Exhibit 99.1
UNITED MICROELECTRONICS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2015 AND 2014
Address: No. 3 Li-Hsin Road II, Hsinchu Science Park, Hsinchu City, Taiwan, R.O.C.
Telephone: 886-3-578-2258
The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.
1
REVIEW REPORT OF INDEPENDENT ACCOUNTANTS
English Translation of a Report Originally Issued in Chinese
To United Microelectronics Corporation
We have reviewed the accompanying consolidated balance sheets of United Microelectronics Corporation and subsidiaries (collectively, the “Company”) as of March 31, 2015 and 2014, the related consolidated statements of comprehensive income for the three-month periods ended March 31, 2015 and 2014 and consolidated statements of changes in equity and cash flows for the three-month periods ended March 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue the review report based on our reviews. Certain investments, which were accounted for under the equity method based on the financial statements of the investees, were reviewed by other independent accountants. Our reviews, insofar as it related to the investments accounted for under the equity method balances of NT$4,631 million and NT$4,021 million, which represented 1.44% and 1.33% of the total consolidated assets as of March 31, 2015 and 2014, respectively, the related shares of investment income from the associates and joint ventures amounted to NT$(9) million and NT$16 million, which represented (0.20)% and 1.27% of the consolidated income from continuing operations before income tax for the three-month periods ended March 31, 2015 and 2014, respectively, and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$209 million and NT$270 million, which represented 5.49% and 5.14% of the consolidated total comprehensive income, for the three-month periods ended March 31, 2015 and 2014, respectively, are based solely on the reports of other independent accountants.
We conducted our reviews in accordance with the Statements of Auditing Standards No. 36, “Review of Financial Statements” of the Republic of China. A review is limited primarily to applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews and the reports of other independent accountants, we are not aware of any material modifications or adjustments that should be made to the consolidated financial statements referred to above in order for them to be in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standards No. 34, “Interim Financial Reporting” which is endorsed by Financial Supervisory Commission of the Republic of China.
ERNST & YOUNG
Taiwan
Republic of China
April 29, 2015
Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations 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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.
2
English Translation of Consolidated Financial Statements Originally Issued in Chinese
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2015, December 31, 2014 and March 31, 2014 (March 31, 2015 and 2014 are unaudited)
(Expressed in Thousands of New Taiwan Dollars)
As of | ||||||||||||||
Assets | Notes | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | 4, 6(1) | $ | 53,632,056 | $ | 45,701,335 | $ | 53,915,155 | |||||||
Financial assets at fair value through profit or loss, current | 4, 6(2), 12(7) | 900,934 | 740,129 | 857,157 | ||||||||||
Available-for-sale financial assets, current | 4, 6(5), 12(7) | — | — | 2,313,818 | ||||||||||
Notes receivable | 4 | 67,953 | 126,141 | 53,951 | ||||||||||
Accounts receivable, net | 4, 6(3) | 20,553,750 | 22,207,271 | 18,827,301 | ||||||||||
Accounts receivable-related parties, net | 4, 7 | 1,370 | 36,022 | 4,887 | ||||||||||
Other receivables | 4 | 553,107 | 658,409 | 634,184 | ||||||||||
Current tax assets | 4 | 36,445 | 34,480 | 53,248 | ||||||||||
Inventories, net | 4, 5, 6(4) | 15,641,351 | 15,242,232 | 14,421,441 | ||||||||||
Prepayments | 1,519,517 | 2,003,269 | 2,107,851 | |||||||||||
Non-current assets held for sale | 4, 6(24) | 5,813,415 | 6,978,991 | 67,108 | ||||||||||
Other current assets | 2,313,713 | 3,134,870 | 3,497,601 | |||||||||||
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Total current assets | 101,033,611 | 96,863,149 | 96,753,702 | |||||||||||
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Non-current assets | ||||||||||||||
Financial assets at fair value through profit or loss, noncurrent | 4, 6(2), 12(7) | 44,338 | 45,232 | 98,052 | ||||||||||
Available-for-sale financial assets, noncurrent | 4, 5, 6(5), 12(7) | 26,821,106 | 24,362,104 | 21,710,827 | ||||||||||
Financial assets measured at cost, noncurrent | 4, 6(6) | 3,855,368 | 3,833,006 | 4,169,010 | ||||||||||
Investments accounted for under the equity method | 4, 5, 6(7) | 9,337,152 | 9,237,713 | 8,674,050 | ||||||||||
Property, plant and equipment | 4, 5, 6(8), 8 | 165,956,301 | 166,690,243 | 158,012,762 | ||||||||||
Intangible assets | 4, 6(9) | 4,492,321 | 4,532,938 | 4,555,177 | ||||||||||
Deferred tax assets | 4, 5, 6(22) | 2,043,214 | 2,244,810 | 2,735,375 | ||||||||||
Prepayment for equipment | 2,602,567 | 1,063,353 | 255,601 | |||||||||||
Refundable deposits | 8 | 1,145,916 | 1,145,843 | 1,252,213 | ||||||||||
Prepayment for investments | 90,824 | — | — | |||||||||||
Other assets-others | 3,642,088 | 3,227,257 | 3,410,650 | |||||||||||
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Total non-current assets | 220,031,195 | 216,382,499 | 204,873,717 | |||||||||||
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Total assets | $ | 321,064,806 | $ | 313,245,648 | $ | 301,627,419 | ||||||||
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(continued)
3
English Translation of Consolidated Financial Statements Originally Issued in Chinese
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2015, December 31, 2014 and March 31, 2014 (March 31, 2015 and 2014 are unaudited)
(Expressed in Thousands of New Taiwan Dollars)
As of | ||||||||||||||
Liabilities and Equity | Notes | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Current liabilities | ||||||||||||||
Short-term loans | 6(10), 8 | $ | 7,216,847 | $ | 6,250,754 | $ | 7,516,080 | |||||||
Financial liabilities at fair value through profit or loss, current | 4, 5, 6(11), 12(7) | — | 42,354 | 18,087 | ||||||||||
Notes and accounts payable | 6,382,973 | 6,167,339 | 7,154,997 | |||||||||||
Other payables | 11,942,069 | 12,421,152 | 10,553,628 | |||||||||||
Payables on equipment | 7,411,869 | 10,478,714 | 4,820,059 | |||||||||||
Current tax liabilities | 4 | 2,737,970 | 2,540,688 | 1,147,185 | ||||||||||
Liabilities directly associated with non-current assets held for sale | 4, 6(24) | 4,448,125 | 5,594,850 | 23,104 | ||||||||||
Current portion of long-term liabilities | 4, 6(12), 6(13) | 3,637,118 | 3,774,986 | 16,903,347 | ||||||||||
Other current liabilities | 665,974 | 835,239 | 1,099,150 | |||||||||||
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Total current liabilities | 44,442,945 | 48,106,076 | 49,235,637 | |||||||||||
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Non-current liabilities | ||||||||||||||
Bonds payable | 4, 6(12) | 24,978,847 | 24,977,820 | 19,980,247 | ||||||||||
Long-term loans | 6(13), 8 | 9,911,068 | 8,423,470 | 7,679,021 | ||||||||||
Deferred tax liabilities | 4, 5, 6(22) | 1,847,133 | 2,161,014 | 2,594,301 | ||||||||||
Net defined benefit liabilities, non-current | 4, 5 | 3,832,717 | 3,825,490 | 3,803,087 | ||||||||||
Guarantee deposits | 478,099 | 451,906 | 361,801 | |||||||||||
Other liabilities-others | 6,311,765 | 291,021 | 198,014 | |||||||||||
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Total non-current liabilities | 47,359,629 | 40,130,721 | 34,616,471 | |||||||||||
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Total liabilities | 91,802,574 | 88,236,797 | 83,852,108 | |||||||||||
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Equity attributable to the parent company | ||||||||||||||
Capital | 4, 5, 6(15), 6(16) | |||||||||||||
Common stock | 127,477,628 | 127,252,078 | 126,978,232 | |||||||||||
Capital collected in advance | 32,096 | 50,970 | 50,336 | |||||||||||
Additional paid-in capital | 4, 5, 6(12), 6(15), 6(16) | |||||||||||||
Premiums | 37,219,718 | 37,145,022 | 43,181,516 | |||||||||||
Treasury stock transactions | 1,255,514 | 1,255,514 | 1,219,636 | |||||||||||
The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries | 348,342 | 348,342 | 236,259 | |||||||||||
Recognize changes in subsidiaries’ ownership | — | 563 | — | |||||||||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | 114,434 | 91,238 | 21,801 | |||||||||||
Employee stock options | 99,958 | 166,268 | 245,679 | |||||||||||
Stock options | — | — | 403,880 | |||||||||||
Other | 567,530 | 440,932 | — | |||||||||||
Retained earnings | 6(15) | |||||||||||||
Legal reserve | 6,511,844 | 6,511,844 | 5,248,824 | |||||||||||
Unappropriated earnings | 41,803,623 | 37,827,179 | 28,368,858 | |||||||||||
Other components of equity | 4 | |||||||||||||
Exchange differences on translation of foreign operations | (1,804,697 | ) | (899,979 | ) | (3,818,628 | ) | ||||||||
Unrealized gains or losses on available-for-sale financial assets | 14,107,277 | 13,272,691 | 13,674,270 | |||||||||||
Equity directly associated with non-current assets held for sale | — | — | 869 | |||||||||||
Treasury stock | 4, 6(15) | (2,303,609 | ) | (2,303,609 | ) | (2,365,246 | ) | |||||||
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Total equity attributable to the parent company | 225,429,658 | 221,159,053 | 213,446,286 | |||||||||||
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Non-controlling interests | 6(15) | 3,832,574 | 3,849,798 | 4,329,025 | ||||||||||
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Total equity | 229,262,232 | 225,008,851 | 217,775,311 | |||||||||||
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Total liabilities and equity | $ | 321,064,806 | $ | 313,245,648 | $ | 301,627,419 | ||||||||
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The accompanying notes are an integral part of the consolidated financial statements.
4
English Translation of Consolidated Financial Statements Originally Issued in Chinese
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three-month periods ended March 31, 2015 and 2014
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)
For the three-month periods ended March 31, | ||||||||||
Notes | 2015 | 2014 | ||||||||
Operating revenues | 4, 5, 7, 14 | |||||||||
Sales revenues | $ | 37,200,156 | $ | 30,828,276 | ||||||
Less: Sales returns and discounts | (493,739 | ) | (81,557 | ) | ||||||
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Net sales | 36,706,417 | 30,746,719 | ||||||||
Other operating revenues | 943,227 | 946,866 | ||||||||
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Net operating revenues | 4, 6(17) | 37,649,644 | 31,693,585 | |||||||
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Operating costs | 4, 6(4), 6(14), 6(16) 6(18), 14 | |||||||||
Costs of goods sold | (27,652,403 | ) | (25,054,897 | ) | ||||||
Other operating costs | (842,132 | ) | (737,310 | ) | ||||||
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Operating costs | (28,494,535 | ) | (25,792,207 | ) | ||||||
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Gross profit | 9,155,109 | 5,901,378 | ||||||||
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Operating expenses | 4, 6(14), 6(16), 6(18) 7, 14 | |||||||||
Sales and marketing expenses | (1,044,487 | ) | (833,578 | ) | ||||||
General and administrative expenses | (953,013 | ) | (847,766 | ) | ||||||
Research and development expenses | (2,916,323 | ) | (3,334,852 | ) | ||||||
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Subtotal | (4,913,823 | ) | (5,016,196 | ) | ||||||
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Net other operating income and expenses | 4, 6(19) | (142,614 | ) | 55,457 | ||||||
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Operating income | 4,098,672 | 940,639 | ||||||||
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Non-operating income and expenses | ||||||||||
Other income | 4, 6(20) | 74,095 | 125,606 | |||||||
Other gains and losses | 4, 6(20), 14 | 331,539 | 393,763 | |||||||
Finance costs | 6(20) | (114,734 | ) | (155,148 | ) | |||||
Share of profit or loss of associates and joint ventures | 4, 5, 6(7), 14 | 41,806 | (35,381 | ) | ||||||
Exchange gain, net | 4, 12 | — | 22,104 | |||||||
Exchange loss, net | 4, 12 | (77,268 | ) | — | ||||||
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Subtotal | 255,438 | 350,944 | ||||||||
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Income from continuing operations before income tax | 4,354,110 | 1,291,583 | ||||||||
Income tax expense | 4, 5, 6(22), 14 | (441,638 | ) | (180,776 | ) | |||||
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Net income | 3,912,472 | 1,110,807 | ||||||||
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Other comprehensive income (loss) | 6(21) | |||||||||
Items that may be reclassified subsequently to profit or loss | ||||||||||
Exchange differences on translation of foreign operations | (890,828 | ) | 1,444,082 | |||||||
Unrealized gain on available-for-sale financial assets | 617,059 | 2,409,477 | ||||||||
Share of other comprehensive income of associates and joint ventures | 4 | 178,692 | 350,684 | |||||||
Income tax related to components of other comprehensive income | 4, 6(22) | (12,021 | ) | (73,963 | ) | |||||
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Total other comprehensive income (loss), net of tax | (107,098 | ) | 4,130,280 | |||||||
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Total comprehensive income (loss) | $ | 3,805,374 | $ | 5,241,087 | ||||||
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Net income attributable to: | ||||||||||
Stockholders of the parent | $ | 3,979,910 | $ | 1,179,698 | ||||||
Non-controlling interests | (67,438 | ) | (68,891 | ) | ||||||
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$ | 3,912,472 | $ | 1,110,807 | |||||||
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Comprehensive income (loss) attributable to: | ||||||||||
Stockholders of the parent | $ | 3,909,778 | $ | 5,260,712 | ||||||
Non-controlling interests | (104,404 | ) | (19,625 | ) | ||||||
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$ | 3,805,374 | $ | 5,241,087 | |||||||
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Earnings per share (NTD) | 4, 6(23) | |||||||||
Earnings per share-basic | $ | 0.32 | $ | 0.09 | ||||||
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Earnings per share-diluted | $ | 0.31 | $ | 0.09 | ||||||
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The accompanying notes are an integral part of the consolidated financial statements.
5
English Translation of Consolidated Financial Statements Originally Issued in Chinese
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the three-month periods ended March 31, 2015 and 2014
(Expressed in Thousands of New Taiwan Dollars)
Equity Attributable to the Parent Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital | Retained Earnings | Other Components of Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Notes | Common Stock | Collected in Advance | Additional Paid-in Capital | Legal Reserve | Unappropriated Earnings | Exchange Differences on Translation of Foreign Operations | Unrealized Gain or Loss on Available- for-Sale Financial Assets | Equity Directly Associated with Non- Current Assets Held for Sale | Treasury Stock | Total | Non- Controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2014 | 6(15) | $ | 126,920,817 | $ | 25,682 | $ | 45,326,454 | $ | 5,248,824 | $ | 27,189,160 | $ | (5,271,199 | ) | $ | 11,046,696 | $ | — | $ | (2,365,246 | ) | $ | 208,121,188 | $ | 4,319,988 | $ | 212,441,176 | |||||||||||||||||||||||||
Net income for the three-month ended March 31, 2014 | 6(15) | — | — | — | — | 1,179,698 | — | — | — | — | 1,179,698 | (68,891 | ) | 1,110,807 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax for the three-month ended March 31, 2014 | 6(15), 6(21) | — | — | — | — | — | 1,453,440 | 2,627,574 | — | — | 4,081,014 | 49,266 | 4,130,280 | |||||||||||||||||||||||||||||||||||||||
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Total comprehensive income (loss) | — | — | — | — | 1,179,698 | 1,453,440 | 2,627,574 | — | — | 5,260,712 | (19,625 | ) | 5,241,087 | |||||||||||||||||||||||||||||||||||||||
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Share-based payment transaction | 4, 5, 6(15), 6(16) | 57,415 | 24,654 | 4,105 | — | — | — | — | — | — | 86,174 | — | 86,174 | |||||||||||||||||||||||||||||||||||||||
Convertible bonds repurchased | 4, 6(12) | — | — | 460 | — | — | — | — | — | — | 460 | — | 460 | |||||||||||||||||||||||||||||||||||||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | — | — | (2,748 | ) | — | — | — | — | — | — | (2,748 | ) | — | (2,748 | ) | |||||||||||||||||||||||||||||||||||||
Changes in subsidiaries’ ownership | 4, 6(15) | — | — | (19,500 | ) | — | — | — | — | — | — | (19,500 | ) | 28,662 | 9,162 | |||||||||||||||||||||||||||||||||||||
Others | — | — | — | — | — | (869 | ) | — | 869 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
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Balance as of March 31, 2014 | 6(15) | $ | 126,978,232 | $ | 50,336 | $ | 45,308,771 | $ | 5,248,824 | $ | 28,368,858 | $ | (3,818,628 | ) | $ | 13,674,270 | $ | 869 | $ | (2,365,246 | ) | $ | 213,446,286 | $ | 4,329,025 | $ | 217,775,311 | |||||||||||||||||||||||||
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Balance as of January 1, 2015 | 6(15) | $ | 127,252,078 | $ | 50,970 | $ | 39,447,879 | $ | 6,511,844 | $ | 37,827,179 | $ | (899,979 | ) | $ | 13,272,691 | $ | — | $ | (2,303,609 | ) | $ | 221,159,053 | $ | 3,849,798 | $ | 225,008,851 | |||||||||||||||||||||||||
Net income for the three-month ended March 31, 2015 | 6(15) | — | — | — | — | 3,979,910 | — | — | — | — | 3,979,910 | (67,438 | ) | 3,912,472 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax for the three-month ended March 31, 2015 | 6(15), 6(21) | — | — | — | — | — | (904,718 | ) | 834,586 | — | — | (70,132 | ) | (36,966 | ) | (107,098 | ) | |||||||||||||||||||||||||||||||||||
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Total comprehensive income (loss) | — | — | — | — | 3,979,910 | (904,718 | ) | 834,586 | — | — | 3,909,778 | (104,404 | ) | 3,805,374 | ||||||||||||||||||||||||||||||||||||||
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Share-based payment transaction | 4, 5, 6(15), 6(16) | 225,550 | (18,874 | ) | 8,386 | — | — | — | — | — | — | 215,062 | — | 215,062 | ||||||||||||||||||||||||||||||||||||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | — | — | 23,196 | — | — | — | — | — | — | 23,196 | — | 23,196 | ||||||||||||||||||||||||||||||||||||||||
Changes in subsidiaries’ ownership | — | — | (563 | ) | — | (3,466 | ) | — | — | — | — | (4,029 | ) | 87,180 | 83,151 | |||||||||||||||||||||||||||||||||||||
Others | 4, 6(15) | — | — | 126,598 | — | — | — | — | — | — | 126,598 | — | 126,598 | |||||||||||||||||||||||||||||||||||||||
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Balance as of March 31, 2015 | 6(15) | $ | 127,477,628 | $ | 32,096 | $ | 39,605,496 | $ | 6,511,844 | $ | 41,803,623 | $ | (1,804,697 | ) | $ | 14,107,277 | $ | — | $ | (2,303,609 | ) | $ | 225,429,658 | $ | 3,832,574 | $ | 229,262,232 | |||||||||||||||||||||||||
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The accompanying notes are an integral part of the consolidated financial statements.
6
English Translation of Consolidated Financial Statements Originally Issued in Chinese
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three-month periods ended March 31, 2015 and 2014
(Expressed in Thousands of New Taiwan Dollars)
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income before tax | $ | 4,354,110 | $ | 1,291,583 | ||||
Adjustments to reconcile net income before tax to net cash provided by operating activities: | ||||||||
Depreciation | 10,310,797 | 9,450,230 | ||||||
Amortization | 437,399 | 400,083 | ||||||
Bad debt reversal | (9,429 | ) | (18,135 | ) | ||||
Net gain of financial assets and liabilities at fair value through profit or loss | (129,825 | ) | (15,545 | ) | ||||
Interest expense | 101,040 | 147,307 | ||||||
Interest revenue | (74,095 | ) | (124,278 | ) | ||||
Dividend revenue | — | (1,328 | ) | |||||
Share-based payment | 120 | 822 | ||||||
Share of profit or loss of associates and joint ventures | (41,806 | ) | 35,381 | |||||
Gain on disposal of property, plant and equipment | (52,113 | ) | (58,020 | ) | ||||
Gain on disposal of non-current assets held for sale | (41,203 | ) | — | |||||
Gain on disposal of investments | (189,697 | ) | (367,003 | ) | ||||
Impairment loss on financial assets | 63,090 | 92,519 | ||||||
Impairment loss on non-financial assets | 225,530 | — | ||||||
Loss on reacquisition of bonds | — | 1,204 | ||||||
Exchange loss (gain) on financial assets and liabilities | (12,705 | ) | 77,085 | |||||
Exchange loss on long-term liabilities | — | 73,380 | ||||||
Amortization of deferred income | (9,866 | ) | (7,909 | ) | ||||
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Income and expense adjustments | 10,577,237 | 9,685,793 | ||||||
Changes in operating assets and liabilities: | ||||||||
Financial assets and liabilities at fair value through profit or loss | (148,100 | ) | (203,828 | ) | ||||
Notes receivable and accounts receivable | 2,039,066 | (1,958,514 | ) | |||||
Other receivables | 80,238 | 105,717 | ||||||
Inventories | (417,462 | ) | (381,433 | ) | ||||
Prepayments | 479,637 | (446,167 | ) | |||||
Other current assets | 800,844 | (1,456,482 | ) | |||||
Notes and accounts payable | (32,722 | ) | (280,293 | ) | ||||
Other payables | (177,072 | ) | (326,466 | ) | ||||
Other current liabilities | (316,993 | ) | 200,297 | |||||
Net defined benefit liabilities | 7,226 | 5,303 | ||||||
Other liabilities-others | 586 | (4,209 | ) | |||||
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Cash generated from operations | 17,246,595 | 6,231,301 | ||||||
Interest received | 93,767 | 98,916 | ||||||
Dividend received | 113,069 | 143,872 | ||||||
Interest paid | (217,609 | ) | (203,641 | ) | ||||
Income tax paid | (366,011 | ) | (38,808 | ) | ||||
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Net cash provided by operating activities | 16,869,811 | 6,231,640 | ||||||
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(continued)
7
English Translation of Consolidated Financial Statements Originally Issued in Chinese
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three-month periods ended March 31, 2015 and 2014
(Expressed in Thousands of New Taiwan Dollars)
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Cash flows from investing activities: | ||||||||
Acquisition of financial assets at fair value through profit or loss | $ | — | $ | (29,900 | ) | |||
Acquisition of available-for-sale financial assets | (1,897,155 | ) | (68,197 | ) | ||||
Proceeds from disposal of available-for-sale financial assets | 208,591 | 528,724 | ||||||
Acquisition of financial assets measured at cost | (74,894 | ) | (136,323 | ) | ||||
Acquisition of investments accounted for under the equity method | — | (60,700 | ) | |||||
Proceeds from disposal of investments accounted for under the equity method | — | 4,000 | ||||||
Increase in prepayment for investments | (90,824 | ) | — | |||||
Proceeds from capital reduction and liquidation of investments | 9,782 | — | ||||||
Acquisition of subsidiaries (net of cash acquired) | 414,958 | — | ||||||
Acquisition of property, plant and equipment | (14,892,734 | ) | (6,276,591 | ) | ||||
Proceeds from disposal of property, plant and equipment | 44,214 | 73,489 | ||||||
Proceeds from disposal of non-current assets held for sale | 641,866 | — | ||||||
Increase in refundable deposits | (79,739 | ) | (17,477 | ) | ||||
Decrease in refundable deposits | 79,110 | 53,307 | ||||||
Acquisition of intangible assets | (344,092 | ) | (175,070 | ) | ||||
Increase in other assets-others | (519,349 | ) | (8,249 | ) | ||||
Decrease in other assets-others | 2,304 | 13,016 | ||||||
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Net cash used in investing activities | (16,497,962 | ) | (6,099,971 | ) | ||||
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Cash flows from financing activities: | ||||||||
Increase in short-term loans | 5,334,629 | 5,367,850 | ||||||
Decrease in short-term loans | (4,468,155 | ) | (2,567,731 | ) | ||||
Redemption of bonds | — | (57,180 | ) | |||||
Proceeds from long-term loans | 3,404,410 | — | ||||||
Repayments of long-term loans | (2,554,183 | ) | (475,232 | ) | ||||
Increase in guarantee deposits | 32,868 | 35,958 | ||||||
Decrease in guarantee deposits | (2,002 | ) | (2,443 | ) | ||||
Increase in other financial liabilities | 6,107,635 | — | ||||||
Exercise of employee stock options | 214,943 | 85,352 | ||||||
Change in non-controlling interests | 84,530 | 8,261 | ||||||
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Net cash provided by financing activities | 8,154,675 | 2,394,835 | ||||||
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Effect of exchange rate changes on cash and cash equivalents | (775,643 | ) | 573,590 | |||||
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Net increase in cash and cash equivalents | 7,750,881 | 3,100,094 | ||||||
Cash and cash equivalents at beginning of period | 46,212,423 | 50,830,678 | ||||||
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Cash and cash equivalents at end of period | $ | 53,963,304 | $ | 53,930,772 | ||||
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Reconciliation of the balances of cash and cash equivalents at end of period: | ||||||||
Cash and cash equivalents balances on the consolidated balance sheets | $ | 53,632,056 | $ | 53,915,155 | ||||
Cash and cash equivalents included in non-current assets held for sale | 331,248 | 15,617 | ||||||
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Cash and cash equivalents at end of period | $ | 53,963,304 | $ | 53,930,772 | ||||
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Investing activities partially paid by cash: | ||||||||
Cash paid for acquiring property, plant and equipment | ||||||||
Increase in property, plant and equipment | $ | 11,821,574 | $ | 4,395,907 | ||||
Add: Payable at beginning of period | 10,742,203 | 6,700,743 | ||||||
Less: Payable at end of period | (7,671,043 | ) | (4,820,059 | ) | ||||
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Cash paid | $ | 14,892,734 | $ | 6,276,591 | ||||
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The accompanying notes are an integral part of the consolidated financial statements.
8
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Three-Month Periods Ended March 31, 2015 and 2014
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
1. | HISTORY AND ORGANIZATION |
United Microelectronics Corporation (UMC) was incorporated in Republic of China (R.O.C.) in May 1980 and commenced operations in April 1982. UMC is a full service semiconductor wafer foundry, and provides a variety of services to satisfy customer needs. UMC’s ordinary shares were publicly listed on the Taiwan Stock Exchange (TWSE) in July 1985 and its American Depositary Shares (ADSs) were listed on the New York Stock Exchange (NYSE) in September 2000.
2. | DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE |
The consolidated financial statements of UMC and its subsidiaries (the “Company”) were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on April 29, 2015.
3. | NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS |
A. | The Company adopted the International Financial Reporting Standard (IFRS), International Accounting Standard (IAS) and Interpretations developed by the International Financial Reporting Interpretation Committee (IFRIC) issued, revised or amended by International Accounting Standard Board (IASB) which have been endorsed by Financial Supervisory Commission (FSC) and effective on January 1, 2015 (collectively referred to as “2013 edition of TIFRSs” (TIFRSs)). The effects of adopting TIFRSs on the Company’s consolidated financial statements are summarized as below: |
(1) | IFRS 3 “Business Combinations” |
Under the amendment, IFRS 3 “Business Combinations” (IFRS 3) (as revised in 2008) does not apply to contingent consideration that arose from business combinations whose acquisition dates precede the application of IFRS 3 (as revised in 2008). Furthermore, the amendment limits the scope of the measurement choices for non-controlling interest. Only the components of non-controlling interests that are present ownership interests that entitle their holders to a proportionate share of the entity’s net assets, in the event of liquidation could be measured at either fair value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable net assets. Other components of non-controlling interest are measured at their acquisition date fair value.
9
The amendment also requires an entity in a business combination to account for the replacement of the acquiree’s share-based payment transactions (when the acquirer is not obliged to do so) as new share-based payment awards in the post-combination financial statements.
Outstanding share-based payment transactions that the acquirer does not exchange for its share-based payment transactions: if vested — they are part of non-controlling interest; if unvested — they are measured at market based value as if granted at acquisition date, and allocated between NCI and post-combination expense.
(2) | IAS 34 “Interim Financial Reporting” |
The amendment clarifies that if users of an entity’s interim financial report have access to the most recent annual financial report of that entity, it is unnecessary for the notes to an interim financial report to provide relatively insignificant updates to the information that was reported in the notes in the most recent annual financial report. Furthermore, the amendment requires additional disclosures of financial instruments and contingent liabilities/assets.
(3) | IFRS 7 “Financial Instruments: Disclosures” |
The amendment emphasizes the interaction between quantitative and qualitative disclosures and the nature and extent of risks associated with financial instruments so that users of financial statements will have a better understanding.
(4) | IFRS 7 “Financial Instruments: Disclosures” (Amendment) |
The amendment requires additional quantitative and qualitative disclosures relating to transfers of financial assets, when financial assets are derecognized in their entirety, but the entity has a continuing involvement in them, or when financial assets are not derecognized in their entirety.
(5) | IFRS 10 “Consolidated Financial Statements” |
IFRS 10 “Consolidated Financial Statements”(IFRS 10) replaces the portion of IAS 27 “Consolidated and Separate Financial Statements” (IAS 27) that addresses the accounting for consolidated financial statements and the former Standing Interpretations Committee (SIC)-12 “Consolidation-Special Purpose Entities”. The changes introduced by IFRS 10 primarily relate to the elimination of the perceived inconsistency between IAS 27 and SIC-12 by introducing a new integrated control model. That is, IFRS 10 primarily relates to whether to consolidate another entity, but does not change how an entity is consolidated.
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(6) | IFRS 11 “Joint Arrangements” |
IFRS 11 “Joint Arrangements” replaces IAS 31 “Interests in Joint Ventures” and SIC-13 “Jointly Controlled Entities-Non-Monetary Contributions by Venturers”. The changes introduced by IFRS 11 primarily relate to increase comparability within IFRSs by removing the choice for accounting for jointly controlled entities under the proportionate consolidation method, so that the structure of the arrangement is no longer the most important factor when determining the classification as a joint operation or a joint venture (an investment classified as a joint venture is accounted for in accordance with IAS 28 “Investments in Associates and Joint Ventures” (IAS 28)), which then determines the accounting.
(7) | IFRS 12 “Disclosures of Interests in Other Entities” |
IFRS 12 “Disclosures of Interests in Other Entities” primarily integrates and makes consistent the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities and present those requirements in a single IFRS.
(8) | IFRS 13 “Fair Value Measurement” |
IFRS 13 “Fair Value Measurement” (IFRS 13) primarily relates to defining fair value, setting out in a single IFRS framework for measuring and disclosing fair values to reduce complexity and improve consistency in applying fair value measurement. However, IFRS 13 does not change existing requirements in other IFRSs as to when the fair value measurement or related disclosure is required.
(9) | IAS 19 “Employee Benefits” (Revised) |
The revision includes: (1)For defined benefit plans, the ability to defer the recognition of actuarial gains and losses (i.e., the corridor approach) has been removed. Actuarial gains and losses will be recognized in other comprehensive income as they occur. (2)Amounts recorded in profit or loss are limited to current and past service costs, gains or losses on settlements, and net interest income (expense) on the pension asset or liability. (3)New disclosures include quantitative information about the sensitivity of the defined benefit obligation to reasonably possible changes in each significant actuarial assumption. (4)Termination benefits will be recognized at the earlier of when the offer of termination cannot be withdrawn, or when the related restructuring costs are recognized under IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.
(10) | IAS 1 “Presentation of Financial Statements” |
The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements.
(11) | Presentation of Items of Other Comprehensive Income (Amend IAS 1 “Presentation of Financial Statements”) |
The amendments to IAS 1 change the grouping of items presented in other comprehensive income. Items that would be reclassified (or recycled) to profit or loss at certain points in the future would be presented separately from items that will never be reclassified.
11
(12) | IAS 34 “Interim Financial Reporting” |
The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 “Operating Segments”. Besides, total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous annual financial statements for that reportable segment.
(13) | IFRS 10 “Consolidated Financial Statements” (Amendment) |
The amendments related to Investment Entities provide an exception to the consolidation requirements in IFRS 10 and require investment entities to account for particular subsidiaries at fair value through profit or loss, rather than consolidating them. The amendments also set out disclosure requirements for investment entities.
The Company has evaluated the impact of the aforementioned standards and interpretations listed (1) ~ (13) to the Company’s financial position and performance and determined that there is no material impact. The Company has made necessary disclosures in accordance with the aforementioned standards and interpretations.
B. | Standards issued by IASB but not yet endorsed by FSC (the effective dates are to be determined by FSC): |
No. | The projects of Standards or Interpretations | Effective for annual periods beginning on or after | ||
IAS 36 | Impairment of Assets | January 1, 2014 | ||
IFRIC 21 | Levies | January 1, 2014 | ||
IAS 39 | Novation of Derivatives and Continuation of Hedge Accounting | January 1, 2014 | ||
IAS 19 | Defined Benefit Plans: Employee Contributions | July 1, 2014 | ||
Improvements to International Financial Reporting Standards (2010-2012 cycle) | ||||
IFRS 2 | Share-based Payment | July 1, 2014 | ||
IFRS 3 | Business Combinations | July 1, 2014 | ||
IFRS 8 | Operating Segments | July 1, 2014 | ||
IFRS 13 | Fair Value Measurement | — | ||
IAS 16 | Property, Plant and Equipment | July 1, 2014 | ||
IAS 24 | Related Party Disclosures | July 1, 2014 | ||
IAS 38 | Intangible Assets | July 1, 2014 | ||
Improvements to International Financial Reporting Standards (2011-2013 cycle) |
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No. | The projects of Standards or Interpretations | Effective for annual periods beginning on or after | ||
IFRS 1 | First-time Adoption of International Financial Reporting Standards | — | ||
IFRS 3 | Business Combinations | July 1, 2014 | ||
IFRS 13 | Fair Value Measurement | July 1, 2014 | ||
IAS 40 | Investment Property | July 1, 2014 | ||
IFRS 14 | Regulatory Deferral Accounts | January 1, 2016 | ||
IFRS 11 | Accounting for Acquisitions of Interests in Joint Operations | January 1, 2016 | ||
IAS 16 and IAS 38 | Clarification of Acceptable Methods of Depreciation and Amortization | January 1, 2016 | ||
IFRS 15 | Revenue from Contracts with Customers | January 1, 2017 | ||
IAS 16 and IAS 41 | Agriculture: Bearer Plants | January 1, 2016 | ||
IFRS 9 | Financial Instruments | January 1, 2018 | ||
IAS 27 | Equity Method in Separate Financial Statements | January 1, 2016 | ||
IFRS 10 and IAS 28 | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | January 1, 2016 | ||
Improvements to International Financial Reporting Standards (2012—2014 cycle) | ||||
IFRS 5 | Non-current Assets Held for Sale and Discontinued Operations | January 1, 2016 | ||
IFRS 7 | Financial Instruments: Disclosures | January 1, 2016 | ||
IAS 19 | Employee Benefits | January 1, 2016 | ||
IAS 34 | Interim Financial Reporting | January 1, 2016 | ||
IAS 1 | Disclosure Initiative | January 1, 2016 | ||
IFRS 10, IFRS 12 and IAS 28 | Investment Entities: Applying the Consolidation Exception | January 1, 2016 |
The potential effects of adopting the standards or interpretations issued by IASB but not yet endorsed by FSC on the Company’s financial statements in future periods are summarized as below:
(14) | IAS 36 “Impairment of Assets” (Amendment) |
This amendment relates to the amendment issued in May 2011 and requires entities to disclose the recoverable amount of an asset (including goodwill) or a cash-generating unit (CGU) when an impairment loss has been recognized or reversed during the period. The amendment also requires detailed disclosure of how the fair value less costs of disposal has been determined when an impairment loss has been recognized or reversed, including valuation techniques used, level of fair value hierarchy of assets and key assumptions used in the measurements. The amendment is effective for annual periods beginning on or after January 1, 2014.
13
(15) | IFRIC 21 “Levies” |
This interpretation provides guidance on when to recognize a liability for a levy imposed by a government (both for levies that are accounted for in accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” and those where the timing and amount of the levy is certain). The interpretation is effective for annual periods beginning on or after January 1, 2014.
(16) | IAS 39 “Financial Instruments: Recognition and Measurement” (Amendment)—Novation of Derivatives and Continuation of Hedge Accounting |
Under the amendment, there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met. The interpretation is effective for annual periods beginning on or after January 1, 2014.
(17) | IFRS 8 “Operating Segments” |
The amendments require an entity to disclose the judgments made by management in applying the aggregation criteria to operating segments. The amendments also clarify that an entity shall only provide reconciliations of the total of the reportable segments’ assets to the entity’s assets if the segment assets are reported regularly to the Chief Operating Decision Maker (CODM). The amendment is effective for annual periods beginning on or after July 1, 2014.
(18) | IFRS 13 “Fair Value Measurement” |
The amendment to the Basis for Conclusions of IFRS 13 clarifies that when deleting paragraph B5.4.12 of IFRS 9 Financial Instruments and paragraph AG79 of IAS 39 Financial Instruments: Recognition and Measurement as consequential amendments from IFRS 13 Fair Value Measurement, the IASB did not intend to change the measurement requirements for short-term receivables and payables.
(19) | IAS 24 “Related Party Disclosures” |
The amendment clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity. The amendment is effective for annual periods beginning on or after July 1, 2014.
(20) | IFRS 13 “Fair Value Measurement” |
The amendment clarifies that paragraph 52 of IFRS 13 includes a scope exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis. The objective of this amendment is to clarify that this portfolio exception applies to all contracts within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, regardless of whether they meet the definitions of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation. The amendment is effective for annual periods beginning on or after July 1, 2014.
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(21) | IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” (Amendment) |
The amendments to IFRS 11 require that the relevant principles on business combinations accounting in IFRS 3 and other standards should be applied in accounting for the acquisition of an interest in a joint operation in which the activity constitutes a business. The amendments are applicable to both the acquisition of the initial interest in a joint operation with an existing business and the acquisition of an additional interest in the same joint operation. However, a previously held interest is not remeasured when the acquisition of an additional interest in the same joint operation results in retaining joint control. Transactions between an investor and a joint operation under common control are also excluded. The amendment is effective for annual periods beginning on or after January 1, 2016 with earlier application permitted. The impact that adoption of the new amendment will have on our financial position and results of operation will be dependent upon the specific terms of any applicable future acquisition of joint arrangements.
(22) | IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortisation” (Amendment) |
The amendment to IAS 16, “Property, Plant and Equipment” (IAS 16) clarifies that depreciation of an item of property, plant and equipment based on revenue generated by using the asset is not appropriate. The amendment to IAS 38, “Intangible Assets” establishes a rebuttable presumption that amortization of an intangible asset based on revenue generated by using the asset is inappropriate. The presumption may only be rebutted in certain limited circumstances where the intangible asset is expressed as a measure of revenue; or where it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated. The amendment is effective for annual periods beginning on or after January 1, 2016 with earlier application permitted.
(23) | IFRS 15 “Revenue from Contracts with Customers” |
The core principle of IFRS 15 is that revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. Extensive disclosures will be required, including disaggregation of total revenue; information related to performance obligations; changes in contract asset and liability account balances between periods and key judgments and estimates. The standard will apply to annual periods beginning on or after January 1, 2017 with early adoption is permitted.
15
(24) | IFRS 9 “Financial Instruments” |
The IASB has issued the final version of IFRS 9, which combines classification and measurement, the expected credit loss impairment model and hedge accounting. The standard will replace IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9 which introduced new classification and measurement requirements (in 2009 and 2010) and a new hedge accounting model (in 2013). The final completed version of IFRS 9 requires the followings: (1) Classification and measurement: Financial assets are measured at amortized cost, fair value through profit or loss, or fair value through other comprehensive income, based on both the entity’s business model for managing the financial assets and the financial asset’s contractual cash flow characteristics. Financial liabilities are measured at amortized cost or fair value through profit or loss. Furthermore there is requirement that “own credit risk” adjustments are not recognized in profit or loss. (2) Impairment: Expected credit loss model is used to evaluate impairment. Entities are required to recognize either 12-month or lifetime expected credit losses, depending on whether there has been a significant increase in credit risk since initial recognition. (3) Hedge accounting: Hedge accounting is more closely aligned with risk management activities and hedge effectiveness is measured based on the hedge ratio. The new standard is effective for annual periods beginning on or after January 1, 2018.
(25) | IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”—Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures (Amendment) |
The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full. IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture. The amendment is effective for annual periods beginning on or after January 1, 2016.
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(26) | IAS 1 “Presentation of Financial Statements”—“Disclosure Initiative” (Amendment): |
The amendments (1) clarify that an entity must not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures or functions. The amendments reemphasize that, when a standard requires a specific disclosure, the information must be assessed to determine whether it is material and, consequently, whether presentation or disclosure of that information is warranted, (2) clarify that specific line items in the statement(s) of profit or loss and OCI and the statement of financial position may be disaggregated, and how an entity shall present additional subtotals, (3) clarify that entities have flexibility as to the order in which they present the notes to financial statements, but also emphasize that understandability and comparability should be considered by an entity when deciding on that order, (4) removing the examples of the income taxes accounting policy and the foreign currency accounting policy, as these were considered unhelpful in illustrating what significant accounting policies could be, and (5) clarify that the share of OCI of associates and joint ventures accounted for using the equity method must be presented in aggregate as a single line item, classified between those items that will or will not be subsequently reclassified to profit or loss. The amendment is effective for annual periods beginning on or after January 1, 2016.
The Company is currently evaluating the potential impact of the aforementioned standards and interpretations listed (14) ~ (26) to the Company’s financial position and performance, and the related impact will be disclosed when the evaluation is completed.
4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(1) | Statement of Compliance |
The Company’s consolidated financial statements were prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers (Regulations), IFRSs, IASs, IFRIC and SIC, which are endorsed by FSC, and IAS34.
(2) | Basis of Preparation |
The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments measured at fair value.
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(3) | General Description of Reporting Entity |
a. | Principles of consolidation |
Subsidiaries are fully consolidated from the date of acquisition (the date on which the Company obtains control), and continue to be consolidated until the date that such control ceases. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.
A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction. Total comprehensive income of subsidiaries is attributed to the stockholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
If the Company loses control over a subsidiary, the Company derecognizes the assets and liabilities of the subsidiary, as well as any non-controlling interests previously recorded by the Company. A gain or loss is recognized in profit or loss and is calculated as the difference between: (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Any gain or loss previously recognized in the other comprehensive income would be reclassified to profit or loss or transferred directly to retained earnings if required by other TIFRSs. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the cost on initial recognition of an investment.
b. | The consolidated entities are as follows: |
As of March 31, 2015, December 31, 2014 and March 31, 2014
Percentage of ownership (%) as of | ||||||||||||||||
Investor | Subsidiary | Business nature | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||||
UMC | UMC GROUP (USA) | IC Sales | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | UNITED MICROELECTRONICS (EUROPE) B.V. | Marketing support activities | 100.00 | 100.00 | 100.00 |
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Percentage of ownership (%) as of | ||||||||||||||||
Investor | Subsidiary | Business nature | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||||
UMC | UMC CAPITAL CORP. | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | GREEN EARTH LIMITED (GE) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | TLC CAPITAL CO., LTD. (TLC) | New business investment | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | UMC NEW BUSINESS INVESTMENT CORP. (NBI) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | UMC INVESTMENT (SAMOA) LIMITED | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | FORTUNE VENTURE CAPITAL CORP. (FORTUNE) | Consulting and planning for investment in new business | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | UMC GROUP JAPAN | IC Sales | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | UMC KOREA CO., LTD. | Marketing support activities | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | OMNI GLOBAL LIMITED (OMNI) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
UMC | BEST ELITE INTERNATIONAL LIMITED (BE) | Investment holding | 86.88 | 86.88 | 86.88 | |||||||||||
UMC | WAVETEK MICROELECTRONICS CORPORATION (WAVETEK) | GaAs Foundry service | 82.52 | 81.53 | 81.53 | |||||||||||
UMC | NEXPOWER TECHNOLOGY CORP. (NEXPOWER) | Sales and manufacturing of solar power batteries | 44.16 | 44.16 | 44.16 | |||||||||||
FORTUNE | UNITRUTH INVESTMENT CORP. (UNITRUTH) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
FORTUNE | TOPCELL SOLAR INTERNATIONAL CO., LTD. (TOPCELL) | Sales and manufacturing of solar power cell | 26.04 | 26.04 | 26.04 |
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Percentage of ownership (%) as of | ||||||||||||||||
Investor | Subsidiary | Business nature | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||||
FORTUNE | NEXPOWER | Sales and manufacturing of solar power batteries | 5.99 | 5.99 | 5.99 | |||||||||||
FORTUNE | ALLIANCE OPTOTEK CORP. (ALLIANCE) | Design and manufacturing of LED | — | — | 21.77 | |||||||||||
UNITRUTH | NEXPOWER | Sales and manufacturing of solar power batteries | 2.25 | 2.25 | 2.25 | |||||||||||
UNITRUTH | TOPCELL | Sales and manufacturing of solar power cell | 1.03 | 1.03 | 1.03 | |||||||||||
UNITRUTH | ALLIANCE | Design and manufacturing of LED | — | — | 6.86 | |||||||||||
UMC CAPITAL CORP. | UMC CAPITAL (USA) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
UMC CAPITAL CORP. | ECP VITA PTE. LTD. | Insurance | 100.00 | 100.00 | 100.00 | |||||||||||
TLC | SOARING CAPITAL CORP. | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
TLC | NEXPOWER | Sales and manufacturing of solar power batteries | 5.87 | 5.87 | 5.87 | |||||||||||
TLC | TOPCELL | Sales and manufacturing of solar power cell | 2.37 | 2.37 | 2.37 | |||||||||||
TLC | ALLIANCE | Design and manufacturing of LED | — | — | 45.88 | |||||||||||
SOARING CAPITAL CORP. | UNITRUTH ADVISOR (SHANGHAI) CO., LTD. | Investment holding and advisory | 100.00 | 100.00 | 100.00 |
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Percentage of ownership (%) as of | ||||||||||||||||
Investor | Subsidiary | Business nature | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||||
GE | UNITED MICROCHIP CORPORATION | Investment holding | 100.00 | — | — | |||||||||||
UMC INVESTMENT (SAMOA) LIMITED | UMC (BEIJING) LIMITED | Marketing support activities | 100.00 | 100.00 | 100.00 | |||||||||||
NBI | TERA ENERGY DEVELOPMENT CO., LTD. (TERA ENERGY) | Energy Technical Services | 100.00 | 100.00 | 100.00 | |||||||||||
NBI | UNISTARS CORP. | High brightness LED packages | 78.72 | 78.72 | 78.02 | |||||||||||
NBI | TOPCELL | Sales and manufacturing of solar power cell | 62.38 | 62.38 | 62.38 | |||||||||||
NBI | EVERRICH ENERGY CORP. (EVERRICH) | Solar engineering integrated design services | — | — | 100.00 | |||||||||||
EVERRICH | EVERRICH ENERGY INVESTMENT (HK) LIMITED (EVERRICH-HK) | Investment holding | — | — | 100.00 | |||||||||||
EVERRICH | SMART ENERGY ENTERPRISES LIMITED (SMART ENERGY) | Investment holding | — | — | 100.00 | |||||||||||
TERA ENERGY | TERA ENERGY USA INC. | Solar project | 100.00 | 100.00 | 100.00 | |||||||||||
TERA ENERGY | EVERRICH-HK | Investment holding | 100.00 | 100.00 | — | |||||||||||
TERA ENERGY | SMART ENERGY | Investment holding | 100.00 | 100.00 | — | |||||||||||
EVERRICH-HK | EVERRICH (SHANDONG) ENERGY CO., LTD. | Solar engineering integrated design services | 100.00 | 100.00 | 100.00 | |||||||||||
SMART ENERGY | SMART ENERGY SHANDONG CORPORATION | Solar engineering integrated design services | — | — | 100.00 |
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Percentage of ownership (%) as of | ||||||||||||||||
Investor | Subsidiary | Business nature | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||||
OMNI | UNITED MICROTECHNOLOGY CORPORATION (NEW YORK) | Research and development | 100.00 | 100.00 | 100.00 | |||||||||||
OMNI | UNITED MICROTECHNOLOGY CORPORATION (CALIFORNIA) | Research and development | 100.00 | 100.00 | — | |||||||||||
WAVETEK | WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED (WAVETEK-SAMOA) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
WAVETEK | WAVETEK MICROELECTRONICS INVESTMENT (HK) LIMITED | Investment holding | — | — | 100.00 | |||||||||||
WAVETEK- SAMOA | WAVETEK MICROELECTRONICS CORPORATION (USA) | Sales and marketing service | 100.00 | 100.00 | 100.00 | |||||||||||
NEXPOWER | NPT HOLDING LIMITED | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
NEXPOWER | SOCIALNEX ITALIA 1 S.R.L. | Photovoltaic power plant | 100.00 | 100.00 | 100.00 | |||||||||||
NPT HOLDING LIMITED | NLL HOLDING LIMITED | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
BE | INFOSHINE TECHNOLOGY LIMITED (INFOSHINE) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
INFOSHINE | OAKWOOD ASSOCIATES LIMITED (OAKWOOD) | Investment holding | 100.00 | 100.00 | 100.00 | |||||||||||
OAKWOOD | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. (HEJIAN) | Sales and manufacturing of integrated circuits | 100.00 | 100.00 | 100.00 |
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Percentage of ownership (%) as of | ||||||||||||||||
Investor | Subsidiary | Business nature | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||||
HEJIAN | UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD. | Integrated circuits design services | 100.00 | 100.00 | 100.00 | |||||||||||
HEJIAN | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. (Note A) | Sales and manufacturing of integrated circuits | 33.33 | — | — | |||||||||||
ALLIANCE | LIGHT HOUSE GLOBAL INCORP. (LIGHT HOUSE) | Investment holding | — | — | 100.00 | |||||||||||
LIGHT HOUSE | ALLIANCE OPTOTEK DONGGUAN CO., LTD. | LED lighting manufacturing and sale | — | — | 100.00 |
Note A: In reference to UMC’s 3-way agreement with Xiamen Municipal People’s Government and FUJIAN ELECTRONICS & INFORMATION GROUP described in Note 9(4), the Company invested RMB 0.6 billion in United Semiconductor (XIAMEN) CO., LTD. and acquired control of the Board of Directors in January 2015. Since the Company obtained control over United Semiconductor (XIAMEN) CO., LTD., it was included as a consolidated entity.
(4) | Business Combinations and Goodwill |
Business combinations are accounted for using the acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at the acquisition date fair value. For the components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation, the acquirer measures at either fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and are classified under administrative expenses.
When the Company acquires a business, it assesses the assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts held by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.
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Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IAS 39, either in profit or loss or other comprehensive income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the difference is recognized as a gain on bargain purchase.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each CGU that is expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or groups of units to which the goodwill is so allocated represents the lowest level within the Company at which the goodwill is monitored for internal management purposes and cannot be larger than an operating segment before aggregation.
Where goodwill forms part of a CGU and part of the operation within that unit is disposed, the goodwill associated with the operation disposed is included in the carrying amount of the operation. Goodwill disposed in these circumstance is measured based on the relative values of the operation disposed and the portion of the CGU retained.
(5) | Foreign Currency Transactions |
The Company’s consolidated financial statements are presented in New Taiwan Dollars (NTD), which is also the parent company’s functional currency. Each entity in the Company determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded by the Company’s entities at their respective functional currency rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates as at the dates of the initial transactions.
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All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:
a. | Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization. |
b. | Foreign currency derivatives within the scope of IAS 39 are accounted for based on the accounting policy for financial instruments. |
c. | Exchange differences arising on a monetary item that is part of a reporting entity’s net investment in a foreign operation are recognized initially in other comprehensive income and reclassified from equity to profit or loss upon disposal of such investment. |
When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.
(6) | Translation of Foreign Currency Financial Statements |
The assets and liabilities of foreign operations are translated into NTD at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average exchange rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.
On partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. On partial disposal of an associate or a joint venture that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.
Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.
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(7) | Current and Non-Current Distinction |
An asset is classified as current when:
a. | the Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle; |
b. | the Company holds the asset primarily for the purpose of trading; |
c. | the Company expects to realize the asset within twelve months after the reporting period; or |
d. | the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. |
All other assets are classified as non-current.
A liability is classified as a current when:
a. | the Company expects to settle the liability in normal operating cycle; |
b. | the Company holds the liability primarily for the purpose of trading; |
c. | the liability is due to be settled within twelve months after the reporting period; or |
d. | the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. |
All other liabilities are classified as non-current.
(8) | Cash Equivalents |
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and with maturity dates that do not present significant risks on changes in value resulting from changes in interest rates, including time deposits with original maturities of three months or less and repurchase agreements collateralized by government bonds and corporate bonds.
(9) | Financial Instruments |
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.
The Company determines the classification of its financial assets at initial recognition. In accordance with IAS 39 and the Regulations, financial assets of the Company are classified as financial assets at fair value through profit or loss, available-for-sale financial assets, held-to-maturity financial assets and notes, accounts and other receivables.
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Purchase or sale of financial assets and liabilities are recognized using trade date accounting. All financial assets are recognized initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable costs. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the income statement.
Financial Assets
a. | Classification and subsequent measurement |
i. | Financial assets at fair value through profit or loss |
Financial assets at fair value through profit or loss are comprised of financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss.
Financial assets acquired for the purpose of selling or repurchasing in the near term, and derivative financial instruments that are not designated as hedging instruments in hedge accounting are classified as financial assets at fair value through profit or loss. Financial assets at fair value through profit or loss are measured at fair value with changes in fair value recognized in profit or loss.
ii. | Available-for-sale financial assets |
Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity financial assets, or loans and receivables. Available-for-sale financial investments are subsequently measured at fair value. Other than impairment losses and foreign exchange gains and losses arising from monetary financial assets which are recognized in profit or loss, subsequent measurement of available-for-sale equity instrument financial assets are recognized in other comprehensive income until the investment is derecognized, at which time the cumulative gain or loss is recognized in profit or loss.
If equity instrument investments do not have quoted prices in an active market and their fair value cannot be reliably measured, then they are classified as financial assets measured at cost on the balance sheet.
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iii. | Held-to-maturity financial assets |
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Company has positive intention and ability to hold them to maturity.
After initial measurement held-to-maturity financial assets are measured at amortized cost using the effective interest rate (EIR) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs. The EIR method amortization and impairment, if any, is recognized in profit or loss.
iv. | Notes, accounts and other receivables |
Notes and accounts receivable are creditors’ rights as a result of sales of goods or services. Other receivables are any receivable not classified as notes and accounts receivable. Notes, accounts and other receivables are initially measured and recognized at their fair values and subsequently measured at amortized cost using the EIR method, less impairment. If the effect of discounting is immaterial, the short term notes, accounts and other receivables are measured at their nominal amount.
b. | Derecognition of financial assets |
A financial asset is derecognized when:
i. | the contractual rights to receive cash flows from the asset have expired; |
ii. | the Company has transferred assets and substantially all the risks and rewards of the asset have been transferred; or |
iii. | the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. |
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or to be received including any cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.
If the transferred asset is part of a larger financial asset and the part transferred qualifies for derecognition in its entirety, the Company allocates the previous carrying amount of the larger financial asset between the part that continues to be recognized and the part that is derecognized, based on the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part derecognized and the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated that had been recognized in other comprehensive income, is recognized in profit or loss. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair values of those parts.
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c. | Impairment policy |
The carrying amount of a financial asset is reduced as a result of impairment, except for accounts receivable for which the carrying amount is reduced through use of an allowance account. When an account receivable is deemed to be uncollectible, it is written off from the allowance account.
i. | Notes, accounts and other receivables |
The Company first assesses at each reporting date whether objective evidence of impairment exists for notes, accounts and other receivables that are individually significant. If there is objective evidence that an impairment loss has occurred, the amount of impairment loss is assessed individually. For notes, accounts and other receivables other than those mentioned above, the Company groups those assets with similar credit risk characteristics and collectively assess them for impairment. If, in a subsequent period, the amount of the impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and recognized through profit or loss. The reversal shall not result in a carrying amount of notes, accounts and other receivables that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed.
ii | Other financial assets |
The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more loss events that has occurred since the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the individual financial asset or a group of financial assets.
For the financial assets carried at amortized cost, the amount of the impairment loss is measured as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. For equity investments classified as available-for-sale, objective evidence of an impairment would include a significant or prolonged decline in the fair value of the investment below its cost. When there is objective evidence of an impairment for available-for-sale equity securities, the full amount of the losses previously recognized in other comprehensive income is reclassified to profit or loss. Impairment losses recognized on equity investments cannot be reversed through profit or loss. Any subsequent increases in their fair value after impairment are recognized in other comprehensive income.
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Financial Liabilities
a. | Classification and subsequent measurement |
The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.
i. | Financial liabilities at fair value through profit or loss |
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on the subsequent measurement of liabilities held for trading including interest paid are recognized in profit or loss.
ii. | Financial liabilities carried at amortized cost |
Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the EIR method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR method amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.
b. | Derecognition of financial liabilities |
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
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(10) | Inventories |
Inventories are accounted for on a perpetual basis. Raw materials are stated at actual purchase costs, while the work in process and finished goods are stated at standard costs and subsequently adjusted to weighted-average costs at the end of each month. The cost of work in progress and finished goods comprises raw materials, direct labor, other direct costs and related production overheads. Allocation of fixed production overheads to the costs of conversion is based on the normal capacity of the production facilities. Cost associated with underutilized capacity is expensed as incurred. Inventories are valued at the lower of cost and net realizable value item by item. Net realizable value 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.
(11) | Non-current Assets Held for Sale (Disposal Group) |
Non-current assets (disposal group) are classified as held for sale if they are available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets (disposal group) and that are highly probable to complete the sale within one year from the date of classification. Non-current assets (disposal group) classified as held for sale are measured at the lower of their carrying amounts and fair values less costs to sell. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.
Impairment losses of non-current assets held for sale (disposal group) are recognized in the income statement in the current period for the excess of the carrying amounts over fair values less costs to sell. Any subsequent increase in fair value less cost to sell an asset up to the cumulative impairment loss previously recognized in accordance with the IAS 36, “Impairment of Assets” (IAS 36) would be recognized as a gain.
(12) | Investments Accounted For Under the Equity Method |
The Company’s investments in associates and joint ventures are accounted for using the equity method other than those that meet the criteria to be classified as non-current assets held for sale.
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of an entity, but is not control or joint control over those policies.
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A joint venture is a type of joint arrangement whereby the Company that has joint control of the arrangement has rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement where no single party controls the arrangement on its own, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Any difference between the acquisition cost and the Company’s share of the net fair value of the identifiable assets and liabilities of associates and joint ventures is accounted for as follows:
a. | Any excess of the acquisition cost over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill and is included in the carrying amount of the investment. Amortization of goodwill is not permitted. |
b. | Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture over the acquisition cost, after reassessing the fair value, is recognized as a gain in profit or loss on the acquisition date. |
Under the equity method, the investments in associates and joint ventures are carried on the balance sheet at cost plus post acquisition changes in the Company’s share of profit or loss and other comprehensive income of associates and joint ventures. The Company’s share of changes in associates’ and joint ventures’ profit or loss and other comprehensive income are recognized directly in profit or loss and other comprehensive income, respectively, of the Company. Distributions received from an associate or a joint venture reduce the carrying amount of the investment. Any unrealized gains and losses resulting from transactions between the Company and the associate or the joint venture are eliminated to the extent of the Company’s interest in the associate or the joint venture.
Financial statements of associates and joint ventures are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.
Upon an associate’s issuance of new shares, if the Company takes up more shares than its original proportionate holding while maintaining its significant influence over that associate, such increase would be accounted for as an acquisition of an additional equity interest in the associate. Upon an associate’s issuance of new shares, if the Company does not take up proportionate shares and reduces its shareholding percentage while maintaining its significant influence over that associate, a proportionate share of the gain or loss previously recognized in other comprehensive income is reclassified to profit and loss. Any remaining differences will be charged to additional paid-in capital. When a change in equity of an associate is not resulted from its profit or loss or other comprehensive income, and such changes do not affect the Company’s ownership percentage, the Company recognizes its proportionate share of all related changes in equity. Accordingly, upon disposal of the associate, the Company reclassifies the aforementioned additional paid-in capital to profit or loss on a pro rata basis.
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The Company ceases to use the equity method upon loss of significant influence over an associate. Any difference between the carrying amount of the investment in an associate upon loss of significant influence and the fair value of the retained investment plus proceeds from disposal will be recognized in profit or loss. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Company continues to apply the equity method and does not remeasure the retained interest.
The Company determines at each reporting date whether there is any objective evidence that the investments in associates and joint ventures are impaired. An impairment loss, being the difference between the recoverable amount of the associate and joint venture and its carrying value, is recognized in profit or loss in the statement of comprehensive income and forms part of the carrying amount of the investments.
(13) | Property, Plant and Equipment |
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any, and any borrowing costs incurred for long-term construction projects are capitalized if the recognition criteria are met. Significant renewals, improvements and major inspections meeting the recognition criteria are treated as capital expenditures, and the carrying amounts of those replaced parts are derecognized. Maintenance and repairs are recognized in profit or loss as incurred. Any gain or loss arising from derecognition of the assets is recognized in other operating income and expenses.
Depreciation is calculated on a straight-line basis over the estimated economic lives. A significant part of an item of property, plant and equipment which has a different useful life from the remainder of the item is depreciated separately.
The depreciation methods, useful lives and residual values for the assets are reviewed at each fiscal year end, and the differences resulted from the previous estimation are recorded as changes in accounting estimates.
Except for land, which is not depreciated, the estimated economic lives of the assets are as follows:
Buildings | 20~56 years | |
Machinery and equipment | 3~11 years | |
Transportation equipment | 5~7 years | |
Furniture and fixtures | 1~9 years | |
Leasehold improvement | The shorter of lease terms or economic useful lives |
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(14) | Intangible Assets |
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets which fail to meet the recognition criteria are not capitalized and the expenditures are reflected in profit or loss in the period incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each fiscal year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and is treated as changes in accounting estimates.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are recognized in other operating income and expenses.
Accounting policies of the Company’s intangible assets are summarized as follows:
a. | Goodwill arising from business combination is not amortized, and is tested for impairment annually or more frequently if events or changes in circumstances suggest that the carrying amount may not be recoverable. If an event occurs or circumstances change which indicates that the goodwill is impaired, an impairment loss is recognized. Goodwill impairment losses cannot be reversed once recognized. |
b. | Software is amortized over 1~6 years on a straight-line basis. |
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c. | Patent and technology license fee: Upon signing of contract and obtaining the right to intellectual property, any portion attributable to non-cancellable and mutually agreed future fixed license fees for patent and technology is discounted, and recognized as an intangible asset and related liability. The cost of the intangible asset is not revalued once determined on initial recognition, and is depreciated over the economic life (5~10 years) on a straight-line basis. Interest expenses from the related liability are recognized and calculated based on the EIR method. Based on the timing of payments, the liability is classified as current and non-current. |
d. | Others are mainly the intellectual property license fees, amortized over the shorter of the contract term or estimated economic life (3 years) of the related technology on a straight-line basis. |
(15) | Impairment of Non-Financial Assets |
The Company assesses at each reporting date whether there is an indication that an asset in the scope of IAS 36 may be impaired. If any indication exists, the Company completes impairment testing for the CGU to which the individual assets belong. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The recoverable amount of an individual asset or a CGU is the higher of its fair value less costs to sell and its value in use. If circumstances indicate that previously recognized impairment losses may no longer exist or may have decreased at each reporting date, the Company re-assesses the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognized for the asset in prior years.
A CGU, or group of CGU, to which goodwill has been allocated is tested for impairment annually at the same time every year, irrespective of whether there is any indication of impairment. Where the carrying amount of a CGU (including the carrying amount of goodwill) exceeds its recoverable amount, the CGU is considered impaired. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the CGU (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods.
The recognition or reversal of impairment losses is classified as other operating income and expenses.
35
(16) | Bonds |
Convertible bonds
UMC evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, UMC assesses if the economic characteristics and risks of the put and call options embedded in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.
For the liability component excluding the derivatives, its fair value is determined based on the effective interest rate applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost using the EIR method before the instrument is converted or settled. For the embedded derivative that is not closely related to the host contract, it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies as an equity component. The equity component is recognized initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IAS 39.
If the convertible bondholders exercise their conversion right before maturity, UMC shall adjust the carrying amount of the liability component. The adjusted carrying amount of the liability component at conversion and the carrying amount of equity component are credited to common stock and additional paid-in capital—premiums. No gain or loss is recognized upon bond conversion.
In addition, the liability component of convertible bonds is classified as a current liability if within 12 months the bondholders may exercise the put right. After the put right expires, the liability component of the convertible bonds should be reclassified as a non-current liability if it meets the definition of a non-current liability in all other respects.
Exchangeable bonds
In accordance with IAS 39, if the economic characteristics and risks of the embedded call or put options are not clearly and closely related to the host contract, the derivative financial instruments embedded in exchangeable bonds would be recognized separately as financial assets or liabilities at fair value through profit or loss.
36
UMC also has exchangeable bonds where the bondholders may exchange the bonds into ordinary shares of certain public entities which UMC holds as available-for-sale financial assets. When exchangeable bondholders exercise their right to exchange their bonds for reference shares, the book value of the bonds is offset against the book value of the investments in reference shares and the related stockholders’ equity accounts, with the difference recognized as a gain or loss on disposal of investments.
Both the host contract and bifurcated embedded derivative financial instrument in exchangeable bonds are classified as current liabilities if the bondholders have the right to demand settlement by exercising the exchange option of the bonds.
(17) | Post-Employment Benefits |
All regular employees are entitled to a defined benefit pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name with the Bank of Taiwan and hence, not associated with the Company. Therefore, fund assets are not to be included in the Company’s consolidated financial statements. Pension benefits for employees of the overseas branch and subsidiaries are provided in accordance with the local regulations.
The Labor Pension Act of the R.O.C. (the Act), which adopts a defined contribution plan, became effective on July 1, 2005. Employees eligible for the Labor Standards Law, a defined benefit plan, were allowed to elect either the pension calculation under the Act or continue to be subject to the pension calculation under the Labor Standards Law. Those employees that elected to be subject to the Act will have their seniority achieved under the Labor Standards Law retained upon election of the Act, and the Company will make monthly contributions and recognize an expense of no less than 6% of these employees’ monthly wages to the employees’ individual pension accounts. Overseas subsidiaries and branches make contributions to the respective benefit plans based on the specific percentage requirement of local regulations. A post-employment benefit plan that is classified as a defined benefit plan is accounted for under the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. The Company recognizes all actuarial gains and losses in the periods which they occur in other comprehensive income, which then are immediately recognized in retained earnings.
(18) | Treasury Stock |
UMC’s own equity instruments repurchased (treasury shares) are recognized at repurchase cost and deducted from equity. Any difference between the carrying amount and the consideration is recognized in equity.
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(19) | Share-Based Payment Transactions |
The cost of equity-settled transactions between the Company and its employees is measured based on the fair value at the date on which they are granted. The fair value of the equity instruments is determined using an appropriate pricing model.
The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the periods in which the performance and/or service conditions are being fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has passed and the Company’s best estimate of the quantity of equity instruments that will ultimately vest. The charge to profit or loss for a period represents the movement in cumulative expense recognized between the beginning and the end of that period.
No expense will be recognized for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional upon a market or non-vesting condition. These are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it fully vests on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award substitutes for the cancelled award and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
38
(20) | Revenue Recognition |
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The recognition criteria and methods are described below:
Sales revenue
Revenue from sale of goods is recognized when all the following conditions have been satisfied:
a. | the significant risks and rewards of ownership of the goods have been transferred to the buyer; |
b. | neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold have been retained; |
c. | the amount of revenue can be measured reliably; |
d. | it is probable that the economic benefits associated with the transaction will flow to the entity; and |
e. | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Sales returns and discounts are estimated based on customer complaints, historical experiences and any other known factors that might significantly affect the estimation and recorded in the same period in which sales are made.
Interest income
For financial assets measured at amortized cost (including held-to-maturity financial assets), interest income is recorded using the effective interest rate and recognized in profit or loss. Interest income from financial assets at fair value through profit or loss is recognized in the income statement as part of other income when the Company’s right to receive payments is established.
Dividends
Revenue is recognized when the Company’s right to receive the dividends is established.
39
(21) | Income Tax |
Income tax expense (benefit) is the aggregate amount of current income tax and deferred income tax included in the determination of profit or loss for the period.
Current income tax
Current income tax assets and liabilities for the current period and prior periods are measured using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity rather than profit or loss.
The additional 10% income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the stockholders’ meeting.
Deferred income tax
Deferred income tax is determined using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts in financial statements at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
a. | When the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; |
b. | In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not be reversed in the foreseeable future. |
40
Deferred tax assets are recognized for all deductible temporary differences, the carryforward of unused tax losses and unused tax credits, to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and the carryforward of unused tax losses and unused tax credits can be utilized, except:
a. | Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; |
b. | In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. |
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is not recognized in profit or loss but rather in other comprehensive income or directly in equity. Deferred tax assets are reassessed and recognized at each reporting date. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities offset each other, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at the acquisition date, might be realized and recognized subsequently as follows:
a. | Acquired deferred tax benefits recognized with in the measured period that result from new information about facts and circumstances that existed at the acquisition date shall be applied to reduce the carrying amount of any goodwill related to that acquisition. If the carrying amount of that goodwill is zero, any remaining deferred tax benefits shall be recognized in profit or loss; |
b. | All other acquired deferred tax benefits realized shall be recognized in profit or loss, other comprehensive income or equity. |
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(22) | Earnings per Share |
Earnings per share is computed according to IAS 33, “Earnings Per Share”. Basic earnings per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the current reporting period. Diluted earnings per share is computed by taking basic earnings per share into consideration plus additional ordinary shares that would have been outstanding if the dilutive share equivalents had been issued. Net income is also adjusted for interest and other income or expenses derived from any underlying dilutive share equivalents. The weighted-average of outstanding shares is adjusted retroactively for stock dividends and employee stock bonus issues.
5. | SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS |
The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, the accompanying disclosures and the disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation for uncertainty at the reporting date, that would have a significant risk for a material adjustment to the carrying amounts of assets or liabilities within the next fiscal year are discussed below.
The Company bases its assumptions and estimates on information available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(1) | The Fair Value of Financial Instruments |
Where the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example, the discounted cash flows model) or the market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.
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(2) | Derivative Instruments |
The embedded derivative features contained in exchangeable bonds are bifurcated and separately accounted for if the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to those of the host contracts. Those bifurcated embedded derivatives are fair valued at the end of each reporting period by using the option pricing model with the changes in fair value included in earnings. The valuation model uses the market-based observable inputs including share price, volatility, credit spread and swap rates.
(3) | Inventories |
Inventories are valued at lower of cost and net realizable value item by item. Net realizable value 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. Please refer to Note 6(4). Costs of completion include direct labor and overhead, including depreciation and maintenance of production equipment, indirect labor costs, indirect material costs, supplies, utilities and royalties that is expected to be incurred at normal production level. The Company estimates normal production level taking into account loss of capacity resulting from planned maintenance, based on historical experience and current production capacity.
(4) | Post-Employment Benefits |
Cost of post-employment benefit pension plan and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The assumptions used for measuring pension cost and the present value of the pension obligation are disclosed in Note 6(14).
In determining the appropriate discount rate, management considers the interest rates of the government bonds extrapolated from maturity corresponding to the expected duration of the defined benefit obligation. As for the rate of future salary increase, management takes account of past experiences, comparisons within the industry and the geographical region, inflation and the discount rate.
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(5) | Share-Based Payment Transactions |
The Company measures the cost of equity-settled transactions with employees based on reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 6(16).
(6) | Revenue Recognition-Sales Returns and Discounts |
The Company estimates sales returns and discounts based on customer complaints, historical experience and other known factors that might significantly affect the estimation.
(7) | Impairment of Property, Plant and Equipment |
At each reporting date or whenever events indicate that the asset’s value has declined or significant changes in the market with an adverse effect have taken place, the Company assesses whether there is an indication that an asset in the scope of IAS 36 may be impaired. If any indication exists, the Company completes impairment testing for the CGU to which the individual assets belong. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The recoverable amount of an individual asset or CGU is the higher of fair value less costs of disposal and its value in use. The fair value less costs of disposal is based on best information available to reflect the amount that an entity could obtain from the disposal of the asset in an orderly transaction between market participants, after deducting the costs of disposal. The value in use is measured at the net present value of the future cash flows the entity expects to derive from the asset or CGU. Cash flow projection involves subjective judgments and estimates which include the estimated useful lives of property, plant and equipment, capacity that generates future cash flows, capacity of physical output, potential fluctuations of economic cycle in the industry and the Company’s operating situation.
(8) | Income Tax |
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and different interpretations of tax regulations made by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Company.
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Deferred tax assets are recognized for all carryforward of unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences.
(9) | Classification of Joint Arrangements |
The Company holds significant percentage of the voting rights of its joint arrangements. The Company has joint control over these arrangements as under the contractual agreements, unanimous consent is required from all parties to the agreements for all relevant activities.
The Company’s joint arrangements are structured as limited companies and provide the Company and the parties to the agreements with rights to the net assets of the limited companies under the arrangements. Therefore, these entities are classified as joint ventures of the Company.
6. | CONTENTS OF SIGNIFICANT ACCOUNTS |
(1) | Cash and Cash Equivalents |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Cash on hand | $ | 3,685 | $ | 3,878 | $ | 3,556 | ||||||
Checking and savings accounts | 22,215,359 | 10,389,664 | 13,903,834 | |||||||||
Time deposits | 28,426,364 | 30,782,070 | 34,780,204 | |||||||||
Repurchase agreements collateralized by government bonds and corporate bonds | 2,986,648 | 4,525,723 | 5,227,561 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 53,632,056 | $ | 45,701,335 | $ | 53,915,155 | ||||||
|
|
|
|
|
|
Please refer to the consolidated statements of cash flows for the reconciliation of the balances of cash and cash equivalents on the consolidated statements of cash flows and on the consolidated balance sheets.
45
(2) | Financial Assets at Fair Value through Profit or Loss |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Designated financial assets at fair value through profit or loss | ||||||||||||
Convertible bonds | $ | 147,922 | $ | 150,550 | $ | 98,052 | ||||||
|
|
|
|
|
| |||||||
Financial assets held for trading | ||||||||||||
Listed stocks | 363,306 | 246,183 | 458,476 | |||||||||
Corporate bonds | 386,752 | 388,628 | 398,681 | |||||||||
Forward exchange contracts | 47,292 | — | — | |||||||||
|
|
|
|
|
| |||||||
Subtotal | 797,350 | 634,811 | 857,157 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 945,272 | $ | 785,361 | $ | 955,209 | ||||||
|
|
|
|
|
| |||||||
Current | $ | 900,934 | $ | 740,129 | $ | 857,157 | ||||||
Noncurrent | 44,338 | 45,232 | 98,052 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 945,272 | $ | 785,361 | $ | 955,209 | ||||||
|
|
|
|
|
|
(3) | Accounts Receivable, Net |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Accounts receivable | $ | 21,583,112 | $ | 23,307,624 | $ | 19,858,111 | ||||||
Less: allowance for sales returns and discounts | (766,810 | ) | (828,029 | ) | (466,240 | ) | ||||||
Less: allowance for doubtful accounts | (262,552 | ) | (272,324 | ) | (564,570 | ) | ||||||
|
|
|
|
|
| |||||||
Net | $ | 20,553,750 | $ | 22,207,271 | $ | 18,827,301 | ||||||
|
|
|
|
|
|
Aging analysis of account receivables:
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Neither past due nor impaired | $ | 18,163,099 | $ | 17,067,173 | $ | 16,444,680 | ||||||
|
|
|
|
|
| |||||||
Past due but not impaired: | ||||||||||||
£ 30 days | 1,970,476 | 4,409,411 | 2,183,464 | |||||||||
31 to 60 days | 199,163 | 313,494 | 166,572 | |||||||||
61 to 90 days | 35,209 | 230,086 | 24,123 | |||||||||
91 to 120 days | 19,510 | 32,858 | 8,462 | |||||||||
> 120 days | 166,293 | 154,249 | — | |||||||||
|
|
|
|
|
| |||||||
Subtotal | 2,390,651 | 5,140,098 | 2,382,621 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 20,553,750 | $ | 22,207,271 | $ | 18,827,301 | ||||||
|
|
|
|
|
|
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Movement on allowance for individually evaluated doubtful accounts:
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Beginning balance | $ | 272,324 | $ | 574,421 | ||||
Net charge for the period | (9,772 | ) | (9,851 | ) | ||||
|
|
|
| |||||
Ending balance | $ | 262,552 | $ | 564,570 | ||||
|
|
|
|
The terms for third party domestic sales were net 30~60 days, while the collection periods for third party overseas sales were month end 30~60 days.
The impairment losses assessed individually as of March 31, 2015 and 2014 primarily resulted from the financial difficulties of the counter trading parties and the amounts recognized were the difference between the carrying amount of the accounts receivable and the present value of expected collectable amounts. The Company has no collateral with respect to those accounts receivables.
(4) | Inventories, Net |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Raw materials | $ | 2,242,771 | $ | 2,287,656 | $ | 2,560,647 | ||||||
Supplies and spare parts | 2,770,016 | 2,631,200 | 2,512,616 | |||||||||
Work in process | 11,067,383 | 10,453,741 | 9,044,301 | |||||||||
Finished goods | 1,182,857 | 1,426,188 | 2,275,336 | |||||||||
|
|
|
|
|
| |||||||
Total | 17,263,027 | 16,798,785 | 16,392,900 | |||||||||
Less: allowance for inventory valuation losses | (1,621,676 | ) | (1,556,553 | ) | (1,971,459 | ) | ||||||
|
|
|
|
|
| |||||||
Net | $ | 15,641,351 | $ | 15,242,232 | $ | 14,421,441 | ||||||
|
|
|
|
|
|
a. | For the three-month periods ended March 31, 2015 and 2014, the Company recognized NT$27,652 million and NT$25,055 million, respectively, in operating costs, of which NT$121 million and NT$20 million, respectively, were loss as a result of the net realizable value of inventory being lower than its cost. |
b. | Inventories were not pledged. |
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(5) | Available-For-Sale Financial Assets |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Common stocks | $ | 25,725,870 | $ | 23,510,084 | $ | 23,575,634 | ||||||
Preferred stocks | 816,808 | 781,148 | 312,600 | |||||||||
Depositary receipts | 200,237 | — | — | |||||||||
Funds | 78,191 | 70,872 | 136,411 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 26,821,106 | $ | 24,362,104 | $ | 24,024,645 | ||||||
|
|
|
|
|
| |||||||
Current | $ | — | $ | — | $ | 2,313,818 | ||||||
Noncurrent | 26,821,106 | 24,362,104 | 21,710,827 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 26,821,106 | $ | 24,362,104 | $ | 24,024,645 | ||||||
|
|
|
|
|
|
UMC issued bonds that were exchangeable at any time on or after January 1, 2010 and prior to November 22, 2014, for common stocks originally owned and classified as available-for-sale financial assets, noncurrent. Therefore, these common stocks were classified as current assets since the exchangeable date. The bonds matured on December 2, 2014 and UMC redeemed all the remaining bonds.
(6) | Financial Assets Measured at Cost, Non-current |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Common stocks | $ | 599,618 | $ | 602,429 | $ | 626,733 | ||||||
Preferred stocks | 3,121,643 | 3,100,211 | 3,122,595 | |||||||||
Funds | 134,107 | 130,366 | 419,682 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 3,855,368 | $ | 3,833,006 | $ | 4,169,010 | ||||||
|
|
|
|
|
|
Since these financial assets mostly consist of non-publicly traded stocks and private venture funds, for which the fair value cannot be reliably measured due to lack of sufficient financial information available, the Company measures these financial assets at cost.
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(7) | Investments Accounted For Under the Equity Method |
a. | Details of investments accounted for under the equity method are as follows: |
As of | ||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||
Investee companies | Amount | Percentage of ownership or voting rights | Amount | Percentage of ownership or voting rights | ||||||||||||
Unlisted companies | ||||||||||||||||
MOS ART PACK CORP. (MAP) (Note A) | $ | 238,373 | 72.98 | $ | 238,373 | 72.98 | ||||||||||
UNITED LIGHTING OPTO-ELECTRONIC INC. (UNITED LIGHTING) (Note B) | 9,586 | 55.25 | 9,586 | 55.25 | ||||||||||||
SHANDONG HUAHONG ENERGY INVEST CO., INC. (SHANDONG HUAHONG) (Note C) | 710,574 | 50.00 | 731,565 | 50.00 | ||||||||||||
WINAICO SOLAR PROJEKT 1 GMBH (Note C) | 30,036 | 50.00 | 35,532 | 50.00 | ||||||||||||
LIST EARN ENTERPRISE INC. | 10,441 | 49.00 | 10,660 | 49.00 | ||||||||||||
MTIC HOLDINGS PTE. LTD. | 99,277 | 45.44 | 105,872 | 45.44 | ||||||||||||
YUNG LI INVESTMENTS, INC. | 233,281 | 45.16 | 219,157 | 45.16 | ||||||||||||
MEGA MISSION LIMITED PARTNERSHIP | 2,016,474 | 45.00 | 2,052,269 | 45.00 | ||||||||||||
WINAICO IMMOBILIEN GMBH (Note C) | 211,873 | 44.78 | 256,064 | 44.78 | ||||||||||||
UNITECH CAPITAL INC. | 696,358 | 42.00 | 682,191 | 42.00 | ||||||||||||
HSUN CHIEH INVESTMENT CO., LTD. | 3,935,110 | 36.49 | 3,749,009 | 36.49 | ||||||||||||
CTC CAPITAL PARTNERS I, L.P. | 197,984 | 31.40 | 183,681 | 31.40 | ||||||||||||
TRANSLINK CAPITAL PARTNERS III, L.P. (Note D) | 200,699 | 27.29 | 199,443 | 29.29 | ||||||||||||
UNITED LED CORPORATION HONG KONG LIMITED | 526,521 | 25.14 | 518,495 | 29.03 | ||||||||||||
ACHIEVE MADE INTERNATIONAL LTD. | 119,411 | 23.32 | 121,567 | 23.32 | ||||||||||||
TRANSLINK CAPITAL PARTNERS I, L.P. (Note D) | 101,154 | 10.38 | 124,249 | 10.38 | ||||||||||||
|
|
|
| |||||||||||||
Total | $ | 9,337,152 | $ | 9,237,713 | ||||||||||||
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|
|
49
As of | ||||||||
March 31, 2014 | ||||||||
Investee companies | Amount | Percentage of ownership or voting rights | ||||||
Unlisted companies | ||||||||
MAP (Note A) | $ | 238,373 | 72.98 | |||||
UNITED LIGHTING (Note B) | 9,586 | 55.25 | ||||||
SHANDONG HUAHONG (Note C) | 697,210 | 50.00 | ||||||
WINAICO SOLAR PROJEKT 1 GMBH (Note C) | 47,656 | 50.00 | ||||||
ACHIEVE MADE INTERNATIONAL LTD. | 121,478 | 49.38 | ||||||
LIST EARN ENTERPRISE INC. | 10,018 | 49.00 | ||||||
MTIC HOLDINGS PTE. LTD. | 155,175 | 45.44 | ||||||
YUNG LI INVESTMENTS, INC. | 275,728 | 45.16 | ||||||
MEGA MISSION LIMITED PARTNERSHIP | 1,847,867 | 45.00 | ||||||
WINAICO IMMOBILIEN GMBH (Note C) | 314,161 | 44.78 | ||||||
UNITECH CAPITAL INC. | 717,683 | 42.00 | ||||||
UNITED LED CORPORATION HONG KONG LIMITED | 478,167 | 39.13 | ||||||
TRANSLINK CAPITAL PARTNERS III, L.P. (Note D) | 55,964 | 38.45 | ||||||
HSUN CHIEH INVESTMENT CO., LTD. | 3,303,439 | 36.49 | ||||||
UC FUND II | 4,007 | 35.45 | ||||||
EXOJET TECHNOLOGY CORP. | 81,840 | 33.10 | ||||||
CTC CAPITAL PARTNERS I, L.P. | 210,711 | 31.40 | ||||||
TRANSLINK CAPITAL PARTNERS I, L.P. (Note D) | 104,987 | 10.38 | ||||||
|
| |||||||
Total | $ | 8,674,050 | ||||||
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|
50
Note A: | On March 10, 2011, MAP filed for liquidation through a decision at its stockholders’ meeting. The liquidation has not been completed as of March 31, 2015. | |
Note B: | On June 19, 2012, UNITED LIGHTING filed for liquidation through a decision at its stockholders’ meeting. The liquidation has not been completed as of March 31, 2015. | |
Note C: | The Company uses the equity method to account for its investment in SHANDONG HUAHONG, WINAICO SOLAR PROJEKT 1 GMBH and WINAICO IMMOBILIEN GMBH, which are joint ventures. | |
Note D: | The Company follows international accounting practices in equity accounting for limited partnerships because no equivalent type of business exists domestically. Therefore, the Company uses the equity method to account for these investees. |
Certain investments accounted for under the equity method were reviewed by other independent accountants. Shares of investment income (loss) from these associates and joint ventures amounted to NT$(9) million and NT$16 million for the three-month periods ended March 31, 2015 and 2014, respectively. Share of other comprehensive income from these associates and joint ventures amounted to NT$209 million and NT$270 million for the three-month periods ended March 31, 2015 and 2014, respectively. The balances of investments accounted for under the equity method were NT$4,631 million, NT$4,537 million and NT$4,021 million as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively.
No investment accounted for using the equity method was pledged.
b. | Financial information of associates and joint ventures: |
There is no individually significant associate or joint venture for the Company. When an associate or a joint venture is a foreign operation, and the functional currency of the foreign entity is different from the Company, an exchange difference arising from translation of the foreign entity will be recognized in other comprehensive income (loss). Such exchange differences recognized in other comprehensive income (loss) in the financial statements for the three-month period ended March 31, 2015 were NT$(61) million, which were not included in the following table.
51
(i) | The aggregate amount of the Company’s share of its associates that are accounted for using the equity method was as follows: |
For the three-month period ended March 31, 2015 | ||||
Net income | $ | 66,614 | ||
Other comprehensive income | 239,597 | |||
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| |||
Total comprehensive income | $ | 306,211 | ||
|
|
(ii) | The Company began to use the equity method to account for its investments in SHANDONG HUAHONG, WINAICO SOLAR PROJEKT 1 GMBH and WINAICO IMMOBILIEN GMBH, on January 7, 2011, December 7, 2011 and March 31, 2013, respectively. The aggregate amount of the Company’s share of its joint ventures that are accounted for using the equity method was as follows: |
For the three-month period ended March 31, 2015 | ||||
Net loss | $ | (24,808 | ) | |
Other comprehensive income (loss) | — | |||
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| |||
Total comprehensive loss | $ | (24,808 | ) | |
|
|
c. | One of UMC’s associate, HSUN CHIEH INVESTMENT CO., LTD., held 441 million shares of UMC’s stock as of March 31, 2015, December 31, 2014 and March 31, 2014. Another associate, MEGA MISSION LIMITED PARTNERSHIP, held 20 million shares, 29 million shares and 0 share of UMC’s stock as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. |
(8) | Property, Plant and Equipment |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Land | $ | 1,314,402 | $ | 1,314,402 | $ | 1,915,066 | ||||||
Buildings | 12,637,063 | 12,955,815 | 13,869,643 | |||||||||
Machinery and equipment | 123,464,188 | 119,069,687 | 124,520,084 | |||||||||
Transportation equipment | 14,562 | 14,630 | 14,988 | |||||||||
Furniture and fixtures | 907,669 | 942,520 | 1,137,157 | |||||||||
Leasehold improvement | 11,349 | 12,210 | 979,978 | |||||||||
Construction in progress and equipment awaiting inspection | 27,607,068 | 32,380,979 | 15,575,846 | |||||||||
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|
|
|
|
| |||||||
Net | $ | 165,956,301 | $ | 166,690,243 | $ | 158,012,762 | ||||||
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|
|
|
52
Cost:
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||||||||||||||||||
As of January 1, 2015 | $ | 1,314,402 | $ | 25,837,548 | $ | 662,490,428 | $ | 67,683 | $ | 5,359,909 | $ | 68,280 | $ | 32,380,979 | $ | 727,519,229 | ||||||||||||||||
Additions | — | — | — | — | — | — | 9,437,301 | 9,437,301 | ||||||||||||||||||||||||
Disposals | — | — | (470,335 | ) | (815 | ) | (31,616 | ) | — | — | (502,766 | ) | ||||||||||||||||||||
Transfers and reclassifications | — | 9,279 | 14,861,051 | 1,314 | 69,981 | — | (14,168,498 | ) | 773,127 | |||||||||||||||||||||||
Exchange effect | — | (52,496 | ) | (1,440,198 | ) | (149 | ) | (4,438 | ) | (527 | ) | (42,714 | ) | (1,540,522 | ) | |||||||||||||||||
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| |||||||||||||||||
As of March 31, 2015 | $ | 1,314,402 | $ | 25,794,331 | $ | 675,440,946 | $ | 68,033 | $ | 5,393,836 | $ | 67,753 | $ | 27,607,068 | $ | 735,686,369 | ||||||||||||||||
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|
|
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|
| |||||||||||||||||
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||||||||||||||||||
As of January 1, 2014 | $ | 1,925,691 | $ | 25,846,909 | $ | 630,966,729 | $ | 66,554 | $ | 5,285,463 | $ | 1,800,921 | $ | 19,368,388 | $ | 685,260,655 | ||||||||||||||||
Additions | — | — | — | — | — | — | 4,166,796 | 4,166,796 | ||||||||||||||||||||||||
Disposals | (10,625 | ) | — | (737,858 | ) | — | (6,097 | ) | (2,880 | ) | — | (757,460 | ) | |||||||||||||||||||
Transfers and reclassifications | — | 419,183 | 7,856,330 | 726 | 74,981 | 5,972 | (8,038,153 | ) | 319,039 | |||||||||||||||||||||||
Exchange effect | — | 111,566 | 2,961,287 | 209 | 12,222 | 807 | 78,815 | 3,164,906 | ||||||||||||||||||||||||
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|
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|
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|
|
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|
| |||||||||||||||||
As of March 31, 2014 | $ | 1,915,066 | $ | 26,377,658 | $ | 641,046,488 | $ | 67,489 | $ | 5,366,569 | $ | 1,804,820 | $ | 15,575,846 | $ | 692,153,936 | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation and Impairment:
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||||||||||||||||||
As of January 1, 2015 | $ | — | $ | 12,881,733 | $ | 543,420,741 | $ | 53,053 | $ | 4,417,389 | $ | 56,070 | $ | — | $ | 560,828,986 | ||||||||||||||||
Depreciation | — | 289,641 | 9,935,610 | 1,137 | 83,614 | 795 | — | 10,310,797 | ||||||||||||||||||||||||
Impairment Loss | — | — | 225,530 | — | — | — | — | 225,530 | ||||||||||||||||||||||||
Disposals | — | — | (470,335 | ) | (622 | ) | (31,616 | ) | — | — | (502,573 | ) | ||||||||||||||||||||
Transfers and reclassifications | — | (305 | ) | (228 | ) | — | 20,533 | — | — | 20,000 | ||||||||||||||||||||||
Exchange effect | — | (13,801 | ) | (1,134,560 | ) | (97 | ) | (3,753 | ) | (461 | ) | — | (1,152,672 | ) | ||||||||||||||||||
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|
| |||||||||||||||||
As of March 31, 2015 | $ | — | $ | 13,157,268 | $ | 551,976,758 | $ | 53,471 | $ | 4,486,167 | $ | 56,404 | $ | — | $ | 569,730,068 | ||||||||||||||||
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|
53
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||||||||||||||||||
As of January 1, 2014 | $ | — | $ | 12,167,522 | $ | 505,795,974 | $ | 51,507 | $ | 4,136,774 | $ | 755,978 | $ | — | $ | 522,907,755 | ||||||||||||||||
Depreciation | — | 307,245 | 8,982,006 | 1,067 | 88,189 | 71,723 | — | 9,450,230 | ||||||||||||||||||||||||
Disposals | — | — | (730,596 | ) | — | (4,911 | ) | (2,880 | ) | — | (738,387 | ) | ||||||||||||||||||||
Transfers and reclassifications | — | — | (36,463 | ) | (240 | ) | (2,045 | ) | (775 | ) | — | (39,523 | ) | |||||||||||||||||||
Exchange effect | — | 33,248 | 2,515,483 | 167 | 11,405 | 796 | — | 2,561,099 | ||||||||||||||||||||||||
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| |||||||||||||||||
As of March 31, 2014 | $ | — | $ | 12,508,015 | $ | 516,526,404 | $ | 52,501 | $ | 4,229,412 | $ | 824,842 | $ | — | $ | 534,141,174 | ||||||||||||||||
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|
|
During the three-month period ended March 31, 2015, UMC determined the machinery and equipment would not be utilized any longer due to physical damage. Therefore, UMC recorded an impairment loss of NT$226 million, the carrying value of this asset.
a. | The amounts of total interest expense before capitalization of borrowing costs were NT$177 million and NT$199 million for the three-month periods ended March 31, 2015 and 2014, respectively. Details of capitalized borrowing costs are as follows: |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Buildings | $ | 16,431 | $ | 15,997 | ||||
Machinery and equipment | 56,290 | 35,250 | ||||||
Others | 2,614 | 102 | ||||||
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|
| |||||
Total interest capitalized | $ | 75,335 | $ | 51,349 | ||||
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|
| |||||
Interest rates applied | 1.35%~2.10 | % | 1.44%~2.21 | % | ||||
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|
|
b. | Please refer to Note 8 for property, plant and equipment pledged as collateral. |
54
(9) | Intangible Assets |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Goodwill | $ | 7,791 | $ | 7,791 | $ | 50,863 | ||||||
Software | 245,330 | 215,998 | 158,835 | |||||||||
Patents and technology license fees | 2,902,160 | 3,021,788 | 3,310,707 | |||||||||
Others | 1,337,040 | 1,287,361 | 1,034,772 | |||||||||
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|
|
|
|
| |||||||
Net | $ | 4,492,321 | $ | 4,532,938 | $ | 4,555,177 | ||||||
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|
|
|
|
|
Cost:
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||||||||||||
As of January 1, 2015 | $ | 7,791 | $ | 490,744 | $ | 4,229,744 | $ | 2,904,499 | $ | 7,632,778 | ||||||||||
Additions | — | — | 53 | 268,502 | 268,555 | |||||||||||||||
Disposals | — | (91,590 | ) | — | (124,408 | ) | (215,998 | ) | ||||||||||||
Reclassifications | — | 65,251 | (53 | ) | — | 65,198 | ||||||||||||||
Exchange effect | — | (720 | ) | (12,380 | ) | (14 | ) | (13,114 | ) | |||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
As of March 31, 2015 | $ | 7,791 | $ | 463,685 | $ | 4,217,364 | $ | 3,048,579 | $ | 7,737,419 | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||||||||||||
As of January 1, 2014 | $ | 50,863 | $ | 432,462 | $ | 4,155,667 | $ | 2,110,088 | $ | 6,749,080 | ||||||||||
Additions | — | — | — | 116,537 | 116,537 | |||||||||||||||
Disposals | — | (46,860 | ) | — | (61,495 | ) | (108,355 | ) | ||||||||||||
Reclassifications | — | 16,672 | — | (61,700 | ) | (45,028 | ) | |||||||||||||
Exchange effect | — | 4,327 | 22,777 | 2 | 27,106 | |||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
As of March 31, 2014 | $ | 50,863 | $ | 406,601 | $ | 4,178,444 | $ | 2,103,432 | $ | 6,739,340 | ||||||||||
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|
|
|
|
|
|
|
|
|
Accumulated Amortization and Impairment:
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||||||||||||
As of January 1, 2015 | $ | — | $ | 274,746 | $ | 1,207,956 | $ | 1,617,138 | $ | 3,099,840 | ||||||||||
Amortization | — | 35,620 | 110,717 | 218,817 | 365,154 | |||||||||||||||
Disposals | — | (91,590 | ) | — | (124,408 | ) | (215,998 | ) | ||||||||||||
Exchange effect | — | (421 | ) | (3,469 | ) | (8 | ) | (3,898 | ) | |||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
As of March 31, 2015 | $ | — | $ | 218,355 | $ | 1,315,204 | $ | 1,711,539 | $ | 3,245,098 | ||||||||||
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|
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|
|
|
|
|
|
|
55
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||||||||||||
As of January 1, 2014 | $ | — | $ | 259,210 | $ | 754,898 | $ | 995,325 | $ | 2,009,433 | ||||||||||
Amortization | — | 33,329 | 109,474 | 196,530 | 339,333 | |||||||||||||||
Disposals | — | (46,860 | ) | — | (61,495 | ) | (108,355 | ) | ||||||||||||
Reclassifications | — | (1,564 | ) | — | (61,700 | ) | (63,264 | ) | ||||||||||||
Exchange effect | — | 3,651 | 3,365 | — | 7,016 | |||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
As of March 31, 2014 | $ | — | $ | 247,766 | $ | 867,737 | $ | 1,068,660 | $ | 2,184,163 | ||||||||||
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|
|
|
|
|
|
|
|
|
The amortization amounts of intangible assets are as follows:
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Operating cost | $ | 131,395 | $ | 127,450 | ||||
|
|
|
| |||||
Operating expense | $ | 233,759 | $ | 211,883 | ||||
|
|
|
|
The carrying amounts of significant technology license fees obtained by the Company were NT$2,752 million, NT$2,858 million and NT$3,129 million as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The remaining amortization periods were 7~8 years, 7~8 years and 8~9 years, respectively.
(10) | Short-term Loans |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Unsecured bank loans | $ | 7,216,847 | $ | 6,250,754 | $ | 7,516,080 | ||||||
|
|
|
|
|
|
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Interest rates applied | 0.61%~2.50% | 0.57%~2.07% | ||||||
|
|
|
|
a. | The Company’s unused short-term lines of credits amounted to NT$19,198 million, NT$19,650 million and NT$16,596 million as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. |
b. | Please refer to Note 8 for property, plant and equipment pledged as collateral for short-term loans. |
56
(11) | Financial Liabilities at Fair Value through Profit or Loss, Current |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Forward exchange contracts | $ | — | $ | 42,354 | $ | — | ||||||
Derivatives embedded in exchangeable bonds | — | — | 18,087 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | — | $ | 42,354 | $ | 18,087 | ||||||
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|
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|
|
|
(12) | Bonds Payable |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Unsecured domestic bonds payable | $ | 25,000,000 | $ | 25,000,000 | $ | 20,000,000 | ||||||
Unsecured exchangeable bonds payable | — | — | 3,785,387 | |||||||||
Unsecured convertible bonds payable | — | — | 10,198,815 | |||||||||
Less: Discounts on bonds payable | (21,153 | ) | (22,180 | ) | (300,888 | ) | ||||||
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|
|
|
|
| |||||||
Total | 24,978,847 | 24,977,820 | 33,683,314 | |||||||||
Less: Current or exchangeable portion due within one year | — | — | (13,703,067 | ) | ||||||||
|
|
|
|
|
| |||||||
Net | $ | 24,978,847 | $ | 24,977,820 | $ | 19,980,247 | ||||||
|
|
|
|
|
|
A. | On December 2, 2009, UMC issued SGX-ST listed zero coupon exchangeable bonds. The terms and conditions of the bonds are as follows: |
a. | Issue Amount: US$127.2 million |
b. | Period: December 2, 2009 ~ December 2, 2014 (Maturity date) |
c. | Redemption: |
i. | UMC may redeem the bonds, in whole or in part, after 12 months of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.5% per annum (the Early Redemption Price) if the closing price of the ordinary shares of Unimicron Technology Corporation (Unimicron) on the TWSE, translated into U.S. dollars at the prevailing exchange rate, for a period of 20 consecutive trading days, the last of which occurs not more than 10 days prior to the date upon which notice of such redemption is published, is at least 130% of the exchange price then in effect translated into U.S. dollars at the rate of NTD 32.197=USD 1.00. |
57
ii. | UMC may redeem the bonds, in whole, but not in part, at the Early Redemption Price if at least 90% in principal amount of the bonds has already been exchanged, redeemed or purchased and cancelled. |
iii. | UMC may redeem all, but not part, of the bonds, at the Early Redemption Price at any time, in the event of certain changes in the R.O.C.’s tax rules which would require UMC to gross up for payments of principal, or to gross up for payments of interest or premium. |
iv. | All, or any portion, of the bonds would be redeemable in U.S. dollars at the option of bondholders on December 2, 2011 at 99% of the principal amount. |
v. | Bondholders have the right to require UMC to redeem all or any portion of the bonds at the Early Redemption Price if the ordinary shares of the exchanged securities are officially delisted on the TWSE for a period of five consecutive trading days. |
vi. | In the event that a change of control as defined in the indenture of the bonds occurs to UMC or Unimicron, the bondholders shall have the right to require UMC to redeem the bonds, in whole or in part, at the Early Redemption Price. |
d. | Terms of Exchange |
i. | Underlying Securities: Ordinary shares of Unimicron |
ii. | Exchange Period: The bonds are exchangeable at any time on or after January 1, 2010 and prior to November 22, 2014, into Unimicron ordinary shares; provided, however, that if the exercise date falls within 5 business days from the beginning of, and during, any closed period, the right of the exchanging holder of the bonds to vote with respect to the shares it receives will be subject to certain restrictions. |
iii. | Exchange Price and Adjustment: The exchange price was originally NT$51.1875 per share, determined on the basis of a fixed exchange rate of NTD 32.197=USD 1.00. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture. |
e. | Redemption on the Maturity Date: |
The bonds matured on December 2, 2014, and UMC redeemed the bonds at 97.53% of the principal amount. The principal amount of the redeemed bonds was US$127.2 million.
58
B. | On December 2, 2009, UMC issued SGX-ST listed zero coupon exchangeable bonds. The terms and conditions of the bonds are as follows: |
a. | Issue Amount: US$80 million |
b. | Period: December 2, 2009 ~ December 2, 2014 (Maturity date) |
c. | Redemption: |
i. | UMC may redeem the bonds, in whole or in part, after 12 months of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.5% per annum (the Early Redemption Price) if the closing price of the ordinary shares of Novatek Microelectronics Corp., Ltd. (Novatek) on the TWSE, translated into U.S. dollars at the prevailing exchange rate, for a period of 20 consecutive trading days, the last of which occurs not more than 10 days prior to the date upon which notice of such redemption is published, is at least 130% of the exchange price then in effect translated into U.S. dollars at the rate of NTD 32.197=USD 1.00. |
ii. | UMC may redeem the bonds, in whole, but not in part, at the Early Redemption Price if at least 90% in principal amount of the bonds has already been exchanged, redeemed or purchased and cancelled. |
iii. | UMC may redeem all, but not part, of the bonds, at the Early Redemption Price at any time, in the event of certain changes in the R.O.C.’s tax rules which would require UMC to gross up for payments of principal, or to gross up for payments of interest or premium. |
iv. | All, or any portion, of the bonds would be redeemable in U.S. dollars at the option of bondholders on December 2, 2011 at 99% of the principal amount. |
v. | Bondholders have the right to require UMC to redeem all or any portion of the bonds at the Early Redemption Price if the ordinary shares of the exchanged securities are officially delisted on the TWSE for a period of five consecutive trading days. |
vi. | In the event that a change of control as defined in the indenture of the bonds occurs to UMC or Novatek, the bondholders shall have the right to require UMC to redeem the bonds, in whole or in part, at the Early Redemption Price. |
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d. | Terms of Exchange |
i. | Underlying Securities: Ordinary shares of Novatek |
ii. | Exchange Period: The bonds are exchangeable at any time on or after January 1, 2010 and prior to November 22, 2014, into Novatek ordinary shares; provided, however, that if the exercise date falls within 5 business days from the beginning of, and during, any closed period, the right of the exchanging holder of the bonds to vote with respect to the shares it receives will be subject to certain restrictions. |
iii. | Exchange Price and Adjustment: The exchange price was originally NT$108.58 per share, determined on the basis of a fixed exchange rate of NTD 32.197=USD 1.00. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture. |
e. | Exchange of the Bonds |
As of December 31, 2013, certain bondholders have exercised their rights to exchange their bonds with the total principal amount of US$77 million into Novatek shares. Gains from disposal of investments and gains from exchange of bonds from bondholders exercising exchange rights during the year ended December 31, 2013 amounted NT$1,137 million, and were recognized as non-operating income and expenses.
f. | Early Redemption of the Bonds: |
Since over 90% principal amount of the bonds has already been exchanged, UMC redeemed the bonds in whole at the Early Redemption Price on July 22, 2013. The remaining principal amount of the redeemed bonds was US$3 million. UMC recognized a gain of NT$45 million from the redemption as non-operating income and expenses.
C. | On May 24, 2011, UMC issued SGX-ST listed currency linked zero coupon convertible bonds. The terms and conditions of the bonds are as follows: |
a | Issue Amount: US$500 million |
b. | Period: May 24, 2011 ~ May 24, 2016 (Maturity date) |
c. | Redemption: |
i. | UMC may redeem the bonds, in whole or in part, after 3 years of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.25% per annum (the Early Redemption Amount) if the closing price of UMC’s ADS on the New York Stock Exchange, for a period of 20 out of 30 consecutive ADS trading days, the last of which occurs not more than 5 ADS trading days prior to the date upon which notice of such redemption is published, is at least 130% of the conversion price. The Early Redemption Price will be converted into NTD based on the Fixed Exchange Rate (NTD 28.846=USD 1.00), and this fixed NTD amount will be converted using the prevailing rate at the time of redemption for payment in USD. |
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ii. | UMC may redeem the bonds, in whole, but not in part, at the Early Redemption Amount if at least 90% in principal amount of the bonds has already been converted, redeemed or repurchased and cancelled. |
iii. | UMC may redeem all, but not part, of the bonds, at the Early Redemption Amount at any time, in the event of certain changes in the R.O.C.’s tax rules which would require UMC to gross up for payments of principal, or to gross up for payments of interest or premium. |
iv. | All or any portion of the bonds will be redeemable at Early Redemption Amount at the option of bondholders on May 24, 2014 at 99.25% of the principal amount. |
v. | Bondholders have the right to require UMC to redeem all of the bonds at the Early Redemption Amount if UMC’s ADS cease to be listed or admitted for trading on the New York Stock Exchange, or UMC’s ordinary shares cease to be listed on the Taiwan Stock Exchange. |
vi. | In the event that a change of control as defined in the indenture of the bonds occurs to UMC, the bondholders shall have the right to require UMC to redeem the bonds, in whole but not in part, at the Early Redemption Amount. |
d. | Terms of Conversion |
i. | Underlying Securities: ADS of UMC |
ii. | Conversion Period: The bonds are convertible at any time on or after July 4, 2011 and prior to May 14, 2016, into UMC’s ADS; provided, however, that if the exercise date falls within 8 business days from the beginning of, and during, any closed period, the right of the converting holder of the bonds to vote with respect to the ADS it receives will be subject to certain restrictions. |
iii. | Conversion Price and Adjustment: The conversion price was originally USD 3.77 per ADS, determined on the basis of a Fixed Exchange Rate of NTD 28.846=USD 1.00. The conversion price will be subject to adjustments upon the occurrence of certain events set out in the indenture. |
e. | Early Redemption of the Bonds: |
UMC redeemed bonds with principal amount of US$324 million as requested by investors on May 27, 2014. The associated convertible rights were deemed cancelled and the consideration paid for the early redemption was fully allocated to the liability components. UMC adjusted the carrying amount of the liability components to reflect actual consideration paid and recognized a loss amount to NT$194 million as non-operating income and expenses. UMC reclassified cancelled convertible rights of NT$441 million from additional paid in capital – stock options to additional paid in capital – others.
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As bondholders’ redemption and UMC’s repurchases of bonds from open market in prior year amounted to US$466 million, which represented over 90% principal being redeemed; therefore, UMC redeemed the remaining bonds in whole at the Early Redemption Price on June 27, 2014. The principal amount of the redeemed bonds was US$34 million. UMC recognized a gain of NT$15 million from the redemption as non-operating income and expense.
In accordance with IAS 32, the value of the conversion right of the convertible bonds was determined at issuance and recognized in additional paid-in capital – stock options amounting to NT$680 million, after reduction of issuance costs amounting to NT$3 million. The effective interest rate on the liability component of the convertible bonds was determined to be 0.82%.
D. | In early June, 2012, UMC issued a five-year and a seven-year domestic unsecured corporate bonds amounting to NT$10,000 million, with a face value of NT$1 million per unit. The five-year domestic unsecured corporate bond was issued in the amount of NT$7,500 million. Interest will be paid annually at a rate of 1.43%, and the principal will be repayable in June 2017 upon maturity. The seven-year domestic unsecured corporate bond was issued in the amount of NT$2,500 million. Interest will be paid annually at a rate of 1.63%, and the principal will be repayable in June 2019 upon maturity. |
E. | In mid-March, 2013, UMC issued five-year and seven-year domestic unsecured corporate bonds amounting to NT$10,000 million, with a face value of NT$1 million per unit. The five-year domestic unsecured corporate bond was issued in the amount of NT$7,500 million. Interest will be paid annually at a rate of 1.35%, and the principal will be repayable in March 2018 upon maturity. The seven-year domestic unsecured corporate bond was issued in the amount of NT$2,500 million. Interest will be paid annually at a rate of 1.50%, and the principal will be repayable in March 2020 upon maturity. |
F. | In mid-June, 2014, UMC issued seven-year and ten-year domestic unsecured corporate bonds amounting to NT$5,000 million, with a face value of NT$1 million per unit. The seven-year domestic unsecured corporate bond was issued in the amount of NT$2,000 million. Interest will be paid annually at a rate of 1.70%, and the principal will be repayable in June 2021 upon maturity. The ten-year domestic unsecured corporate bond was issued in the amount of NT$3,000 million. Interest will be paid annually at a rate of 1.95%, and the principal will be repayable in June 2024 upon maturity. |
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(13) | Long-Term Loans |
a. | Details of long-term loans as of March 31, 2015 and December 31, 2014 are as follows: |
As of | ||||||||||
Lenders | March 31, 2015 | December 31, 2014 | Redemption | |||||||
Secured Long-Term Loan from Mega International Commercial Bank (1) | $ | 73,053 | $ | 80,358 | Effective August 1, 2012 to August 1, 2017. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | |||||
Secured Long-Term Loan from Mega International Commercial Bank (2) | 15,000 | 16,000 | Effective November 21, 2013 to November 21, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | |||||||
Secured Long-Term Loan from Taiwan Cooperative Bank (1) | 78,883 | 87,647 | Effective May 25, 2012 to May 25, 2017. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | |||||||
Secured Long-Term Loan from Taiwan Cooperative Bank (2) | 78,647 | 84,265 | Effective July 10, 2013 to July 10, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | |||||||
Secured Long-Term Loan from Taiwan Cooperative Bank (3) | 19,410 | — | Effective February 13, 2015 to February 13, 2020. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | |||||||
Secured Syndicated Loans from Bank of Taiwan and 7 others (1) | 1,385,000 | — | Repayable semi-annually from February 6, 2017 to February 6, 2020 with monthly interest payments. | |||||||
Secured Syndicated Loans from Taiwan Cooperative Bank and 5 others | 150,000 | 150,000 | Repayable semi-annually from October 25, 2010 to April 25, 2015 with monthly interest payments. |
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As of | ||||||||||
Lenders | March 31, 2015 | December 31, 2014 | Redemption | |||||||
Unsecured Long-Term Loan from Bank of Taiwan | $ | 3,000,000 | $ | 2,700,000 | Repayable quarterly from October 31, 2015 to July 31, 2017 with monthly interest payments. | |||||
Unsecured Long-Term Loan from Mega International Commercial Bank (1) | 923,077 | 1,230,769 | Repayable quarterly from December 28, 2012 to December 28, 2015 with monthly interest payments. | |||||||
Unsecured Long-Term Loan from Mega International Commercial Bank (2) | 1,000,000 | 300,000 | Repayable quarterly from October 4, 2015 to October 4, 2018 with monthly interest payments. | |||||||
Unsecured Long-Term Loan from E. Sun Bank | 500,000 | 500,000 | Repayable quarterly from December 24, 2015 to December 24, 2017 with monthly interest payments. | |||||||
Unsecured Long-Term Loan from Taiwan Cooperative Bank | 1,000,000 | 1,000,000 | Repayable quarterly from March 24, 2016 to December 24, 2017 with monthly interest payments. | |||||||
Unsecured Revolving Loan from CTBC Bank (Note A) | 2,000,000 | 1,000,000 | Settlement due on August 30, 2016 with monthly interest payments. | |||||||
Unsecured Revolving Loan from Chang Hwa Commercial Bank (Note B) | 2,333,333 | 2,666,667 | Repayable quarterly from December 29, 2014 to December 29, 2016 with monthly interest payments. | |||||||
Unsecured Revolving Loan from China Development Industrial Bank (Note C) | 1,000,000 | 1,000,000 | Settlement due on December 29, 2019 with monthly interest payments. | |||||||
Secured Syndicated Loans from Bank of Taiwan and 7 others (2) | — | 1,385,000 | Repayable semi-annually from February 7, 2015 to February 7, 2016 with monthly interest payments. | |||||||
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Subtotal | 13,556,403 | 12,200,706 | ||||||||
Less: Administrative expenses from syndicated loans | (8,217 | ) | (2,250 | ) | ||||||
Less: Current portion | (3,637,118 | ) | (3,774,986 | ) | ||||||
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| |||||||
Total | $ | 9,911,068 | $ | 8,423,470 | ||||||
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For the three- month period ended March 31, 2015 | ||||
Interest Rates | 1.26%~2.95% | |||
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b. | Details of long-term loans as of March 31, 2014 are as follows: |
Lenders | As of March 31, 2014 |
Redemption | ||||
Secured Long-Term Loan from Bank of Taiwan | $ | 898,225 | Effective July 13, 2011 to July 13, 2016. Interest-only payment for the first year. Principal is repaid in 16 quarterly payments with monthly interest payments. | |||
Secured Long-Term Loan from First Commercial Bank (1) | 310,000 | Effective December 31, 2010 to December 31, 2015. Interest-only payment for the first year. Principal is repaid in 8 semi-annual payments with monthly interest payments. | ||||
Secured Long-Term Loan from First Commercial Bank (2) | 125,000 | Effective June 24, 2011 to June 24, 2016. Interest-only payment for the first year. Principal is repaid in 8 semi-annual payments with monthly interest payments. | ||||
Secured Long-Term Loan from First Commercial Bank (3) | 103,000 | Bullet repayment on May 16, 2014 with monthly interest payments. | ||||
Secured Long-Term Loan from First Commercial Bank (4) | 400,000 | Bullet repayment on June 27, 2014 with monthly interest payments. | ||||
Secured Long-Term Loan from Mega International Commercial Bank (3) | 554,823 | Repayable quarterly from June 30, 2011 to June 30, 2016 with monthly interest payments. | ||||
Secured Long-Term Loan from Mega International Commercial Bank (1) | 102,275 | Effective August 1, 2012 to August 1, 2017. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Mega International Commercial Bank (2) | 17,000 | Effective November 21, 2013 to November 21, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Taiwan Cooperative Bank (1) | 113,941 | Effective May 25, 2012 to May 25, 2017. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Taiwan Cooperative Bank (2) | 70,000 | Effective July 10, 2013 to July 10, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. |
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Lenders | As of March 31, 2014 | Redemption | ||||
Secured Syndicated Loans from Bank of Taiwan and 7 others | $ | 1,385,000 | Repayable semi-annually from February 7, 2015 to February 7, 2016 with monthly interest payments. | |||
Secured Syndicated Loans from Taiwan Cooperative Bank and 5 others | 450,000 | Repayable semi-annually from October 25, 2010 to April 25, 2015 with monthly interest payments. | ||||
Unsecured Long-Term Loan from Bank of Taiwan | 900,000 | Repayable quarterly from October 31, 2015 to July 31, 2017 with monthly interest payments. | ||||
Unsecured Long-Term Loan from Mega International Commercial Bank (1) | 2,153,846 | Repayable quarterly from December 28, 2012 to December 28, 2015 with monthly interest payments. | ||||
Unsecured Long-Term Loan from Mega International Commercial Bank (2) | 300,000 | Repayable quarterly from October 4, 2015 to October 4, 2018 with monthly interest payments. | ||||
Unsecured Long-Term Loan from E. Sun Bank | 500,000 | Repayable quarterly from December 24, 2015 to December 24, 2017 with monthly interest payments. | ||||
Unsecured Revolving Loan from CTBC Bank (Note A) | 1,000,000 | Settlement due on August 30, 2016 with monthly interest payments. | ||||
Unsecured Revolving Loan from Chang Hwa Commercial Bank (Note B) | 1,000,000 | Repayable quarterly from December 29, 2014 to December 29, 2016 with monthly interest payments. | ||||
Unsecured Long-Term Loan from Taiwan Cooperative Bank | 500,000 | Repayable quarterly from March 24, 2016 to December 24, 2017 with monthly interest payments. | ||||
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| |||||
Subtotal | 10,883,110 | |||||
Less:Administrative expenses from syndicated loans | (3,809 | ) | ||||
Less: Current portion | (3,200,280 | ) | ||||
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| |||||
Total | $ | 7,679,021 | ||||
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|
For the three- month period ended March 31, 2014 | ||
| ||
Interest Rates | 1.23%~2.51% | |
|
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Note A: | UMC entered into a 5-year loan agreement with CTBC Bank, effective from August 30, 2011. The agreement offered UMC a revolving line of credit of NT$2.5 billion starting from the first use of the loan to the expiration date of the agreement, August 30, 2016. As of March 31, 2015, December 31, 2014 and March 31, 2014, the unused line of credit were NT$0.5 billion, NT$1.5 billion and NT$1.5 billion, respectively. | |
Note B: | UMC entered into a 5-year loan agreement with Chang Hwa Commercial Bank, effective from December 29, 2011. The agreement offered UMC a revolving line of credit of NT$3 billion. This line of credit will be reduced starting from the end of the third year after the first use and every three months thereafter, with a total of nine adjustments. The expiration date of the agreement is December 29, 2016. As of March 31, 2015, December 31, 2014 and March 31, 2014, the unused line of credit were nil, nil and NT$2 billion, respectively. | |
Note C: | UMC entered into a 5-year loan agreement with China Development Industrial Bank, effective from September 25, 2014. The agreement offered UMC a revolving line of credit of NT$2 billion. This line of credit will be reduced starting from the end of the second year after the first use and every twelve months thereafter, with a total of four adjustments. The expiration date of the agreement is December 29, 2019. As of March 31, 2015 and December 31, 2014, the unused line of credit were both NT$1 billion. |
b. | Please refer to Note 8 for property, plant and equipment pledged as collateral for long- term loans. |
(14) | Post-Employment Benefits |
a. | Defined contribution plan |
The Labor Pension Act of the R.O.C. (the Act) which became effective on July 1, 2005 is a defined contribution plan. Employees can elect to continue to apply the relevant pension rules under the Labor Standards Law of the R.O.C., or to apply the pension rules under the Act and maintain the seniority achieved under the Labor Standards Law. Under the Act, the monthly contributions percentage shall not be less than 6% of these employees’ monthly wages. The Company and its domestic subsidiaries have been making monthly contributions of 6% based on each individual employee’s salary or wage to employees’ pension accounts beginning July 1, 2005. Based on the Act, a total of NT$155 million and NT$144 million were contributed by the Company for the three-month periods ended March 31, 2015 and 2014, respectively. Pension benefits for employees of the Singapore branch, and other subsidiaries overseas were provided in accordance with the local regulations, and during the three-month periods ended March 31, 2015 and 2014, the Company made total contributions of NT$135 million and NT$104 million, respectively.
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b. | Defined benefit plan |
The employee pension plan mandated by the Labor Standards Act of the R.O.C. is a defined benefit plan. The pension benefits are disbursed based on the units of service years and the average monthly salary prior to retirement according to the Labor Standards Act. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year and the total units will not exceed 45 units. The Company contributes an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited with the Bank of Taiwan under the name of an administered pension fund committee. For the three-month periods ended March 31, 2015 and 2014, total pension expenses of NT$28 million and NT$28 million, respectively, were recognized by the Company.
(15) | Equity |
a. | Capital stock: |
i. | UMC had 26,000 million common shares authorized to be issued as of March 31, 2015, December 31, 2014 and March 31, 2014, of which 12,748 million shares, 12,725 million shares and 12,698 million shares were issued as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively, each at a par value of NT$10. |
ii. | UMC had 147 million, 150 million and 168 million ADSs, which were traded on the NYSE as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The total number of common shares of UMC represented by all issued ADSs were 734 million shares, 749 million shares and 841 million shares as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. One ADS represents five common shares. |
iii. | Among the employee stock options issued by UMC on June 19, 2009, 21 million options had been exercised during the three-month period ended March 31, 2015, of which the issuance process for 18 million shares has been approved by the authority, and the share registry has been updated as of March 31, 2015. The remaining 3 million shares were still pending for authorization as of March 31, 2015, thus, they were classified as Capital collected in advance. |
iv. | Among the employee stock options issued by UMC on June 19, 2009, 8 million options were exercised during the three-month period ended March 31, 2014. The issuance process was completed through the authority. |
v. | On December 30, 2014, UMC sold 5 million shares of treasury stock to employees, which were repurchased during the period from March 15 to May 6, 2013, for the purpose of transferring to employees. |
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b. | Treasury stock: |
i. | UMC carried out treasury stock program, and repurchased its shares from the centralized securities exchange market. The purpose for repurchase, and changes in treasury stock during the three-month periods ended March 31, 2015 and 2014 are as follows: |
For the three-month period ended March 31, 2015
(In thousands of shares)
Purpose | As of January 1, 2015 | Increase | Decrease | As of March 31, 2015 | ||||||||||||
For transfer to employees | 194,510 | — | — | 194,510 | ||||||||||||
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For the three-month period ended March 31, 2014
(In thousands of shares)
Purpose | As of January 1, 2014 | Increase | Decrease | As of March 31, 2014 | ||||||||||||
For transfer to employees | 200,000 | — | — | 200,000 | ||||||||||||
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ii. | According to the Securities and Exchange Law of the R.O.C., the total shares of treasury stock shall not exceed 10% of UMC’s issued stock, and the total purchase amount shall not exceed the sum of the retained earnings, additional paid-in capital-premiums and realized additional paid-in capital. As such, the maximum number of shares of treasury stock that UMC could hold as of March 31, 2015 and 2014, were 1,275 million shares and 1,270 million shares, with the maximum payments of NT$80,641 million and NT$71,766 million, respectively. |
iii. | In compliance with Securities and Exchange Law of the R.O.C., treasury stock should not be pledged, nor should it be entitled to voting rights or receiving dividends. Stock held by subsidiaries is treated as treasury stock. These subsidiaries have the same rights as other stockholders except for subscription to new stock issuance and voting rights. |
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iv. | As of March 31, 2015, UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held 16 million shares of UMC’s stock. The closing price on March 31, 2015 was NT$15.50. |
As of December 31, 2014, UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held 16 million shares of UMC’s stock. The closing price on December 31, 2014 was NT$14.75.
As of March 31, 2014, UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held 16 million shares of UMC’s stock. The closing price on March 31, 2014 was NT$12.85.
v. | UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held shares of UMC’s stock through acquiring shares of UNITED SILICON INC. in 1997, and these shares were converted to UMC’s stock in 2000 as a result of the Company’s 5 in 1 merger. |
c. | Retained earnings and dividend policies: |
According to UMC’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:
i. | Payment of all taxes and dues; |
ii. | Offset prior years’ operation losses; |
iii. | Appropriate 10% of the remaining amount after deducting items (i) and (ii) as a legal reserve; |
iv. | Appropriate or reverse special reserve in accordance with relevant laws or regulations, and |
v. | Appropriate 0.1% of the remaining amount after deducting items (i), (ii), (iii) and (iv) as directors’ remuneration; and |
vi. | After deducting items (i), (ii), (iii) and (iv) above from the current year’s earnings, no less than 5% of the remaining amount together with the prior years’ unappropriated earnings is to be allocated as employee bonus, which will be settled through issuance of new shares of UMC, or cash. Employees of UMC’s subsidiaries, meeting certain requirements determined by the Board of Directors, are also eligible for the employee stock bonus. |
vii. | The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the stockholders’ meeting. |
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The policy for dividend distribution should reflect factors such as the current and future investment environment, funding requirements, domestic and international competition and capital budgets; as well as the benefit of stockholders, stock dividend equilibrium and long-term financial planning. The Board of Directors shall make the distribution proposal annually and present it at the stockholders’ meeting. UMC’s Articles of Incorporation further provide that at least 20% of the dividends must be paid in the form of cash. Accordingly, no more than 80% of the dividends to stockholders, if any, may be paid in the form of stock dividends.
According to the regulations of Taiwan FSC, UMC is required to appropriate a special reserve in the amount equal to the sum of debit elements under equity, such as unrealized loss on financial instruments and negative cumulative translation adjustment, at every year-end. Such special reserve is prohibited from distribution. However, if any of the debit elements is reversed, the special reserve in the amount equal to the reversal may be released for earnings distribution or offsetting accumulated deficit.
The Company estimates the amounts of the employee bonus and remuneration to directors and recognizes them in the profit or loss during the periods earned for the three-month periods ended March 31, 2015 and 2014. The Board of Directors estimated the amount by taking into consideration UMC’s Articles of Incorporation, government regulations and industry averages. If the board subsequently modifies the estimates significantly, UMC will recognize the change as an adjustment in the profit or loss in the same period. The difference between the estimation and the resolution of the stockholders’ meeting will be recognized in profit or loss in the subsequent year. Upon stockholders’ approval, the number of shares distributed as share dividends is calculated based on the total approved bonus amount divided by the closing price one day prior to the approved date with the consideration of the impacts of ex-right/ex-dividend. Compensation expense relating to stock bonus is remeasured at fair market value at the date of stock distribution. Information on the above mentioned employee bonus and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.
The appropriation and compensation of 2014 unappropriated retained earnings have not yet been approved by the stockholder’s meeting as of the reporting date. Information on the Board of Directors’ recommendations and stockholders’ approval can be obtained from the “Market Observation Post System” on the website of the TWSE.
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The distributions of cash dividend, employee bonus and directors’ remuneration for 2014 and 2013 were approved through the Board of Directors’ meeting and the stockholders’ meeting held on March 18, 2015 and June 11, 2014, respectively. The details of distribution are as follows:
2014 | 2013 | |||||||
Cash Dividend | NT$ | 0.55 per share | NT$ | 0.01 per share | ||||
Employee bonus – Cash (in thousand NT$) | 1,458,956 | 1,162,656 | ||||||
Directors’ remuneration (in thousand NT$) | 10,812 | 11,746 |
The stockholders’ meeting held on June 11, 2014 resolved a cash distribution of NT$6,128 million from additional paid-in capital, at approximately NT$0.49 per share.
The aforementioned 2013 employee bonuses and remuneration to directors approved during stockholders’ meeting, were consistent with the resolutions of meeting of Board of Directors held on April 16, 2014.
d. | Non-controlling interests: |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Balance as of January 1 | $ | 3,849,798 | $ | 4,319,988 | ||||
Attributable to non-controlling interests: | ||||||||
Net loss | (67,438 | ) | (68,891 | ) | ||||
Other comprehensive income (loss) | (36,966 | ) | 49,266 | |||||
Changes in subsidiaries’ ownership | 87,180 | 28,662 | ||||||
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Balance as of March 31 | $ | 3,832,574 | $ | 4,329,025 | ||||
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(16) | Employee Stock Options |
On May 12, 2009, the Company was authorized by the Securities and Futures Bureau of the FSC, to issue employee stock options with a total number of 500 million units each. Each unit entitled an optionee to subscribe to 1 share of the Company’s common stock. Settlement upon the exercise of the options would be made through the issuance of new shares by the Company. The exercise prices of the options were set at the closing prices of the Company’s common stock on the dates of grant. The contractual lives were 6 years and an optionee might exercise the options in accordance with certain schedules as prescribed by the plans after 2 years from the dates of grant. Detailed information relevant to the employee stock options is disclosed as follows:
Date of grant | Total number of options granted (in thousands) | Total number of options outstanding as of March 31, 2015 (in thousands) | Shares available to option holders as of March 31, 2015 (in thousands) | Exercise price (NT$) | ||||||||||||
June 19, 2009 | 300,000 | 27,995 | 27,995 | $ | 10.40 | |||||||||||
Total | 300,000 | 27,995 | 27,995 |
a. | A summary of the Company’s stock option plan and related information for the three-month periods ended March 31, 2015 and 2014 is as follows: |
For the three-month periods ended March 31, | ||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||
Options (in thousands) | Shares available to option holders (in thousands) | Weighted- average exercise price per share (NTD) | Options (in thousands) | Shares available to option holders (in thousands) | Weighted- average exercise price per share (NTD) | |||||||||||||||||||
Outstanding at beginning of period | 48,729 | 48,729 | $ | 10.40 | 87,768 | 87,768 | $ | 10.40 | ||||||||||||||||
Exercised | (20,668 | ) | (20,668 | ) | $ | 10.40 | (8,207 | ) | (8,207 | ) | $ | 10.40 | ||||||||||||
Forfeited | (66 | ) | (66 | ) | $ | 10.40 | (206 | ) | (206 | ) | $ | 10.40 | ||||||||||||
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Outstanding at end of period | 27,995 | 27,995 | $ | 10.40 | 79,355 | 79,355 | $ | 10.40 | ||||||||||||||||
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Exercisable at end of period | 23,549 | 23,549 | $ | 10.40 | 74,596 | 74,596 | $ | 10.40 | ||||||||||||||||
|
|
|
|
|
|
|
|
b. | The information on the Company’s outstanding stock options as of March 31, 2015 is as follows: |
Outstanding Stock Options | Exercisable Stock Options | |||||||||||||||||||||||||||||||
Authorization Date | Range of Exercise Price (NTD) | Options (in thousands) | Shares available to option holders (in thousands) | Weighted- average expected remaining years | Weighted- average exercise price per share (NTD) | Options (in thousands) | Shares available to option holders (in thousands) | Weighted- average exercise price per share (NTD) | ||||||||||||||||||||||||
2009.05.12 | $ | 10.40 | 27,995 | 27,995 | 0.22 | $ | 10.40 | 23,549 | 23,549 | $ | 10.40 |
The weighted-average share price at the date of exercise of employee stock options for the three-month periods ended March 31, 2015 and 2014 were NT$15.50 and NT$12.67, respectively.
73
c. | The options granted between January 1, 2004 and December 31, 2007 have all been vested before the transition date to TIFRS (January 1, 2012) and there has not been any modification to the stock option plan. Effective 2008, the compensation expenses related to the Company’s compensatory employee stock option plan were calculated based on fair value. The compensation expenses for the three-month periods ended March 31, 2015 and 2014 were NT$0 million and NT$1 million, respectively. |
The fair value of the options outstanding as of March 31, 2015 and 2014 were estimated at the date of grant using the Black-Scholes options pricing model with the following weighted-average assumptions. The factors after the adoption of IFRS 2 “Share-based Payment” to account for share-based payments were as follows:
Items | Factors | |||
Expected dividend yields | 1.98 | % | ||
Volatility factors of the expected market price of the Company’s common stock | 40.63 | % | ||
Risk-free interest rate | 1.01 | % | ||
Weighted-average expected life | 3.16~5.03 years |
The aforementioned expected volatility reflects that the assumption that the historical volatility over a period similar to the life of the option is indicative of future trends. The expected option life is based on the historical data of periods for previously granted options. The expected dividend yield is based on historical dividend yield. The risk-free interest rate is based on average interest rate for Taiwan Government Bond over a period similar to the life of the option. The estimates used to calculate the fair value of employee stock option cannot predict future events that are likely to occur or the final amounts employees will benefit from these options. In addition, future events will not affect the reasonableness of the initial calculation for fair value for the stock options. The compensation expenses for the stock options will be adjusted annually for the changes in expected forfeiture rates, with the effects recognized in the current period.
(17) | Operating Revenues |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Net sales | ||||||||
Sale of goods | $ | 36,706,417 | $ | 30,746,719 | ||||
Other operating revenues | ||||||||
Royalty | 9,394 | 2,703 | ||||||
Mask tooling | 807,792 | 681,734 | ||||||
Others | 126,041 | 262,429 | ||||||
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|
|
| |||||
Net operating revenues | $ | 37,649,644 | $ | 31,693,585 | ||||
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|
|
74
(18) | Operating Costs and Expenses |
The Company’s personnel, depreciation and amortization expenses are summarized as follows:
For the three-month periods ended March 31, | ||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||
Operating costs | Operating expenses | Total | Operating costs | Operating expenses | Total | |||||||||||||||||||
Personnel expenses | ||||||||||||||||||||||||
Salaries | $ | 3,925,937 | $ | 1,605,358 | $ | 5,531,295 | $ | 3,377,602 | $ | 1,375,809 | $ | 4,753,411 | ||||||||||||
Labor and health insurance | 213,231 | 85,280 | 298,511 | 195,810 | 80,969 | 276,779 | ||||||||||||||||||
Pension | 240,496 | 82,424 | 322,920 | 209,661 | 66,880 | 276,541 | ||||||||||||||||||
Other personnel expenses | 54,294 | 22,529 | 76,823 | 44,773 | 13,814 | 58,587 | ||||||||||||||||||
Depreciation | 9,731,506 | 563,289 | 10,294,795 | 8,892,123 | 545,097 | 9,437,220 | ||||||||||||||||||
Amortization | 160,343 | 277,056 | 437,399 | 162,790 | 237,293 | 400,083 |
(19) | Net Other Operating Income and Expenses |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Net rental loss from property | $ | (10,400 | ) | $ | (2,563 | ) | ||
Gain on disposal of property, plant and equipment | 52,113 | 58,020 | ||||||
Impairment loss of property, plant and equipment | (225,530 | ) | — | |||||
Others | 41,203 | — | ||||||
|
|
|
| |||||
Total | $ | (142,614 | ) | $ | 55,457 | |||
|
|
|
|
(20) | Non-Operating Income and Expenses |
a. | Other income |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Interest income | ||||||||
Bank deposits | $ | 65,614 | $ | 116,843 | ||||
Others | 8,481 | 7,435 | ||||||
Dividend income | — | 1,328 | ||||||
|
|
|
| |||||
Total | $ | 74,095 | $ | 125,606 | ||||
|
|
|
|
75
b. | Other gains and losses |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Gain on valuation of financial assets and liabilities at fair value through profit or loss | ||||||||
Designated financial assets at fair value through profit or loss | $ | — | $ | 4,057 | ||||
Financial assets held for trading | 88,902 | 12,132 | ||||||
Forward exchange contract | 43,551 | — | ||||||
Loss on valuation of financial assets and liabilities at fair value through profit or loss | ||||||||
Designated financial assets at fair value through profit or loss | (2,628 | ) | — | |||||
Embedded derivative financial liabilities | — | (644 | ) | |||||
Impairment loss | ||||||||
Available-for-sale financial assets, noncurrent | (63,090 | ) | (1,280 | ) | ||||
Financial assets measured at cost, noncurrent | — | (91,239 | ) | |||||
Gain on disposal of investments | 189,697 | 367,003 | ||||||
Other gains and losses | 75,107 | 103,734 | ||||||
|
|
|
| |||||
Total | $ | 331,539 | �� | $ | 393,763 | |||
|
|
|
|
c. | Finance costs |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Interest expenses | ||||||||
Bonds payable | $ | 46,447 | $ | 91,756 | ||||
Bank loans | 54,558 | 55,444 | ||||||
Others | 35 | 107 | ||||||
Financial expenses | 13,694 | 7,841 | ||||||
|
|
|
| |||||
Total | $ | 114,734 | $ | 155,148 | ||||
|
|
|
|
76
(21) | Components of Other Comprehensive Income (Loss) |
For the three-month period ended March 31, 2015 | ||||||||||||||||||||
Arising during the period | Reclassification adjustments during the period | Other comprehensive income (loss), before tax | Income tax effect | Other comprehensive income (loss), net of tax | ||||||||||||||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||||||
Exchange differences on translation of foreign operations | $ | (890,828 | ) | $ | — | $ | (890,828 | ) | $ | 11,336 | $ | (879,492 | ) | |||||||
Unrealized gain (loss) on available-for-sale financial assets | 746,226 | (129,167 | ) | 617,059 | (23,687 | ) | 593,372 | |||||||||||||
Share of changes in other comprehensive income (loss) of associates and joint ventures accounted for using equity method | 178,692 | — | 178,692 | 330 | 179,022 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total other comprehensive income (loss) | $ | 34,090 | $ | (129,167 | ) | $ | (95,077 | ) | $ | (12,021 | ) | $ | (107,098 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
For the three-month period ended March 31, 2014 | ||||||||||||||||||||
Arising during the period | Reclassification adjustments during the period | Other comprehensive income (loss), before tax | Income tax effect | Other comprehensive income (loss), net of tax | ||||||||||||||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||||||
Exchange differences on translation of foreign operations | $ | 1,444,082 | $ | — | $ | 1,444,082 | $ | 253 | $ | 1,444,335 | ||||||||||
Unrealized gain (loss) on available-for-sale financial assets | 2,778,197 | (368,720 | ) | 2,409,477 | (59,058 | ) | 2,350,419 | |||||||||||||
Share of changes in other comprehensive income (loss) of associates and joint ventures accounted for using equity method | 350,684 | — | 350,684 | (15,158 | ) | 335,526 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total other comprehensive income (loss) | $ | 4,572,963 | $ | (368,720 | ) | $ | 4,204,243 | $ | (73,963 | ) | $ | 4,130,280 | ||||||||
|
|
|
|
|
|
|
|
|
|
77
(22) | Income Tax |
a. | The major components of income tax expense for the three-month periods ended March 31, 2015 and 2014 were as follows: |
i. | Income tax expense recorded in profit or loss |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Current income tax expense (benefit): | ||||||||
Current income tax charge | $ | 569,983 | $ | 221,685 | ||||
Adjustments in respect of current income tax of prior periods | (6,096 | ) | (77 | ) | ||||
Deferred income tax expense (benefit): | ||||||||
Deferred income tax expense (benefit) related to origination and reversal of temporary differences | (332,232 | ) | (42,916 | ) | ||||
Deferred income tax related to recognition and derecognition of tax losses and unused tax credits | 194,873 | 11,563 | ||||||
Adjustment of prior year’s deferred income tax | — | (3 | ) | |||||
Deferred tax expense arising from write-down or reversal of write-down of deferred tax assets | 15,110 | (9,476 | ) | |||||
|
|
|
| |||||
Income tax expense recorded in profit or loss | $ | 441,638 | $ | 180,776 | ||||
|
|
|
|
ii. | Income tax relating to components of other comprehensive income |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Exchange differences on translation of foreign operations | $ | 11,336 | $ | 253 | ||||
Unrealized gain on available-for-sale financial assets | (23,687 | ) | (59,058 | ) | ||||
Share of changes in other comprehensive income of associates and joint ventures accounted for using equity method | 330 | (15,158 | ) | |||||
|
|
|
| |||||
Income tax relating to components of other comprehensive income | $ | (12,021 | ) | $ | (73,963 | ) | ||
|
|
|
|
78
iii. | Deferred income tax charged directly to equity |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Temporary differences arising from the initial recognition of the equity component separately from the liability component | $ | — | $ | 462 | ||||
Adjustments of changes in net assets of associates and joint ventures accounted for using equity method | — | 1 | ||||||
|
|
|
| |||||
Income tax charged directly to equity | $ | — | $ | 463 | ||||
|
|
|
|
b. | A reconciliation between income tax expense and income before tax at UMC’s applicable tax rate was as follows: |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Income before tax | $ | 4,354,110 | $ | 1,291,583 | ||||
|
|
|
| |||||
At UMC’s statutory income tax rate of 17% | 740,199 | 219,569 | ||||||
Adjustments in respect of current income tax of prior periods | (6,096 | ) | (77 | ) | ||||
Net change in loss carry-forward and investment tax credits | 99,342 | 67,875 | ||||||
Tax effect of deferred tax assets/liabilities | (28,558 | ) | (36,042 | ) | ||||
Tax effect of non-taxable income and not-deductible expenses: | ||||||||
Tax exempt income | (236,789 | ) | (12,212 | ) | ||||
Investment gain | (199,515 | ) | (155,871 | ) | ||||
Others | 74,679 | 62,521 | ||||||
Basic tax | — | 558 | ||||||
Effect of different tax rates applicable to UMC and its subsidiaries | (2,485 | ) | (5,411 | ) | ||||
Taxes withheld in other jurisdictions | — | 15,099 | ||||||
Others | 861 | 24,767 | ||||||
|
|
|
| |||||
Income tax expense recorded in profit or loss | $ | 441,638 | $ | 180,776 | ||||
|
|
|
|
79
c. | The Company is subject to taxation in Taiwan and other foreign jurisdictions. As of March 31, 2015, income tax returns of UMC and its subsidiaries in Taiwan have been examined by the tax authorities through 2012 and 2011, respectively, while in other foreign jurisdictions, relevant tax authorities have completed the examination through 2008. UMC has applied for a recheck of the 2012 and 2011 tax return to the competent tax collection authorities as UMC disagreed with the decision made in the tax assessment notice. |
d. | Imputation credit information |
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Balances of imputation credit amounts | $ | 1,344,439 | $ | 1,332,236 | $ | 1,116,171 | ||||||
|
|
|
|
|
|
The | expected creditable ratio for 2014 and the actual creditable ratio for 2013 were 3.55% and 4.78%, respectively. |
e. | UMC’s earnings generated in the year ended December 31, 1997 and prior years have been fully appropriated. |
(23) | Earnings Per Share |
a. | Earnings per share-basic |
Basic earnings per share amounts are calculated by dividing the net income for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year. The reciprocal shareholdings held by subsidiaries are deducted from the computation of weighted-average number of shares outstanding.
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Net profit attributable to the parent company | $ | 3,979,910 | $ | 1,179,698 | ||||
|
|
|
| |||||
Weighted-average number of ordinary shares for basic earnings per share (thousand shares) | 12,526,260 | 12,479,925 | ||||||
|
|
|
| |||||
Earnings per share-basic (NTD) | $ | 0.32 | $ | 0.09 | ||||
|
|
|
|
80
b. | Earnings per share-diluted |
Diluted earnings per share is calculated by taking basic earnings per share plus the effect of additional common shares that would have been outstanding if the dilutive share equivalents had been issued. The net income attributable to ordinary equity holders of the parent would be also adjusted for the interest and other income or expenses derived from any underlying dilutive share equivalents, such as convertible bonds. For employee bonus that may be distributed in shares, the number of shares to be distributed is taken into consideration assuming the distribution will be made entirely in shares when calculating diluted earnings per share. Additionally, the dilutive effect of outstanding employee options generally should be reflected in diluted earnings per share by application of treasury stock method. The “assumed proceeds” include the exercise price of the options and the average measured but unrecognized compensation expense during the period.
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Net income attributable to the parent company | $ | 3,979,910 | $ | 1,179,698 | ||||
Effect of dilution | ||||||||
Unsecured convertible bonds | — | 16,994 | ||||||
|
|
|
| |||||
Income attributable to the Company’s stockholders | $ | 3,979,910 | $ | 1,196,692 | ||||
|
|
|
| |||||
Weighted average number of common stocks for basic earnings per share (thousand shares) | 12,526,260 | 12,479,925 | ||||||
Effect of dilution | ||||||||
Employee bonus | 121,144 | 109,571 | ||||||
Employee stock options | 12,642 | 14,335 | ||||||
Unsecured convertible bonds | — | 554,153 | ||||||
|
|
|
| |||||
Weighted average number of common stocks after dilution (thousand shares) | 12,660,046 | 13,157,984 | ||||||
|
|
|
| |||||
Diluted earnings per share (NTD) | $ | 0.31 | $ | 0.09 | ||||
|
|
|
|
81
(24) | Non-Current Assets Held For Sale (Disposal Group) |
TOPCELL SOLAR INTERNATIONAL CO., LTD. (TOPCELL)
In order to integrate resources and reduce operating cost by improving operating performance and expanding economies of scale, TOPCELL’s Board of Directors (TOPCELL, one of the Company’s subsidiaries) resolved to offer a merger with MOTECH INDUSTRIES, INC. (MOTECH) on December 26, 2014. Six shares of TOPCELL were exchanged for one share of MOTECH. MOTECH will be the surviving company when the merger is expected to become effective on July 1, 2015 upon the completion of follow-up procedures to be determined when the merger is approved by TOPCELL’s stockholders and the authority. TOPCELL’s assets and liabilities have been reclassified to non-current assets held for sale as a disposal group. This disposal group is classified under new business segment.
Assets and liabilities reclassified to non-current assets held for sale as a disposal group mainly consist of:
As of | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 331,248 | $ | 511,088 | ||||
Notes and accounts receivable | 412,812 | 758,839 | ||||||
Other receivable | 63,197 | 77,579 | ||||||
Inventories | 801,629 | 823,249 | ||||||
Prepayment | 298,556 | 325,605 | ||||||
Non-current assets held for sale | — | 600,663 | ||||||
Property, plant and equipment | 3,848,487 | 3,821,601 | ||||||
Others | 57,486 | 60,367 | ||||||
|
|
|
| |||||
5,813,415 | 6,978,991 | |||||||
|
|
|
| |||||
Liabilities | ||||||||
Short-term loans | (2,619,307 | ) | (2,807,292 | ) | ||||
Notes and accounts payable | (354,622 | ) | (623,501 | ) | ||||
Other payables | (190,262 | ) | (217,350 | ) | ||||
Payables on equipment | (156,028 | ) | (158,537 | ) | ||||
Current portion of long-term liabilities | (810,878 | ) | (1,164,878 | ) | ||||
Other current liabilities | (50,736 | ) | (205,530 | ) | ||||
Long-term loans | (266,292 | ) | (417,762 | ) | ||||
|
|
|
| |||||
(4,448,125 | ) | (5,594,850 | ) | |||||
|
|
|
| |||||
Net carrying amount of the disposal group | $ | 1,365,290 | $ | 1,384,141 | ||||
|
|
|
|
82
ALLIANCE OPTOTEK CORP. (ALLIANCE)
In order to integrate resources and expand operation to improve operating performance and industrial competitiveness, ALLIANCE’s Board of Directors (ALLIANCE, one of the Company’s subsidiaries) resolved merger with WIESON TECHNOLOGIES CO., LTD. (WIESON) on January 23, 2014. WIESON is the surviving company and the merger date is June 3, 2014. ALLIANCE’s assets and liabilities had been reclassified to non-current assets held for sale as a disposal group. This disposal group was under new business segment.
ALLIANCE’s assets and liabilities reclassified to non-current assets held for sale as a disposal group mainly consist of:
As of March 31, 2014 | ||||
Assets | ||||
Cash and cash equivalents | $ | 15,617 | ||
Notes and accounts receivable | 14,239 | |||
Inventories | 24,165 | |||
Property, plant and equipment | 6,669 | |||
Others | 6,418 | |||
|
| |||
67,108 | ||||
|
| |||
Liabilities | ||||
Payables | (22,984 | ) | ||
Others | (120 | ) | ||
|
| |||
(23,104 | ) | |||
|
| |||
Net carrying amount of the disposal group | $ | 44,004 | ||
|
|
7. | RELATED PARTY TRANSACTIONS |
(1) | Significant related party transactions |
a. | Operating transaction |
Operating revenues
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Associates | $ | — | $ | 120 | ||||
Joint ventures | 3,548 | 3,417 | ||||||
Other related parties (Note A) | 466 | 6,463 | ||||||
|
|
|
| |||||
Total | $ | 4,014 | $ | 10,000 | ||||
|
|
|
|
83
Note A: | Transactions with other related parties are primarily from the operating transactions with SILICON INTEGRATED SYSTEMS CORP. (SIS). The amounts for the three-month periods ended March 31, 2015 and 2014 were NT$0 million and NT$6 million, respectively. |
Accounts receivable, net
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Joint ventures | $ | 1,172 | $ | 18,164 | $ | 3,350 | ||||||
Other related parties (Note B) | 347 | 18,127 | 1,562 | |||||||||
|
|
|
|
|
| |||||||
Total | 1,519 | 36,291 | 4,912 | |||||||||
Less: Allowance for sales returns and discounts | (149 | ) | (269 | ) | (25 | ) | ||||||
|
|
|
|
|
| |||||||
Net | $ | 1,370 | $ | 36,022 | $ | 4,887 | ||||||
|
|
|
|
|
|
Note B: | Balances of other related parties are accounts receivables primarily from SIS. As of March 31, 2015, December 31, 2014 and March 31, 2014, the balances were NT$0 million, NT$17 million and NT$2 million, respectively. |
The sales price to the above related parties was determined through mutual agreement based on the market rates. The collection periods for domestic sales to related parties were month-end 45~60 days, while the term for overseas sales was net 60 days.
b. | Key management personnel compensation |
For the three-month periods ended March 31, | ||||||||
2015 | 2014 | |||||||
Short-term employee benefits | $ | 66,085 | $ | 60,448 | ||||
Post-employment benefits | 703 | 1,144 | ||||||
Termination benefits | — | 1,029 | ||||||
Share-based payment | 9 | 47 | ||||||
Others | 116 | 117 | ||||||
|
|
|
| |||||
Total | $ | 66,913 | $ | 62,785 | ||||
|
|
|
|
84
8. | ASSETS PLEDGED AS COLLATERAL |
As of March 31, 2015, December 31, 2014 and March 31, 2014
Amount | ||||||||||||||||
As of | ||||||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | Party to which asset(s) was pledged | Purpose of pledge | ||||||||||||
Refundable Deposits | $ | 815,119 | $ | 815,119 | $ | 815,079 | Customs | Customs duty guarantee | ||||||||
Refundable Deposits | 198,343 | 158,094 | 156,658 | Science Park Administration | Collateral for land lease | |||||||||||
Refundable Deposits | 50,402 | 53,202 | 52,800 | Liquefied Natural Gas Business Division, CPC Corporation, Taiwan | Energy resources guarantee | |||||||||||
Refundable Deposits | 1,246 | 1,246 | 1,246 | Bureau of Energy, Ministry of Economic Affairs | Energy resources guarantee | |||||||||||
Refundable Deposits | 870 | 870 | — | National Pingtung University of Science and Technology | Guarantee for engineering project | |||||||||||
Refundable Deposits | 357 | 357 | — | National Pei-men Senior High School | Guarantee for engineering project | |||||||||||
Refundable Deposits | — | — | 1,110 | Hsinchu Kuang-Fu high school | Cooperative education | |||||||||||
Land | — | — | 600,664 | First Commercial Bank | Collateral for long-term loans | |||||||||||
Buildings | 541,723 | 1,074,856 | 1,582,341 | Syndicated Loans from Bank of Taiwan and 7 others and Syndicated Loans from Taiwan Cooperative Bank and 5 others | Collateral for long-term loans | |||||||||||
Machinery and equipment | 3,033,367 | 4,764,493 | 5,892,133 | Bank of Taiwan, Cooperative Bank, First Commercial Bank, Mega International Commercial Bank, Syndicated Loans from Bank of Taiwan and 7 others and Syndicated Loans from Taiwan Cooperative Bank and 5 others | Collateral for long-term and short-term loans | |||||||||||
Furniture and fixtures | 10,976 | 36,217 | 40,221 | Syndicated Loans from Bank of Taiwan and 7 others and Syndicated Loans from Taiwan Cooperative Bank and 5 others | Collateral for long-term loans | |||||||||||
Construction in progress and equipment awaiting inspection | — | — | 89,283 | Bank of Taiwan, First Commercial Bank and Mega International Commercial Bank | Collateral for long-term loans | |||||||||||
|
|
|
|
|
| |||||||||||
Total | $ | 4,652,403 | $ | 6,904,454 | $ | 9,231,535 | ||||||||||
|
|
|
|
|
|
85
9. | SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS |
(1) | The Company entered into several patent license agreements and development contracts of intellectual property for a total contract amount of approximately NT$13.9 billion. As of March 31, 2015, the portion of royalties and development fees not yet recognized is NT$1.4 billion. |
(2) | The Company entered into several construction contracts for the expansion of its factory premise. As of March 31, 2015, these construction contracts amounted to approximately NT$17.4 billion and the portion of the contracts not yet recognized is approximately NT$8.2 billion. |
(3) | The Company entered into several operating lease contracts for land and office. These renewable operating leases will expire in various years through 2034. Future minimum lease payments under those leases are as follows: |
Year | As of March 31, 2015 | |||
2015 | $ | 318,199 | ||
2016 | 391,800 | |||
2017 | 353,482 | |||
2018 | 265,326 | |||
2019 | 254,807 | |||
2020 and thereafter | 2,905,015 | |||
|
| |||
Total | $ | 4,488,629 | ||
|
|
(4) | The Board of Directors of UMC resolved to participate in a 3-way agreement with Xiamen Municipal People’s Government and FUJIAN ELECTRONICS & INFORMATION GROUP to form a company which will focus on 12’’ wafer foundry services. Based on the agreement, UMC will submit an investment application with R.O.C. government authorities for approval to invest in the company established by Xiamen Municipal People’s Government and FUJIAN ELECTRONICS & INFORMATION GROUP. The Company anticipates that its investment could reach approximately US$1.4 billion in the next five years, with instalment funding starting in 2015. On December 31, 2014, UMC obtained R.O.C. government authority’s approval of the investment application for US$0.7 billion (including indirect investment). In January 2015, the Company invested RMB 0.6 billion and obtained the control over United Semiconductor (XIAMEN) CO., LTD. by acquiring more than half of the seats of the Board of Directors. Furthermore, according to the agreement, UMC recognized a financial liability as other liabilities-others, for repurchase from Xiamen Municipal People’s Government and FUJIAN ELECTRONICS & INFORMATION GROUP their investments in the company at their original investment cost plus interest, beginning from the seventh year following the last instalment payment made by Xiamen Municipal People’s Government and FUJIAN ELECTRONICS & INFORMATION GROUP. However, as stipulated in the agreement, in the event that the regulation of Taiwan does not allow UMC to become the sole owner of the company, UMC will not acquire 10% of Xiamen Municipal People’s Government and FUJIAN ELECTRONICS & INFORMATION GROUP’s investment. |
86
10. | SIGNIFICANT DISASTER LOSS |
None.
11. | SIGNIFICANT SUBSEQUENT EVENTS |
In order to integrate research and development resources, reduce operating cost and improve operating performance, WAVETEK MICROELECTRONICS CORPORATION’s Board of Directors (WAVETEK, one of the Company’s subsidiaries) resolved to merge with EPITRON TECHNOLOGY INC. (EPITRON) on January 26, 2015. Every 3.333 shares of EPITRON will be exchanged for one share of WAVETEK. WAVETEK will become the surviving company when the merger becomes effective on April 1, 2015. UMC will remain the controlling interest in WAVETEK after the merger.
12. | OTHERS |
(1) | Categories of financial instruments |
As of | ||||||||||||
Financial Assets | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||
Non-derivative financial instruments | ||||||||||||
Financial assets at fair value through profit or loss | ||||||||||||
Designated financial assets at fair value through profit or loss | $ | 147,922 | $ | 150,550 | $ | 98,052 | ||||||
Financial assets held for trading | 750,058 | 634,811 | 857,157 | |||||||||
|
|
|
|
|
| |||||||
Subtotal | 897,980 | 785,361 | 955,209 | |||||||||
|
|
|
|
|
| |||||||
Available-for-sale financial assets | 26,821,106 | 24,362,104 | 24,024,645 | |||||||||
|
|
|
|
|
| |||||||
Financial assets measured at cost | 3,855,368 | 3,833,006 | 4,169,010 | |||||||||
|
|
|
|
|
| |||||||
Loans and receivables | ||||||||||||
Cash and cash equivalents (excludes cash on hand) | 53,628,371 | 45,697,457 | 53,911,599 | |||||||||
Receivables | 21,176,180 | 23,027,843 | 19,520,323 | |||||||||
Refundable deposits | 1,145,916 | 1,145,843 | 1,252,213 | |||||||||
Other financial assets, current | 2,313,713 | 3,134,870 | 3,496,369 | |||||||||
|
|
|
|
|
| |||||||
Subtotal | 78,264,180 | 73,006,013 | 78,180,504 | |||||||||
|
|
|
|
|
| |||||||
Derivative financial instruments | ||||||||||||
Forward exchange contracts | 47,292 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 109,885,926 | $ | 101,986,484 | $ | 107,329,368 | ||||||
|
|
|
|
|
|
87
As of | ||||||||||||
Financial Liabilities | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||
Non-derivative financial instruments | ||||||||||||
Financial liabilities at amortized cost | ||||||||||||
Short-term loans | $ | 7,216,847 | $ | 6,250,754 | $ | 7,516,080 | ||||||
Payables | 25,840,057 | 29,172,157 | 22,528,684 | |||||||||
Capacity deposit (current portion included) | 67,058 | 70,200 | 83,813 | |||||||||
Bonds payable (current portion included) | 24,978,847 | 24,977,820 | 33,683,314 | |||||||||
Long-term loans (current portion included) | 13,548,186 | 12,198,456 | 10,879,301 | |||||||||
|
|
|
|
|
| |||||||
Subtotal | 71,650,995 | 72,669,387 | 74,691,192 | |||||||||
|
|
|
|
|
| |||||||
Derivative financial instruments | ||||||||||||
Financial liabilities at fair value through profit or loss | ||||||||||||
Forward exchange contracts | — | 42,354 | — | |||||||||
Embedded derivative financial liabilities in exchangeable bonds | — | — | 18,087 | |||||||||
|
|
|
|
|
| |||||||
Subtotal | — | 42,354 | 18,087 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 71,650,995 | $ | 72,711,741 | $ | 74,709,279 | ||||||
|
|
|
|
|
|
(2) | Financial risk management objectives and policies |
The Company’s risk management objectives are to manage the market risk, credit risk and liquidity risk related to its operating activities. The Company identifies measures and manages the aforementioned risks based on policy and risk preference.
The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.
(3) | Market risk |
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks comprise of currency risk, interest rate risk, and other price risk (such as equity price risk).
88
Foreign currency risk
The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign subsidiaries.
The Company applies natural hedges on the foreign currency risk arising from purchases or sales, and utilizes spot or forward exchange contracts to avoid foreign currency risk and the net effect of the risks related to monetary financial assets and liabilities is minor. The notional amounts of the foreign currency contracts are the same as the amount of the hedged items. In principle, the Company does not carry out any forward exchange contracts for uncertain commitments. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.
The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. When NTD strengthens/weakens against USD by 10%, the profit for the three-month periods ended March 31, 2015 and 2014 increases/decreases by NT$130 million and NT$48 million, respectively.
Interest rate risk
The Company is exposed to interest rate risk arising from borrowing at floating interest rates. All of the Company’s bonds have fixed interest rates and are measured at amortized cost. As such, changes in interest rates would not affect the future cash flows. On the other hand, as the interest rates of the Company’s short-term and long-term bank loans are floating, changes in interest rates would affect the future cash flows but not the fair value. Please refer to Note 6(10), 6(12) and 6(13) for the range of interest rate of the Company’s bonds and bank loans.
At the reporting dates, a change of 10 basis points of interest rate in a reporting period could cause the profit for the three-month periods ended March 31, 2015 and 2014 to decrease/increase by NT$5 million and NT$5 million, respectively.
Equity price risk
The Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future performance of equity markets. The Company’s listed equity investments are classified as financial assets at fair value through profit or loss and available-for-sale financial assets, while unlisted equity securities are classified as available-for-sale financial assets which are subsequently measured using a valuation model and financial assets measured at cost.
89
The sensitivity analysis for the equity instruments is based on the change in fair value as of the reporting date. A change of 5% in the price of the aforementioned financial assets at fair value through profit or loss could increase/decrease the Company’s profit for the three-month periods ended March 31, 2015 and 2014 by NT$18 million and NT$23 million, respectively. A change of 5% in the price of the aforementioned available-for-sale financial instrument could increase/decrease the Company’s other comprehensive income for the three-month periods ended March 31, 2015 and 2014 by NT$1,340 million and NT$1,199 million, respectively.
(4) | Credit risk management |
The Company only trades with approved and creditworthy third parties. Where the Company trades with third parties which have less favorable financial positions, it will request collateral from them. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, notes and accounts receivable balances are monitored on an ongoing basis, which consequently minimizes the Company’s exposure to bad debts.
The Company mitigates the credit risks from financial institutions by limiting its counter parties to only reputable domestic or international financial institutions with good credit standing and spreading its holdings among various financial institutions. The Company’s exposure to credit risk arising from the default of counter-parties is limited to the carrying amount of these instruments.
As of March 31, 2015, December 31, 2014 and March 31, 2014, accounts receivables from the top ten customers represent 52%, 57% and 51% of the total accounts receivables of the Company, respectively. The credit concentration risk of other accounts receivables is insignificant.
(5) | Liquidity risk management |
The Company’s objectives are to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, bank loans and bonds.
90
The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity:
As of March 31, 2015 | ||||||||||||||||||||
Less than 1 year | 2 to 3 years | 4 to 5 years | > 5 years | Total | ||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||
Short-term loans | $ | 7,285,486 | $ | — | $ | — | $ | — | $ | 7,285,486 | ||||||||||
Payables | 25,531,415 | — | — | 6,945,022 | 32,476,437 | |||||||||||||||
Capacity deposits | — | 67,058 | — | — | 67,058 | |||||||||||||||
Bonds payable | 578,999 | 15,666,412 | 5,306,554 | 5,287,785 | 26,839,750 | |||||||||||||||
Long-term loans | 3,836,559 | 8,318,661 | 1,945,574 | 1,142 | 14,101,936 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 37,232,459 | $ | 24,052,131 | $ | 7,252,128 | $ | 12,233,949 | $ | 80,770,667 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Less than 1 year | 2 to 3 years | 4 to 5 years | > 5 years | Total | ||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||
Short-term loans | $ | 6,299,905 | $ | — | $ | — | $ | — | $ | 6,299,905 | ||||||||||
Payables | 28,816,995 | — | — | 104,952 | 28,921,947 | |||||||||||||||
Capacity deposits | — | 70,200 | — | — | 70,200 | |||||||||||||||
Bonds payable | 622,936 | 8,197,725 | 10,339,221 | 7,818,618 | 26,978,500 | |||||||||||||||
Long-term loans | 3,947,580 | 7,528,391 | 1,144,247 | — | 12,620,218 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 39,687,416 | $ | 15,796,316 | $ | 11,483,468 | $ | 7,923,570 | $ | 74,890,770 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Derivative financial liabilities | ||||||||||||||||||||
Forward exchange contracts | ||||||||||||||||||||
Inflow | $ | 3,249,080 | $ | — | $ | — | $ | — | $ | 3,249,080 | ||||||||||
Outflow | (3,291,434 | ) | — | — | — | (3,291,434 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net | $ | (42,354 | ) | $ | — | $ | — | $ | — | $ | (42,354 | ) | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As of March 31, 2014 | ||||||||||||||||||||
Less than 1 year | 2 to 3 years | 4 to 5 years | > 5 years | Total | ||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||
Short-term loans | $ | 7,564,796 | $ | — | $ | — | $ | — | $ | 7,564,796 | ||||||||||
Payables | 22,391,013 | — | — | — | 22,391,013 | |||||||||||||||
Capacity deposits | 238 | 83,575 | — | — | 83,813 | |||||||||||||||
Bonds payable | 14,397,985 | 573,500 | 15,272,912 | 5,043,304 | 35,287,701 | |||||||||||||||
Long-term loans | 3,337,767 | 7,093,319 | 817,385 | — | 11,248,471 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 47,691,799 | $ | 7,750,394 | $ | 16,090,297 | $ | 5,043,304 | $ | 76,575,794 | ||||||||||
|
|
|
|
|
|
|
|
|
|
91
(6) | Foreign currency risk management |
UMC entered into forward exchange contracts for hedging the exchange rate risk arising from the net assets or liabilities denominated in foreign currency. The details of forward exchange contracts entered into by UMC are summarized as follows:
As of March 31, 2015
Type | Notional Amount | Contract Period | ||
Forward exchange contracts | Sell USD 172 million | February 25, 2015~April 23, 2015 |
(7) | Fair value of financial instruments |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — | Quoted (unadjusted) market prices in active markets for identical assets or liabilities; | |
Level 2 — | Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; | |
Level 3 — | Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. |
92
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
a. | Assets and liabilities measured and recorded at fair value on a recurring basis: |
As of March 31, 2015 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets: | ||||||||||||||||
Financial assets at fair value through profit or loss, current | $ | 750,058 | $ | 150,876 | $ | — | $ | 900,934 | ||||||||
Financial assets at fair value through profit or loss, noncurrent | — | 44,338 | — | 44,338 | ||||||||||||
Available-for-sale financial assets, noncurrent | 19,349,074 | 157,413 | 7,314,619 | 26,821,106 |
As of December 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets: | ||||||||||||||||
Financial assets at fair value through profit or loss, current | $ | 634,811 | $ | 105,318 | $ | — | $ | 740,129 | ||||||||
Financial assets at fair value through profit or loss, noncurrent | — | 45,232 | — | 45,232 | ||||||||||||
Available-for-sale financial assets, noncurrent | 18,174,030 | 170,922 | 6,017,152 | 24,362,104 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Financial liabilities at fair value through profit or loss, current | — | 42,354 | — | 42,354 |
As of March 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets: | ||||||||||||||||
Financial assets at fair value through profit or loss, current | $ | 857,157 | $ | — | $ | — | $ | 857,157 | ||||||||
Available-for-sale financial assets, current | 2,313,818 | — | — | 2,313,818 | ||||||||||||
Financial assets at fair value through profit or loss, noncurrent | 23,518 | 74,534 | — | 98,052 | ||||||||||||
Available-for-sale financial assets, noncurrent | 17,388,120 | 202,053 | 4,120,654 | 21,710,827 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Financial liabilities at fair value through profit or loss, current | — | 18,087 | — | 18,087 |
93
Fair values of financial assets at fair value through profit or loss and available-for-sale financial assets that are categorized into level 1 are based on the quoted market prices in active market. If there is no active market, the Company estimates the fair value by using the market method valuation techniques based on parameters such as recent fund raising activities, valuation of similar companies, individual company’s development, market conditions and other economic indicators. If there are restrictions on the sale or transfer of an available-for-sale financial asset, which are a characteristic of the asset, the fair value of the asset will be determined based on similar but unrestricted financial assets’ quoted market price with appropriate discounts for the restrictions.
The Company issued exchangeable bonds which contain a compound derivative instrument, comprising of the exchange option with a fixed foreign exchange rate feature and a call option. The compound derivative instrument is classified as liabilities carried at fair value through profit or loss. The derivatives are fair valued using a valuation model. The valuation model uses the market-based observable inputs including share price, volatility, credit spread, and swap rates.
During the three-month periods ended March 31, 2015 and 2014, there were no significant transfers between Level 1 and Level 2 fair value measurements.
Reconciliations for fair value measurement in Level 3 fair value hierarchy were as follows:
Available-for-sale financial assets | ||||||||||||||||
Common stock | Funds | Preferred stock | Total | |||||||||||||
As of January 1, 2015 | $ | 5,236,004 | $ | — | $ | 781,148 | $ | 6,017,152 | ||||||||
Recognized in profit (loss) | (4,563 | ) | — | — | (4,563 | ) | ||||||||||
Recognized in other comprehensive income (loss) | 473,465 | — | — | 473,465 | ||||||||||||
Acquisition | 1,376,000 | 8,529 | 38,700 | 1,423,229 | ||||||||||||
Transfer to Level 3 | 35,916 | — | — | 35,916 | ||||||||||||
Transfer out of Level 3 | (625,193 | ) | — | — | (625,193 | ) | ||||||||||
Exchange effect | (2,256 | ) | (91 | ) | (3,040 | ) | (5,387 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
As of March 31, 2015 | $ | 6,489,373 | $ | 8,438 | $ | 816,808 | $ | 7,314,619 | ||||||||
|
|
|
|
|
|
|
|
94
Available-for-sale financial assets | ||||||||||||||||
Common stock | Funds | Preferred stock | Total | |||||||||||||
As of January 1, 2014 | $ | 3,517,733 | $ | — | $ | 312,600 | $ | 3,830,333 | ||||||||
Recognized in other comprehensive income (loss) | 364,552 | — | — | 364,552 | ||||||||||||
Disposal | (10,223 | ) | — | — | (10,223 | ) | ||||||||||
Transfer out of Level 3 | (64,261 | ) | — | — | (64,261 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
As of March 31, 2014 | $ | 3,807,801 | $ | — | $ | 312,600 | $ | 4,120,401 | ||||||||
|
|
|
|
|
|
|
|
Recognized as part of profit (loss) above, the loss from financial assets still held by the Company as of March 31, 2015 and 2014 were NT$5 million and nil, respectively.
Recognized as part of other comprehensive income (loss) above, the income from financial assets still held by the Company as of March 31, 2015 and 2014 were NT$107 million and NT$386 million, respectively.
Transfers between different levels of fair value hierarchy for the financial assets held by the Company were caused by the occurrence of certain events or the change of environment.
b. | Assets and liabilities not recorded at fair value on a recurring basis but for which fair value is disclosed: |
The fair value of bonds payables is estimated by the market price or estimated using valuation model. The model uses market-based observable inputs including share price, volatility, credit spread and swap rates. The fair value of long-term loans is determined using discounted cash flow model, based on the Company’s current incremental borrowing rates of similar loans.
The fair values of the Company’s short-term financial instruments including cash and cash equivalents, receivables, refundable deposits, other financial assets, current, short-term loans, payables and capacity deposits approximate their carrying amount due to their maturities within one year.
As of March 31, 2015
Fair value measurements during reporting period using | ||||||||||||||||||||
Items | Fair value | Level 1 | Level 2 | Level 3 | Book value | |||||||||||||||
Bonds payables (current portion included) | $ | 25,094,518 | $ | 25,094,518 | $ | — | $ | — | $ | 24,978,847 | ||||||||||
Long-term loans (current portion included) | 13,548,186 | — | 13,548,186 | — | 13,548,186 |
95
(8) | Significant assets and liabilities denominated in foreign currencies |
As of | ||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Foreign Currency (thousand) | Exchange Rate | NTD (thousand) | Foreign Currency (thousand) | Exchange Rate | NTD (thousand) | |||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||
Monetary items | ||||||||||||||||||||||||
USD | $ | 1,756,995 | 31.23 | $ | 54,875,748 | $ | 1,767,638 | 31.56 | $ | 55,781,155 | ||||||||||||||
JPY | 7,787,884 | 0.2555 | 1,989,505 | 8,964,201 | 0.2610 | 2,340,081 | ||||||||||||||||||
EUR | 6,857 | 33.37 | 228,814 | 20,071 | 38.30 | 768,728 | ||||||||||||||||||
SGD | 36,463 | 22.69 | 827,353 | 38,173 | 23.90 | 912,326 | ||||||||||||||||||
RMB | 1,822,866 | 5.02 | 9,150,767 | 83,347 | 5.08 | 423,046 | ||||||||||||||||||
Non-Monetary items | ||||||||||||||||||||||||
USD | 96,396 | 31.17 | 3,004,322 | 85,296 | 31.40 | 2,678,468 | ||||||||||||||||||
CHF | — | — | — | 1,590 | 31.97 | 50,829 | ||||||||||||||||||
JPY | 5,000,000 | 0.2586 | 1,293,000 | — | — | — | ||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||
Monetary items | ||||||||||||||||||||||||
USD | 587,565 | 31.34 | 18,412,141 | 648,436 | 31.67 | 20,535,974 | ||||||||||||||||||
JPY | 8,269,067 | 0.2627 | 2,172,284 | 9,918,471 | 0.2673 | 2,651,207 | ||||||||||||||||||
EUR | 4,378 | 33.87 | 148,297 | 20,970 | 38.75 | 812,579 | ||||||||||||||||||
SGD | 46,009 | 22.87 | 1,052,230 | 39,493 | 24.08 | 950,992 | ||||||||||||||||||
RMB | 9,801 | 5.07 | 49,689 | 9,737 | 5.13 | 49,914 | ||||||||||||||||||
The exchange gain or loss from monetary | ||||||||||||||||||||||||
USD | (18,634 | ) | 363,831 | |||||||||||||||||||||
JPY | 42,296 | (45,899 | ) | |||||||||||||||||||||
EUR | (7,035 | ) | 38,945 | |||||||||||||||||||||
SGD | (12,403 | ) | (10,838 | ) | ||||||||||||||||||||
RMB | (3,018 | ) | 9,521 | |||||||||||||||||||||
Other | (78,474 | ) | (22,285 | ) |
96
As of | ||||||||||||
March 31, 2014 | ||||||||||||
Foreign Currency (thousand) | Exchange Rate | NTD (thousand) | ||||||||||
Financial Assets | ||||||||||||
Monetary items | ||||||||||||
USD | $ | 1,814,734 | 30.40 | $ | 55,170,104 | |||||||
JPY | 5,014,423 | 0.2923 | 1,465,904 | |||||||||
EUR | 14,776 | 41.68 | 615,906 | |||||||||
SGD | 32,058 | 24.09 | 772,281 | |||||||||
RMB | 110,701 | 4.88 | 539,758 | |||||||||
Non-Monetary items | ||||||||||||
USD | 72,670 | 30.41 | 2,210,125 | |||||||||
CHF | 1,980 | 34.29 | 67,900 | |||||||||
Financial Liabilities | ||||||||||||
Monetary items | ||||||||||||
USD | 653,840 | 30.51 | 19,950,627 | |||||||||
JPY | 4,820,555 | 0.2983 | 1,437,972 | |||||||||
EUR | 3,507 | 42.15 | 147,819 | |||||||||
SGD | 39,234 | 24.27 | 952,198 | |||||||||
RMB | 29,173 | 4.93 | 143,706 | |||||||||
The exchange gain or loss from monetary financial assets and liabilities | ||||||||||||
USD | 43,133 | |||||||||||
JPY | (37,730 | ) | ||||||||||
EUR | 10,041 | |||||||||||
SGD | (2,363 | ) | ||||||||||
RMB | (2,274 | ) | ||||||||||
Other | 11,297 |
(9) | Significant intercompany transactions among consolidated entities for the three-month periods ended March 31, 2015 and 2014 are disclosed in Attachment 1. |
(10) | Capital management |
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios to support its business and maximize the stockholders’ value. The Company also ensures its ability to operate continuously to provide returns to stockholders and the interests of other related parties, while maintaining the optimal capital structure to reduce costs of capital.
97
To maintain or adjust the capital structure, the Company may adjust the dividend payment to stockholders, return capital to stockholders, issue new shares or dispose assets to redeem liabilities.
Similar to its peers, the Company monitors its capital based on debt to capital ratio. The ratio is calculated as the Company’s net debt divided by its total capital. The net debt is derived by taking the total liabilities on the consolidated balance sheets minus cash and cash equivalents. The total capital consists of total equity (including capital, additional paid-in capital, retained earnings, other components of equity and non-controlling interests) plus net debt.
The Company has maintained the same capital management strategy for the three-month period ended March 31, 2015 as compared to the three-month period ended March 31, 2014, which is to maintain a reasonable ratio in order to raise capital with reasonable cost. The debt to capital ratios as of March 31, 2015, December 31, 2014 and March 31, 2014 were as follows:
As of | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
Total liabilities | $ | 91,802,574 | $ | 88,236,797 | $ | 83,852,108 | ||||||
Less: Cash and cash equivalents | (53,632,056 | ) | (45,701,335 | ) | (53,915,155 | ) | ||||||
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Net debt | 38,170,518 | 42,535,462 | 29,936,953 | |||||||||
Total equity | 229,262,232 | 225,008,851 | 217,775,311 | |||||||||
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Total capital | $ | 267,432,750 | $ | 267,544,313 | $ | 247,712,264 | ||||||
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Debt to capital ratios | 14.27 | % | 15.90 | % | 12.09 | % | ||||||
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13. | ADDITIONAL DISCLOSURES |
(1) | The following are additional disclosures for the Company and its affiliates as required by the R.O.C. Securities and Futures Bureau: |
a. | Financing provided to others for the three-month period ended March 31, 2015: Please refer to Attachment 2. |
b. | Endorsement/Guarantee provided to others for the three-month period ended March 31, 2015: Please refer to Attachment 3. |
98
c. | Securities held as of March 31, 2015 (excluding subsidiaries, associates and joint venture): Please refer to Attachment 4. |
d. | Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the three-month period ended March 31, 2015: Please refer to Attachment 5. |
e. | Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the three-month period ended March 31, 2015: Please refer to Attachment 6. |
f. | Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the three-month period ended March 31, 2015: Please refer to Attachment 7. |
g. | Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock for the three-month period ended March 31, 2015: Please refer to Attachment 8. |
h. | Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of March 31, 2015: Please refer to Attachment 9. |
i. | Names, locations and related information of investees as of March 31, 2015 (excluding investment in Mainland China): Please refer to Attachment 10. |
j. | Financial instruments and derivative transactions: Please refer to Note 12. |
(2) | Investment in Mainland China |
a. | Investee company name, main businesses and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, net income (loss) of investee company, percentage of ownership, investment income (loss), book value of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 11. |
b. | Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, unrealized gain or loss, and other events with significant effects on the operating results and financial condition: None. |
99
14. | OPERATING SEGMENT INFORMATION |
The Company determined its operating segments based on business activities with discrete financial information regularly reported through the Company’s internal reporting protocols to the Company’s chief operating decision maker. The Company is organized into business units based on its products and services. As of March 31, 2015, the Company had the following segments: wafer fabrication and new business. There were no material differences between the accounting policies, described in Note 4, and those applied by the operating segments. The primary operating activity of the wafer fabrication segment is the manufacture of chips to the design specifications of our customers by using our own proprietary processes and techniques. The Company maintains a diversified customer base across industries, including communication, consumer electronics, computer, memory and others, while continuing to focus on manufacturing for high growth, large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics. New business segment primarily includes researching, developing, manufacturing, and providing solar energy and new generation light-emitting diode (LED).
Reportable segment information for the three-month periods ended March 31, 2015 and 2014 were as follows:
For the three-month period ended March 31, 2015 | ||||||||||||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | ||||||||||||||||
Net revenue from external customers | $ | 35,977,553 | $ | 1,672,091 | $ | 37,649,644 | $ | — | $ | 37,649,644 | ||||||||||
Net revenue from sales among intersegments | 21,941 | 852 | 22,793 | (22,793 | ) | — | ||||||||||||||
Segment net income (loss), net of tax | 4,033,392 | (343,078 | ) | 3,690,314 | 222,158 | 3,912,472 | ||||||||||||||
Capital expenditure | 14,852,641 | 40,093 | 14,892,734 | — | 14,892,734 | |||||||||||||||
Depreciation | 10,103,393 | 207,404 | 10,310,797 | — | 10,310,797 | |||||||||||||||
Share of profit or loss of associates and joint ventures | (157,612 | ) | (22,740 | ) | (180,352 | ) | 222,158 | 41,806 | ||||||||||||
Income tax expense (benefit) | 442,431 | (793 | ) | 441,638 | — | 441,638 | ||||||||||||||
Impairment loss | 288,620 | — | 288,620 | — | 288,620 |
100
For the three-month period ended March 31, 2014 | ||||||||||||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | ||||||||||||||||
Net revenue from external customers | $ | 28,696,723 | $ | 2,996,862 | $ | 31,693,585 | $ | — | $ | 31,693,585 | ||||||||||
Net revenue from sales among intersegments | 15,495 | 1,714 | 17,209 | (17,209 | ) | — | ||||||||||||||
Segment net income (loss), net of tax | 1,212,783 | (218,362 | ) | 994,421 | 116,386 | 1,110,807 | ||||||||||||||
Capital expenditure | 6,223,531 | 53,060 | 6,276,591 | — | 6,276,591 | |||||||||||||||
Depreciation | 8,890,061 | 560,169 | 9,450,230 | — | 9,450,230 | |||||||||||||||
Share of profit or loss of associates and joint ventures | (148,704 | ) | (3,063 | ) | (151,767 | ) | 116,386 | (35,381 | ) | |||||||||||
Income tax expense (benefit) | 182,385 | (1,609 | ) | 180,776 | — | 180,776 | ||||||||||||||
Impairment loss | 92,519 | — | 92,519 | — | 92,519 |
As of March 31, 2015 | ||||||||||||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination (Note) | Consolidated | ||||||||||||||||
Segment assets | $ | 313,077,848 | $ | 12,610,457 | $ | 325,688,305 | $ | (4,623,499 | ) | $ | 321,064,806 | |||||||||
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Segment liabilities | $ | 84,929,689 | $ | 6,901,798 | $ | 91,831,487 | $ | (28,913 | ) | $ | 91,802,574 | |||||||||
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As of December 31, 2014 | ||||||||||||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination (Note) | Consolidated | ||||||||||||||||
Segment assets | $ | 304,022,185 | $ | 13,622,342 | $ | 317,644,527 | $ | (4,398,879 | ) | $ | 313,245,648 | |||||||||
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Segment liabilities | $ | 80,166,502 | $ | 8,096,635 | $ | 88,263,137 | $ | (26,340 | ) | $ | 88,236,797 | |||||||||
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As of March 31, 2014 | ||||||||||||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination (Note) | Consolidated | ||||||||||||||||
Segment assets | $ | 289,748,658 | $ | 17,831,557 | $ | 307,580,215 | $ | (5,952,796 | ) | $ | 301,627,419 | |||||||||
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Segment liabilities | $ | 73,880,051 | $ | 9,994,324 | $ | 83,874,375 | $ | (22,267 | ) | $ | 83,852,108 | |||||||||
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Note: | The adjustment primarily consisted of elimination entries for wafer fabrication segment’s investments in new business segment that was accounted for under the equity method. |
101
ATTACHMENT 1 (Significant intercompany transactions between consolidated entities)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
For the three-month period ended March 31, 2015
Related party | Counterparty | Relationship with the Company (Note 2) | Transactions | |||||||||||||||||||
No. (Note 1) | Account | Amount | Terms (Note 3) | Percentage of consolidated operating revenues or consolidated total assets (Note 4) | ||||||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Sales | $ | 16,480,498 | Net 60 days | 44 | % | |||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Accounts receivable | 9,319,139 | — | 3 | % | ||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Sales | 2,002,635 | Net 60 days | 5 | % | ||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Accounts receivable | 1,526,217 | — | 0 | % |
For the three-month period ended March 31, 2014
Related party | Counterparty | Relationship with the Company (Note 2) | Transactions | |||||||||||||||||||
No. (Note 1) | Account | Amount | Terms (Note 3) | Percentage of consolidated operating revenues or consolidated total assets (Note 4) | ||||||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Sales | $ | 12,727,101 | Net 60 days | 40 | % | |||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Accounts receivable | 6,404,100 | — | 2 | % | ||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Sales | 775,820 | Net 60 days | 2 | % | ||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Accounts receivable | 677,416 | — | 0 | % |
Note 1: | UMC and its subsidiaries are coded as follows: |
1. UMC is coded “0”. |
2. The subsidiaries are coded consecutively beginning from “1” in the order presented in the table above. |
Note 2: | Transactions are categorized as follows: |
1. The holding company to subsidiary. |
2. Subsidiary to holding company. |
3. Subsidiary to subsidiary. |
Note 3: | The sales price to the above related parties was determined through mutual agreement based on the market conditions. |
Note 4: | The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item’s balance at period-end. |
For profit or loss items, cumulative balances are used as basis. |
102
ATTACHMENT 2 (Financing provided to others for the three-month period ended March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
TERA ENERGY DEVELOPMENT CO., LTD.
No. (Note 1) | Lender | Counter-party | Financial statement account | Related Party | Maximum balance for the period | Ending balance | Actual amount provided | Interest rate | Nature of financing | Amount of sales to (purchases from) counter- party | Reason for financing | Allowance for doubtful accounts |
Collateral | Limit of financing amount for individual counter- party (Note2) | Limit of total financing amount (Note2) | |||||||||||||||||||||||||||||||||||||||||||
Item | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | TERA ENERGY DEVELOPMENT CO., LTD. | TIPPING POINT ENERGY COC PPA SPE-1, LLC | Other receivables | No | $ | 2,936 | $ | 2,936 | $ | 2,936 | 9.00 | % | | Need for operating | | $ | 2,936 | — | $ | 2,936 | None | $ | — | $ | 74,314 | $ | 118,903 | |||||||||||||||||||||||||||||||
. |
NEXPOWER TECHNOLOGY CORPORATION
No. (Note 1) | Lender | Counter-party | Financial statement account | Related Party | Maximum balance for the period | Ending balance | Actual amount provided | Interest rate | Nature of financing | Amount of sales to (purchases from) counter- party | Reason for financing | Allowance for doubtful accounts |
Collateral | Limit of financing amount for individual counter- party (Note3) | Limit of total financing amount (Note3) | |||||||||||||||||||||||||||||||||||||||
Item | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | NEXPOWER TECHNOLOGY CORPORATION | SOCIALNEX ITALIA 1 S.R.L. | Other receivables - related parties | Yes | $ | 6,694 | $ | — | $ | — | 7.00 | % | The need for short term financing | $ | — | Business turnover | $ | — | None | $ | — | $ | 107,735 | $ | 861,882 |
Note 1: The parent company and its subsidiaries are coded as follows:
(i) The parent company is coded “0”. |
(ii) The subsidiaries are coded consecutively beginning from “1” in the order presented in the table above. |
Note | 2: Limit of financing amount for individual counter-party including guarantee amount shall not exceed 25% of the lender’s net assets value as of the period or the needed amount for operation, which is higher. |
Limit of total financing amount shall not exceed 40% of the lender’s net assets of value as of March 31, 2015. |
Note | 3: Limit of financing amount for individual counter-party shall not exceed 5% of the lender’s net assets value as of the period or the needed amount for operation, which is lower. |
Limit of total financing amount shall not exceed 40% of the lender’s net assets of value as of March 31, 2015. |
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ATTACHMENT 3 (Endorsement/Guarantee provided to others for the three-month period ended March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
No. (Note 1) | Endorsor/Guarantor |
Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 3) | Maximum balance for the period | Ending balance (Note 5) | Actual amount provided (Note 5) | Amount of collateral guarantee/ endorsement | Percentage of accumulated guarantee amount to net assets value from the latest financial statement | Limit of total guarantee/ endorsement amount (Note 4) | |||||||||||||||||||||||||
Company name | Releationship (Note 2) | |||||||||||||||||||||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | NEXPOWER TECHNOLOGY CORPORATION | 3 | $ | 11,271,483 | $ | 3,100,000 | $ | 1,700,000 | $ | 1,385,000 | $ | — | 0.75 | % | $ | 45,085,932 |
NEXPOWER TECHNOLOGY CORPORATION
No. (Note 1) | Endorsor/Guarantor |
Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 3) | Maximum balance for the period | Ending balance | Actual amount provided | Amount of collateral guarantee/ endorsement | Percentage of accumulated guarantee amount to net assets value from the latest financial statement | Limit of total guarantee/ endorsement amount (Note 6) | |||||||||||||||||||||||||
Company name | Releationship (Note 2) | |||||||||||||||||||||||||||||||||
0 | NEXPOWER TECHNOLOGY CORPORATION | SOCIALNEX ITALIA 1 S.R.L. | 2 | $ | 107,735 | $ | 18,668 | $ | 18,668 | $ | 18,668 | $ | 18,668 | 0.87 | % | $ | 861,882 |
Note 1: | The parent company and its subsidiaries are coded as follows: |
1. The parent company is coded “0”.
2. The subsidiaries are coded consecutively beginning from “1” in the order presented in the table above.
Note 2: | According to the “Guidelines Governing the Preparation of Financial Reports by Securities Issuers” issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following: |
1. A company that has a business relationship with endorsor/guarantor.
2. A subsidary in which endorsor/guarantor holds directly over 50% of equity interest.
3. An investee in which endorsor/guarantor and its subsidiaries hold over 50% of equity interest.
4. An investor which holds directly or indirectly over 50% of equity interest of endorsor/guarantor.
5. A company that has provided guarantees to endorsor/guarantor, and vice versa, due to contractual requirements.
6. An investee in which endorsor/guarantor conjunctly invests with other shareholders, and for which endorsor/guarantor has
provided endorsement/guarantee in proportion to its shareholding percentage.
Note 3: | The amount of guarantees/endorsements shall not exceed 20% of the net worth of endorsor/guarantor; and the ceilings on the amount of guarantees/endorsements for any single entity are as follows: |
1. The amount of guarantees/endorsements for any single entity shall not exceed 5% of net worth of endorsor/guarantor.
2. The amount of guarantees/endorsements for a company which endorsor/guarantor does business with, except the ceiling rules
abovementioned shall not exceed the needed amounts arising from business dealings which is the higher amount of total sales or
purchase transactions between endorsor/guarantor and the receiving party.
The aggregate amount of guarantees/endorsements that the Company as a whole is permitted to make shall not exceed 40% of
the Company’s net worth, and the aggregate amount of guarantees/endorsements for any single entity shall not exceed 20% of
the Company��s net worth.
Note 4: | Limit of total guaranteed/endorsed amount shall not exceed 20% of UMC’s net assets value as of March 31, 2015. |
Note 5: | On December 24, 2014, the board of directors resolved to provide endorsement to NEXPOWER TECHNOLOGY CORPORATION’s (NEXPOWER) syndicated loan from banks including Bank of Taiwan for the amount up to NT$1,700 million. |
As of March 31, 2015, actual amount provided was NT$1,385 million.
Note 6: | Limit of total guaranteed/endorsed amount shall not exceed 40% of NEXPOWER’s net assets value as of December 31, 2014. |
104
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
March 31, 2015 | ||||||||||||||||||||||||||
Type of | Name of securities | Relationship | Financial | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||
Bonds | CATHAY FINANCIAL HOLDING CO., LTD. | — | Financial assets at fair value through profit or loss, current | 380 | $ | 386,752 | — | $ | 386,752 | None | ||||||||||||||||
Stock | ACTION ELECTRONICS CO., LTD. | — | Financial assets at fair value through profit or loss, current | 18,182 | 120,002 | 6.44 | 120,002 | None | ||||||||||||||||||
Stock | MICRONAS SEMICONDUCTOR HOLDING AG | — | Financial assets at fair value through profit or loss, current | 1,600 | 167,200 | 1.22 | 167,200 | None | ||||||||||||||||||
Stock | KING YUAN ELECTRONICS CO., LTD. | — | Financial assets at fair value through profit or loss, current | 2,675 | 76,104 | 0.22 | 76,104 | None | ||||||||||||||||||
Stock | SILICON INTEGRATED SYSTEMS CORP. | The Company’s director | Available-for-sale financial assets, noncurrent | 120,892 | 1,026,373 | 19.70 | 1,026,373 | None | ||||||||||||||||||
Stock | UNIMICRON HOLDING LIMITED | — | Available-for-sale financial assets, noncurrent | 20,000 | 656,250 | 17.67 | 656,250 | None | ||||||||||||||||||
Stock | UNITED FU SHEN CHEN TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 17,511 | — | 15.75 | — | None | ||||||||||||||||||
Stock | FARADAY TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 57,067 | 2,596,550 | 13.78 | 2,596,550 | None | ||||||||||||||||||
Stock | UNIMICRON TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 196,136 | 3,981,561 | 12.75 | 3,981,561 | None | ||||||||||||||||||
Stock | HOLTEK SEMICONDUCTOR INC. | — | Available-for-sale financial assets, noncurrent | 25,944 | 1,533,306 | 11.47 | 1,533,306 | None | ||||||||||||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | — | Available-for-sale financial assets, noncurrent | 14,857 | 148,571 | 11.01 | 148,571 | None | ||||||||||||||||||
Stock | MIE FUJITSU SEMICONDUCTOR LIMITED | Available-for-sale financial assets, noncurrent | 10,000 | 1,293,000 | 9.28 | 1,293,000 | None | |||||||||||||||||||
Stock | ITE TECH. INC. | — | Available-for-sale financial assets, noncurrent | 13,960 | 550,023 | 8.84 | 550,023 | None | ||||||||||||||||||
Stock | UNITED INDUSTRIAL GASES CO., LTD. | — | Available-for-sale financial assets, noncurrent | 16,680 | 1,340,047 | 7.66 | 1,340,047 | None | ||||||||||||||||||
Stock | PROMOS TECHNOLOGIES INC. | — | Available-for-sale financial assets, noncurrent | 164,990 | — | 6.49 | — | None | ||||||||||||||||||
Stock | AMIC TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 5,627 | — | 4.71 | — | None | ||||||||||||||||||
Stock | SUBTRON TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 12,521 | 194,822 | 4.23 | 194,822 | None | ||||||||||||||||||
Stock | NOVATEK MICROELECTRONICS CORP. | — | Available-for-sale financial assets, noncurrent | 16,445 | 2,664,023 | 2.70 | 2,664,023 | None | ||||||||||||||||||
Stock | KING YUAN ELECTRONICS CO., LTD. | — | Available-for-sale financial assets, noncurrent | 23,158 | 658,836 | 1.94 | 658,836 | None | ||||||||||||||||||
Stock | EPISTAR CORP. | — | Available-for-sale financial assets, noncurrent | 10,715 | 540,036 | 0.97 | 540,036 | None | ||||||||||||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,315 | 42,086 | 0.83 | 42,086 | None | ||||||||||||||||||
Stock- Preferred stock | TAIWAN HIGH SPEED RAIL CORP. | — | Available-for-sale financial assets, noncurrent | 30,000 | 300,000 | — | 300,000 | None | ||||||||||||||||||
Stock | PIXTECH, INC. | — | Financial assets measured at cost, noncurrent | 9,883 | — | 17.63 | Note | None | ||||||||||||||||||
Stock | OCTTASIA INVESTMENT HOLDING INC. | — | Financial assets measured at cost, noncurrent | 6,692 | 196,071 | 9.29 | Note | None | ||||||||||||||||||
Stock | EMIVEST AEROSPACE CORP. | — | Financial assets measured at cost, noncurrent | 1,124 | — | 1.50 | Note | None | ||||||||||||||||||
Stock- Preferred stock | MTIC HOLDINGS PTE. LTD. | — | Financial assets measured at cost, noncurrent | 12,000 | 263,460 | — | N/A | None |
105
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
Name of securities | Relationship | Financial statement account | March 31, 2015 | |||||||||||||||||||||||||
Type of securities | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | |||||||||||||||||||||||
Stock-Preferred stock | TONBU, INC. | — | Financial assets measured at cost, noncurrent | 938 | $ | — | — | N/A | None | |||||||||||||||||||
Stock-Preferred stock | AETAS TECHNOLOGY INC. | — | Financial assets measured at cost, noncurrent | 1,166 | — | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | TASHEE GOLF & COUNTRY CLUB | — | Financial assets measured at cost, noncurrent | 0 | 60 | — | N/A | None |
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015.
FORTUNE VENTURE CAPITAL CORP.
March 31, 2015 | ||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||
Stock | CLIENTRON CORP. | — | Available-for-sale financial assets, noncurrent | 14,060 | $ | 267,215 | 19.53 | $ | 267,215 | None | ||||||||||||||||||
Stock | ACT GENOMICS CO.,LTD. | — | Available-for-sale financial assets, noncurrent | 3,600 | 45,000 | 14.17 | 45,000 | None | ||||||||||||||||||||
Stock | OCULON OPTOELECTRONICS INC. | — | Available-for-sale financial assets, noncurrent | 1,947 | — | 11.73 | — | None | ||||||||||||||||||||
Stock | BCOM ELECTRONICS INC. | — | Available-for-sale financial assets, noncurrent | 1,572 | 10,886 | 11.73 | 10,886 | None | ||||||||||||||||||||
Stock | EVERGLORY RESOURCE TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 2,500 | 19,454 | 10.23 | 19,454 | None | ||||||||||||||||||||
Stock | UWIZ TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 4,530 | 52,593 | 9.14 | 52,593 | None | ||||||||||||||||||||
Stock | ADVANCE MATERIALS CORP. | — | Available-for-sale financial assets, noncurrent | 11,910 | 124,260 | 8.67 | 124,260 | None | ||||||||||||||||||||
Stock | AREC INC. | — | Available-for-sale financial assets, noncurrent | 1,109 | 15,080 | 8.34 | 15,080 | None | ||||||||||||||||||||
Stock | AWISE FIBER TECH.CO.,LTD. | — | Available-for-sale financial assets, noncurrent | 1,519 | 3,418 | 8.31 | 3,418 | None | ||||||||||||||||||||
Stock | ELE-CON TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 2,530 | 49,259 | 7.83 | 49,259 | None | ||||||||||||||||||||
Stock | EPITRON TECHNOLOGY INC. | — | Available-for-sale financial assets, noncurrent | 2,450 | 8,233 | 7.78 | 8,233 | None | ||||||||||||||||||||
Stock | BORA PHARMACEUTICALS CO., LTD. (formerly BORA CORP.) | — | Available-for-sale financial assets, noncurrent | 1,700 | 200,600 | 7.57 | 200,600 | None | ||||||||||||||||||||
Stock | SHIN-ETSU HANDOTAI TAIWAN CO., LTD. | — | Available-for-sale financial assets, noncurrent | 10,500 | 105,000 | 7.00 | 105,000 | None | ||||||||||||||||||||
Stock | EXCELLENCE OPTOELECTRONICS INC. | — | Available-for-sale financial assets, noncurrent | 8,529 | 130,870 | 6.62 | 130,870 | None | ||||||||||||||||||||
Stock | MERIDIGEN BIOTECH CO., LTD. | — | Available-for-sale financial assets, noncurrent | 3,300 | 66,000 | 6.13 | 66,000 | None | ||||||||||||||||||||
Stock | PRIMESENSOR TECHNOLOGY INC. | — | Available-for-sale financial assets, noncurrent | 1,225 | 7,180 | 5.79 | 7,180 | None | ||||||||||||||||||||
Stock | CANDMARK ELECTROPTICS CO., LTD. (formerly CANDMARK ENTERPRISE CO., LTD.) | — | Available-for-sale financial assets, noncurrent | 3,801 | 69,938 | 5.28 | 69,938 | None | ||||||||||||||||||||
Stock | ACTI CORP. | — | Available-for-sale financial assets, noncurrent | 1,968 | 53,720 | 5.25 | 53,720 | None | ||||||||||||||||||||
Stock | ANDES TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 1,732 | 138,540 | 4.86 | 138,540 | None | ||||||||||||||||||||
Stock | LUMITEK CORP. | — | Available-for-sale financial assets, noncurrent | 1,785 | — | 4.81 | — | None | ||||||||||||||||||||
Stock | LUMINESCENCE TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 524 | 18,328 | 4.33 | 18,328 | None | ||||||||||||||||||||
Stock | AMOD TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 358 | 5,383 | 4.33 | 5,383 | None | ||||||||||||||||||||
Stock | SOLID STATE SYSTEM CO., LTD. | — | Available-for-sale financial assets, noncurrent | 3,000 | 87,660 | 4.24 | 87,660 | None |
106
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
FORTUNE VENTURE CAPITAL CORP.
March 31, 2015 | ||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||
Stock | WALTOP INTERNATIONAL CORP. | — | Available-for-sale financial assets, noncurrent | 1,275 | $ | 4,883 | 4.02 | $ | 4,883 | None | ||||||||||||||||
Stock | MOBILE DEVICES INC. | — | Available-for-sale financial assets, noncurrent | 2,309 | — | 3.96 | — | None | ||||||||||||||||||
Stock | DAWNING LEADING TECHNOLOGY INC. | — | Available-for-sale financial assets, noncurrent | 10,133 | 132,743 | 3.78 | 132,743 | None | ||||||||||||||||||
Stock | SUBTRON TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 10,129 | 157,604 | 3.43 | 157,604 | None | ||||||||||||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 4,907 | 157,019 | 3.09 | 157,019 | None | ||||||||||||||||||
Stock | DRAMEXCHANGE TECH. INC. | — | Available-for-sale financial assets, noncurrent | 336 | 3,634 | 2.48 | 3,634 | None | ||||||||||||||||||
Stock | SUPERALLOY INDUSTRIAL CO., LTD. | — | Available-for-sale financial assets, noncurrent | 4,603 | 586,852 | 2.31 | 586,852 | None | ||||||||||||||||||
Stock | CRYSTALWISE TECHNOLOGY INC. | — | Available-for-sale financial assets, noncurrent | 4,321 | 125,953 | 2.06 | 125,953 | None | ||||||||||||||||||
Stock | LICO TECHNOLOGY CORP. | — | Available-for-sale financial assets, noncurrent | 2,520 | — | 2.03 | — | None | ||||||||||||||||||
Stock | ALL-STARS XMI LTD. | — | Available-for-sale financial assets, noncurrent | 7 | 217,980 | 1.37 | 217,980 | None | ||||||||||||||||||
Stock | WIESON TECHNOLOGIES CO., LTD. | — | Available-for-sale financial assets, noncurrent | 842 | 11,952 | 1.27 | 11,952 | None | ||||||||||||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 2,698 | 399,282 | 1.19 | 399,282 | None | ||||||||||||||||||
Stock | POWERTEC ENERGY CORP. | — | Available-for-sale financial assets, noncurrent | 18,700 | 89,199 | 1.10 | 89,199 | None | ||||||||||||||||||
Stock | HIGH POWER OPTOELECTRONICS, INC. | — | Available-for-sale financial assets, noncurrent | 1,530 | — | 0.53 | — | None | ||||||||||||||||||
Stock | MERCURIES LIFE INSURANCE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 5,054 | 89,456 | 0.37 | 89,456 | None | ||||||||||||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | — | Available-for-sale financial assets, noncurrent | 475 | 4,746 | 0.35 | 4,746 | None | ||||||||||||||||||
Stock | UNITED MICROELECTRONICS CORP. | Parent company | Available-for-sale financial assets, noncurrent | 16,079 | 249,220 | 0.13 | 249,220 | None | ||||||||||||||||||
Stock | GLOBALWAFERS CO., LTD. | — | Available-for-sale financial assets, noncurrent | 184 | 16,837 | 0.05 | 16,837 | None | ||||||||||||||||||
Stock | DARCHUN VENTURE CORP. | — | Financial assets measured at cost, noncurrent | 3,335 | 33,345 | 19.65 | Note | None | ||||||||||||||||||
Stock | GOLDEN TECHNOLOGY VENTURE CAPITAL INVESTMENT CORP. | — | Financial assets measured at cost, noncurrent | 766 | 587 | 10.67 | Note | None | ||||||||||||||||||
Stock | NCTU SPRING I TECHNOLOGY VENTURE CAPITAL INVESTMENT CORP. | — | Financial assets measured at cost, noncurrent | 269 | — | 10.06 | Note | None | ||||||||||||||||||
Stock | RISELINK VENTURE CAPITAL CORP. | — | Financial assets measured at cost, noncurrent | 5,398 | 50,618 | 6.67 | Note | None | ||||||||||||||||||
Stock | PARAWIN VENTURE CAPITAL CORP. | — | Financial assets measured at cost, noncurrent | 3,600 | 27,896 | 5.00 | Note | None | ||||||||||||||||||
Stock | IBT VENTURE CORP. | — | Financial assets measured at cost, noncurrent | 193 | 450 | 3.81 | Note | None | ||||||||||||||||||
Stock | ANIMATION TECHNOLOGIES INC. | — | Financial assets measured at cost, noncurrent | 265 | — | 3.16 | Note | None | ||||||||||||||||||
Stock | FIRST INTERNATIONAL TELECOM CORP. | — | Financial assets measured at cost, noncurrent | 4,610 | — | 1.02 | Note | None | ||||||||||||||||||
Fund | IGLOBE PARTNERS FUND, L.P. | — | Financial assets measured at cost, noncurrent | — | 12,092 | — | N/A | None | ||||||||||||||||||
Stock-Preferred stock | AEVOE INTERNATIONAL LTD. | — | Financial assets measured at cost, noncurrent | 4,170 | 181,286 | — | N/A | None | ||||||||||||||||||
Stock-Preferred stock | REALLUSION (CAYMAN) HOLDING INC. | — | Financial assets measured at cost, noncurrent | 1,872 | 14,696 | — | N/A | None |
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015.
107
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
TLC CAPITAL CO., LTD.
March 31, 2015 | ||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||
Convertible bonds | EASOU HOLDINGS COMPANY LIMITED (formerly YETI GROUP LTD.) | — | Financial assets at fair value through profit or loss, current | — | $ | 103,584 | — | $ | 103,584 | None | ||||||||||||||||||
Convertible bonds | WINKING ENTERTAINMENT LTD. | — | Financial assets at fair value through profit or loss, noncurrent | — | 44,338 | — | 44,338 | None | ||||||||||||||||||||
Stock | VSENSE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,851 | 46,282 | 17.06 | 46,282 | None | ||||||||||||||||||||
Stock | BEAUTY ESSENTIALS INTERNATIONAL LTD. | — | Available-for-sale financial assets, noncurrent | 150,500 | 273,910 | 15.65 | 273,910 | None | ||||||||||||||||||||
Stock | SUPERALLOY INDUSTRIAL CO., LTD. | — | Available-for-sale financial assets, noncurrent | 9,804 | 1,249,994 | 4.93 | 1,249,994 | None | ||||||||||||||||||||
Stock | ACTI CORP. | — | Available-for-sale financial assets, noncurrent | 1,500 | 40,950 | 4.00 | 40,950 | None | ||||||||||||||||||||
Stock | CANDMARK ELECTROPTICS CO., LTD. (formerly CANDMARK ENTERPRISE CO., LTD.) | — | Available-for-sale financial assets, noncurrent | 2,772 | 51,009 | 3.85 | 51,009 | None | ||||||||||||||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | — | Available-for-sale financial assets, noncurrent | 4,086 | 40,857 | 3.03 | 40,857 | None | ||||||||||||||||||||
Stock | WIESON TECHNOLOGIES CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,775 | 25,191 | 2.67 | 25,191 | None | ||||||||||||||||||||
Stock | COLAND HOLDINGS LTD. | — | Available-for-sale financial assets, noncurrent | 1,344 | 96,218 | 1.72 | 96,218 | None | ||||||||||||||||||||
Stock | SIMPLO TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 4,110 | 647,294 | 1.33 | 647,294 | None | ||||||||||||||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 2,698 | 399,282 | 1.19 | 399,282 | None | ||||||||||||||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,859 | 59,480 | 1.17 | 59,480 | None | ||||||||||||||||||||
Stock | ALL-STARS XMI LTD. | — | Available-for-sale financial assets, noncurrent | 6 | 186,840 | 1.17 | 186,840 | None | ||||||||||||||||||||
Stock | POWERTEC ENERGY CORP. | — | Available-for-sale financial assets, noncurrent | 18,700 | 89,199 | 1.10 | 89,199 | None | ||||||||||||||||||||
Stock | TXC CORP. | — | Available-for-sale financial assets, noncurrent | 1,978 | 79,219 | 0.64 | 79,219 | None | ||||||||||||||||||||
Stock | MERCURIES LIFE INSURANCE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 7,588 | 134,309 | 0.56 | 134,309 | None | ||||||||||||||||||||
Stock | CHIPMOS TECHNOLOGIES INC. | — | Available-for-sale financial assets, noncurrent | 2,288 | 107,650 | 0.26 | 107,650 | None | ||||||||||||||||||||
Stock | GLOBALWAFERS CO., LTD. | — | Available-for-sale financial assets, noncurrent | 184 | 16,837 | 0.05 | 16,837 | None | ||||||||||||||||||||
Stock | CHUNGHWA TELECOM CO., LTD. | — | Available-for-sale financial assets, noncurrent | 2,015 | 200,493 | 0.03 | 200,493 | None | ||||||||||||||||||||
Stock | KU6 MEDIA CO., LTD. | — | Available-for-sale financial assets, noncurrent | 0.078 | — | 0.00 | — | None | ||||||||||||||||||||
Stock-Preferred stock | HIGHLANDER FINANCIAL GROUP CO., LTD. | — | Available-for-sale financial assets, noncurrent | 16,663 | 149,550 | — | 149,550 | None | ||||||||||||||||||||
Stock-Preferred stock | X2 POWER TECHNOLOGIES LIMITED | — | Available-for-sale financial assets, noncurrent | 22,500 | 70,383 | — | 70,383 | None | ||||||||||||||||||||
Stock | WINKING ENTERTAINMENT LTD. | — | Financial assets measured at cost, noncurrent | 1,461 | 12,996 | — | Note | None | ||||||||||||||||||||
Stock-Preferred stock | TOUCH MEDIA INTERNATIONAL HOLDINGS | — | Financial assets measured at cost, noncurrent | 7,575 | 293,729 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | EASOU HOLDINGS COMPANY LIMITED (formerly YETI GROUP LTD.) | — | Financial assets measured at cost, noncurrent | 14,356 | 265,326 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | WINKING ENTERTAINMENT LTD. | — | Financial assets measured at cost, noncurrent | 4,971 | 198,222 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | ALO7.COM LTD. | — | Financial assets measured at cost, noncurrent | 2,606 | 183,678 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | IMO, INC. | — | Financial assets measured at cost, noncurrent | 8,519 | 150,266 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | YOUJIA GROUP LTD. | — | Financial assets measured at cost, noncurrent | 2,685 | 105,016 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | ADWO MEDIA HOLDINGS LTD. | — | Financial assets measured at cost, noncurrent | 6,664 | 109,821 | — | N/A | None | ||||||||||||||||||||
Stock-Preferred stock | IAPPPAY TECHNOLOGY LTD. | — | Financial assets measured at cost, noncurrent | 1,004 | 103,355 | — | N/A | None | ||||||||||||||||||||
Fund | H&QAP GREATER CHINA GROWTH FUND, L.P. | — | Financial assets measured at cost, noncurrent | — | 24,947 | — | N/A | None | ||||||||||||||||||||
Stock | MONTAGE TECHNOLOGY GLOBAL HOLDINGS, LTD. | — | Prepayment for investments | 125 | 90,824 | — | — | None |
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015.
108
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITRUTH INVESTMENT CORP.
March 31, 2015 | ||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||
Stock | OCULON OPTOELECTRONICS INC. | — | Available-for-sale financial assets, noncurrent | 1,288 | $ | — | 7.77 | $ | — | None | ||||||||||||||||||
Stock | BCOM ELECTRONICS INC. | — | Available-for-sale financial assets, noncurrent | 1,030 | 7,130 | 7.68 | 7,130 | None | ||||||||||||||||||||
Stock | AREC INC. | — | Available-for-sale financial assets, noncurrent | 986 | 13,404 | 7.41 | 13,404 | None | ||||||||||||||||||||
Stock | UWIZ TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 3,410 | 39,593 | 6.88 | 39,593 | None | ||||||||||||||||||||
Stock | AWISE FIBER TECH.CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,089 | 2,449 | 5.95 | 2,449 | None | ||||||||||||||||||||
Stock | EXCELLENCE OPTOELECTRONICS INC. | — | Available-for-sale financial assets, noncurrent | 6,374 | 97,801 | 4.94 | 97,801 | None | ||||||||||||||||||||
Stock | EVERGLORY RESOURCE TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,200 | 9,338 | 4.91 | 9,338 | None | ||||||||||||||||||||
Stock | EPITRON TECHNOLOGY INC. | — | Available-for-sale financial assets, noncurrent | 1,528 | 5,136 | 4.86 | 5,136 | None | ||||||||||||||||||||
Stock | ADVANCE MATERIALS CORP. | — | Available-for-sale financial assets, noncurrent | 6,039 | 63,004 | 4.39 | 63,004 | None | ||||||||||||||||||||
Stock | AMOD TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 314 | 4,723 | 3.80 | 4,723 | None | ||||||||||||||||||||
Stock | ELE-CON TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,190 | 23,177 | 3.69 | 23,177 | None | ||||||||||||||||||||
Stock | CANDMARK ELECTROPTICS CO., LTD. (formerly CANDMARK ENTERPRISE CO., LTD.) | — | Available-for-sale financial assets, noncurrent | 2,037 | 37,487 | 2.83 | 37,487 | None | ||||||||||||||||||||
Stock | DRAMEXCHANGE TECH. INC. | — | Available-for-sale financial assets, noncurrent | 336 | 3,634 | 2.48 | 3,634 | None | ||||||||||||||||||||
Stock | TAIWANJ PHARMACEUTICALS CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,000 | 30,000 | 2.22 | 30,000 | None | ||||||||||||||||||||
Stock | WALTOP INTERNATIONAL CORP. | — | Available-for-sale financial assets, noncurrent | 687 | 2,630 | 2.17 | 2,630 | None | ||||||||||||||||||||
Stock | ACTI CORP. | — | Available-for-sale financial assets, noncurrent | 752 | 20,518 | 2.01 | 20,518 | None | ||||||||||||||||||||
Stock | LUMITEK CORP. | — | Available-for-sale financial assets, noncurrent | 683 | — | 1.84 | — | None | ||||||||||||||||||||
Stock | SUPERALLOY INDUSTRIAL CO., LTD. | — | Available-for-sale financial assets, noncurrent | 1,133 | 144,443 | 0.57 | 144,443 | None | ||||||||||||||||||||
Stock | MOBILE DEVICES INC. | — | Available-for-sale financial assets, noncurrent | 300 | — | 0.51 | — | None | ||||||||||||||||||||
Stock | WIESON TECHNOLOGIES CO., LTD. | — | Available-for-sale financial assets, noncurrent | 266 | 3,768 | 0.40 | 3,768 | None | ||||||||||||||||||||
Stock | HIGH POWER OPTOELECTRONICS, INC. | — | Available-for-sale financial assets, noncurrent | 510 | — | 0.18 | — | None | ||||||||||||||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | — | Available-for-sale financial assets, noncurrent | 247 | 2,468 | 0.18 | 2,468 | None | ||||||||||||||||||||
Stock | MERCURIES LIFE INSURANCE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 2,316 | 40,985 | 0.17 | 40,985 | None | ||||||||||||||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | — | Available-for-sale financial assets, noncurrent | 284 | 42,030 | 0.13 | 42,030 | None | ||||||||||||||||||||
Stock | CLIENTRON CORP. | — | Available-for-sale financial assets, noncurrent | 80 | 1,520 | 0.11 | 1,520 | None |
109
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UMC CAPITAL CORP.
March 31, 2015 | ||||||||||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||||||||||
Capital | TRANSLINK MANAGEMENT III, L.L.C. | — | Available-for-sale financial assets, noncurrent | — | USD | 49 | 16.00 | USD | 49 | None | ||||||||||||||||||||||||||
Fund | STORM VENTURES FUND V, L.P. | — | Available-for-sale financial assets, noncurrent | — | USD | 270 | 2.89 | USD | 270 | None | ||||||||||||||||||||||||||
Stock | MOBILE IRON, INC. | — | Available-for-sale financial assets, noncurrent | 1,205 | USD | 11,154 | 1.56 | USD | 11,154 | None | ||||||||||||||||||||||||||
Stock | ALL-STARS XMI LTD. | — | Available-for-sale financial assets, noncurrent | 7 | USD | 7,000 | 1.37 | USD | 7,000 | None | ||||||||||||||||||||||||||
Stock | PARADE TECHNOLOGIES, LTD. | — | Available-for-sale financial assets, noncurrent | 226 | USD | 2,129 | 0.30 | USD | 2,129 | None | ||||||||||||||||||||||||||
American Depositary Shares | CHUNGHWA TELECOM CO., LTD. | — | Available-for-sale financial assets, noncurrent | 200 | USD | 6,407 | 0.03 | USD | 6,407 | None | ||||||||||||||||||||||||||
Stock-Preferred stock | CNEX LABS, INC. | — | Available-for-sale financial assets, noncurrent | 2,071 | USD | 3,000 | — | USD | 3,000 | None | ||||||||||||||||||||||||||
Stock-Preferred stock | GLYMPSE, INC. | — | Available-for-sale financial assets, noncurrent | 1,159 | USD | 4,000 | — | USD | 4,000 | None | ||||||||||||||||||||||||||
Stock-Preferred stock | ATSCALE, INC. | — | Available-for-sale financial assets, noncurrent | 4,374 | USD | 2,500 | — | USD | 2,500 | None | ||||||||||||||||||||||||||
Stock | OCTTASIA INVESTMENT HOLDING INC. | — | Financial assets measured at cost, noncurrent | 7,035 | USD | 7,035 | — | Note | None | |||||||||||||||||||||||||||
Stock | CIPHERMAX, INC. | — | Financial assets measured at cost, noncurrent | 95 | — | — | Note | None | ||||||||||||||||||||||||||||
Stock-Preferred stock | GCT SEMICONDUCTOR, INC. | — | Financial assets measured at cost, noncurrent | 175 | USD | 1,000 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | FORTEMEDIA, INC. | — | Financial assets measured at cost, noncurrent | 12,241 | USD | 5,828 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | SIFOTONICS TECHNOLOGIES CO., LTD. | — | Financial assets measured at cost, noncurrent | 3,500 | USD | 3,000 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | NEVO ENERGY, INC. (formerly SOLARGEN ENERGY INC.) | — | Financial assets measured at cost, noncurrent | 4,980 | USD | 4,980 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | TRILLIANT HOLDINGS, INC. | — | Financial assets measured at cost, noncurrent | 4,000 | USD | 5,000 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | SWIFTSTACK, INC. | — | Financial assets measured at cost, noncurrent | 2,140 | USD | 3,208 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | THISMOMENT, INC. | — | Financial assets measured at cost, noncurrent | 4,064 | USD | 4,008 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | NEXENTA SYSTEMS, INC. | — | Financial assets measured at cost, noncurrent | 2,891 | USD | 3,500 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | ALPINE ANALYTICS, INC. | — | Financial assets measured at cost, noncurrent | 1,749 | USD | 4,500 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | CLOUDWORDS, INC. | — | Financial assets measured at cost, noncurrent | 4,191 | USD | 5,000 | — | N/A | None | |||||||||||||||||||||||||||
Stock-Preferred stock | ZYLOGIC SEMICONDUCTOR CORP. | — | Financial assets measured at cost, noncurrent | 750 | — | — | N/A | None | ||||||||||||||||||||||||||||
Stock-Preferred stock | WISAIR, INC. | — | Financial assets measured at cost, noncurrent | 173 | — | — | N/A | None | ||||||||||||||||||||||||||||
Stock-Preferred stock | EAST VISION TECHNOLOGY LTD. | — | Financial assets measured at cost, noncurrent | 2,770 | — | — | N/A | None | ||||||||||||||||||||||||||||
Stock-Preferred stock | EV2 HOLDINGS, INC. (formerly ENVERV, INC.) | — | Financial assets measured at cost, noncurrent | 1,621 | — | — | N/A | None | ||||||||||||||||||||||||||||
Fund | VENGLOBAL CAPITAL FUND III, L.P. | — | Financial assets measured at cost, noncurrent | — | USD | 651 | — | N/A | None | |||||||||||||||||||||||||||
Fund | TRANSLINK CAPITAL PARTNERS II, L.P. | — | Financial assets measured at cost, noncurrent | — | USD | 2,455 | — | N/A | None |
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015.
110
ATTACHMENT 4 (Securities held as of March 31, 2015) (Excluding subsidiaries, associates and joint ventures)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UMC NEW BUSINESS INVESTMENT CORP.
March 31, 2015 | ||||||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||||||
Stock | SOLARGATE TECHNOLOGY CORPORATION | — | Available-for-sale financial assets, noncurrent | 957 | $ | — | 15.94 | $ | — | None | ||||||||||||||||||||||
Stock | WIN WIN PRECISION TECHNOLOGY CO., LTD. | — | Available-for-sale financial assets, noncurrent | 3,150 | 49,613 | 6.93 | 49,613 | None | ||||||||||||||||||||||||
Stock | LICO TECHNOLOGY CORPORATION | — | Available-for-sale financial assets, noncurrent | 4,089 | — | 3.29 | — | None | ||||||||||||||||||||||||
Stock | POWERTEC ENERGY CORPORATION | — | Available-for-sale financial assets, noncurrent | 10,000 | 47,700 | 0.59 | 47,700 | None | ||||||||||||||||||||||||
Fund | PAMIRS FUND SEGREGATED PORTFOLIO II | — | Available-for-sale financial assets, noncurrent | 2 | 69,753 | — | 69,753 | None | ||||||||||||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD.
| ||||||||||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||||||
Stock | TIAN TAI YI ENERGY CO., LTD. | — | Financial assets measured at cost- noncurrent | 437 | $ | 4,367 | 5.56 | Note | None | |||||||||||||||||||||||
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015. |
| |||||||||||||||||||||||||||||||
EVERRICH (SHANDONG) ENERGY CO., LTD.
| ||||||||||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||||||
Capital | GOLMUD SOLARGIGA ENERGY ELECTRIC POWER CO., LTD. | — | Financial assets measured at cost, noncurrent | — | RMB | 10,000 | 10.00 | Note | None | |||||||||||||||||||||||
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015. |
| |||||||||||||||||||||||||||||||
NEXPOWER TECHNOLOGY CORPORATION
| ||||||||||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Book value | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||||||||||||||||
Stock | PACIFIC-GREEN INTEGRATED TECHNOLOGY INC. | — | Financial assets measured at cost- noncurrent | 54 | $ | 3,244 | 18.00 | Note | None | |||||||||||||||||||||||
Note : The net assets values for unlisted investees classified as “Financial assets measured at cost, noncurrent” were not available as of March 31, 2015. |
|
111
ATTACHMENT 5 (Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the three-month period ended March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
Type | Name of the securities | Financial statement account | Counter-party | Relationship | Beginning balance | Addition | Disposal | Ending balance | ||||||||||||||||||||||||||||||||||||||||||||||
Units (thousand)/ bonds/ shares (thousand) | Amount (Note 1) | Units (thousand)/ bonds/ shares (thousand) | Amount | Units (thousand)/ bonds/ shares (thousand) | Amount | Cost | Gain (Loss) from disposal | Units (thousand)/ bonds/ shares (thousand) | Amount (Note 1) | |||||||||||||||||||||||||||||||||||||||||||||
Stock | MIE FUJITSU SEMICONDUCTOR LIMITED | Available- for-sale financial assets, noncurrent | Purchase of newly issued shares | — | — | $ | — | 10,000 | $ | 1,331,000 | — | $ | — | $ | — | $ | — | 10,000 | $ | 1,293,000 | ||||||||||||||||||||||||||||||||||
Stock | WAVETEK MICROELECTRONICS CORPORATION | Investments accounted for under the equity method | Purchase of newly issued shares | Subsidiary | 80,683 | 456,760 | 45,547 | 455,470 | — | — | — | — | 126,230 | | 911,115 (Note 2) | | ||||||||||||||||||||||||||||||||||||||
Note 1: | Theamounts of beginning and ending balances of available for sale financial assets are recorded at the prevailing market prices. The amounts of beginning and ending balances of investments accounted for under the equity method include adjustment under the equity method. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 2: | Theending balance includes share of income of associates and joint ventures of NT$3,087 thousand, retained earnings adjustment under equity method of NT$(3,794) thousand, additional paid- in capital adjustment under equity method of NT$(391) thousand amd exchange differences on translation of foreign operations adjustment under equity method of NT$(17) thousand. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Type | Name of the securities | Financial statement account | Counter-party | Relationship | Beginning balance | Addition | Disposal | Ending balance | ||||||||||||||||||||||||||||||||||||||||||||||
Units (thousand)/ bonds/ shares (thousand) | Amount (Note 1) | Units (thousand)/ bonds/ shares (thousand) | Amount | Units (thousand)/ bonds/ shares (thousand) | Amount | Cost | Gain (Loss) from disposal | Units (thousand)/ bonds/ shares (thousand) | Amount (Note 1) | |||||||||||||||||||||||||||||||||||||||||||||
Capital | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Investments accounted for under the equity method | Purchase of newly issued shares | Subsidiary | — | — | — | USD | 100,000 | — | — | — | — | — | | USD98,495 (Note 2) | | |||||||||||||||||||||||||||||||||||||
Note 1: The amounts of beginning and ending balances of investments accounted for under the equity method include adjustment under the equity method. |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 2: | Theending balance includes share of lose of associates and joint ventures of USD (48) thousand, additional paid-in capital adjustment under equity method of USD 6 thousand and exchange differences on translation of foreign operations adjustment under equity method of USD (1,463) thousand. |
112
ATTACHMENT 6 (Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the three-month period ended March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
Where counter-party is a related party, details of prior transactions | ||||||||||||||||||||||||
Name of | Transaction | Transaction amount | Payment status | Counter-party | Relationship | Former holder of property | Relationship between former holder and acquirer of property | Date of transaction | Transaction amount | Price reference | Date of acquisition and status of utilization | Other commitments | ||||||||||||
Dormitory | 2015.03.09 | $432,190 | By the construction progress | YIH SHIN CONSTRUCTION CO., LTD | Third party | N/A | N/A | N/A | N/A | Open Bidding | Employee Dormitory | None |
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.
Where counter-party is a related party, details of prior transactions | ||||||||||||||||||||||||
Name | Transaction | Transaction amount | Payment status | Counter-party | Relationship | Former holder of property | Relationship between former holder and acquirer of property | Date of transaction | Transaction amount | Price reference | Date of acquisition and status of utilization | Other commitments | ||||||||||||
Fab | 2015.03.20 | RMB 193,000 | By the construction progress | FUJIAN TUNG KANG STEEL CO., LTD | Third Party | N/A | N/A | N/A | N/A | Open Bidding | Manufacturing purpose | None |
113
ATTACHMENT 7 (Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the three-month period ended March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
Names of properties | Transaction date | Date of original acquisition | Book value | Transaction amount | Status of proceeds collection | Gain (Loss) from disposal | Counter-party | Relationship | Reason of disposal | Price reference | Other commitments | |||||||||||
None |
114
ATTACHMENT 8 ( Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital stock for the three-month period ended March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
Transactions | Details of non-arm’s length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||||||||||||||
UMC GROUP (USA) | Subsidiary | Sales | $ | 16,480,498 | 49 | % | Net 60 Days | N/ | A | N/ | A | $ | 9,319,139 | 45 | % | |||||||||||||||||||||||
UMC GROUP JAPAN | Subsidiary | Sales | 2,002,635 | 6 | % | Net 60 Days | N/ | A | N/ | A | 1,526,217 | 7 | % | |||||||||||||||||||||||||
UMC GROUP (USA) | ||||||||||||||||||||||||||||||||||||||
Transactions | Details of non-arm’s length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | Parent company | Purchases | USD | 522,637 | 99 | % | Net 60 Days | N/A | N/A | USD | 298,212 | 99 | % | |||||||||||||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Associate | Purchases | USD | 5,206 | 1 | % | Net 60 Days | N/A | N/A | USD | 3,636 | 1 | % | |||||||||||||||||||||||||
UMC GROUP JAPAN | ||||||||||||||||||||||||||||||||||||||
Transactions | Details of non-arm’s length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | Parent company | Purchases | JPY | 7,381,739 | 98 | % | Net 60 Days | N/ | A | N/ | A | JPY | 5,869,926 | 98 | % | |||||||||||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | ||||||||||||||||||||||||||||||||||||||
Transactions | Details of non-arm’s length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||||||||||||||
UMC GROUP (USA) | Associate | Sales | USD | 5,206 | 7% | Net 60 Days | N/A | N/A | USD | 3,636 | 8 | % |
115
ATTACHMENT 9 (Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
Ending balance | Turnover rate (times) | Overdue receivables | Amount received in subsequent period | Allowance for doubtful accounts | ||||||||||||||||||||||||||||||||||||
Counter-party | Relationship | Notes receivable | Accounts receivable | Other receivables | Total | Amount | Collection status | |||||||||||||||||||||||||||||||||
UMC GROUP (USA) | Subsidiary | $ | — | $ | 9,319,139 | $ | 32 | $ | 9,319,171 | 7.99 | $ | — | — | $ | 4,437,906 | $ | 8,256 | |||||||||||||||||||||||
UMC GROUP JAPAN | Subsidiary | — | 1,526,217 | 24 | 1,526,241 | 5.87 | 112,949 | | Collection in subsequent period | | — | — |
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.
Ending balance | Turnover rate (times) | Overdue receivables | Amount received in subsequent period | Allowance for doubtful accounts | ||||||||||||||||||||||||||||||||||||
Counter-party | Relationship | Notes receivable | Accounts receivable | Other receivables | Total | Amount | Collection status | |||||||||||||||||||||||||||||||||
UMC GROUP (USA) | Associate | — | USD | 3,636 | — | USD | 3,636 | 6.76 | — | — | — | — |
116
ATTACHMENT 10 (Names, locations and related information of investee companies as of March 31, 2015) (Not including investment in Mainland China)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UNITED MICROELECTRONICS CORPORATION
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Note | |||||||||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | ||||||||||||||||||||||||||||||||
UMC GROUP (USA) | USA | IC Sales | USD | 16,438 | USD | 16,438 | 16,438 | 100.00 | $ | 1,615,274 | $ | 33,983 | $ | 33,983 | ||||||||||||||||||||||||
UNITED MICROELECTRONICS (EUROPE) B.V. | The Netherlands | Marketing support activities | USD | 5,421 | USD | 5,421 | 9 | 100.00 | 134,738 | 586 | 586 | |||||||||||||||||||||||||||
UMC CAPITAL CORP. | Cayman Islands | Investment holding | USD | 81,500 | USD | 81,500 | 71,663 | 100.00 | 5,021,089 | 163,717 | 163,717 | |||||||||||||||||||||||||||
GREEN EARTH LIMITED | Samoa | Investment holding | USD | 10,000 | USD | 10,000 | 10,000 | 100.00 | 243,657 | (1,818 | ) | (1,818 | ) | |||||||||||||||||||||||||
TLC CAPITAL CO., LTD. | Taipei City, Taiwan | New business investment | 6,000,000 | 6,000,000 | 486,150 | 100.00 | 7,325,520 | (55,400 | ) | (55,400 | ) | |||||||||||||||||||||||||||
UMC NEW BUSINESS INVESTMENT CORP. | Taipei City, Taiwan | Investment holding | 6,000,000 | 6,000,000 | 600,000 | 100.00 | 2,210,499 | (57,504 | ) | (57,504 | ) | |||||||||||||||||||||||||||
UMC INVESTMENT (SAMOA) LIMITED | Samoa | Investment holding | USD | 1,520 | USD | 1,520 | 1,520 | 100.00 | 45,820 | (268 | ) | (268 | ) | |||||||||||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | Taipei City, Taiwan | Consulting and planning for investment in new business | 5,000,053 | 5,000,053 | 458,800 | 100.00 | 6,196,059 | (13,484 | ) | (13,484 | ) | |||||||||||||||||||||||||||
UMC GROUP JAPAN | Japan | IC Sales | JPY | 60,000 | JPY | 60,000 | 1 | 100.00 | 69,363 | 20,372 | 20,372 | |||||||||||||||||||||||||||
UMC KOREA CO., LTD. | Korea | Marketing support activities | KRW | 550,000 | KRW | 550,000 | 110 | 100.00 | 17,367 | 198 | 198 | |||||||||||||||||||||||||||
OMNI GLOBAL LIMITED | Samoa | Investment holding | USD | 3,000 | USD | 3,000 | 3,000 | 100.00 | 44,105 | (255 | ) | (255 | ) | |||||||||||||||||||||||||
BEST ELITE INTERNATIONAL LIMITED | British Virgin Islands | Investment holding | USD | 235,089 | USD | 235,089 | 597,682 | 86.88 | 18,517,083 | 425,973 | 370,102 | |||||||||||||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Hsinchu City, Taiwan | GaAs Foundry service | 1,707,482 | 1,252,012 | 126,230 | 82.52 | 911,115 | 3,831 | 3,087 | |||||||||||||||||||||||||||||
MTIC HOLDINGS PTE. LTD. | Singapore | Investment holding | SGD | 12,000 | SGD | 12,000 | 12,000 | 45.44 | 99,277 | (1,881 | ) | (833 | ) | |||||||||||||||||||||||||
MEGA MISSION LIMITED PARTNERSHIP | Cayman Islands | Investment holding | USD | 67,500 | USD | 67,500 | — | 45.00 | 2,016,474 | 178,567 | 80,355 | |||||||||||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 5,331,885 | 5,331,885 | 215,283 | 44.16 | 821,260 | (278,357 | ) | (122,917 | ) | |||||||||||||||||||||||||||
UNITECH CAPITAL INC. | British Virgin Islands | Investment holding | USD | 21,000 | USD | 21,000 | 21,000 | 42.00 | 696,358 | (9,446 | ) | (3,967 | ) | |||||||||||||||||||||||||
HSUN CHIEH INVESTMENT CO., LTD. | Taipei City, Taiwan | Investment holding | 336,241 | 336,241 | 130,489 | 36.49 | 3,935,110 | (12,999 | ) | (4,743 | ) |
117
ATTACHMENT 10 (Names, locations and related information of investee companies as of March 31, 2015) (Not including investment in Mainland China)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
FORTUNE VENTURE CAPITAL CORP.
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Note | |||||||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | ||||||||||||||||||||||||||||||
UNITRUTH INVESTMENT CORP. | Taipei City, Taiwan | Investment holding | $ | 800,000 | $ | 800,000 | 132,660 | 100.00 | $ | 1,032,566 | $ | 25,431 | $ | 25,431 | ||||||||||||||||||||||
MOS ART PACK CORP. | Hsinchu City, Taiwan | IC Packaging | 290,000 | 290,000 | 29,000 | 54.45 | 177,849 | — | — | Note | ||||||||||||||||||||||||||
TOPCELL SOLAR INTERNATIONAL CO., LTD. | Taoyuan City, Taiwan | Sales and manufacturing of solar power cell | 1,032,692 | 1,032,692 | 71,363 | 26.04 | 362,209 | (18,850 | ) | (4,909 | ) | |||||||||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 718,930 | 718,930 | 29,194 | 5.99 | 111,368 | (278,357 | ) | (16,669 | ) |
Note: | On March 10, 2011, MOS ART PACK CORP. (MAP) reached the decesion of liquidation at it’s stockholders’ meeting. The Company had ceased to recognize investment income of MAP thereafter. |
TLC CAPITAL CO., LTD.
Initial Investment | Investment as of March 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||||||||||||||||
SOARING CAPITAL CORP. | Samoa | Investment holding | USD | 900 | USD | 900 | 900 | 100.00 | $ | 16,486 | $ | (591 | ) | $ | (591 | ) | ||||||||||||||||||||||||||
LIST EARN ENTERPRISE INC. | Samoa | Investment holding | USD | 309 | USD | 309 | 309 | 49.00 | 10,441 | 22 | 11 | |||||||||||||||||||||||||||||||
YUNG LI INVESTMENTS, INC. | Taipei City, Taiwan | Investment holding | 240,800 | 280,000 | 24,080 | 45.16 | 233,281 | (3,265 | ) | (1,475 | ) | |||||||||||||||||||||||||||||||
CTC CAPITAL PARTNERS I, L.P. | Cayman Islands | Investment holding | USD | 3,872 | USD | 3,872 | — | 31.40 | 197,984 | (1,460 | ) | (458 | ) | |||||||||||||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 778,019 | 778,019 | 28,601 | 5.87 | 109,105 | (278,357 | ) | (16,330 | ) | |||||||||||||||||||||||||||||||
TOPCELL SOLAR INTERNATIONAL CO., LTD. | Taoyuan City, Taiwan | Sales and manufacturing of solar power cell | 384,140 | 384,140 | 6,508 | 2.37 | 49,280 | (18,850 | ) | (448 | ) |
UNITRUTH INVESTMENT CORP.
Initial Investment | Investment as of March 31, 2015 | |||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||||||||||
MOS ART PACK CORP. | Hsinchu City, Taiwan | IC Packaging | $ | 98,690 | $ | 98,690 | 9,869 | 18.53 | $ | 60,524 | $ | — | $ | — | Note | |||||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 309,700 | 309,700 | 10,990 | 2.25 | 41,925 | (278,357 | ) | (6,275 | ) | |||||||||||||||||||||||||
TOPCELL SOLAR INTERNATIONAL CO., LTD. | Taoyuan City, Taiwan | Sales and manufacturing of solar power cell | 165,272 | 165,272 | 2,815 | 1.03 | 19,472 | (18,850 | ) | (193 | ) |
Note: | On March 10, 2011, MOS ART PACK CORP. (MAP) reached the decesion of liquidation at it’s stockholders’ meeting. The Company had ceased to recognize investment income of MAP thereafter. |
118
ATTACHMENT 10 (Names, locations and related information of investee companies as of March 31, 2015) (Not including investment in Mainland China)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
UMC CAPITAL CORP.
Investee company | Address | Main businesses | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||||
UMC CAPITAL (USA) | USA | Investment holding | USD | 200 | USD | 200 | 200 | 100.00 | USD | 493 | USD | (15 | ) | USD | (15 | ) | ||||||||||||||||||||
ECP VITA PTE. LTD. | Singapore | Insurance | USD | 9,000 | USD | 9,000 | 9,000 | 100.00 | USD | 14,420 | USD | 432 | USD | 432 | ||||||||||||||||||||||
TRANSLINK CAPITAL PARTNERS III, L.P. | Cayman Islands | Investment holding | USD | 6,000 | USD | 6,000 | — | 27.29 | USD | 6,422 | USD | 894 | USD | 127 | ||||||||||||||||||||||
ACHIEVE MADE INTERNATIONAL LTD. | British Virgin Islands | Internet Content Provider | USD | 11,035 | USD | 11,035 | 2,724 | 23.32 | USD | 5,248 | USD | (265 | ) | USD | (26 | ) | ||||||||||||||||||||
TRANSLINK CAPITAL PARTNERS I, L.P. | Cayman Islands | Investment holding | USD | 2,498 | USD | 3,382 | — | 10.38 | USD | 3,237 | USD | 2,227 | USD | 185 | ||||||||||||||||||||||
UMC NEW BUSINESS INVESTMENT CORP. | ||||||||||||||||||||||||||||||||||||
Initial Investment | Investment as of March 31, 2015 | |||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses | Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | Hsinchu City, Taiwan | Energy Technical Services | $ | 230,754 | $ | 230,754 | 31,655 | 100.00 | $ | 278,229 | $ | (6,993 | ) | $ | (7,904 | ) | ||||||||||||||||||||
UNISTARS CORPORATION | Hsinchu County, Taiwan | High brightness LED packages | 477,240 | 477,240 | 33,194 | 78.72 | 136,391 | (18,590 | ) | (14,633 | ) | |||||||||||||||||||||||||
TOPCELL SOLAR INTERNATIONAL CO., LTD. | Taoyuan City, Taiwan | Sales and manufacturing of solar power cell | 3,404,527 | 3,404,527 | 170,931 | 62.38 | 826,176 | (18,851 | ) | (11,758 | ) | Note 1 | ||||||||||||||||||||||||
UNITED LIGHTING OPTO-ELECTRONIC INC. | Hsinchu City, Taiwan | LED lighting manufacturing and sale | 266,772 | 266,772 | 8,949 | 55.25 | 9,586 | — | — | Note 2 | ||||||||||||||||||||||||||
WINAICO IMMOBILIEN GMBH | Germany | Solar project | EUR | 5,900 | EUR | 5,900 | 5,900 | 32.78 | 153,916 | (11,809 | ) | (9,102 | ) | |||||||||||||||||||||||
UNITED LED CORPORATION HONG KONG LIMITED | Hongkong | Investment holding | USD | 22,500 | USD | 22,500 | 22,500 | 25.14 | 526,521 | (40,723 | ) | (11,294 | ) | |||||||||||||||||||||||
Note 1: TOPCELLSOLAR INTERNATIONAL CO., LTD. will merged with Motech Industries Inc. on July 1, 2015, and Motech Industries Inc. will be the surviving company. The book vale of NT$826,176 thousand was reclassed from “Investments accounted for under the equity method” to “Non-current assets held for sale”. |
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Note 2:On June 19, 2012, UNITED LIGHTING OPTO-ELECTRONIC INC. has filed for liquidation through a decision at its stockholders’ meeting. The Company had ceased to recognize investment income of UNITED LIGHTING OPTO-ElECTRONIC INC. thereafter. |
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TERA ENERGY DEVELOPMENT CO., LTD. | ||||||||||||||||||||||||||||||||||||
Initial Investment | Investment as of March 31, 2015 | |||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses | Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||||||||||
TERA ENERGY USA INC. | USA | Solar project | $ | 535 | $ | 535 | 0 | 100.00 | $ | 13 | $ | (1 | ) | $ | (1 | ) | ||||||||||||||||||||
EVERRICH ENERGY INVESTMENT (HK) LIMITED | Hongkong | Investment holding | USD | 1,092 | USD | 1,725 | 1,092 | 100.00 | 119,655 | (457 | ) | (457 | ) | |||||||||||||||||||||||
SMART ENERGY ENTERPRISES LIMITED | Hongkong | Investment holding | USD | 0 | USD | 0 | 1,821 | 100.00 | 27 | (0 | ) | (0 | ) | |||||||||||||||||||||||
WINAICO SOLAR PROJEKT 1 GMBH | Germany | Solar project | EUR | 1,120 | EUR | 1,120 | 1,120 | 50.00 | 30,036 | (1,854 | ) | (927 | ) | |||||||||||||||||||||||
WINAICO IMMOBILIEN GMBH | Germany | Solar project | EUR | 2,160 | EUR | 2,160 | 2,160 | 12.00 | 57,957 | (11,809 | ) | (1,417 | ) |
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ATTACHMENT 10 (Names, locations and related information of investee companies as of March 31, 2015) (Not including investment in Mainland China)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
WAVETEK MICROELECTRONICS CORPORATION
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||
WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED | Samoa | Investment holding | USD | 600 | USD | 600 | 600 | 100.00 | $ | 8,023 | $ | (1,783 | ) | $ | (1,783 | ) | ||||||||||||||||||
WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED | ||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | ||||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Note | |||||||||||||||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION (USA) | USA | Sales and marketing service | USD | 60 | USD | 60 | 60 | 100.00 | $ | 2,089 | $ | 25 | $ | 25 | ||||||||||||||||||||
NEXPOWER TECHNOLOGY CORPORATION | ||||||||||||||||||||||||||||||||||
Initial Investment | Investment as of March 31, 2015 | |||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||||||||
SOCIALNEX ITALIA 1 S.R.L. | Italy | Photovoltaic power plant | EUR | 3,637 | EUR | 3,637 | — | 100.00 | $ | 115,624 | $ | 957 | $ | 957 | ||||||||||||||||||||
NPT HOLDING LIMITED | Samoa | Investment holding | USD | 0 | USD | 0 | 0 | 100.00 | 0 | — | — | |||||||||||||||||||||||
NPT HOLDING LIMITED | ||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||
NLL HOLDING LIMITED | Samoa | Investment holding | USD | 0 | USD | 0 | 0 | 100.00 | $ | 0 | $ | — | $ | — | ||||||||||||||||||||
BEST ELITE INTERNATIONAL LIMITED | ||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||
INFOSHINE TECHNOLOGY LIMITED | British Virgin Islands | Investment holding | USD | 354,000 | USD | 354,000 | — | 100.00 | USD | 325,745 | USD | 13,665 | USD | 13,665 | ||||||||||||||||||||
INFOSHINE TECHNOLOGY LIMITED | ||||||||||||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||
OAKWOOD ASSOCIATES LIMITED | British Virgin Islands | Investment holding | USD | 354,000 | USD | 354,000 | — | 100.00 | USD | 325,745 | USD | 13,665 | USD | 13,665 |
120
ATTACHMENT 10 (Names, locations and related information of investee companies as of March 31, 2015) (Not including investment in Mainland China)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
OMNI GLOBAL LIMITED
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||||||||||||
UNITED MICROTECHNOLOGY CORPORATION (NEW YORK) | USA | Research & Development | USD | 950 | USD | 950 | 0 | 100.00 | $ | 31,680 | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||||
UNITED MICROTECHNOLOGY CORPORATION (CALIFORNIA) | USA | Research & Development | USD | 13.50 | — | — | 100.00 | 398 | (24 | ) | (24 | ) |
GREEN EARTH LIMITED
Investee company | Address | Main businesses and products | Initial Investment | Investment as of March 31, 2015 | Net income (loss) of investee company | Investment income (loss) recognized | Note | |||||||||||||||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Book value | ||||||||||||||||||||||||||||||||||
UNITED MICROCHIP CORPORATION | Cayman | Investment holding | $ | — | $ | — | — | 100.00 | $ | — | $ | — | $ | — | Note |
Note: | UNITED MICROCHIP CORPORATION was set up on February 4, 2015 and has not yet invested in UNITED MICROCHIP CORPORATION on March 31, 2015. |
121
ATTACHMENT 11 (Investment in Mainland China as of March 31, 2015)
(Amount in thousand; Currency denomination in NTD or in foreign currencies)
Investee company | Main businesses and products | Total amount of paid-in capital | Method of investment (Note 1) | Accumulated outflow of investment from Taiwan as of January 1, 2015 |
Investment flows | Accumulated outflow of investment from Taiwan as of March 31, 2015 | Net income (loss) of investee company | Percentage of ownership | Investment income (loss) recognized (Note 2) | Carrying value as of March 31, 2015 | Accumulated inward remittance of earnings as of March 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outflow | Inflow | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNITRUTH ADVISOR (SHANGHAI) CO., LTD. | Investment Holding and advisory |
|
(USD |
| $
| 25,000 800 | ) | (ii)SOARING COPITAL CORP. |
|
(USD |
| $
| 25,000 800 | ) | $ | — | $ | — |
|
(USD |
| $
| 25,000 800 | ) | $ | (561 | ) | 100.00% | $
| (561 2.(iii) | )
| $ | 13,596 | $ | — | |||||||||||||||||||||||||||||||||||||||
SHANDONG HUAHONG ENERGY INVEST CO., INC. | Invest new energy business |
|
(RMB |
|
| 1,506,000 300,000 | ) | (i) |
|
(USD |
|
| 42,500 1,360 | ) | — | — |
|
(USD |
|
| 42,500 1,360 | ) | (26,724 | ) | 50.00% |
| (13,362 2.(ii) | )
| 710,574 | — | ||||||||||||||||||||||||||||||||||||||||||||
JINING SUNRICH SOLAR ENERGY CORP. | To construct, operate, and maintain solar power plant |
|
(RMB |
| | 1,405,600 280,000 | ) | (i) |
|
(USD |
|
| 654,063 20,930 | ) | — | — |
|
(USD |
|
| 654,063 20,930 | ) | (27,028 | ) | 50.00% |
| (13,514 2.(ii) | )
| 667,327 | — | ||||||||||||||||||||||||||||||||||||||||||||
EVERRICH (SHANDONG) ENERGY CO., LTD. | Solar engineering integrated design services |
|
(USD |
|
| 96,875 3,100 | ) | (ii)EVERRICH ENERGY INVESTMENT (HK) LIMITED |
|
(USD |
|
| 96,875 3,100 | ) | — | — |
|
(USD |
|
| 96,875 3,100 | ) | (327 | ) | 100.00% |
| (327 2.(iii) | )
| 112,707 |
|
(USD |
|
| 103,313 3,306 | ) | |||||||||||||||||||||||||||||||||||||||
UNITED LED CORPORATION | Research, manufacturing and sales in LED epitaxial wafers |
|
(USD |
|
| 2,625,000 84,000 | ) | (ii)UNITED LED CORPORATION HONG KONG LIMITED |
|
(USD |
|
| 632,813 20,250 | ) | — | — |
|
(USD |
|
| 632,813 20,250 | ) |
|
(RMB |
|
| (40,993 (8,166) | ) ) | 25.14% |
|
(RMB |
|
| (11,370 (2,265) 2.(ii) | ) )
|
|
(RMB |
| | 507,888 101,173 | ) | — | ||||||||||||||||||||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Sales and manufacturing of integrated circuits |
|
(USD |
|
| 11,875,000 380,000 | ) | (ii)OAKWOOD ASSOCIATES LIMITED |
|
(USD |
|
| 7,346,531 235,089 | ) | — | — |
|
(USD |
| | 7,346,531 235,089 | ) |
|
(USD |
| | 425,750 13,624 | ) |
| 86.88% (Note 4) |
|
|
(USD |
|
| 369,906 11,837 2. (ii) | )
|
|
(USD |
| | 17,756,688 568,214 | ) | — | ||||||||||||||||||||||||||||||
UMC (BEIJING) LIMITED | Marketing support activities |
|
(USD |
|
| 15,625 500 | ) | (ii)UMC INVESTMENT (SAMOA) LIMITED |
|
(USD |
|
| 15,625 500 | ) | — | — |
|
(USD |
| | 15,625 500 | ) | 34 |
| 100.00% (Note 5) |
|
| 34 2.(iii) |
| 16,276 | — | |||||||||||||||||||||||||||||||||||||||||||
UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD. | Design support of integrated circuits |
|
(RMB |
|
| 150,600 30,000 | ) | (i) | — | — | — | — |
|
(RMB |
|
| (2,977 (593) | ) ) | 86.88% |
|
(RMB |
|
| (2,585 (515) 2. (iii) | ) )
|
|
(RMB |
| | 115,244 22,957 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Sales and manufacturing of integrated circuits |
|
(RMB |
|
| 9,237,914 1,804,222 | ) | (i) | — | — | — |
| — (Note 6) |
|
|
(RMB |
|
| (4,121 (821) | ) ) | 28.96% |
|
(RMB |
|
| (1,195 (238) 2. (iii) | ) )
|
|
(RMB |
| | 2,674,109 532,691 | ) | — |
Accumulated investment in Mainland China as of March 31, 2015 | Investment amounts authorized by Investment Commission, MOEA | Upper limit on investment | ||||||||
$ (USD | 8,813,406 282,029 | ) | $ | 31,177,469 (USD 997,679 | ) | $ | 135,257,795 |
Note 1 : | The methods for engaging in investment in Mainland China include the following: |
(i) Direct investment in Mainland China. |
(ii) Indirectly investment in Mainland China through companies registered in a third region. (Please specify the name of the company in third region). |
(iii) Other methods |
Note 2 : | The investment income (loss) recognized in current period: |
1. Please specify no investment income (loss) has been recognized due to the investment is still during development stage. |
2. The investment income (loss) were determined based on the following basis: |
(i) The financial report was audited and certified by an international accounting firm in cooperation with an R.O.C. accounting firm. |
(ii) The financial statements certificated by the CPA of the parent company in Taiwan. |
(iii) Others. |
Note 3 : | Initial investment amounts denominated in foreign currencies are translated into New Taiwan Dollars using the spot rates at the financial report date. |
Note 4 : | The Company indirectly invested in HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. via investment in BEST ELITE INTERNATIONAL LIMITED (BEST ELITE), an equity investee. The Investment Commission, MOEA has approved to invest US$217,572 thousand in BEST ELITE’s preferred stock, invest US$91,984 thousand in BEST ELITE’s common stock. As of March 31, 2015, the amount of investment has been remitted. |
Note 5 : | UMC (BEIJING) LIMITED have been made in the Investment Commission, MOEA and approved US$3,000 thousand. As of March 31, 2015, the amount of investment US$2,500 thousand has not yet been remitted. |
Note 6 : | The consent to invest in UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. (USCXM) have been made by the Investment Commission, MOEA which approved the total investment amount US$710,640 thousand. |
As of March 31, 2015, the investment amount to USCXM from HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. was US$86,880 thousand, and the rest investment amount US$623,760 thousand has not yet been remitted. |
122