 thousand per payment.
Unsecured long-term loan from
Shanghai Commercial & Saving Bank
33,333
from 24 September 2011, principal is repaid in 12 quarterly
2.13 Started
payments in the amount of NTD 16,667 thousand per payment.
Secured syndicated Loans from Fubon
Financial Bank
457,143
from 22 July 2012, principal is repaid in 7 semi-annually
1.83 Started
payments in the amount of NTD 114,286 thousand each payment.
"
320,000
from 22 July 2012, principal is repaid in 7 semi-annually
1.88 Started
payments in the amount of NTD 80,000 thousand each payment.
"
200,000
from 22 July 2012, principal is repaid in 7 semi-annually
1.83 Started
payments in the amount of NTD 50,000 thousand each payment.
"
25,548
from 22 July 2012, principal is repaid in 7 semi-annually
1.20 Started
payments in the amount of USD214,285 each payment.
"
40,875
from 22 July 2012, principal is repaid in 7 semi-annually
1.20 Started
payments in the amount of USD342,857 each payment.
"
61,313
from 22 July 2012, principal is repaid in 7 semi-annually
1.20 Started
payments in the amount of USD514,285 each payment.
"
51,094
from 22 July 2012, principal is repaid in 7 semi-annually
1.20 Started
payments in the amount of USD428,571 each payment.
"
434,301
from 17 June 2013, principal is repaid in 7 semi-annually
1.20 Started
payments in the amount of USD2,914,285 each payment.
"
651,452
from 17 June 2013, principal is repaid in 7 semi-annually
3.16 Started
payments in the amount of USD4,371,429 each payment.
"
119,220
from 17 June 2013, principal is repaid in 7 semi-annually
1.20 Started
payments in the amount of USD800,000 each payment.
"
178,830
from 17 June 2013, principal is repaid in 7 semi-annually
3.16 Started
payments in the amount of USD1,200,000 each payment.
Secured syndicated Loans from Bank
of Taiwan
"
Secured long-term loan from Shanghai
Commercial and Saving Bank
Far Eastern International Bank
Subtotal
135
31 December Interest rate
2013
(%)
1,064,286
from 29 April 2013, principal is repaid in 7 semi-annually
1.95 Started
payments in the amount of NTD 212,857 thousand each payment.
571,429
from 29 April 2013, principal is repaid in 7 semi-annually
1.95 Started
payments in the amount of NTD 114,286 thousand each payment.
34,220
from 26 December 2013, principal is repaid in 8 quarterly
10.53 Started
payments in the amount of RMB875,000 each payment.
200,000
will be repaid upon the maturity date on 18 November
1.75 Principal
2015.
4,553,044
Less: current portion
(1,876,237)
Total
$2,676,807
TATUNG 2012 Annual Report
Financial Overview
31 December 2012
Lenders
Unsecured long-term loan from
Citibank Europe
Unsecured long-term loan from China
Development industrial Bank
Unsecured Long-Term Loan from Bank
of Taiwan
Unsecured long-term loan from
Shanghai Commercial & Saving Bank
Unsecured long-term loan from JihSun
Bank
Unsecured long-term loan from Fubon
Financial Bank
Unsecured long-term loan from
Shanghai Commercial & Saving Bank
Unsecured long-term loan from Bank
of Weifang
Secured syndicated loans from Fubon
Financial Bank
31 December Interest rate
2012
(%)
$555,285
1.06~1.59
209,676
2.03
150,000
1.70
100,000
2.05
200,000
1.78
72,600
2.49~2.71
58,080
1.97~2.06
46,202
93,333
"
35,455
"
685,714
"
480,000
"
300,000
"
37,338
"
59,739
"
89,609
"
74,674
"
592,416
"
888,624
"
162,624
"
243,936
Secured syndicated loans from Bank
of Taiwan
1,490,000
"
800,000
Far Eastern International Bank
230,000
Subtotal
Maturity date and terms of repayment
Started from 22 April 2011, principal is repaid in 10 quarterly payments in
10% of principal per payment.
Started from 24 October 2012, principal is repaid in 5 quarterly payments
in NTD 41,935 thousand per payment.
Started from 31 December 2011, principal is repaid in 20 quarterly
payments in NTD 10,000 thousand per payment.
Started from 24 September 2011, principal is repaid in 12 quarterly
payments in NTD 16,667 thousand per payment.
Started from 28 September 2012, principal is repaid in 8 quarterly
payments in NTD 25,000 thousand per payment.
Started from 25 December 2011, principal is repaid in 6 quarterly
payments in the amount of USD2,500,000 per payment.
Started from 25 March 2011, principal is repaid in 10 quarterly payments in
the amount of USD1,000,000 per payment.
- Bullet Repayment on August 18, 2013.
from 4 July 2009, principal is repaid in 15 quarterly payments in the
1.28~1.32 Started
amount of USD93,333 per payment.
from 4 July 2010, principal is repaid in 11 quarterly payments in the
1.28~1.32 Started
amount of NTD 35,455 thousand per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.42~1.65 Started
in the amount of NTD 114,286 thousand per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.47 Started
in the amount of NTD 80,000 thousand per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.46 Started
in the amount of NTD 50,000 thousand per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD214,285 per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD342,857 per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD514,285 per payment.
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD428,571 per payment.
from 17 June 2013, principal is repaid in 7 semi-annually payments
1.20 Started
in the amount of USD2,914,285 per payment.
from 17 June 2013, principal is repaid in 7 semi-annually payments
3.16 Started
in the amount of USD4,371,429 per payment.
from 17 June 2013, principal is repaid in 7 semi-annually payments
1.20 Started
in the amount of USD800,000 per payment.
from 17 June 2013, principal is repaid in 7 semi-annually payments
3.16 Started
in the amount of USD1,200,000 per payment.
from 29 April 2013, principal is repaid in 7 semi-annually payments
1.58~1.79 Started
in the amount of NTD 212,857 thousand per payment.
from 29 April 2013, principal is repaid in 7 semi-annually payments
1.58 Started
in the amount of NTD 114,286 thousand per payment.
1.75 Bullet Repayment on August 30, 2015.
7,655,305
Less: current portion
(2,753,445)
Total
$4,901,860
136
Financial Overview
1 January 2012
Lenders
Secured long-term loan from Hua
Nan Bank
$35,000
Secured long-term loan from China
Development Industrial Bank
30,772
Secured long-term loan from Citibank
Europe
1,134,333
Unsecured long-term loan from China
Development Industrial Bank
102,800
"
137
1 January
2012
20,000
Interest rate
(%)
Maturity date and terms of repayment
Started from 28 August 2007, principal is repaid in 19 quarterly payments
2.10 in the amount of NTD 26,000 thousand per payment. The remaining
principal is repaid on the 20th payment.
Started from 11 March 2009, principal is repaid in 12 quarterly payments
1.77 in the amount of NTD 30,769 thousand per payment. The remaining
principal is repaid on the 13th payment.
from 22 April 2011, principal is repaid in 10 quarterly payments
1.29~1.31 Started
with 10% of principal each payment.
from 28 June 2011, principal is repaid in 5 quarterly payments in
1.73 Started
the amount of NTD 51,400 thousand per payment.
Started from 25 June 2011, principal is repaid in 4 quarterly payments in
1.871 the amount of NTD 40,000 thousand on the 1st payment and NTD 20,000
thousand each payment on the following payments.
Started
from 31 December 2011, principal is repaid in 20 quarterly
1.70 payments
in the amount of NTD 10,000 thousand each payment.
Unsecured long-term loan from Bank
of Taiwan
190,000
Unsecured long-term loan from
Shanghai Commercial & Saving Bank
166,667
from 24 September 2011, principal is repaid in 12 quarterly
2.05 Started
payments in the amount of NTD 16,667 thousand each payment.
Unsecured long-term loan from JihSun
Bank
300,000
from 28 September 2012, principal is repaid in 8 quarterly
1.78 Started
payments in the amount of NTD 25,000 thousand each payment.
Unsecured long-term loan from Fubon
Financial Bank
378,550
from 25 December 2011, principal is repaid in 6 quarterly
1.56~2.01 Started
payments in the amount of NTD 75,710 thousand each payment.
Unsecured long-term loan from
Shanghai Commercial & Saving Bank
181,704
from 25 March 2011, principal is repaid in 10 quarterly payments in
1.66~1.97 Started
the amount of USD1,000,000 each payment.
Unsecured long-term loan from Bank
of Weifang
48,063
Secured syndicated loans from Fubon
Financial Bank
466,667
from 4 July 2009, principal is repaid in 15 quarterly payments in the
1.28~1.32 Started
amount of USD93,333 per payment.
“
177,273
from 4 July 2010, principal is repaid in 11 quarterly payments in the
1.28~1.32 Started
amount of NTD 35,455 thousand each payment.
“
800,000
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.42 Started
in the amount of NTD 114,286 thousand each payment.
Secured syndicated loans from Fubon
Financial Bank
560,000
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.47 Started
in the amount of NTD 80,000 thousand each payment.
“
350,000
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.46 Started
in the amount of NTD 50,000 thousand each payment.
“
45,412
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD214,285 per payment.
“
72,660
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD342,857 per payment.
“
108,990
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD514,285 per payment.
“
90,825
from 22 July 2012, principal is repaid in 7 semi-annually payments
1.23 Started
in the amount of USD428,571 per payment.
“
617,610
from 17 June 2013, principal is repaid in 7 semi-annually payments
1.20 Started
in the amount of USD2,914,290 per payment.
“
926,415
from 17 June 2013, principal is repaid in 7 semi-annually payments
3.16 Started
in the amount of USD4,371,429 per payment.
“
169,540
from 17 June 2013, principal is repaid in 7 semi-annually payments
1.20 Started
in the amount of USD800,000 per payment.
“
254,310
from 17 June 2012, principal is repaid in 7 semi-annually payments
3.16 Started
in the amount of USD1,200,000 per payment.
Secured syndicated loans from Bank
of Taiwan
920,000
from 29 April 2013, principal is repaid in 6 semi-annually payments
1.58 Started
in the amount of NTD 131,428 thousand each payment.
“
800,000
from 27 April 2013, principal is repaid in 6 semi-annually payments
1.58 Started
in the amount of NTD 114,286 thousand per payment.
Subtotal
8,947,591
Less: current portion
(1,874,206)
Total
$7,073,385
- Bullet Repayment on August 18, 2013.
TATUNG 2012 Annual Report
Financial Overview
Certain long term loans of SCSC and its subsidiaries included debt covenants requiring minimum levels of liquidity ratio, liability to equity
ratio, and net assets value. For the years ended 31 December 2013, the Company did not breach any such covenants, therefore there was
no immediate repayment of the loans triggered by breach of covenants. Please refer to Note 9 for details of the syndicated loans.
As of 31 December 2013, the Company’s Chairman, W.S. Lin, guaranteed of SCSC and its subsidiaries’ bank loans, except for unsecured
loans amounted to NTD 143,333 thousand and syndicated loans amounted to NTD 4,175,490 thousand. Please refer to Note 8 for the
guarantee for the long-term loans.
(d) FD and its subsidiaries
31 December 2013
Lenders
Secured loan from Bank of Taiwan
31 December Interest rate
2013
(%)
$160,000
2.81
Chaileasing Finance Co., Ltd.
24,083
3.05
IBT Leasing Co., Ltd.
17,831
3.83
Robina Finance & Leasing Corp.
29,250
3.85
Subtotal
Maturity date and terms of repayment
Effective from 18 December 2013 to 18 December 2018. The first
repayment date is 2 years after the date of this agreement and
interest is paid monthly. Principal is repaid at NTD 10,000 thousand
semi-annually starting from the 3rd year after the first draw and
NTD 110,000 thousand starting from the 6th payment. Interest is paid
monthly.
Effective from 20 March 2013 to 20 March 2015. Principal is repaid in
24 monthly payments. The first 12 repayment is NTD 2,420 thousand
per payment, the following 11 repayments is NTD 1,495 thousand per
payment, and the last repayment is NTD 838 thousand.
Effective from 27 June 2013 to 27 November 2015. Principal is repaid
in 18 monthly payments. The first 9 repayment is NTD 2,400 thousand
per payment, the following 8 repayments is NTD 1,500 thousand per
payment, and the last repayment is NTD 1,360 thousand.
Effective from 12 October 2013 to 12 September 2013. Principal is
repaid in 24 monthly payments. The first repayment is NTD 2,382
thousand, the remaining repayments is decreasing, and the last
repayment is NTD 903 thousand.
231,164
Less: current portion
(58,805)
Total
$172,359
31 December 2012
Lenders
Secured loan from Bank of Taiwan
Unsecured long-term loan from
Hua Nan Bank
31 December Interest rate
2012
(%)
$180,000
8,333
Subtotal
188,333
Less: current portion
(28,333)
Total
$160,000
Maturity date and terms of repayment
Effective from 1 October 2009 to 1 October 2014. The first repayment
date is 2 years after the date of this agreement and interest is paid
2.86 monthly. Principal is repaid at NTD 10,000 thousand semi-annually
starting from the 3rd year after first draw and NTD 150,000 thousand
starting from the 6th payment. Interest is paid monthly.
25 October 2010 to 25 October 2013. Principal is repaid in 72
2.22~2.316 Effective
monthly payments at NTD 833 thousand each payment.
1 January 2012
Lenders
1 January
2012
Secured long-term loan from Bank
of Taiwan
$200,000
Unsecured long-term loan from
Hua Nan Bank
18,333
Subtotal
218,333
Less: current portion
(30,000)
Total
$188,333
Interest rate
(%)
Maturity date and terms of repayment
Effective from 1 October 2009 to 1 October 2014. The first repayment
date is 2 years after the date of this agreement and interest is paid
2.86 monthly. Principal is repaid by NTD 10,000 thousand semi-annually
started from the 3rd year after loaned and NTD 150,000 thousand
started from the 6th payment. Interest is paid monthly.
Effective
25 October 2010 to 25 October 2013. Principal is repaid in 72
2.22~2.316 monthly payments,
NTD 833 thousand each payment.
138
Financial Overview
(e) SCAD
31 December 2013
Lenders
31 December Interest rate
2013
(%)
Maturity date and terms of repayment
Unsecured long-term loan from
Mega Bank
$320,000
1 December 2012 to 30 November 2014. Interest is paid
1.5 Effective
monthly. Principal is repaid upon maturity date.
Unsecured long-term loan from
Hua Nan Bank
60,000
15 November 2012 to 15 November 2014. Interest is paid
1.5-1.65 Effective
monthly. Principal is repaid upon maturity date.
Subtotal
380,000
Less: current portion
(380,000)
Total
Note:
$Long-term loans above are guaranteed by the Chairman of the Company.
31 December 2012
Lenders
31 December Interest rate
2012
(%)
Maturity date and terms of repayment
Unsecured long-term loan from Mega
Bank
$100,000
1.0
Effective December 1, 2011 to November 30, 2014. Interest is paid
monthly. Principal is repaid upon maturity date.
Unsecured long-term loan from Hua
Nan Bank
100,000
1.5
Effective November 15, 2012 to November 15, 2014. Interest is paid
monthly. Principal is paid upon maturity date.
Subtotal
200,000
Less: current portion
(100,000)
Total
$100,000
Note:
Long-term loans above are guaranteed by the Chairman of the Company.
(f) Tatung Forestry and Development Co.
31 December 2013
Lenders
Secured long-term loan from Sunny
Bank
31 December Interest rate
2013
(%)
$120,000
Less: current portion
Total
Maturity date and terms of repayment
Effective from April 2012 to April 2027. The first repayment date is
months after the date of this agreement. Principal is repaid in
2.25 36
24 payments semi-annually started from April 2015. Interest is paid
monthly.
$120,000
31 December 2012
Lenders
Unsecured long-term loan from Hua
Nan Bank
31 December Interest rate
2012
(%)
$120,000
Less: current portion
Total
1.90
Maturity date and terms of repayment
Effective 25 February 2010 to 25 February 2025. Interest is repaid monthly.
Principal is repaid monthly started from the 37th month after first draw.
$120,000
1 January 2012
Lenders
Unsecured long-term loan from Hua
Nan Bank
Less: current portion
Total
139
1 January
2012
Interest rate
(%)
$100,000
$100,000
1.90
Maturity date and terms of repayment
Effective 25 February 2010 to 25 February 2025. Interest is repaid monthly.
Principal is repaid monthly started from the 37th month after first draw.
TATUNG 2012 Annual Report
Financial Overview
(i) Tatung (Thailand) Co., Ltd.
31 December 2013
Lenders
31 December Interest rate
2013
(%)
Kasikorn leasing Co.,Ltd.
$51
Less: current portion
(51)
Total
Maturity date and terms of repayment
2.25 Effective 5 June 2011 to 5 May 2014. Principal is repaid monthly.
$-
31 December 2012
Lenders
31 December Interest rate
2012
(%)
Maturity date and terms of repayment
TiscoCo.
$88
4.81~4.51 Effective 16 July 2010 to 25 June 2013. Principal is repaid monthly.
Kasikorn leasing Co., Ltd.
183
4.81~4.51 Effective 5 June 2011 to 5 May 2014. Principal is repaid monthly.
Subtotal
271
Less: current portion
(197)
Total
Note:
$74
Pledged assets – Transportation equipment.
1 January 2012
Lenders
1 January
2012
Interest rate
(%)
Maturity date and terms of repayment
Kasikorn Factoryan (Note i)
$767
7.78~2.40 Effective 25 July 2007 to 25 June 2012. Principal is repaid monthly.
Tisco Co., (Note ii)
265
7.78~2.40 Effective 16 July 2010 to 25 June 2013. Principal is repaid monthly.
308
7.78~2.40 Effective 5 June 2011 to 5 May 2014. Principal is repaid monthly.
Kasikorn leasing Co., Ltd.(Note ii)
Subtotal
1,340
Less: current portion
(1,038)
Total
$302
Note (i): Pledged assets – SMT Machinery equipment.
Note (ii): Pledged assets – Transportation equipment.
(j) Tatung Electric Technology (VN) Co., Ltd.
1 January 2012
Lenders
1 January
2012
Interest rate
(%)
Unsecured long-term loans from ICBC
$40,053
Less: current portion
(40,053)
Total
3.1~1.865
Maturity date and terms of repayment
Effective 4 November 2005 to 22 May 2012. Principal is repaid semiannually.
$-
(k) Tatung Precise Meter Co.
31 December 2013
Lenders
Unsecured long-term Loan from
Hua Nan Bank
Less: current portion
Total
31 December Interest rate
2013
(%)
$4,667
Maturity date and terms of repayment
October 2012 to October 2015. Principal is repaid in 12
2.88 Effective
quarterly payments.
$4,667
31 December 2012
Lenders
Unsecured long-term Loan from Hua
Nan Bank
Less: Current portion
Total
31 December
Interest rate (%)
2012
$7,000
Maturity date and terms of repayment
Effective October 2012 to October 2015. Principal is repaid in 12 quarterly
2.88
payments.
$7,000
140
Financial Overview
(l)
Tatung Fine Chemicals Co., Ltd.
31 December 2013
Lenders
31 December
2013
Secu red long -ter m loan from
Chailease Finance Co., Ltd.
$31,500
Less: current portion
(22,500)
Total
Interest rate
(%)
Maturity date and terms of repayment
28 July 2013 to 28 June 2015. Principal is repaid in 24 monthly
2.65 Effective
payments with interest payments due monthly.
$9,000
Tatung Fine Chemical Co., Ltd. did not have long-term loans as of 31 December2012 and 1 January 2012.
Please refer to Note 8 for assets pledged as collateral for long term loans.
(23)Finance lease commitments
The Group has finance leases for various items of plant and machinery. Theses leases contain purchase options. Future minimum lease
payments under finance leases together with the present value of the net minimum lease payments are as follows:
31 December 2013
Minimum Present value
payments of payments
Not later than one year
31 December 2012
Minimum Present value
payments of payments
1 January 2012
Minimum Present value
payments of payments
$-
$-
$-
$-
$101,406
$101,406
Total minimum lease payments
-
-
-
-
101,406
101,406
Less: finance charges on finance lease
-
-
-
-
-
-
$-
$-
$-
$-
$101,406
$101,406
Present value of minimum lease payments
(24) Post-employment benefits
Defined contribution plan
The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under
the Labor Pension Act, the Company and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees’ monthly
wages to the employees’ individual pension accounts. The Company and its domestic subsidiaries have made monthly contributions of 6% of
each individual employee’s salaries or wages to employees’ pension accounts.
Subsidiaries located in the People’s Republic of China will contribute social welfare benefits based on a certain percentage of employees’
salaries or wages to the employees’ individual pension accounts.
Pension benefits for employees of overseas subsidiaries and branches are provided in accordance with the local regulations.
Expenses under the defined contribution plan for the years ended 31 December 2013 and 2012 were NTD 678,714 thousand and NTD 537,742
thousand, respectively.
Defined benefits plan
The Company and its domestic subsidiaries adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The
pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per
year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall
not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries contribute an amount equivalent to 2% of the
employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered
pension fund committee.
Expenses under the defined benefits plan for the years ended 31 December 2013 and 2012 were NTD 167,272 thousand and NTD 209,922
thousand, respectively.
The cumulative amount of actuarial gains and losses recognized in other comprehensive income is as follows:
2013
$255,017
(90,247)
3,250
$168,020
Balance as of 1 January
Actuarial gains and losses for the period
Acquisitions through business combinations
Balance as of 31 December
2012
$255,017
$255,017
Reconciliation of liability (asset) of the defined benefit plan is as follows:
As at
Defined benefit obligation
Plan assets at fair value
Funded status
Past service cost
Other
Accrued pension liabilities (gross)
Less: other payable
Accrued pension liabilities (net)
141
31 December 2013
$6,306,271
(413,359)
5,892,912
(656)
320,665
6,212,921
(369)
$6,212,552
31 December 2012
$6,754,500
(429,670)
6,324,830
(1,313)
368,325
6,691,842
(398)
$6,691,444
1 January 2012
$6,970,927
(409,454)
6,561,473
(1,969)
439,632
6,999,136
(417)
$6,998,719
TATUNG 2012 Annual Report
Financial Overview
Changes in present value of the defined benefit obligation are as follows:
Defined benefit obligation at 1 January
Acquisitions through business combinations
2013
2012
$6,754,500
$6,970,927
90,023
-
Current service cost
91,806
101,512
Interest cost
78,597
104,771
Benefits paid
(617,768)
(675,158)
Actuarial losses (gains)
(90,887)
252,448
$6,306,271
$6,754,500
2013
$429,670
2012
$409,454
Defined benefit obligation at 31 December
Changes in fair value of plan assets are as follows:
Plan assets, at fair value at 1 January
Acquisitions through business combinations
50,491
-
7,292
6,726
Expected return on plan assets
Contributions by employer
Benefits paid
544,314
691,216
(617,768)
(675,157)
(640)
(2,569)
$413,359
$429,670
Actuarial gains (losses)
Plan assets, at fair value at 31 December
The Group expected to contribute NTD 313,376 thousand to its defined benefit plan during the 12 months beginning after 31 December 2013.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Pension plan (%) as at
31 December 2013
31 December 2012
29.05%~22.86%
33.84%~21.77%
31.38%~23.87%
Equity instruments
59.86%~8.56%
53.63%~8.51%
58.02%~10.04%
Debt instruments
62.39%~13.47%
57.07%~20.99%
58.48%~17.69%
Others
0.00%~52.33%
0.00%~45.99%
0.00%~46.90%
Cash
1 January 2012
The actual return on plan assets of the Group for the years ended 31 December 2013 and 2012 were NTD 6,652 thousand and NTD 4,157
thousand, respectively.
Employee pension fund is deposited under a trust administered by the Bank of Taiwan. The overall expected rate of return on assets is
determined based on historical trend and analyst’s expectation on the asset’s return in its market over the obligation period. Furthermore, the
utilization of the fund by the labor pension fund supervisory committee and the fact that the minimum earnings are guaranteed to be no less
than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks are also
taken into consideration in determining the expected rate of return on assets.
The principal assumptions used in determining the Group’s defined benefit plan are shown below:
31 December 2013
31 December 2012
1 January 2012
Discount rate
0.75%~2.00%
1.00%~1.50%
1.25%~1.75%
Expected rate of return on plan assets
0.75%~2.00%
1.00%~1.75%
1.25%~2.00%
1.00%
1.00%~2.00%
1.00%~3.00%
Expected rate of salary increases
A 0.5% change in discount rate on defined benefit obligation:
2013
Discount rate
Discount rate
Increase By 0.5%
Decrease By 0.5%
Effect on the defined benefit obligation
$(247,865)
2012
Discount rate
Discount rate
Increase By 0.5%
Decrease By 0.5%
$264,052
$(406,230)
$420,828
Other information on the defined benefit plan is as follows:
2013
2012
$6,306,271
$6,754,500
Plan assets at fair value
(413,359)
(429,670)
Surplus (deficit) in plan
$5,892,912
$6,324,830
$282,208
$213,480
$640
$2,569
Defined benefit obligation at present value
Experience adjustments on plan liabilities
Experience adjustments on plan assets
142
Financial Overview
(25)Provisions
Sales returns and
allowances
As at 1 January 2013
Maintenance
warranties
Reserve for
lawsuit
Decommissioning,
restoration and
rehabilitation
$72,007
Total
$38,592
$45,649
$903,985
70
180,887
449,982
1,428
632,367
(14,384)
(20,044)
(847,830)
-
(882,258)
Unused provision reversed
-
(1,058)
(39,646)
-
(40,704)
Effect of exchange rate changes
-
(19,099)
-
-
(19,099)
As at 31 December 2013
$24,278
$186,335
$466,491
$73,435
$750,539
Current-31 December 2013
$24,278
$186,335
$-
$-
$210,613
-
-
466,491
73,435
539,926
As at 31 December 2013
$24,278
$186,335
$466,491
$73,435
$750,539
Current-31 December 2012
$38,592
$45,649
$-
$-
$84,241
-
-
903,985
72,007
975,992
As at 31 December 2012
$38,592
$45,649
$903,985
$72,007
$1,060,233
Current-1 January 2012
$91,700
$28,650
$-
$-
$120,350
-
-
847,141
70,820
917,961
$91,700
$28,650
$847,141
$70,820
$1,038,311
Arising during the period
Utilized
Non-current-31 December 2013
Non-current-31 December 2012
Non-current-1 January 2012
As at 1 January 2012
$1,060,233
Sales returns and allowances
A provision has been recognized for sales returns and allowances based on other known factors. The provision is recognized and the
corresponding entry is made against operating revenue at the time of sales.
Maintenance warranties
A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgment and other
known factors.
Reserve for lawsuit
Provisions have been recognized for estimated legal obligations and relevant cost based on past experience. If the existing obligation is mostly
likely to incur and the amount may be reasonably estimated, the provisions for legal matters is to be recognized.
Decommissioning, restoration and rehabilitation
A provision has been recognized for decommissioning costs associated with a factory owned by GET. The Group is committed to
decommissioning the site as a result of the construction of the factory.
(26) Equities
(a) Common stock
The Company’s authorized and issued capital were all NTD 100,000,000 thousand and NTD 23,395,367 thousand, as at 31 December 2013,
31 December 2012, and 1 January 2012, each at a par value of NTD 10. Each share is entitled to one voting right and the right to receive
dividends.
(b) Capital surplus
As at
31 December 2013
Donated assets received
31 December 2012
1 January 2012
$-
$-
$70,000
Share of changes in net assets of associates and joint
ventures accounted for using the equity method
455,575
543,908
543,908
Other
312,395
183,621
105,470
Total
$767,970
$727,529
$719,378
According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a
company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium
or income from endowments received by the Company. The distribution could be made in cash or in the form of dividend shares to its
shareholders in proportion to the number of shares being held by each of them.
(c) Treasury stock
As of 31 December 2013, 31 December 2012 and 1 January 2012, the Company’s subsidiaries, CPT and its subsidiaries, and Chunghwa
Electronics Investment Co., held 70,598 thousand shares and 333 thousand shares, 131,078 thousand shares and 333 thousand shares,
and 131,078 thousand shares and 333 thousand shares of the Company’s stock, respectively. As of 31 December 2013, 31 December
2012, and 1 January 2012, the Company’s shares held by the subsidiaries was NTD 806,870 thousand, NTD 1,493,830 thousand and NTD
1,493,429 thousand, respectively. Moreover, the Company’s subsidiary, CPT, acquired Giantplus and paid the shares of the Company for
143
TATUNG 2012 Annual Report
Financial Overview
partial settlement. Therefore, CPT decreased its shareholding of the Company by 60,480 thousand shares. As a result of this treasury stock
transaction, the Company recognized a reduction of NTD 686,960 thousand for treasury stock and decreased the retained earnings by
NTD 583,002 thousand for the difference between the fair value and book value of the treasury stock.
(d) Retained earnings and dividend policies:
According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:
i. Payment of all taxes and dues;
ii. Offset prior years’ operation losses;
iii. Appropriate 10% of the remaining amount after deducting items (i) and (ii) as a legal reserve;
iv. Appropriate or reverse special reserve in accordance with relevant laws or regulations, and Reverse of special reserve
v. Appropriate no more than 2% and no less than 1% of the remaining amount after deducting items (i), (ii), (iii) and (iv) as directors’
remuneration and employee’s bonus, respectively;
vi. After deducting items (i), (ii), (iii) and (iv) above from the current year’s earnings, the distribution of the remaining portion, if any, will be
recommended by the board of directors and resolved in the stockholders’ meeting. The distribution of earnings could not be less than
60% of the accumulated distributable earnings.
The policy of dividend distribution should reflect factors such as the current operating results and fund requirements. But, at least 10% of the
dividends must be paid in the form of cash.
According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to
the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss,
it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the
number of shares being held by each of the shareholders.
When distributing distributable earnings for the years ended 2011 and 2012, the Company has to set aside special reserve, for other net
deductions from shareholders’ equity of the period. For any subsequent reversal of other net deductions from shareholders’ equity, the
amount reversed may be distributed.
Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Financial-Supervisory-Securities-Corporate-1010012865, which sets
out the following provisions for compliance:
On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains)
recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1,
the company shall set aside an equal amount of special reserve. Following a company’s adoption of the TIFRS for the preparation of its
financial reports, when distributing distributable earnings, it shall set aside special reserve, from the profit/loss of the current period and
the undistributed earnings from the previous period, an amount equal to “other net deductions from shareholders’ equity for the current
fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it
shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions
from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be
distributed.
As of 1 January 2013, special reserve set aside for the first-time adoption of TIFRS amounted to NTD 15,894,690 thousand. Furthermore, the
Company did not reverse special reserve to retained earnings during the year ended 31 December 2013 as a result of the use, disposal
or reclassification of related assets. As of 31 December 2013, special reserve set aside for the first-time adoption of TIFRS amounted to NTD
15,894,690 thousand.
Details of the 2012 make good of deficits as approved by the shareholders’ meeting on 13 June 2013 is as follows:
Make good of deficits
2012
Capital surplus-donated assets received
$70,000
There is no deficits compensation as resolution of the Board of Directors’ meeting on 18 March 2014.
The Company makes no provision on employees' bonuses for the years ended 31 December 2013 and 31 December 2012 because it
posted net loss in 2013 and 2012. Please refer to Market Observation Post System (“MOPS”) for more details.
(e) Non-controlling interests:
2013
2012
Balance as of January 1
$29,063,512
$42,769,732
Profit (loss) attributable to non-controlling interests
(3,708,144)
(11,189,995)
Actuarial gain (loss) from defined benefit plans
122,856
(21,180)
Exchange differences resulting from translating the financial statements of a
foreign operation
678,873
(704,930)
(218,453)
(168,341)
346,618
-
(651,176)
291,628
3,216,262
-
98,177
(1,913,402)
$28,948,525
$29,063,512
Other comprehensive income, attributable to non-controlling interests, net of tax:
Unrealized gains (losses) from available-for-sale financial assets
Deemed treasury stock transaction – subsidiary disposed of the Company’s shares
Acquisition or disposal of interest in a subsidiary
Acquisition of a subsidiary
Others
Balance as of 31 December
(27)Share-based payment plans
Certain employees of the Group are entitled to share-based payment as part of their remunerations; services are provided by the employees
in return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.
Share-based payment plan for employees of the Company
On 7 August 2007, the Company was approved by the Securities and Futures Bureau of the Financial Supervisory commission, Executive Yuan,
144
Financial Overview
to issue 55,000 thousand shares of employee stock options. Each share of option entitles a holder to buy one share of the Company’s common
stock. The Company issues new shares of common stock when employees exercise options. The exercise price of options is set at the closing
price of the Company’s common stock on the date of grant. Stock options expire in five years from the grant date and vest over service periods
that ranged from two to four years.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
2007.08.28
Exercise price of share options (NTD )
55,000
$14.90
The fair value of these options was calculated at the date of grant using the Black-Scholes option pricing model with the following weightedaverage assumptions:
2007 Stock Option Plans
Expected dividend yield
0.00%
Expected volatility
44.40%
Risk-free interest rate
2.52%
Expected life
-
The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is
indicative of future trends, which may also not necessarily be the actual outcome.
The following table contains further details on the aforementioned share-based payment plan:
2013
2012
Number of share
Weighted average
Number of share
Weighted average
options outstanding exercise price of share options outstanding exercise price of share
(in thousands)
options (NTD )
(in thousands)
options (NTD )
Outstanding at beginning of period
Granted
Forfeited
Exercised
Expired
Outstanding at end of period
Exercisable at end of period
-1
$-
45,493
$14.90
-
-
(45,493)
-
14.90
-
For share options granted during the period,
weighted average fair value of those options at
the measurement date (NTD )
1
-
-
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject
to the first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options
outstanding was as follows:
1 January 2012: 45,493 thousand shares.
31 December 2012: 0 share.
31 December 2013: 0 share
The information on the outstanding share options as of 31 December 2013 and 2012, and 1 January 2012, is as follows:
Range of exercise price
As at 31 December 2013
share options outstanding at the end of the period
As at 31 December 2012
share options outstanding at the end of the period
As at 1 January 2012
share options outstanding at the end of the period
Weighted average remaining
contractual life (Years)
$-
-
$14.90
0.6
Share-based payment plan for employees of the subsidiary
(a) CPT:
CPT was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 24 May 2007 to grant options for up to 100,000
units, respectively. Each unit entitles an optionee to subscribe to 1,000 shares of CPT’s common shares. When stock options are exercised,
new stocks would be issued for the exercise. The exercise price of the option was set at the closing price of the CPTs common share on the
grant date. An optionee may exercise the options in accordance with certain schedules as prescribed by the plan 2 years after the grant
date. The contractual term of each option granted is six years. There are no cash settlement alternatives. CPT Group does not have a past
practice of cash settlement for these employee share options.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
2007.5.30
145
Total number of share options granted (in thousands)
100,000
Exercise price of share options (NTD )
$15.20
TATUNG 2012 Annual Report
Financial Overview
In 2012, the stock option granted by the share-based payment plan expired. The following table contains further details on the
aforementioned share-based payment plan:
2012
Number of share options
outstanding
(in thousands)
Outstanding at beginning of period
Weighted average exercise
price of share options (NTD )
67,514
$15.20
Granted
-
-
Forfeited
-
-
Exercised
-
-
(67,514)
15.20
Outstanding at end of period
-
-
Exercisable at end of period
-
-
Expired
For share options granted during the period, weighted average
fair value of those options at the measurement date (NTD)
-
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject to the
first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options outstanding was as
follows:
31 December 2012
Outstanding thousand shares
1 January 2012
-
67,514
The information on the outstanding share options as of 31 December 2012, and 1 January 2012, is as follows:
Weighted average remaining
contractual life (Years)
Range of exercise price
As at 31 December 2012
share options outstanding at the end of the period
As at 1 January 2012
share options outstanding at the end of the period
$-
-
$15.20
0.41
(b) Giantplus
Certain employees of Giantplus are entitled to share-based payment as part of their remunerations; services are provided by the
employees in return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.
Giantplus was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 19 November 2007 to grant options for
up to 14,000 thousand units, respectively. Each unit entitles an optionee to subscribe to 1 share of Giantplus’s common shares. The exercise
price of the option was set at the closing price of the Giantplus’s common share on the grant date. When stock options are exercised,
new stocks would be issued for the exercise. An optionee may exercise the options in accordance with certain schedules as prescribed by
the plan 2 years after the grant date. The contractual term of each option granted is six years. There are no cash settlement alternatives.
Giantplus Group does not have a past practice of cash settlement for these employee share options.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
2007.11.28
Exercise price of share options (NTD )
14,000
$41.10
In 2013, the stock option granted by the share-based payment plan were expired. The following table contains further details on the
aforementioned share-based payment plan:
2013
Number of share options
outstanding
(in thousands)
Outstanding at beginning of period
Weighted average exercise
price of share options (NTD )
5,367
$41.10
Granted
-
-
Forfeited
(5,367)
41.10
Exercised
-
-
Expired
-
-
Outstanding at end of period
-
41.10
Exercisable at end of period
-
41.10
For share options granted during the period, weighted average
fair value of those options at the measurement date (NTD )
-
146
Financial Overview
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject to the
first-time adoption exemption as the options were granted and vested before 1 January 2012. There was no outstanding share option as of
31 December 2013.
(c) FD
FD was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 18 July 2007 and 6 December 2007,
respectively, to grant options for up to 10,000 thousand units, respectively. Each unit entitles an optionee to subscribe to 1 share of FD’s
common shares. The exercise price of the option was set at the closing price of the FD’s common share on the grant date. When stock
options are exercised, new stocks would be issued for the exercise. An optionee may exercise the options in accordance with certain
schedules as prescribed by the plan 2 years after the grant date. The contractual term of each option granted is five years. If there is any
change in the equity structure of FD, the exercise price for each issued stock option plan will be adjusted. There are no cash settlement
alternatives FD Group does not have a past practice of cash settlement for these employee share options.
Period of grant
Accumulated highest % of exercisable stock option
First stock option plan
In 2 years
40%
In 3 years
70%
In 4 years
100%
Period of grant
Accumulated highest % of exercisable stock option
Second stock option plan
At the two-year mark
10%
At the three-year mark
40%
At the four-year mark
70%
At the five-year mark
100%
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
Exercise price of share options (NTD )
2007.08.22
10,000
$29.90
2007.12.14
10,000
$23.50
The following table contains further details on the aforementioned share-based payment plan:
2013
2012
Number of share Weighted average Number of share Weighted average
options outstanding exercise price of options outstanding exercise price of
share options (NTD )
share options (NTD )
(in thousands)
(in thousands)
4,635
$23.50
11,188
$26.65
Granted
-
-
-
-
Forfeited
-
-
-
-
Exercised
-
-
-
-
(4,635)
23.50
(6,553)
23.50
Outstanding at end of period
-
-
4,635
23.50
Exercisable at end of period
-
-
4,635
-
Outstanding at beginning of period
Expired
For share options granted during the period,
weighted average fair value of those options
at the measurement date (NTD )
-
-
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject to the
first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options outstanding was
as follows:
1 January 2012: 9,481thousand shares.
31 December 2012: 4,635 thousand shares.
31 December 2013: 0 share.
147
TATUNG 2012 Annual Report
Financial Overview
The relevant details of the aforementioned share-based payment plan are as follows:
Range of exercise price
Weighted average remaining
contractual life (Years)
As at 31 December 2013
share options outstanding at the end of the period
$23.50~$29.50
-
As at 31 December 2012
share options outstanding at the end of the period
$23.50~$29.50
0.45
As at 1 January 2012
share options outstanding at the end of the period
$23.50~$29.50
1.45
(d) SCSC
Certain employees of SCSC are entitled to share-based payment as part of their remunerations; services are provided by the employees in
return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.
SCSC was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 20 December 2007 to grant options for up to
1,000 thousand units, respectively. Each unit entitles an optionee to subscribe to 1 share of SCSC’s common shares. The exercise price of the
option was set at the closing price of the SCSC’s common share on the grant date. When stock options are exercised, new stocks would be
issued for the exercise. An optionee may exercise the options in accordance with certain schedules as prescribed by the plan 2 years after
the grant date. The contractual term of each option granted is five years. There are no cash settlement alternatives. SCSC Group does not
have a past practice of cash settlement for these employee share options.
The fair value of the share options is estimated at the grant date using a binomial option pricing-model, taking into account the terms and
conditions upon which the share options were granted.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
2007.12.20
Exercise price of share options (NTD )
1,000
$21.3
The following table contains further details on the aforementioned share-based payment plan:
2013
2012
Number of share Weighted average Number of share Weighted average
options outstanding exercise price of options outstanding exercise price of
share options (NTD )
share options (NTD )
(in thousands)
(in thousands)
Outstanding at beginning of period
-
$-
185,600
$21.30
Granted
-
-
-
-
Exercised
-
-
(148,800)
-
Expired
-
-
(36,800)
-
Outstanding at end of period
-
-
-
-
Exercisable at end of period
-
-
-
-
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject to the
first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options outstanding was
as follows:
1 January 2012: 185,600 shares.
1 January 2013 & 31 December 2012: 0 share.
31 December 2013: 0 share.
Weighted average price of share on exercise date of option is NTD 43.78.
The relevant details of the aforementioned share-based payment plan are as follows:
Range of exercise price
Weighted average remaining
contractual life (Years)
As at 31 December 2013
share options outstanding at the end of the period
$-
-
As at 31 December 2012
share options outstanding at the end of the period
-
-
As at 1 January 2012
share options outstanding at the end of the period
21.30
0.47
(e) GET
GET was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 30 October, 2007, 14 June 2010 and 25
January 2011 to grant options for up to 3,500 thousand units, 8,000 thousand units, 9,500 thousand units, respectively. Each unit entitles an
optionee to subscribe to 1 share of GET’s common shares. The exercise price of the option was set at the closing price of the Giantplus’s
common share on the grant date. An optionee may exercise the options in accordance with certain schedules as prescribed by the plan
2 years after the grant date. The contractual term of each option granted is five years. There are no cash settlement alternatives. GET
Group does not have a past practice of cash settlement for these employee share options.
The fair value of the share options is estimated at the grant date using a binomial option pricing-model, taking into account the terms and
conditions upon which the share options were granted.
148
Financial Overview
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
Exercise price of share options (NTD )
2007.11.16
3,500
$99.20
2010.10.15
8,000
$53.80
2011.3.28
9,500
$101.10
2013
2012
Number of share Weighted average Number of share Weighted average
options outstanding exercise price of options outstanding exercise price of
share options (NTD )
share options (NTD )
(in thousands)
(in thousands)
12,623
$81.40
17,970
$85.70
Granted
-
-
-
-
Forfeited
-
-
-
-
Exercised
-
-
-
-
Expired
(1,531)
78.50
(5,347)
80.90
Outstanding at end of period
11,092
81.80
12,623
87.00
Exercisable at end of period
5,352
Outstanding at beginning of period
1,593
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject to the
first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options outstanding was
as follows:
1 January 2012: 8,883 thousand shares.
1 January 2013 & 31 December 2012: 5,310 thousand shares.
31 December 2013: 4,575 thousand shares.
The relevant details of the aforementioned share-based payment plan are as follows:
Range of exercise price (NTD )
As at 31 December 2013
share options outstanding at the end of the period
As at 31 December 2012
share options outstanding at the end of the period
As at 1 January 2012
share options outstanding at the end of the period
Weighted average remaining
contractual life (Years)
53.8~101.4
16.5
56.1~107.0
2.90
56.1~107.0
2.89
(f) Apollo Solar Energy Co., Ltd. (“Apollo”)
Apollo was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 1 June 2010 to grant options for up to 3,000
thousand units. Each unit entitles an optionee to subscribe to 1 share of Apollo’s common shares. An optionee may exercise the options in
accordance with certain schedules as prescribed by the plan 1 year after the grant date. The contractual term of each option granted is
five years.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
2010.06.01
Exercise price of share options (NTD )
3,000
$10.00
2013
2012
Number of share Weighted average Number of share Weighted average
options outstanding exercise price of options outstanding exercise price of
share options (NTD )
share options (NTD )
(in thousands)
(in thousands)
1,639
$10.00
2,125
$10.00
Granted
-
-
-
-
Forfeited
-
-
-
-
Exercised
-
-
-
-
Expired
(217)
10.00
(486)
10.00
Outstanding at end of period
1,422
10.00
1,639
10.00
Exercisable at end of period
1,422
10.00
1,639
10.00
Outstanding at beginning of period
Average fair value of those options at the
measurement date (NTD )
149
$-
$-
TATUNG 2012 Annual Report
Financial Overview
The relevant details of the aforementioned share-based payment plan are as follows:
Range of exercise price (NTD )
Weighted average remaining
contractual life (Years)
As at 31 December 2013
share options outstanding at the end of the period
$10.00
1.41
As at 31 December 2012
share options outstanding at the end of the period
$10.00
2.41
As at 1 January 2012
share options outstanding at the end of the period
$10.00
3.41
The expense recognized for employee services received from GET and Apollo during the years ended 31 December 2013 and 2012, is
shown in the following table:
2013
Total expense arising from equity-settled share-based payment
transactions
2012
$27,562
$86,537
(g) Tatung Fine Chemicals Co., Ltd. (“TFC”)
Certain employees of TFC are entitled to share-based payment as part of their remunerations; services are provided by the employees in
return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.
TFC was authorized by Securities and Futures Bureau of Financial Supervisory Commission on 13 December 2007 to grant options for up to
3,010 thousand units. Each unit entitles an optionee to subscribe to 1 share of TFC’s common shares. The exercise price of the option was
set at the closing price of the TFC’s common share on the grant date. If there is any change in the equity structure of TFC, the exercise
price for each issued stock option plan will be adjusted. An optionee may exercise the options in accordance with certain schedules as
prescribed by the plan 2 years after the grant date. The contractual term of each option granted is five years. There are no cash settlement
alternatives. TFC does not have a past practice of cash settlement for these employee share options.
The fair value of the share options is estimated at the grant date using a binomial option pricing-model, taking into account the terms and
conditions upon which the share options were granted. The above plan has been expired on 13 December 2012.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
Total number of share options granted (in thousands)
96.12.13
Exercise price of share options (NTD )
3,010
$10.80
The relevant details of the aforementioned share-based payment plan are as follows:
2013
2012
Number of share Weighted average Number of share Weighted average
options outstanding exercise price of options outstanding exercise price of
share options (NTD )
share options (NTD )
(in thousands)
(in thousands)
Outstanding at beginning of period
-
$-
138
$10.80
Granted
-
-
-
-
Forfeited
-
-
-
-
Exercised
-
-
(75)2
-
Expired
-
-
-
-
Outstanding at end of period
-
-
631
-
Exercisable at end of period
-
-
63
-
Average fair value of those options at the
measurement date (NTD)
$-
$-
1. Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject to the
first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options outstanding was
as follows:
1 January 2012: 138 thousand shares.
1 January 2013 & 31 December 2012: 0 thousand shares.
31 December 2013: 0 thousand shares.
2. Weighted average price of share on exercise date of option is NTD 10.75.
150
Financial Overview
The relevant details of the aforementioned share-based payment plan are as follows:
Weighted average remaining
contractual life (Years)
Range of exercise price
As at 31 December 2013
share options outstanding at the end of the period
As at 31 December 2012
share options outstanding at the end of the period
As at 1 January 2012
share options outstanding at the end of the period
-
-
-
-
$10.80
0.95
The expense recognized for employee services received during the years ended 31 December 2013 and 2012, were both NTD 0.
TFC did not modify or cancel any plan as of 31 December 2013 and 31 December 2012.
(28)Operating revenue
2013
Sale of goods
2012
$109,504,046
$105,989,370
(1,574,583)
(1,425,955)
Revenue arising from rendering of services
3,923,009
702,439
Other operating revenues
1,074,398
832,689
$112,926,870
$106,098,543
Less: sales returns, discounts and allowances
Total
(29) Operating leases
Operating lease commitments - Group as lessee
The Group has entered into commercial leases on certain motor vehicles and items of machinery. These leases have an average life of three to
five years with no renewal option included in the contracts. There are no restrictions placed upon the Group by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases as at 31 December 2013, 31 December 2012, and 1 January 2012 are
as follows:
31 December 2013
Not later than one year
Later than one year and not later than five years
Later than five years
Total
31 December 2012
1 January 2012
$208,648
$110,293
$97,923
683,276
654,690
301,124
76,350
322,875
294,216
$968,274
$1,087,858
$693,263
Operating lease expenses recognized are as follows:
2013
Minimum lease payments
Contingent rents
Total
2012
$617,413
$799,065
-
-
$617,413
$799,065
The commercial leases on certain items of machinery also contain contingent rent clauses; lessee has to make contingent rent payment
calculated on a basis of a specified percentage over the monthly sales revenue.
Operating lease commitments - Group as lessor
The Group has entered into commercial property leases with remaining terms of between five and twenty years. All leases include a clause to
enable upward revision of the rental charge on an annual basis according to prevailing market conditions.
Future minimum rentals receivable under non-cancellable operating leases as at 31 December 2013, 31 December 2012, and 1 January 2012
are as follows:
31 December 2013
Not later than one year
31 December 2012
1 January 2012
$156,734
$63,187
$19,765
Later than one year and not later than five years
443,419
298,838
435,571
Later than five years
506,400
760,216
385,718
$1,106,553
$1,122,241
$841,054
Total
There is no contingent rent recognized as income for the years ended 31 December 2013, 31 December 2012, and 1 January 2012, respectively.
(30) Summary statement of employee benefits, depreciation and amortization expenses by function during the years ended 31 December 2013
and 2012:
151
TATUNG 2012 Annual Report
Financial Overview
Operating
costs
2013
Operating
expenses
Total amount
Operating
costs
2012
Operating
expenses
Total amount
Employee benefits expense
Salaries
$8,342,180
$5,300,444
$13,642,624
$7,507,271
$5,308,676
$12,815,947
Labor and health insurance
635,328
427,120
1,062,448
608,854
402,066
1,010,920
Pension
551,558
294,428
845,986
548,426
199,238
747,664
Other employee benefits expense
347,922
227,126
575,048
315,794
181,774
497,568
Depreciation
11,939,007
1,202,034
13,141,041
14,729,988
1,345,731
16,075,719
Amortization
68,380
960,866
1,029,246
114,623
834,198
948,821
(31) Non-operating income and expenses
(a) Other income
2013
Dividend income
2012
$57,164
Interest income
Others
Total
$68,151
362,090
461,675
1,575,934
2,727,905
$1,995,188
$3,257,731
(b) Other gains and losses
For the years ended 31 December
2013
Gains (losses) on disposal of property, plant and equipment
Gains on disposal of investments
Foreign exchange losses (gains), net
Gains (losses) on financial assets / financial liabilities at fair value through
profit or loss
Impairment losses from non-financial assets
Other gains and losses
Total
2012
$61,918
1,040,387
238,234
$(246,387)
451,868
1,031,132
92,670
(97,940)
(1,390,264)
(1,615,469)
(332,703)
(714,591)
$(1,572,524)
$91,379
(c) Finance costs
For the years ended 31 December
2013
2012
Interest on borrowings from bank
Interest on bonds payable
$2,780,669
399,204
$2,833,894
274,887
Total finance costs
$3,179,873
$3,108,781
(32)Components of other comprehensive income
For the year ended 31 December 2013:
Income tax
Other
relating to
Other
Reclassification
Arising during
adjustments comprehensive components comprehensive
income, net of
of other
income, before
the period
during the
tax
comprehensive
tax
period
income
Exchange differences resulting from translating the
financial statements of a foreign operation
Unrealized gains (losses) from available-for-sale
financial assets
$892,231
$(7,783)
$884,448
$(90,864)
$793,584
(187,330)
(22,202)
(209,532)
6,982
(202,550)
Actuarial gains or losses on defined benefits plan
93,970
-
93,970
4,478
98,448
Share of other comprehensive income of
associates and joint ventures accounted for using
the equity method
119,604
21,406
141,010
-
141,010
$918,475
$(8,579)
$909,896
$(79,404)
$830,492
Total of other comprehensive income
152
Financial Overview
For the year ended 31 December 2012:
Income tax
Other
relating to
Other
Reclassification
Arising during
adjustments comprehensive components comprehensive
income, net of
of other
income, before
the period
during the
tax
comprehensive
tax
period
income
Exchange differences resulting from translating the
financial statements of a foreign operation
$(1,168,562)
$-
$(1,168,562)
$119,611
$(1,048,951)
164,222
(67,806)
96,416
(2,356)
94,060
Actuarial gains or losses on defined benefits plan
(252,253)
-
(252,253)
4,627
(247,626)
Share of other comprehensive income of
associates and joint ventures accounted for using
the equity method
(88,395)
-
(88,395)
-
(88,395)
$(1,344,988)
$(67,806)
$(1,412,794)
$121,882
$(1,290,912)
Unrealized gains (losses) from available-for-sale
financial assets
Total of other comprehensive income
(33) Income tax
The major components of income tax expense (income) are as follows:
Income tax expense (income) recognized in profit or loss
For the years ended 31 December
2013
2012
Current income tax expense (income):
Current income tax charge
Adjustments in respect of current income tax of prior periods
$668,173
$159,456
15,617
(4,296)
75,958
(819,408)
(384,371)
604,059
$375,377
$(60,189)
Deferred tax expense (income):
Deferred tax expense (income) relating to origination and reversal of temporary
differences
Deferred tax expense (income) relating to origination and reversal of tax loss
and tax credit
Total income tax expense (income)
Income tax relating to components of other comprehensive income
2013
2012
Deferred tax expense (income):
Exchange differences resulting from translating the financial statements of a
foreign operation
$(90,864)
$119,611
Unrealized gains (losses) from available-for-sale financial assets
6,982
(2,356)
Actuarial (gains) losses on defined benefits plan
4,478
4,627
$(79,404)
$121,882
Income tax relating to components of other comprehensive income
A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:
2013
Accounting profit (loss) before tax from continuing operations
$(15,268,815)
Tax at the domestic rates applicable to profits in the country concerned
$87,691
$(219,842)
Tax effect of revenues exempt from taxation
448,594
22,893
Tax effect of expenses not deductible for tax purposes
131,422
164,378
(308,413)
(215,349)
Tax effect of deferred tax assets/liabilities
10% surtax on undistributed retained earnings
Adjustments in respect of current income tax of prior periods
Alternative Minimum Tax Act
Others
Total income tax expense (income) recognized in profit or loss
153
2012
$(4,944,175)
3
192,065
15,617
(4,296)
463
-
-
(38)
$375,377
$(60,189)
TATUNG 2012 Annual Report
Financial Overview
Deferred tax assets (liabilities) relate to the following:
For the year ended 31 December 2013
Deferred
tax income
Deferred
(expense)
tax income
Beginning
recognized
(expense)
balance as at 1
in other
January 2013 recognized in
profit or loss comprehensive
income
Exchange
differences
Ending
balance as at
31 December
2013
Temporary differences
Deferred tax assets
Revaluations of available-for-sale investments to
fair value
$540,815
$(114,338)
$6,982
$-
$433,459
1,633
195,986
-
-
197,619
405,662
18,727
-
-
424,389
Unrealised intragroup profits and losses
14,572
(7,341)
-
-
7,231
Long-term deferred revenues
18,207
(18,207)
-
-
-
135,598
127,502
-
-
263,100
32,504
(4,112)
8,416
-
36,808
Allowance for doubtful accounts
151,086
(44,888)
-
494
106,692
Unrealized loss on market decline of inventories
161,679
(90,894)
-
1,841
72,626
4,490
179
-
-
4,669
19,084
-
-
-
19,084
-
-
(7,199)
-
(7,199)
Unused tax credits
28,009
(28,009)
-
-
-
Unused tax losses
353,694
412,380
-
8,404
774,478
67,873
218,899
(3,938)
1,042
283,876
1,934,906
665,884
4,261
11,781
2,616,832
Investments accounted for using the equity
method
(583,506)
(56,030)
-
-
(639,536)
Unrealized gain (loss) on foreign exchange
(246,372)
93,240
-
-
(353,132)
Exchange differences resulting from translating the
financial statements of a foreign operation
(529,422)
(3,319)
(83,665)
-
(616,406)
(5,765,567)
-
-
-
(5,765,567)
(23,484)
(391,332)
-
-
(414,816)
(7,148,351)
(357,471)
(83,665)
-
(7,589,457)
$308,413
$(79,404)
$11,781
Impairment on property, plant and Equipment
Investments accounted for using the equity
method
Provisions
Accrued pension liabilities
Employee benefits
Impairment on prepayments
Exchange differences resulting from translating the
financial statements of a foreign operation
Other
Subtotal
Deferred tax liabilities
Reserve for land revaluation
Other
Subtotal
Deferred tax income/ (expense)
Net deferred tax assets/(liabilities)
$(5,213,445)
$(4,972,625)
$1,934,906
$2,616,832
$(7,148,351)
$(7,589,457)
Reflected in balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
154
Financial Overview
For the year ended 31 December 2012
Deferred
tax income
Deferred
(expense)
tax income
Beginning
recognized
(expense)
balance as at 1
in other
January 2012 recognized in
profit or loss comprehensive
income
Exchange
differences
Ending
balance as at
31 December
2012
Temporary differences
Deferred tax assets
Revaluations of available-for-sale investments to
fair value
$546,010
$(2,839)
$(2,356)
$-
$540,815
1,633
-
-
-
1,633
380,850
24,812
-
-
405,662
Unrealised intragroup profits and losses
90,391
(75,819)
-
-
14,572
Provisions
51,683
83,915
-
-
135,598
Accrued pension liabilities
325,111
(296,359)
3,752
-
32,504
Allowance for doubtful accounts
305,353
(154,267)
-
-
151,086
Unrealized loss on market decline of inventories
302,736
(139,975)
-
(1,082)
161,679
Employee benefits
3,349
266
875
-
4,490
Impairment on prepayments
5,051
14,033
-
-
19,084
Long-term deferred revenues
101,763
(80,986)
-
(2,570)
18,207
Other
616,567
(548,517)
-
(177)
67,873
1,019,149
(664,960)
-
(495)
353,694
11,082
16,927
-
-
28,009
3,760,728
(1,823,769)
2,271
(4,324)
1,934,906
Investments accounted for using the equity
method
(2,792,769)
2,209,263
-
-
(583,506)
Unrealized gain (loss) on foreign exchange
(62,090)
(184,282)
-
-
(246,372)
Exchange differences resulting from translating the
financial statements of a foreign operation
(669,192)
20,159
119,611
-
(529,422)
(5,765,567)
-
-
-
(5,765,567)
(17,547)
(6,022)
-
85
(23,484)
(9,307,165)
2,039,118
119,611
85
(7,148,351)
$215,349
$121,882
$(4,239)
Impairment on property, plant and Equipment
Investments accounted for using the equity
method
Unused tax losses
Unused tax credits
Subtotal
Deferred tax liabilities
Reserve for land revaluation
Other
Subtotal
Deferred tax income/ (expense)
Net deferred tax assets/(liabilities)
$(5,546,437)
$(5,213,445)
$3,760,728
$1,934,906
$(9,307,165)
$(7,148,351)
Reflected in balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
155
TATUNG 2012 Annual Report
Financial Overview
The following table contains information of the unused tax losses of the Group:
Unused tax losses as at
31 December 2013
2013
Tax losses for the
period
$8,985,867
$8,529,318
$-
$-
2023
2012
16,418,182
15,874,596
16,336,807
-
2022
2011
12,964,198
12,808,419
13,923,238
14,023,890
2021
2020
Year
31 December 2012
1 January 2012
Expiration year
2010
19,532,152
18,413,842
18,785,813
18,865,142
2009
34,166,502
33,362,307
34,582,106
34,626,963
2019
2008
4,532,453
4,446,296
5,140,764
5,156,849
2018
2007
2,410,484
781,013
818,686
1,624,316
2017
2006
16,718,175
10,850,229
10,850,229
10,829,352
2016
2005
2,247,945
689,140
689,140
6,954
2015
2014
2004
1,673,533
1,022,791
1,022,791
-
$119,649,491
$106,777,951
$102,149,574
$85,133,466
Details of the Group’s unused tax credit are as follows:
Laws and regulations
The Act for Upgrading
Industries
The Act for Upgrading
Industries
The Act for Upgrading
Industries
The Act for Upgrading
Industries
Unused tax losses as at
31 December 31 December 1 January 2012 Expiration year
2013
2012
Items
Investment tax credit relates to
machinery and equipment
Investment tax credit relates to Training
Investment tax credit relates to Research
and Development
Emerging vital strategy industry
$-
$-
$71,725
2012
106,880
60,782
72,772
2013
1,918
278
278
2014
-
-
4,394
2012
-
-
4,046
2013
-
-
19,175
2012
-
24,002
517,336
2013
48,299
48,299
48,299
2015
$157,097
$133,361
$738,024
Unrecognized deferred tax assets
As of 31 December 2013, 31 December 2012, and 1 January 2012, deferred tax assets that have not been recognized as they may not be used
to offset taxable profits amount to NTD 19,882,707 thousand, NTD 19,866,491 thousand, and NTD 14,507,254 thousand, respectively.
Imputation credit information
31 December 2013
Balances of imputation credit amounts
31 December 2012
$1,215,850
1 January 2012
$1,049,545
$995,235
The actual creditable ratio for 2012 and 2011 were both 0%.
The Company’s earnings generated in the year ended 31 December 1997 and prior years have been fully appropriated.
The assessment of income tax returns
As of 31 December 2013, the assessment of the income tax returns of the Company and its subsidiaries is as follows:
The assessment of income tax returns by tax authorities
The Company
Assessed and approved up to 2008
Subsidiary-SCAD
Assessed and approved up to 2008
Subsidiary-CPT
Assessed and approved up to 2011
Notes
Subsidiary-SCSC
Assessed and approved up to 2011
Subsidiary-FD
Assessed and approved up to 2010
2009 has not been assessed and approved.
Subsidiary-TSTI
Assessed and approved up to 2011
Note
Subsidiary-TFC
Assessed and approved up to 2011
Note:
The competent R.O.C. tax authorities have assessed the income tax returns of TSTI up until 2011 except 2009 and 2010. Certain investment tax credits had been
reduced resulting in additional tax payable by NTD 4,091 thousand and NTD 7,268 thousand, respectively. TSTI disagreed with the outcome of income tax returns
in 2009 and 2010 and filed an administrative appeal. TSTI has estimated and recognized the mostly possible effect in the book.
156
Financial Overview
(34) Earnings (loss) per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity
by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after
adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year
plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into
ordinary shares.
2013
2012
Basic and diluted loss per share:
Loss attributable to ordinary equity holders of the Company (in thousand NTD
)
Weighted average number of ordinary shares outstanding for basic and
diluted earnings per share (in thousands)
Basic and diluted loss per share
$(1,611,408)
$(4,018,631)
2,318,433
2,309,097
$(0.70)
$(1.74)
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of
completion of the financial statements.
(35) Business combinations
Acquisition of Giantplus
On 30 April 2013, CPT acquired 24.04% of the voting shares of Giantplus. Prior to the acquisition, CPT held 29.64% of ownership of Giantplus.
Therefore, after the acquisition, CPT acquired 53.68% of ownership of Giantplus and has acquired the control over Giantplus. CPT has acquired
Giantplus because it aimed to improve the vertical integration function and enhance the industry competiveness.
The fair value of the identifiable assets and liabilities of Giantplus as at the date of acquisition were:
Fair value recognized on the acquisition date
Assets
Cash and cash equivalents
Accounts receivables (including related-party)
$2,100,720
1,775,210
Other receivables (including related-party)
146,373
Inventories
973,403
Property, plant and equipment
Intangible assets-software
Intangible assets-other
Other
4,516,843
61,747
212,163
1,806,740
11,593,199
Liabilities
Short-term loans
Accounts payables
$(1,467,268)
(1,551,798)
Other payables
(548,729)
Long-term loans (including current portion)
(808,780)
Other
(273,053)
(4,649,628)
Identifiable net assets
$6,943,571
Bargain purchase gain:
Purchase consideration
Add: non-controlling interests at fair value (46.32% of identifiable net assets at fair value)
Less: identifiable net assets at fair value
Bargain purchase gain
157
$2,228,839
3,216,262
(6,943,571)
$(1,498,470)
TATUNG 2012 Annual Report
Financial Overview
The Group has elected to measure the non-controlling interest in the acquiree at fair value of identifiable net assets proportionately attributed
to it.
Prior to the acquisition, CPT has held 29.64% of ownership in Giantplus and recognized an impairment loss of NTD 1,825,968 thousand.
The fair value and the total contractual amount of the trade receivables amounts to NTD 1,921,583 thousand. None of the trade receivables
have been impaired and it is expected that the full contractual amount can be collected.
From the acquisition date, Giantplus has contributed NTD 8,372,035 thousand of revenue and NTD 291,493 thousand to the net loss before tax
of the CPT Group. If the combination had taken place at the beginning of the year, revenue from the continuing operations would have been
NTD 60,963,838 thousand and the loss from continuing operations for the CPT Group would have been NTD 4,412,126 thousand.
Acquisition consideration
Cash
Shares held at fair value
Value of ownership prior to the acquisition
Total consideration
$544,199
450,576
1,234,064
$2,228,839
Analysis of cash flows on acquisition:
Transaction costs of the acquisition
Net cash acquired with the subsidiary
Net cash flow on acquisition
$(544,199)
2,100,720
$1,556,521
CPT has taken its available-for-sale financial assets – Tatung Co., Ltd for 60,480 thousand shares as consideration for the 24.04% interest in
Giantplus. The fair value of the shares is the closing price of the shares of the Group at the acquisition date (NTD 7.45 per share). The fair value
of the consideration given is therefore NTD 450,576 thousand. CPT has recognized a loss on disposal of the investment. However, it is a treasury
stock transaction to the Company. Please refer to Note 26 (c) for more details.
(36)Changes in parent’s interest in subsidiaries
Acquisition of new shares in a subsidiary not in proportionate to ownership interest
a. Tatung Medical Healthcare Technologies Co., Ltd. (“TMHT”) issued new shares on 21 January 2013, and the Group purchased all of the new
shares, consequently the ownership interest in TMHT was increased to 95.72%. The Group paid cash for the new shares in the amount of NTD
100,000 thousand. The difference of NTD 421 thousand between the consideration and the carrying value of the interest acquired has
been recognized in equity.
b. Tatung Consumer Products (Taiwan) Co., Ltd. (“TCPC”) made up to the deficits by capital reduction amounting to NTD 549,900 thousand
on 31 March 2013. TCPC then issued new shares on 31 May 2013 for NTD 495,500 thousand. The Group’s ownership interest in TCPC was
reduced to 99.1%. The difference of NTD 4,846 thousand between the consideration and the carrying value of the interest acquired has
been recognized in equity.
c. TFC issued new shares on 13 November 2013, the Group increased the ownership interest in TFC to 54.63%. The Group paid cash for the
new shares in the amount of NTD 118,167 thousand. The difference of NTD (5,773) thousand between the consideration and the carrying
value of the interest acquired has been recognized in equity.
Disposal on Chunghwa Picture Display Technology (Shen-Zhen) Ltd. (“CPDTSZ”)
Disposal on Chunghwa Picture Display Technology (Shen-Zhen) Ltd. (“CPDTSZ”):
On 1 July 2013, CPT disposed of all the shares of CPDTSZ for NTD 1,978,837 thousand, resulted in a gain on disposal for NTD 309,359 thousand.
The Group reclassified the other comprehensive (loss) income from exchange differences on translation of foreign operation prior to the
disposal for NTD 7,783 thousand. Accordingly, a total gain on the transaction was NTD 317,142 thousand and was recognized as non-operating
income and expense - gain on disposal of investments of statement of comprehensive income.
The book value of the assets and liabilities of CPDTSZ as at the date on 1 July 2013 were:
Book value
Cash and cash equivalents
$28,526
Accounts receivable
115,573
Other receivables
Prepayments
Property, plant and equipment
Long-term prepayments
Long-term and short-term loans
10,098
418
1,900,894
49,477
(238,297)
Accounts payable
(28,412)
Other payables
(25,189)
Advanced receipts
Other current liabilities
Total net assets
(142,995)
(615)
$1,669,478
158
Financial Overview
Disposal consideration
Cash
$1,911,157
Other receivables
67,680
Total consideration
$1,978,837
Analysis of cash flows on disposal:
Transaction costs of the disposal
$1,911,157
Net cash disposed from the subsidiary
(28,526)
Net cash flow on disposal
$1,882,631
(37)Acquisition of additional shares in a subsidiary
On 1 July 2013, CPT transferred 35% of the voting shares of CPTF Optronics Co., Ltd. from CPTB, CPTL, FVD, and other non-controlling interest
shareholders to CPTTG, which increased CPTTG ownership to 75%. A cash consideration of NTD 373,195 thousand was paid to the noncontrolling interest shareholders. The carrying value of the additional interest acquired was NTD 234,017 thousand. The difference of NTD
139,178 thousand between the consideration and the carrying value of the interest acquired has been recognized in equity by CPT group.
Then, the Company recognized the related equity in accordance with the combined proportion of ownership interest.
On 1 September 2012, CPT transferred 20% of the voting shares of CPTF Optronics Co., Ltd. from CPTB, CPTL, and other non-controlling interest
shareholders to CPTTG, which increased CPTTG ownership to 40%. A cash consideration of NTD 470,585 thousand was paid to the noncontrolling interest shareholders. The carrying value of the additional interest acquired was NTD 375,236 thousand. The difference of NTD
95,349 thousand between the consideration and the carrying value of the interest acquired has been recognized in equity by CPT group. Then,
the Company recognized the related equity in accordance with the combined proportion of ownership interest.
(38)Acquisition of new shares in a subsidiary not in proportionate to ownership interest
CPTF Optronics Co., Ltd., CPTW, and FDT acquired the non-listed shares of Xiamen Overseas Chinese Electronic Co., Ltd. by financing entrusted
loans amounting to RMB460,000 thousand and non-interest loans amounting to RMB200,000 thousand, which increased the ownership
interest to 39.16%. The difference of RMB1,549,986 thousand between the consideration and the carrying value of the interest acquired has
been recognized in retained earningsby CPT group. Then, the Company recognized the related retained earnings in accordance with the
combined proportion of ownership interest.
(39) Technology and purchase agreement
Contracting party
The term of the contract
The content of repayment
January 2009 ~ December 2013
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. CPT is required to pay royalty fees based on a
pre-determined percentage of net sales of the
related products for continuing use of exclusive
technology.
July 2010 ~ June 2015
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. CPT is required to pay royalty fees based on a
pre-determined percentage of net sales of the
related products for continuing use of exclusive
technology.
July 2011 ~ June 2016
1. CPT is required to pay licensing fees (one time
payment) for using the technologies.
2. The Company is required to pay royalty fees
during the effective period of the contract.
January 2010 ~ December 2016
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. The Company is required to pay royalty fees
during the effective period of the contract.
Technical agreement
Samsung Electronics Co., Ltd. (SEC)
Mitsubishi Electric Corporation (MELCO)
Sharp Corporation
Hitachi Ltd.
159
TATUNG 2012 Annual Report
Financial Overview
Contracting party
Toshiba Matsushita Display Technology
Co., Ltd. (TMD)
LG. Display Co., Ltd. (LG Philips LCD Co.,
Ltd. LPL)
Semiconductor Energy Laboratory Co.,
Ltd (SEL)
Hydis Technology Co., Ltd.
The term of the contract
The content of repayment
March 2012 ~ February 2017
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. CPT is required to pay royalty fees based on a
pre-determined percentage of net sales of the
related products for continuing use of exclusive
technology.
September 2007 ~ September 2014
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. CPT is required to pay royalty fees based on a
pre-determined percentage of net sales of the
related products for continuing use of exclusive
technology.
January 2009 ~ December 2018
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. CPT is required to pay royalty fees based on a
pre-determined percentage of net sales of the
related products for continuing use of exclusive
technology.
November 2012 ~ October 2022
1. CPT is required to pay licensing fees on installment
basis for using the technologies.
2. CPT is required to pay royalty fees based on a
pre-determined percentage of net sales of the
related products for continuing use of exclusive
technology.
April 2005 ~ March 2016
1. Corning Taiwan will guarantee to supply materials
of TFT-LCD to CPT for 6 generation fabrication.
2. CPT is requi red to make prepayments on
installment basis to Corning Taiwan to be
deductible from subsequent purchase.
Purchase agreement
Corning Display Technologies Taiwan
Co., Ltd (Corning Taiwan)
7. Related party transactions
Significant related party transactions
(1) Sales (including leasing revenue)
2013
Entity with joint control or significant influence over the Company
Associates
Joint ventures
Other related parties
Total
2012
$29,726
$10,730
1,670,800
1,852,782
22,461
40,443
4,885
7,440
$1,727,872
$1,911,395
(a) The Company
The sales price to related parties was determined through mutual agreement based on market conditions. The collection terms for
domestic related parties were 90 days, equivalent to those for domestic third parties; the collection terms for foreign related parties were
30-180 days, equivalent to these for foreign third parties.
(b) CPT and its subsidiaries
There are no significant differences between selling prices to related parties and prices to arm’s length customers. The comparison of
collection terms between related parties and arm’s length customers is summarized as follows:
Region
Oversea
Year ended 31 December 2013
Related parties
General supplier
Year ended 31 December 2012
Related parties
General supplier
O/A 30-90 days
Cash payment with 60 days O/A 30-90 days
Cash payment with 60 days
O/A 30-90 days
Cash payment with 45 days O/A 30-90 days
Cash payment with 45 days
at sight
L/C 30-60 days at sight
L/C 30-60 days at sight
160
Financial Overview
(c) FD and its subsidiaries
There are no significant differences between selling prices to related parties and prices to arm’s length customers except for particular
inventory. The comparison of collection terms between related parties and arm’s length customers is summarized as follows:
Region
Oversea
Internal
Year ended 31 December 2013
Related parties
General supplier
O/A 60-150 days
O/A 30-150 days
Or L/C SIGHT
Year ended 31 December 2012
Related parties
General supplier
O/A 60-150 days
O/A 30-150 days
Or L/C SIGHT
O/A or TT 30-150 days
O/A or TT 30-150 days
O/A 30-120 days
O/A 30-120 days
(2) Purchase
Associates
2013
2012
$1,410,788
$1,074,709
(a) The Company
The purchase price from related parties was determined through mutual agreement based on market conditions. The payment terms to
related parties and third parties for domestic purchases were both net 30-150 days, while the terms for overseas purchases were both net
30-120 days.
(b) CPT and its subsidiaries
There are no significant differences between purchase prices from related parties and purchase prices from arm’s length suppliers. The
comparison of terms of payment between related parties and arm’s length suppliers is summarized as follows:
Region
Oversea
Year ended 31 December 2013
Related parties
General supplier
T/T 30-360 days
L/C 30-180 days
Year ended 31 December 2012
Related parties
General supplier
T/T 30-360 days
L/C 30-180 days
T/T 30-360 days
Internal
30-90 days after check
T/T 30-360 days
30-210 days after check
30-90 days after checks
30-210 days after check
(c) FD and its subsidiaries
There are no significant differences between purchase prices from related parties and purchase prices from arm’s length suppliers except
for particular inventory. The payment term is one to five month. The comparison of terms of payment between related parties and arm’s
length suppliers is summarized as follows:
Region
Year ended 31 December 2013
Related parties
General supplier
Year ended 31 December 2012
Related parties
General supplier
Oversea
T/T 30-150 days after QC
or DA 120 days
T/T or L/C 30-150 days
after QC
T/T 30-150 days after QC
or DA 120 days
T/T or L/C 30-150 days
after QC
Internal
30-120days after QC
30-120 days after QC
30-120days after QC
30-120 days after QC
(3) Notes receivable
As at
Entity with joint control or significant influence over
the Company
31 December 2013
31 December 2012
1 January 2012
$-
$-
$102
31 December 2013
31 December 2012
(4) Accounts receivable – related parties
As at
Entity with joint control or significant influence over
the Company
Associates
Other related parties
Net
161
1 January 2012
$422
$2,029
$4,900
232,190
460,803
493,980
186
-
-
$232,798
$462,832
$498,880
TATUNG 2012 Annual Report
Financial Overview
(5) Others receivable – related parties (current or non-current)
31 December 2013
Entity with joint control or significant influence over
the Company
31 December 2012
1 January 2012
$12
$8
$11
50,218
55,295
2,934,386
358
-
-
50,588
55,303
2,934,397
-
-
(271,386)
Non-current portion
(16,842)
(16,908)
(46,436)
Current portion
$33,746
$38,395
$2,616,575
Associates
Other related parties
Net
Less: credit for investments accounted for under the
equity method
(6) Accounts payable – related parties
As at
31 December 2013
Entity with joint control or significant influence over
the Company
Associates
Net
31 December 2012
1 January 2012
$17
$8
$-
478,010
381,095
202,591
$478,027
$381,103
$202,591
(7) Other payable
As at
31 December 2013
Entity with joint control or significant influence over
the Company
31 December 2012
1 January 2012
$1,647
$542
$1,070
Associates
4,360
4,314
12,133
Other related parties
1,462
-
-
$7,469
$4,856
$13,203
Net
(8) Plants and Office leased – related parties
2013
Entity with joint control or significant influence over
the Company
Associates
Net
2012
$24,148
$90
13,679
13,004
$37,827
$13,094
(9) Compensation of key management personnel
2013
Short-term employee benefits
Post-employment benefits
Termination benefits
share-based payment awards
Total
2012
$198,739
$186,215
5,959
9,551
-
290
8,309
23,347
$213,007
$219,403
162
Financial Overview
(10) The chairman of Tatung Company, Wei-Shan Lin, guaranteed several bank loans and the 2nd domestic convertible bond for the Company and
its subsidiaries.
8. Assets pledged as collateral
The following table lists assets of the Group pledged as collateral:
31 December 2013
Carrying amounts
31 December 2012
Land
$3,685,118
$3,265,162
$1,071,992
Loans
Buildings
17,818,024
17,444,201
12,662,690
Loans
Lease improvement
1,650,501
1,955,612
829,256
Loans
12,485,224
17,198,709
23,629,988
Loans
5,859,630
2,996,078
5,551,498
309,591
-
-
Loans
4,027
-
-
Lawsuit deposit
Rent prepaid(current and non-current)
320,858
311,382
6,879
Available-for-sale financial assets - share
969,739
224,400
-
Investments accounted for under the equity
method
-
3,117,797
5,880,466
Construction in progress & prepaid for
equipment
-
479,640
-
Enforcement for
constructions, Cash
guaranteed
5,579
-
-
Loans
$43,108,291
$46,992,981
$49,632,769
Machines and other Equipment
Investment in debt security with no active
market
Financial assets at fair value through profit or
loss, current – share
Other current assets – Deposit-out
Accounts receivable (Note)
Total
Note:
1 January 2012
Various guarantees
Loans
Loans, Guarantee
for enforcement
Loan
The transactions between the entities are written off for the consolidated financial statements.
As of 31 December 2013, 31 December 2012 and 1 January 2012, the shares amounting to NTD 4,422,093 thousand, NTD 1,721,779 thousand, and
NTD 2,534,993 thousand, respectively of the subsidiaries of the Group were pledged for loans. The related amounts of the pledged shares were
offset while preparing the consolidated financial statements.
9. Commitments and contingencies
(1) Other
(a) The promissory notes issued by the Company and subsidiaries for bank loans, construction escrow and tariff guarantee amounted to
USD5,000 thousand and NTD 64,923,049 thousand.
(b) The Company and its subsidiaries’ unused letters of credit for importing raw materials and machinery amounted to USD26,152 thousand,
JPY200,335 thousand, RMB19,719 thousand, EUR1,909 thousand and NTD 65,326 thousand.
(c) Contract escrows issued by financial institutions amounted to USD407 thousand and NTD 2,108,419 thousand.
(d) Collateral for account receivable factoring amounted to USD2,000 thousand. Collateral for real estate transaction contract amounted to
NTD 450,000 thousand.
(e) The Company’s first overseas zero-coupon secured convertible bonds were guaranteed by J.P. Morgan. The balance of guarantees was
USD151,250 thousand.
(f) The Company applied to Mega International Commercial Bank and Bank of Taiwan for a credit line to be issued for Tatung Co., of Japan,
Inc. The promissory notes of credit amounted to NTD 1,360,000 thousand and NTD 950,000 thousand.
(g) The Company has filed an appeal against the National Taxation Bureau for the tax affairs related to an additional tax and fines resulted
from the commodity taxes from 2004 to 2008. In January 2013, the Company has provided some SCSC shares as guarantee for this tax
appealing.
(h) The Company provided guaranty for Tatung Infocomm Co., Ltd. to apply for a credit line of NTD 2,000,000 thousand to the Land Bank. The
maturity date of guaranties is September 22, 2014. On March 23, 2012, the board of directors resolved to sell the common shares of Tatung
InfoComm Co., Ltd. to Vee Telecom Multimedia Co., Ltd. Since the Company has completed the transaction. Tatung InfoComm Co., Ltd.
was no longer a subsidiary. Accordingly, Tatung InfoComm Co., Ltd. is negotiating with the bank to relieve the Company from endorsing for
it.
(i) United Aerotech System Corporation filed a legal action against the Company on January 6, 2010, claiming payments of consultant
fees amounted to NTD 1.49 million. The Company argued that the payment of consultant fees was not reasonable, and the court of first
instance ruled in favor of the Company but United Aerotech System Corporation claimed. United Aerotech System Corporation claimed a
higher amount of NTD 2 million in the oral arguments on June 28, 2011, and the court of second instance ruled in favor of United Aerotech
System Corporation. The Company also appealed. The Company appealed to the court of third instance, and as of the reporting date,
163
TATUNG 2012 Annual Report
Financial Overview
the action is still ongoing. Due to the uncertainty of the results, the loss could not be reasonably estimated. If United Aerotech System
Corporation files an action against the remaining balance, the probable loss would be between NTD 60 million and NTD 0. However both
courts in the first and second instance found the evidence supporting the claim in the amount of NTD 60 million to be invalid.
(j) The Company is engaged in a construction project with Taiwan Railway Administration, MOTC (“ Taiwan Railway”). Taiwan Railway failed
to complete the inspection process after the goods were delivered. The Company has filed an action against Taiwan Railway to claim
payments in January 2013. The action is pending at the court of first instance.
(k) Compal Electronics, Inc. (“Compal”) made a public announcement on 29 March 2013 to request the Company to purchase the CPT shares
held by Compal and it filed for arbitration to the Arbitration Association of the Republic of China. The Company received the arbitration
appeal submitted by Compal from the Association on 3 April 2013. An arbitration tribunal was formed on 20 August 2013 and has
convened four inquiries on the following dates: 8 October 2013, 10 December 2013, 22 January 2014 and 11 March 2014. The next inquiry
was scheduled to begin on 22 April 2014.
According to the Company’s attorney, the special claim at issue shall not be binding on the Company. The Company has retained legal
counsel to handle the relevant issues concerning the arbitration to uphold the rights of the Company and its shareholders.
(l) As of 31 December 2013, CPT and its subsidiaries have the following commitments and contingencies.
Significant litigation:
Lawsuits against intellectual properties
i. In February 2007, Anvik Corporation filed a patent infringement suit in the United States District Court of New York against CPT, Tatung
Company and Tatung Company of America (the “Tatung Companies”). The lawsuit alleged CPT and Tatung Companies of using the
photo-masking equipment and the patented methods performed by such system in producing TFT-LCD panel without permission. This
infringement suit is now under the jurisdiction of the District Court of California. CPT has engaged United States attorneys to defend the
case accordingly. The lawsuit has been settled without compensation in October 2013.
ii. Eidos Display, LLC and Eidoes III, LLC filed a patent infringement suit in the United States District Court of Texas against CPT and the other
three Taiwanese LCD companies. CPT has engaged United States attorneys to defend the case accordingly.
Other lawsuits
Besides, CPT was cooperative with investigations from authorities of European Union, Korea and Canada, and such investigations are still
underway. In December 2010, EC brought in a verdict to fine CPT with EUR 9,030 thousand. CPT would not appeal to a higher court and
agree to pay the fines, which have been accrued and will not result in further material effect. The Korean Fair Trading Commission (KFTC) had
imposed a fine on CPT in the amount of 290 million Korean Won (equivalent to USD 262,000). The fine had been paid in February 2012, and
Canada had already ceased the investigation.
CPT received plaints of civil class action for LCD from the consumer groups in U.S. and Canada. The civil class action in U.S. and Canada had
been settled out of court. In addition, Opt out action and civil class action filed by state prosecutors in U.S. are in the process of compromise.
Fair trading commission, Executive Yuan, R.O.C. made a request in December 2008 to CPT for additional information on the matter. CPT is
cooperative with the request. The commission has notified CPT that the investigation on this claim was terminated.
During November 2007, CPT received plaint of antitrust civil class action for CRT and a criminal summons from the U.S. Department of Justice
(D.O.J.), which accused CPT, together with other companies had been involved in price-fixing and supply-controlling. Therefore, CPT had been
subject to the investigation relating to the Antitrust Act and has been cooperative with investigations from various parties, including JFTC, KFTC
(Korean Fair Trading Commission) and EC, and has not been imposed with any fines. At the same time, CPT received plaints of civil class action
for CRT from the consumer groups in U.S. and Canada. The civil class action in U.S. and in Canada had been settled out of court. In addition,
CPT has been subject to the investigation from certain countries in Europe, such as Czech Republic, Hungary and Slovakia. The Czech Republic
had reached a verdict on the lawsuits. The fines have been paid on 2010.
CPT has engaged legal representatives to defend the above suits and believes that these suits will not have a material adverse effect on CPT’s
result of operations or financial condition.
Unrecognized contract commitment
CPT has entered into a contract to dispose of partial land in an area of 61,369.22 square feet and buildings occupying area of 29,275.22 square
feet located in Ba-de factory in Taoyuan County with Toppan Chunghwa Electronics Co., Ltd. and Gi-Jin Construction Co., Ltd., respectively.
Transaction amount 2,814,149 thousand dollars. The transferred date shall be no later than 3 July 2015 in accordance with the real estate
transaction agreement.
(m) As of 31 December 2013, Apollo has the following commitments and contingencies
Due to the fact that demand for raw materials for solar batteries exceeds existing supply, Apollo Solar Energy Co., Ltd. had entered into
long-term supplies contract with upstream suppliers. The contract period was for ten years, starting January 1, 2006 to December 31, 2015.
Under the contract, the suppliers had guaranteed long-term supplies of raw materials to Apollo Solar Energy Co., Ltd.; Apollo Solar Energy
Co., Ltd. agreed to pay loyalties in the amount of NTD 75,000 thousand (including sales tax) in return. However the suppliers defaulted on
their contractual obligation and failed to provide the materials as stipulated under the contract, therefore the contract was rescinded
in January, 2007. The supplier had reimbursed Apollo Solar Energy Co., Ltd. for half of the loyalties paid which amounted to NTD 37,500
thousand (including sales tax). The contract amounted to USD85,308 thousand. Apollo Solar Energy Co., Ltd will reach an agreement with
the supplier in January, 2010 that the contract term is from January 1, 2009 to December 31, 2015 and the contract amounted to USD63,013
thousand.
As of 31 December 2010, the balance of loyalties was NTD 19,064 thousand which has no future economic benefit, therefore, Apollo has
recognized an impairment loss of NTD 19,064 thousand and reclassified in long-term prepayments. Apollo has written-off the prepayments
by NTD 76 thousand. As of 31 December 2013, the balance of long-term prepayments was NTD 13,978 thousand with the impairment loss of
NTD 13,978 thousand.
(n) As of 31 December 2013, SCSC and its subsidiaries have the following commitments and contingencies:
i. SCSC, in search of securing an ample supply of silicon raw material for producing the diode, has entered into a silicon raw material
supply contract in December 2007, amended in March 2012, with Cargill, with the contract duration starting from December 31,
2007 to December 31, 2017. Under the contract, Cargill has made commitment to provide certain quantity of silicon raw material to
Green Energy Technology Inc. during the contract period and at the total contract price of JPY4,268,592 thousand. In addition, SCSC
is required to pay a minimum purchase amount of JPY275,724 thousand. As of 31 December 2013, the amount of prepayment was
JPY166,596 thousand (or the equivalent of approx. NTD 30,753 thousand), which is classified under the prepayments and long-term
prepayments.
ii. As of 31 December 2013, GET and its subsidiaries has signed a purchase contract for materials and paid USD74,140 thousand and
EUR23,590 thousand (or the equivalent of approx. NTD 3,323,160 thousand), which is classified under the prepayments and long-term
prepayments. As of 31 December 2013, GET and its subsidiaries have recognized loss contingency of the paid prepayment of NTD
82,552 thousand.
iii. Hemlock Semiconductor Corporation, a supplier of silicon raw material, has filed a lawsuit against GET and Tatung Co. of America Inc.
(“TUS”). TUS has denied all causes of actions, and the litigation is in the early stages of discovery. GET has received the legal document
on 10 March 2014 and engaged legal counsel for the legal matter.
iv. As of 31 December 2013, a supplier of silicon raw material, has sent a notice of interest payable amounting to USD10,418 thousand
164
Financial Overview
(or the equivalent of NTD 310,508 thousand) to GET for charging interests resulting from overdue advances and payments. GET has
assessed thta the possibility of the payment for the interest payable is low based on their business interactions in between. Therefore,
GET did not recognize the payable.
v. GET, in a move to expand their long-term business, have established cooperation with downstream suppliers through long-term
strategic alliance by entering into a contract with well-known suppliers and clients in Taiwan. Under the contract, GET and its subsidiaries
are to supply multi-crystalline wafer. A total of USD6,704 thousand (or the equivalent of NTD 217,713 thousand) was accounted for under
the advance receipts (current and non-current) as of 31 December 2013.
vi. In order to raise capital for developing the Da-yuan’s plant, purchasing machinery and equipment, and to repay debt and meet the
cash flow requirements for operating purposes, the Board of Directors approved a proposal for a syndicated loan on 14 June 2010 in the
amount of NTD 2.66 billion. The syndicated loan was jointly underwritten by Taipei Fubon Bank, Taiwan Bank, Land Bank, Taishin Bank,
First Bank, Chang Hwa Bank and Cathay United Bank for a five-year period. The syndicated loan contract was signed on 22 June 2010.
The lending caps for each subcategory and the purposes of the loan are separately disclosed in the table below:
Item
Loan Cap (in thousands)
Purpose
tem A-1 (Note)
NTD 700,000 (or USD equivalent)
The issuing bank issues a letter of credit pursuant to the contracts.
Item A-2 (Note)
NTD 650,000 (or USD equivalent)
For the borrower to develop Da-yuan plant (including the
advance payment for the letter of credit of Item A-1)
Item B
NTD 400,000
For the borrower to develop Da-yuan plant
Item C
NTD 800,000
For the borrower to repay debt and to cover the needs of operations.
Item D
NTD 560,000
For the borrower to cover the needs of operations.
Note:
The sum of drawdown of Items A-1 and A-2 shall not exceed NTD 900,000 thousand (or US dollars in equivalence).
As of December 31, 2013, all credits of above Item A-1 ~ Item D had been fully used.
vii. In order to raise capital for developing the Luzhu plant (Including purchasing machinery and equipment) in the Southern Taiwan
Science Park, and cover the mid-term operating capital needs, the Board of Directors approved a proposal on 25 January 2011 for a
syndicated loan which was jointly underwritten by Taiwan Bank, Cathay United Bank, Land Bank, Taiwan Agricultural Bank, HSBC (Taiwan)
Bank, Industrial Bank of Taiwan, and Yuanta Bank for a five-year period in the amount of NTD 3.2 billion. The syndicated loan contract
was signed on 1 February 2011. The lending caps for each subcategory and the purposes of the loan are separately disclosed in the
table below:
Item
Loan Cap (in thousands)
Item A
NTD 800,000
Item B
NTD 1,700,000
Item C-1 (Note)
USD22,000
Item C-2 (Note)
USD22,000
Note:
Purpose
For the borrower to pay for development and construction of
Luzhu plant.
For the borrower to pay for the purchase of machinery and
equipment in Luzhu plant.
For the borrower to apply for a letter of credit for overseas
purchase
For the borrower to cover mid-term turnover capital of
operation.
The sums of loan cap of Items C-1 and C-2 shall not exceed the lower of NTD 700,000 thousand or USD 22 million.
Of the aforesaid subcategory loan caps, except that Item C’s loan cap is in revolving facility, all the others are in non-revolving. As of 31
December 2013, all credits of above Item A ~ Item C-2 had been fully used.
viii. To purchase machines, equipment and to cover the mid-term operating capital needs, the Board of Directors approved a proposal
on May 19, 2011 for a syndicated loan which was jointly underwritten by Taipei Fubon Bank, Mega International Commercial Bank, First
Bank, Far East International Bank, Chang Hwa Bank and Taiwan Business Bank for a five-year period in the amount of USD70 million.
The syndicated loan contract was signed on May 30, 2011. The lending caps for each subcategory and the purposes of the loan are
separately disclosed in the table below:
Item
Loan Cap (in thousands)
Item A
USD56,000
Item B
USD14,000
Purpose
For the borrower purchase machinery and equipment or to
cover mid-term turnover capital of operation.
As of December 31, 2012, all credits of above Item A ~ Item B had been fully used.
ix. Lof Solar Corp. failed to fulfill its obligations under the terms of the wafer-purchasing contract with the Company. The Company took a
legal action to notify Lof solar Corp. of the Company’s decision to terminate the contract, and confiscated prepayments of USD3,902
thousand received from Lof Solar Corp. Lof Solar Corp. disagreed with the Company’s decisions and filed a lawsuit against the
Company concerning the dispute to Taipei District Court on 13 April 2011. On 2 June 2011, Taipei District Court ruled to cease the legal
proceedings and instructed Lof Solar Corp to resolve this dispute by arbitration. However, Lof Solar Corp refused to accept the Court’s
ruling and filed an appeal to Taiwan Supreme Court. On 13 October 2011, the Supreme Court overruled the appeal and consented to
Taipei District Court’s ruling. After that, Lof Solar Corp. did not further submit this dispute to arbitration in Taipei District Court within the
specific timeframe prescribed by Taiwan Supreme Court’s ruling. As a result, Taipei District Court dismissed this case on 29 December
2011. However, Lof Solar Corp has the right to file for the arbitration. As of the issuance date of the audit report of independent auditors,
Lof Solar Corp. had not yet applied for arbitration.
10.Significant disaster loss
None.
11. Significant subsequent events
165
TATUNG 2012 Annual Report
Financial Overview
(1) The board of director of SCSC resolved to participate in a private placement to issue shares of its subsidiary, GET, with a maximum amount of 1
billion.
(2) FD has an agreement with the other shareholders of its subsidiary, Hefei Fuying Opto-electronic Co., Ltd (“Hefei”). Starting from 16 January 2014,
the other shareholders will assign the Chairman, the CFO and other important management for Hefei to govern the finance and operation of
Hefei. Accordingly, FD has lost the control over Hefei’s operations and excluded Hefei from the consolidated financial statement of FD since
January 2014.
(3) To respond to the significant growth of customer service centers market in Mainland China, the board of director of TSTI has resolved to invest
in Tatung System Technologies (Shanghai) Ltd. through Tatung System Technologies Holding Ltd. The investment amount was USD750,500
thousand and has completed the remittance in February 2014.
The above investment has been approved by Investment Commission, MOEA on 6 January 2014.
(4) CPT's subsidiary, CPTB, pledged its shares of CPTTG for 190,000 thousand shares to obtain financing from the financial institutions in China in the
amount of RMB790,000 thousand.
12. Other
(1) Categories of financial instruments
Financial assets
31 December 2013
31 December 2012
1 January 2012
Financial assets at fair value through profit or loss:
Held for trading (includes the non - current ones)
$857,130
$120,739
$105,585
2,844,350
2,174,459
2,051,334
20,000
20,000
20,000
Cash and cash equivalents(excludes cash on hand)
22,708,659
24,103,343
30,093,730
Investment in debt security with no active market,
current (includes the non - current ones)
7,277,142
3,204,182
5,829,954
709,813
811,055
1,096,973
17,310,526
13,280,573
13,843,448
2,994,460
1,863,800
4,107,550
500,766
592,994
632,839
51,501,366
43,855,947
55,604,494
$55,222,846
$46,171,145
$57,781,413
Available-for-sale financial assets (includes Financial assets
measured at cost)
$(202,146, $344,529, $429,749)(includes the non-current ones)
Held-to-maturity financial assets
Loans and receivables:
Notes receivable (includes related parties)
Accounts receivable (includes related parties)
(include the construction receivable)
Other receivables (includes related parties)
(includes the non - current ones)
Other non - current assets–deposits-out
subtotal
Total
Financial liabilities
31 December 2013
31 December 2012
1 January 2012
Financial liabilities at amortized cost:
Short-term loan
Short-term notes and bills payable
Payables (includes related parties)(includes the
non-current ones)
Bonds payables (includes the current portions)
Loan (includes the current portions)
Deposits in
Subtotal
$40,373,734
$38,170,205
$40,317,299
4,941,588
1,551,694
698,917
32,143,247
29,097,255
28,868,465
5,918,437
5,381,573
6,307,920
35,434,205
46,254,035
49,793,399
118,200
90,876
234,489
118,929,411
120,545,638
126,220,489
29,137
109,031
767,233
-
-
15,562
$118,958,548
$120,654,669
$127,003,284
Financial liabilities at fair value through profit or loss:
Held-for-trading
Financial liabilities from Hedge
Total
166
Financial Overview
(2) Financial risk management objectives and policies
The Group’s risk management objectives are to manage market risk, credit risk and liquidity risk related to its operating activities. The Group
identifies measures and manages the aforementioned risks based on policy and risk preference. The Group has established appropriate
policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, due approval
process by the board of directors and audit committee must be carried out based on related protocols and internal control procedures. The
Group complies with its financial risk management policies at all times.
(3) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market
risks comprise of currency risk, interest rate risk, and other price risk (such as equity price risk).
In practice, it is rarely the case that a single risk variable will change independently from other risk variables, there is usually interdependencies
between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk
variables.
Foreign currency risk
The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or
expense are denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.
The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables,
therefore natural hedge is received. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated
in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in
foreign subsidiaries are for strategic purposes, they are not hedged by the Group.
The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant
monetary items denominated in foreign currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly related to
the volatility in the exchange rates for USD, JPY and RMB.
The information of the sensitivity analysis is as follows:
a. When NTD strengthened/ weakened against USD by 1%, the profit for the years ended 31 December 2013 and 2012 increased (decreased)
by NTD 223 million/NTD (223) million and NTD 175 million/NTD (175) million.
b. When NTD strengthened/ weakened against JPY by 1%, the profit for the years ended 31 December 2013 and 2012 increased/decreased
by NTD 34 million/NTD (34) million and NTD 38 million/NTD (38) million.
c. When NTD strengthened/ weakened against RMB by 1%, the profit for the years ended 31 December 2013 and 2012 increased/decreased
by NTD 13 million/NTD (13) million and NTD 12 million/NTD (12) million.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s loans and receivables at variable
interest rates, bank borrowings with fixed interest rates and variable interest rates.
The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest
rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.
The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments
and borrowings with variable interest rates and interest rate swaps. At the reporting date, an increase/decrease of 10 basis points of interest
rate in a reporting period could cause the profit for the years ended 31 December 2013 and 2012 to decrease/increase by NTD 79 million and
NTD 88 million, respectively.
Equity price risk
The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the
investment securities. The Group’s listed equity securities are classified under held for trading financial assets or available-for-sale financial
assets, while unlisted equity securities are classified as available-for-sale. The Group manages the equity price risk through diversification and
placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a
regular basis. The Group’s board of directors reviews and approves all equity investment decisions.
At the reporting date, a decrease of 1% in the price of the listed equity securities held for trading could increase/decrease the Group’s profit for
the years ended 31 December 2013 and 2012 by NTD (10,850) thousand and NTD (16,860) thousand, respectively.
(4) Credit risk management
Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit
risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits
and other financial instruments.
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer
credit risk management. Credit limits are established for all customers based on their financial position, rating from credit rating agencies,
historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain customer’s credit risk will also be
managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.
As of 31 December 2013, 31 December 2012, and 1 January 2012, amounts receivables from top ten customers represented 20.31%, 42.03% and
31.75% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.
Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance
with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and
financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no
significant credit risk for these counter parties.
(5) Liquidity risk management
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents,
highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of
the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes
the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated
interest rate yield curve as of the end of the reporting period.
Non-derivative financial instruments
167
TATUNG 2012 Annual Report
Financial Overview
More than 5
Years
4-5 Years
Total
Less Than 1 Year
2-3 Years
$57,734,184
$16,776,850
$3,162,913
$2,700
$77,676,647
4,941,588
-
-
-
4,941,588
32,143,247
-
-
-
32,143,247
5,959,160
-
-
-
5,959,160
118,200
2,667
980
-
121,847
$55,518,302
$28,432,754
$1,794,055
$122,333
$85,867,444
1,551,694
-
-
-
1,551,694
29,097,255
-
-
-
29,097,255
-
6,618,400
-
-
6,618,400
81,708
8,188
980
-
90,876
$51,758,382
$34,503,899
$7,029,987
$102,846
$93,395,114
698,917
-
-
-
698,917
Payables (including relates parties) (including the
non-current portions)
28,868,465
-
-
-
28,868,465
Convertible bonds payable (including the current
portions)
1,055,800
6,043,500
-
-
7,099,300
201,882
31,627
980
-
234,489
31 December 2013
Loans
Short-term notes and bills payable
Payables (including relates parties) (including the
non-current portions)
Convertible bonds payable(including the current
portions)
Deposit-in
31 December 2012
Loans
Short-term notes and bills payable
Payables (including relates parties) (including the
non-current portions)
Convertible bonds payable (including the current
portions)
Deposit-in
1 January 2012
Loans
Short-term notes and bills payable
Deposit-in
Derivative financial instruments
Less Than 1 Year
2-3 Years
More than 5
Years
4-5 Years
Total
31 December 2013
Flow-in
$889,656
$-
$-
$-
$889,656
Flow-out
(890,073)
-
-
-
(890,073)
$(417)
$-
$-
$-
$(417)
Flow-in
$3,842,522
$-
$-
$-
$3,842,522
Flow-out
(3,951,553)
-
-
-
(3,951,553)
$(109,031)
$-
$-
$-
$(109,031)
Flow-in
$128,856
$-
$-
$-
$128,856
Flow-out
(885,761)
-
-
-
(885,761)
$(756,905)
$-
$-
$-
$(756,905)
Net
31 December 2012
Net
1 January 2012
Net
The above tables about the disclosures of derivative financial instruments use the undiscounted net cash flow.
(6) Fair value of financial instruments
(a) The methods and assumptions applied in determining the fair value of financial instruments:
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to
168
Financial Overview
estimate the fair values:
i. The carrying amount of cash and cash equivalents, accounts receivables, payables and other current liabilities approximate their fair
value.
ii. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on
market quotation price (including listed equity securities and bonds) at the reporting date.
iii. Fair value of equity instruments without market quotations (including unquoted public company and private company equity
securities) are estimated using the market method valuation techniques based on parameters such as recent fund raising activities,
valuation of similar companies, individual company’s development, market conditions and other economic indicators.
iv. The fair value of derivative financial instrument is based on market quotations. For unquoted derivatives that are not options, the fair
value is determined based on discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of optionbased derivative financial instruments is obtained using the option pricing model.
v. The fair value of other financial assets and liabilities is determined using discounted cash flow analysis, the interest rate and discount
rate are selected with reference to those of similar financial instruments.
(b) Fair value of financial instruments carried at amortized cost
Except as detailed in the following table, the Group considers that the carrying amounts of carried at amortized cost financial assets and
financial liabilities recognized in the consolidated financial statements approximate their fair values.
Carrying amounts
Financial liabilities
Bonds payable
31 December 2013
31 December 2012
1 January 2012
$5,918,437
$5,381,573
$6,307,920
31 December 2013
31 December 2012
1 January 2012
$6,026,833
$5,784,900
$7,001,152
Fair value
Financial liabilities
Bonds payable
(c) Fair value measurements recognized in the consolidated statement of financial position.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 based on the degree to which the fair value is observable:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 fair value 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); and
• Level 3 fair value 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).
31 December 2013
Level 1
Financial assets
Financial assets at fair value through profit or loss:
Forward exchange contracts
Open-end funds
Designated financial assets at fair value through profit or loss
Available-for-sale financial assets:
Share
Financial liabilities
Financial liabilities at fair value through profit or loss:
Forward exchange contracts
Embedded derivatives
Exchange options
Designated financial liabilities at fair value through profit or loss
Level 2
Level 3
Total
$47,624
-
$25,723
783,783
$-
$25,723
47,624
783,783
2,280,961
-
361,243
2,642,204
-
16,793
2,998
9,346
320,959
-
16,793
2,998
9,346
320,959
31 December 2012
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at fair value through profit or loss:
Forward exchange contracts
Open-end funds
$-
$998
$-
$998
119,741
-
-
119,741
1,246,373
-
583,557
1,829,930
-
109,031
-
109,031
Available-for-sale financial assets:
Share
Financial liabilities
Financial liabilities at fair value through profit or loss:
Forward exchange contracts
169
TATUNG 2012 Annual Report
Financial Overview
1 January 2012
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at fair value through profit or loss:
Share
$15
$-
$-
$15
Forward exchange contracts
-
70,732
-
70,732
Embedded derivatives
-
2,069
-
2,069
32,769
-
-
32,769
1,121,768
-
499,817
1,621,585
$-
$10,196
$-
$10,196
Embedded derivatives
-
10,328
-
10,328
Share swap contract
-
746,709
-
746,709
Fund
Financial assets at fair value through profit or loss:
Share
Financial liabilities
Financial liabilities at fair value through profit or loss:
Forward exchange contracts
There were no transfers between Level 1 and 2 for the year ended 31 December 2013 and 2012, respectively.
Regulate financial assets with Level 3 value measurement is below:
Measurement at fair value
through income/loss
Share
1 January 2013
Available- forsale
Derivative
Share
Total
$-
$-
$583,557
$583,557
Recognized in other comprehensive income, 2013
-
-
40,412
40,412
Acquisition / Issuance, 2013
-
-
34,839
34,839
Disposal / Liquidation, 2013
-
-
(308,600)
(308,600)
Transfers from Level 3 (Note)
-
-
(42,276)
(42,276)
Exchange differences
-
-
(4,385)
(4,385)
Through business combination, 2013
-
-
57,696
57,696
31 December 2013
$-
$-
$361,243
$361,243
1 January 2012
$-
$-
$499,817
$499,817
Recognized in other comprehensive income, 2012
-
-
63,354
63,354
Acquisition / Issuance, 2012
-
-
42,906
42,906
Disposal / Liquidation, 2012
-
-
(21,636)
(21,636)
Exchange differences
-
-
(884)
(884)
$-
$-
$583,557
$583,557
31 December 2012
Note:
FocalTech System Co., Ltd. Stocks held by the Company under available-for-sale financial assets was listed on the Taiwan Stock Exchange on 8 December
2013. Since then, quoted prices in active market became available, and it was transferred from the level 3 to the level 1.
(7) Derivative financial instruments held by the Group for trading of derivative financial instruments included forward foreign exchange contracts,
currency options, embedded derivatives and structured equity swap contracts. The related information are as follows:
The Company
Forward exchange contracts
170
Financial Overview
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments:
31 December 2013
Buying currency exchange forward
Currency
Period
Amount (thousands)
Buy USD sell NTD
August 2012 - March 2014
Currency
Period
Buy USD sell NTD
December 2012 - October 2013
USD 96,000
Sell USD buy NTD
December 2012 - March 2013
USD 1,000
Currency
Period
Buy USD sell NTD
August 2011-June 2012
Buy EUR sell NTD
November 2011-May 2012
USD 78,409
31 December 2012
Buying currency exchange forward
Amount (thousands)
1 January 2012
Buying currency exchange forward
Amount (thousands)
USD 154,320
EUR 1,022
Embedded derivative
31 December 2013
Convertible bonds embedded derivative
$-
31 December 2012
1 January 2012
$-
$2,069
The Company first issue of overseas convertible bonds embedded derivatives contained investor put option value, the redemption value of the
bonds and reset the value recorded under financial assets carried at fair value through profit or loss.
Exchange options
31 December 2013
The following table refers to the related conditions with regard to the Company's unamortized exchange options on 31 December 2013.
171
Counterparty
Foreign exchange rate
Foreign exchange rate on
the date of settlement FX
A
USD/JPY
FX > 102.20
The Company executed at 102.20 to sell USD 1,000
B
USD/JPY
FX > 102.00
The Company executed at 102.00 to sell USD 1,000
B
USD/JPY
FX > 102.20
The Company executed at 102.20 to sell USD 1,500
B
USD/JPY
FX > 102.90
The Company executed at 102.90 to sell USD 1,000
B
USD/JPY
FX > 102.10
The Company executed at 102.10 to sell USD 1,000
B
USD/JPY
FX > 102.40
The Company executed at 102.40 to sell USD 1,000
B
USD/JPY
FX > 105.30
The Company executed at 105.30 to sell USD 1,000
B
USD/JPY
FX > 103.50
The Company executed at 103.50 to sell USD 1,000
B
USD/JPY
FX > 104.00
The Company executed at 104.00 to sell USD 1,000
B
USD/JPY
FX > 104.80
The Company executed at 104.80 to sell USD 1,000
B
USD/NTD
FX < 29.48
The Company executed at 29.48 to buy USD 1,000
B
USD/NTD
FX < 29.49
The Company executed at 29.49 to buy USD 1,000
B
USD/NTD
FX < 29.25
The Company executed at 29.25 to buy USD 1,000
B
USD/NTD
FX < 29.26
The Company executed at 29.26 to buy USD 1,000
B
USD/NTD
FX < 29.40
The Company executed at 29.40 to buy USD 1,000
B
USD/NTD
FX < 29.40
The Company executed at 29.40 to buy USD 1,000
B
USD/NTD
FX < 29.42
The company executed at 29.42 to buy USD 1,000
B
USD/NTD
FX < 29.49
The company executed at 29.49 to buy USD 1,000
Term of settlement
TATUNG 2012 Annual Report
Financial Overview
Counterparty
Foreign exchange rate
Foreign exchange rate on
the date of settlement FX
B
USD/NTD
FX < 29.75
The company executed at 29.75 to buy USD 1,000
B
USD/NTD
FX < 29.50
The company executed at 29.50 to buy USD 1,000
C
USD/JPY
FX > 104.70
The company executed at 104.70 to sell USD 1,000
C
USD/JPY
FX > 102.60
The company executed at 102.60 to sell USD 1,000
C
USD/NTD
FX < 29.53
The company executed at 29.53 to buy USD 1,000
D
USD/JPY
FX > 102.10
The company executed at 102.10 to sell USD 1,000
D
USD/JPY
FX > 107.00
The company executed at 107.00 to sell USD 1,000
E
USD/JPY
FX > 103.20
The company executed at 103.20 to sell USD 1,000
F
USD/NTD
FX < 29.30
The company executed at 29.30 to buy USD 1,000
Term of settlement
As of 31 December 2013, foreign exchange options contracts that have been settled amounted to USD 533,141 thousand and JPY1,198,300
thousand, and the remaining unsettled contracts amounted to USD27,500 thousand, with a fair value of NTD 9,346 thousand (including royalties
amounted to NTD 6,810 thousand and unrealized loss amounted to NTD 2,536 thousand), recognized as financial liabilities carried at fair value
through profit or loss - current.
31 December 2012
As of 31 December 2012, foreign exchange options contracts that had been fully settled amounted to USD446,200 thousand and JPY1,204,355
thousand.
January 1, 2012
None.
CPT and its subsidiaries
Forward foreign exchange contracts
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments. Forward
foreign exchange contracts entered into by the CPT and its subsidiaries as follows:
Item
Contract amount
Period
31 December 2013
Buy JPY sell USD
USD 28,000 thousand dollars
2014.01~2014.02
USD 36,000 thousand dollars
2013.01-2013.02
31 December 2012
Buy JPY sell USD
1 January 2012
Buy JPY sell USD
USD 136,000 thousand dollars
2012.01-2012.03
Buy NTD sell USD
USD 67,000 thousand dollars
2012.01-2012.03
Embedded derivatives
The embedded derivatives arising from issuing convertible bonds of Giantplus have been separated from the host contract and carried at fair
value through profit or loss.
31 December 2013
Convertible bonds embedded derivative
31 December 2012
$(2,997)
1 January 2012
$-
$-
Giantplus' second issue of overseas convertible bonds embedded derivatives contained investor put option value, the redemption value of the
bonds and reset the value recorded under financial assets carried at fair value through profit or loss.
SCSC and its subsidiaries
Forward foreign exchange contracts
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments. Forward
foreign exchange contracts entered into by the SCSC and its subsidiaries as follows:
Item
Contract amount
Period
31 December 2013
None.
31 December 2012
None.
1 January 2012
Forwardforeign exchange contracts
BUY USD 15,438 thousand dollars
2012/02
172
Financial Overview
FD and its subsidiaries
Forward foreign exchange contracts
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments. Forward
foreign exchange contracts entered into by the FD and its subsidiaries as follows:
Item
Contract amount
Period
31 December 2013
Forward foreign exchange contracts
Sell USD1,500 thousand dollars
2014.1.10~2014.3.14
Sell USD6,000 thousand dollars
2013.1.04~2013.4.19
Sell USD7,000 thousand dollars
2012.1.06~2012.4.27
31 December 2012
Forward foreign exchange contracts
1 January 2012
Forward foreign exchange contracts
TFC and its subsidiaries
Forward foreign exchange contracts
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments. Forward
foreign exchange contracts entered into by the TFC and its subsidiaries as follows:
Item
Contract amount
Period
Forward foreign exchange contracts
Sell USD 600,000 thousand dollars
2012.9.21~2013.1.2
Forward foreign exchange contracts
Sell USD 200,000 thousand dollars
2012.1.21~2013.2.1
31 December 2013
None.
31 December 2012
1 January 2012
None
Tatung Compressors (Zhongshan) Co., Ltd.
Forward foreign exchange contracts
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments. Forward
foreign exchange contracts entered into by the Tatung Compressors (Zhongshan) Co., Ltd. as follows:
31 December 2013
Item
Sell out the exchange options
Contract amount
Buy RMB sell USD
Period
Amount (thousands)
2014.01~2014.08
USD 6,200
31 December 2012
None
1 January 2012
Item
Sell out the exchange options
Contract amount
Buy RMB sell USD
Period
Amount (thousands)
2012.01~2012.02
USD 1,200
Tatung Global strategy Investment and Trading (BVI) Inc.
31 December 2013
None.
31 December 2012
None.
1 January 2012
Investment targets
Period contract
Structure equity swap contracts
2010.03-2011.09
Amount (thousand dollars)
USD60,298
Price agreed
USD4.13 per GDS
The aforementioned derivative transactions are reputable financial institutions with good credit risk is not so high.
For forward foreign exchange contracts, to hedge the risk of exchange rate changes on net assets or net liabilities with cash inflows or outflows
relative maturity, and the company also has sufficient working capital, no significant cash flow risk.
(8) Significant assets and liabilities denominated in foreign currencies
The exchange rates used to translate assets and liabilities denominated in foreign currencies are disclosed as follows:
173
TATUNG 2012 Annual Report
Financial Overview
Foreign currency-dollar, NTD -thousand
31 December 2013
Foreign currency
Exchange rate
NTD
Financial Assets - Monetary items
USD
$993,955,112
29.80500
$29,624,832
JPY
1,544,765,656
0.28390
438,559
RMB
59,117,667
4.88855
289,000
HKD
3,026,000
3.81300
11,538
EUR
761,565
41.0900
31,293
AUD
961
26.58500
26
Non-Monetary items
USD
(55,983)
29.80500
(1,669)
RMB
121,145,680
4.88855
592,227
THB
285,550,117
0.91350
260,850
USD
1,741,358,752
29.80500
59,901,198
JPY
13,426,892,723
0.28390
3,811,895
RMB
316,226,000
4.88855
1,545,887
HKD
229,000
3.81300
873
EUR
1,529,444
41.0900
62,845
CZK
8,440
1.55390
13
CHF
42,731
33.48500
1,431
Financial Liabilities - Monetary items
Foreign currency
31 December 2012
Exchange rate
NTD
Financial Assets - Monetary items
USD
$864,663,628
29.04
$25,109,788
JPY
1,369,934,052
0.3364
493,250
RMB
92,083,000
4.62~4.6202
425,441
HKD
6,334,000
3.747
23,735
EUR
788,723
38.49
30,368
USD
(99,062)
29.04
(2,877)
RMB
170,398,178
4.62016
787,267
THB
150,887,257
0.9535
143,871
USD
1,466,942,534
29.04
42,599,982
JPY
12,827,503,043
0.3364
4,693,123
RMB
349,545,000
4.62~4.602
1,614,956
HKD
282,000
3.747
1,055
EUR
1,073,235
38.49
41,308
CZK
8,440
1.53464
13
CHF
7,273
31.305
231
Non-Monetary items
Financial Liabilities - Monetary items
174
Financial Overview
Foreign currency
1 January 2012
Exchange rate
NTD
Financial Assets - Monetary items
USD
$1,058,466,537
30.275~30.29
$31,971,222
JPY
2,571,063,147
0.3903~0.3906
1,002,783
RMB
267,423,069
4.8063~4.81
1,284,935
HKD
5,853,000
3.897
22,808
EUR
784,102
39.18~39.20
30,270
CZK
7,043
1.5163
11
Foreign currency
1 January 2012
Exchange rate
NTD
Investments accounted for under the
equity method
USD
27,095,461
30.275~30.28
820,298
RMB
7,144,964
4.8049
34,331
THB
77,074,000
0.96
79,991
USD
$1,492,082,493
29.385~30.275
$45,176,744
JPY
13,876,413,077
0.39~0.3906
5,410,845
RMB
511,861,631
4.8063~4.81
2,350,560
EUR
1,695,014
39.18~39.2
66,425
CZK
8,440
1.5156
13
CHF
22,667
32.22
730
Financial Liabilities - Monetary items
(9) Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of
changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return
capital to shareholders or issue new shares.
(10) Banciao District Court found the Company guilty in Nature Worldwide Technology Co., case on 29 June 2012. Chairman Lin deeply regretted
the result and found the verdict unacceptable. An appeal has been filed by the Company’s attorney to Taiwan High Court. The Company's
operations, financial matters and business continued as usual and were not affecting by the case.
(11) As of 31 December 2013, the Group has the liquidity risk that the balance of the Group’s current liabilities exceeds the balance of its current
assets, which was resulted from the consolidation of the consolidated financial position CPT and GET. The aforementioned companies planned
to roll over the short-term loans when matured. The Company’s management believed that execution of the initiatives described above would
effectively reduce the liquidity risk existed in Group’s financial position as of 31 December 31 2013. The Company’s consolidated financial
statements did not make adjustments in relation to the degree of effectiveness of the above execution.
13. Other disclosure
A. Information at significant transactions:
a. Financing provided to others: refer to Attachment 1.
b. Endorsement/Guarantee provided to others: refer to Attachment 2.
c. Securities held: refer to Attachment 3.
d. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NTD 300 million or 20 percent of the
capital stock: refer to Attachment 4.
e. Acquisition of real estate in the amount exceeding the lower of NTD 300 million or 20 percent of capital stock: none.
f. Disposal of real estate up to the amount exceeding the lower of NTD 300 million or 20 percent of capital stock: none.
g. Related party transactions for purchases and sales amounts exceeding the lower of NTD 100 million or 20 percent of capital stock: refer to
Attachment 5.
h. Receivables from related parties with amounts exceeding the lower of NTD 100 million or 20 percent of capital stock: refer to Attachment 6.
i. Engage in derivative transactions: refer to note 6 and note 12 in the consolidated financial statements.
175
TATUNG 2012 Annual Report
Financial Overview
j.
Intercompany Relationships and Significant Intercompany Transactions: refer to Attachment 9.
B. Information on investees:
a. Of the investee company directly or indirectly has significant influence or control over, their investee companies’ information: refer to
Attachment 7.
b. Of the investee company who directly or indirectly has control, exposing the following:
i. Financing provided to others: refer to Attachment 1.
ii. Endorsement/Guarantee provided to others: refer to Attachment 2.
iii. Securities held: refer to Attachment 3.
iv. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NTD 300 million or 20 percent of the
capital stock: refer to Attachment 4.
v. Acquisition of real estate in the amount exceeding the lower of NTD 300 million or 20 percent of capital stock: none.
vi. Disposal of real estate up to the amount exceeding the lower of NTD 300 million or 20 percent of capital stock: none.
vii. Related party transactions for purchases and sales amounts exceeding the lower of NTD 100 million or 20 percent of capital stock: refer
to Attachment 5.
viii. Receivables from related parties with amounts exceeding the lower of NTD 100 million or 20 percent of capital stock: refer to
Attachment 6.
ix. Engage in derivative transactions: refer to note 6 and note 12 in the consolidated financial statements.
C. Information on investments in mainland China:
a. The investee company name, main business, paid-in capital, investment , capital outflow, ownership, investment gains and losses, ending
balance of investment, repatriation of investment income and have to go to the mainland investment limit scenario: refer to Attachment 8.
b. with the investee companies directly or indirectly through a third country following the occurrence of significant transactions, prices,
payment terms and unrealized gains and losses were as follows :
i. Ending balance and percentage, purchase amount and percentage of related payables: refer to Attachment 8-3.
ii. Sales amount and percentage of the balance and percentage of the related receivables: refer to Attachment 8-3.
iii. Gains and loss on the transaction amount of property: None (have been eliminated in the consolidated financial statements).
iv. Endorsement guarantees or collateral ending balance and purpose: None.
v. Financing, the total ending balance, and current interest rates range: None.
vi. Other for profit or loss or financial position have a significant impact on the transactions, such as the provision of services or received,
etc.: None (have been eliminated in the consolidated financial statements ) .
14. Segment information
For management purposes, the Group is organized into business units based on their products and services and has four reportable operating
segments as follows:
(1) Optical sector: This sector is responsible for CRT, TFT-LCD backlight module manufacturing and production, development of liquid crystal
display modules, electronic switches and sensors and solar modules virus, manufacturing and sales.
(2) Energy efficiency and solar energy sector: This sector is responsible for the manufacturing of semiconductor materials, wafers, polycrystalline
solar silicon ingots, polycrystalline solar silicon, polycrystalline silicon ingot and non-film solar modules.
(3) Consumer products sector: This sector is responsible for digital television, flat panel display manufacturing, digital media devices, digital audiovisual and home appliances, etc..
(4) Power sector: This sector is responsible for transformers, distribution panels, cables, motors, etc. manufacturing.
No operating segments have been aggregated to form the above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies
consistent with those in the consolidated financial statements. However income taxes are managed on a group basis and are not allocated to
operating segments.
Enterprises should be in accordance with International Financial Reporting Standards (IFRS) No. 8, "Operating Segments" requires the disclosure of
the twenty-four reporting segments to measure the amount of assets, as a measure of the amount of the assets and liabilities of the Company and
its subsidiaries are not available to the Chief operating decision maker, it has not been disclosed.
Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.
(1) Information on profit or loss, assets and liabilities of the reportable segment:
For the year ended 31 December 2013
Optical
Energy
efficiency and
solar energy
Consumer
products
Power
Other
operating
segments
Adjustment
and
elimination
Consolidated
Revenue
External customer
$60,004,399
$9,893,596
$12,303,835
$14,890,503
$15,834,537
$-
$112,926,870
Inter-segment
3,303,412
184
9,693,538
1,696,344
38,046,668
(52,740,146)
-
Total revenue
$63,307,811
$9,893,780
$21,997,373
$16,586,847
$53,881,205
$(52,740,146)
$112,926,870
$(4,483,384)
$(1,760,416)
$(761,174)
$279,075
$(900,950)
$2,307,297
$(5,319,552)
Interest expenses
176
Financial Overview
For the year ended 31 December 2012
Other
operating
segments
Adjustment
and
elimination
Optical
Energy
efficiency and
solar energy
Consumer
products
Power
$51,247,908
$10,326,524
$19,776,505
$17,510,990
$7,236,616
$-
$106,098,543
Inter-segment
2,065,277
64
13,368,461
2,226,332
9,389,502
(27,049,636)
-
Total revenue
$53,313,185
$10,326,588
$33,144,966
$19,737,322
$16,626,118
$(27,049,636)
$106,098,543
$(11,208,858)
$(3,508,439)
$(917,224)
$609,270
$(5,179,498)
$4,996,123
$(15,208,626)
Consolidated
Revenue
External customer
Interest expenses
1
2
Revenue from information software and real estate development that are operating segments that did not meet the quantitative thresholds for reportable segments.
Inter-segment revenue are eliminated on consolidation and recorded under the “adjustment and elimination” column, all other adjustments and eliminations are
disclosed below.
(2) Geographical information
Revenue from external customers
2013
Taiwan
2012
$40,385,665
$29,224,079
China
7,357,593
9,435,565
Asia
1,140,139
4,433,843
196,689
4,086,956
3,563,441
7,336,975
59,842,747
49,362,037
440,596
2,219,088
$112,926,870
$106,098,543
Europe
United States
Southeast Asia
Other countries
Total
The revenue information above is based on the location of the customer.
Non-current assets
31 December 2013
31 December 2012
$96,371,442
$98,567,733
$109,301,042
14,729,416
19,149,191
20,323,772
Asia
25,676
40,343
47,754
Europe
70,175
773,493
-
United States
279,957
121,407
139,512
Southeast Asia
990,975
1,161,588
2,099,338
$112,467,641
$119,813,755
$131,911,418
Taiwan
China
Total
1 January 2012
(3) Information about major customers
The Company’s sales to any single customer did not account for more than 10% of its net consolidated sales of 2013 and 2012. No disclosure is
required.
15. First-time adoption of TIFRS
For all periods up to and including the year ended 31 December 2012, the Group prepared its financial statements in accordance with generally
accepted accounting principles in R.O.C. (R.O.C. GAAP). The consolidated financial statements for the year ended 31 December 2013 are the first
the Group has prepared in accordance with TIFRS.
Accordingly, the Group has prepared financial statements which comply with TIFRS and the Regulations Governing the Preparation of Financial
Reports by Securities Issuers for periods beginning 1 January 2013 as described in the accounting policies under Note 4. Furthermore the first interim
financial statements prepared under TIFRS also comply with the requirements under IFRS 1 First-time Adoption of International Financial Reporting
Standards. The Group’s opening balance sheet was prepared as at 1 January 2012, the Group’s date of transition to TIFRS.
177
TATUNG 2012 Annual Report
Financial Overview
Exemptions applied in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 1 First-time Adoption of International Financial Reporting Standards allows first-time adopters certain exemptions from the retrospective
application of certain IFRS. The Group has applied the following exemptions:
(1) IFRS 3 Business Combinations has not been applied to acquisitions of subsidiaries or of interests in associates and joint ventures that occurred
before 1 January 2012. By applying this exemption, immediately after the business combination, the carrying amount in accordance with
R.O.C. GAAP of assets acquired and liabilities assumed in that business combination, shall be their deemed costs in accordance with TIFRS
at that date. The subsequent measurement of these assets and liabilities will be in accordance with TIFRS. Under IFRS 1 First-time Adoption
of International Financial Reporting Standards, the carrying amount of goodwill in the opening balance sheet shall be its carrying amount
in accordance with R.O.C. GAAP at 31 December 2011, after testing for impairment and reclassifying amounts to intangible assets that are
required to be recognized. The Group has performed goodwill impairment testing as at the date of transition to TIFRS and no impairment loss
has been recognized as at that date.
(2) The Group has elected to use previous GAAP revaluation of certain land and buildings under Property, plant and equipment as their deemed
costs at the date of the revaluation.
(3) The Group has elected to use the fair value of certain investment properties on transition date to TIFRS as their deemed costs. There is sufficient
evidence that these investment properties are continuously being rented out and have lease terms over ten years. The fair value on transition
date to TIFRS was based on the contractual rent of the property using the discounted cash flow method and the Group’s weighted average
cost of capital 1.248%~3.03% as the discount rate.
(4) IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities requires specified changes in a decommissioning, restoration or
similar liability to be added to or deducted from the cost of the asset to which it relates; the adjusted depreciable amount of the asset is then
depreciated prospectively over its remaining useful life. The Group needs not comply with these requirements for changes in such liabilities that
occurred before the date of transition to TIFRS by adopting the first-time adoption exemption.
(5) The Group has elected the exemption to not separate the liability and equity components of a compound financial instrument if the liability
component is no longer outstanding at the date of transition to TIFRS.
(6) The Group has recognized all cumulative actuarial gains and losses on pensions as at the date of transition to TIFRS directly in retained earnings.
(7) The Group has elected to disclose amounts required by paragraph 120A(p) of IAS 19 prospectively from the date of transition to TIFRS.
(8) Accumulated balance of exchange differences resulting from translating the financial statements of a foreign operation is deemed to be zero
as at the date of transition to TIFRS.
(9) IFRS 2 Share-based Payment has not been applied to equity instruments in share-based payment transactions that were granted on or before
7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 that vested before the date of transition to
TIFRS.
Impacts of transitioning to TIFRS
The following tables contain reconciliation of balance sheets as at 1 January 2012 (the date of transition to TIFRS) and 31 December 2012 and
statements of comprehensive income for the year ended 31 December 2012:
Reconciliation of consolidated balance sheet items as at 1 January 2012 (the date of transition to TIFRS)
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Current assets
Cash and cash
equivalents
Financial assets at fair
value through income
statement - current
Available-for-sale financial
assets - current
Financial assets measured
at cost- current
Investment in debt security
with no active accountedcurrent
Notes
Current assets
Cash and cash
equivalents
Financial assets at fair
value through income
statement - current
Available-for-sale
financial assets - current
Financial assets
measured at cost- current
Investment in debt
security with no active
accounted-current
$31,180,922
$-
$(278,456)
$30,902,466
103,516
-
-
103,516
402,894
90,121
-
493,015
276,081
(90,121)
-
185,960
-
-
4,293,641
4,293,641
1,096,871
-
102
1,096,973
Notes receivable, net
29
Notes receivable -related
parties, net
102
-
(102)
-
Notes receivable -related
parties, net
29
Accounts receivable, net
13,344,568
-
(307,058)
13,037,510
Accounts receivable, net
29
498,880
-
-
498,880
Accounts receivable related parties, net
-
-
307,058
307,058
Construction receivables
1,444,539
-
-
1,444,539
Other receivables, net
Notes receivable, net
Accounts receivable related parties, net
Construction receivables
Other receivables, net
1
2
2
1, 24
29
178
Financial Overview
R.O.C. GAAP
Items
Other receivables, netrelated parties, net
Inventories
Prepayments
Deferred advertisement
expense
Deferred income tax
assets - current
Non-current assets held for
sale
Other current assets
Total current assets
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Other receivables, netrelated parties, net
Notes
2,616,575
-
-
2,616,575
24,187,839
(512,843)
(134,647)
23,540,349
Inventories
9, 21
3,765,361
-
37,058
3,802,419
Prepayments
4, 23
263,215
-
(263,215)
-
-
29
801,639
-
(801,639)
-
-
27
3,263,873
-
(3,263,873)
-
-
24
1,089,879
-
(524,097)
565,782
Other current assets
24
84,336,754
(512,843)
(935,228)
82,888,683
Total current assets
Funds and investments
Non-current assets
11,928,000
(38,347)
(85,094)
11,804,559
Investments accounted
for under the equity
method
10, 21
10,204
-
(10,204)
-
-
29
2,069
-
-
2,069
659,069
469,501
-
1,128,570
20,000
-
-
20,000
700,930
(457,141)
-
243,789
-
-
1,536,313
1,536,313
118,587,834
(221,631)
(5,526,791)
112,839,412
-
5,094,257
5,482,513
10,576,770
Investment property
5
3,062,541
(97,435)
(897,775)
2,067,331
Intangible assets
4, 7, 23
632,315
-
(632,315)
-
Refundable deposit
23,29
1,001,236
-
(1,001,236)
-
-
23
46,436
-
-
46,436
456,632
12,451
3,291,645
3,760,728
Other non-current assets
5,409,032
-
972,437
6,381,469
Other non-current assets
Total non-current assets
7,545,651
4,761,655
3,129,493
150,407,446
Total non-current assets
$226,853,052
$4,248,812
$2,194,265
$233,296,129
Total assets
Investments accounted for
under the equity method
Cash surrender value from
life insurance
Financial assets at fair
value through income
statement - non-current
Available-for-sale financial
assets, non-current
Financial assets in held-tomaturity, non-current
Financial assets carried at
cost, non-current
Investment in debt security
with no active accounted,
non-current
Total Funds and
investments
Property, plant and
equipment
Intangible assets
Financial assets at fair
value through income
statement - non-current
Available-for-sale
financial assets, noncurrent
Financial assets in heldto-maturity, non-current
Financial assets carried
at cost, non-current
Investment in debt
security with no active
accounted, non-current
2
2
1, 24
13,320,272
Property, plant and
3, 5, 6, 23
equipment
Other non-current assets
Refundable deposit
Deferred expense
Long-term receivables, net
- related parties
Deferred income tax
assets - non-current
Total assets
179
Long-term receivables,
net - related parties
Deferred income tax
assets - non-current
29
7, 8, 25
6, 23, 24,
29
TATUNG 2012 Annual Report
Financial Overview
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Current liabilities
Short-term borrowings
Notes
Current liabilities
$40,317,299
$-
$-
$40,317,299
Short-term borrowings
Short-term notes and bills
payable
698,917
-
-
698,917
Short-term notes and
bills payable
Notes payable
250,040
-
-
250,040
Notes payable
19,896,972
-
-
19,896,972
Trade payables
Trade payables
Accounts payable related parties
202,591
-
-
202,591
Accounts payable related parties
Current tax liabilities
324,987
-
-
324,987
Current tax liabilities
767,233
-
-
13,203
-
(13,203)
15,652
-
-
9,203,203
90,132
(844,805)
8,448,530
Other payables
-
-
120,350
120,350
Provision, current
2,443,720
-
-
2,443,720
Advanced receipts
-
-
998,900
10,526,289
-
(998,900)
3,465
-
(3,465)
-
-
2,114,462
-
(109,483)
2,004,979
Other current liabilities others
86,778,033
90,132
(850,606)
86,017,559
Total current liabilities
Financial liabilities at fair
value through profit or loss,
current
Other payables - related
parties
Derivative financial
liabilities for hedgingcurrent
Other payables
Advanced receipts
Current portion of longterm loans
Deferred income tax
liabilities - current
Other current liabilities others
Total current liabilities
Financial liabilities at
767,233 fair value through profit
or loss, current
Other payables related parties
Derivative financial
15,652
liabilities for hedgingcurrent
Current portion of
bonds payable
Current portion of long9,527,389
term loans
998,900
Long-term liabilities
29
8, 22, 29
29
27, 29
Non-current liabilities
Bonds payable
5,542,382
(233,362)
-
5,309,020
Bonds payable
15
Long-term loans
40,342,010
-
(76,000)
40,266,010
Long-term loans
23
70,332
-
-
70,332
Long-term payables
726,518
-
-
726,518
Long-term deferred
revenues
5,619,674
-
(5,619,674)
-
-
14
-
-
917,961
917,961
Provision, non- current
3, 22
747,020
-
6,998,719
Accrued pension
liability
7
Long-term payables
Long-term deferred
revenues
Total long-term loans with
interest
46,681,242
Reserves
Reserve for land
revaluation
-
5,619,674
Other liabilities
Accrued pension liability
6,251,699
180
Financial Overview
R.O.C. GAAP
Items
Deposits received
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
234,489
-
-
21,335
-
-
1,046,316
147,704
8,113,145
219,741
-
(219,741)
-
-
21
Other liabilities - others
2,027,389
-
(70,820)
1,956,569
Other non-current
liabilities, others
3
Total non-current libilities
9,800,969
661,362
3,044,871
65,808,118
Total non-current
libilities
Total liabilities
148,879,918
751,494
2,194,265
151,825,677
Total liabilities
Capital stock
23,395,367
-
-
23,395,367
Capital stock
5,958,455
(5,239,077)
-
719,378
Capital reserve
Deferred credit for
investments accounted for
under the equity method
Deferred income tax
liabilities – non-current
Deferred credit –
intercompany gain
Capital reserve
234,489
Special reserve
Accumulated deficits
Deposits received
Deferred credit for
investments accounted
for under the equity
method
Deferred income tax
9,307,165
5, 13, 14, 27
liabilities – non-current
21,335
Retained earnings
10, 11, 12, 13,
15
Retained earnings
-
-
15,978,036
15,978,036
(2,595,800)
19,238,783
(15,978,036)
664,947
Adjusting items in
shareholders' equity
Special reserve
28
3, 5, 7, 8, 9,
Undistributed earnings 10, 11, 12, 13,
15, 28
Other equity
1,060,477
(1,060,477)
-
Exchange differences
resulting from
- translating the financial
statements of a foreign
operation
Unrecognized net loss on
pension cost
(1,089,054)
1,089,054
-
-
-
7
Unrealized Gain or Loss on
Financial Instruments
(1,055,289)
496,990
-
(558,299)
Unrealized Gain or
Loss on Financial
Instruments
2, 19
(5,280)
-
-
(5,280)
Cash Flow Hedges
9,969,197
(9,969,197)
-
-
-
3, 28
Treasury stock
(1,003,636)
(489,793)
-
(1,493,429)
Treasury stock
19
Minority interest
43,338,697
(568,965)
-
42,769,732
Minority interest
2, 3, 7, 8, 10,
11, 12, 13
77,973,134
3,497,318
-
81,470,452
Total shareholders'
equity
$226,853,052
$4,248,812
$2,194,265
$233,296,129
Total liabilities and
shareholders' equity
Cumulative translation
adjustment
Cash Flow Hedges
Unrealized revaluation
increments
Total shareholders' equity
Total liabilities and
shareholders' equity
181
Notes
20, 26, 28
TATUNG 2012 Annual Report
Financial Overview
Reconciliation of consolidated balance sheet items as at 31 December 2012
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Current assets
Cash and cash
equivalents
Notes
Current assets
Cash and cash
equivalents
$24,602,889
$-
$(201,867)
$24,401,222
Financial assets at fair
value through income
statement - current
120,739
-
-
120,739
Available-for-sale financial
assets - current
589,856
90,121
-
679,977
Financial assets measured
at cost- current
228,449
(90,121)
-
138,328
Investment in debt security
with no active accounted,
current
-
-
2,581,938
2,581,938
746,650
-
64,405
811,055
12,817,741
-
(1,006,157)
11,811,584
462,832
-
-
462,832
-
-
1,006,157
1,006,157
1,174,700
-
-
1,174,700
Other receivables, net
38,395
-
-
38,395
Other receivables related parties, net
24,494,366
(1,268,797)
-
23,225,569
Inventories
9
3,251,003
-
57,068
3,308,071
Prepayments
4, 23
753,006
-
(753,006)
-
-
29
267,217
-
(267,217)
-
-
27
2,444,476
-
(2,444,476)
-
-
24
69,133
-
753,006
822,139
Other current assets
24, 29
72,061,452
(1,268,797)
(210,149)
70,582,506
Total current assets
Notes receivable, net
Accounts receivable, net
Accounts receivable related parties, net
Construction receivables
Other receivables, net
Other receivables - related
parties, net
Inventories
Prepayments
Deferred advertisement
expense
Deferred income tax
assets current
Non-current assets held for
sale
Other current assets
Total assets
Funds and investments
Financial assets at fair
value through income
statement - current
Available-for-sale
financial assets current
Financial assets
measured at costcurrent
Investment in debt
security with no active
accounted, current
1, 24
2
2
1, 24
Notes receivable, net
Accounts receivable,
net
Accounts receivable related parties, net
Construction
receivables
29
29
Non-current assets
Investments accounted for
under the equity method
11,878,758
(14,279)
(51,401)
11,813,078
Investments accounted
for under the equity
method
10, 21
Cash surrender value from
life insurance
10,204
-
(10,204)
-
-
29
Prepayment for long-term
investments
2,140
-
(2,140)
-
-
16
Available-for-sale financial
assets, non-current
623,445
526,508
-
1,149,953
Financial assets in held-tomaturity, non-current
20,000
-
-
20,000
Financial assets carried at
cost, non-current
671,141
(464,940)
-
206,201
Available-for-sale
financial assets, noncurrent
Financial assets in
held-to-maturity, noncurrent
Financial assets carried
at cost, non-current
2
2
182
Financial Overview
R.O.C. GAAP
Items
Investment in debt security
with no active accounted,
non-current
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Amounts
Items
Investment in debt
security with no active
accounted, noncurrent
Notes
24
-
622,244
622,244
105,993,886
199,693
(5,166,053)
101,027,526
Property, plant and
equipment
3, 5, 6, 23
-
5,094,257
5,445,563
10,539,820
Investment property
5
3,480,839
(159,586)
(655,480)
2,665,773
Intangible assets
4, 7, 23
592,543
-
(592,543)
-
Refundable deposit
29
1,102,597
-
(1,102,597)
-
-
23
633,797
-
16,908
650,705
16,908
-
(16,908)
-
615,343
17,026
1,302,537
1,934,906
Other non-current assets
3,578,989
-
1,350,942
4,929,931
Total non-current assets
6,540,177
5,198,679
1,140,868
$201,282,042
$3,929,882
$930,719
Total Funds and
investments
Property, plant and
equipment
Intangible assets
-
Presentation
13,205,688
Other non-current assets
Refundable deposit
Deferred expense
Long-term receivables
Long-term receivables, net
- related parties
Deferred income tax
assets - non-current
Total assets
183
Long—term
receivables
Long-term receivables,
net - related parties
Deferred income tax
assets
Other non-current
assets
135,560,137 Total non-current assets
$206,142,643
Total assets
29
29
7, 8, 27
4, 6, 16, 23,
24, 29
TATUNG 2012 Annual Report
Financial Overview
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Current liabilities
Short-term borrowings
Notes
Current liabilities
$38,170,205
$-
$-
$38,170,205
Short-term borrowings
1,551,694
-
-
1,551,694
Short-term notes and
bills payable
99,604
-
-
99,604
Notes payable
19,750,087
-
-
19,750,087
Trade payables
Accounts payable related parties
381,103
-
-
381,103
Accounts payable related parties
Current tax liabilities
297,977
-
-
297,977
Current tax liabilities
Financial liabilities at fair
value through profit or loss,
current
109,031
-
-
Financial liabilities at
109,031 fair value through profit
or loss, current
4,856
-
(4,856)
-
Other payables related parties
29
9,667,871
100,797
(902,207)
8,866,461
Other payables
8, 22, 29
-
-
84,241
84,241
Derivative financial
liabilities for hedgingcurrent
29
4,460,921
-
-
4,460,921
Advanced receipts
16,104,949
-
-
16,104,949
Current portion of longterm loans
2,974
-
(2,974)
-
-
27
1,429,476
-
(81,163)
1,348,313
Other current liabilities others
29
92,030,748
100,797
(906,959)
91,224,586
Total current liabilities
Short-term notes and bills
payable
Notes payable
Trade payables
Other payables - related
parties
Other payables
Advanced receipts
Current portion of longterm loans
Deferred income tax
liabilities - current
Other current liabilities others
Total current liabilities
Long-term liabilities
Bonds payable
Long-term loans
Long-term deferred
revenues
Total long-term Liabilities
29
Non-current liabilities
5,518,452
(136,879)
-
5,381,573
Bonds payable
15
30,202,286
-
(53,200)
30,149,086
Long-term loans
23
337,032
-
-
337,032
Long-term deferred
revenues
5,619,674
-
(5,619,674)
-
-
14
-
-
975,992
975,992
Provision, non- current
3, 22
598,750
-
6,691,444
Accrued pension
liability
7
36,057,770
Reserves
Reserve for land
revaluation
Other reserves
Total reserves
5,619,674
Other liabilities
Accrued pension liability
6,092,694
184
Financial Overview
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Deposits received
90,876
-
-
Deferred credit for
investments accounted for
under the equity method
22,847
-
-
343,484
146,899
6,657,968
51,401
-
(51,401)
-
Other liabilities - others
1,219,098
-
(72,007)
1,147,091
Total non-current libilities
7,820,400
608,770
1,837,678
51,944,292
Total liabilities
141,528,592
709,567
930,719
143,168,878
Total liabilities
Capital stock
23,395,367
-
-
23,395,367
Capital stock
5,944,602
(5,217,073)
-
727,529
Capital reserve
Deferred income tax
liabilities – non-current
Deferred credit –
intercompany gain
Capital reserve
90,876
Special reserve
Accumulated deficits
Deferred credit for
investments accounted
for under the equity
method
Deferred income tax
7,148,351
5, 13, 14, 27
liabilities – non-current
Other non-current
liabilities, others
Total non-current
libilities
21
3
10, 11, 12, 13,
15, 17, 18
Retained earnings
-
-
15,894,690
15,894,690
(6,377,504)
18,392,285
(15,894,690)
(3,879,909)
Adjusting items in
shareholders' equity
Cumulative translation
adjustment
Deposits received
22,847
Retained earnings
Special reserve
28
3, 5, 7, 8, 9,
Undistributed earnings 10, 11, 12, 13,
15, 17, 20, 28
Other equity
Exchange differences
resulting from 3, 17, 20, 26,
(428,502) translating the financial
28
statements of a foreign
operation
622,884
(1,051,386)
-
Unrealized Gain or Loss on
pension cost
(1,113,251)
1,113,251
-
-
-
7
Unrealized Gain or Loss on
Financial Instruments
(812,988)
507,896
-
(305,092)
Unrealized Gain or
Loss on Financial
Instruments
2, 17, 19
Unrealized revaluation
increments
9,885,850
(9,885,850)
-
-
-
3, 28
Treasury stock
(1,004,037)
(489,793)
-
(1,493,830)
Treasury stock
19
Minority interest
29,212,527
(149,015)
-
29,063,512
Total shareholders' equity
59,753,450
3,220,315
-
62,973,765
Total shareholders'
equity
$201,282,042
$3,929,882
$930,719
$206,142,643
Total liabilities and
shareholders' equity
Total liabilities and
shareholders' equity
185
Notes
2, 3, 7, 8, 10,
Minority interest 11, 12, 13, 17,
18
TATUNG 2012 Annual Report
Financial Overview
Reconciliation of statement of comprehensive income items for the year ended 31 December 2012
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Notes
Operating revenue, Net
$107,356,308
$(1,257,765)
$-
$106,098,543
Operating revenue,
Net
Operating costs
(106,744,457)
1,170,899
-
(105,573,558)
Operating costs
Gross profit (loss)
611,851
(86,866)
-
524,985
Gross profit (loss)
Operating expenses
9
3, 7, 8, 9, 12
Operating expenses
Selling expenses
(5,218,184)
111,208
-
(5,106,976)
Selling expenses
3, 7, 8, 9, 12
Administrative expenses
(5,444,791)
(71,868)
-
(5,516,659) Administrative expenses
3, 7, 8, 12
Research and
development expenses
(5,287,079)
(8,118)
-
(5,295,197)
Research and
development expenses
3, 7, 8, 12
Total
(15,950,054)
31,222
-
(15,918,832)
Operating income (loss)
(15,338,203)
(55,644)
-
(15,393,847)
Operating income
(loss)
Non-operating income
and expense
Non-operating income
Interest revenue
461,675
-
2,796,056
3,257,731
Other income
25
Dividend income
68,151
-
(68,151)
-
-
25
Disposal of fixed assets
162,720
18,158
(89,499)
91,379
Other gains (losses)
3, 25
Disposal of investments
455,694
(3,826)
(451,868)
-
-
25
Foreign exchange loss
1,031,131
-
(1,031,131)
-
-
25
40,388
-
(40,388)
-
-
25
Other income
2,727,905
-
(2,727,905)
-
-
25
Total
4,947,664
(96,483)
-
(3,108,781)
Finance costs
15, 25
10, 25
Gain on disposal of
financial assets
Non-operating income
and expense
Interest expense
(3,012,298)
(127,178)
11,881
-
(115,297)
Share of other
comprehensive
income of associates
and joint ventures
accounted for using
the equity method
(258,008)
-
258,008
-
-
25
-
(1,231)
1,231
-
-
25
Impairment loss
(332,703)
-
332,703
-
-
25
Loss on valuation of
financial assets
(138,328)
-
138,328
-
-
25
Other losses
(882,616)
-
882,616
-
-
25
(4,751,131)
(71,501)
-
125,032
Investment loss recognized
under the equity method
Loss on disposal of fixed
assets
Loss on disposal of
investments
Total
186
Financial Overview
R.O.C. GAAP
Items
Profit (loss) before tax
Income tax benefits
Consolidated net income
Impact of transitioning to TIFRS
Amounts
Remeasurements
TIFRS
Presentation
Amounts
Items
Notes
(15,141,670)
(127,145)
-
(15,268,815)
Profit (loss) before tax
57,634
2,555
-
60,189
Income tax benefits
$(15,084,036)
$(124,590)
$-
(15,208,626)
Nte loss
-
(1,168,562)
-
96,416
-
(252,253)
-
(88,395)
-
121,882
-
(1,290,912)
$(16,499,538)
7, 8, 13
Exchange differences
resulting from
translating the financial
statements of a foreign
operation
Unrealized gain or
loss on financial
instruments)
Actuarial loss from
defined benefit plans
Share of other
comprehensive
income of associates
and joint ventures
accounted for using
the equity method
Other comprehensive
income (loss) , net of
income tax
Other comprehensive
income, net of tax
8
2, 29
7, 29
10, 29
29
29
Total comprehensive
income
Material adjustments to the consolidated statement of cash flows for the year ended 31 December 2012
The transition from R.O.C. GAAP to TIFRS has not had a material impact on the statement of cash flows. The statement of cash flow prepared
under R.O.C. GAAP was reported using the indirect method. Furthermore, cash flows from interest and dividends received and interest paid were
classified as cash flows from operating activities and interest and dividends received were not disclosed separately. However, in accordance
with the requirements under IAS 7 Statement of Cash Flows, the interest received and dividends received for the year ended 31 December 2012,
are separately disclosed in the statement of cash flow in the amount of NTD 499,325 thousand and NTD 69,651 thousand, respectively. Interest and
dividends received are classified as cash flows from investing activities while interest paid is classified as cash flows from financing activities. Apart
from the aforementioned differences, there were no material differences between the statements of cash flows prepared under R.O.C. GAAP and
TIFRS.
(1) Cash and cash equivalents
Under the requirements of IAS 7 Statement of Cash Flows, certain fixed-term deposits held by the Group are reclassified to bond investments for
which no active market exists. As of 1 January 2012 and 31 march 2012 and 31 December 2012, cash and cash equivalents reclassified to bond
investments for which no active market exists as follows:
1 January 2012
Cash and cash equivalents
31 December 2012
$(278,456)
$(208,104)
Investment in debt security with no active accounted,
current
242,456
208,104
Investment in debt security with no active accounted,
non-current
36,000
-
(2) Financial assets measured at cost
Under the previous accounting policies, equity investments in unlisted entities were measured at cost and net of impairment loss if objective
evidence of impairment exists. However under the requirements of IAS 39 Financial Instruments: Recognition and Measurement, only
investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably
measured could be measured at cost. Therefore these investments in unlisted entities are measured at fair value and reclassified to financial
assets at fair value through profit or loss or available-for-sale financial assets. The following table illustrates the impact of the adjustments:
187
TATUNG 2012 Annual Report
Financial Overview
As at 1 January 2012
Classification under R.O.C.
GAAP
Classification under TIFRS
Differences
Recognized
Carrying amount Carrying amount Recognized in
unrealized gains
in retained
under R.O.C.
under
TIFRS
or losses from
earnings
GAAP
Financial assets measured
at cost- current
Available-for-sale financial
assets - current
90,121
90,121
-
-
Financial assets measured
at cost - non-current
Available-for-sale financial
assets - non-current
457,141
469,501
7,197
5,163
As at 31 December 2012
Classification under R.O.C.
GAAP
Classification under TIFRS
Differences
Recognized
Carrying amount Carrying amount Recognized in
unrealized gains
in retained
under R.O.C.
under
TIFRS
or losses from
earnings
GAAP
Financial assets measured
at cost- current
Available-for-sale financial
assets – current
90,121
90,121
-
-
Financial assets measured
at cost - non-current
Available-for-sale financial
assets - non-current
464,940
526,508
19,081
42,487
Unrealized valuation gains and losses from available-for-sale financial assets in the amount of NTD 61,568 thousand for the year ended 31
December 2012, were recognized under other comprehensive income.
(3) Adjustments relating to property, plant and equipment and decommissioning, restoration and rehabilitation provision
Fixed assets acquired prior to the issuance of Accounting Research and Development Foundation Interpretation No. 97-340, the cost of such
assets does not include the costs of dismantling and removing the asset and restoring the site on which it is located, and related provision is not
recognized. Furthermore, for fixed assets acquired prior to the issuance of Accounting Research and Development Foundation Interpretation
No. 97-340, even if the cost of a component of the asset is significant relative to the total cost of such asset, that component is not depreciated
separately. However under the requirements of IAS 16 Property, Plant and Equipment, the cost of an item of property, plant and equipment
comprises the costs of dismantling and removing the asset and restoring the site on which it is located and each part of an item of property,
plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately.
Therefore the following adjustments were made:
Consolidated balance sheet
1 January 2012
31 December 2012
Buildings-accumulated depreciation
$(552,605)
$(597,906)
Machinery and equipment-accumulated depreciation
(5,154,053)
(3,994,553)
(21,328)
(33,213)
(1,284)
(938)
5,507,639
4,826,303
72,820
72,007
(72,820)
(72,007)
42,174
(47,700)
-
(5,224)
179,457
(146,769)
Office Equipment–accumulated depreciation
Transportation Equipment–accumulated depreciation
Other equipment–accumulated depreciation
Short-term Provisions of Decommissioning, restoration and rehabilitation
Other liabilities, others
Retained earnings (after 2008)
Exchange differences
Minority Interest
Consolidated statement of comprehensive income
2012
Operating costs:
depreciation
$(701,511)
Operating expenses:
depreciation
$316,162
Other operating costs:
Other (losses) and gains
$18,158
188
Financial Overview
The Group has elected to use previous GAAP revaluation of certain land and buildings under property, plant and equipment as their deemed
costs at the date of the revaluation. Consequently, the unrealized revaluation reserve in equity under R.O.C. GAAP as at 1 January 2012 and 31
December 2012 are reduced by NTD 9,969,197 thousand and NTD 9,885,850 thousand, respectively and adjustment of NTD 9,969,197 thousand
and NTD 9,885,850 thousand, respectively were made against retained earnings.
(4) Reclassification of land use rights to prepaid rent
Land use rights were classified as intangible assets under R.O.C. GAAP. Upon transitioning to TIFRS, in accordance with the requirements of
IAS 17 Leases, land use rights were reclassified to prepaid rent under current assets and long-term prepaid rent under non-current assets. As
of 1 January 2012 and 31 December 2012, land use rights reclassified to prepaid rent were NTD 21,052 thousand and NTD 22,490 thousand,
respectively. As of 1 January 2012 and 31 December 2012, land use rights reclassified to long-term prepaid rent were NTD 877,650 thousand and
NTD 633,568 thousand, respectively.
(5) Rental properties and idle assets reclassified to investment properties and deemed cost exemption
Properties held to be leased out or for long-term capital appreciation are currently classified under other assets as rental properties and idle
assets, as there is no clear guidance under R.O.C. GAAP. However under the requirements of IAS 40 Investment Property, properties which
meet the definition of investment property should be classified as such. Therefore as of 1 January 2012 and 31 December 2012, other assets
reclassified to investment properties were NTD 5,482,513 thousand and NTD 5,445,563 thousand, respectively. Furthermore, the Group has
elected to use the fair value of certain investment properties on transition date to TIFRS as their deemed costs. Consequently, the adjustment to
the book value of investment property, retained earnings and deferred tax liabilities were NTD 5,094,257 thousand, NTD 4,948,363 thousand and
NTD 145,894 thousand, respectively .
(6) Prepayments for equipment
As of 1 January 2012 and 31 December 2012, the Group’s reclassification in accordance with TIFRS decreased property, plant and equipment
by NTD 677,260 thousand and NTD 536,089 thousand, and increased prepayment for equipment by NTD 677,260 thousand and NTD 536,089
thousand, respectively.
(7) Employee benefits
The Group used actuarial techniques to calculate the defined benefit obligation and recognized related pension costs and accrued pension
liabilities under R.O.C. GAAP. Upon transitioning to TIFRS, actuarial calculations were made in accordance with the requirements under IAS
19 Employee Benefits. As of 1 January 2012 and 31 December 2012, adjustments were made to reduce deferred pension cost in the amount
of NTD 97,435 thousand and NTD 159,586 thousand, respectively; adjustments were made to accrued pension liabilities in the amount of NTD
747,020 thousand and NTD 598,750 thousand, respectively; adjustments were made to reduce unrecognized net pension cost in the amount
of NTD 1,089,054 thousand and NTD 1,113,251 thousand, respectively; adjustments were made to increase deferred tax assets by NTD 9,116
thousand and NTD 13,419 thousand, respectively; adjustments were made to reduce retained earnings by NTD 1,524,786 thousand and NTD
1,486,304 thousand, respectively; and adjustments were made to decrease non-controlling interest by NTD 399,607 thousand and NTD 371,864
thousand, respectively; the pension cost was decreased by NTD 317,227 thousand; and the income tax benefit was increased by NTD 1,538
thousand.
Furthermore, as the Group adopts the accounting policy of recognizing all actuarial gains or losses to other comprehensive income after
transitioning to TIFRS, and combining with the effect of the aforementioned adjustments, the pension costs and other comprehensive income
for the year ended 31 December 2012 were adjusted by NTD 331,379 thousand and NTD 252,253 thousand, respectively.
(8) Employee benefits - Compensated absences
In accordance with the requirements under IAS 19 Employee Benefits, accumulating compensated absences are recognized as salary
expenses, consequently, the expense payable increased by NTD 90,132 thousand and NTD 100,797 thousand, deferred tax assets increased
by NTD 3,335 thousand and NTD 3,607 thousand, retained earnings decreased by NTD 64,168 thousand and NTD 75,651 thousand, and noncontrolling interest decreased by NTD 22,629 thousand and NTD 21,539 thousand, as of 1 January 2012 and 31 December 2012, respectively.
The salary expense and income tax benefits for the year ended 31 December 2012 were adjusted by NTD 9,305 thousand and NTD 272
thousand, respectively.
(9) Long-term construction contracts
The Group accounted for its long-term construction contracts using both percentage-of-completion method and completed-contract
method, under R.O.C. GAAP. However under the requirements of IFRIC 15 Agreements for the Construction of Real Estate, the Group must
analyze if agreements for the construction of real estate are within the scope of IAS 11 Construction Contracts or IAS 18 Revenue. An agreement
is within the scope of IAS 11, when the buyer is able to specify the major structural elements of the design of the real estate before construction
begins and/or specify major structural changes once construction is in progress (whether or not it exercises that ability). Consequently,
adjustments were made for certain long-term construction contracts that are not within the scope of IAS 11:
CONSOLIDATED BALANCE SHEETS
1 January 2012
Inventories
Retained earnings
189
31 December 2012
$(512,843)
$(1,268,797)
512,843
1,268,797
TATUNG 2012 Annual Report
Financial Overview
Consolidated statement of comprehensive income
2012
Operating revenues
$(1,257,765)
Operating cost
393,926
Operating expenses
107,885
(10) Investments accounted for under the equity method
For the investments accounted for under equity method, the Group recognized the effect by the equity method. The Group’s investments
accounted for under the equity method decreased by NTD 38,347 thousand and NTD 14,279 thousand as of 1 January 2012 and 31 December
2012, respectively. The capital reserve decreased by NTD 887 thousand, the retained earnings decreased by NTD 9,601 thousand and NTD
5,575 thousand, respectively; the cumulative translation adjustment increased by NTD 0 thousand and NTD 2,950 thousand, respectively: and
the non-controlling interest decreased by NTD 27,859 thousand and NTD 10,767 thousand, respectively, as of 1 January 2012 and 31 December
2012. Shares of other comprehensive income of associates and joint ventures accounted for using the equity method for the year ended 31
December 2012 was decreased by NTD 11,881 thousand.
(11) The Company recognized capital surplus for long-term investments accounted for under the equity method. Unless not provided under IFRSs or
otherwise provided by the Company Act and relevant regulations by the Ministry of Economic Affairs, capital surplus amounted to NTD 4,960,040
thousand was adjusted to retained earnings and non-controlling interest by NTD 4,905,434 thousand and NTD 54,606 thousand, respectively,
as they do not meet IFRSs requirements.
(12) The Company selects the exemption for share-based payment under the TIFRS 1 “First-time Adoption of International Financial Reporting
Standards”. The exemption selection for share-based payment would cause the retained earnings to decrease by NTD 4,841 thousand and
NTD 4,851 thousand, capital reserve to increase by NTD 4,660 thousand and NTD 4,661 thousand, non-controlling interest to increase by 181
thousand and NTD 190 thousand, respectively as of 1 January 2012 and 31 December 2012. The salaries expense was increased by NTD 38
thousand for the year ended 31 December 2012.
(13) The Company recognized deferred tax liabilities resulted from the taxable temporary difference under IAS 12 Income tax, the taxable basis
of liability component of compound financial instrument is equal to total amount of original book value of liability component and equity
component.
1 January 2012
Deferred tax assets- Non-current assets
31 December 2012
$1,810
$1,005
Capital reserve
(2,380)
(2,344)
Special reserve
1,326
1,760
Non-controlling interests
(756)
(421)
The income tax benefits were increased by NTD 745 thousand for the year ended 31 December 2012.
(14) According to the revised Regulations Governing the Preparation of Financial Reports by Securities Issuers, the Group reclassified the reserve for
land revaluation resulted from the revaluation of land and buildings to deferred tax liabilities. As of 1 January 2012 and 31 December 2012, the
reserve for land revaluation were both decreased by NTD 5,619,674 thousand and deferred tax liabilities were both increased by NTD 5,619,674
thousand.
(15) The Group’s oversea convertible bonds did not have equity component in accordance with the definition of equity component under IAS 32.
Therefore, it should be treated according towith the combined instruments provision. As of 1 January 2012 and 31 December 2012, the bonds
payable decreased by NTD 233,362 thousand and NTD 136,879 thousand, capital reserve both decreased by NTD 279,037 thousand, and
retained earnings increased by NTD 512,399 thousand and NTD 415,916 thousand, respectively. The finance expense was increased by NTD
96,483 thousand for the year ended 31 December 2012.
(16) According to the revised Regulations Governing the Preparation of Financial Reports by Securities Issuers, prepayments in long-term
investments was reclassified from fund and investments to other assets. As of 1 January 2012 and 31 December 2012, fund and investment
were decreased by NTD 0 thousand and NTD 2,140 thousand, respectively and other assets were increased by NTD 0 thousand and NTD 2,140
thousand, respectively.
(17) The Company reclassified the capital reserve resulted from the acquisition of new shares in GET not in proportionate to ownership interest to
retained earnings for the year ended 31 December 2012. The non-controlling interests was decreased by NTD 460 thousand, capital reserve –
long-term investment in debit balance was decreased by NTD 32,558 thousand, unrealized gain or loss on financial instruments was decreased
by NTD 978 thousand, cumulative translation adjustment was decreased by NTD 434 thousand and retained earnings was decreased by NTD
30,686 thousand.
(18) The Company recognized the capital reserve-stock option based on the proportion of ownership interests under ROC GAAP for the year
ended 31 December 2012. However, under TIFRS, it could be recognized only when the stock option expires. Therefore, capital reserve-longterm investment decreased by NTD 10,592 thousand, and non-controlling interest increased by NTD 10,592 thousand.
(19) The Company should recognize the book value ofits shares held by subsidiaries on 1 January 2002 as treasury stock when first adopting ROC
190
Financial Overview
GAAP No.30 Treasury Stock. This amount might not be equal to original investment cost and there is no clear regulation under TIFRS. Therefore,
this amount should be adjusted retroactively. The treasury stock increased by NTD 489,793 thousand and unrealized gain or loss on financial
instruments increased by NTD 489,793 thousand as of 1 January 2012.
(20)A foreign operation of the Company was liquidated and the proceeds of the shares were remitted in January 2012. The Company has writtenoff the book value of the investment under equity method and the related cumulated translation adjustment. However, the Company has
elected the exemption to reclassify the accumulated balance of exchange differences resulting from translating the financial statements of a
foreign operation to retained earnings at the date of transition to TIFRS. The duplicated deduction from exchange differences on translation of
foreign operation increased by NTD 1,351 thousand and retained earnings decreased by NTD 1,351 thousand.
(21) The Company reclassified the deferred credit among affiliates to investments accounted for under the equity in accordance with IAS28.
Therefore, the investments accounted for under the equity were decreased by NTD 85,094 thousand and NTD 51,401 thousand, respectively,
inventories were decreased by NTD 134,647 thousand and NTD 0 thousand, respectively, and deferred credit among affiliates were decreased
by NTD 219,741 thousand and NTD 51,401 thousand, respectively, as of 1 January 2012 and 31 December 2012.
(22)The Company has reclassified the payable for lawsuit of anti-trust with uncertain time to provision. Therefore, the accrued expense was
decreased by NTD 847,140 thousand and NTD 903,986 thousand, respectively, and provision-non-current were increased by NTD 847,140
thousand and NTD 903,986 thousand, respectively, as of 1 January 2012 and 31 December 2012.
(23)The Company reclassified the deferred expense in accordance with TIFRS. The impact resulted from the reclassification to 1 January 2012 and
31 December 2012 were as follows:
1 January 2012
31 December 2012
Prepayments
$16,006
$34,578
Property, plant and equipment
632,982
815,599
927
578
203,617
129,026
(1,001,236)
(1,102,597)
71,704
69,616
(76,000)
(53,200)
Intangible assets
Other assets
Other deferred charges
Long-term prepaid rentals
Long-term loans
(24) The Company reclassified the restricted bank deposits in accordance with TIFRS. The impact resulted from the reclassification to 1 January 2012
and 31 December 2012 was as follows:
1 January 2012
31 December 2012
Demand deposits
$-
$6,237
Notes receivable
-
$64,405
Restricted assets
(3,263,873)
(2,444,476)
Investment in debt security with no active accounted, current
4,051,185
2,373,834
Other current assets
(787,312)
-
Investment in debt security with no active accounted, non-current
1,500,313
622,244
(1,500,313)
(622,244)
Other non-current assets
(25)Reconciliations of consolidated statement of comprehensive income
The consolidated income statement prepared under R.O.C. GAAP and the Regulations Governing the Preparation of Financial Reports by
Securities Issuers before revision only presented the following components of operating profit or loss: operating revenue, operating costs and
operating expenses. Upon transitioning to TIFRS, in order to comply with the presentation of financial statements under TIFRS and the revised
Regulations Governing the Preparation of Financial Reports by Securities Issuers, certain items on the statement of comprehensive income
have been reclassified. All other impact on the statement of comprehensive income as results of adjustments upon transitioning to TIFRS has
been described in items above.
(26)Accumulated balance of exchange differences resulting from translating the financial statements of a foreign operation deemed to be zero.
Accumulated balance of exchange differences resulting from translating the financial statements of a foreign operation is deemed to be zero
as at the date of transition to TIFRS in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards.
(27)Classification and valuation of deferred tax
191
TATUNG 2012 Annual Report
Financial Overview
Under the requirements of R.O.C. GAAP, the current and non-current deferred tax liabilities and assets of the same taxable entity should be
offset against each other and presented as a net amount. However under the requirements of IAS 12 Income Taxes, an entity shall offset
deferred tax assets and deferred tax liabilities if, and only if, the entity has a legally enforceable right to set off current tax assets against current
tax liabilities; and if the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the
same taxable entity.
Under the requirements of R.O.C. GAAP, a deferred tax asset or liability should, according to the classification of its related asset or liability,
be classified as current or non-current. If a deferred tax asset or liability is not related to an asset or liability for financial reporting, it should be
classified as current or non-current according to the expected reversal date of the temporary difference. However under the requirements of
IAS 1 Presentation of Financial Statements, deferred tax assets or liabilities are classified as non-current. Therefore as of 1 January 2012 and 31
December 2012, deferred tax assets reclassified to non-current assets were NTD 801,639 thousand and NTD 267,217 thousand, respectively. The
deferred tax liabilities reclassified to non-current liabilities were NTD 3,465 thousand and NTD 2,974 thousand. The deferred assets and liabilities
increased at the same by NTD 2,490,006 thousand and NTD 1,035,320 thousand.
Under the requirements of R.O.C. GAAP, deferred tax assets are recognized in full, however, if there is over 50% possibility that the economic
benefits of a deferred tax asset become unrealizable, a valuation allowance account should be established to reduce the carrying amount of
the deferred tax asset. However under the requirements of IAS 12 Income Taxes, a deferred tax asset shall be recognized to the extent that it is
probable that it would be utilized.
The following tables illustrate the deferred tax effects of all adjustments relating to the transitioning to TIFRS:
Income tax income:
Other relative
description in this
Note
For the year ended 31 December 2012
Recognized in profit or loss:
Employee benefits
Taxable temporary difference from compound financial instruments
(7), (8)
$1,810
(13)
745
$2,555
Deferred assets and liabilities:
Other relative
description in
this Note
1 January 2012
Deferred tax
Deferred tax
assets
liabilities
31 December 2012
Deferred tax
Deferred tax
assets
liabilities
Bonds payable
(13)
$-
$1,810
$-
$1,005
Election of deemed cost for investment properties
(14)
-
5,765,568
-
5,765,568
12,451
-
17,026
-
$12,451
$5,767,378
$17,026
$5,766,573
Employee benefits
Total
(7), (8)
(28)Special reserve
Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Financial-Supervisory-Securities-Corporate-1010012865, on a public
company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to
shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the Company shall
set aside an equal amount of special reserve. An equal amount of the Company’s unrealized revaluation gains in the amount of NTD 14,917,559
thousand and cumulative translation adjustments (gains) in the amount of NTD 1,060,477 thousand that the Company elects to transfer to
retained earnings by application of the exemption under IFRS 1 has been set aside to special reserve. The amount set aside to special reserve
was adjusted to NTD 15,894,690 thousand as at 31 December 2012.
(29)Other
Certain items in the financial statements prepared based on R.O.C. GAAP have been reclassified for comparison purposes.
192
Financial Overview
ATTACHMENT 1
Financing provided to others for the year ended 31 December 2013
No.
Lender
(Note 1)
Counter-party
Financial statement account
Related
Party
Maximum
balance for the
period
Tatung Global Strategy Investment and
Trading (BVI) Inc.
Affiliated account
Yes
$816,874
Tatung InfoComm Co.,Ltd.
Long-term receivables
Yes
557,980
Tatung Fine Chemicals Co., Ltd.
Affiliated account
Yes
50,000
Tatung Vietnam Co.,Ltd.
Affiliated account
Yes
687,691
Green Energy Technology Inc.
Affiliated account
Yes
700,000
Nature Worldwide Technology Corp.
Other receivables
Yes
188,991
Chunghwa Electronic Investment Co., Ltd.
Other receivables - related parties
Yes
275,000
HEDA Biotechnology Co.,Ltd.
Other receivables - related parties
Yes
20,000
Nature Worldwide Technology Corp.
Affiliated account / Other
receivables - related parties
Yes
948,722
Accounts receivable - related parties
Yes
27,146
Other receivables - related parties
Yes
19,554
Other receivables - related parties
Yes
24,443
Other receivables - related parties
Yes
132,969
7
Huaian Tatung Advanced Technology
Materials Co., Ltd.
Wujiang Shanghua Material Technology
Co., Ltd.
Tatung Coatings (Kunshan) Co., Ltd.
Huaian Tatung Advanced Technology
Materials Co., Ltd.
Shan-Chih Wire and Cable Tecknology Tatung Wire And Cable Technology
(Wujiang) Co. , Ltd.
(Wujiang) Co., Ltd.
Chunghwa Pictures Display Technology Chunghwa Picture Tubes Technology
(Fujian) Ltd.
(Group) Co., Ltd.
Other receivables - related parties
Yes
928,824
8
Daliant Investments Ltd.
Chunghwa Picture Tubes (Bermuda) Ltd.
Other receivables - related parties
Yes
19,650
9
Bensaline Investments Ltd.
Chunghwa Picture Tubes (Bermuda) Ltd.
Other receivables - related parties
Yes
20,850
10
Bangalor Investments Ltd.
Chunghwa Picture Tubes (Bermuda) Ltd.
Other receivables - related parties
Yes
20,400
11
Dalemont Investments Ltd.
Chunghwa Picture Tubes (Bermuda) Ltd.
Other receivables - related parties
Yes
19,500
12
CPTF Optronics Co., Ltd.
Chunghwa Picture Tubes Technology
(Group) Co., Ltd.
Other receivables - related parties
Yes
1,091,109
13
Giantplus Technology Co., Ltd.
Giantplus Holding L.L.C
Other receivables
Yes
443,025
14
Giantplus Holding L.L.C
Kunshan Giantplus Optronics Display
Technology Co.,Ltd
Shenzhen Giantplus Optoelectronics
Display Co.,Ltd.
Other receivables - related parties
Yes
769,340
Other receivables - related parties
Yes
88,980
15
Taipei Industry Corporation
Green Energy Technology Inc
Other receivables
Yes
150,000
0
Tatung Co., Ltd
1
Shan-Chih Asset Development Co.
2
Chih Sheng Investment Co., Ltd.
3
Shan-Chih Investment Co., Ltd.
4
Tatung Fine Chemicals Co., Ltd.
5
6
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
193
The Company and its subsidiaries are coded as follows:
(i) The Company is coded "0".
(ii) The subsidiaries are coded consecutively beginning from "1" in the
order presented in the table above.
Nature of financing is coded as follows: operational funding is
coded"1"; short-term financing is coded "2".
Pursuant to Interpretation (93) No. 167 issued by Accounting Research
and Development Foundations, the amount past due for more than
three months of normal credit period should be reclassified from
accounts receivable-affiliates to other receivables-affiliates and
treated as financing to others.
Financing for individual counter-party shall not exceed 40% of the
Company's net assets value from the latest financial statements
($13,320,478 thousand).
Total financing shall not exceed 40% of the Company's net assets value
from the latest financial statements ($13,320,478 thousand).
Shan-Chih Assets Development Co.: Financing for individual counterparty shall not exceed 40% of the lender's net assets value as of last
year ($11,553,108 thousand).
Shan-Chih Assets Development Co.: Total financing shall not exceed
40% of the lender's net assets value as of last year ($11,553,108
thousand).
Chih-Sheng Investment Co., Ltd.: Financing for individual counter-party
shall not exceed 40% of the lender's net assets value from the latest
financial statements ($497,539 thousand).
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
Chih-Sheng Investment Co., Ltd.: Total financing shall not exceed 40%
of the lender's net assets value from the latest financial statements
($497,539 thousand).
Shan Chih Investment Co.Ltd: Financing for individual counterparty shall not exceed 40% of the lender's net assets value ($173,003
thousand).
Shan Chin Investment Co.Ltd: Total financing amount shall not exceed
40% of the lender's net assets value ($173,003 thousand).
Tatung Fine Chemicals Co.: Financing for individual counter-party shall
not exceed 10% of the lender's net assets value from the latest financial
statements ($67,099 thousand).
Except when the company hold 10 0% of voting shares of the
company's funds and loans directly and indirectly. Financing for
individual counter-party shall not exceed 50% of the lender's net assets
value from the latest financial statements ($335,495 thousand).
Tatung Fine Chemicals Co.: Total financing amount shall not exceed
40% of the lender's net assets value from the latest financial statements
($268,396 thousand).
Except when the company holds 100% of voting shares of the
company's funds and loans directly and indirectly. Financing for
individual counter-party shall not exceed 50% of the lender's net assets
value from the latest financial statements $335,495 thousand).
Tatung Coatings (Kunshan) Co. Ltd. : Financing for individual counterparty shall not exceed 20% of the lender's net assets value from the
latest financial statements ($32,974 thousand).
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Ending balance
Actual amount
provided
Nature of Amount of sales to
financing (purchases from) Reason for financing
counter-party
(Note 2)
Interest rate
Allowance
for doubtful
accounts
Limit of financing
amount for
Limit of total
individual
financing amount
counter-party
Collateral
Item
Value
Business turnover
$-
None
$-
(Note 4)
(Note 5)
(Note 20)
Business turnover
-
None
-
(Note 4)
(Note 5)
-
Business turnover
-
None
-
(Note 4)
(Note 5)
2
-
Business turnover
-
None
-
(Note 4)
(Note 5)
3.00%
2
-
Business turnover
-
None
-
(Note 6)
(Note 7)
68,991
3.00%
2
-
Business turnover
68,991
(Note 18)
None
-
(Note 6)
(Note 7)
95,000
45,000
2.00%
2
-
Business turnover
-
None
-
(Note 8)
(Note 9)
20,000
20,000
2.00%
2
-
Business turnover
20,000
None
-
(Note 8)
(Note 9)
929,577
929,577
3.10%
2
-
(Note 19)
Business turnover
-
None
-
(Note 10)
(Note 11)
-
-
2.90%
2
-
(Note 3)
-
-
-
-
(Note 12)
(Note 13)
-
-
3.30%
2
-
Business turnover
-
None
-
(Note 14)
(Note 15)
24,443
24,443
7.15%
2
-
Business turnover
-
None
-
(Note 14)
(Note 15)
132,969
-
6.00%
2
-
Loan repayment
-
None
-
(Note 16)
(Note 17)
928,824
928,824
5.60%
2
-
Business turnover
-
None
-
1,319,738
1,319,738
19,522
19,522
-
2
-
Business turnover
-
None
-
47,875
(Note 22)
20,714
20,714
-
2
-
Business turnover
-
None
-
(Note 22)
(Note 23)
20,267
20,267
-
2
-
Business turnover
-
None
-
48,356 (Note
22)
48,356
(Note 23)
19,373
19,373
-
2
-
Business turnover
-
None
-
(Note 22)
(Note 23)
708,840
708,840
5.60% 6.00%
2
-
Business turnover
-
None
-
3,262,938
3,262,938
-
2,118,490
2,824,654
1,421,284
1,421,284
$816,874
$816,874
2.00%
2
$-
(Note 21)
557,980
557,980
2.00%
2
-
-
-
3.00%
2
511,841
466,866
2.00%
-
-
68,991
685,515
536,490
2
-
Business turnover
-
None
-
1,065,963
-
-
3.00%
2
-
Business turnover
-
None
-
1,065,963
Business turnover
and
- Machinery
equipment
250,000
166,596
Note 15:
Note 16:
Note 17:
Note 18:
Note 19:
2
-
Except when the company holds 100% of voting shares of the
company's funds and loans directly and indirectly. Financing for
individual counter-party shall not exceed 40% of the lender's net assets
value from the latest financial statements ($65,947 thousand).
Tatung Coatings (Kunshan) Co. Ltd.: Total financing shall not exceed
40% of the lender's net assets value from the latest financial statements
($65,947 thousand).
Except for Shan-Chih Fine Chemicals Co,'s (shares) 100% ownership
investees, whether directly or indirectly.
Shan-Chih Wire and Cable Technology (Wujiang) Co .Ltd: Financing for
individual counter-party shall not exceed 5% of the lender's net assets
value from the latest financial statements ($1,665,060 thousand).
Shan-Chih Wire and Cable Technology (Wujiang) Co . Ltd: Total
financing shall not exceed 5% of the lender's net assets value from the
latest financial statements ($65,947 thousand), i.e. 5% of the lender's net
assets value as of the ultimate parent company ($1,665,060 thousand).
Shan-Chih Asset Development Co., Ltd.'s receivables from Nature
Worldwide Technology Corp. were collected in the amount of $120,000
thousand on 10 June 2013. The remaining claim is still pending in the
court.
The amount of financing to Nature Worldwide Technology Corp. from
the Company's subsidiary, Shan-Chih Investment Co., Ltd. is exceeding
the limit. The Nature Worldwide Technology Corp. is in the process of
liquidation. The company's financial position will be improved once the
liquidation is completed.
-
None
(Note 22)
2.00% 3.00%
3.00%
Business turnover
47,597
3.00%
150,000
-
48,204
-
150,000
2
(Note 22)
(Note 22)
(Note 22)
(Note 22)
(Note 24)
(Note 23)
47,875
(Note 23)
48,204
47,597
(Note 23)
(Note 23)
(Note 23)
(Note 23)
166,596
(Note 25)
Note 20: On 30 March 2012, the Company signed a Share Purchase Contract
with Vee Telecom Multimedia Co., Ltd. Under the contract, the
Company would sell all of its shares of its subsidiary, Tatung InfoComm
Co., Ltd., to Vee Telecom Multimedia Co., Ltd..
Moreover, the original amount of NTD 557,980 thousand that the
Company has financed to Tatung InfoComm Co., Ltd will be repaid by
Tatung InfoComm co., Ltd. in five years. Please refer to Note 6 (15) for
more details.
Note 21: The Company has financed to its subsidiary �Tatung Global Strategy
Investment and Trading (BVI) Inc.. Part of the loans have been expired
to pay. The Board of Directors of the Company has resolved to
proceed the organization restructure to solve the overdue. The finance
transaction will be settled upon the organization restructure.
Note 22: Financing for individual counter-party shall not exceed 25%~40% of the
net assets values from the latest financial statements.
Note 23: Total financing amount shall not exceed 40% of the audited/reviewed
net assets value of the most current period.
Note 24: Taipei Industry Co.: Financing individual counter-party shall not exceed
40% of the lender's net assets value as of most current period ($166,596
thousand).
Note 25: Taipei Industry Co.L Total financing shall not exceed 40% of the
lender's net assets value from the latest financial statements ($166,596
thousand).
194
Financial Overview
ATTACHMENT 2
Endorsement / Guarantee provided to others for the year ended 31 December 2013
Receiving party
No.
Endorsor / Guarantor
(Note 1)
0
Company name
Relationship
(Note 2)
Limit of guarantee
/ endorsement Maximum balance
amount for
for the period
receiving party
Tatung Co. of Japan, Inc.
2
$8,325,299
(Note 3)
$2,310,000
Tatung InfoComm Co.,Ltd.
(Note 7)
-
8,325,299
(Note 3)
2,000,000
Tatung Co.,Ltd
1
Forward Electronics Co., Ltd.
Forward Development Co., Ltd.
2
352,751
(Note 4)
240,000
2
Forward Development Co., Ltd.
Suzhou Forward Electronics Technology
Co., Ltd.
3
437,401
(Note 5)
162,000
Tatung Co., Ltd.
4
86,648,313
(Note 6)
20,336,156
Tatung Forestry and Construction Co.
2
7,220,693
(Note 6)
50,000
Suqian Zhiwei Real Estate Co.,Ltd.
3
7,220,693
(Note 6)
275,000
Chyun Huei Health Technologies Inc.
2
195,787
(Note 8)
130,000
TSTI Technologies (Shanghai) Co., Ltd.
3
195,787
(Note 8)
5,000
-
4,116,231
(Note 10)
388,431
Huallar Optronics (Fuzhou) Co. Ltd.
2
4,078,673
(Note 10)
48,885
CPTF Visual Display (Fuzhou) Ltd.
2
4,078,673
(Note 10)
1,368,794
Xiamen Overseas Chinese Electronics Co.,
Ltd.
6
4,078,673
(Note 10)
710,257
Chunghwa Picture Display Technology
(Shen-Zhen) Ltd.
3
1,478,469
(Note 10)
298,250
3
4
5
6
Shan-Chih Asset Development Co.
Tatung System Technologies Inc.
Chunghwa Picture Tubes (Wujiang) Ltd.
CPTF Optronics Co., Ltd.
Chunghwa Picture Display Technology
(Shen-Zhen) Ltd.
(Note 12)
7
Chunghwa Pictures Display Technology
(Fujian) Ltd.
8
Chunghwa Picture Tubes Technology (Group) Kornerstone Materials Technology Co. Ltd.
Co., Ltd.
2
3,248,850
(Note 10)
2,646,922
9
Green Energy Technology Inc.
2
4,549,946
2,475,388
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
195
Ultra Energy (Weifang) Technology Co. Ltd.
(Note 9)
The Company and its subsidiaries are coded as follows:
1. The Company is coded "0".
2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.
According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau,
receiving parties should be disclosed as one of the following:
1. An investee company that has a business relationship with Tatung Co.,Ltd.
2. A subsidiary in which Tatung holds directly over 50% of equity interest.
3. An investee in which Tatung and its subsidiaries hold over 50% of equity interest.
4. An investee in which Tatung holds directly and indirectly over 50% of equity interest.
5. An investee that has provided guarantees to Tatung Co.,Ltd, and vice versa, due to contractual requirements.
6. An investee in which Tatung conjunctly invests with other shareholders, and for which Tatung has provided endorsement/guarantee in proportion to its
shareholding percentage.
Tatung Co.: Individual endorsement or guarantee shall not exceed 25% of the Company's net assets value from the latest financial statements of net
($8,325,299 thousand) is limited; Total endorsement or guarantee for others shall not exceed 50% of the Company's net assets value of the latest financial
statements ($16,650,598 thousand).
Forward Electronics Co.: Individual endorsement or guarantee shall not exceed 30% of the provider's net assets value from the latest financial statements
($352,751 thousand). Total endorsement or guarantee for others shall not exceed 50% of the provider's net assets value from the latest financial statements
($587,918 thousand).
Forward Development Co., Ltd.: Individual endorsement or guarantee shall not exceed 30% of the provider's net assets value from the latest financial
statements ($437,401 thousand). Total endorsement or guarantee for others shall not exceed 50% of the provider's net assets value from the latest financial
statements ($729,001 thousand).
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Ending balance
Actual amount
provided
Amount of
collateral
guarantee /
endorsement
Percentage of
accumulated guarantee
amount to net assets
value from the latest
financial statement
Limit of total
guarantee/
endorsement
amount
Guarantee
provided by
parent company
(Note 11)
Guarantee
provided by a
subsidiary
(Note 11)
Guarantee
provided to
subsidiaries in
Mainland China
(Note 11)
$2,310,000
$1,504,670
None
7.08%
$16,650,298
(Note 3)
Y
N
N
2,000,000
138,093
None
6.13%
16,650,298
(Note 3)
N
N
N
238,440
160,947
None
20.76%
(Note 4)
587,918
N
N
N
160,947
91,229
None
10.46%
729,001
(Note 5)
N
N
Y
15,358,006
12,958,006
None
53.17%
86,648,313
(Note 6)
N
Y
N
42,000
42,000
None
0.15%
14,441,386
(Note 6)
N
N
N
275,000
-
None
0.97%
14,441,386
(Note 6)
N
N
Y
90,000
28,900
None
9.19%
489,467
(Note 8)
N
N
N
5,000
5,000
None
0.51%
489,467
(Note 8)
N
N
Y
(Note 12)
-
(Note 12)
-
None
-
4,116,231
(Note 10)
N
N
Y
48,885
48,885
None
0.60%
4,078,673
(Note 10)
N
N
Y
1,368,794
622,127
None
16.78%
4,078,673
(Note 10)
N
N
Y
539,696
406,727
None
6.62%
4,078,673
(Note 10)
N
N
Y
-
-
None
-
1,649,673
(Note 10)
N
N
Y
2,646,922
2,499,260
None
24.44%
5,414,750
(Note 10)
N
N
Y
305,300
108,732
None
2.68%
5,687,433
N
N
Y
(Note 9)
Note 6:
Shan-Chih Asset Development Co.: Limits on individual endorsement or guarantee shall not exceed 25% of the provider's net assets value from the financial
statements of last year ($7,220,693 thousand). Total endorsement or guarantee for others shall not exceed 50% of the provider's net assets value of the
financial statements of last year ($14,441,386 thousand).
Total endorsement or guarantee for the parent company shall not exceed 300% of the provider's net assets value from the financial statements of last year
($86,648,313 thousand).
Note 7: On 23 March 2012, the Company signed a Share Purchase Contract with Vee Telecom Multimedia Co., Ltd. Under the contract, the Company would sell
all of its shares of its subsidiary, Tatung InfoComm Co., Ltd., to Vee Telecom Multimedia Co., Ltd.. Total shares have been transferred completely. Tatung
InfoComm Co., Ltd. has been in the dissolution process of endorsement with the bank.
Note 8: Tatung System Technologies Inc.: Individual endorsement or guarantee shall not exceed 20% of the provider's net assets value from the latest financial
statements ($195,787 thousand). Total endorsement or guarantee for others shall not exceed 50% of the provider's net assets value from the latest financial
statements ($489,467 thousand).
Note 9: Green Energy Technology Inc.: Individual endorsement or guarantee shall not exceed 40% of the provider's net assets value from the latest financial
statements ($4,549,946 thousand). Total endorsement or guarantee for others shall not exceed 50% of the provider's net assets value from the latest financial
statements ($5,687,433 thousand).
Note 10: Chunghwa Picture Tubes, Ltd.: Individual endorsement or guarantee shall not exceed 30% to 50% of the provider's net assets value, however, no limits for the
counter-party who is a company 100% directly or indirectly owned by CPT.
Total endorsement or guarantee for others shall not exceed 50% of the provider's net assets value.
Note 11: A company is coded "Y" when a subsidiary is endorsed by the listed parent company, or a listed parent company is endorsed by a subsidiary, or a company
with an endorsement in Mainland China.
Note 12: CPT Group sold Chunghwa Picture Tubes Co. (Shenzhen) Ltd. On 1 July 2013, as a result, the endorsement does not comply with the Public Companies
Financing Guidelines. however, Chunghwa Picture Tubes (Wujiang) Co., Ltd. has immediately made improvements and has released the endorsement in
October 2013.
196
Financial Overview
ATTACHMENT 3
Securities held for the year ended 31 December 2013
Holder
Tatung Co., Ltd.
Note 1:
197
Type and name of securities
Relationship
Financial statement account
Stock—Taiwan Sugar Co., Ltd.
-
Financial assets measured at cost, current
Stock—Taiwan Power Co., Ltd.
-
Financial assets measured at cost, current
Stock—Tongya Telecommunication
Industry Co., Ltd.
-
Financial assets measured at cost, current
Stock—Chung Hwa Trading
Development Co.
-
Financial assets measured at cost, current
Stock—China Daily News Co., Ltd.
-
Financial assets measured at cost, current
Stock—Chi Yeh Chemical Co.
-
Financial assets measured at cost, current
Stock—United Electric Industry Co., Ltd.
-
Financial assets measured at cost, current
Stock—ASIA-PACIFIC TECHNOLOGY &
INTELLECTUAL PROPERTY SERVICES INC.
-
Financial assets measured at cost, current
Stock—E&E Recycling Co.
-
Financial assets measured at cost, current
Stock—Scientific Pharmaceutical Elite
Co., Ltd.
Financial assets measured at cost, current
Stock—Yi Chi Associated Trading Co.
-
Financial assets measured at cost,
noncurrent
Stock—Tatung Otis Elevator Co.
-
Available-for-sale financial assets, current
Stock—Taiwan Cogeneration Co.
-
Available-for-sale financial assets, current
Stock—Rechi Precision Co., Ltd.
-
Available-for-sale financial assets, current
Stock—Medigen Biotechnology Co.
-
Available-for-sale financial assets, current
Stock—Tatung Technology Inc.
-
Available-for-sale financial assets,
noncurrent
Subordinated debt—TC Bank.
-
Held-to-maturity financial assets,
noncurrent
fund—UPAMC Emerging Mkts
Corporate Bd Fd-Acc
-
Financial assets at fair value through profit
or loss, current
fund—Eastspring Inv South Africa Fixed
Inc
-
Financial assets at fair value through profit
or loss, current
fund—Schroder China Bond RMB
-
Financial assets at fair value through profit
or loss, current
Tatung Technology corp was renamed Tatung Technology Inc. in July, 2013.
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Units (thousand) / bonds /
shares (thousand)
31 December 2013
Percentage of ownership
Book value
(%)
Note (Note 4)
Market value /
net assets value
1,391
$-
-
$-
2,104
14
-
-
19,800
8,000
9.90
-
49,984
500
0.08
-
2,347
-
0.01
-
125,000
1,091
0.63
-
1,229,569
6,705
2.77
-
140,000
10
-
-
1,430,000
10,000
4.61
-
600,000
2,918
5.45
-
30,000
300
6.67
-
20,000
106,162
10.00
106,162
7,172,920
124,809
1.22
124,809
859,574
27,463
0.18
27,463
1,212,000
241,188
0.89
241,188
1,027,056
41,082
2.51
41,082
-
20,000
-
-
500,000
4,979
-
4,979
100,000
3,001
-
2,852
200,000
9,644
-
9,670
(Note 1)
198
Financial Overview
ATTACHMENT 3-1
Securities held for the year ended 31 December 2013
Holder
Suzhou Forward Electronics
Technology Co., Ltd.
San Chih Semiconductor
Co., Ltd.
Type and name of securities
Relationship
Financial statement account
Capital–Nanjing Global Display
Technology Co.,Ltd.
-
Financial assets measured at cost,
noncurrent
Stock–Formosa Epitaxy Inc.
-
Available-for-sale financial assets,
noncurrent
Stock–Crystal Applied Technology
Inc.
-
Available-for-sale financial assets,
noncurrent
Green Energy Technology
Inc.
Stock–Chunghwa Picture Tubes
Co.
Subsidiary of Tatung Co., Ltd.
Available-for-sale financial assets,
noncurrent
Tatung Fine Chemicals Co.,
Ltd.
Stock–Hsieh Chih Industrial Library
Publishing Co.
Investee company of Tatung Co.,
Ltd.
Financial assets measured at cost,
noncurrent
Stock–TSC Venture Management,
Inc.
Reinvestment
Financial assets measured at cost,
noncurrent
Stock–Tatung Co., Ltd.
Parent Company
Available-for-sale financial assets,
noncurrent
Chunghwa Electronics
Investment Co., Ltd.
Chih Sheng Investment Co.,
Ltd.
Stock–Medigen Biotechnology
Corp.
-
Available-for-sale financial assets,
current
Stock–Tatung Technology Inc.
-
Available-for-sale financial assets,
noncurrent
Stock–Tatung Atherton Co., Ltd.
-
Financial assets measured at cost,
noncurrent
-
Financial assets measured at cost,
noncurrent
Stock–Hua Nan Financial Holdings
Co., Ltd.
-
Available-for-sale financial assets,
noncurrent
Stock–Cathay Financial Holdings
Co., Ltd.
-
Available-for-sale financial assets,
noncurrent
Stock–Yuanta Financial Holding
Co., Ltd.
-
Available-for-sale financial assets,
noncurrent
Stock–CTBC Financial Holding Co.,
Ltd.
-
Available-for-sale financial assets,
noncurrent
Chih Sheng Holding Co., Ltd. Stock–Can Yang Investments Ltd.
Shan-Chih Asset
Development Co.
Subsidiary of Tatung Co., Ltd.
Available-for-sale financial assets,
noncurrent
Stock–Tatung System Technologies Subsidiary of Tatung Co., Ltd.
Inc.
Available-for-sale financial assets,
noncurrent
Stock–Chunghwa Picture Tubes
Co.
Subsidiary of Tatung Co., Ltd.
Available-for-sale financial assets,
noncurrent
Stock–Chunghwa Electronics
Investment Co., Ltd.
Subsidiary of Tatung Co., Ltd.
Available-for-sale financial assets,
noncurrent
Tatung Forestry and
Construction Co.
Stock–Hsieh Chih Industrial Library
Publishing Co.
Investee company of Tatung Co.,
Ltd.
Financial assets measured at cost,
noncurrent
Shan-Chih Asset
International Holding Corp.
Stock–Proview International
Holdings Ltd.
Tatung Science and
Technology, Inc.
Stock–Tatung Telecom
Corporation
Tatung Co. of America Inc.
Stock–INSURANCE TRUST &
ESCROW, USA
-
Financial assets measured at cost,
noncurrent
Stock–Megaforce Co., Ltd.
-
Available-for-sale financial assets,
current
Fund–Hua Nan Phoenix Money
Market
-
Financial assets at fair value through
profit or loss,current
Stock–Tatung Technology Inc.
-
Available-for-sale financial assets,
noncurrent
Tatung Medical Healthcare
Technologies Co., Ltd.
Shan Chih Investment Co.,
Ltd.
Note 2:
199
Stock–Green Energy Technology
Inc.
Subsidiary of Tatung Co., Ltd.
Available-for-sale financial assets,
noncurrent
Financial assets measured at cost,
noncurrent
Subsidiary of Tatung Co., Ltd.
Available-for-sale financial assets,
noncurrent
Stock–Tatung System Technologies Subsidiary of Tatung Co., Ltd.
Inc.
Available-for-sale financial assets,
noncurrent
Stock–Green Energy Technology
Inc.
All transactions are eliminated in the consolidated financial statements.
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Units (thousand) / bonds /
shares (thousand)
31 December 2013
Percentage of ownership
Book value
(%)
Note
Market value /
net assets value
-
$10,190
17.29
$-
12,121,000
206,663
2.00
206,663
684,331
17,492
0.83
17,492
94,580,689
160,787
1.46
160,787
1
10
0.03
-
270,000
2,700
-
-
333,586
2,759
0.01
2,759
118,036
23,489
-
-
2,727,272
30,000
8.80
-
1,000,000
23,595
10.00
-
4,250,100
128,671
2.62
-
110,250
1,918
-
1,918
40,950
1,976
-
1,976
3,696
66
-
66
617,539
12,567
-
12,567
13,253,936
277,560
3.85
277,560
(Note 2)
171
5
-
5
(Note 2)
141,871,033
283,742
2.19
283,742
(Note 2)
562,355
1,000
0.20
1,000
(Note 2)
14
140
0.40
-
125,190,000
-
16.22
-
25,000
745
10.00
-
250,000
7,451
-
-
80,000
1,008
-
1,008
-
30,000
-
-
1,027,056
41,082
2.50
-
1,278,173
40,135
0.37
40,135
(Note 2)
540,450
15,808
0.80
15,808
(Note 2)
(Note 2)
(Note 2)
200
Financial Overview
ATTACHMENT 3-2
Securities held for the year ended 31 December 2013
Holder
Chunghwa Picture Tubes, Ltd.
Type and name of securities
Stock–Ili Technology corp.
Relationship
Financial statement account
-
Available-for-sale financial assets,
current
Add: Adjustments for change in value of
investment
subtotal
Stock–Tatung Co., Ltd.
Ultimate parent entity
Available-for-sale financial assets,
noncurrent
Add: Adjustments for change in value of
investment
subtotal
Chunghwa Picture Tubes, Ltd.
Stock–Toppan Chunghwa
Electronics Co., Ltd.
Chunghwa Picture Tubes (Bermuda) Stock–Tatung Co., Ltd.
Ltd.
Ultimate parent entity
Available-for-sale financial assets,
noncurrent
Available-for-sale financial assets,
noncurrent
Add: Adjustments for change in value of
investment
subtotal
Chunghwa Picture Tubes (Malaysia) Stock–Country Heights Holding
Sdn.Bhd.
Berhad
-
Available-for-sale financial assets,
noncurrent
Add: Adjustments for change in value of
investment
subtotal
Mines Golf Resort Berhad
-
Dalemont Investment Ltd.
Stock–Tatung Co.,Ltd
Ultimate parent entity
Daliant Investment Ltd.
Stock–Tatung Co.,Ltd
Ultimate parent entity
Banglor Investment Ltd.
Stock–Tatung Co.,Ltd
Ultimate parent entity
Bensaline Investment Ltd.
Stock–Tatung Co.,Ltd
Ultimate parent entity
Financial assets measured at cost,
noncurrent
Available-for-sale financial assets,
noncurrent
Available-for-sale financial assets,
noncurrent
Available-for-sale financial assets,
noncurrent
Available-for-sale financial assets,
noncurrent
Add: Adjustments for change in value of
investment
subtotal
CPTF Optronics Co., Ltd.
Stock–Xiamen Overseas Chinese
Electronics Co., Ltd.
CPTF Optronics Co., Ltd.
Stock–Xiamen Overseas Chinese
Electronics Co., Ltd.
Stock–Xiamen Overseas Chinese
Electronics Co., Ltd.
Stock–Xiamen Overseas Chinese
Electronics Co., Ltd.
Other related party
Available-for-sale financial assets,
noncurrent
Add: Adjustments for change in value of
investment
Other related party
Financial assets at fair value through
profit or loss, noncurrent
Financial assets at fair value through
profit or loss, noncurrent
Financial assets at fair value through
profit or loss, noncurrent
Available-for-sale financial assets,
noncurrent
Add: Adjustments for change in value of
investment
subtotal
Chunghwa Pictures Display
Technology (Fujian) Ltd.
Chunghwa Picture Tubes (Wujiang)
Ltd.
Chunghwa Picture Tubes (Labuan)
Ltd.
Stock–FocaTech systems Co., Ltd.
Other related party
Other related party
-
subtotal
Giantplus Technology Co., Ltd.
Stock–Chinfong Optronics Co., Ltd.
-
Hsh Heng Investment Co., Ltd.
Stock–Monterey International Corp.
-
Note 2:
201
All transactions are eliminated in the consolidated financial statements.
Available-for-sale financial assets,
noncurrent
Available-for-sale financial assets,
noncurrent
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Units (thousand) / bonds /
shares (thousand)
1,685,506
31 December 2013
Percentage of ownership
Book value
(%)
$45,159
Market value /
net assets value
2.23
$98,265
0.47
90,513
Note
53,106
98,265
10,944,773
408,712
(Note 2)
(318,199)
90,513
6,750,000
81,409
2.53
60,479
11,046,994
586,923
0.47
91,359
9.00
295,287
(Note 2)
(495,564)
91,359
24,800,000
127,063
168,224
295,287
5,000,000
-
5.26
-
12,105,265
643,148
0.52
100,168
(Note 2)
12,161,208
646,120
0.52
100,573
(Note 2)
12,227,364
649,635
0.52
101,120
(Note 2)
12,112,154
643,514
0.52
100,111
(Note 2)
12.00
1,172,259
2,582,417
(2,180,445)
401,972
62,783,960
1,236,589
(64,330)
1,172,259
16,581,119
309,591
3.17
309,591
15,873,015
296,370
3.03
296,370
9,523,809
177,822
1.82
177,822
234,001
43,241
0.53
56,511
13,270
56,511
2,141,452
46,036
4.77
46,036
1,056,783
15,471
2.00
15,471
202
Financial Overview
ATTACHMENT 4
Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20
percent of the capital stock for the year ended 31 December 2013
Buyer / seller
Type and name of
securities
Financial statement
account
Counterparty
Tatung Co., Ltd
Tatung Consumer
Investments accounted for Acquisition
Products (Taiwan) Co., Ltd. under the equity method
Tatung System
Technologies Inc.
Huei Chyun Co.
Relationship
-
Beginning balance
Shares / units
Amount
55,000,000
$(487,861)
-
-
85,452,977
2,633,705
-
27,902,321
245,246
-
71,424,770
523,544
Giantplus Technology Co., Investments accounted for (Note 11)
Ltd.
under the equity method
Non related
party
130,865,696
3,073,418
Chunghwa Picture
Tubes (Wujiang) Ltd.
Xiamen Overseas Chinese Investments accounted for (Note 15)
Electronics Co., Ltd.
under the equity method
Non related
party
100,121,168
908,209
-
-
-
CPTF Optronics Co.,
Ltd.
Financial assets at fair
value through profit or loss,
noncurrent
Xiamen Overseas Chinese Investments accounted for (Note 15)
Electronics Co., Ltd.
under the equity method
79,365,079
71,246
San Chih
Semiconductor
Co.,Ltd.
Investments accounted for Tatung
Reinvestment
under the equity method Medical
of Tatung Co.,
Healthcare
Ltd.
Technologies
Co., Ltd.
Green Energy Technology Investments accounted for Acquisition
Inc.
under the equity method and open
market
Green Energy
Technology Inc.
Shihlien Energy
Technology Co.
Available-for-sale financial
assets, noncurrent
Chunghwa Picture
Tubes, Ltd.
Tatung Co., Ltd.
Available-for-sale financial open market
assets, noncurrent
Available-for-sale financial
assets, noncurrent
Chunghwa Pictures
Display Technology
(Fujian) Ltd.
Giantplus Technology
Co., Ltd.
Note 1:
Note 2:
-
Non related
party
-
-
-
-
Financial assets at fair
value through profit or loss,
noncurrent
Xiamen Overseas Chinese Investments accounted for (Note15)
Electronics Co., Ltd.
under the equity method
-
-
-
15,873,015
14,249
-
-
-
-
40,997,078
498,315
Mega International
Investment Trading Co.
Financial assets at fair
value through profit or loss,
noncurrent
Available-for-sale financial Open market
assets, current
Non related
party
The ending balance included the investment gains and losses under the equity method and the related changes in equity.
This amount included incremental cash investment, investment loss recognized, the increase in the cumulative translation adjustment, and the increase in
equity of investees.
Note 3: Tatung Consumer Products (Taiwan) Co. Has had capital reduction to make up the cumulated deficits and then has increased the captial.
Note 4: Huei Chyun Inc.was spun off from a subsidiary, Chyun Huei health Technologies Inc. on 1 January 2013.
Note 5: Total net assets was $130,739 thousand and other equity - unrealized gain or loss on available-for-sale financial assets was $279 thousand.
Note 6: This amount included the purchase of new shares from GET's private placement of $200,000 thousand, the exchange differences on translation of financial
statements of foreign operations of $26,800 thousand, a change of $28,928 thousand on changes in shareholding, unrealized gain or loss on available-forsale financial assets for $7,819 thousand, and changes in equity of investee for $1,943 thousand.
Note 7: This amount included share of profits (losses) of subsidiaries, associates and joint ventures of $(615,135) thousand and other comprehensive income (loss) of
$(555) thousand.
Note 8: CPT acquired 24.04% of Giantplus's equity by transferring its available-for-sale financial assets - Tatung Co., Ltd. by 60,480 thousand shares as acquisition
consideration. The fair value of these shares was $450,576 thousand, calculated based on Tatung Co., Ltd.'s stock price at closing price on the acquisition
date ($7.45 per share).
Note 9: The gain or loss was treated in accordance with the accounting treatment of treasury stock. Please refer to Note 6 (25)(c) for more details.
Note 10: This amount included unrealized gain or loss on available-for-sale financial assets of $NT17,545 thousand.
Note 11: Open Market, Pacific Royal Fund-Core Value Growth Fund, Sunplus Technology Co. and Catcher Technology Co.
203
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Addition
Shares / units
Disposal
Amount
49,550,000
Shares / units
$495,500
Amount
Ending balance
Cost
54,900,000
$-
$-
(Note 3)
Gain (Loss)
from disposal
$-
Shares / units
Note
Amount
49,650,000
$(317,592)
(Note 1)
(325,231)
(Note 2)
13,140,000
131,400
13,140,000
169,128
131,018
38,110
-
-
9,900,990
265,490
28,740,000
697,419
738,226
(40,807)
66,613,967
1,545,279
(Note 4)
(Note 6)
(Note 5)
(615,690)
(Note 7)
-
-
27,902,321
360,357
245,245
115,112
-
-
-
-
60,479,997
-
450,576
(1,807,935)
10,944,773
90,513
(Note 10)
236,981,757
3,727,309
130,865,696
-
3,060,032
(1,825,968)
236,981,757
3,659,300
(Note 14)
-
-
100,121,168
-
-
405,362
-
-
187,580
-
-
-
-
9,523,809
177,822
-
-
79,365,079
-
-
1,528,266
-
-
62,783,960
1,236,590
-
-
-
-
62,783,960
1,172,259
(Note 17)
326,581
-
-
-
-
16,581,119
309,591
(Note 17)
-
15,873,015
-
-
305,653
-
-
312,634
-
-
-
-
15,873,015
296,370
-
40,997,078
498,574
491,729
6,845
-
-
9,523,809
16,581,119
15,873,015
-
(Note 12)
(Note 16)
(Note 18)
(Note 16)
(Note 16)
(Note 8)
(Note 13)
(Note 9)
(Note 18)
(Note 18)
(Note 18)
(Note 18)
(Note 17)
(Note 17)
Note 12: Included the value of the equity held of $1,234,064 thousand prior to the acquisition, cash paid of $544,199 thousand, public offering stock of $450,576
thousand, and bargain purchase benefits of $1,498,470 thousand.
Note 13: CPT holds 29.64% interest in the Giantplus Technology Co. prior to the acquisition, and the amount is the carrying value of the equity held prior to the
acquisition.
Note 14: The ending balance included share of profits (losses) of associates and joint ventures of $(211,590) thousand, the changes in capital reserve of $(1,308)
thousand, the changes in retained earnings of $(2,971) thousand, realized gain on deferred credit under the equity method of $51,401 thousand, unrealized
gain or loss on available-for-sale financial assets recognized under the equity method of $(16,949) thousand, and the exchange differences on translation of
financial statements of foreign operations arising from equity method investments of $74,492 thousand.
Note 15: Xiamen Shin Huei Co. Johnson Line (Beijing) Investment Co., Ltd., Lingling Wang and concerted action individual.
Note 16: Chunghwa Picture Tubes Co.'s sub-subsidiary CPTF Optronics Co. Ltd. and Xiamen Shin Huei Co. Entrustment entered into a voting right agreement.
According to the agreement, CPT group will hold 41,977,943 shares of Xiamen Xinhui entrusted to exercise their voting rights, and such rights were booked in
the "Financial assets carried at fair value through profit or loss - non-current."
Note 17 : The ending balance included the adjustments of the liquidity reduction at a rate of 22.37%.
Note 18: Chunghwa Picture Tubes Co.'s sub-subsidiary Chunghwa Picture Tube (Wujiang) Ltd.'s board of direvtors resolved to sell shares of Xiamen Overseas Chinese
Electronic Co., Ltd. CPT Group has no control over its future operations.
Because CPT group will not have significant influence, the balance has been reclassified from the investments under equity method to available-for-sale
financial assets - non-current.
204
Financial Overview
ATTACHMENT 5
Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital
stock for the year ended 31 December 2013
Purchased (sales)
Related party
Tatung Electronics (S) Pte. Ltd.
Tatung Co. of Japan, Inc.
Tatung Vietnam Co., Ltd.
Relationship
Investments of Investee company accounted for under the
equity method
Investments of Investee company accounted for under the
equity method
Investments of Investee company accounted for under the
equity method
Xiamen Overseas Chinese Electronics Other related party of Chunghwa Picture Tubes, Ltd.
Co., Ltd.
Tatung (Shanghai) Co., Ltd.
Subsidiary of Tatung Electric (Singapore) Pte. Ltd.
Tatung Co. of America Inc.
Tatung System Technologies Inc.
Investments of Investee company accounted for under the
equity method
Investments of Investee company accounted for under the
equity method
Green Energy Technology Inc.
Subsidiary of San Chih Semiconductor Co.
Tatung Information Technology
(Jiangsu) Co., Ltd.
Tatung Consumer Products (Taiwan)
Co., Ltd.
Tatung Electric Company of America,
Inc.
Investments of Investee company accounted for under the
equity method
Investments of Investee company accounted for under the
equity method
Investments of Investee company accounted for under the
equity method
Green Energy Technology Inc.
Subsidiary of San Chih Semi Conductor Co.
Tatung (Shanghai) Co., Ltd.
Subsidiary of Tatung Electric (Singapore) Pte. Ltd.
Tatung Wire & Cable (Thailand) Co.,
Ltd.
Chunghwa Picture Tubes, Ltd.
Investments of Investee company accounted for under the
equity method
Investments of Investee company accounted for under the
equity method
Tatung Wire And Cable Technology
(Wujiang) Co., Ltd.
Subsidiary of Tatung Information (Singapore) Pte. Ltd.
Tatung Co., Ltd.
Ultimate parent entity
Tatung Co., Ltd.
Ultimate parent entity
Tatung Electronics (S) Pte. Ltd.
Reinvestment of Tatung Co., Ltd.
Tatung Co., Ltd.
Parent Company
Tatung Electric Company of America, Tatung Co., Ltd.
Inc.
Parent Company
Tatung Co.,Ltd.
Tatung Information Technology
(Jiangsu) Co., Ltd.
Tatung Electronics (S)Pte. Ltd.
Tatung Co., Ltd.
Ultimate parent entity
Tatung Co., Ltd.
Ultimate parent entity
Tatung Co., Ltd.
Parent Company
Chunghwa Picture Tubes, Ltd.
Reinvestment of Tatung Co., Ltd.
Tatung Vietnam Co.,Ltd.
Tatung Co., Ltd.
Parent Company
Tatung Consumer Products (Taiwan)
Co., Ltd.
Tatung Co., Ltd.
Parent Company
Tatung (Shanghai) Co., Ltd.
Tatung Co. of Japan, Inc.
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
205
The Company: The sales price to related parties was determined through mutual agreement based on market conditions.
The Company: The collection terms for domestic related parties were 90 days, equivalent to those for domestic third parties; the collection terms for foreign
related parties were 30-180 days, equivalent to these for foreign third parties.
The Company: The purchase price to related parties was determined through mutual agreement based on market conditions.
The Company: The payment terms to related parties and third parties for domestic purchases were both net 30-150 days, while the terms for overseas
purchases were both net 30-120 days.
The transactions among the consoldiated entities were eliminated in the consolidated financial statements.
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Details of non-arm's length
transaction
Transactions
Purchases
(Sales)
Amount (Note 5)
Percentage of
total purchases
(sales)
Credit Term
Unit price
Credit Term
Notes and accounts receivable
(payable)
Balance
(Note 5)
Percentage
of total
receivables
(payable)
Purchases
$536,230
3.32
-
(Note 3)
(Note 4)
$(167,646)
(3.70)
Purchases
689,776
4.28
-
(Note 3)
(Note 4)
(119,822)
(2.64)
Purchases
401,375
2.49
-
(Note 3)
(Note 4)
(11,862)
(0.26)
Purchases
414,514
2.57
-
(Note 3)
(Note 4)
(97,563)
(2.15)
Purchases
437,187
2.71
-
(Note 3)
(Note 4)
(92,376)
(2.04)
Purchases
198,938
1.23
-
(Note 3)
(Note 4)
(14,475)
(0.32)
Purchases
148,921
0.92
-
(Note 3)
(Note 4)
(6,814)
(0.15)
Purchases
173,357
1.07
-
(Note 3)
(Note 4)
(116,199)
(2.56)
Purchases
106,318
0.66
-
(Note 3)
(Note 4)
(45,672)
(1.01)
Sales
(3,578,293)
(14.86)
-
(Note 1)
(Note 2)
1,258,394
16.77
Sales
(528,401)
(2.19)
-
(Note 1)
(Note 2)
150,867
2.01
Sales
(502,411)
(2.09)
-
(Note 1)
(Note 2)
337,993
4.51
Sales
(228,945)
(0.95)
-
(Note 1)
(Note 2)
84,768
1.13
Sales
(137,867)
(0.57)
-
(Note 1)
(Note 2)
22,360
0.30
Sales
(180,607)
(0.75)
-
(Note 1)
(Note 2)
20,410
0.27
Sales
(103,492)
(0.43)
-
(Note 1)
(Note 2)
72,886
0.97
397,651
42.28
-
-
-
(1,222,195)
(86.77)
Sales
(106,683)
(10.06)
-
-
-
17,751
18.94
Sales
(518,746)
(48.94)
-
-
-
16,596
17.71
Sales
(481,739)
(91.09)
60
-
-
49,887
84.85
528,349
86.00
120
-
-
(153,561)
(89.19)
(454,001)
29.62
60
-
-
105,342
22.45
236,977
19.99
120-150
-
-
(91,346)
(20.17)
Sales
(572,533)
13.60
60
-
-
107,676
4.68
Sales
(3,277,151)
77.86
150
-
-
1,917,735
83.37
Sales
(372,636)
(84.33)
60
-
-
28,576
86.72
Purchases
3,585,051
68.72
-
-
-
(1,256,305)
(83.62)
Purchases
Purchases
Sales
Purchases
Note
206
Financial Overview
ATTACHMENT 5-1
Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital
stock for the year ended 31 December 2013
Company Name
Related party
Relationship
Ultra Energy (Weifang) Technology
Co. Ltd.
Subsidiary of Green Energy Technology Inc.
Tatung Co., Ltd.
Parent Company
Tatung Co., Ltd.
Investments of Investee company accounted for under
the equity method
Forward Development Co., Ltd.
Investments of Investee company accounted for under
the equity method
Suzhou Forward Electronics
Technology Co., Ltd.
Investments of Investee company accounted for under
the equity method
Suzhou Forward Electronics
Technology Co., Ltd.
Investments of Investee company accounted for under
the equity method
Forward Electronics Co., Ltd.
Parent Company
Forward Electronics Equipment(Dong
Guan) Co., Ltd.
Reinvestments of Investee company accounted for under
the equity method
Chunghwa Picture Tubes (Wujiang)
Ltd.
Reinvestments of Investee company accounted for under
the equity method
CPTF Visual Display (Fuzhou) Ltd.
Reinvestments of Investee company accounted for under
the equity method
Suzhou Forward Electronics
Technology Co., Ltd.
Reinvestments of Investee company accounted for under
the equity method
Forward Electronics Equipment(Dong
Guan) Co., Ltd.
Reinvestments of Investee company accounted for under
the equity method
Chunghwa Picture Tubes, Ltd.
Reinvestments of Tatung Co., Ltd.
CPTF Visual Display (Fuzhou) Ltd.
Reinvestments of Investee company accounted for under
the equity method
Green Energy Technology Inc.
Green Energy Technology Inc.
Tatung System Technologies Inc.
Forward Electronics Co., Ltd.
Forward Development Co., Ltd.
Suzhou Forward Electronics Technology
Co., Ltd.
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Recorded in payables of subsidiary.
This is a deposits-in for rework of materials which was recorded in other current liabilities of subsidiary.
Percentageof GET.
Percentage of Ultra Energy(Weifang) Technology Co., Ltd..
The ratio is calculated based on the total sales and total accounts/notes receivable of each subsidiary.
The ratio is calculated based on the total purchase and total accounts/notes payable of each equity investee of investee company.
FD sold raw materials to Forward Development Co, Ltd. for further process, and then sold back to FD, and eliminated total amount in accordance with the
regulation.
Note 13: The amount included the raw materials sold to Fuhua Electronic Technology Co., Ltd., Suzhou for further process and sold back to FD and eliminated an
amount of $45,276 thousand in accordance with regulation.
Note 14: For foreign regions, the credit term is 60-150 days or L/C SIGHT after monthly closing; For domestic regions, the credit term is 30-120 days after monthly closing.
Note 15: For foreign regions, the credit term is T/T30-150 days or L/C upon receiving; For domestic regions, the credit term is 30-120 days upon receiving.
207
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Details of non-arm's length Notes and accounts receivable
transaction
(payable)
Transactions
Purchases
(Sales)
Percentage of
Amount (Note 5) total purchases
(sales)
Percentage
of total
receivables
(payable)
Note
481,401
17.84
(Note 8)
(1,145,700)
(51.06)
(Note 6),
(Note 8)
(287,608)
(12.82)
(Note 7),
(Note8)
120,856
4.48
(418,282)
(18.64)
Net 90 days
from the end
the month
No differences of
of when
invoice is
issued
39,211
6.00
-
"
(Note 14)
10,235
3.00
-
"
(Note 14)
30,396
9.00
-
"
(Note 15)
(152,272)
(45.00)
-
"
(Note 14)
10,235
2.00
-
"
(Note 14)
75,788
18.00
-
"
(Note 14)
191,628
44.00
-
"
(Note 14)
153,705
36.00
-
"
(Note 15)
(346,741)
(77.00)
-
"
(Note 15)
(103,616)
(23.00)
-
"
(Note 14)
142,367
20.00
-
"
(Note 14)
-
-
-
Credit Term
Unit price
Credit Term
Sales
(445,591)
(3.56)
T/T 90days
not applicable not
applicable
conversion
cost, etc.
1,818,273
30.55
T/T 30days
"
"
other
Sales
conversion
cost, etc.
(180,831)
(1.44)
502,110
8.44
Sales
(202,382)
(6.00)
Sales
(246,329)
(Note 12)
Sales
(199,285)
(Note 13)
300,755
22.24
Sales
(296,355)
(24.50)
Sales
(246,406)
(20.37)
Sales
(318,340)
(26.31)
Sales
(305,178)
(25.23)
Purchases
670,508
55.26
Purchases
296,428
24.43
Sales
(326,494)
(18.50)
Sales
(235,574)
(13.35)
Purchases
Net 120 days from the
end of the month of
when invoice is issued
Net 120 days from the
end of the month of
when invoice is issued
Net 90 days from the
end of the month of
when invoice is issued
Net 30 days from the
end of the month of
when invoice is issued
Net 120 days from the
end of the month of
when invoice is issued
Net 30 days from the
end of the month of
when invoice is issued
Net 155 days from the
end of the month of
when invoice is issued
Net 120 days from the
end of the month of
when invoice is issued
Net 90 days from the
end of the month of
when invoice is issued
Net 60 days from the
end of the month of
when invoice is issued
Net 30 days from the
end of the month of
when invoice is issued
Net 120 days from the
end of the month of
when invoice is issued
Net 150 days from the
end of the month of
when invoice is issued
Net 60 days from the
end of the month of
when invoice is issued
not applicable not
applicable
"
"
Balance
(Note 5)
208
Financial Overview
ATTACHMENT 5-2
Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital
stock for the year ended 31 December 2013
Company Name
Related party
Giantplus Technology Co., Ltd.
Relationship
Subsidiary
Company in associates
Subsidiary
Company in associates
Chunghwa Picture Tubes, Ltd.
CPTF Optronics Co., Ltd.
Chunghwa Picture Tubes (Wujiang) Ltd.
Kunshan Giantplus Optoelectronics
Technology Co., Ltd.
Sub-subsidiary
KUENDER & CO., Ltd.
Other related party
ELITEGROUP COMPUTER SYSTEM CO.,
LTD.
Suzhou Forward Electronics
Technology Co., Ltd.
Other related party
Ili Technology Co., Ltd.
Other related party
CPTF Optronics Co., Ltd.
Sub-subsidiary
Chunghwa Picture Tubes (Wujiang)
Ltd.
Sub-subsidiary
CPTF Visual Display (Fuzhou) Ltd.
Sub-subsidiary
Chunghwa Pictures Display
Technology (Fujian) Ltd.
Sub-subsidiary
Company in associates
Chunghwa Picture Tubes, Ltd.
Holding Co. of parent
Chunghwa Picture Tubes (Wujiang)
Ltd.
Subsidiary of Chunghwa P.T. (Bermuda) Ltd.
CPTF Visual Display (Fuzhou) Ltd.
Subsidiary of Chunghwa P.T. (Bermuda) Ltd.
Chunghwa Picture Tubes, Ltd.
Holding Co. of parent
CPTF Optronics Co., Ltd.
Subsidiary of Chunghwa P.T. (Bermuda) Ltd.
Chunghwa Pictures Display Technology Chunghwa Picture Tubes, Ltd.
(Fujian) Ltd.
Holding Co. of parent
Chunghwa Picture Tubes, Ltd.
Holding Co. of parent
CPTF Optronics Co., Ltd.
Subsidiary of Chunghwa P.T. (Bermuda) Ltd.
Chunghwa Picture Tubes, Ltd.
Parent Company
CPTF Visual Display (Fuzhou) Ltd.
Parent Company
Giantplus Technology Co., Ltd.
Kunshan Giantplus Optoelectronics
Technology Co., Ltd.
Shenzhen Giantplus Optoelectronics
Display Co., Ltd.
Kunshan Giantplus Optoelectronics
Technology Co., Ltd.
Shenzhen Giantplus Optoelectronics
Display Co., Ltd.
Sub-subsidiary
Giantplus Technology Co., Ltd.
Holding Co. of parent
Chunghwa Picture Tubes, Ltd.
Holding Co. of parent
Giantplus Technology Co., Ltd.
Holding Co. of parent
Sub-subsidiary
Note 16: CPT and its subsidiary purchased materials, equipmemts through Tatung company of Japan. Payment for purchasing and charges was recorded as
accounts payable.
209
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Details of non-arm's length Notes and accounts receivable
transaction
(payable)
Transactions
Purchases
(Sales)
Percentage of
Amount (Note 5) total purchases
(sales)
Credit Term
Unit price
Credit Term
Percentage
of total
receivables
(payable)
Balance
(Note 5)
Sales
$(1,519,040)
(3.27)
-
-
-
$517,789
15.73
Sales
(357,884)
(0.77)
-
-
-
-
-
Purchases
1,008,389
2.17
-
-
-
(435,172)
(13.22)
Purchases
292,672
0.63
-
-
-
-
-
Sales
(262,419)
(0.56)
-
-
-
21,191
0.64
Sales
(605,461)
(1.30)
-
-
-
48,601
1.48
Sales
(172,602)
(0.37)
-
-
-
75,692
2.30
Purchases
341,314
0.73
-
-
-
(126,620)
(3.85)
Purchases
115,829
0.25
-
-
-
(129,942)
(3.95)
Purchases
1,199,455
2.58
-
-
-
(6,873,554)
(208.76)
Purchases
6,993,964
15.04
-
-
-
(6,970,887)
(211.71)
Purchases
697,075
1.50
-
-
-
(522,657)
(15.87)
Purchases
2,026,327
4.36
-
-
-
(1,864,734)
(56.63)
Sales
(1,199,455)
(16.89)
-
-
-
6,873,554
91.24
Sales
(598,631)
(8.43)
-
-
-
394,335
5.23
Purchases
1,081,803
15.24
-
-
-
(492,949)
(6.54)
(6,993,964)
(92.65)
-
-
-
6,970,887
98.84
598,631
7.93
(394,335)
(38.48)
Sales
(2,026,327)
(99.31)
-
-
-
1,864,734
99.78
Sales
(697,075)
(37.93)
-
-
-
522,657
51.18
Sales
(1,081,803)
(58.86)
-
-
-
492,949
48.27
Sales
(963,014)
(8.41)
-
-
-
435,172
13.75
Purchases
1,793,641
15.96
-
-
-
(508,269)
(20.80)
Purchases
642,037
5.71
-
-
-
(1,543,795)
(63.19)
Purchases
685,176
6.10
-
-
-
(1,133,951)
(46.42)
(642,037)
(5.61)
-
-
-
1,543,795
48.78
262,037
2.33
-
-
-
(21,191)
(0.87)
(685,176)
(5.99)
-
-
-
1,133,951
35.83
Sales
Purchases
Sales
Purchases
Sales
Note
210
Financial Overview
ATTACHMENT 6
Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock for
the year ended 31 December 2013
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Company
recorded as
receivable
Related party
1. Accounts receivableRelated party
Green Energy
Technology Inc.
Tatung Consumer
Products (Taiwan) Co.,
Ltd.
Tatung Electric
Company of America,
Inc.
Relationship
Tatung Co., Ltd.
(Note 1)
Turnover
rate
Amount Allowance
received in for
doubtful
Collection subsequent accounts
period
status
Overdue receivables
Amount
Subsidiary of San Chih
Semi Conductor Co.
$337,993
1.87
$-
-
$307,369
$-
Investments of Investee
company accounted for
under the equity method
1,258,394
2.58
-
-
930,365
-
Investments of Investee
company accounted for
under the equity method
150,867
3.65
-
-
133,023
-
1,785,969
-
-
-
192,204
-
Reinvestment of Shan Chin
Investment Co. Ltd.
183,747
-
-
-
-
-
Investments of Investee
company accounted for
under the equity method
841,380
-
-
-
-
-
338,284
-
-
-
889
-
146,950
-
-
-
67,222
-
479,255
-
-
-
-
-
158,009
-
-
-
-
-
131,324
-
-
-
-
-
191,628
1.90
-
-
-
-
153,705
3.97
-
-
-
-
Reinvestment of Tatung
Co. Ltd.
142,367
1.42
-
-
-
-
Sub-subsidiary of Green
Energy Technology Inc.
481,401
1.56
-
-
-
-
Ultimate parent entity
120,856
3.22
-
-
-
-
Total
2. Other accounts
receivable-Related
party (including longterm)
Tatung Information
Technology (Jiangsu)
Co., Ltd.
Shan-Chih Wire and
Cable technology
(Wujiang) Co., Ltd.
Tatung Global Strategy
Investment and Trading
(BVI) Inc.
Ending
balance
1,747,254
Reinvestment of Tatung
Information (Singapore)
Pte. Ltd.
Investments of Investee
company accounted for
under the equity method
Green Energy
Subsidiary of San Chih
Semiconductor Co.
Technology Inc.
Investments of Investee
Tatung Vietnam Co., Ltd. company accounted for
under the equity method
of Investee
Tatung (Thailand) Co., Investments
company accounted for
Ltd.
under the equity method
Shan-Chih Asset
Development Co.
Total
3,933,594
3. Construction
receivables
Chunghwa Picture
Tubes, Ltd.
Forward
Development
Co., Ltd.
Chunghwa Picture Tubes
(Wujiang) Ltd.
CPTF Visual Display
(Fuzhou) Ltd.
Suzhou Forward
Electronics
Chunghwa Picture Tubes,
Technology Co., Ltd.
Ltd.
Ultra Energy (Weifang)
Technology Co. Ltd.
Green Energy
Technology Inc.
Tatung Co., Ltd.
Note 1:
211
Investments of Investee
company accounted for
under the equity method
Sub-subsidiary of
investment corp
accounted for under the
equity method
Sub-subsidiary of
investment corp
accounted for under the
equity method
All transactions are eliminated in the consolidated financial statements.
TATUNG 2012 Annual Report
Financial Overview
ATTACHMENT 6-1
Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock for the
year ended 31 December 2013
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Company
recorded as
receivable
Tatung Co. of
Japan, Inc.
Related party
Relationship
Chunghwa Picture
Tubes (Labuan) Ltd.
Sub-subsidiary
of parent
reinvestment
Chunghwa Picture
Tubes, Ltd.
Reinvestment of
Tatung Co. Ltd.
Tatung Co., Ltd.
Tatung Co., Ltd.
Ending
balance
(Note 1)
Turnover
rate
Overdue receivables
Collection
status
Amount
Amount
received in
subsequent
period
Allowance
for doubtful
accounts
109,900
-
109,900
-
-
-
1,917,735
0.43
951,348
-
-
-
Parent Company
107,676
0.52
54,036
-
-
-
Ultimate parent
entity
105,342
-
-
-
-
-
Chunghwa
Giantplus Technology
Picture Tubes, Ltd. Co., Ltd.
Subsidiary
517,789
4.69
-
-
496,790
-
Giantplus
Picture
Technology Co., Chunghwa
Tubes, Ltd.
Ltd.
Parent Company
435,172
4.34
-
-
-
-
CPTF Optronics
Co., Ltd.
Chunghwa Picture
Tubes, Ltd.
Holding Co. of CPT
6,873,554
-
-
-
-
-
Chunghwa Picture
Tubes (Wujiang) Ltd.
subsidiary of
Chunghwa
P.T.(Bermuda) Ltd.
394,335
-
-
-
-
-
Chunghwa
Picture Tubes
(Wujiang) Ltd.
Chunghwa Picture
Tubes, Ltd.
Holding Co. of CPT
6,970,887
-
-
-
-
-
Chunghwa
Pictures Display
Technology
(Fujian) Ltd.
Chunghwa Picture
Tubes, Ltd.
Holding Co. of CPT
1,864,734
-
-
-
-
-
CPTF Visual
Display (Fuzhou)
Ltd.
Chunghwa Picture
Tubes, Ltd.
Holding Co. of CPT
522,657
-
-
-
-
-
CPTF Optronics Co.,
Ltd.
subsidiary of
Chunghwa
P.T.(Bermuda) Ltd.
492,949
-
-
-
-
-
Tatung
(Shanghai) Co.,
Ltd.
Kunshan
Giantplus
Technology
Optoelectronics Giantplus
Technology Co., Co., Ltd.
Ltd.
Holding Co. of CPT
1,543,795
-
-
-
252,993
-
Shenzhen
Giantplus
Optoelectronics
Display Co., Ltd.
Holding Co. of CPT
1,133,951
-
-
-
1,133,951
-
Giantplus Technology
Co., Ltd.
212
Financial Overview
ATTACHMENT 7
Names, locations and related information of investee companies as of 31 December 2013
Investor company
Tatung Co., Ltd.
Investee company
Address
Main businesses and products
Chunghwa Picture Tubes, Ltd.
Taoyuan
County,Taiwan
The manufacturing and sale of picture tubes and TFT-LCD
products.
Tatung System Technologies Inc.
Taipei City, Taiwan
The manufacturing of data storage.
Forward Electronics Co., Ltd.
New Taipei City,
Taiwan
The manufacturing and sale of electronics
Taiwan Telecommunication
Industry Co., Ltd.
Taipei City, Taiwan
Telecommunication
San Chih Semiconductor Co., Ltd. Taipei City, Taiwan
The manufacturing and sale of semiconductors and chips
Central Research Technology Co. Taipei City, Taiwan
Offering EMCIRF testing and certification services
Tatung Consumer Products
(Taiwan) Co., Ltd.
Taipei City, Taiwan
Sales, installation and service of home appliances and digital
computer products
Tatung SM-Cyclo Co.
New Taipei City,
Taiwan
Speed reducers, speed variators
Tatung Fine Chemicals Co., Ltd.
Taipei City, Taiwan
Industrial coatings, electrocution coatings resistor
coatings,photo-catalyst, inkjet ink
Shan-Chih Asset Development
Taipei City, Taiwan
Co.
Chunghwa Electronics Investment Taipei City, Taiwan
Co., Ltd.
New Taipei City,
Tatung Die Casting Co.
Taiwan
Shan Chih Container Terminal
Taipei City, Taiwan
Co., Ltd.
The development and leasing of real estate
Tatung (Thailand) Co., Ltd.
Thailand
The manufacturing of IT products
Tatung Co. of Japan, Inc.
Japan
The sale and purchase of electronic parts
Tatung Electronics (S) Pte. Ltd.
Singapore
The sales and services of Tatung products in Singapore
Investment holding
Speedometer
International storage and transportation
Tatung Wire & Cable (Thailand)
Thailand
Co., Ltd.
Tatung Singapore Information Co. Singapore
Ltd.
Tatung Electric (Singapore) Pte.
Singapore
Ltd.
The manufacturing and sales of wire and cable
Tatung Co. of America Inc.
U.S.A.
The sale and servicing of IT and household electronics
products in the US
Tatung Mexico S.A de C.V.
Mexico
The manufacturing of IT products in South America
Tatung Science and Technology,
Inc.
U.S.A.
The sale and purchase of IT products
ELITEGROUP COMPUTER SYSTEM
CO., LTD.
Taipei City, Taiwan
The manufacturing, design and sales of IT products
Tatung Netherlands B.V.
Netherlands
The sales of digital information products
Tatung (U.K.) Ltd.
United Kingdom
The sales of digital information peripherals
TATUNG CZECH s.r.o
Czech Republic
The manufacturing of IT products
Lansong International Co., Ltd.
Cambodia
Forestry
Tatung Medical Healthcare
Technologies Co., Ltd.
Taipei City, Taiwan
The design and sales of medical appliances
Investment holding
Investment holding
Note 1: Tatung Biotech Company was renamed Tatung Medical Healthcare Technologies Co., Ltd. in January 2013.
213
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Initial Investment
Ending balance
Investment as of 31 December 2013
Beginning
balance
Number of shares
(thousand)
Percentage of
ownership (%)
Net income
(loss) of investee
company
Book value
Investment
income (loss)
recognized
$4,293,025
$4,293,025
548,385,630
8.46
$557,269
$(4,852,881)
$(257,707)
247,655
247,655
36,018,121
53.60
504,133
81,529
42,407
314,095
314,095
18,955,623
12.05
143,473
(289,497)
(35,138)
2,538,471
2,538,471
751,000
100.00
(738,279)
(9,393)
4,360
920,981
920,981
49,913,576
43.18
1,947,587
(644,435)
(294,614)
135,000
135,000
13,500,000
100.00
81,277
2,841
2,772
1,145,500
650,000
49,650,000
99.10
(317,592)
(351,933)
(347,887)
71,220
71,220
6,400,000
85.33
178,246
90,528
77,543
392,316
274,149
37,458,319
48.27
314,751
(147,872)
(66,175)
14,840,192
14,840,192
5,220,064
100.00
30,149,514
194,618
87,071
2,217,447
2,217,447
262,626,267
93.27
2,098,009
(567,226)
(397,943)
7,880
7,880
153,000
51.00
38,120
33,642
16,360
-
81,000
-
-
-
-
(61,443)
896,506
896,506
97,400,000
100.00
348,498
7,842
7,842
1,903
1,903
15,000
100.00
513,235
19,646
19,646
48,276
48,276
3,600,000
90.00
65,221
(1,577)
(1,419)
60,154
60,154
6,810,000
100.00
79,250
(6,709)
(8,193)
1,625,465
1,625,465
86,049,842
100.00
(355,971)
(226,266)
(240,706)
626,418
626,418
31,598,675
100.00
859,755
13,924
12,025
45,115
45,115
1,750,000
50.00
131,091
(37,397)
(18,327)
380,363
380,363
1,597,248
100.00
445,422
2,034
17,074
632,934
632,934
5,122,000
100.00
8,520
(113)
(113)
5,499,212
6,735,324
201,681,420
27.49
5,611,995
3,624,281
996,415
178,579
178,579
11,030
100.00
(125,852)
-
-
2,067,876
2,067,876
42,584,000
100.00
(221,130)
-
-
342,448
342,448
-
100.00
149,033
(41,567)
(48,287)
1,271,592
1,271,592
4,346,400
98.33
-
14,942
14,942
306,474
206,474
23,854,407
95.72
187,067
(19,597)
(28,298)
Note
(Note 1)
214
Financial Overview
ATTACHMENT 7-1
Names, locations and related information of investee companies as of 31 December 2013
Investor company
Investee company
Address
City,
Toes Toes Opto-Mechatronics Co. Taipei
Taiwan
The manufacturing of various automatic equipment
Tisnet Technology Inc.
Taipei City,
Taiwan
Design and development of computer software and equipment
Tatung Okuma Co., Ltd.
Taipei City,
Taiwan
Sales and production of working machine
KUENDER & CO., LTD.
Taipei City,
Taiwan
Conversion of plastic module
Tatung Electric Company of
America, Inc.
U.S.A.
Sales and service of motors
Tatung Vietnam Co., Ltd.
BinhDuong
Province,
Vietnam
The manufacturing and sales of home appliances
Tatung Electric Technology (VN)
Co., Ltd.
BinhDuong
Province,
Vietnam
The manufacturing and sales of wire and cable
Shan Chih Investment Co., Ltd.
Taipei City,
Taiwan
Investment holding
Chih Sheng Investment Co., Ltd.
Taipei City,
Taiwan
Investment holding
Hsieh Chih Industrial Library
Publishing Co.
Taipei City,
Taiwan
The publishing and sales of Hsieh Chih Industrial Library
Chung-Tai Technology
Development Engineering Co.
New Taipei
City, Taiwan
Construction of telecom cable
Tatung Telecom Corporation
U.S.A.
Production,sales and service of public telephone
Tatung Co., Ltd.
Tatung Global Strategy Investment British Virgin
and Trading (BVI) Inc.
Islands
Investment holding
British Virgin
Islands
Investment holding
Absolute Alpha Limited
215
Main businesses and products
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Initial Investment
Ending balance
Investment as of 31 December 2013
Beginning
balance
Number of shares
(thousand)
Percentage of
ownership (%)
Book value
Net income
(loss) of investee
company
Investment
income (loss)
recognized
170,000
170,000
17,000,000
85.00
172,177
(22,612)
(26,634)
40,000
40,000
4,000,000
18.35
9,379
5,101
968
49,000
49,000
8,428,000
49.00
715,265
357,701
175,274
38,500
38,500
7,161,000
50.00
143,308
(22,816)
(10,257)
121,184
121,184
1,000,000
100.00
199,380
4,441
4,441
974,437
974,437
-
100.00
(22,820)
(124,093)
(123,802)
353,512
353,512
-
100.00
94,311
(15,208)
(15,096)
2,119,350
2,119,350
77,627,119
95.83
414,479
(25,383)
(24,325)
1,500,000
1,500,000
150,000,000
100.00
1,268,533
(189,401)
(178,956)
2,420
2,420
242
6.91
830
927
50
88,000
88,000
2,200,000
22.00
16,226
1,118
357
2,953
2,953
87,500
35.00
(3,159)
(512)
1,339
2,352,502
2,352,502
72,000,000
100.00
(403,058)
(186,544)
(131,040)
3,190
3,190
50,000
100.00
21,477
(163)
(163)
Note
216
Financial Overview
ATTACHMENT 7-2
Names, locations and related information of investee companies as of 31 December 2013
Investor company
Forward Electronics Co.,
Ltd.
San Chih Semiconductor
Co., Ltd.
GREATER POWER LIMITED
Investee company
GREEN ENERGY
TECHNOLOGY HOLDING
CO., LTD.
Tatung System
Technologies Inc.
Note 2:
Note3:
217
Main businesses and products
Forward Development Co., Ltd.
British Virgin Islands
Investment holding
Apollo Solar Energy Co., Ltd.
Taoyuan County,
Taiwan
The manufacturing and sale of solar
module and related component
Laster Tech Corporation Ltd.
New Taipei City,
Taiwan
Sales of material for LED
Green Energy Technology Inc.
Taoyuan County,
Taiwan
Solar photovoltaic multicrystalline silicon
wafers
Forward Electronics Co., Ltd.
New Taipei City,
Taiwan
The manufacturing and sale of electronics
GREATER POWER LIMITED
Hong Kong
Investment holding
Chih De Investment Co., Ltd.
Taipei City, Taiwan
Investment holding
ULTRA ENERGY HOLDINGS LIMITED
Hong Kong
Investment holding
ENERGY WELL INTERNATIONAL LIMITED
Hong Kong
Investment holding
Bangkok
Investment holding
Apollo Solar Energy Co., Ltd.
Taoyuan County,
Taiwan
The manufacturing and sale of solar
module and related component
ULTRA ENERGY HOLDINGS LIMITED
Hong Kong
Investment holding
Green Energy Technology GREEN ENERGY TECHNOLOGY HOLDING
Inc.
CO., LTD.
ENERGY WELL
INTERNATIONAL LIMITED
Address
GREEN ENERGY TECHNOLOGY IN (THAILAND) Prachuabkirikhan
Co., LTD.
Province
Construction and operation of solar
electric factory
GREEN ENERGY TECHNOLOGY INSTALLATION Prachuabkirikhan
TEAM CO., LTD.
Province
Construction of solar electric factory
SOMPHUM SOLAR POWER CO., LTD.
Beungkarn
Operation of solar electric factory
SOMPRASONG INTERNATIONAL CO., LTD.
Sangcom, Udonthani
Construction of solar electric factory
LERTLA THERMAL POWER CO., LTD.
Meung, Nonglhai
Operation of solar electric factory
MAEKHONG SOLAR POWER CO., LTD.
Meung, Nonglhai
Operation of solar electric factory
PHUPHAN TECHNOLOGY CO., LTD.
Jangwad Nongkhai.
Operation of solar electric factory
Chyun Huei Health Technology Inc.
Taipei City, Taiwan
Information software service
Huei Chyun Inc.
Taipei City, Taiwan
Biotechnology services
Tatung System Technologies Holding Ltd.
Samoa
Investment Holding
In order to integrate enterprise resources and reduce the operating costs of the Group, GET entered into simple consolidation in accordance with the
acquisition method to business merger on 6 December 2012, GET is the surviving company and bear the assets and liabilities of Green investment, including
its joint ventures (GETH) Thailand established with the local industry to invest in the establishment of a local power plant.
Huei Chyun Co. was spun off on 1 January 2013 from Chyun Huei Health Technologies Inc. and was disposed of on 31 January 2013 to Tatung Medical
Healthcare Technologies Co., Ltd.
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Initial Investment
Ending balance
Investment as of 31 December 2013
Beginning balance
Number of shares Percentage of
(thousand)
ownership (%)
Book value
Net income
(loss) of
investee
company
Investment
income (loss)
recognized
680,752
680,752
-
100.00
1,438,467
(95,338)
(94,888)
355,296
355,296
5,398,269
24.54
33,142
18,460
2,973
59,997
59,997
5,129,425
10.22
75,793
73,516
12,169
1,617,318
679,092
66,613,967
19.36
1,545,279
(2,428,169)
(615,135)
230,958
230,958
10,491,156
6.67
80,552
(289,497)
(19,313)
446,482
446,482
13,760,000
100.00
565,847
35,414
35,414
1,000
1,000
100,000
100.00
986
3
3
446,482
446,482
13,760,000
19.77
566,212
180,261
35,638
1,768,360
1,768,360
56,012,000
100.00
2,296,205
143,648
143,648
146,670
146,670
575,000
50.00
130,425
(29,664)
(10,672)
99,650
-
9,964,961
45.30
62,226
18,460
12,827
1,767,493
1,767,493
55,840,000
80.23
2,296,304
179,132
143,718
(USD 55,840,000)
(USD 55,840,000)
-
56,308
-
-
-
-
-
7,239
7,239
14,000
70.00
21,641
(6,186)
(4,330)
23,128
23,128
245,000
100.00
15,162
(4,328)
(4,328)
23,128
23,128
245,000
100.00
39,476
4,977
4,977
14,535
14,535
151,900
62.00
6,161
(2,659)
(1,649)
17,735
17,735
186,000
62.00
6,932
(4,506)
(2,794)
36,225
-
372,000
62.00
16,098
(5,841)
(3,621)
5,000
50,000
1,460,000
100.00
20,794
(235)
(235)
-
-
-
(Note 3)
-
-
(381)
(381)
28,169
-
970,000
100.00
20,837
(8,788)
(8,788)
Note
(Note 2)
218
Financial Overview
ATTACHMENT 7-3
Names, locations and related information of investee companies as of 31 December 2013
Investor company
Investee company
Address
Main businesses and products
Shang Chih International Chemical British Virgin Islands
Industry Co., Ltd.
Investment holding
Tatung Forestry and Construction
Co.
Taipei City, Taiwan
The design and construction of structural
engineering
Taipei Industry Corporation
Taipei City, Taiwan
The production and sales of mixing
concrete
Chih Sheng Realty Co., Ltd.
Taipei City, Taiwan
Realty management
Shan-Chih Asset International
Holding Corp.
Samoa
Investment holding
Hsieh Chih Industrial Library
Publishing Co.
Taipei City, Taiwan
The publishing and sales of Hsieh Chih
Industrial Library
Shan-Chih Asset International
Holding Corp.
Shan-Chih Asset International
(Hong Kong) Holding limited
Hong Kong
Investment holding
Taiwan Telecommunication
Industry Company Ltd.
Taiwan Telecommunication
Investments Limited.
British Virgin Islands
Investment holding
Taiwan Telecommunication
Investments Limited.
Shan Chih (Hong Kong) Co., Ltd.
Hong Kong
International trade
Taiwan Nissei Display System Co.,
Ltd.
New Taipei City,
Taiwan
Motor Speed Meter
Tatung Chugai Precious Metals
Co., Ltd.
Taoyuan County,
Taiwan
Electrical contacts
Tatung Fine Chemicals Co.
Taipei City, Taiwan
Industrial coatings, electrocution coatings
resistor coatings,photo-catalyst, inkjet ink
Chih Sheng Investment (BVI) Co.,
Ltd.
British Virgin Islands
Investment holding
Green Energy Technology Inc.
Taoyuan County,
Taiwan
The manufacturing and sale of electronics
Laster Tech Corporation Ltd.
New Taipei City,
Taiwan
Sales of material for LED
HEDA Biotechnology Co., Ltd.
Taipei City, Taiwan
Produce, Food Retail and Wholesale
Industry
Chunghwa Electronics
Development Co., Ltd.
Taipei City, Taiwan
Investment holding
Chih Sheng Holding Co., Ltd.
British Virgin Islands
Investment holding
Chih Sheng Holding HK Limited
Hong Kong
Investment holding
Goldmax Asia Pacific Ltd
Hong Kong
Investment holding
Tatung Fine Chemicals Co., Ltd.
Shan-Chih Asset Development
Co.
Chih Sheng Investment Co., Ltd.
Chih Sheng Investment (BVI) Co.,
Ltd.
Chih Sheng Holding Co., Ltd.
219
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Initial Investment
Ending balance
Investment as of 31 December 2013
Beginning balance
Number of shares Percentage of
(thousand)
ownership (%)
Book value
Net income
(loss) of
investee
company
Investment
income (loss)
recognized
84,647
84,647
-
100.00
(5,143)
(43)
(30,470)
21,618
21,618
2,219,328
98.64
(22,495)
378
373
1,058,450
1,058,450
556,720
50.61
1,148,657
44,481
22,512
339,000
339,000
33,900,000
100.00
341,841
2,829
2,829
2,020,107
2,008,124
65,400,000
100.00
1,323,090
(50,146)
(50,146)
9,960
-
3,201
91.46
10,731
956
874
1,200,480
1,200,480
40,000,000
100.00
1,188,772
(43,605)
(43,605)
106,836
106,836
4,029,108
100.00
128,303
(9,674)
(9,674)
117,688
117,688
378,769
100.00
11,412
(41)
(41)
40,464
40,464
200,000
20.00
40,362
7,622
2,259
30,325
30,325
171,500
49.00
19,189
(9,522)
(5,200)
57,044
57,044
3,796,537
4.89
33,028
(147,872)
(7,563)
508,336
465,011
16,862,590
100.00
331,965
(51,140)
(43,757)
588,129
588,129
18,971,917
5.51
352,255
(2,428,169)
(123,075)
12,000
12,000
1,000,000
2.03
15,258
73,516
950
12,000
12,000
1,200,000
52.17
2,855
(7,367)
(3,466)
180,000
-
18,000,000
6.39
196,460
(567,226)
1,007
507,171
486,809
16,812,590
100.00
370,886
(51,082)
(51,082)
185,935
148,729
6,205,310
100.00
106,189
(23,541)
(23,541)
181,336
181,336
6,000,000
55.05
137,807
(49,935)
(27,487)
Note
220
Financial Overview
ATTACHMENT 7-4
Names, locations and related information of investee companies as of 31 December 2013
Investor company
Investee company
Address
Main businesses and products
Chunghwa Picture Tubes Co.
Taoyuan County,
Taiwan
The manufacturing and sale of picture tubs
and TFT-LCD products
FORWARD ELECTRONICS CO., LTD.
New Taipei City,
Taiwan
The manufacturing and sale of electronics
TISNET Technology Inc.
Taipei City, Taiwan
Design and development of computer
software and equipment
San Chih Semiconductor Co.
Taipei City, Taiwan
The manufacturing and sale of
semiconductors and chips
Shan Chih Investment Co. Ltd.
Taipei City, Taiwan
Investment holding
Tatung Fine Chemicals Co.
Taipei City, Taiwan
Industrial coatings, electrocution coatings
resistor coatings, photo-catalyst, inkjet ink
Apollo Solar Energy Co., Ltd.
Taoyuan County,
Taiwan
The manufacturing and sale of solar
module and related component
Shan-Chih International Holding
Corporation
Samoa
Investment holding
Laster Tech Corporation Ltd.
New Taipei City,
Taiwan
Sales of material for LED
TMX Logistics, Inc.
USA
Hub Service
TMX Technologies, Inc.
USA
Technologies & Business
Tatung Global Strategy
Investment and Trading(BVI) Inc.
Chunghwa Picture Tubes Co.
Taoyuan County,
Taiwan
The manufacturing and sale of picture tubs
and TFT-LCD products
Absolute Alpha Limited
Tatung Information Technologies
Corp.
U.S.A
The sale of electronic products
Chunghwa Picture Tubes
(Bermuda) Ltd.
Bermuda
Investment holding
Chunghwa Electronics
Investment Co., Ltd.
Toes Opto-Mechatronics Co.
Shan Chin Investment Co. Ltd.
Tatung Mexico S.A de C.V.
Chunghwa Picture Tubes Co.
Giantplus Technology Co., Ltd.
Giantplus (Samoa) Holding Co.,
Ltd.
Note 4:
221
Chunghwa Picture Tubes (Labuan) Labuan
Ltd.
Investment holding
Giantplus Technology Co., Ltd.
development, production and
Miaoli Country,Taiwan Research,
sales of LCD Display
FORWARD ELECTRONICS CO., LTD.
Taipei City, Taiwan
The manufacturing and sale of electronics
Giantplus (Samoa) Holding Co.,
Ltd.
Samoa
Investment
Hsh Heng Investment Co., Ltd.
Miaoli Country, Taiwan Investment
Dai Yi Medical Appliance Co., Ltd.
development, production and
Kaohsiung City, Taiwan Research,
sales of medical equipments
Giantplus Holding L.L.C
U.S.A
Investment
CPT Company acquired Giantplus Technology Co.'s 24.04% voting shares on 30 April, 2013. CPT held 29.64% of Giantplus Technology Co.'s interest in the
company prior to the acquisition, and therefore acquired a total shareholding of 53.68% and acquired control. CPT recognized the investment gains (loss)
based on the shareholding prior to and after the acquisition.
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Initial Investment
Ending balance
Book value
Net income
(loss) of
investee
company
Investment
income (loss)
recognized
Investment as of 31 December 2013
Beginning balance
Number of shares Percentage of
(thousand)
ownership (%)
4,033,037
4,033,037
585,825,932
9.04
1,534,740
(4,852,881)
(438,763)
41,505
41,505
11,485,750
7.30
88,260
(322,076)
(21,144)
178,000
178,000
17,800,000
81.65
41,373
5,101
3,946
320,374
320,374
17,362,651
15.02
948,800
(644,435)
(96,799)
92,918
92,918
3,376,213
4.17
16,650
(24,233)
(1,058)
17,338
17,338
1,138,960
1.47
9,545
(147,872)
(2,409)
28,600
28,600
436,800
1.99
1,408
(29,664)
242
242,739
242,739
7,950,000
100.00
221,767
(40,596)
(40,596)
42,986
42,986
3,986,008
7.94
60,562
73,516
8,961
83,160
83,160
2,694,403
100.00
66,446
(7,135)
-
21,605
21,605
7,000
100.00
16,896
(974)
-
1,982,713
1,982,713
198,918,167
3.07
520,765
(4,852,881)
(148,983)
1,595
1,595
50,000
100.00
20,232
(79)
(115)
3,779,927
3,779,927
131,900,000
100.00
13,938,928
3,245,142
3,245,142
211,536
211,536
8,000,000
41.03
804,198
(381,113)
(156,371)
5,524,295
4,529,520
236,981,757
53.68
3,659,300
(541,903)
(216,638)
402,900
402,900
24,099,974
15.33
185,600
(286,742)
(43,958)
1,397,086
(Note 4)
-
44,000,000
100.00
3,553,725
1,483
1,483
21,000
(Note 4)
-
2,100,000
100.00
22,542
674
674
35,106
(Note 4)
-
2,606,250
18.35
16,459
(37,197)
(6,826)
1,397,086
(Note 4)
-
-
100.00
3,553,209
1,503
1,503
Note
(Note 4)
222
Financial Overview
ATTACHMENT 8
Investment in Mainland China as of 31 December 2013
Investor company
(Note 10)
Investee company
Tatung Electric (Singapore) Tatung (Shanghai) Co., Ltd.
Pte. Ltd.
Tatung Information
(Singapore) Pte. Ltd.
San Chih Semiconductor
Co.
FORWARD ELECTRONICS
CO., LTD.
Tatung System
Technologies Inc.
The manufacturing and sales of TV,
Monitor and PCs.
TATUNG WIRE AND CABLE
TECHNOLOGY (WUJIANG) CO., LTD.
The manufacturing and sales of wire
and cable
TATUNG COMPRESSORS
(ZHONGSHAN) CO., LTD.
The manufacturing and sales of
reciprocating compressors for freezing
and refrigeration
ULTRA ENERGY (WEIFANG)
TECHNOLOGY CO. LTD.
Solar wafer slicing
Shi Lin Yun Dian Tou New Energy
Resource Development Co.
Development of solar energy
FORWARD ELECTRONICS
EQUIPMENT(DONG GUAN) CO., LTD.
The manufacturing and sale of tuner,
keyboard, mouse, remote controller,
switch, socket, potentiometer and
gaming mouse.
SUZHOU FORWARD ELECTRONICS
TECHNOLOGY CO., LTD.
The manufacturing and sale of
backlight unit for TFT-LCD, driving
board, tuner, keyboard, mouse,
switch, socket and connector.
CPTF Visual Display (Fuzhou) Ltd.
Manufacture components of TFT-LCD
TSTI Technologies (Shanghai) Co.,
Ltd.
Information software service
Total Amount of
Paid-in Capital
$700,244
The manufacturing and sale of industry
coating and electrodeposition
coating.
The manufacturing and sale of
positive material of lithium battery,
printer ink,electro-deposition high
performance coating.
Wujiang Shang Huah Plastic Co., Ltd. ABS plastic, color dyes.
WUJIANG SHANGHUA MATERIAL
TECHNOLOGY CO., LTD.
Dongguan Tongli Trading Co., Ltd.
The manufacturing and sale of ABS
plastic
The whole sale of painting, coating
and chemical products
Method of
Investment
(Note 1)
(2)
(Note 11)
810,692
(2)
(Note 11)
412,653
(2)
(Note 11)
363,268
(2)
(Note 11)
2,074,428
USD 69,600
488,855
(RMB100,000)
USD 4,600
(2)
(Note 13)
(2)
(Note 12)
(2)
(Note 5)
USD 27,200
(2)
(Note 5)
USD 5,200
(2)
(Note 5)
28,169
USD 970
Huaian Tatung Advanced
Technology Materials Co., Ltd.
223
The manufacturing and sales
of AC motor, DC motors, AC
generators, diesel engine generators,
variablespeed motors, inverters and
PLCs, transformers, switchboards
Tatung Information Technology
(Jiangsu) Co., Ltd.
Tatung Coatings (Kunshan) Co., Ltd.
TATUNG FINE CHEMICALS
CO.
Main Businesses and Products
80,970
(2)
(Note 6)
(1)
USD 2,467
162,429
(1)
USD 5,000
10,080
(1)
USD 300
52,411
USD 1,600
32,236
USD 1,000
(2)
(Note 7)
(2)
(Note 7)
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2013
$608,189
Investment Flows
Outflow
Inflow
-
-
Accumulated
Outflow of
Investment from
Taiwan as of 31
December 2013
$608,189
Net income (loss) of
investee company
$13,924
Percentage of
Ownership
86.36%
Investment income Carrying Value
(loss) recognized as of December
(Note 2)
31, 2013
$12,025
Accumulated
Inward
Remittance
of Earnings as
of Outflow 31
December 2013
$818,574
-
(703,979)
-
130,991
-
275,288
-
68,834
1,010,994
-
(2) B.
(Note 4)
(2,165)
88,080
-
176,392
USD 814
(2) B.
810,692
-
-
810,692
(132,179)
100.00%
(132,179)
(2) B.
412,653
-
-
412,653
(107,495)
100.00%
(107,495)
(2) B.
293,308
-
-
293,308
22,159
79.89%
17,703
(2) B.
2,074,428
-
-
USD 69,600
-
2,074,428
180,261
100.00%
USD 69,600
-
-
-
(17,703)
24.00%
(2) B.
149,480
-
-
149,480
(18,942)
100.00%
(18,942)
(2) B.
407,267
-
-
407,267
(57,949)
100.00%
(57,949)
(Note 4)
1,236,375
-
98,312
-
(8,788)
20,837
-
(2) B. , (Note 4)
(Note 4)
8,236
142,291
(2) B.
35,495
-
-
35,495
22,820
24.81%
5,490
(2) B.
-
28,169
-
USD 970
33,156
-
-
USD 1,060
147,987
-
-
-
-
-
-
USD 1,000
(RMB-1,833)
33,156
8,236
100.00%
147,987
(2) B.
(17,053)
100.00%
-
-
10,080
52,411
(8,524)
100.00%
(8,524)
(36,385)
100.00%
(36,385)
USD 1,000
112,417
-
16,799
2,757
5,958
100.00%
5,958
(2) B.
USD 1,600
32,236
(17,053)
54,602
USD 1,694
(2) B.
USD 300
USD 1,600
32,236
USD 970
100.00%
USD 4,550
USD 300
52,411
(8,788)
USD 1,060
USD 4,550
10,080
28,169
USD 85
31,686
(2) B.
8,726
USD 270
47,354
-
(2) B.
224
Financial Overview
ATTACHMENT 8-1
Investment in Mainland China as of 31 December 2013
Investor company
(Note 10)
Investee company
CPTF Optronics Co., Ltd.
Main Businesses and Products
Assembly final module of TFT-LCD
Total Amount of
Paid-in Capital
11,368,450
Method of
Investment
(Note 1)
(3)
RMB 2,325,526
Chunghwa Picture
Tubes(Wujiang) Ltd.
Assembly final module of TFT-LCD
3,576,600
USD 120,000
CPTF Visual Display (Fuzhou)
Ltd.
Manufacture components of TFT-LCD
154,986
USD 5,200
Chunghwa Picture Tubes Display Assembly final module of TFT-LCD
Technology (Fujian) Ltd.
894,150
USD 30,000
Chunghwa Picture Display
Technology (Shen-Zhen) Ltd. Assembly final module of TFT-LCD
894,150
USD 30,000
CPT TPV Optical (Fujian) Co., Manufacture components of TFT-LCD
Ltd.
670,612
USD 22,500
Xiamen Overseas Chinese
Electronics Co., Ltd.
Chunghwa Picture Tubes Co.
Operation of TFT-LCD
2,557,689
RMB 523,200
Chunghwa Picture Tubes
Technology (Group) Co., Ltd. Investment holding
3,424,395
RMB 700,493
HWALLAR OPTRONICS
(FUZHOU)CO., LTD.
Kornerstone Material
Technology Co.
Manufacture components of TFT-LCD
Manufacture components of TFT-LCD
89,415
Sales and service of TFT-LCD
9,777
894,150
357,660
864,345
USD 29,000
Shan-Chih Asset International
Holding Co., Ltd.
Shan-Chih Asset Development
Co.
225
Tatung Real Estate Consultant
(Shanghai) Co., Ltd.
Suqian Zhiwei Real Estate
Co., Ltd.
Realty and Leasing Service
Realty management
(2)
(Note 9)
(2)
(Note 9)
(2)
(Note 9)
(4)
(Note 9)
(4)
(Note 9)
(4)
(4)
USD 12,000
Kunshan Giantplus Optronics Sales of Touch Panel
Display Technology Co., Ltd.
(Note 9)
1,877,715
USD 30,000
Shenzhen Giantplus
Optoelectronics Display Co., Ltd. Manufacture Components of LCD Display
(4)
(Note 9)
RMB 2,000
Kunshan Giantplus Optoelectronics Manufacture Components of LCD Display
Technology Co., Ltd.
(Note 9)
USD3,000
USD63,000
CPTF Optronics (Shen-Zhen)
Co., Ltd.
(2)
14,903
(Note 9)
(4)
(Note 9)
(2)
(Note 9)
(2)
(Note 9)
(2)
(Note 9)
(2)
USD 500
(Note 11)
1,192,200
(2)
USD 40,000
(Note 8)
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2013
$238,440
Investment Flows
Outflow
Inflow
-
-
USD 8,000
-
Accumulated
Outflow of
Investment from
Taiwan as of 31
December 2013
$238,440
Net income (loss) of
investee company
$2,737,780
Percentage of
Ownership
100.00%
USD 8,000
-
-
-
Accumulated
Investment income Carrying Value Inward Remittance
of Earnings as
(loss) recognized as of December
of Outflow 31
(Note 2)
31, 2013
December 2013
$2,281,392
$6,797,515
(2) B.
1,549,398
100.00%
1,259,661
$1,162,604
USD39,007
6,692,990
-
254,996
-
2,682,368
-
-
-
650,981
-
-
-
7,259,072
-
14,714
-
1,145,854
-
4,851
-
1,521,025
-
860,223
-
521,973
-
7,824
-
1,189,102
-
(2) B.
-
-
-
-
25,150
75.19%
16,320
(2) B.
-
-
-
-
1,206,541
100.00%
980,918
(2) B.
-
-
-
-
(143,842)
-
(116,944)
(2) B.
-
-
-
-
(45,034)
80.00%
(27,606)
(2) B.
-
-
-
-
542,520
20.02%
1,027,951
(2) B.
-
-
-
-
(367,944)
75.06%
(276,179)
(2) B.
-
-
-
-
(27,012)
51.00%
(11,477)
(2) B.
-
-
-
-
(293,613)
82.80%
(182,480)
(2) B.
-
-
-
-
1,726
100.00%
1,295
(2) B.
894,150
-
-
USD 30,000
357,660
-
-
-
-
USD 40,000
357,660
864,345
-
-
14,903
6,036
100.00%
-
1,192,200
USD 40,000
6,036
(2) B.
(74,687)
100.00%
(74,687)
(2) B.
(6,540)
100.00%
USD 500
-
113,614
(2) B.
USD 29,000
USD 500
1,192,200
100.00%
USD 12,000
USD 29,000
14,903
113,614
USD 30,000
USD 12,000
864,345
894,150
(6,540)
(2) B.
(42,586)
100.00%
(42,586)
(2) B.
226
Financial Overview
ATTACHMENT 8-2
Investment in Mainland China as of 31 December 2013
Investor company
(Note 10)
Taiwan Telecommunication
Investment Ltd.
Goldmax Asia Pacific Ltd.
Investee company
Taiwan Telecommunication
(Fujian) Company Ltd.
Main Businesses and Products
The manufacturing of fax and printers
Total Amount of
Paid-in Capital
$172,306
Method of
Investment
(Note 1)
(2)
(Note 11)
Kornerstone Material
Technology Co.
Manufacture components of TFT-LCD
2,217,355
(2)
(Note 11)
Wu-jiang Tatung Electronics
Trading co., LTD.
Chih Sheng Holding HK Limited
Sales of Information Production
161,907
(2)
(Note 11)
WTE-niche Limited
Sales of Panel
19,741
(2)
(Note 11)
SHAN-CHIH WIRE&CABLE
TECHNOLOGY(WUJIANG)
CO., LTD.
The manufacturing and sales of wire and
cable
53,194
(2)
(Note 11)
Shan-Chih International Holding
Corporation
The manufacturing and sales of AC
motor, DC motors, AC generators, diesel
engine generators,variable speed
motors, inverters and PLCs, transformers,
switchboards
700,244
The manufacturing and sales of
reciprocating compressors for freezing
and refrigeration
363,268
TATUNG CRANES (SHANGHAI) The manufacturing and sales of cranes
CO., LTD.
45,670
Tatung (Shanghai) Co., Ltd.
TATUNG COMPRESSORS
(ZHONGSHAN) CO., LTD.
Tatung (Shanghai) Co., Ltd.
(2)
(Note 11)
(2)
(Note 11)
RMB 9,348
(2)
(Note 11)
Accumulated Investment in Mainland China
as of 31 December 2013
Investment Amounts Authorized by Investment
Commission, MOEA
Upper Limit on Investment
$9,454,329
$19,139,774
$19,980,717
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
227
The methods for engaging in investment in Mainland China include the following:
(1) Direct investment in Mainland China.
(2) Indirectly investment in Mainland China through companies registered in a third region. (Please specify the name of the company in third region).
(3) Is invested in the company through a third country to reinvest in Mainland China. In addition to the USD 8,000 thousand outward remittance from Taiwan
to invest, the remaining amount was reinvested by mainland companies and third sub-regional investment company.
(4) Reinvested by the surplus from a mainland company established through a third region.
(5) Other methods
The investment income (loss) recognized in current period:
(1)Please specify no investment income (loss) has been recognized as still in the early stage of operation.
(2)The investment income (loss) were determined based on the following:
A. The financial report was audited and certified by an international accounting firm in cooperation with an R.O.C. accounting firm.
B. The financial statements certificated by the CPA of the parent company in Taiwan.
C. Others.
Initial investment amounts denominated in foreign currencies are translated into New Taiwan Dollars using the spot rates at the financial report date.
US dollars exchange rate on 31 December 2013: 29.8050
RMB exchange rate on 31 December 2010: 4.88855
All amounts are eliminated in the consolidated financial statements.
Reinvested through Forward Investment Co., Ltd. by remitting the ivestment funding and equipment investment.
Tatung System Technologies Inc. Holdings Limited, established in a third region, Samoa, reinvested in World Technology (Shanghai) Co., Ltd.
Shang Chih International Chemical Industry Co., Ltd.
Shan-Chih Asset International (Hong Kong) Holding Limited.
Chunghwa P.T.(Bermuda) Ltd. and Chunghwa P.T.(Labuan) Ltd. are the third region investment companies.
Refer to Attachment 7 for investment percentages in all investees of the Company.
Refer to the investment company name column got third area investment companird.
Ultra Energy (Weifang) Technology Co. Ltd,, the subsidiary of GET, has paid prepayments to Shih Lin Yun Power Investment New Energy Co., Ltd. as
consideration for trading its shares, and has been resolved by the board to be disposed of on 25 December 2013, therefore was accounted for as noncurrent assets.
ULTRA ENERGY HOLDINGS LIMITED.
TATUNG 2012 Annual Report
Financial Overview
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2013
$117,688
Investment Flows
Outflow
Inflow
-
-
Accumulated
Outflow of
Investment from
Taiwan as of 31
December 2013
$117,688
Net income (loss) of
investee company
$(7,758)
Percentage of
Ownership
60.00%
Investment income Carrying Value as
(loss) recognized of December 31,
(Note 2)
2013
$(7,758)
Accumulated
Inward
Remittance
of Earnings as
of Outflow 31
December 2013
$138,898
-
311,040
-
96,392
-
8,921
-
13,176
-
116,450
-
92,141
-
(386)
30,984
-
(RMB79)
RMB 6,342
(2) B.
257,795
130,415
-
388,211
(293,613)
17.20%
(49,930)
(2) B.
46,990
-
-
46,990
(23,318)
100.00%
(23,318)
(2) B.
12,202
-
-
12,202
(233)
100.00%
(233)
(2) B.
53,194
-
-
53,194
(28,176)
100.00%
(28,127)
(2) B.
92,055
-
-
92,055
13,924
13.64%
1,896
(2) B.
69,960
-
-
69,960
22,159
20.11%
4,448
(2) B.
16,780
16,780
(860)
USD 563
USD 563
(RMB176)
45.00%
(2) C.
228
Financial Overview
ATTACHMENT 8-3
Investment in Mainland China as of 31 December 2013
The details of significant transacitons directly or indirectly made with investees located in Mainland China:
(1) Purchases(Sales):
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Details of nonarm's length
transaction
Transactions
Company
Tatung Co.,
Ltd.
Counter-party
Purchases
(Sales)
Xiamen
Overseas
Chinese
Purchases
Electronics Co.,
Ltd.
Tatung
(Shanghai) Co., Purchases
Ltd.
Tatung
Information
Technology
Purchases
(Jiangsu) Co.,
Ltd.
Others
Purchases
Tatung
(Shanghai) Co., Sales
Ltd.
Tatung Wire
and Cable
Technology
Sales
(wujiang) Co.,
Ltd.
Others
(2)
(3)
(4)
(5)
(Note 5)
Percentage
of total
purchases
(sales)
Term
Unit
price
Term
Balance
(Note 5)
Percentage
of total
receivables
(payable)
$414,514
2.57
-
(Note 3)
(Note 4)
$(97,563)
(2.15)
437,187
2.71
-
(Note 3)
(Note 4)
(92,376)
(2.04)
106,318
0.66
-
(Note 3)
(Note 4)
(45,672)
(1.01)
95,729
0.59
-
(Note 3)
(Note 4)
(4,691)
(0.10)
$1,055,748
6.53
(240,302)
(5.30)
$(228,945)
(0.95)
-
(Note 1)
(Note 2)
$84,768
1.13
(103,492)
(0.43)
-
(Note 1)
(Note 2)
72,886
0.97
142,229
0.59
-
(Note 1)
(Note 2)
62,708
0.84
$(474,666)
(1.97)
$220,362
2.94
Note
Property transactions: None.
Endorsement guarantee or ending balance of security provided and the purpose: Ending balance of the Company's investee endorsement $ 0.
Maximum balance, the total ending balance, and current interest rates range of financing: None.
Other transactions that have material impact on profit or loss or financial position of current period: None.
Note 1:
Note 2:
Note 3:
Note 4:
229
Sales
Amount
Notes and accounts
receivable (payable)
The Company: The sales price to related parties was determined through mutual agreement based on market conditions.
The Company: The collection terms for domestic related parties were 90 days, equivalent to those for domestic third parties; the collection terms for foreign
related parties were 30-180 days, equivalent to these for foreign third parties.
The Company: The purchase price to related parties was determined through mutual agreement based on market conditions.
The Company: The payment terms to related parties and third parties for domestic purchases were both net 30-150 days, while the terms for overseas
purchases were both net 30-120 days.
TATUNG 2012 Annual Report
Financial Overview
ATTACHMENT 9
Intercompany Relationships and Significant Intercompany Transactions For The Year Ended 31 December 2013
Individual transaction amounts less than 100 million yuan or more, do not be revealed; other assets or liabilities and income or expense side surface to
expose the way, the relative transaction is no longer expose
(Amounts in Thousands of New Taiwan Dollars, Unless specified Otherwise)
Intercompany Transactions
Number
( Note 1)
Company Name
Counter Party
Relationships
(Note 2) Financial Statements Item
Amount
Terms
Percentage of
Consolidated Net
Revenue or Total
Assets (Note 3)
1
Account receivable
1,258,394
Tatung Co., Ltd
Tatung Consumer Products (Taiwan) Co.,
Ltd.
Tatung Consumer Products (Taiwan) Co.,
Ltd.
1
Sales
3,578,293
(Note 4)
3.17%
0
Tatung Co., Ltd
Tatung (Shanghai) Co., Ltd
1
Sales
228,945
(Note 4)
0.20%
0
Tatung Co., Ltd
Tatung Wire & Cable (Thailand) Co., Ltd.
1
Sales
137,867
(Note 4)
0.12%
0
Tatung Co., Ltd
Green Energy Technology Inc.
1
Sales
502,411
(Note 4)
0.44%
0
Tatung Co., Ltd
Green Energy Technology Inc.
1
Account receivable
337,993
-
0.17%
0
Tatung Co., Ltd
Green Energy Technology Inc.
1
Other receivable
146,950
-
0.07%
0
Tatung Co., Ltd
Shan-Chih Wire & Cable Technology
(Wujiang) Co., Ltd.
1
Other receivable
183,747
-
0.09%
0
Tatung Co., Ltd
Tatung Vietnam Co., Ltd.
1
Other receivable
479,255
-
0.24%
0
Tatung Co., Ltd
Tatung Information Technology (Jiangsu)
Co., Ltd.
1
Other receivable
1,785,969
-
0.88%
0
Tatung Co., Ltd
Shan-Chih Asset Development Co.
1
Other receivable
338,284
-
0.17%
0
Tatung Co., Ltd
Tatung Global Strategy Investment and
Trading (BVI) Inc.
1
Other receivable
841,380
-
0.41%
0
Tatung Co., Ltd
Tatung (Thailand) Co., Ltd.
1
Other receivable
158,009
-
0.08%
0
Tatung Co., Ltd
1
Sales
103,492
(Note 4)
0.09%
0
Tatung Co., Ltd
1
Sales
180,607
(Note 4)
0.16%
0
Tatung Co., Ltd
Tatung Wire and Cable Technology
(Wujiang) Co., Ltd.
Chunghwa Picture Tubes Co.&
Consolidated subsidiary
Chunghwa Picture Tubes Co.&
Consolidated subsidiary
1
Construction
receivable
131,324
0
Tatung Co., Ltd
0
-
-
0.62%
0.06%
0
Tatung Co., Ltd
Tatung Electric Company of America, Inc.
1
Sales
528,401
0
Tatung Co., Ltd
Tatung Electric Company of America, Inc.
1
Account receivable
150,867
1
Tatung Electronics(S)Pte. Ltd.
Tatung Co., Ltd
2
Sales
481,739
(Note 5)
0.43%
2
Tatung Co., Ltd
2
Sales
106,683
(Note 5)
0.09%
2
Tatung Information Technology
(Jiangsu) Co., Ltd.
Tatung Information Technology
(Jiangsu) Co., Ltd.
Tatung Electronics(S)Pte.Ltd.
3
Sales
518,746
(Note 5)
0.46%
3
Tatung Company of Japan, Inc.
Tatung Co., Ltd
2
Sales
572,533
(Note 5)
3
Tatung Company of Japan, Inc.
Tatung Co., Ltd
2
Account receivable
3
Tatung Company of Japan, Inc.
3
Sales
3,277,151
3
Tatung Company of Japan, Inc.
Chunghwa Picture Tubes Co.&
Consolidated subsidiary
Chunghwa Picture Tubes Co.&
Consolidated subsidiary
3
Account receivable
2,027,635
4
Tatung Vietnam Co.,Ltd.
Tatung Co., Ltd
2
Sales
5
Chunghwa Picture Tubes Co.&
Consolidated subsidiary
Chunghwa Picture Tubes Co.&
Consolidated subsidiary
3
Sales
5
Forward Electronics Co., Ltd &
Consolidated subsidiary
Forward Electronics Co., Ltd &
Consolidated subsidiary
3
Account receivable
487,700
107,676
1.00%
(Note 5)
1.05%
Tatung Co., Ltd
2
Sales
202,382
Tatung Co., Ltd
2
Account receivable
105,342
7
Tatung (Shanghai) Co., Ltd
Tatung Co., Ltd
2
Sales
454,001
8
Green Energy Technology Inc.
Tatung Co., Ltd
2
Account receivable
120,856
8
Green Energy Technology Inc.
Tatung Co., Ltd
2
Sales
180,831
Note 5:
-
2.90%
1,185,586
Tatung (Shanghai) Co., Ltd
Note 4:
(Note 5)
0.51%
0.05%
0.33%
Tatung System Technologies Inc.
Note 3:
-
0.47%
0.07%
372,636
6
The Company and its subsidiaries are coded as follows:
1 The Company is coded "0".
2 Subsidiaries are coded consecutively starting from "1" in the order
presented in the table above.
Note 2: Transactions are categorized as follows:
1 Parent company to subsidiary
2 Subsidiary to parent company
3 Subsidiary to subsidiary
-
(Note 5)
7
Note 1:
(Note 4)
(Note 5)
(Note 5)
(Note 5)
0.24%
0.18%
0.05%
0.40%
0.06%
0.16%
When calculating the percentage of transaction amount to the
consolidated revenues or the consolidated assets: Items of the balance
sheets are calculated as its ending balance to total consolidated
assets; items of income statement are calculated by its cumulative
balance to the total consolidated income.
The Company: The sales price to related parties was determined
through mutual agreement based on market conditions.
The is no significant different in sales prices between FD and its
subsidiaries sold to related parties and general customers.
230
Financial Overview
Parent company only statements
Report of Independent Auditors
To Tatung Co., Ltd.
We have audited the accompanying parent company only balance sheets of Tatung Co., Ltd. (“the Company”) as of December 31,
2013, December 31, 2012, and January 1, 2012, and the related parent company only statements of comprehensive income, changes
in equity and cash flows for the years ended December 31, 2013 and 2012. These parent company only financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these parent company only financial
statements based on our audits. Certain investments accounted for using the equity method based on financial statements as of
December 31, 2013, December 31, 2012, and January 1, 2012 of the investees, which were audited by the other auditors. Our audit
insofar as it relates to the investment amounted to 6,868,364 thousand, 7,340,078 thousand, and 8,431,505 thousand which represented
9.42%, 9.84% and 10.04% of the total assets as of December 31, 2013, December 31, 2012, and January 1, 2012 respectively, and the
related share of profits (losses) of subsidiaries, associates and joint ventures of 885,014 thousand and 8,802 thousand which represented
(50.63)% and (0.22)% of the loss before income tax for the years ended December 31, 2013 and 2012 respectively, and the related share
of other comprehensive income (loss) of subsidiaries, associates and joint ventures of 40,201 thousand and (179,867) thousand which
represented 16.26% and 45.37% of the total comprehensive income (loss) for the years ended December 31, 2013 and 2012 respectively,
are based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing standards in the Republic of China on Taiwan and
“Guidelines for Certified Public Accountants’ Examination and Reports on Financial Statements”. Those 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 and the reports of the other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the reports of the other auditors, the parent company only financial statements referred to
above present fairly, in all material respects, the financial position of Tatung Co., Ltd. as of December 31, 2013, December 31, 2012, and
January 1, 2012, and the results of its operations and its cash flows for the years then ended December 31, 2013 and 2012, in conformity
with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers.
Ernst & Young
Taipei, Taiwan
Republic of China
March 18, 2014
Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial position and results of operations
and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China on Taiwan and not
those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and
applied in the Republic of China on Taiwan.
231
TATUNG 2012 Annual Report
Financial Overview
TATUNG CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2013 and 2012
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)
January 1 to December 31, January 1 to December 31,
2013
2012
Contents
Amount
Operating revenues
%
Amount
%
$24,206,708
100
$32,376,859
100
Less: Sales returns
(95,526)
-
(153,533)
-
Less: Sales allowances
(23,364)
-
(38,237)
-
24,087,818
100
32,185,089
100
(21,693,816)
(90)
(29,224,610)
(91)
2,394,002
10
2,960,479
9
Unrealized gross (profit) losses
(15,564)
-
(43,760)
-
Realized gross profits (losses)
43,760
-
61,863
-
2,422,198
10
2,978,582
9
Net operating revenues
Operating cost
Gross profit
Net operating profit
Operating expenses
Sales and marketing
(1,468,483)
(6)
(1,541,321)
(5)
General and administrative
(511,167)
(2)
(531,966)
(2)
Research and development
(699,956)
(3)
(745,240)
(2)
(2,679,606)
(11)
(2,818,527)
(9)
(257,408)
(1)
160,055
-
250,495
1
469,969
1
Total operating expense
Operating (loss) income
Non-operating income and expense
Other income
Other gains and (losses)
52,956
-
99,999
-
Finance cost
(958,287)
(4)
(970,488)
(3)
Share of profits (losses) of subsidiaries, associates and joint ventures
(835,637)
(3)
(3,800,392)
(11)
(1,490,473)
(6)
(4,200,912)
(13)
(1,747,881)
(7)
(4,040,857)
(13)
136,473
-
22,226
-
(1,611,408)
(7)
(4,018,631)
(13)
6,687
-
249,374
1
Total non-operating income and expense
Loss before income tax
Income tax benefit
Net Loss
Other comprehensive income
Unrealized gain or loss on financial instruments
Actuarial loss from defined benefit plans
(55,531)
-
(214,508)
(1)
Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures
296,060
1
(431,327)
(1)
-
-
-
-
Income tax expense related to components of other comprehensive income
Other comprehensive income (loss), net of income tax
Total comprehensive loss
247,216
1
(396,461)
(1)
$(1,364,192)
(6)
$(4,415,092)
(14)
Loss per share
Basic loss per share (NT$)
$(0.70)
$(1.74)
Diluted loss per share (NT$)
$(0.70)
$(1.74)
232
Financial Overview
TATUNG CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS
As of December 31, 2013, December 31, 2012, and January 1, 2012
Assets
December 31, 2013
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss, current
Available-for-sale financial assets, current
Financial assets carried at cost, current
Investment in debt security with no active market, current
Notes receivable, net
Notes receivable - related parties, net
Accounts receivable, net
Accounts receivable - related parties, net
Construction receivables
Other receivables, net
Other receivables - related parties, net
Current tax assets
Inventories
Prepayments
Total current assets
$3,793,041
41,351
499,622
29,238
1,174,118
353,198
3,462
2,758,653
2,044,102
2,342,999
19,834
3,182,223
20,234
4,166,964
361,721
20,790,760
5
1
2
4
3
3
4
6
1
29
$2,758,053
105,787
525,593
29,238
16,982
449,919
149,412
3,507,147
2,482,199
1,006,157
33,804
3,692,915
20,009
5,081,010
288,296
20,146,521
4
1
1
5
3
1
5
7
27
$2,214,383
59,433
262,634
59,284
793,463
528,133
6,651
3,402,610
3,052,979
307,058
35,345
3,626,414
11,054
6,783,383
304,769
21,447,593
3
1
2
4
4
4
8
26
Non-current assets
Financial assets at fair value through profit or loss, non-current
Available-for-sale financial assets, non-current
Financial assets in held-to-maturity, non-current
Financial assets carried at cost, non-current
Investment in debt security with no active market, non-current
Investments accounted for under the equity method
Property, plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets
Deposit-out
Long-term receivables
Long-term receivables - related parties
Total non-current assets
41,082
20,000
300
47,466,831
2,156,405
83,100
502,200
216,944
212,612
557,980
889,184
52,146,638
65
3
1
1
1
71
16,711
20,000
588,060
49,843,023
2,235,284
114,109
560,867
171,969
263,735
557,980
71,605
54,443,343
1
67
3
1
1
73
2,069
16,711
20,000
916,272
57,978,070
2,418,025
70,782
544,293
186,769
320,706
29,558
62,503,255
1
69
3
1
74
100
$74,589,864
100
$83,950,848
100
233
$72,937,398
Amount
%
January 1, 2012
Amount
Total Assets
%
December 31, 2012
Contents
Amount
%
TATUNG 2012 Annual Report
Financial Overview
Liabilities and Equity
Contents
Current liabilities
Short-term loans
Short-term notes and bills payable
Financial liabilities at fair value through profit or loss, current
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Provision, current
Advanced receipts
Current portion of bonds payable
Current portion of long-term loans
Other current liabilities - others
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans
Deferred tax liabilities
Long-term payables
Accrued pension liabilities
Deposits in
Deferred credit for investments accounted for under the equity method
Total non-current libilities
Total liabilities
Total equity
Capital stock
Common stock
Capital reserve
Retained earnings
Special Reserve
(Accumulated deficits) Unappropriated earnings
Total retained earnings
Other equities
Exchange differences on translation of foreign operation
Unrealized gain or loss on financial instruments
Cash flow hedges contributed to losses of effective hedges
Total other equities
Treasury stock
Total equity
Total liabilities and equity
December 31, 2013
Amount
%
(Expressed in Thousands of New Taiwan Dollars)
December 31, 2012
January 1, 2012
Amount
%
Amount
%
$5,777,227
629,586
9,346
3,819,411
714,265
1,162,228
50,641
131,652
189,080
4,372,470
4,828,163
35,413
21,719,482
8
1
5
1
2
6
7
30
$5,032,068
399,939
70,460
3,704,611
931,629
1,440,223
87,570
3,077
243,383
5,912,594
45,207
17,870,761
7
1
5
1
2
8
24
$6,710,529
599,592
3,226,295
2,746,553
2,145,411
345,328
3,254
342,569
717,555
1,756,856
44,215
18,638,157
8
1
4
3
3
1
2
22
12,366,634
240,884
3,119,551
1,791
2,187,861
17,916,721
39,636,203
17
4
3
24
54
3,977,033
13,288,504
279,500
3,275,923
792
1,987,098
22,808,850
40,679,611
5
18
5
3
31
55
3,961,615
17,657,207
242,926
70,332
3,298,062
5,433
1,376,396
26,611,971
45,250,128
5
21
4
2
32
54
23,395,367
767,970
32
1
23,395,367
727,529
31
1
23,395,367
719,378
28
1
15,894,690
(5,919,690)
9,975,000
22
(8)
14
15,894,690
(3,879,909)
12,014,781
21
(5)
16
15,978,036
664,947
16,642,983
19
1
20
(188,770)
158,498
(30,272)
(806,870)
33,301,195
(1)
46
(428,502)
(305,092)
(733,594)
(1,493,830)
33,910,253
(1)
(1)
(2)
45
(558,299)
(5,280)
(563,579)
(1,493,429)
38,700,720
(1)
(1)
(2)
46
100
$74,589,864
100
$83,950,848
100
$72,937,398
234
Financial Overview
TATUNG CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2013 and 2012
Contents
Balance as of January 1, 2012
Capital Stock
Capital Reserve
$23,395,367
$719,378
Reverse of special reserve
-
-
Capital surplus used to cover accumulated deficits
-
(70,000)
Net loss on January 1 to December 31, 2012
-
-
Other comprehensive income on January 1 to December 31, 2012
-
-
Total comprehensive income on January 1 to December 31, 2012
-
-
Acquisition or disposal on subsidiary shares
-
78,151
Changes in treasury stocks held by subsidiaries
-
-
Balance as of December 31, 2012
$23,395,367
$727,529
Balance as of January 1, 2013
$23,395,367
$727,529
Net loss on January 1 to December 31, 2013
-
-
Other comprehensive income on January 1 to December 31, 2013
-
-
Total comprehensive income on January 1 to December 31, 2013
-
-
Acquisition or disposal on subsidiary shares
-
40,441
Disposal of treasury stocks held by subsidiaries
-
-
23,395,367
$767,970
Balance as of December 31, 2013
235
TATUNG 2012 Annual Report
Financial Overview
(Expressed in Thousands of New Taiwan Dollars)
Retained Earnings
Special Reserve
Other Capital Reserves
(Accumulated
deficits)/
Unappropriated
Earnings
Exchange Differences
on Translation of
Foreign Operation
Unrealized Gain or
Loss on Financial
Instruments
Cash Flow Hedges
Treasury Stock
Total
$15,978,036
$664,947
$-
$(558,299)
$(5,280)
$(1,493,429)
$38,700,720
(83,346)
-
-
-
-
-
(83,346)
-
70,000
-
-
-
-
-
-
(4,018,631)
-
-
-
-
(4,018,631)
-
(226,446)
(428,502)
253,207
5,280
-
(396,461)
-
(4,245,077)
(428,502)
253,207
5,280
-
(4,415,092)
-
(369,779)
-
-
-
-
(291,628)
-
-
-
-
-
(401)
(401)
$15,894,690
$(3,879,909)
$(428,502)
$(305,092)
$-
$(1,493,830)
$33,910,253
$15,894,690
$(3,879,909)
$(428,502)
$(305,092)
$-
$(1,493,830)
$33,910,253
-
(1,611,408)
-
-
-
-
(1,611,408)
-
(23,593)
239,732
31,077
-
-
247,216
-
(1,635,001)
239,732
31,077
-
-
(1,364,192)
-
178,222
-
432,513
-
-
651,176
-
(583,002)
-
-
-
686,960
103,958
$15,894,690
$(5,919,690)
$(188,770)
$158,498
$-
$(806,870)
$33,301,195
236
Financial Overview
TATUNG CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2013 and 2012
Contents
(Expressed in Thousands of New Taiwan Dollars)
January 1 to
December 31, 2013
January 1 to
December 31, 2012
Amount
Amount
Cash flows from operating activities:
Net loss before income tax
$(1,747,881)
$(4,040,857)
Depreciation expense
479,707
527,242
Amortization expense
43,236
19,902
(134,607)
181,718
Interest expenses
958,287
970,488
Interest income
(37,738)
(41,986)
Dividends income
(42,751)
(41,193)
Share of (profit) losses of associates and joint ventures
835,637
3,800,392
(3,056)
13,558
(107,646)
(214,390)
Adjustments to reconcile net loss to net cash provided by operating activities:
(Gain) Loss from financial asset or financial liability at fair value through profit or loss
(Gain) Loss on disposal of property, plant and equipment
Gain on disposal of investments
Unrealized gains or losses
other
(28,196)
-
-
1,440
Changes in assets and liabilities from operating activities:
Decrease in notes receivable
96,721
78,214
145,950
(142,761)
Decrease (Increase) in accounts receivable
748,494
(104,537)
Decrease in accounts receivable - related parties
438,097
570,780
(1,336,842)
(699,099)
Decrease (Increase) in notes receivable - related parties
Increase in construction receivables
Decrease in other receivables
13,970
11,702
Decrease (Increase) in other receivables - related parties
167,516
(544,306)
Decrease in inventory
914,046
1,684,270
(Increase) Decrease in prepayments
(73,425)
49,453
-
952,045
137,929
(226,003)
(104,957)
(70,353)
Decrease in other current assets
Decrease (Increase) in financial assets at fair value through profit or loss
Transfer of inventory into property, plant and equipment
(Increase) Decrease other non-current assets - others
(44,975)
58,684
(817,579)
(42,047)
114,800
478,316
Decrease in accounts payable - related parties
(217,364)
(1,814,924)
Decrease in other payables
(236,438)
(716,823)
(36,929)
(257,758)
Increase in long term receivables - related parties
Increase in accounts payable
Decrease in other payables - related parties
Increase in provision, current
128,575
11,154
Decrease in advanced receipts
(54,303)
(99,186)
-
70,460
Increase on financial liability at fair value through profit or loss
(Decrease) Increase in other current liabilities - others
Decrease in accrued pension liability
Decrease in long-term payables
991
(211,903)
(236,647)
-
(70,332)
(23,419)
117,607
37,738
42,879
Dividend received
3,568,525
5,459,034
Interest paid
(575,337)
(655,728)
Cash provided by (used in) operations
Interest received
Income taxes return (paid)
Net cash provided by operating activities
237
(9,794)
76,062
(8,872)
3,083,569
4,954,920
TATUNG 2012 Annual Report
Financial Overview
For the Years Ended December 31, 2013 and 2012
Contents
(Expressed in Thousands of New Taiwan Dollars)
January 1 to
December 31, 2013
January 1 to
December 31, 2012
Amount
Amount
Cash flows from investing activities:
Acquisition of financial assets carried at cost
Disposal of financial assets carried at cost
Disposal of available-for-sale financial assets
Acquisition of investment in debt security with no active market
Disposal of investment in debt security with no active market
Acquisition of investments accounted for under the equity method
Disposal of investments accounted for under the equity method
(300)
-
-
3,904
111,518
190,157
(569,076)
(16,982)
-
328,212
(733,667)
(1,368,621)
33,016
144,328
(297,157)
(292,477)
Disposal of property, plant and equipment
4,342
16,418
Decrease in deposit-out
51,123
-
-
(240,648)
Acquisition of property, plant and equipment
Increase in other receivables-related parties
Decrease in other receivables-related parties
423,413
-
Acquisition of intangible assets
(12,227)
(63,229)
(989,015)
(1,298,938)
Net cash used in investing activities
Cash flows from financing astivities:
Increase in short-term loans
Decrease in short-term loans
745,159
-
-
(1,678,461)
Increase in short-term notes and bills payable
629,586
-
Decrease in short-term notes and bills payable
(400,000)
(200,000)
(1,016,245)
Repayment for bonds payable
-
Proceeds from long-term loans
6,719,707
3,268,089
Repayment for long-term loans
(8,755,017)
(3,481,054)
Increase in deposits-in
999
-
Decrease in deposits-in
-
(4,641)
(1,059,566)
(3,112,312)
Net cash used in financing astivities
Effects of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of periods
Cash and cash equivalents at the end of periods
-
-
1,034,988
543,670
2,758,053
2,214,383
$3,793,041
$2,758,053
238
Financial Overview
TATUNG CO., LTD.
NOTES TO PARENT COMPANY ONLY FINANCIAL
STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2013 and 2012
(Expressed in Thousands of New Taiwan Dollars unless
otherwise Specified)
1. Organization Operations
Established in 1918, Tatung Company (the “Company”) was
incorporated under the Company Act of the Republic of China (“R.
O.C.”) and underwent reorganization in 1939. The total capital at
that time was Taiwan Yuan $180,000, later increased to Taiwan Yuan
$20,000,000 after several capital injections. After the reformation
of monetary system in 1949, the total capital was converted to the
equivalent of New Taiwan dollars (“NTD”) 200,000. As of December
31, 2013, the issued capital and registered was NTD23,395,367
thousand. The main activities of the Company are as follows:
(1) The design, manufacture, sale, installation, network system,
automation system, lease, maintenance service, import, export
and agency of the following products:
1 Steel manufacturing machinery 2 Industrial appliances
3 Household appliances
4 Refrigerator
5 Air conditioners
6 Metal processing machinery
7 Electronic products
8 Wire and cable
10 Cookware
9 Chemical industry
11 Wood-made products
12 Plastic products
13 Office equipment
14 Audio products
15 Precision meter
16 Transmission equipment
17 Transportation facilities
18 Healthcare products
19 Microbe fermentation
20 Construction
21 Furniture
22 Solar wafers
23 Water treatment engineering
24 Telecommunication
equipment
25 Parking facilities
26 Automation machinery
27 Automobiles
28 Semiconductor
(2) Magazine publishing
(3) Customs brokerage
(4) General import/export (excluding permitted business)
(5) Development and leasing (excluding construction industry) of
industrial parks on behalf of the competent authority.
The investment plans should be resolved by the Board of Directors, but
the total amount of investment is not limited to the amount provided
by Article 13 of Company Act, which states that the total amount of
investment shall not exceed 40% of the amount of its own paid-in
capital.
The Company’s common shares were publicly listed on the Taiwan Stock
Exchange (TWSE) in 9 February 1962. The Company’s registered office
and the main business location is at No. 22, Section 3, Zhongshan North
Road, Taipei, Republic of China (R.O.C.).
2. Date and procedures of authorization of financial
statements for issue
The parent company only financial statements of the Company
for the years ended 31 December 2013 and 2012 were authorized
for issue in accordance with a resolution of the Board of Directors’
meeting on 18 March 2014.
3. Newly issued or revised standards and
interpretations
(1) Standards or interpretations issued, revised or amended, which
239
are recognized by Financial Supervisory Commission (“FSC”), but
not yet adopted by the Company at the date of issuance of the
Company’s financial statements are listed below.
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments which is divided in three distinct
phases is designed by the International Accounting Standards
Board (“IASB”) to eventually replace IAS 39 Financial Instruments:
Recognition and Measurement in its entirety. The first phase relates
to the classification and measurement of financial assets and
liabilities that must be applied for annual periods beginning on or
after 1 January 2015. The IASB will work on the remaining phases
relate to impairment methodology and hedge accounting.
However companies adopting Inter national Financial
Reporting Standards, International Accounting Standards, and
Interpretations developed by the International Financial Reporting
Interpretations Committee or the former Standing Interpretations
Committee as recognized by the FSC (collectively referred to as
“TIFRS”) may not early adopt IFRS 9. FSC will announce the local
effective date for IFRS 9 in the future. Adopting the first phase of
IFRS 9 will have an impact on the classification and measurement
of financial assets. The impact of adopting the remaining two
phases of IFRS 9 on the Company could not be determined at this
stage.
(2) Standards issued by IASB but not yet recognized by FSC at the
date of issuance of the Company’s financial statements are listed
below.
A. Improvements to International Financial Reporting Standards
(issued in 2010):
IFRS 1 “First-time Adoption of International Financial Reporting
Standards”
The annual improvements to International Financial Reporting
Standards (“IFRS”) issued in 2010 made the following
amendments to IFRS 1: If a first-time adopter changes its
accounting policies or its use of the exemptions in IFRS 1 after
it has published an interim financial report, it needs to explain
those changes and update the reconciliations by paragraph
32 in accordance with paragraph 23 of IFRS 1.
Furthermore, the amendment allows first-time adopters to
use an event-driven fair value as deemed cost, even if the
event occurs after the date of transition, but before the first
IFRS financial statements are issued. The amendment also
expands the scope of ‘deemed cost’ for property, plant
and equipment or intangible assets to include items used
subject to rate regulated activities. The exemption will be
applied on an item-by-item basis. All such assets will also
need to be tested for impairment at the date of transition.
The amendment allows entities with rate-regulated activities
to use the carrying amount of their property, plant and
equipment and intangible balances from their previous GAAP
as its deemed cost upon transition to IFRS. These amendments
became effective for annual periods beginning on or after 1
January 2011.
IFRS 3 “Business Combinations”
Under the amendment, IFRS 3 (as revised in 2008) do not
apply to contingent consideration that arose from business
combinations whose acquisition dates precede the
application of IFRS 3 (as revised in 2008). Furthermore, the
amendment limits the scope of the measurement choices
for non-controlling interest. Only the components of noncontrolling interests that are present ownership interests that
entitle their holders to a proportionate share of the entity's
net assets, in the event of liquidation could be measured
at either fair value or at the present ownership instruments'
proportionate share of the acquiree's identifiable net assets.
Other components of non-controlling interest are measured
at their acquisition date fair value.
The amendment also requires an entity in a business
combination to account for the replacement of the
acquiree's share-based payment transactions (when the
acquirer is not obliged to do so) as new share-based payment
awards in the post-combination financial statements.
Outstanding share-based payment transactions that the
acquirer does not exchange for its share-based payment
transactions: if vested — they are part of non-controlling
interest; if unvested — they are measured at market based
value as if granted at acquisition date, and allocated
between NCI and post-combination expense.
These amendments became effective for annual periods
TATUNG 2012 Annual Report
Financial Overview
beginning on or after 1 July 2010.
IFRS 7 “Financial Instruments: Disclosures”
The amendment emphasizes the interaction between
quantitative and qualitative disclosures and the nature and
extent of risks associated with financial instruments. The
amendment became effective for annual periods beginning
on or after 1 January 2011.
IAS 1 “Presentation of Financial Statements”
The amendment clarifies that an entity will present an analysis
of other comprehensive income for each component of
equity, either in the statement of changes in equity or in the
notes to the financial statements. The amendment became
effective for annual periods beginning on or after 1 January
2011.
IAS 34 “Interim Financial Reporting”
The amendment clarifies that if a user of an entity's interim
financial report have access to the most recent annual
financial report of that entity, it is unnecessary for the notes
to an interim financial report to provide relatively insignificant
updates to the information that was reported in the notes
in the most recent annual financial report. Furthermore the
amendment adds disclosure requirements around disclosures
of financial instruments and contingent liabilities/assets. The
amendment is effective for annual periods beginning on or
after 1 January 2011.
IFRIC 13 “Customer Loyalty Programmes”
The amendment clarifies that when the fair value of award
credits is measured based on the value of the awards for
which they could be redeemed, the amount of discounts or
incentives otherwise granted to customers not participating
in the award credit scheme is to be taken into account. The
amendment is effective for annual periods beginning on or
after 1 January 2011.
B. IFRS 1 “First-time Adoption of International Financial Reporting
Standards” — Limited Exemption from Comparative IFRS 7
Disclosures for First-time Adopters
IFRS 1 has been amended to allow first-time adopters to
utilize the transitional provisions of IFRS 7 Financial Instruments:
Disclosures. These provisions give relief from providing
comparative information in the disclosures required by
amendments to IFRS 1 in the first year of application. The
amendment is effective for annual periods beginning on or
after 1 July 2010.
C. IFRS 1 “First-time Adoption of International Financial Reporting
Standards” — Severe Hyperinflation and Removal of Fixed
Dates for First-time Adopters
The amendment has provided guidance on how an entity
should resume presenting IFRS financial statements when
its functional currency ceases to be subject to severe
hyperinflation. The amendment also removes the legacy fixed
dates in IFRS 1 relating to derecognition and day one gain
or loss transactions. The amended standard has these dates
coinciding with the date of transition to IFRS. The amendment
is effective for annual periods beginning on or after 1 July
2011.
D. IFRS 7 “Financial Instruments: Disclosures” (Amendment)
The amendment requires additional quantitative and
qualitative disclosures relating to transfers of financial assets,
when financial assets are derecognised in their entirety, but
the entity has a continuing involvement in them, or financial
assets are not derecognised in their entirety. The amendment
is effective for annual periods beginning on or after 1 July
2011.
E. IAS 12 “Income Taxes” — Deferred Taxes: Recovery of
Underlying Assets
The amendment to IAS 12 introduce a rebuttable presumption
that deferred tax on investment properties measured at fair
value will be recognized on a sale basis, unless an entity
has a business model that would indicate the investment
property will be consumed in the business. The amendment
also introduces the requirement that deferred tax on nondepreciable assets measured using the revaluation model
in IAS 16 should always be measured on a sale basis. As a
result of this amendment, SIC 21 Income Taxes — Recovery of
Revalued Non-Depreciable Assets has been withdrawn. The
amendment is effective for annual periods beginning on or
after 1 January 2012.
F. IFRS 10 “Consolidated Financial Statements”
IFRS 10 replaces the portion of IAS 27 that addresses the
accounting for consolidated financial statements and SIC12. The changes introduced by IFRS 10 primarily relate to the
elimination of the perceived inconsistency between IAS 27
and SIC-12 by introducing a new integrated control model.
That is, IFRS 10 primarily relates to whether to consolidate
another entity, but does not change how an entity is
consolidated. The standard is effective for annual periods
beginning on or after 1 January 2013.
G. IFRS 11 “Joint Arrangements”
IFRS 11 replaces IAS 31 and SIC-13. The changes introduced
by IFRS 11 primarily relate to increase comparability within
IFRS by removing the choice for jointly controlled entities to
use proportionate consolidation, so that the structure of the
arrangement is no longer the most important factor when
determining the classification as a joint operation or a joint
venture, which then determines the accounting. The standard
is effective for annual periods beginning on or after 1 January
2013.
H. IFRS 12 “Disclosures of Interests in Other Entities”
IFRS 12 primarily integrates and makes consistent the
disclosure requirements for subsidiaries, joint arrangements,
associates and unconsolidated structured entities and
present those requirements in a single IFRS. The standard is
effective for annual periods beginning on or after 1 January
2013.
I. IFRS 13“Fair Value Measurement”
IFRS 13 primarily relates to defining fair value, setting out
in a single IFRS a framework for measuring fair value and
requiring disclosures about fair value measurements to
reduce complexity and improve consistency in application
when measuring fair value. However, IFRS 13 does not change
existing requirements in other IFRS as to when the fair value
measurement or related disclosure is required. The standard is
effective for annual periods beginning on or after 1 January
2013.
J. IAS 1 “Presentation of Financial Statements” — Presentation of
Items of Other Comprehensive Income
The amendments to IAS 1 change the grouping of items
presented in Other Comprehensive Income. Items that would
be reclassified (or recycled) to profit or loss in the future
would be presented separately from items that will never be
reclassified. The amendment is effective for annual periods
beginning on or after 1 July 2012.
K. IAS 19 “Employee Benefits” (Revised)
The revision includes: (1) For defined benefit plans, the ability
to defer recognition of actuarial gains and losses (i.e., the
corridor approach) has been removed. Actuarial gains and
losses are now recognized in Other Comprehensive Income.
(2) Amounts recorded in profit or loss are limited to current
and past service costs, gains or losses on settlements, and
net interest income (expense). (3) New disclosures include
quantitative information about the sensitivity of the defined
benefit obligation to a reasonably possible change in each
significant actuarial assumption. (4) Termination benefits will
be recognized at the earlier of when the offer of termination
cannot be withdrawn, or when the related restructuring costs
are recognized under IAS 37 Provisions, Contingent Liabilities
and Contingent Assets, etc. The revised standard is effective
for annual periods beginning on or after 1 January 2013.
L. IFRS 1 “First-time Adoption of International Financial Reporting
Standards” — Government Loans
The IASB has added an exception to the retrospective
application of IFRS 9 (or IAS 39) and IAS 20. These amendments
require first-time adopters to apply the requirements of IAS
20 prospectively to government loans existing at the date of
transition to IFRS. However, entities may choose to apply the
requirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to
government loans retrospectively if the information needed
to do so had been obtained at the time of initially accounting
for those loans. The amendment is effective for annual
periods beginning on or after 1 January 2013.
M. IFRS 7 “Financial Instruments: Disclosures” — Disclosures —
Offsetting Financial Assets and Financial Liabilities
These amendments require an entity to disclose information
about rights of set-off and related arrangements. The
disclosures would provide users with information that is useful
in evaluating the effect of netting arrangements on an
240
Financial Overview
entity’s financial position. The new disclosures are required
for all recognized financial instruments that are set off in
accordance with IAS 32 Financial Instruments: Presentation.
The disclosures also apply to recognized financial instruments
that are subject to an enforceable master netting
arrangement or ‘similar agreement’. The amendment is
effective for annual periods beginning on or after 1 January
2013.
N. IAS 32 “Financial Instruments: Presentation” — Offsetting
Financial Assets and Financial Liabilities
The amendment clarifies the meaning of “currently has a
legally enforceable right to set-off” in IAS 32. The amendment
is effective for annual periods beginning on or after 1 January
2014.
O. IFRIC 20 “Stripping Costs in the Production Phase of a Surface
Mine”
This Interpretation applies to waste removal (stripping) costs
incurred in surface mining activity, during the production
phase of the mine. If the benefit from the stripping activity
will be realized in the current period, an entity is required to
account for the stripping activity costs as part of the cost
of inventory. When the benefit is the improved access to
ore, the entity recognizes these costs as a non-current asset
(“stripping activity asset”), only if certain criteria are met. The
stripping activity asset is accounted for as an addition to, or
as an enhancement of, an existing asset. The interpretation is
effective for annual periods beginning on or after 1 January
2013.
P. Improvements to International Financial Reporting Standards
(2009-2011 cycle):
IFRS 1 “First-time Adoption of International Financial Reporting
Standards”
The amendment clarifies that an entity that has stopped
applying IFRS may choose to either: Re-apply IFRS 1, even
if the entity applied IFRS 1 in a previous reporting period;
or Apply IFRS retrospectively in accordance with IAS 8 (i.e.,
as if it had never stopped applying IFRS) in order to resume
reporting under IFRS. The amendment is effective for annual
periods beginning on or after 1 January 2013.
IAS 1 “Presentation of Financial Statements”
The amendment clarifies the difference between voluntary
additional comparative information and the minimum
required comparative information. Generally, the minimum
required comparative period is the previous period. An
entity must include comparative information in the related
notes to the financial statements when it voluntarily provides
comparative information beyond the minimum required
comparative period. The additional comparative period
does not need to contain a complete set of financial
statements. The opening statement of financial position
(known as ’the third balance sheet’) must be presented
when an entity changes its accounting policies (making
retrospective restatements or reclassifications) and those
changes have a material effect on the statement of financial
position. The opening statement would be at the beginning
of the preceding period. However, unlike the voluntary
comparative information, the related notes are not required
to include comparatives as of the date of the third balance
sheet. The amendment is effective for annual periods
beginning on or after 1 January 2013.
IAS 16 “Property, Plant and Equipment” (Amendment)
The amendment clarifies that major spare parts and servicing
equipment that meet the definition of property, plant and
equipment are not inventory. The amendment is effective for
annual periods beginning on or after 1 January 2013.
IAS 32 “Financial Instruments: Presentation” (Amendment)
The amendment removes existing income tax requirements
from IAS 32 and requires entities to apply the requirements in
IAS 12 to any income tax arising from distributions to equity
holders. The amendment is effective for annual periods
beginning on or after 1 January 2013.
IAS 34 “Interim Financial Reporting” (Amendment)
The amendment clarifies the requirements in IAS 34 relating
to segment information for total assets and liabilities for
each reportable segment to enhance consistency with the
requirements in IFRS 8 Operating Segments. Besides, total
241
assets and liabilities for a particular reportable segment
need to be disclosed only when the amounts are regularly
provided to the chief operating decision maker and there
has been a material change in the total amount disclosed
in the entity’s previous annual financial statements for that
reportable segment. The amendment is effective for annual
periods beginning on or after 1 January 2013.
Q. IFRS 10 “Consolidated Financial Statements” (Amendment)
The Investment Entities amendments provide an exception
to the consolidation requirements in IFRS 10 and require
investment entities to measure particular subsidiaries at fair
value through profit or loss, rather than consolidate them.
The amendments also set out disclosure requirements for
investment entities. The amendment is effective for annual
periods beginning on or after 1 January 2014.
R. IAS 36 “Impairment of Assets” (Amendment)
This amendment relates to the amendment issued in May
2011 and requires entities to disclose the recoverable amount
of an asset (including goodwill) or a cash-generating unit
when an impairment loss has been recognized or reversed
during the period. The amendment also requires detailed
disclosure of how the fair value less costs of disposal has been
measured when an impairment loss has been recognized
or reversed, including valuation techniques used, level of
fair value hierarchy of assets and key assumptions used
in measurement. The amendment is effective for annual
periods beginning on or after 1 January 2014.
S. IFRIC 21 “Levies”
This interpretation provides guidance on when to recognize
a liability for a levy imposed by a government (both for levies
that are accounted for in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets and those
where the timing and amount of the levy is certain). The
interpretation is effective for annual periods beginning on or
after 1 January 2014.
T. IAS 39 “Financial Instruments: Recognition and Measurement”
(Amendment)
Under the amendment, there would be no need to
discontinue hedge accounting if a hedging derivative was
novated, provided certain criteria are met. The interpretation
is effective for annual periods beginning on or after 1 January
2014.
U. IFRS 9 “Financial Instruments” (Hedge accounting and
amendments to IFRS 9, IFRS 7 and IAS 39)
The IASB announced amendments to the accounting
requirements for financial instruments, which include: (1)
bring into effect a substantial overhaul of hedge accounting
that will allow entities to better reflect their risk management
activities in the financial statements; (2) allow the changes to
address the ‘own credit’ not to be recognized in profit or loss
that were already included in IFRS 9 Financial Instruments to
be applied in isolation without the need to change any other
accounting for financial instruments; and (3) remove the 1
January 2015 mandatory effective date of IFRS 9.
V. IAS 19 “Employee Benefits” (Defined benefit plans: employee
contributions)
The amendments apply to contributions from employees or
third parties to defined benefit plans. The objective of the
amendments is to provide a policy choice for a simplified
accounting for contributions that are independent of the
number of years of employee service, for example, employee
contributions that are calculated according to a fixed
percentage of salary. The amendment is effective for annual
periods beginning on or after 1 July 2014.
W. Improvements to International Financial Reporting Standards
(2010-2012 cycle):
IFRS 2 “Share-based Payment”
The annual improvements amend the definitions of 'vesting
condition' and 'market condition' and adds definitions for
'performance condition' and 'service condition' (which were
previously part of the definition of 'vesting condition'). The
amendment prospectively applies to share-based payment
transactions for which the grant date is on or after 1 July 2014.
IFRS 3 “Business Combinations”
The amendments include: (1) deleting the reference to
"other applicable IFRSs" in the classification requirements;
TATUNG 2012 Annual Report
Financial Overview
X.
(2) deleting the reference to "IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or other IFRSs as appropriate",
other contingent consideration that is not within the scope
of IFRS 9 shall be measured at fair value at each reporting
date and changes in fair value shall be recognized in profit
or loss; (3) amending the classification requirements of IFRS 9
Financial Instruments to clarify that contingent consideration
that is a financial asset or financial liability can only be
measured at fair value, with changes in fair value being
presented in profit or loss depending on the requirements
of IFRS 9. The amendments apply prospectively to business
combinations for which the acquisition date is on or after 1
July 2014.
IFRS 8 “Operating Segments”
The amendments require an entity to disclose the judgments
made by management in applying the aggregation criteria
to operating segments. The amendments also clarify that
an entity shall only provide reconciliations of the total of
the reportable segments' assets to the entity's assets if the
segment assets are reported regularly. The amendment is
effective for annual periods beginning on or after 1 July 2014.
IFRS 13 “Fair Value Measurement”
The amendment to the Basis for Conclusions of IFRS 13
clarifies that when deleting paragraph B5.4.12 of IFRS 9
Financial Instruments and paragraph AG79 of IAS 39 Financial
Instruments: Recognition and Measurement as consequential
amendments from IFRS 13 Fair Value Measurement, the IASB
did not intend to change the measurement requirements for
short-term receivables and payables.
IAS 16 “Property, Plant and Equipment”
The amendment clarifies that when an item of property, plant
and equipment is revalued, the accumulated depreciation
at the date of revaluation is adjusted to equal the difference
between the gross carrying amount and the carrying amount
of the asset. The amendment is effective for annual periods
beginning on or after 1 July 2014.
IAS 24 “Related Party Disclosures”
The amendment clarifies that an entity providing key
management personnel services to the reporting entity
or to the parent of the reporting entity is a related party of
the reporting entity. The amendment is effective for annual
periods beginning on or after 1 July 2014.
IAS 38 “Intangible Assets”
The amendment clarifies that when an intangible asset is
revalued, the accumulated amortization at the date of
revaluation is adjusted to equal the difference between the
gross carrying amount and the carrying amount of the asset.
The amendment is effective for annual periods beginning on
or after 1 July 2014.
Improvements to International Financial Reporting Standards
(2011-2013 cycle):
IFRS 1 “First-time Adoption of International Financial Reporting
Standards”
The amendment clarifies that an entity, in its first IFRS financial
statements, has the choice between applying an existing and
currently effective IFRS or applying early a new or revised IFRS
that is not yet mandatorily effective, provided that the new or
revised IFRS permits early application.
IFRS 3 “Business Combinations”
This amendment clarifies that paragraph 2A. of IFRS 3 Business
Combinations excludes the formation of all types of joint
arrangements as defined in IFRS 11 Joint Arrangements from
the scope of IFRS 3; and the scope exception only applies
to the financial statements of the joint venture or the joint
operation itself. The amendment is effective for annual
periods beginning on or after 1 July 2014.
IFRS 13 “Fair Value Measurement”
The amendment clarifies that paragraph 52 of IFRS 13
includes a scope exception for measuring the fair value of a
group of financial assets and financial liabilities on a net basis.
The objective of this amendment is to clarify that this portfolio
exception applies to all contracts within the scope of IAS 39
Financial Instruments: Recognition and Measurement or IFRS
9 Financial Instruments, regardless of whether they meet the
definitions of financial assets or financial liabilities as defined
in IAS 32 Financial Instruments: Presentation. The amendment
is effective for annual periods beginning on or after 1 July
2014.
IAS 40 “Investment Property”
The amendment clarifies the interrelationship of IFRS 3 and
IAS 40 when classifying property as investment property
or owner-occupied property; in determining whether a
specific transaction meets the definition of both a business
combination as defined in IFRS 3 Business Combinations and
investment property as defined in IAS 40 Investment Property,
separate application of both standards independently of
each other is required. The amendment is effective for annual
periods beginning on or after 1 July 2014.
Y. IFRS 14 “Regulatory Deferral Accounts”
IFRS 14 permits first-time adopters to continue to recognize
amounts related to rate regulation in accordance with their
previous GAAP requirements when they adopt IFRS. However,
to enhance comparability with entities that already apply
IFRS and do not recognize such amounts, the Standard
requires that the effect of rate regulation must be presented
separately from other items. IFRS 14 is effective for annual
periods beginning on or after 1 January 2016.
The abovementioned standards and interpretations issued by
IASB have not yet recognized by FSC at the date of issuance
of the Company’s financial statements, the local effective
dates are to be determined by FSC. As the Company is still
currently determining the potential impact of the standards
and interpretations listed under A~B, D~K, M~N, and P~X it is not
practicable to estimate their impact on the Company at this point
in time. All other standards and interpretations have no material
impact on the Company.
4. Summary of significant accounting policies
(1) Statement of compliance
The financial statements of the Company for the years ended 31
December 2013 and 2012 have been prepared in accordance
with the Regulations Governing the Preparation of Financial
Reports by Securities Issuers (“the Regulations”).
(2) Basis of preparation
The Company prepared parent company only financial
statements in accordance with Article 21 of the Regulations,
which provided that the profit or loss and other comprehensive
income for the period presented in the parent company only
financial statements shall be the same as the profit or loss and
other comprehensive income attributable to stockholders of the
parent presented in the consolidated financial statements for the
period, and the total equity presented in the parent company
only financial statements shall be the same as the equity
attributable to the parent company presented in the consolidated
financial statements. Therefore, the Company accounted for its
investments in subsidiaries using equity method and, accordingly,
made necessary adjustments.
The parent company only financial statements have been
prepared on a historical cost basis, except for financial instruments
measured at fair value. The parent company only expressed in
Thousands of New Taiwan Dollars.
(3) Foreign currency transactions
The Company’s parent company only financial statements are
presented in its functional currency, New Taiwan Dollars (NTD).
Items included in the financial statements are measured using
that functional currency.
Transactions in foreign currencies are initially recorded by the
Company at functional currency rates prevailing at the date of
the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the functional currency
closing rate of exchange ruling at the reporting date. Nonmonetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair
value is determined. Non-monetary items that are measured
at historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions.
All exchange differences arising on the settlement of monetary
items or on translating monetary items are taken to profit or loss in
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Financial Overview
the period in which they arise except for the following:
A. Exchange differences arising from foreign currency
borrowings for an acquisition of a qualifying asset to the
extent that they are regarded as an adjustment to interest
costs are included in the borrowing costs that are eligible for
capitalization.
B. Foreign currency items within the scope of IAS 39 Financial
Instruments: Recognition and Measurement are accounted
for based on the accounting policy for financial instruments.
C. Exchange differences arising on a monetary item that
forms part of a reporting entity’s net investment in a foreign
operation is recognized initially in other comprehensive
income and reclassified from equity to profit or loss on
disposal of the net investment.
When a gain or loss on a non-monetary item is recognized
in other comprehensive income, any exchange component
of that gain or loss is recognized in other comprehensive
income. When a gain or loss on a non-monetary item is
recognized in profit or loss, any exchange component of that
gain or loss is recognized in profit or loss.
(4) Translation of financial statements in foreign currency
The assets and liabilities of foreign operations are translated into
NTD at the closing rate of exchange prevailing at the reporting
date and their income and expenses are translated at an
average rate for the period. The exchange differences arising on
the translation are recognized in other comprehensive income.
On the disposal of a foreign operation, the cumulative amount
of the exchange differences relating to that foreign operation,
recognized in other comprehensive income and accumulated in
the separate component of equity, is reclassified from equity to
profit or loss when the gain or loss on disposal is recognized.
On the partial disposal of a subsidiary that includes a foreign
operation that does not result in a loss of control, the proportionate
share of the cumulative amount of the exchange differences
recognized in other comprehensive income is re-attributed to
the non-controlling interests in that foreign operation. In partial
disposal of an associate or jointly controlled entity that includes
a foreign operation that does not result in a loss of significant
influence or joint control, only the proportionate share of the
cumulative amount of the exchange differences recognized in
other comprehensive income is reclassified to profit or loss.
Any goodwill and any fair value adjustments to the carrying
amounts of assets and liabilities arising on the acquisition of a
foreign operation are treated as assets and liabilities of the foreign
operation and expressed in its functional currency.
(5) Current and non-current distinction
An asset is classified as current when:
A. The Group expects to realize the asset, or intends to sell or
consume it, in its normal operating cycle
B. The Group holds the asset primarily for the purpose of trading
C. The Group expects to realize the asset within twelve months
after the reporting period
D. The asset is cash or cash equivalent unless the asset is
restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.
A liability is classified as current when:
A. The Group expects to settle the liability in its normal operating
cycle
B. The Group holds the liability primarily for the purpose of
trading
C. The liability is due to be settled within twelve months after the
reporting period
D. The Group does not have an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting period. Terms of a liability that could, at the option
of the counterparty, result in its settlement by the issue of
equity instruments do not affect its classification.
(6) Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand
deposits and short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value (include fixedterm deposits that have maturities of 3 months from the date of
acquisition).
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(7) Financial instruments
Financial assets and financial liabilities are recognized when the
Company becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities within the scope of
IAS 39 Financial Instruments: Recognition and Measurement
are recognized initially at fair value plus or minus, in the case
of investments not at fair value through profit or loss, directly
attributable transaction costs.
A. Financial assets
The Company accounts for regular way purchase or sales of
financial assets on the trade date.
Financial assets of the Company are classified as financial
assets at fair value through profit or loss, held-to-maturity
investments, available-for-sale financial assets and loans and
receivables. The Company determines the classification of its
financial assets at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include
financial assets held for trading and financial assets
designated upon initial recognition at fair value through profit
or loss.
A financial asset is classified as held for trading if:
(a) it is acquired or incurred principally for the purpose of
selling or repurchasing it in the near term;
(b) on initial recognition it is part of a portfolio of identified
financial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term profit-taking; or
(c) it is a derivative (except for a derivative that is a financial
guarantee contract or a designated and effective
hedging instrument).
If a contract contains one or more embedded derivatives, the
entire hybrid (combined) contract may be designated as a
financial asset at fair value through profit or loss; or a financial
asset may be designated as at fair value through profit or loss
when doing so results in more relevant information, because
either:
(a) it eliminates or significantly reduces a measurement or
recognition inconsistency; or
(b) a group of financial assets, financial liabilities or both is
managed and its performance is evaluated on a fair value
basis, in accordance with a documented risk management
or investment strategy, and information about the group is
provided internally on that basis to the key management
personnel.
Financial assets at fair value through profit or loss are
measured at fair value with changes in fair value recognized
in profit or loss. Dividends or interests on financial assets at
fair value through profit or loss are recognized in profit or
loss (including those received during the period of initial
investment). If financial assets do not have quoted prices
in an active market and their far value cannot be reliably
measured, then they are classified as financial assets
measured at cost on balance sheet and carried at cost net
of accumulated impairment losses, if any, as at the reporting
date.
Available-for-sale financial assets
Available-for-sale investments are non-derivative financial
assets that are designated as available-for-sale or those not
classified as financial assets at fair value through profit or loss,
held-to-maturity financial assets, or loans and receivables.
Foreign exchange gains and losses and interest calculated
using the effective interest method relating to monetary
available-for-sale financial assets, or dividends on an
available-for-sale equity instrument, are recognized in profit or
loss. Subsequent measurement of available-for-sale financial
assets at fair value is recognized in equity until the investment
is derecognized, at which time the cumulative gain or loss is
recognized in profit or loss.
If equity instrument investments do not have quoted prices
in an active market and their far value cannot be reliably
measured, then they are classified as financial assets
measured at cost on balance sheet and carried at cost net
of accumulated impairment losses, if any, as at the reporting
date.
TATUNG 2012 Annual Report
Financial Overview
Held-to-maturity financial assets
Non-derivative financial assets with fixed or determinable
payments and fixed maturities are classified as held-tomaturity when the Company has the positive intention
and ability to hold it to maturity, other than those that are
designated as available-for-sale, classified as financial assets
at fair value through profit or loss, or meet the definition of
loans and receivables.
After initial measurement held-to-maturity financial assets
are measured at amortized cost using the effective interest
method, less impairment. Amortized cost is calculated by
taking into account any discount or premium on acquisition
and fee or transaction costs. The effective interest method
amortization is recognized in profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an
active market other than those that the Company upon initial
recognition designates as available for sale, classified as at
fair value through profit or loss, or those for which the holder
may not recover substantially all of its initial investment.
Loans and receivables are separately presented on the
balance sheet as receivables or bond investments for which
no active market exists. After initial measurement, such
financial assets are subsequently measured at amortized
cost using the effective interest rate method, less impairment.
Amortized cost is calculated by taking into account any
discount or premium on acquisition and fee or transaction
costs. The effective interest method amortization is
recognized in profit or loss.
Impairment of financial assets
The Company assesses at each reporting date whether
there is any objective evidence that a financial asset other
than the financial assets at fair value through profit or loss is
impaired. A financial asset is deemed to be impaired if, and
only if, there is objective evidence of impairment as a result
of one or more loss events that has occurred after the initial
recognition of the asset and that loss event has an impact
on the estimated future cash flows of the financial asset. The
carrying amount of the financial asset impaired, other than
receivables impaired which are reduced through the use of
an allowance account, is reduced directly and the amount
of the loss is recognized in profit or loss.
A significant or prolonged decline in the fair value of
an available-for-sale equity instrument below its cost is
considered a loss event.
Other loss events include:
(a) significant financial difficulty of the issuer or obligor; or
(b) a breach of contract, such as a default or delinquency in
interest or principal payments; or
(c) it becoming probable that the borrower will enter
bankruptcy or other financial reorganisation; or
(d) the disappearance of an active market for that financial
asset because of financial difficulties.
For held-to-maturity financial assets and loans and
receivables measured at amortized cost, the Company
first assesses individually whether objective evidence of
impairment exists individually for financial asset that are
individually significant, or collectively for financial assets that
are not individually significant. If the Company determines
that no objective evidence of impairment exits for an
individually assessed financial asset, whether significant or not,
it includes the asset in a group of financial assets with similar
credit risk characteristics and collectively assesses them for
impairment. If there is objective evidence that an impairment
loss has been incurred, the amount of the loss is measured
as the difference between the assets carrying amount and
the present value of estimated future cash flows. The present
value of the estimated future cash flows is discounted at
the financial assets original effective interest rate. If a loan
has a variable interest rate, the discount rate for measuring
any impairment loss is the current effective interest rate.
Interest income is accrued based on the reduced carrying
amount of the asset, using the rate of interest used to discount
the future cash flows for the purpose of measuring the
impairment loss. Receivables together with the associated
allowance are written off when there is no realistic prospect
of future recovery. If, in a subsequent year, the amount of the
B.
estimated impairment loss increases or decreases because of
an event occurring after the impairment was recognized, the
previously recognized impairment loss is increased or reduced
by adjusting the allowance account. If a future write-off is
later recovered, the recovery is credited to profit or loss.
In the case of equity investments classified as available-forsale, where there is evidence of impairment, the cumulative
loss - measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on
that investment previously recognized in profit or loss - is
removed from other comprehensive income and recognized
in profit or loss. Impairment losses on equity investments
are not reversed through profit or loss; increases in their fair
value after impairment are recognized directly in other
comprehensive income.
In the case of debt instruments classified as available-forsale, the amount recorded for impairment is the cumulative
loss measured as the difference between the amortized
cost and the current fair value, less any impairment loss
on that investment previously recognized in profit or loss.
Future interest income continues to be accrued based on
the reduced carrying amount of the asset, using the rate of
interest used to discount the future cash flows for the purpose
of measuring the impairment loss. The interest income is
recognized in profit or loss. If, in a subsequent year, the fair
value of a debt instrument increases and the increase can be
objectively related to an event occurring after the impairment
loss was recognized in profit or loss, the impairment loss is
reversed through profit or loss.
Derecognition of financial assets
A financial asset is derecognized when:
(a) The rights to receive cash flows from the asset have
expired
(b) The Company has transferred the asset and substantially
all the risks and rewards of the asset have been transferred
(c) The Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has
transferred control of the asset.
On derecognition of a financial asset in its entirety,
the difference between the carrying amount and the
consideration received or receivable including any
cumulative gain or loss that had been recognized in other
comprehensive income, is recognized in profit or loss.
Financial liabilities and equity
Classification between liabilities or equity
The Company classifies the instrument issued as a financial
liability or an equity instrument in accordance with the
substance of the contractual arrangement and the definitions
of a financial liability, and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. The transaction costs of an equity transaction are
accounted for as a deduction from equity (net of any related
income tax benefit) to the extent they are incremental costs
directly attributable to the equity transaction that otherwise
would have been avoided.
Compound instruments
The Company evaluates the terms of the convertible bonds
issued to determine whether it contains both a liability and an
equity component. Furthermore, the Company assesses if the
economic characteristics and risks of the put and call options
contained in the convertible bonds are closely related to the
economic characteristics and risk of the host contract before
separating the equity element.
For the liability component excluding the derivatives, its fair
value is determined based on the rate of interest applied at
that time by the market to instruments of comparable credit
status. The liability component is classified as a financial
liability measured at amortized cost before the instrument is
converted or settled.
For the embedded derivative that is not closely related to
the host contract (for example, if the exercise price of the
embedded call or put option is not approximately equal
on each exercise date to the amortized cost of the host
debt instrument), it is classified as a liability component
and subsequently measured at fair value through profit or
loss unless it qualifies for an equity component. The equity
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Financial Overview
component is assigned the residual amount after deducting
from the fair value of the instrument as a whole the amount
separately determined for the liability component. Its
carrying amount is not remeasured in the subsequent
accounting periods. If the convertible bond issued does not
have an equity component, it is accounted for as a hybrid
instrument in accordance with the requirements under IAS 39
Financial Instruments: Recognition and Measurement.
Transaction costs are apportioned between the liability and
equity components of the convertible bond based on the
allocation of proceeds to the liability and equity components
when the instruments are initially recognized.
On conversion of a convertible bond before maturity, the
carrying amount of the liability component being the
amortized cost at the date of conversion is transferred to
equity.
Financial liabilities
Financial liabilities within the scope of IAS 39 Financial
Instruments: Recognition and Measurement are classified as
financial liabilities at fair value through profit or loss or financial
liabilities measured at amortized cost upon initial recognition.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss.
A financial liability is classified as held for trading if:
(a) it is acquired or incurred principally for the purpose of
selling or repurchasing it in the near term;
(b) on initial recognition it is part of a portfolio of identified
financial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term profit-taking; or
(c) it is a derivative (except for a derivative that is a financial
guarantee contract or a designated and effective
hedging instrument).
If a contract contains one or more embedded derivatives,
the entire hybrid (combined) contract may be designated
as a financial liability at fair value through profit or loss;
or a financial liability may be designated as at fair value
through profit or loss when doing so results in more relevant
information, because either:
(a) it eliminates or significantly reduces a measurement or
recognition inconsistency; or
(b) a group of financial assets, financial liabilities or both is
managed and its performance is evaluated on a fair
value basis, in accordance with a documented risk
management or investment strategy, and information
about the group is provided internally on that basis to the
key management personnel.
Gains or losses on the subsequent measurement of liabilities
at fair value through profit or loss, including interest paid, are
recognized in profit or loss.
If the financial liabilities at fair value through profit or loss do
not have quoted prices in an active market and their far
value cannot be reliably measured, then they are classified
as financial liabilities measured at cost on balance sheet and
carried at cost as at the reporting date.
Financial liabilities at amortized cost
Financial liabilities measured at amortized cost include
interest bearing loans and borrowings that are subsequently
measured using the effective interest rate method after initial
recognition. Gains and losses are recognized in profit or loss
when the liabilities are derecognized as well as through the
effective interest rate method amortization process.
Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or transaction
costs.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under
the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms
of an existing liability are substantially modified (whether or
not attributable to the financial difficulty of the debtor), such
an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and
245
the difference in the respective carrying amounts and the
consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognized in profit or loss.
C. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net
amount reported in the balance sheet if, and only if, there is
a currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net basis, or to
realize the assets and settle the liabilities simultaneously.
D. Fair value of financial instruments
The fair value of financial instruments that are traded in active
markets at each reporting date is determined by reference to
quoted market prices, without any deduction for transaction
costs.
For financial instruments not traded in an active market,
the fair value is determined using appropriate valuation
techniques. Such techniques may include using recent
arm’s length market transactions; reference to the current fair
value of another instrument that is substantially the same; a
discounted cash flow analysis or other valuation models.
(8) Derivative financial instrument
The Company uses derivative financial instruments to hedge
its foreign currency risks and interest rate risks. A derivative is
classified in the balance sheet as financial assets or liabilities at fair
value through profit or loss (held for trading) except for derivatives
that are designated effective hedging instruments which are
classified as derivative financial assets or liabilities for hedging.
Derivative financial instruments are initially recognized at fair value
on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative. Any gains or losses arising
from changes in the fair value of derivatives are taken directly to
profit or loss, except for the effective portion of cash flow hedges,
which is recognized in equity.
Derivatives embedded in host contracts are accounted for as
separate derivatives and recorded at fair value if their economic
characteristics and risks are not closely related to those of the
host contracts and the host contracts are not held for trading or
designated at fair value though profit or loss. These embedded
derivatives are measured at fair value with changes in fair value
recognized in profit or loss.
(9) Inventories
Inventories are valued at lower of cost and net realizable value
item by item.
Costs incurred in bringing each inventory to its present location
and condition are accounted for as follows:
Raw materials - purchase cost on weighted average cost formula
Work in progress and finished goods - cost of direct materials and
labor and a proportion of manufacturing overheads based on
normal operating capacity but excluding borrowing costs.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.
(10) Construction contract
When the outcome of a construction contract can be estimated
reliably, contract revenue and contract costs associated with
the construction contract shall be recognised as revenue and
expenses respectively by reference to the stage of completion
of the contract activity at the end of the reporting period. The
recognition of revenue and expenses by reference to the stage
of completion of a contract is often referred to as the percentage
of completion method. Under this method, contract revenue is
matched with the contract costs incurred in reaching the stage
of completion, resulting in the reporting of revenue, expenses
and profit which can be attributed to the proportion of work
completed.
When the outcome of a construction contract cannot be
estimated reliably, revenue shall be recognised only to the extent
of contract costs.
When it is probable that total contract costs will exceed total
contract revenue, the expected loss shall be recognised as an
expense immediately.
TATUNG 2012 Annual Report
Financial Overview
(11) Investments accounted for using the equity method
The Company’s investment in its subsidiaries is presented as
investments accounted for using the equity method and adjusted
by necessary measurements in accordance with Article 21 of
the Regulations, which provided that the profit or loss and other
comprehensive income for the period presented in the parent
company only financial statements shall be the same as the
profit or loss and other comprehensive income attributable to
stockholders of the parent presented in the consolidated financial
statements for the period, and the total equity presented in the
parent company only financial statements shall be the same as
the equity attributable to the parent company presented in the
consolidated financial statements.
These adjustments resulted from considering the different
treatments of investments in subsidiaries under IAS 27 Consolidated
Financial Statements and under IFRS applied to different entity
level. These investments may be debited or credited using the
equity method, as share of profits (losses) of subsidiaries, associates
and joint ventures, or share of other comprehensive income (loss)
of subsidiaries, associates and joint ventures.
The Company's investment in its associate is accounted for using
the equity method other than those that meet the criteria to be
classified as held for sale. An associate is an entity over which the
Company has significant influence.
Under the equity method, the investment in the associate is
carried in the balance sheet at cost and adjusted thereafter
for the post-acquisition change in the Company's share of
net assets of the associate. After the interest in the associate
is reduced to zero, additional losses are provided for, and a
liability is recognized, only to the extent that the Company has
incurred legal or constructive obligations or made payments
on behalf of the associate. Unrealized gains and losses resulting
from transactions between the Company and the associate are
eliminated to the extent of the Company's related interest in the
associate.
When changes in the net assets of an associate occur and not
those that are recognized in profit or loss or other comprehensive
income and do not affects the Company's percentage of
ownership interests in the associate, the Company recognizes such
changes in equity based on its percentage of ownership interests.
The resulting capital surplus recognized will be reclassified to profit
or loss at the time of disposing the associate on a pro-rata basis.
When the associate issues new stock, and the Company's interest
in an associate is reduced or increased as the Company fails
to acquire shares newly issued in the associate proportionately
to its original ownership interest, the increase or decrease in the
interest in the associate is recognized in Additional Paid in Capital
and Investment in associate. When the interest in the associate
is reduced, the cumulative amounts previously recognized in
other comprehensive income are reclassified to profit or loss or
other appropriate items. The aforementioned capital surplus
recognized is reclassified to profit or loss on a pro rata basis when
the Company disposes the associate.
The financial statements of the associate are prepared for the
same reporting period as the Company. Where necessary,
adjustments are made to bring the accounting policies in line with
those of the Company.
The Company determines at each reporting date whether there
is any objective evidence that the investment in the associate
is impaired in accordance with IAS 39 Financial Instruments:
Recognition and Measurement. If this is the case the Company
calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying
value and recognizes the amount in the ‘share of profit or loss
of an associate’ in the statement of comprehensive income in
accordance with IAS 36 Impairment of Assets. In determining the
value in use of the investment, the Company estimates:
A. Its share of the present value of the estimated future cash
flows expected to be generated by the associate, including
the cash flows from the operations of the associate and the
proceeds on the ultimate disposal of the investment; or
B. The present value of the estimated future cash flows expected
to arise from dividends to be received from the investment
and from its ultimate disposal.
Because goodwill that forms part of the carrying amount of
an investment in an associate is not separately recognized,
it is not tested for impairment separately by applying the
requirements for impairment testing goodwill in IAS 36
Impairment of Assets.
Upon loss of significant influence over the associate, the
Company measures and recognizes any retaining investment
at its fair value. Any difference between the carrying amount
of the associate upon loss of significant influence and the fair
value of the retaining investment and proceeds from disposal
is recognized in profit or loss.
The Company recognizes its interest in the jointly controlled
entities using the equity method other than those that meet
the criteria to be classified as held for sale. A jointly controlled
entity is a joint venture that involves the establishment of a
corporation, partnership or other entity.
(12) Property, plant and equipment
Proper ty, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment losses,
if any. Such cost includes the cost of dismantling and removing
the item and restoring the site on which it is located and borrowing
costs for construction in progress if the recognition criteria are
met. Each part of an item of property, plant and equipment with
a cost that is significant in relation to the total cost of the item
is depreciated separately. When significant parts of property,
plant and equipment are required to be replaced in intervals,
the Group recognized such parts as individual assets with specific
useful lives and depreciation, respectively. The carrying amount
of those parts that are replaced is derecognized in accordance
with the derecognition provisions of IAS 16 Property, plant and
equipment. When a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognized in profit or loss as
incurred.
Depreciation is calculated on a straight-line basis over the
estimated economic lives of the following assets:
Buildings
3 ~ 50 year
Machinery and equipment
3 ~ 10 year
Transportation equipment
3 ~ 10 year
Office equipment
3 ~ 10 year
Leased assets
3 ~ 50 year
Leasehold improvements
The shorter of lease terms or
economic useful lives
Other equipment
2 ~ 10 year
An item of property, plant and equipment and any significant
part initially recognized is derecognized upon disposal or when
no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset is recognized
in profit or loss.
The assets’ residual values, useful lives and methods of
depreciation are reviewed at each financial year end and
adjusted prospectively, if appropriate.
(13) Leases
Company as a lessee
Finance leases which transfer to the Company substantially all
the risks and benefits incidental to ownership of the leased item,
are capitalized at the commencement of the lease at the fair
value of the leased property or, if lower, at the present value of
the minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as
to achieve a constant rate of interest on the remaining balance of
the liability. Finance charges are recognized in profit or loss.
A leased asset is depreciated over the useful life of the asset.
However, if there is no reasonable certainty that the Company
will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful life of the
asset and the lease term.
Operating lease payments are recognized as an expense on a
straight-line basis over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all
the risks and benefits of ownership of the asset are classified as
operating leases. Initial direct costs incurred in negotiating an
operating lease are added to the carrying amount of the leased
asset and recognized over the lease term on the same basis as
rental income. Rental revenue generated from operating lease
is recognized over the lease term using the straight line method.
Contingent rents are recognized as revenue in the period in which
they are earned.
246
Financial Overview
(14) Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired in a
business combination is its fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at
cost less any accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in profit or loss for the year in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or
indefinite.
Intangible assets with finite lives are amortized over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortization period and the amortization method for an
intangible asset with a finite useful life is reviewed at least at the
end of each financial year. Changes in the expected useful life
or the expected pattern of consumption of future economic
benefits embodied in the asset is accounted for by changing the
amortization period or method, as appropriate, and are treated
as changes in accounting estimates.
Intangible assets with indefinite useful lives are not amortized,
but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life
is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in profit or loss when the asset is derecognized.
Research and development costs
Research costs are expensed as incurred. Development
expenditures, on an individual project, are recognized as an
intangible asset when the Company can demonstrate:
A. The technical feasibility of completing the intangible asset so
that it will be available for use or sale
B. Its intention to complete and its ability to use or sell the asset
C. How the asset will generate future economic benefits
D. The availability of resources to complete the asset
E. The ability to measure reliably the expenditure during
development
Following initial recognition of the development expenditure as an
asset, the cost model is applied requiring the asset to be carried
at cost less any accumulated amortization and accumulated
impairment losses. During the period of development, the asset is
tested for impairment annually. Amortization of the asset begins
when development is complete and the asset is available for use.
It is amortized over the period of expected future benefit.
Computer software
The cost of computer software is amortized on a straight-line basis
over the estimated useful life (3 years).
A summary of the policies applied to the Company’s intangible
assets is as follows:
Useful lives
Amortization method used
Computer software
Finite
Amortized on a straight- line
basis over the estimated
useful life
Internally generated or
acquired
Acquired
(15) Impairment of non-financial assets
The Company assesses at the end of each reporting period
whether there is any indication that an asset in the scope of IAS
36 Impairment of Assets may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Company estimates the asset’s recoverable amount. An
asset’s recoverable amount is the higher of an asset’s or cashgenerating unit’s (“CGU”) fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
247
those from other assets or groups of assets. Where the carrying
amount of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable
amount.
For assets excluding goodwill, an assessment is made at each
reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have
decreased. If such indication exists, the Company estimates
the asset’s or cash-generating unit’s recoverable amount. A
previously recognized impairment loss is reversed only if there has
been an increase in the estimated service potential of an asset
which in turn increases the recoverable amount. However, the
reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation, had no
impairment loss been recognized for the asset in prior years.
An impairment loss of continuing operations or a reversal of such
impairment loss is recognized in profit or loss.
(16) Provisions
Provisions are recognized when the Company has a present
obligation (legal or constructive) as a result of a past event, it is
probably that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where
the Company expects some or all of a provision to be reimbursed,
the reimbursement is recognized as a separate asset but only
when the reimbursement is virtually certain. If the effect of the
time value of money is material, provisions are discounted using
a current pre-tax rate that reflects the risks specific to the liability.
Where discounting is used, the increase in the provision due to the
passage of time is recognized as a borrowing cost.
Maintenance warranties
A provision is recognized for expected warranty claims on
products sold, based on past experience, management’s
judgement and other known factors.
(17)Treasury shares
Own equity instruments which are reacquired (treasury shares)
are recognized at cost and deducted from equity. Any
difference between the carrying amount and the consideration is
recognized in equity.
(18) Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue
can be reliably measured. Revenue is measured at the fair
value of the consideration received or receivable. The following
specific recognition criteria must also be met before revenue is
recognized:
Sale of goods
Revenue from the sale of goods is recognized when all the
following conditions have been satisfied:
A. the significant risks and rewards of ownership of the goods
have passed to the buyer;
B. neither continuing managerial involvement nor effective
control over the goods sold have been retained;
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 entity; and
E. the costs incurred in respect of the transaction can be
measured reliably.
Rendering of Services
Revenue from Information systems integration services is
recognized by reference to the stage of completion. Stage of
completion is measured by reference to the proportion that
contract cost incurred for work performed to date bear to the
estimated total contract costs. Where the contract outcome
cannot be measured reliably, revenue is recognized only to the
extent that the expenses incurred are eligible to be recovered.
Interest income
For all financial assets measured at amortized cost (including
loans and receivables and held-to-maturity financial assets) and
available-for-sale financial assets, interest income is recorded
using the effective interest rate method and recognized in profit or
loss.
Dividends
TATUNG 2012 Annual Report
Financial Overview
Revenue is recognized when the Company’s right to receive the
payment is established.
Rent Income
Rental income from operating lease is accounted by straight-line
basis on the period of lease.
(19) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the cost of the respective assets. All
other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
(20) Government grants
Government grants are recognized where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. Where the grant relates to an
asset, it is recognized as deferred income and released to income
in equal amounts over the expected useful life of the related
asset. When the grant relates to an expense item, it is recognized
as income over the period necessary to match the grant on a
systematic basis to the costs that it is intended to compensate.
Where the Company receives non-monetary grants, the asset
and the grant are recorded gross at nominal amounts and
released to the statement of comprehensive income over the
expected useful life and pattern of consumption of the benefit of
the underlying asset by equal annual installments. Where loans
or similar assistance are provided by governments or related
institutions with an interest rate below the current applicable
market rate, the effect of this favorable interest is regarded as
additional government grant.
(21) Post-employment benefits
All regular employees of the Company is entitled to a pension plan
that is managed by an independently administered pension fund
committee. Fund assets are deposited under the committee’s
name in the specific bank account and hence, not associated
with the Company. Therefore fund assets are not included in the
parent company only financial statements.
For the defined contribution plan, the Company will make a
monthly contribution of no less than 6% of the monthly wages of
the employees subject to the plan. The Company recognizes
expenses for the defined contribution plan in the period in which
the contribution becomes due. Post-employment benefit plan
that is classified as a defined benefit plan uses the Projected Unit
Credit Method to measure its obligations and costs based on
actuarial assumptions. The Company recognizes all actuarial
gains and losses in the period in which they occur in other
comprehensive income. Actuarial gains and losses recognized
in other comprehensive income are recognized immediately in
retained earnings.
(22)Share-based payment transactions
The cost of equity-settled transactions between the Company
and its employees is recognized based on the fair value of the
equity instruments granted. The fair value of the equity instruments
is determined by using an appropriate pricing model.
The cost of equity-settled transactions is recognized, together with
a corresponding increase in other capital reserves in equity, over
the period in which the performance and/or service conditions
are fulfilled. The cumulative expense recognized for equitysettled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and
the Company’s best estimate of the number of equity instruments
that will ultimately vest. The income statement expense or credit
for a period represents the movement in cumulative expense
recognized as at the beginning and end of that period.
No expense is recognized for awards that do not ultimately vest,
except for equity-settled transactions where vesting is conditional
upon a market or non-vesting condition, which are treated as
vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
Where the terms of an equity-settled transaction award are
modified, the minimum expense recognized is the expense as
if the terms had not been modified, if the original terms of the
award are met. An additional expense is recognized for any
modification that increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the employee
as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it
vested on the date of cancellation, and any expense not yet
recognized for the award is recognized immediately. This includes
any award where non-vesting conditions within the control of
either the entity or the employee are not met. However, if a new
award is substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the cancelled
and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional
share dilution in the computation of diluted earnings per share
The cost of restricted stocks issued is recognized as salary
expense based on the fair value of the equity instruments on
the grant date, together with a corresponding increase in other
capital reserves in equity, over the vesting period. The Company
recognized unearned employee salary which is a transitional
contra equity account; the balance in the account will be
recognized as salary expense over the passage of vesting period.
IFRS 1 First-Time Adoption of International Financial Reporting
Standards allows first-time adopters certain exemptions from the
retrospective application of certain IFRS. As such, IFRS 2 Share
based Payment has not been applied to equity instruments
in share-based payment transactions that were granted on
or before 7 November 2002, nor has it been applied to equity
instruments granted after 7 November 2002 that vested before
1 January 2012 (the date of transition to TIFRS). For cash settled
share based payment transactions, the Company has not applied
IFRS 2 to liabilities that were settled before 1 January 2012.
(23) Income taxes
Income tax expense (income) is the aggregate amount included
in the determination of profit or loss for the period in respect of
current tax and deferred tax.
Current income tax
Current income tax assets and liabilities for the current and prior
periods are measured at the amount expected to be recovered
from or paid to the taxation authorities, using the tax rates and
tax laws that have been enacted or substantively enacted by the
end of the reporting period. Current income tax relating to items
recognized in other comprehensive income or directly in equity is
recognized in other comprehensive income or equity and not in
profit or loss.
The 10% income tax for undistributed earnings is recognized as
income tax expense in the subsequent year when the distribution
proposal is approved by the Shareholders’ meeting.
Deferred tax
Deferred tax is provided on temporary differences at the reporting
date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary
differences, except:
A. Where the deferred tax liability arises from the initial
recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit
nor taxable profit or loss
B. In respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint
ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable
future.
Deferred tax assets are recognized for all deductible temporary
differences, carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences,
and the carry forward of unused tax credits and unused tax losses
can be utilized, except:
A. Where the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss
B. In respect of deductible temporary differences associated
248
Financial Overview
with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognized only to the extent
that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilized.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the year when the asset is realized
or the liability is settled, based on tax rates and tax laws that have
been enacted or substantively enacted at the reporting date.
The measurement of deferred tax assets and deferred tax 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.
Deferred tax relating to items recognized outside profit or loss
is recognized outside profit or loss. Deferred tax items are
recognized in correlation to the underlying transaction either in
other comprehensive income or directly in equity. Deferred tax
assets are reassessed at each reporting date and are recognized
accordingly.
Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current income tax assets against
current income tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
5. Significant accounting judgements, estimates and
assumptions
The preparation of the Company’s parent only financial statements
require management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent liabilities, at
the end of the reporting period. However, uncertainty about these
assumption and estimate could result in outcomes that require a
material adjustment to the carrying amount of the asset or liability
affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of
estimation uncertainty at the reporting date, that have a significant
risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
A. Fair value of financial instruments
Where the fair value of financial assets and financial liabilities
recorded in the balance sheet cannot be derived from active
markets, they are determined using valuation techniques
including the income approach (for example the discounted
cash flows model) or market approach. Changes in assumptions
about these factors could affect the reported fair value of the
financial instruments. Please refer to Note 12 for more details.
B. Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash
generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs to sell and its value in use. The
fair value less costs to sell calculation is based on available data
from binding sales transactions in an arm’s length transaction of
similar assets or observable market prices less incremental costs
that would be directly attributable to the disposal of the asset.
The value in use calculation is based on a discounted cash flow
model. The cash flows projections are derived from the budget
for the next five years and do not include restructuring activities
that the Company is not yet committed to or significant future
investments that will enhance the asset’s performance of the cash
generating unit being tested. The recoverable amount is most
sensitive to the discount rate used for the discounted cash flow
model as well as the expected future cash-inflows and the growth
rate used for extrapolation purposes.
C. Pension benefits
The cost of post-employment benefit and the present value
of the pension obligation under defined benefit pension
plans are determined using actuarial valuations. An actuarial
valuation involves making various assumptions. These include
the determination of the discount rate, future salary increases,
mortality rates and future pension increases. Please refer to Note
6 for more details.
D. Share-based payment transactions
249
The Company measures the cost of equity-settled transactions
with employees based on reference to the fair value of the equity
instruments at the date at which they are granted. Estimating
fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate
also requires determination of the most appropriate inputs to the
valuation model including the expected life of the share option,
volatility and dividend yield and making assumptions about them.
The assumptions and models used for estimating fair value for
share-based payment transactions are disclosed in Note 6.
E. Revenue recognition - sales returns and allowance
The Company estimates sales returns and allowance based on
historical experience and other known factors at the time of sale,
which reduces the operating revenue. Please refer to Note 6.
F. Income tax
Uncertainties exist with respect to the interpretation of complex tax
regulations and the amount and timing of future taxable income.
Given the wide range of international business relationships and
the long-term nature and complexity of existing contractual
agreements, differences arising between the actual results and
the assumptions made, or future changes to such assumptions,
could necessitate future adjustments to tax income and expense
already recorded. The Company establishes provisions, based
on reasonable estimates, for possible consequences of audits by
the tax authorities of the respective counties in which it operates.
The amount of such provisions is based on various factors, such
as experience of previous tax audits and differing interpretations
of tax regulations by the taxable entity and the responsible tax
authority. Such differences of interpretation may arise on a wide
variety of issues depending on the conditions prevailing in the
respective the Company company's domicile.
Deferred tax assets are recognized for all carryforward of
unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable
profit will be available or there are sufficient taxable temporary
differences against which the unused tax losses, unused tax credits
or deductible temporary differences can be utilized. The amount
of deferred tax assets determined to be recognized is based upon
the likely timing and the level of future taxable profits and taxable
temporary differences together with future tax planning strategies.
Please refer to Note 6 for more details on unrecognized deferred
tax assets as of 31 December 2013.
TATUNG 2012 Annual Report
Financial Overview
6. Contents of significant accounts
(1) Cash and cash equivalents
As at
31 December 2013
Cash on hand & demand deposits
Cash in banks
1 January 2012
$53,572
$53,541
$52,235
3,708,793
2,347,287
1,938,792
4,911
330,680
212,041
25,765
26,545
11,315
$3,793,041
$2,758,053
$2,214,383
Fixed-term deposits
Cash in transit
Total
31 December 2012
(2) Financial assets at fair value through profit or loss
As at
31 December 2013
31 December 2012
1 January 2012
Held for trading:
Derivatives not designated as hedging instruments
Forward foreign exchange contracts
$23,727
$-
$59,433
-
-
2,069
23,727
-
61,502
Open-end funds
17,624
105,787
-
Subtotal
17,624
105,787
-
Total
$41,351
$105,787
$61,502
Current
$41,351
$105,787
$59,433
-
-
2,069
$41,351
$105,787
$61,502
Embedded derivatives
Subtotal
Non-derivative financial assets
Non-current
Total
Financial assets at fair value through profit or loss were not pledged.
(3) Available-for-sale financial assets
As at
31 December 2013
31 December 2012
1 January 2012
Stocks
$540,704
$542,304
$279,345
Current
$499,622
$525,593
$262,634
41,082
16,711
16,711
$540,704
$542,304
$279,345
Non-current
Total
Financial assets available for sale were not pledged.
250
Financial Overview
(4) Held-to-maturity financial assets
As at
31 December 2013
Bonds
$20,000
31 December 2012
$20,000
1 January 2012
$20,000
Financial assets held-to-maturity were not pledged.
(5) Financial assets measured at cost
As at
31 December 2013
31 December 2012
1 January 2012
Stocks
$29,538
$29,238
$59,284
Current
$29,238
$29,238
$59,284
300
-
-
$29,538
$29,238
$59,284
Non-current
Total
Financial assets measured at cost were not pledged.
The fair value of the above investments in unlisted entities are not reliably measurable as the variability in the range of reasonable fair value
measurements is significant for the instrument and the probabilities of the various estimates within the range cannot be reasonably assessed
and used when measuring fair value. Therefore these investments were measured at cost.
The Company disposed of financial assets measured at cost in the carrying amount of NTD 0 thousand and NTD 226 thousand in the years
ended 31 December 2013 and 2012, respectively. The resulting disposal gain recognized was NTD 0 thousand and NTD 3,678 thousand in the
years ended 31 December 2013 and 2012, respectively.
(6) Bond investments for which no active market exists
As at
31 December 2013
Cash in banks-Reserve Account
31 December 2012
1 January 2012
$1,147,002
$588,060
$916,272
Fixed-term deposits
27,116
16,982
6,151
Deposit-out (Note1)
-
-
787,312
$1,174,118
$605,042
$1,709,735
Total
As at
31 December 2013
Current
Non-current
Total
31 December 2012
1 January 2012
$1,174,118
$16,982
$793,463
-
588,060
916,272
$1,174,118
$605,042
$1,709,735
Please refer to Note 8 for more details on bond investments under pledge for which no active market exists.
Note 1: The Company had provided a contract security deposit to Credit Suisse AG as guarantee for the trading of Tatung Global Strategy Investment and Trading (BVI)
Inc. on derivative financial instrument. The deposit amounted to NTD 787,312 thousand as of 1 January 2012. The guarantee expired and was settled on May 2012
251
TATUNG 2012 Annual Report
Financial Overview
(7) Notes receivables
As at
31 December 2013
Notes receivables arising from operating activities
Less: allowance for doubtful debts
Subtotal
Notes receivables-related parties
Less: allowance for doubtful debts
Subtotal
Total
31 December 2012
1 January 2012
$353,198
$449,919
$528,133
-
-
-
353,198
449,919
528,133
3,462
149,412
6,651
-
-
-
3,462
149,412
6,651
$356,660
$599,331
$534,784
Notes receivables were not pledged.
(8) Accounts receivable and Accounts receivable-related parties
As at
31 December 2013
Accounts receivable
31 December 2012
1 January 2012
$2,290,863
$2,992,703
$3,157,879
-
-
(80,059)
Less: allowance for doubtful debts
(169,773)
(126,191)
(61,918)
Net
2,121,090
2,866,512
3,015,902
642,740
649,846
398,899
(5,177)
(9,211)
(12,191)
-
-
-
637,563
640,635
386,708
Subtotal
2,758,653
3,507,147
3,402,610
Accounts receivable-related parties
2,047,172
2,482,200
3,054,872
(3,069)
-
(1,892)
(1)
(1)
(1)
Net
2,044,102
2,482,199
3,052,979
Total
$4,802,755
$5,989,346
$6,455,589
Less: allowance for sales returns and discounts
Installment accounts receivable
Less: unrealized interest revenue – trade
receivables from instalment sales
Less: allowance for doubtful debts
Net
Less: allowance for doubtful debts
Less: unrealized interest revenue – trade
receivables from instalment sales
The expected recovery of the accounts receivables from installment sales is as follows:
As at
31 December 2013
Not later than one year
31 December 2012
1 January 2012
$246,690
$362,608
$237,190
Later than one year and not later than two years
162,678
128,698
126,013
Later than two years
233,372
158,540
35,696
$642,740
$649,846
$398,899
Accounts receivables were not pledged.
Accounts receivable are generally on 30-180 day terms. The movements in the provision for impairment of accounts receivable and accounts
252
Financial Overview
receivable-related parties are as follows:
Individually impaired
As at 1 January 2013
Total
$20,135
$106,056
$126,191
-
46,651
46,651
$20,135
$152,707
$172,842
Charge(reversal) for the current period
As at 31 December 2013
Collectively impaired
As at 1 January 2012
Charge(reversal) for the current period
As at 31 December 2012
$18,135
$45,675
$63,810
2,000
60,381
62,381
$20,135
$106,056
$126,191
Impairment loss that was individually determined for the years ended 31 December 2013 and 2012, arose due to the fact that the counterparty
was in financial difficulties. The amount of impairment loss recognized was the difference between the carrying amount of the trade
receivable and the present value of its expected recoverable amount. The Company does not hold any collateral for such trade receivables.
Ageing analysis of account receivables and account receivables-related parties that are past due as at the end of the reporting period but
not impaired is as follows:
Neither past due nor
impaired
As at
1 to 6 months
Past due but not impaired
6 months to 1 year
More than 1 year
Total
31 December 2013
$2,883,686
$456,767
$145,260
$1,322,220
$4,807,933
31 December 2012
3,958,294
727,396
64,930
1,247,938
5,998,558
1 January 2012
4,692,406
631,946
44,582
1,178,906
6,547,840
(9) Construction receivables
31 December 2013
Accumulated cost incurred
31 December 2012
1 January 2012
$4,712,306
$1,994,452
$319,076
528,284
308,202
75,558
Accumulated amount of construction progress
(2,897,591)
(1,296,497)
(87,576)
Construction receivables
$2,342,999
$1,006,157
$307,058
Accumulated recognized project profit (loss)
As at 31 December 2013
Items
Contract
proceeds
Contract costs
incurred
Accumulated
recognized
total project
profit(loss)
Percentage of
completion
Amounts billed
based on
construction
progress
Construction
contracts
receivable
Retained
amount of
construction
contracts
Percentage
of completion
method
Category A
$2,322,948
$1,683,865
$168,237
5~99%
$853,447
$998,655
$-
Category B
1,739,117
1,277,279
232,087
0~99%
1,052,511
456,855
-
Category C
2,417,152
1,751,162
127,960
77~85%
991,633
887,489
-
$6,479,217
$4,712,306
$528,284
$2,897,591
$2,342,999
$-
Total
253
TATUNG 2012 Annual Report
Financial Overview
As at 31 December 2012
Items
Contract
proceeds
Contract costs
incurred
Accumulated
recognized
total project
profit(loss)
Percentage of
completion
Amounts billed
based on
construction
progress
Construction
contracts
receivable
Retained
amount of
construction
contracts
Percentage
of completion
method
Category A
$1,136,687
$760,774
$54,792
0~99%
$268,283
$547,283
$-
Category B
1,704,040
1,233,678
253,410
0~99%
1,028,214
458,874
-
$2,840,727
$1,994,452
$308,202
$1,296,497
$1,006,157
$-
Amount of
construction
progress
Construction
contracts
receivable
Retained
Amount of
construction
contracts
Total
As at 1 January 2012
Items
Contract
proceeds
Contract costs
incurred
Accumulated
recognized
total project
profit(loss)
Percentage of
completion
Percentage
of completion
method
Category A
$349,372
$74,695
$33,765
1~99%
$7,900
$100,560
$-
Category B
1,139,087
244,381
41,793
0~99%
79,676
206,498
-
$1,488,459
$319,076
$75,558
$87,576
$307,058
$-
Total
(10) Inventory
A. The details of inventories are as follows:
As at
31 December 2013
31 December 2012
1 January 2012
Raw materials
$881,586
$1,271,526
$1,602,912
Work in progress
1,348,387
1,391,135
1,278,251
Finished good
1,486,913
1,826,515
2,567,795
57,159
29,054
364,748
530,596
708,961
1,094,195
4,304,641
5,227,191
6,907,901
(137,677)
(146,181)
(124,518)
$4,166,964
$5,081,010
$6,783,383
Inventories in transit
Construction in progress
Total
Less: allowance for inventory valuation losses
Net
The cost of inventories recognized in expenses amounted to NTD 21,693,816 thousand and NTD 29,224,610 thousand, including the recognition
of allowance for inventory valuation losses of NTD 29,003 thousand and NTD 58,989 thousand for the years ended 31 December 2013 and 2012,
respectively.
Inventories were not pledged.
254
Financial Overview
(11) Investments accounted for using the equity method
A. The following table lists the investments accounted for using the equity method of the Company:
As at
31 December 2013
Name of investee company
31 December 2012
Percentage of
ownership (%)
Carrying
amount
Carrying
amount
1 January 2012
Percentage of
ownership (%)
Carrying
amount
Percentage of
ownership (%)
Investment in subsidiaries:
Listed companies
Chunghwa Picture Tubes, Ltd.
Tatung System Technologies Inc.
Forward Electronics Co., Ltd.
San Chih Semiconductor Co., Ltd.
Tatung Fine Chemicals Co.
Subtotal
$557,269
8.46
$546,723
8.46
$1,669,636
8.46
504,133
53.60
513,491
53.60
530,664
53.60
143,473
12.05
143,185
12.05
183,521
12.05
1,947,587
43.18
2,234,130
43.19
2,727,475
43.26
314,751
48.27
260,198
39.09
262,769
39.51
3,467,213
3,697,727
5,374,065
Non-public companies
Taiwan Telecommunication Industry Co., Ltd.
Central Research Technology Co.
100.00
(745,063)
100.00
(764,577)
100.00
81,277
100.00
78,504
100.00
80,165
100.00
(317,592)
99.10
(487,861)
100.00
(248,716)
100.00
178,246
85.33
179,233
85.33
143,976
85.33
Shang-Chih Asset Development Co.
30,149,514
100.00
31,870,915
100.00
36,734,569
100.00
Chunghwa Electronic Investment Co., Ltd.
2,098,009
93.27
2,061,886
99.64
2,812,162
99.52
38,120
51.00
29,639
51.00
27,361
51.00
-
-
55,438
100.00
76,373
100.00
Tatung (Thailand) Co., Ltd.
348,498
100.00
356,066
100.00
343,962
100.00
Tatung Company of Japan, Inc.
Tatung Consumer Products (Taiwan) Co., Ltd.
Tatung Sm-Cyclo Co., Ltd.
Tatung Die Casting Co.
Shang Chih Container Terminal Co., Ltd. (Note 1)
513,235
100.00
596,540
100.00
686,076
100.00
Tatung Electronics(S) Pte. Ltd.
65,221
90.00
67,139
90.00
66,306
90.00
Tatung Wire & Cable (Thailand) Co., Ltd.
79,250
100.00
90,757
100.00
98,340
100.00
(355,971)
100.00
(102,944)
100.00
194,785
100.00
Tatung Electric (Singapore) Pte. Ltd.
859,755
100.00
800,928
100.00
809,584
100.00
Tatung Co. of America Inc.
131,091
50.00
145,655
50.00
173,068
50.00
Tatung Mexico S.A de C.V.
445,422
100.00
420,603
100.00
350,642
100.00
Tatung Co. of Canada Inc. (Note 2)
-
-
-
-
22,213
100.00
8,520
100.00
8,412
100.00
9,003
100.00
-
-
-
-
80,265
100.00
199,380
100.00
176,203
100.00
179,104
100.00
Tatung Singapore Information Co., Ltd.
Tatung Science and Technology Inc.
Tatung Visual Display (Mexico) S.A. de C.V. (Note3)
Tatung Electric Company of America, Inc.
Tatung Netherlands B.V.
(125,852)
100.00
(125,852)
100.00
(125,852)
100.00
Tatung (U.K.)Ltd.
(221,130)
100.00
(221,130)
100.00
(221,130)
100.00
TATUNG CZECH s.r.o
149,033
100.00
201,434
100.00
229,112
100.00
Tatung Medical Healthcare Technologies Co., Ltd.
(SeQual Technologies. Co., Ltd. has Renamed Tatung
Medical Healthcare Technologies Co., Ltd. on Jan.2013)
187,067
95.72
116,305
92.87
123,315
92.87
Toes Opto-Mechatronics Co.
172,177
85.00
198,772
85.00
199,370
85.00
9,379
18.35
8,411
18.35
7,475
18.35
(22,820)
100.00
99,549
100.00
198,048
100.00
94,311
100.00
107,855
100.00
124,198
100.00
-
-
-
-
240,403
100.00
Shang Chih Investment Co., Ltd.
414,479
95.83
378,640
95.83
428,405
95.83
Chih Sheng Investment Co., Ltd.
1,268,533
100.00
1,465,667
100.00
868,005
100.00
Tatung Global Strategy Investment And Trading (BVI) Inc.
(403,058)
100.00
(299,919)
100.00
(13,243)
100.00
Tisnet Technology Inc.
Tatung Vietnam Co. Ltd.
Tatung Electric Technology (Vietnam) Co., Ltd.
Tatung Infocomm Co., Ltd. (Note 4)
255
(738,279)
TATUNG 2012 Annual Report
Financial Overview
As at
31 December 2013
Name of investee company
Absolute Alpha Limited
Subtotal
Percentage of
ownership (%)
Carrying
amount
21,477
31 December 2012
Carrying
amount
100.00
35,327,292
Percentage of
ownership (%)
21,370
1 January 2012
Carrying
amount
100.00
37,553,152
Percentage of
ownership (%)
4,459
100.00
43,937,226
Investment in associates:
Listed companies
Elitegroup Computer System Co., Ltd.
5,611,995
27.49
5,889,503
27.49
6,672,580
27.49
Tatung-Okuma Co., Ltd.
715,265
49.00
539,991
49.00
422,200
49.00
Kuender & Co.,Ltd.
143,308
50.00
163,232
50.00
182,092
50.00
830
6.91
780
6.91
714
6.91
16,226
22.00
15,869
22.00
15,675
22.00
-
98.33
-
98.33
-
98.33
(3,159)
35.00
(4,329)
35.00
(2,878)
35.00
Non-public companies
Hsieh Chih Industrial Library Publishing Co.
Chung-Tai Technology Development Engineering Co.
Lansong International Co., Ltd.
Tatung Telecom Corporation
Subtotal
The balance of the investment accounted for
using equity method
Add: the credit balance of the investment
accounted for using equity method
Total
6,484,465
6,605,046
7,290,383
45,278,970
47,855,925
56,601,674
2,187,861
1,987,098
1,376,396
$47,466,831
$49,843,023
$57,978,070
Note 1: The Company resolved by the board of directors in July 2013 to dispose of the total shares of Shang Chih Container Terminal Co., Ltd. The share have been
transferred completely in September 2013 and the proceeds amounted to NTD18,075 thousand.
Note 2: Tatung Co. of Canada Inc. was liquidated in October, 2012.
Note 3: Tatung Visual Display (Mexico) S.A. de D.V. and Tatung Mexico S.A. de C.V. have merged in December 2012. Tatung Visual Display (Mexico) S.A. de C.V. is the
extinguished company.
Note 4: On 23 March 2012, the board of directors resolved to dispose of the common shares of Tatung InfoComm Co., Ltd. to Vee Telecom Multimedia Co., Ltd. Both
parties entered into a share purchase contract to transfer the shares by three installments. As of 31 December 2012, the Company has completed the transfer of
all shares amounted to NTD106,601 thousand.
B.
Investments in subsidiaries:
Investments in subsidiaries were presented as investments accounted for using the equity method and adjusted by necessary
measurements.
Please refer to Note 8 on investment in subsidiaries under pledge.
C. Investments in associates:
The carrying amounts of investments accounted for using the equity method for which were publicly listed amounted to NTD5,611,995
thousand, NTD5,889,503 thousand, and NTD6,672,580 thousand, as of 31 December 2013, 31 December 2012, and 1 January 2012,
respectively. The fair values of these investments were NTD3,529,425 thousand, NTD2,924,381 thousand, and NTD2,065,608 thousand, as of
31 December 2013, 31 December 2012, and 1 January 2012, respectively.
Investments in associates were not pledged.
The following table illustrates summarized financial information of the Company’s investment in associates:
As at
31 December 2013
Total assets (100%)
Total liabilities (100%)
31 December 2012
1 January 2012
$33,139,293
$30,726,913
$35,515,929
13,087,805
9,093,080
11,374,717
For the years ended 31 December
2013
Revenue (100%)
Net income (100%)
2012
$56,587,886
$52,011,487
4,012,393
565,884
256
Financial Overview
(12) Property, plant and equipment
A. The details of property, plant and equipment are as follows:
Machinery and Office equipment
equipment
Buildings
Transportation
equipment
Construction in
progress and
equipment
awaiting
examination
Leasehold
improvements
Other Equipment
Total
Cost:
As of 1 January 2013
$601,261
$5,957,696
$381,518
$62,738
$230,809
$66,523
$1,521,444
$8,821,989
Additions
2,804
82,308
23,871
3,638
28,368
161,466
99,659
402,114
Disposals
-
(54,568)
(15,094)
(1,833)
(217)
-
(60,691)
(132,403)
3,951
3,106
-
-
10,216
(14,026)
(3,303)
(56)
As of 31 December 2013
$608,016
$5,988,542
$390,295
$64,543
$269,176
$213,963
$1,557,109
$9,091,644
As at 1 January 2012
$590,366
$6,007,808
$380,160
$64,585
$169,645
$62,463
$1,554,000
$8,829,027
Additions
10,895
115,457
43,896
2,096
61,436
40,377
83,339
357,496
Disposals
-
(165,569)
(42,454)
(3,943)
(14)
(36,317)
(134,658)
(382,955)
-
-
(84)
-
(258)
-
18,763
18,421
$601,261
$5,957,696
$381,518
$62,738
$230,809
$66,523
$1,521,444
$8,821,989
$(420,853)
$(4,479,694)
$(278,670)
$(57,397)
$(64,294)
$-
$(1,285,797)
$(6,586,705)
(14,703)
(289,377)
(39,154)
(2,584)
(40,265)
-
(93,624)
(479,707)
Disposals
-
54,135
14,456
1,780
218
-
60,528
131,117
Other changes (Note)
-
(3,105)
-
-
(140)
-
3,301
56
As of 31 December 2013
$(435,556)
$(4,718,041)
$(303,368)
$(58,201)
$(104,481)
$-
$(1,315,592)
$(6,935,239)
As at 1 January 2012
$(404,943)
$(4,304,623)
$(276,911)
$(58,171)
$(30,602)
$-
$(1,335,752)
$(6,411,002)
(15,910)
(315,897)
(40,085)
(3,040)
(33,703)
-
(118,607)
(527,242)
Disposals
-
140,826
38,325
3,814
11
-
168,562
351,538
Other changes (Note)
-
-
1
-
-
-
-
1
$(420,853)
$(4,479,694)
$(278,670)
$(57,397)
$(64,294)
$-
$(1,285,797)
$(6,586,705)
31 December 2013
$172,460
$1,270,501
$86,927
$6,342
$164,695
$213,963
$241,517
$2,156,405
31 December 2012
$180,408
$1,478,002
$102,848
$5,341
$166,515
$66,523
$235,647
$2,235,284
1 January 2012
$185,423
$1,703,185
$103,249
$6,414
$139,043
$62,463
$218,248
$2,418,025
Other changes (Note)
Other changes
(Note)
As of 31 December 2012
Depreciation and
impairment:
As at 1 January 2013
Depreciation
Depreciation
As of 31 December 2012
Net carrying amount as at:
Note:
257
Other changes including transfer from advance payments in equipment and reclassification.)
TATUNG 2012 Annual Report
Financial Overview
No borrowing costs were capitalized as property, plant and equipment for the years ended 31 December 2013 and 2012.
Components of buildings, including main building structure, electronic engineering, electrical engineering, fire engineering, air conditioning
units and elevators, are depreciated by their own respective useful lives.
Please refer to Note 8 for more details on property, plant and equipment under pledge.
B. The related fixed assets transactions between the Company and Tatung University are summarized as follows:
(a) With respect to the dispute concerning Shan-Chih Hall and New-De-Hui Building, according to the arbitration award made by the
Arbitration Association on June 2, 2010, the ownership of the aforementioned buildings belonged to Tatung University. Tatung University
was ordered to pay NTD 794,772 thousand plus interest to the Company for the construction costs of the two buildings. Tatung University
paid the full payment of NTD 839,775 thousand to the Company on February 10, 2011.
Since the Company has lost the prescriptive rights, and Tatung University had claimed the counterplea for prescriptive rights in the
arbitration, the Company wouldn’t be entitled to monetary claims if it takes legal actions against Tatung University. In addition,
the Company has already taken advantage of substantial benefits from the cooperation of both parties. On June 12, 2012, the
shareholders’ meeting resolved that the Company shall discontinue the actions against Tatung University in matters relating to the real
estate issues and the related expenses.
(b) In order to obtain parcels of lands with lot numbers No. 207 et al. of Niu-PuSection, on December 26, 1968, the Company entered into a
contract with Tatung University by paying off NTD 116,207 thousand in advance. However as the Company failed to pay the remaining
amount of the consideration, the title remained with Tatung University. Since this event happened 40 years ago and obviously the
contract had expired, the Company had written off the prepayment of NTD 116,207 thousand as non-operating expense—other
losses in 2004. However, the Ministry of Education hoped that Tatung University can resort to other judicial means than an arbitration to
resolve this dispute. As stated in the letter dated August 12, 2011 from Tatung University, according to its board meeting resolution dated
July 4, 2011, Tatung University would not be participating in the arbitration process. On June 12, 2012, the shareholders’ meeting resolved
that the Company shall discontinue the actions against Tatung University in matters relating to the real estate issues and the related
expenses.
(c) In 1972, the Company and Tatung University co-built the Experiment Building and Engineering Building located on Tatung University
campus. Accordingly, Tatung University applied to the Ministry of Education to register the ownership of the aforementioned buildings.
However, based on conservatism and prudent accounting considerations, the Company had decided to write off the amount
capitalized to non-operating expense – other losses in 1996. The Company filed an application to the Arbitration Association of the
Republic of China for resolution of the matter on July 26, 2010. However, the Ministry of Education hoped that Tatung University can
resort to other judicial means than an arbitration to resolve this dispute. As stated in the letter dated August 12, 2011 from Tatung
University, according to its board meeting resolution dated July 4, 2011, Tatung University would not be participating in the arbitration
process. On June 12, 2012, the shareholders’ meeting resolved that the Company shall discontinue the actions against Tatung University
in matters relating to the real estate issues and the related expenses.
C. As of December 31, 2010, the carrying amount of New-She-Gong Building was NTD 149,784 thousand. As of the issue date of the audit
report, the ownership registration is still in progress, however, pursuant to R.O.C. Civil Code, the ownership belongs to the Company.
Execution of specific development plan
The Company and Tatung University have not yet reached a consensus for overall development strategy. When they do, the two parties
will then appoint a consultancy company to provide feasibility studies on the overall development strategy of the whole case based on
the analog configuration of the buildings.
(13) Intangible assets
Computer software cost
Amortization and
impairment
Cost
Net book value
Cost:
1 January 2013
Addition-acquired separately
Amortization
31 December 2013
1 January 2012
Addition-acquired separately
Amortization
31 December 2012
$142,166
$(28,057)
$114,109
12,227
-
12,227
-
(43,236)
(43,236)
$154,393
$(71,293)
$83,100
$78,937
$(8,155)
$70,782
63,229
-
63,229
-
(19,902)
(19,902)
$142,166
$(28,057)
$114,109
Amortization expense of intangible assets under the statement of comprehensive income:
2013
Operating expense
$43,236
2012
$19,902
258
Financial Overview
(14) Other non-current assets
31 December 2013
31 December 2012
1 January 2012
Advance payments in equipment
$57,762
$12,845
$25,932
Other non-current assets - other
159,182
159,124
160,837
$216,944
$171,969
$186,769
Total
Among the above other non-current assets – other, some lands and land prepayment in the amount of NTD 74,742 thousand were held
temporarily under third parties because of regulatory or other reasons as of 31 December 2013, 2012 and 1 January 2012. In order to secure the
Company’s right over the lands, the Company have been adopting possible means, including having the lands pledged to the Company.
(15) Long-term receivables-net
31 December 2013
Tatung InfoComm Co., Ltd.
31 December 2012
$557,980
1 January 2012
$557,980
$-
On March 30, 2012, the Company entered into a share purchase contract with Vee Telecom Multimedia Co., Ltd. Under the contract, the
Company would sell all of its shares of its subsidiary, Tatung InfoComm Co., Ltd., to Vee Telecom Multimedia Co., Ltd. Moreover, the original
amount of NTD 557,980 thousand that the Company has financed to Tatung InfoComm Co., Ltd will be repaid by Tatung InfoComm co., Ltd. in
five years. For the first two years, the interests will be paid quarterly at 2%. In the third year, the interests and principals of NTD 15,000 thousand
would be paid quarterly. In the fourth year, the interests and principals of NTD 30,000 thousand would be paid quarterly. In the fifth year, the
interests and principals would be paid quarterly in equal installments.
(16) Short-term loans
Interest Rates (%)
31 December 2013 31 December 2012
1 January 2012
Unsecured bank loans
2.28%-3.20%
$2,890,801
$2,640,000
$2,159,468
L/C loans
1.12%-2.80%
1,270,459
1,542,558
2,406,187
Short-term loans in foreign currency
0.97%-2.55%
1,595,197
816,305
2,087,972
5,756,457
4,998,863
6,653,627
20,770
33,205
56,902
$5,777,227
$5,032,068
$6,710,529
Subtotal
Due to employees
0.17%-0.92%
Total
The Company’s unused short-term lines of credits amounted to NTD 4,204,181 thousand, NTD 4,745,758 thousand, and NTD 4,318,995 thousand,
as at 31 December 2013, 31 December 2012, and 1 January 2012, respectively.
(17) Short-term notes and bills payable
Guarantors
Interest Rates (%)
Unsecured domestic bills payable
0.85%-1.62%
Less: Unamortized discount
Net
31 December 2013 31 December 2012
1 January 2012
$630,000
$400,000
$600,000
(414)
(61)
(408)
$629,586
$399,939
$599,592
(18) Financial liabilities at fair value through profit or loss - current
31 December 2013
31 December 2012
1 January 2012
Held for trading:
Derivatives not designated as hedging Instruments
Foreign currency option
Foreign exchange forward contracts
Total
259
$9,346
$-
$-
-
70,460
-
$9,346
$70,460
$-
TATUNG 2012 Annual Report
Financial Overview
(19) Bonds payable
Liability component:
31 December 2013
The second domestic secured convertible bonds payable
31 December 2012
1 January 2012
$-
$762,400
$762,400
4,470,750
4,356,000
4,543,500
Less: discount on the second domestic secured convertible
bonds payable
-
-
(44,845)
Discount on the first overseas secured convertible
bonds payable
(98,280)
(378,967)
(581,885)
-
(762,400)
-
4,372,470
3,977,033
4,679,170
(4,372,470)
-
(717,555)
Bonds payable, net of current portion
$-
$3,977,033
$3,961,615
Embedded derivatives (Note 1)
$-
$-
$2,069
The first overseas secured convertible bonds payable
Repayment
Subtotal
Less: current portion
Note 1: Including conversion option value, bondholder’s put option value, the entity’s call option value and the entity’s reset value.
The Company
A. On 10 December 2007, the Company issued second domestic zero secured convertible bonds. The terms and conditions of the bonds are
as follows:
(a) Issue Amount: NTD 2,500,000 thousand, each with a face value of NTD 100 thousand, issued at par value.
(b) Period: from 10 December 2007 to 10 December 2012
(c) Guarantors: China Development Industrial Bank. According to the contract, the Company has provided some stocks to China
Development Industrial Bank for custody. As of 31 December 2013 and 2012, and 1 January 2012, the Company has provided 0
thousand shares, 0 thousand shares, and 187,190 thousand shares of Chunghwa Picture Tubes Ltd., 0 thousand shares, 0 thousand
shares, and 18,400 thousand shares of Forward Electronics Co., Ltd., and 0 thousand shares, 0 thousand shares and 24,000 thousand
shares of Tatung System Technologies Inc. to China Development Industrial Bank.
(d) Conversion:
i. Underlying securities: The Company’s Common shares.
The Company will issue common shares for conversion.
ii. Conversion Period: Except for the closed period, bondholders may convert the bonds to the Company’s common shares during a
period 30 days after the issuance and 10 days before the maturity.
iii. Conversion Price and Adjustment: The conversion price is NTD19.75 per share according to the issue terms. The applicable
conversion price will be subject to adjustment upon the occurrence of certain events set out in the indenture. The conversion
price was adjusted to NTD18.49 per share, NTD15.80 per share, and NTD 14.11 per share on 11 June 2008, and 5 January 2009, and 2
October 2009, respectively. The conversion price was again adjusted to NTD 33.49 per share on 10 February 2011.
(e) Redemption:
i. On or at any time 30 days after the issue date and 40 days prior to the maturity date, if the closing price of the Company’s share
on TSE has been at least 150% of either the conversion price or the last adjusted conversion price, for 30 consecutive days, the
Company may redeem all, but not some, of the bonds.
ii. If at least 90% principal of the bonds have already been redeemed, repurchased, cancelled or converted, at any time on or after
30 days after the issue date and 40 days prior to the maturity date, the Company may redeem all, but not some of the bonds.
(f) On 10 December 2010, the bondholders have the right to require the Company’s underwriter to redeem the bonds at a price equal to
par value of the principal amount.
As of 31 December 2012, the Company has redeemed all of the bonds.
The second domestic secured convertible bonds mentioned above reached maturity on 10 December 2012 and had been terminated
of trading. (Please refer to M.O.P.S)
B. On 25 March 2011, the Company issued first overseas zero coupon secured convertible bonds. The terms and conditions of the bonds are
as follows:
(a) Issue Amount: USD150,000 thousand, each with a face value of 100 thousand, issued at par value.
(b) Period: from 25 March 2011 to 25 March 2014.
(c) Guarantors: J.P. Morgan
(d) Conversion:
i. Underlying securities: The Company’s common shares.
The Company will issue common shares for conversion.
ii Procedure: The bondholders may, after having provided the conversion notice required under the trust deed and other documents
or certificates required by R.O.C. laws and regulations, apply for conversion of the bonds with the conversion agent located outside
the R.O.C.
The issuer will deliver the relevant shares through book-entry transfer to an account registered in the name of the converting holder
or its local agent at Taiwan Depositary & Clearing Corporation (”TDCC”) within five business days after receipt of the conversion
notice; if the converting bondholder is overseas Chinese or non-ROC citizen and has not opened an account with the TDCC
pursuant to applicable R.O.C. laws and regulations, the issuer will transfer such common shares after such account has been set up
by the bondholder.
iii. Conversion Period: Except for bonds that have previously been redeemed or repurchased or except during the closed period (as
260
Financial Overview
defined below), the bondholders shall have the right to request the issuer to convert the bonds into common shares pursuant to
applicable laws and regulations and the indenture at any time during the period starting from the 41st day after the issuance of the
bonds and ending on the date 10 days prior to the maturity date. For purposes hereof, the “closed period” shall include:
1 The period of sixty days prior to the date of annual shareholders’ meeting, and the period of thirty days prior to the special
shareholders’ meeting.
2 The period starting on the 15th trading day prior to the first day of any closure period (i.e. the period during which Tatung’s
shareholders’ registration is closed) for determining shareholders entitled to receive stock or cash dividends or subscription of new
shares in a capital increase for cash to the relevant record date.
3 In the event of capital reduction of Tatung, the period from the record date for such capital reduction to one day prior to the trading
of the shares reissued after the capital reduction.
4 Such other periods during which Tatung may be required to close its shareholders’ registration pursuant to the ROC laws and TWSE
rules.
iv. Conversion Price and Adjustment: The conversion price shall initially be NTD 7.74. The conversion price will be adjusted to NTD 18.3711
on share relisting date.
After the issuance of the bonds, the conversion price shall be adjusted in accordance with the following anti-dilution formula:
1 After the issuance of the bonds, upon the occurrence of any event which will increase the number of the issued common shares
of the issuer (including, but not limited to, issue of new shares in a capital increase for cash (including the shares issued by way
of private placement), recapitalization of retained earnings or capital surplus, issue of employee bonus shares, stock splits, issue
of new shares to sponsor the issue of global depositary receipts and any other events specified in the indenture), and where the
consideration per share receivable by the issuer is less than the market value per common share (as defined in the indenture), the
conversion price shall be adjusted in accordance with following formula (subject to the provisions of the indenture). The adjustment
of the conversion price shall be made downwards, not upwards, to the nearest cent of a dollar. Adjusted Conversion Price = Then
Conversion Price × [ENS+(NNS × PNI)/P]/ [ENS+NNS]. ENS = Number of shares outstanding before issue (Note 1); NNS = Number of new
shares to be issued; PNI = Per share offering price of the new issue (Note 2); P = Market Value per Common Share (as defined in the
Indenture) on relevant record date.
Remark 1: ENS means the number of total issued and outstanding common shares (including the common shares issued by way of
private placement), minus the number of treasury shares which have been repurchased by the issuer but have not been cancelled
or transferred.
Remark 2: In the event of free distribution of shares or stock splits, PNI shall be zero.
2 The conversion price shall not be adjusted in the event of capital reduction for cancellation of treasury shares of the Issuer. After
the issuance of the bonds, upon the occurrence of any capital reduction (other than capital reduction for cancellation of treasury
shares) which will decrease the number of the issued common shares of the issuer, the conversion price shall be adjusted in
accordance with following formula, effective on the record date of such capital reduction: Adjusted Conversion Price = Then
Conversion Price × Number of outstanding shares before capital reduction (Note 1) Number of outstanding shares after capital
reduction.
Remark 1: “Outstanding shares” means the number of total issued and outstanding common shares (including the common shares
issued by way of public offering and private placement), minus the number of treasury shares which have been repurchased by the
Issuer but have not been cancelled or transferred.
3 After the issuance of the bonds, if the issuer shall distribute any cash dividends or other form of cash to its shareholders, subject to
the criteria in the indenture, the conversion price shall be adjusted in accordance with the following formula: (adjustment method
should be subject to detailed terms in the Indenture. The conversion price shall be adjusted downward, not upward, and made to
the nearest cent of a dollar) Adjusted conversion Price = Then Conversion Price x [1-(C/P)] C = Amount of cash per share; P = Market
Value per Common Share (as defined in the Indenture).
4 After the issuance of the bonds, upon the occurrence of certain dilutive or other analogous events as specified in the indenture, the
conversion price shall also be adjusted in the manner as prescribed in the indenture.
(e) The issuer will redeem the bonds which are not redeemed before the maturity date, or required and cancelled, or converted, at a
price equal to par value of the principal amount upon maturity.
(f) Redemption:
i. The issuer may redeem the bonds, before the maturity date, in whole or in part at any time after the first anniversary of the issue date
at 100% of the principal amount, if the closing price of the common shares of Tatung traded on TWSE (translated into U.S. dollars at
the then prevailing exchange rate on the relevant trading day) on each trading day during a period of 20 consecutive trading days
reaches 130% or above of the then applicable conversion price (translated into U.S. dollars at a fixed exchange rate determined on
the pricing date).
ii. The issuer may redeem all of the outstanding bonds at 100% of the principal amount, in the event that more than 90% of the bonds
have been cancelled after being redeemed, repurchased or converted.
iii. If as a result of changes to the relevant tax laws and regulations in the R.O.C., the issuer becomes obligated to pay any additional
taxes or other costs, the issuer may redeem all of the outstanding bonds at 100% of the principal amount pursuant to the terms of the
trust deed and the terms and conditions. Bondholders may elect not to have their bonds redeemed but with no entitlement to any
additional amounts or reimbursement of additional tax.
(g) Redemption at the option of the bondholders:
i. In the event that the common shares of Tatung cease to be listed on the Taiwan Stock Exchange (”TWSE”), each bondholder shall
have the right to require the issuer to redeem the bonds, in whole or in part, at 100% of the principal amount of the bonds.
ii. In the event that a change of control as defined in the trust deed and the terms and conditions of the bonds occurs to the issuer, the
bondholders shall have the right to require the issuer to redeem the bonds, in whole or in part, at 100% of the principal amount.
iii. The bondholders should follow the redemption procedure as specified in the trust deed and the terms and conditions when
exercising the aforementioned repurchase option. The issuer should follow the redemption procedure as specified in the trust deed
and the terms and conditions when dealing with bondholders’ redemption requests. The issuer will redeem the bonds with cash on
the payment date as specified in the trust deed and the terms and conditions.
As of 31 December 2013, there was no bond converted.
C. In accordance with IAS 39, the first overseas zero coupon convertible bonds, consists of embedded derivatives, which are recorded as
financial assets at fair value through profit or loss – noncurrent, and of pure bond values, which are recorded as bonds payable.
261
TATUNG 2012 Annual Report
Financial Overview
(20) Long-term loans
Details of long-term loans as of 31 December 2013, 31 December 2012 and 1 January 2012 are as follows:
31 December 2013
Lenders
31 December Interest rate
2013
(%)
Maturity date and terms of repayment
Secured Long-term loans from King's
Town Bank
$480,000
Effective from 17 February 2011 to 17 February 2016. The first repayment date is
2 years after the date of this agreement and interest is paid monthly. Principal
2.6700 is repaid in 7 repayments. The 1st repayment is 20% of amount drawn, the
2nd repayment is 10%, the following 4 repayments are 15% each, and the
remaining repayment is 10% of principal.
Secured long-Term loans from Bank of
Taiwan
450,000
Effective from 4 August 2011 to 27 July 2016. The first repayment date is 2 years
2.2950 after the date of this agreement and interest is paid monthly. Principal is
repaid in 6 semi-annually. Interest is paid monthly.
Unsecured long-term loans from
Mega International Commercial Bank
1,400,000
12 January 2013 to 11 January 2015. The principal will be repaid upon
2.2450 Effective
maturity.
Unsecured long-term loans from
Taishin International Bank
200,000
24 October 2013 to 24 October 2015. The principal will be repaid
3.2000 Effective
upon maturity.
Unsecured long-term loans from
Chang Hwa Bank
1,000,000
4 October 2013 to 4 October 2015. The principal will be repaid upon
2.3400 Effective
maturity.
Unsecured long-term loans from Hua
Nan Bank
2,000,000
8 November 2013 to 8 November 2015. The principal will be repaid
2.4150 Effective
upon maturity.
Unsecured long-term loans from
Taiwan Cooperative Bank
1,300,000
12 October 2013 to 6 December 2015. The principal will be repaid
2.3450 Effective
upon maturity.
Unsecured long-term loans from Far
Eastern International
1,000,000
31 December 2013 to 31 December 2016.The principal will be repaid
2.2400 Effective
upon maturity.
300,000
Effective 13 November 2013 to 13 May 2016. The 1st repayment of principal is in
2.3904 6 months after first draw. The remaining principal is repaid in 5 semi-annually
payments. The last repayment is no longer than 2 year and 6 months after
execution date of the loan agreement.
Secured Syndicated loans from Taishin
International Bank
2,400,000
Effective 15 June 2010 to 15 June 2014. The 1st repayment of principal is in 36
after loaned. The remaining principal is repaid in 2 annually payments.
2.4905 months
The 1st repayment will be one of third and the remaining will be repaid in the
2nd payment.
Secured Syndicated loans from Taishin
Internation Bank
2,120,000
Effective 15 January 2010 to 15 December 2014. The 1st repayment of principal
in 36 months after first draw. The remaining principal is repaid in 3 semi2.4905 isannually
payments. The 1st and 2nd repayments will be both at 20%and the
remaining 60% will be repaid in the 3th repayment.
2,750,000
Effective 16 September 2013 to 19 September 2016. The 1st repayment of
is in 18 months after first draw. The remaining principal is repaid in
2.5432 principal
4 semi-annually repayments. The 1st to 3rd payments will be 10%and the
remaining 70% will be repaid in the 4th repayment.
Secured Syndicated loans from Bank
SinoPac
700,000
Effective 28 October 2013 to 28 October 2015. The 1st repayment of principal
in 18 months after first draw. The remaining principal is repaid in 3 quarterly
2.6617 ispayments.
The 1st and 2nd repayments will decrease the credit by 30% each,
and the remaining 40% will be repaid in the 3rd repayment.
Hua Nan Bank L/C loans (USD7,937
thousand)
236,572
1.797~2.3784 Principal is repaid in 180 days after first draw.
Hua Nan Bank L/C loans (EUR 1,330
thousand)
54,649
1.5418~1.7191 Principal is repaid in 180 days after first draw.
480
1.2957 Principal is repaid in 180 days after first draw.
276,034
1.4228~1.78 Principal is repaid in 180 days after first draw.
133
1.3015 Principal is repaid in 180 days after first draw.
383,326
2.22~2.907 Principal is repaid in 180 days after first draw.
The Export-Import Bank Of the ROC
Secured Syndicated loans from First
Bank
Hua Nan Bank L/C loans (JPY1,690
thousand)
Chang Hwa Bank L/C loans (USD9,261
thousand)
Chang Hwa Bank L/C loans (JPY468
thousand)
Mega Bank L/C loans (USD12,861
thousand)
262
Financial Overview
Lenders
Hua Nan Bank secured loans in a
foreign currency (USD4,387 thousand)
Mega Bank secured loans in a foreign
currency (USD804 thousand)
Two-year loans due to stockholders
and employees
Subtotal
31 December Interest rate
2013
(%)
Maturity date and terms of repayment
130,757
1.9027~1.9556 Principal is repaid in 180 days after first draw.
23,971
2.22 Principal is repaid in 180 days after first draw.
18,163
17,224,085
Less: unamortized issuing cost
(29,288)
17,194,797
Less: current portion
(4,828,163)
Total
$12,366,634
31 December 2012
Lenders
Maturity date and terms of repayment
$850,000
Effective from 17 February 2011 to 17 February 2016. The first repayment date is
2 years after the date of this agreement and interest is paid monthly. Principal
2.67 is repaid in 7 repayments. The 1st repayment is 20%, the 2nd repayment is 10%,
the following 4 repayments are 15%, and the remaining repayment is 10% of
principal.
450,000
Effective from 4 August 2011 to 27 July 2016. The first repayment date is 2 years
2.045 after the date of this agreement and interest is paid monthly. Principal is
repaid in 6 semi-annually. Interest is paid monthly.
1,500,000
12 January 2012 to 1 January 2014. The principal will be repaid upon
2.245 Effective
maturity.
Unsecured long-term loan from
Taishin International Bank
200,000
26 October 2011 to 31 October 2014. The principal will be repaid
3.94 Effective
upon maturity.
Unsecured long-term loan from
Chang Hwa Bank
900,000
September 28, 2012 to 28 September 2014. The principal will be
2.315~2.34 Effective
repaid upon maturity .
Unsecured long-term loan from Hwa
Nan Bank
2,000,000
2.43 Effective 2 May 2012 to 2 May 2014. The principal will be repaid upon maturity.
Unsecured long-term loan from
Taiwan Cooperative Bank
1,300,000
4 June 2012 to 4 June 2014. The principal will be repaid upon
2.345 Effective
maturity.
250,000
22 September 2011 to 22 September 2013. The principal will be repaid
2.345 Effective
upon maturity.
Secured Syndicated loan s from
Taishin International Bank
3,600,000
Effective 15 June 2010 to 15 June 2014. The 1st repayment of principal is in
months after first draw. The remaining principal is repaid in 2 annually
2.6316 36
payments. The 1st repayment will be one of three repayments and the
remaining will be repaid in the 2nd payment.
Secured Syndicated loan from Taishin
International Bank
2,650,000
Effective 15 December 2010 to 15 December 2014. The 1st repayment of
is in 36 months after first draw. The remaining principal is repaid in 3
2.6316 principal
semi-annually payments. The 1st and 2nd repayments will be both 20%,and
the remaining 60% will be repaid in the 3th repayment.
Secured Syndicated loan from First
Bank
3,300,000
16 September 2008 to 16 September 2013. The principal will be repaid
1.7105 Effective
upon maturity.
Secured Syndicated loan from Bank
SinoPac
750,000
Effective 30 January 2012 to 30 January 2014. The 1st repayment of principal
2.6121 is in 15 months after first draw. The remaining principal is repaid in 4 quarterly
payments.
Hua Nan bank L/C loans (USD6,303
thousand)
183,029
1.5328~2.2199 Principal is repaid in 180 days after first draw.
25,977
0.9853~1.1193 Principal is repaid in 180 days after first draw.
341,215
1.3552~1.6305 Principal is repaid in 180 days after first draw.
Secured long-term loan from King's
Town Ban
Secured long-term loan from Bank of
Taiwan
Unsecured long-term loan from Mega
International Commercial Bank
Unsecured long-term loan from Far
Eastern International
Hua Nan bank L/C loans (EUR675
thousand)
Chang Hwa Bank L/C loans (USD11,750
thousand)
263
31 December Interest rate
2012
(%)
TATUNG 2012 Annual Report
Financial Overview
Lenders
Mega Bank L/C loans (USD17,524
thousand)
31 December Interest rate
2012
(%)
Maturity date and terms of repayment
508,884
1.7441~2.22 Principal is repaid in 180 days after first draw.
Hua Nan Bank secured loans in a
foreign currency (USD 2,381 thousand)
69,155
1.723~2.0613 Principal is repaid in 180 days after first draw.
Mega Bank secured loans in a foreign
currency (USD 10,253 thousand)
297,744
1.7442~2.252 Principal is repaid in 180 days after first draw.
Two-year loans due to stockholders
and employees
25,094
Subtotal
19,201,098
Less: current portion
(5,912,594)
Total
0.48~0.92
$13,288,504
1 January 2012
Lenders
1 January 2012 Interest rate (%)
Maturity date and terms of repayment
$1,150,000
Effective from 17 February 2011 to 17 February 2016. The first repayment date is
2 years after the date of this agreement and interest is paid monthly. Principal
2.5 is repaid in 7 repayments. The 1st repayment is 20%, the 2nd repayment is 10%,
the following 4 repayments are 15%, and the remaining repayment is 10% of
principal.
Secured long-term loan from Bank of
Taiwan
450,000
Effective from 4 August 2011 to 27 July 2016. The first repayment date is 2 years
2.045 after the date of this agreement and interest is paid monthly. Principal is
repaid in 6 semi-annually. Interest is paid monthly.
Unsecured long-term loan from Mega
International Commercial Bank
1,700,000
12 January 2011 to1 January 2013. The principal will be repaid upon
2.145 Effective
maturity.
Secured long-term loan from King's
Town Bank
Unsecured long-term loan from
Chang Hwa Bank
950,000
Unsecured long-term loan from TC
Bank
400,000
31 October 2011 to 31 October 2013. The principal will be repaid
2.269~2.312 Effective
upon maturity.
26 January 2011 to 30 November 2012. The principal will be repaid
2.3 Effective
upon maturity.
Unsecured Long-Term Loan from Hua
Nan Bank
2,050,000
14 September 2011 to14 September 2013. The principal will be repaid
2.34 Effective
upon maturity.
Unsecured long-term loan from
Taiwan Cooperative Bank
1,300,000
16 April 2010 to 16 April 2012. The principal will be repaid upon
2.175 Effective
maturity.
Unsecured long-term loan from Far
Eastern International
Secured Syndicated loan from Taishin
International Bank
Secured Syndicated loan from Taishin
International Bank
300,000
22 September 2011 to 22 September 2013. The principal will be repaid
2.25 Effective
upon maturity.
3,600,000
Effective 15 June 2010 to 15 June 2014. The 1st repayment of principal is in
months after first draw. The remaining principal is repaid in 2 annually
2.6474 36
payments. The 1st repayment will be one of three repayments and the
remaining will be repaid in the 2nd payment.
2,650,000
Effective 15 December 2010 to 15 December 2014. The 1st repayment of
is in 36 months after first draw. The remaining principal is repaid in
2.6558 principal
3 semi-annually payments. The 1st and 2nd repayments will be 20%, and the
remaining 60% will be repaid in the 3th repayment.
16 September 2008 to 16 September 2013. The principal will be repaid
1.5695 Effective
upon maturity.
Secured Syndicated loan from First
Bank
$3,300,000
Hua Nan bank L/C loans (USD4,905
thousand)
148,566
1.5856~2.7378 Principal is repaid in 180 days after first draw.
5,896
2.4411~2.4908 Principal is repaid in 180 days after first draw.
25,970
0.882~1.0954 Principal is repaid in 180 days after first draw.
220,273
1.694~2.0752 Principal is repaid in 180 days after first draw.
Hua Nan bank L/C loans (EUR150
thousand)
Hua Nan bank L/C loans (JPY66,540
thousand)
Chang Hwa Bank L/C loans (USD7,272
thousand)
264
Financial Overview
Lenders
1 January 2012 Interest rate (%)
Maturity date and terms of repayment
Mega Bank L/C loans (USD17,101
thousand)
517,998
1.279~1.945 Principal is repaid in 180 days after first draw.
Hua Nan Bank secured loans in a
foreign currency (USD 7,439 thousand)
225,340
2.2199~2.6744 Principal is repaid in 180 days after first draw.
Mega Bank secured loans in a foreign
currency (USD8,726 thousand)
264,313
1.905~1.971 Principal is repaid in 180 days after first draw.
TC Bank secured loans in a foreign
currency (USD3,263 thousand)
98,851
3.3~3.35 Principal is repaid in 180 days after first draw.
Two-year loans due to stockholders
and employees
56,856
Subtotal
19,414,063
Less: Current portion
(1,756,856)
Total
$17,657,207
0.48~0.92
Shan-Chih Asset Development Co. guaranteed the Company’s long-term loans, the second domestic secured convertible bonds payable,
and the first Euro-convertible bonds. As of 31 December 2013, 31 December 2012, and 1 January 2012, the balance of guarantees was NTD
15,358,006 thousand, NTD 16,142,300 thousand and NTD 19,331,363 thousand, respectively; the Company’s Chairman, W.S. Lin, guaranteed
some of the Company’s bank loans and the second domestic secured convertible bonds payable.
For the years ended 31 December 2013, 31 December 2012, and 1 January 2012, certain long term loans of the Company included debt
covenants requiring minimum levels of liquidity ratio, liability to equity ratio, and net assets value. For the years ended 31 December 2013, 31
December 2012, and 1 January 2012, the Company did not breach any such covenants, therefore there was no immediate repayment of the
loans triggered by breach of covenants.
Please refer to Note 8 for assets pledged as collateral for long-term loans.
(21) Post-employment benefits
Defined contribution plan
The Company adopts a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the
Company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts.
The Company has made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.
Expenses under the defined contribution plan for the years ended 31 December 2013 and 2012 were NTD 78,281 thousand and NTD 80,222
thousand, respectively.
Defined benefits plan
The Company adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed
based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first
15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the
Labor Standards Act, the Company contributes an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to
the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee.
Pension costs recognized in profit or loss for the years ended 31 December 2013 and 2012:
Current period service cost
Interest cost
Expected return on plan assets
Total
2013
2012
$24,463
$25,016
33,669
42,192
(935)
(998)
$57,197
$66,210
Expenses under the defined benefits plan for the years ended 31 December 2013 and 2012 were NTD 57,197 thousand and NTD 66,210
thousand, respectively.
The cumulative amount of actuarial (gains) and losses recognized in other comprehensive income is as follows:
2013
Balance as of 1 January
Actuarial (gains) and losses for the period
Balance as of 31 December
265
2012
$214,508
$-
55,531
214,508
$270,039
$214,508
TATUNG 2012 Annual Report
Financial Overview
Reconciliation of liability (asset) of the defined benefit plan is as follows:
As at
31 December 2013
Defined benefit obligation
31 December 2012
1 January 2012
$3,200,459
$3,366,935
$3,375,311
Plan assets at fair value
(83,410)
(93,513)
(79,750)
Funded status
3,117,049
3,273,422
3,295,561
2,502
2,501
2,501
$3,119,551
$3,275,923
$3,298,062
Other
Accrued pension liabilities (gross)
Changes in present value of the defined benefit obligation are as follows:
2013
2012
$3,366,935
$3,375,311
Current service cost
24,463
25,016
Interest cost
33,669
42,192
(280,139)
(289,815)
55,531
214,231
$3,200,459
$3,366,935
2013
2012
$93,513
$79,750
935
998
269,101
302,857
(280,139)
(289,815)
-
(277)
$83,410
$93,513
Defined benefit obligation at 1 January
Benefits paid
Actuarial losses (gains)
Defined benefit obligation at 31 December
Changes in fair value of plan assets are as follows:
Plan assets, at fair value at 1 January
Expected return on plan assets
Contributions by employer
Benefits paid
Actuarial gains (losses)
Plan assets, at fair value at 31 December
The Company expected to contribute NTD 43,678 thousand to its defined benefit plan during the 12 months beginning after 31 December 2013.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Pension plan (%) as at
31 December 2013
31 December 2012
1 January 2012
Cash
24.39%
21.77%
24.29%
Equity instruments
41.20%
38.32%
42.19%
Debt instruments
14.72%
24.00%
17.69%
Others
19.69%
15.91%
15.83%
The actual return on plan assets of the Company for the years ended 31 December 2013 and 2012 were NTD 935 thousand and NTD 721
thousand, respectively.
Employee pension fund is deposited under a trust administered by the Bank of Taiwan. The overall expected rate of return on assets is
determined based on historical trend and analyst’s expectation on the asset’s return in its market over the obligation period. Furthermore, the
utilization of the fund by the labor pension fund supervisory committee and the fact that the minimum earnings are guaranteed to be no less
than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks are also
taken into consideration in determining the expected rate of return on assets.
The principal assumptions used in determining the Company’s defined benefit plan are shown below:
31 December 2013
31 December 2012
1 January 2012
Discount rate
0.75%
1.00%
1.25%
Expected rate of return on plan assets
0.75%
1.00%
1.25%
Expected rate of salary increases
1.00%
1.00%
1.00%
266
Financial Overview
A 0.5% change in discount rate on defined benefit obligation:
2013
Discount rate
Discount rate
Increase By 0.5%
Decrease By 0.5%
Effect on the current period service cost and
interest cost
Effect on the defined benefit obligation
2012
Discount rate
Discount rate
Increase By 0.5%
Decrease By 0.5%
$1,032
$(29,068)
$6,067
$(24,950)
(41,729)
44,208
(57,150)
39,586
Other information on the defined benefit plan is as follows:
2013
2012
$3,200,459
$3,366,935
Plan assets at fair value
(83,410)
(93,513)
Surplus (deficit) in plan
$3,117,049
$3,273,422
$34,365
$180,200
$-
$276
Defined benefit obligation at present value
Experience adjustments on plan liabilities
Experience adjustments on plan assets
(22)Provisions
Maintenance warranties
As at 1 January 2013
$3,077
Arising during the period
130,337
Utilized
(1,762)
As at 31 December 2013
$131,652
31 December 2013
Current
31 December 2012
$131,652
$3,077
1 January 2012
$3,254
Maintenance warranties
A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgment and other
known factors.
(23)Equities
A. Common stock
The Company’s authorized and issued capital were all NTD 100,000,000 thousand and NTD 23,395,367 thousand, as at 31 December 2013,
31 December 2012, and 1 January 2012, each at a par value of NTD 10. Each share is entitled to one voting right and the right to receive
dividends.
B. Capital surplus
As at
31 December 2013
Donated assets received
31 December 2012
1 January 2012
$-
$-
$70,000
Share of changes in net assets of associates and joint
ventures accounted for using the equity method
455,575
543,908
543,908
Other
312,395
183,621
105,470
Total
$767,970
$727,529
$719,378
According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a
company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium
or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its
shareholders in proportion to the number of shares being held by each of them.
C. Treasury stock
As of 31 December 2013, 31 December 2012 and 1 January 2012, the Company’s subsidiaries, CPT and its subsidiaries, and Chunghwa
Electronics Investment Co., held 70,598 thousand shares and 333 thousand shares, 131,078 thousand shares and 333 thousand shares,
and 131,078 thousand shares and 333 thousand shares of the Company’s stock, respectively. As of 31 December 2013, 31 December
2012, and 1 January 2012, the Company’s shares held by the subsidiaries was NTD 806,870 thousand, NTD 1,493,830 thousand and NTD
1,493,429 thousand, respectively. In 2013, CPT acquired Giantplus and paid the shares of the Company as partial settlement. Therefore,
CPT decreased its shareholding of the Company by 60,480 thousand shares. As a result of this treasury stock transaction, the Company
267
TATUNG 2012 Annual Report
Financial Overview
recognized a reduction of NTD 686,960 thousand for treasury stock and decreased the retained earnings by NTD 583,002 thousand for the
difference between the fair value and book value of the treasury stock.
D. Retained earnings and dividend policies:
According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:
(a) Payment of all taxes and dues;
(b) Offset prior years’ operation losses;
(c) Appropriate 10% of the remaining amount after deducting items (a) and (b) as a legal reserve;
(d) Appropriate or reverse special reserve in accordance with relevant laws or regulations, and Reverse of special reserve
(e) Appropriate no more than 2% and no less than 1% of the remaining amount after deducting items (a), (b), (c) and (d) as directors’
remuneration and employee’s bonus, respectively;
(f) After deducting items (a), (b), (c) and (d) above from the current year’s earnings, the distribution of the remaining portion, if any, will be
recommended by the board of directors and resolved in the stockholders’ meeting. The distribution of earnings could not be less than
60% of the accumulated distributable earnings.
The policy of dividend distribution should reflect factors such as the current operating results and fund requirements. But, at least 10% of the
dividends must be paid in the form of cash.
According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to
the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss,
it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the
number of shares being held by each of the shareholders.
When distributing distributable earnings for the years ended 2011 and 2012, the Company has to set aside special reserve, for other net
deductions from shareholders’ equity of the period. For any subsequent reversal of other net deductions from shareholders’ equity, the
amount reversed may be distributed.
Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Financial-Supervisory-Securities-Corporate-1010012865, which sets
out the following provisions for compliance:
On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains)
recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1,
the company shall set aside an equal amount of special reserve. Following a company’s adoption of the TIFRS for the preparation of its
financial reports, when distributing distributable earnings, it shall set aside special reserve, from the profit/loss of the current period and
the undistributed earnings from the previous period, an amount equal to “other net deductions from shareholders’ equity for the current
fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it
shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions
from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be
distributed.
As of 1 January 2013, special reserve set aside for the first-time adoption of TIFRS amounted to NTD 15,894,690 thousand. Furthermore, the
Company did not reverse special reserve to retained earnings during the year ended 31 December 2013 as a result of the use, disposal
or reclassification of related assets. As of 31 December 2013, special reserve set aside for the first-time adoption of TIFRS amounted to NTD
15,894,690 thousand.
Details of the 2012 make good of deficits as approved by the shareholders’ meeting on 13 June 2013 is as follows:
Make good of deficits
2012
Capital surplus-donated assets received
$70,000
There is no deficits compensation as resolution of the Board of Directors’ meeting on 18 March 2014.
The Company makes no provision on employees’ bonuses for the years ended 31 December 2013 and 31 December 2012 because it
posted net loss in 2013 and 2012. Please refer to MOPS for more details.
(24) Share-based payment plans
Certain employees of the Company are entitled to share-based payment as part of their remunerations; services are provided by the
employees in return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.
Share-based payment plan for employees of the Company
On 7 August 2007, the Company was approved by the Securities and Futures Bureau of the Financial Supervisory commission, Executive Yuan,
to issue 55,000 thousand shares of employee stock options. Each share of option entitles a holder to buy one share of the Company’s common
stock. The Company issues new shares of common stock when employees exercise options. The exercise price of options is set at the closing
price of the Company’s common stock on the date of grant. Stock options expire in five years from the grant date and vest over service periods
that ranged from two to five years.
The relevant details of the aforementioned share-based payment plan are as follows:
Date of grant
2007.08.28
Total number of share options granted (in thousands)
55,000
Exercise price of share options (NTD)
$14.90
The fair value of these options was calculated at the date of grant using the Black-Scholes option pricing model with the following weightedaverage assumptions:
2007 Stock Option Plans
Expected dividend yield
Expected volatility
Risk-free interest rate
Expected life
0.00%
44.40%
2.52%
-
The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is
268
Financial Overview
indicative of future trends, which may also not necessarily be the actual outcome.
The following table contains further details on the aforementioned share-based payment plan:
2013
2012
Number of share
Weighted average
Number of share
Weighted average
options outstanding exercise price of share options outstanding exercise price of share
(in thousands)
options (NTD)
(in thousands)
options (NTD)
-1
$-
45,493
$14.90
Granted
-
-
-
-
Forfeited
-
-
(45,493)
14.90
Exercised
-
-
-
-
Expired
-
-
-
-
Outstanding at end of period
-
-
-
-
Exercisable at end of period
-
-
-
-
Outstanding at beginning of period
For share options granted during the period,
weighted average fair value of those options at
the measurement date (NTD)
1
-
-
Included in these balances are options that have not been recognized in accordance with IFRS 2 Share-based Payment subject
to the first-time adoption exemption as the options were granted and vested before 1 January 2012. The number of options
outstanding was as follows:
1 January 2012: 45,493 thousand shares.
31 December 2012: 0 share.
31 December 2013: 0 share
The information on the outstanding share options as of 31 December 2013 and 2012, and 1 January 2012, is as follows:
Range of exercise price
Weighted average remaining
contractual life (Years)
As at 31 December 2013
share options outstanding at the end of the period
$-
-
As at 31 December 2012
share options outstanding at the end of the period
$-
-
As at 1 January 2012
share options outstanding at the end of the period
$14.90
0.6
(25)Operating revenue
2013
Sale of goods
Less: sales returns, discounts and allowances
Revenue arising from rendering of services
Construction contract revenue
Other operating revenues
Total
2012
$20,601,053
$29,485,162
(118,890)
(191,770)
471,646
454,799
2,644,710
1,712,057
489,299
724,841
$24,087,818
$32,185,089
(26) Operating leases
Company as lessee
The Company has entered into commercial leases on land and plants. These leases have an average life of one year with no renewal option
included in the contracts. There are no restrictions placed upon the Company by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases as at 31 December 2013, 31 December 2012, and 1 January 2012 are
as follows:
31 December 2013
Not later than one year
269
$216,798
31 December 2012
$194,370
1 January 2012
$198,087
TATUNG 2012 Annual Report
Financial Overview
Operating lease expenses recognized are as follows:
Minimum lease payments
2013
2012
$194,370
$198,087
(27) Summary statement of employee benefits, depreciation and amortization expenses by function during the years ended 31 December 2013
and 2012:
2013
Operating
expenses
Operating
costs
Total amount
2012
Operating
expenses
Operating
costs
Total amount
Employee benefits expense
Salaries
$1,202,171
$1,194,485
$2,396,656
$1,282,107
$1,248,370
$2,530,477
106,110
112,931
219,041
111,663
108,204
219,867
Pension
64,188
71,290
135,478
69,621
76,811
146,432
Other employee benefits expense
48,664
10,219
58,883
57,087
9,449
66,536
Depreciation
417,229
62,478
479,707
454,195
73,047
527,242
Amortization
-
43,236
43,236
-
19,902
19,902
Labor and health insurance
(28)Non-operating income and expenses
A. Other income
2013
Dividend income
$42,751
$41,193
37,738
41,986
170,006
386,790
$250,495
$469,969
Interest income
Others
Total
B.
2012
Other gains and losses
For the years ended 31 December
2013
Gains (losses) on disposal of property, plant and equipment
2012
$3,056
$(13,558)
Gains on disposal of investments
107,646
214,390
Foreign exchange losses (gains), net
(73,681)
182,098
Gains (losses) on financial assets / financial liabilities at fair value through
profit or loss
134,607
(181,718)
(118,672)
(101,213)
$52,956
$99,999
Other gains and losses
Total
C. Finance costs
For the years ended 31 December
2013
2012
Interest on borrowings from bank
$619,805
$656,253
Interest on bonds payable
338,482
314,235
$958,287
$970,488
Total finance costs
270
Financial Overview
(29) Components of other comprehensive income
For the year ended 31 December 2013:
Income tax
Other
relating to
Other
Reclassification
Arising during
adjustments comprehensive components comprehensive
income, net of
of other
income, before
the period
during the
tax
comprehensive
tax
period
income
Unrealized gains (losses) from available-for-sale
financial assets
$89,511
$(82,824)
$6,687
$-
$6,687
Actuarial gains or losses on defined benefits plan
(55,531)
-
(55,531)
-
(55,531)
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for using the equity method
296,060
-
296,060
-
296,060
$330,040
$(82,824)
$247,216
$-
$247,216
Total of other comprehensive income
For the year ended 31 December 2012:
Income tax
Other
relating to
Other
Reclassification
Arising during
adjustments comprehensive components comprehensive
income, net of
of other
income, before
the period
during the
tax
comprehensive
tax
period
income
Unrealized gains (losses) from available-for-sale
financial assets
$255,469
$(6,095)
$249,374
$-
$249,374
Actuarial gains or losses on defined benefits plan
(214,508)
-
(214,508)
-
(214,508)
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for using the equity method
(431,327)
-
(431,327)
-
(431,327)
$(390,366)
$(6,095)
$(396,461)
$-
$(396,461)
Total of other comprehensive income
(30) Income tax
The major components of income tax expense (income) are as follows:
Income tax expense (income) recognized in profit or loss
For the years ended 31 December
2013
2012
Current income tax expense (income):
Current income tax charge
Adjustments in respect of current income tax of prior periods
$(20,876)
$(42,226)
(135,648)
-
20,051
20,000
$(136,473)
$(22,226)
Deferred tax expense (income):
Deferred tax expense (income) relating to origination and reversal of temporary
differences
Total income tax expense (income)
271
TATUNG 2012 Annual Report
Financial Overview
There was not significant deferred income tax effect resulted from other comprehensive income and changes in equity in 2013 and 2012.
A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:
2013
Accounting loss before tax from continuing operations
2012
$(1,747,881)
$(4,040,857)
$-
$-
Tax effect of revenues exempt from taxation
-
-
Tax effect of expenses not deductible for tax purposes
-
-
20,051
20,000
-
-
(135,648)
-
(20,876)
(42,226)
$(136,473)
$(22,226)
Tax at the domestic rates applicable to profits in the country concerned
Tax effect of deferred tax assets/liabilities
10% surtax on undistributed retained earnings
Adjustments in respect of current income tax of prior periods
Income tax benefit from consolidated return system
Total income tax expense (income) recognized in profit or loss
Deferred tax assets (liabilities) relate to the following:
For the year ended 31 December 2013
Deferred
tax income
Beginning
(expense)
balance as at 1
January 2013 recognized in
profit or loss
Ending
balance as at
31 December
2013
Temporary differences
Deferred tax assets
Investments accounted for using the equity method
$405,662
$17,233
$422,895
Unrealised intragroup profits and losses
7,439
(4,793)
2,646
Accrued pension liabilities
4,066
(4,066)
-
Allowance for doubtful accounts
119,496
(43,060)
76,436
Impairment loss
23,681
(23,681)
-
523
(300)
223
560,867
(58,667)
502,200
$(127,459)
$35,280
$(92,179)
(148,624)
3,336
(145,288)
(3,417)
-
(3,417)
(279,500)
38,616
(240,884)
Other
Subtotal
Deferred tax liabilities
Investments accounted for using the equity method
Unrealized (gain) loss on foreign exchange
Reserve for land revaluation
Subtotal
Deferred tax income/ (expense)
Net deferred tax assets/ (liabilities)
$(20,051)
$281,367
$261,316
$560,867
$502,200
$(279,500)
$(240,884)
Reflected in balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
272
Financial Overview
For the year ended 31 December 2012
Deferred
tax income
Beginning
(expense)
balance as at 1
January 2012 recognized in
profit or loss
Ending
balance as at
31 December
2012
Temporary differences
Deferred tax assets
Investments accounted for using the equity method
$380,850
$24,812
$405,662
Unrealised intragroup profits and losses
10,517
(3,078)
7,439
Accrued pension liabilities
50,587
(46,521)
4,066
Allowance for doubtful accounts
65,048
54,448
119,496
Impairment loss
23,681
-
23,681
Allowance for sales returns and discounts
13,610
(13,610)
-
-
523
523
544,293
16,574
560,867
Investments accounted for using the equity method
$(89,010)
$(38,449)
$(127,459)
Unrealized gain (loss) on foreign exchange
(150,333)
1,709
(148,624)
(3,417)
-
(3,417)
(166)
166
-
(242,926)
(36,574)
(279,500)
Other
Subtotal
Deferred tax liabilities
Reserve for land revaluation
Other
Subtotal
Deferred tax income/ (expense)
$(20,000)
Net deferred tax assets/ (liabilities)
$301,367
$281,367
$544,293
$560,867
$(242,926)
$(279,500)
Reflected in balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
The following table contains information of the unused tax losses of the Company:
Unused tax losses as at
Year
31 December 2013
31 December 2012
1 January 2012
Expiration year
2013
$1,354,676
$898,127
$-
$-
2023
2012
539,931
89,910
89,910
-
2022
2010
2,540,849
1,595,932
1,595,932
1,595,932
2020
2009
2,537,636
1,733,441
1,733,441
1,733,441
2019
2007
2,132,114
731,828
731,828
731,828
2017
2006
3,392,327
2,822,308
2,822,308
2,822,308
2016
2005
2,247,945
689,140
689,140
689,140
2015
2014
2004
273
Tax losses for the
period
1,673,533
1,022,791
1,022,791
1,022,791
$16,419,011
$9,583,477
$8,685,350
$8,595,440
TATUNG 2012 Annual Report
Financial Overview
Unrecognized deferred tax assets
As of 31 December 2013, 31 December 2012, and 1 January 2012, deferred tax assets that have not been recognized as they may not be used
to offset taxable profits amounted to NTD 4,077,955 thousand, NTD 3,920,268 thousand, and NTD 3,523,021 thousand, respectively.
Imputation credit information
31 December 2013
Balances of imputation credit amounts
$1,215,850
31 December 2012
1 January 2012
$1,047,545
$995,235
The actual creditable ratio for 2012 and 2011 were both 0%.
The Company’s earnings generated in the year ended 31 December 1997 and prior years have been fully appropriated.
The assessment of income tax returns
As of 31 December 2013, the R.O.C. income tax authorities have assessed the income tax returns of the Company up until 2008.
(31) Earnings (loss) per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity
by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the Company (after
adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year
plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into
ordinary shares.
2013
2012
Basic and diluted loss per share:
Net loss (in thousands NTD)
Weighted average number of ordinary shares outstanding for basic and
diluted earnings per share (in thousands)
Basic and diluted loss per share
$(1,611,408)
$(4,018,631)
2,318,433
2,309,101
$(0.70)
$(1.74)
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of
completion of the financial statements.
7. Related party transactions
Significant related party transactions
(1) Sales (including leasing revenue)
2013
Entity with joint control or significant influence over the Company
Subsidiaries
Associates
$2,065
$5,114
5,797,491
8,771,232
25,235
11,781
156
4,663
$5,824,947
$8,792,790
Other related parties
Total
2012
The sales price to related parties was determined through mutual agreement based on market conditions. The collection terms for domestic
related parties were 90 days, equivalent to those for domestic third parties; the collection terms for foreign related parties were 30-180 days,
equivalent to these for foreign third parties.
(2) Purchase
2013
Entity with joint control or significant influence over the Company
2012
$700
$-
Subsidiaries
2,987,819
8,517,642
Associates
423,602
461,335
-
1,002
$3,412,121
$8,979,979
Other related parties
Net
The purchase price from related parties was determined through mutual agreement based on market conditions. The payment terms to
related parties and third parties for domestic purchases were both net 30-150 days, while the terms for overseas purchases were both net 30120 days.
274
Financial Overview
(3) Notes receivable– related parties
As at
31 December 2013
31 December 2012
1 January 2012
$3,462
$149,412
$6,651
31 December 2013
31 December 2012
Subsidiaries
(4) Accounts receivable – related parties (including lease receivable)
As at
Entity with joint control or significant influence over
the Company
Subsidiaries
$186
$1,649
$2,770
2,045,940
2,476,399
3,049,586
1,040
657
2,337
6
3,495
179
2,047,172
2,482,200
3,054,872
(3,069)
-
(1,892)
(1)
(1)
(1)
$2,044,102
$2,482,199
$3,052,979
Associates
Other related parties
Subtotal
Less: allowance for doubtful accounts
Unrealized interest revenue – trade receivables from
instalment sales
Net
1 January 2012
(5) Construction receivables
31 December 2013
Subsidiaries
31 December 2012
1 January 2012
$-
$-
$137,860
(6) Others receivable thers receivableo (current or non-current)
As at
31 December 2013
Loans receivable(Note)
31 December 2012
1 January 2012
$1,283,740
$877,219
$1,517,265
2,867,563
2,842,237
2,102,783
45,433
47,094
48,870
10
11
10
Subtotal
4,196,746
3,766,561
3,668,928
Less: allowance for doubtful accounts
(125,339)
(2,041)
(12,956)
Net
4,071,407
3,764,520
3,655,972
Non-current portion (Reclassified as non-current assets)
(889,184)
(71,605)
(29,558)
$3,182,223
$3,692,915
$3,626,414
Reclassified from accounts receivable due to over-due
Subsidiaries
Associates
Entity with joint control or significant influence over
the Company
Current portion
Note:
Loans receivable details are as below:
31 December 2013
Name of related parties
275
2013
Balance as of
Maximum balance 31 December 2013
Interest rates
Interest revenue
Tatung Vietnam Co. Ltd.
$687,691
$466,866
2%
$3,492
Tatung Global Strategy Investment and Trading (BVI) Inc.
$816,874
$816,874
2%
$16,269
Tatung Fine Chemicals Co.
$50,000
$-
3%
$31,950
TATUNG 2012 Annual Report
Financial Overview
31 December 2012
Name of related parties
Tatung Vietnam Co. Ltd.
Tatung Global Strategy Investment and Trading (BVI)
Inc.
2012
Balance as of
Maximum balance 31 December 2012
Interest rates
Interest revenue
$81,312
$81,312
2%
$116
$795,907
$795,907
2%
$14,892
1 January 2012
Name of related parties
2011
Balance as of
Maximum balance 31 December 2011
Interest rates
Interest revenue
Tatung Global Strategy Investment and Trading (BVI) Inc.
$778,453
$669,409
2%
$4,917
Tatung Infocomm Co.,Ltd.
$482,856
$482,856
2%
$2,881
Chunghwa Electronic Investment Co., Ltd
$365,000
$365,000
2%
$907
(7) Prepayments
As at
31 December 2013
31 December 2012
1 January 2012
$160,283
$175,598
$142,617
31 December 2013
31 December 2012
Subsidiaries
(8) Accounts payable – related parties
As at
Subsidiaries
Associates
Net
1 January 2012
$615,925
$838,889
$2,685,124
98,340
92,740
61,429
$714,265
$931,629
$2,746,553
(9) Other payable– related parties
As at
31 December 2013
31 December 2012
1 January 2012
Entity with joint control or significant influence over
the Company
$1,379
$474
$764
Subsidiaries
47,036
84,566
339,016
Associates
2,173
2,480
5,495
53
50
53
$50,641
$87,570
$345,328
Other related parties
Net
(10) Acquisition of property, plant and equipment and intangible assets
Acquisition proceeds
2013
Subsidiaries
Associates
Total
2012
$70,692
$-
42
-
$70,734
$-
276
Financial Overview
(11) Plants and Office leased r the and equipme
2013
Subsidiaries
Associates
Total
2012
$10,959
$11,743
1,850
1,942
$12,809
$13,685
There were no significant differences in terms of rental between related parties and arm’s length transactions.
(12) Compensation of key management personnel
2013
Short-term employee benefits
$41,040
$49,275
448
681
$41,488
$49,956
Post-employment benefits
Total
2012
(13) Operating expense–rent expenditure
2013
Subsidiaries
$194,370
2012
$198,087
(14) Notes endorsement and guarantee
The balances of guarantees that the Company provided for related parties as of 31 December 2013, 31 December 2012, and 1 January 2012
were as follows:
Name of related parties
Purpose
31 December 2013
Tatung Company of Japan, Inc.
Pledged for financing
NTD
2,310,000
thousand
Tatung InfoComm Co., Ltd.
Pledged for financing
NTD
2,000,000
thousand
Name of related parties
Purpose
31 December 2012
Tatung Company of Japan, Inc.
Pledged for financing
NTD
2,310,000
thousand
Tatung InfoComm Co., Ltd.
Pledged for financing
NTD
2,000,000
thousand
Name of related parties
Purpose
Pledged for financing
NTD
2,285,400
thousand
Tatung InfoComm Co., Ltd.
Pledged for financing
NTD
2,000,000
thousand
Tatung Global Strategy Investment and
Trading (BVI) Inc.
Guarantee for derivative financial
instrument
USD
60,000
thousand
(Note)
On 23 March 2012, the board of directors resolved to sell the common shares of Tatung InfoComm Co., Ltd. to Vee Telecom Multimedia Co., Ltd.. The Company
has completed the transfer of all shares. Accordingly, Tatung InfoComm Co., Ltd. is negotiating with the bank to relieve the Company from endorsing for it.
Please refer to Note 6(20) for more details of the subsidiary’s endorsement for the Company.
(15) Please refer to Note 6(12) for more details of utilization of New-De-Hui Building and Shan-Chih Hall by Tatung University.
277
(Note)
1 January 2012
Tatung Company of Japan, Inc.
Note:
(Note)
TATUNG 2012 Annual Report
Financial Overview
8. Assets pledged as collateral
The following table lists assets of the Company pledged as collateral:
Carrying amounts
31 December 31 December 1 January 2012
2013
2012
Machines and other Equipment
Investment in debt security with no active market
Investments accounted for under the equity method
Total
$486,605
$553,721
$620,818
1,174,118
605,042
1,709,736
1,039,347
1,303,555
2,243,164
$2,700,070
$2,462,318
$4,573,718
Long-term loans
Construction security deposit
and long-term loans
Long-term loans and
commodity tax controversy
9. Commitments and contingencies
(1) Legal claim contingency
A. United Aerotech System Corporation filed a legal action against the Company on January 6, 2010, claiming payments of consultant
fees amounted to NTD 1.49 million. The Company argued that the payment of consultant fees was not reasonable, and the court of first
instance ruled in favor of the Company but United Aerotech System Corporation appealed. United Aerotech System Corporation claimed
a higher amount of NTD 2 million in the oral arguments on June 28, 2011, and the court of second instance ruled in favor of United Aerotech
System Corporation. The Company also appealed. The Company appealed to the court of third instance, and as of the reporting date,
the action is still ongoing. Due to the uncertainty of the results, the loss could not be reasonably estimated. If United Aerotech System
Corporation files an action against the remaining balance, the probable loss would be between NTD 60 million and NTD 0. However, both
courts in the first and second instance found the evidence supporting the claim in the amount of NTD 60 million to be invalid.
B. Compal Electronics, Inc. (“Compal”) made a public announcement on 29 March 2013 to request the Company to purchase the CPT
shares held by Compal and it filed for arbitration to the Arbitration Association of the Republic of China. The Company received the
arbitration appeal submitted by Compal from the Association on 3 April 2013. An arbitration tribunal was formed on 20 August 2013 and
has convened four inquiries on the following dates: 8 October 2013, 10 December 2013, 22 January 2014 and 11 March 2014. The next
inquiry was scheduled to begin on 22 April 2014. According to the Company’s attorney, the special claim at issue shall not be binding on
the Company. The Company has retained legal counsel to handle the relevant issues concerning the arbitration to uphold the rights of the
Company and its shareholders.
C. The Company is engaged in a construction project with Taiwan Railway Administration, MOTC (“Taiwan Railway”). Taiwan Railway failed
to complete the inspection process after the goods were delivered. The Company has filed an action against Taiwan Railway to claim
payments in January 2013. The action is pending at the court of first instance.
(2) Unrecognized contract commitment
The Company has entered into a purchase agreement for construction equipments for NTD 248,500 thousand. The Company has paid NTD
49,700 thousand and recorded in other non-current assets-prepayments for equipments. The unpaid balance is NTD 198,800 thousand.
(3) Other
A. The promissory notes issued by the Company for bank loans, construction escrow and tariff guarantee amounted to NTD 8,940,347
thousand.
B. The Company and its subsidiaries’ unused letters of credit for importing raw materials and machinery amounted to NTD 58,479 thousand,
USD 23,773 thousand, EUR 82 thousand, JPY 200,335 thousand.
C. Contract escrows issued by financial institutions amounted to NTD 2,052,140 thousand and USD407 thousand.
D. The Company’s first overseas zero-coupon secured convertible bonds were guaranteed by J.P. Morgan. The balance of guarantees was
USD151,250 thousand.
E. The Company applied to Mega International Commercial Bank and Bank of Taiwan for a credit line to be issued for Tatung Co., of Japan,
Inc. The promissory notes of credit amounted to NTD1,360,000 thousand and NTD950,000 thousand.
F. The Company has filed an appeal against the National Taxation Bureau for the tax affairs related to an additional tax and fines resulted
from the commodity taxes from 2004 to 2008. In January 2013, the Company has provided some SCSC shares as guarantee for this tax
controversy.
G. The Company provided guaranty for Tatung InfoComm Co., Ltd. to apply for a credit line of NTD 2,000,000 thousand to the Land Bank. The
maturity date of guaranties is September 22, 2014. On March 23, 2012, the board of directors resolved to sell the common shares of Tatung
InfoComm Co., Ltd. to Vee Telecom Multimedia Co., Ltd. Since the Company has completed the transaction, Tatung InfoComm Co., Ltd.
was no longer a subsidiary of the Company. Accordingly, Tatung InfoComm Co., Ltd. is negotiating with the bank to relieve the Company
from endorsing for it.
10.Significant disaster loss
None.
11. Significant subsequent events
None.
278
Financial Overview
12. Other
(1) Categories of financial instruments
Financial assets
31 December 2013
31 December 2012
1 January 2012
Financial assets at fair value through profit or loss:
Held for trading (includes the non - current ones)
$41,351
$105,787
$61,502
Available-for-sale financial assets (includes Financial assets
measured at cost)($29,538, $29,238, $59,284)(includes the
non-current ones)
570,242
571,542
338,629
20,000
20,000
20,000
Cash and cash equivalents (excludes cash on hand)
3,739,469
2,704,512
2,162,148
Investment in debt security with no active market,
current (includes the non - current ones)
1,174,118
605,042
1,709,735
Notes receivable (includes related parties)
356,660
599,331
534,784
Accounts receivable (includes related parties)
(include the construction receivable)
7,145,754
6,995,503
6,762,647
Other receivables (includes related parties)
(includes the non - current ones)
4,649,221
4,356,304
3,691,317
212,612
263,735
320,706
17,277,834
15,524,427
15,181,337
$17,909,427
$16,221,756
$15,601,468
Held-to-maturity financial assets
Loans and receivables:
Other non - current assets–deposits-out
subtotal
Total
Financial liabilities
31 December 2013
31 December 2012
1 January 2012
Financial liabilities at amortized cost:
Short-term loan
$5,777,227
$5,032,068
$6,710,529
629,586
399,939
599,592
Payables (includes related parties)(includes the
non - current ones)
5,746,545
6,164,033
8,533,919
Bonds payables (includes the current portions)
4,372,470
3,977,033
4,679,170
Loan (includes the current portions)
17,194,797
19,201,098
19,414,063
1,791
792
5,433
33,722,416
34,774,963
39,942,706
9,346
70,460
-
$33,731,762
$34,845,423
$39,942,706
Short-term notes and bills payable
Deposits in
Subtotal
Financial liabilities at fair value through profit or loss:
Held-for-trading
Total
(2) Financial risk management objectives and policies
279
TATUNG 2012 Annual Report
Financial Overview
The Company’s risk management objectives are to manage market risk, credit risk and liquidity risk related to its operating activities. The
Company identifies measures and manages the aforementioned risks based on policy and risk preference. The Company has established
appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities,
due approval process by the board of directors and audit committee must be carried out based on related protocols and internal control
procedures. The Company complies with its financial risk management policies at all times.
(3) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market
risks comprise of currency risk, interest rate risk, and other price risk (such as equity price risk).
In practice, it is rarely the case that a single risk variable will change independently from other risk variables, there is usually interdependencies
between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk
variables.
Foreign currency risk
The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when
revenue or expense are denominated in a different currency from the Company’s functional currency) and the Company’s net investments in
foreign subsidiaries.
The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency
payables, therefore natural hedge is received. The Company also uses forward contracts to hedge the foreign currency risk on certain items
denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net
investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.
The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant
monetary items denominated in foreign currencies as at the end of the reporting period. The Company’s foreign currency risk is mainly related
to the volatility in the exchange rates for USD, and JPY.
The information of the sensitivity analysis is as follows:
A. When NTD strengthened/ weakened against USD by 1%, the profit for the years ended 31 December 2013 and 2012 increased (decreased)
by NTD55 million/NTD(55) million and NTD61 million/NTD(61) million.
B. When NTD strengthened/ weakened against JPY by 1%, the profit for the years ended 31 December 2013 and 2012 increased/decreased
by NTD3 million/NTD(3) million and NTD166 thousand/NTD(166) thousand.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s loans and receivables at
variable interest rates, bank borrowings with fixed interest rates and variable interest rates.
The Company manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into
interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.
The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments
and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a
reporting period could cause the profit for the years ended 31 December 2013 and 2012 to increase/decrease by NTD17 million and NTD27
million, respectively
Equity price risk
The Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the
investment securities. The Company’s listed equity securities are classified under held for trading financial assets or available-for-sale financial
assets, while unlisted equity securities are classified as available-for-sale. The Company manages the equity price risk through diversification
and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior
management on a regular basis. The Company’s board of directors reviews and approves all equity investment decisions.
At the reporting date, a change of 1% in the overall earnings stream of the valuations performed on unlisted equity securities classified
under available-for-sale could have an impact of NTD 362 thousand and NTD 224 thousand on the Company’s equity for the years ended 31
December 2013 and 2012, respectively.
At the reporting date, a decrease of 1% in the price of the listed equity securities held for trading could increase/decrease the Company’s
profit for the years ended 31 December 2013 and 2012 by NTD(3,935) thousand and NTD(5,423) thousand, respectively
(4) Credit risk management
Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to
credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank
deposits and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to
customer credit risk management. Credit limits are established for all customers based on their financial position, rating from credit rating
agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria etc. Certain customer’s credit risk
will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.
As of 31 December 2013, 31 December 2012, and 1 January 2012, amounts receivables from top ten customers represented 55.54%, 52.63%
and 51.97% of the total accounts receivables of the Company, respectively. The credit concentration risk of other accounts receivables is
insignificant.
Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company’s treasury in
accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures,
which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk.
Consequently, there is no significant credit risk for these counter parties.
(5) Liquidity risk management
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents,
highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of
the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes
the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated
interest rate yield curve as of the end of the reporting period.
Non-derivative financial instruments
280
Financial Overview
Less Than 1 Year
More than 5
Years
Total
2-3 Years
4-5 Years
$11,711,312
$9,191,848
$2,223,558
$-
$23,126,718
630,000
-
-
-
630,000
5,648,879
97,666
-
-
5,746,545
4,470,750
-
-
-
4,470,750
1,791
-
-
-
1,791
$10,944,662
$12,696,833
$866,524
$-
$24,508,019
400,000
-
-
-
400,000
6,164,033
-
-
-
6,164,033
-
4,356,000
-
-
4,356,000
792
-
-
-
792
$8,467,385
$16,559,731
$1,645,536
$-
$26,672,652
600,000
-
-
-
600,000
Payables (including relates parties) (including the
non-current portions)
8,463,587
70,332
-
-
8,533,919
Convertible bonds payable (including the current
portions)
762,400
4,543,500
-
-
5,305,900
5,433
-
-
-
5,433
31 December 2013
Loans (including contracted interests)
Short-term notes and bills payable
Payables (including relates parties) (including the
non-current portions)
Convertible bonds payable(including the current
portions)
Deposit-in
31 December 2012
Loans (including contracted interests)
Short-term notes and bills payable
Payables (including relates parties) (including the
non-current portions)
Convertible bonds payable (including the current
portions)
Deposit-in
1 January 2012
Loans (including contracted interests)
Short-term notes and bills payable
Deposit-in
Derivative financial instruments
Less Than 1 Year
2-3 Years
More than 5
Years
4-5 Years
Total
31 December 2013
Flow-in
$25,192
$-
$-
$-
$25,192
Flow-out
(10,811)
-
-
-
(10,811)
$14,381
$-
$-
$-
$14,381
Flow-in
$2,821,360
$-
$-
$-
$2,821,360
Flow-out
(2,891,820)
-
-
-
(2,891,820)
$(70,460)
$-
$-
$-
$(70,460)
$-
$-
$-
$-
$-
-
-
-
-
-
$-
$-
$-
$-
$-
Net
31 December 2012
Net
1 January 2012
Flow-in
Flow-out
Net
The above tables about the disclosures of derivative financial instruments used the undiscounted net cash flow.
(6) Fair value of financial instruments
A. The methods and assumptions applied in determining the fair value of financial instruments:
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current
281
TATUNG 2012 Annual Report
Financial Overview
B.
transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to
estimate the fair values:
(a) The carrying amount of cash and cash equivalents, accounts receivables, payables and other current liabilities approximate their fair
value.
(b) For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on
market quotation price (including listed equity securities and bonds) at the reporting date.
(c) Fair value of equity instruments without market quotations (including unquoted public company and private company equity
securities) are estimated using the market method valuation techniques based on parameters such as recent fund raising activities,
valuation of similar companies, individual company’s development, market conditions and other economic indicators.
(d) The fair value of derivative financial instrument is based on market quotations. For unquoted derivatives that are not options, the fair
value is determined based on discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of optionbased derivative financial instruments is obtained using the option pricing model.
(e) The fair value of other financial assets and liabilities is determined using discounted cash flow analysis, the interest rate and discount
rate are selected with reference to those of similar financial instruments.
Fair value of financial instruments carried at amortized cost
Except as detailed in the following table, the Company considers that the carrying amounts of carried at amortized cost financial assets
and financial liabilities recognized in the consolidated financial statements approximate their fair values.
Carrying amounts
31 December 2013
31 December 2012
1 January 2012
$4,372,470
$3,977,033
$4,649,170
31 December 2013
31 December 2012
1 January 2012
$4,470,750
$4,356,000
$5,302,402
Financial liabilities
Bonds payable
Fair value
Financial liabilities
Bonds payable
C. Fair value measurements recognized in the consolidated statement of financial position.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 based on the degree to which the fair value is observable:
(a) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
(b) Level 2 fair value 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);
(c) Level 3 fair value 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).
31 December 2013
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at fair value through profit or loss:
Forward exchange contracts
Open-end funds
$-
$23,727
$-
$23,727
17,624
-
-
17,624
393,460
-
147,244
540,704
-
9,346
-
9,346
Available-for-sale financial assets:
Share
Financial liabilities
Financial liabilities at fair value through profit or loss:
Exchange options
31 December 2012
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at fair value through profit or loss:
Open-end funds
$105,787
$-
$-
$105,787
435,472
-
106,832
542,304
-
70,460
-
70,460
Available-for-sale financial assets:
Share
Financial liabilities
Forward exchange contracts
282
Financial Overview
1 January 2012
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at fair value through profit or loss:
Forward exchange contracts
$-
$59,433
$-
$59,433
-
2,069
-
2,069
172,513
-
106,832
279,345
Embedded derivatives
Available-for-sale financial assets:
Share
Financial liabilities: None
There were no transfers between Level 1 and 2 for the year ended 31 December 2013 and 2012, respectively.
Regulate financial assets with Level 3 value measurement is below:
Measurement at fair value
through income/loss
Share
1 January 2013
Available- forsale
Derivative
Share
Total
$-
$-
$106,832
$106,832
-
-
40,412
40,412
31 December 2013
$-
$-
$147,244
$147,244
1 January 2012
$-
$-
$106,832
$106,832
-
-
-
-
$-
$-
$106,832
$106,832
Recognized in other comprehensive income
Recognized in other comprehensive income
31 December 2012
(7) Derivative financial instruments held by the Company for trading of derivative financial instruments included forward foreign exchange
contracts, currency options, embedded derivatives and structured equity swap contracts. The related information are as follows:
The Company
Forward exchange contracts
Forward foreign exchange contracts to manage exposure part partial transactions, but not designated as hedging instruments:
31 December 2013
Buying currency exchange forward
Currency
Period
Amount (thousands)
Buy USD sell NTD
August 2012 - March 2014
Currency
Period
Buy USD sell NTD
December 2012 - October 2013
USD 96,000
Sell USD buy NTD
December 2012 - March 2013
USD 1,000
Currency
Period
Buy USD sell NTD
100.08-101.06
USD 154,320
Buy EUR sell NTD
100.11-101.05
EUR 1,022
USD 78,409
31 December 2012
Buying currency exchange forward
Amount (thousands)
1 January 2013
Buying currency exchange forward
Amount (thousands)
Embedded derivative
31 December 2013
Convertible bonds embedded derivative
$-
31 December 2012
$-
1 January 2012
$2,069
The Company’s first issue of overseas convertible bonds embedded derivatives contained investor put option value, the redemption value of
the bonds and reset the value recorded under financial assets carried at fair value through profit or loss.
283
TATUNG 2012 Annual Report
Financial Overview
Exchange options
31 December 2013
The following table refers to the related conditions with regard to the Company's unamortized exchange options on 31 December 2013.
Counterparty
Foreign exchange rate
Foreign exchange rate on
the date of settlement FX
A
USD/JPY
FX > 102.20
The Company executed at 102.20 to sell USD 1,000
B
USD/JPY
FX > 102.00
The Company executed at 102.00 to sell USD 1,000
B
USD/JPY
FX > 102.20
The Company executed at 102.20 to sell USD 1,500
B
USD/JPY
FX > 102.90
The Company executed at 102.90 to sell USD 1,000
B
USD/JPY
FX > 102.10
The Company executed at 102.10 to sell USD 1,000
B
USD/JPY
FX > 102.40
The Company executed at 102.40 to sell USD 1,000
B
USD/JPY
FX > 105.30
The Company executed at 105.30 to sell USD 1,000
B
USD/JPY
FX > 103.50
The Company executed at 103.50 to sell USD 1,000
B
USD/JPY
FX > 104.00
The Company executed at 104.00 to sell USD 1,000
B
USD/JPY
FX > 104.80
The Company executed at 104.80 to sell USD 1,000
B
USD/NTD
FX < 29.48
The Company executed at 29.48 to buy USD 1,000
B
USD/NTD
FX < 29.49
The Company executed at 29.49 to buy USD 1,000
B
USD/NTD
FX < 29.25
The Company executed at 29.25 to buy USD 1,000
B
USD/NTD
FX < 29.26
The Company executed at 29.26 to buy USD 1,000
B
USD/NTD
FX < 29.40
The Company executed at 29.40 to buy USD 1,000
B
USD/NTD
FX < 29.40
The Company executed at 29.40 to buy USD 1,000
B
USD/NTD
FX < 29.42
The company executed at 29.42 to buy USD 1,000
B
USD/NTD
FX < 29.49
The company executed at 29.49 to buy USD 1,000
B
USD/NTD
FX < 29.75
The company executed at 29.75 to buy USD 1,000
B
USD/NTD
FX < 29.50
The company executed at 29.50 to buy USD 1,000
C
USD/JPY
FX > 104.70
The company executed at 104.70 to sell USD 1,000
C
USD/JPY
FX > 102.60
The company executed at 102.60 to sell USD 1,000
C
USD/NTD
FX < 29.53
The company executed at 29.53 to buy USD 1,000
D
USD/JPY
FX > 102.10
The company executed at 102.10 to sell USD 1,000
D
USD/JPY
FX > 107.00
The company executed at 107.00 to sell USD 1,000
E
USD/JPY
FX > 103.20
The company executed at 103.20 to sell USD 1,000
F
USD/NTD
FX < 29.30
The company executed at 29.30 to buy USD 1,000
Term of settlement
As of 31 December 2013, foreign exchange options contracts that have been settled amounted to USD 533,141 thousand and JPY1,198,300
thousand, and the remaining unsettled contracts amounted to USD27,500 thousand, with a fair value of NTD 9,346 thousand (including royalties
amounted to NTD 6,810 thousand and unrealized loss amounted to NTD 2,536 thousand), recognized as financial liabilities carried at fair value
through profit or loss - current.
31 December 2012
As of 31 December 2012, foreign exchange options contracts that had been fully settled amounted to USD446,200 thousand and JPY1,204,355
thousand.
January 1, 2012
None.
The aforementioned derivative transactions are reputable financial institutions with good credit risk is not so high.
For forward foreign exchange contracts, to hedge the risk of exchange rate changes on net assets or net liabilities with cash inflows or outflows
relative maturity, and the company also has sufficient working capital, no significant cash flow risk.
284
Financial Overview
(8) Significant assets and liabilities denominated in foreign currencies
The exchange rates used to translate assets and liabilities denominated in foreign currencies are disclosed as follows:
Foreign currency-dollar, NTD-thousand
31 December 2013
Foreign currency
Exchange rate
NTD
Financial Assets - Monetary items
USD
$113,927,112
29.80500
$3,395,598
JPY
205,104,656
0.28390
58,229
EUR
664,565
41.09000
27,307
USD
7,072,321
29.80500
210,791
RMB
104,976,503
4.88855
513,183
Non-Monetary items
THB
481,251,673
0.91350
427,748
JPY
1,807,803,617
0.28390
513,235
SGD
2,765,936
23.58000
65,221
MXN
195,317,539
2.28050
445,422
GBP
(4,093,452)
49.28000
(201,725)
CZK
99,397,734
1.49936
149,033
VND
50,701,844,081
0.00141
71,491
USD
298,397,752
29.80500
8,893,745
JPY
1,150,533,723
0.28390
326,637
EUR
1,529,444
41.09000
62,845
Financial Liabilities - Monetary items
CZK
8,440
1.49936
13
CHF
42,731
33.48500
1,431
Foreign currency
31 December 2012
Exchange rate
NTD
Financial Assets - Monetary items
USD
104,499,628
29.04000
3,034,689
JPY
266,524,052
0.33640
89,659
EUR
703,723
38.49000
27,086
Non-Monetary items
USD
7,513,273
29.04000
218,185
RMB
151,073,614
4.62016
697,984
THB
468,613,409
0.95350
446,823
JPY
1,773,304,454
0.33640
596,540
SGD
2,825,728
23.76000
67,139
MXN
192,120,355
2.23795
429,956
GBP
(4,093,452)
46.83000
(191,696)
CZK
131,258,299
1.53464
201,434
VND
153,127,112,419
0.00139
212,847
USD
313,225,534
29.04000
9,096,070
Financial Liabilities - Monetary items
285
JPY
217,022,043
0.33640
73,006
EUR
1,073,235
38.49000
41,309
CZK
8,440
1.53464
13
CHF
7,273
31.82500
231
TATUNG 2012 Annual Report
Financial Overview
Foreign currency
1 January 2012
Exchange rate
NTD
Financial Assets - Monetary items
USD
167,546,179
30.29000
5,074,974
JPY
34,758,147
0.39030
13,566
EUR
462,102
39.20000
18,114
CZK
7,043
1.51630
11
GBP
366
46.74050
17
USD
11,602,418
30.27500
351,263
RMB
209,030,066
4.80490
1,004,369
Non - Monetary items
THB
458,486,119
0.96470
442,302
JPY
1,756,466,446
0.39060
686,076
SGD
2,766,279
23.49869
65,004
MXN
207,587,996
2.16220
448,847
CAD
761,064
29.18700
22,213
GBP
(4,093,452)
54.02052
(221,130)
CZK
150,637,957
1.51560
228,307
VND
230,175,810,568
0.00140
322,246
USD
433,777,589
30.29000
13,139,123
JPY
384,262,599
0.39030
149,978
Financial Liabilities - Monetary items
EUR
1,534,014
39.20000
60,133
CZK
8,440
1.51560
13
CHF
22,667
32.22000
730
(9) Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light
of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders,
return capital to shareholders or issue new shares.
(10) Banciao District Court found the Company guilty in Nature Worldwide Technology Co., case on 29 June 2012. Chairman Lin deeply regretted
the result and found the verdict unacceptable. An appeal has been filed by the Company’s attorney to Taiwan High Court. The Company's
operations, financial matters and business continued as usual and were not affected by the case.
13. Other disclosure
(1) Information at significant transactions:
A. Financing provided to others: refer to Attachment 1.
B. Endorsement/Guarantee provided to others: refer to Attachment 2.
C. Securities held: refer to Attachment 3.
D. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NTD300 million or 20 percent of the capital
stock: refer to Attachment 4.
E. Acquisition of real estate in the amount exceeding the lower of NTD300 million or 20 percent of capital stock: none.
F. Disposal of real estate up to the amount exceeding the lower of NTD300 million or 20 percent of capital stock: none.
G. Related party transactions for purchases and sales amounts exceeding the lower of NTD100 million or 20 percent of capital stock: refer to
Attachment 5.
H. Receivables from related parties with amounts exceeding the lower of NTD100 million or 20 percent of capital stock: refer to Attachment 6.
I. Engage in derivative transactions: refer to Note 6 and Note 12 in the consolidated financial statements.
J. Intercompany Relationships and Significant Intercompany Transactions: refer to Attachment 10.
(2) Information on investees:
A. Of the investee company directly or indirectly has significant influence or control over, their investee companies’ information: refer to
Attachment 8.
286
Financial Overview
B.
Of the investee company who directly or indirectly has control, exposing the following:
(a) Financing provided to others: refer to Attachment 1.
(b) Endorsement/Guarantee provided to others: refer to Attachment 2.
(c) Securities held: refer to Attachment 3.
(d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NTD 300 million or 20 percent of the
capital stock: refer to Attachment 4.
(e) Acquisition of real estate in the amount exceeding the lower of NTD 300 million or 20 percent of capital stock: none.
(f) Disposal of real estate up to the amount exceeding the lower of NTD 300 million or 20 percent of capital stock: none.
(g) Related party transactions for purchases and sales amounts exceeding the lower of NTD 100 million or 20 percent of capital stock: refer
to Attachment 5.
(h) Receivables from related parties with amounts exceeding the lower of NTD 100 million or 20 percent of capital stock: refer to
Attachment 6.
(i) Engage in derivative transactions: Attachment 7.
C. Information on investments in mainland China:
(a) The investee company name, main business, paid-in capital, investment, capital outflow, ownership, investment gains and losses,
ending balance of investment, repatriation of investment income and have to go to the mainland investment limit scenario: refer to
Attachment 9.
(b) with the investee companies directly or indirectly through a third country following the occurrence of significant transactions, prices,
payment terms and unrealized gains and losses were as follows:
i Ending balance and percentage, purchase amount and percentage of related payables: refer to Attachment 9-3.
ii Sales amount and percentage of the balance and percentage of the related receivables: refer to Attachment 9-3.
iii Gains and loss on the transaction amount of property: None.
iv Endorsement guarantees or collateral ending balance and purpose: None.
v. Financing, the total ending balance, and current interest rates range: None.
vi Other for profit or loss or financial position have a significant impact on the transactions, such as the provision of services or received,
etc.: None.
Please refer to page 193 to 212 in the consolidated financial statements for the the Attachment 1 to 6 to the parent company only financial
statements, which are the Attachment 1 to 6 to the consolidated financial statements. Please refer to page 172 to 173 in the consolidated
financial statements for the Attachment 7 to the parent company only financial statements, which are the information related to the derivatives
financial instruments of the subsidiaries in the consolidated financial statements. Please refer to page 213 to 230 in the consolidated financial
statements for the Attachment 8 to 10 to the parent company only financial statements, which are the Attachment 7 to 9 to the consolidated
financial statements.
14. First-time adoption of TIFRS
For all periods up to and including the year ended 31 December 2012, the Company prepared its financial statements in accordance with
generally accepted accounting principles in R.O.C. (R.O.C. GAAP). The consolidated financial statements for the year ended 31 December 2013
are the first the Company has prepared in accordance with TIFRS.
Accordingly, the Company has prepared financial statements which comply with TIFRS and the Regulations Governing the Preparation of
Financial Reports by Securities Issuers for periods beginning 1 January 2013 as described in the accounting policies under Note 4. Furthermore
the first interim financial statements prepared under TIFRS also complied with the requirements under IFRS 1 First-time Adoption of International
Financial Reporting Standards. The Company’s opening balance sheet was prepared as at 1 January 2012, the Company’s date of transition to
TIFRS.
Exemptions applied in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 1 First-time Adoption of International Financial Reporting Standards allows first-time adopters certain exemptions from the retrospective
application of certain IFRS. The Company has applied the following exemptions:
(1) IFRS 3 Business Combinations has not been applied to acquisitions of subsidiaries or of interests in associates and joint ventures that occurred
before 1 January 2012. By applying this exemption, immediately after the business combination, the carrying amount in accordance with
R.O.C. GAAP of assets acquired and liabilities assumed in that business combination, shall be their deemed costs in accordance with TIFRS
at that date. The subsequent measurement of these assets and liabilities will be in accordance with TIFRS. Under IFRS 1 First-time Adoption
of International Financial Reporting Standards, the carrying amount of goodwill in the opening balance sheet shall be its carrying amount
in accordance with R.O.C. GAAP at 31 December 2011, after testing for impairment and reclassifying amounts to intangible assets that are
required to be recognized. The Company has performed goodwill impairment testing as at the date of transition to TIFRS and no impairment
loss has been recognized as at that date.
(2) The Company has elected to use previous GAAP revaluation of certain land and buildings under property, plant and equipment as their
deemed costs at the date of the revaluation.
(3) The Company has elected the exemption to not separate the liability and equity components of a compound financial instrument if the
liability component is no longer outstanding at the date of transition to TIFRS.
(4) The Company has recognized all cumulative actuarial gains and losses on pensions as at the date of transition to TIFRS directly in retained
earnings.
(5) The Company has elected to disclose amounts required by paragraph 120A(p) of IAS 19 prospectively from the date of transition to TIFRS.
(6) Accumulated balance of exchange differences resulting from translating the financial statements of a foreign operation is deemed to be zero
as at the date of transition to TIFRS.
(7) IFRS 2 Share-based Payment has not been applied to equity instruments in share-based payment transactions that were granted on or before
7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 that vested before the date of transition to
TIFRS.
287
TATUNG 2012 Annual Report
Financial Overview
Impacts of transitioning to TIFRS
The following tables contain reconciliation of balance sheets as at 1 January 2012 (the date of transition to TIFRS) and 31 December 2012 and
statements of comprehensive income for the year ended 31 December 2012:
Reconciliation of consolidated balance sheet items as at 1 January 2012 (the date of transition to TIFRS)
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements Presentation
TIFRS
Amounts
Items
Current assets
Cash and cash equivalents
Notes
Current assets
$2,214,383
$-
$-
$2,214,383
59,433
-
-
59,433
172,513
90,121
-
262,634
149,405
(90,121)
-
59,284
-
-
793,463
793,463
528,133
-
-
528,133
Notes receivable, net
6,651
-
-
6,651
Notes receivable -related
parties, net
Accounts receivable, net
3,709,668
-
(307,058)
3,402,610
Accounts receivable, net
Accounts receivable - related
parties, net
3,052,979
-
-
3,052,979
Accounts receivable - related
parties, net
-
-
307,058
307,058
Construction receivables
46,399
-
(11,054)
35,345
Other receivables, net
3,626,414
-
-
3,626,414
Other receivables, netrelated parties, net
-
-
11,054
11,054
Current tax assets
6,783,383
-
-
6,783,383
Inventories
304,769
-
-
304,769
Prepayments
6,151
-
(6,151)
-
-
12
787,312
-
(787,312)
-
Other current assets
12
21,447,593
-
-
21,447,593
Total current assets
Financial assets at fair value
through income statement - current
Available-for-sale financial assets current
Financial assets measured at costcurrent
Investment in debt security with no
active accounted-current
Notes receivable, net
Notes receivable -related parties,
net
Construction receivables
Other receivables, net
Other receivables, net- related
parties, net
Inventories
Prepayments
Restricted assets
Other current assets
Total current assets
Funds and investments
Investments accounted for under
the equity method
Prepayment for long-term
investments
Financial assets at fair value
through income statement - noncurrent
Available-for-sale financial assets,
non-current
Financial assets in held-to-maturity,
non-current
Financial assets carried at cost,
non-current
Investment in debt security with no
active accounted, non-current
Cash and cash equivalents
Financial assets at fair value
through income statement current
Available-for-sale financial
assets - current
Financial assets measured at
cost- current
Investment in debt security
with no active accountedcurrent
1
1
12
20
20
Non-current assets
54,589,123
4,252,684
(863,737)
57,978,070
79,011
-
(79,011)
-
2,069
-
-
2,069
-
16,711
-
16,711
20,000
-
-
20,000
16,711
(16,711)
-
-
-
-
916,272
916,272
Investments accounted for 6, 7, 13,
under the equity method
15
Financial assets at fair value
through income statement non-current
Available-for-sale financial
assets, non-current
Financial assets in held-tomaturity, non-current
Financial assets carried at
cost, non-current
Investment in debt security
with no active accounted,
non-current
11
1
1
12
288
Financial Overview
R.O.C. GAAP
Items
Total Funds and investments
Property, plant and equipment
Intangible assets
Impact of transitioning to TIFRS
Amounts
Remeasurements Presentation
TIFRS
Amounts
Items
Notes
54,706,914
2,443,957
-
(25,932)
2,418,025
Property, plant and
equipment
70,782
-
-
70,782
Intangible assets
320,706
-
-
320,706
Refundable deposit
7,083
-
(7,083)
-
-
29,558
-
-
29,558
304,785
-
239,508
544,293
991,015
-
(804,246)
186,769
Other non-current assets
1,653,147
4,252,684
(624,229)
62,503,255
Total non-current assets
$80,322,393
$4,252,684
$(624,229)
$83,950,848
Total assets
3
Other non-current assets
Refundable deposit
Deferred expense
Long-term receivables, net - related
parties
Deferred income tax assets - noncurrent
Other non-current assets
Total non-current assets
Total assets
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements Presentation
Items
Current liabilities
$-
$-
$6,710,529
Short-term borrowings
599,592
-
-
599,592
Short-term notes and bills
payable
Trade payables
3,226,295
-
-
3,226,295
Trade payables
Accounts payable - related parties
2,746,553
-
-
2,746,553
Accounts payable - related
parties
Other payables
2,095,694
52,971
(3,254)
2,145,411
Other payables
345,328
-
-
345,328
Other payables - related
parties
3,254
3,254
Provision, current
Advanced receipts
Other payables - related parties
Advanced receipts
Current portion of long-term loans
Other current liabilities - others
Total current liabilities
3, 8, 11,
12
Notes
$6,710,529
Short-term notes and bills payable
18
TIFRS
Amounts
Current liabilities
Short-term borrowings
Long-term receivables, net related parties
Deferred income tax assets non-current
8
342,569
-
-
342,569
-
-
717,555
717,555
2,474,411
-
(717,555)
1,756,856
44,215
-
-
18,585,186
52,971
-
Current portion of bonds
payable
Current portion of long-term
loans
5, 20
20
20
20
44,215 Other current liabilities - others
18,638,157
Total current liabilities
-
Long-term liabilities
Non-current liabilities
Bonds payable
4,194,978
(233,363)
-
3,961,615
Bonds payable
Long-term loans
17,657,207
-
-
17,657,207
Long-term loans
289
10
TATUNG 2012 Annual Report
Financial Overview
R.O.C. GAAP
Items
Long-term payables
Total long-term loans with interest
Impact of transitioning to TIFRS
Amounts
Remeasurements Presentation
70,332
-
TIFRS
Amounts
-
Items
70,332
21,922,517
Long-term payables
-
Reserves
Reserve for land revaluation
Notes
3,418
-
(3,418)
-
-
9
3,110,474
187,588
-
3,298,062
Accrued pension liability
4
5,433
-
-
5,433
Deposits received
1,197,191
179,205
-
1,376,396
-
-
242,926
242,926
863,737
-
(863,737)
-
-
5,176,835
133,430
(624,229)
26,611,971
Total non-current liabilities
Total liabilities
45,687,956
186,401
(624,229)
45,250,128
Total liabilities
Capital stock
23,395,367
-
-
23,395,367
Capital stock
5,958,455
(5,239,077)
-
719,378
Capital reserve
Other liabilities
Accrued pension liability
Deposits received
Deferred credit for investments
accounted for under the equity method
Deferred income tax liabilities –
non-current
Deferred credit – intercompany
gain
Total non-current libilities
Capital reserve
Retained earnings
Special reserve
Accumulated deficits
6
9, 18
15
6, 7, 10,
13
Retained earnings
-
-
15,978,036
15,978,036
(2,595,800)
19,238,783
(15,978,036)
664,947
Adjusting items in shareholders'
equity
Cumulative translation adjustment
Deferred credit for investments
accounted for under the equity
method
Deferred income tax liabilities
– non-current
Special reserve
19
2, 4, 5, 6,
Undistributed earnings 7, 10, 13,
17, 19
Other equity
Exchange differences resulting
from translating the financial 6, 17, 19
statements of a foreign operation
1,060,477
(1,060,477)
-
-
(1,089,054)
1,089,054
-
-
-
4, 6
(1,055,289)
496,990
-
(558,299)
Unrealized Gain or Loss on
Financial Instruments
6, 14
(5,280)
-
-
(5,280)
Cash Flow Hedges
9,969,197
(9,969,197)
-
-
-
2, 19
Treasury stock
(1,003,636)
(489,793)
-
(1,493,429)
Treasury stock
14
Total shareholders' equity
34,634,437
4,066,283
-
38,700,720
Total shareholders' equity
$80,322,393
$4,252,684
$(624,229)
$83,950,848
Total liabilities and
shareholders' equity
Unrecognized net loss on pension
cost
Unrealized Gain or Loss on Financial
Instruments
Cash Flow Hedges
Unrealized revaluation increments
Total liabilities and shareholders'
equity
290
Financial Overview
Reconciliation of consolidated balance sheet items as at 31 December 2012
R.O.C. GAAP
Items
Impact of transitioning to TIFRS
Amounts
Remeasurements Presentation
TIFRS
Amounts
Items
Current assets
Cash and cash equivalents
Notes
Current assets
$2,758,053
$-
$-
$2,758,053
105,787
-
-
105,787
435,472
90,121
-
525,593
119,359
(90,121)
-
29,238
-
-
16,982
16,982
Notes receivable, net
449,919
-
-
449,919
Notes receivable, net
Notes receivable - related parties,
net
149,412
-
-
149,412
Notes receivable - related
parties, net
Accounts receivable, net
4,513,304
-
(1,006,157)
3,507,147
Accounts receivable, net
Accounts receivable - related
parties, net
2,482,199
-
-
2,482,199
Accounts receivable - related
parties, net
-
-
1,006,157
1,006,157
Construction receivables
53,813
-
(20,009)
33,804
Other receivables, net
3