Post on 28-Jun-2020
Wintek Corporation and Subsidiaries Consolidated Financial Statements for the Years Ended December 31, 2013 and 2012 and Independent Auditors’ Report
- 1 -
DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES
The Companies required to be included in the consolidated financial statements of affiliates in accordance with
the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated
Financial Statements of Affiliated Enterprises” for the year ended December 31, 2013 are all the same as the
companies required to be included in the consolidated financial statements of parent and subsidiary companies
as provided in International Accounting Standard 27 “Consolidated and Separate Financial Statements.”
Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been
disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we have not
prepared a separate set of consolidated financial statements of affiliates.
Very truly yours,
WINTEK CORPORATION
By:
Hyley H. Huang
President
March 4, 2014
- 2 -
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and the Shareholders
Wintek Corporation
We have audited the accompanying consolidated balance sheets of Wintek Corporation (the “Corporation”) and
its subsidiaries (collectively referred to as the “Group”) as of December 31, 2013, December 31, 2012 and
January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity and cash
flows for the years ended December 31, 2013 and 2012. These consolidated financial statements are the
responsibility of the Corporation’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. However, we did not audit the financial statements of (a)
Wintek Electro-Optics Corporation, Wintek (Central Europe) GmbH as of and for the years ended December 31,
2013, December 31, 2012 and as of January 1, 2012; (b) Wintek Technology (India) Private Limited as of and
for the year ended December 31, 2012 and as of January 1, 2012; and (c) Wintek Vietnam Co., Ltd. as of
January 1, 2012. The carrying amounts of these subsidiaries’ total assets were 0.3% (NT$231,216 thousand),
0.5% (NT$412,869 thousand) and 7% (NT$6,096,546 thousand) of the consolidated total assets as of December
31, 2013, December 31, 2012 and January 1, 2012, respectively, and their net sales were 0.1% (NT$44,256
thousand) and 0.1% (NT$138,359 thousand) of the consolidated total net sales in 2013 and 2012, respectively.
These subsidiaries’ statements were audited by other auditors, whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for these subsidiaries as well as these subsidiaries’
information disclosed in Note 31 to the consolidated financial statements, is based solely on the reports of the
other auditors.
We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified
Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We believe that our audits 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 consolidated financial statements
referred to above present fairly, in all material respects, the financial position of the Group as of December 31,
2013, December 31, 2012 and January 1, 2012, and their financial performance and their cash flows for the
years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of
Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International
Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the
Financial Supervisory Commission of the Republic of China.
The management’s plans on improving the Group’s financial and operation conditions are described in Note 1 to
the consolidated financial statements. The consolidated financial statements as of and for the year ended
December 31, 2013 do not include any adjustments that might result from the outcome of this uncertainty.
- 3 -
We have also audited the financial statements of Wintek Corporation, the parent company, as of and for the
years ended December 31, 2013 and 2012, on which we have issued a modified unqualified report.
March 4, 2014
Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial
position, financial performance and cash flows in accordance with accounting principles and practices
generally accepted in the Republic of China and not those of any other jurisdictions. The standards,
procedures and practices to audit such consolidated financial statements are those generally applied in the
Republic of China.
For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial
statements have been translated into English from the original Chinese version prepared and used in the
Republic of China. If there is any conflict between the English version and the original Chinese version or any
difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and
consolidated financial statements shall prevail.
- 4 -
WINTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of New Taiwan Dollars)
December 31, 2013 December 31, 2012 January 1, 2012
ASSETS Amount % Amount % Amount %
CURRENT ASSETS
Cash and cash equivalents (Note 6) $ 7,068,795 9 $ 5,941,016 7 $ 7,682,309 9
Financial assets at fair value through profit or loss - current (Note 7) 134,952 - 471 - 61,740 -
Available-for-sale financial assets - current (Note 8) 553,836 1 310,663 - 311,133 -
Debt investments with no active market - current (Notes 9 and 27) 312,375 - 148,081 - 181,650 -
Notes receivable 10,868 - 3,152 - 5,074 -
Trade receivables (Note 10) 11,629,191 14 13,405,267 15 15,503,482 17
Other receivables (Notes 10 and 21) 987,511 1 480,558 - 1,394,327 2
Inventories (Note 11) 9,260,172 11 11,429,764 13 11,647,296 13
Other current assets 2,052,478 3 3,508,977 4 1,883,201 2
Total current assets 32,010,178 39 35,227,949 39 38,670,212 43
NON-CURRENT ASSETS
Financial assets measured at cost - noncurrent (Note 12) 148,895 - 177,935 - 208,482 -
Debt investments with no active market - noncurrent (Notes 9 and 27) 149,025 - - - - -
Property, plant and equipment (Notes 13 and 27) 46,039,575 56 50,423,824 56 40,925,979 46
Investment properties (Notes 14 and 27) 67,318 - 67,403 - 71,988 -
Computer software 52,684 - 49,967 - 29,197 -
Goodwill 36,866 - 35,920 - 37,447 -
Deferred tax assets (Note 21) 1,279,634 2 1,206,044 1 980,072 1
Prepayments for equipment 1,006,942 1 2,371,962 3 6,819,076 8
Refundable deposits 75,243 - 81,187 - 81,297 -
Long-term prepayments for lease (Notes 15 and 27) 1,159,431 2 1,129,602 1 1,201,678 2
Other non-current assets (Note 18) 51,654 - 27,350 - 45,869 -
Total non-current assets 50,067,267 61 55,571,194 61 50,401,085 57
TOTAL $ 82,077,445 100 $ 90,799,143 100 $ 89,071,297 100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 16) $ 21,617,807 26 $ 19,820,912 22 $ 14,636,338 17
Short-term bills payable (Note 16) 39,999 - 199,809 - 278,540 -
Financial liabilities at fair value through profit or loss - current
(Note 7) 12,732 - 37,792 - 23,753 -
Notes payable 205,814 - 14,300 - 14,116 -
Trade payables 11,705,765 14 10,634,965 12 13,714,923 15
Other payables (Note 17) 5,612,541 7 5,682,751 6 5,921,030 7
Current tax liabilities (Note 21) 61,218 - 163,181 - 92,453 -
Provisions - current 17,188 - 34,547 - 71,452 -
Current portion of long-term borrowings (Notes 16 and 27) 9,226,179 11 2,463,047 3 3,474,368 4
Other current liabilities - others 352,455 1 290,651 1 354,926 -
Total current liabilities 48,851,698 59 39,341,955 44 38,581,899 43
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 16 and 27) 7,011,871 9 16,558,851 18 14,564,597 17
Deferred tax liabilities (Note 21) 17,388 - 19,954 - 11,656 -
Other non-current liabilities 12,883 - 4,970 - 4,469 -
Total non-current liabilities 7,042,142 9 16,583,775 18 14,580,722 17
Total liabilities 55,893,840 68 55,925,730 62 53,162,621 60
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital
Common stock 18,477,784 23 18,477,784 20 16,477,784 19
Capital surplus
Additional paid-in capital from share issuance in excess of par 15,381,964 19 18,260,403 20 17,658,360 20
Treasury stock transactions 172,402 - 172,402 - 172,402 -
Difference between market price and carrying amount in acquisition or
disposal of subsidiaries 1,235 - 1,235 - - -
Merger 48,478 - 48,478 - 48,478 -
Others 318 - 318 - 318 -
Retained earnings
Legal reserve - - - - 1,576,205 2
Accumulated deficit (8,706,924) (11) (1,323,142) (1) (314,789) (1)
Other equity
Exchange differences on translating foreign operations 284,694 - (1,039,918) (1) - -
Unrealized gain on available-for-sale financial assets 370,440 1 136,890 - 128,986 -
Total equity attributable to owners of the parent 26,030,391 32 34,734,450 38 35,747,744 40
NON-CONTROLLING INTERESTS 153,214 - 138,963 - 160,932 -
Total equity 26,183,605 32 34,873,413 38 35,908,676 40
TOTAL $ 82,077,445 100 $ 90,799,143 100 $ 89,071,297 100
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated March 4, 2014)
- 5 -
WINTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Loss Per Share)
Year Ended December 31
2013 2012
Amount % Amount %
SALES $ 76,397,725 100 $ 102,178,051 100
COST OF GOODS SOLD (Notes 11 and 20) 79,640,376 104 99,702,585 97
GROSS PROFIT (LOSS) (3,242,651) (4) 2,475,466 3
OPERATING EXPENSES (Note 20)
Selling and marketing expenses 593,549 1 841,797 1
General and administrative expenses 1,854,795 2 1,688,644 2
Research and development expenses 1,449,836 2 1,506,327 1
Total operating expenses 3,898,180 5 4,036,768 4
OTHER OPERATING INCOME AND EXPENSES
(Note 13) (3,394,590) (5) (780,104) (1)
LOSS FROM OPERATIONS (10,535,421) (14) (2,341,406) (2)
NON-OPERATING INCOME AND EXPENSES
Interest income 37,407 - 56,882 -
Dividend income 21,738 - 18,918 -
Other income 362,730 1 249,183 -
Gain on disposal of investments 24,623 - 86 -
Net foreign exchange gain 541,642 1 173,251 -
Valuation gain on financial assets (liabilities) at fair
value through profit 257,051 - - -
Finance costs (Note 13) (916,985) (1) (866,462) (1)
Other expenses (630) - (2,558) -
Loss on disposal of property, plant and equipment (1,091) - (1,299) -
Valuation loss on financial assets (liabilities) at fair
value through loss - - (97,773) -
Total non-operating income and expenses 326,485 1 (469,772) (1)
LOSS BEFORE INCOME TAX (10,208,936) (13) (2,811,178) (3)
INCOME TAX EXPENSE (Note 21) 31,127 - 31,500 -
NET LOSS FOR THE YEAR (10,240,063) (13) (2,842,678) (3)
(Continued)
- 6 -
WINTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of New Taiwan Dollars, Except Loss Per Share)
Year Ended December 31
2013 2012
Amount % Amount %
OTHER COMPREHENSIVE INCOME (LOSS)
Exchange differences on translating foreign
operations $ 1,324,612 2 $ (1,039,918) (1)
Unrealized gain on available-for-sale financial assets 233,343 - 7,924 -
Actuarial loss on defined benefit plans (Note 18) (7,700) - (32,836) -
Other comprehensive income (loss) for the year,
net of income tax 1,550,255 2 (1,064,830) (1)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR $ (8,689,808) (11) $ (3,907,508) (4)
NET INCOME (LOSS) ATTRIBUTABLE TO:
Owners of the parent $ (10,254,316) (13) $ (2,881,517) (3)
Non-controlling interests 14,253 - 38,839 -
$ (10,240,063) (13) $ (2,842,678) (3)
TOTAL COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO:
Owners of the parent $ (8,704,059) (11) $ (3,945,245) (4)
Non-controlling interests 14,251 - 37,737 -
$ (8,689,808) (11) $ (3,907,508) (4)
LOSS PER SHARE (Note 22)
Basic $ (5.55) $ (1.64)
Diluted $ (5.55) $ (1.64)
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated March 4, 2014) (Concluded)
- 7 -
WINTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In Thousands of New Taiwan Dollars)
Equity Attributable to Owners of the Parent
Other Equity
Exchange Unrealized
Retained Earnings (Note 19)
Differences on
Translating
Gain on
Available-for-
Share Capital
(Note 19)
Capital Surplus
(Note 19) Legal Reserve
Accumulated
Deficit
Foreign
Operations
sale Financial
Assets Total
Non-controlling
Interests Total Equity
BALANCE AT JANUARY 1, 2012 $ 16,477,784 $ 17,879,558 $ 1,576,205 $ (314,789) $ - $ 128,986 $ 35,747,744 $ 160,932 $ 35,908,676
Issuance of capital stock for GDRs - June 5, 2012 2,000,000 930,716 - - - - 2,930,716 - 2,930,716
Difference between market price and carrying amount in
acquisition or disposal of subsidiaries - 1,235 - - - - 1,235 (1,235) -
Cash dividends distributed by subsidiaries - - - - - - - (73,213) (73,213)
Offset of deficit against legal reserve - - (1,576,205) 1,576,205 - - - - -
Offset of deficit against capital surplus - (328,673) - 328,673 - - - - -
Decrease in non-controlling interests - - - - - - - 14,742 14,742
Net loss for the year ended December 31, 2012 - - - (2,881,517) - - (2,881,517) 38,839 (2,842,678)
Other comprehensive income (loss) for the year ended December
31, 2012, net of income tax - - - (31,714) (1,039,918) 7,904 (1,063,728) (1,102) (1,064,830)
Total comprehensive income (loss) for the year ended December
31, 2012 - - - (2,913,231) (1,039,918) 7,904 (3,945,245) 37,737 (3,907,508)
BALANCE AT DECEMBER 31, 2012 18,477,784 18,482,836 - (1,323,142) (1,039,918) 136,890 34,734,450 138,963 34,873,413
Offset of deficit against capital surplus - (2,878,439) - 2,878,439 - - - - -
Net loss for the year ended December 31, 2013 - - - (10,254,316) - - (10,254,316) 14,253 (10,240,063)
Other comprehensive income (loss) for the year ended December
31, 2013, net of income tax - - - (7,905) 1,324,612 233,550 1,550,257 (2) 1,550,255
Total comprehensive income (loss) for year ended December 31,
2013 - - - (10,262,221) 1,324,612 233,550 (8,704,059) 14,251 (8,689,808)
BALANCE AT DECEMBER 31, 2013 $ 18,477,784 $ 15,604,397 $ - $ (8,706,924) $ 284,694 $ 370,440 $ 26,030,391 $ 153,214 $ 26,183,605
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated March 4, 2014)
- 8 -
WINTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Year Ended December 31
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax $(10,208,936) $ (2,811,178)
Adjustments for :
Depreciation 8,503,301 8,455,684
Amortization 25,243 18,360
Impairment loss recognized on trade receivables 367 6,395
Net loss (gain) on fair value change of financial assets (liabilities)
designated as at fair value through profit or loss
(257,051) 97,773
Finance costs 916,985 866,462
Interest income (37,407) (56,882)
Dividend income (21,738) (18,918)
Loss on disposal of property, plant and equipment 1,091 1,299
Gain on disposal of investments (24,623) (86)
Write-down of inventories 1,416,204 1,042,713
Impairment loss recognized on property, plant and equipment 3,394,590 780,104
Net gain on foreign-currency exchange (568,581) (433,967)
Amortization of long-term prepayments for lease 24,721 33,375
Others (15) 28
Net changes in operating assets and liabilities
Financial instruments held for trading 97,792 (22,526)
Notes receivable (7,715) 1,968
Trade receivables 1,842,596 2,032,034
Other receivables (502,635) 936,430
Inventories 863,993 (1,001,280)
Other current assets 1,537,319 (1,704,642)
Notes payable 190,696 187
Trade payables 1,006,511 (2,998,589)
Other payables (120,290) (395,410)
Provisions (17,359) (36,905)
Other current liabilities 50,985 (39,548)
Cash generated from operations 8,106,044 4,752,881
Interest received 35,766 56,248
Interest paid (865,369) (866,204)
Income tax paid (214,315) (221,382)
Net cash generated from operating activities 7,062,126 3,721,543
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets (62,942) (110,025)
Proceeds of the sale of available-for-sale financial assets 107,523 128,101
Acquisition of debt investments with no active market (309,878) (15,884)
Proceeds of the sale of debt investments with no active market - 49,453
Proceeds of the return of capital on financial assets measured at cost - 19,717
Acquisition of property, plant and equipment (2,607,439) (13,445,927)
(Continued)
- 9 -
WINTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of New Taiwan Dollars)
Year Ended December 31
2013 2012
Proceeds of the disposal of property, plant and equipment $ 234,412 $ 83,173
Decrease in refundable deposits 6,438 -
Acquisition of computer software (27,819) (36,134)
Increase in other assets (4,458) (22,990)
Increase in prepayments for equipment (1,949,578) (1,918,443)
Other dividend received 21,738 18,918
Others 506 (771)
Net cash used in investing activities (4,591,497) (15,250,812)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of short-term borrowings 1,386,304 5,982,513
Repayment of short-term bills payable (159,810) (78,731)
Proceeds of long-term borrowings 1,744,031 8,133,951
Repayment of long-term borrowings (4,798,035) (6,859,897)
Proceeds of guarantee deposits received 7,760 679
Dividends paid to non-controlling interests - (73,213)
Issuance of capital stock for GDRs - 2,930,716
Increase in non-controlling interests - 14,742
Net cash generated from (used in) financing activities (1,819,750) 10,050,760
EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF
CASH HELD IN FOREIGN CURRENCIES
476,900 (262,784)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
1,127,779 (1,741,293)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR
5,941,016 7,682,309
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 7,068,795 $ 5,941,016
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated March 4, 2014) (Concluded)
- 10 -
WINTEK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
1. GENERAL INFORMATION
Wintek Corporation (the “Corporation”) was incorporated on April 26, 1990. It manufactures and sells
liquid crystal displays (LCDs), liquid crystal modules (LCMs) and touch panels.
The Corporation’s shares have been listed on the Taiwan Stock Exchange (TSE) since December 19, 1998.
The consolidated financial statements are presented in the Corporation’s functional currency.
As of December 31, 2013, the Corporation’s accumulated deficit was $8,706,924 thousand, current
liabilities exceeded current assets by $16,841,520 thousand, and debt to total asset ratio was 68%. To repay
the Corporation’s debt, boost its working capital and strengthen its financial position, the management
plans to improve the Corporation’s operation results and financial condition; the plan includes the
following:
a. Capital increase: In their annual meeting in 2013, shareholders approved the issuance of 150 million to
200 million global depositary receipts (GDRs) and evaluated other long-term plans to raise capital.
These plans will be carried out vigorously in light of prevailing financial conditions to enhance the
Corporation’s financial structure and expand its working capital. The issuance of these GDRs was
approved by the Securities and Futures. Bureau on December 11, 2013. The date of issuance will
depend on the condition of capital market and the Corporation’s operation.
b. Strengthening revenue-generating capability: The Corporation continues to build on its superiority in its
one glass solution (OGS) technology and production capacity to win more customer orders. In addition,
the Corporation continues to apply it’s the capability maturity integration model to its full lamination
and display technology which provides cost saving to the Corporation, offers value-added service to its
customers and increase market share and revenue.
c. Cost saving strategy:To reduce fixed costs, lower the breakeven point, improve profitability and
increase cash flow, the Corporation intends to improve production management by centralizing plants
with low utilization rate and not cost-effective. The Corporation has centralized the front-end
production process of touch panels and the monthly cost-saving efficiency has reached 90% as of
December 31, 2013.
d. Shortening the cash conversion cycle: The Corporation actively strives for favorable terms of payment,
lower inventory balances and accounts receivable financing to shorten the cash conversion cycle and
increase benefit from capital use. As a result, the average collection days have reduced from 46 days to
39 days; days sales of inventory have reduced from 52 days to 39 days; days payable outstanding have
increased from 64 days to 75 days from the third quarter of 2013 to the fourth quarter of 2013 which
contributes to faster cash collection and improvement of the working capital.
Under performing those plans above, Management believed that the Corporation can increase its cash
inflow to repayment the current borrowings, obtain the opportunities to re-financing and effectively reduce
the Corporation’s operating cost, as well as improve its performance and financial structure. Therefore,
these consolidated financial statements as of and for the year ended December 31, 2013 does not include
any adjustments that might result from the outcome of this uncertainty.
- 11 -
2. APPROVAL OF FINANCIAL STATEMENTS
The consolidated financial statements were approved by the board and authorized for issue on March 4,
2014.
3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS
a. New, amended and revised standards and interpretations (the “New Taiwan-IFRSs”) in issue but not yet
effective
The Corporation and entities controlled by the Corporation (the “Group”) have not applied the
following International Financial Reporting Standards (IFRS), International Accounting Standards
(IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) issued by the International
Accounting Standards Board (IASB). On January 28, 2014, the Financial Supervisory Commission
(FSC) announced the framework for the adoption of the updated IFRSs version in the Republic of
China (ROC). Under this framework, starting January 1, 2015, the previous version of IFRSs
endorsed by the FSC (the 2010 IFRSs version) currently applied by companies with shares listed on the
Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market
will be replaced by the updated IFRSs without IFRS 9 (the 2013 IFRSs version). However, as of the
date that the consolidated financial statements were authorized for issue, the FSC had not endorsed the
following new, amended and revised standards and interpretations issued by the IASB (the New
Taiwan-IFRSs”) included in the 2013 IFRSs version. Furthermore, the FSC has not yet announced the
effective date for the following New Taiwan-IFRSs that are not included in the 2013 IFRSs version.
Effective Date Announced by
IASB (Note 1)
The New IFRSs included in the 2013 IFRSs version not yet endorsed
by the FSC
Improvements to IFRSs (2009) - amendment to IAS 39 January 1, 2009 and January 1,
2010, as appropriate
Amendment to IAS 39 “Embedded Derivatives” Effective for annual periods
ending on or after June 30,
2009
Improvements to IFRSs (2010) July 1, 2010 and January 1,
2011, as appropriate
Annual Improvements to IFRSs 2009-2011 Cycle January 1, 2013
Amendment to IFRS 1 “Limited Exemption from Comparative IFRS 7
Disclosures for First-Time Adopters”
July 1, 2010
Amendment to IFRS 1 “Severe Hyperinflation and Removal of Fixed
Dates for First-Time Adopters”
July 1, 2011
Amendment to IFRS 1 “Government Loans” January 1, 2013
Amendment to IFRS 7 “Disclosure - Offsetting Financial Assets and
Financial Liabilities”
January 1, 2013
Amendment to IFRS 7 “Disclosure - Transfer of Financial Assets” July 1, 2011
IFRS 10 “Consolidated Financial Statements” January 1, 2013
IFRS 11 “Joint Arrangements” January 1, 2013
IFRS 12 “Disclosure of Interests in Other Entities” January 1, 2013
Amendments to IFRS 10, IFRS 11 and IFRS 12 “Consolidated
Financial Statements, Joint Arrangements and Disclosure of
Interests in Other Entities: Transition Guidance”
January 1, 2013
(Continued)
- 12 -
Effective Date Announced by
IASB (Note 1)
The New IFRSs included in the 2013 IFRSs version not yet endorsed
by the FSC
Amendments to IFRS 10, IFRS 12 and IAS 27 “Investment Entities” January 1, 2014
IFRS 13 “Fair Value Measurement” January 1, 2013
Amendment to IAS 1 “Presentation of Other Comprehensive Income” July 1, 2012
Amendment to IAS 12 “Deferred Tax: Recovery of Underlying
Assets”
January 1, 2012
IAS 19 (Revised 2011) “Employee Benefits” January 1, 2013
IAS 27 (Revised 2011) “Separate Financial Statements” January 1, 2013
IAS 28 (Revised 2011) “Investments in Associates and Joint
Ventures”
January 1, 2013
Amendment to IAS 32 “Offsetting Financial Assets and Financial
Liabilities”
January 1, 2014
IFRIC 20 “Stripping Costs in Production Phase of a Surface Mine” January 1, 2013
The New IFRSs not included in the 2013 IFRSs version
Annual Improvements to IFRSs 2010-2012 Cycle July 1, 2014 (Note 2)
Annual Improvements to IFRSs 2011-2013 Cycle July 1, 2014
IFRS 9 “Financial Instruments” Effective date not determined
Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of
IFRS 9 and Transition Disclosures”
Effective date not determined
IFRS 14 “Regulatory Deferral Accounts” January 1, 2016
Amendment to IAS 19 “Defined Benefit Plans: Employee
Contributions”
July 1, 2014
Amendment to IAS 36 “Impairment of Assets: Recoverable Amount
Disclosures for Non-Financial Assets”
January 1, 2014
Amendment to IAS 39 “Novation of Derivatives and Continuation of
Hedge Accounting”
January 1, 2014
IFRIC 21 “Levies” January 1, 2014
(Concluded)
Note 1: Unless stated otherwise, the above New Taiwan-IFRSs are effective for annual periods
beginning on or after the respective effective dates.
Note 2: The amendment to IFRS 2 applies to share-based payment transactions for which the grant
date is on or after 1 July 2014; the amendment to IFRS 3 applies to business combinations for
which the acquisition date is on or after 1 July 2014; the amendment to IFRS 13 is effective
immediately; and the remaining amendments are effective for annual periods beginning on or
after July 1, 2014.
b. Significant impending changes in accounting policy resulting from the New Taiwan-IFRSs in issue but
not yet effective
Except for the following, the initial application of the above New Taiwan-IFRSs has not had any
material impact on the Group’s accounting policies:
1) IFRS 9 “Financial Instruments”
All recognized financial assets that are within the scope of IAS 39 “Financial Instruments:
Recognition and Measurement” are subsequently measured at amortized cost or fair value.
Specifically, financial assets that are held within a business model whose objective is to collect
- 13 -
contractual cash flows that are solely payments of principal and interest on the principal outstanding
are generally measured at amortized cost at the end of subsequent accounting periods. All other
financial assets are measured at their fair values at the end of the reporting period. However, the
Group may irrevocably choose to present subsequent changes in the fair value of an equity
investment (that is not held for trading) in other comprehensive income, with only dividend income
generally recognized in profit or loss.
The mandatory effective date of IFRS 9, which was previously set at January 1, 2015, had been
canceled and will be reset once the standard is completed, with a new impairment model and
finalization of any limited amendments to the provisions classification and measurement.
2) IFRS 13 “Fair Value Measurement”
IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value,
establishes a framework for measuring fair value, and requires disclosures about fair value
measurements. The disclosure requirements in IFRS 13 are more extensive than those required in
the current standards. For example, quantitative and qualitative disclosures based on the
three-level fair value hierarchy that are currently required for financial instruments only will be
extended by IFRS 13 to cover all assets and liabilities within its scope.
3) Amendment to IAS 1 “Presentation of Items of Other Comprehensive Income”
The amendment to IAS 1 requires items of other comprehensive income to be grouped into those
that (1) will not be reclassified subsequently to profit or loss; and (2) will be reclassified
subsequently to profit or loss when specific conditions are met. Income taxes on related items of
other comprehensive income are grouped on the same basis. Before this amendment, IAS 1 had
no such requirements.
4) Amendment to IAS 36 “Recoverable Amount Disclosures for Non-Financial Assets”
In issuing IFRS 13 “Fair Value Measurement,” the IASB amended the disclosure requirements in
IAS 36 “Impairment of Assets,” introducing a requirement to disclose in every reporting period the
recoverable amount of an asset or each cash-generating unit. The amendment clarifies that the
disclosure of recoverable amounts is required only when an impairment loss has been recognized or
reversed during the period. Furthermore, the Group is required to disclose the discount rate used
in measuring recoverable amount based on fair value less costs of disposal and the valuation
technique used.
c. The impact of the application of the New Taiwan-IFRSs in issue but not yet effective on the Group’s
consolidated financial statements.
As of the date the consolidated financial statements were authorized for issue, the Group had been
continually assessing the possible impact that the application of the above New Taiwan-IFRSs would
have on the Group's financial position and operating result, and will disclose the relevant impact when
the assessment is complete.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On May 14, 2009, the FSC announced the “Framework for the Adoption of IFRSs by the Companies in the
ROC.” In this framework, starting 2013, companies with shares listed on the Taiwan Stock Exchange or
traded on the Taiwan GreTai Securities Market or Emerging Stock Market should prepare their
consolidated financial statements in accordance with the Regulations Governing the Preparation of
Financial Reports by Securities Issuers and the IFRSs, IAS, IFRIC and SIC endorsed by the FSC.
- 14 -
The Group’s consolidated financial statements for the year ended December 31, 2013 is its first IFRS
consolidated financial statements. The date of transition to Taiwan-IFRSs was January 1, 2012. Refer to
Note 33 for the impact of Taiwan-IFRS conversion on the Group’s consolidated financial statements.
Statement of Compliance
The consolidated financial statements have been prepared in accordance with the Regulations Governing
the Preparation of Financial Reports by Securities Issuers and Taiwan-IFRSs as endorsed by the FSC.
Basis of Preparation
The consolidated financial statements have been prepared on the historical cost basis except for financial
instruments that are measured at fair value. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
The opening consolidated balance sheets as of the date of transition to Taiwan-IFRSs were prepared in
accordance with IFRS 1 “First-time Adoption of International Financial Reporting Standards.” The
applicable Taiwan-IFRSs have been applied retrospectively by the Group except for some aspects where
IFRS 1 prohibits retrospective application or grants exemptions to this general principle. For the
exemptions that the Group elected to use, refer to Note 33.
Classification of Current and Non-current Assets and Liabilities
Current assets include:
1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents, unless the asset is restricted from being exchanged or is used to settle a
liability for at least 12 months after the reporting period.
Current liabilities include:
1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to
refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and
before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12
months after the reporting period.
Assets and liabilities that are not classified as current are classified as non-current.
Basis of Consolidation
a. Principles for preparing consolidated financial statements
The consolidated financial statements incorporate the financial statements of the Corporation and the
entities controlled by the Corporation (i.e., its subsidiaries).
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by the Corporation.
All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.
- 15 -
Attribution of total comprehensive income to non-controlling interests
Total comprehensive income of subsidiaries is attributed to the owners of the Corporation and to the
non-controlling interests even if this attribution results in the non-controlling interests’ having a deficit
balance.
Changes in the Group’s ownership interests in existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group’s losing
control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the
Group’s interests and the non-controlling interests are adjusted to reflect the changes in its interests in
the subsidiaries. Any difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is recognized directly in equity and
attributed to the owners of the Corporation.
b. Entities included in consolidated financial statements
The consolidated entities as of December 31, 2013, December 31, 2012, and January 1, 2012 were as
follows:
% of Ownership
Investor Investee Main Businesses
December 31,
2013
December 31,
2012
January 1,
2012
Wintek Corporation Wintek Technology (Cayman)
Corporation (“Wintek Technology
Cayman”)
Overseas reinvested holding
company
100 100 100
Masstop LLC Overseas reinvested holding
company
100 100 100
Wintek (B.V.I.) Corporation (“Wintek
BVI”)
Overseas reinvested holding
company
100 100 100
Wintek International Holding (Cayman)
Corporation (“Wintek International
Holding”)
Overseas reinvested holding
company
100 100 100
United Win Investment Corporation
(“United Win Investment”)
Investment 100 100 100
Wintek Electro-Optics Corporation
(“Wintek Electro-Optics”)
Sells LCD/LCM products 100 100 100
Wintek (Central Europe) GmbH
(“Wintek Central Europe”)
Sells LCD/LCM products 100 100 100
Mactech Corporation (“Mactech”) Manufactures machinery and
equipment
49 49 50.03
WinPower Optronics Corporation
(“WinPower”)
Design ICs 31 31 36
United Win Investment Mactech Manufactures machinery and
equipment
- - -
Wintek Technology Cayman United Win Technology (Cayman)
Corporation (“United Win Cayman”)
Overseas reinvested holding
company
100 100 100
United Win Cayman United Win (H.K.) Technology Limited
(“United Win HK”)
Overseas reinvested holding
company
100 100 100
Wintek Technology (H.K.) Limited
(“Wintek Technology HK”)
Overseas reinvested holding
company
100 100 100
United Win HK United Win (China) Technology
Limited (“United Win China”)
Manufactures and sells
electronic components,
accessories and related
products
100 100 100
Wintek Technology HK Wintek (China) Technology Ltd.
(“Wintek China”)
Manufactures and sells
electronic components,
accessories and related
products
83 100 100
Wintek BVI Wintek International (Samoa)
Corporation (“Wintek Samoa”)
Overseas reinvested holding
company
100 100 100
Wintek Samoa Wintek Vietnam Co., Ltd.(“Wintek
Vietnam”)
Manufactures and processes
LCD/LCM and touch panel
products
100 100 100
Masstop LLC Masstop Asia Pacific Ltd. (“Masstop”) Overseas reinvested holding
company and seller of
LCD/LCM products
100 100 100
Masstop Dongguan Masstop Liquid Crystal
Display Co., Ltd. (“Dongguan
Masstop”)
Manufactures and sells LCM
and touch panel products
100 100 100
(Continued)
- 16 -
% of Ownership
Investor Investee Main Businesses
December 31,
2013
December 31,
2012
January 1,
2012
Dongguan Masstop DongGuan Sheng Feng Import and
Export Trading Co., Ltd.
(“DongGuan Innolife”)
Import and export trading 100 100 100
DongGuan Innolife Electronic
Technology Co., Ltd. (“Innolife”)
Manufactures and sells
owned-brand products
100 100 -
Wintek (China) Technology Ltd.
(“Wintek China”)
Manufactures and sells
electronic components,
accessories and related
products
17 - -
Wintek International Holding Wintek Far East (Cayman) Corporation
(“Wintek Far East”)
Overseas reinvested holding
company
82 81 81
Wintek Technology (India) Private
Limited (“Wintek India”)
Manufactures and sells
LCD/LCM products
- - -
Wintek Electro- Optics Wintek Far East Overseas reinvested holding
company
18 19 19
Wintek Far East Wintek India Manufactures and sells
LCD/LCM products
100 100 100
(Concluded)
The Corporation had control over Mactech and WinPower because the Corporation and its president
had appointed half of their respective board members; thus, these investees were deemed subsidiaries of
the Group.
Foreign Currencies
In preparing the financial statements of each group entity, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of
the transactions. At the end of each reporting period, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date. Nonmonetary items measured at fair value that are
denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value is
determined. Exchange differences arising on the retranslation of nonmonetary items are included in profit
or loss for the period, except for exchange differences arising from the retranslation of nonmonetary items,
in respect of which gains and losses are recognized directly in other comprehensive income; in this case, the
exchange differences are also recognized directly in other comprehensive income. Nonmonetary items
that are measured at historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items arising from settlement or translation are recognized in profit or
loss in the period in which they arise, except for exchange differences on transactions entered into in order
to hedge certain foreign-currency risks.
For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated into New Taiwan dollars using exchange rates prevailing at the end of the
reporting period. Income and expense items are translated at the average exchange rates for the period.
Exchange differences are recognized in other comprehensive income.
Inventories
Inventories consist of raw materials, supplies, work-in-process, finished goods and commodity. Inventories
are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except
where it may be appropriate to group similar or related items. Net realizable value is the estimated selling
price of inventories less all estimated costs of completion and costs necessary to make the sale.
Inventories are recorded at weighted-average cost on the balance sheet date.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, less subsequent accumulated depreciation and subsequent
accumulated impairment loss.
Properties under construction for production, supply or administrative purposes are carried at cost, less any
recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization.
- 17 -
These properties are depreciated and classified to the appropriate categories of property, plant and
equipment when completed and ready for intended use.
Freehold land is not depreciated.
Depreciation is recognized using the straight-line method. Each significant item is depreciated separately.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset and is
recognized in profit or loss.
Investment Properties
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment
properties also include land held for a currently undetermined future use.
Investment properties are measured initially at cost, including transaction costs. After initial recognition,
investment properties are measured at cost less accumulated depreciation and accumulated impairment loss.
Depreciation is recognized using the straight-line method.
Any gain or loss arising on the derecognition of the property is calculated as the difference between the net
disposal proceeds and the carrying amount of the asset and is included in profit or loss in the period in
which the property is derecognized.
Goodwill
Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition
of the business less accumulated impairment loss.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units
(or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired, by comparing its carrying amount,
including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a
cash-generating unit was acquired in a business combination during the current annual period, that unit
should be tested for impairment before the end of the current annual period. If the recoverable amount of
the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based
on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or
loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.
Intangible Assets
Intangible assets with finite useful lives that are acquired separately are initially measured at cost and
subsequently measured at cost less accumulated amortization and accumulated impairment loss.
Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and
amortization method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful
life is assumed to be zero unless the Group expects to dispose of the intangible asset before the end of its
economic life.
- 18 -
Gains or losses arising from the derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the
asset is derecognized.
Impairment of Tangible and Intangible Assets Other Than Goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible
assets, excluding goodwill, to determine whether there is any indication of impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate
assets are allocated to the individual cash-generating units on a reasonable and consistent basis of
allocation.
Recoverable amount is the higher of fair value less costs to sell or value in use. If the recoverable amount
of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of
the asset or cash-generating unit is reduced to its recoverable amount.
When an impairment loss is reversed, the carrying amount of the asset or cash-generating unit is increased
to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would
have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior
years. A reversal of an impairment loss is recognized in profit or loss.
Financial Instruments
Financial assets and financial liabilities are recognized when a group entity becomes a party to the
contractual provisions of these instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from
the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognized immediately in profit or loss.
All regular way purchases or sales of financial assets and financial liabilities are recognized and
derecognized on a settlement date basis.
a. Measurement category
The categories of financial assets held by the Group are financial assets/liabilities at fair value through
profit or loss, available-for-sale financial assets, and loans and receivables.
Financial assets/liabilities at fair value through profit or loss
Financial assets/liabilities at fair value through profit or loss are stated at fair value, with any gains or
losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit
or loss incorporates any dividend or interest earned on the financial asset. Financial liabilities not
classified as at fair value through profit or loss are measured at amortized cost using the effective
interest method.
Available-for-sale financial assets
Available-for-sale financial assets are nonderivatives that either are designated as available for sale or
are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value
through profit or loss.
- 19 -
Available-for-sale (AFS) financial assets are measured at fair value. Dividends on AFS equity
instruments are recognized in profit or loss. Changes in the carrying amounts of available-for-sale
financial assets are recognized in other comprehensive income and will be reclassified to profit or loss
when the investment is disposed of or is determined to be impaired.
Dividends on available-for-sale are recognized in profit or loss when the Group’s right to receive the
dividends is established.
Available-for-sale equity investments with no quoted market prices in an active market and whose fair
value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of
these unquoted equity investments are measured at cost less any identified impairment loss at the end of
each reporting period and are presented in a separate line item as financial assets carried at cost. If, in
a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets
are remeasured at fair value. The difference between carrying amount and fair value is recognized in
profit or loss or other comprehensive income on financial assets. Any impairment losses are
recognized in profit and loss.
Loans and receivables
Loans and receivables (including cash and cash equivalents, debt investments with no active market,
notes receivable, and trade and other receivables) are measured at amortized cost using the effective
interest method, less any impairment, except for short-term receivables when the effect of discounting
is immaterial.
Cash equivalents include time deposits that have original maturities within three months from the date
of acquisition, are highly liquid, are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting
short-term cash commitments.
b. Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of
impairment at the end of each reporting period. Financial assets are considered impaired when there is
objective evidence that, as a result of one or more events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the investment have been affected.
For financial assets carried at amortized cost, assets are assessed for impairment on a collective basis
even if they have been assessed as not impaired individually. Objective evidence of impairment for a
portfolio of receivables could include the Group's past experience of collecting payments and an
increase in the number of delayed payments in the portfolio past the average credit period, as well as
observable changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortized cost, the amount of the impairment loss recognized is the
difference between the asset's carrying amount and the present value of estimated future cash flows,
discounted at the financial asset's original effective interest rate.
For financial assets measured at amortized cost, if the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognized, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of
the investment at the date the impairment is reversed does not exceed what the amortized cost would
have been had the impairment not been recognized.
For available-for-sale equity investments, a significant or prolonged decline in the fair value of the
security below its cost is considered an objective evidence of impairment. For all other financial
assets, objective evidence of impairment could include:
- 20 -
Significant financial difficulty of the issuer or counterparty;
Breach of contract, such as a default or delinquency in interest or principal payments;
It becoming probable that the borrower will undergo bankruptcy or financial reorganization;
The disappearance of an active market for that financial asset because of financial difficulties.
When an available-for-sale financial asset is considered impaired, cumulative gains or losses previously
recognized in other comprehensive income are reclassified to profit or loss in the period.
For available-for-sale equity securities, impairment losses previously recognized in profit or loss are not
reversed through profit or loss. Any increase in fair value after an impairment loss is recognized in
other comprehensive income.
For financial assets carried at cost, impairment loss is measured as the difference between the asset's
carrying amount and the present value of the estimated future cash flows discounted at the current
market rate of return for a similar financial asset. This impairment loss will not be reversed in
subsequent periods.
The carrying amount of the financial asset is directly reduced by the impairment loss, except for trade
receivables, whose carrying amount is reduced through the use of an allowance account. When a trade
receivable is considered uncollectible, it is written off against the allowance account. Recoveries of
amounts previously written off are credited against the allowance account. Changes in the carrying
amount of the allowance account are recognized in profit or loss, and uncollectible trade receivables are
written off against the allowance account.
c. Derecognition of financial assets/liabilities
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party.
On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss that had been
recognized in other comprehensive income is recognized in profit or loss.
The Group derecognizes financial liabilities only when the Group’s obligations are discharged or
cancelled or they expire. The difference between the carrying amount of the financial liability
derecognized and the consideration paid and payable is recognized in profit and loss.
d. Derivative financial instruments
To manage its exposure to interest rate and foreign exchange rate risks, the Group enters into a variety
of derivative financial instruments, including forward exchange contracts, interest rate swaps contracts,
cross-currency swap contracts, swap contracts and option contracts.
Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and
are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain
or loss is generally recognized in profit or loss immediately. When the fair value of derivative
financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of
derivative financial instruments is negative, the derivative is recognized as a financial liability.
- 21 -
Provisions
Provisions are measured at the best estimate of the consideration required to settle the present obligation at
the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant
products, at the best estimate by the management of the Group of the expenditure required to settle the
Group’s obligation.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for
estimated customer returns, rebates and similar allowances. Sales returns are recognized at the time of
sale provided the seller can reliably estimate future returns and recognizes a liability for returns based on
previous experience and relevant factors.
a. Sale of goods
Revenue from the sale of goods is recognized when the goods are delivered and titles have passed to the
buyers, at which time all the following conditions are satisfied:
The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
The Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold;
The amount of revenue can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the Group; and
The transaction costs incurred or to be incurred can be measured reliably.
The Group does not recognize sales revenue on materials delivered to subcontractors because this
delivery does not involve a transfer of risks and rewards of materials ownership.
b. Dividend and interest income
Dividend income from investments is recognized when the shareholder's right to receive payment has
been established and if it is probable that the economic benefits will flow to the Group and the amount
of income can be measured reliably.
Interest income from a financial asset is recognized when it is probable that the economic benefits will
flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a
time basis by referring to the principal outstanding at the effective interest rate applicable.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are
added to the cost of these assets, until the assets are substantially ready for their intended use or sale. All
other borrowing costs are recognized in profit or loss in the period in which they are incurred.
Government Grants
Government grants are not recognized until there is reasonable assurance that the Group will comply with
the conditions attached to them and will receive the grants.
- 22 -
Government grants are recognized in profit or loss on a systematic basis over the periods in which the
Group recognizes as expenses the related costs for which the grants are intended to compensate.
Government grants to be received as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Group with no future related costs are recognized in
profit or loss in the period in which they become receivable.
Retirement Benefit Costs
Payments to defined contribution retirement benefit plans are recognized as an expense when employees
have rendered services entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected
unit credit method. Actuarial gains and losses on the defined benefit obligation are recognized
immediately in other comprehensive income.
The retirement benefit obligation recognized in the consolidated balance sheets represents the present value
of the defined benefit obligation as reduced by the fair value of plan assets. Any asset resulting from this
calculation is limited to the present value of available refunds and reductions in future contributions to the
plan.
Employee Share Options
Employee share options to employees are measured at the fair value of the equity instruments at the grant
date.
The fair value determined at the grant date of the employee share options is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of employee share options that will eventually
vest, with a corresponding increase in capital surplus - employee stock options. The fair value determined
at the grant date of the employee share options is immediately recognized as an expense in full at the grant
date.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
a. Current tax
According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for
as income tax in the year the shareholders approve the retention of these earnings.
Adjustments of prior years’ tax liabilities are added to or deducted from the current years’ tax provision.
b. Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable
temporary differences. Deferred tax assets are generally recognized for all deductible temporary
differences, unused loss carryforwards and research and development expenditures to the extent that it
is probable that taxable profits will be available against which these deductible temporary differences
can be used.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in
subsidiaries, except where the Group can control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with such investments and interests are
- 23 -
recognized only to the extent that it is probable that there will be sufficient taxable profits against which
to use the benefits of the temporary differences and these differences are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the
end of each reporting period and recognized to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply to the period in
which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the Group’s expectations, at the end of the reporting period, of tax
consequences based on the manner of recovery or settlement of an asset or liability.
c. Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are
recognized in other comprehensive income or directly in equity, in which case, the current and deferred
tax are also recognized in other comprehensive income or directly in equity, respectively. If current tax
or deferred tax arises from the initial accounting for a business combination, the tax effect is included in
the accounting for the business combination.
5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group's accounting policies, management is required to make judgments, estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors
that are considered relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.
Critical accounting judgments and key sources of estimation uncertainty are as follow:
a. Income tax
As of December 31, 2013, December 31, 2012 and January 1, 2012, the carrying amounts of deferred
tax assets in relation to unused tax losses were $446,888 thousand, $399,436 thousand, and $429,999
thousand, respectively. As of December 31, 2013, December 31, 2012 and January 1, 2012, no
deferred tax assets had been recognized on tax losses of $3,240,281 thousand, $435,127 thousand and
$456,507 thousand, respectively, because of the unpredictability of future profit streams. The
reliability of the deferred tax asset mainly depends on whether sufficient future profits or taxable
temporary differences will be available. In cases where the actual future profits generated are less than
expected, a material reversal of deferred tax assets may arise, which would be recognized in profit or
loss for the period in which such a reversal takes place.
b. Impairment of property, plant and equipment
The impairment of equipment in relation to the production of touch panels and other module are based
on the recoverable amount of those assets, which is the higher of fair value less costs to sell or
value-in-use of those assets. Any changes in the market price or future cash flows will affect the
- 24 -
recoverable amount of those assets and may lead to the recognition of additional, or reversal of,
impairment losses.
c. Write-down of inventory
The net realizable value of inventory is the estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated costs necessary to make the sale. The
estimation of net realizable value is based on current market conditions and the historical experience of
selling products of a similar nature. Changes in market conditions may have a material impact on the
estimation of net realizable value.
d. Recognition and measurement of defined benefit plans
Accrued pension liabilities and the resulting pension expense under defined benefit pension plans are
calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate,
rate of employee turnover, and long-term average future salary increase. Changes in economic
circumstances and market conditions will affect these assumptions and may have a material impact on
the amount of the expense and the liability.
6. CASH AND CASH EQUIVALENTS December 31, December 31, January 1,
2013 2012 2012
Cash on hand $ 14,956 $ 2,953 $ 4,315
Checking accounts and demand deposits 4,225,532 4,640,009 5,038,646
Cash equivalents
Commercial paper - interest at 0.68% - 60,013 40,033
Time deposits with original maturities of less
than three months 2,828,307 1,238,041 2,599,315
$ 7,068,795 $ 5,941,016 $ 7,682,309
7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31, December 31, January 1,
2013 2012 2012
Financial assets held for trading
Derivative financial assets (not under hedge
accounting)
Forward exchange contracts $ 132,356 $ 91 $ 734
Swap contracts 2,596 380 1,540
Cross-currency swap contracts - - 54,847
Option contracts - - 4,619
Financial assets at fair value through profit or
loss-current $ 134,952 $ 471 $ 61,740
- 25 -
December 31, December 31, January 1,
2013 2012 2012
Financial liabilities held for trading
Derivative financial liabilities (not under hedge
accounting)
Forward exchange contracts $ 392 $ 6,820 $ 1,042
Swap contracts 2,601 711 1,823
Interest rate swap contracts 9,739 14,442 20,888
Option contracts - 15,819 -
Financial liabilities at fair value through profit or
loss-current $ 12,732 $ 37,792 $ 23,753
The Group used forward exchange, swap, cross-currency swap, interest rate swap, and option contracts to
manage exposures to exchange rate and interest rate fluctuations of its foreign-currency assets or liabilities.
The financial risk management objective of the Group is to minimize risks due to changes in fair values or
cash flows. These contracts did not meet the criteria for hedge effectiveness and thus did not qualify for
hedge accounting.
a. Forward exchange contracts
At the end of the reporting period, outstanding forward exchange contracts not under hedge accounting
were as follows:
Currency Maturity Date Notional Amount
December 31, 2013
Sell/buy NT$/US$ January 15 to March 24, 2014 NT$9,389,640/US$319,000
Sell/buy US$/NT$ January 13 to March 24, 2014 US$631/NT$18,820
Sell/Buy US$/RMB January 9 to January 24, 2014 US$49,076/RMB303,084
Sell/Buy RMB/US$ January 15 to January 17, 2014 RMB152,681/US$25,076
December 31, 2012
Sell/buy US$/JPY January 4 to January 11, 2013 US$7,800/JPY657,576
Sell/buy NT$/US$ January 22 to February 5, 2013 NT$1,737,810/US$60,000
Sell/buy US$/NT$ January 22 to March 25, 2013 US$763/NT$22,254
Sell/buy NT$/JPY March 26, 2013 NT$5,681/JPY16,600
Sell/buy US$/RMB January 14, 2013 US$3,500/RMB21,871
January 1, 2012
Sell/buy US$/JPY January 4, 2012 US$4,000/JPY311,840
Sell/buy US$/NT$ January 4 to March 26, 2012 US$19,501/NT$588,983
Sell/buy JPY/NT$ February 14, 2012 JPY22,275/NT$8,656
Sell/buy NT$/JPY January 27 to March 2, 2012 NT$19,509/JPY49,861
b. Swap contracts
At the end of the reporting period, outstanding swap contracts not under hedge accounting were as
follows:
- 26 -
Currency Maturity Date Notional Amount
December 31, 2013
Sell/Buy NT$/US$ March 18 to July 3, 2014 NT$534,310/US$18,000
December 31, 2012
Sell/buy NT$/US$ January 17 to March 7, 2013 NT$ 1,089,500/US$ 37,500
Sell/buy US$/NT$ January 28, 2013 US$21,800/NT$633,307
January 1, 2012
Sell/buy US$/NT$ January 12 to February 7, 2012 US$79,900/NT$2,418,513
c. Cross-currency swap contracts
At the end of the reporting period, outstanding cross-currency swap contracts not under hedge
accounting were as follows:
Contract Amount Maturity Date
Interest Rates
for Payment
(Receivables)
Range of Interest Rates
Receivables
January 1, 2012
US$16,500/NT$483,450 January 30, 2012 - USD Libor 1M+0.26%
US$10,000/NT$294,000 March 9, 2012 1.10% USD Libor 1M+0.50%
US$10,000/NT$290,000 May 23, 2012 0.90% USD Libor 3M+0.65%
US$6,000/NT$176,400 February 21, 2012 1.07% USD Libor 3M+1.20%
US$6,000/NT$176,358 February 22, 2012 1.05% USD Libor 3M+1.15%
US$10,000/NT$295,800 March 22, 2012 (1.00%) USD Libor 3M+1.00%
d. Interest rate swap contracts
The Corporation entered into interest rate swap contracts with financial institutions to hedge against
adverse fluctuations of the floating interest rates for its long-term borrowings. However, those
contracts did not meet the criteria hedge effectiveness and thus did not qualify for hedge accounting.
At the end of the reporting period, outstanding interest swap contracts not under hedge accounting were
as follows:
Contract Amount Maturity Date Interest Rates for Payment
Interest Rates
Receivables
December 31, 2013
US$10,000 July 20, 2015 2.05% (Yearly, ACT/360) LI USD 3M+0bp
(Quarterly, ACT/360)
December 31, 2012
US$10,000 July 20, 2015 2.05% (Yearly, ACT/360) LI USD 3M+0bp
(Quarterly, ACT/360)
- 27 -
Contract Amount Maturity Date Interest Rates for Payment
Interest Rates
Receivables
January 1, 2012
NT$571,429 (Note) December 15, 2012 Daily range accrual, 2.35%+(3*TWD 90D
CP)*N/M
N is the number of days which TWD 5Y
CMS-TWD 1Y CMS≤ 0 in that calculation
period
90-day commercial
paper
US$10,000 July 20, 2015 2.05% (Yearly, ACT/360) LI USD 3M+0bP
(Quarterly, ACT/360)
Note: The principal amounts of the interest rate swap contracts decrease gradually as loans are repaid.
e. Option contracts
At the end of the reporting period, outstanding option contracts not under hedge accounting were as
follows:
December 31, 2012
Contract
Amount
Exercise Period
Exercise Price
Strike
Price
Long call US$1,000 October 30, 2012-October 24,
2013
JPY75.80-JPY79.00 JPY75.80
Long put US$1,000 October 30, 2012-October 24,
2013
JPY79.00- JPY84.50 JPY84.50
Short call US$2,000 October 30, 2012-October 24,
2013
More than JPY84.50 JPY84.50
Short put US$2,000 October 30, 2012-October 24,
2013
Less than JPY74.00 JPY75.80
As of December 31, 2011, United Win HK had a structured currency instrument. On each
predetermined trading date, the counterparty of United Win HK could exercise its right to buy a certain
amount of U.S. dollars at the rate of US$1.0:RMB6.7 if the exchange rate for US$1.00 was higher than
RMB6.7. The trading date was set for every month under a schedule specified in the contract. As of
September 30, 2012, the counterparty had lost its U.S. dollar buying right under the contract since the
exchange rate was lower than the agreed rate for five consecutive months.
Other major terms of the structured currency instrument are summarized as follows:
Contract Amount Maturity Exchange Rate
US$4,000 November 10, 2011-October 11, 2013 RMB6.7:US$1
8. AVAILABLE-FOR-SALE FINANCIAL ASSETS
December 31, December 31, January 1,
2013 2012 2012
Publicly listed stocks $ 511,254 $ 273,763 $ 248,631
Mutual funds 42,582 36,900 62,502
$ 553,836 $ 310,663 $ 311,133
- 28 -
9. DEBT INVESTMENETS WITH NO ACTIVE MARKET
December 31, December 31, January 1,
2013 2012 2012
Current
Time deposits with original maturities of more
than three months $ 219,960 $ 132,197 $ 181,650
Mortgaged time deposits 89,415 15,884 -
Restricted deposits 3,000 - -
$ 312,375 $ 148,081 $ 181,650 Non-current
Restricted deposits $ 119,220 $ - $ -
Mortgaged time deposits 29,805 - -
$ 149,025 $ - $ -
Refer to Note 27 for information on debt investments with no active market pledged as security.
10. TRADE RECEIVABLES AND OTHER RECEIVABLES
December 31, December 31, January 1,
2013 2012 2012
Trade receivables
Trade receivables $ 11,655,318 $ 13,430,894 $ 15,522,764
Less: Allowance for impairment loss (26,127) (25,627) (19,282)
$ 11,629,191 $ 13,405,267 $ 15,503,482
Other receivables
Factored accounts receivable $ 532,690 $ 379,071 $ 716,089
Tax refund receivable 376,583 64,368 534,125
Others 78,238 37,119 144,113
$ 987,511 $ 480,558 $ 1,394,327
The average payment term for the sale of goods is 45 to 90 days. The Group recognizes an allowance for
doubtful accounts of 100% against all receivables that are probably not recoverable. It assesses the
impairment of trade receivable from major customers and customer groups located in different regions by
referring to both the amounts that are expected to be irrecoverable and the historical experience of default.
On the basis of historical collection experience, extensive analysis of the credit rating and defined credit
limits by customer, the Group believes most of the trade receivables are still considered recoverable.
As of December 31, 2013, December 31, 2012, and January 1, 2012, trade receivables from major
customers who each represent more than 10% of the consolidated total balance of trade receivables were as
follows:
- 29 -
December 31, December 31, January 1,
2013 2012 2012
T Corporation $ 1,732,992 $ - $ -
U Corporation 1,621,582 995,443 1,796
V Corporation 1,538,751 3,084,818 -
W Corporation 1,218,423 3,988,900 7,215,042
X Corporation 981,508 1,743,238 2,358,913
Y Corporation 377,162 2,100,796 34,353
Z Corporation 221,282 98,702 3,406,355
Movements in the allowance for impairment loss recognized on trade receivables were as follows:
Year Ended December 30
2013 2012
Balance, at January 1 $ 25,627 $ 19,282
Impairment losses recognized 367 6,441
Effect of exchange rate changes 133 (96)
Balance, at December 31 $ 26,127 $ 25,627
On trade receivables, the Group recognized impairment losses of $8,563 thousand, $8,563 thousand and
$2,055 thousand as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively. These
amounts mainly pertained to trade receivables from customers that were in liquidation. The Group has no
collateral for these receivables.
Factored accounts receivable were as follows:
Counterparties
Receivables
Sold
Amounts
Collected
Advances
Received at
Year-end
Interest Rates
on Advances
Received (%) Credit Line
Year ended December 31, 2013
Ta Chong Commercial Bank US$ 270,210 US$ 188,340 US$ 69,590 1.80-2.83 US$ 90,000
Bank of Taiwan 79,806 23,887 50,327 2.02-2.65 79,000
Land Bank 26,790 26,790 - - -
Shanghai Commercial & Savings Bank 16,744 16,744 - - -
Ta Chong Commercial Bank 27,906 27,906 - - -
Yuanta Commercial Bank 16,744 16,744 - - -
China Development Industrial Bank 19,534 19,534 - - -
Taipei Fubon Bank 26,790 26,790 - - -
Industrial Bank of Taiwan 16,744 16,744 - - -
Bank of Taiwan 167,438 167,438 - - -
E. SUN Commercial Bank 26,790 26,790 - - -
Mega International Commercial Bank 16,744 16,744 - - -
DBS Bank 19,534 19,534 - - -
First Commercial Bank 33,488 33,488 - - -
Taishin Bank 541 541 - - -
US$ 765,803 US$ 628,014 US$ 119,917 US$ 169,000
- 30 -
Counterparties
Receivables
Sold
Amounts
Collected
Advances
Received at
Year-end
Interest Rates
on Advances
Received (%) Credit Line
Year ended December 31, 2012
Land Bank US$ 49,518 US$ 41,097 US$ 7,579 1.17-2.25 US$ 9,600 Shanghai Commercial & Savings Bank 26,872 21,609 4,737 1.17-2.25 6,000
Ta Chong Commercial Bank 44,787 36,014 7,895 1.17-2.25 10,000
Yuanta Bank 47,471 42,207 4,737 1.17-2.25 6,000 China Development Industrial Bank 45,083 38,942 5,527 1.17-2.25 7,000
Taichung Bank 54,929 54,929 - - - Taipei Fubon Bank 64,967 56,545 7,580 1.17-2.25 9,600
Industrial Bank of Taiwan 26,872 21,609 4,737 1.17-2.25 6,000
Taiwan Business Bank 39,480 39,480 - - -
Bank of Taiwan 268,722 216,087 47,371 1.17-2.25 60,000
E.SUN Commercial Bank 64,967 56,545 7,580 1.17-2.25 9,600
Mega International Commercial Bank 26,872 21,609 4,737 1.17-2.25 6,000 Bank of Panhsin 10,299 10,299 - - -
DBS Bank 31,351 25,210 5,527 1.17-2.25 7,000
Bank of Kaohsiung 24,031 24,031 - - - Cathay United Bank 13,732 13,732 - - -
First Commercial Bank 74,343 63,816 9,474 1.17-2.25 12,000
Hua Nan Bank 27,465 27,465 - - - Far Eastern International Bank 24,031 24,031 - - -
Taishin Bank 21,710 21,710 - - 30,000
US$ 987,502 US$ 856,967 US$ 117,481 US$ 178,800
The above credit lines may be used on a revolving basis.
Based on the factoring agreements, losses from trade disputes (such as those on sales returns and discounts)
are borne by the Group while losses from credit risk are borne by the banks. As of December 31, 2013,
the Group had issued to the banks promissory notes with an aggregate amount of US$169,000 thousand as
collateral.
11. INVENTORIES
December 31, December 31, January 1,
2013 2012 2012
Finished goods $ 1,866,526 $ 2,647,305 $ 2,436,826
Work in process 5,592,232 5,566,615 5,959,531
Raw materials and supplies 1,797,430 3,213,773 3,249,563
Commodity 3,984 2,071 1,376
$ 9,260,172 $ 11,429,764 $ 11,647,296
The cost of inventories recognized as cost of goods sold for the years ended December 31, 2013 and 2012
was $79,640,376 thousand and $99,702,585 thousand, respectively.
The cost of inventories recognized as cost of goods sold in the year ended December 31, 2013 and 2012
included inventory write-downs of $1,416,204 thousand and $1,042,713 thousand, respectively.
- 31 -
12. FINANCIAL ASSETS MEASURED AT COST
December 31, December 31, January 1,
2013 2012 2012
Unlisted stocks
Kingpak Technology Corporation (“Kingpak”) $ 123,443 $ 123,443 $ 143,160
Hsin Chu Golf Country Club Co., Ltd. 9,260 9,260 9,260
Integrated Solutions Technology, Inc.
(“Integrated Solutions”) 6,818 6,818 6,818
Uniflex Technology Inc. (“Uniflex”) 6,434 6,434 6,434
Taichung International Country Club 2,940 2,940 2,940
FocalTech Corporation, Ltd. - 29,040 30,275
Transcom Corporation (“Transcom”) - - 9,595
Asia Pacific Microsystems, Inc.
(“Microsystems”) - - -
Andes Technology Corporation (“Andes”) - - -
IDesia Ltd. - - -
$ 148,895 $ 177,935 $ 208,482
Kingpak reduced its capital in August 2012 and returned $19,717 thousand to the Group.
FocalTech Systems Inc. was reorganized on December 21, 2012, and the related share swap between
FocalTech Corporation, Ltd. and FocalTech Systems Inc. was set at 1:1. Its shares became listed on the
Taiwan Stock Exchange in November 2013. Transcom’s share began to be traded on the Taiwan Gre Tai
Securities Market in December 2012. Thus, the Group reclassified these equity investments to available
for-sale-financial assets.
Management believed that the above unlisted equity investments held by the Group had fair values that
could not be reliably measured because there is a wide range of estimated fair values; thus, these
investments were measured at cost less impairment at the end of the reporting period.
13. PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 2013
Beginning
Balance Additions Disposal
Reclassified
Amount
Translation
Adjustments
Ending
Balance
Cost
Land $ 2,900,269 $ 6,150 $ - $ - $ - $ 2,906,419
Buildings 15,416,358 601,543 (2,629 ) 3,564,544 456,692 20,036,508 Machinery and equipment 48,272,188 2,739,762 (5,822,553 ) (24,076 ) 1,791,148 46,956,469
Transportation equipment 65,102 4,591 (8,161 ) (441 ) 2,036 63,127
Furniture and fixtures 342,501 32,551 (25,638 ) (3,929 ) 10,917 356,402 Leasehold improvements 457,607 14,819 (83 ) - 26,565 498,908
Other equipment 7,574,660 1,308,260 (1,349,140 ) (10,314 ) 363,677 7,887,143
Construction in progress 5,362,862 1,165,971 - (3,564,587 ) 193,916 3,158,162 80,391,547 $ 5,873,647 $ (7,208,204 ) $ (38,803 ) $ 2,844,951 81,863,138
Accumulated depreciation
Buildings 3,809,612 $ 1,066,379 $ (2,629 ) $ (2 ) $ 96,743 4,970,103
Machinery and equipment 21,019,696 6,255,881 (5,581,486 ) (5,613 ) 657,506 22,345,984
Transportation equipment 32,842 9,175 (6,524 ) (126 ) 1,289 36,656 Furniture and fixtures 229,298 55,881 (24,289 ) (1,740 ) 6,480 265,630
Leasehold improvements 165,279 111,394 (83 ) - 11,182 287,772
Other equipment 3,867,704 1,002,738 (1,340,086 ) (3,774 ) 138,326 3,664,908 29,124,431 $ 8,501,448 $ (6,955,097 ) $ (11,255 ) $ 911,526 31,571,053
(Continued)
- 32 -
Year Ended December 31, 2013
Beginning
Balance Additions Disposal
Reclassified
Amount
Translation
Adjustments
Ending
Balance
Accumulated impairment
Land $ 33,981 $ - $ - $ - $ - $ 33,981
Buildings 84,446 - - - (7,266 ) 77,180
Machinery and equipment 722,818 3,394,590 (17,603 ) - 39,377 4,139,182 Other equipment 2,047 - - - 120 2,167
843,292 $ 3,394,590 $ (17,603 ) $ - $ 32,231 4,252,510
$ 50,423,824 $ 46,039,575
(Concluded)
Year Ended December 31, 2012
Beginning
Balance Additions Disposal
Reclassified
Amount
Translation
Adjustments
Ending
Balance
Cost
Land $ 2,900,269 $ - $ - $ - $ - $ 2,900,269
Buildings 11,320,865 1,572,719 (292,506 ) 3,074,664 (259,384 ) 15,416,358 Machinery and equipment 43,390,512 12,454,086 (6,505,155 ) - (1,067,255 ) 48,272,188
Transportation equipment 57,068 21,349 (11,809 ) - (1,506 ) 65,102
Furniture and fixtures 312,475 67,282 (25,974 ) - (11,282 ) 342,501 Leasehold improvements 455,505 25,342 (5,823 ) - (17,417 ) 457,607
Other equipment 7,755,562 1,586,544 (1,556,637 ) - (210,809 ) 7,574,660
Construction in progress 3,830,385 4,779,692 - (3,074,664 ) (172,551 ) 5,362,862 70,022,641 $ 20,507,014 $ (8,397,904 ) $ - $ (1,740,204 ) 80,391,547
Accumulated depreciation
Buildings 3,394,406 $ 771,665 $ (290,507 ) $ - $ (65,952 ) 3,809,612
Machinery and equipment 20,841,768 6,474,442 (5,966,852 ) - (329,662 ) 21,019,696
Transportation equipment 37,599 7,999 (11,809 ) - (947 ) 32,842 Furniture and fixtures 216,236 46,243 (24,915 ) - (8,266 ) 229,298
Leasehold improvements 69,912 105,136 (5,829 ) - (3,940 ) 165,279 Other equipment 4,454,484 1,048,353 (1,548,508 ) - (86,625 ) 3,867,704
29,014,405 $ 8,453,838 $ (7,848,420 ) $ - $ (495,392 ) 29,124,431
Accumulated impairment
Land 33,981 $ - $ - $ - $ - 33,981
Buildings 4,292 83,605 - - (3,451 ) 84,446 Machinery and equipment 41,853 689,028 (7,314 ) - (749 ) 722,818
Other equipment 2,131 - (1 ) - (83 ) 2,047
82,257 $ 772,633 $ (7,315 ) $ - $ (4,283 ) 843,292
$ 40,925,979 $ 50,423,824
Under an operating lease, the Corporation rents the sites of its manufacturing facilities from the Ministry of
Economic Affairs (MOEA) under various contracts, with the latest expiry in April 2020. The monthly
rentals are $233 thousand.
Due to the change of the production technology and process, the Group recognized impairment losses of
$3,394,590 thousand for 2013 and $401,763 thousand for 2012 based on the carrying amounts of certain
old machinery and equipment.
There was a decline in the sales of no-touch LCD products, which caused a decrease in cash inflows from
the use of the related machinery and the recoverable amount of the machinery becoming lower than its
carrying amount; thus, the Group recognized an impairment loss of $287,265 thousand for 2012. The
recoverable amount of the machinery was based on its value in use, determined at a discount rate of 7.84%.
Wintek India recognized an impairment loss of $83,605 thousand for 2012 based on a building appraisal
report.
For its building expansion, Mactech entered into a contract to buy a 3,874-square meter lot located on
Tanxing Road in the Tanzi District in Taichung in December 2007. However, because this lot is classified
- 33 -
as an agricultural land, the title to this lot is under the name of Mactech’s president. Nevertheless,
Mactech’s president has signed a trust deed assigning Mactech as the beneficiary of this lot.
Interest capitalization was as follows:
Year Ended December 31
2013 2012
Interest capitalized $ 179,506 $ 81,245
Interest rates 1.31%-5.91% 2.16%-2.94%
Property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives (in
years) of the assets, as follows:
Building
Main building 8-35
Electrical power equipment 5-6
Interior decoration 3-10
Others 3-6
Machinery and equipment 2-11
Transportation equipment 3-11
Furniture and fixtures 3-10
Leasehold improvements 2-10
Other equipment 2-15
Refer to Note 27 for the carrying amounts of the property, plant and equipment pledged by the Group for its
borrowings.
14. INVESTMENT PROPERTIES
December 31,
2013
December 31,
2012
January 1,
2012
Building
Cost $ 85,621 $ 83,423 $ 86,763
Less: Accumulated depreciation (18,303) (16,020) (14,775)
$ 67,318 $ 67,403 $ 71,988
The investment properties are depreciated on a straight-line basis over an estimated life of 46 years, in the
calculation of depreciation.
As of December 31, 2013, December 31, 2012 and January 1, 2012, the fair values of the investment
properties were $149,234 thousand, $137,379 thousand and $121,080 thousand, respectively. The
valuation was not based on an independent appraiser’s work but on market transaction prices for similar
properties.
All of the Group's investment properties were held under freehold interests. The carrying amounts of the
investment properties pledged by the Group for it borrowings are shown in Note 27.
- 34 -
15. PREPAYAMENTS FOR LEASE
Location
Period for Use
(Years)
United Win China Suzhou Industrial Park, China 45-70
Dongguan Masstop Mulberry Industrial Park, China 50
Wintek China Dongguan Songshan Lake Sci&Tech Industry Park, China 50
Wintek India Nokia Telecom Special Economic Zone, India 33
Wintek Vietnam Quang Chau Industrial Park, Vietnam 43.75-44
Quang Chau New Urban Area, Vietnam 44
All of the acquired lots were used to build factories, office building and employee dormitories.
16. BORROWINGS
a. Short-term borrowings
Short-term borrowings were unsecured loans. Interest rates were 1.27% to 6.00%, 0.72% to 4.80%
and 0.82% to 3.97% as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively.
b. Short-term bills payable
Short-term bills payable consisted of commercial paper. These instruments were issued at annual
discount rates of 1.08%, 0.95% to 1.08% and 0.97% to 1.00% as of December 31, 2013, December 31,
2012 and January 1, 2012.
c. Long-term borrowings
December 31,
2013
December 31,
2012
January 1,
2012
Secured loans - repayable in installments
from March 2014 to October 2018
$ 9,670,124 $ 10,138,897 $ 8,326,110
Unsecured loans - repayable in installments
from April 2014 to September 2015
6,158,341 8,553,644 9,712,855
Other loans - loans from lease company,
repayable in installments from September
2015 to August 2016
409,585 329,357 -
16,238,050 19,021,898 18,038,965
Less: Current portion (9,226,179) (2,463,047) (3,474,368)
$ 7,011,871 $ 16,558,851 $ 14,564,597
Interest
Secured loans 1.65%-5.91% 1.71%-6.17% 1.46%-2.48%
Unsecured loans 2.17%-3.15% 2.02%-2.77% 1.46%-3.20%
Other loans 2.69%-4.07% 2.69%-3.26% -
The Corporation entered into loan agreement amounting to $6.5 billion in November 2010 with a
syndicate of banks led by Bank of Taiwan. These loans were for constructing plants and buying
equipment. The agreements provided that the Corporation (a) should maintain certain current,
debt-to-equity and interest coverage ratios based on the Corporation’s annual consolidated financial
statements; and (b) should not, without the prior written consent of the majority of the bank syndicate,
- 35 -
sell important assets and royalties, buy back its own shares and reduce capital during the contract
period.
The arrangement fee of a syndicate of banks is recognized as a reduction of financial liabilities and
amortized using the straight-line method over the loan period.
To raise working capital, the Corporation entered into loan agreement with SinoPac Bank. Under the
agreement, the Corporation should maintain certain current, debt-to-equity and interest coverage ratios
based on the Corporation’s annual condensed consolidated financial statements during the contract
term.
In August 2011, Masstop and United Win HK entered into a US$200,000 thousand loan agreement with
a syndicate of banks led by Bank of Taiwan. The Corporation guaranteed this loan. Under the loan
agreement, the Corporation should (a) maintain certain current, debt and interest coverage ratios every
fiscal year based on the Corporation’s audited annual condensed consolidated financial statements and
(b) ensure that as a direct or indirect owner of more than 75% equity interest each in Masstop, United
Win HK, Dongguan Masstop and United Win China, it will maintain operating control over these four
subsidiaries.
As of December 31, 2013, the Group could not meet the some terms of the agreements that were
primarily related to the consolidated financial ratio of the Group. Nevertheless, as of March 4, 2014, the
date of the approval of the issuance date of the consolidated financial statements, the syndicate of banks
had agreed to waive its right to demand immediate payment. Thus, the loan had not been classified as a
current liability as of December 31, 2013.
In June 2012, Wintek China entered into a US$180,000-thousand syndicated loan agreement with China
Development Bank and Bank of China Limited - Dongguan Branch. Dongguan Masstop guaranteed
this syndicated loan and provided plant, property and equipment as loan collateral together with Wintek
China. Under the loan agreement, Wintek China should (a) maintain certain debt to asset, receivables
turnover and debt coverage ratios and (b) have annual gross sales of not less than RMB2,000,000
thousand at least after the third year of the loan agreement was signing. As of the December 31, 2013,
Wintek China did not breach the above loan agreement.
17. OTHER PAYABLES
December 31,
2013
December 31,
2012
January 1,
2012
Other accrued expenses $ 3,338,659 $ 2,835,105 $ 3,498,593
Payables for the purchase of equipment 1,193,381 1,241,502 987,566
Accrued payroll and bonus 1,080,501 1,606,144 1,434,871
$ 5,612,541 $ 5,682,751 $ 5,921,030
18. RETIREMENT BENEFIT PLANS
a. Defined contribution plans
The Corporation, Mactech, United Win Investment and WinPower have pension plans under the Labor
Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity
makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and
wages.
- 36 -
United Win China, Dongguan Masstop, Wintek China, DongGuan Sheng Feng, DongGuan Innolife,
Masstop, Wintek Electro-Optics, Wintek India, Wintek Central Europe and Wintek Vietnam have
defined contribution plans under their respective local laws. The overseas reinvested holding
companies have no pension plans.
b. Defined benefit plan
The Corporation and Mactech have defined benefit plans under the Labor Standards Law, under which
pension benefits are calculated on the basis of the length of service and average monthly salaries of the
six months before retirement. The Corporation and Mactech contribute amounts equal to 2% of total
monthly salaries and wages to a pension fund administered by their pension fund monitoring
committees. Pension contributions are deposited in the Bank of Taiwan in the committees’ names.
The plan assets are invested in domestic (foreign) equity and debt securities, bank deposits, etc. The
investment is conducted at the discretion of Bureau of Labor Funds, Ministry of Labor or under the
mandated management. However, in accordance with Enforcement Rules of the Labor Pension Act,
the return generated by employees' pension contribution should not be below the interest rate for a
2-year time deposit with local banks.
The actuarial valuations of plan assets and the present value of the defined benefit obligations were
carried out by qualifying actuaries. The principal assumptions used in actuarial valuations were as
follows:
Valuation at
December 31,
2013
December 31,
2012
January 1,
2012
Discount rate 1.875% 1.625% 1.75%
Expected return on plan assets 2.00% 1.875% 2.00%
Expected rates of salary increase 3.00%-3.50% 3.00%-3.50% 3.00%-3.50%
The assessment of the overall expected rate of return was based on historical return trends and analysts’
predictions of the market for the asset over the life of the related obligation, by reference to the
aforementioned use of the plan assets and the impact of the related minimum return.
Amounts recognized in profit or loss on the defined benefit plans were as follows:
For the Year Ended December 31
2013 2012
Current service cost $ 2,556 $ 2,474
Interest cost 4,734 4,474
Expected return on plan assets (5,900) (5,938)
$ 1,390 $ 1,010
Actuarial gains and losses recognized in other comprehensive income for the years ended December 31,
2013 and 2012 was $7,700 thousand and $32,836 thousand, respectively. The cumulative amount of
actuarial gains and losses recognized in other comprehensive income as of December 31, 2013 and
2012 was $40,536 thousand and $32,836 thousand, respectively.
Included in the consolidated balance sheets were the following amounts arising from the Group's
obligation its defined benefit plans:
- 37 -
December 31,
2013
December 31,
2012
January 1,
2012
Present value of the funded defined benefit
obligation
$ 300,897 $ 291,332 $ 255,617
Fair value of plan assets (322,624) (306,478) (288,400)
Net assets arising from the defined benefit
obligation (recorded under other
non-current assets)
$ (21,727) $ (15,146) $ (32,783)
Movements in the present value of defined benefit obligation were as follows:
Year Ended December 31
2013 2012
Opening defined benefit obligation $ 291,332 $ 255,617
Current service cost 2,556 2,474
Interest cost 4,734 4,474
Actuarial losses 5,779 29,762
Benefit paid (3,504) (995)
Closing defined benefit obligation $ 300,897 $ 291,332
Movements in the fair value of the plan assets were as follows:
Year Ended December 31
2013 2012
Opening fair value of plan assets $ 306,478 $ 288,400
Expected return on plan asset 5,900 5,938
Actuarial losses (1,921) (3,074)
Contribution from the employer 15,671 16,209
Benefit paid (3,504) (995)
Closing fair value of plan assets $ 322,624 $ 306,478
The major categories of the plan assets were as follows:
December 31,
2013
December 31,
2012
January 1,
2012
Cash 23 25 24
Debt instruments 9 10 11
Fixed-revenue assets 18 16 16
Equity security 45 37 41
Short-term bills 4 10 8
Others 1 2 -
100 100 100
The Group chose to disclose the history of experience adjustments prospectively from the date of
transition to Taiwan-IFRSs (see Note 33), as follows:
- 38 -
December 31,
2013
December 31,
2012
January 1,
2012
Experience adjustments on plan liabilities $ (16,258) $ (29,762) $ -
Experience adjustments on plan assets $ (1,921) $ (3,074) $ -
The Group expects to make contributions of $15,996 thousand and $16,209 thousand to the defined
benefit plans during the annual periods beginning after 2013 and 2012, respectively.
19. EQUITY
Share Capital
a. Common stock
December 31,
2013
December 31,
2012
January 1,
2012
Number of shares authorized (in thousands) 2,500,000 2,100,000 1,800,000
Shares authorized $ 25,000,000 $ 21,000,000 $ 18,000,000
Number of shares issued and fully paid (in
thousands) 1,847,778 1,847,778 1,647,778
Shares issued $ 18,477,784 $ 18,477,784 $ 16,477,784
Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and the right to
dividends.
b. Common share issuance through private placement
In October 2006, the Corporation issued in accordance with Article 43-6 of the Securities and Exchange
Act - 32,444 thousand common shares at a par value of NT$10.00 through private placement. The
issuance price was NT$27.74 per share. These shares may be resold only after three years from the
delivery date (November 23, 2006). As of December 31, 2013, the shares had not been listed because
the Corporation had accumulated deficit for the most recent fiscal year and did not meet the
requirement for public listing under the Guidelines and Provisions in Article 12-1 of the Taiwan Stock
Exchange Corporation’s Rules for the Review of Securities Listings.
c. Issuance of global depositary receipts (GDRs)
The Corporation increased its capital by issuing GDRs. Each GDR represented the right to receive
five common shares. Other information on GDRs is as follows:
Issued Units
Issued Shares of
Stock (In Thousands) Issue Price (US$)
November 2002 16,000,000 80,000 $3.835
November 2004 19,000,000 95,000 5.24
October 2007 20,000,000 100,000 6.00
April 2010 30,000,000 150,000 4.07
January 2011 40,000,000 200,000 8.264
June 2012 40,000,000 200,000 2.50
- 39 -
As of December 31, 2013, the GDR holders had exchanged GDRs amounting to US$728,626 thousand,
representing 847,091 thousand common shares, and the total outstanding GDRs were equal to 6
thousand common shares, or 0.0003% of total capital shares issued.
The GDR holders have the same rights as the Corporation’s shareholders. In addition, under the
related laws and depositary agreement, the GDR depositary will act on behalf of the GDR holders when
they:
1) Exercise voting rights;
2) Sell the securities of depositary receipts; and
3) Receive dividends and subscribe for capital stock.
Capital Surplus
The capital surplus arising from shares issued in excess of par (including share premium from the issuance
of common shares, conversion of bonds, treasury share transactions, and excess of the consideration
received over the carrying amount of the subsidiaries’ net assets during disposal or acquisition) and
donations may be used to offset a deficit. In addition, when the Corporation has no deficit, such capital
surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage
of the Corporation’s capital surplus and once a year).
The capital surplus from long-term investments, employee share options and share warrants, however, may
not be used for any purpose.
Retained Earnings and Dividends Policy
The Corporation’s Articles of Incorporation provide that after (a) the payment of all taxes required by law;
(b) the offset of deficit; and (c) the deduction of legal reserve and special reserve, the remaining earnings
will be reserved for the operating requirements of its business or allocated as follows:
1) Up to 2% as remuneration to directors and supervisors;
2) 15% as employees’ bonus; and
3) The remainder, as dividends.
The Corporation’s dividend policy takes the following aspects into consideration:
1) Investment environment;
2) Global competition;
3) Shareholders’ benefits;
4) Dividend stability; and
5) The Corporation’s capital expenditure budget, capital requirement and long-term financial plan.
Under the Corporation Law, the board of directors should draft a proposal on earnings distribution for
approval at the shareholders’ meeting. In principle, cash dividends should be more than 10% of total
dividends.
For the years ended December 31, 2013 and 2012, the Corporation had no profits; thus, it did not estimate
bonus to employees and remuneration to directors and supervisors.
Under Rule No. 100116 and Rule No. 0950000507 issued by the Financial Supervisory Commission (FSC),
an amount equal to the net debit balance of shareholders’ equity items (including exchange differences on
translating foreign operations, unrealized gain [loss] on available-for-sale financial assets, and the gain or
loss on the hedging instrument relating to the effective portion of a cash flow hedge) should be transferred
from unappropriated earnings to a special reserve before any appropriation of earnings generated before
January 1, 2012. Any special reserve appropriated may be reversed to the extent of the decrease in the net
debit balance.
- 40 -
Under Rule No. 1010012865 issued by the FSC on April 6, 2012 and the directive titled “Questions and
Answers for Special Reserves Appropriated Following the Adoption of Taiwan-IFRSs”, on the first-time
adoption of Taiwan-IFRSs, the Corporation should appropriate to a special reserve an amount that is the
same as these of unrealized revaluation increment and cumulative translation differences (gains) transferred
to retained earnings as a result of the Corporation’s use of exemptions under IFRS 1. However, at the date
of transition to Taiwan-IFRSs, if the increase in retained earnings that resulted from all Taiwan-IFRSs
adjustments is not sufficient for this appropriation, only the increase in retained earnings that resulted from
all Taiwan-IFRSs adjustments will be appropriated to special reserve. This special reserve may be
reversed in proportion to the usage, disposal or reclassification of the related assets and thereafter
distributed. The special reserve appropriated on the first-time adoption of Taiwan-IFRSs may be used to
offset deficits in subsequent years. No appropriation of earnings should be made until any shortage of the
foregoing special reserve is appropriated in subsequent years if the Corporation has earnings and the
original need to appropriate a special reserve is not eliminated.
Legal reserve should be appropriated from earnings until the legal reserve equals the Corporation’s paid-in
capital. Legal reserve may be used to offset deficit. If the Corporation has no deficit and the legal
reserve has exceeded 25% of the Corporation’s capital, the excess may be transferred to capital or
distributed in cash.
Except for non-ROC resident shareholders, all shareholders receiving dividends are allowed a tax credit
equal to their proportionate share of the income tax paid by the Corporation.
The offset of the deficits for 2012 and 2011 was approved at the shareholders’ meetings in May 2013 and
June 2012, respectively. The appropriations of deficit were as follows:
Offset of Deficit
2012 2011
Offset of deficit against legal reserve $ - $ 1,576,205
Offset of deficit against capital surplus 2,878,439 328,673
The proposed offset of deficit for 2012 was based on the Corporation’s financial statements for the year
ended December 31, 2012, which were prepared in accordance with the Guidelines Governing the
Preparation of Financial Reports by Securities Issuers and the Generally Accepted Accounting Principles in
the Republic of China (ROC GAAP), and on the balance sheet for the year ended December 31, 2012,
which was prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by
Securities Issuers (revised) and Taiwan-IFRSs.
The offset of deficit for 2013 using $8,706,924 thousand of the capital surplus was proposed by the
Corporation’s board of directors on March 4, 2014.
Information on the bonus to employees, directors and supervisors proposed by the Corporation’s board of
directors is available on the Market Observation Post System website of the Taiwan Stock Exchange.
Special Reserve Appropriated Following the First-time Adoption of Taiwan-IFRSs
The Corporation had an accumulated deficit that resulted from all Taiwan-IFRSs adjustments; thus, no
special reserve was appropriated.
- 41 -
20. EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES
Year Ended December 31
2013 2012
Operating
Costs
Operating
Expenses Total
Operating
Costs
Operating
Expenses Total
Short-term employee
benefits
$ 6,595,235 $ 1,190,507 $ 7,785,742 $ 7,981,437 $ 1,328,281 $ 9,309,718
Post-employment benefits
Defined contribution
plans
429,533 53,691 483,224 532,162 58,726 590,888
Defined benefit plans 2,032 (642) 1,390 1,689 (679) 1,010
Others 3,403,020 214,827 3,617,847 4,142,555 155,812 4,298,367
Depreciation 8,131,565 371,736 8,503,301 8,143,571 312,113 8,455,684
Amortization 6,262 18,981 25,243 6,770 11,590 18,360
21. INCOME TAXES
a. Income tax recognized in profit or loss
The major components of tax expense were as follows:
Year Ended December 31
2013 2012
Current tax
Current year $ 104,716 $ 272,495
Income tax expense of unappropriated earnings 5,626 6,109
Prior years 2,415 (24,540)
112,757 254,064
Deferred tax
Current year (79,716) (223,225)
Prior years (1,914) 661
(81,630) (222,546)
Income tax expense recognized in profit or loss $ 31,127 $ 31,500
A reconciliation of loss before income tax and income tax expense recognized in profit or loss was as
follows:
Year Ended December 31
2013 2012
Income tax expense calculated at the statutory rate $ (3,035,509) $ (785,229)
Tax effect of adjusting items:
Nondeductible expense in determining taxable income (313,295) 483,060
Tax-exempt income (28,895) (22,135)
Tax of 10% on undistributed earnings 5,626 6,109
Unrecognized loss carryforwards 2,890,292 260,538
Unrecognized investment credits 6,087 (6,087)
Unrecognized temporary differences 488,574 100,669
Investment credits - (340)
Others 17,746 18,794
Adjustments for prior year’s tax 501 (23,879)
Income tax expense $ 31,127 $ 31,500
- 42 -
The statutory tax rates above were 17% for the Group in the ROC and 25% for the subsidiaries in China.
The statutory tax rates used by group entities operating in other jurisdictions are based on the tax laws
in those jurisdictions.
b. Current tax assets and liabilities
December 31,
2013
December 31,
2012
January 1,
2012
Current tax assets
Tax refund receivable $ 3,233 $ 2,813 $ 2,087
Current tax liabilities
Income tax payable $ 61,218 $ 163,181 $ 92,453
c. The movements of deferred tax assets and liabilities
Year Ended December 31, 2013
Opening
Balance
Recognized in
Profit or loss Closing Balance
Deferred tax assets
Temporary differences
Inventories $ 395,655 $ (83,825) $ 311,830
Unrealized operation costs 46,276 (9,893) 36,383
Unrealized loss on exchange 137 3,520 3,657
Investments accounted for using equity
method 66,538 (10,552) 55,986
Provisions 5,873 (2,951) 2,922
Payable for employee welfare 1,972 - 1,972
Property, plant and equipment 205,985 145,814 351,799
Intangible assets 2,386 (81) 2,305
Payable for annual leave 8,099 707 8,806
Doubtful debts 601 34 635
Financial assets at fair value through profit
and loss 6,248 (6,248) -
Financial assets measured at cost 13,319 - 13,319
Prepayments for equipment - 34,743 34,743
Others 47,432 (39,043) 8,389
800,521 32,225 832,746
Loss carryforwards 399,436 47,452 446,888
Investment credits 6,087 (6,087) -
$ 1,206,044 $ 73,590 $ 1,279,634
Deferred tax liabilities
Temporary differences
Financial assets at fair value through profit
and loss $ - $ 17,388 $ 17,388
Unrealized gain on exchange 19,938 (19,938) -
Others 16 (16) -
$ 19,954 $ (2,566) $ 17,388
- 43 -
Year Ended December 31, 2012
Opening
Balance
Recognized in
Profit or loss Closing Balance
Deferred tax assets
Temporary differences
Inventories $ 396,467 $ (812) $ 395,655
Unrealized operation costs 32,670 13,606 46,276
Unrealized loss on exchange - 137 137
Investments accounted for using equity
method 17,360 49,178 66,538
Provisions 12,147 (6,274) 5,873
Payable for employee welfare 1,972 - 1,972
Property, plant and equipment 9,328 196,657 205,985
Intangible assets 2,529 (143) 2,386
Payable for annual leave 7,042 1,057 8,099
Doubtful debts 626 (25) 601
Financial assets at fair value through profit
and loss - 6,248 6,248
Financial assets measured at cost 13,319 - 13,319
Others 56,613 (9,181) 47,432
550,073 250,448 800,521
Loss carryforwards 429,999 (30,563) 399,436
Investment credits - 6,087 6,087
$ 980,072 $ 255,972 $ 1,206,044
Deferred tax liabilities
Temporary differences
Financial assets at fair value through profit
and loss $ 5,673 $ (5,673) $ -
Unrealized gain on exchange 5,566 14,372 19,938
Others 417 (401) 16
$ 11,656 $ 8,298 $ 19,954
d. Items for which no deferred tax assets have been recognized
December 31,
2013
December 31,
2012
January 1,
2012
Loss carryforwards
Expiry in 2018 $ 220,204 $ - $ -
Expiry in 2019 249,194 258,501 273,130
Expiry in 2021 168,061 168,061 183,377
Expiry in 2022 8,560 8,565 -
Expiry in 2023 2,594,262 - -
$ 3,240,281 $ 435,127 $ 456,507
(Continued)
- 44 -
December 31,
2013
December 31,
2012
January 1,
2012
Investment credits
Purchase of machinery and equipment $ 6,087 $ 61,734 $ 324,428
Research and development - 123,613 332,293
Personnel training - 2,628 2,935
$ 6,087 $ 187,975 $ 659,656
Deductible temporary difference
$ 716,658 $ 200,797 $ 108,786
(Concluded)
Unrecognized investment credits will expire in 2014.
e. Information on unused loss carryforwards
Loss carryforward as of December 31, 2013 comprised:
Unused
Amount Expiry Year
$ 2,870,524 2018
2,434,604 2019
988,595 2021
50,354 2022
15,260,364 2023
$ 21,604,441
f. Information on integrated income tax
December 31,
2013
December 31,
2012
January 1,
2012
Imputation credit account $ 249,264 $ 247,364 $ 225,527
The Corporation had no unappropriated earnings generated before January 1, 1998.
The Corporation had operating losses in 2012 and 2011; thus, the shareholders resolved not to make
appropriations for these years.
g. In November 2010, the Industrial Development Bureau (IDB) approved the tax credits for Emerging,
Important and Strategic Industries. The credits can be used to reduce the Corporation’s tax obligations
for five years from 2013.
h. Income tax returns through 2010 of the Corporation, 2011 of the Mactech and United Win Investment
had been assessed and cleared by the tax authorities.
- 45 -
22. LOSS PER SHARE (EPS)
Number of
Shares Loss Per Share
Net Loss (In Thousands) (NT$)
For the year ended December 31, 2013
Basic and diluted $ (10,254,316) 1,847,778 $ (5.55)
For the year ended December 31, 2012
Basic and diluted $ (2,881,517) 1,759,254 $ (1.64)
If the Group offers to pay employee bonuses in cash or shares, the Group will assume that the entire amount
of the bonus will be settled in shares, and the resulting potential shares will be included in the weighted
average number of shares outstanding to be used in the computation of diluted earnings per share, if the
effect is dilutive. The dilutive effect of the potential shares is included in the computation of diluted
earnings per share until the shareholders resolve the number of shares to be distributed to employees at their
meeting in the following year.
Since the exercise price of the options issued by the Corporation exceeded the average market price of the
shares in the year ended December 31, 2013 and 2012, the options were anti-dilutive and excluded from the
computation of diluted EPS.
23. SHARE-BASED PAYMENT ARRANGEMENTS
Under stock option plans (the “Plans”), the Corporation issued to employees 29,000 units in August 2007;
Mactech, 2,000 units in July 2008; and WinPower, 1,111 units in November 2011. Each unit represents one
thousand common shares. Employees eligible to receive the Corporation’s options under the Plan are
full-time employees of both the Corporation and subsidiaries. Certain percentages of the options of the
Corporation and Mactech are exercisable two years from the grant dates, and those of WinPower are
exercisable one month from the grant date. The option certificate is valid for six years and the vested right
is exercisable on the basis of an employee’s service years. The exercise price of the Corporation’s stock
option is the closing price of its share on the grant date. If any change is made in the common stock
subject to the Plan, the exercise price of any Plan options outstanding will be appropriately adjusted in
accordance with a certain formula. The exercise prices of the stock options granted by Mactech and
WinPower were NT$10.00 per common share.
Other information on the Corporation’s employee stock options is as follows:
Year Ended December 31
2013 2012
Weighted Weighted
Average Average
Exercise Exercise
Price Price
Employee Stock Options Units (NT$) Units (NT$)
Balance, beginning of year 4,241 $ 28.30 4,657 $ 29.91
Options forfeited (4,241) 28.30 (416) 29.91
Balance, end of year - - 4,241 28.30
Options exercisable, end of year - - 4,241 28.30
- 46 -
Information on outstanding options of the Corporation is as follows:
December 31,
2013
December 31,
2012
January 1,
2012
Exercise Price (NT$) $ - $ 28.30 $ 29.91
Weighted-average Remaining Contractual Life
(Years)
- 0.67 1.67
The compensation cost recognized under the intrinsic value method for the years ended December 31, 2013
and 2012 was zero. Had the Corporation used the Black-Scholes Model to price the options granted, the
method, the assumptions and pro forma information, assuming the employee stock options were granted
before December 31, 2007, would have been as follows:
Black-Scholes Model
Assumptions
Risk-free interest rate 2.28%
Expected life 4 years
Expected volatility 44.06%
Expected dividend yield -
Year Ended December 31
2013 2012
Net loss
Pro forma $(10,254,316) $ 2,881,517
Loss per share (NT$)
Pro forma $(5.55) $(1.64)
Other information on Mactech’s employee stock options is as follows:
Year Ended December 31
2013 2012
Employee Stock Options Units
Weighted
Average
Exercise
Price
(NT$) Units
Weighted
Average
Exercise
Price
(NT$)
Balance, beginning of year 38 $10.00 618 $10.00
Options exercised - - (539) 10.00
Options forfeited (4) 10.00 (41) 10.00
Balance, end of year 34 10.00 38 10.00
Options exercisable, end of year 34 10.00 38 10.00
- 47 -
Information on Mactech’s outstanding options is as follows:
December 31,
2013
December 31,
2012
January 1,
2012
Exercise Price (NT$) $ 10.00 $ 10.00 $ 10.00
Weighted-average Remaining Contractual Life
(Years)
0.58 1.58 2.58
Other information on WinPower’s employee stock option is as follows:
Year Ended
December 31, 2012
Units
Weighted-
average
Exercise
Price (NT$)
Balance, beginning of year 1,059 10.00
Options exercised (935) 10.00
Options forfeited (124) 10.00
Balance, end of year - -
Options exercisable, end of year - -
24. CAPITAL MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as going
concerns while maximizing the return to shareholders through the optimization of the debt and equity
balance. The capital structure of the Group consists of net debt (borrowings offset by cash and cash
equivalents) and equity of the Group (comprising share capital, capital surplus, retained earnings and other
equity).
The directors of the Group review the capital structure quarterly. As part of this review, the directors
consider the cost of capital and the risks associated with each class of capital. On the basis of the
recommendations of the directors, to balance the overall capital structure, the Group may adjust the amount
of dividends for distribution, the number of new shares issued, or the amount of new debt issued or existing
debt redeemed. In addition, under certain loan agreements with a syndicate of banks, the Group should
not buy back its own shares and reduce capital during the contract period.
25. FINANCIAL INSTRUMENTS
a. Fair value of financial instruments
1) Fair value of financial instruments not carried at fair value
Management believes the carrying amounts of financial assets and financial liabilities recognized in
the consolidated financial statements approximate their fair values or the fair value cannot be
reliably a measured.
- 48 -
2) Fair value measurements of financial instruments recognized in the consolidated balance sheets
Financial instruments that are measured subsequent to initial recognition at fair value are grouped
into Levels 1 to 3 based on the degree to which the fair value is observable, as follows:
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 and those 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 through valuation techniques, which include
inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
The Group’s financial instruments, available-for-sale financial assets and financial assets and
liabilities at fair value through profit or loss, are classified under Level 1 and Level 2, respectively.
There were no transfers between Level 1 and 2 for the years ended December 31, 2013 and 2012.
3) Valuation techniques and assumptions applied to measure fair value
The fair values of financial assets and financial liabilities are determined as follows:
The fair values of financial assets and financial liabilities with standard terms and conditions
and traded in active liquid markets are determined with reference to quoted market prices.
The fair values of derivative instruments are calculated using quoted prices. If quoted prices are
not available, a discounted cash flow analysis is done, using the applicable yield curve for the
duration of the instruments for non-optional derivatives, and option pricing models for optional
derivatives. Forward contracts are measured using quoted forward exchange rates and yield
curves derived from quoted interest rates matching maturities of the contracts. Interest rate
swaps are measured at the present value of future cash flows estimated and discounted on the
basis of the applicable yield curves derived from quoted interest rates.
b. Categories of financial instruments
December 31,
2013
December 31,
2012
January 1,
2012 Financial assets Fair value through profit and loss
Held for trading $ 134,952 $ 471 $ 61,740 Loans and receivables 20,157,765 19,978,074 24,766,842 Available-for-sale financial assets 702,731 488,598 519,615 Financial liabilities Fair value through profit and loss
Held for trading 12,732 37,792 23,753 Amortized cost 55,419,976 55,374,635 52,603,912
- 49 -
Loans and receivables measured at amortized cost comprise cash and cash equivalents, debt
investments with no active market, notes and trade receivables and other receivables. Available-for-sale
financial assets included the carrying amount of available-for-sale financial measured at cost.
Financial liabilities measured at amortized cost comprise short-term loans, short-term bills payable,
notes and accounts payable, other payables and long-term borrowings.
c. Financial risk management objectives and policies
The Group’s major financial instruments include equity investments, trade receivables, trade payables
and borrowing. The Group’s Corporate Treasury provides services to the business, coordinates access
to domestic and international financial markets, manages and monitors the financial risks relating to the
operations of the Group through internal risk reports, which analyze exposures by degree and
magnitude of risks. These risks include market risk (including currency risk and interest rate risk),
credit risk and liquidity risk.
The Group seeks to minimize the effects of these risks by using derivative financial instruments to
hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved
by the Coporation’s board of directors. Compliance with policies and exposure limits is reviewed by
the internal auditors.
The Corporate Treasury reports quarterly to the Board of Directors.
1) Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency
exchange rates and interest rates. The Group uses a variety of derivative financial instruments to
manage its exposure to foreign currency risk and interest rate risk, including:
Forward exchange contracts to hedge against the exchange rate risk on imports and exports; and
Interest rate swaps to mitigate the risk of rising interest rates.
There had been no change to the Group’s exposure to market risks or the manner in which these
risks were managed and measured.
a) Foreign currency risk
Several subsidiaries of the Coporation have foreign currency sales and purchases, which expose
the Group to foreign currency risk. Exchange rate exposures are managed within approved
policy parameters through forward exchange contracts.
The carrying amounts of the Group’s foreign currency-denominated monetary assets and
monetary liabilities (including those eliminated on consolidation) at the end of the reporting
period are listed in Note 30.
Sensitivity analysis
The Group was mainly exposed to the U.S. dollar (USD). Assuming a 4% movement in the
levels of the NTD against the USD, the losses before income tax for the years ended December
31, 2013 and 2012 would have changed by $6,446 thousand and $66,676 thousand, respectively.
Assuming a 1% movement in the levels of the RMB against the USD, losses before income tax
for the years ended December 31, 2013 and 2012 would have changed by $203,314 thousand
and $29,848 thousand, respectively.
- 50 -
The sensitivity rate is the rate used when reporting foreign currency risk internally to the
directors and represents the directors’ assessment of the reasonably possible change in foreign
exchange rates.
b) Interest rate risk management
The Group was exposed to interest rate risk because entities in the Group borrowed funds at
both fixed and floating interest rates. The risk is managed by the Group by maintaining an
appropriate mix of fixed and floating rate borrowings and by using interest rate swap contracts.
Hedging activities are evaluated regularly to align with interest rate views and defined risk
appetite, ensuring that the most cost-effective hedging strategies are applied.
The carrying amounts of the Group’s financial assets and financial liabilities with exposure to
interest rates on at the end of the reporting period were as follows:
December 31,
2013
December 31,
2012
January 1,
2012
Fair value interest rate risk
Financial assets $ 2,873,290 $ 788,911 $ 1,833,507
Financial liabilities 18,880,123 13,611,900 8,503,954
Cash flow interest rate risk
Financial assets 4,660,755 5,334,506 6,101,450
Financial liabilities 19,025,472 25,445,161 24,470,777
Interest rate sensitivity analysis
The sensitivity analyses below were determined on the basis of the exposure to interest rates for
both derivative and nonderivative instruments at the end of the reporting period. For floating
rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the
end of the reporting period was outstanding for the whole year. A 0.3% increase or decrease was
used when reporting interest rate risk internally to the directors and represents the directors’
assessment of the reasonably possible change in interest rates.
Has interest rates been changed by 0.3% and all other variables been held constant, the Group’s
losses before income tax for the years ended December 31, 2013 and 2012 would have changed
by $57,076 thousand and $76,335 thousand, respectively.
2) Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations, resulting in
financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to
credit risk which will cause a financial loss to the Group due to failure of counterparties to
discharge an obligation could arise from the carrying amount of the respective recognized financial
assets as stated in the balance sheets.
The Group adopted a policy of only dealing with creditworthy counterparties. The Group has
credit policy and management procedures on trade receivables to ensure it can evaluate the debts
soundly and recover the receivables.
The Group’s concentrations of credit risk of 49%, 89% and 87% in total trade receivables as of
December 31, 2013, December 31, 2012 and January 1, 2012, respectively, pertained to the Group’s
the five largest customers.
- 51 -
3) Liquidity risk management
The Group manages liquidity risk by monitoring and maintaining a level of cash and cash
equivalents deemed adequate to finance the Group’s operations and mitigate the effects of
fluctuations of cash flows. In addition, the directors monitor the use of bank borrowings and
ensure compliance with loan covenants.
Liquidity and interest risk rate tables for nonderivative financial liabilities
The following tables detail the Group’s remaining contractual maturity for its nonderivative
financial liabilities with agreed repayment periods. The tables have been drawn up on the basis of
undiscounted cash flows of financial liabilities from the earliest date on which the Group can be
required to pay. Specifically, bank loans with a repayment on demand clause were included in the
“Less Than 1 Year” column below regardless of the probability of the banks choosing to exercise
their repayment rights in repayment periods of one year or longer. The maturity dates for other
nonderivative financial liabilities were based on the agreed repayment dates.
Less Than
1 Year 1-2 Years Over 2 Years
December 31, 2013
Noninterest bearing $ 15,291,209 $ 800,258 $ 98,579
Variable interest rate instruments 12,102,520 3,636,658 3,286,294
Fixed interest rate instruments 18,781,465 78,774 19,884
$ 46,175,194 $ 4,515,690 $ 3,404,757
December 31, 2012
Noninterest bearing $ 14,550,112 $ 122,040 $ 626
Variable interest rate instruments 8,966,320 10,270,737 6,208,104
Fixed interest rate instruments 13,517,448 47,880 46,572
$ 37,033,880 $ 10,440,657 $ 6,255,302
January 1, 2012
Noninterest bearing $ 18,027,145 $ 139,687 $ 498
Variable interest rate instruments 9,906,180 5,259,762 9,304,835
Fixed interest rate instruments 8,489,600 - 14,354
$ 36,422,925 $ 5,399,449 $ 9,319,687
Liquidity and interest risk rate tables for derivative financial liabilities
The following table details the Group's liquidity analysis for its derivative financial instruments.
The table was based on the undiscounted contractual net cash inflows and outflows on derivative
instruments that settle on a net basis and the undiscounted gross inflows and outflows on those
derivatives that require gross settlement. When the amount payable or receivable was not fixed,
the amount disclosed was determined by referring to the projected interest rates as illustrated by the
yield curves at the end of the reporting period.
- 52 -
Less Than
1 Year 1-2 Years Over 2 Years
December 31, 2013
Net settled:
Interest rate swap $ - $ - $ (8,382)
Forward exchange 118,155 - -
$ 118,155 $ - $ (8,382)
Gross settled:
Forward exchange
Inflows $ 2,247,856 $ - $ -
Outflows (2,227,910) - -
19,946 - -
Swap
Inflows 536,490 - -
Outflows (534,310) - -
2,180 - -
$ 22,126 $ - $ -
December 31, 2012
Net settled:
Interest rate swap $ - $ - $ (12,833)
Forward exchange 4,590 - -
Currency option (12,284) - -
$ (7,694) $ - $ (12,833)
Gross settled:
Forward exchange
Inflows $ 350,030 $ - $ -
Outflows (355,987) - -
(5,957) - -
Swap
Inflows 1,722,307 - -
Outflows (1,722,572) - -
(265) - -
$ (6,222) $ - $ -
- 53 -
Less Than
1 Year 1-2 Years Over 2 Years
January 1, 2012
Net settled:
Interest rate swap $ (8,135) $ - $ (17,699)
Cross-currency swap 57,441 - -
Forward exchange (638) - -
Currency option 4,892 - -
$ 53,560 $ - $ (17,699)
Gross settled:
Forward exchange
Inflows $ 315,708 $ - $ -
Outflows (315,866) - -
(158) - -
Swap
Inflows $ 2,418,513 $ - $ -
Outflows (2,418,973) - -
(460) - -
$ (618) $ - $ -
26. TRANSACTIONS WITH RELATED PARTIES
Balances and transactions between the Corporation and its subsidiaries, which are related parties of the
Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of
transactions between the Group and other related parties are disclosed below.
Compensation of key management personnel
Year Ended December 31
2013 2012
Short-term employee benefits $ 77,971 $ 96,628
Post-employment benefits 1,128 1,199
$ 79,099 $ 97,827
The remuneration of directors and key executives was determined by the remuneration committee, taking
into consideration the performance of individuals and market trends.
27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY
The following assets were provided as collaterals or guarantees to the Institute of Information Industry as
well as part of the requirements for the tariff of imported raw materials, letters of credit and long-term
borrowings:
- 54 -
December 31,
2013
December 31,
2012
January 1,
2012
Property, plant and equipment $ 19,776,915 $ 17,162,772 $ 6,645,856
Investment properties 44,969 45,026 48,089
Prepayments for lease 649,118 626,551 -
Restricted deposit (classified under debt
investments with no active market) 122,220 - -
Mortgaged time deposits (classified under debt
investments with no active market) 119,220 15,884 -
$ 20,712,442 $ 17,850,233 $ 6,693,945
28. SIGNIFICANT EVENTS AFTER REPORTING PERIOD
On March 4, 2014, the board of directors decided to change the useful life of equipment from 6 to 10 years
considering the practice among peers and evaluating the result from the appraisal company. These changes
are expected to reduce depreciation expenses by $2,622,656 thousand for the year ended December 31,
2014.
29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS
a. As of December 31, 2013, December 31, 2012 and January 1, 2012, unused letters of credit for the
purchases of raw materials and machinery and equipment amounted to $418,229 thousand, $518,022
thousand and $544,137 thousand, respectively.
b. Unrecognized commitments were as follows:
December 31,
2013
December 31,
2012
January 1,
2012
Acquisition of property, plant and equipment $ 4,401,386 $ 2,138,121 $ 5,090,499
c. Under sales agreements expiring between 2014 and 2021, the Group should pay royalty fees at a
percentage of net sales of certain products or at a fixed amount. For the years ended December 31,
2013 and 2012, royalty expenses were $111,296 thousand and $146,879 thousand, respectively.
30. EXCHANGE RATES OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES
The significant financial assets and liabilities denominated in foreign currencies were as follows:
December 31, 2013 December 31, 2012 January 1, 2012
Foreign
Currency
Exchange
Rate
New Taiwan
Dollar
Foreign
Currency
Exchange
Rate
New Taiwan
Dollar
Foreign
Currency
Exchange
Rate
New Taiwan
Dollar
Financial assets
Monetary items
USD (USD/NTD) $ 850,848 29.81 $ 25,359,514 $ 898,580 29.04 $26,094,766 $ 1,098,462 30.28 $ 33,255,940
USD (USD/RMB) 529,438 6.10 15,779,885 523,342 6.29 15,197,850 536,952 6.30 16,256,209
JPY 289,698 0.28 82,245 107,101 0.34 36,029 121,042 0.39 47,278
Financial liabilities
Monetary items
USD (USD/NTD) 1,171,623 29.81 34,920,233 1,023,118 29.04 29,711,341 1,023,127 30.28 30,975,171
USD (USD/RMB) 1,187,584 6.10 35,395,933 1,166,297 6.29 33,869,257 962,688 6.30 29,145,372
JPY 1,523,708 0.28 432,581 2,143,797 0.34 721,173 1,469,220 0.39 573,877
- 55 -
31. SEPARATELY DISCLOSED ITEMS
Information on significant transactions and investees:
a) Financing provided to others: Table 1
b) Endorsements/guarantees provided: Table 2
c) Marketable securities held (excluding investment in subsidiaries, associates and joint controlled
entities): Table 3
d) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the
paid-in capital: Table 4
e) Acquisition of individual real estate at costs of at least NT $300 million or 20% of the paid-in capital:
None
f) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital:
None
g) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the
paid-in capital: Table 5
h) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital:
Table 6
i) Trading in derivative instruments: Table 7
j) Intercompany relationships and significant intercompany transactions: Table 7
k) Information on investees: Table 8
l) Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business
activities, paid-in capital, method of investment, inward and outward remittance of funds,
ownership percentage, net income of investees, investment income or loss, carrying amount of the
investment at the end of the period, repatriations of investment income, and limit on the amount of
investment in the mainland China area: Table 9
2) Any of the following significant transactions with investee companies in mainland China, either
directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or
losses:
a) The amount and percentage of purchases and the balance and percentage of the related payables
at the end of the period: Table 5
b) The amount and percentage of sales and the balance and percentage of the related receivables at
the end of the period: Table 5
c) The amount of property transactions and the amount of the resulting gains or losses: None
d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the
end of the period and the purposes: Table 2
- 56 -
e) The highest balance, the end of period balance, the interest rate range, and total current period
interest with respect to financing of funds: Table 1
f) Other transactions that have a material effect on the profit or loss for the period or on the
financial position, such as the rendering or receiving of services: Table 7
32. SEGMENT INFORMATION
Information reported to the chief operating decision maker for the purposes of resource allocation and
assessment of segment performance focuses on types of goods or services delivered or provided.
Specifically, the Group’s reportable segments under IFRS 8 “Operating Segments” were touch panels and
others.
a. Segment revenues and results
Following is the analysis of the Group’s revenue and results by reportable segment:
Year Ended December 31
Segment Revenue Segment Profit
2013 2012 2013 2012
Touch panels $ 68,995,725 $ 91,123,178 $ (4,914,262) $ 3,302,315
Others 7,402,000 11,054,873 (3,766,364) (3,955,077)
Total $ 76,397,725 $102,178,051 (8,680,626) (652,762)
Foreign exchange gain, net 541,642 173,251
Interest income 37,407 56,882
Other income 409,091 268,187
General and administrative expenses (1,854,795) (1,688,644)
Finance costs (916,985) (866,462)
Valuation gain (loss) on financial
assets (liabilities) at fair value
through profit or loss through profit
or loss 257,051 (97,773)
Other expenses (1,721) (3,857)
Loss before income tax $ (10,208,936) $ (2,811,178)
Segment revenue reported above represents revenue generated from external customers. There were
no intersegment sales for the years ended December 31, 2013 and 2012.
Segment profit represents the profit before tax earned by each segment without the allocation of central
administration costs and directors’ salaries, interest income, gain or loss on disposal of assets, foreign
exchange gain or loss, valuation gain or loss on financial instruments, finance costs and income tax
expense. This was the measure reported to the chief operating decision maker for the purposes of
resource allocation and assessment of segment performance.
b. Geographical information
The Group mainly operates in three geographical areas: Taiwan, China and Vietnam. The Group’s
revenue from operations from external customers by location of operations and information on its
non-current assets by location of assets are shown below.
- 57 -
Revenue from
External Customers Non-current Assets
Year Ended December 31 December 31, December 31, January 1,
2013 2012 2013 2012 2012
Taiwan $ 76,097,952 $ 101,839,242 $ 12,532,208 $ 15,124,295 $ 18,526,035
China 255,517 200,450 29,535,719 32,291,811 26,191,966
Vietnam - - 6,588,615 6,772,106 4,326,250
Other 44,256 138,359 131,091 176,938 376,762
$ 76,397,725 $ 102,178,051 $ 48,787,633 $ 54,365,150 $ 49,421,013
Noncurrent assets excluded those classified as deferred tax assets.
c. Information on major customers
Year Ended December 31
2013 2012
Customer Amount % Amount %
Corporation B $ 16,117,771 21 $ 65,086,972 64
Corporation C 15,593,417 20 2,965,524 3
Corporation D 13,337,969 18 9,420,931 9
Corporation A 7,380,247 10 10,273,530 10
$ 52,429,404 69 $ 87,746,957 86
33. FIRST-TIME ADOPTION OF Taiwan-IFRSs
a. Basis of the preparation of the financial information under Taiwan-IFRSs
The Group’s consolidated financial statements for the year ended December 31, 2013 were the first
Taiwan-IFRSs financial statements. The Group not only followed the significant accounting policies
stated in Note 4 but also applied the requirements under IFRS 1 “First-time Adoption of IFRS” as the
basis for the preparation.
b. Impact on the transition to Taiwan-IFRSs
After the transition to Taiwan-IFRSs, the impact on the Group’s consolidated balance sheets and
consolidated statements of comprehensive income is stated as follows:
1) Reconciliation of the consolidated balance sheet items as of January 1, 2012
Effect of
ROC GAAP Transition to Taiwan-IFRSs
Item Amounts Taiwan-IFRSs Amounts Item Note
Assets
Cash and cash equivalents $ 7,863,959 $ (181,650 ) $ 7,682,309 Cash and cash equivalents a)
Available-for-sale financial assets
- current
169,025 142,108 311,133 Available-for-sale financial assets
- current
k)
- - 181,650 181,650 Debt investments with no active
market - current
a)
Other receivables 1,392,079 2,248 1,394,327 Other receivables -
Other financial assets - current 80,442 (80,442 ) - - -
Deferred tax assets - current 486,264 (486,264 ) - - b) Other current assets 1,684,276 198,925 1,883,201 Other current assets d)
(Continued)
- 58 -
Effect of
ROC GAAP Transition to Taiwan-IFRSs
Item Amounts Taiwan-IFRSs Amounts Item Note
Financial assets measured at cost -
noncurrent
$ 251,619 $ (43,137 ) $ 208,482 Financial assets measured at cost -
noncurrent
k)
Property, plant and equipment,
net
47,741,185 (6,815,206 ) 40,925,979 Property, plant and equipment c), h), i),
j)
- - 71,988 71,988 Investment properties h) Computer software - 29,197 29,197 Computer software c)
Land use rights 1,226,443 (1,226,443 ) - - d)
- - 1,201,678 1,201,678 Long-term prepayments for rent d) - - 6,819,076 6,819,076 Prepayments for equipment j)
Deferred tax assets - noncurrent 475,108 504,964 980,072 Deferred tax assets b), f)
Other assets - others 304,834 (258,965 ) 45,869 Other non-current assets c), e), i)
Liabilities
Accrued expense 4,899,712 1,021,318 5,921,030 Other payables f)
Payable for the acquisition of
equipment
987,566 (987,566 ) - - -
Other current liabilities 430,227 (70,832) 359,395 Other current and non-current
liabilities
l)
- - 71,452 71,452 Provisions - current l) Other liabilities - others 620 (620 ) - - -
Deferred tax liabilities -
noncurrent
- 11,656 11,656 Deferred tax liabilities b)
Equity
Capital surplus - long-term
investments
3,262 (3,262 ) - - g)
Capital surplus-Employee stock
options
3,264 (3,264 ) - - g)
Accumulated deficit (1,904,878 ) 1,590,089 (314,789 ) Accumulated deficit e), f), g)
Cumulative translation adjustments
1,670,453 (1,670,453 ) - Exchange difference on translating foreign operations
-
Unrealized gain on financial instruments
30,014 98,972 128,986 Unrealized gain on available-for-sale financial
assets
k)
Minority interest 158,695 2,237 160,932 Non-controlling interests e), f),g)
(Concluded)
2) Reconciliation of the consolidated balance sheet items as of December 31, 2012
Effect of
ROC GAAP Transition to Taiwan-IFRSs
Item Amounts Taiwan-IFRSs Amounts Item Note
Assets
Cash and cash equivalents $ 6,073,213 $ (132,197 ) $ 5,941,016 Cash and cash equivalents a)
Available-for-sale financial assets
- current
284,102 26,561 310,663 Available-for-sale financial assets
- current
k)
- - 148,081 148,081 Debt investments with no active
market - current
a)
Other receivables 477,676 2,882 480,558 Other receivables -
Other financial assets-current 87,908 (87,908 ) - - -
Restricted assets - current 15,884 (15,884 ) - - a)
Deferred tax assets - current 462,645 (462,645 ) - - b) Other current assets 3,390,334 118,643 3,508,977 Other current assets d)
Financial assets measured at cost - noncurrent
189,019 (11,084 ) 177,935 Financial assets measured at cost - noncurrent
k)
Property, plant and equipment,
net
52,805,031 (2,381,207 ) 50,423,824 Property, plant and equipment c), h), i),
j)
- - 67,403 67,403 Investment properties h)
Computer software 30,809 19,158 49,967 Computer software c)
Land use rights 1,153,525 (1,153,525 ) - - d) - - 1,129,602 1,129,602 Long-term prepayments for rent d)
- - 2,371,962 2,371,962 Prepayments for equipment j)
Deferred tax assets - noncurrent 715,347 490,697 1,206,044 Deferred tax assets b), f) Other assets others 203,735 (176,385 ) 27,350 Other non-current assets c), e), i)
(Continued)
- 59 -
Effect of
ROC GAAP Transition to Taiwan-IFRSs
Item Amounts Taiwan-IFRSs Amounts Item Note
Liabilities
Accrued expense $ 4,399,001 $ 1,283,750 $ 5,682,751 Other payables f)
Payables for the acquisition of
equipment
1,241,502 (1,241,502 ) - -
Other current liabilities 333,624 (38,003 ) 295,621 Other current and non-current
liabilities
l)
- - 34,547 34,547 Provisions - current l) Deferred tax liability - noncurrent - 19,954 19,954 Deferred tax liability - noncurrent b)
Equity
Capital surplus - long-term
investments
4,482 (4,482 ) - - g)
Capital surplus - employee stock
options
381 (381 ) - - g)
- - 1,235 1,235 Difference between market price and carrying amount by
acquisition or disposal of
subsidiaries
g)
Accumulated deficit (2,878,439 ) 1,555,297 (1,323,142 ) Accumulated deficit e), f), g)
Cumulative translation
adjustments
629,875 (1,669,793 ) (1,039,918 ) Exchange difference on
translating foreign operations
Unrealized gain on financial
instruments
121,411 15,479 136,890 Unrealized gain on
available-for-sale financial
assets
k)
Minority interest 140,910 (1,947 ) 138,963 Non-controlling interests e), f), g)
(Concluded)
3) Reconciliation of the consolidated statement of comprehensive income for the year ended
December 31, 2012
Effect of
ROC GAAP Transition to Taiwan-IFRSs
Item Amounts Taiwan-IFRSs Amounts Item Note
Operating expenses $ 4,032,100 $ 4,668 $ 4,036,768 Operating expenses e), f) -
- 780,104 780,104 Other operating income and
expenses
m)
Impairent loss on assets 780,104 (780,104 ) - - m) Income tax expense 32,753 (1,253 ) 31,500 Income tax expense f)
Other comprehensive income
-
- - (1,039,918 )
Exchange differences on
translating foreign operations
-
- - 7,924 Unrealized valuation gain on
available-for-sale financial
assets
k)
- - - (32,836 ) Loss on benefit plan e)
4) Exemptions from IFRS 1
IFRS 1 “First-time Adoption of International Financial Reporting Standards” establishes the
procedures for the Group’s first consolidated financial statements prepared in accordance with
Taiwan-IFRSs. Under IFRS 1, the Group is required to determine the accounting policies under
Taiwan-IFRSs and retrospectively apply those accounting policies to its opening balance sheet at
the date of transition to Taiwan-IFRSs, January 1, 2012, except for optional exemptions and
mandatory exceptions to such retrospective application provided under IFRS 1. The major
optional exemptions the Group adopted are summarized as follows:
- 60 -
a) Business combinations
The Group elected not to apply IFRS 3 “Business Combinations” retrospectively to business
combinations that occurred before the date of transition. Thus, the carrying amounts of
goodwill generated from past business combinations as well as the assets, liability, and
non-controlling interests in the consolidated balance sheet were the same as the carrying
amounts shown in the consolidated balance sheet as of December 31, 2011, which had been
prepared in accordance with ROC GAAP.
The election not to apply IFRS 3 was also true for investments in associates made in the past.
b) Share-based payment transactions
The Group elected to take the optional exemption from applying IFRS 2 “Share-based
Payment” retrospectively to shared-based payment transactions granted and vested before the
transition date.
c) Employee benefits
The Group elected to recognize all cumulative actuarial gains and losses on employee benefits
in accumulated earnings at the date of transition.
d) Cumulative translation differences
The Group elected to reset the cumulative translation differences to zero at the transition date
and adjusted accumulated earnings accordingly.
The effects of the above elections had been considered in Item 5 – “Explanations for significant
reconciling items in the transition to Taiwan-IFRSs.”
5) Explanations for significant reconciling items in the transition to Taiwan-IFRSs
Material differences between the accounting policies under ROC GAAP and the accounting policies
adopted under Taiwan-IFRSs were as follows:
a) Time deposits of more than three months
Under ROC GAAP, the term “cash and cash equivalents” used in the financial statements
includes cash on hand, demand deposits, check deposits, time deposits that are cancelable but
without any loss of principal and negotiable certificates of deposit that are readily sellable
without any loss of principal. Under Taiwan-IFRSs, cash equivalents are held for the purpose
of meeting short-term cash commitments rather than for investment or other purposes. An
investment normally qualifies as a cash equivalent only when it has a short maturity of three
months or less from the date of acquisition. Some certificates of deposit the Group held had
maturities of more than three months from the date of investment; thus they were reclassified
from cash and cash equivalents to debt investments with no active market - current.
b) Deferred tax asset/liability and valuation allowance
Under ROC GAAP, valuation allowances are provided to the extent, if any, that it is more likely
than not that deferred income tax assets will not be realized. Under Taiwan-IFRSs, an entity
recognizes deferred tax assets only if it is highly probable that taxable profits will be available
against which the deductible temporary difference can be used; thus a valuation allowance
account is not used.
In addition, under ROC GAAP, a deferred tax asset and liability is classified as current or
noncurrent in accordance with the classification of related asset or liability for financial
- 61 -
reporting. But if a deferred income tax asset or liability does not relate to an asset or liability
in the financial statements, it is classified as current or noncurrent on the basis of the expected
length of the realization or settlement period. Under Taiwan-IFRSs, a deferred tax asset and
liability is classified as non-current.
Under ROC GAAP, the current deferred tax liabilities and assets of the same taxable entity
should be offset against each other and presented as a net amount; the same treatment is applied
to non-current deferred tax liabilities and assets.
Under Taiwan-IFRSs, an entity should offset deferred tax assets and deferred tax liabilities only
if:
i. The entity has a legally enforceable right to current tax assets against current tax liabilities;
and
ii. The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the
same taxation authority on either:
i) The same taxable entity; or
ii) Different taxable entities that intend either to settle current tax liabilities and assets on a
net basis, or to realize the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or assets are expected to
be settled or recovered.
c) Classification of deferred charges
Under ROC GAAP, deferred charges are classified under other assets. Under Taiwan-IFRSs,
the items in deferred charges are classified as property, plant and equipment, intangible assets
and prepayments - noncurrent (classified under other assets) in accordance with their nature.
d) Land use rights
Under ROC GAAP, land use rights are classified under intangible assets. Under IAS 17
“Leases,” land use rights are classified as long-term prepayments for lease.
e) Employee benefits - defined benefit plans
Under ROC GAAP, unrecognized net transition obligations should be amortized on a
straight-line basis over the employees’ remaining service periods. Under Taiwan-IFRSs, as
the transitional provisions of IAS 19 “Employee Benefits” do not apply to a first-time adopter's
transition to Taiwan-IFRSs, the Group should recognize unrecognized net transition obligations
in unappropriated earnings at the transition date.
In addition, under ROC GAAP, it is not allowed to recognize actuarial gains and losses from
defined benefit plans directly to equity; instead, actuarial gains and losses should be accounted
for under the corridor approach, which requires the deferral of gains and losses. The corridor
approach requires the amortization of actuarial gains and losses over the expected average
remaining working lives of the participating employees.
Under IAS 19, the Group has elected to recognize actuarial gains and losses fully as other
comprehensive income and reported in retained earnings in the period in which they arise. The
subsequent reclassification to earnings is not permitted.
- 62 -
f) Employee benefits - accumulated compensated absences
Accumulated compensated absences are not addressed in the ROC GAAP; thus, the Group has
not recognized at the end of reporting periods the expected cost of employee benefits in the
form of accumulated compensated absences. Under Taiwan-IFRSs, when the employees render
services that increase their entitlement to future compensated absences, an entity should
recognize the expected cost of employee benefits at the end of reporting periods.
g) Investments accounted for using the equity method
Subsidiary issues new shares but the Corporation does not buy new shares proportionately
The investor may subscribe for additional investees shares at a percentage different from its
existing ownership percentage, resulting in a change in the investor’s holding percentage in the
investee. Under ROC GAAP, the investor records this change as an adjustment to long-term
investments, with the corresponding amount charged or credited to capital surplus. Under
Taiwan-IFRSs, changes in a parent’s ownership interest in a subsidiary without the loss of the
parent’s control are accounted for as equity transactions.
In addition, according to the “Frequently Asked Questions Related to the IFRS Adoption”
issued by the Taiwan Stock Exchange, capital surplus items not addressed by Taiwan’s
Company Law and the rules issued by the Ministry of Economic Affairs should be adjusted on
the date of transition to Taiwan-IFRSs.
A subsidiary’s newly granted employee stock options
Under ROC GAAP, when the subsidiaries of the Corporation issue employee stock options,
there is a corresponding adjustment to capital surplus - employee stock options. In addition, the
Corporation records the changes in its equity in the investees’ net assets as an adjustment to
investments, with the corresponding amounts credited or charged to capital surplus.
Under Taiwan-IFRSs, the equity in a subsidiary, which cannot be attributed directly or
indirectly to the parent, is attributed to non-controlling interest.
h) Investment properties
Under ROC GAAP, property that is held by a lessor under an operating lease is classified under
property, plant and equipment. Under Taiwan-IFRSs, the property held to earn rentals or for
capital appreciation or both should be classified as investment properties.
i) The Group’s land registered under someone else’s name
Under the pre-revised Guidelines Governing the Preparation of Financial Reports by Securities
Issuers, land that is owned by the Group but registered under someone else’s name, is classified
under other assets. Under Taiwan-IFRSs, the land is classified as property, plant and
equipment depending on the purpose of landholding.
j) Prepayments for equipment
Under ROC GAAP, prepayments for equipment are classified as property, plant and equipment.
Under Taiwan-IFRSs, prepayments for equipment are classified as prepayments and presented
under non-current assets.
- 63 -
k) Financial assets measured at cost - noncurrent
Under the Guidelines Governing the Preparation of Financial Reports by Securities Issuers,
investments in equity instruments with no quoted prices in an active market and with fair values
that cannot be reliably measured, such as non-publicly traded stocks and stocks traded in the
Emerging Stock Market, are classified as financial assets measured at cost.
Under Taiwan-IFRSs, nonderivative financial assets that are designated as available-for-sale
financial assets, or are not designated as at financial assets and liabilities at fair value through
profit or loss on initial recognition are classified as available-for-sale financial assets and are
initially measured at fair value.
l) Warranty reserves
Under ROC GAAP, warranty reserves are included in other current liabilities. Under
Taiwan-IFRSs, warranty reserves are listed as provisions.
m) Impairment loss of assets
Under the Guidelines Governing the Preparation of Financial Reports by Securities Issuers,
impairment loss on assets are recognized as non-operating expenses and losses. Under
Taiwan-IFRSs, impairment loss on assets is recognized as other operating income and expenses,
operating expenses or non-operating expense in accordance with their nature.
- 64 -
TABLE 1
WINTEK CORPORATION AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
No. Lender Borrower Financial Statement Account Related
Parties
Highest Balance for
the Period
Ending Balance
(Note 3)
Actual Borrowing
Amount Used
Range of Interest
Rate
Nature of
Financing
Business
Transaction
Amounts
Reasons for
Short-term
Financing
Allowance for
Impairment loss
Collateral Aggregate
Financing
Limits Item Value
1 United Win Technology
(Cayman) Corporation
United Win (H.K.) Technology
Limited (Note 4)
Receivables from related parties Yes US$ 3,000 US$ 3,000 US$ 3,000 - Note 1 $ - Operating capital $ - - - Note 2
United Win (China)
Technology Limited (Note 4)
Receivables from related parties Yes US$ 60,000 US$ - US$ - - Note 1 - Operating capital - - - Note 2
2 United Win (H.K.)
Technology Limited
United Win (China)
Technology Limited (Note 4)
Receivables from related parties Yes US$ 120,000 US$ 80,000 US$ 61,000 2.16%-2.22% Note 1 - Operating capital - - - Note 2
Wintek (China) Technology
Ltd. (Note 4)
Receivables from related parties Yes US$ 40,000 US$ 40,000 US$ 40,000 0.90%-1.74% Note 1 - Operating capital - - - Note 2
Wintek Corporation (Note 4) Receivables from related parties Yes US$ 19,000 US$ 19,000 US$ - - Note 1 - Operating capital - - - Note 2
3 Masstop Asia Pacific Ltd. Dongguan Masstop Liquid
Crystal Display Co., Ltd.
(Note 4)
Receivables from related parties Yes US$ 106,000 US$ 83,000 US$ 63,000 and
RMB$ 126,820
2.08%-3.28% Note 1 - Operating capital - - - Note 2
4 Wintek BVI Wintek Fra East (Cayman)
Corporation (Note 4)
Receivables from related parties Yes US$ 2,000 US$ - US$ - - Note 1 - Operating capital - - - Note 2
Sun Farm Corporation Other receivables No US$ 1,788 US$ 1,330 US$ 1,330 1.69%-2.19% Note 1 - Operating capital - - - Note 2
Wintek Corporation (Note 4) Receivables from related parties Yes US$ 11,000 US$ - US$ - - Note 1 - Operating capital - - - Note 2
5 Dongguan Masstop
Liquid Crystal Display
Co., Ltd.
Wintek (China) Technology
Ltd. (Note 4)
Receivables from related parties Yes RMB 833,850 RMB 380,000 RMB 380,000 5.40% Note 1 - Operating capital - - - Note 2
DongGuan Sheng Feng Import
and Export Trading Co., Ltd.
(Note 4)
Receivables from related parties Yes RMB 5,000 RMB 5,000 RMB 5,000 5.40% Note 1 - Operating capital - - - Note 2
6 Wintek Technology
(H.K.) Limited
Wintek (China) Technology
Ltd. (Note 4)
Receivables from related parties Yes US$ 6,600 US$ - US$ - - Note 1 - Operating capital - - - Note 2
7 Wintek Technology
Cayman
Wintek Corporation (Note 4) Receivables from related parties Yes US$ 5,000 US$ - US$ - - Note 1 - Operating capital - - - Note 2
Wintek Technology (H.K.)
Limited (Note 4)
Receivables from related parties Yes US$ 600 US$ 600 US$ 600 - Note 1 - Operating capital - - - Note 2
8 United Win Investment
Corporation
WinPower Optronics
Corporation (Note 4)
Receivables from related parties Yes $ 90,000 $ 90,000 $ 60,800 2.86% Note 1 - Operating capital - - - Note 2
Note 1: Necessary for short-term financing.
Note 2: For the financing provided by each subsidiary, the maximum amount should not exceed 25% of the net assets of the Corporation as of December 31, 2012 ($34,837,095 × 25% = $8,709,274).
Note 3: The ending balance amount has been approved by the board of directors.
Note 4: Significant intercompany accounts and transactions have been eliminated; please see Table 8.
- 65 -
TABLE 2
WINTEK CORPORATION AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
No. Endorser/Guarantor
Endorsee/Guarantee
Limits on
Endorsement/
Guarantee Given
on Behalf of
Each Party
Maximum
Amount
Endorsed/Guaran
teed During the
Period
Outstanding
Endorsement/
Guarantee at the
End of the Period
Actual Borrowing
Amount
Amount
Endorsed/
Guaranteed by
Collaterals
Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity In Latest
Financial
Statements
(%)
Aggregate
Endorsement/
Guarantee Limit
Endorsement/
Guarantee Given
by Parent on
Behalf of
Subsidiaries
Endorsement/
Guarantee Given
by Subsidiaries on
Behalf of Parent
Endorsement/
Guarantee Given
On behalf of
Companies in
Mainland China
Name Nature of
Relationship
0 Wintek Corporation (The
“Corporation”)
United Win (H.K.) Technology
Limited
Indirectly owned
subsidiary
Note 1 $ 4,011,438
(US$ 135,500)
$ 3,880,645
(US$ 131,000)
$ 3,557,160
(US$ 120,000)
$ - 13% Note 2 Y - -
Wintek Technology (H.K.)
Limited
Indirectly owned
subsidiary
Note 1 253,627
(US$ 8,000)
-
(US$ -)
-
(US$ -)
- - Note 2 Y - -
Wintek (China) Technology
Ltd.
Indirectly owned
subsidiary
Note 1 259,846
(RMB 55,000)
-
(RMB -)
-
(RMB -)
- - Note 2 Y - Y
Masstop Asia Pacific Ltd. Indirectly owned
subsidiary
Note 1 2,919,685
(US$ 98,500)
2,638,485
(US$ 89,000)
2,548,560
(US$ 86,000)
- 8.84% Note 2 Y - -
Dongguan Masstop Liquid
Crystal Display Co., Ltd.
Indirectly owned
subsidiary
Note 1 1,276,687
(US$ 5,000 and
RMB 250,000)
149,950
(US$ 5,000)
131,206
(US$ 4,375)
- 0.50% Note 2 Y - Y
Wintek Vietnam Co., Ltd. Indirectly owned
subsidiary
Note 1 651,010
( 115,000 and
US$ 18,000)
529,175
( 80,000 and
US$ 15,000)
68,598
(US$ 2,300)
- 1.77% Note 2 Y - -
Mactech Subsidiary Note 1 60,000 60,000 42,928 - 0.20% Note 2 Y - -
1 Dongguan Masstop Liquid Crystal
Display Co., Ltd.
Wintek (China) Technology
Ltd.
Investments
accounted for
using the equity
method
Note 1 6,475,273
(RMB 1,376,619)
6,475,273
(RMB 1,376,619)
5,284,937
(RMB1,123,558 )
6,475,273
(RMB 1,376,619)
21.68% Note 2 - - Y
Note 1: The maximum amount was 25% of the Corporation’s net assets as of December 31, 2012 ($34,837,095 × 25% = $8,709,274).
Note 2: The maximum amount was 50% of the Corporation’s net assets as of December 31, 2012 ($34,837,095 × 50% = $17,418,547).
Note 3: For the guarantees jointly provided by the Corporation and subsidiaries, the maximum amount of guarantee to each guaranteed party and total guarantee were 50% of the Corporation’s net assets as of December 31, 2012.
- 66 -
TABLE 3
WINTEK CORPORATION AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Holding Company Type and Name of Marketable
Securities
Relationship with the
Holding Company Financial Statement Account
December 31, 2013
Note Shares Carrying Amount
Percentage of
Ownership
Fair Value
(Note)
Wintek Corporation Capital stock
Sitronix Technology Co., Ltd. - Available-for-sale financial assets - current 2,207,657 $ 101,552 2 $ 101,552
Calin Technology Co., Ltd. - Available-for-sale financial assets - current 3,037,852 87,187 3 87,187
Transcom - Available-for-sale financial assets - current 1,324,166 20,882 5 20,882
Kingpak The president of Wintek
Corporation is a brother
of Kingpak’s president
Financial assets measured at cost - noncurrent 6,234,361 97,575 6 77,860
Integrated Solutions - Financial assets measured at cost - noncurrent 322,044 3,510 1 2,632
Uniflex - Financial assets measured at cost - noncurrent 384,860 3,176 1 4,506
Microsystems - Financial assets measured at cost - noncurrent 6,388,936 - 4 25,994
Andes - Financial assets measured at cost - noncurrent 1,156,955 - 2 3,143
Wintek Technology Cayman Capital stock
Focal Tech Corporation, Ltd. - Financial assets measured at cost - noncurrent 1,194,819 US$ 9,681 2 US$ 9,681
Share capital
IDesia Ltd. - Financial assets measured at cost - noncurrent 358,822 - 10 -
United Win Investment Mutual funds
Yuanta Wan Tai Money Markets
Fund
- Available-for-sale financial assets - current 677,860 10,038 - 10,038
HSBC China A-Share Focused - Available-for-sale financial assets - current 300,000 3,024 - 3,024
Franklin Templeton SinoAm Global
Aggregate Bond A Fund
- Available-for-sale financial assets - current 1,000,000 9,866 - 9,866
BNP Paribas TCB Elite Fd of EM
Market A Fund
- Available-for-sale financial assets - current 500,000 5,057 - 5,057
Allianz Glbl Inv All Seasons Hvst
FOBF A Fund
- Available-for-sale financial assets - current 444,496 4,963 - 4,963
(Continued)
- 67 -
Holding Company Type and Name of Marketable
Securities
Relationship with the
Holding Company Financial Statement Account
December 31, 2013
Note Shares Carrying Amount
Percentage of
Ownership
Fair Value
(Note)
United Win Investment Capital stock
Taiwan Business Bank - Available-for-sale financial assets - current 1,081,600 $ 9,810 - $ 9,810
Calin Technology Co., Ltd. - Available-for-sale financial assets - current 72,000 2,066 - 2,066
Ultra Chip Inc. - Available-for-sale financial assets - current 83,325 1,209 - 1,209
Uniflex - Financial assets measured at cost - noncurrent 394,728 3,258 1 4,621
Andes - Financial assets measured at cost - noncurrent 1,735,434 - 4 4,714
Kingpak - Financial assets measured at cost - noncurrent 1,652,800 15,868 2 20,642
Hsin Chu Golf Country Club Co., Ltd. - Financial assets measured at cost - noncurrent 3 9,260 - 259
Microsystems - Financial assets measured at cost - noncurrent 622,736 - - 2,534
Integrated Solutions Technology Inc. - Financial assets measured at cost - noncurrent 322,044 3,308 1 2,632
Mactech Mutual funds
FSITC Global Socially Responsible
Investment Bond A Fund
- Available-for-sale financial assets - current 1,000,000 9,634 - 9,634
Capital stock
Taichung International Country Club - Financial assets measured at cost - noncurrent 3 2,940 - 501
(Concluded)
Note: The estimated fair values of the securities held with no quoted market prices were based on the investees’ net assets.
- 68 -
TABLE 4
WINTEK CORPORATION AND SUBSIDIARIES
MARKETABLE SECURITIES ACQUIRED AND DISPOSED AT COST OR PRICES OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Company Name
Type and Name of
Marketable
Securities
Financial Statement
Account Counterparty
Nature of the
Relationship
Beginning Balance (Note 1) Acquisition Disposal Ending Balance (Note 1)
Number of
Shares Amount
Number of
Shares Amount
Number of
Shares Amount
Carrying
Amount
Gain (Loss)
on Disposal
Number of
Shares Amount
Wintek Corporation Capital stock
Wintek Technology
Cayman (Note 2)
Investments accounted
for using the equity
method
Wintek Technology
Cayman
Investee 295,230,801 $ 14,039,352 19,830,000 $ 574,079 - $ - $ - $ - 315,060,801 $ 11,899,426
Wintek BVI
(Note 2)
Investments accounted
for using the equity
method
Wintek BVI Investee 282,730,328 7,708,588 16,009,672 479,579 - - - - 298,740,000 8,574,142
Wintek Technology
Cayman
Capital stock
United Win
Technology
(Cayman)
Corporation
(Note 2)
Investments accounted
for using the equity
method
United Win
Technology
(Cayman)
Corporation
Investee 291,372,030 US$ 485,960 19,830,000 US$ 19,830 - - - - 311,202,030 US$ 395,214
United Win
Technology
(Cayman)
Corporation
Capital stock
Wintek Technology
(H.K.) Limited
(Note 2)
Investments accounted
for using the equity
method
Wintek Technology
(H.K.) Limited
Investee 220,170,000 US$ 188,544 19,830,000 US$ 19,830 - - - - 240,000,000 US$ 196,786
Wintek Technology
(H.K.) Limited
Share Capital
Wintek (China)
Technology Ltd.
(Note 2)
Investments accounted
for using the equity
method
Wintek (China)
Technology Ltd.
Investee - US$ 188,602 - US$ 19,830 - - - - - US$ 197,366
Dongguan Masstop
Liquid Crystal
Display Co., Ltd.
Wintek (China)
Technology Ltd.
(Note 2)
Investments accounted
for using the equity
method
Wintek (China)
Technology Ltd.
Intercompany - - - US$ 49,000 - - - - - US$ 49,177
Wintek BVI Capital stock
Wintek International
(Samoa)
Corporation
(Note 2)
Investments accounted
for using the equity
method
Wintek International
(Samoa)
Corporation
Investee 279,000,000 US$ 257,202 23,000,000 US$ 23,000 - - - - 302,000,000 US$ 285,048
(Continued)
- 69 -
Company Name
Type and Name of
Marketable
Securities
Financial Statement
Account Counterparty
Nature of the
Relationship
Beginning Balance (Note 1) Acquisition Disposal Ending Balance (Note 1)
Number of
Shares Amount
Number of
Shares Amount
Number of
Shares Amount
Carrying
Amount
Gain (Loss)
on Disposal
Number of
Shares Amount
Wintek International
(Samoa)
Corporation
Share Capital
Wintek Vietnam
Co., Ltd. (Note 2)
Investments accounted
for using the equity
method
Wintek Vietnam
Co., Ltd.
Investee - US$ 256,061 - US$ 23,006 - $ - $ - $ - - US$ 283,905
(Concluded)
Note 1: Beginning and ending balances included the share of subsidiary, foreign currency translation reserve and unrecognized gains and losses resulting from the transactions with the subsidiaries.
Note 2: Significant intercompany accounts and transactions have been eliminated.
- 70 -
TABLE 5
WINTEK CORPORATION AND SUBSIDIARIES
TOTAL PURCHASES FORM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars)
Purchaser or Seller Related Party
Nature of Relationship
with the Purchaser or
Seller
Transaction Details Abnormal Transaction Notes and Accounts
Receivable (Payable) Note
Purchase
or Sale Amount
% to
Total Collection Terms Unit Price Collection Terms
Ending
Balance
%
to Total
Wintek Corporation Wintek (China) Technology
Ltd. (Note)
Indirectly owned subsidiary Sale $ (317,781) - T/T 60 days - - $ - -
United Win (China)
Technology Limited (Note)
Indirectly owned subsidiary Sale (290,026) - T/T 90 days - - - -
Dongguan Masstop Liquid
Crystal Display Co., Ltd.
(Note)
Indirectly owned subsidiary Sale (187,731) - T/T 60 days - - 6,428 -
Wintek (China)
Technology Ltd.
Wintek Corporation (Note) Ultimate Parent Purchase 317,781 2% T/T 60 days - - - -
United Win (China)
Technology Limited
Wintek Corporation (Note) Ultimate Parent Purchase 290,026 55% T/T 90 days - - - -
Dongguan Masstop Liquid
Crystal Display Co.,
Ltd.
Wintek Corporation (Note) Ultimate Parent Purchase 187,731 2% T/T 60 days - - (6,428) (5%)
Note: Significant intercompany accounts and transactions have been eliminated; please see Table 7.
- 71 -
TABLE 6
WINTEK CORPORATION AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Company Name Related Party Nature of Relationship Ending Balance Turnover
Rate
Overdue Amounts Received in
Subsequent Period
Allowance for
Doubtful Accounts Amount Action Taken
Wintek Corporation Wintek (China) Technology Ltd.
(Note 5)
Indirectly owned subsidiary $ 689,440
(Note 2)
- $ - - $ - $ -
Wintek Vietnam Co., Ltd. (Note 5) Indirectly owned subsidiary 252,216
(Note 2)
- - - - -
Dongguan Masstop Liquid Crystal
Display Co., Ltd.
Wintek Corporation (Note 5) Ultimate parent 2,407,432
(Note 3)
4.01 - - 2,407,432 -
United Win (China) Technology Limited Wintek Corporation (Note 5) Ultimate parent 7,094,142
(Note 1)
2.38 - - - -
Mactech Corporation Wintek Corporation (Note 5) Parent Company 549,962
(Note 1)
0.68 - - - -
Wintek (China) Technology Ltd. Wintek Corporation (Note 5) Ultimate parent 461,031
(Note 1)
7.61 - - 72 -
Wintek Vietnam Co., Ltd. Wintek Corporation (Note 5) Ultimate parent 22,219,533
(Note 2)
2.23 - - 37,647 -
United Win (H.K.) Technology Limited United Win (China) Technology Limited
(Note 5)
Parent Company US$ 61,000
(Note 4)
- - - US$ - -
Wintek (China) Technology Ltd.
(Note 5)
Intercompany US$ 40,000
(Note 4)
- - - US$ - -
Masstop Asia Pacific Ltd. Dongguan Masstop Liquid Crystal
Display Co., Ltd. (Note 5)
Ultimate parent US$ 63,000
(Note 4)
- - - US$ - -
RMB 126,820
(Note 4)
- - - RMB - -
Dongguan Masstop Liquid Crystal
Display Co., Ltd.
Wintek (China) Technology Ltd.
(Note 5)
Investments accounted for
using the equity method
RMB 380,000
(Note 4)
- - - RMB - -
Note 1: The ending balance was under trade receivables
Note 2: The ending balance was under other receivables.
Note 3: The ending balance was under trade receivables and other receivables.
Note 4: The ending balance was under other receivables from related parties.
Note 5: Significant intercompany accounts and transactions have been eliminated; please see Table 7.
- 72 -
TABLE 7
WINTEK CORPORATION AND SUBSIDIARIES
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Numbers Company Name Counterparty Transaction Flow (Note)
Transactions
Account Amounts Terms Ratio to Consolidated
Sales or Consolidated Assets
0 Wintek Corporation United Win (China) Technology
Limited
1 Sales $ 302,266 T/T 90 days -
2 Cost of goods sold 3,018,055 T/T 60 days 4
2 Trade payable 7,094,142 T/T 60 days 9
Dongguan Masstop Liquid Crystal
Display Co., Ltd.
1 Sales 187,731 T/T 60 days -
2 Cost of goods sold 6,682,141 T/T 60 days 9
2 Other payables 2,407,432 T/T 60 days 3
Mactech Corporation 2 Non-operating income and expenses 204,370 90-120 days after the end of the
transaction month
-
2 Other payables 505,778 90-120 days after the end of the
transaction month
1
Wintek Vietnam Co., Ltd. 1 Other receivables 252,216 T/T 90 days -
1 Non-operation income and expenses 52,763 T/T 90 days -
2 Cost of goods sold 2,338,574 T/T 90 days 3
2 Trade payable 2,221,953 T/T 90 days 3
Wintek (China) Technology Ltd. 1 Sales 317,781 T/T 60 days -
1 Other receivables 689,440 T/T 60 days 1
2 Manufacturing overhead - outsourcing 5,133,436 - 7
2 Trade payable 461,031 T/T 90 days 1
1 United Win (China) Technology Limited Wintek (China) Technology Ltd. 3 Sales RMB 82,623 T/T 60 days 1
3 Other receivables RMB 62,700 T/T 60 days -
3 Cost of goods sold RMB 20,055 T/T 60 days -
2 Dongguan Masstop Liquid Crystal Display Co.,
Ltd.
Wintek (China) Technology Ltd. 3 Interest income RMB 35,988 - -
3 Sales RMB 51,256 T/T 60 days -
3 Trade receivables RMB 40,393 T/T 60 days -
3 Other receivables from related parties RMB 380,000 - 2
3 Cost of goods sold RMB 100,404 T/T 60 days 1
3 Other payables RMB 30,893 - -
3 Masstop Asia Pacific Ltd. Dongguan Masstop Liquid Crystal
Display Co., Ltd.
3 Interest income US$ 2,144 - -
3 Other receivables from related parties US$ 63,000 - 2
3 Other receivables from related parties RMB 126,820 - 1
4 United Win Technology (Cayman) Corporation United Win (H.K.) Technology
Limited
3 Other receivables from related parties US$ 3,000 - -
(Continued)
- 73 -
Numbers Company Name Counterparty Transaction Flow (Note)
Transactions
Account Amounts Terms Ratio to Consolidated
Sales or Consolidated Assets
5 United Win (H.K.) Technology Limited United Win (China) Technology
Limited
3 Interest income US$ 1,703 - -
3 Other receivables from related parties US$ 61,000 - 2
Wintek (China) Technology Ltd. 3 Other receivables from related parties US$ 40,000 - 1
6 DongGuan Sheng Feng Import and Export
trading Co., Ltd.
Wintek Vietnam Co., Ltd. 3 Sales RMB 13,088 T/T 30 days -
7 United Win Investment WinPower 3 Other receivables from related parties RMB 60,800 - -
(Concluded)
Note 1: From the parent company to the subsidiary.
Note 2: From the subsidiary to the parent company.
Note 3: Between subsidiaries.
- 74 -
TABLE 8
WINTEK CORPORATION AND SUBSIDIARIES
INFORMATION ON INVESTEES
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investor Company Investee Company Location Main Businesses and Products
Original Investment Amount As of December 31, 2013 Net Income (Loss)
of the Investee
Share of
profit (Loss) Note
December 31, 2013 December 31, 2012 Shares Percentage of
Ownership Carrying Amount
Wintek Corporation Wintek Technology Cayman (Note 2)
British Cayman Islands Overseas reinvested holding company $ 9,554,923 $ 8,980,844 315,060,801 100 $ 11,899,426 $ (3,794,540 ) $ (3,773,124 ) Subsidiary
Wintek BVI (Note 2) British Virgin Islands Overseas reinvested holding company 8,884,836 8,405,257 298,740,000 100 8,574,142 144,246 137,524 Subsidiary
Masstop LLC (Note 2) United States Overseas reinvested holding company 5,760,840 5,760,840 187,702,422 100 4,953,627 (1,444,084 ) (1,445,478 ) Subsidiary
Wintek Electro-Optics (Note 2) United States Sells LCD/LCM products 111,393 111,393 1,000 100 117,860 (28,829 ) (29,085 ) Subsidiary
United Win Investment (Note 2) Taichung, Taiwan Investment 339,000 242,000 34,404,000 100 238,032 (332 ) (332 ) Subsidiary
Mactech (Note 2) Taichung, Taiwan Manufactures machinery and equipment 54,581 54,581 18,323,187 49 168,023 (84,398 ) 52,455 Subsidiary Wintek Central Europe (Note 2) Germany Sells LCD/LCM products 53,475 53,475 - 100 132,701 685 685 Subsidiary
Wintek International Holding
(Note 2)
British Cayman Islands Overseas reinvested holding company 589,924 530,754 18,610,003 100 98,833 (38,025 ) (34,951 ) Subsidiary
WinPower (Note 2) Hsinchu Taiwan IC design 23,625 23,625 1,950,000 31 (12,921 ) (48,119 ) (14,835 ) Subsidiary
Wintek Technology Cayman United Win Technology (Cayman) Corporation (Note 2)
British Cayman Islands Overseas reinvested holding company US$ 311,202 US$ 291,372 311,202,030 100 US$ 395,214 US$ (123,777 ) (Note 1) Indirectly owned subsidiary
Apticon Inc. British Cayman Islands Overseas reinvested holding company US$ 6,000 US$ 6,000 3,333,333
23
US$ - US$ - (Note 1) Investments accounted
for by the equity method
United Win Technology (Cayman) Corporation
United Win (H.K.) Technology Limited
Hong Kong Overseas reinvested holding company US$ 71,202 US$ 71,202 554,637,266 100 US$ 164,169 US$ (107,053 ) (Note 1) Indirectly owned subsidiary
Wintek Technology (H.K.)
Limited (Note 2)
Hong Kong Overseas reinvested holding company US$ 240,000 US$ 220,170 240,000,000 100 US$ 196,786 US$ (17,152 ) (Note 1) Indirectly owned
subsidiary
Masstop LLC Masstop Asia Pacific Ltd.
(Note 2)
Hong Kong Overseas reinvested holding company and seller
of LCD/LCM products
US$ 187,702 US$ 187,702 1,460,304,927 100 US$ 167,371 US$ (48,555 ) (Note 1) Indirectly owned
subsidiary
Wintek BVI Wintek International (Samoa)
Corporation (Note 2)
Samoa Islands Overseas reinvested holding company US$ 302,000 US$ 279,000 302,000,000 100 US$ 285,048 US$ 4,847 (Note 1) Indirectly owned
subsidiary
Wintek International (Samoa)
Corporation
Wintek Vietnam Co., Ltd.
(Note 2)
Vietnam Manufactures and processes LCD/LCM and
touch panel products
US$ 300,880 US$ 277,874 - 100 US$ 283,905 US$ 4,838 (Note 1) Indirectly owned
subsidiary
Wintek International Holding Wintek Fra East (Cayman)
Corporation (Note 2)
British Cayman Islands Overseas reinvested holding company US$ 18,610 US$ 16,610 18,610,000 82 US$ 3,419 US$ (1,588 ) (Note 1) Indirectly owned
subsidiary Wintek Technology (India)
Private Limited (Note 2)
India Manufactures and sells LCD/LCM products US$ - US$ - 3 - US$ - US$ (1,588 ) (Note 1) Indirectly owned
subsidiary
Wintek Electro-Optics Wintek Fra East (Cayman)
Corporation
British Cayman Islands Overseas reinvested holding company US$ 4,000 US$ 4,000 4,000,000 18 US$ 735 US$ (1,588 ) (Note 1) Indirectly owned
subsidiary
Wintek Fra East (Cayman)
Corporation
Wintek Technology (India)
Private Limited (Note 2)
India
Manufactures and sells LCD/LCM products US$ 22,610 US$ 22,610 22,610,000 100 US$ 4,154 US$ (1,588 ) (Note 1) Indirectly owned
subsidiary
United Win Investment Mactech (Note 2) Taichung, Taiwan Manufactures machinery and equipment 18 18 1,000 - 18 (84,398 ) (Note 1) Subsidiary
Note 1: Under certain regulations, the net investment income recognized need not be disclosed.
Note 2: Significant intercompany accounts and transactions have been eliminated.
- 75 -
TABLE 9
WINTEK CORPORATION AND SUBSIDIARIES
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
YEAR ENDED DECEMBER 31, 2013
(In Thousands of New Taiwan Dollars)
Investee Company Main Businesses and Products Paid-in Capital Method of
Investment
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
January 1, 2013
Remittance of Funds Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31, 2013
Net Income (Loss)
of the Investee
% Ownership of
Direct or Indirect
Investment
Investment
Gain (Loss)
(Note 5)
Carrying Amount
as of December 31,
2013
Accumulated
Repatriation of
Investment Income
as of December 31,
2013
Outward Inward
United Win (China)
Technology Limited
(Note 9)
Manufactures and sells electronic
components, accessories and
related products
$ 3,964,065 (Note 1) $ 2,113,532 $ - $ - $ 2,113,532 $ (3,187,893) 100% $ (3,141,763) $ 4,897,865 $ 476,880
Dongguan Masstop
Liquid Crystal
Display Co., Ltd.
(Note 9)
Manufactures and sells LCMs and
touch panel products
6,013,192 (Note 1) 5,445,433 - - 5,445,433 (1,476,733) 100% (1,426,380) 4,850,952 -
Apticon Technology
(Nanjing) Co., Ltd.
(Note 9)
Manufactures LCD back light
modules
497,773 (Note 2) (Note 4) - - - - 23% - - -
Wintek (China)
Technology Ltd.
(Note 9)
Manufactures and sells electronic
components, accessories and
related products
8,613,645 (Note 1) 6,562,167 591,033 - 7,153,200 (516,897) 100% (497,481) 6,101,964 -
DongGuan Sheng Feng
Import and Export
Trading Co., Ltd.
(Note 9)
Import and export trading 24,443 (Note 3) - - - - (10,085) 100% (10,085) (8,016) -
DongGuan Innolife
Electronic
Technology Co.,
Ltd. (Note 9)
Manufactures and sells self-
owned-brand products
97,771 (Note 3) - - - - 24,221 100% (24,221) 72,408 -
Accumulated Outward Remittance for Investment
in Mainland China as of December 31, 2013
Investment Amount Authorized by Investment
Commission, MOEA (Note 6)
Upper Limit on the Amount of Investment
Stipulated by Investment Commission, MOEA
$ 14,235,285 $ 22,640,325 (Note 7)
Note 1: The investment was made by establishing a corporation in a third country and then making the new corporation invest in companies located in Mainland China.
Note 2: The investment was made through a corporation established in a third country, which, in turn, invested in companies located in Mainland China.
Note 3: The investment in Mainland China was made by the subsidiary located in Mainland China directly.
Note 4: The investment in Mainland China was made by Apticon Inc., the investee of Wintek Technology Cayman, an investee of Wintek Corporation (the “Corporation”). The investment capital was provided Apticon Inc.
Note 5: Except for its investment in Apticon Technology (Nanjing) Co., Ltd., which had liquidated its operation, the Corporation recognized its equity in the net income (loss) of investees on the basis of financial statements audited by the Corporation’s independent CPA.
Note 6: The amount includes the investment amounts approved by the Investment Commission, MOEA but does not include the common stock issuance made by the Mainland China-based subsidiary from its earnings.
Note 7: According to the “Regulations for Screening of Application to Engage in Technical Cooperation in Mainland China” issued by the Investment Commission of the Ministry of Economic Affairs on August 29, 2008, there is no limit on the investment in Mainland China since the Corporation
had acquired the IDB approval of the Corporation’s establishment of operating headquarters in Taiwan.
Note 8: The foreign-currency amounts were translated into New Taiwan dollars at the exchange rates as of December 31, 2013.
Note 9: Significant intercompany accounts and transactions have been eliminated.