|
40. |
RELATED PARTIES TRANSACTIONS |
The ROC Government, one of Chunghwa’s customers has significant equity interest in Chunghwa. Chunghwa provides fixed-line services, wireless services, internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and at arm’s-length prices. The transactions with the ROC government bodies have not been provided because the transactions are not individually or collectively significant. However, the related revenues and operating costs have been appropriately recorded.
|
|
a. |
The Company engages in business transactions with the following related parties: |
|
Company |
|
Relationship |
|
Taiwan International Standard Electronics Co., Ltd. |
|
Associate |
|
So-net Entertainment Taiwan Limited |
|
Associate |
|
Skysoft Co., Ltd. |
|
Associate |
|
KingwayTek Technology Co., Ltd. |
|
Associate |
|
Dian Zuan Integrating Marketing Co., Ltd. |
|
Associate |
|
Taiwan International Ports Logistics Corporation |
|
Associate |
|
Huada Digital Corporation |
|
Joint venture |
|
Chunghwa Benefit One Co., Ltd. |
|
Joint venture |
|
International Integrated System, Inc. |
|
Associate |
|
Senao Networks, Inc. |
|
Associate |
|
EnGenius Tech. Co., Ltd. |
|
Associate |
|
HopeTech Technologies Limited |
|
Associate |
|
ST-2 Satellite Ventures Pte., Ltd. |
|
Associate |
|
Viettel-CHT Co., Ltd. |
|
Associate |
|
Click Force Co., Ltd. |
|
Associate |
|
Other related parties |
|
|
|
Chunghwa Telecom Foundation |
|
A nonprofit organization of which the funds donated by Chunghwa exceeds one third of its total funds |
|
Senao Technical and Cultural Foundation |
|
A nonprofit organization of which the funds donated by SENAO exceeds one third of its total funds |
|
Sochamp Technology Co., Ltd. |
|
Investor of significant influence over CHST |
|
E-Life Mall Co., Ltd. |
|
One of the directors of E-Life Mall and a director of SENAO are members of an immediate family |
|
Engenius Technologies Co., Ltd. |
|
Chairman of Engenius Technologies Co., Ltd. is a member of SENAO’s management |
|
United Daily News Co., Ltd. |
|
Investor of significant influence over SFD |
|
Shenzhen Century Communication Co., Ltd. |
|
Investor of significant influence over SCT |
|
|
b. |
Balances and transactions between Chunghwa and its subsidiaries, which are related parties of Chunghwa, have been eliminated on consolidation and are not disclosed in this note. Terms of the foregoing transactions with related parties were not significantly different from transactions with non-related parties. When no similar transactions with non-related parties can be referenced, terms were determined in accordance with mutual agreements. Details of transactions between the Company and other related parties are disclosed below: |
|
|
1) |
Operating transactions |
|
|
|
Revenues |
|
|||||||||
|
|
|
Year Ended December 31 |
|
|||||||||
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|||
|
|
|
NT$ |
|
|
NT$ |
|
|
NT$ |
|
|||
|
|
|
(In Millions) |
|
|||||||||
|
Associates |
|
$ |
333 |
|
|
$ |
292 |
|
|
$ |
344 |
|
|
Joint ventures |
|
|
9 |
|
|
|
7 |
|
|
|
1 |
|
|
Others |
|
|
81 |
|
|
|
49 |
|
|
|
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
423 |
|
|
$ |
348 |
|
|
$ |
410 |
|
|
|
|
Operating Costs and Expenses |
|
|||||||||
|
|
|
Year Ended December 31 |
|
|||||||||
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|||
|
|
|
NT$ |
|
|
NT$ |
|
|
NT$ |
|
|||
|
|
|
(In Millions) |
|
|||||||||
|
Associates |
|
$ |
1,451 |
|
|
$ |
1,405 |
|
|
$ |
1,197 |
|
|
Joint ventures |
|
|
17 |
|
|
|
17 |
|
|
|
2 |
|
|
Others |
|
|
62 |
|
|
|
74 |
|
|
|
71 |
|
|
|
|
$ |
1,530 |
|
|
$ |
1,496 |
|
|
$ |
1,270 |
|
|
|
2) |
Non-operating transactions |
|
|
|
Non-operating Income and Expenses |
|
|||||||||
|
|
|
Year Ended December 31 |
|
|||||||||
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|||
|
|
|
NT$ |
|
|
NT$ |
|
|
NT$ |
|
|||
|
|
|
|
|
|
|
(In Millions) |
|
|
|
|
|
|
|
Associates |
|
$ |
36 |
|
|
$ |
37 |
|
|
$ |
32 |
|
|
Others |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
$ |
36 |
|
|
$ |
37 |
|
|
$ |
32 |
|
|
|
3) |
Receivables |
|
|
|
December 31 |
|
|||||
|
|
|
2016 |
|
|
2017 |
|
||
|
|
|
NT$ |
|
|
NT$ |
|
||
|
|
|
(In Millions) |
|
|||||
|
Associates |
|
$ |
9 |
|
|
$ |
43 |
|
|
Joint ventures |
|
|
— |
|
|
|
— |
|
|
Others |
|
|
5 |
|
|
|
6 |
|
|
|
|
$ |
14 |
|
|
$ |
49 |
|
|
|
4) |
Payables |
|
|
|
December 31 |
|
|||||
|
|
|
2016 |
|
|
2017 |
|
||
|
|
|
NT$ |
|
|
NT$ |
|
||
|
|
|
(In Millions) |
|
|||||
|
Associates |
|
$ |
757 |
|
|
$ |
680 |
|
|
Joint ventures |
|
|
1 |
|
|
|
— |
|
|
Others |
|
|
4 |
|
|
|
4 |
|
|
|
|
$ |
762 |
|
|
$ |
684 |
|
|
|
5) |
Customers’ deposits |
|
|
|
December 31 |
|
|||||
|
|
|
2016 |
|
|
2017 |
|
||
|
|
|
NT$ |
|
|
NT$ |
|
||
|
|
|
(In Millions) |
|
|||||
|
Associates |
|
$ |
10 |
|
|
$ |
6 |
|
|
Joint ventures |
|
|
1 |
|
|
|
— |
|
|
|
|
$ |
11 |
|
|
$ |
6 |
|
|
|
6) |
Acquisition of property, plant and equipment |
|
|
|
Year Ended December 31 |
|
|||||||||
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|||
|
|
|
NT$ |
|
|
NT$ |
|
|
NT$ |
|
|||
|
|
|
(In Millions) |
|
|||||||||
|
Associates |
|
$ |
314 |
|
|
$ |
313 |
|
|
$ |
390 |
|
|
Joint ventures |
|
|
11 |
|
|
|
7 |
|
|
|
— |
|
|
|
|
$ |
325 |
|
|
$ |
320 |
|
|
$ |
390 |
|
|
|
7) |
Prepayments |
Chunghwa entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite. This lease is for 15 years which should start from the official operation of ST-2 satellite and the total contract value is approximately $6,000 million (SG$261 million), including a prepayment of $3,068 million, and the rest of amount should be paid annually when ST-2 satellite starts its official operation. ST-2 satellite was launched in May 2011, and began its official operation in August 2011. The total rental expense for the year ended December 31, 2015 was $404 million, which consisted of an offsetting credit of the prepayment of $204 million and an additional accrual of $200 million. The total rental expense for the year ended December 31, 2016 was $394 million, which consisted of an offsetting credit of the prepayment of $204 million and an additional accrual of $190 million. The total rental expense for the year ended December 31, 2017 was $392 million, which consisted of an offsetting credit of the prepayment of $204 million and an additional accrual of $188 million. The prepaid rents (classified as prepayments) as of December 31, 2016 and 2017, were as follows:
|
|
|
December 31 |
|
|||||
|
|
|
2016 |
|
|
2017 |
|
||
|
|
|
NT$ |
|
|
NT$ |
|
||
|
|
|
(In Millions) |
|
|||||
|
Prepaid rents - current |
|
$ |
204 |
|
|
$ |
204 |
|
|
Prepaid rents - noncurrent |
|
|
1,755 |
|
|
|
1,551 |
|
|
|
|
$ |
1,959 |
|
|
$ |
1,755 |
|
|
|
c. |
Compensation of key management personnel |
The compensation of directors and other key management personnel for the years ended December 31, 2015, 2016 and 2017 were as follows:
|
|
|
Year Ended December 31 |
|
|||||||||
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|||
|
|
|
NT$ |
|
|
NT$ |
|
|
NT$ |
|
|||
|
|
|
|
|
|
|
(In Millions) |
|
|
|
|
|
|
|
Short-term employee benefits |
|
$ |
212 |
|
|
$ |
251 |
|
|
$ |
254 |
|
|
Post-employment benefits |
|
|
9 |
|
|
|
8 |
|
|
|
9 |
|
|
Share-based payment |
|
|
3 |
|
|
|
2 |
|
|
|
2 |
|
|
|
|
$ |
224 |
|
|
$ |
261 |
|
|
$ |
265 |
|
The compensation of directors and other key management personnel was mainly determined by the compensation committee having regard to the performance of individual and market trends.