UNITED MICROELECTRONICS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2016 AND 2015
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 ofUnited Microelectronics Corporation and subsidiaries (collectively, the “Company”) as of September 30, 2016 and 2015, the related consolidated statements of comprehensive income for the three-month and nine-month periods endedSeptember 30, 2016 and 2015 and consolidated statements of changes in equity and cash flows for the nine-month periods endedSeptember 30, 2016 and 2015. 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 review, insofar as it related to the investments accounted for under the equity method balances of NT$6,263 million and NT$3,460 million, which represented 1.67% and 1.05% of the total consolidated assets as of September 30, 2016 and 2015, respectively, the related shares of investment income from the associates and joint ventures in the amount of NT$200 million, NT$157 million, NT$272 million and NT$136 million, which represented 10.25%, 11.26%, 7.20% and 1.24% of the consolidated income from continuing operations before income tax for the three-monthand nine-month periods endedSeptember 30, 2016 and 2015, respectively, and the related shares of other comprehensive income from the associates and joint ventures in the amount of NT$(303) million, NT$(722) million, NT$(250) million and NT$(1,107) million, which represented 66.36%,(25.34)%, 69.58% and (17.87)% of the consolidated total comprehensive income for the three-month and nine-month periods ended September 30, 2016 and 2015, 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
October 26, 2016
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 | ||||||||
September 30, 2016, December 31, 2015 and September 30, 2015 (September 30, 2016 and 2015 are unaudited) | ||||||||
(Expressed in Thousands of New Taiwan Dollars) | ||||||||
As of | ||||||||
Assets | Notes | September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 | ||
Current assets |
|
|
|
| ||||
Cash and cash equivalents | 6(1) | $ 55,266,242 | $ 53,290,433 | $ 52,142,742 | ||||
Financial assets at fair value through profit or loss, current | 6(2), 12(7) | 750,848 | 664,918 | 843,925 | ||||
Notes receivable | 4,728 | 58,588 | 72,036 | |||||
Accounts receivable, net | 6(3) | 22,302,289 | 19,059,774 | 19,452,028 | ||||
Accounts receivable-related parties, net | 7 | 58,539 | 213,460 | 231,367 | ||||
Other receivables | 942,464 | 632,885 | 704,096 | |||||
Current tax assets | 53,089 | 24,335 | 46,619 | |||||
Inventories, net | 6(4) | 17,166,603 | 17,641,385 | 16,560,257 | ||||
Prepayments | 9,735,537 | 2,164,296 | 2,189,152 | |||||
Other current assets | 689,384 | 1,066,447 | 2,790,199 | |||||
Total current assets | 106,969,723 | 94,816,521 | 95,032,421 | |||||
Non-current assets | ||||||||
Financial assets at fair value through profit or loss, noncurrent | 6(2), 12(7) | 211,458 | 81,933 | 82,175 | ||||
Available-for-sale financial assets, noncurrent | 6(5), 7, 12(7) | 23,138,261 | 23,800,686 | 19,714,589 | ||||
Financial assets measured at cost, noncurrent | 6(6) | 2,774,368 | 3,888,309 | 3,930,763 | ||||
Investments accounted for under the equity method | 6(7) | 11,675,338 | 12,379,859 | 10,224,399 | ||||
Property, plant and equipment | 6(8), 8 | 215,414,139 | 186,433,395 | 183,891,275 | ||||
Intangible assets | 6(9), 7 | 4,245,239 | 4,504,088 | 4,549,283 | ||||
Deferred tax assets | 6(23) | 3,810,263 | 2,294,935 | 2,075,368 | ||||
Prepayment for equipment | 1,103,449 | 2,333,981 | 2,854,262 | |||||
Refundable deposits | 8 | 2,245,521 | 2,638,788 | 2,505,227 | ||||
Other noncurrent assets-others | 3,371,532 | 4,194,315 | 4,352,329 | |||||
Total non-current assets | 267,989,568 | 242,550,289 | 234,179,670 | |||||
Total assets | $ 374,959,291 | $ 337,366,810 | $ 329,212,091 | |||||
(continued) |
3
English Translation of Consolidated Financial Statements Originally Issued in Chinese | ||||||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, 2016, December 31, 2015 and September 30, 2015 (September 30, 2016 and 2015 are unaudited) | ||||||||
(Expressed in Thousands of New Taiwan Dollars) | ||||||||
As of | ||||||||
Liabilities and Equity | Notes | September 30, 2016 | December 31, 2015 | September 30, 2015 | ||||
Current liabilities | ||||||||
Short-term loans | 6(10), 8 | $ 35,821,080 | $ 5,505,049 | $ 2,524,597 | ||||
Financial liabilities at fair value through profit or loss, current | 6(11), 12(7) | - | 999 | 16,092 | ||||
Notes and accounts payable | 6,742,383 | 5,954,249 | 6,336,175 | |||||
Other payables | 11,019,452 | 12,522,765 | 11,995,053 | |||||
Payables on equipment | 14,452,431 | 14,657,626 | 14,075,957 | |||||
Current tax liabilities | 1,638,809 | 1,996,006 | 2,147,335 | |||||
Current portion of long-term liabilities | 6(12), 6(13), 8 | 11,224,988 | 6,601,721 | 6,311,069 | ||||
Other current liabilities | 2,542,561 | 1,007,103 | 1,063,819 | |||||
Total current liabilities | 83,441,704 | 48,245,518 | 44,470,097 | |||||
Non-current liabilities | ||||||||
Bonds payable | 6(12) | 34,395,145 | 41,636,670 | 41,551,680 | ||||
Long-term loans | 6(13), 8 | 5,289,840 | 5,887,737 | 6,235,208 | ||||
Deferred tax liabilities | 6(23) | 1,790,896 | 1,674,432 | 1,702,655 | ||||
Net defined benefit liabilities, noncurrent | 3,892,696 | 3,890,801 | 3,841,279 | |||||
Guarantee deposits | 487,358 | 509,708 | 512,043 | |||||
Other noncurrent liabilities-others | 6(15), 9(5) | 26,662,770 | 6,704,541 | 6,900,987 | ||||
Total non-current liabilities | 72,518,705 | 60,303,889 | 60,743,852 | |||||
Total liabilities | 155,960,409 | 108,549,407 | 105,213,949 | |||||
Equity attributable to the parent company | ||||||||
Capital | 6(16), 6(17) | |||||||
Common stock | 126,243,187 | 127,581,329 | 127,581,329 | |||||
Additional paid-in capital | 6(12), 6(16), 6(17) | |||||||
Premiums | 36,862,383 | 37,253,121 | 37,253,121 | |||||
Treasury stock transactions | 1,744,988 | 1,509,386 | 1,506,871 | |||||
The differences between the fair value of the consideration paid or receivedfrom acquiring ordisposing subsidiaries and the carrying amounts of the subsidiaries | 707,386 | 705,819 | 705,819 | |||||
Recognize changes in subsidiaries’ ownership | 7,946 | - | 12,398 | |||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | 110,079 | 109,365 | 119,560 | |||||
Employee stock options | - | - | 2,722 | |||||
Stock options | 1,572,121 | 1,572,121 | 1,572,121 | |||||
Other | - | 501,757 | 572,873 | |||||
Retained earnings | 6(16) | |||||||
Legal reserve | 9,070,841 | 7,725,978 | 7,725,978 | |||||
Unappropriated earnings | 38,801,856 | 42,981,664 | 39,959,021 | |||||
Other components of equity | ||||||||
Exchange differences on translation of foreign operations | (1,618,288) | 1,978,583 | 2,435,184 | |||||
Unrealized gains or losses on available-for-sale financial assets | 8,607,212 | 8,696,821 | 6,404,354 | |||||
Treasury stock | 6(16) | (4,719,037) | (3,825,606) | (3,830,201) | ||||
Total equity attributable to the parent company | 217,390,674 | 226,790,338 | 222,021,150 | |||||
Non-controlling interests | 6(16) | 1,608,208 | 2,027,065 | 1,976,992 | ||||
Total equity | 218,998,882 | 228,817,403 | 223,998,142 | |||||
Total liabilities and equity | $ 374,959,291 | $ 337,366,810 | $ 329,212,091 | |||||
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 and nine-month periods ended September 30, 2016 and 2015 | ||||||||||
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share) | ||||||||||
For the three-month periods ended September 30, | For the nine-month periods ended September 30, | |||||||||
Notes | 2016 | 2015 | 2016 | 2015 | ||||||
Operating revenues | 6(18), 7, 14 | |||||||||
Sales revenues | $ 37,708,960 | $ 35,071,877 | $ 107,802,094 | $ 109,588,219 | ||||||
Less: Sales returns and discounts | (739,815) | (676,625) | (2,007,528) | (1,759,157) | ||||||
Net sales | 36,969,145 | 34,395,252 | 105,794,566 | 107,829,062 | ||||||
Other operating revenues | 1,194,444 | 924,589 | 3,769,619 | 3,151,977 | ||||||
Net operating revenues | 38,163,589 | 35,319,841 | 109,564,185 | 110,981,039 | ||||||
Operating costs | 6(4), 6(14), 6(17) | |||||||||
Costs of goods sold | (29,034,741) | (27,476,876) | (85,791,036) | (83,724,642) | ||||||
Other operating costs | (827,411) | (932,362) | (2,152,777) | (2,467,203) | ||||||
Operating costs | (29,862,152) | (28,409,238) | (87,943,813) | (86,191,845) | ||||||
Gross profit | 8,301,437 | 6,910,603 | 21,620,372 | 24,789,194 | ||||||
Operating expenses | 6(14), 6(17), 6(19), 7, 14 | |||||||||
Sales and marketing expenses | (1,206,412) | (1,045,184) | (3,307,430) | (3,019,540) | ||||||
General and administrative expenses | (1,769,225) | (942,344) | (4,280,174) | (2,813,869) | ||||||
Research and development expenses | (3,397,032) | (3,138,555) | (9,708,121) | (9,070,242) | ||||||
Subtotal | (6,372,669) | (5,126,083) | (17,295,725) | (14,903,651) | ||||||
Net other operating income and expenses | 6(8), 6(20) | (443,784) | (803,758) | (407,206) | (929,678) | |||||
Operating income | 1,484,984 | 980,762 | 3,917,441 | 8,955,865 | ||||||
Non-operating income and expenses | ||||||||||
Other income | 6(21) | 534,447 | 678,772 | 830,540 | 955,099 | |||||
Other gains and losses | 6(21), 6(25), 7, 14 | 432,268 | (443,836) | 970,090 | 1,144,922 | |||||
Finance costs | 6(8), 6(21) | (395,887) | (136,414) | (839,109) | (408,957) | |||||
Share of profit or loss of associates and joint ventures | 6(7), 14 | 232,841 | (158,707) | (92,905) | (125,438) | |||||
Exchange gain, net | 12 | - | 470,614 | - | 404,206 | |||||
Exchange loss, net | 12 | (338,011) | - | (1,005,911) | - | |||||
Subtotal | 465,658 | 410,429 | (137,295) | 1,969,832 | ||||||
Income from continuing operations before income tax | 1,950,642 | 1,391,191 | 3,780,146 | 10,925,697 | ||||||
Income tax expense | 6(23), 14 | (194,443) | (84,146) | (365,915) | (1,161,140) | |||||
Net income | 1,756,199 | 1,307,045 | 3,414,231 | 9,764,557 | ||||||
Other comprehensive income (loss) | 6(22) | |||||||||
Items that may be reclassified subsequently to profit or loss | ||||||||||
Exchange differences on translation of foreign operations | (2,126,763) | 5,274,196 | (3,527,773) | 3,232,600 | ||||||
Unrealized gain (loss) on available-for-sale financial assets | 290,556 | (3,100,717) | 235,032 | (5,762,821) | ||||||
Share of other comprehensive income (loss) of associates and joint ventures | 6(7) | (403,354) | (585,988) | (429,684) | (1,003,569) | |||||
Income tax related to items that may be reclassified subsequently to profit or loss | 6(23) | 25,982 | (44,727) | (51,220) | (36,469) | |||||
Total other comprehensive income (loss), net of tax | (2,213,579) | 1,542,764 | (3,773,645) | (3,570,259) | ||||||
Total comprehensive income (loss) | $ (457,380) | $ 2,849,809 | $ (359,414) | $ 6,194,298 | ||||||
Net income attributable to: | ||||||||||
Stockholders of the parent | $ 2,974,770 | $ 1,708,479 | $ 5,767,672 | $ 10,288,764 | ||||||
Non-controlling interests | (1,218,571) | (401,434) | (2,353,441) | (524,207) | ||||||
$ 1,756,199 | $ 1,307,045 | $ 3,414,231 | $ 9,764,557 | |||||||
Comprehensive income (loss) attributable to: | ||||||||||
Stockholders of the parent | $ 802,409 | $ 3,214,531 | $ 2,081,192 | $ 6,755,590 | ||||||
Non-controlling interests | (1,259,789) | (364,722) | (2,440,606) | (561,292) | ||||||
$ (457,380) | $ 2,849,809 | $ (359,414) | $ 6,194,298 | |||||||
Earnings per share (NTD) | 6(24) | |||||||||
Earnings per share-basic | $ 0.24 | $ 0.14 | $ 0.47 | $ 0.82 | ||||||
Earnings per share-diluted | $ 0.23 | $ 0.13 | $ 0.44 | $ 0.79 | ||||||
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 nine-month periods ended September 30, 2016 and 2015 | |||||||||||||||||||||||
(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 | Additional | Legal Reserve | Unappropriated | Exchange Differences on Translation of Foreign Operations | Unrealized Gain or Loss on Available-for-Sale Financial Assets | Treasury Stock | Total | Non- | Total Equity | ||||||||||||
Balance as of January 1, 2015 | 6(16) | $ 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 | |||||||||||
Appropriation and distribution of 2014 retained earnings | 6(16) | ||||||||||||||||||||||
Legal reserve | - | - | - | 1,214,134 | (1,214,134) | - | - | - | - | - | - | ||||||||||||
Cash dividends | - | - | - | - | (6,939,322) | - | - | - | (6,939,322) | - | (6,939,322) | ||||||||||||
Net income for the nine-month ended September 30, 2015 | 6(16) | - | - | - | - | 10,288,764 | - | - | - | 10,288,764 | (524,207) | 9,764,557 | |||||||||||
Other comprehensive income (loss), net of tax for the nine-month ended September 30, 2015 | 6(16), 6(22) | - | - | - | - | - | 3,335,163 | (6,868,337) | - | (3,533,174) | (37,085) | (3,570,259) | |||||||||||
Total comprehensive income (loss) | - | - | - | - | 10,288,764 | 3,335,163 | (6,868,337) | - | 6,755,590 | (561,292) | 6,194,298 | ||||||||||||
Share-based payment transaction | 6(16), 6(17) | 329,251 | (50,970) | 254,896 | - | - | - | - | 676,850 | 1,210,027 | - | 1,210,027 | |||||||||||
Embedded conversion options derived from convertible bonds | 6(12) | - | - | 1,572,121 | - | - | - | - | - | 1,572,121 | - | 1,572,121 | |||||||||||
Treasury stock acquired | 6(16) | - | - | - | - | - | - | - | (2,203,442) | (2,203,442) | - | (2,203,442) | |||||||||||
Share of changes in net assets of associates and joint ventures accounted for | - | - | 28,321 | - | - | - | - | - | 28,321 | - | 28,321 | ||||||||||||
The differences between the fair value of the consideration paid or received from acquiring | 6(16) | - | - | 357,477 | - | - | - | - | - | 357,477 | (1,377,306) | (1,019,829) | |||||||||||
Changes in subsidiaries' ownership | 6(16) | - | - | 12,314 | - | (3,466) | - | - | - | 8,848 | 166,192 | 175,040 | |||||||||||
Adjustments for dividends subsidiaries received from parent company | - | - | 8,838 | - | - | - | - | - | 8,838 | - | 8,838 | ||||||||||||
Decrease in non-controlling interests | 6(16) | - | - | - | - | - | - | - | - | - | (100,400) | (100,400) | |||||||||||
Others | - | - | 63,639 | - | - | - | - | - | 63,639 | - | 63,639 | ||||||||||||
Balance as of September 30, 2015 | 6(16) | $ 127,581,329 | $ - | $ 41,745,485 | $ 7,725,978 | $ 39,959,021 | $ 2,435,184 | $ 6,404,354 | $ (3,830,201) | $ 222,021,150 | $ 1,976,992 | $ 223,998,142 | |||||||||||
Balance as of January 1, 2016 | 6(16) | $ 127,581,329 | $ - | $ 41,651,569 | $ 7,725,978 | $ 42,981,664 | $ 1,978,583 | $ 8,696,821 | $ (3,825,606) | $ 226,790,338 | $ 2,027,065 | $ 228,817,403 | |||||||||||
Appropriation and distribution of 2015 retained earnings | 6(16) | ||||||||||||||||||||||
Legal reserve | - | - | - | 1,344,863 | (1,344,863) | - | - | - | - | - | - | ||||||||||||
Cash dividends | - | - | - | - | (6,906,973) | - | - | - | (6,906,973) | - | (6,906,973) | ||||||||||||
Net income for the nine-month ended September 30, 2016 | 6(16) | - | - | - | - | 5,767,672 | - | - | - | 5,767,672 | (2,353,441) | 3,414,231 | |||||||||||
Other comprehensive income (loss), net of tax for the nine-month ended September 30, 2016 | 6(16), 6(22) | - | - | - | - | - | (3,596,871) | (89,609) | - | (3,686,480) | (87,165) | (3,773,645) | |||||||||||
Total comprehensive income (loss) | - | - | - | - | 5,767,672 | (3,596,871) | (89,609) | - | 2,081,192 | (2,440,606) | (359,414) | ||||||||||||
Treasury stock acquired | 6(16) | - | - | - | - | - | - | - | (2,395,793) | (2,395,793) | - | (2,395,793) | |||||||||||
Treasury stock cancelled | 6(16) | (1,338,142) | - | (164,220) | - | - | - | - | 1,502,362 | - | - | - | |||||||||||
Share of changes in net assets of associates and joint ventures accounted for | - | - | 714 | - | - | - | - | - | 714 | - | 714 | ||||||||||||
The differences between the fair value of the consideration paid or received from acquiring | 6(16) | - | - | 1,567 | - | - | - | - | - | 1,567 | (6,595) | (5,028) | |||||||||||
Changes in subsidiaries' ownership | 6(16) | - | - | 7,946 | - | (7,027) | - | - | - | 919 | 2,028,344 | 2,029,263 | |||||||||||
Adjustments for dividends subsidiaries received from parent company | - | - | 9,084 | - | - | - | - | - | 9,084 | - | 9,084 | ||||||||||||
Others | - | - | (501,757) | - | (1,688,617) | - | - | - | (2,190,374) | - | (2,190,374) | ||||||||||||
Balance as of September 30, 2016 | 6(16) | $ 126,243,187 | $ - | $ 41,004,903 | $ 9,070,841 | $ 38,801,856 | $ (1,618,288) | $ 8,607,212 | $ (4,719,037) | $ 217,390,674 | $ 1,608,208 | $ 218,998,882 | |||||||||||
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 nine-month periods ended September 30, 2016 and 2015 | ||||
(Expressed in Thousands of New Taiwan Dollars) | ||||
For the nine-month periods ended September 30, | ||||
2016 | 2015 | |||
Cash flows from operating activities: | ||||
Net income before tax | $ 3,780,146 | $ 10,925,697 | ||
Adjustments to reconcile net income before tax to net cash provided by operating activities: | ||||
Depreciation | 36,911,721 | 32,126,194 | ||
Amortization | 1,695,440 | 1,407,684 | ||
Bad debt expenses (reversal) | 125 | (186,409) | ||
Net loss (gain) of financial assets and liabilities at fair value through profit or loss | (255,781) | 155,452 | ||
Interest expense | 763,696 | 364,522 | ||
Interest income | (226,342) | (268,900) | ||
Dividend income | (604,198) | (686,199) | ||
Share-based payment | - | 1,245 | ||
Share of loss of associates and joint ventures | 92,905 | 125,438 | ||
Gain on disposal of property, plant and equipment | (65,913) | (95,844) | ||
Gain on disposal of non-current assets held for sale | - | (41,203) | ||
Gain on disposal of investments | (1,074,398) | (2,120,332) | ||
Impairment loss on financial assets | 552,759 | 1,223,025 | ||
Impairment loss on non-financial assets | 455,076 | 1,021,010 | ||
Exchange loss (gain) on financial assets and liabilities | 194,886 | (133,932) | ||
Amortization of deferred income | (22,916) | (26,539) | ||
Income and expense adjustments | 38,417,060 | 32,865,212 | ||
Changes in operating assets and liabilities: | ||||
Financial assets and liabilities at fair value through profit or loss | 86,825 | (261,488) | ||
Notes receivable and accounts receivable | (3,270,848) | 3,030,937 | ||
Other receivables | (107,457) | (112,219) | ||
Inventories | 260,985 | (814,856) | ||
Prepayments | (8,378,756) | (481,892) | ||
Other current assets | 438,330 | 452,901 | ||
Notes and accounts payable | 885,109 | (128,981) | ||
Other payables | (702,657) | 402,691 | ||
Other current liabilities | 1,405,485 | (147,828) | ||
Net defined benefit liabilities | 1,895 | 15,789 | ||
Other noncurrent liabilities-others | (80,455) | 281,315 | ||
Cash generated from operations | 32,735,662 | 46,027,278 | ||
Interest received | 234,923 | 259,522 | ||
Dividend received | 728,103 | 909,352 | ||
Interest paid | (618,642) | (590,309) | ||
Income tax paid | (2,175,920) | (2,245,027) | ||
Net cash provided by operating activities | 30,904,126 | 44,360,816 | ||
(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 nine-month periods ended September 30, 2016 and 2015 | ||||
(Expressed in Thousands of New Taiwan Dollars) | ||||
For the nine-month periods ended September 30, | ||||
2016 | 2015 | |||
Cash flows from investing activities: | ||||
Acquisition of financial assets at fair value through profit or loss | $ (230,037) | $ (136,146) | ||
Proceeds from disposal of financial assets at fair value through profit or loss | 167,580 | - | ||
Acquisition of available-for-sale financial assets | (199,102) | (2,796,625) | ||
Proceeds from disposal of available-for-sale financial assets | 2,044,043 | 1,373,147 | ||
Acquisition of financial assets measured at cost | (81,974) | (95,063) | ||
Proceeds from disposal of financial assets measured at cost | 523,605 | - | ||
Acquisition of investments accounted for under the equity method | - | (110,544) | ||
Proceeds from capital reduction and liquidation of investments | 136,847 | 303,719 | ||
Acquisition of subsidiaries (net of cash acquired) | - | 414,958 | ||
Disposal of subsidiaries | - | (834,955) | ||
Acquisition of property, plant and equipment | (69,655,661) | (47,153,743) | ||
Proceeds from disposal of property, plant and equipment | 70,594 | 146,663 | ||
Proceeds from disposal of non-current assets held for sale | - | 641,866 | ||
Increase in refundable deposits | (809,532) | (1,501,607) | ||
Decrease in refundable deposits | 1,089,142 | 158,083 | ||
Acquisition of intangible assets | (1,238,294) | (922,844) | ||
Cash inflow from combination | - | 1,583 | ||
Government grants related to assets acquisition | 5,914,521 | 253,641 | ||
Increase in other noncurrent assets-others | (120,279) | (1,478,290) | ||
Decrease in other noncurrent assets-others | 623,725 | 318,532 | ||
Net cash used in investing activities | (61,764,822) | (51,417,625) | ||
Cash flows from financing activities: | ||||
Increase in short-term loans | 37,721,544 | 10,551,420 | ||
Decrease in short-term loans | (6,342,759) | (13,429,862) | ||
Proceeds from bonds issued | - | 18,424,800 | ||
Bonds issuance costs | - | (83,880) | ||
Proceeds from long-term loans | 2,000,000 | 3,834,460 | ||
Repayments of long-term loans | (5,474,987) | (4,162,275) | ||
Increase in guarantee deposits | 3,444 | 47,348 | ||
Decrease in guarantee deposits | (4,274) | (6,764) | ||
Increase in other financial liabilities | 15,979,088 | 6,107,635 | ||
Cash dividends | (6,906,726) | (6,939,016) | ||
Exercise of employee stock options | - | 289,413 | ||
Treasury stock acquired | (2,395,793) | (2,203,442) | ||
Treasury stock sold to employees | - | 677,017 | ||
Acquisition of subsidiaries | (5,028) | (935,089) | ||
Changes in non-controlling interests | 182 | (15,343) | ||
Net cash provided by financing activities | 34,574,691 | 12,156,422 | ||
Effect of exchange rate changes on cash and cash equivalents | (1,738,186) | 830,706 | ||
Net increase in cash and cash equivalents | 1,975,809 | 5,930,319 | ||
Cash and cash equivalents at beginning of period | 53,290,433 | 46,212,423 | ||
Cash and cash equivalents at end of period | $ 55,266,242 | $ 52,142,742 | ||
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 theNine-Month Periods EndedSeptember 30, 2016 and 2015
(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 onOctober 26, 2016.
3. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS
a. Standards issued by International Accounting Standards Board (IASB) and endorsed by Financial Supervisory Commission (FSC) but not yet applicable are listed below:
|
|
|
|
|
No. |
| The projects of Standards or Interpretations |
| Effective for annual periods beginning on or after |
IAS36 |
| 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 |
9
|
|
|
|
|
No. |
| The projects of Standards or Interpretations |
| Effective for annual periods beginning on or after |
|
| Improvements to International Financial Reporting Standards (2011-2013 cycle) |
|
|
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 |
| Clarification of Acceptable Methods of Depreciation and Amortization |
| January 1, 2016 |
IAS 16 and |
| Agriculture: Bearer Plants |
| January 1, 2016 |
IAS 27 |
| Equity Method in Separate Financial Statements |
| 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 and endorsed by FSC on the Company’s financial statements in future periods are summarized as below:
(1) 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.
10
(2) 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.
(3) 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.
(4) 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.
(5) IFRS 13 “Fair Value Measurement”
The amendment to the Basis for Conclusions of IFRS 13“Fair Value Measurement”(IFRS 13) clarifies that when deleting paragraph B5.4.12 of IFRS 9“Financial Instruments” (IFRS 9) and paragraph AG79 of IAS 39“Financial Instruments: Recognition and Measurement” (IAS 39) as consequential amendments from IFRS 13, the IASB did not intend to change the measurement requirements for short-term receivables and payables.
(6) 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.
(7) 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 or IFRS 9, regardless of whether theymeet 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.
11
(8) IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” (Amendment)
The amendments require that the relevant principles on business combinations accounting inIFRS 3 “Business Combinations” (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 amendment is effective for annual periods beginning on or after January 1, 2016 with earlier application permitted.
(9) IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortisation” (Amendment)
The amendment to IAS 16“Property, Plant and Equipment” 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.
(10)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.
12
The aforementioned standards and interpretations issued by IASB and recognized by FSC so that they are applicable for annual periods beginning on or after January 1, 2017. The Company has evaluated the impact of the aforementioned standards and interpretations listed (1) ~ (10) to the Company’s financial position and performance, and determined that there is no material impact.
b. Standards issued by IASB but not yet endorsed by FSC (the effective dates are to be determined by FSC) are listed below:
|
|
|
|
|
No. |
| The projects of Standards or Interpretations |
| Effective for annual periods beginning on or after |
IFRS 15 |
| Revenue from Contracts with Customers |
| January 1, 2018 |
IFRS 9 |
| Financial Instruments |
| January 1, 2018 |
IFRS 10 and IAS 28 |
| Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
| - |
IFRS 16 |
| Leases |
| January 1, 2019 |
IAS 12 |
| Recognition of Deferred Tax Assets for Unrealized Losses |
| January 1, 2017 |
IAS 7 |
| Disclosure Initiative |
| January 1, 2017 |
IFRS 2 |
| Share-based Payment |
| January 1, 2018 |
IFRS 4 |
| Financial Instruments with Insurance Contracts |
| January 1, 2018 |
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:
(11)IFRS 15 “Revenue from Contracts with Customers” with its Amendment “Clarifications to IFRS 15 Revenue from Contracts with Customers” (IFRS 15)
The core principle of IFRS 15 is that revenue is recognized 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 amendment in 2016 clarifies how to identify a performance obligation in a contract,determine whether an entity is a principal or an agent, and determine whether the revenue from granting a license should be recognized at a point in time or over time. The standard will apply to annual periods beginning on or after January 1, 2018, and early adoption is permitted.
13
(12)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 and all previous versions of IFRS 9. 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, and (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.
(13)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 inIFRS 10“Consolidated Financial Statements” (IFRS 10) andIAS 28“Investments in Associates and Joint Ventures” (IAS 28), 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 gain 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 effective date of this amendment has been postponed indefinitely, but early adoption is allowed.
(14)IFRS 16 “Leases”
The new standard requires lessees to account for all leases under a single on-balance sheet model (subject to certain exemptions). Lessor accounting still uses the dual classification approach: operating lease and finance lease. The Standard is effective for annual periods beginning on or after January 1, 2019.
14
(15)IAS 12 “Income Taxes”-Recognition of Deferred Tax Assets for Unrealized Losses
The amendment clarifies how to account for deferred tax assets for unrealized losses. The amendment is effective for annual periods beginning on orafter January 1, 2017.
(16)“Disclosure Initiative”-Amendment to IAS 7 “Statement of Cash Flows”
The amendment relates to changes in liabilities arising from financing activities and to require a reconciliation of the carrying amount of liabilities at the beginning and end of the period. The amendment is effective for annual periods beginning on or afterJanuary 1, 2017.
(17)IFRS 2 “Share-based payment” (Amendment)
The amendment clarifying that (1) vesting conditions (service and non-market performance conditions), upon which satisfaction of a cash-settled share-based payment transaction is conditional, are not taken into account when estimating the fair value of the cash-settled share-based payment at the measurement date. Instead, these are taken into account by adjusting the number of awards included in the measurement of the liability arising from the transaction, (2) if tax laws or regulations require the employer to withhold a certain amount in order to meet the employee’s tax obligation associated with the share-based payment, such transactions will be classified in their entirety as equity-settled share-based payment transactions if they would have been so classified in the absence of the net share settlement feature, and (3) that if the terms and conditions of a cash-settled share-based payment transaction are modified, with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as an equity-settled transaction from the date of the modification. The equity-settled share-based payment transaction is measured by reference to the fair value of the equity instruments granted at the modification date and is recognized in equity, on the modification date, to the extent to which goods or services have been received. The liability for the cash-settled share-based payment transaction as at the modification date is derecognized on that date. Any difference between the carrying amount of the liability derecognized and the amount recognized in equity on the modification date is recognized immediately in profit or loss. The amendment iseffective for annual periods beginning on or after January 1, 2018.
The Company is currently evaluating the potential impact of the aforementioned standards and interpretations listed (11) ~ (17) to the Company’s financial position and performance, and the related impact will be disclosed when the evaluation is completed.
15
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 (2013 edition of TIFRSs (TIFRSs)), and IAS 34“Interim Financial Reporting”.
(2) Basis of Preparation
The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments measured at fair value.
(3) General Description of Reporting Entity
a. Principles of consolidation
The same principles of consolidation have been applied in the Company’s consolidated financial statements as those applied in the Company’s consolidated financial statements for the year ended December 31, 2015. For the principles of consolidation, please refer to Note 4(3) of the Company’s consolidated financial statements for the year ended December 31, 2015.
b. The consolidated entities are as follows:
As ofSeptember 30, 2016, December 31, 2015 andSeptember 30, 2015
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| |||
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|
|
| Percentage of ownership (%) as of | |||||
Investor |
| Subsidiary |
| Business nature |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 | |
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 | |
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 |
16
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
| Percentage of ownership (%) as of | |||||
Investor |
| Subsidiary |
| Business nature |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 | |
UMC |
| TLC CAPITAL CO., LTD. (TLC) |
| Venture capital |
| 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 venture capital |
| 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 |
| SINO PARAGON LIMITED |
| Investment holding |
| 100.00 |
| - |
| - | |
UMC |
| BEST ELITE INTERNATIONAL LIMITED (BE) |
| Investment holding |
| 91.08 |
| 91.06 |
| 91.06 | |
UMC, FORTUNE and UNITRUTH INVESTMENT CORP. (UNITRUTH) |
| WAVETEK MICROELECTRONICS CORPORATION (WAVETEK) |
| Sales and manufacturing of integrated circuits |
| 78.47 |
| 78.47 |
| 78.47 | |
UMC, FORTUNE, UNITRUTH and TLC |
| NEXPOWER TECHNOLOGY CORP. (NEXPOWER) |
| Sales and manufacturing of solar power batteries |
| 67.54 |
| 67.54 |
| 58.27 | |
FORTUNE |
| UNITRUTH |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 | |
UMC CAPITAL CORP. |
| UMC CAPITAL (USA) |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 |
FORTUNE |
| UNITRUTH |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 | ||
UMC CAPITAL CORP. |
| UMC CAPITAL (USA) |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 |
17
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| |||
|
|
|
|
|
| Percentage of ownership (%) as of | |||||
Investor |
| Subsidiary |
| Business nature |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 | |
UMC CAPITAL CORP. |
| ECP VITA PTE. LTD. |
| Insurance |
| - |
| 100.00 |
| 100.00 | |
TLC |
| SOARING CAPITAL CORP. |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 | |
SOARING CAPITAL CORP. |
| UNITRUTH ADVISOR (SHANGHAI) CO., LTD. |
| Investment holding and advisory |
| 100.00 |
| 100.00 |
| 100.00 | |
GE |
| UNITED MICROCHIP CORPORATION |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 | |
UMCINVESTMENT (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 |
| 82.76 |
| 82.76 |
| 82.76 | |
TERA ENERGY |
| EVERRICH ENERGY INVESTMENT (HK) LIMITED (EVERRICH-HK) |
| Investment holding |
| 100.00 |
| 100.00 |
| 100.00 | |
EVERRICH- |
| EVERRICH (SHANDONG) ENERGY CO., LTD. |
| Solar engineering integrated design services |
| 100.00 |
| 100.00 |
| 100.00 | |
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 |
| 100.00 | |
18
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
| Percentage of ownership (%) as of | ||||
Investor |
| Subsidiary |
| Business nature |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
OMNI |
| ECP VITA PTE. LTD. |
| Insurance |
| 100.00 |
| - |
| - |
OMNI |
| UMC TECHNOLOGY JAPAN CO., LTD. |
| Semiconductor manufacturing technology development and consulting services |
| 100.00 |
| - |
| - |
WAVETEK |
| WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED (WAVETEK-SAMOA) |
| Investment holding |
| 100.00 |
| 100.00 |
| 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 |
HEJIAN |
| UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD. |
| Integrated circuits design services |
| 100.00 |
| 100.00 |
| 100.00 |
HEJIAN |
| UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. (USC) (Note A) |
| Sales and manufacturing of integrated circuits |
| 29.41 |
| 33.33 |
| 33.33 |
Note A: As described in Note 9(5), the Company control USC’s Board of Directors.
19
(4) The same accounting policies have been applied in the Company’s consolidated financial statements for the nine-month period ended September 30, 2016 as those applied in the Company’s consolidated financial statements for the six-month period ended June 30, 2016 and the year ended December 31, 2015. For the summary of other significant accounting policies, please refer to Note 4 of the Company’s consolidated financial statements for the six-month period ended June 30, 2016 and for year ended December 31, 2015.
5. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The same significant accounting judgments, estimates and assumptions have been applied in the Company’s consolidated financial statements for the nine-month period ended September 30, 2016 as those applied in the Company’s consolidated financial statements forthe year ended December 31, 2015. For significant accounting judgments, estimates and assumptions, please refer to Note 5 of the Company’s consolidated financial statements forthe year ended December 31, 2015.
6. CONTENTS OF SIGNIFICANT ACCOUNTS
(1) Cash andCash Equivalents
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Cash on hand |
| $3,868 |
| $3,943 |
| $3,865 |
Checking and savings accounts |
| 23,454,069 |
| 14,464,203 |
| 16,298,570 |
Time deposits |
| 22,645,586 |
| 33,962,629 |
| 33,029,397 |
Repurchase agreements collateralized by government and corporate bonds |
| 9,162,719 |
| 4,859,658 |
| 2,810,910 |
Total |
| $55,266,242 |
| $53,290,433 |
| $52,142,742 |
(2) Financial Assets at Fair Value through Profit or Loss
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Designated financial assets at fair value through profit or loss |
|
|
|
|
| |
Convertible bonds |
| $317,461 |
| $295,708 |
| $304,969 |
|
|
|
|
|
|
|
Financial assets held for trading |
|
|
|
|
|
|
Listed stocks |
| 431,144 |
| 258,055 |
| 235,269 |
Corporate bonds |
| 190,058 |
| 192,080 |
| 383,602 |
Forward exchange contracts |
| 23,643 |
| 1,008 |
| 2,260 |
Subtotal |
| 644,845 |
| 451,143 |
| 621,131 |
Total |
| $962,306 |
| $746,851 |
| $926,100 |
|
|
|
|
|
|
|
Current |
| $750,848 |
| $664,918 |
| $843,925 |
Noncurrent |
| 211,458 |
| 81,933 |
| 82,175 |
Total |
| $962,306 |
| $746,851 |
| $926,100 |
(3) Accounts Receivable, Net
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Accounts receivable |
| $23,812,144 |
| $20,253,481 |
| $20,677,400 |
Less: allowance for sales returns and discounts |
| (1,421,404) |
| (1,103,139) |
| (1,132,837) |
Less: allowance for doubtful accounts |
| (88,451) |
| (90,568) |
| (92,535) |
Net |
| $22,302,289 |
| $19,059,774 |
| $19,452,028 |
20
Aging analysis of account receivables, net:
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Neither past due nor impaired |
| $18,846,889 |
| $15,643,254 |
| $16,757,515 |
Past due but not impaired: |
|
|
|
|
|
|
≤ 30 days |
| 2,161,734 |
| 2,497,133 |
| 2,299,159 |
31 to 60 days |
| 742,985 |
| 652,241 |
| 319,556 |
61 to 90 days |
| 499,622 |
| 213,367 |
| 31,466 |
91 to 120 days |
| 23,046 |
| 38,597 |
| 15,570 |
> 120 days |
| 28,013 |
| 15,182 |
| 28,762 |
Subtotal |
| 3,455,400 |
| 3,416,520 |
| 2,694,513 |
Total |
| $22,302,289 |
| $19,059,774 |
| $19,452,028 |
Movement on allowance for individually evaluated doubtful accounts:
|
| For the nine-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Beginning balance |
| $90,568 |
| $272,324 |
Net charge for the period |
| (2,117) |
| (179,789) |
Ending balance |
| $88,451 |
| $92,535 |
The collection periods for third party domestic sales and third party overseas sales were month-end 30~60 days and net 30~60 days, respectively.
The impairment losses assessed individually as ofSeptember 30, 2016 and 2015 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 | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Raw materials |
| $2,282,485 |
| $2,522,906 |
| $2,615,709 |
Supplies and spare parts |
| 2,619,038 |
| 2,044,550 |
| 2,023,092 |
Work in process |
| 11,462,580 |
| 11,025,222 |
| 10,079,947 |
Finished goods |
| 802,500 |
| 2,048,707 |
| 1,841,509 |
Total |
| $17,166,603 |
| $17,641,385 |
| $16,560,257 |
21
a. For the three-month periods ended September 30, 2016 and 2015, the Company recognized NT$29,035 million and NT$27,477 million, respectively, in operating cost, of which NT$195 million and NT$357 million were related to write-down of inventories. For the nine-month periods ended September 30, 2016 and 2015, the Company recognized NT$85,791 million and NT$83,725 million, respectively, in operating cost, of which NT$1,385 million and NT$1,040 million were related to write-down of inventories.
b. On February 6, 2016, an earthquake with a magnitude of 6.4 Richter struck southern Taiwan and caused financial related losses to UMC. UMC insured for losses endured due to the earthquake. As of September 30, 2016, UMC recognized losses including loss from scrapped inventory of NT$1,143 million and production line recovery expenses of NT$667 million. Furthermore, UMC received compensation from insurance claims of NT$1,065 million. UMC is still in the process of negotiating for insurance claims with the insurance companies.
c. None of the aforementioned inventories were pledged.
(5) Available-For-Sale Financial Assets, Non-Current
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Common stocks |
| $20,876,112 |
| $21,586,850 |
| $18,404,308 |
Preferred stocks |
| 1,182,297 |
| 1,166,256 |
| 1,005,822 |
Depositary receipts |
| 219,139 |
| 196,560 |
| 198,468 |
Funds |
| 860,713 |
| 851,020 |
| 105,991 |
Total |
| $23,138,261 |
| $23,800,686 |
| $19,714,589 |
22
(6) Financial Assets Measured at Cost, Non-Current
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Common stocks |
| $554,844 |
| $598,295 |
| $600,829 |
Preferred stocks |
| 2,117,660 |
| 3,160,427 |
| 3,186,850 |
Funds |
| 101,864 |
| 129,587 |
| 143,084 |
Total |
| $2,774,368 |
| $3,888,309 |
| $3,930,763 |
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.
(7) Investments Accounted For Under the Equity Method
a. Details of investments accounted for under the equity method are as follows:
|
| As of | ||||||||||
|
| September 30,2016 |
| December 31, 2015 |
| September 30,2015 | ||||||
Investee companies |
| Amount |
| Percentage of ownership or voting rights |
| Amount |
| Percentage of ownership or voting rights |
| Amount |
| Percentage of ownership or voting rights |
Listed company |
|
|
|
|
|
|
|
|
|
|
|
|
FARADAY TECHNOLOGY CORP. (FARADAY) (Note A) |
| $1,688,003
|
| 13.94 |
| $1,794,581
|
| 13.94 |
| $1,835,866 |
| 13.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unlisted companies |
|
|
|
|
|
|
|
|
|
|
|
|
SHANDONG HUAHONG ENERGY INVEST CO., INC. (SHANDONG HUAHONG) (Note B) |
| 622,967 |
| 50.00 |
| 680,374 |
| 50.00 |
| 719,472 |
| 50.00 |
WINAICO SOLAR PROJEKT 1 GMBH (Note B) |
| 29,113 |
| 50.00 |
| 32,737 |
| 50.00 |
| 35,308 |
| 50.00 |
LIST EARN ENTERPRISE INC. |
| 9,868 |
| 49.00 |
| 10,486 |
| 49.00 |
| 10,861 |
| 49.00 |
MTIC HOLDINGS PTE. LTD. |
| 77,896 |
| 45.44 |
| 81,342 |
| 45.44 |
| 93,562 |
| 45.44 |
YUNG LI INVESTMENTS, INC. |
| 344,638 |
| 45.16 |
| 321,761 |
| 45.16 |
| 241,169 |
| 45.16 |
MEGA MISSION LIMITED PARTNERSHIP |
| 1,729,984 |
| 45.00 |
| 1,967,164 |
| 45.00 |
| 1,812,335 |
| 45.00 |
WINAICO IMMOBILIEN GMBH (Note B) |
| 213,561 |
| 44.78 |
| 233,713 |
| 44.78 |
| 252,105 |
| 44.78 |
UNITECH CAPITAL INC. |
| 547,330 |
| 42.00 |
| 532,186 |
| 42.00 |
| 587,268 |
| 42.00 |
HSUN CHIEH INVESTMENT CO., LTD. |
| 3,150,208 |
| 36.49 |
| 3,177,578 |
| 36.49 |
| 2,872,847 |
| 36.49 |
YANN YUAN INVESTMENT CO., LTD. |
| 2,334,601 |
| 31.94 |
| 2,299,914 |
| 31.94 |
| - |
| - |
CTC CAPITAL PARTNERS I, L.P. |
| 62,119 |
| 31.40 |
| 221,607 |
| 31.40 |
| 156,503 |
| 31.40 |
VSENSE CO., LTD. |
| 87,356 |
| 28.63 |
| 101,281 |
| 28.63 |
| 103,393 |
| 28.63 |
UNITED LED CORPORATION HONG KONG LIMITED |
| 355,587 |
| 25.14 |
| 478,112 |
| 25.14 |
| 515,568 |
| 25.14 |
ACHIEVE MADE INTERNATIONAL LTD. |
| 101,420 |
| 23.32 |
| 116,321 |
| 23.32 |
| 120,863 |
| 23.32 |
CLIENTRON CORP. |
| 231,137 |
| 20.28 |
| 235,620 |
| 20.28 |
| 259,740 |
| 20.28 |
TRANSLINK CAPITAL PARTNERS I, L.P. (Note C) |
| 89,550 |
| 10.38 |
| 95,082 |
| 10.38 |
| 105,320 |
| 10.38 |
MOS ART PACK CORP. (MAP) (Note D) |
| - |
| - |
| - |
| - |
| 238,373 |
| 72.98 |
UNITED LIGHTING OPTO-ELECTRONIC INC. (UNITED LIGHTING) |
| - |
| - |
| - |
| - |
| 9,586 |
| 55.25 |
TRANSLINK CAPITAL PARTNERS III, L.P. (Note C) |
| - |
| - |
| - |
| - |
| 254,260 |
| 25.23 |
Total |
| $11,675,338 |
|
|
| $12,379,859 |
|
|
| $10,224,399 |
|
|
23
Note A: Beginning from June 2015, the Company accounts for its investment in FARADAY as an associate given the fact that the Company obtained the ability to exercise significant influence over FARADAY through representation on its Board of Directors. As a result, the investment was revalued to fair value and reclassified out of the available-for-sale category as an investment in associate accounted for under the equity method. Fair value remeasurement that was previously recognized in other comprehensive income was reclassified to profit or loss in the current period.
Note B: SHANDONG HUAHONG, WINAICO SOLAR PROJEKT 1 GMBH and WINAICO IMMOBILIEN GMBH are joint ventures to the Company.
Note C: The Company follows international accounting practices in equity accounting for limited partnerships and uses the equity method to account for these investees.
Note D: On March 10, 2011, MAP filed for liquidation through a decision at its stockholders’ meeting. The liquidation was completed on December 3, 2015.
Note E: On June 19, 2012, UNITED LIGHTING filed for liquidation through a decision at its stockholders’ meeting. The liquidation was completed onNovember23, 2015.
24
The carrying amount of investments accounted for using the equity method for which there are published price quotations amounted to NT$1,688 million, NT$1,795 million and NT$1,836 million, as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively. The fair value of these investments were NT$1,101 million, NT$1,534 million and NT$1,387 million, as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively.
Certain investments accounted for under the equity method were reviewed by other independent accountants. Shares of profit or loss of these associates and joint ventures amounted to NT$200 million, NT$157 million, NT$272 million and NT$136 million for the three-month and nine-month periods ended September 30, 2016 and 2015, respectively. Share of other comprehensive income (loss) of these associates and joint ventures amounted to NT$(303) million, NT$(722) million, NT$(250) million and NT$(1,107) million for the three-month and nine-month periods ended September 30, 2016 and 2015, respectively. The balances of investments accounted for under the equity method were NT$6,263 million, NT$4,142 million and NT$3,460 million as ofSeptember 30, 2016, December 31, 2015 and September 30, 2015,respectively.
None of the aforementioned associates and joint ventures were pledged.
b. Financial information of associates and joint ventures:
There is no individually significant associate or joint venture for the Company. When an associate or a joint venture is a foreign operation, and the functional currency of the foreign entity is different from the Company, an exchange difference arising from translation of the foreign entity will be recognized in other comprehensive income (loss). Such exchange differences recognized in other comprehensive income (loss) in the financial statements for the three-month and nine-month periods ended September 30, 2016 and 2015 wereNT$(86) million, NT$158 million, NT$(131) million andNT$77million, respectively,which were not included in the following table.
(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 periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Net income (loss) |
| $240,281 |
| $(164,758) |
Other comprehensive income (loss) |
| (304,824) |
| (779,681) |
Total comprehensive income (loss) |
| $(64,543) |
| $(944,439) |
|
|
|
|
|
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Net income (loss) |
| $(57,318) |
| $(112,709) |
Other comprehensive income (loss) |
| (273,483) |
| (1,079,581) |
Total comprehensive income (loss) |
| $(330,801) |
| $(1,192,290) |
25
(ii) 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 periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Net income (loss) |
| $(7,440) |
| $6,051 |
Other comprehensive income (loss) |
| - |
| 31,464 |
Total comprehensive income (loss) |
| $(7,440) |
| $37,515 |
|
|
|
|
|
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Net income (loss) |
| $(35,587) |
| $(12,729) |
Other comprehensive income (loss) |
| - |
| - |
Total comprehensive income (loss) |
| $(35,587) |
| $(12,729) |
c. One of UMC’s associate, HSUN CHIEH INVESTMENT CO., LTD., held 441 million shares of UMC’s stock as ofSeptember 30, 2016, December 31, 2015 and September 30, 2015. Another associate, MEGA MISSION LIMITED PARTNERSHIP, held nil share, 10 million shares and 13 million shares of UMC’s stock as ofSeptember 30, 2016, December 31, 2015 and September 30, 2015,respectively. The other associate, YANN YUAN INVESTMENT CO., LTD., held 165 million shares, nil share and nil share of UMC’s stock as ofSeptember 30, 2016, December 31, 2015 and September 30, 2015, respectively.
(8) Property, Plant and Equipment
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Land |
| $1,314,402 |
| $1,314,402 |
| $1,314,402 |
Buildings |
| 16,492,383 |
| 17,271,051 |
| 12,273,250 |
Machinery and equipment |
| 130,989,966 |
| 124,628,140 |
| 120,912,390 |
Transportation equipment |
| 17,000 |
| 17,627 |
| 14,001 |
Furniture and fixtures |
| 1,411,217 |
| 1,288,250 |
| 861,892 |
Leasehold improvement |
| 7,695 |
| 9,814 |
| 10,661 |
Construction in progress and equipment awaiting inspection |
| 65,181,476 |
| 41,904,111 |
| 48,504,679 |
Net |
| $215,414,139 |
| $186,433,395 |
| $183,891,275 |
26
Cost:
|
| Land |
| Buildings |
| Machinery and equipment |
| Transportation equipment |
| Furniture and fixtures |
| Leaseholdimprovement |
| Construction in progress and equipment awaiting inspection |
| Total |
As of January 1, 2016 |
| $1,314,402 |
| $31,396,873 |
| $712,551,068 |
| $74,251 |
| $6,064,146 |
| $70,431 |
| $41,904,111 |
| $793,375,282 |
Additions |
| - |
| - |
| - |
| - |
| - |
| - |
| 63,055,192 |
| 63,055,192 |
Disposals |
| - |
| - |
| (3,514,164) |
| (4,390) |
| (30,878) |
| - |
| - |
| (3,549,432) |
Transfers and reclassifications |
| - |
| 522,099 |
| 43,346,067 |
| 3,441 |
| 478,946 |
| - |
| (36,953,283) |
| 7,397,270 |
Exchange effect |
| - |
| (241,414) |
| (6,762,113) |
| (704) |
| (23,899) |
| (2,521) |
| (2,818,595) |
| (9,849,246) |
As ofSeptember 30, 2016 |
| $1,314,402 |
| $31,677,558 |
| $745,620,858 |
| $72,598 |
| $6,488,315 |
| $67,910 |
| $65,187,425 |
| $850,429,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Land |
| Buildings |
| Machinery and equipment |
| Transportation equipment |
| Furniture and fixtures |
| Leaseholdimprovement |
| 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 |
| - |
| - |
| - |
| - |
| - |
| - |
| 44,142,393 |
| 44,142,393 |
Acquired in business combination |
| - |
| - |
| 123,124 |
| - |
| 31,009 |
| - |
| 210 |
| 154,343 |
Disposals |
| - |
| - |
| (1,988,927) |
| (1,643) |
| (39,215) |
| - |
| - |
| (2,029,785) |
Transfers and reclassifications |
| - |
| 33,817 |
| 32,623,143 |
| 2,926 |
| 181,987 |
| 728 |
| (28,169,968) |
| 4,672,633 |
Exchange effect |
| - |
| 213,265 |
| 5,908,870 |
| 536 |
| 19,984 |
| 1,894 |
| 151,065 |
| 6,295,614 |
As ofSeptember 30, 2015 |
| $1,314,402 |
| $26,084,630 |
| $699,156,638 |
| $69,502 |
| $5,553,674 |
| $70,902 |
| $48,504,679 |
| $780,754,427 |
27
Accumulated Depreciation and Impairment:
|
| Land |
| Buildings |
| Machinery and equipment |
| Transportation equipment |
| Furniture and fixtures |
| Leaseholdimprovement |
| Construction in progress and equipment awaiting inspection |
| Total |
As of January 1, 2016 |
| $- |
| $14,125,822 |
| $587,922,928 |
| $56,624 |
| $4,775,896 |
| $60,617 |
| $- |
| $606,941,887 |
Depreciation |
| - |
| 1,135,942 |
| 35,422,370 |
| 3,896 |
| 347,659 |
| 1,854 |
| - |
| 36,911,721 |
Impairment loss |
| - |
| - |
| 447,279 |
| - |
| 1,848 |
| - |
| 5,949 |
| 455,076 |
Disposals |
| - |
| - |
| (3,476,868) |
| (4,390) |
| (29,441) |
| - |
| - |
| (3,510,699) |
Transfers and reclassifications |
| - |
| 994 |
| (994) |
| - |
| - |
| - |
| - |
| - |
Exchange effect |
| - |
| (77,583) |
| (5,683,823) |
| (532) |
| (18,864) |
| (2,256) |
| - |
| (5,783,058) |
As of September 30, 2016 |
| $- |
| $15,185,175 |
| $614,630,892 |
| $55,598 |
| $5,077,098 |
| $60,215 |
| $5,949 |
| $635,014,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Land |
| Buildings |
| Machinery and equipment |
| Transportation equipment |
| Furniture and fixtures |
| Leaseholdimprovement |
| 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 |
| - |
| 869,196 |
| 30,991,566 |
| 3,521 |
| 259,551 |
| 2,360 |
| - |
| 32,126,194 |
Impairment loss |
| - |
| - |
| 1,003,230 |
| - |
| 17,780 |
| - |
| - |
| 1,021,010 |
Disposals |
| - |
| - |
| (1,939,702) |
| (1,451) |
| (39,125) |
| - |
| - |
| (1,980,278) |
Transfers and reclassifications |
| - |
| (305) |
| 1,380 |
| - |
| 20,542 |
| - |
| - |
| 21,617 |
Exchange effect |
| - |
| 60,756 |
| 4,767,033 |
| 378 |
| 15,645 |
| 1,811 |
| - |
| 4,845,623 |
As ofSeptember 30, 2015 |
| $- |
| $13,811,380 |
| $578,244,248 |
| $55,501 |
| $4,691,782 |
| $60,241 |
| $- |
| $596,863,152 |
The thin-film solar cell and module industry has undergone challenging business conditions in the past year and experienced pricing declines indirectly due to oversupply in the silicon solar cell industry and the reductions in government supported incentives. The Company considered that the thin-film solar cell and module business had an indication of possible impairment and performed an impairment test for the CGU composed of property, plant and equipment used in the manufacturing of thin-film solar cells and modules.
The Company determined the recoverable amountofthe CGU to be NT$1,169 million based on the fair value less costs of disposal. The impairment test revealed that the recoverable amount was less than the carrying amount. After considering the relevant objective evidence, the Company recorded in the net other operating income and expenses an impairment loss of NT$455 millionfor the nine-month period ended September 30, 2016, all of which came from new business segment.
While in 2015, the Company determined the recoverable amount of the CGU to be NT$1,995 million on the basis of value in use, representing the present value of the future cash flows expected to be derived by the CGU, and compared it to its carrying amount. The impairment test revealed that the recoverable amount was less than the carrying amount. After considering the relevant objective evidence, the Company recorded in the net other operating income and expenses an impairment loss of NT$795 million at discount rates of 13.0% for the nine-month period ended September 30, 2015, all of which came from new business segment.
28
a. The amounts of total interest expense before capitalization of borrowing costs were NT$921 million and NT$625 million for the nine-month periods ended September 30, 2016 and 2015, respectively. Details of capitalized borrowing costs are as follows:
|
| For the nine-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Total interest capitalized |
| $156,762 |
| $259,292 |
Interest rates applied |
| 1.52%~2.01% |
| 1.35%~2.10% |
b. Please refer to Note 8 for property, plant and equipment pledged as collateral.
(9) Intangible Assets
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Goodwill |
| $15,188 |
| $15,188 |
| $15,188 |
Software |
| 366,825 |
| 377,643 |
| 238,804 |
Patents and technology license fees |
| 2,638,677 |
| 2,871,308 |
| 2,993,760 |
Others |
| 1,224,549 |
| 1,239,949 |
| 1,301,531 |
Net |
| $4,245,239 |
| $4,504,088 |
| $4,549,283 |
Cost:
|
| Goodwill |
| Software |
| Patents and technology license fees |
| Others |
| Total |
As of January 1, 2016 |
| $15,188 |
| $652,898 |
| $4,546,748 |
| $3,421,557 |
| $8,636,391 |
Additions |
| - |
| 1,365 |
| 161,923 |
| 967,176 |
| 1,130,464 |
Disposals |
| - |
| (66,600) |
| - |
| (974,417) |
| (1,041,017) |
Reclassifications |
| - |
| 163,860 |
| - |
| - |
| 163,860 |
Exchange effect |
| - |
| (5,523) |
| (60,009) |
| (3) |
| (65,535) |
As ofSeptember 30, 2016 |
| $15,188 |
| $746,000 |
| $4,648,662 |
| $3,414,313 |
| $8,824,163 |
29
|
| 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 |
| - |
| 417 |
| 263,847 |
| 766,442 |
| 1,030,706 |
Acquired in business combination |
| 7,397 |
| 330 |
| 11,023 |
| - |
| 18,750 |
Disposals |
| - |
| (140,233) |
| - |
| (522,588) |
| (662,821) |
Reclassifications |
| - |
| 125,163 |
| (259) |
| - |
| 124,904 |
Exchange effect |
| - |
| 3,270 |
| 47,442 |
| (4) |
| 50,708 |
As ofSeptember 30, 2015 |
| $15,188 |
| $479,691 |
| $4,551,797 |
| $3,148,349 |
| $8,195,025 |
Accumulated Amortization and Impairment:
|
| Goodwill |
| Software |
| Patents and technology license fees |
| Others |
| Total |
As of January 1, 2016 |
| $- |
| $275,255 |
| $1,675,440 |
| $2,181,608 |
| $4,132,303 |
Amortization |
| - |
| 173,582 |
| 359,201 |
| 982,575 |
| 1,515,358 |
Disposals |
| - |
| (66,600) |
| - |
| (974,417) |
| (1,041,017) |
Exchange effect |
| - |
| (3,062) |
| (24,656) |
| (2) |
| (27,720) |
As of September 30, 2016 |
| $- |
| $379,175 |
| $2,009,985 |
| $2,189,764 |
| $4,578,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
| - |
| 104,106 |
| 333,255 |
| 752,270 |
| 1,189,631 |
Disposals |
| - |
| (140,233) |
| - |
| (522,588) |
| (662,821) |
Exchange effect |
| - |
| 2,268 |
| 16,826 |
| (2) |
| 19,092 |
As of September 30, 2015 |
| $- |
| $240,887 |
| $1,558,037 |
| $1,846,818 |
| $3,645,742 |
30
The amortization amounts of intangible assets are as follows:
|
| For thethree-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Operating cost |
| $170,671 |
| $131,503 |
Operating expense |
| 342,939 |
| 293,497 |
|
| For the nine-monthperiods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Operating cost |
| $493,914 |
| $390,992 |
Operating expense |
| 1,021,444 |
| 798,639 |
Significant technology licenses obtained by the Company amounted to NT$2,155 million, NT$2,483 million and NT$2,586 million as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively, which were included in the carrying amounts of patents and technology license fees. The remaining amortization periods were 6~7 years, 6~7 years and 7~8 years, respectively.
(10)Short-Term Loans
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Unsecured bank loans |
| $35,821,080 |
| $5,505,049 |
| $2,513,597 |
Secured bank loans |
| - |
| - |
| 11,000 |
Total |
| $35,821,080 |
| $5,505,049 |
| $2,524,597 |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Interest rates applied |
| 0.72%~4.60% |
| 0.61%~4.85% |
a. The Company’s unused short-term lines of credits amounted to NT$38,386 million, NT$35,863 million and NT$21,635 million as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively.
b. Please refer to Note 8 for property, plant and equipment pledged as collateral for short- term loans.
31
(11)Financial Liabilities at Fair Value through Profit or Loss, Current
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Forward exchange contracts |
| $- |
| $999 |
| $16,092 |
(12)Bonds Payable
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Unsecured domestic bonds payable |
| $25,000,000 |
| $25,000,000 |
| $25,000,000 |
Unsecured convertible bonds payable |
| 18,196,332 |
| 18,196,332 |
| 18,196,332 |
Less: Discounts on bonds payable |
| (1,302,105) |
| (1,559,662) |
| (1,644,652) |
Total |
| 41,894,227 |
| 41,636,670 |
| 41,551,680 |
Less: Current portion |
| (7,499,082) |
| - |
| - |
Net |
| $34,395,145 |
| $41,636,670 |
| $41,551,680 |
A. 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 beconverted using the prevailing rate at the time of redemption for payment in USD.
32
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 liabilitycomponents 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.
33
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 withIAS 32“Financial Instruments: Presentation” (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%.
B. 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.
C. 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.
34
D. 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.
E. On May 18, 2015, 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$600 million
b. Period: May 18, 2015 ~ May 18, 2020 (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 the ordinary shares of UMC on the TWSE, for a period of 20 out of 30 consecutive trading days, the last of which occurs not more than 5 days prior to the date upon which notice of such redemption is published, is at least 125% of the conversion price. The Early Redemption Price will be converted into NTD based on the Fixed Exchange Rate (NTD 30.708=USD 1.00), and this fixed NTD amount will be converted using the prevailing rate at the time of redemption for payment in USD.
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 18, 2018 at 99.25% of the principal amount.
v. Bondholders have the right to require UMC to redeem all of the bonds at theEarly Redemption Amount if UMC’s ordinary shares cease to be listed on the Taiwan Stock Exchange.
35
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: Ordinary shares of UMC
ii. Conversion Period: The bonds are convertible at any time on or after June 28, 2015 and prior to May 8, 2020, into UMC 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 converting holder of the bonds to vote with respect to the shares it receives will be subject to certain restrictions.
iii. Conversion Price and Adjustment: The conversion price was originally NT$17.50 per share. The conversion price will be subject to adjustments upon the occurrence of certain events set out in the indenture. The conversion price was NT15.9895 per share on September 30, 2016.
e. Redemption on the Maturity Date: On the maturity date, UMC will redeem the bonds at 98.76% of the principal amount unless, prior to such date:
i. UMC shall have redeemed the bonds at the option of UMC, or the bonds shall have been redeemed at option of the bondholder;
ii. The bondholders shall have exercised the conversion right before maturity; or
iii. The bonds shall have been redeemed or repurchased by UMC and cancelled.
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$1,894 million, after reduction of issuance costs amounting to NT$9 million. The effective interest rate on the liability component of the convertible bonds was determined to be 2.03%.
(13)Long-Term Loans
a. Details of long-term loans as of September 30, 2016, December 31, 2015 and September 30, 2015 are as follows:
|
|
|
|
| ||||
|
| As of |
|
| ||||
Lenders |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
| Redemption |
Secured Long-Term Loan from Mega International Commercial Bank (1) |
| $29,221 |
| $51,137 |
| $58,442 |
| 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) |
| 9,000 |
| 12,000 |
| 13,000 |
| 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) |
| 26,294 |
| 52,588 |
| 61,353 |
| 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) |
| - |
| 40,156 |
| 44,618 |
| Effective January 10, 2013 to January 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) |
| 44,941 |
| 61,794 |
| 67,412 |
| Effective July 10, 2013 to July 10, 2018. Interest-only payment for the first year. Principal is repaid in 17 quarterly paymentswith monthly interest payments. |
Secured Long-Term Loan from Taiwan Cooperative Bank (4) |
| 15,985 |
| 19,410 |
| 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 Long-Term Loan from Taiwan Cooperative Bank (5) |
| 20,073 |
| 22,750 |
| 22,750 |
| Effective April 28, 2015 to April 28, 2020. 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 (6) |
| 6,871 |
| 7,300 |
| 7,300 |
| Effective August 10, 2015 to August 10, 2020. 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 (7) |
| 110,000 |
| 110,000 |
| - |
| Effective October 19, 2015 to October 19, 2025. Interest-only payment for the first year. Principal is repaid in 37 quarterly payments with monthly interest payments. |
Secured Long-Term Loan from Taiwan Cooperative Bank (8) |
| 2,215 |
| 2,510 |
| - |
| Effective October 28, 2015 to April 28, 2020. Interest-only payment for the first half year. Principal is repaid in 17 quarterly payments with monthly interest payments. |
Secured Long-Term Loan from Taiwan Cooperative Bank (9) |
| 5,900 |
| 5,900 |
| - |
| Effective November 20, 2015 to November 20, 2020. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. |
Unsecured Long-Term Loan from Bank of Taiwan |
| 1,500,000 |
| 2,625,000 |
| 3,000,000 |
| Repayable quarterly from October 31, 2015 to July 31, 2017 with monthly interest payments. |
Unsecured Syndicated Loans from Bank of Taiwan and 7 others |
| 1,385,000 |
| 1,385,000 |
| 1,385,000 |
| Repayable semi-annually from February 6, 2017 to February 6, 2020 with monthly interest payments. |
Unsecured Long-Term Loan from Mega International Commercial Bank (1) |
| 1,067,302 |
| 1,423,077 |
| 1,000,000 |
| Repayable quarterly from October 4, 2015 to October 4, 2018 with monthly interest payments. |
Unsecured Long-Term Loan from Mega International Commercial Bank (2) |
| - |
| - |
| 307,692 |
| Repayable quarterly from December 28, 2012 to December 28, 2015 with monthly interest payments. |
Unsecured Long-Term Loan from E. Sun Bank |
| 277,778 |
| 444,445 |
| 500,000 |
| Repayable quarterly from December 24, 2015 to December 24, 2017 with monthly interest payments. |
Unsecured Long-Term Loan from Taiwan Cooperative Bank |
| 1,187,500 |
| 1,900,000 |
| 1,400,000 |
| Repayable quarterly from March 24, 2016 to December 24, 2017with monthly interest payments. |
Unsecured Revolving Loan from CTBC Bank (Note A) |
| 2,000,000 |
| - |
| - |
| Settlement due on January 25, 2021 with monthly interest payments. |
Unsecured Revolving Loan from CTBC Bank (Note B) |
| - |
| 2,000,000 |
| 2,000,000 |
| Settlement due on August 30, 2016 with monthly interest payments. |
Unsecured Revolving Loan from Chang Hwa Commercial Bank (Note C) |
| 333,333 |
| 1,333,333 |
| 1,666,667 |
| Repayable quarterly from December 29, 2014 to December 29, 2016 with monthly interest payments. |
Unsecured Revolving Loan from KGI Bank (Note D) |
| 1,000,000 |
| 1,000,000 |
| 1,000,000 |
| Settlement due on December 29, 2019 with monthly interest payments. |
Subtotal |
| 9,021,413 |
| 12,496,400 |
| 12,553,644 |
|
|
Less: Administrative expenses from syndicated loans |
| (5,667) |
| (6,942) |
| (7,367) |
|
|
Less: Current portion |
| (3,725,906) |
| (6,601,721) |
| (6,311,069) |
|
|
Total |
| $5,289,840 |
| $5,887,737 |
| $6,235,208 |
|
|
36
37
Note A: UMC entered into a 5-year loan agreement with CTBC Bank, effective from January 25, 2016. 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, January 25, 2021. As of September 30, 2016, the unused line of credit was NT$0.5 billion.
Note B: UMC entered into a 5-year loan agreement with CTBC Bank, effective from August 30, 2011. The agreement, which 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, was early expired on January 25, 2016. As of December 31, 2015 and September 30, 2015, the unused line of credit were both NT$0.5 billion.
Note C: 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 September 30, 2016, December 31, 2015 and September 30, 2015, all lines of credit were used.
Note D: UMC entered into a 5-year loan agreement with KGI 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 September 30, 2016, December 31, 2015 and September 30, 2015, the unused line of credit all were NT$1 billion.
b. Please refer to Note 8 for property, plant and equipment pledged as collateral for long- term loans.
38
(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$161 million, NT$153 million, NT$475 million and NT$463 million were contributed by the Company for the three-month and nine-month periods ended September 30, 2016 and 2015, 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 and nine-month periods ended September 30, 2016 and 2015, the Company made total contributions of NT$141 million, NT$139 million, NT$437 million and NT$404 million, respectively.
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 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 and nine-month periods ended September 30, 2016 and 2015, total pension expenses of NT23 million, NT$26 million, NT$70 million and NT$79 million, respectively, were recognized by the Company.
(15)Government Grants
During the nine-month period ended September 30, 2016, UMC’s subsidiaries received major equipment acquisition related government grants in an aggregate amount of NT$5,601million. The grants were recorded in other noncurrent liabilities-others and will be amortized as income over the estimated economic useful lives of related equipment. As of September 30, 2016, the amortization has not been started.
39
(16)Equity
a. Capital stock:
i. UMC had 26,000 million common shares authorized to be issued as of September 30, 2016, December 31, 2015 and September 30, 2015, of which 12,624 million shares, 12,758 million shares and 12,758 million shares were issued as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively, each at a par value of NT$10.
ii. UMC had 149 million, 136 million and 135 million ADSs, which were traded on the NYSE as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively. The total number of common shares of UMC represented by all issued ADSs were 743 million shares, 678 million shares and 675 million shares as of September 30, 2016, December 31, 2015 and September 30, 2015, respectively. One ADS represents five common shares.
iii. Among the employee stock options issued by UMC on June 19, 2009, 28 million options had been exercised during the nine-month period ended September 30, 2015. The issuance process was completed through the authority.
iv. UMC sold 61 million shares of treasury stock to employees for the year ended December 31, 2015, which were repurchased during the period from March 15 to May 6, 2013, for the purpose of transferring to employees.
v. On June 15, 2016, UMC cancelled 134 million shares of treasury stock, which were repurchased during the periods from March 15 to May 6, 2013, for the purpose of transferring to employees.
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 nine-month periods ended September 30, 2016 and 2015 are as follows:
40
For the nine-month period ended September 30, 2016
(In thousands of shares)
Purpose |
| As of January 1, 2016 |
| Increase |
| Decrease |
| As of September 30, 2016 |
For transfer to employees |
| 333,814 |
| 200,000 |
| 133,814 |
| 400,000 |
For the nine-month period ended September 30, 2015
(In thousands of shares)
Purpose |
| As of January 1, 2015 |
|
Increase |
|
Decrease |
| As of September 30, 2015 |
For transfer to employees |
| 194,510 |
| 200,000 |
| 60,286 |
| 334,224 |
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 September 30, 2016, December 31, 2015 and September 30, 2015, were 1,262 million shares, 1,276 million shares and 1,276 million shares, with the maximum payments of NT$87,187 million, NT$90,687 million and NT$87,662 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.
iv. As of September 30, 2016, December 31, 2015 and September 30, 2015, UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., all held 16 million shares of UMC’s stock. The closing price on September 30, 2016, December 31, 2015 and September 30, 2015, were NT$11.55, NT$12.10 and NT$10.80, respectively.
41
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:
In consideration of the revision of the Company Act in May 2015, the stockholders’ meeting resolved the amendment of UMC’s Articles of Incorporation on June 7, 2016. According to the amendment of UMC’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:
i. Payment of taxes.
ii. Making up loss for preceding years.
iii. Setting aside 10% for legal reserve, except for when accumulated legal reserve has reached UMC’s paid-in capital.
iv. Appropriating or reversing special reserve by government officials or other regulations.
v. The remaining, plus the previous year’s unappropriated earnings, shall be distributed according to the distribution plan proposed by the Board of Directors according to the dividend policy in paragraph two of this clause and submitted to the stockholders’ meeting for approval.
Because UMC is within a capital intensive industry and continues to operate in its growth phase, the dividend policy of UMC shall be determined pursuant to the factors, such as the investment environment, capital requirement, domestic and overseas competition environment and capital budget of UMC current or future, as well as stockholders interest, balance of dividend and long term financial plan of UMC. The Board of Directors shall propose the distribution plan and submit to the stockholders’ meeting every year. The distribution of stockholders dividend shall be allocated as cash dividend in the range of 20% to 100%, and stock dividend in the range of 0% to 80%.
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.
42
The distributions of earnings for 2015 and 2014 were approved through the stockholders’ meeting held on June 7, 2016 and June 9, 2015, respectively. The details of distribution are as follows:
|
| Appropriation of earnings (in thousand NT dollars) |
| Cash dividend per share (NT dollars) | ||||
|
| 2015 |
| 2014 |
| 2015 |
| 2014 |
Legal reserve |
| $1,344,862 |
| $1,214,134 |
|
|
|
|
Cash dividends |
| 6,906,973 |
| 6,939,322 |
| $0.55 |
| $0.55 |
The aforementioned 2015 and 2014distributions approved during stockholders’ meeting were consistent with the resolutions of meeting of Board of Directors held on March 16, 2016 and March 18, 2015.
The cash dividend per share for 2015 was adjusted to NT$0.56501906 per share according to the resolution of the Board of Directors’ meeting on June 15, 2016. The adjustment was made for the decrease in outstanding common shares due to the share repurchase program and the cancellation of the treasury stock purchased.
The cash dividend per share for 2014 was adjusted to NT$0.54969673 per share according to the resolution of the Board of Directors’ meeting on June 17, 2015. The adjustment was made for the increase in outstanding common shares that resulted from the exercises of employee stock options and the transfers of treasury shares to employees after the stockholders’ meeting.
Please refer to Note 6(19) for information on the employees’ compensation and remuneration to directors.
d. Non-controlling interests:
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Beginning balance |
| $2,027,065 |
| $3,849,798 |
Attributable to non-controlling interests: |
|
|
|
|
Net loss |
| (2,353,441) |
| (524,207) |
Other comprehensive income (loss) |
| (87,165) |
| (37,085) |
The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries |
| (6,595) |
| (1,377,306) |
Changes in subsidiaries’ ownership |
| 2,028,344 |
| 166,192 |
Decrease in non-controlling interests |
| - |
| (100,400) |
Ending balance |
| $1,608,208 |
| $1,976,992 |
43
(17)Employee Stock Options
On May 12, 2009, the Company was authorized by the Securities and Futures Bureau of 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. All employee stock options expired on June 18, 2015.
A summary of the Company’s stock option plan and related information for the nine-month period ended September 30, 2015 is as follows:
|
| For the nine-month period ended September 30, | ||||
|
| 2015 | ||||
|
| 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 |
Exercised |
| (27,828) |
| (27,828) |
| $10.40 |
Forfeited |
| (469) |
| (469) |
| $10.40 |
Expired |
| (20,432) |
| (20,432) |
| $10.40 |
Outstanding at end of period |
| - |
| - |
| $10.40 |
|
|
|
|
|
|
|
Exercisable at end of period |
| - |
| - |
| $10.40 |
The weighted-average share price at the date of exercise of employee stock options for the nine-month period ended September 30, 2015 was NT$14.95.
Effective 2008, the compensation expenses related to the Company’s compensatoryemployee stock option plan were calculated based on fair value. The compensation expenses for the three-month and nine-month periods ended September 30, 2015 were nil and NT$1 million, respectively.
44
The fair value of the aforementioned options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions. The assumptions 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.
(18)Operating Revenues
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Net sales |
|
|
|
|
Sale of goods |
| $36,969,145 |
| $34,395,252 |
Other operating revenues |
|
|
|
|
Royalty |
| 3,943 |
| 1,502 |
Mask tooling |
| 832,447 |
| 755,964 |
Others |
| 358,054 |
| 167,123 |
Net operating revenues |
| $38,163,589 |
| $35,319,841 |
45
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Net sales |
|
|
|
|
Sale of goods |
| $105,794,566 |
| $107,829,062 |
Other operating revenues |
|
|
|
|
Royalty |
| 10,801 |
| 13,674 |
Mask tooling |
| 2,890,477 |
| 2,616,137 |
Others |
| 868,341 |
| 522,166 |
Net operating revenues |
| $109,564,185 |
| $110,981,039 |
(19)Operating Costs and Expenses
The Company’s personnel, depreciation and amortization expenses are summarized as follows:
|
| For the three-month periods endedSeptember 30, | ||||||||||
|
| 2016 |
| 2015 | ||||||||
|
| Operating costs |
| Operating expenses |
| Total |
| Operating costs |
| Operating expenses |
| Total |
Personnel expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries |
| $3,560,530 |
| $1,737,678 |
| $5,298,208 |
| $3,653,096 |
| $1,545,670 |
| $5,198,766 |
Labor and healthinsurance |
| 209,572 |
| 93,075 |
| 302,647 |
| 217,313 |
| 97,621 |
| 314,934 |
Pension |
| 234,954 |
| 90,133 |
| 325,087 |
| 237,435 |
| 79,991 |
| 317,426 |
Other personnel expenses |
| 54,453 |
| 16,921 |
| 71,374 |
| 56,071 |
| 29,802 |
| 85,873 |
Depreciation |
| 11,598,550 |
| 714,278 |
| 12,312,828 |
| 10,472,398 |
| 604,496 |
| 11,076,894 |
Amortization |
| 194,479 |
| 371,144 |
| 565,623 |
| 161,022 |
| 337,394 |
| 498,416 |
|
| For the nine-month periods endedSeptember 30, | ||||||||||
|
| 2016 |
| 2015 | ||||||||
|
| Operating costs |
| Operating expenses |
| Total |
| Operating costs |
| Operating expenses |
| Total |
Personnel expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries |
| $10,699,324 |
| $4,949,049 |
| $15,648,373 |
| $11,326,270 |
| $4,686,708 |
| $16,012,978 |
Labor and healthinsurance |
| 605,823 |
| 264,850 |
| 870,673 |
| 628,605 |
| 261,538 |
| 890,143 |
Pension |
| 719,893 |
| 263,652 |
| 983,545 |
| 714,152 |
| 237,384 |
| 951,536 |
Other personnel expenses |
| 161,671 |
| 47,214 |
| 208,885 |
| 164,859 |
| 68,530 |
| 233,389 |
Depreciation |
| 34,811,394 |
| 2,032,171 |
| 36,843,565 |
| 30,322,463 |
| 1,755,790 |
| 32,078,253 |
Amortization |
| 565,977 |
| 1,129,463 |
| 1,695,440 |
| 478,402 |
| 929,282 |
| 1,407,684 |
46
In consideration of the revision of the Company Act in May 2015, the stockholders’ meeting resolved the amendment of UMC’s Articles of Incorporation on June 7, 2016. According to the amendment of UMC’s Articles of Incorporation, the employees’ compensation and directors’ remuneration shall be distributed in the following order:
UMC shall allocate no less than 5% of profit as employees’ compensation and no more than 0.1% of profit as directors’ compensation for each profitable fiscal year. However, UMC's accumulated losses shall be reserved. The employees’ compensation under the preceding paragraph will be entitled to receive shares or cash. The employees of UMC’s subsidiaries who fulfill specific requirements finalized by the Board of Directors may be granted such compensation. Directors may only receive compensation in cash. UMC may, by a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors, distribute employees’ and director’s compensation in the preceding two paragraphs and report to the stockholders’ meeting for such distribution.
The distributions of employees’ compensation and remuneration to directors for 2015 have followed the aforementioned amendment of the UMC’s articles.
The Company estimates the amounts of the employees’ compensation and remuneration to directors and recognizes them in the profit or loss during the periods when earned for the nine-month periods ended September 30, 2016 and 2015. The Board of Directors estimated the amount by taking into consideration the amendment of the Articles of Incorporation, government regulations and industry averages. If the Board of Directors resolves to distribute employee compensation through stock, the number of stockdistributed is calculated based on total employee compensation divided by the closing price of the day before the Board of Directors meeting. If the Board of Directors subsequently modifies the estimates significantly, the Company will recognize the change as an adjustment in the profit or loss in the subsequent period. The difference between the estimation and the resolution of the stockholders’ meeting will be recognized in profit or loss in the subsequent year.
47
The distributions of employees’ compensation and remuneration to directors for 2015 and 2014 were approved through the stockholders’ meeting held on June 7, 2016 and June 9, 2015, respectively. The details of information are as follows:
|
| 2015 |
| 2014 |
Employees’ compensation – Cash |
| $1,131,180 |
| $1,458,956 |
Directors’ remuneration |
| 12,086 |
| 10,812 |
The aforementioned 2015 and 2014 employees’ compensation and remuneration to directors approved during the stockholders’ meeting were consistent with the resolutions of meeting of Board of Directorsheld on March 16, 2016 andMarch 18, 2015.
Information on the aforementioned employees’ compensation and remuneration to directors can be obtained from the “Market Observation Post System” on the website of the TWSE.
(20)Net Other Operating Income and Expenses
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Net rental loss from property |
| $(37,240) |
| $(22,733) |
Gain on disposal of property, plant and equipment |
| 18,479 |
| 13,589 |
Impairment loss of property, plant and equipment |
| (455,076) |
| (795,480) |
Others |
| 30,053 |
| 866 |
Total |
| $(443,784) |
| $(803,758) |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Net rental loss from property |
| $(97,253) |
| $(46,581) |
Gain on disposal of property, plant and equipment |
| 65,913 |
| 95,844 |
Impairment loss of property, plant and equipment |
| (455,076) |
| (1,021,010) |
Others |
| 79,210 |
| 42,069 |
Total |
| $(407,206) |
| $(929,678) |
48
(21)Non-Operating Income and Expenses
a. Other income
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Interest income |
|
|
|
|
Bank deposits |
| $43,045 |
| $96,295 |
Others |
| 7,613 |
| 9,083 |
Dividend income |
| 483,789 |
| 573,394 |
Total |
| $534,447 |
| $678,772 |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Interest income |
|
|
|
|
Bank deposits |
| $197,278 |
| $232,694 |
Others |
| 29,064 |
| 36,206 |
Dividend income |
| 604,198 |
| 686,199 |
Total |
| $830,540 |
| $955,099 |
b. Other gains and losses
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
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 |
| $2,913 |
| $23,389 |
Financial assets held for trading |
| 78,147 |
| - |
Forward exchange contract |
| 73,048 |
| - |
Loss on valuation of financial assets and liabilities at fair value through profit or loss |
|
|
|
|
Financial assets held for trading |
| - |
| (91,642) |
Forward exchange contract |
| - |
| (252,977) |
Impairment loss |
|
|
|
|
Available-for-sale financial assets, noncurrent |
| (67,639) |
| (743,981) |
Gain on disposal of investments |
| 304,197 |
| 611,944 |
Other gains and losses |
| 41,602 |
| 9,431 |
Total |
| $432,268 |
| $(443,836) |
49
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
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 |
| $- |
| $17,793 |
Financial assets held for trading |
| 66,827 |
| - |
Forward exchange contract |
| 214,700 |
| - |
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 |
| (25,746) |
| - |
Financial assets held for trading |
| - |
| (42,285) |
Forward exchange contract |
| - |
| (130,960) |
Impairment loss |
|
|
|
|
Available-for-sale financial assets, noncurrent |
| (259,554) |
| (1,223,025) |
Financial assets measured at cost, noncurrent |
| (293,205) |
| - |
Gain on disposal of investments |
| 1,074,398 |
| 2,120,332 |
Other gains and losses |
| 192,670 |
| 403,067 |
Total |
| $970,090 |
| $1,144,922 |
c. Finance costs
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Interest expenses |
|
|
|
|
Bonds payable |
| $170,814 |
| $93,052 |
Bank loans |
| 206,340 |
| 34,941 |
Others |
| 22 |
| 26 |
Financial expenses |
| 18,711 |
| 8,395 |
Total |
| $395,887 |
| $136,414 |
50
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Interest expenses |
|
|
|
|
Bonds payable |
| $414,188 |
| $219,859 |
Bank loans |
| 349,442 |
| 144,577 |
Others |
| 66 |
| 86 |
Financial expenses |
| 75,413 |
| 44,435 |
Total |
| $839,109 |
| $408,957 |
(22)Components of Other Comprehensive Income (Loss)
|
| For the three-month period ended September 30, 2016 | ||||||||
|
| 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 |
| $(2,126,763) |
| $- |
| $(2,126,763) |
| $18,108 |
| $(2,108,655) |
Unrealized gain (loss) on available-for-sale financial assets |
| 527,215 |
| (236,659) |
| 290,556 |
| (5,129) |
| 285,427 |
Share of other comprehensive income (loss) of associates and joint ventures which maybe reclassified subsequently to profit or loss |
| (403,354) |
| - |
| (403,354) |
| 13,003 |
| (390,351) |
Total other comprehensive income (loss) |
| $(2,002,902) |
| $(236,659) |
| $(2,239,561) |
| $25,982 |
| $(2,213,579) |
|
| For the three-month period ended September 30, 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 |
| $5,274,196 |
| $- |
| $5,274,196 |
| $(39,045) |
| $5,235,151 |
Unrealized gain (loss) on available-for-sale financial assets |
| (3,233,383) |
| 132,666 |
| (3,100,717) |
| (987) |
| (3,101,704) |
Share of other comprehensive income (loss) of associates and joint ventures which maybe reclassified subsequently to profit or loss |
| (585,988) |
| - |
| (585,988) |
| (4,695) |
| (590,683) |
Total other comprehensive income (loss) |
| $1,454,825 |
| $132,666 |
| $1,587,491 |
| $(44,727) |
| $1,542,764 |
51
|
| For the nine-month period ended September 30, 2016 | ||||||||
|
| 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 |
| $(3,527,773) |
| $- |
| $(3,527,773) |
| $14,517 |
| $(3,513,256) |
Unrealized gain (loss) on available-for-sale financial assets |
| 1,123,189 |
| (888,157) |
| 235,032 |
| (90,995) |
| 144,037 |
Share of other comprehensive income (loss) of associates and joint ventures which maybe reclassified subsequently to profit or loss |
| (429,684) |
| - |
| (429,684) |
| 25,258 |
| (404,426) |
Total other comprehensive income (loss) |
| $(2,834,268) |
| $(888,157) |
| $(3,722,425) |
| $(51,220) |
| $(3,773,645) |
|
| For the nine-month period ended September 30, 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 |
| $3,232,600 |
| $- |
| $3,232,600 |
| $(20,885) |
| $3,211,715 |
Unrealized gain (loss) on available-for-sale financial assets |
| (5,186,062) |
| (576,759) |
| (5,762,821) |
| (16,443) |
| (5,779,264) |
Share of other comprehensive income (loss) of associates and joint ventures which maybe reclassified subsequently to profit or loss |
| (1,003,569) |
| - |
| (1,003,569) |
| 859 |
| (1,002,710) |
Total other comprehensive income (loss) |
| $(2,957,031) |
| $(576,759) |
| $(3,533,790) |
| $(36,469) |
| $(3,570,259) |
52
(23)Income Tax
a. The major components of income tax expense for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
i. Income tax expense recorded in profit or loss
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Current income tax expense (benefit): |
|
|
|
|
Current income tax charge |
| $775,923 |
| $511,563 |
Adjustments in respect of current income tax of prior periods |
| (258,726) |
| 13,125 |
Deferred income tax expense (benefit): |
|
|
|
|
Deferred income tax related to origination and reversal of temporary differences |
| (332,430) |
| (444,094) |
Deferred income tax related to recognition andderecognition of tax losses and unused tax credits |
| (37,765) |
| 14,726 |
Adjustment of prior year’s deferred income tax |
| - |
| 234 |
Deferred income tax arising from write-down or reversal of write-down of deferred tax assets |
| 47,441 |
| (11,408) |
Income tax expense (benefit) recorded in profit or loss |
| $194,443 |
| $84,146 |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Current income tax expense (benefit): |
|
|
|
|
Current income tax charge |
| $2,244,594 |
| $1,960,692 |
Adjustments in respect of current income tax of prior periods |
| (424,100) |
| (154,971) |
Deferred income tax expense (benefit): |
|
|
|
|
Deferred income tax related to origination and reversal of temporary differences |
| (1,538,702) |
| (1,181,857) |
Deferred income tax related to recognition andderecognition of tax losses and unused tax credits |
| (58,041) |
| 548,871 |
Adjustment of prior year’s deferred income tax |
| 52,952 |
| 5,514 |
Deferred income tax arising from write-down or reversal of write-down of deferred tax assets |
| 89,212 |
| (17,109) |
Income tax expense (benefit) recorded in profit or loss |
| $365,915 |
| $1,161,140 |
53
ii. Income tax relating to components of other comprehensive income
Items that may be reclassified subsequently to profit or loss:
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Exchange differences on translation of foreign operations |
| $18,108 |
| $(39,045) |
Unrealized loss (gain) on available-for-sale financial assets |
| (5,129) |
| (987) |
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss |
| 13,003 |
| (4,695) |
Income tax related to items that may be reclassified subsequently to profit or loss |
| $25,982 |
| $(44,727) |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Exchange differences on translation of foreign operations |
| $14,517 |
| $(20,885) |
Unrealized loss (gain) on available-for-sale financial assets |
| (90,995) |
| (16,443) |
Share of other comprehensive income of associates and joint ventures which may be reclassified subsequently to profit or loss |
| 25,258 |
| 859 |
Income tax related to items that may be reclassified subsequently to profit or loss |
| $(51,220) |
| $(36,469) |
54
iii. Deferred income tax charged directly to equity
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Temporary differences arising from the initial recognition of the equity component separately from the liability component |
| $- |
| $- |
Adjustments of changes in net assets of associates and joint ventures accounted for using equity method |
| - |
| - |
Income tax charged directly to equity |
| $- |
| $- |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Temporary differences arising from the initial recognition of the equity component separately from the liability component |
| $- |
| $(322,001) |
Adjustments of changes in net assets of associates and joint ventures accounted for using equity method |
| 1,407 |
| 479 |
Income tax charged directly to equity |
| $1,407 |
| $(321,522) |
b. A reconciliation between income tax expense and income before tax at UMC’s applicable tax rate was as follows:
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Income before tax |
| $3,780,146 |
| $10,925,697 |
At UMC’s statutory income tax rate of 17% |
| 642,625 |
| 1,857,368 |
Adjustments in respect of current income tax of prior periods |
| (424,100) |
| (154,971) |
Net changes in loss carry-forward and investment tax credits |
| 781,252 |
| 283,623 |
Tax effect of deferred tax assets/liabilities |
| 114,501 |
| 47,487 |
Tax effect of non-taxable income and not-deductible expenses: |
|
|
|
|
Tax exempt income |
| (1,152,679) |
| (1,297,879) |
Investment gain |
| (506,419) |
| (340,062) |
Dividend income |
| (88,164) |
| (103,743) |
Others |
| 312,303 |
| 306,147 |
Basic tax |
| - |
| 12,638 |
Estimated 10% income tax on unappropriated earnings |
| 240,250 |
| 398,580 |
Effect of different tax rates applicable to UMC and its subsidiaries |
| (13,599) |
| (12,837) |
Taxes withheld in other jurisdictions |
| 267,978 |
| 4,308 |
Others |
| 191,967 |
| 160,481 |
Income tax expense recorded in profit or loss |
| $365,915 |
| $1,161,140 |
55
c. The Company is subject to taxation in Taiwan and other foreign jurisdictions. As of September 30, 2016, income tax returns of UMC and its subsidiaries in Taiwan have been examined by the tax authorities through 2014 and 2012, respectively, while in other foreign jurisdictions, relevant tax authorities have completed the examination through 2009. UMC has applied for a recheck of the 2013, 2012 and 2011 tax returns to the competent tax collection authorities as UMC disagreed with the decision made in the tax assessment notices.
d. Imputation credit information
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Balances of imputation credit amounts |
| $2,472,023 |
| $2,656,855 |
| $2,062,476 |
The expected creditable ratio for 2015 and the actual creditable ratio for 2014 were 6.68% and 6.81%, respectively. Effective from January 1, 2015, imputation credit ratio for individual stockholders residing in R.O.C. will be half of the original ratio according to the revised Article 66-6 of Income Tax Act.
e. UMC’s earnings generated in the year ended December 31, 1997 and prior years have been fully appropriated.
56
(24)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 company by the weighted-average number of ordinary shares outstanding during the year. The reciprocal stockholdings held by subsidiaries are deducted from the computation of weighted-average number of shares outstanding.
|
| For the three-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Net income attributable to the parent company |
| $2,974,770 |
| $1,708,479 |
Weighted-average number of ordinary shares for basic earnings per share (thousand shares) |
| 12,208,240 |
| 12,524,505 |
Earnings per share-basic (NTD) |
| $0.24 |
| $0.14 |
|
| For the nine-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Net income attributable to the parent company |
| $5,767,672 |
| $10,288,764 |
Weighted-average number of ordinary shares for basic earnings per share (thousand shares) |
| 12,316,725 |
| 12,541,081 |
Earnings per share-basic (NTD) |
| $0.47 |
| $0.82 |
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 company would be also adjusted for the interest and other income or expenses derived from any underlying dilutive share equivalents, such as convertible bonds. For employees’ compensation 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
57
during the period.
|
| For the three-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Net income attributable to the parent company |
| $2,974,770 |
| $1,708,479 |
Effect of dilution |
|
|
|
|
Unsecured convertible bonds |
| 70,764 |
| 69,347 |
Income attributable to stockholders of the parent |
| $3,045,534 |
| $1,777,826 |
Weighted-average number of common stocks for basic earnings per share (thousand shares) |
| 12,208,240 |
| 12,524,505 |
Effect of dilution |
|
|
|
|
Employees’ compensation |
| 41,687 |
| 68,914 |
Unsecured convertible bonds |
| 1,152,306 |
| 1,100,592 |
Weighted-average number of common stocks after dilution (thousand shares) |
| 13,402,233 |
| 13,694,011 |
|
|
|
|
|
Diluted earnings per share (NTD) |
| $0.23 |
| $0.13 |
|
| For the nine-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Net income attributable to the parent company |
| $5,767,672 |
| $10,288,764 |
Effect of dilution |
|
|
|
|
Unsecured convertible bonds |
| 211,213 |
| 102,902 |
Income attributable to stockholders of the parent |
| $5,978,885 |
| $10,391,666 |
Weighted-average number of common stocks for basic earnings per share (thousand shares) |
| 12,316,725 |
| 12,541,081 |
Effect of dilution |
|
|
|
|
Employees’ compensation |
| 65,056 |
| 136,084 |
Employee stock options |
| - |
| 4,461 |
Unsecured convertible bonds |
| 1,152,306 |
| 548,280 |
Weighted-average number of common stocks after dilution (thousand shares) |
| 13,534,087 |
| 13,229,906 |
|
|
|
|
|
Diluted earnings per share (NTD) |
| $0.44 |
| $0.79 |
58
(25)Deconsolidation of Subsidiaries
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 was the surviving company. On June 1, 2015, the Company derecognized the related assets and liabilities.
a. TOPCELL’s derecognized assets and liabilities mainly consisted of:
|
|
|
Assets |
|
|
Cash and cash equivalents |
| $834,955 |
Notes and accounts receivable |
| 855,927 |
Other receivables |
| 60,638 |
Inventories |
| 495,726 |
Prepayments |
| 231,288 |
Property, plant and equipment |
| 3,862,129 |
Others |
| 106,714 |
|
| 6,447,377 |
Liabilities |
|
|
Short-term loans |
| (3,488,700) |
Notes and accounts payable |
| (409,244) |
Other payables |
| (197,259) |
Payables on equipment |
| (127,297) |
Current portion of long-term liabilities |
| (810,878) |
Other current liabilities |
| (10,107) |
Long-term loans |
| (176,470) |
|
| (5,219,955) |
Net carrying amount of the disposal group |
| $1,227,422 |
59
b. Consideration received and gain recognized from the transaction:
|
|
|
Stock received-MOTECH |
| $1,495,023 |
Less: Net assets of the subsidiary deconsolidated |
| (1,227,422) |
Add: Non-controlling interests |
| 100,400 |
Less: Goodwill |
| (43,072) |
Gain on disposal of the shares of subsidiary |
| $324,929 |
Gain on disposal of the shares of subsidiary for the nine-month period ended September 30, 2015 was recognized as other gains and losses in the consolidated statement of comprehensive income.
c. Analysis of net cash outflow arising from deconsolidation of the subsidiary:
Cash received |
| $- |
Net cash of subsidiary derecognized |
| (834,955) |
Net cash flow from deconsolidation |
| $(834,955) |
7. RELATED PARTY TRANSACTIONS
(1) Significant related party transactions
a. Operating transactions
Operating revenues
|
| For the three-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Associates |
| $291,086 |
| $450,016 |
Joint ventures |
| 3,215 |
| 3,577 |
Other related parties |
| 758 |
| 2,450 |
Total |
| $295,059 |
| $456,043 |
60
|
| For the nine-month periods endedSeptember 30, | ||
|
| 2016 |
| 2015 |
Associates |
| $1,681,852 |
| $662,796 |
Joint ventures |
| 10,064 |
| 10,624 |
Other related parties |
| 2,217 |
| 5,405 |
Total |
| $1,694,133 |
| $678,825 |
Accounts receivable, net
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Associates |
| $61,255 |
| $215,402 |
| $233,838 |
Joint ventures |
| 1,105 |
| 1,161 |
| 1,202 |
Other related parties |
| 345 |
| 1,834 |
| 1,137 |
Total |
| 62,705 |
| 218,397 |
| 236,177 |
Less:Allowance for sales returns and discounts |
| (4,166) |
| (4,937) |
| (4,810) |
Net |
| $58,539 |
| $213,460 |
| $231,367 |
The sales price to the above related parties was determined through mutual agreement in reference to market conditions. The collection periods for domestic sales to related parties were month-end 45~60 days, while the collection periods for overseas sales was net 60 days.
b. Significant asset transactions
Acquisition of intangible assets
|
| For the three-month periods ended September 30, | ||
|
| Purchase price | ||
|
| 2016 |
| 2015 |
Associates |
| $27,339 |
| $34,603 |
|
| For the nine-month periods ended September 30, | ||
|
| Purchase price | ||
|
| 2016 |
| 2015 |
Associates |
| $174,364 |
| $49,062 |
61
Disposal of available-for-sale financial assets, noncurrent
For the nine-month period ended September 30, 2016: None.
|
|
|
|
|
| For the three-month period ended September 30, 2015 | ||
|
| Trading Volume (In thousands of shares) | Transaction underlying |
| Disposal amount |
| Disposal gain | |
Associates |
| - |
| None |
| $- |
| $- |
|
|
|
|
|
| For the nine-month period ended September 30, 2015 | ||
|
| Trading Volume (In thousands of shares) | Transaction underlying |
| Disposal amount |
| Disposal gain | |
Associates |
| 336 |
| DRAMEXCHANGE TECH. INC. |
| $5,400 |
| $2,346 |
c. Key management personnel compensation
|
| For the three-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Short-term employee benefits |
| $96,762 |
| $79,482 |
Post-employment benefits |
| 680 |
| 838 |
Termination benefits |
| - |
| 1,582 |
Share-based payment |
| 1 |
| 58 |
Others |
| 104 |
| 140 |
Total |
| $97,547 |
| $82,100 |
|
| For the nine-month periods ended September 30, | ||
|
| 2016 |
| 2015 |
Short-term employee benefits |
| $224,347 |
| $212,161 |
Post-employment benefits |
| 2,121 |
| 2,188 |
Termination benefits |
| 938 |
| 1,582 |
Share-based payment |
| 4 |
| 5,500 |
Others |
| 319 |
| 395 |
Total |
| $227,729 |
| $221,826 |
62
8. ASSETS PLEDGED AS COLLATERAL
As of September 30, 2016, December 31, 2015 and September 30, 2015
|
| Amount |
|
|
|
| ||||
|
| As of |
|
|
|
| ||||
|
| September 30,2016 |
| December 31, 2015 |
| September 30,2015 |
| Party to which asset(s) was pledged |
| Purpose of pledge |
Refundable Deposits (Time deposit) |
| $815,159 |
| $815,159 |
| $815,119 |
| Customs |
| Customs duty guarantee |
Refundable Deposits (Time deposit) |
| 251,231 |
| 207,510 |
| 190,755 |
| Science Park Administration |
| Collateral for land lease |
Refundable Deposits (Time deposit) |
| 37,084 |
| 49,785 |
| 56,186 |
| Liquefied Natural Gas Business Division, CPC Corporation, Taiwan |
| Energy resources guarantee |
Refundable Deposits (Time deposit) |
| 870 |
| 870 |
| 870 |
| National Pingtung University of Science and Technology |
| Guarantee for engineering project |
Refundable Deposits (Time deposit) |
| - |
| 357 |
| 357 |
| National Pei-men Senior High School |
| Guarantee for engineering project |
Refundable Deposits (Time deposit) |
| 286 |
| 286 |
| 286 |
| Bureau of Energy, Ministry of Economic Affairs |
| Energy resources guarantee |
Buildings |
| 139,921 |
| 145,493 |
| - |
| Taiwan Cooperative Bank |
| Collateral for long-term loans |
Machinery and equipment |
| 263,796 |
| 414,275 |
| 453,203 |
| Taiwan Cooperative Bank and Mega International Commercial Bank |
| Collateral for long-term and short-term loans |
Total |
| $1,508,347 |
| $1,633,735 |
| $1,516,776 |
|
|
|
|
9. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS
(1) As of September 30, 2016, amounts available under unused letters of credit for importing machinery and equipment was NT$3 billion.
(2) The Company entered into several patent license agreements and development contracts of intellectual property for a total contract amount of approximately NT$14.5 billion. As of September 30, 2016, the portion of royalties and development fees not yet recognized was NT$1.3 billion.
(3) The Company entered into several construction contracts for the expansion of its factory premise. As ofSeptember 30, 2016, these construction contracts amounted toapproximately NT$24.4 billion and the portion of the contracts not yet recognized was approximately NT$3.6 billion.
63
(4) The Company entered into several operating lease contracts for land and office. These renewable operating leases will expire in various years through 2036. Future minimum lease payments under those leases are as follows:
Year |
|
|
| As of September 30, 2016 |
2016 |
|
|
| $98,481 |
2017 |
|
|
| 375,915 |
2018 |
|
|
| 310,172 |
2019 |
|
|
| 305,917 |
2020 |
|
|
| 281,982 |
2021 and thereafter |
|
|
| 3,103,208 |
Total |
|
|
| $4,475,675 |
(5) The Board of Directors of UMC resolved to participate in a 3-way agreement with Xiamen Municipal People’s Government and FUJIAN ELECTRONIC & 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 ELECTRONIC & 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$0.7billion (including indirect investment). In January 2015, the Company obtained the control over UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. by acquiring more than half of the seats of the Board of Directors. As of September 30, 2016, the Company has invested RMB 1.8billion. Furthermore, according to the agreement, UMC recognized a financial liability in other noncurrent liabilities-others, for the repurchase of other investors’ investmentsin the company at their original investment cost plus interest, beginning from the seventh year following the last instalment payment made by other investors.
10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT SUBSEQUENT EVENTS
On February 6, 2016, an earthquake with a magnitude of 6.4 Richter struck southern Taiwan and caused related losses to UMC. Besides described in Note 6(4), the Company received additional reimbursement on closed insurance claims of US$50 million in subsequent period.
64
12. OTHERS
(1) Categories of financial instruments
|
| As of | |||||
Financial Assets |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 | |
Non-derivative financial instruments |
|
|
|
|
|
| |
Financial assets at fair value through profit or loss |
|
|
|
|
|
| |
Designated financial assets at fair value through profit or loss |
| $317,461 |
| $295,708 |
| $304,969 | |
Financial assets held for trading |
| 621,202 |
| 450,135 |
| 618,871 | |
Subtotal |
| 938,663 |
| 745,843 |
| 923,840 | |
Available-for-sale financial assets |
| 23,138,261 |
| 23,800,686 |
| 19,714,589 | |
Financial assets measured at cost |
| 2,774,368 |
| 3,888,309 |
| 3,930,763 | |
Loans and receivables |
|
|
|
|
|
| |
Cash and cash equivalents (excludes cash on hand) |
| 55,262,374 |
| 53,286,490 |
| 52,138,877 | |
Receivables |
| 23,308,020 |
| 19,964,707 |
| 20,459,527 | |
Refundable deposits |
| 2,245,521 |
| 2,638,788 |
| 2,505,227 | |
Other financial assets, current |
| 689,384 |
| 1,066,447 |
| 2,790,199 | |
Subtotal |
| 81,505,299 |
| 76,956,432 |
| 77,893,830 | |
Derivative financial instruments |
|
|
|
|
|
| |
Financial assets at fair value through profit or loss |
|
|
|
|
|
| |
Forward exchange contracts |
| 23,643 |
| 1,008 |
| 2,260 | |
Total |
| $108,380,234 |
| $105,392,278 |
| $102,465,282 | |
|
|
|
|
| |||
|
|
|
|
| |||
|
| As of | |||||
Financial Liabilities |
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 | |
Non-derivative financial instruments |
|
|
|
|
|
| |
Financial liabilities measured at amortized cost |
|
|
|
|
|
| |
Short-term loans |
| $35,821,080 |
| $5,505,049 |
| $2,524,597 | |
Payables |
| 32,337,161 |
| 33,242,615 |
| 32,515,395 | |
Capacity deposit (current portion included) |
| 264,353 |
| 358,887 |
| 366,682 | |
Bonds payable (current portion included) |
| 41,894,227 |
| 41,636,670 |
| 41,551,680 | |
Long-term loans (current portion included) |
| 9,015,746 |
| 12,489,458 |
| 12,546,227 | |
Other financial liabilities-noncurrent |
| 20,540,097 |
| 6,056,742 |
| 6,240,027 | |
Subtotal |
| 139,872,664 |
| 99,289,421 |
| 95,744,658 | |
Derivative financial instruments |
|
|
|
|
|
| |
Financial liabilities at fair value through profit or loss |
|
|
|
|
|
| |
Forwardexchangecontracts |
| - |
| 999 |
| 16,092 | |
Total |
| $139,872,664 |
| $99,290,420 |
| $95,760,750 |
65
(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, 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 currency risk, interest rate risk and other price risk (such as equity price risk).
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 thehedged 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.
66
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 nine-month periods ended September 30, 2016 and 2015 decreases/increases by NT$58 million and increases/decreases by NT$75 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 nine-month periods ended September 30, 2016 and 2015 to decrease/increase by NT$34 million and NT$11 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.
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 nine-month periods ended September 30, 2016 and 2015 by NT$22 million and NT$12 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 nine-month periods ended September 30, 2016 and 2015 by NT$1,116 million and NT$983 million, respectively.
67
(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 September 30, 2016, December 31, 2015 and September 30, 2015, accounts receivables from the top ten customers represent 66%, 58% and 54% 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.
The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity:
|
| As of September 30, 2016 | ||||||||
|
| Less than 1 year |
| 2 to 3 years |
| 4 to 5 years |
| > 5 years |
| Total |
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Short-term loans |
| $36,043,355 |
| $- |
| $- |
| $- |
| $36,043,355 |
Payables |
| 31,925,353 |
| - |
| - |
| 122,895 |
| 32,048,248 |
Capacity deposits |
| 218,917 |
| 45,436 |
| - |
| - |
| 264,353 |
Bonds payable |
| 7,994,161 |
| 10,374,721 |
| 22,888,688 |
| 3,158,763 |
| 44,416,333 |
Long-term loans |
| 3,809,480 |
| 2,006,118 |
| 3,486,857 |
| 52,299 |
| 9,354,754 |
Other financial liabilities -noncurrent |
| - |
| - |
| - |
| 22,921,395 |
| 22,921,395 |
Total |
| $79,991,266 |
| $12,426,275 |
| $26,375,545 |
| $26,255,352 |
| $145,048,438 |
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2015 | ||||||||
|
| Less than 1 year |
| 2 to 3 years |
| 4 to 5 years |
| > 5 years |
| Total |
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Short-term loans |
| $5,539,169 |
| $- |
| $- |
| $- |
| $5,539,169 |
Payables |
| 32,882,728 |
| - |
| - |
| 107,975 |
| 32,990,703 |
Capacity deposits |
| 167,586 |
| 191,301 |
| - |
| - |
| 358,887 |
Bonds payable |
| 622,936 |
| 15,510,038 |
| 23,444,199 |
| 5,218,410 |
| 44,795,583 |
Long-term loans |
| 6,782,180 |
| 4,206,040 |
| 1,829,407 |
| 62,208 |
| 12,879,835 |
Other financial liabilities -noncurrent |
| - |
| - |
| - |
| 6,778,450 |
| 6,778,450 |
Total |
| $45,994,599 |
| $19,907,379 |
| $25,273,606 |
| $12,167,043 |
| $103,342,627 |
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Forward exchangecontracts |
|
|
|
|
|
|
|
|
|
|
Net settlement |
| $(999) |
| $- |
| $- |
| $- |
| $(999) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of September 30, 2015 | ||||||||
|
| Less than 1 year |
| 2 to 3 years |
| 4 to 5 years |
| > 5 years |
| Total |
Non-derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Short-term loans |
| $2,538,561 |
| $- |
| $- |
| $- |
| $2,538,561 |
Payables |
| 32,253,781 |
| - |
| - |
| 108,211 |
| 32,361,992 |
Capacity deposits |
| 174,741 |
| 191,941 |
| - |
| - |
| 366,682 |
Bonds payable |
| 528,123 |
| 15,562,163 |
| 23,463,762 |
| 5,241,535 |
| 44,795,583 |
Long-term loans |
| 6,495,170 |
| 4,327,295 |
| 2,135,943 |
| - |
| 12,958,408 |
Other financial liabilities -noncurrent |
| - |
| - |
| - |
| 7,015,959 |
| 7,015,959 |
Total |
| $41,990,376 |
| $20,081,399 |
| $25,599,705 |
| $12,365,705 |
| $100,037,185 |
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
Inflow |
| $130,500 |
| $- |
| $- |
| $- |
| $130,500 |
Outflow |
| (131,667) |
| - |
| - |
| - |
| (131,667) |
Net |
| (1,167) |
| - |
| - |
| - |
| (1,167) |
Net settlement |
| (14,925) |
| - |
| - |
| - |
| (14,925) |
Total |
| $(16,092) |
| $- |
| $- |
| $- |
| $(16,092) |
68
(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 September 30, 2016
Type |
| Notional Amount |
| Contract Period |
Forward exchange contracts |
| Sell USD 104 million |
| September 9, 2016~ October 20,2016 |
As of December 31, 2015
Type |
| Notional Amount |
| Contract Period |
Forward exchange contracts |
| Sell USD 44 million |
| December 3, 2015~January 28, 2016 |
69
As of September 30, 2015
Type |
| Notional Amount |
| Contract Period |
Forward exchange contracts |
| Sell USD 96 million |
| September 4, 2015~October 29, 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.
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 September 30, 2016 | ||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
Financial assets: |
|
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss, current |
| $621,203 |
| $129,645 |
| $- |
| $750,848 |
Financial assets at fair value through profit or loss, noncurrent |
| 169,745 |
| 41,713 |
| - |
| 211,458 |
Available-for-sale financial assets, noncurrent |
| 12,982,680 |
| 86,053 |
| 10,069,528 |
| 23,138,261 |
70
|
| As of December 31, 2015 | ||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
Financial assets: |
|
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss, current |
| $450,135 |
| $214,783 |
| $- |
| $664,918 |
Financial assets at fair value through profit or loss, noncurrent |
| - |
| 81,933 |
| - |
| 81,933 |
Available-for-sale financial assets, noncurrent |
| 14,571,610 |
| 142,231 |
| 9,086,845 |
| 23,800,686 |
Financial liabilities: |
|
|
|
|
|
|
|
|
Financialliabilities at fair value through profit or loss, current |
| - |
| 999 |
| - |
| 999 |
|
| As of September 30, 2015 | ||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
Financial assets: |
|
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss, current |
| $618,871 |
| $225,054 |
| $- |
| $843,925 |
Financial assets at fair value through profit or loss, noncurrent |
| - |
| 82,175 |
| - |
| 82,175 |
Available-for-sale financial assets, noncurrent |
| 12,856,275 |
| 141,235 |
| 6,717,079 |
| 19,714,589 |
Financial liabilities: |
|
|
|
|
|
|
|
|
Financialliabilities at fair value through profit or loss, current |
| - |
| 16,092 |
| - |
| 16,092 |
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 financialassets’ quoted market price with appropriate discounts for the restrictions.
71
During the nine-month periods ended September 30, 2016 and 2015, 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, 2016 |
| $7,138,180 |
| $782,409 |
| $1,166,256 |
| $9,086,845 |
Recognized in profit (loss) |
| (110,005) |
| (7,439) |
| - |
| (117,444) |
Recognized in other comprehensive income (loss) |
| 828,528 |
| 13,473 |
| (16,313) |
| 825,688 |
Acquisition |
| 20,114 |
| 108,752 |
| 70,237 |
| 199,103 |
Disposal |
| (2,782) |
| - |
| - |
| (2,782) |
Return of Capital |
| (31,951) |
| (21,062) |
| - |
| (53,013) |
Transfer to Level 3 |
| 211,217 |
| - |
| - |
| 211,217 |
Exchange effect |
| (19,540) |
| (22,663) |
| (37,883) |
| (80,086) |
As of September 30, 2016 |
| $8,033,761 |
| $853,470 |
| $1,182,297 |
| $10,069,528 |
|
|
| ||||||
|
|
| ||||||
|
| 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) |
| (127,621) |
| - |
| - |
| (127,621) |
Recognized in other comprehensive income (loss) |
| (268,258) |
| (1,306) |
| 26,014 |
| (243,550) |
Acquisition |
| 1,672,568 |
| 35,478 |
| 473,702 |
| 2,181,748 |
Disposal |
| (20,962) |
| - |
| (300,000) |
| (320,962) |
Transfer to Level 3 |
| 14,854 |
| - |
| - |
| 14,854 |
Transfer out of Level 3 |
| (848,338) |
| - |
| - |
| (848,338) |
Exchange effect |
| 17,453 |
| 1,385 |
| 24,958 |
| 43,796 |
As of September 30, 2015 |
| $5,675,700 |
| $35,557 |
| $1,005,822 |
| $6,717,079 |
Recognized as part of profit (loss) above, the loss from financial assets still held by the Company as of September 30, 2016 and 2015 were NT$117 million and NT$128 million, respectively.
Recognized as part of other comprehensive income (loss) above, the income (loss) fromfinancial assets still held by the Company as of September 30, 2016 and 2015 were NT$826 million and NT$(196) million, respectively.
72
The Company’s policy to recognize the transfer into and out of fair value hierarchy levels is based on the event or changes in circumstances that caused the transfer.
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 risk-free interest 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 September 30, 2016
|
|
|
| Fair value measurements during reporting period using |
|
| ||||
Items |
| Fair value |
| Level 1 |
| Level 2 |
| Level 3 |
| Carrying amount |
Bonds payables (current portion included) |
| $42,304,265 |
| $25,117,998 |
| $17,186,267 |
| $- |
| $41,894,227 |
Long-term loans (current portion included) |
| 9,015,746 |
| - |
| 9,015,746 |
| - |
| 9,015,746 |
As of December 31, 2015
|
|
|
| Fair value measurements during reporting period using |
|
| ||||
Items |
| Fair value |
| Level 1 |
| Level 2 |
| Level 3 |
| Carrying amount |
Bonds payables |
| $42,325,673 |
| $25,134,763 |
| $17,190,910 |
| $- |
| $41,636,670 |
Long-term loans (current portion included) |
| 12,489,458 |
| - |
| 12,489,458 |
| - |
| 12,489,458 |
73
As of September 30, 2015
|
|
|
| Fair value measurements during reporting period using |
|
| ||||
Items |
| Fair value |
| Level 1 |
| Level 2 |
| Level 3 |
| Carrying amount |
Bonds payables |
| $41,734,313 |
| $25,119,326 |
| $16,614,987 |
| $- |
| $41,551,680 |
Long-term loans (current portion included) |
| 12,546,277 |
| - |
| 12,546,277 |
| - |
| 12,546,277 |
(8) Significant assets and liabilities denominated in foreign currencies
| As of | ||||||||||
| September 30, 2016 |
| December 31, 2015 | ||||||||
| Foreign Currency (thousand) |
| Exchange Rate | NTD (thousand) |
| Foreign Currency (thousand) |
| Exchange Rate |
| NTD (thousand) | |
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
USD | $1,752,368 |
| 31.29 |
| $54,832,873 |
| $1,725,145 |
| 32.75 |
| $56,491,956 |
JPY | 5,599,001 |
| 0.3074 |
| 1,720,892 |
| 9,788,783 |
| 0.2673 |
| 2,616,896 |
EUR | 4,298 |
| 34.74 |
| 149,334 |
| 2,843 |
| 35.43 |
| 100,737 |
SGD | 36,831 |
| 22.88 |
| 842,700 |
| 47,351 |
| 23.18 |
| 1,097,581 |
RMB | 1,411,458 |
| 4.66 |
| 6,583,047 |
| 647,490 |
| 4.97 |
| 3,220,014 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Monetary items |
|
|
|
|
|
|
|
|
|
|
|
USD | 143,204 |
| 31.31 |
| 4,483,706 |
| 130,593 |
| 32.76 |
| 4,278,209 |
JPY | 10,919,474 |
| 0.3089 |
| 3,373,026 |
| 10,919,474 |
| 0.2709 |
| 2,958,086 |
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
|
|
|
|
|
USD | $755,883 |
| 31.41 |
| $23,740,923 |
| $746,826 |
| 32.86 |
| $24,540,716 |
JPY | 6,102,260 |
| 0.3130 |
| 1,910,006 |
| 9,414,887 |
| 0.2750 |
| 2,589,093 |
EUR | 41,833 |
| 35.28 |
| 1,475,916 |
| 2,253 |
| 36.10 |
| 81,332 |
SGD | 42,464 |
| 23.06 |
| 979,244 |
| 46,302 |
| 23.36 |
| 1,081,629 |
RMB | 10,911,052 |
| 4.72 |
| 51,478,217 |
| 1,373,296 |
| 5.02 |
| 6,898,065 |
|
|
|
|
|
|
|
|
|
|
|
|
The exchange gain or loss from monetary financial assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
|
| (301,229) |
|
|
|
|
| 358,721 |
JPY |
|
|
|
| (11,641) |
|
|
|
|
| 117,978 |
EUR |
|
|
|
| 11,661 |
|
|
|
|
| (19,908) |
SGD |
|
|
|
| (8,266) |
|
|
|
|
| (18,603) |
RMB |
|
|
|
| (696,623) |
|
|
|
|
| 7,428 |
Other |
|
|
|
| 187 |
|
|
|
|
| (76,305) |
74
|
| As of | ||||
|
| September 30, 2015 | ||||
|
| Foreign Currency (thousand) |
| Exchange Rate |
| NTD (thousand) |
Financial Assets |
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
USD |
| $1,757,298 |
| 32.86 |
| $57,741,262 |
JPY |
| 7,104,758 |
| 0.2671 |
| 1,897,941 |
EUR |
| 14,261 |
| 36.63 |
| 522,394 |
SGD |
| 48,834 |
| 23.19 |
| 1,132,457 |
RMB |
| 938,945 |
| 5.15 |
| 4,834,597 |
|
|
|
|
|
|
|
Non-Monetary items |
|
|
|
|
|
|
USD |
| 105,707 |
| 32.87 |
| 3,475,239 |
JPY |
| 5,000,000 |
| 0.2715 |
| 1,357,500 |
|
|
|
|
|
|
|
Financial Liabilities |
|
|
|
|
|
|
Monetary items |
|
|
|
|
|
|
USD |
| $624,932 |
| 32.97 |
| $20,604,029 |
JPY |
| 7,201,869 |
| 0.2756 |
| 1,984,835 |
EUR |
| 15,743 |
| 37.08 |
| 583,742 |
SGD |
| 57,276 |
| 23.37 |
| 1,338,542 |
RMB |
| 1,295,985 |
| 5.20 |
| 6,737,824 |
|
|
|
|
|
|
|
The exchange gain or loss from monetary financial assets and liabilities |
|
|
|
|
|
|
USD |
|
|
|
|
| 426,417 |
JPY |
|
|
|
|
| 85,056 |
EUR |
|
|
|
|
| (23,176) |
SGD |
|
|
|
|
| (21,821) |
RMB |
|
|
|
|
| 13,449 |
Other |
|
|
|
|
| (75,719) |
75
(9) Significant intercompany transactions among consolidated entities forthe nine-month periods ended September 30, 2016 and 2015 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.
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 thenine-month period ended September 30, 2016 as compared to thenine-month period ended September 30, 2015, which is to maintain a reasonable ratio in order to raise capital with reasonable cost. The debt to capital ratios as of September 30, 2016, December 31, 2015 and September 30, 2015 were as follows:
76
|
| As of | ||||
|
| September 30, 2016 |
| December 31, 2015 |
| September 30, 2015 |
Total liabilities |
| $155,960,409 |
| $108,549,407 |
| $105,213,949 |
Less: Cash and cash equivalents |
| (55,266,242) |
| (53,290,433) |
| (52,142,742) |
Net debt |
| 100,694,167 |
| 55,258,974 |
| 53,071,207 |
Total equity |
| 218,998,882 |
| 228,817,403 |
| 223,998,142 |
Total capital |
| $319,693,049 |
| $284,076,377 |
| $277,069,349 |
Debt to capital ratios |
| 31.50% |
| 19.45% |
| 19.15% |
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 forthe nine-month period ended September 30, 2016: Please refer to Attachment 2.
b. Endorsement/Guarantee provided to others forthe nine-month period ended September 30, 2016: Please refer to Attachment 3.
c. Securities held as ofSeptember 30, 2016 (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 forthe nine-month period ended September 30, 2016: 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 forthe nine-month period ended September 30, 2016: 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 forthe nine-month period ended September 30, 2016: 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 forthe nine-month period endedSeptember 30,2016: Please refer to Attachment 8.
77
h. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as ofSeptember 30, 2016: Please refer to Attachment 9.
i. Names, locations and related information of investees as ofSeptember 30, 2016 (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),carrying amount 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.
14. OPERATING SEGMENT INFORMATION
(1) 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 ofSeptember 30, 2016, 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 endedSeptember 30, 2016and 2015 were as follows:
78
|
| For the three-month period ended September 30, 2016 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination |
| Consolidated |
Net revenue from external customers |
| $38,049,769 |
| $113,820 |
| $38,163,589 |
| $- |
| $38,163,589 |
Net revenue from sales among intersegments |
| - |
| 2,209 |
| 2,209 |
| (2,209) |
| - |
Segment net income (loss), net of tax |
| 1,956,649 |
| (695,182) |
| 1,261,467 |
| 494,732 |
| 1,756,199 |
Capital expenditure |
| 19,855,346 |
| 6,805 |
| 19,862,151 |
| - |
| 19,862,151 |
Depreciation |
| 12,223,437 |
| 112,435 |
| 12,335,872 |
| - |
| 12,335,872 |
Share of profit or loss of associates and joint ventures |
| (205,231) |
| (56,660) |
| (261,891) |
| 494,732 |
| 232,841 |
Income tax expense (benefit) |
| 194,419 |
| 24 |
| 194,443 |
| - |
| 194,443 |
Impairment loss |
| 57,697 |
| 465,018 |
| 522,715 |
| - |
| 522,715 |
|
| For the three-month period ended September 30, 2015 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination |
| Consolidated |
Net revenue from external customers |
| $35,170,568 |
| $149,273 |
| $35,319,841 |
| $- |
| $35,319,841 |
Net revenue from sales among intersegments |
| - |
| 5,059 |
| 5,059 |
| (5,059) |
| - |
Segment net income (loss), net of tax |
| 1,735,593 |
| (1,051,625) |
| 683,968 |
| 623,077 |
| 1,307,045 |
Capital expenditure |
| 20,510,212 |
| (283,078) |
| 20,227,134 |
| - |
| 20,227,134 |
Depreciation |
| 10,917,623 |
| 175,508 |
| 11,093,131 |
| - |
| 11,093,131 |
Share of profit or loss of associates and joint ventures |
| (778,136) |
| (3,648) |
| (781,784) |
| 623,077 |
| (158,707) |
Income tax expense (benefit) |
| 82,577 |
| 1,569 |
| 84,146 |
| - |
| 84,146 |
Impairment loss |
| 738,311 |
| 801,150 |
| 1,539,461 |
| - |
| 1,539,461 |
79
Reportable segment information for thenine-month periods endedSeptember 30, 2016 and 2015 were as follows:
|
| For the nine-month period ended September 30, 2016 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination |
| Consolidated |
Net revenue from external customers |
| $109,221,383 |
| $342,802 |
| $109,564,185 |
| $- |
| $109,564,185 |
Net revenue from sales among intersegments |
| - |
| 5,528 |
| 5,528 |
| (5,528) |
| - |
Segment net income (loss), net of tax |
| 3,736,622 |
| (1,210,670) |
| 2,525,952 |
| 888,279 |
| 3,414,231 |
Capital expenditure |
| 69,663,248 |
| (71,587) |
| 69,655,661 |
| - |
| 69,655,661 |
Depreciation |
| 36,573,682 |
| 338,039 |
| 36,911,721 |
| - |
| 36,911,721 |
Share of profit or loss of associates and joint ventures |
| (868,559) |
| (112,625) |
| (981,184) |
| 888,279 |
| (92,905) |
Income tax expense (benefit) |
| 362,581 |
| 3,334 |
| 365,915 |
| - |
| 365,915 |
Impairment loss |
| 477,664 |
| 530,171 |
| 1,007,835 |
| - |
| 1,007,835 |
|
| For the nine-month period ended September 30, 2015 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination |
| Consolidated |
Net revenue from external customers |
| $107,986,620 |
| $2,994,419 |
| $110,981,039 |
| $- |
| $110,981,039 |
Net revenue from sales among intersegments |
| - |
| 8,312 |
| 8,312 |
| (8,312) |
| - |
Segment net income (loss), net of tax |
| 10,432,340 |
| (1,517,457) |
| 8,914,883 |
| 849,674 |
| 9,764,557 |
Capital expenditure |
| 47,040,342 |
| 113,401 |
| 47,153,743 |
| - |
| 47,153,743 |
Depreciation |
| 31,597,277 |
| 528,917 |
| 32,126,194 |
| - |
| 32,126,194 |
Share of profit or loss of associates and joint ventures |
| (955,966) |
| (19,146) |
| (975,112) |
| 849,674 |
| (125,438) |
Income tax expense (benefit) |
| 1,160,684 |
| 206 |
| 1,161,140 |
| - |
| 1,161,140 |
Impairment loss |
| 1,442,570 |
| 801,465 |
| 2,244,035 |
| - |
| 2,244,035 |
80
|
| As of September 30, 2016 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination (Note) |
| Consolidated |
Segment assets |
| $373,050,778 |
| $3,788,524 |
| $376,839,302 |
| $(1,880,011) |
| $374,959,291 |
Segment liabilities |
| $154,068,372 |
| $1,895,119 |
| $155,963,491 |
| $(3,082) |
| $155,960,409 |
|
| As of December 31, 2015 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination (Note) |
| Consolidated |
Segment assets |
| $335,087,629 |
| $5,484,681 |
| $340,572,310 |
| $(3,205,500) |
| $337,366,810 |
Segment liabilities |
| $106,609,990 |
| $1,942,746 |
| $108,552,736 |
| $(3,329) |
| $108,549,407 |
|
| As of September 30, 2015 | ||||||||
|
| Wafer Fabrication |
| New Business |
| Subtotal |
| Adjustment and Elimination (Note) |
| Consolidated |
Segment assets |
| $326,837,903 |
| $5,096,550 |
| $331,934,453 |
| $(2,722,362) |
| $329,212,091 |
Segment liabilities |
| $103,130,593 |
| $2,087,318 |
| $105,217,911 |
| $(3,962) |
| $105,213,949 |
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.
81
ATTACHMENT 1 (Significant intercompany transactions between consolidated entities) | ||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||
For the nine-month period ended September 30, 2016 | ||||||||||||||
Related party | Counterparty | Relationship with the Company | Transactions | |||||||||||
No. | Account | Amount | Collection periods | Percentage of consolidated operating | ||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Sales | $51,968,012 | Net 60 days | 47% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Accounts receivable | 10,466,811 | - | 3% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Sales | 3,074,098 | Net 60 days | 3% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Accounts receivable | 618,273 | - | 0% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 1 | Sales | 178,422 | Net 30 days | 0% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 1 | Accounts receivable | 168,266 | - | 0% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | WAVETEK MICROELECTRONICS CORPORATION | 1 | Sales | 147,163 | Month-end 30 days | 0% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | WAVETEK MICROELECTRONICS CORPORATION | 1 | Accounts receivable | 422 | - | 0% | |||||||
1 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP (USA) | 3 | Sales | 315,041 | Net 60 days | 0% | |||||||
1 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP (USA) | 3 | Accounts receivable | 26,907 | - | 0% | |||||||
1 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Sales | 119,830 | Net 60 days | 0% | |||||||
1 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Accounts receivable | 33,176 | - | 0% | |||||||
For the nine-month period ended September 30, 2015 | ||||||||||||||
Related party | Counterparty | Relationship with the Company | Transactions | |||||||||||
No. | Account | Amount | Collection periods | Percentage of consolidated operating | ||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Sales | $47,616,758 | Net 60 days | 43% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Accounts receivable | 6,784,252 | - | 2% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Sales | 6,622,140 | Net 60 days | 6% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Accounts receivable | 2,027,889 | - | 1% | |||||||
1 | WAVETEK MICROELECTRONICS CORPORATION | UNITED MICROELECTRONICS CORPORATION | 2 | Sales | 623,402 | Net 30 days | 1% | |||||||
1 | WAVETEK MICROELECTRONICS CORPORATION | UNITED MICROELECTRONICS CORPORATION | 2 | Accounts receivable | 88,524 | - | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP (USA) | 3 | Sales | 496,759 | Net 60 days | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP (USA) | 3 | Accounts receivable | 119,300 | - | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Sales | 127,427 | Net 60 days | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Accounts receivable | 44,983 | - | 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 in reference to 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. |
82
ATTACHMENT 2 (Financing provided to others for the nine-month period ended September 30, 2016) | ||||||||||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | ||||||||||||||||||||||||||||||||
Collateral | ||||||||||||||||||||||||||||||||
No. | 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 |
| 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 | $2,942 | $2,919 | $2,919 | 9.00% | Need for operating | $2,919 | - | $2,919 | None | $- | $61,243 | $97,989 | ||||||||||||||||
OAKWOOD ASSOCIATES LIMITED | ||||||||||||||||||||||||||||||||
Collateral | ||||||||||||||||||||||||||||||||
No. | 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 | Limit of financing amount for individual counter-party (Note3) | Limit of total financing amount (Note3) | ||||||||||||||||||
Item | Value | |||||||||||||||||||||||||||||||
1 | OAKWOOD ASSOCIATES LIMITED | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Other receivables - related parties | Yes | $626,200 | $626,200 | $- | - | The need for short-term financing | $- | Business turnover | $- | None | $- | $1,104,456 | $8,835,652 | ||||||||||||||||
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 latest financial statements of lender. | ||||||||||||||||||||||||||||||||
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 latest financial statements of lender. |
83
ATTACHMENT 3 (Endorsement/Guarantee provided to others for the nine-month period ended September 30, 2016) | ||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||||||
No. | Endorsor/Guarantor | Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 3) | 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 | Maximum balance for the period | Ending balance | Actual amount | Amount of collateral guarantee/endorsement | ||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | NEXPOWER TECHNOLOGY CORP. | 3 | $10,869,534 | $1,700,000 | $1,700,000 | $1,385,000 | $- | 0.78% | $43,478,135 | ||||||||||
NEXPOWER TECHNOLOGY CORP. | ||||||||||||||||||||
No. | Endorsor/Guarantor | Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 3) | 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 | Maximum balance for the period | Ending balance | Actual amount | Amount of collateral guarantee/endorsement | ||||||||||||||
1 | NEXPOWER TECHNOLOGY CORP. | SOCIALNEX ITALIA 1 S.R.L. | 2 | $46,709 | $19,455 | $19,455 | $19,455 | $19,455 | 2.08% | $373,674 | ||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | ||||||||||||||||||||
No. | Endorsor/Guarantor | Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 7) | Percentage of accumulated guarantee amount to net assets value from the latest financial statement | Limit of total guarantee/endorsement amount (Note 7) | |||||||||||||||
Company name |
| Releationship | Maximum balance for the period | Ending balance | Actual amount | Amount of collateral guarantee/endorsement | ||||||||||||||
1 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 6 | $21,278,149 | $9,208,824 | $9,208,824 | $9,208,824 | $- | 43.28% | $21,278,149 | ||||||||||
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 stockholders, and for which endorsor/guarantor has provided endorsement/guarantee in proportion to its stockholding percentage. | ||||||||||||||||||||
Note 3: The amount of endorsements/guarantees shall not exceed 20% of the net worth of endorsor/guarantor; and the ceilings on the amount of endorsements/guarantees for any single entity are as follows: | ||||||||||||||||||||
1. The amount of endorsements/guarantees for any single entity shall not exceed 5% of net worth of endorsor/guarantor. | ||||||||||||||||||||
2. The amount of endorsements/guarantees 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 endorsements/guarantees 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 | ||||||||||||||||||||
endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth. | ||||||||||||||||||||
Note 4: Limit of total endorsed/guaranteed amount shall not exceed 20% of UMC's net assets value as of September 30, 2016. | ||||||||||||||||||||
Note 5: On December 24, 2014, the board of directors resolved to provide endorsement to NEXPOWER TECHNOLOGY CORP's syndicated loan from banks including Bank of Taiwan for the amount up to NT$1,700 million. | ||||||||||||||||||||
As of September 30, 2016, actual amount provided was NT$1,385 million. | ||||||||||||||||||||
Note 6: Limit of total endorsed/guaranteed amount shall not exceed 40% of NEXPOWER TECHNOLOGY CORP's net assets value as of December 31, 2015. | ||||||||||||||||||||
Note 7: Limit of total endorsed/guaranteed amount shall not exceed 100% of HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.'s net assets value as of September 30, 2016. | ||||||||||||||||||||
The amount of endorsements/guarantees for any single entity shall not exceed 100% of net worth of HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.'s net assets value as of September 30, 2016. | ||||||||||||||||||||
The aggregate amount of endorsements/guarantees 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 | ||||||||||||||||||||
endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth. |
84
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||
September 30, 2016 | ||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||
Bonds | CATHAY FINANCIAL HOLDING CO., LTD. | - | Financial assets at fair value through profit or loss, current | 190 | $190,058 | - | $190,058 | None | ||||||||
Stock | ACTION ELECTRONICS CO., LTD. | - | Financial assets at fair value through profit or loss, current | 18,182 | 115,639 | 6.56 | 115,639 | None | ||||||||
Stock | ELITE SEMICONDUCTOR MEMORY TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, current | 3,643 | 129,326 | 1.29 | 129,326 | None | ||||||||
Stock | PIXART IMAGING, INC. | - | Financial assets at fair value through profit or loss, current | 1,600 | 111,680 | 1.20 | 111,680 | None | ||||||||
Stock | KING YUAN ELECTRONICS CO., LTD. | - | Financial assets at fair value through profit or loss, current | 2,675 | 74,499 | 0.23 | 74,499 | None | ||||||||
Stock | SILICON INTEGRATED SYSTEMS CORP. | The Company's director | Available-for-sale financial assets, noncurrent | 120,892 | 772,500 | 19.70 | 772,500 | None | ||||||||
Stock | UNIMICRON HOLDING LIMITED | - | Available-for-sale financial assets, noncurrent | 20,000 | 648,117 | 17.67 | 648,117 | None | ||||||||
Stock | MIE FUJITSU SEMICONDUCTOR LIMITED | - | Available-for-sale financial assets, noncurrent | 18,447 | 3,373,026 | 15.87 | 3,373,026 | None | ||||||||
Stock | UNITED FU SHEN CHEN TECHNOLOGY CORP. | - | Available-for-sale financial assets, noncurrent | 17,511 | - | 15.75 | - | None | ||||||||
Stock | UNIMICRON TECHNOLOGY CORP. | - | Available-for-sale financial assets, noncurrent | 196,136 | 2,598,802 | 12.85 | 2,598,802 | None | ||||||||
Stock | HOLTEK SEMICONDUCTOR INC. | - | Available-for-sale financial assets, noncurrent | 25,304 | 1,270,274 | 11.19 | 1,270,274 | None | ||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | - | Available-for-sale financial assets, noncurrent | 8,914 | 48,761 | 9.49 | 48,761 | None | ||||||||
Stock | ITE TECH. INC. | - | Available-for-sale financial assets, noncurrent | 13,960 | 432,759 | 8.84 | 432,759 | None | ||||||||
Stock | UNITED INDUSTRIAL GASES CO., LTD. | - | Available-for-sale financial assets, noncurrent | 16,680 | 1,295,762 | 7.66 | 1,295,762 | 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 | 123,204 | 4.26 | 123,204 | None | ||||||||
Stock | NOVATEK MICROELECTRONICS CORP. | - | Available-for-sale financial assets, noncurrent | 16,445 | 1,817,127 | 2.70 | 1,817,127 | None | ||||||||
Stock | KING YUAN ELECTRONICS CO., LTD. | - | Available-for-sale financial assets, noncurrent | 20,483 | 570,443 | 1.76 | 570,443 | None | ||||||||
Stock | EPISTAR CORP. | - | Available-for-sale financial assets, noncurrent | 10,715 | 253,945 | 0.98 | 253,945 | None | ||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,315 | 26,501 | 0.82 | 26,501 | 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 | ||||||||
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 | TA SHEE 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 September 30, 2016. |
85
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Stock | EVERGLORY RESOURCE TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 2,500 | $26,675 | 10.23 | $26,675 | None | ||||||||||
Stock | ACT GENOMICS CO., LTD. | - | Available-for-sale financial assets, noncurrent | 4,600 | 92,000 | 10.13 | 92,000 | None | ||||||||||
Stock | UWIZ TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 2,718 | 60,775 | 9.14 | 60,775 | None | ||||||||||
Stock | ADVANCE MATERIALS CORP. | - | Available-for-sale financial assets, noncurrent | 11,910 | 84,321 | 8.67 | 84,321 | None | ||||||||||
Stock | BORA PHARMACEUTICALS CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,768 | 115,804 | 7.57 | 115,804 | None | ||||||||||
Stock | SHIN-ETSU HANDOTAI TAIWAN CO., LTD. | - | Available-for-sale financial assets, noncurrent | 10,500 | 169,890 | 7.00 | 169,890 | None | ||||||||||
Stock | EXCELLENCE OPTOELECTRONICS INC. | - | Available-for-sale financial assets, noncurrent | 8,529 | 119,066 | 5.61 | 119,066 | None | ||||||||||
Stock | ACTI CORP. | - | Available-for-sale financial assets, noncurrent | 1,968 | 46,242 | 5.31 | 46,242 | None | ||||||||||
Stock | LUMITEK CORP. | - | Available-for-sale financial assets, noncurrent | 1,785 | - | 4.81 | - | None | ||||||||||
Stock | MERIDIGEN BIOTECH CO., LTD. | - | Available-for-sale financial assets, noncurrent | 3,300 | 23,529 | 4.76 | 23,529 | None | ||||||||||
Stock | AMOD TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 358 | 2,774 | 4.33 | 2,774 | None | ||||||||||
Stock | WALTOP INTERNATIONAL CORP. | - | Available-for-sale financial assets, noncurrent | 425 | 2,104 | 4.02 | 2,104 | None | ||||||||||
Stock | SOLID STATE SYSTEM CO., LTD. | - | Available-for-sale financial assets, noncurrent | 3,000 | 78,810 | 3.71 | 78,810 | None | ||||||||||
Stock | SUBTRON TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 10,059 | 98,978 | 3.42 | 98,978 | None | ||||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 4,907 | 98,873 | 3.08 | 98,873 | None | ||||||||||
Stock | DAWNING LEADING TECHNOLOGY INC. | - | Available-for-sale financial assets, noncurrent | 10,265 | 126,674 | 2.89 | 126,674 | None | ||||||||||
Stock | ANDES TECHNOLOGY CORP. | - | Available-for-sale financial assets, noncurrent | 887 | 57,465 | 2.39 | 57,465 | None | ||||||||||
Stock | PRIMESENSOR TECHNOLOGY INC. | - | Available-for-sale financial assets, noncurrent | 434 | 3,649 | 2.06 | 3,649 | None | ||||||||||
Stock | LICO TECHNOLOGY CORP. | - | Available-for-sale financial assets, noncurrent | 2,520 | - | 2.03 | - | None | ||||||||||
Stock | MOBILE DEVICES INC. | - | Available-for-sale financial assets, noncurrent | 231 | - | 1.79 | - | None | ||||||||||
Stock | CRYSTALWISE TECHNOLOGY INC. | - | Available-for-sale financial assets, noncurrent | 2,920 | 25,490 | 1.38 | 25,490 | None | ||||||||||
Stock | ALL-STARS XMI LTD. | - | Available-for-sale financial assets, noncurrent | 7 | 213,899 | 1.37 | 213,899 | None | ||||||||||
Stock | WIESON TECHNOLOGIES CO., LTD. | - | Available-for-sale financial assets, noncurrent | 842 | 9,392 | 1.28 | 9,392 | None | ||||||||||
Stock | NORATECH PHARMACEUTICALS, INC. | - | Available-for-sale financial assets, noncurrent | 1,000 | 28,480 | 0.99 | 28,480 | None | ||||||||||
Stock | SUPERALLOY INDUSTRIAL CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,930 | 411,328 | 0.97 | 411,328 | None | ||||||||||
Stock | POWERTEC ENERGY CORP. | - | Available-for-sale financial assets, noncurrent | 18,700 | 56,100 | 0.84 | 56,100 | None | ||||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,321 | 533,212 | 0.45 | 533,212 | None | ||||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | - | Available-for-sale financial assets, noncurrent | 285 | 1,556 | 0.30 | 1,556 | None |
86
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | ||||||||||||||||
September 30, 2016 | ||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||
Stock | GLOBALWAFERS CO., LTD. | - | Available-for-sale financial assets, noncurrent | 784 | $60,479 | 0.21 | $60,479 | None | ||||||||
Stock | UNITED MICROELECTRONICS CORP. | Parent company | Available-for-sale financial assets, noncurrent | 16,079 | 185,709 | 0.13 | 185,709 | None | ||||||||
Stock | DARCHUN VENTURE CORP. | - | Financial assets measured at cost, noncurrent | 2,344 | 23,441 | 19.65 | Note | None | ||||||||
Stock | GOLDEN TECHNOLOGY VENTURE CAPITAL INVESTMENT CORP. | - | Financial assets measured at cost, noncurrent | 766 | 587 | 10.67 | Note | None | ||||||||
Stock | RISELINK VENTURE CAPITAL CORP. | - | Financial assets measured at cost, noncurrent | 4,275 | 39,391 | 6.67 | Note | None | ||||||||
Stock | PARAWIN VENTURE CAPITAL CORP. | - | Financial assets measured at cost, noncurrent | 2,916 | 21,057 | 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 | ||||||||
Stock | FORTEMEDIA, INC. | - | Financial assets measured at cost, noncurrent | 21 | 102 | - | Note | None | ||||||||
Stock-Preferred Stock | FORTEMEDIA, INC. | - | Financial assets measured at cost, noncurrent | 311 | 5,431 | - | N/A | None | ||||||||
Note : The net assets values for unlisted investees classified as "Financial assets measured at cost, noncurrent" were not available as of September 30, 2016. | ||||||||||||||||
TLC CAPITAL CO., LTD. | ||||||||||||||||
September 30, 2016 | ||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||
Convertible bonds | HIGHLANDER FINANCIAL GROUP CO., LTD. | - | Financial assets at fair value through profit or loss, current | - | $78,400 | - | $78,400 | None | ||||||||
Convertible bonds | DAFENG TV LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,700 | 169,745 | - | 169,745 | None | ||||||||
Stock | WINKING ENTERTAINMENT LTD. | - | Available-for-sale financial assets, noncurrent | 6,433 | 223,422 | 17.53 | 223,422 | None | ||||||||
Stock | BEAUTY ESSENTIALS INTERNATIONAL LTD. | - | Available-for-sale financial assets, noncurrent | 150,500 | 188,486 | 15.76 | 188,486 | None | ||||||||
Fund | OAK HILL OPPORTUNITIES FUND, SEGREGATED PORTFOLIO | - | Available-for-sale financial assets, noncurrent | 9 | 280,764 | 9.00 | 280,764 | None | ||||||||
Stock | ACTI CORP. | - | Available-for-sale financial assets, noncurrent | 1,500 | 35,250 | 4.05 | 35,250 | None | ||||||||
Stock | WIESON TECHNOLOGIES CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,775 | 19,795 | 2.69 | 19,795 | None | ||||||||
Stock | SUPERALLOY INDUSTRIAL CO., LTD. | - | Available-for-sale financial assets, noncurrent | 5,247 | 1,118,372 | 2.64 | 1,118,372 | None | ||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | - | Available-for-sale financial assets, noncurrent | 2,451 | 13,401 | 2.61 | 13,401 | None | ||||||||
Stock | ALL-STARS XMI LTD. | - | Available-for-sale financial assets, noncurrent | 6 | 183,342 | 1.17 | 183,342 | None | ||||||||
Stock | POWERTEC ENERGY CORP. | - | Available-for-sale financial assets, noncurrent | 18,700 | 56,100 | 0.84 | 56,100 | None |
87
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||
TLC CAPITAL CO., LTD. | ||||||||||||||||
September 30, 2016 | ||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||
Stock | SIMPLO TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 2,371 | $244,193 | 0.77 | $244,193 | None | ||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | - | Available-for-sale financial assets, noncurrent | 2,068 | 834,433 | 0.71 | 834,433 | None | ||||||||
Stock | TXC CORP. | - | Available-for-sale financial assets, noncurrent | 1,978 | 85,350 | 0.64 | 85,350 | None | ||||||||
Stock | MONTAGE TECHNOLOGY GLOBAL HOLDINGS, LTD. | - | Available-for-sale financial assets, noncurrent | 125 | 90,998 | 0.41 | 90,998 | None | ||||||||
Stock | GLOBALWAFERS CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,084 | 83,609 | 0.29 | 83,609 | None | ||||||||
Stock | CHUNGHWA TELECOM CO., LTD. | - | Available-for-sale financial assets, noncurrent | 2,015 | 222,657 | 0.03 | 222,657 | None | ||||||||
Stock-Preferred stock | HIGHLANDER FINANCIAL GROUP CO., LTD. | - | Available-for-sale financial assets, noncurrent | 16,663 | 156,550 | - | 156,550 | None | ||||||||
Stock-Preferred stock | X2 POWER TECHNOLOGIES LIMITED | - | Available-for-sale financial assets, noncurrent | 22,500 | 70,448 | - | 70,448 | None | ||||||||
Stock-Preferred stock | GAME VIDEO LTD. | - | Available-for-sale financial assets, noncurrent | 279 | 125,240 | - | 125,240 | None | ||||||||
Stock-Preferred stock | ALO7 LTD. | - | Financial assets measured at cost, noncurrent | 2,606 | 183,679 | - | 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 | 5,332 | 87,857 | - | 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 | - | 18,364 | - | N/A | None | ||||||||
UNITRUTH INVESTMENT CORP. | ||||||||||||||||
September 30, 2016 | ||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||
Stock | UWIZ TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 2,046 | $45,744 | 6.88 | $45,744 | None | ||||||||
Stock | EVERGLORY RESOURCE TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,200 | 12,804 | 4.91 | 12,804 | None | ||||||||
Stock | ADVANCE MATERIALS CORP. | - | Available-for-sale financial assets, noncurrent | 6,039 | 42,754 | 4.39 | 42,754 | None | ||||||||
Stock | EXCELLENCE OPTOELECTRONICS INC. | - | Available-for-sale financial assets, noncurrent | 6,374 | 88,979 | 4.19 | 88,979 | None | ||||||||
Stock | AMOD TECHNOLOGY CO., LTD. | - | Available-for-sale financial assets, noncurrent | 314 | 2,434 | 3.80 | 2,434 | None | ||||||||
Stock | TAIWANJ PHARMACEUTICALS CO., LTD. | - | Available-for-sale financial assets, noncurrent | 1,000 | 25,910 | 2.22 | 25,910 | None | ||||||||
Stock | WALTOP INTERNATIONAL CORP. | - | Available-for-sale financial assets, noncurrent | 229 | 1,133 | 2.17 | 1,133 | None | ||||||||
Stock | ACTI CORP. | - | Available-for-sale financial assets, noncurrent | 752 | 17,662 | 2.03 | 17,662 | None |
88
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
UNITRUTH INVESTMENT CORP. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Stock | LUMITEK CORP. | - | Available-for-sale financial assets, noncurrent | 683 | $- | 1.84 | $- | None | ||||||||||
Stock | WIESON TECHNOLOGIES CO., LTD. | - | Available-for-sale financial assets, noncurrent | 266 | 2,961 | 0.40 | 2,961 | None | ||||||||||
Stock | MOBILE DEVICES INC. | - | Available-for-sale financial assets, noncurrent | 30 | - | 0.23 | - | None | ||||||||||
Stock | ASIA PACIFIC MICROSYSTEMS, INC. | - | Available-for-sale financial assets, noncurrent | 148 | 809 | 0.16 | 809 | None | ||||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | - | Available-for-sale financial assets, noncurrent | 176 | 70,846 | 0.06 | 70,846 | None | ||||||||||
UMC CAPITAL CORP. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Convertible bonds | ALPINE ANALYTICS, INC. | - | Financial assets at fair value through profit or loss, current | - | USD | 882 | - | USD | 882 | None | ||||||||
Convertible bonds | INEDA SYSTEMS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 1,332 | - | USD | 1,332 | None | ||||||||
Fund | TRANSLINK CAPITAL PARTNERS III, L.P. | - | Available-for-sale financial assets, noncurrent | - | USD | 9,763 | 15.71 | USD | 9,763 | None | ||||||||
Capital | TRANSLINK MANAGEMENT III, L.L.C. | - | Available-for-sale financial assets, noncurrent | - | USD | 274 | 14.33 | USD | 274 | None | ||||||||
Fund | EVERYI CAPITAL ASIA FUND, L.P. | - | Available-for-sale financial assets, noncurrent | - | USD | 579 | 14.29 | USD | 579 | None | ||||||||
Stock | ALL-STARS SP IV LTD. | - | Available-for-sale financial assets, noncurrent | 7 | USD | 6,368 | 5.03 | USD | 6,368 | None | ||||||||
Fund | OAK HILL OPPORTUNITIES FUND, SEGREGATED PORTFOLIO | - | Available-for-sale financial assets, noncurrent | 4 | USD | 3,985 | 4.00 | USD | 3,985 | None | ||||||||
Fund | SIERRA VENTURES XI, L.P. | - | Available-for-sale financial assets, noncurrent | - | USD | 494 | 1.76 | USD | 494 | None | ||||||||
Fund | STORM VENTURES FUND V, L.P. | - | Available-for-sale financial assets, noncurrent | - | USD | 970 | 1.69 | USD | 970 | None | ||||||||
Stock | MOBILE IRON, INC. | - | Available-for-sale financial assets, noncurrent | 1,205 | USD | 3,313 | 1.41 | USD | 3,313 | None | ||||||||
Stock | ALL-STARS XMI LTD. | - | Available-for-sale financial assets, noncurrent | 7 | USD | 6,832 | 1.37 | USD | 6,832 | None | ||||||||
American | CHUNGHWA TELECOM CO., LTD. | - | Available-for-sale financial assets, noncurrent | 200 | USD | 6,999 | 0.03 | USD | 6,999 | None | ||||||||
Stock-Preferred stock | CNEX LABS, INC. | - | Available-for-sale financial assets, noncurrent | 2,495 | USD | 4,350 | - | USD | 4,350 | 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 | 5,324 | USD | 3,661 | - | USD | 3,661 | None |
89
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
UMC CAPITAL CORP. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Stock-Preferred stock | INEDA SYSTEMS, INC. | - | Available-for-sale financial assets, noncurrent | 6,545 | USD | 6,000 | - | USD | 6,000 | None | ||||||||
Stock-Preferred stock | SENSIFREE LTD. | - | Available-for-sale financial assets, noncurrent | 276 | USD | 1,500 | - | USD | 1,500 | None | ||||||||
Stock-Preferred stock | APPIER HOLDINGS, INC. | - | Available-for-sale financial assets, noncurrent | 52 | USD | 1,000 | - | USD | 1,000 | None | ||||||||
Stock-Preferred stock | DCARD HOLDINGS LTD. | - | Available-for-sale financial assets, noncurrent | 20,000 | USD | 2,000 | - | USD | 2,000 | None | ||||||||
Stock-Preferred stock | EPIC! CREATIONS, INC. | - | Available-for-sale financial assets, noncurrent | 1,812 | USD | 3,000 | - | USD | 3,000 | None | ||||||||
Stock-Preferred stock | NEXTINPUT, INC. | - | Available-for-sale financial assets, noncurrent | 3,235 | USD | 1,000 | - | USD | 1,000 | 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. | - | 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 | 2,855 | USD | 4,580 | - | N/A | None | |||||||||
Stock-Preferred stock | NEXENTA SYSTEMS, INC. | - | Financial assets measured at cost, noncurrent | 3,525 | USD | 4,019 | - | 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 | 9,461 | USD | 6,011 | - | 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 | 261 | - | N/A | None | |||||||||
Fund | TRANSLINK CAPITAL PARTNERS II, L.P. | - | Financial assets measured at cost, noncurrent | - | USD | 2,406 | - | N/A | None | |||||||||
Note : The net assets values for unlisted investees classified as "Financial assets measured at cost, noncurrent" were not available as ofSeptember 30, 2016. |
90
ATTACHMENT 4 (Securities held as of September 30, 2016) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
UMC NEW BUSINESS INVESTMENT CORP. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Stock | SOLARGATE TECHNOLOGY CORP. | - | 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 | 24,035 | 6.93 | 24,035 | None | ||||||||||
Stock | MOTECH INDUSTRIES, INC. | - | Available-for-sale financial assets, noncurrent | 26,978 | 855,217 | 5.52 | 855,217 | None | ||||||||||
Stock | LICO TECHNOLOGY CORP. | - | Available-for-sale financial assets, noncurrent | 4,089 | - | 3.29 | - | None | ||||||||||
Stock | POWERTEC ENERGY CORP. | - | Available-for-sale financial assets, noncurrent | 10,000 | 30,000 | 0.45 | 30,000 | None | ||||||||||
Fund | PAMIRS FUND SEGREGATED PORTFOLIO II | - | Available-for-sale financial assets, noncurrent | - | 7,243 | - | 7,243 | None | ||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Stock | TIAN TAI YI ENERGY CO., LTD. | - | Financial assets measured at cost-noncurrent | 356 | $3,556 | 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 September 30, 2016. | ||||||||||||||||||
EVERRICH (SHANDONG) ENERGY CO., LTD. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
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 September 30, 2016. | ||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
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 September 30, 2016. | ||||||||||||||||||
SINO PARAGON LIMITED | ||||||||||||||||||
September 30, 2016 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ | Shares as collateral | ||||||||||
Fund | SPARKLABS KOREA FUND II, L.P. | - | Available-for-sale financial assets, noncurrent | - | $15,655 | 16.67 | $15,655 | None | ||||||||||
Fund | SPARKLABS GLOBAL VENTURES FUND I, L.P. | - | Available-for-sale financial assets, noncurrent | - | 62,620 | 11.46 | 62,620 | None |
91
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 nine-month period ended September 30, 2016) | |||||||||||||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | |||||||||||||||||||||||||||||||||||
Type of securities | Name of the securities | Financial statement account | Counter-party | Relationship | Beginning balance | Addition | Disposal | Ending balance | |||||||||||||||||||||||||||
Units (thousand)/ bonds/ | Amount | Units (thousand)/ bonds/ | Amount | Units (thousand)/ bonds/ | Amount | Cost | Gain (Loss) | Units (thousand)/ bonds/ | Amount | ||||||||||||||||||||||||||
Stock | MOTECH INDUSTRIES INC. | Available-for-sale financial assets, noncurrent | Open market | - | 11,894 | $537,601 | - | $- | 11,894 | $430,861 | $424,015 | $6,846 | - | $- | |||||||||||||||||||||
Stock | NIEN MADE ENTERPRISE CO., LTD. | Available-for-sale financial assets, noncurrent | Open market | - | 3,093 | 699,015 | - | - | 1,772 | 469,339 | 170,089 | 299,250 | 1,321 | 533,212 | |||||||||||||||||||||
Note 1 : | The amounts of beginning and ending balances of available for sale financial assets are recorded at the prevailing market prices. | ||||||||||||||||||||||||||||||||||
Note 2 : | The disposal cost represents historical cost. | ||||||||||||||||||||||||||||||||||
TLC CAPITAL CO., LTD. | |||||||||||||||||||||||||||||||||||
Type of securities | Name of the securities | Financial statement account | Counter-party | Relationship | Beginning balance | Addition | Disposal | Ending balance | |||||||||||||||||||||||||||
Units (thousand)/ bonds/ | Amount | Units (thousand)/ bonds/ | Amount | Units (thousand)/ bonds/ | Amount | Cost | Gain (Loss) | Units (thousand)/ bonds/ | Amount | ||||||||||||||||||||||||||
Stock | SUPERALLOY INDUSTRIAL CO., LTD. | Available-for-sale financial assets, noncurrent | Open market/Over the counter | - | 8,404 | $1,021,911 | - | $- | 3,157 | $426,082 | $15,459 | $410,623 | 5,247 | $1,118,372 | |||||||||||||||||||||
Note 1 : | The amounts of beginning and ending balances of available for sale financial assets are recorded at the prevailing market prices. | ||||||||||||||||||||||||||||||||||
Note 2 : | The disposal cost represents historical cost. | ||||||||||||||||||||||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | |||||||||||||||||||||||||||||||||||
Type of securities | Name of the securities | Financial statement account | Counter-party | Relationship | Beginning balance | Addition | Disposal | Ending balance | |||||||||||||||||||||||||||
Units (thousand)/ bonds/ | Amount | Units (thousand)/ bonds/ | Amount | Units (thousand)/ bonds/ | Amount | Cost | Gain (Loss) | Units (thousand)/ bonds/ | Amount | ||||||||||||||||||||||||||
Capital | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Investments accounted for under the equity method | Purchase of newly issued shares | Subsidiary | - | USD | 92,351 | - | USD | 187,209 | - | $- | $- | $- | - | USD | 245,179 | ||||||||||||||||||
Note 1 : | The amounts of beginning and ending balances of investments accounted for under the equity method include adjustments under the equity method. | ||||||||||||||||||||||||||||||||||
Note 2 : | The ending balance includes share of loss of associates and joint ventures of USD (27,643) thousand, additional paid-in capital adjustment under equity method of USD 31 thousand and exchange differences on translation of | ||||||||||||||||||||||||||||||||||
foreign operations adjustment under equity method of USD (6,769) thousand. |
92
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 nine-month period ended September 30, 2016) | ||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||||
Where counter-party is a related party, details of prior transactions | ||||||||||||||||||||||||
Name of properties | Transaction date | 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 | ||||||||||||
None | ||||||||||||||||||||||||
93
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 nine-month period ended September 30, 2016) | ||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||
Names of properties | Transaction date | Date of original acquisition | Carrying amount | Transaction amount | Status of proceeds collection | Gain (Loss) from disposal | Counter-party | Relationship | Reason of disposal | Price reference | Other commitments | |||||||||||
None | ||||||||||||||||||||||
94
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 nine-month period ended September 30, 2016) | ||||||||||||||||||||||||
(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 | $51,968,012 | 52 | % | Net 60 days | N/A | N/A | $10,466,811 | 45 | % | |||||||||||||
UMC GROUP JAPAN | Subsidiary | Sales | 3,074,098 | 3 | % | Net 60 days | N/A | N/A | 618,273 | 3 | % | |||||||||||||
FARADAY TECHNOLOGY CORPORATION | Associate | Sales | 1,543,370 | 2 | % | Month-end 45 days | N/A | N/A | 57,736 | 0 | % | |||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Subsidiary | Sales | 178,422 | 0 | % | Net 30 days | N/A | N/A | 168,266 | 1 | % | |||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Subsidiary | Sales | 147,163 | 0 | % | Month-end 30 days | N/A | N/A | 422 | 0 | % | |||||||||||||
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 | Parent company | Purchases | USD | 1,609,311 | 99 | % | Net 60 days | N/A | N/A | USD | 334,296 | 100 | % | |||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Associate | Purchases | USD | 9,693 | 1 | % | Net 60 days | N/A | N/A | USD | 859 | 0 | % | |||||||||||
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 | Parent company | Purchases | JPY | 9,382,579 | 96 | % | Net 60 days | N/A | N/A | JPY | 1,997,512 | 95 | % | |||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Associate | Purchases | JPY | 402,298 | 4 | % | Net 60 days | N/A | N/A | JPY | 107,148 | 5 | % | |||||||||||
95
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 nine-month period ended September 30, 2016) | |||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||
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 | 9,693 | 5% | Net 60 days | N/A | N/A | USD | 859 | 2% | ||||||||||||
FARADAY TECHNOLOGY CORPORATION | Associate | Sales | USD | 4,165 | 2% | Net 45 days | N/A | N/A | USD | 112 | 0% | ||||||||||||
UMC GROUP JAPAN | Associate | Sales | USD | 3,687 | 2% | Net 60 days | N/A | N/A | USD | 1,060 | 3% | ||||||||||||
WAVETEK 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) | ||||||||||
UNITED MICROELECTRONICS | Parent company | Purchases | $142,654 | 22% | Net 30 days | N/A | N/A | $33 | 0% | ||||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) 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) | ||||||||||
UNITED MICROELECTRONICS | Parent company | Purchases | RMB | 21,901 | 5% | Net 30 days | N/A | N/A | RMB | 21,388 | 18% | ||||||||||||
96
ATTACHMENT 9 (Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of September 30, 2016) | ||||||||||||||||||||
(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 | $- | $10,466,811 | $11 | $10,466,822 | 7.66 | $- | - | $4,119,379 | $8,272 | ||||||||||
UMC GROUP JAPAN | Subsidiary | - | 618,273 | 181 | 618,454 | 2.81 | 84,725 | Collection in | - | - | ||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Subsidiary | - | 168,266 | 356,214 | 524,480 | 2.83 | 307,982 | Collection in | 145,757 | - | ||||||||||
97
ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2016) (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 September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
UMC GROUP (USA) | USA | IC Sales | USD | 16,438 | USD | 16,438 | 16,438 | 100.00 | $1,704,251 | $85,760 | $85,760 | ||||||||||||||
UNITED MICROELECTRONICS (EUROPE) B.V. | The Netherlands | Marketing support activities | USD | 5,421 | USD | 5,421 | 9 | 100.00 | 138,742 | 1,942 | 1,942 | ||||||||||||||
UMC CAPITAL CORP. | Cayman Islands | Investment holding | USD | 81,500 | USD | 81,500 | 71,663 | 100.00 | 4,164,574 | (271,412) | (271,412) | ||||||||||||||
GREEN EARTH LIMITED | Samoa | Investment holding | USD | 10,000 | USD | 10,000 | 10,000 | 100.00 | 244,927 | (10,616) | (10,616) | ||||||||||||||
TLC CAPITAL CO., LTD. | Taipei City, Taiwan | Venture capital | 6,000,000 | 6,000,000 | 526,600 | 100.00 | 7,897,839 | 313,166 | 313,166 | ||||||||||||||||
UMC NEW BUSINESS INVESTMENT CORP. | Taipei City, Taiwan | Investment holding | 6,000,000 | 6,000,000 | 600,000 | 100.00 | 1,899,111 | (236,918) | (236,918) | ||||||||||||||||
UMC INVESTMENT (SAMOA) LIMITED | Samoa | Investment holding | USD | 1,520 | USD | 1,520 | 1,520 | 100.00 | 44,802 | (1,350) | (1,350) | ||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | Taipei City, Taiwan | Consulting and planning for venture capital | 4,160,053 | 5,000,053 | 374,800 | 100.00 | 5,286,082 | 191,061 | 181,976 | ||||||||||||||||
UMC GROUP JAPAN | Japan | IC Sales | JPY | 60,000 | JPY | 60,000 | 1 | 100.00 | 160,448 | (24,397) | (24,397) | ||||||||||||||
UMC KOREA CO., LTD. | Korea | Marketing support activities | KRW | 550,000 | KRW | 550,000 | 110 | 100.00 | 19,027 | 755 | 755 | ||||||||||||||
OMNI GLOBAL LIMITED | Samoa | Investment holding | USD | 3,500 | USD | 3,000 | 3,500 | 100.00 | 435,388 | 15,059 | 15,059 | ||||||||||||||
SINO PARAGON LIMITED | Samoa | Investment holding | USD | 2,600 | - | 2,600 | 100.00 | 81,404 | (87) | (87) | |||||||||||||||
BEST ELITE INTERNATIONAL LIMITED | British Virgin Islands | Investment holding | USD | 266,862 | USD | 266,712 | 626,566 | 91.08 | 20,710,132 | (205,707) | (187,380) | ||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Hsinchu County, Taiwan | Sales and manufacturing of integrated circuits | 1,707,482 | 1,707,482 | 126,230 | 77.74 | 509,049 | 71,305 | 55,432 | ||||||||||||||||
MTIC HOLDINGS PTE. LTD. | Singapore | Investment holding | SGD | 12,000 | SGD | 12,000 | 12,000 | 45.44 | 77,896 | (10,644) | (2,184) | ||||||||||||||
MEGA MISSION LIMITED PARTNERSHIP | Cayman Islands | Investment holding | USD | 67,500 | USD | 67,500 | - | 45.00 | 1,729,984 | (348,030) | (156,614) | ||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 5,529,169 | 5,529,164 | 38,247 | 43.10 | (14,152) | (964,265) | (415,584) | ||||||||||||||||
UNITECH CAPITAL INC. | British Virgin Islands | Investment holding | USD | 21,000 | USD | 21,000 | 21,000 | 42.00 | 547,330 | 19,570 | 8,220 | ||||||||||||||
HSUN CHIEH INVESTMENT CO., LTD. | Taipei City, Taiwan | Investment holding | 336,241 | 336,241 | 147,908 | 36.49 | 3,150,208 | 401,034 | 146,329 | ||||||||||||||||
YANN YUAN INVESTMENT CO., LTD. | Taipei City, Taiwan | Investment holding | 2,300,000 | 2,300,000 | 46,000 | 31.94 | 2,334,601 | 350,661 | 112,017 | ||||||||||||||||
FARADAY TECHNOLOGY CORPORATION | Hsinchu City, Taiwan | Design of application-specific integrated circuit | 38,918 | 38,918 | 34,240 | 13.94 | 1,688,003 | (214,437) | (29,902) |
98
ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2016) (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 September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
UNITRUTH INVESTMENT CORP. | Taipei City, Taiwan | Investment holding | $800,000 | $800,000 | 132,660 | 100.00 | $755,241 | $(96,470) | $(96,470) | ||||||||||||||||
CLIENTRON CORP. | Xinbei City, Taiwan | Thin client | 245,573 | 245,573 | 14,689 | 19.62 | 223,649 | 30,442 | 5,356 | ||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 768,930 | 768,930 | 6,116 | 6.89 | (2,263) | (964,265) | (66,460) | ||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Hsinchu County, Taiwan | Sales and manufacturing of integrated circuits | 5,454 | 5,454 | 735 | 0.45 | 4,712 | 71,305 | 323 | ||||||||||||||||
TLC CAPITAL CO., LTD. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
SOARING CAPITAL CORP. | Samoa | Investment holding | USD | 900 | USD | 900 | 900 | 100.00 | $21,321 | $7,260 | $7,260 | ||||||||||||||
LIST EARN ENTERPRISE INC. | Samoa | Investment holding | USD | 309 | USD | 309 | 309 | 49.00 | 9,868 | (9) | (4) | ||||||||||||||
YUNG LI INVESTMENTS, INC. | Taipei City, Taiwan | Investment holding | 186,606 | 186,606 | 18,661 | 45.16 | 344,638 | 51,519 | 13,753 | ||||||||||||||||
CTC CAPITAL PARTNERS I, L.P. | Cayman Islands | Investment holding | USD | 2,372 | USD | 3,872 | - | 31.40 | 62,119 | (117,567) | (36,911) | ||||||||||||||
VSENSE CO., LTD. | Taipei City, Taiwan | Medical devices, measuring equipment, reagents and consumables | 95,916 | 95,916 | 4,251 | 28.63 | 87,356 | (49,342) | (14,127) | ||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 778,019 | 778,019 | 4,033 | 4.54 | (1,492) | (964,265) | (43,819) | ||||||||||||||||
UNITRUTH INVESTMENT CORP. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | $559,700 | $559,700 | 11,550 | 13.01 | $(4,274) | $(964,265) | $(125,498) | ||||||||||||||||
CLIENTRON CORP. | Xinbei City, Taiwan | Thin client | 41,007 | 41,007 | 492 | 0.66 | 7,488 | 30,442 | 179 | ||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Hsinchu County, Taiwan | Sales and manufacturing of integrated circuits | 3,402 | 3,402 | 459 | 0.28 | 2,940 | 71,305 | 202 | ||||||||||||||||
99
ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2016) (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 and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
UMC CAPITAL (USA) | USA | Investment holding | USD | 200 | USD | 200 | 200 | 100.00 | USD | 522 | USD | 6 | USD | 6 | |||||||||||
ACHIEVE MADE INTERNATIONAL LTD. | British Virgin | Internet Content Provider | USD | 11,035 | USD | 11,035 | 2,724 | 23.32 | USD | 4,664 | USD | (1,106) | USD | (258) | |||||||||||
TRANSLINK CAPITAL PARTNERS I, L.P. | Cayman Islands | Investment holding | USD | 4,036 | USD | 4,036 | - | 10.38 | USD | 2,860 | USD | (509) | USD | (42) | |||||||||||
ECP VITA PTE. LTD. | Singapore | Insurance | - | USD | 9,000 | - | - | - | USD | (1,451) | USD | (2,424) | |||||||||||||
UMC NEW BUSINESS INVESTMENT CORP. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | Hsinchu City, Taiwan | Energy Technical Services | $190,752 | $190,752 | 27,655 | 100.00 | $236,862 | $(618) | $(2,933) | ||||||||||||||||
UNISTARS CORPORATION | Hsinchu County, Taiwan | High brightness LED packages | 577,030 | 577,030 | 43,173 | 82.76 | 130,429 | (55,035) | (45,547) | ||||||||||||||||
WINAICO IMMOBILIEN GMBH | Germany | Solar project | EUR | 5,900 | EUR | 5,900 | 5,900 | 32.78 | 155,152 | (38,835) | (11,236) | ||||||||||||||
UNITED LED CORPORATION HONG KONG LIMITED | Hongkong | Investment holding | USD | 22,500 | USD | 22,500 | 22,500 | 25.14 | 355,587 | (372,606) | (93,672) | ||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
EVERRICH ENERGY INVESTMENT (HK) LIMITED | Hongkong | Investment holding | USD | 1,092 | USD | 1,092 | 1,092 | 100.00 | $117,413 | $9,281 | $9,281 | ||||||||||||||
WINAICO SOLAR PROJEKT 1 GMBH | Germany | Solar project | EUR | 1,120 | EUR | 1,120 | 1,120 | 50.00 | 29,113 | (6,114) | (3,057) | ||||||||||||||
WINAICO IMMOBILIEN GMBH | Germany | Solar project | EUR | 2,160 | EUR | 2,160 | 2,160 | 12.00 | 58,409 | (38,835) | (4,660) | ||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED | Samoa | Investment holding | USD | 900 | USD | 600 | 900 | 100.00 | $7,285 | $(5,822) | $(5,822) | ||||||||||||||
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ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2016) (Not including investment in Mainland China) | |||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||
WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment asof September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION (USA) | USA | Sales and marketing service | USD | 60 | USD | 60 | 60 | 100.00 | $2,298 | $83 | $83 | ||||||||||||||
NEXPOWER TECHNOLOGY CORP. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
SOCIALNEX ITALIA 1 S.R.L. | Italy | Photovoltaic power plant | EUR | 3,637 | EUR | 3,637 | - | 100.00 | $123,909 | $(839) | $(839) | ||||||||||||||
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 September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
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 September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
INFOSHINE TECHNOLOGY LIMITED | British Virgin Islands | Investment holding | USD | 354,000 | USD | 354,000 | - | 100.00 | USD | 351,498 | USD | (68,586) | USD | (68,586) | |||||||||||
INFOSHINE TECHNOLOGY LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
OAKWOOD ASSOCIATES LIMITED | British Virgin Islands | Investment holding | USD | 354,000 | USD | 354,000 | - | 100.00 | USD | 351,498 | USD | (68,586) | USD | (68,586) |
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ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2016) (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 September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
UNITED MICROTECHNOLOGY CORPORATION (NEW YORK) | USA | Research & Development | USD | 950 | USD | 950 | 0 | 100.00 | $31,665 | $(82) | $(82) | ||||||||||||||
UNITED MICROTECHNOLOGY CORPORATION (CALIFORNIA) | USA | Research & Development | USD | 1,000 | USD | 1,000 | 0 | 100.00 | 31,555 | 178 | 178 | ||||||||||||||
ECP VITA PTE. LTD. | Singapore | Insurance | USD | 9,000 | - | 9,000 | 100.00 | 396,039 | (47,166) | 31,616 | |||||||||||||||
UMC TECHNOLOGY JAPAN CO., LTD. | Japan | Semiconductor manufacturing technology development and consulting services | JPY | 35,000 | - | 4 | 100.00 | 10,812 | 0 | 0 | |||||||||||||||
GREEN EARTH LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2016 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance |
| Beginning balance | Number of shares (thousand) |
| Percentage of ownership |
| Carrying amount | ||||||||||||||||||
UNITED MICROCHIP CORPORATION | Cayman | Investment holding | USD | 50 | USD | 50 | - | 100.00 | $1,021 | $(47) | $(47) | ||||||||||||||
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ATTACHMENT 11 (Investment in Mainland China as of September 30, 2016) | |||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||
Investee company | Main businesses and products | Total amount of | Method of investment | Accumulated | Investment flows | Accumulated outflow of investment from Taiwan as of | Percentage of ownership | Investment income (loss) recognized | Carrying value as of | Accumulated inward remittance of earnings as of | |||||||||||||||
Outflow |
| Inflow | Net income (loss) of investee company | ||||||||||||||||||||||
UNITRUTH ADVISOR (SHANGHAI) CO., LTD. | Investment Holding and advisory | $25,048 | (ii)SOARING COPITAL CORP. | $25,048 | $- | $- | $25,048 | $7,439 | 100.00% | $7,439 | $20,859 | $- | |||||||||||||
SHANDONG HUAHONG ENERGY INVEST CO., INC. | Invest new energy business | 1,400,400 | (i) | 42,582 | - | - | 42,582 | (33,268) | 50.00% | (16,634) | 622,967 | - | |||||||||||||
JINING SUNRICH SOLAR ENERGY CORP. | To construct, operate, and maintain solar power plant | 1,307,040 | (iii)SHANDONG HUAHONG ENERGY INVEST CO., INC. | 655,318 | - | - | 655,318 | (33,985) | 50.00% | (16,992) | 581,631 | - | |||||||||||||
EVERRICH (SHANDONG) ENERGY CO., LTD. | Solar engineering integrated design services | 97,061 | (ii)EVERRICH ENERGY INVESTMENT (HK) LIMITED | 97,061 | - | - | 97,061 | 9,318 | 100.00% | 9,318 | 110,525 | 123,267 | |||||||||||||
UNITED LED CORPORATION | Research, manufacturing and sales in LED epitaxial wafers | 2,630,040 | (ii)UNITED LED CORPORATION HONG KONG LIMITED | 634,028 | - | - | 634,028 | (354,735) | 25.14% | (89,177) | 342,080 | - | |||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Sales and manufacturing of integrated circuits | 11,897,800 | (ii)OAKWOOD ASSOCIATES LIMITED | 8,350,753 | 4,696 | - | 8,355,449 | (194,372) | 91.08% | (177,058) | 19,380,702 | - | |||||||||||||
UMC (BEIJING) LIMITED | Marketing support activities | 15,655 | (ii)UMC INVESTMENT | 15,655 | - | - | 15,655 | 45 | 100.00% | 45 | 15,246 | - | |||||||||||||
UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD. | Design support of integrated circuits | 140,040 | (iii)HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | - | - | - | - | (3,986) | 91.08% | (3,632) | 121,536 | - | |||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Sales and manufacturing of integrated circuits | 29,207,135 | (iii)HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | - | - | - | - | (2,766,089) | 26.79% | (773,268) | 7,066,040 | - | |||||||||||||
Accumulated investment in Mainland China as of | Investment amounts authorized by Investment Commission, MOEA | Upper limit on investment | |||||||||||||||||||||||
$9,825,141 | $34,801,660 | $130,434,404 | |||||||||||||||||||||||
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$249,345 thousand in BEST ELITE's preferred stock, invest US$91,984 thousand in BEST ELITE's common stock. As of September 30, 2016, 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 September 30, 2016, 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$719,040 thousand. | ||||||||||||||||||||||||
As of September 30, 2016, the investment amount to USCXM from HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. was US$269,040 thousand, and the rest investment amount US$450,000 thousand has not yet been remitted. |
103