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See accompanying notes to consolidated interim financial statements.
Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2015 and 2016 NAN YA PRINTED CIRCUIT BOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
MARCH 31, 2015, DECEMBER 31, 2015 AND MARCH 31, 2016
(Expressed in thousands of New Taiwan Dollars)
March 31, 2015
December 31, 2015
March 31, 2016
Assets Amounts % Amounts % Amounts %
Current assets:
1100 Cash and cash equivalents (note 6(1)) $ 8,292,813 18 10,314,873 22 9,906,580 22
1125 Available-for-sale financial assets-current (note 6(2)) 7,223,108 15 5,123,705 11 4,102,896 9
1170 Accounts receivable, net (note 6(3)) 6,900,009 15 5,972,808 13 6,496,850 14
1180 Accounts receivable-related parties (notes 6(3) and 7) 11,015 - 10,505 - 5,376 -
1200 Other receivables (note 6(3)) 169,932 - 95,980 - 144,629 -
1210 Other receivables-related parties (notes 6(3) and 7) 1,408,215 3 2,025,053 4 1,807,042 4
1310 Inventories (note 6(4)) 3,681,093 8 3,627,055 8 3,455,652 7
1470 Other current assets 261,878 1 328,697 1 251,756 1
Total current assets 27,948,063 60 27,498,676 59 26,170,781 57
Non-current assets:
1550 Investments accounted for using equity method (note 6(5)) 671,921 1 719,723 1 732,836 2
1600 Property, plant and equipment (notes 6(6) and 7) 17,415,719 37 17,622,414 38 17,753,321 39
1780 Intangible assets 11,462 - 9,653 - 9,049 -
1840 Deferred tax assets 844,066 2 805,190 2 805,190 2
1900 Other non-current assets 67,183 - 64,771 - 66,850 -
Total non-current assets 19,010,351 40 19,221,751 41 19,367,246 43
Total assets $ 46,958,414 100 46,720,427 100 45,538,027 100
March 31, 2015
December 31, 2015
March 31, 2016
Liabilities and Equity Amounts % Amounts % Amounts %
Current liabilities:
2100 Short-term loans (note 6(7)) $ 456,878 1 330,662 1 159,380 -
2170 Accounts payable 1,403,289 4 1,819,677 4 1,479,517 3
2180 Accounts payable-related parties (note 7) 425,342 1 347,625 1 354,409 1
2200 Other payables 1,354,263 3 1,605,938 3 1,210,031 3
2220 Other payables-related parties (note 7) 95,247 - 93,217 - 73,451 -
2230 Current income tax liabilities 162,651 - 85,783 - 85,699 -
2300 Other current liabilities 161,071 - 162,876 - 215,730 -
2322 Current portion of long-term liabilities (note 6(8)) 540,101 1 284,366 1 1,058,840 3
Total current liabilities 4,598,842 10 4,730,144 10 4,637,057 10
Non-current liabilities:
2540 Long-term loans (note 6(8)) 1,287,448 3 2,314,637 5 1,588,259 4
2570 Deferred tax liabilities 1,372,774 3 1,348,727 3 1,348,684 3
2640 Net defined benefit liabilities 1,530,182 3 1,577,063 3 1,581,664 3
2645 Guarantee deposits 50,180 - 48,243 - 53,819 -
Total non-current liabilities 4,240,584 9 5,288,670 11 4,572,426 10
Total liabilities 8,839,426 19 10,018,814 21 9,209,483 20
Equity (notes 6(10)(11)):
3100 Common stock 6,461,655 14 6,461,655 14 6,461,655 14
3200 Capital surplus 21,916,582 47 21,916,582 47 21,916,582 48
3310 Legal reserve 4,240,724 9 4,402,201 10 4,402,201 10
3320 Special reserve 672,510 1 672,510 1 672,510 2
3350 Retained earnings 2,512,190 5 1,784,409 4 1,462,758 3
3400 Other equity 2,315,327 5 1,464,256 3 1,412,838 3
Total equity 38,188,988 81 36,701,613 79 36,328,544 80
Total Liabilities and equity $ 46,958,414 100 46,720,427 100 45,538,027 100
See accompanying notes to consolidated interim financial statements.
Reviewed only, not audited in accordance with generally accepted auditing standards NAN YA PRINTED CIRCUIT BOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2016 (Expressed in thousands of New Taiwan Dollars, except for loss per share)
For the three-month periods ended
March 31,
2015 2016
Amounts % Amounts %
4000 Operating revenues (note 7) 8,035,658 100 7,659,702 100
5000 Operating costs (notes 6(9)(11) and 7) 7,308,568 91 7,383,697 96
Gross profit 727,090 9 276,005 4
Operating expenses (notes 6(9)(11) and 7):
6100 Selling expenses 165,193 2 131,208 2
6200 Administrative expenses 301,695 4 301,294 4
6000 Total operating expenses 466,888 6 432,502 6
6900 Operating income (loss) 260,202 3 (156,497) (2)
Non-operating income and expenses (notes 6(5)(15)(16)):
7010 Other income 31,530 - 33,286 1
7020 Other gains and losses 359,408 5 (209,017) (3)
7050 Finance costs (3,517) - (2,219) -
7060 Recognized share of profit of associates accounted for using equity
method
1,411 - 13,113 -
Total non-operating income and expenses 388,832 5 (164,837) (2)
Income (loss) before income tax 649,034 8 (321,334) (4)
7950 Less: income tax expense (note 6(10)) 85,603 1 317 -
Net income (loss) 563,431 7 (321,651) (4)
8300 Other comprehensive income (loss) (notes 6(10)(11)(16)):
8360 Items that could be reclassified subsequently to profit or loss
8361 Exchange differences arising on translation of foreign operations (170,937) (2) (231,452) (3)
8362 Unrealized gains (losses) on available-for-sale financial assets (801,851) (10) 179,991 2
8399 Less: income tax expense related components of other comprehensive
income
20
-
43
-
Total of items that could be reclassified to profit or loss (972,768) (12) (51,418) (1)
8300 Other comprehensive loss (net after tax) (972,768) (12) (51,418) (1)
Total comprehensive loss (409,337) (5) (373,069) (5)
9750 Basic earnings (loss) per share (expressed in New Taiwan Dollars) (note 6(13)) 0.87 (0.50)
9850 Diluted earnings per share (expressed in New Taiwan Dollars) (note 6(13)) 0.87 -
See accompanying notes to consolidated interim financial statements.
Reviewed only, not audited in accordance with generally accepted auditing standards
NAN YA PRINTED CIRCUIT BOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2016
(Expressed in thousands of New Taiwan Dollars)
Retained Earnings Others Equity
Common
stock
Capital
surplus
Legal
reserve
Special
reserve
Unappropriated
retained earnings
(accumulated deficit)
Exchange
differences on
translation of
foreign operations
Unrealized (losses)
gains on
available-for-sale
financial assets
Total Equity
Balance as of January 1, 2015 $ 6,461,655 21,916,582 4,240,724 672,510 1,948,759 740,319 2,547,776 38,528,325
Net income for the three-month period ended March 31, 2015 - - - - 563,431 - - 563,431
Net other comprehensive income for the three-month period ended March 31, 2015 - - - - - (170,917) (801,581) (972,768)
Total comprehensive income for the three-month period ended March 31, 2015 - - - - 563,431 (170,917) (801,581) (409,337)
Balance as of March 31, 2015 $ 6,461,655 21,916,582 4,240,724 672,510 2,512,190 569,402 1,745,925 38,118,988
Balance as of January 1, 2016 $ 6,461,655 21,916,582 4,402,201 672,510 1,784,409 520,982 943,274 36,701,613
Net loss for the three-month period ended March 31, 2016 - - - - (321,651) - - (321,651)
Net other comprehensive loss for the three-month period ended March 31, 2016 - - - - - (231,409) 179,991 (51,418)
Total comprehensive loss for the three-month period ended March 31, 2016 - - - - (321,651) (231,409) 179,991 (373,069)
Balance as of March 31, 2016 $ 6,461,655 21,916,582 4,402,201 672,510 1,462,758 289,573 1,123,265 36,328,544
See accompanying notes to consolidated interim financial statements.
Reviewed only, not audited in accordance with generally accepted auditing standards
NAN YA PRINTED CIRCUIT BOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2016
(Expressed in thousands of New Taiwan Dollars)
For the three-month periods ended
March 31, 2015 2016
Cash flows from operating activities:
Net income (loss) before income tax $ 649,034 (321,334)
Adjustments for:
Income and expenses not affecting cash flows
Depreciation expense 674,804 663,148
Amortization expense 603 604
Interest expense 3,517 2,219
Interest income (18,576) (19,038)
Share of profit of associates accounted for using equity method (1,411) (13,113)
(Gain) loss on disposal of property, plant and equipment, net (20,850) 123
Gain on reversal of impairment loss of property, plant and equipment (594) (1,413)
Gain on disposal of investment (323,113) (9,886)
Unrealized foreign currency exchange gain, net 378 267,907
Total income and expenses items 314,758 890,551
Change in operating assets and liabilities:
Change in operating assets, net:
Decrease (increase) in accounts receivable (including related parties) 283,294 (632,878)
Decrease (increase) in other receivables 162,140 (48,028)
(Increase) decrease in inventories (89,678) 172,705
Decrease (increase) in other current assets (99,963) 77,990
Change in operating assets ,net 255,793 (430,211)
Change in operating liabilities, net:
Increase (decrease) in accounts payable (including related parties) 33,438 (309,146)
Decrease in other payables (including related parties) (429,620) (417,217)
Increase in other current liabilities 7,622 52,854
Increase in net defined benefit liabilities 7,527 4,601
Change in operating liabilities, net (381,033) (668,908)
Total change in operating assets and liabilities (125,240) (1,099,119)
Total adjustments 189,518 (208,568)
Cash inflow (outflow) generated from operations 838,552 (529,902)
Interest received 24,834 18,294
Interest paid (3,131) (524)
Income tax paid (6,783) (1,371)
Net cash provided (used) in operating activities 853,472 (513,503)
Cash flows from investing activities:
Proceeds from disposal of available-for-sale financial assets 2,264,685 1,210,686
Acquisition of property, plant and equipment (233,477) (1,013,593)
Proceeds from disposal of property, plant and equipment 26,808 1,573
Decrease (increase) in other non-current assets 5,493 (2,079)
Decrease in other receivables due from related parties 626,165 218,011
Net cash provided by investing activities 2,689,634 414,598
Cash flows from financing activities:
Decrease in short-term loans (59,415) (171,282)
Increase in long-term loans 188,407 395,582
Decrease in long-term loans (271,372) (289,390)
(Increase) decrease in guarantee deposits (3,572) 5,576
Net cash used in financing activities (145,952) (59,514)
Effect of exchange rate changes on cash and cash equivalents (56,644) (249,874)
Increase (decrease) in cash and cash equivalents 3,340,510 (408,293)
Cash and cash equivalents at the beginning of period 4,952,303 10,314,873
Cash and cash equivalents at the end of period $ 8,292,813 9,906,580
1
(Continued)
Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2015 and 2016
NAN YA PRINTED CIRCUIT BOARD CORPORATION AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2016
(All amounts are expressed in thousands of New Taiwan Dollars,
except for per share information or unless otherwise specified)
1. Description of business
Nan Ya Printed Circuit Board Corporation (the “Company”) was legally established with the approval
by the Ministry of Economic Affairs on October 28, 1997, with registered address at 3F, No.201-36,
Dunhua N. Rd., Songshan Dist., Taipei City, Taiwan. The Company and its subsidiaries (the “Group”)
main operating activities are primarily in the manufacturing and selling of printed circuit boards.
2. Approval date and procedures of the financial report
The consolidated financial statements as of and for the three-month period ended March 31, 2016 were
authorized for issue by the Board of Directors on May 9, 2016.
3. New standards and interpretations not yet adopted
The IFRSs issued by IASB but not yet endorsed by FSC.
New, revised and amended standards and interpretations for IFRSs issued by the IASB but not yet
endorsed by the FSC are as follows:
New, revised or amended standards and interpretations
Effective date
prescribed by
IASB
IFRS 9 “Financial Instruments” January 1, 2018
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
Between an Investor and its Associate or Joint Venture”
To be determined
by the IASB
Amendments to IFRS 10, IFRS 12, and IAS 28 “Investment Entities:
Applying the Consolidation Exception”
January 1, 2016
Amendment to IFRS 11 “Accounting for Acquisitions of Interests in Joint
Operations”
January 1, 2016
IFRS 14 “Regulatory Deferral Account” January 1, 2016
IFRS 15 “Revenue from Contracts with Customers” January 1, 2018
IFRS 16 “Lease” January 1, 2019
Amendment to IFRS 15 “Explanation of IFRS 15” January 1, 2018
Amendment to IAS 1 “Disclosure Initiative” January 1, 2016
Amendment to IAS 7 “Disclosure Initiative” January 1, 2017
Amendment to IAS 12 “Recognition of Deferred Tax Asset arising from
unrealized loss”
January 1, 2017
Amendment to IAS 16 and IAS 38 “Clarification of Acceptable Methods of
Depreciation and Amortization”
January 1, 2016
Amendments to IAS16 and IAS 41 “Bearer Plants” January 1, 2016
Amendments to IAS 19 “Defined Benefit Plans: Employee Contributions” July 1, 2014
2
(Continued)
New, revised or amended standards and interpretations
Effective date
prescribed by
IASB
Amendments to IAS 27 “Equity Method in Separate Financial Statements” January 1, 2016
Amendment to IAS 36 “ 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
Annual Improvements Cycle 2010-2012 and 2011-2013 July 1, 2014
Annual Improvements to IFRSs 2012–2014 Cycle January 1, 2016
Amendments to IFRIC Interpretation 21 “Levies” January 1, 2014
The Group is evaluating the impact on its financial position and financial performance of the
initial adoption of above mentioned standards or interpretations. The results thereof will be
disclosed when the Group completes its evaluation.
4. Summary of significant accounting policies
(1) Statement of compliance
The accompanying consolidated financial statements have been prepared in accordance with the
Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter
referred to the Regulations) and guidelines of IAS 34 “Interim Financial Reporting” which are
endorsed by the FSC. These consolidated financial statements do not include all disclosures
required for full annual consolidated financial statements under the Regulations and International
Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and
SIC Interpretations as endorsed by the FSC (hereinafter referred to as IFRS endorsed by the
FSC).
Except as described below, the significant accounting policies adopted in the accompanying
consolidated financial statements are the same as the consolidated financial statements as of and
for the year ended December 31, 2015. Please refer to note 4 of the consolidated financial
statements as of and for the year ended December 31, 2015 for the detail disclosures of
significant accounting policies.
(2) Basis of consolidation
The principle of preparing consolidated financial statements are the same as the consolidated
financial statements as of and for the year ended December 31, 2015. Please refer to note 4(3) of
the consolidated financial statements as of and for the year ended December 31, 2015 for relevant
information.
3
(Continued)
(a) The subsidiaries included in the consolidated financial statements are as follows:
Percentage of ownership (%)
Investor
Name of
subsidiary
Business activity
March 31,
2015
December
31, 2015
March 31,
2016
The Company NPUC Customer sales promotion and
other services
100.00% 100.00% 100.00%
The Company NPHK Selling and investing in
electronic products
100.00% 100.00% 100.00%
NPHK NPKC Producing and selling PCB 100.00% 100.00% 100.00%
(b) Subsidiaries not include in the consolidated financial statements: None.
(3) Income tax
The Group evaluates and discloses interim period income tax expense in accordance with
paragraph B12 of IAS 34 “Interim Financial Reporting”.
Income tax expense is best estimated by multiplying the pretax income for the interim reporting
period by the effective annual tax rate as forecasted by the management, and should be allocated
to current and deferred tax expense based on the proportion of the annual estimated and deferred
tax expense.
Temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and their respective tax bases shall be measured based on the tax rates that
have been enacted or substantively enacted at the time of the asset or liability is recovered or
settled and recognized directly in equity or other comprehensive income as tax expense.
(4) Employee benefits
The pension cost for the interim period is calculated and disclosed on a year-to-date basis by
using the actuarially determined pension cost rate at the end of prior fiscal year, adjusted for
significant market fluctuations since that time and for significant curtailments, settlements, or
other significant one-off events.
5. Critical accounting judgments and key sources of estimates uncertainly
The consolidated financial statements are prepared in conformity with IAS 34 “Interim financial
reporting” as endorsed by the FSC, under which, management make judgments, estimates and
assumptions that affect the application of the accounting policies and the reported amount of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
In these consolidated financial statements, judgments and key sources of estimation uncertainty used
by management in the application of critical accounting policies are expected to be consistent with
those of note 5 of the consolidated financial statements for the year ended December 31, 2015.
4
(Continued)
6. Description of the significant accounts
Except as described below, the description of significant accounts in the accompanying interim
consolidated financial statements is not materially different from the consolidated financial statements
as of and for the year ended December 31, 2015. Please refer to note 6 of the consolidated financial
statements as of and for the year ended December 31, 2015 for the detailed disclosures of these
significant accounts.
(1) Cash and cash equivalents
March 31,
2015
December 31,
2015
March 31,
2016
Cash on hand $ 35 15 18
Cash in bank 997,302 2,240,449 2,794,364
Cash equivalents – time deposits 6,697,958 7,553,480 6,797,248
Cash equivalents – short-term bills 380,903 - 173,390
Cash equivalents –bonds with a put option 216,615 520,929 171,560
$ 8,292,813 10,314,873 9,906,580
(2) Financial assets
Financial assets consist of the following:
March 31,
2015
December 31,
2015
March 31,
2016
Available-for-sale financial assets-current:
Domestic listed stocks $ 4,202,863 3,397,436 3,586,403
Mutual funds 3,020,245 1,726,269 516,493
Total $ 7,223,108 5,123,705 4,102,896
(3) Accounts receivable and other receivables
March 31,
2015
December 31,
2015
March 31,
2016
Accounts receivable – non-related parties $ 6,972,086 6,029,263 6,553,295
Accounts receivable – related parties 11,015 10,505 5,376
Other receivables – non related parties 169,932 95,980 144,629
Other receivables –related parties 1,408,215 2,025,053 1,807,042
Less: allowance for doubtful accounts (72,077) (56,455) (56,445)
$ 8,489,171 8,104,346 8,453,897
5
(Continued)
Overdue but unimpaired aging of accounts receivable and other receivables of the Group were as
followed:
March 31,
2015
December 31,
2015
March 31,
2016
Overdue < 60 days $ 79,698 123,121 223,669
Overdue from 61 days to 90 days 7,473 16,002 2,840
Overdue from 91 days to 120 days 600 3,617 3,972
Overdue from 121 days to 1 year 15,392 16,741 6,562
Overdue > 1 year - 15,880 25,508
$ 103,163 175,361 262,551
Movements of allowance for doubtful accounts of accounts receivable and other receivables for
the three-month periods ended March 31, 2015 and 2016 were as follows:
Individually
assessed
impairment loss
Collectively
assessed
impairment loss
Total
Balance as of January 1, 2015 $ - 72,084 72,084
Effect of exchange rate - (7) (7)
Balance as of March 31, 2015 $ - 72,077 72,077
Individually
assessed
impairment loss
Collectively
assessed
impairment loss
Total
Balance as of January 1, 2016 $ - 56,455 56,455
Effect of exchange rate - (10) (10)
Balance as of March 31, 2016 $ - 56,445 56,445
(4) Inventories
March 31,
2015
December 31,
2015
March 31,
2016
Finished goods $ 1,074,574 1,198,452 1,019,107
Work in progress 1,676,046 1,457,558 1,582,350
Raw materials 681,962 651,299 617,086
Supplies 248,511 319,746 237,109
$ 3,681,093 3,627,055 3,455,652
No inventory devaluation or recovery of impairment was recognized for the three-month periods
ended March 31, 2015 and 2016.
6
(Continued)
(5) Investment accounted for using the equity method
The components of the investments accounted for using equity method were as follows:
March 31,
2015
December 31,
2015
March 31,
2016
Associates $ 671,921 719,723 732,836
Summary of shares of the profit or loss of associates attributable to the Group were as follows:
For the three-month
periods ended March 31,
2015 2016
Share of profit of associates accounted
for using equity method
1,411
13,113
(6) Property, plant and equipment
The cost and depreciation of the property, plant and equipment of the Group for the three-month
periods ended March 31, 2015 and 2016 were as follows:
Building
Machinery
and
equipment
Vehicles
Miscellaneous
equipment
Under
construction
Total
Cost:
Balance as of January 1, 2015 $ 3,960,944 40,943,133 16,566 4,027,789 1,544,862 50,493,294
Additions - 6,416 - 272 226,789 233,477
Disposals - (558,987) - (30,259) - (589,246) Reclassification - 68,702 - 3,851 (71,923) -
Impact of exchange rate change (24,849) (217,878) (53) (2,256) (21,121) (266,157)
Balance as of March 31 , 2015 $ 3,936,095 40,240,756 16,513 3,999,397 1,678,607 49,871,368
Balance as of January 1, 2016 $ 3,929,020 40,598,464 15,874 4,067,062 2,649,298 51,259,718 Additions - 10,635 2,270 134,525 866,163 1,013,593
Disposals - (297,071) (68) (548) - (297,687) Reclassification - 499,740 - 4,310 (504,050) -
Impact of exchange rate change (33,523) (311,013) (58) (3,129) (51,413) (399,136)
Balance as of March 31 , 2016 $ 3,895,497 40,500,755 18,018 4,202,220 2,959,998 51,576,488
Accumulated depreciation:
Balance as of January 1, 2015 $ 1,665,178 27,602,454 10,694 3,201,183 - 32,479,509
Depreciation for the period 41,429 597,117 250 36,008 - 674,804 Reversal of impairment loss - (594) - - - (594)
Disposals - (556,830) - (26,458) - (583,288)
Impact of exchange rate change (11,176) (101,835) (29) (1,742) - (114,782)
Balance as of March 31 , 2015 $ 1,695,431 27,540,312 10,915 3,208,991 - 32,455,649
Balance as of January 1, 2016 $ 1,814,919 28,517,970 11,118 3,293,297 - 33,637,304
Depreciation for the period 39,908 582,653 211 40,376 - 663,148 Reversal of impairment loss - (1,396) (4) (13) - (1,413)
Disposals - (295,443) (64) (484) - (295,991) Reclassification - 139 - (139) - -
Impact of exchange rate change (16,843) (160,680) (39) (2,319) - (179,881)
Balance as of March 31 , 2016 $ 1,837,984 28,643,243 11,222 3,330,718 - 33,823,167
7
(Continued)
Building
Machinery
and
equipment
Vehicles
Miscellaneous
equipment
Under
construction
Total
Carrying amounts:
Balance as of March 31, 2015 $ 2,240,664 12,700,444 5,598 790,406 1,678,607 17,415,719
Balance as of December 31, 2015 $ 2,114,101 12,080,494 4,756 773,765 2,649,298 17,622,414
Balance as of March 31, 2016 $ 2,057,513 11,857,512 6,796 871,502 2,959,998 17,753,321
Please refer to note 6(15) for further information about the capitalized interest on borrowings for
the purchase of the property, plant and equipment and gain (loss) on disposal of property, plant
and equipment.
(7) Short-term loans
March 31,
2015
December 31,
2015
March 31,
2016
Unsecured bank loans $ 456,878 330,662 159,380
Unused credit facility for short-term loans $ 2,000,000 2,000,000 2,000,000
Range of interest rates 1.25%~1.50% 1.30%~1.39% 4.1325%
Please refer to note 6(15) for information of interest expense. For other relevant information,
please refer to note 6(5) of the consolidated financial statements as of and for the year ended
December 31, 2015.
(8) Long-term loans
Long-term loans consisted of the following: March 31, 2015
Currency Interest rate range Expiration Unused credit Amount
Unsecured long-term bank loans USD 0.81%~0.95% 2016 - $ 540,101
Unsecured long-term bank loans USD 1.36%~2.35% 2018 2,396,850 1,287,448
Less: current portion 540,101 Total $ 1,287,448
December 31, 2015
Currency Interest rate range Expiration Unused credit Amount
Unsecured long-term bank loans USD 0.9214%~1.926% 2016 $ - $ 284,366
Unsecured long-term bank loans USD 1.36%~1.4366% 2018 1,565,025 2,314,637
Less: current portion 284,366
Total $ 2,314,637
March 31, 2016
Currency Interest rate range Expiration Unused credit Amount
Unsecured long-term bank loans USD 1.36%~1.7202% 2016 $ - $ 529,420
Unsecured long-term bank loans USD 1.36%~1.7202% 2017 - 1,058,840
Unsecured long-term bank loans USD 1.36%~1.7202% 2018 1,140,512 1,058,839
Less: current portion 1,058,840 Total $ 1,588,259
8
(Continued)
Issuance and repayments of loans
The issuance of long-term loans was $188,407 and $395,582, the interest rate range were from
1.36%~2.35% and 1.36%~1.7202%, the expiration date is May 6, 2018 and repayments of
$271,372 and $289,390 were made for the three-month periods ended March 31, 2015 and 2016,
respectively.
Please refer to note 6(15) for information on interest expense, and note 6(8) of the consolidated
financial statements as of and for the year ended December 31, 2015 for other relevant
information.
(9) Employee benefits
(a) Defined benefit plan
Subsequent to December 31, 2015, there is apparently no evidence of any material market
volatility, material curtailment, reimbursement and settlement or other material one-time
events. Therefore, pension cost in the consolidated financial statements is measured and
disclosed according to the respective actuarial report for the years ended December 31,
2014 and 2015.
Recognition as expense of pension cost was as follows:
For the three-month periods
ended March 31,
2015 2016
Operating costs $ 14,123 12,343
Selling expenses 418 349
Administrative expenses 1,822 1,627
Total $ 16,363 14,319
(b) Defined contribution plan
The pension costs that were contributed to Bureau of Labor Insurance were as follows:
For the three-month periods
ended March 31,
2015 2016
Operating costs $ 103,759 115,107
Selling expenses 1,525 1,598
Administrative expenses 8,222 10,035
Total $ 113,506 126,740
9
(Continued)
(10) Income tax
(a) The details of income tax expense were as follows:
For the three-month periods
ended March 31,
2015 2016
Current income tax expenses
Generated in current period $ 29,143 317
Deferred tax expenses
Origination and reversal of
temporary differences
56,460
-
Income tax expense of continuing
operations
$ 85,603
317
(b) The details of income tax benefit under other comprehensive income were as follows:
For the three-month periods
ended March 31,
2015 2016
Items that could be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
financial statements
$ 20
43
(c) The Company applies to the criterion of Emerging Important Strategical Industries and
Related Technical Services, which was approved by the National Tax Administration. Thus,
the Company is exempt from paying the profit-seeking enterprise income tax on related
income for five consecutive years, commencing from the date of the Company’s choice.
Related tax-exempt information are as follows:
Tax-exempt category Interpretation No. Encouraging items Tax-exempt period
Expansion of capital increase No. 1001784030
on 2012.1.16
IC substrate base
(BGA substrate base)
2013.1.1~2017.12.31
(d) The Company’s income tax returns have been examined by the ROC tax authority through
2013.
(e) The ROC Income Tax Act allows offset of net losses, as assessed by the tax authorities,
against taxable income over a period of ten years for local tax reporting purposes. As of
March 31, 2016, unused loss carry forward available to the Company were as follows:
Year
Unused loss
carry forward
Expiry year
2012 (Declared) $ 1,800,204 2022
2013 (Declared) 1,285,305 2023
Total $ 3,085,509
10
(Continued)
(f) Information related to intergraded income tax were as follows:
March 31,
2015
December 31,
2015
March 31,
2016
Undistributed earnings on and after 1998 $ 2,512,190 1,784,409 1,462,758
Imputation credit account balance $ 517,137 403,488 403,683
2014 (actual) 2015 (estimated)
Tax deduction ratio for earnings distribution to ROC residents 22.77% 27.18%
Under the information for integrated income tax, the above imputation credit account and
creditable ratio were calculated according to the formal interpretation No.10204562810
issued by Taxation Administration, Ministry of Finance, R.O.C. on October 17, 2013.
(11) Equity
Except for those described below, there were no material changes in equity for the three-month
periods ended March 31, 2015 and 2016. Please refer to note 6(11) of the consolidated financial
statements for the year ended December 31, 2015 for other relevant disclosures of equity.
(a) Retained earnings
Earnings appropriation and distribution
According to the Company’s articles of incorporation, the Company’s earnings from the
current year should be used to pay income tax, offset prior-year deficits, set aside 10% of
the remainder as legal reserve, provide a special reserve when necessary, and pay dividends.
After the above-mentioned appropriation, the remainder (the distributable earnings after
dividends), if any, plus the undistributed earnings from previous years should be proposed
by the board of directors and is subject to the shareholders’ approval. The Company
appropriates 0.1% to 1% of the distributable earnings after dividends as employees’ bonus,
and records it as periodic expense in the current year.
The Company distributes dividends in cash or stock. Fifty percent or more of the
distributable earnings after deducting legal reserve and special reserve should be distributed
as dividends, of which cash dividends should be the priority, and the total of earnings and
capital surplus transferred to share capital should be no more than 50% of all dividends for
the year.
According to the amendments of Corporation Law in May 2015, employee bonuses are no
longer subject to earnings appropriation and distribution. The consequential amendments to
the Company’s Articles of Incorporation had been proposed by the Company’s board of
directors on December 23, 2015 and are subject to the resolution of the stockholders
meeting. According to the amended Company’s Articles of Incorporation, the Company’s
annual net profit, after providing for income tax and covering the losses of previous years,
is first set aside for legal reserve at the rate of 10% until the accumulated balance of legal
reserve equals the total issued capital, and any special reserves pursuant to relevant laws
and regulations. The remainder, plus the undistributed earnings of the previous years, are
distributed or left undistributed for business purposes according to the resolution of the
stockholders’ dividend distribution plan, which are initially proposed by the board of
11
(Continued)
directors and adopted by the shareholders in the annual stockholders’ meeting.
For the three-month period ended March 31, 2015 , the estimated employee bonus was
$688 based on the distribution plan according to the Company’s articles of incorporation,
and the amount is reported under the operating cost and expense for the above period. The
difference between the amounts approved in the shareholders’ meeting and those
recognized in the consolidated financial statements, if any, are accounted for as changes in
accounting estimates and recognized as profit or loss in the following year.
The appropriations of earnings and employee bonus amounted to $2,751 in 2014 were
approved in the shareholders meeting on June 17, 2015.
The amounts of appropriation of dividends per share in 2014, approved in the shareholders
meeting on June 17, 2015, were as follows:
2014
Dividends per
share (TWD)
Amount
Dividends distributed to common stock shareholders:
Cash $ 1.30 840,015
The appropriations of earnings were approved in the board of directors’ meeting on March
18, 2016. The earnings distribution are yet to be approved at the shareholders’ meeting.
This information can be reviewed on the Market Observation Post System website after
related meetings are held. The amounts of appropriation of dividends per share were as
follows:
2015
Dividends per
share (TWD)
Amount
Dividends distributed to common stock shareholders:
Cash $ 1.00 646,165
(d) Other equity
Exchange differences
on translation of
financial statements for
foreign operation
Unrealized (loss)
gain on
available-for–sale
financial assets
Total
Balance as of January 1, 2015 $ 740,319 2,547,776 3,288,095
Exchange differences on translation (net of tax) (170,917) - (170,917)
Unrealized loss on available-for-sale financial
assets
-
(801,851)
(801,851)
Balance as of March 31, 2015 $ 569,402 1,745,925 2,315,327
Balance as of January 1, 2016 $ 520,982 943,274 1,464,256
Exchange differences on translation (net of tax) (231,409) - (231,409) Unrealized gain on available-for-sale financial
assets
-
179,991
179,991
Balance as of March 31, 2016 $ 289,573 1,123,265 1,412,838
12
(Continued)
(12) Share-based payment transactions
The Group believes that there was no material change on share-based payment transactions for
the three-month periods ended March 31, 2015 and 2016. Please refer to note 6(12) of the
consolidated financial statements for the year ended December 31, 2015 for related detail
disclosures on share-based payment transactions.
(13) Earnings per share
The basic earnings per share were calculated as follows:
For the three-month periods
ended March 31,
2015 2016
Basic Earnings Per Share
Net income (loss) attributable to equity
shareholder’s of the Company
$ 563,431
(321,651)
Weighted average number of ordinary
shares outstanding (basic)
646,166
646,166
Basic earnings (loss) per share $ 0.87 (0.50)
Diluted Earnings Per Share
Net income attributable to equity
shareholder’s of the Company
$ 563,431
-
Weighted average number of ordinary
shares outstanding (basic)
646,166
Effect of employee stock bonus 69 -
Weighted average number of ordinary
shares outstanding (diluted)
646,235
-
Diluted earnings per share $ 0.87 -
The exercise price of the options issued by the Company exceeded the average market price of
the shares during the three-month period ended March 31, 2016.
The stock options were not included in the calculation of weighted average number of ordinary
shares because they were anti-dilutive during the three-month periods end March 31, 2015.
(14) Employee compensation
According to the Company’s articles of incorporation, which are subject to the shareholders’
approval, the Company’s annual net profit should be set aside from the allocation 0.05% to 0.5%
as employee compensation based on the Company’s net profit before tax offsetting employee
compensation. When the Company incurs accumulated deficit, the Company should be reserve in
advance with covering the accumulated deficits.
The Company did not recognize its employee compensation for the three-month period ended
March 31, 2016 due to the loss incurred by the Company.
13
(Continued)
For the year ended December 31, 2015, the estimated employee compensation which were based
on the distribution plan according to the Company's articles of incorporation amounted to $1,507.
The amounts were reported under the operating cost and expense for the above periods. The
difference between the amounts approved in the shareholders' meeting and those recognized in
the consolidated financial statements, if any, are accounted for as changes in accounting
estimates and recognized as profit or loss in 2016.
(15) Non-operating income and expenses
(a) Other income
The Group’s other income were as follows:
For the three-month periods
ended March 31,
2015 2016
Interest income of bank deposits $ 18,576 19,038
Others 12,954 14,248
Total $ 31,530 33,286
(b) Other gains and losses
The Group’s other gains and losses were as follows:
For the three-month periods
ended March 31,
2015 2016
Foreign exchange net loss $ (43,421) (299,770)
Net gain on disposal of available-
for-sale financial assets
323,113
9,886
Gains (losses) on disposal of property,
plant and equipments
20,850
(123)
Gains on disposal of materials and
spoilages
61,893
82,214
Gains on recovery of impairment loss 594 1,413
Others (3,621) (2,637)
Total $ 359,408 (209,017)
(c) Finance expenses
The details of finance expenses were as follows:
For the three-month periods
ended March 31,
2015 2016
Interest expense $ 7,609 12,180
Less: capitalized interest (4,092) (9,961) $ 3,517 2,219
Interest capitalization rate 1.3600%~1.5543% 1.4366%~1.6791%
14
(Continued)
(16) Reclassified adjustments of the components of other comprehensive income
The details of the reclassified adjustments of the components of other comprehensive income
were as follows:
For the three-month periods
ended March 31,
2015 2016
Available-for-sale financial assets:
Net change in fair value during the year $ (478,738) 189,877
Net change in fair value reclassified as
profit or loss
(323,113)
(9,886)
Net change in fair value recognized into
other comprehensive income
$ (801,851)
179,991
(17) Financial instruments
Except for those described below, the Group believes that there was no material change with
regard to the fair value and exposure risks of credit risk, liquidity risk and market risk on
financial instruments. Please refer to note 6(17) of the consolidated financial statements for the
year ended December 31, 2015 for the related detail disclosures on financial instruments.
(a) Liquidity risk
(i) The following are the remaining contractual maturities at the end of the reporting
period of financial liabilities, including estimated interest payments but excluding the
impact of netting agreements:
Carrying
amount
Contractual
cash flow Within 6
months
6-12months
1-2years
2-5years
Over 5 years
March 31, 2015
Non-derivative financial liabilities
Unsecured short-term bank loans $ 456,878 457,002 457,002 - - - -
Unsecured long-term bank loans (including
current portion)
1,827,549
1,885,454
271,852
271,852
268,350
1,073,400
-
Accounts payable (including related parties) 1,828,631 1,828,631 1,828,631 - - - -
Other payables (including related parties) 1,449,510 1,449,510 1,449,510 - - - -
$ 5,562,568 5,620,597 4,006,995 271,852 268,350 1,073,400 -
December 31, 2015
Non-derivative financial liabilities
Unsecured short-term bank loans $ 330,662 330,751 330,751 - - - -
Unsecured long-term bank loans (including
current portion)
2,599,003
2,677,260
284,550
-
957,084
1,435,626
-
Accounts payable (including related parties) 2,167,302 2,167,302 2,167,302 - - - -
Other payables (including related parties) 1,699,155 1,699,155 1,699,155 - - - -
$ 6,796,122 6,874,468 4,481,758 - 957,084 1,435,626 -
March 31, 2016
Non-derivative financial liabilities
Unsecured short-term bank loans $ 159,380 165,425 165,425 - - - -
Unsecured long-term bank loans (including
current portion)
2,647,099
2,742,661
548,532
548,532
1,097,064
548,533
-
Accounts payable (including related parties) 1,833,926 1,833,926 1,833,926 - - - -
Other payables (including related parties) 1,283,482 1,283,482 1,283,482 - - - -
$ 5,923,887 6,025,494 3,831,365 548,532 1,097,064 548,533 -
It is not expected that the cash flows included in the maturity analysis could occur
significantly earlier, or at significantly different amounts.
15
(Continued)
(b) Currency risk
(i) The Group’s exposure to significant foreign currency risk was as follows:
March 31, 2015
Foreign
Currency
(in thousands)
Exchange
rate
New Taiwan
Dollars
Financial assets:
Monetary items
USD $ 429,210 31.4010 13,477,637
EUR 3 33.9010 94
JPY 1,580 0.2604 411
Financial liabilities
Monetary items
USD 105,466 31.4010 3,311,746
JPY 231,080 0.2604 60,173
RMB 237 5.1124 1,211
December 31, 2015
Foreign
Currency
(in thousands)
Exchange
rate
New Taiwan
Dollars
Financial assets:
Monetary items
USD $ 459,361 33.0660 15,189,223
EUR 7 36.0384 240
JPY 4,730 0.2736 1,294
Financial liabilities
Monetary items
USD 118,418 33.0660 3,915,624
EUR 35 36.0384 1,258
JPY 185,020 0.2736 50,622
CNY 761 5.0921 3,877
March 31, 2016
Foreign
Currency
(in thousands)
Exchange
rate
New Taiwan
Dollars
Financial assets:
Monetary items
USD $ 471,832 32.2820 15,231,669
EUR 6 36.4318 228
JPY 4,171 0.2859 1,193
Financial liabilities
Monetary items
USD 108,800 32.2820 3,512,277
EUR 133 36.4318 4,853
JPY 228,139 0.2859 65,225
CNY 784 4.9962 3,918
16
(Continued)
The Group’s exposure to foreign currency risk arises from the foreign currency
exchange fluctuations on cash and cash equivalents, accounts receivable, other
receivables, loans, accounts payable and other payables which are denominated in
different foreign currencies. A 1% appreciation or depreciation of the NTD against
the USD as of March 31, 2015 and 2016 would have decreased or increased the net
income before tax by $101,659 and $117,194 for the three-month periods ended
March 31, 2015 and 2016, respectively. This analysis assumes that all other variables
remain constant and is performed on the same basis.
(ii) Other pricing risks
The effects of the changes of the price equity securities (the analysis assumes that all
other variables remain constant and is performed on the same basis) on the
comprehensive income on the reporting date were as follows:
For the three-month
periods ended March 31,
2015 2016
Price of equity securities on reporting date
Appreciation of 1% $ 42,029 35,864
Depreciation of 1% $ (42,029) (35,864)
(b) Information of fair value
(i) Fair value of financial instruments
The carrying and fair value of the Group’s financial assets and liabilities are as
follows:
Fair Value
Carrying
Value
Level 1
Level 2
Level 3
Total
March 31, 2015
Available-for-sale financial assets
Domestic listed stocks $ 4,202,863 4,202,863 - - 4,202,863
Mutual funds 3,020,245 3,020,245 - - 3,020,245
Total $ 7,223,108 7,223,108 - - 7,223,108
Loans and receivables
Cash and cash equivalents $ 8,292,813 - - - -
Accounts receivable, net (including related
parties)
6,911,024 - - - -
Other receivables (including related parties) 1,578,147 - - - -
Total $ 16,781,984 - - - -
Financial liabilities measured by amortized cost
Short term loans $ 456,878 - - - -
Accounts payable (including related parties) 1,828,631 - - - -
Other payables (including related parties) 1,449,510 - - - -
Long term loans (including current portion) 1,827,549 - - - -
Total $ 5,562,568 - - - -
17
(Continued)
Fair Value
Carrying
Value
Level 1
Level 2
Level 3
Total
December 31, 2015
Available-for-sale financial assets
Domestic listed stocks $ 3,397,436 3,397,436 - - 3,397,436
Mutual funds 1,726,269 1,726,269 - - 1,726,269
Total $ 5,123,705 5,123,705 - - 5,123,705
Loans and receivables
Cash and cash equivalents $ 10,314,873 - - - -
Accounts receivable, net (including related
parties)
5,983,313
-
-
-
-
Other receivables(including related parties) 2,121,033 - - - -
Total $ 18,419,219 - - - -
Financial liabilities measured by amortized cost
Short term loans $ 330,662 - - - -
Accounts payable (including related parties) 2,167,302 - - - -
Other payables (including related parties) 1,699,155 - - - -
Long term loans (including current portion) 2,599,003 - - - -
Total $ 6,796,122 - - - -
Fair Value
Carrying
Value
Level 1
Level 2
Level 3
Total
March 31, 2016
Available-for-sale financial assets
Domestic listed stocks $ 3,586,403 3,586,403 - - 3,586,403
Mutual funds 516,493 516,493 - - 516,493
Total $ 4,102,896 4,102,896 - - 4,102,896
Loans and receivables
Cash and cash equivalents $ 9,906,580 - - - -
Accounts receivable, net (including related
parties)
6,502,226
-
-
-
-
Other receivables(including related parties) 1,951,671 - - - -
Total $ 18,360,477 - - - -
Financial liabilities measured by amortized cost
Short term loans $ 159,380 - - - -
Accounts payable (including related parties) 1,833,926 - - - -
Other payables (including related parties) 1,283,482 - - - -
Long term loans (including current portion) 2,647,099 - - - -
Total $ 5,923,887 - - - -
(ii) Valuation techniques and assumptions unused fair value determination
Financial liabilities measured by amortized cost
Fair value measurement is based on the latest quoted price and agreed-upon price if
these prices are available in an active market. When market value is unavailable, the
fair value of financial assets and liabilities are evaluated based on the discounted cash
flow of the financial assets and liabilities.
(iii) Valuation techniques and assumptions used in fair value determination
Non-derivative financial instruments
If a quoted price is available on an active market, the market price should be used as
the fair value; the market price published by the primary stock exchanges as the basis
of fair value evaluation for listed equity instruments.
18
(Continued)
Financial instruments have an active market price when the public offer of financial
instruments, which represents the actual price of the fair market where transactions
often incur, can be frequently and promptly obtained from brokers, underwriters,
industrial unions, institutes of pricing services and authorities. The market is
considered inactive when conditions mentioned above are not met. In general, high or
incremental differences between the buying and selling price or low trading volumes
are indications of inactive markets.
If the financial instruments the Company possesses have an active market price, the
nature of its fair value will be as follows:
Stock of listed companies has standard clauses while financial assets and liabilities
traded in the active markets refer to the market price when deciding their fair value.
Except for those financial instruments with active markets mentioned above, the fair
values of other financial instruments are measured by referring to the price of other
commencing components.
(18) Financial risk management
The Group believes that there were no material changes in financial risk management objective
and policy since December 31, 2015. Please refer to the detail disclosure on financial risk
management in note 6(18) of the consolidated financial statements as of and for the year ended
December 31, 2015.
(19) Capital management
The Group believes that there were no material changes in capital management target, policy and
procedure and in quantitative information adopted for capital management since December 31,
2015. Please refer to note 6(19) of the consolidated financial statements as of and for the year
ended December 31, 2015 for the detail disclosure on capital management.
7. Related-party Transactions
(1) Other related-party transactions
(a) Sales to related parties
Significant sales to related parties were as follows:
For the three-month periods
ended March 31,
2014 2015
Associates $ 15,031 12,731
19
(Continued)
(b) Accounts receivable- related parties
Accounts receivable to related parties were as follows:
Item listed
Types of
related parties
March 31,
2015
December 31,
2015
March 31,
2016
Accounts receivable
-related parties
Associates
$ 11,015
10,505
5,376
The normal credit term with the related parties above is collection before the 15th of the
month following the sales month and on open account 70 days. Sales price is cost plus
profit as quoted price. There is no collateral received among related parties accounts
receivable and there is no need to estimate bad debt expense.
(c) Purchase from related parties
Purchases from related parties were as follows:
For the three-month periods
ended March 31,
2015 2016
The parent company $ 303,359 237,272
Associates 498,146 436,180
$ 801,505 673,452
(d) Accounts payable-related parties
Accounts payable from related parties were as follows:
Item listed
Types of
related parties
March 31,
2015
December 31,
2015
March 31,
2016
Accounts payable
-related parties
The parent company
$ 130,654
101,265
90,922
Accounts payable
-related parties
Associates
294,688
246,360
263,487
$ 425,342 347,625 354,409
The purchase price from related parties is not significantly different from that from
non-related general parties. The normal credit term with the related parties above is collected
before the 15th of the month following the purchase month, on open account 90 days, on
open account 60 days and on the day following the day of approving payment.
(e) Property transactions
The Group purchased fixed assets from Nan Ya Electric (Nantong) Co., Ltd. with the
acquisition price of $8,224 for the three-month period ended March 31, 2015. However, the
Group still has unpaid payables accounted under other payables - related parties amounting
to $9,407, $621 and 609 as of March 31 and December 31, 2015, and March 31, 2016,
respectively.
20
(Continued)
(f) Financing to related parties
Financing to relate parties were as follows:
March 31,
2015
December 31,
2015
March 31,
2016
Associates $ 1,408,215 2,025,053 1,807,042
(g) Guarantees
The parent company acted as a joint guarantor and assumed the joint responsibility of the
Group’s participating loan borrowed from Chang Hwa Commercial Bank.
(h) Lease contracts
The Group signed lease contracts with NPC (the parent company) to rent the factory, which
is located at Lujhu Township, Taoyuan County and Shulin Dist., New Taipei City,
employees’ dormitories and the office in Taipei, etc. The operating lease reported as
expense resulting from the above transactions for the three-month periods ended March 31,
2015 and 2016 were $42,648 and $43,526, respectively.
(i) Others
The Group bought utilities from Nan Ya Electronic Materials (Kunshan) Co., Ltd.
amounting to $216,395 and $211,145 for the three-month periods ended March 31, 2015
and 2016, respectively. The Group still has unpaid payables accounted under other
payables - related parties amounting to $85,840, $72,842, and $92,596 for the three-month
periods ended March 31, 2015 and 2016, and for the year ended December 31, 2015,
respectively.
(2) Key Management Personnel Transactions
Key Management Personnel Compensation
For the three-month periods
ended March 31,
2015 2016
Short-term employee benefits $ 4,213 4,487
8. Pledged properties:None.
9. Significant commitments and contingencies Except for those described in the financial statements and accompanying notes, the commitments and
contingencies of the company as of March 31, 2016 were as follows: (1) The balance of outstanding letters of credit for the importation of raw materials of the Group
amounted to $37,587. (2) The guarantee for customs and guarantee for letters of credit were $64,500 and $20,000,
respectively.
21
(Continued)
10. Significant disaster loss:None.
11. Significant subsequent event:None.
12. Others
(1) The Group’s personnel, depreciation, depletion and amortization expenses, categorized by
function were as follows:
For the three-month period ended
March 31, 2015
For the three-month period ended
March 31, 2016
Classified as
Operating
Costs
Classified as
Operating
Expenses
Total Classified as
Operating
Costs
Classified as
Operating
Expenses
Total
Employee benefits
Salaries 1,627,930 181,284 1,809,214 1,605,715 178,546 1,784,261
Labor and health insurance 139,311 13,820 153,131 132,819 14,333 147,152
Pension expenses 117,882 11,987 129,869 127,450 13,609 141,059
Other personnel expenses 58,747 4,894 63,641 68,357 6,264 74,621
Depreciation expenses 672,915 1,889 674,804 660,667 2,481 663,148
Amortization expenses 603 - 603 604 - 604
(2) The seasonality of operation
The operation of the Group is not influenced by seasonality and periodicity.
22
(Continued)
13. Other disclosure items
(1) Relevant information on material transaction items:
According to Regulations Governing the Preparation of Financial Reports by Securities Issuers, the Group should disclose significant transactions as of
the three-month period ended March 31, 2016 as follows:
(a) Fund financing to other parties:
No. Financing
Company
Counter
-party
Financial
Statement
Account
Related
parties
Maximum
balance
Ending
balance
Actual
amount
used
Interest
rate
Nature
of funds
provided
(Note 1)
Amount
of
business
contact
Reasons for
short-term
fund
circulation
Allowance
for doubtful
accounts
Collateral Financing
Limit
for Each
Borrowing
Company
Financing
Company’s
Financing
Amount
Limit
Item Value
0 The Company NPHK Other receivables-
related parties
Yes 50,000 50,000 - - 2 - Operating
capital
- None - 7,265,709
(Note 2)
14,531,418
(Note 3)
0 The Company HYPC Other receivables-
related parties
Yes 2,000,000 1,700,000 1,000,000 1.474%
~ 1.497%
2 - Operating
capital
- None - 7,265,709
(Note 2)
14,531,418
(Note 3)
0 The Company FPC Other receivables-
related parties
Yes 1,300,000 1,300,000 - - 2 - Operating
capital
- None - 7,265,709
(Note 2)
14,531,418
(Note 3)
1 NPHK NPKC Other receivables-
related parties
Yes 277,624 - - 1.926% 2 - Operating
capital
- None - 3,045,446
(Note 4)
5,075,743
(Note 5)
2 NPKC PFGK Other receivables-
related parties
Yes 1,000,733 807,042 807,042 1.271%
~1.327%
2 - Operating
capital
- None - 4,888,548
(Note 4)
4,888,548
(Note 5)
Note 1: 1. With business contact
2. Necessary for short-term fund circulation
Note 2: The amount of financing to related parties or parties with business contact is subjected to a limit, which is 25% of the net value. To other counterparties, the limit is 20% of the net value. Note 3: The amount of financing to others is subjected to a limit, which is 50% of the net value. To those without business contact but in need of fund, the limit is 40% of the net value.
Note 4 For NPKC and NPHK, the amount of financing to related parties or parties with business contact is subjected to a limit, which is 50% and 60%, respectively, of the net value. To other counterparties, the limit is 40% of the net value.
Note 5 For NPKC and NPHK, the amount of financing to others is subjected to a limit, which is 100% of the net value. To those without business contact but in need of fund, the limit is 40% of the net value.
There is no restriction when financing to foreign firms who directly or indirectly 100% of voting rights.
23
(Continued)
(b) Endorsement and guarantee for others:
No.
Endorsement
/guarantee
Provider
Counter-party/
guarantee receiver Limit of
guarantee/
endorsement
amount for
receiving party
Maximum
balance
Ending
balance
Actual
amount
used
Endorsement
and
guarantee
secured by
assets
Percentage of
accumulated guarantee
amount to net assets
value
from the latest financial
statement
Limit of total
guarantee/
endorsement
amount
Classified as
endorsement and
guarantee
to subsidiary by
parent company
Classified as
endorsement and
guarantee to
parent company by
parent’s subsidiary
Classified as
endorsement
and guarantee to
companies in
Mainland China
Name Relation
0 The Company NPHK 2
(Note 1)
23,613,554
(Note 2)
277,625 - - - - 47,227,107
(Note 2)
Y - -
Note 1:The relation between the endorsement/guarantee provider and the Counter-party/guarantee receiver are as follows:
2. Subsidiary of which the investor holds more than 50% of its outstanding common stock.
Note 2:The total amount of endorsement cannot exceed more than 1.3 times of the Company’s net value, but for single enterprise, the amount of endorsement cannot exceed half of the aforementioned amount.
(c) Information regarding securities held at the end of the March 31, 2016(investees, affiliates and joint ventures were not included):
Name of company
which holds
securities
Category and name
of securities
Relationship between issuer of security
and
the company which holds securities
Account name
March 31, 2016
Note Shares / Units
(in thousands)
Carrying
value
Percentage of
ownership
Market value or
net asset value
The Company FPC stock The parent is the companies’ legal director. Available-for-sale financial asset-current 7,011 559,449 0.11% 559,449 -
The Company FCFC stock The director is the Company’s chairman 〃 15,432 1,237,634 0.26% 1,237,634 -
The Company IMI stock Investee of the Company under equity
method 〃 61,383 1,789,320 0.94% 1,789,320 -
The Company Mega Diamond Money Market Fund - 〃 41,688 516,493 - 516,493 -
(d) Information regarding accumulated purchase or sale of securities for the period exceeding $300 million or 20% of the Company’s paid-in capital:
Company
name
Type and Issuer of
Marketable
Securities
Account
Name Counterparty
Nature of
the
Relationship
Beginning Balance Acquisition Disposal Ending Balance
Number of
Shares
(in thousands)
Amount Number of
Shares
(in thousands)
Amount Acquisition Amount Carrying
Value
Gain (Loss)
on
Disposal
Number of
Shares
(in thousands)
Amount
The Company Mega Diamond Money
Market Fund
Available-for-sale financial
assets-current
- - 139,475 1,726,269 - - 97,787 1,210,686 1,210,301 385
(Note 1)
41,688 515,968
(Note 2)
Note 1: The disposal gain above did not include realized appraisal profit amounted to $9,501. Note 2: The ending balance above did not include unrealized appraisal profit amounted to $525.
(e) Information regarding acquisition of real estate exceeding $300 million or 20% of the Company’s paid-in capital:None.
24
(Continued)
(f) Information regarding receivables from disposal of real estate exceeding $300 million or 20% of the Company’s paid-in capital:None.
(g) Information regarding purchases and sales from related parties for which the amount exceeded $100 million or 20% of the Company’s paid-in
capital::
Purchasing
(selling)
company
Related party Nature of
relationship
Transaction details Abnormal transaction Accounts/notes receivable
(payable) Note
Purchase
(sale)
Amount % to total Payment terms Unit price Payment
terms
Ending balance % to total
The Company Parent company Parent company Purchase 225,614 5.05% Before the 15th of the following month - - (83,003) (4.72)% -
The Company NPKC Subsidiary of the Company Purchase 2,496,337 55.84% Before the 15th of the following month - - (980,097) (55.70)% Note
NPKC NEMK Same chairman Purchase 390,361 21.97% On open account 60 days - - (255,697) (24.11)% -
Note: The transactions listed in the left have been written off during the preparation of the consolidated financial statements.
(h) Information regarding receivables from related parties for which the amount exceeded $100 million or 20% of the Company’s paid-in capital:
Accounts receivable
company Counter party Nature of relationship Amount Turnover
Overdue receivables
-related parties Subsequent
Received
Allowance for
doubtful
account Amount Method
The Company HYPC Other related parties Other receivables-related parties:1,000,000 Note - - - -
NPKC The Company (Note 1) Parent company Accounts receivable-related parties:980,097 9.61 - - 761,830 -
NPKC PFGK Other related parties Other receivables-related parties:807,042 Note - - 129,120 -
Note: Receivables from related parties without the calculating of turnover rate.
Note 1: The transactions listed in the left have been written off during the preparation of the consolidated financial statements.
(i) Information regarding trading in derivative financial instruments:None.
(j) Business relationship and significant intercompany transactions were listed as follows:
No. Name Counterparty relation
Transaction details
Account name Amount Transaction terms
Percentage of Consolidated
Total Operating Revenues
or Total Assets
1 NPKC The Company 2 Sales 2,496,337 Before the 15th of the following month 32.59%
1 NPKC The Company 2 Accounts receivables 980,097 Before the 15th of the following month 2.15%
25
(Continued)
Note 1: Numbers are filled in as follows
1. 0 represents parent company 2. Subsidiaries are numbered from 1
Note 2: classifications of relation with counterparty are listed as follows:
1. Parent to subsidiary 2. Subsidiary to parent
3. between subsidiaries
Only data related to sales and accounts receivable of all the intercompany transactions and business contact are disclosed. The related purchase and accounts payable are not stated. Note 3: the transaction amount divided by the consolidated net operating revenue or consolidated total asset.
(2) Relevant information about reinvestment (investees of mainland china are not included):
Relevant information about reinvestment for the three-month period ended March 31, 2016 is as follows:
Investor Investee Location Main Businesses and Products
Investment Amount Balance as of March 31, 2016 Net Income
(Loss) of the
Investee
Equity in Net
Income
(Net Loss)
Note March 31,
2016
December 31,
2015 Shares
Percentage of
Ownership Carrying value
The Company NPHK HK Business of electronic products 5,020,900 5,020,900 1,223,820,000 100.00% 11,937,630 (155,485) (155,485) Note
The Company NPUC USA Customer sales promotion 3,479 3,479 1,000,000 100.00% 10,475 (309) (309) Note
The Company FPC TAIWAN Production and marketing of PCBs 654,868 654,868 11,958,300 0.13% 732,836 10,446,085 13,113
Note: The transactions listed in the left have been written off during the preparation of the consolidated financial statements.
(3) Investment in Mainland China:
(a) Relevant information about the name of investees and the main business activities were as follows:
Investee
Company
Name
Main Businesses
and Products
Actual amount
of Paid-in
Capital
Method of
Investment
Accumulated
Outflow of
Investment from
Taiwan as of
Jan 1, 2016
Outflow/ Inflow amount
of current period
Accumulated
Outflow of
Investment from
Taiwan as of
March 31, 2016
Current
income of
investees
Direct and
Indirect
Shareholding
Ratio by the
Company
Investment
Gain (Loss)
(Note2)
Carrying
Values as of
March 31,
2016
Accumulated
Inward
Remittance of
Earnings as of
March 31, 2016
Outflow Inflow
NPKC Production and
marketing of PCBs
5,017,721 (Note 1) 5,017,721 - - 5,017,721 (155,704) 100.00% (155,704)
(Note 2)
11,923,682 -
Note 1: NPKC in Mainland China is invested through a company established in a third region.
Note 2: Investment gain or loss is recognized according to the financial statements reviewed by a CPA.
26
(Continued)
(b) Quota for investment in Mainland China:
Accumulated outflow investment
from Taiwan to China
Investment amounts authorized
by the investment commission,
MOEA
Maximum allowable
investment authorized
by the investment
commission, MOEA
5,017,721 5,017,721 21,797,126
(c) Information on significant transactions among investees in Mainland China:
Please refer to “significant information for relevant transaction” and “business contact and significant transactions” for direct or indirect significant
transactions (written off during the preparation of the consolidated financial statements), between the Company and its investees in Mainland China
for the three-month period ended March 31, 2016.
27
14. Segment information
The reconciliation of operating segments of the Group is as follows:
For the three-month period ended March 31, 2015
Domestic
American
Asian
Adjustments
and write off
Total
Revenue:
From external clients $ 7,862,433 - 173,225 - 8,035,658
Intersegments 6,398 9,150 3,253,749 (3,269,297) -
Total revenue $ 7,868,831 9,150 3,426,974 (3,269,297) 8,035,658
Income/Loss of reportable segments $ 619,891 2,802 124,550 (98,209) 649,034
For the three-month period ended March 31, 2016
Domestic
American
Asian
Adjustments
and write off
Total
Revenue:
From external clients $ 6,885,463 - 774,239 - 7,659,702
Intersegments 6,280 6,136 2,496,337 (2,508,753) -
Total revenue $ 6,891,743 6,136 3,270,576 (2,508,753) 7,659,702
Income/Loss of reportable segments $ (321,651) 8 (155,485) 155,794 (321,334)
Domestic
American
Asian
Adjustments
and write off
Total
Assets of reportable segments
March 31, 2015 $ 44,167,487 12,317 16,469,642 (13,691,032) 46,958,414
December 31, 2015 $ 43,054,354 11,037 17,231,704 (13,576,668) 46,720,427
March 31, 2016 $ 42,033,327 10,475 16,605,168 (13,110,943) 45,538,027
Domestic
American
Asian
Adjustments
and write off
Total
Liabilities of reportable segments
March 31, 2015 $ 6,048,499 - 4,131,695 (1,340,768) 8,839,426
December 31, 2015 $ 6,352,741 - 4,785,611 (1,119,538) 10,018,814
March 31, 2016 $ 5,704,783 - 4,545,760 (1,041,060) 9,209,483