Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission
in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish
and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed
to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission
or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
If “Yes” is marked, indicate below the file number
assigned to the registrant in connection with Rule 12g3-2(b):
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER
30, 2015 AND 2016
(Amounts
in Thousands, Unless Stated Otherwise)
(Unaudited)
Advanced Semiconductor Engineering,
Inc. (the “Company”), a corporation incorporated under the laws of Republic of China (the “ROC”), and its
subsidiaries (collectively referred to as the “Group”) offer a comprehensive range of semiconductors packaging, testing,
and electronic manufacturing services (“EMS”).
The Company’s ordinary
shares are listed on the Taiwan Stock Exchange (the “TSE”) under the symbol “2311”. Since September 2000,
the Company’s ordinary shares have been traded on the New York Stock Exchange (the “NYSE”) under the symbol “ASX”
in the form of American Depositary Shares (“ADS”). The ordinary shares of its subsidiary, Universal Scientific Industrial
(Shanghai) Co., Ltd (“USISH”), are listed on the Shanghai Stock Exchange (the “SSE”) under the symbol “601231”.
The condensed consolidated
financial statements are presented in the Company’s functional currency, New Taiwan dollar (NT$).
|
|
2.
|
APPROVAL OF FINANCIAL STATEMENTS
|
The condensed consolidated
financial statements were authorized for issue by management on November 7, 2016.
|
|
3.
|
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ISSUED BY THE INTERNATIONAL ACCOUNTING STANDARDS
BOARD (“IFRSs”)
|
|
|
a.
|
Amendments to IFRSs that are mandatorily effective for the current year
|
In the current year, the Group
has applied the following new, revised or amended standards and interpretations that have been issued and effective:
|
New, Revised or Amended Standards and Interpretations
|
|
Effective Date Issued by International
Accounting Standards Board (“IASB”)
(Note 1)
|
|
|
|
|
|
|
|
Amendments to IFRSs
|
|
Annual Improvements to IFRSs: 2012-2014 Cycle
|
|
January 1, 2016 (Note 2)
|
|
Amendments to IFRS 10, IFRS 12 and International Accounting Standard (“IAS”) 28
|
|
Investment Entities: Applying the Consolidation Exception
|
|
January 1, 2016
|
|
Amendments to IFRS 11
|
|
Accounting for Acquisitions of Interests in Joint Operations
|
|
January 1, 2016
|
(Continued)
|
New, Revised or Amended Standards and Interpretations
|
|
Effective Date Issued by International
Accounting Standards Board (“IASB”)
(Note 1)
|
|
|
|
|
|
|
|
IFRS 14
|
|
Regulatory Deferral Accounts
|
|
January 1, 2016
|
|
Amendments to IAS 1
|
|
Disclosure Initiative
|
|
January 1, 2016
|
|
Amendments to IAS 16 and IAS 38
|
|
Clarification of Acceptable Methods of Depreciation and Amortization
|
|
January 1, 2016
|
|
Amendments to IAS 16 and IAS 41
|
|
Agriculture: Bearer Plants
|
|
January 1, 2016
|
(Concluded)
Note
1: The aforementioned new, revised or amended standards and interpretations are effective for annual period beginning on or
after the effective dates, unless specified otherwise.
Note
2: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning
on or after January 1, 2016; the remaining amendments are applied retrospectively for annual periods beginning on or after January
1, 2016.
The adoption of aforementioned
standards or interpretations have no material effect on the Group’s accounting policies.
|
|
b.
|
New, revised or amended standards and interpretations in issue but not yet effective
|
The Group has not applied the
following new, revised or amended standards and interpretations that have been issued but are not yet effective:
|
New, Revised or Amended Standards and Interpretations
|
|
Effective Date Issued by IASB (Note)
|
|
|
|
|
|
|
|
Amendments to IFRS 2
|
|
Classification and Measurement of Share-based Payment Transactions
|
|
January 1, 2018
|
|
Amendments to IFRS 4
|
|
Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
|
|
January 1, 2018
|
|
IFRS 9
|
|
Financial Instruments
|
|
January 1, 2018
|
|
Amendments to IFRS 9 and IFRS 7
|
|
Mandatory Effective Date of IFRS 9 and Transition Disclosures
|
|
January 1, 2018
|
|
Amendments to IFRS 10 and IAS 28
|
|
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
|
|
To be determined by the IASB
|
|
IFRS 15
|
|
Revenue from Contracts with Customers
|
|
January 1, 2018
|
|
Amendments to IFRS 15
|
|
Clarifications to IFRS 15
|
|
January 1, 2018
|
|
IFRS 16
|
|
Leases
|
|
January 1, 2019
|
|
Amendments to IAS 7
|
|
Disclosure Initiative
|
|
January 1, 2017
|
|
Amendments to IAS 12
|
|
Recognition of Deferred Tax Assets for Unrealized Losses
|
|
January 1, 2017
|
|
|
|
|
|
|
|
|
Note:
|
The aforementioned new, revised or amended standards and interpretations are effective for annual
period beginning on or after the effective dates, unless specified otherwise.
|
|
|
c.
|
Significant changes in accounting policy resulted from new, revised and amended standards and interpretations
in issue but not yet effective
|
Except for the following, the
Group believes that the adoption of aforementioned new, revised or
amended standards and interpretations will not have a material
effect on the Group’s accounting policies. As of the date that the accompanying condensed consolidated financial statements
were authorized for issue, the Group continues in evaluating the impact on its financial position and operating results as a result
of the initial adoption of the below standards and interpretations. The related impact will be disclosed when the Group completes
the evaluation.
IFRS 9 “Financial
Instruments”
Recognition and measurement
of financial assets
With regards to financial assets,
all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement”
are subsequently measured at amortized cost or fair value. Under IFRS 9, the requirement for the classification of financial assets
is stated below.
For the Group’s debt
instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding,
their classification and measurement are as follows:
|
|
1)
|
For debt instruments, if they are held within a business model whose objective is to collect the
contractual cash flows, the financial assets are measured at amortized cost and are assessed for impairment continuously with impairment
loss recognized in profit or loss, if any. Interest revenue is recognized in profit or loss by using the effective interest method;
|
|
|
2)
|
For debt instruments, if they are held within a business model whose objective is achieved by both
the collecting of contractual cash flows and the selling of financial assets, the financial assets are measured at fair value through
other comprehensive income (FVTOCI) and are assessed for impairment. Interest revenue is recognized in profit or loss by using
the effective interest method, and other gain or loss shall be recognized in other comprehensive income, except for impairment
gains or losses and foreign exchange gains and losses. When the debt instruments are derecognized or reclassified, the cumulative
gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.
|
Except for above, all other
financial assets are measured at fair value through profit or loss. However, the Group may make an irrevocable election to present
subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with
only dividend income generally recognized in profit or loss. No subsequent impairment assessment is required, and the cumulative
gains or losses previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss.
The impairment of financial
assets
IFRS 9 requires that impairment
loss on financial assets is recognized by using the “Expected Credit Losses Model”. The credit loss allowance is required
for financial assets measured at amortized cost, financial assets mandatorily measured at FVTOCI, lease receivables, contract assets
arising from IFRS 15 “Revenue from Contracts with Customers”, certain written loan commitments and financial guarantee
contracts. A loss allowance for the 12-month expected credit losses is required for a financial asset if its credit risk has not
increased significantly since initial recognition. A loss allowance for full lifetime expected credit losses is required for a
financial asset if its credit risk has increased significantly since initial recognition and is not low. However, a loss allowance
for full lifetime expected credit losses is required for trade receivables that do not constitute a financing transaction.
For purchased or originated
credit-impaired financial assets, the Group takes into account the expected credit losses on initial recognition in calculating
the credit-adjusted effective interest rate. Subsequently, any changes in expected losses are recognized as a loss allowance with
a corresponding gain or loss recognized in profit or loss.
Hedge accounting
The main changes in hedge accounting
amended the application requirements for hedge accounting to better reflect the entity’s risk management activities. Compared
with IAS 39, the main changes include: (1) enhancing types of transactions eligible for hedge accounting, specifically broadening
the risk eligible for hedge accounting of non-financial items; (2) changing the way hedging derivative instruments are accounted
for to reduce profit or loss volatility; and (3) replacing retrospective effectiveness assessment with the principle of economic
relationship between the hedging instrument and the hedged item.
Amendments to IFRS 10 and
IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”
The amendments stipulated that,
when the Group sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture,
the gain or loss resulting from the transaction is recognized in full. Also, when the Group loses control over a subsidiary that
contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized
in full.
Conversely, when the Group
sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from
the transaction is recognized only to the extent of the unrelated investors’ interest in the associate or joint venture,
i.e. the Group’s share of the gain or loss is eliminated. Also, when the Group loses control over a subsidiary that does
not contain a business but retains significant influence or joint control in an associate or a joint venture, the gain or loss
resulting from the transaction is recognized only to the extent of the unrelated investors’ interest in the associate or
joint venture, i.e. the Group’s share of the gain or loss is eliminated.
IFRS 15 “Revenue from
Contracts with Customers” and amendments
IFRS 15 establishes principles
for recognizing revenue that apply to all contracts with customers, and will supersede IAS 18 “Revenue”, IAS 11 “Construction
Contracts” and a number of revenue-related interpretations from January 1, 2018.
When applying IFRS 15, an entity
shall recognize revenue by applying the following steps:
|
|
—
|
Identify the contract with the customer;
|
|
|
—
|
Identify the performance obligations in the contract;
|
|
|
—
|
Determine the transaction price;
|
|
|
—
|
Allocate the transaction price to the performance obligations in the contracts; and
|
|
|
—
|
Recognize revenue when the entity satisfies a performance obligation.
|
In identifying performance
obligations, IFRS 15 and related amendment require that a good or service is distinct if it is capable of being distinct (for example,
the Group regularly sells it separately) and the promise to transfer it is distinct within the context of the contract (i.e. the
nature of the promise in the contract is to transfer each of those goods or services individually rather than to transfer combined
items).
When IFRS 15 and related amendment
are effective, the Group may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively
with the cumulative effect of initially applying this Standard recognized at the date of initial application.
IFRS 16 “Leases”
IFRS 16 sets out the accounting
standards for leases that will supersede IAS 17 and a number of related interpretations.
Under IFRS 16, if the Group
is a lessee, it shall recognize right-of-use assets and lease liabilities for all leases on the consolidated balance sheets except
for low-value and short-term leases. The Group may elect to apply the accounting method similar to the accounting for operating
lease under IAS 17 to the low-value and short-term leases. On the consolidated statements of comprehensive income, the Group should
present the depreciation expense charged on the right-of-use asset separately from interest expense accrued on the lease liability;
interest is computed by using effective interest method. On the consolidated statements of cash flows, cash payments for the principal
portion of the lease liability are classified within financing activities; cash payments for interest portion are classified within
operating activities.
The application of IFRS 16
is not expected to have a material impact on the accounting of the Group as lessor.
When IFRS 16 becomes effective,
the Group may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with
the cumulative effect of the initial application of this Standard recognized at the date of initial application.
Amendments to IAS 12 “Recognition
of Deferred Tax Assets for Unrealized Losses”
The amendment clarifies that
the difference between the carrying amount of the debt instrument measured at fair value and its tax base gives rise to a temporary
difference, even though there are unrealized losses on that asset, irrespective of whether the Group expects to recover the carrying
amount of the debt instrument by sale or by holding it and collecting contractual cash flows.
In addition, in determining
whether to recognize a deferred tax asset, the Group should assess a deductible temporary difference in combination with all of
its other deductible temporary differences, unless the tax law restricts the utilization of losses to deduction against income
of a specific type, in which case, a deductible temporary difference is assessed in combination only with other deductible temporary
differences of the appropriate type. The amendment also stipulates that, when determining whether to recognize a deferred tax asset,
the estimate of probable future taxable profit may include some of the Group’s assets for more than their carrying amount
if there is sufficient evidence that it is probable that the Group will achieve this, and that the estimate for future taxable
profit should exclude tax deductions resulting from the reversal of deductible temporary differences.
|
|
4.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
a.
|
Statement of Compliance
|
The condensed consolidated
financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The condensed consolidated
financial statements are not subject to qualification relating to the application of IFRSs.
The consolidated financial
statements are condensed as they do not include all of the information required for a complete set of annual financial statements,
and they should be read in conjunction with the Group’s annual audited consolidated financial statements and related notes
thereto for the year ended December 31, 2015 prepared in accordance with IFRSs.
|
|
b.
|
Basis of consolidation
|
Subsidiaries included in condensed
consolidated financial statements were as follows:
|
|
|
|
|
|
|
Percentage of Ownership (%)
|
|
Name of Investee
|
|
Main Businesses
|
|
Establishment
and
Operating
Location
|
|
December
31, 2015
|
|
September
30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
A.S.E. Holding Limited
|
|
Holding company
|
|
Bermuda
|
|
100.0
|
|
100.0
|
|
J & R Holding Limited (“J&R Holding”)
|
|
Holding company
|
|
Bermuda
|
|
100.0
|
|
100.0
|
|
Innosource Limited
|
|
Holding company
|
|
British Virgin Islands
|
|
100.0
|
|
100.0
|
|
Omniquest Industrial Limited
|
|
Holding company
|
|
British Virgin Islands
|
|
100.0
|
|
100.0
|
|
ASE Marketing & Service Japan Co., Ltd.
|
|
Engaged in marketing and sales services
|
|
Japan
|
|
100.0
|
|
100.0
|
|
ASE Test, Inc.
|
|
Engaged in the testing of semiconductors
|
|
Kaohsiung, ROC
|
|
100.0
|
|
100.0
|
|
USI Inc. (“USIINC”)
|
|
Engaged in investing activity and established in April 2015
|
|
Nantou, ROC
|
|
99.2
|
|
99.2
|
|
Luchu Development Corporation
|
|
Engaged in the development of real estate properties
|
|
Taipei, ROC
|
|
86.1
|
|
86.1
|
|
TLJ Intertech Inc. (“TLJ”)
|
|
Engaged in information software services and 60% shareholdings were
acquired by ASE Test, Inc. in May 2016
|
|
Taipei, ROC
|
|
–
|
|
60.0
|
|
Alto Enterprises Limited
|
|
Holding company
|
|
British Virgin Islands
|
|
100.0
|
|
100.0
|
|
Super Zone Holdings Limited
|
|
Holding company
|
|
Hong Kong
|
|
100.0
|
|
100.0
|
|
ASE (Kun Shan) Inc.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Kun Shan, China
|
|
100.0
|
|
100.0
|
|
ASE Investment (Kun Shan) Limited
|
|
Holding company
|
|
Kun Shan, China
|
|
100.0
|
|
100.0
|
|
Advanced Semiconductor Engineering (China) Ltd.
|
|
Will engage in the packaging and testing of semiconductors
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
ASE Investment (Labuan) Inc.
|
|
Holding company
|
|
Malaysia
|
|
100.0
|
|
100.0
|
|
ASE Test Limited (“ASE Test”)
|
|
Holding company
|
|
Singapore
|
|
100.0
|
|
100.0
|
|
ASE (Korea) Inc.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Korea
|
|
100.0
|
|
100.0
|
|
J&R Industrial Inc.
|
|
Engaged in leasing equipment and investing activity
|
|
Kaohsiung, ROC
|
|
100.0
|
|
100.0
|
|
ASE Japan Co., Ltd.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Japan
|
|
100.0
|
|
100.0
|
|
ASE (U.S.) Inc.
|
|
After-sales service and sales support
|
|
U.S.A.
|
|
100.0
|
|
100.0
|
|
Global Advanced Packaging Technology Limited, Cayman Islands
|
|
Holding company
|
|
British Cayman Islands
|
|
100.0
|
|
100.0
|
|
ASE WeiHai Inc.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Shandong, China
|
|
100.0
|
|
100.0
|
|
Suzhou ASEN Semiconductors Co., Ltd.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Suzhou, China
|
|
60.0
|
|
60.0
|
|
Anstock Limited
|
|
Engaged in financing activity
|
|
British Cayman Islands
|
|
100.0
|
|
100.0
|
|
Anstock II Limited
|
|
Engaged in financing activity
|
|
British Cayman Islands
|
|
100.0
|
|
100.0
|
|
ASE Module (Shanghai) Inc.
|
|
Will engage in the production and sale of electronic components
and printed circuit boards
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
ASE (Shanghai) Inc.
|
|
Engaged in the production of substrates
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
ASE Corporation
|
|
Holding company
|
|
British Cayman Islands
|
|
100.0
|
|
100.0
|
|
ASE Mauritius Inc.
|
|
Holding company
|
|
Mauritius
|
|
100.0
|
|
100.0
|
|
ASE Labuan Inc.
|
|
Holding company
|
|
Malaysia
|
|
100.0
|
|
100.0
|
|
Shanghai Ding Hui Real Estate Development Co., Ltd.
|
|
Engaged in the development, construction and sale of real estate
properties
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
Shanghai Ding Qi Property Management Co., Ltd.
|
|
Engaged in the management of real estate properties
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
Advanced Semiconductor Engineering (HK) Limited
|
|
Engaged in the trading of substrates
|
|
Hong Kong
|
|
100.0
|
|
100.0
|
|
Shanghai Ding Wei Real Estate Development Co., Ltd.
|
|
Engaged in the development, construction and leasing of real estate
properties
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
Shanghai Ding Yu Real Estate Development Co., Ltd.
|
|
Engaged in the development, construction and leasing of real estate
properties
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
Shanghai Ding Fan Department Store Co., Ltd.
|
|
Will engage in department store business and was established in
July 2016
|
|
Shanghai, China
|
|
–
|
|
100.0
|
|
Kun Shan Ding Yue Real Estate Development Co., Ltd.
|
|
Engaged in the development, construction and leasing of real estate
properties
|
|
Kun Shan, China
|
|
100.0
|
|
100.0
|
|
Kun Shan Ding Hong Real Estate Development Co., Ltd.
|
|
Engaged in the development, construction and leasing of real estate
properties
|
|
Kun Shan, China
|
|
100.0
|
|
100.0
|
|
ASE Electronics Inc.
|
|
Engaged in the production of substrates
|
|
Kaohsiung, ROC
|
|
100.0
|
|
100.0
|
|
ASE Test Holdings, Ltd.
|
|
Holding company
|
|
British Cayman Islands
|
|
100.0
|
|
100.0
|
(Continued)
|
|
|
|
|
|
|
Percentage of Ownership (%)
|
|
Name of Investee
|
|
Main Businesses
|
|
Establishment
and
Operating
Location
|
|
December
31, 2015
|
|
September
30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
ASE Holdings (Singapore) Pte. Ltd.
|
|
Holding company
|
|
Singapore
|
|
100.0
|
|
100.0
|
|
ASE Singapore Pte. Ltd.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Singapore
|
|
100.0
|
|
100.0
|
|
ISE Labs, Inc.
|
|
Engaged in the testing of semiconductors
|
|
U.S.A.
|
|
100.0
|
|
100.0
|
|
ASE Electronics (M) Sdn. Bhd.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Malaysia
|
|
100.0
|
|
100.0
|
|
ASE Assembly & Test (Shanghai) Limited
|
|
Engaged in the packaging and testing of semiconductors
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
ASE Trading (Shanghai) Ltd.
|
|
Engaged in trading activity
|
|
Shanghai, China
|
|
100.0
|
|
100.0
|
|
Wuxi Tongzhi Microelectronics Co., Ltd.
|
|
Engaged in the packaging and testing of semiconductors
|
|
Wuxi, China
|
|
100.0
|
|
100.0
|
|
Huntington Holdings International Co., Ltd.
|
|
Holding company
|
|
British Virgin Islands
|
|
99.2
|
|
99.2
|
|
Unitech Holdings International Co., Ltd.
|
|
Holding company
|
|
British Virgin Islands
|
|
99.2
|
|
99.2
|
|
Real Tech Holdings Limited
|
|
Holding company
|
|
British Virgin Islands
|
|
99.2
|
|
99.2
|
|
Universal ABIT Holding Co., Ltd.
|
|
In the process of liquidation
|
|
British Cayman Islands
|
|
99.2
|
|
99.2
|
|
Rising Capital Investment Limited
|
|
Holding company
|
|
British Virgin Islands
|
|
99.2
|
|
99.2
|
|
Rise Accord Limited
|
|
Holding company
|
|
British Virgin Islands
|
|
99.2
|
|
99.2
|
|
Universal Scientific Industrial (Kunshan) Co., Ltd.
|
|
Engaged in the manufacturing and sale of computer assistance system
and related peripherals
|
|
Kun Shan, China
|
|
99.2
|
|
99.2
|
|
USI Enterprise Limited (“USIE”)
|
|
Engaged in the services of investment advisory and warehousing management
|
|
Hong Kong
|
|
96.7
|
|
98.8
|
|
Universal Scientific Industrial (Shanghai) Co., Ltd. (“USISH”)
|
|
Engaged in the designing, manufacturing and sale of electronic components
|
|
Shanghai, China
|
|
75.7
|
|
77.3
|
|
Universal Global Technology Co., Limited
|
|
Holding company
|
|
Hong Kong
|
|
75.7
|
|
77.3
|
|
Universal Global Technology (Kunshan) Co., Ltd.
|
|
Engaged in the designing and manufacturing of electronic components
|
|
Kun Shan, China
|
|
75.7
|
|
77.3
|
|
Universal Global Technology (Shanghai) Co., Ltd.
|
|
Engaged in the processing and sales of computer and communication
peripherals as well as business in import and export of goods and technology
|
|
Shanghai, China
|
|
75.7
|
|
77.3
|
|
Universal Global Electronics (Shanghai) Co., Ltd.
|
|
Engaged in the sale of electronic components and telecommunications
equipment
|
|
Shanghai, China
|
|
75.7
|
|
77.3
|
|
Universal Global Industrial Co., Limited
|
|
Engaged in manufacturing, trading and investing activity
|
|
Hong Kong
|
|
75.7
|
|
77.3
|
|
Universal Global Scientific Industrial Co., Ltd. (“UGTW”)
|
|
Engaged in the manufacturing of components of telecomm and cars
and provision of related R&D services
|
|
Nantou, ROC
|
|
75.7
|
|
77.3
|
|
USI America Inc.
|
|
Engaged in the manufacturing and processing of motherboards and
wireless network communication and provision of related technical service
|
|
U.S.A.
|
|
75.7
|
|
77.3
|
|
Universal Scientific Industrial De Mexico S.A. De C.V.
|
|
Engaged in the assembling of motherboards and computer components
|
|
Mexico
|
|
75.7
|
|
77.3
|
|
USI Japan Co., Ltd.
|
|
Engaged in the manufacturing and sale of computer peripherals, integrated
chip and other related accessories
|
|
Japan
|
|
75.7
|
|
77.3
|
|
USI Electronics (Shenzhen) Co., Ltd.
|
|
Engaged in the design, manufacturing and sale of motherboards and
computer peripherals
|
|
Shenzhen, China
|
|
75.7
|
|
77.3
|
|
Universal Scientific Industrial Co., Ltd. (“USI”)
|
|
Engaged in the manufacturing, processing and sale of computers,
computer peripherals and related accessories
|
|
Nantou, ROC
|
|
99.0
|
|
76.5
|
|
|
|
|
|
|
|
|
|
|
(Concluded)
|
|
c.
|
Other significant accounting policies
|
Except for the following, the
accounting policies applied in these condensed consolidated financial statements are consistent with those applied in the Group’s
consolidated financial statements for the year ended December 31, 2015.
Pension cost for an interim
period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial
year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant
one-off events.
Income tax expense represents
the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated
by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings.
A translation of the condensed
consolidated financial statements into U.S. dollars is included solely for the convenience of the readers, and has been translated
from New Taiwan dollar (NT$) at the exchange rate as set forth in the statistical release by the U.S. Federal Reserve Board of
the United States, which was NT$31.27 to US$1.00 as of September 30, 2016. The translation should not be construed as a representation
that the NT$ amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate
of exchange.
|
|
5.
|
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
|
Except those discussed below,
the same critical accounting judgments and key sources of estimation uncertainty of condensed consolidated financial statements
have been followed in these condensed consolidated financial statements as were applied in the preparation of the Group’s
consolidated financial statements for the year ended December 31, 2015.
For the associate accounted
for using the equity method, the Group recognized goodwill which is included within the carrying amount of the investment as of
each investment date as the excess of cost of investments over the Group’s share of the net fair value of the associate’s
identifiable assets acquired and the liabilities assumed at the respective investment dates; as a result, it involves critical
accounting judgment and estimates when determining aforementioned fair values. The management engaged external appraiser to identify
and evaluate the associate’s identifiable tangible assets, intangible assets and liabilities. The scope of such evaluation
includes assumptions as current replacement cost of tangible assets, the categories of intangible assets and their expected economic
benefits, growth rates and discount rates used in cash flow analysis. The amounts of differences between fair value of identified
tangible and intangible assets and the carrying amount at each respective investment dates are depreciated or amortized over their
remaining useful lives or expected future economic benefit lives. The management considered that the related evaluation and assumption
has appropriately reflected the fair value of identifiable assets acquired and liabilities assumed.
|
|
6.
|
CASH AND CASH EQUIVALENTS
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash on hand
|
|
$
|
8,806
|
|
|
$
|
8,146
|
|
|
$
|
260
|
|
|
Checking accounts and demand deposits
|
|
|
50,291,823
|
|
|
|
29,027,930
|
|
|
|
928,300
|
|
|
Cash equivalents
|
|
|
4,950,552
|
|
|
|
8,625,344
|
|
|
|
275,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
55,251,181
|
|
|
$
|
37,661,420
|
|
|
$
|
1,204,395
|
|
Cash equivalents include time
deposits that are of a short maturity of three months or less from the date of acquisitions, and are highly liquid, readily convertible
to known amounts in cash and the risk of changes in
values is insignificant. Cash equivalents are held for the purpose of meeting
short-term cash commitments rather than for investments or other purposes.
|
|
7.
|
FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (“FVTPL”)
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets designated as at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private-placement convertible bonds
|
|
$
|
100,500
|
|
|
$
|
100,583
|
|
|
$
|
3,217
|
|
|
Structured time deposits
|
|
|
1,646,357
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
1,746,857
|
|
|
|
100,583
|
|
|
|
3,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open-end mutual funds
|
|
|
573,242
|
|
|
|
584,424
|
|
|
|
18,689
|
|
|
Forward exchange contracts
|
|
|
18,913
|
|
|
|
55,645
|
|
|
|
1,779
|
|
|
Swap contracts
|
|
|
1,452,611
|
|
|
|
38,451
|
|
|
|
1,230
|
|
|
Quoted shares
|
|
|
37,058
|
|
|
|
34,728
|
|
|
|
1,111
|
|
|
Foreign currency option contracts
|
|
|
5,020
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
2,086,844
|
|
|
|
713,248
|
|
|
|
22,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,833,701
|
|
|
$
|
813,831
|
|
|
$
|
26,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion option, redemption option and put option of convertible bonds (Note 19)
|
|
$
|
2,632,565
|
|
|
$
|
2,224,051
|
|
|
$
|
71,124
|
|
|
Swap contracts
|
|
|
290,176
|
|
|
|
1,708,293
|
|
|
|
54,631
|
|
|
Forward exchange contracts
|
|
|
69,207
|
|
|
|
10,825
|
|
|
|
346
|
|
|
Interest rate swap contracts
|
|
|
119
|
|
|
|
8,791
|
|
|
|
281
|
|
|
Foreign currency option contracts
|
|
|
13,659
|
|
|
|
1,560
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,005,726
|
|
|
$
|
3,953,520
|
|
|
$
|
126,432
|
|
The Group invested in structured
time deposits and private-placement convertible bonds, and all included embedded derivative instruments which are not closely related
to the host contracts. The Group designated the entire contracts as financial assets at FVTPL on initial recognition.
At each balance sheet date,
the outstanding swap contracts not accounted for hedge accounting were as follows:
|
|
|
|
|
Notional Amount
|
|
Currency
|
|
Maturity Period
|
|
(In Thousands)
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Sell NT$/Buy US$
|
|
2016.01-2016.12
|
|
NT$57,554,138/US$1,802,834
|
|
Sell US$/Buy CNY
|
|
2016.01-2016.03
|
|
US$353,881/CNY2,255,872
|
|
Sell US$/Buy JPY
|
|
2016.03
|
|
US$67,125/JPY8,240,000
|
|
Sell US$/Buy NT$
|
|
2016.01
|
|
US$91,750/NT$3,005,494
|
(Continued)
|
|
|
|
|
Notional Amount
|
|
Currency
|
|
Maturity Period
|
|
(In Thousands)
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Sell EUR/Buy US$
|
|
2016.10
|
|
EUR4,960/US$5,573
|
|
Sell JPY/Buy US$
|
|
2016.10
|
|
JPY38,308/US$380
|
|
Sell NT$/Buy US$
|
|
2016.10-2017.09
|
|
NT$62,646,431/US$1,951,500
|
|
Sell US$/Buy CNY
|
|
2016.10
|
|
US$52,535/CNY349,800
|
|
Sell US$/Buy JPY
|
|
2016.11-2016.12
|
|
US$83,036/JPY8,420,000
|
|
Sell US$/Buy KRW
|
|
2016.10-2016.11
|
|
US$20,000/KRW22,232,000
|
|
Sell US$/Buy NT$
|
|
2016.10-2016.11
|
|
US$51,600/NT$1,621,665
|
(Concluded)
At each balance sheet date,
the outstanding forward exchange contracts not accounted for hedge accounting were as follow:
|
|
|
|
|
Notional Amount
|
|
Currency
|
|
Maturity Period
|
|
(In Thousands)
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Sell NT$/Buy US$
|
|
2016.02
|
|
NT$325,400/US$10,000
|
|
Sell US$/Buy CNY
|
|
2016.01-2016.03
|
|
US$121,000/CNY780,252
|
|
Sell US$/Buy JPY
|
|
2016.01
|
|
US$14,000/JPY1,713,388
|
|
Sell US$/Buy KRW
|
|
2016.01
|
|
US$8,000/KRW9,420,350
|
|
Sell US$/Buy MYR
|
|
2016.01-2016.02
|
|
US$6,000/MYR25,525
|
|
Sell US$/Buy NT$
|
|
2016.01-2016.03
|
|
US$155,000/NT$5,088,230
|
|
Sell US$/Buy SGD
|
|
2016.01-2016.02
|
|
US$11,400/SGD16,079
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Sell NT$ /Buy US$
|
|
2016.10-2016.11
|
|
NT$10,147,295/US$325,000
|
|
Sell US$/Buy CNY
|
|
2016.10-2016.11
|
|
US$65,000/CNY433,976
|
|
Sell US$/Buy JPY
|
|
2016.10-2016.11
|
|
US$21,864/JPY2,227,835
|
|
Sell US$/Buy KRW
|
|
2016.10-2016.11
|
|
US$26,400/KRW29,134,690
|
|
Sell US$/Buy MYR
|
|
2016.10-2016.11
|
|
US$9,000/MYR36,944
|
|
Sell US$/Buy SGD
|
|
2016.10-2016.12
|
|
US$11,100/SGD14,988
|
At each balance sheet date,
the outstanding foreign currency option contracts not accounted for hedge accounting were as follows:
|
Currency
|
|
Maturity Period
|
|
(In Thousands)
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Buy US$ Call/CNY Put
|
|
2017.08 (Note)
|
|
US$2,000/CNY13,800
|
|
Buy US$ Put/CNY Call
|
|
2016.03
|
|
US$20,000/CNY131,600
|
|
Sell US$ Put/CNY Call
|
|
2017.08 (Note)
|
|
US$1,000/CNY 6,900
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Buy US$ Call/CNY Put
|
|
2017.08 (Note)
|
|
US$2,000/CNY13,800
|
|
Sell US$ Put/CNY Call
|
|
2017.08 (Note)
|
|
US$1,000/CNY 6,900
|
|
|
|
|
|
|
|
|
Note:
|
The contracts will be settled once a month and the counterparty has the right to early terminate
the contracts, or the contracts will be early terminated, or both parties will have no obligation to settle the contracts when
the specific criteria is met. Partial of the aforementioned outstanding contracts as of September 30, 2015 were early terminated.
|
At each balance sheet date,
the outstanding interest rate swap contracts not accounted for hedge accounting were as follows:
|
Maturity Period
|
|
Notional Amounts
(In Thousands)
|
|
Range of
Interest Rates
Paid
|
|
Range of
Interest Rates
Received
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016.10
|
|
NT$1,000,000
|
|
4.60%
(Fixed)
|
|
0.00%-5.00%
(Floating)
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016.10
|
|
NT$1,000,000
|
|
4.60%
(Fixed)
|
|
0.00%-5.00%
(Floating)
|
|
|
8.
|
AVAILABLE-FOR-SALE FINANCIAL ASSETS
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unquoted ordinary shares
|
|
$
|
249,217
|
|
|
$
|
506,502
|
|
|
$
|
16,197
|
|
|
Limited partnership
|
|
|
476,612
|
|
|
|
448,913
|
|
|
|
14,356
|
|
|
Quoted ordinary shares
|
|
|
197,580
|
|
|
|
160,243
|
|
|
|
5,124
|
|
|
Open-end mutual funds
|
|
|
16,037
|
|
|
|
44,207
|
|
|
|
1,414
|
|
|
Unquoted preferred shares
|
|
|
15,260
|
|
|
|
14,166
|
|
|
|
453
|
|
|
|
|
|
954,706
|
|
|
|
1,174,031
|
|
|
|
37,544
|
|
|
Current
|
|
|
30,344
|
|
|
|
70,092
|
|
|
|
2,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
|
|
$
|
924,362
|
|
|
$
|
1,103,939
|
|
|
$
|
35,303
|
|
|
|
9.
|
TRADE RECEIVABLES, NET
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
$
|
45,014,393
|
|
|
$
|
52,063,840
|
|
|
$
|
1,664,977
|
|
|
Less: Allowance for doubtful debts
|
|
|
82,906
|
|
|
|
54,262
|
|
|
|
1,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net
|
|
$
|
44,931,487
|
|
|
$
|
52,009,578
|
|
|
$
|
1,663,242
|
|
The Group’s average credit
terms were 30 to 90 days. Allowance for doubtful debts is assessed by reference to the collectability of receivables by evaluating
the account aging, historical experience and current financial condition of customers.
As of December 31, 2015 and
September 30, 2016, except that the Group’s five largest customers accounted for 26% and 33% of accounts receivable, respectively,
the concentration of credit risk is insignificant for the remaining accounts receivable.
Aging of receivables based
on the past due date
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not past due
|
|
$
|
40,409,227
|
|
|
$
|
47,741,458
|
|
|
$
|
1,526,750
|
|
|
1 to 30 days
|
|
|
3,901,300
|
|
|
|
3,695,299
|
|
|
|
118,174
|
|
|
31 to 90 days
|
|
|
495,664
|
|
|
|
532,980
|
|
|
|
17,044
|
|
|
More than 91 days
|
|
|
208,202
|
|
|
|
94,103
|
|
|
|
3,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
45,014,393
|
|
|
$
|
52,063,840
|
|
|
$
|
1,664,977
|
|
Aging of receivables that
were past due but not impaired
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 to 30 days
|
|
$
|
3,086,796
|
|
|
$
|
3,669,497
|
|
|
$
|
117,349
|
|
|
31 to 90 days
|
|
|
344,265
|
|
|
|
333,527
|
|
|
|
10,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,431,061
|
|
|
$
|
4,003,024
|
|
|
$
|
128,015
|
|
Except for those impaired,
the Group had not provided an allowance for doubtful debts on trade receivables at each balance sheet date since there has not
been a significant change in credit quality and the amounts were still considered collectible. The Group did not hold any collateral
or other credit enhancements over these balances nor did it have a legal right to offset against any amounts owed by the Group
to counterparties.
Movement of the allowance
for doubtful trade receivables
|
|
|
Impaired
Individually
|
|
Impaired
Collectively
|
|
Total
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
28,305
|
|
|
$
|
55,840
|
|
|
$
|
84,145
|
|
|
Impairment losses recognized
|
|
|
20,411
|
|
|
|
2,888
|
|
|
|
23,299
|
|
|
Amount written off as uncollectible
|
|
|
–
|
|
|
|
(208
|
)
|
|
|
(208
|
)
|
|
Effect of foreign currency exchange differences
|
|
|
(177
|
)
|
|
|
(871
|
)
|
|
|
(1,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2015
|
|
$
|
48,539
|
|
|
$
|
57,649
|
|
|
$
|
106,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
39,046
|
|
|
$
|
43,860
|
|
|
$
|
82,906
|
|
|
Impairment losses recognized (reversed)
|
|
|
(29,013
|
)
|
|
|
1,349
|
|
|
|
(27,664
|
)
|
|
Effect of foreign currency exchange differences
|
|
|
(691
|
)
|
|
|
(289
|
)
|
|
|
(980
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
9,342
|
|
|
$
|
44,920
|
|
|
$
|
54,262
|
|
|
|
|
Impaired
Individually
|
|
Impaired
Collectively
|
|
Total
|
|
|
|
|
US$ (Note 4)
|
|
|
|
US$ (Note 4)
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
1,249
|
|
|
$
|
1,402
|
|
|
$
|
2,651
|
|
|
Impairment losses recognized (reversed)
|
|
|
(928
|
)
|
|
|
43
|
|
|
|
(885
|
)
|
|
Effect of foreign currency exchange differences
|
|
|
(22
|
)
|
|
|
(9
|
)
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
299
|
|
|
$
|
1,436
|
|
|
$
|
1,735
|
|
|
|
b.
|
Transfers of financial assets
|
Factored trade receivables
of the Company were as follows:
|
Counterparties
|
|
|
Receivables
Sold
(In Thousands)
|
|
|
|
Amounts
Collected
(In Thousands)
|
|
|
|
Advances
Received
At Period-end
(In Thousands)
|
|
|
|
Interest Rates
on Advances
Received
(%)
|
|
|
|
Credit Line
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Citi bank
|
|
US$
|
47,555
|
|
|
US$
|
–
|
|
|
US$
|
47,555
|
|
|
|
1.03
|
|
|
US$
|
92,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Citi bank
|
|
US$
|
–
|
|
|
US$
|
41,849
|
|
|
US$
|
–
|
|
|
|
–
|
|
|
US$
|
66,000
|
|
Pursuant to the factoring agreement,
losses from commercial disputes (such as sales returns and discounts) should be borne by the Company, while losses from credit
risk should be borne by the banks. The Company also issued promissory notes to the banks for commercial disputes which remained
undrawn since. The promissory notes amounted to US$5,000 thousand and US$2,000 thousand as of December 31, 2015 and September 30,
2016, respectively. As of September 30, 2016, there was no significant losses from commercial disputes in the past and the Company
does not expect any significant commercial dispute losses in the foreseeable future.
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finished goods
|
|
$
|
10,012,182
|
|
|
$
|
6,639,252
|
|
|
$
|
212,320
|
|
|
Work in process
|
|
|
1,692,346
|
|
|
|
4,664,874
|
|
|
|
149,180
|
|
|
Raw materials
|
|
|
9,672,894
|
|
|
|
11,071,692
|
|
|
|
354,068
|
|
|
Supplies
|
|
|
852,251
|
|
|
|
788,774
|
|
|
|
25,225
|
|
|
Raw materials and supplies in transit
|
|
|
1,028,606
|
|
|
|
470,561
|
|
|
|
15,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23,258,279
|
|
|
$
|
23,635,153
|
|
|
$
|
755,841
|
|
The cost of inventories recognized
as operating costs for the nine months ended September 30, 2015 and 2016 were NT$170,887,198 thousand and NT$158,489,852 thousand
(US$5,068,431 thousand), respectively, which included write-down of inventories at NT$3,724 thousand and NT$313,124 thousand (US$10,013
thousand), respectively.
|
|
11.
|
INVENTORIES RELATED TO REAL ESTATE BUSINESS
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and buildings held for sale
|
|
$
|
5,431
|
|
|
$
|
667
|
|
|
$
|
21
|
|
|
Construction in progress
|
|
|
23,956,678
|
|
|
|
22,453,205
|
|
|
|
718,043
|
|
|
Land held for construction
|
|
|
1,751,429
|
|
|
|
1,687,526
|
|
|
|
53,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25,713,538
|
|
|
$
|
24,141,398
|
|
|
$
|
772,031
|
|
Land and buildings held for
sale located in Shanghai Zhangjiang was completed and successively sold. Construction in progress is mainly located on Caobao Road
and Hutai Road in Shanghai, China and Lidu Road and Xinhong Road in Kun Shan, China. The capitalized borrowing costs for the nine
months ended September 30, 2015 and 2016 is disclosed in Note 23.
As of December 31, 2015 and
September 30, 2016, inventories related to real estate business of NT$24,837,046 thousand and NT$11,978,732 thousand (US$383,074
thousand), respectively, are expected to be recovered longer than twelve months.
Refer to Note 34 for the carrying
amount of inventories related to real estate business that had been pledged by the Group to secure bank borrowings.
|
|
12.
|
OTHER FINANCIAL ASSETS
|
|
|
|
December 31, 2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured subordinate corporate bonds
|
|
$
|
–
|
|
|
$
|
1,000,000
|
|
|
$
|
31,980
|
|
|
Time deposits with original maturity over three months
|
|
|
220,545
|
|
|
|
948,086
|
|
|
|
30,319
|
|
|
Pledged time deposits (Note 34)
|
|
|
207,359
|
|
|
|
235,913
|
|
|
|
7,544
|
|
|
Guarantee deposits
|
|
|
197,513
|
|
|
|
210,966
|
|
|
|
6,746
|
|
|
Others (Note 34)
|
|
|
22,254
|
|
|
|
7,592
|
|
|
|
243
|
|
|
|
|
|
647,671
|
|
|
|
2,402,557
|
|
|
|
76,832
|
|
|
Current
|
|
|
301,999
|
|
|
|
1,047,303
|
|
|
|
33,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
|
|
$
|
345,672
|
|
|
$
|
1,355,254
|
|
|
$
|
43,340
|
|
In June 2016, the Group acquired
1,000 units of perpetual unsecured subordinate corporate bonds in the amount of NT$1,000,000 thousand (US$31,037 thousand). The
corporate bonds are in denomination of NT$1,000 thousand with annual interest rate at 3.5% as of September 30, 2016.
|
|
13.
|
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates
|
|
$
|
36,508,403
|
|
|
$
|
48,869,930
|
|
|
$
|
1,562,838
|
|
|
Investments in joint ventures
|
|
|
613,841
|
|
|
|
703,684
|
|
|
|
22,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
37,122,244
|
|
|
$
|
49,573,614
|
|
|
$
|
1,585,341
|
|
|
|
a.
|
Investments in associates
|
|
|
1)
|
Investments in associates accounted for using the equity method consisted of the following:
|
|
|
|
|
|
|
|
Carrying Amount
|
|
|
|
|
|
Operating
|
|
December 31,
2015
|
|
September 30, 2016
|
|
Name of Associate
|
|
Main Business
|
|
Location
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Material associate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siliconware Precision Industries Co., Ltd. (“SPIL”)
|
|
Engaged in assembly, testing and turnkey services of integrated circuits
|
|
ROC
|
|
$
|
35,141,701
|
|
|
$
|
45,675,004
|
|
|
$
|
1,460,665
|
|
|
Associates that are not individually material
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deca Technologies Inc.
（
”DECA”
）
|
|
Holding company and the group engaged in manufacturing, development and marketing of wafer level packaging and interconnect technology
|
|
British Cayman Islands
|
|
|
–
|
|
|
|
1,892,542
|
|
|
|
60,523
|
|
|
Hung Ching Development & Construction Co. (“HC”)
|
|
Engaged in the development, construction and leasing of real estate properties
|
|
ROC
|
|
|
1,294,191
|
|
|
|
1,266,121
|
|
|
|
40,490
|
|
|
Hung Ching Kwan Co. (“HCK”)
|
|
Engaged in the leasing of real estate properties
|
|
ROC
|
|
|
332,444
|
|
|
|
324,959
|
|
|
|
10,392
|
|
|
Advanced Microelectronic Products Inc. (“AMPI”)
|
|
Engaged in manufacturing of integrated circuit
|
|
ROC
|
|
|
40,216
|
|
|
|
11,453
|
|
|
|
366
|
|
|
|
|
|
|
|
|
|
36,808,552
|
|
|
|
49,170,079
|
|
|
|
1,572,436
|
|
|
|
|
Less: Deferred gain on transfer of land
|
|
|
|
|
300,149
|
|
|
|
300,149
|
|
|
|
9,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
36,508,403
|
|
|
$
|
48,869,930
|
|
|
$
|
1,562,838
|
|
|
|
2)
|
At each balance sheet date, the percentages of ownership held by the Group were as follows:
|
|
|
|
|
|
|
December 31,
2015
|
|
|
|
September 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPIL
|
|
|
|
24.99
|
%
|
|
|
33.29
|
%
|
|
|
DECA
|
|
|
|
–
|
|
|
|
22.07
|
%
|
|
|
HC
|
|
|
|
26.22
|
%
|
|
|
26.22
|
%
|
|
|
HCK
|
|
|
|
27.31
|
%
|
|
|
27.31
|
%
|
|
|
AMPI
|
|
|
|
18.24
|
%
|
|
|
17.38
|
%
|
|
|
3)
|
In September 2015, the Company acquired 725,749 thousand ordinary shares and 10,650 thousand units
of ADS (one ADS represents five ordinary shares) of SPIL at NT$45 per ordinary share. The percentage of ownership was 24.99% and,
as a result, the Company obtained significant influence over SPIL.
|
In March and April 2016, the
Company acquired additional 258,300 thousand ordinary shares and ADS (one ADS represents five ordinary shares) of SPIL from open
market with a total consideration of NT$13,735,498 thousand (US$439,255 thousand) which was paid in cash. As the result, the percentage
of ownership increased from 24.99% to 33.29%.
As of September 30, 2016, the
Company has completed the identification of the difference between the cost of the investment and the Company’s share of
the net fair value of SPIL’s identifiable assets and liabilities. Therefore, the Company has retrospectively adjusted the
comparative financial statements for prior periods. As of December 31, 2015, the retrospective adjustments are summarized as follows:
|
|
|
Before adjusted
|
|
After adjusted
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using the equity method - SPIL
|
|
$
|
35,423,058
|
|
|
$
|
35,141,701
|
|
|
Retained earnings
|
|
$
|
53,981,305
|
|
|
$
|
53,699,948
|
|
In June 2016, the Company’s
board of directors approved to enter into and execute a joint share exchange agreement with SPIL. Please refer to Note 37.
|
|
4)
|
In July 2016, the Company acquired 98,490 thousand preferred shares issued by DECA at US$0.608
per share with a total consideration of NT$1,934,062 thousand (US$59,882 thousand). The percentage of ownership was 22.07% and
the Company obtained significant influence over DECA. As of September 30, 2016, the Company has not completed the identification
of the difference between the cost of the investment and the Company’s share of the net fair value of DECA’s identifiable
assets and liabilities.
|
|
|
5)
|
The convertible bond holders of AMPI exercised the conversion option in September 2016 and, as
a result, the percentage of ownership held by the Company decreased from 18.24% to 17.38%.
|
|
|
6)
|
Fair values (Level 1 inputs in terms of IFRS 13) of investments in associates with available published
price quotation are summarized as follows:
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPIL
|
|
|
$
|
40,741,700
|
|
|
$
|
48,753,100
|
|
|
$
|
1,559,101
|
|
|
|
HC
|
|
|
$
|
1,149,549
|
|
|
$
|
1,170,138
|
|
|
$
|
37,420
|
|
|
|
AMPI
|
|
|
$
|
104,255
|
|
|
$
|
83,271
|
|
|
$
|
2,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7)
|
Summarized financial information in respect of the Group’s material associate
|
The summarized financial information
below represents amounts shown in SPIL’s consolidated financial statements prepared in accordance with IFRSs as issued by
IASB and adjusted by the Group for equity method accounting purposes.
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
48,785,212
|
|
|
$
|
44,914,756
|
|
|
$
|
1,436,353
|
|
|
Non-current assets
|
|
|
74,424,040
|
|
|
|
75,278,522
|
|
|
|
2,407,372
|
|
|
Current liabilities
|
|
|
(30,677,239
|
)
|
|
|
(30,432,003
|
)
|
|
|
(973,201
|
)
|
|
Non-current liabilities
|
|
|
(23,002,788
|
)
|
|
|
(26,339,259
|
)
|
|
|
(842,317
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$
|
69,529,225
|
|
|
$
|
63,422,016
|
|
|
$
|
2,028,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proportion of the Group’s ownership
|
|
|
24.99
|
%
|
|
|
33.29
|
%
|
|
|
33.29
|
%
|
(Continued)
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets attributable to the Group
|
|
$
|
17,375,353
|
|
|
$
|
21,113,189
|
|
|
$
|
675,190
|
|
|
Adjustments for fair value of identifiable assets acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
8,254,294
|
|
|
|
12,782,259
|
|
|
|
408,770
|
|
|
Tangible assets
|
|
|
3,249,580
|
|
|
|
3,819,232
|
|
|
|
122,137
|
|
|
Intangible assets
|
|
|
6,268,474
|
|
|
|
7,960,324
|
|
|
|
254,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
$
|
35,141,701
|
|
|
$
|
45,675,004
|
|
|
$
|
1,460,665
|
|
(Concluded)
The above tangible assets and
intangible assets are mainly depreciated or amortized over 10 years.
|
|
|
For the Nine Months Ended September 30, 2016
|
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
62,934,405
|
|
|
$
|
2,012,613
|
|
|
Gross profit
|
|
$
|
14,121,937
|
|
|
$
|
451,613
|
|
|
Profit before income tax
|
|
$
|
8,292,368
|
|
|
$
|
265,186
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period
|
|
$
|
7,253,481
|
|
|
$
|
231,963
|
|
|
Other comprehensive loss for the period
|
|
|
(1,518,518
|
)
|
|
|
(48,562
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
$
|
5,734,963
|
|
|
$
|
183,401
|
|
|
Cash dividends received from SPIL
|
|
$
|
3,941,740
|
|
|
$
|
126,055
|
|
|
|
8)
|
Aggregate information of associates that are not individually material
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group’s share of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit (loss) for the period
|
|
$
|
118,754
|
|
|
$
|
(13,186
|
)
|
|
$
|
(422
|
)
|
|
Other comprehensive loss for the period
|
|
|
(62,823
|
)
|
|
|
(37,574
|
)
|
|
|
(1,201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
$
|
55,931
|
|
|
$
|
(50,760
|
)
|
|
$
|
(1,623
|
)
|
The investments accounted for
using the equity method and the share of profit or loss and other comprehensive loss of the investments in associates for the nine
months ended September 30, 2015 and 2016 was based on the associates’ financial statements prepared in accordance with IFRSs
as issued by IASB and adjusted by the Group for equity method accounting purposes.
|
|
b.
|
Investments
in joint ventures
|
|
|
1)
|
The
Group’s investment in joint ventures that are not individually material and were
accounted for using the equity method consisted of ASE Embedded Electronics Inc. (“ASEEE”).
In May 2015, the Group and TDK Corporation (“TDK”) entered into an agreement
to establish a joint venture to invest in ASEEE. The Croup invested NT$618,097 thousand
in August 2015 and participated ASEEE’s capital increase in cash with NT$146,903
thousand (US$4,698 thousand) in September 2016. As of December 31, 2015 and September
30, 2016, the percentage of ownership are both 51%. ASEEE are located in ROC and engaged
in the production of embedded substrate. According to the joint arrangement, the Group
and TDK must act together to direct the relevant operating activities and, as a result,
the Group does not control ASEEE. The investment in ASEEE is accounted for using the
equity method.
|
|
|
2)
|
Aggregate
information of joint venture that is not individually material
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
The Group’s share of net loss and total comprehensive loss for the period
|
|
$
|
(195
|
)
|
|
$
|
(57,252
|
)
|
|
$
|
(1,831
|
)
|
|
|
3)
|
The
investments accounted for using the equity method and the share of loss and other comprehensive
loss for the investments in the joint venture for the nine months ended September 30,
2015 and 2016, respectively, was based on the joint venture’s financial statements
prepared in accordance with IFRSs as issued by IASB and adjusted by the Group for equity
method accounting purposes.
|
|
|
14.
|
PROPERTY, PLANT AND EQUIPMENT
|
The
carrying amounts of each class of property, plant and equipment were as follows:
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
3,381,300
|
|
|
$
|
3,339,803
|
|
|
$
|
106,805
|
|
|
Buildings and improvements
|
|
|
59,801,054
|
|
|
|
57,676,078
|
|
|
|
1,844,454
|
|
|
Machinery and equipment
|
|
|
78,715,309
|
|
|
|
73,399,437
|
|
|
|
2,347,280
|
|
|
Other equipment
|
|
|
1,814,994
|
|
|
|
1,841,436
|
|
|
|
58,888
|
|
|
Construction in progress and machinery in transit
|
|
|
6,284,418
|
|
|
|
8,952,101
|
|
|
|
286,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
149,997,075
|
|
|
$
|
145,208,855
|
|
|
$
|
4,643,711
|
|
For
the nine months ended September 30, 2015
|
|
|
Land
|
|
Buildings and improvements
|
|
Machinery and equipment
|
|
Other equipment
|
|
Construction in progress and machinery
in transit
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
3,348,018
|
|
|
$
|
86,725,254
|
|
|
$
|
233,669,627
|
|
|
$
|
7,182,574
|
|
|
$
|
5,862,217
|
|
|
$
|
336,787,690
|
|
|
Additions
|
|
|
–
|
|
|
|
53,050
|
|
|
|
173,239
|
|
|
|
204,926
|
|
|
|
22,698,232
|
|
|
|
23,129,447
|
|
|
Disposals
|
|
|
–
|
|
|
|
(202,257
|
)
|
|
|
(5,877,465
|
)
|
|
|
(203,255
|
)
|
|
|
(8,992
|
)
|
|
|
(6,291,969
|
)
|
(Continued)
|
|
|
Land
|
|
Buildings and improvements
|
|
Machinery and equipment
|
|
Other equipment
|
|
Construction in progress and machinery
in transit
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification
|
|
$
|
–
|
|
|
$
|
6,638,011
|
|
|
$
|
14,094,445
|
|
|
$
|
289,476
|
|
|
$
|
(20,893,867
|
)
|
|
$
|
128,065
|
|
|
Effect of foreign currency exchange differences
|
|
|
34,556
|
|
|
|
34,066
|
|
|
|
31,141
|
|
|
|
40,687
|
|
|
|
207,628
|
|
|
|
348,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30,2015
|
|
$
|
3,382,574
|
|
|
$
|
93,248,124
|
|
|
$
|
242,090,987
|
|
|
$
|
7,514,408
|
|
|
$
|
7,865,218
|
|
|
$
|
354,101,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
–
|
|
|
$
|
30,329,544
|
|
|
$
|
149,497,980
|
|
|
$
|
5,365,887
|
|
|
$
|
7,164
|
|
|
$
|
185,200,575
|
|
|
Depreciation expense
|
|
|
–
|
|
|
|
3,537,606
|
|
|
|
17,636,686
|
|
|
|
576,456
|
|
|
|
–
|
|
|
|
21,750,748
|
|
|
Impairment losses recognized
|
|
|
–
|
|
|
|
117,646
|
|
|
|
31,155
|
|
|
|
–
|
|
|
|
2,290
|
|
|
|
151,091
|
|
|
Disposals
|
|
|
–
|
|
|
|
(185,390
|
)
|
|
|
(5,693,081
|
)
|
|
|
(196,852
|
)
|
|
|
–
|
|
|
|
(6,075,323
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
322
|
|
|
|
601
|
|
|
|
(4,102
|
)
|
|
|
–
|
|
|
|
(3,179
|
)
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(65,898
|
)
|
|
|
126,631
|
|
|
|
35,553
|
|
|
|
–
|
|
|
|
96,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30,2015
|
|
$
|
–
|
|
|
$
|
33,733,830
|
|
|
$
|
161,599,972
|
|
|
$
|
5,776,942
|
|
|
$
|
9,454
|
|
|
$
|
201,120,198
|
|
(Concluded)
For
the nine months ended September 30, 2016
|
|
|
Land
|
|
Buildings and improvements
|
|
Machinery and equipment
|
|
Other equipment
|
|
Construction in progress and machinery
in transit
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
3,381,300
|
|
|
$
|
94,447,932
|
|
|
$
|
243,283,607
|
|
|
$
|
7,722,408
|
|
|
$
|
6,397,760
|
|
|
$
|
355,233,007
|
|
|
Additions
|
|
|
–
|
|
|
|
(19,825
|
)
|
|
|
100,380
|
|
|
|
76,145
|
|
|
|
21,128,121
|
|
|
|
21,284,821
|
|
|
Disposals
|
|
|
–
|
|
|
|
(387,024
|
)
|
|
|
(8,033,648
|
)
|
|
|
(84,143
|
)
|
|
|
(215,773
|
)
|
|
|
(8,720,588
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
3,316,244
|
|
|
|
14,388,566
|
|
|
|
594,599
|
|
|
|
(18,299,584
|
)
|
|
|
(175
|
)
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1,159
|
|
|
|
–
|
|
|
|
1,159
|
|
|
Effect of foreign currency exchange differences
|
|
|
(41,497
|
)
|
|
|
(2,534,611
|
)
|
|
|
(4,762,613
|
)
|
|
|
(194,188
|
)
|
|
|
(42,550
|
)
|
|
|
(7,575,459
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
3,339,803
|
|
|
$
|
94,822,716
|
|
|
$
|
244,976,292
|
|
|
$
|
8,115,980
|
|
|
$
|
8,967,974
|
|
|
$
|
360,222,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
–
|
|
|
$
|
34,646,878
|
|
|
$
|
164,568,298
|
|
|
$
|
5,907,414
|
|
|
$
|
113,342
|
|
|
$
|
205,235,932
|
|
|
Depreciation expense
|
|
|
–
|
|
|
|
3,845,108
|
|
|
|
17,236,723
|
|
|
|
612,940
|
|
|
|
–
|
|
|
|
21,694,771
|
|
|
Impairment losses recognized
|
|
|
–
|
|
|
|
620
|
|
|
|
876,153
|
|
|
|
5,564
|
|
|
|
4,509
|
|
|
|
886,846
|
|
|
Disposals
|
|
|
–
|
|
|
|
(332,480
|
)
|
|
|
(7,790,959
|
)
|
|
|
(76,588
|
)
|
|
|
(100,049
|
)
|
|
|
(8,300,076
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
(5,200
|
)
|
|
|
2,979
|
|
|
|
2,221
|
|
|
|
–
|
|
|
|
–
|
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
824
|
|
|
|
–
|
|
|
|
824
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(1,008,288
|
)
|
|
|
(3,316,339
|
)
|
|
|
(177,831
|
)
|
|
|
(1,929
|
)
|
|
|
(4,504,387
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
–
|
|
|
$
|
37,146,638
|
|
|
$
|
171,576,855
|
|
|
$
|
6,274,544
|
|
|
$
|
15,873
|
|
|
$
|
215,013,910
|
|
|
|
|
Land
|
|
Buildings and improvements
|
|
Machinery and equipment
|
|
Other equipment
|
|
Construction in progress and machinery
in transit
|
|
Total
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1,2016
|
|
$
|
108,132
|
|
|
$
|
3,020,401
|
|
|
$
|
7,780,096
|
|
|
$
|
246,959
|
|
|
$
|
204,597
|
|
|
$
|
11,360,185
|
|
|
Additions
|
|
|
–
|
|
|
|
(634
|
)
|
|
|
3,210
|
|
|
|
2,435
|
|
|
|
675,667
|
|
|
|
680,678
|
|
|
Disposals
|
|
|
–
|
|
|
|
(12,377
|
)
|
|
|
(256,912
|
)
|
|
|
(2,691
|
)
|
|
|
(6,900
|
)
|
|
|
(278,880
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
106,052
|
|
|
|
460,140
|
|
|
|
19,015
|
|
|
|
(585,212
|
)
|
|
|
(5
|
)
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
37
|
|
|
|
–
|
|
|
|
37
|
|
|
Effect of foreign currency exchange differences
|
|
|
(1,327
|
)
|
|
|
(81,056
|
)
|
|
|
(152,306
|
)
|
|
|
(6,210
|
)
|
|
|
(1,361
|
)
|
|
|
(242,260
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30,2016
|
|
$
|
106,805
|
|
|
$
|
3,032,386
|
|
|
$
|
7,834,228
|
|
|
$
|
259,545
|
|
|
$
|
286,791
|
|
|
$
|
11,519,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1,2016
|
|
$
|
–
|
|
|
$
|
1,107,991
|
|
|
$
|
5,262,817
|
|
|
$
|
188,916
|
|
|
$
|
3,625
|
|
|
$
|
6,563,349
|
|
|
Depreciation expense
|
|
|
–
|
|
|
|
122,965
|
|
|
|
551,222
|
|
|
|
19,602
|
|
|
|
–
|
|
|
|
693,789
|
|
|
Impairment losses recognized
|
|
|
–
|
|
|
|
20
|
|
|
|
28,019
|
|
|
|
178
|
|
|
|
144
|
|
|
|
28,361
|
|
|
Disposals
|
|
|
–
|
|
|
|
(10,633
|
)
|
|
|
(249,151
|
)
|
|
|
(2,449
|
)
|
|
|
(3,200
|
)
|
|
|
(265,433
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
(166
|
)
|
|
|
95
|
|
|
|
71
|
|
|
|
–
|
|
|
|
–
|
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
26
|
|
|
|
–
|
|
|
|
26
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(32,245
|
)
|
|
|
(106,054
|
)
|
|
|
(5,687
|
)
|
|
|
(62
|
)
|
|
|
(144,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30,2016
|
|
$
|
–
|
|
|
$
|
1,187,932
|
|
|
$
|
5,486,948
|
|
|
$
|
200,657
|
|
|
$
|
507
|
|
|
$
|
6,876,044
|
|
Due
to the Group’s future operation plans and capacity evaluation or production demands in segment of packaging and testing,
the Group believed that a portion of property, plant and equipment was not used and recognized an impairment loss of NT$151,091
thousand and NT$886,846 thousand (US$28,361 thousand) under the line item of other operating income and expenses in the consolidated
statements of comprehensive income for the nine months ended September 30, 2015 and 2016, respectively. The recoverable amount
of a portion of the impaired property, plant and equipment is determined by its fair value less costs of disposal, of which the
fair value is based on the quoted prices of assets with similar obsolescence provided by the vendors in market. The recent quoted
prices of assets are a Level 3 input in terms of IFRS 13 because the market is not very active. The recoverable amount of the
other portion of the impaired property, plant and equipment is determined on the basis of its value in use. The Group expects
to derive zero future cash flows from these assets.
Each
class of property, plant and equipment was depreciated on a straight-line basis over the following useful lives:
|
Buildings and improvements
|
|
|
|
Main plant buildings
|
|
10-40 years
|
|
Cleanrooms
|
|
10-20 years
|
|
Others
|
|
3-20 years
|
|
Machinery and equipment
|
|
2-10 years
|
|
Other equipment
|
|
2-20 years
|
The
capitalized borrowing costs for the nine months ended September 30, 2015 and 2016 ,respectively, are disclosed in Note 23.
|
|
|
Cost
|
|
Accumulated impairment
|
|
Carrying amount
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
12,434,411
|
|
|
$
|
1,988,996
|
|
|
$
|
10,445,415
|
|
|
Effect of foreign currency exchange differences
|
|
|
63,855
|
|
|
|
–
|
|
|
|
63,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2015
|
|
$
|
12,498,266
|
|
|
$
|
1,988,996
|
|
|
$
|
10,509,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
12,495,515
|
|
|
$
|
1,988,996
|
|
|
$
|
10,506,519
|
|
|
Acquisitions through business combinations
|
|
|
83,892
|
|
|
|
–
|
|
|
|
83,892
|
|
|
Effect of foreign currency exchange differences
|
|
|
(77,963
|
)
|
|
|
–
|
|
|
|
(77,963
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
12,501,444
|
|
|
$
|
1,988,996
|
|
|
$
|
10,512,448
|
|
|
|
|
Cost
|
|
Accumulated impairment
|
|
Carrying amount
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
399,601
|
|
|
$
|
63,607
|
|
|
$
|
335,994
|
|
|
Acquisitions through business combinations
|
|
|
2,683
|
|
|
|
–
|
|
|
|
2,683
|
|
|
Effect of foreign currency exchange differences
|
|
|
(2,494
|
)
|
|
|
–
|
|
|
|
(2,494
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
399,790
|
|
|
$
|
63,607
|
|
|
$
|
336,183
|
|
|
|
16.
|
OTHER INTANGIBLE ASSETS
|
The
carrying amounts of each class of other intangible assets were as follows:
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
$
|
274,402
|
|
|
$
|
214,167
|
|
|
$
|
6,849
|
|
|
Computer software
|
|
|
953,322
|
|
|
|
954,310
|
|
|
|
30,518
|
|
|
Patents and acquired specific technology
|
|
|
15,696
|
|
|
|
411,530
|
|
|
|
13,161
|
|
|
Others
|
|
|
138,673
|
|
|
|
124,662
|
|
|
|
3,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,382,093
|
|
|
$
|
1,704,669
|
|
|
$
|
54,515
|
|
For
the nine months ended September 30, 2015
|
|
|
Customer relationships
|
|
Computer software
|
|
Patents and acquired specific technology
|
|
Others
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
1,579,015
|
|
|
$
|
2,882,932
|
|
|
$
|
2,139,138
|
|
|
$
|
184,409
|
|
|
$
|
6,785,494
|
|
|
Additions
|
|
|
–
|
|
|
|
392,235
|
|
|
|
209
|
|
|
|
1,063
|
|
|
|
393,507
|
|
|
Disposals or derecognization
|
|
|
–
|
|
|
|
(2,941
|
)
|
|
|
(1,983,914
|
)
|
|
|
(205
|
)
|
|
|
(1,987,060
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
15,034
|
|
|
|
–
|
|
|
|
–
|
|
|
|
15,034
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(15,596
|
)
|
|
|
(17
|
)
|
|
|
121
|
|
|
|
(15,492
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2015
|
|
$
|
1,579,015
|
|
|
$
|
3,271,664
|
|
|
$
|
155,416
|
|
|
$
|
185,388
|
|
|
$
|
5,191,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
$
|
1,077,514
|
|
|
$
|
2,084,805
|
|
|
$
|
2,118,254
|
|
|
$
|
37,050
|
|
|
$
|
5,317,623
|
|
|
Amortization expense
|
|
|
157,876
|
|
|
|
242,100
|
|
|
|
8,382
|
|
|
|
13,114
|
|
|
|
421,472
|
|
|
Disposals or derecognization
|
|
|
–
|
|
|
|
(2,245
|
)
|
|
|
(1,983,914
|
)
|
|
|
–
|
|
|
|
(1,986,159
|
)
|
|
Reclassification
|
|
|
–
|
|
|
|
3,160
|
|
|
|
–
|
|
|
|
–
|
|
|
|
3,160
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(10,506
|
)
|
|
|
(3,555
|
)
|
|
|
161
|
|
|
|
(13,900
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2015
|
|
$
|
1,235,390
|
|
|
$
|
2,317,314
|
|
|
$
|
139,167
|
|
|
$
|
50,325
|
|
|
$
|
3,742,196
|
|
For
the nine months ended September 30, 2016
|
|
|
Customer relationships
|
|
Computer software
|
|
Patents and acquired specific technology
|
|
Others
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
915,636
|
|
|
$
|
3,338,360
|
|
|
$
|
154,082
|
|
|
$
|
193,338
|
|
|
$
|
4,601,416
|
|
|
Additions (Note 33)
|
|
|
–
|
|
|
|
282,739
|
|
|
|
403,543
|
|
|
|
1,246
|
|
|
|
687,528
|
|
|
Disposals
|
|
|
–
|
|
|
|
(36,542
|
)
|
|
|
(30
|
)
|
|
|
–
|
|
|
|
(36,572
|
)
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
1,074
|
|
|
|
30
|
|
|
|
1,104
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(65,196
|
)
|
|
|
(4,318
|
)
|
|
|
(2,327
|
)
|
|
|
(71,841
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
915,636
|
|
|
$
|
3,519,361
|
|
|
$
|
554,351
|
|
|
$
|
192,287
|
|
|
$
|
5,181,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
641,234
|
|
|
$
|
2,385,038
|
|
|
$
|
138,386
|
|
|
$
|
54,665
|
|
|
$
|
3,219,323
|
|
|
Amortization expense
|
|
|
60,235
|
|
|
|
260,597
|
|
|
|
9,938
|
|
|
|
13,098
|
|
|
|
343,868
|
|
|
Disposals
|
|
|
–
|
|
|
|
(28,772
|
)
|
|
|
(30
|
)
|
|
|
–
|
|
|
|
(28,802
|
)
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
483
|
|
|
|
23
|
|
|
|
506
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(51,812
|
)
|
|
|
(5,956
|
)
|
|
|
(161
|
)
|
|
|
(57,929
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
701,469
|
|
|
$
|
2,565,051
|
|
|
$
|
142,821
|
|
|
$
|
67,625
|
|
|
$
|
3,476,966
|
|
|
|
|
Customer relationships
|
|
Computer software
|
|
Patents and acquired specific technology
|
|
Others
|
|
Total
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
29,282
|
|
|
$
|
106,759
|
|
|
$
|
4,927
|
|
|
$
|
6,183
|
|
|
$
|
147,151
|
|
|
Additions (Note 33)
|
|
|
–
|
|
|
|
9,042
|
|
|
|
12,905
|
|
|
|
40
|
|
|
|
21,987
|
|
|
Disposals
|
|
|
–
|
|
|
|
(1,169
|
)
|
|
|
(1
|
)
|
|
|
–
|
|
|
|
(1,170
|
)
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
34
|
|
|
|
1
|
|
|
|
35
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(2,085
|
)
|
|
|
(137
|
)
|
|
|
(74
|
)
|
|
|
(2,296
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
29,282
|
|
|
$
|
112,547
|
|
|
$
|
17,728
|
|
|
$
|
6,150
|
|
|
$
|
165,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
|
|
|
Customer relationships
|
|
Computer software
|
|
Patents and acquired specific technology
|
|
Others
|
|
Total
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2016
|
|
$
|
20,507
|
|
|
$
|
76,272
|
|
|
$
|
4,426
|
|
|
$
|
1,748
|
|
|
$
|
102,953
|
|
|
Amortization expense
|
|
|
1,926
|
|
|
|
8,334
|
|
|
|
318
|
|
|
|
419
|
|
|
|
10,997
|
|
|
Disposals
|
|
|
–
|
|
|
|
(920
|
)
|
|
|
(1
|
)
|
|
|
–
|
|
|
|
(921
|
)
|
|
Acquisitions through business combinations
|
|
|
–
|
|
|
|
–
|
|
|
|
15
|
|
|
|
1
|
|
|
|
16
|
|
|
Effect of foreign currency exchange differences
|
|
|
–
|
|
|
|
(1,657
|
)
|
|
|
(191
|
)
|
|
|
(5
|
)
|
|
|
(1,853
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
$
|
22,433
|
|
|
$
|
82,029
|
|
|
$
|
4,567
|
|
|
$
|
2,163
|
|
|
$
|
111,192
|
|
(Concluded)
Each
class of other intangible assets, except a portion of customer relationships amortized based on the pattern in which the economic
benefits are consumed, were amortized on the straight-line basis over the following useful lives:
|
Customer relationships
|
|
11 years
|
|
Computer software
|
|
2-5 years
|
|
Patents and acquired specific technology
|
|
5-15 years
|
|
Others
|
|
5-32 years
|
|
|
17.
|
LONG-TERM PREPAYMENTS FOR LEASE
|
Long-term
prepayments for lease mainly represent land use right located in China with periods for use from 50 to 70 years.
Short-term
borrowings mainly represented unsecured revolving bank loans with annual interest rates at 0.57%-5.78% and 0.21%-7.98% as of December
31, 2015 and September 30, 2016, respectively.
|
|
b.
|
Short-term
bills payable
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Commercial papers
|
|
$
|
4,350,000
|
|
|
$
|
2,000,000
|
|
|
$
|
63,959
|
|
|
Less: unamortized discounts
|
|
|
1,946
|
|
|
|
658
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,348,054
|
|
|
$
|
1,999,342
|
|
|
$
|
63,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual interest rate
|
|
|
0.78
|
%
|
|
|
0.67
|
%
|
|
|
|
|
As
of December 31, 2015 and September 30, 2016, the long-term bank loans with fixed interest rates were both NT$1,500,000 thousand
(US$47,970 thousand) with annual interest rates at 1.17%. The long-term bank loans with fixed interest rate will be repayable
through December 2018. The others with floating interest rates consisted of the followings:
|
|
|
December
31,
2015
|
|
September
30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Working capital bank loans
|
|
|
|
|
|
|
|
Syndicated bank loans - repayable through January 2017
to July 2018, annual interest rates were 1.56%-1.92% and 1.94% as of December 31, 2015 and September 30, 2016, respectively
|
|
$
|
12,159,037
|
|
|
$
|
8,968,960
|
|
|
$
|
286,823
|
|
|
Others - repayable through October 2016 to August 2019, annual
interest rates were 0.90%-3.98% and 0.74%-4.33% as of December 31, 2015 and September 30, 2016, respectively
|
|
|
25,660,638
|
|
|
|
33,147,893
|
|
|
|
1,060,054
|
|
|
Mortgage loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayable through December 2016 to June 2023,
annual interest rates were both 4.95%-5.39% as of December 31, 2015 and September 30, 2016.
|
|
|
3,251,139
|
|
|
|
4,607,809
|
|
|
|
147,356
|
|
|
|
|
|
41,070,814
|
|
|
|
46,724,662
|
|
|
|
1,494,233
|
|
|
Less: unamortized arrangement fee
|
|
|
18,670
|
|
|
|
9,596
|
|
|
|
307
|
|
|
|
|
|
41,052,144
|
|
|
|
46,715,066
|
|
|
|
1,493,926
|
|
|
Less: current portion
|
|
|
2,057,465
|
|
|
|
6,272,817
|
|
|
|
200,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings
|
|
$
|
38,994,679
|
|
|
$
|
40,442,249
|
|
|
$
|
1,293,324
|
|
Pursuant
to the above syndicated bank loans agreements, the Company and some of its subsidiaries should maintain certain financial covenants
including current ratio, leverage ratio, tangible net assets and interest coverage ratio. Such financial ratios are calculated
based on the Group’s annual audited consolidated financial statements or semi-annual reviewed consolidated financial statements
or subsidiaries’ annual audited financial statements. The Group was in compliance with all of the loan covenants as of December
31, 2015 and June 30, 2016. The Company’s subsidiaries were in compliance with all of the loan covenants as of December
31, 2015.
The
Group had sufficient long term credit facility obtained before December 31, 2015 to refinance a portion of loans on a long-term
basis. Therefore, NT$2,105,883 thousand were not classified as current portion of long-term borrowings as of December 31, 2015.
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Unsecured commercial paper
|
|
$
|
2,000,000
|
|
|
$
|
2,000,000
|
|
|
$
|
63,959
|
|
|
Less: unamortized arrangement fee
|
|
|
1,011
|
|
|
|
1,062
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings
|
|
$
|
1,998,989
|
|
|
$
|
1,998,938
|
|
|
$
|
63,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual interest rates
|
|
|
1.03
|
%
|
|
|
0.97
|
%
|
|
|
|
|
The
commercial paper contract was entered into with Ta Ching Bills Finance Corporation in December 2015 and the duration is three
years.
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Unsecured domestic bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayable at maturity in January 2021 and interest due annually with annual interest rate at 1.30%
|
|
$
|
–
|
|
|
$
|
7,000,000
|
|
|
$
|
223,857
|
|
|
Repayable at maturity in January 2023 and interest due annually with annual interest rate at 1.50%
|
|
|
–
|
|
|
|
2,000,000
|
|
|
|
63,959
|
|
|
Unsecured convertible overseas bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$400,000 thousand
|
|
|
13,130,000
|
|
|
|
12,544,000
|
|
|
|
401,151
|
|
|
US$200,000 thousand (linked to New Taiwan dollar)
|
|
|
6,185,600
|
|
|
|
6,185,600
|
|
|
|
197,813
|
|
|
Secured overseas bonds - secured by the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$300,000 thousand, repayable at maturity in July 2017; interest due semi-annually with annual interest rate 2.125%
|
|
|
9,847,500
|
|
|
|
9,408,000
|
|
|
|
300,864
|
|
|
CNY500,000 thousand, with annual interest rate at 4.25% and repaid in September 2016
|
|
|
2,527,489
|
|
|
|
–
|
|
|
|
–
|
|
|
Secured domestic bonds - secured by banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With annual interest rate at 1.45% and repaid in August 2016
|
|
|
8,000,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
39,690,589
|
|
|
|
37,137,600
|
|
|
|
1,187,644
|
|
|
Less: discounts on bonds payable
|
|
|
1,264,339
|
|
|
|
881,000
|
|
|
|
28,174
|
|
|
|
|
|
38,426,250
|
|
|
|
36,256,600
|
|
|
|
1,159,470
|
|
|
Less: current portion
|
|
|
14,685,866
|
|
|
|
9,384,865
|
|
|
|
300,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23,740,384
|
|
|
$
|
26,871,735
|
|
|
$
|
859,346
|
|
The
Group had sufficient long term credit facility obtained before December 31, 2015 to refinance a portion of the bonds payable on
a long-term basis. Therefore, NT$8,000,000 thousand was not classified as current portion of bonds payable as of December 31,
2015.
|
|
a.
|
In
September 2013, the Company offered the third unsecured convertible overseas bonds (the
“Bonds”) in US$400,000 thousand. The Bonds is zero coupon bonds with the
maturity of 5 years, in denominations of US$200 thousand or in any integral multiples
thereof. Each holder of the Bonds has the right at any time on or after October 16, 2013
and up to (and including) August 26, 2018, except during legal lock-up period, to convert
the Bonds into newly issued listed common shares at the conversion price NT$33.085, determined
on the basis of a fixed exchange rate of US$1 to NT$29.956. The conversion price will
be adjusted in accordance with the conversion provisions due to anti-dilution clause.
As of December 31, 2015 and September 30, 2016, the conversion price were NT$30.28 and
NT$28.99 (US$0.93), respectively.
|
The
Bonds may be redeemed at the option of the Company, in whole or in part, at any time on or after the third anniversary of the
offering date provided that (1) the closing price, translated into U.S. dollars, of the common shares for a period of 20 consecutive
trading days is at least 130% of the conversion price, (2) at least 90% in aggregate principal amount of the Bonds originally
outstanding has been redeemed, repurchased and canceled or converted, or (3) the Company is required to pay additional taxes on
the Bonds as a result of certain changes in tax laws in the ROC.
Each
holder shall have the right to request the Company repurchase all or any portion of the principal amount thereof of a holder’s
Bonds (1) on the third anniversary of the offering date, (2) in the event of a change of control, or (3) in the event of delisting.
The
Bonds contained a debt host contract, recognized as bonds payable, and the conversion option, redemption option and put option
(collectively the “Bonds Options”) aggregately recognized as financial liabilities at FVTPL. The effective interest
rate of the debt host contract was 3.16% and the aggregate fair value of the Bonds Options was NT$1,667,950 thousand on initial
recognition.
|
|
b.
|
In
July 2015, the Company offered the forth unsecured convertible overseas bonds (the “Currency
Linked Bonds”) in US$200,000 thousand. The Currency Linked Bonds is zero coupon
bonds with the maturity of 2.75 years, in denominations of US$200 thousand or in any
integral multiples thereof. Repayment, redemption and put amount denominated in U.S.
dollar will be converted into New Taiwan dollar amount using a fixed exchange rate of
US$1 to NT$30.928 (the “Fixed Exchange Rate”) and then converted back to
U.S. dollar amount using the applicable prevailing rate at the time of repayment, redemption
or put. Each holder of the Currency Linked Bonds has the right at any time on or after
August 11, 2015 and up to (and including) March 17, 2018, except during legal lock-up
period, to convert the Currency Linked Bonds into common shares at the conversion price
NT$54.55, determined on the basis of the Fixed Exchange Rate. The Company’s treasury
shares will be available for delivery upon conversion of the Currency Linked Bonds. The
conversion price will be adjusted in accordance with the conversion provisions due to
anti-dilution clause. As of December 31, 2015 and September 30, 2016, the conversion
price was NT$51.73 and NT$49.52 (US$1.58), respectively.
|
The
Currency Linked Bonds may be redeemed at the option of the Company, in whole or in part, at any time on or after March 19, 2018
provided that (1) the closing price, translated into U.S. dollars, of the common shares for a period of 20 out of 30 consecutive
trading days is at least 130% of the conversion price, (2) at least 90% in aggregate principal amount of the Currency Linked Bonds
originally outstanding has been redeemed, repurchased and canceled or converted, or (3) the Company is required to pay additional
taxes on the Currency Linked Bonds as a result of certain changes in tax laws in the ROC.
Each
holder shall have the right to request the Company repurchase all or any portion of the principal amount thereof of a holder’s
Currency Linked Bonds (1) in the event of a change of control, or (2) in the event of delisting.
The
Currency Linked Bonds contained a debt host contract, recognized as bonds payable, and the conversion option, recognized as capital
surplus. The effective interest rate of the debt host contract was 1.58% and the fair value of the conversion option was NT$214,022
thousand on initial recognition.
|
|
c.
|
To
focus on corporate sustainability and to carry out the commitment to environmental protection
and energy conservation, Anstock II Limited, a subsidiary the Company 100% owned, offered
overseas bonds in US$300,000 thousand with the maturity of 3 years and annual interest
rate of 2.125% (the “Green Bonds”) in July 2014. The Green Bonds were unconditionally
and irrevocably guaranteed by the Company and the proceeds were used to fund certain
eligible projects to promote the Group’s transition to low-carbon and climate resilient
growth.
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Accrued salary and bonus
|
|
$
|
5,826,982
|
|
|
$
|
5,900,872
|
|
|
|
188,707
|
|
|
Payables for property, plant and equipment
|
|
|
4,782,357
|
|
|
|
5,607,586
|
|
|
|
179,328
|
|
|
Accrued employees’ compensation and remuneration to directors and supervisors
|
|
|
2,270,608
|
|
|
|
1,577,483
|
|
|
|
50,447
|
|
|
Accrued employee insurance
|
|
|
599,218
|
|
|
|
623,069
|
|
|
|
19,925
|
|
|
Accrued utilities
|
|
|
466,956
|
|
|
|
446,717
|
|
|
|
14,286
|
|
|
Accrued patents and acquired specific technology
|
|
|
–
|
|
|
|
117,600
|
|
|
|
3,761
|
|
|
Others
|
|
|
5,248,697
|
|
|
|
5,601,862
|
|
|
|
179,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
19,194,818
|
|
|
$
|
19,875,189
|
|
|
$
|
635,599
|
|
|
|
21.
|
RETIREMENT
BENEFIT PLANS
|
The
Group’s retirement benefit plans consisted of defined contribution retirement plan and defined benefit retirement plan.
Employee benefit expenses in respect of the Group’s defined benefit retirement plans were calculated using the projected
pension cost stated in 2014 and 2015 actuarial reports and recognized in the following line items in respective periods:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Operating costs
|
|
$
|
238,824
|
|
|
$
|
229,241
|
|
|
$
|
7,331
|
|
|
Selling and marketing expenses
|
|
|
7,598
|
|
|
|
7,469
|
|
|
|
239
|
|
|
General and administrative expenses
|
|
|
34,505
|
|
|
|
34,842
|
|
|
|
1,114
|
|
|
Research and development expenses
|
|
|
28,663
|
|
|
|
25,873
|
|
|
|
827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
309,590
|
|
|
$
|
297,425
|
|
|
$
|
9,511
|
|
Ordinary
shares
|
|
|
December 31,
2015
|
|
September 30,
2016
|
|
|
|
|
|
|
|
Numbers of shares authorized (in thousands)
|
|
|
10,000,000
|
|
|
|
10,000,000
|
|
|
Numbers of shares reserved (in thousands)
|
|
|
|
|
|
|
|
|
|
Employee share options
|
|
|
800,000
|
|
|
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers of shares registered (in thousands)
|
|
|
7,902,929
|
|
|
|
7,923,623
|
|
|
Numbers of shares subscribed in advance (in thousands)
|
|
|
7,499
|
|
|
|
13,067
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares issued and fully paid (in thousands)
|
|
|
7,910,428
|
|
|
|
7,936,690
|
|
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Shares capital authorized
|
|
$
|
100,000,000
|
|
|
$
|
100,000,000
|
|
|
$
|
3,197,953
|
|
|
Shares capital reserved
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share options
|
|
$
|
8,000,000
|
|
|
$
|
8,000,000
|
|
|
$
|
255,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares capital registered
|
|
$
|
79,029,290
|
|
|
$
|
79,236,226
|
|
|
$
|
2,533,937
|
|
|
Shares capital subscribed in advance
|
|
|
156,370
|
|
|
|
272,824
|
|
|
|
8,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares capital issued
|
|
$
|
79,185,660
|
|
|
$
|
79,509,050
|
|
|
$
|
2,542,662
|
|
The
holders of issued ordinary shares with a par value at $10 per share are entitled the right to vote and receive dividends, except
the shares held by the Group’s subsidiaries which are not entitled the right to vote. As of December 31, 2015 and September
30, 2016, there were both 500,000 thousand ordinary shares included in the authorized shares that were not yet required to complete
the share registration process.
American
Depositary Receipts
The
Company issued ADSs and each ADS represents five ordinary shares. As of December 31, 2015 and September 30, 2016, 115,240 thousand
and 125,518 thousand ADSs were outstanding and represented approximately 576,198 thousand and 627,590 thousand ordinary shares
of the Company, respectively.
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
May be used to offset a deficit,
distributed as cash dividends,
or transferred to share capital (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arising from issuance of ordinary shares
|
|
$
|
5,479,616
|
|
|
$
|
5,704,731
|
|
|
$
|
182,435
|
|
(Continued)
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Arising from the difference between consideration received and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition
|
|
$
|
7,197,510
|
|
|
$
|
7,176,958
|
|
|
$
|
229,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May be used to offset a deficit only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arising from changes in percentage of ownership interest in subsidiaries (2)
|
|
|
8,491,435
|
|
|
|
6,578,548
|
|
|
|
210,379
|
|
|
Arising from treasury share transactions
|
|
|
717,355
|
|
|
|
950,368
|
|
|
|
30,392
|
|
|
Arising from exercised employee share options
|
|
|
544,112
|
|
|
|
597,869
|
|
|
|
19,120
|
|
|
Arising from expired employee share options
|
|
|
3,626
|
|
|
|
3,626
|
|
|
|
116
|
|
|
Arising from share of changes in capital surplus of associates
|
|
|
30,284
|
|
|
|
38,567
|
|
|
|
1,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May not be used for any purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arising from employee share options
|
|
|
1,080,590
|
|
|
|
1,198,714
|
|
|
|
38,334
|
|
|
Arising from equity component of convertible bonds
|
|
|
214,022
|
|
|
|
214,022
|
|
|
|
6,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23,758,550
|
|
|
$
|
22,463,403
|
|
|
$
|
718,369
|
|
(Concluded)
|
|
1)
|
Such
capital surplus may be used to offset a deficit; in addition, when the Company has no
deficit, such capital surplus may be distributed as cash dividends or transferred to
share capital (limited to a certain percentage of the Company’s capital surplus
and once a year).
|
|
|
2)
|
Such
capital surplus arises from the effect of changes in ownership interest in a subsidiary
resulted from equity transactions other than actual disposal or acquisition, or from
changes in capital surplus of subsidiaries accounted for by using equity method.
|
|
|
c.
|
Retained
earnings and dividend policy
|
In
accordance with the amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders
and do not include employees. The consequential amendments to the Company’s Articles of Incorporation proposed for 2015
was resolved at the Company’s annual shareholders’ meetings. For information about the accrual basis of the employees’
compensation and remuneration to directors and the actual appropriations, please refer to employee benefits expense under profit
before income tax in Note 23(e).
The
amended Articles of Incorporation of ASE Inc. (the “Articles”) in June 2016 provides that annual net income shall
be distributed in the following order:
|
|
1)
|
Replenishment
of deficits;
|
|
|
2)
|
10.0%
as legal reserve;
|
|
|
3)
|
Special
reserve appropriated or reversed in accordance with laws or regulations set forth by
the authorities concerned;
|
|
|
4)
|
Addition
or deduction of realized gains or losses on equity instruments at fair value through
other comprehensive income.
|
The
Company is currently in the mature growth stage. To meet the capital needs for business development now and in the future and
satisfy the shareholders’ demand for cash inflows, the Company shall use residual dividend policy to distribute dividends,
of which the cash dividend is not lower than 30% of the total dividend distribution, with the remainder to be distributed in stock.
A distribution plan is also to be made by the board of directors and passed for resolution in the shareholders’ meeting.
Appropriation
of earnings to legal reserve shall be made until the legal reserve equals the Company’s capital surplus. Legal reserve may
be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s capital
surplus, the excess may be transferred to capital or distributed in cash.
Under
Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive titled “Questions and Answers for Special
Reserves Appropriated Following Adoption of IFRSs”, the Company should appropriate or reverse to a special reserve.
Expect
for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit equal to their proportionate
share of the income tax paid by the Company.
The
appropriations of earnings for 2014 and 2015 resolved at the Company’s annual shareholders’ meetings in June 2015
and June 2016, respectively, were as follows:
|
|
|
Appropriation of Earnings
|
|
Dividends Per Share
|
|
|
|
For Year 2014
|
|
For Year 2015
|
|
For Year 2014
|
|
For Year 2015
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
(in dollars)
|
|
(in dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Legal reserve
|
|
$
|
2,359,267
|
|
|
$
|
1,947,887
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
|
|
|
15,589,825
|
|
|
|
12,476,779
|
|
|
$
|
2.00
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17,949,092
|
|
|
$
|
14,424,666
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Exchange
differences on translating foreign operations
|
|
|
|
For the nine months ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
$
|
4,540,862
|
|
|
$
|
4,492,671
|
|
|
$
|
143,674
|
|
|
Exchange differences arising on translating foreign operations
|
|
|
1,262,013
|
|
|
|
(6,147,519
|
)
|
|
|
(196,595
|
)
|
|
Share of exchange difference of associates accounted for using the equity method
|
|
|
12
|
|
|
|
(301,327
|
)
|
|
|
(9,636
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
$
|
5,802,887
|
|
|
$
|
(1,956,175
|
)
|
|
$
|
(62,557
|
)
|
|
|
2)
|
Unrealized
gain on available-for-sale financial assets
|
|
|
|
For the nine months ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
$
|
526,778
|
|
|
$
|
588,119
|
|
|
$
|
18,808
|
|
|
Unrealized loss arising on revaluation of available-for-sale financial assets
|
|
|
(37,190
|
)
|
|
|
(62,028
|
)
|
|
|
(1,984
|
)
|
|
Cumulative loss reclassified to profit or loss on disposal of available-for-sale financial assets
|
|
|
11,495
|
|
|
|
7,512
|
|
|
|
240
|
|
|
Unrealized loss on available-for-sale financial assets of associates accounted for using the equity method
|
|
|
(62,835
|
)
|
|
|
(233,717
|
)
|
|
|
(7,474
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
$
|
438,248
|
|
|
$
|
299,886
|
|
|
$
|
9,590
|
|
|
|
e.
|
Treasury
shares (in thousand shares)
|
|
|
|
Beginning
|
|
|
|
|
|
Ending
|
|
|
|
Balance
|
|
Addition
|
|
Decrease
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares held by subsidiaries
|
|
|
145,883
|
|
|
|
–
|
|
|
|
–
|
|
|
|
145,883
|
|
|
Shares reserved for bonds conversion
|
|
|
–
|
|
|
|
120,000
|
|
|
|
–
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,883
|
|
|
|
120,000
|
|
|
|
–
|
|
|
|
265,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the nine months
ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares held by subsidiaries
|
|
|
145,883
|
|
|
|
–
|
|
|
|
–
|
|
|
|
145,883
|
|
|
Shares reserved for bonds conversion
|
|
|
120,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265,883
|
|
|
|
–
|
|
|
|
–
|
|
|
|
265,883
|
|
In
February 2015, the board of directors approved to repurchase up to 120,000 thousand of the Company’s ordinary shares which
will be used for equity conversion of convertible overseas bonds in the future. The Company has completed the repurchase during
March 2015 and the shares repurchased accounted for 1.53% of the Company’s total issued shares. The average repurchase price
was NT$44.45 per share.
The
Company’s shares held by its subsidiaries at each balance sheet date were as follows:
|
|
|
Shares
Held by Subsidiaries
|
|
Carrying amount
|
|
Carrying amount
|
|
Fair Value
|
|
Fair Value
|
|
|
|
(in thousand
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
|
|
shares)
|
|
|
|
(Note 4)
|
|
|
|
(Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASE Test
|
|
|
88,200
|
|
|
$
|
1,380,721
|
|
|
|
|
|
|
$
|
3,351,618
|
|
|
|
|
|
|
J&R Holding
|
|
|
46,704
|
|
|
|
381,709
|
|
|
|
|
|
|
|
1,774,743
|
|
|
|
|
|
|
ASE Test, Inc.
|
|
|
10,979
|
|
|
|
196,677
|
|
|
|
|
|
|
|
417,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,883
|
|
|
$
|
1,959,107
|
|
|
|
|
|
|
$
|
5,543,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASE Test
|
|
|
88,200
|
|
|
$
|
1,380,721
|
|
|
$
|
44,155
|
|
|
$
|
3,316,338
|
|
|
$
|
106,055
|
|
|
J&R Holding
|
|
|
46,704
|
|
|
|
381,709
|
|
|
|
12,207
|
|
|
|
1,756,061
|
|
|
|
56,158
|
|
|
ASE Test, Inc.
|
|
|
10,979
|
|
|
|
196,677
|
|
|
|
6,290
|
|
|
|
412,802
|
|
|
|
13,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,883
|
|
|
$
|
1,959,107
|
|
|
$
|
62,652
|
|
|
$
|
5,485,201
|
|
|
$
|
175,414
|
|
Fair
values of the Company’s shares held by subsidiaries are based on the closing price from an available published price quotation,
which is a Level 1 input in terms of IFRS 13, at the balance sheet dates.
The
Company issued ordinary shares in connection with its merger with its subsidiaries. The shares held by its subsidiaries were reclassified
from investments accounted for using the equity method to treasury shares on the proportion owned by the Company.
Under
the Securities and Exchange Act in the ROC, the Company shall neither pledge treasury shares nor exercise shareholders’
rights on these shares, such as rights to dividends and voting. The subsidiaries holding treasury shares, however, retain shareholders’
rights except the rights to participate in any share issuance for cash and voting.
|
|
f.
|
Non-controlling
interests
|
|
|
|
For the nine months ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
$
|
8,209,860
|
|
|
$
|
11,492,545
|
|
|
$
|
367,526
|
|
|
Attributable to non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit for the period
|
|
|
643,071
|
|
|
|
849,819
|
|
|
|
27,177
|
|
|
Exchange difference on translating foreign operations
|
|
|
107,617
|
|
|
|
(596,012
|
)
|
|
|
(19,060
|
)
|
|
Unrealized gain on available-for-sale financial assets
|
|
|
3,282
|
|
|
|
1,547
|
|
|
|
50
|
|
|
Non-controlling interest arising from acquisition of subsidiaries (Note 27)
|
|
|
–
|
|
|
|
7,021
|
|
|
|
225
|
|
|
Partial disposal of interests in subsidiaries (Notes 28)
|
|
|
1,711,579
|
|
|
|
26,436
|
|
|
|
845
|
|
|
Repurchase of outstanding ordinary shares of subsidiaries (Note 28)
|
|
|
–
|
|
|
|
(912,886
|
)
|
|
|
(29,194
|
)
|
(Continued)
|
|
|
For the nine months ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Spin-off of subsidiaries
|
|
$
|
3,500
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Non-controlling interest relating to issue of ordinary shares under employee share options
|
|
|
292,233
|
|
|
|
425,523
|
|
|
|
13,608
|
|
|
Cash dividends to non-controlling interests
|
|
|
(232,148
|
)
|
|
|
(236,426
|
)
|
|
|
(7,561
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
$
|
10,738,994
|
|
|
$
|
11,057,567
|
|
|
$
|
353,616
|
|
(Concluded)
|
|
23.
|
PROFIT
BEFORE INCOME TAX
|
|
|
a.
|
Other
operating income and expenses
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
$
|
44,779
|
|
|
$
|
38,096
|
|
|
$
|
1,218
|
|
|
Impairment loss on property, plant and equipment
|
|
|
(151,091
|
)
|
|
|
(886,846
|
)
|
|
|
(28,361
|
)
|
|
Others
|
|
|
34,745
|
|
|
$
|
144,499
|
|
|
$
|
4,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(71,567
|
)
|
|
$
|
(704,251
|
)
|
|
$
|
(22,522
|
)
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
|
Government subsidy
|
|
$
|
114,333
|
|
|
$
|
219,725
|
|
|
$
|
7,027
|
|
|
Interest income
|
|
|
192,162
|
|
|
|
171,615
|
|
|
|
5,488
|
|
|
Dividends income
|
|
|
74,374
|
|
|
$
|
20,625
|
|
|
$
|
660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
380,869
|
|
|
$
|
411,965
|
|
|
$
|
13,175
|
|
|
|
c.
|
Other
gains and losses
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on financial assets designated as at FVTPL
|
|
$
|
743,746
|
|
|
$
|
165,319
|
|
|
$
|
5,287
|
|
|
Net gains (losses) arising on financial instruments held for trading
|
|
|
2,452,527
|
|
|
|
(1,657,476
|
)
|
|
|
(53,006
|
)
|
|
Foreign exchange gains (losses), net
|
|
|
(1,141,608
|
)
|
|
|
2,235,621
|
|
|
|
71,494
|
|
|
Others
|
|
|
(11,494
|
)
|
|
|
(9,398
|
)
|
|
|
(300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,043,171
|
|
|
$
|
734,066
|
|
|
$
|
23,475
|
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Total interest expense for financial liabilities measured at amortized cost
|
|
$
|
1,865,132
|
|
|
$
|
1,923,733
|
|
|
$
|
61,520
|
|
|
Less: Amounts included in the cost of qualifying assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories related to real estate business
|
|
|
(146,084
|
)
|
|
|
(176,710
|
)
|
|
|
(5,651
|
)
|
|
Property, plant and equipment
|
|
|
(37,811
|
)
|
|
|
(38,828
|
)
|
|
|
(1,242
|
)
|
|
|
|
|
1,681,237
|
|
|
|
1,708,195
|
|
|
|
54,627
|
|
|
Other finance costs
|
|
|
16,960
|
|
|
|
38,390
|
|
|
|
1,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,698,197
|
|
|
$
|
1,746,585
|
|
|
$
|
55,855
|
|
Information
relating to the annual interest capitalization rates was as follows:
|
|
|
For
the Nine Months
Ended
September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
Inventories related to real estate business
(%)
|
|
4.85-6.77
|
|
4.35-6.00
|
|
Property, plant and equipment (%)
|
|
0.76-6.15
|
|
1.15-4.05
|
|
|
e.
|
Depreciation
and amortization
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
$
|
21,750,748
|
|
|
$
|
21,694,771
|
|
|
$
|
693,789
|
|
|
Intangible assets
|
|
|
421,472
|
|
|
|
343,868
|
|
|
|
10,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
22,172,220
|
|
|
$
|
22,038,639
|
|
|
$
|
704,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of depreciation by function
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
|
|
$
|
20,334,199
|
|
|
$
|
20,206,684
|
|
|
$
|
646,201
|
|
|
Operating expenses
|
|
|
1,416,549
|
|
|
|
1,488,087
|
|
|
|
47,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21,750,748
|
|
|
$
|
21,694,771
|
|
|
$
|
693,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of amortization by function
|
|
$
|
90,135
|
|
|
$
|
110,427
|
|
|
$
|
3,532
|
|
|
Operating costs
|
|
|
331,337
|
|
|
|
233,441
|
|
|
|
7,465
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
421,472
|
|
|
$
|
343,868
|
|
|
$
|
10,997
|
|
|
|
f.
|
Employee
benefits expense
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Post-employment benefits
|
|
|
|
|
|
|
|
Defined contribution plans
|
|
$
|
1,258,304
|
|
|
$
|
1,298,851
|
|
|
$
|
41,537
|
|
|
Defined benefit plans
|
|
|
309,590
|
|
|
|
297,425
|
|
|
|
9,511
|
|
|
|
|
|
1,567,894
|
|
|
|
1,596,276
|
|
|
|
51,048
|
|
|
Equity-settled share-based payments
|
|
|
35,919
|
|
|
|
353,676
|
|
|
|
11,310
|
|
|
Salary, incentives and bonus
|
|
|
31,491,527
|
|
|
|
31,845,563
|
|
|
|
1,018,406
|
|
|
Other employee benefits
|
|
|
4,928,015
|
|
|
|
4,915,816
|
|
|
|
157,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
38,023,355
|
|
|
$
|
38,711,331
|
|
|
$
|
1,237,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of employee benefits expense by function
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
|
|
$
|
26,092,702
|
|
|
$
|
26,264,502
|
|
|
$
|
839,926
|
|
|
Operating expenses
|
|
|
11,930,653
|
|
|
|
12,446,829
|
|
|
|
398,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
38,023,355
|
|
|
$
|
38,711,331
|
|
|
$
|
1,237,970
|
|
To
be in compliance with the Company Act as amended in May 2015, the amended Articles of Incorporation of the Company, has been approved
in the shareholders’ meeting in June 2016, stipulate to distribute employees’ compensation and remuneration to directors
at the rates in 5.25%-8.25% and no higher than 0.75%, respectively, of net profit before income tax, employees’ compensation
and remuneration to directors. For the nine months ended September 30, 2015 and 2016, the employees’ compensation and the
remuneration to directors were accrued based on 8.25% and 0.75% of net profit before income tax, employees’ compensation
and remuneration to directors, respectively.
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$(Note 4)
|
|
|
|
|
|
|
|
|
|
Employees’ compensation
|
|
$
|
1,533,299
|
|
|
$
|
1,409,574
|
|
|
$
|
45,078
|
|
|
Remuneration to directors
|
|
|
129,314
|
|
|
|
128,143
|
|
|
|
4,098
|
|
If
there is a change in the proposed amounts after the consolidated financial statements authorized for issue, the differences are
recorded as a change in accounting estimate.
The
appropriations of employees’ compensation and remuneration to directors for 2015 were resolved by the board of directors
in April 2016, and the appropriations of bonus to employees and remuneration to directors and supervisors for 2014 were approved
in the shareholders’ meeting in June 2015. The amounts of the employees’ compensation/bonus and remuneration to directors
and supervisors are disclosed in the table below. After the amendments to the Articles had been resolved in the shareholders’
meeting held in June 2016, the appropriations of the employees’ compensation and remuneration to directors for 2015 were
reported in the shareholders’ meeting.
|
|
|
For Year 2014
|
|
For Year 2015
|
|
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
Bonus to employees / employees’ compensation
|
|
$
|
2,335,600
|
|
|
$
|
2,033,800
|
|
|
Remuneration to directors and supervisors / directors
|
|
|
211,200
|
|
|
|
140,000
|
|
The
differences between the resolved amounts of the bonus to employees and remuneration to directors and supervisors and the accrued
amounts reflected in the consolidated financial statements for the years ended December 31, 2014 and the employees’ compensation
and the remuneration to directors and the accrued amounts reflected in the consolidated financial statements for the years ended
December 31, 2015 were deemed changes in estimates. The difference was NT$1,330 thousand and NT$44,200 thousand (US$1,413 thousand)
and had been adjusted in earnings for the years ended December 31, 2015 and 2016, respectively.
|
|
a.
|
Income
tax expense recognized in profit or loss
|
The
major components of income tax expense were as follows:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Current income tax
|
|
|
|
|
|
|
|
In respect of the current period
|
|
$
|
2,740,629
|
|
|
$
|
3,609,224
|
|
|
$
|
115,421
|
|
|
Income tax on unappropriated earnings
|
|
|
(151,463
|
)
|
|
|
(27,213
|
)
|
|
|
(870
|
)
|
|
Changes in estimate for prior periods
|
|
|
(38,109
|
)
|
|
|
26,514
|
|
|
|
848
|
|
|
|
|
|
2,551,057
|
|
|
|
3,608,525
|
|
|
|
115,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In respect of the current period
|
|
|
31,879
|
|
|
|
(238,983
|
)
|
|
|
(7,643
|
)
|
|
Adjustments to attributable to changes in tax rates
|
|
|
25,937
|
|
|
|
14,184
|
|
|
|
454
|
|
|
Changes in estimate for prior periods
|
|
|
(20,989
|
)
|
|
|
(26,840
|
)
|
|
|
(858
|
)
|
|
Effect of foreign currency exchange differences
|
|
|
(11,990
|
)
|
|
|
(126,918
|
)
|
|
|
(4,059
|
)
|
|
|
|
|
24,837
|
|
|
|
(378,557
|
)
|
|
|
(12,106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense recognized in profit or loss
|
|
$
|
2,575,894
|
|
|
$
|
3,229,968
|
|
|
$
|
103,293
|
|
As
of December 31, 2015 and September 30, 2016, unappropriated earnings were all generated on and after January 1, 1998. As of December
31, 2015 and September 30, 2016, the balance of the Imputation Credit Account (“ICA”) was NT$1,913,243 thousand and
NT$ 2,484,934 thousand (US$ 79,467 thousand), respectively.
The
creditable ratio for the distribution of earnings of 2014 and 2015 was 6.88% (actual) and 9.65% (estimated), respectively.
|
|
c.
|
Income
tax assessments
|
Income
tax returns of ASE Inc. and its ROC subsidiaries have been examined by authorities through 2012 and through 2013 to 2014, respectively.
ASE Inc. and some of its ROC subsidiaries disagreed with the result of examinations relating to its income tax returns for 2004
through 2008 and 2010 through 2012 and appealed to the tax authorities. A settlement was reached in June 2015. The related income
tax expenses in the years resulting from the examinations have been accrued in respective tax years or in the year of the settlement.
The
earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:
Net
profit for the period
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Net profit for the period attributable to owners of the Company
|
|
$
|
15,505,955
|
|
|
$
|
14,369,687
|
|
|
$
|
459,536
|
|
|
Effect of potentially dilutive ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share options issued by subsidiaries
|
|
|
(154,682
|
)
|
|
|
(291,290
|
)
|
|
|
(9,315
|
)
|
|
Investments in associates
|
|
|
–
|
|
|
|
(455,098
|
)
|
|
|
(14,554
|
)
|
|
Convertible bonds
|
|
|
174,970
|
|
|
|
(551,720
|
)
|
|
|
(17,644
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings used in the computation of diluted earnings per share
|
|
$
|
15,526,243
|
|
|
$
|
13,071,579
|
|
|
$
|
418,023
|
|
Weighted
average number of ordinary shares outstanding
(in thousand shares):
|
|
|
For the Nine Months
Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares in computation of basic earnings per share
|
|
|
7,656,395
|
|
|
|
7,658,467
|
|
|
Effect of potentially dilutive ordinary shares:
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
435,578
|
|
|
|
515,295
|
|
|
Employee share options
|
|
|
90,537
|
|
|
|
61,385
|
|
|
Employees’ compensation
|
|
|
58,454
|
|
|
|
37,793
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares in computation of diluted earnings per share
|
|
|
8,240,964
|
|
|
|
8,272,940
|
|
The
Group is able to settle the employees’ compensation by cash or shares. The Group presumed that the entire amount of the
compensation would be settled in shares and the resulting potential shares were included in the weighted average number of ordinary
shares outstanding used in the computation of diluted earnings per share if the effect is dilutive. Such dilutive effect of the
potential shares was included in the computation of diluted earnings per share until the board of directors approve the number
of shares to be distributed to employees at their meeting in the following year.
|
|
26.
|
SHARE-BASED
PAYMENT ARRANGEMENTS
|
Employee
share option plans of the Company and its subsidiaries
In
order to attract, retain and reward employees, ASE Inc. has five employee share option plans for full-time employees of the Group,
including 100,000 thousand share options approved to be granted in April 2015. There are 5,730 thousand share options of the fifth
employee stock option plan that will no longer be issued due to the expiration of grant period. Each share option represents the
right to purchase one ordinary share of ASE Inc. when exercised. Under the terms of the plans, share options are granted at an
exercise price equal to or not less than the closing price of the ordinary shares listed on the TSE at the
grant date. The option
rights of these plans are valid for 10 years, non-transferable and exercisable at certain percentages subsequent to the second
anniversary of the grant date. For any subsequent changes in the Company’s capital structure, the exercise price is accordingly
adjusted.
Information
about share options was as follows:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
|
|
Weighted
|
|
|
|
Weighted
|
|
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Number of
|
|
Exercise
|
|
Number of
|
|
Exercise
|
|
|
|
Options
|
|
Price
|
|
Options
|
|
Price
|
|
|
|
(In
|
|
Per Share
|
|
(In
|
|
Per Share
|
|
|
|
Thousands)
|
|
(NT$)
|
|
Thousands)
|
|
(NT$)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
|
209,745
|
|
|
$
|
20.7
|
|
|
|
252,607
|
|
|
$
|
26.6
|
|
|
Options granted
|
|
|
94,270
|
|
|
|
36.5
|
|
|
|
–
|
|
|
|
–
|
|
|
Options forfeited
|
|
|
(859
|
)
|
|
|
24.4
|
|
|
|
(4,556
|
)
|
|
|
34.5
|
|
|
Options expired
|
|
|
(730
|
)
|
|
|
11.1
|
|
|
|
–
|
|
|
|
–
|
|
|
Options exercised
|
|
|
(41,518
|
)
|
|
|
20.6
|
|
|
|
(26,262
|
)
|
|
|
20.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
|
260,908
|
|
|
|
26.5
|
|
|
|
221,789
|
|
|
|
27.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of period
|
|
|
164,046
|
|
|
|
20.8
|
|
|
|
132,619
|
|
|
|
20.8
|
|
The
weighted average share prices at the exercise dates of share options for the nine months ended September 30, 2015 and 2016 was
NT$39.6 and NT$36.5(US$1.17), respectively.
Information
about the Company’s outstanding share options at each balance sheet date was as follows:
|
|
|
Range of Exercise Price Per Share (NT$)
|
|
Weighted Average Remaining
Contractual Life (Years)
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
$ 20.4-22.6
|
|
|
|
3.5
|
|
|
|
|
|
36.5
|
|
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
20.4-22.6
|
|
|
|
2.7
|
|
|
|
|
|
36.5
|
|
|
|
8.9
|
|
|
|
b.
|
ASE
Mauritius Inc. Option Plan
|
ASE
Mauritius Inc. has an employee share option plan for full-time employees of the Group which granted 30,000 thousand units in December
2007. Under the terms of the plan, each unit represents the right to purchase one ordinary share of ASE Mauritius Inc. when exercised.
The option rights of the plan are valid for 10 years, non-transferable and exercisable at certain percentages subsequent to the
second anniversary of the grant date.
Information
about share options was as follows:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
Number of
|
|
Exercise
|
|
Number of
|
|
Exercise
|
|
|
|
Options
|
|
Price
|
|
Options
|
|
Price
|
|
|
|
(In
|
|
Per Share
|
|
(In
|
|
Per Share
|
|
|
|
Thousands)
|
|
(US$)
|
|
Thousands)
|
|
(US$)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
|
28,545
|
|
|
$
|
1.7
|
|
|
|
28,470
|
|
|
$
|
1.7
|
|
|
Options forfeited
|
|
|
(75
|
)
|
|
|
1.7
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
|
28,470
|
|
|
|
1.7
|
|
|
|
28,470
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of period
|
|
|
28,470
|
|
|
|
1.7
|
|
|
|
28,470
|
|
|
|
1.7
|
|
As
of December 31, 2015 and September 30, 2016, the remaining contractual life was 2 years and 1.3 years, respectively.
The
terms of the plans issued by USIE were the same with those of the Company’s option plans. USIE modified its option plan
granted in 2007 by extending the contractual life to 13 years. The incremental fair value was all recognized as employee benefits
expense in the years of modifications since the options were all vested.
Information
about share options was as follows:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
|
|
Weighted
|
|
|
|
Weighted
|
|
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Number of
|
|
Exercise
|
|
Number of
|
|
Exercise
|
|
|
|
Options
|
|
Price
|
|
Options
|
|
Price
|
|
|
|
(In
|
|
Per Share
|
|
(In
|
|
Per Share
|
|
|
|
Thousands)
|
|
(US$)
|
|
Thousands)
|
|
(US$)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
|
34,159
|
|
|
$
|
2.1
|
|
|
|
29,695
|
|
|
$
|
2.1
|
|
|
Options forfeited
|
|
|
(84
|
)
|
|
|
2.8
|
|
|
|
–
|
|
|
|
–
|
|
|
Options exercised
|
|
|
(4,380
|
)
|
|
|
1.9
|
|
|
|
(3,762
|
)
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
|
29,695
|
|
|
|
2.1
|
|
|
|
25,933
|
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of period
|
|
|
28,106
|
|
|
|
2.1
|
|
|
|
25,933
|
|
|
|
2.2
|
|
Information
on USIE’s outstanding share options at each balance sheet date was as follows:
|
|
|
Range of Exercise Price Per Share
(US$)
|
|
Weighted Average Remaining
Contractual Life (Years)
|
|
|
|
|
|
|
|
December 31, 2015
|
|
$
|
1.5
|
|
|
|
5.0
|
|
|
|
|
|
2.4-2.9
|
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
1.5
|
|
|
|
4.2
|
|
|
|
|
|
2.4-2.9
|
|
|
|
4.1
|
|
In
November 2015, the shareholders of USISH approved a share option plan for the employees of USISH. Each unit represents the right
to purchase one ordinary share of USISH when exercised. The options are valid for 10 years, non-transferable and exercisable at
certain percentages subsequent to the second anniversary of the grant date incorporated with certain performance conditions. For
any subsequent changes in USISH’s capital structure, the exercise price is accordingly adjusted.
Information
about share options was as follows:
|
|
|
For
the Nine Months Ended
September 30, 2016
|
|
|
|
Number of
|
|
Exercise
|
|
|
|
Options
|
|
Price
|
|
|
|
(In
|
|
Per Share
|
|
|
|
Thousands)
|
|
(CNY)
|
|
|
|
|
|
|
|
Balance at January 1
|
|
|
26,627
|
|
|
$
|
15.5
|
|
|
Options forfeited
|
|
|
(1,211
|
)
|
|
|
15.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
|
25,416
|
|
|
|
15.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of period
|
|
|
–
|
|
|
|
–
|
|
As
of December 31, 2015 and September 30, 2016, the remaining contractual life of the share options was 9.9 years and 9.2 years,
respectively.
Fair
value of share options
Share
options granted by the Company and USISH in 2015 were measured using the Hull & White Model (2004) incorporated with Ritchken’s
Trinomial Tree Model (1995) and the Black-Scholes Option Pricing Model, respectively, and the inputs to the models were as follows:
|
|
|
ASE Inc.
|
|
USISH
|
|
|
|
|
|
|
|
Share price at the grant date
|
|
NT$36.5
|
|
CNY15.2
|
|
Exercise prices
|
|
NT$36.5
|
|
CNY15.5
|
|
Expected volatility
|
|
27.02%
|
|
40.33%-45.00%
|
|
Expected lives
|
|
10 years
|
|
10 years
|
|
Expected dividend yield
|
|
4.00%
|
|
0.87%
|
|
Risk free interest rates
|
|
1.34%
|
|
3.06%-3.13%
|
Expected
volatility was based on the historical share price volatility over the past 10 years of ASE Inc. and the comparable companies
of USISH, respectively. Under the Hull & White Model (2004) incorporated with Ritchken’s Trinomial Tree Model (1995),
the Company assumed that employees would exercise the options after vesting date when the share price was 1.88 times the exercise
price to allow for the effects of early exercise.
|
|
27.
|
BUSINESS
COMBINATIONS
|
|
|
|
Principal Activity
|
|
Date of Acquisition
|
|
Proportion of Voting Equity Interests Acquired
|
|
Cash Consideration
|
|
|
|
|
|
|
|
|
|
NT$
|
|
US$
(Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TLJ
|
|
Engaged in information software services
|
|
May 3, 2016
|
|
60%
|
|
$
|
89,998
|
|
|
$
|
2,878
|
|
|
|
b.
|
Consideration
transferred, preliminary fair value of assets acquired and liabilities assumed as well
as net cash outflow on acquisition of subsidiaries at the acquisition dates were as follows:
|
|
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
16,645
|
|
|
$
|
532
|
|
|
Non-current assets
|
|
|
4,081
|
|
|
|
131
|
|
|
Current liabilities
|
|
|
(7,599
|
)
|
|
|
(243
|
)
|
|
|
|
|
13,127
|
|
|
|
420
|
|
|
Non-controlling interests
|
|
|
(7,021
|
)
|
|
|
(225
|
)
|
|
Goodwill
|
|
|
83,892
|
|
|
|
2,683
|
|
|
Total consideration
|
|
|
89,998
|
|
|
|
2,878
|
|
|
Less: Cash and cash equivalent acquired
|
|
|
(16,561
|
)
|
|
|
(530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
73,437
|
|
|
$
|
2,348
|
|
In
May 2016, the Company’s subsidiary, ASE Test, Inc., acquired 60% shareholdings of TLJ with a total consideration determined
primarily based on independent professional appraisal reports. NT$41,739 thousand (US$1,335 thousand) out of the total consideration
was paid to key management personnel and related parties. As of September 30, 2016, the Group has not completed the identification
of the difference between the cost of the investment and the Group’s share of the net fair value of TLJ’s identifiable
assets and liabilities and, as a result, the difference was recognized as goodwill provisionally.
|
|
28.
|
EQUITY
TRANSACTION WITH NON-CONTROLLING INTERESTS
|
In
April 2015, USIE sold its shareholdings of 54,000 thousand ordinary shares of USISH amounting to CNY1,992,060 thousand and, as
a result, the Group’s shareholdings of USISH decreased from 82.1% to 77.2%. The transaction was accounted for as an equity
transaction since the Group did not cease to have control over USISH and, as a result, capital surplus was increased by NT$7,197,510
thousand in the second quarter of 2015.
In
February 2016, USIE repurchased 4,501 thousand shares of USIE’s outstanding ordinary shares and, as a result, the Group’s
shareholdings of USIE increased from 96.7% to 98.8%. The transaction was accounted for as an equity transaction since the Group
did not cease to have control over USIE and capital surplus was decreased by NT$1,912,887 thousand (US$61,173 thousand).
In
February 2016, the Company, with a total consideration of NT$ 792,064 thousand (US$25,330 thousand), completed the disposal of
39,603 thousand shares in USI to the Company’s subsidiary, UGTW, at NT$20 (US$0.64) per share and, as a result, the Group’s
shareholdings of USI decreased from 99.0% to 76.5%. The transaction was accounted for as an equity transaction since the Group
did not cease to have control over USI and capital surplus was decreased by NT$20,552 thousand (US$657 thousand).
|
|
29.
|
NON-CASH
TRANSACTIONS
|
For
the nine months ended September 30, 2015 and 2016, the Group entered into the following non-cash investing activities which were
not reflected in the condensed consolidated statements of cash flows:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
$
|
23,129,447
|
|
|
$
|
21,284,821
|
|
|
$
|
680,678
|
|
|
Increase in prepayments for property, plant and equipment (recorded under the line item of other non-current assets)
|
|
|
(220,918
|
)
|
|
|
(29,653
|
)
|
|
|
(948
|
)
|
|
Decrease (increase) in payables for property, plant and equipment
|
|
|
1,824,553
|
|
|
|
(825,229
|
)
|
|
|
(26,390
|
)
|
|
Capitalized borrowing costs
|
|
|
(37,811
|
)
|
|
|
(38,828
|
)
|
|
|
(1,242
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,695,271
|
|
|
$
|
20,391,111
|
|
|
$
|
652,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from disposal of property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration from disposal of property, plant and equipment
|
|
$
|
175,106
|
|
|
$
|
439,798
|
|
|
$
|
14,064
|
|
|
Decrease (increase) in other receivables
|
|
|
38,178
|
|
|
|
(310,537
|
)
|
|
|
(9,930
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
213,284
|
|
|
$
|
129,261
|
|
|
$
|
4,134
|
|
|
|
30.
|
OPERATING
LEASE ARRANGEMENTS
|
Except
those discussed in Note 17, the Company and its subsidiary, ASE Test, Inc., lease the land on which their buildings are located
under various operating lease agreements with the ROC government expiring through June 2035. The agreements grant these entities
the option to renew the leases and reserve the right for the lessor to adjust the lease payments upon an increase in the assessed
value of the land and to terminate the leases under certain conditions. In addition, the Group leases buildings, machinery and
equipment under operating leases.
The
subsidiaries’ offices located in U.S.A. and Japan, etc. are leased from other parties and the lease term will expire through
2016 to 2023 with the option to renew the leases upon expiration.
The
Group recognized rental expense of NT$1,057,269 thousand and NT$1,073,013 thousand (US$34,314 thousand) for the nine months ended
September 30, 2015 and 2016, respectively.
The
capital structure of the Group consists of debt and equity. The Group manages its capital to ensure that entities in the Group
will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and
equity balance. Key management personnel of the Group periodically reviews the cost of capital and the risks associated with each
class of capital. In order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders,
the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.
The
Group is not subject to any externally imposed capital requirements except those discussed in Note 18.
32. FINANCIAL
INSTRUMENTS
|
|
a.
|
Fair
value of financial instruments that are not measured at fair value
|
|
|
1)
|
Fair
value of financial instruments not measured at fair value but for which fair value is
disclosed
|
Except
bonds payable measured at amortized cost, the management considers that the carrying amounts of financial assets and financial
liabilities not measured at fair value approximate their fair values.
The
carrying amounts and fair value of bonds payable as of December 31, 2015 and September 30, 2016, respectively, were as follows:
|
|
|
Carrying Amount
|
|
Fair Value
|
|
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
$
|
38,426,250
|
|
|
|
|
|
|
$
|
38,465,355
|
|
|
|
|
|
|
September 30, 2016
|
|
|
36,256,600
|
|
|
$
|
1,159,470
|
|
|
|
36,680,738
|
|
|
$
|
1,173,033
|
|
The
aforementioned fair value hierarchy of bonds payable was Level 3 which was determined based on discounted cash flow analysis with
the applicable yield curve for the duration or the last trading prices.
|
|
b.
|
Fair
value of financial instruments that are measured at fair value on a recurring basis
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets at FVTPL
|
|
|
|
|
|
|
|
|
|
Financial assets designated as at FVTPL
|
|
|
|
|
|
|
|
|
|
Structured time deposits
|
|
$
|
–
|
|
|
$
|
1,646,357
|
|
|
$
|
–
|
|
|
$
|
1,646,357
|
|
|
Private-placement convertible bonds
|
|
|
–
|
|
|
|
100,500
|
|
|
|
–
|
|
|
|
100,500
|
|
(Continued)
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets
|
|
|
|
|
|
|
|
|
|
Swap contracts
|
|
$
|
–
|
|
|
$
|
1,452,611
|
|
|
$
|
–
|
|
|
$
|
1,452,611
|
|
|
Forward exchange contracts
|
|
|
–
|
|
|
|
18,913
|
|
|
|
–
|
|
|
|
18,913
|
|
|
Forward currency option contracts
|
|
|
–
|
|
|
|
5,020
|
|
|
|
–
|
|
|
|
5,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial assets held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open-end mutual funds
|
|
|
573,242
|
|
|
|
–
|
|
|
|
–
|
|
|
|
573,242
|
|
|
Quoted shares
|
|
|
37,058
|
|
|
|
–
|
|
|
|
–
|
|
|
|
37,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
610,300
|
|
|
$
|
3,223,401
|
|
|
$
|
–
|
|
|
$
|
3,833,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited Partnership
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
476,612
|
|
|
$
|
476,612
|
|
|
Unquoted shares
|
|
|
–
|
|
|
|
–
|
|
|
|
264,477
|
|
|
|
264,477
|
|
|
Quoted shares
|
|
|
197,580
|
|
|
|
–
|
|
|
|
–
|
|
|
|
197,580
|
|
|
Open-end mutual funds
|
|
|
16,037
|
|
|
|
–
|
|
|
|
–
|
|
|
|
16,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
213,617
|
|
|
$
|
–
|
|
|
$
|
741,089
|
|
|
$
|
954,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion option, redemption option and put option of convertible bonds
|
|
$
|
–
|
|
|
$
|
2,632,565
|
|
|
$
|
–
|
|
|
$
|
2,632,565
|
|
|
Swap contracts
|
|
|
–
|
|
|
|
290,176
|
|
|
|
–
|
|
|
|
290,176
|
|
|
Forward exchange contracts
|
|
|
–
|
|
|
|
69,207
|
|
|
|
–
|
|
|
|
69,207
|
|
|
Foreign currency option contracts
|
|
|
–
|
|
|
|
13,659
|
|
|
|
–
|
|
|
|
13,659
|
|
|
Interest rate swap contracts
|
|
|
–
|
|
|
|
119
|
|
|
|
–
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
–
|
|
|
$
|
3,005,726
|
|
|
$
|
–
|
|
|
$
|
3,005,726
|
|
(Concluded)
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets designated as at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private-placement convertible bonds
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
100,583
|
|
|
$
|
3,217
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
100,583
|
|
|
$
|
3,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
–
|
|
|
|
–
|
|
|
|
55,645
|
|
|
|
1,779
|
|
|
|
–
|
|
|
|
–
|
|
|
|
55,645
|
|
|
|
1,779
|
|
|
Swap contracts
|
|
|
–
|
|
|
|
–
|
|
|
|
38,451
|
|
|
|
1,230
|
|
|
|
–
|
|
|
|
–
|
|
|
|
38,451
|
|
|
|
1,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial assets held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open-end mutual funds
|
|
|
584,424
|
|
|
|
18,689
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
584,424
|
|
|
|
18,689
|
|
|
Quoted shares
|
|
|
34,728
|
|
|
|
1,111
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
34,728
|
|
|
|
1,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
619,152
|
|
|
$
|
19,800
|
|
|
$
|
194,679
|
|
|
$
|
6,226
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
813,831
|
|
|
$
|
26,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partnership
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
448,913
|
|
|
$
|
14,356
|
|
|
$
|
448,913
|
|
|
$
|
14,356
|
|
|
Unquoted shares
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
520,668
|
|
|
|
16,650
|
|
|
|
520,668
|
|
|
|
16,650
|
|
|
Quoted shares
|
|
|
160,243
|
|
|
|
5,124
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
160,243
|
|
|
|
5,124
|
|
|
Open-end mutual funds
|
|
|
44,207
|
|
|
|
1,414
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
44,207
|
|
|
|
1,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
204,450
|
|
|
$
|
6,538
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
969,581
|
|
|
$
|
31,006
|
|
|
$
|
1,174,031
|
|
|
$
|
37,544
|
|
(Continued)
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion option, redemption option and put option of convertible bonds
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
2,224,051
|
|
|
$
|
71,124
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
2,224,051
|
|
|
$
|
71,124
|
|
|
Swap contracts
|
|
|
–
|
|
|
|
–
|
|
|
|
1,708,293
|
|
|
|
54,631
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1,708,293
|
|
|
|
54,631
|
|
|
Forward exchange contracts
|
|
|
–
|
|
|
|
–
|
|
|
|
10,825
|
|
|
|
346
|
|
|
|
–
|
|
|
|
–
|
|
|
|
10,825
|
|
|
|
346
|
|
|
Interest rate swap contracts
|
|
|
–
|
|
|
|
–
|
|
|
|
8,791
|
|
|
|
281
|
|
|
|
–
|
|
|
|
–
|
|
|
|
8,791
|
|
|
|
281
|
|
|
Foreign currency option contracts
|
|
|
–
|
|
|
|
–
|
|
|
|
1,560
|
|
|
|
50
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1,560
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
3,953,520
|
|
|
$
|
126,432
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
3,953,520
|
|
|
$
|
126,432
|
|
(Concluded)
For
assets and liabilities held as of December 31, 2015 and September 30, 2016 that were measured at fair value on a recurring basis,
there were no transfers between Level 1 and Level 2 of the fair value hierarchy.
|
|
2)
|
Reconciliation
of Level 3 fair value measurements of financial assets
|
The
financial assets measured at Level 3 fair value were equity investments with no quoted prices classified as available-for-sale
financial assets - non-current. Reconciliations for the nine months ended September 30, 2015 and 2016 were as follows:
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
$
|
778,866
|
|
|
$
|
741,089
|
|
|
$
|
23,699
|
|
|
Purchase
|
|
|
13,791
|
|
|
|
297,678
|
|
|
|
9,519
|
|
|
Total losses recognized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In profit or loss
|
|
|
(15,891
|
)
|
|
|
(10,734
|
)
|
|
|
(343
|
)
|
|
In other comprehensive income
|
|
|
13,522
|
|
|
|
(29,525
|
)
|
|
|
(944
|
)
|
|
Disposals
|
|
|
(42,902
|
)
|
|
|
(28,927
|
)
|
|
|
(925
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30
|
|
$
|
747,386
|
|
|
$
|
969,581
|
|
|
$
|
31,006
|
|
As
of September 30, 2015 and 2016, unrealized loss of NT$16,633 thousand and NT$ 26,765 thousand (US$856 thousand), recorded in other
comprehensive income under the heading of unrealized gain on available-for-sale financial assets, were included in the carrying
amount of the financial assets at fair value on Level 3 fair value measurement.
|
|
3)
|
Valuation
techniques and assumptions applied for the purpose of measuring fair value
|
|
|
a)
|
Valuation
techniques and inputs applied for the purpose of measuring Level 2 fair value measurement
|
|
Financial Instruments
|
|
Valuation Techniques
and Inputs
|
|
|
|
|
|
Derivatives - swap contracts, forward exchange contracts, foreign
currency option contracts and interest rate swap contracts
|
|
Discounted cash flows - Future cash flows are estimated based on
observable forward exchange rates or interest rates at balance sheet dates and contract forward exchange rates or interest
rates, discounted at rates that reflected the credit risk of various counterparties.
|
|
|
|
|
|
Derivatives - conversion option, redemption option and put option
of convertible bonds
|
|
Option pricing model - Incorporation of present value techniques
and reflect both the time value and the intrinsic value of options
|
(Continued)
|
Financial Instruments
|
|
Valuation Techniques
and Inputs
|
|
|
|
|
|
Structured time deposits and private-placement convertible bonds
|
|
Discounted cash flows - Future cash flows are estimated based on
observable forward exchange rates or stock prices at balance sheet dates and contract interest rate ranges or conversion prices,
discounted at rates that reflected the credit risk of various counterparties.
|
(Concluded)
|
|
b)
|
Valuation
techniques and inputs applied for the purpose of measuring Level 3 fair value measurement
|
The
fair value of the Group’s investments in unquoted shares on Level 3 fair value measurement were measured using market approach
based on investees’ recent financing activities, technical development, valuation of investees comparable companies, market
conditions and other economic indicators.
The
fair values of investments in limited partnership are measured using discounted cash flow technique and a comparable multiple
technique. The significant unobservable inputs used in the discounted cash flow technique were discount rates of 12.34% and the
terminal growth rates of 2.50%. Any significant increase in discount rates or any significant decrease in terminal growth rates
would result in a decrease in the fair value of the investments in limited partnership. The significant unobservable input used
in the comparable multiple technique was EBITDA multiples of 9.73. Any significant decrease in multiples would result in a decrease
in the fair value of the investments in limited partnership.
|
|
c.
|
Categories
of financial instruments
|
|
|
|
December 31, 2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FVTPL
|
|
|
|
|
|
|
|
Designated as at FVTPL
|
|
$
|
1,746,857
|
|
|
$
|
100,583
|
|
|
$
|
3,217
|
|
|
Held for trading
|
|
|
2,086,844
|
|
|
|
713,248
|
|
|
|
22,809
|
|
|
Available-for-sale financial assets
|
|
|
954,706
|
|
|
|
1,174,031
|
|
|
|
37,544
|
|
|
Loans and receivables (Note 1)
|
|
|
101,259,880
|
|
|
|
93,009,972
|
|
|
|
2,974,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FVTPL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
3,005,726
|
|
|
|
3,953,520
|
|
|
|
126,432
|
|
|
Measured at amortized cost (Note 2)
|
|
|
173,294,140
|
|
|
|
177,209,507
|
|
|
|
5,667,078
|
|
Note1: The balances included loans and receivables measured at amortized cost which comprise cash and cash equivalents, trade and
other receivables and other financial assets.
Note2: The balances included financial liabilities measured at amortized cost which comprise short-term borrowings, short-term
bills payable, trade and other payables, bonds payable and long-term borrowings.
|
|
d.
|
Financial
risk management objectives and policies
|
The
derivative instruments used by the Group are to mitigate risks arising from ordinary business operations. All derivative transactions
entered into by the Group are designated as either hedging or trading. Derivative transactions entered into for hedging purposes
must hedge risk against fluctuations in foreign exchange rates and interest rates arising from operating activities. The currencies
and the amount of derivative instruments held by the Group must match its hedged assets and liabilities denominated in foreign
currencies.
The
Group’s risk management department monitors risks to mitigate risk exposures, reports unsettled position, transaction balances
and related gains or losses to the Group’s chief financial officer on monthly basis.
The
Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates and interest
rates. Gains or losses arising from fluctuations in foreign currency exchange rates of a variety of derivative financial instruments
were approximately offset by those of hedged items. Interest rate risk was not significant due to the cost of capital was expected
to be fixed.
There
had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.
|
|
a)
|
Foreign
currency exchange rate risk
|
The
Group had sales and purchases as well as financing activities denominated in foreign currency which exposed the Group to foreign
currency exchange rate risk. The Group entered into a variety of derivative financial instruments to hedge foreign currency exchange
rate risk to minimize the fluctuations of assets and liabilities denominated in foreign currencies.
The
carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities (including those eliminated
upon consolidation) as well as derivative instruments which exposed the Group to foreign currency exchange rate risk at each balance
sheet date are presented in Note 36.
The
Group was principally subject to the impact to exchange rate fluctuation in U.S. dollars and Japanese yen against NT$ or Chinese
Yuan Renminbi (“CNY”). 1% is the sensitivity rate used when reporting foreign currency exchange rate risk internally
to key management personnel and represents management’s assessment of the reasonably possible change in foreign currency
exchange rates. The sensitivity analysis included financial assets and liabilities and inter-company receivables and payables
within the Group. The changes in profit before income tax due to a 1% change in U.S. dollars and Japanese yen both against NT$
and CNY would be NT$56,000 thousand and NT$218,000 thousand (US$6,972 thousand) for the nine months ended September 30, 2015 and
2016, respectively. Hedging contracts and hedged items have been taken into account while measuring the changes in profit before
income tax. The abovementioned sensitivity analysis mainly focused on the foreign currency monetary items at the end of the reporting
period. As the period-end exposure did not reflect the exposure for the nine months ended September 30, 2015 and 2016, the abovementioned
sensitivity analysis was unrepresentative of those periods.
Except
a portion of long-term borrowings and bonds payable at fixed interest rates, the Group was exposed to interest rate risk because
group entities borrowed funds at floating interest rates. Changes in market interest rates will lead to variances in effective
interest rates of borrowings
from which the future cash flow fluctuations arise. The Group entered into a variety of derivative
financial instruments to hedge interest rate risk to minimize the fluctuations of assets and liabilities denominated in interest
rate.
The
carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at each balance
sheet date were as follows:
|
|
|
December 31, 2015
|
|
September 30,2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Fair value interest rate risk
|
|
|
|
|
|
|
|
Financial liabilities
|
|
$
|
18,030,482
|
|
|
$
|
29,731,458
|
|
|
$
|
950,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
53,475,994
|
|
|
|
30,340,234
|
|
|
|
970,267
|
|
|
Financial liabilities
|
|
|
65,213,083
|
|
|
|
72,903,042
|
|
|
|
2,331,405
|
|
For
assets and liabilities with floating interest rates, a 100 basis point increase or decrease was used when reporting interest rate
risk internally to key management personnel. If interest rates had been 100 basis points (1%) higher or lower and all other variables
held constant, the Group’s profit before income tax for the nine months ended September 30, 2015 and 2016 would have decreased
or increased approximately by NT$161,000 thousand and NT$320,000 thousand (US$10,233 thousand), respectively. Hedging contracts
and hedged items have been taken into account while measuring the changes in profit before income tax. The abovementioned sensitivity
analysis mainly focused on the interest rate items at the end of the reporting period. As the period-end exposure did not reflect
the exposure for the nine months ended September 30, 2015 and 2016, the abovementioned sensitivity analysis was unrepresentative
of those periods.
The
Group was exposed to equity or debt price risk through its investments in financial assets at FVTPL, including private-placement
convertible bonds, quoted shares, open-end mutual funds, and available-for-sale financial assets. If equity or debt prices were
1% higher or lower, profit before income tax for the nine months ended September 30, 2015 and 2016 would have increased or decreased
approximately by NT$7,000 thousand and NT$7,200 thousand (US$230 thousand), respectively, and other comprehensive income before
income tax for the nine months ended September 30, 2015 and 2016 would have increased or decreased approximately by NT$9,000 thousand
and NT$12,000 thousand (US$384 thousand), respectively.
In
addition, the Group was also exposed to the Company’s ordinary share price risk through Bonds Options recognized as financial
liabilities held for trading. 7% is the sensitivity rate used when reporting price risk internally to key management personnel.
If the Company’s ordinary share price increased or decreased by 7%, profit before income tax for the nine months ended September
30, 2015 and 2016 would have decreased approximately by NT$586,000 thousand and NT$644,000 thousand (US$20,595 thousand), respectively,
or increased approximately by NT$488,000 thousand and NT$528,000 thousand (US$16,885 thousand), respectively.
Credit
risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group’s credit risk arises from cash and cash equivalents, receivables and other financial assets. The Group’s
maximum exposure to credit risk was the carrying amounts of financial assets in the consolidated balance sheets.
The
Group dealt with counterparties creditworthy and has a credit policy and trade receivable management procedures to ensure recovery
and evaluation of trade receivables. Except for those discussed in Note 9, the Group’s counterparties consisted of a large
number of customers and banks and there was no significant concentration of credit risk exposure.
The
Group manages liquidity risk by maintaining adequate working capital and banking facilities to fulfill the demand for cash flow
used in the Group’s operation and capital expenditure. The Group also monitors its compliance with all the loan covenants.
Liquidity risk is not considered to be significant.
In
the table below, financial liabilities with a repayment on demand clause were included in the earliest time band regardless of
the probability of counter-parties choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities
were based on the agreed repayment dates.
To
the extent that interest flows are floating rate, the undiscounted amounts were derived from the interest rates at each balance
sheet date.
|
|
|
On Demand or
Less than
1 Month
|
|
1 to 3 Months
|
|
3 Months to
1 Year
|
|
1 to 5 Years
|
|
More than
5 Years
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
|
|
$
|
19,393,406
|
|
|
$
|
19,626,026
|
|
|
$
|
6,493,504
|
|
|
$
|
1,926
|
|
|
$
|
194,346
|
|
|
Floating interest rate liabilities
|
|
|
6,617,050
|
|
|
|
5,677,129
|
|
|
|
10,582,324
|
|
|
|
39,202,454
|
|
|
|
775,273
|
|
|
Fixed interest rate liabilities
|
|
|
16,168,484
|
|
|
|
2,463,617
|
|
|
|
24,787,238
|
|
|
|
18,078,920
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
42,178,940
|
|
|
$
|
27,766,772
|
|
|
$
|
41,863,066
|
|
|
$
|
57,283,300
|
|
|
$
|
969,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
|
|
$
|
25,814,299
|
|
|
$
|
20,449,262
|
|
|
$
|
4,484,715
|
|
|
$
|
1,882
|
|
|
$
|
185,672
|
|
|
Floating interest rate liabilities
|
|
|
17,893,862
|
|
|
|
7,033,066
|
|
|
|
6,508,471
|
|
|
|
41,578,145
|
|
|
|
2,123,033
|
|
|
Fixed interest rate liabilities
|
|
|
4,718,810
|
|
|
|
3,804,691
|
|
|
|
10,026,691
|
|
|
|
28,049,987
|
|
|
|
2,062,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
48,426,971
|
|
|
$
|
31,287,019
|
|
|
$
|
21,019,877
|
|
|
$
|
69,630,014
|
|
|
$
|
4,371,205
|
|
|
|
|
On Demand or
Less than
1 Month
|
|
1 to 3 Months
|
|
3 Months to
1 Year
|
|
1 to 5 Years
|
|
More than
5 Years
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
|
|
$
|
825,529
|
|
|
$
|
653,958
|
|
|
$
|
143,419
|
|
|
$
|
60
|
|
|
$
|
5,938
|
|
|
Floating interest rate liabilities
|
|
|
572,237
|
|
|
|
224,914
|
|
|
|
208,138
|
|
|
|
1,329,650
|
|
|
|
67,894
|
|
|
Fixed interest rate liabilities
|
|
|
150,905
|
|
|
|
121,672
|
|
|
|
320,649
|
|
|
|
897,025
|
|
|
|
65,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,548,671
|
|
|
$
|
1,000,544
|
|
|
$
|
672,206
|
|
|
$
|
2,226,735
|
|
|
$
|
139,790
|
|
The
amounts included above for floating interest rate instruments for non-derivative financial liabilities was subject to change if
changes in floating interest rates differ from those estimates of interest rates determined at each balance sheet date.
The
following table detailed the Group‘s liquidity analysis for its derivative financial instruments. The table was based on
the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted
gross cash inflows and outflows on those derivatives that require gross settlement. When the amounts payable or receivable are
not fixed,
the amounts disclosed have been determined by reference to the projected interest rates as illustrated by the yield
curves at each balance sheet date.
|
|
|
On Demand or
Less than
1 Month
|
|
1 to 3 Months
|
|
3 Months to
1 Year
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net settled
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
(230
|
)
|
|
$
|
3,435
|
|
|
$
|
–
|
|
|
Foreign currency option contracts
|
|
$
|
2,054
|
|
|
$
|
8,735
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
$
|
2,822,265
|
|
|
$
|
2,421,602
|
|
|
$
|
–
|
|
|
Outflows
|
|
|
(2,836,080
|
)
|
|
|
(2,429,050
|
)
|
|
|
–
|
|
|
|
|
|
(13,815
|
)
|
|
|
(7,448
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
|
16,561,521
|
|
|
|
22,476,799
|
|
|
|
36,796,825
|
|
|
Outflows
|
|
|
(16,564,549
|
)
|
|
|
(22,007,274
|
)
|
|
|
(35,813,527
|
)
|
|
|
|
|
(3,028
|
)
|
|
|
469,525
|
|
|
|
983,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
|
12,603
|
|
|
|
12,466
|
|
|
|
25,069
|
|
|
Outflows
|
|
|
(11,595
|
)
|
|
|
(11,469
|
)
|
|
|
(23,063
|
)
|
|
|
|
|
1,008
|
|
|
|
997
|
|
|
|
2,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(15,835
|
)
|
|
$
|
463,074
|
|
|
$
|
985,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
43,105
|
|
|
$
|
1,600
|
|
|
$
|
–
|
|
|
Foreign currency option contracts
|
|
$
|
1,043
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
$
|
3,504,294
|
|
|
$
|
672,875
|
|
|
$
|
–
|
|
|
Outflows
|
|
|
(3,507,738
|
)
|
|
|
(674,546
|
)
|
|
|
–
|
|
|
|
|
|
(3,444
|
)
|
|
|
(1,671
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
|
14,149,871
|
|
|
|
16,423,419
|
|
|
|
37,318,400
|
|
|
Outflows
|
|
|
(14,255,579
|
)
|
|
|
(16,759,396
|
)
|
|
|
(38,314,216
|
)
|
|
|
|
|
(105,708
|
)
|
|
|
(335,977
|
)
|
|
|
(995,816
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows
|
|
|
(11,595
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(120,747
|
)
|
|
$
|
(337,648
|
)
|
|
$
|
(995,816
|
)
|
|
|
|
On Demand or
Less than
1 Month
|
|
1 to 3 Months
|
|
3 Months to
1 Year
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net settled
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
$
|
1,378
|
|
|
$
|
51
|
|
|
$
|
–
|
|
|
Foreign currency option contracts
|
|
$
|
33
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
$
|
112,066
|
|
|
$
|
21,518
|
|
|
$
|
–
|
|
|
Outflows
|
|
|
(112,176
|
)
|
|
|
(21,572
|
)
|
|
|
–
|
|
|
|
|
|
(110
|
)
|
|
|
(54
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows
|
|
|
452,506
|
|
|
|
525,213
|
|
|
|
1,193,425
|
|
|
Outflows
|
|
|
(455,886
|
)
|
|
|
(535,957
|
)
|
|
|
(1,225,271
|
)
|
|
|
|
|
(3,380
|
)
|
|
|
(10,744
|
)
|
|
|
(31,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows
|
|
|
(371
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(3,861
|
)
|
|
$
|
(10,798
|
)
|
|
$
|
(31,846
|
)
|
|
|
33.
|
RELATED PARTY TRANSACTIONS
|
Balances
and transactions within the Group had been eliminated upon consolidation. Details of transactions between the Group and other
related parties were disclosed as follows:
|
|
a.
|
The
Company contributed each NT$100,000 thousand (US$3,198 thousand) to ASE Cultural and
Educational Foundation in January 2015 and 2016, respectively, for environmental charity
in promoting the related domestic environmental protection and public service activities
(Note 35).
|
|
|
b.
|
During
the third quarter in 2016, the Company acquired patents and acquired specific technology
from associate at NT$403,543 thousand (US$12,905 thousand), which was primarily based
on independent professional appraisal reports. As of September 30, 2016, NT$313,600 thousand
(US$10,029 thousand) has not been paid and the Company accrued payables under the line
item of other payables and other non-current liabilities.
|
|
|
c.
|
During
the second quarter in 2015, the Company acquired real estate from associate at NT$2,466,000
thousand, which was primarily based on independent professional appraisal reports and
fully paid in the second quarter of 2015.
|
|
|
d.
|
The
Company contracted with associate to construct a foreign labor dormitory on current lease
property and NT$172,400 thousand and NT$646,500 thousand (US$20,675 thousand) has been
paid as of September 30, 2015 and 2016, respectively.
|
|
|
e.
|
In
February 2016, USIE repurchased 1,801 thousand USIE’s outstanding ordinary shares
from the Group’s key management personnel, with approximately NT$1,130,650 thousand
(US$36,157 thousand).
|
|
|
f.
|
Compensation
to key management personnel
|
|
|
|
For the Nine Months Ended September 30
|
|
|
|
2015
|
|
2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Short-term employee benefits
|
|
$
|
775,997
|
|
|
$
|
610,714
|
|
|
$
|
19,530
|
|
|
Post-employment benefits
|
|
|
2,368
|
|
|
|
2,836
|
|
|
|
91
|
|
|
Share-based payments
|
|
|
16,412
|
|
|
|
47,520
|
|
|
|
1,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
794,777
|
|
|
$
|
661,070
|
|
|
$
|
21,141
|
|
The
compensation to the Company’s key management personnel is determined according to personal performance and market trends.
|
|
34.
|
ASSETS
PLEDGED AS COLLATERAL OR FOR SECURITY
|
In
addition to Note 9, the following assets were provided as collateral for bank borrowings and the tariff guarantees of imported
raw materials:
|
|
|
December 31,
2015
|
|
September 30, 2016
|
|
|
|
NT$
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
Inventories related to real estate business
|
|
$
|
16,312,519
|
|
|
$
|
19,272,915
|
|
|
$
|
616,339
|
|
|
Other financial assets (including current and non-current)
|
|
|
229,613
|
|
|
|
243,505
|
|
|
|
7,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,542,132
|
|
|
$
|
19,516,420
|
|
|
$
|
624,126
|
|
|
|
35.
|
SIGNIFICANT CONTINGENT
LIABILITIES AND UNRECOGNIZED COMMITMENTS
|
In
addition to those disclosed in other notes, significant commitments and contingencies of the Group as of each balance sheet date
were as follows:
|
|
a.
|
Significant
commitments
|
|
|
1)
|
As
of December 31, 2015 and September 30, 2016, unused letters of credit of the Group were
approximately NT$93,000 thousand and NT$88,000 thousand (US$2,814 thousand), respectively.
|
|
|
2)
|
As
of December 31, 2015 and September 30, 2016, outstanding commitments to purchase property,
plant and equipment of the Group were approximately NT$8,089,200 thousand and NT$6,983,924
thousand (US$223,343 thousand), respectively, of which NT$1,756,990 thousand and NT$1,353,773
thousand (US$43,293 thousand) had been prepaid, respectively. As of December 31, 2015
and September 30, 2016, the commitment that the Group has contracted for the construction
related to the real estate business were approximately NT$2,745,400 thousand and NT$2,016,576
thousand (US$US$64,489 thousand), respectively.
|
|
|
3)
|
In
consideration of corporate social responsibility for environmental protection, the Company’s
board of directors, in December 2013, approved contributions to be made in the next 30
years, at a total amount of NT$3,000,000 thousand, at the minimum, to environmental protection
efforts in Taiwan.
|
|
|
b.
|
Non-cancellable
operating lease commitments
|
|
|
|
September 30, 2016
|
|
|
|
NT$
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
Less than 1 year
|
|
$
|
321,660
|
|
|
$
|
10,287
|
|
|
1-5 years
|
|
|
501,574
|
|
|
|
16,040
|
|
|
More than 5 years
|
|
|
529,867
|
|
|
|
16,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,353,101
|
|
|
$
|
43,272
|
|
|
|
36.
|
SIGNIFICANT
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
|
The
following information was aggregated by the foreign currencies other than functional currencies of the group entities and the
exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities
denominated in foreign currencies were as follows:
|
|
Foreign Currencies
(In Thousand)
|
|
Exchange Rate
|
Carrying Amount
(In Thousand)
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monetary financial assets
|
|
|
|
|
|
|
|
US$
|
|
$
|
2,926,597
|
|
|
US$1=NT$32.825
|
|
$
|
96,065,552
|
|
|
US$
|
|
|
1,008,097
|
|
|
US$1=CNY6.4936
|
|
|
33,090,795
|
|
|
JPY
|
|
|
3,380,683
|
|
|
JPY1=NT$0.2727
|
|
|
921,912
|
|
|
JPY
|
|
|
8,467,689
|
|
|
JPY1=US$0.0083
|
|
|
2,309,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monetary financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
US$
|
|
|
2,988,953
|
|
|
US$1=NT$32.825
|
|
|
98,112,393
|
|
|
US$
|
|
|
995,195
|
|
|
US$1=CNY6.4936
|
|
|
32,667,265
|
|
|
JPY
|
|
|
3,747,333
|
|
|
JPY1=NT$0.2727
|
|
|
1,021,898
|
|
|
JPY
|
|
|
8,775,382
|
|
|
JPY1=US$0.0083
|
|
|
2,393,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monetary financial assets
|
|
|
|
|
|
|
|
|
|
|
|
US$
|
|
|
3,455,665
|
|
|
US$1=NT$31.36
|
|
|
108,369,656
|
|
|
US$
|
|
|
1,028,436
|
|
|
US$1=CNY6.6778
|
|
|
32,251,751
|
|
|
JPY
|
|
|
3,040,963
|
|
|
JPY1=NT$0.3109
|
|
|
945,435
|
|
|
JPY
|
|
|
8,992,855
|
|
|
JPY1=US$0.0099
|
|
|
2,795,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monetary financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
US$
|
|
|
2,778,373
|
|
|
US$1=NT$31.36
|
|
|
87,129,763
|
|
|
US$
|
|
|
969,433
|
|
|
US$1=CNY6.6778
|
|
|
30,401,433
|
|
|
JPY
|
|
|
6,985,135
|
|
|
JPY1=NT$0.3109
|
|
|
2,171,678
|
|
|
JPY
|
|
|
9,313,192
|
|
|
JPY1=US$0.0099
|
|
|
2,895,471
|
|
The
significant realized and unrealized foreign exchange gains (losses) were as follows:
|
|
|
For the Nine Months Ended
September 30, 2015
|
|
For the Nine Months Ended
September 30, 2016
|
|
Foreign Currencies
|
|
Exchange Rate
|
|
Net Foreign Exchange
Gain (Loss)
|
|
Exchange Rate
|
|
Net Foreign Exchange Gain (Loss)
|
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$
|
|
US$1=NT$32.87
|
|
$
|
124,356
|
|
|
US$1=NT$31.36
|
|
$
|
(335,549
|
)
|
|
$
|
(10,730
|
)
|
|
NT$
|
|
|
|
|
(1,095,340
|
)
|
|
|
|
|
2,553,110
|
|
|
|
81,647
|
|
|
CNY
|
|
CNY1=NT$5.1672
|
|
|
(298,002
|
)
|
|
CNY1=NT$4.6962
|
|
|
56,388
|
|
|
|
1,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,268,986
|
)
|
|
|
|
$
|
2,273,949
|
|
|
$
|
72,720
|
|
|
|
a.
|
In
November 2015, the Company received a legal brief filed by SPIL in connection with a
lawsuit brought by SPIL against the Company which was filed with Kaohsiung District Court.
On June 27, 2016, as SPIL failed to pay the court expenses upon the deadline, the Kaohsiung
District Court dismissed the lawsuit pursuant to the relevant law. As a result, the lawsuit
does not have material impact on the financial position and the result of operations
of the Group.
|
|
|
b.
|
On
December 20, 2013, the Kaohsiung Environmental Protection Bureau (“KEPB”)
imposed a fine of NT$102,014 thousand (“the Administrative Fine”) upon the
Company for the violation of the Water Pollution Control Act . The Company filed an administrative
appeal to nullify the Administrative Fine, which, however, was dismissed by the Kaohsiung
City Government. The Company then filed a lawsuit with the Kaohsiung High Administrative
Court seeking to revoke the dismissal decision made by the Kaohsiung City Government
(the “Administrative Appeal Decision”) and the Administrative Fine, and to
demand a refund of the fine paid by the Company. The judgment of the Kaohsiung High Administrative
Court was rendered on March 22, 2016, ruling to revoke the Administrative Appeal Decision
and the Administrative Fine, and to dismiss the other complaint filed by the Company
(i.e., to demand a refund of the fine paid by the Company). The Company appealed against
the unfavorable ruling on April 14, 2016 and the case is now being heard by the Supreme
Administrative Court. Meanwhile, owing to the event above, in January 2014, the Kaohsiung
District Prosecutors Office charged the Company with violation of the Waste Disposal
Act. The Kaohsiung District Court handed down the judgment and the Company was fined
NT$3,000 thousand. Then the Company appealed against the judgment to the Kaohsiung Branch
of Taiwan High Court, and the Kaohsiung Branch of Taiwan High Court rendered on September
29, 2015 a final judgment of finding the Company not guilty of the criminal charge.
|
|
|
c.
|
For
the future development and sustainable development of semiconductor industry , the Company’s
board of directors approved in June 2016 to enter into and execute a joint share exchange
agreement with SPIL to establish ASE Industrial Holding Co., Ltd. (”HoldCo”)
and HoldCo will acquire all issued and outstanding shares of both ASE and SPIL in the
way of share exchange. The share exchange will be conducted at an exchange ratio of 1
ordinary share of the Company for 0.5 ordinary share of HoldCo, and at NT$55 (US$1.76)
in cash per SPIL’s ordinary share, which has been adjusted to NT$51.2 (US$1.64)
after SPIL’s appropriation of earnings in 2016 (Note 13).
|
As
of the date the condensed consolidated financial statements were authorized for issue, the share exchange transaction which is
based on the share exchange agreement is subject to the satisfaction of various conditions precedent (including but not limited
to the unconditional approvals at the Company and SPIL’s shareholders meeting, the approval or consent to consummate the
transaction from all relevant competent authorities). Unless the Company and SPIL entering into an another agreement, this share
exchange agreement shall be terminated automatically if the aforementioned conditions precedent are not satisfied or to be waived
on or before December 31, 2017.
Due
to the aforementioned share exchange agreement, treasury shares of the Company and the convertible bonds embedded with conversion
option recognized as equity issued by the Company were affected as follows:
|
|
1)
|
For
the outstanding balance of the Bonds, except where the Bonds have been redeemed or repurchased
and cancelled or converted by the holders by exercising their conversion rights before
the share exchange record date, the holders of the Bonds may, after the Company obtains
approval from all relevant competent authorities and after the share exchange record
date, convert such outstanding balance into newly issued HoldCo common shares. The conversion
shall be subject to applicable laws, the indenture of the Bonds and the share exchange
ratio.
|
|
|
2)
|
Treasury
shares purchased before the share exchange record date for the conversion of the Currency
Linked Bonds will be exchanged to HoldCo’s ordinary shares, which will still be
hold by the Company, based on the agreed share exchange ratio. The conversion price of
the Currency Linked Bonds shall also be adjusted in accordance with the agreed share
exchange ratio in the joint share exchange agreement.
|
|
|
3)
|
For
the employee share options issued by the Company upon the approval from relevant competent
authorities before the execution of the joint share exchange agreement, HoldCo will assume
the Company’s obligations under the employee share options as of the share exchange
record date. Except that the exercise price and amount shall be adjusted in accordance
with the agreed share exchange ratio and that the shares subject to exercise shall be
converted into HoldCo’s newly issued ordinary shares, all other terms and conditions
for issuance will remain the same. The final execution arrangements shall be made by
HoldCo in compliance with relevant laws and regulations and subject to the approval of
relevant competent authorities.
|
|
|
38.
|
OPERATING
SEGMENTS INFORMATION
|
The
Group has the following reportable segments: Packaging, Testing and EMS. The Group packages bare semiconductors into finished
semiconductors with enhanced electrical and thermal characteristics; provides testing services, including front-end engineering
testing, wafer probing and final testing services; engages in the designing, assembling, manufacturing and sale of electronic
components and telecommunications equipment motherboards. Information about other business activities and operating segments that
are not reportable are combined and disclosed in “Others.” The Group engages in other activities such as substrate
production and real estate business.
The
accounting policies for segments are the same as those described in Note 4. The measurement basis for resources allocation and
performance evaluation is based on profit before income tax.
Segment
information for the nine months ended September 30, 2015 and 2016 was as follows:
|
|
|
Packaging
|
|
Testing
|
|
EMS
|
|
Others
|
|
Adjustment and Elimination
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
87,513,840
|
|
|
$
|
18,836,024
|
|
|
$
|
98,941,313
|
|
|
$
|
2,463,197
|
|
|
$
|
–
|
|
|
$
|
207,754,374
|
|
|
Inter-segment revenues (Note)
|
|
$
|
7,338,347
|
|
|
$
|
139,156
|
|
|
$
|
41,930,125
|
|
|
$
|
5,784,586
|
|
|
$
|
(55,192,214
|
)
|
|
$
|
–
|
|
|
Segment profit before income tax
|
|
$
|
11,942,526
|
|
|
$
|
4,634,291
|
|
|
$
|
1,922,964
|
|
|
$
|
225,139
|
|
|
$
|
–
|
|
|
$
|
18,724,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
$
|
194,447,474
|
|
|
$
|
40,780,791
|
|
|
$
|
88,452,992
|
|
|
$
|
44,754,584
|
|
|
$
|
–
|
|
|
$
|
368,435,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
|
|
|
Packaging
|
|
Testing
|
|
EMS
|
|
Others
|
|
Adjustment and Elimination
|
|
Total
|
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
91,662,376
|
|
|
$
|
19,728,887
|
|
|
$
|
80,768,466
|
|
|
$
|
5,595,745
|
|
|
$
|
–
|
|
|
$
|
197,755,474
|
|
|
Inter-segment revenues (Note)
|
|
$
|
3,225,876
|
|
|
$
|
183,035
|
|
|
$
|
35,123,433
|
|
|
$
|
7,057,756
|
|
|
$
|
(45,590,100
|
)
|
|
$
|
–
|
|
|
Segment profit before income tax
|
|
$
|
8,545,509
|
|
|
$
|
5,058,493
|
|
|
$
|
2,868,374
|
|
|
$
|
1,977,098
|
|
|
$
|
–
|
|
|
$
|
18,449,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
$
|
200,693,766
|
|
|
$
|
42,705,683
|
|
|
$
|
76,091,008
|
|
|
$
|
41,195,429
|
|
|
$
|
–
|
|
|
$
|
360,685,886
|
|
(Concluded)
|
|
|
Packaging
|
|
Testing
|
|
EMS
|
|
Others
|
|
Adjustment and Elimination
|
|
Total
|
|
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
US$ (Note 4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
2,931,320
|
|
|
$
|
630,921
|
|
|
$
|
2,582,938
|
|
|
$
|
178,949
|
|
|
$
|
–
|
|
|
$
|
6,324,128
|
|
|
Inter-segment revenues (Note)
|
|
$
|
103,162
|
|
|
$
|
5,853
|
|
|
$
|
1,123,231
|
|
|
$
|
225,704
|
|
|
$
|
(1,457,950
|
)
|
|
$
|
–
|
|
|
Segment profit before income tax
|
|
$
|
273,281
|
|
|
$
|
161,768
|
|
|
$
|
91,729
|
|
|
$
|
63,228
|
|
|
$
|
–
|
|
|
$
|
590,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
$
|
6,418,093
|
|
|
$
|
1,365,708
|
|
|
$
|
2,433,355
|
|
|
$
|
1,317,410
|
|
|
$
|
–
|
|
|
$
|
11,534,566
|
|
|
|
Note:
|
Inter-segment
revenues were eliminated upon consolidation.
|
EXHIBIT 99.2
Discussion of Interim Financial Results
as of and for
the Nine-Month Period Ended September
30, 2016
The following sets forth
management’s discussion and analysis of our interim financial results as of and for the nine-month period ended
September 30, 2016. The interim financial information as of and for the nine-month period ended September 30, 2016 and the
comparative financial information as of December 31, 2015 and for the nine-month period ended September 30, 2015 set forth
below are derived from our unaudited condensed consolidated interim financial statements included as Exhibit 99.1 to this
report on Form 6-K. Those unaudited condensed consolidated interim financial statements have been prepared in accordance with
International Accounting Standard No. 34, “Interim Financial Reporting”, as issued by the International
Accounting Standard Board. Those financial statements do not include all of the information required for a complete set of
annual consolidated financial statements prepared in accordance with International Financial Reporting Standards
(“IFRS”), International Accounting Standards (“IAS”), Interpretations of IFRS and Interpretations of
IAS issued by International Accounting Standards Board.
Results of Operations
Operating Revenues
Our operating revenues for the nine-month
period ended September 30, 2016 were NT$197,755.5 million (US$6,324.1 million), which represented a 4.8% decrease from NT$207,754.4
million for the same period in 2015. For the nine-month period ended September 30, 2016, net revenue generated from our electronic
manufacturing services business, packaging business and testing business represented approximately 40.8%, 46.4% and 10.0% of our
total net revenue, respectively.
Packaging revenues increased 4.7% to NT$91,662.4
million (US$2,931.3 million) for the nine-month period ended September 30, 2016 from NT$87,513.8 million for the same period ended
September 30, 2015. The increase in our packaging revenues was due to the stronger demand in our products in Bumping, Flip Chip,
WLP & SiP and IC wirebonding. Testing revenues increased 4.7% to NT$19,728.9 million (US$630.9 million) for the nine-month
period ended September 30, 2016 from NT$18,836.0 million for the same period ended September 30, 2015. The increase was due to
an increase in sales volume for our testing business. Revenues from our electronic manufacturing services business decreased 18.4%
to NT$80,768.5 million (US$2,582.9 million) for the nine-month period ended September 30, 2016 from NT$98,941.3 million for the
same period in 2015. This decrease was primarily due to a decrease in outsourced orders for communications products and consumer
products.
Gross Profit
Our gross profit was NT$37,817.1 million
(US$1,209.4 million) for the nine-month period ended September 30, 2016 compared to NT$36,866.4 million for the same period in
2015. We had a gross margin of 19.1% for the nine-month period ended September 30, 2016, compared to a gross margin of 17.7% for
the same period in 2015. This increase in gross margin was primarily due to a decline in our electronic manufacturing services
business, which had a lower gross margin.
Operating costs decreased 6.4% to NT$159,938.4
million (US$5,114.8 million) for the nine-month period ended September 30, 2016 from NT$170,888.0 million for the same period in
2015. Raw material costs decreased 13.7% to NT$88,633.1 million (US$2,834.4 million) for the nine-month period ended September
30, 2016 from NT$102,736.5 million for the same period in 2015. As a percentage of operating revenues, raw material costs decreased
to 44.8% from 49.5%, primarily as a result of a decrease in orders in our electronic manufacturing services business, which had
relatively higher raw material costs compared to our other businesses. Labor costs slightly increased 0.7% to NT$26,264.5 million
(US$839.9 million) for the nine-month period ended September 30, 2016 from NT$26,092.7 million for the same period in 2015. As
a percentage of operating revenues, labor costs increased to 13.3% from 12.6%, which was due to more overtime expenses from more
holidays under lower operating revenues. Depreciation, amortization and rental expenses decreased 0.6% to NT$21,102.5 million (US$674.8
million) for the nine-month period ended September 30, 2016 from NT$21,225.3 million for the same period in 2015. As a percentage
of operating revenues, depreciation, amortization and rental expenses slightly increased to 10.7% from 10.2%. Although the depreciation,
amortization and rental expenses for the nine-month period ended September 30, 2016 and 2015 were almost flat, an increase in depreciation,
amortization and rental expenses as a percentage of operating revenues was due to a decline of our operating revenues.
Profit from Operations
We had profit from operations of NT$17,871.3
million (US$571.5 million) for the nine-month period ended September 30, 2016, which represented a decrease from NT$18,012.0 million
for the same period in 2015. Our operating margin was 9.0% for the nine-month period ended September 30, 2016 compared to 8.7%
for the same period in 2015. The increase of operating margin was primarily due to an increase in gross margin.
Operating expenses increased 2.4% to NT$19,241.5
million (US$615.3 million) for the nine-month period ended September 30, 2016 from NT$18,782.7 million for the same period in 2015.
This increase was primarily due to an increase in general and administrative expenses.
Selling expenses decreased 4.0% to NT$2,569.3
million (US$82.2 million) for the nine-month period ended September 30, 2016 from NT$2,675.1 million for the same period in 2015,
primarily due to a decrease in amortization expenses in connection with intangible assets, which we acquired in prior mergers fully
amortized. Selling expenses as a percentage of our operating revenues kept at 1.3% for the nine-month periods ended September 30,
2016 and 2015.
General and administrative expenses increased
4.9% to NT$8,371.7 million (US$267.7 million) for the nine-month period ended September 30, 2016 from NT$7,983.6 million for the
same period in 2015, primarily due to an increase in our professional fee incurred related to different investing strategies and
an increase in salary expenses in connection with the costs related to stock options granted in the fourth quarter of 2015. General
and administrative expenses as a percentage of our operating revenues increased to 4.2% for the nine-month period ended September
30, 2016 from 3.8% for the same period in 2015.
Research and development expenses increased
2.2% to NT$8,300.5 million (US$265.4 million) for the nine-month period ended September 30, 2016 from NT$8,124.1 million for the
same period in 2015, primarily due to an
increase in salary expenses from the costs related to stock options granted in the fourth
quarter of 2015. Research and development expenses as a percentage of our operating revenues increased to 4.2% for the nine-month
period ended September 30, 2016 from 3.9% for the same period in 2015.
Net Non-Operating Incomes and Expenses
Net non-operating income and expenses decreased
to a net income of NT$578.2 million (US$18.5 million) for the nine-month period ended September 30, 2016 from a net income of NT$712.9
million for the same period in 2015. This was primarily due to a lesser gain of NT$1,311.2 million (US$41.9 million) from the change
in the net gain/loss, on valuation of financial assets and liabilities and net foreign exchange gain/loss which we utilize from
time to time to reduce the impact of foreign currency fluctuations on our results of operations but offset by an increase of NT$1,191.7
million (US$38.1 million) in the share of profit of associates and joint ventures.
Income Tax Expense
We recognized an income tax expense of
NT$3,230.0 million (US$103.3 million) for the nine-month period ended September 30, 2016 compared to an income tax expense of NT$2,575.9
million for the same period in 2015. The increase was primarily due to an increase in the tax on our real estate business which
generated more operating revenues in 2016.
Net Profit
As a result of the foregoing, we incurred
a net profit of NT$15,219.5 million (US$486.7 million) for the nine-month period ended September 30, 2016, which represented a
decrease from NT$16,149.0 million for the same period in 2015. Our diluted earnings per ADS decreased to NT$7.90 (US$0.25) for
the nine-month period ended September 30, 2016 compared to diluted earnings per ADS of NT$9.42 for the same period in 2015.
Liquidity and Capital Resources
We have historically been able to satisfy
our working capital needs from our cash flow from operations. We have historically funded our capacity expansion from internally
generated cash and, to the extent necessary, the issuance of equity securities and borrowings. If adequate funds are not available
on satisfactory terms, we may be forced to curtail our expansion plans. Moreover, our ability to meet our working capital needs
from cash flow from operations will be affected by the demand for our packaging, testing services and electronic manufacturing
services, which in turn may be affected by several factors. Many of these factors are outside of our control, such as economic
downturns and declines in the prices of our services or products caused by a downturn in the industry. To the extent we do not
generate sufficient cash flow from our operations to meet our cash requirements, we will have to rely on external financing. We
believe that our existing cash, marketable securities, expected cash flow from operations and existing credit lines under our loan
facilities will be sufficient to meet our capital expenditures, working capital, cash obligations under our existing debt and lease
arrangements, and other requirements for at least the next 12 months.
Our cash and cash equivalents as of September
30, 2016 were NT$37,661.4 million (US$1,204.4 million), which represented a 31.8% decrease compared to NT$55,251.2 million as
of December 31, 2015. Our long-term
borrowings as of September 30, 2016, excluding short-term borrowings of NT$31,008.1 million
(US$991.6 million), short-term bills payable of NT$1,999.3 million (US$63.9 million), current portion of bonds payable of NT$9,384.9
million (US$300.1 million) and current portion of long-term borrowings of NT$6,272.8 million (US$200.6 million), were NT$70,812.9
million (US$2,264.5 million), which consisted of bonds payable of NT$26,871.7 million (US$859.3 million) and long-term borrowings
of NT$43,941.2 million (US$1,405.2 million).
Cash Flows
Net cash generated from operating activities
was NT$36,712.1 million (US$1,174.0 million) for the nine-month period ended September 30, 2016 compared to net cash generated
from operating activities NT$34,303.8 million for the same period in 2015. This increase in cash inflow was primarily due to an
increase in cash inflow of NT$9,647.7 million (US$308.5 million) from a decrease of inventories but offset by an increase in cash
outflow of NT$6,791.5 million (US$217.2 million) from trade receivables.
Net cash used in investing activities was
NT$37,137.2 million (US$1,187.6 million) for the nine-month period ended September 30, 2016 compared to NT$57,691.9 million for
the same period in 2015. This decrease in cash outflow was primarily due to a decrease of NT$19,856.6 million (US$635.0 million)
in the acquisition of associates and joint ventures.
Net cash used in financing activities was
NT$11,839.8 million (US$378.6 million) for the nine-month period ended September 30, 2016 compared to net cash generated in financing
activities of NT$12,187.3 million for the same period in 2015. This change in cash flow was primarily due to a decrease in cash
inflow of NT$20,356.2 million (US$651.0 million) from the net borrowings of debt, including short-term borrowings, short-term bills
payable, bonds payable and long-term borrowings and a decrease in cash inflow of NT$8,910.3 million (US$284.9 million) in the proceeds
from partial disposal of interests in subsidiaries but partially offset by a decrease in cash outflow of NT$5,333.4 million (US$170.6
million) in the payments for acquisition of treasury stock.