SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2015
Commission File Number: 000-30540
GIGAMEDIA
LIMITED
8F, No. 22, Lane 407,
Section 2, Tiding
Boulevard
Neihu District
Taipei, Taiwan (R.O.C.)
(Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F x Form 40-F ¨
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes ¨ No
x
(If Yes is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b) :82- .)
GIGAMEDIA LIMITED is submitting under cover of Form 6-K:
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1. |
GigaMedia Notice of Annual General Meeting of Shareholders and Proxy Statement (attached hereto as Exhibit 99.1) |
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2. |
GigaMedia Annual General Meeting of Shareholders Proxy Card (attached hereto as Exhibit 99.2) |
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3. |
GigaMedia 2014 Financial Statements Prepared in Accordance with U.S. GAAP (attached hereto as Exhibit 99.3) |
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4. |
GigaMedia 2014 Financial Statements Prepared in Accordance with Singapore GAAP (attached hereto as Exhibit 99.4) |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
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GigaMedia Limited |
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(Registrant) |
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Date: May 27, 2015 |
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By: /s/ Collin Hwang |
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(Signature) |
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Name: Collin Hwang |
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Title: Chief Executive Officer |
Exhibit 99.1
NOTICE OF THE SIXTEENTH ANNUAL GENERAL MEETING OF SHAREHOLDERS
GigaMedia Limited
Incorporated in the Republic of Singapore
Registration No.: 199905474H
REGISTERED OFFICE
80
Robinson Road, #02-00
Singapore 068898
The 2015 annual general meeting of the shareholders of GigaMedia Limited (the Company) will be held on June 22, 2015 at 3 p.m.
local time at 1404-5 Sunbeam Plaza, 1155 Canton Road, Kowloon, Hong Kong, for the following purposes:
AS ORDINARY AND SPECIAL BUSINESS
ORDINARY RESOLUTIONS:
To consider and, if thought fit, to
pass, with or without modification, the following resolutions which will be proposed as Ordinary Resolutions:
1. Adoption of audited financial statements
RESOLVED that the Report of the Directors, Statement by the Directors, Auditors Report and Audited Financial Statements of the
Company for the financial year ended December 31, 2014 are received and adopted.
(Resolution 1)
2. Approval of appointment of auditors
RESOLVED
that KPMG and KPMG LLP be and are hereby appointed as the independent external auditors of the Company and that the Directors be and are hereby authorized to fix their remuneration.
(Resolution 2)
3. Approval of Directors remuneration
RESOLVED that the remuneration of the Directors is hereby approved in an aggregate amount not exceeding US$350,000 in respect of their
professional services to the Company until the conclusion of the next Annual General Meeting of the Company.
(Resolution 3)
4. Approval for authority to allot and issue shares
RESOLVED that pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore (Companies Act), authority be and
is hereby given to the Directors of the Company to:
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(1) (a) |
issue ordinary shares in the Company (Shares) whether by way of rights, bonus or otherwise; and/or |
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(b) |
make or grant offers, agreements or options (collectively, Instruments) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments
to) options, warrants, debentures or other instruments convertible into Shares, |
at any time and upon such terms and
conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and
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(2) |
notwithstanding that the authority conferred by this Resolution may have ceased to be in force, issue Shares pursuant to any Instrument made or granted by the Directors while this Resolution was in force; and
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(3) |
unless varied or revoked by the Company in general meeting, such authority conferred on the Directors of the Company shall continue in force: |
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(i) |
until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held whichever is earlier; or |
1
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(ii) |
in the case of Shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such Shares in accordance with the terms of the Instruments. |
(Resolution 4)
5. Approval for share purchase mandate RESOLVED
that:
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(1) |
for the purposes of Sections 76C and 76E of the Companies Act, the exercise by the Directors of the Company of all the powers of the Company to purchase or otherwise acquire issued Shares not exceeding in aggregate the
Maximum Limit (as hereafter defined), at such price or prices as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), by way of market purchase(s) on The Nasdaq Stock Market (Nasdaq)
or off-market purchase(s) on an equal access scheme(s) as may be determined by the Directors as they see fit, which scheme(s) shall satisfy all the conditions of the Companies Act, and otherwise in accordance with all other laws and regulations and
rules of Nasdaq as may for the time being be applicable, be and is hereby authorized and approved generally and unconditionally (the Share Purchase Mandate); |
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(2) |
unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the Company pursuant to the Share Purchase Mandate may be exercised by the Directors at any time and from time to
time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of: |
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(a) |
the date on which the next Annual General Meeting of the Company is held; and |
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(b) |
the date by which the next Annual General Meeting of the Company is required by law to be held; |
Average Closing Price means the average of the last
dealt prices of a Share for the five consecutive trading days on which the Shares are transacted on Nasdaq immediately preceding the date of market purchase by the Company or the date of making the offer pursuant to an equal access scheme and deemed
to be adjusted in accordance with the listing rules of Nasdaq for any corporate action which occurs after the relevant five day period;
Maximum Limit means that number of issued Shares representing 10% of the total number of issued Shares as at the date of the
passing of this Resolution (excluding any Shares which are held as treasury shares as at that date); and
Maximum Price,
in relation to a Share to be purchased or acquired pursuant to the Share Purchase Mandate, means the purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which shall not exceed 105% of the
Average Closing Price of the Shares; and
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(4) |
the Directors of the Company and/or any of them be and are hereby authorized to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider expedient
or necessary to give effect to the transactions contemplated and/or authorized by this Resolution. |
(Resolution 5)
6. To transact any other business as may properly be transacted at the Sixteenth Annual General Meeting of the Company.
2
NOTES:
1.
Shareholders are cordially invited to attend the Sixteenth Annual General Meeting in person. Whether or not you plan to be at the Sixteenth Annual General Meeting, you are urged to return your proxy. A shareholder entitled to attend and vote is
entitled to appoint one or more proxies to attend and to vote instead of him.
2. Shareholders wishing to vote by proxy should complete the attached form.
3. The proxy form of an individual shareholder shall be signed either by the shareholder personally or by his attorney. The proxy form of a corporate
shareholder shall be given either under its common seal or signed on its behalf by an attorney or a duly authorized officer of the corporate shareholder.
4. A proxy need not be a shareholder of the Company.
5. The
proxy form (and if relevant, the original power of attorney, or other authority under which it is signed or a notarially certified copy of such power or authority) must be deposited at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717, or the office of the Company, 8F, No. 22, Lane 407, Section 2, Tiding Boulevard, Taipei 114, Taiwan R.O.C., not less than 48 hours before the time for holding the Sixteenth Annual General Meeting, that is by no later than 3 a.m.
June 17, 2015 (New York time), or 3 p.m. June 18, 2015 (Taipei time), failing which the proxy shall not be treated as valid.
6. Electronic
Delivery of Future Proxy Materials. Shareholders can consent to receiving all future proxy statements, proxy card and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions
below relating to Electronic Delivery of Future Proxy Materials and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
7. Only shareholders of record at the close of business on May 1, 2015 are entitled to notice of and to vote at the Sixteenth Annual General Meeting, or
any adjournment or postponement of the Sixteenth Annual General Meeting.
8. The Company intends to use internal sources of funds or external borrowings or
a combination of both to finance the Companys purchase or acquisition of the Shares pursuant to the Share Purchase Mandate. The Directors do not propose to exercise the Share Purchase Mandate to such extent that it would materially and
adversely affect the financial position of the Company and its subsidiaries. The amount of financing required for the Company to purchase or acquire its Shares, and the impact on the Companys financial position, cannot be ascertained as at the
date of this Notice as this will depend on the number of Shares purchased or acquired, the price at which such Shares were purchased or acquired and whether the Shares purchased or acquired would be held in treasury or cancelled.
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BY ORDER OF THE BOARD |
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/s/ Kuo-Lun Huang |
Kuo-Lun Huang (aka Collin Hwang) |
Director and Chief Executive Officer |
3
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
Questions and Answers about the Annual Meeting and Voting
Proposal 1
Proposal 2
Proposal 3
Proposal 4
Proposal 5
Other Matters
Proxy Solicitation
4
GigaMedia Limited
Incorporated in the Republic of Singapore
Registration No.: 199905474H
REGISTERED OFFICE
80
Robinson Road, #02-00
Singapore 068898
PROXY
STATEMENT
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Why Did I Receive This Proxy Statement?
We sent you this proxy statement and the enclosed proxy card because the Companys Board of Directors is soliciting your proxy to be used
at the Companys annual meeting of shareholders on June 22, 2015 at 3 p.m. local time at 1404-5 Sunbeam Plaza, 1155 Canton Road, Kowloon, Hong Kong, or at any adjournment or postponement of the meeting.
Who Can Vote?
You are entitled to vote
if you owned the Shares on the record date (Record Date), which is the close of business on May 1, 2015. Each Share that you own entitles you to one vote.
How Many Shares of Voting Stock Are Outstanding?
On the Record Date, there were 55,261,661 Shares outstanding. The Shares are our only class of voting stock.
What May I Vote On?
1. Adoption of Audited Financial
Statements
2. Approval of Appointment of Auditors
3.
Approval of Directors Remuneration
4. Approval for Authority to Allot and Issue Shares
5. Approval for Share Purchase Mandate
Other Business
How Do I Vote?
To vote by proxy, you
should complete, sign and date the enclosed proxy card and return it promptly in the prepaid envelope provided.
Electronic Delivery of Future Proxy
Materials
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all
future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please go to www.proxyvote.com to indicate that you agree to receive or access proxy materials electronically in
future years.
5
May I Revoke My Proxy?
Your proxy may be revoked prior to its exercise by appropriate notice to the undersigned.
If I Plan To Attend The Meeting, Should I Still Vote By Proxy?
Whether you plan to attend the meeting or not, we urge you to vote by proxy. Returning the proxy card will not affect your right to attend the
meeting, and your proxy will not be used if you are personally present at the meeting and inform the Secretary in writing prior to the voting that you wish to vote your Shares in person.
How Will My Proxy Get Voted?
If you
properly fill in your proxy card and send it to us, your proxy holder (the individual named on your proxy card) will vote your Shares as you have directed. If you sign the proxy card but do not make specific choices, the proxy holder will vote your
Shares as recommended by the Board of Directors and the Companys management.
How Will Voting On Any Other Business Be Conducted?
Although we do not know of any business to be considered at the meeting other than the proposals described in this proxy statement, if any
other business is presented at the meeting, your returned proxy gives authority to the proxy holder to vote on these matters in his discretion.
6
Proposal 1. ADOPTION OF AUDITED FINANCIAL STATEMENTS
The Company seeks shareholders adoption of the audited financial statements of the Company (the Audited Financial
Statements), which have been prepared under Singapore Generally Accepted Accounting Principles, in respect of the financial year ended December 31, 2014. Along with the Audited Financial Statements, the Company seeks
Shareholders adoption of the Report of the Directors, Statement by the Directors and Auditors Report of the Company in respect of the same financial year.
Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the Sixteenth
Annual General Meeting of the Company (AGM).
The Board of Directors of the Company (the Board of
Directors) recommends a vote FOR this proposal.
Proposal 2. APPROVAL OF APPOINTMENT OF AUDITORS
The Company seeks Shareholders approval for the appointment of KPMG and KPMG LLP as the independent external auditors of the Company to
hold such office until the conclusion of the next Annual General Meeting of the Company. The Board of Directors also seeks shareholders approval to authorize the Board of Directors to fix the remuneration for KPMG and KPMG LLP in respect of
their service to the Company for the financial year ended December 31, 2015.
Adoption of this proposal requires the affirmative vote
of a majority of the votes cast by shareholders entitled to vote at the AGM.
The Board of Directors recommends a vote FOR this
proposal.
Proposal 3. APPROVAL OF DIRECTORS REMUNERATION
The Company seeks shareholders approval on the remuneration of Directors in an aggregated amount not exceeding US$350,000 in respect of
their professional services to the Company until the conclusion of the next Annual General Meeting of the Company.
Adoption of this
proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the AGM.
The Companys
management recommends a vote FOR this proposal.
Proposal 4. APPROVAL FOR AUTHORITY TO ALLOT AND ISSUE SHARES
The Company is incorporated in Singapore. Under the Companies Act, Chapter 50 of Singapore (the Companies Act), the
Directors may exercise any power of the Company to issue new Shares only with the prior approval of the shareholders of the Company at a general meeting. Such approval, if granted, is effective from the date of the general meeting at which the
approval was given until the date on which the next Annual General Meeting of the Company is held or is required by law to be held, whichever is earlier.
Shareholders approval is sought to give Directors authority to allot and issue new Shares and other instruments convertible into Shares
during the period from the Sixteenth Annual General Meeting to the earlier of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held.
Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the AGM.
The Board of Directors recommends a vote FOR this proposal.
Proposal 5. APPROVAL FOR SHARE PURCHASE MANDATE
The approval of the Share Purchase Mandate authorizing the Company to purchase or acquire its Shares would give the Company the flexibility to
undertake share purchases or acquisitions at any time, subject to market conditions, during the period when the Share Purchase Mandate is in force.
7
In managing the business of the Company and its subsidiaries (the Group), the
Companys management strives to increase shareholders value by improving, inter alia, the return on equity of the Group. A share purchase by the Company is one of the ways through which the return on equity of the Group may be
enhanced.
A Share purchase is also an available option for the Company to return surplus cash which is in excess of the financial and
possible investment needs of the Group to its shareholders. In addition, the Share Purchase Mandate will allow the Company to have greater flexibility over, inter alia, the Companys share capital structure and its dividend policy.
The Company intends to use internal sources of funds or external borrowings or a combination of both to finance the Companys purchase or
acquisition of the Shares pursuant to the Share Purchase Mandate. The Directors do not propose to exercise the Share Purchase Mandate to such extent that it would materially and adversely affect the financial position of the Group.
Share repurchase programmes may also help buffer short-term share price volatility and off-set the effects of short-term speculators and
investors and, in turn, bolster shareholder confidence and employee morale.
Adoption of this proposal requires the affirmative vote of a
majority of the votes cast by shareholders entitled to vote at the AGM.
The Board of Directors recommends a vote FOR this
proposal.
OTHER MATTERS
As of
the date of this Proxy Statement, the Company does not intend to present and has not been informed that any other person intends to present any business not specified in this Proxy Statement for action at the Sixteenth Annual General Meeting.
Shareholders are urged to sign the enclosed proxy form and to return it promptly in the enclosed envelope. Proxies will be voted in accordance
with shareholders directions. Signing the proxy form does not affect a shareholders right to vote at the Sixteenth Annual General Meeting, and the proxy may be revoked prior to its exercise by appropriate notice to the undersigned.
PROXY SOLICITATION
The Company will pay
the cost of preparing and mailing this proxy statement and form of proxy to its shareholders. The Company has retained Mackenzie Partners, Inc. to request banks and brokers to forward copies of these materials to persons for whom they hold Shares
and to request authority for execution of the proxies.
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GIGAMEDIA LIMITED |
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/s/ Kuo-Lun Huang |
Kuo-Lun Huang (aka Collin Hwang) |
Director and Chief Executive Officer |
8
Exhibit 99.2
GIGAMEDIA LIMITED
8F, NO. 22, LANE 407, SECTION 2
TIDING BLVD.
NEIHU DISTRICT, TAIPEI 114
TAIWAN R.O.C.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred
by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please go to www.proxyvote.com,
indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY MAIL
Mark, sign and date your proxy card and return it, no less than 48 hours before the time of the meeting, in the postage-paid envelope we have provided or return it to Vote
Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M92191-P66765
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED
POSTAGE PRE-PAID ENVELOPE.
GIGAMEDIA LIMITED
The Board of Directors
recommends you vote For proposals 1 through 5.
For Against Abstain
1.
Adoption of Audited Financial Statements
2. Approval of Appointment of Auditors
3. Approval of Directors Remuneration
4. Approval of Authority to Allot
and Issue Shares
5. Approval for Share Purchase Mandate
NOTE: Such other
business as may properly come before the meeting or any adjournment thereof.
For address changes/comments, mark here.
(see reverse for instructions)
Please sign exactly as your name(s) appear(s) hereon. When
signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by
authorized officer.
Signature [PLEASE SIGN WITHIN BOX] Date
Signature (Joint
Owners)
Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, U.S. Annual Report and Singapore Annual Report are available at www.proxyvote.com.
M92192-P66765
GIGAMEDIA LIMITED
Annual Meeting of Shareholders
June 22, 2015 3:00 PM
This proxy is solicited by the Board of Directors
I/We, being a Shareholder/Shareholders of
the above named Company, hereby appoint Kuo-Lun Huang (aka Collin Hwang) of 8F, No. 22, Lane 407, Section 2 Tiding Blvd., Neihu District, Taipei R.O.C., failing whom the Chairman of the Meeting, as my/our proxy to vote for me/us on my/our behalf at
the Annual General Meeting of the Company to be held at 1404-5 Sunbeam Plaza, 1155 Canton Rd., Kowloon, Hong Kong on Monday, June 22, 2015, at 3:00 PM local time, and at any adjournment or postponement thereof.
This Proxy, when properly executed and returned in a timely manner, will be voted at the Annual General Meeting and any adjournments thereof in the manner described herein. If no
contrary indication is made, the proxy will be voted as recommended by the Board of Directors and the Companys management.
1. The proxy form must be signed
by the Shareholder or by the Shareholders attorney duly authorized in writing or, if the appointer is a corporation, either, under seal or in some other manner approved by the directors of the Company.
2. To be effective, the proxy form (and power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority, if relevant) must
be returned to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, no less than 48 hours before the meeting.
Address changes/comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
Exhibit 99.3
GIGAMEDIA LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2014
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(With Reports of Independent Registered Public Accounting Firms Thereon)
GIGAMEDIA LIMITED AND SUBSIDIARIES
Index to Consolidated Financial Statements
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Page |
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Reports of Independent Registered Public Accounting Firms |
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1 |
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Consolidated balance sheets as of December 31, 2013 and 2014 |
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3 |
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Consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014 |
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5 |
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Consolidated statements of comprehensive loss for the years ended December 31, 2012, 2013 and 2014 |
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6 |
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Consolidated statements of changes in equity for the years ended December 31, 2012, 2013 and 2014 |
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7 |
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Consolidated statements of cash flows for the years ended December 31, 2012, 2013 and 2014 |
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8 |
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Notes to consolidated financial statements |
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10 |
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Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
GigaMedia Limited:
We have audited the accompanying consolidated balance sheets of GigaMedia Limited and subsidiaries (the Company) as of December 31, 2013 and
2014, and the related consolidated statements of operations, comprehensive loss, changes in equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated
financial statements referred to above present fairly in all material respects, the financial position of GigaMedia Limited and subsidiaries as of December 31, 2013 and 2014, and the results of their operations and their cash flows for the
years then ended in conformity with U.S. generally accepted accounting principles.
/S/ KPMG
Taipei, Taiwan (the Republic of China)
April 28, 2015
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
GigaMedia Limited
We have audited the accompanying consolidated statements of operations, comprehensive loss, changes in equity and cash flows of GigaMedia Limited and
subsidiaries (the Company) for the year ended December 31, 2012. The Companys management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of
operations and cash flows of GigaMedia Limited and subsidiaries for the year ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.
/s/ GHP Horwath, P.C.
Denver, Colorado
April 30, 2013
2
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2013 AND 2014
(in
thousands of US dollars)
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December 31 |
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2013 |
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2014 |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents (Note 10) |
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$ |
58,801 |
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$ |
50,640 |
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Marketable securities - current (Note 11) |
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|
21,460 |
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29,340 |
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Accounts receivable - net (Note 12) |
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2,027 |
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1,298 |
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Prepaid expenses |
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|
750 |
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|
|
564 |
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Restricted cash (Notes 10 and 16) |
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|
|
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8,991 |
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Other current assets (Notes 13 and 25) |
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|
293 |
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325 |
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Total Current Assets |
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83,331 |
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91,158 |
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Marketable debt securities - noncurrent (Note 14) |
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6,048 |
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4,744 |
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Equity investments (Note 15) |
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5,822 |
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5,781 |
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PROPERTY, PLANT AND EQUIPMENT |
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Land and buildings |
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1,211 |
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1,141 |
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Information and communication equipment |
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4,082 |
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3,903 |
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Office furniture and fixtures |
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|
184 |
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176 |
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Leasehold improvements |
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122 |
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123 |
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Other |
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|
72 |
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|
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5,599 |
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|
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5,415 |
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Less: Accumulated depreciation and amortization |
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(3,922 |
) |
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(3,752 |
) |
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1,677 |
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1,663 |
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INTANGIBLE ASSETS - NET (Note 7) |
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1,461 |
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222 |
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OTHER ASSETS |
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|
|
|
|
Refundable deposits |
|
|
306 |
|
|
|
302 |
|
Prepaid licensing and royalty fees (Note 8) |
|
|
4,666 |
|
|
|
4,383 |
|
Other (Note 19) |
|
|
10 |
|
|
|
51 |
|
|
|
|
|
|
|
|
|
|
Total Other Assets |
|
|
4,982 |
|
|
|
4,736 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
103,321 |
|
|
$ |
108,304 |
|
|
|
|
|
|
|
|
|
|
(Continued)
3
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Continued)
DECEMBER 31, 2013 AND 2014
(in
thousands of US dollars, except share data)
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2013 |
|
|
2014 |
|
LIABILITIES & EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Short-term borrowings (Note 16) |
|
$ |
4,361 |
|
|
$ |
18,641 |
|
Accounts payable |
|
|
1,178 |
|
|
|
771 |
|
Accrued compensation |
|
|
380 |
|
|
|
796 |
|
Accrued expenses (Note 17) |
|
|
2,617 |
|
|
|
3,465 |
|
Deferred revenue |
|
|
2,441 |
|
|
|
1,946 |
|
Other current liabilities (Note 18) |
|
|
3,862 |
|
|
|
1,718 |
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
|
14,839 |
|
|
|
27,337 |
|
|
|
|
|
|
|
|
|
|
OTHER LIABILITIES |
|
|
|
|
|
|
|
|
Accrued pension liabilities (Note 19) |
|
|
170 |
|
|
|
|
|
Other (Notes 20 and 25) |
|
|
11 |
|
|
|
1,938 |
|
|
|
|
|
|
|
|
|
|
Total Other Liabilities |
|
|
181 |
|
|
|
1,938 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
15,020 |
|
|
|
29,275 |
|
|
|
|
|
|
|
|
|
|
EQUITY (Note 22) |
|
|
|
|
|
|
|
|
GigaMedia Shareholders Equity: |
|
|
|
|
|
|
|
|
Common shares, no par value, and additional paid-in capital; issued and outstanding 50,723 thousand shares in 2013 and
55,262 thousand shares in 2014 |
|
|
305,072 |
|
|
|
308,682 |
|
Accumulated deficit |
|
|
(213,021 |
) |
|
|
(218,176 |
) |
Accumulated other comprehensive loss |
|
|
(3,603 |
) |
|
|
(11,487 |
) |
|
|
|
|
|
|
|
|
|
Total GigaMedia shareholders equity |
|
|
88,448 |
|
|
|
79,019 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
(147 |
) |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
Total Equity |
|
|
88,301 |
|
|
|
79,029 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 27) |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
103,321 |
|
|
$ |
108,304 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
4
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(in thousands of US dollars, except for earnings per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
OPERATING REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Asian online game and service revenues |
|
$ |
27,470 |
|
|
$ |
14,106 |
|
|
$ |
8,199 |
|
Other revenues |
|
|
|
|
|
|
926 |
|
|
|
1,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,470 |
|
|
|
15,032 |
|
|
|
9,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS OF REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Asian online game and service revenues |
|
|
(11,388 |
) |
|
|
(6,425 |
) |
|
|
(6,010 |
) |
Cost of other revenues |
|
|
|
|
|
|
(1,159 |
) |
|
|
(1,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,388 |
) |
|
|
(7,584 |
) |
|
|
(7,835 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
16,082 |
|
|
|
7,448 |
|
|
|
1,944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Product development and engineering expenses |
|
|
(1,471 |
) |
|
|
(1,698 |
) |
|
|
(892 |
) |
Selling and marketing expenses |
|
|
(8,377 |
) |
|
|
(4,815 |
) |
|
|
(6,708 |
) |
General and administrative expenses |
|
|
(13,384 |
) |
|
|
(6,324 |
) |
|
|
(6,378 |
) |
Bad debt expense (Note 12) |
|
|
(169 |
) |
|
|
(37 |
) |
|
|
(37 |
) |
Impairment loss on property, plant and equipment (Note 9) |
|
|
|
|
|
|
|
|
|
|
(28 |
) |
Impairment loss on goodwill (Notes 6 and 9) |
|
|
(12,489 |
) |
|
|
(17,054 |
) |
|
|
|
|
Impairment loss on intangible assets (Note 9) |
|
|
(15 |
) |
|
|
(13,251 |
) |
|
|
(115 |
) |
Impairment loss on prepaid licensing and royalty fees (Notes 8 and 9) |
|
|
(702 |
) |
|
|
(2,752 |
) |
|
|
(1,259 |
) |
Other |
|
|
(49 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,656 |
) |
|
|
(45,935 |
) |
|
|
(15,417 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(20,574 |
) |
|
|
(38,487 |
) |
|
|
(13,473 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING INCOME (EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
283 |
|
|
|
238 |
|
|
|
682 |
|
Gain on sales of marketable debt securities (Notes 11 and 14) |
|
|
5,665 |
|
|
|
1,739 |
|
|
|
8,621 |
|
Interest expense |
|
|
(247 |
) |
|
|
(49 |
) |
|
|
(243 |
) |
Foreign exchange gain (loss), net |
|
|
434 |
|
|
|
45 |
|
|
|
(556 |
) |
Equity in net earnings (losses) on equity investments - net (Note 15) |
|
|
234 |
|
|
|
526 |
|
|
|
(531 |
) |
Impairment loss on marketable debt securities and investments (Note 9) |
|
|
(1,193 |
) |
|
|
|
|
|
|
|
|
Gain on sale of equity method investments (Note 5) |
|
|
2,480 |
|
|
|
1,220 |
|
|
|
|
|
Other |
|
|
(7 |
) |
|
|
86 |
|
|
|
437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,649 |
|
|
|
3,805 |
|
|
|
8,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
|
(12,925 |
) |
|
|
(34,682 |
) |
|
|
(5,063 |
) |
INCOME TAX (EXPENSE) BENEFIT (Note 25) |
|
|
(671 |
) |
|
|
(61 |
) |
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM CONTINUING OPERATIONS |
|
|
(13,596 |
) |
|
|
(34,743 |
) |
|
|
(4,990 |
) |
LOSS FROM DISCONTINUED OPERATIONS - NET OF TAX (Note 5) |
|
|
(2,521 |
) |
|
|
(318 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
|
(16,117 |
) |
|
|
(35,061 |
) |
|
|
(4,990 |
) |
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO THE NONCONTROLLING INTERESTS |
|
|
827 |
|
|
|
281 |
|
|
|
(165 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO SHAREHOLDERS OF GIGAMEDIA |
|
($ |
15,290 |
) |
|
($ |
34,780 |
) |
|
($ |
5,155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO SHAREHOLDERS OF GIGAMEDIA |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations - net of tax |
|
($ |
12,769 |
) |
|
($ |
34,462 |
) |
|
($ |
5,155 |
) |
Loss from discontinued operations - net of tax |
|
|
(2,521 |
) |
|
|
(318 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ |
15,290 |
) |
|
($ |
34,780 |
) |
|
($ |
5,155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER SHARE ATTRIBUTABLE TO GIGAMEDIA |
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
($ |
0.25 |
) |
|
($ |
0.68 |
) |
|
($ |
0.10 |
) |
Loss from discontinued operations |
|
|
(0.05 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
($ |
0.30 |
) |
|
($ |
0.69 |
) |
|
($ |
0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
($ |
0.25 |
) |
|
($ |
0.68 |
) |
|
($ |
0.10 |
) |
Loss from discontinued operations |
|
|
(0.05 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
($ |
0.30 |
) |
|
($ |
0.69 |
) |
|
($ |
0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES USED TO COMPUTE LOSS PER SHARE ATTRIBUTABLE TO GIGAMEDIA SHAREHOLDERS (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
50,720 |
|
|
|
50,720 |
|
|
|
53,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
50,720 |
|
|
|
50,720 |
|
|
|
53,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
5
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(in thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
NET LOSS |
|
($ |
16,117 |
) |
|
($ |
35,061 |
) |
|
($ |
4,990 |
) |
OTHER COMPREHENSIVE INCOME (LOSS) - NET OF TAX: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable debt securities |
|
|
(24,004 |
) |
|
|
4,698 |
|
|
|
(7,715 |
) |
Defined benefit pension plan adjustment |
|
|
(323 |
) |
|
|
15 |
|
|
|
|
|
Foreign currency translation adjustments |
|
|
1,814 |
|
|
|
57 |
|
|
|
(171 |
) |
Deconsolidation of subsidiaries |
|
|
2,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ |
19,714 |
) |
|
|
4,770 |
|
|
|
(7,886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS |
|
|
(35,831 |
) |
|
|
(30,291 |
) |
|
|
(12,876 |
) |
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO THE NONCONTROLLING INTERESTS |
|
|
(2,189 |
) |
|
|
287 |
|
|
|
(163 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS ATTRIBUTABLE TO GIGAMEDIA SHAREHOLDERS |
|
($ |
38,020 |
) |
|
($ |
30,004 |
) |
|
($ |
13,039 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
6
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(in thousands of US dollars and shares, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GIGAMEDIA SHAREHOLDERS |
|
|
|
|
|
|
|
|
|
Common shares and additional paid-in capital |
|
|
Accumulated |
|
|
Accumulated other
comprehensive |
|
|
Noncontrolling |
|
|
|
|
|
|
Shares |
|
|
Amount |
|
|
deficit (Note 22) |
|
|
income (loss) |
|
|
interest |
|
|
Total |
|
Balance as of January 1, 2012 |
|
|
50,720 |
|
|
$ |
304,672 |
|
|
($ |
162,951 |
) |
|
|
14,351 |
|
|
($ |
2,996 |
) |
|
$ |
153,076 |
|
Stock-based compensation |
|
|
|
|
|
|
179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
179 |
|
Reversal of cumulative dividend to subsidiary preferred shares (Note 21) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
469 |
|
|
|
469 |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
(15,290 |
) |
|
|
|
|
|
|
(827 |
) |
|
|
(16,117 |
) |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,730 |
) |
|
|
3,016 |
|
|
|
(19,714 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
|
|
50,720 |
|
|
|
304,851 |
|
|
|
(178,241 |
) |
|
|
(8,379 |
) |
|
|
(338 |
) |
|
|
117,893 |
|
Issuance of common shares from exercise of stock options and RSUs |
|
|
3 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Stock-based compensation |
|
|
|
|
|
|
219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
219 |
|
Acquisition of FingerRockz |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
478 |
|
|
|
478 |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
(34,780 |
) |
|
|
|
|
|
|
(281 |
) |
|
|
(35,061 |
) |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,776 |
|
|
|
(6 |
) |
|
|
4,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2013 |
|
|
50,723 |
|
|
|
305,072 |
|
|
|
(213,021 |
) |
|
|
(3,603 |
) |
|
|
(147 |
) |
|
|
88,301 |
|
Issuance of common shares from exercise of stock options and RSUs |
|
|
4,539 |
|
|
|
3,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,593 |
|
Stock-based compensation |
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17 |
|
Liquidation of Dragongate Enterprises Ltd. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6 |
) |
|
|
(6 |
) |
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
(5,155 |
) |
|
|
|
|
|
|
165 |
|
|
|
(4,990 |
) |
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,884 |
) |
|
|
(2 |
) |
|
|
(7,886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2014 |
|
|
55,262 |
|
|
$ |
308,682 |
|
|
($ |
218,176 |
) |
|
($ |
11,487 |
) |
|
|
10 |
|
|
$ |
79,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
7
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(in thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(16,117 |
) |
|
($ |
35,061 |
) |
|
($ |
4,990 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,224 |
|
|
|
408 |
|
|
|
306 |
|
Amortization |
|
|
2,204 |
|
|
|
1,907 |
|
|
|
1,211 |
|
Stock-based compensation |
|
|
179 |
|
|
|
219 |
|
|
|
21 |
|
Gain on sales of equity method investments |
|
|
(2,480 |
) |
|
|
(1,220 |
) |
|
|
|
|
Impairment loss on property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
28 |
|
Impairment losses on goodwill |
|
|
12,489 |
|
|
|
17,054 |
|
|
|
|
|
Impairment losses on intangible assets |
|
|
15 |
|
|
|
13,251 |
|
|
|
115 |
|
Impairment losses on prepaid licensing and royalty fees |
|
|
702 |
|
|
|
2,752 |
|
|
|
1,259 |
|
Provision for bad debt expenses |
|
|
169 |
|
|
|
37 |
|
|
|
37 |
|
Losses (gains) on disposals of property, plant and equipment |
|
|
208 |
|
|
|
4 |
|
|
|
(2 |
) |
Gains on sales of marketable securities |
|
|
(5,665 |
) |
|
|
(1,739 |
) |
|
|
(8,621 |
) |
Equity in net (earnings) losses on equity investments - net |
|
|
(234 |
) |
|
|
(526 |
) |
|
|
531 |
|
Impairment losses on marketable securities and investments |
|
|
1,193 |
|
|
|
|
|
|
|
|
|
Other |
|
|
377 |
|
|
|
(141 |
) |
|
|
(306 |
) |
Net changes in operating assets and liabilities, net of business acquisitions and divestitures: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
1,537 |
|
|
|
767 |
|
|
|
692 |
|
Prepaid expenses |
|
|
755 |
|
|
|
52 |
|
|
|
186 |
|
Other current assets |
|
|
(174 |
) |
|
|
708 |
|
|
|
(260 |
) |
Accounts payable |
|
|
(515 |
) |
|
|
854 |
|
|
|
(407 |
) |
Accrued expenses |
|
|
(59 |
) |
|
|
(2,223 |
) |
|
|
848 |
|
Accrued compensation |
|
|
(831 |
) |
|
|
(853 |
) |
|
|
416 |
|
Other current liabilities |
|
|
(467 |
) |
|
|
(1,017 |
) |
|
|
(711 |
) |
Accrued pension liabilities / Prepaid pension assets |
|
|
110 |
|
|
|
(111 |
) |
|
|
(215 |
) |
Prepaid licensing and royalty fees |
|
|
(2,397 |
) |
|
|
1,026 |
|
|
|
(976 |
) |
Other |
|
|
454 |
|
|
|
(453 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(7,323 |
) |
|
|
(4,305 |
) |
|
|
(10,838 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in restricted cash |
|
|
3,694 |
|
|
|
|
|
|
|
(8,991 |
) |
Cash dividends received from investees |
|
|
|
|
|
|
|
|
|
|
247 |
|
Proceeds from disposals of marketable debt securities |
|
|
8,610 |
|
|
|
3,419 |
|
|
|
18,692 |
|
Divestiture of business, net of cash transferred |
|
|
(1,308 |
) |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(429 |
) |
|
|
(225 |
) |
|
|
(420 |
) |
Proceeds from disposals of property, plant and equipment |
|
|
76 |
|
|
|
35 |
|
|
|
2 |
|
Proceeds from disposals of businesses, net of transaction costs |
|
|
1,735 |
|
|
|
3,258 |
|
|
|
|
|
Purchases of marketable debt securities |
|
|
|
|
|
|
(2,460 |
) |
|
|
(6,490 |
) |
Purchase of equity investments |
|
|
|
|
|
|
|
|
|
|
(19,552 |
) |
Purchases of intangible assets |
|
|
(1,679 |
) |
|
|
(1,227 |
) |
|
|
(110 |
) |
Acquisitions, net of cash acquired |
|
|
|
|
|
|
73 |
|
|
|
|
|
Decrease (increase) in refundable deposits |
|
|
428 |
|
|
|
86 |
|
|
|
3 |
|
Other |
|
|
(10 |
) |
|
|
(5 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
|
11,117 |
|
|
|
2,954 |
|
|
|
(16,626 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
8
GIGAMEDIA LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(in thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from (repayments of) short-term borrowings |
|
|
(4,348 |
) |
|
|
(3,146 |
) |
|
|
15,232 |
|
Cash received from the exercise of stock options |
|
|
|
|
|
|
2 |
|
|
|
3,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
(4,348 |
) |
|
|
(3,144 |
) |
|
|
18,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign currency exchange differences on cash and cash equivalents |
|
|
(712 |
) |
|
|
565 |
|
|
|
478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(1,266 |
) |
|
|
(3,930 |
) |
|
|
(8,161 |
) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
|
|
63,997 |
|
|
|
62,731 |
|
|
|
58,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
|
$ |
62,731 |
|
|
$ |
58,801 |
|
|
$ |
50,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid during the year |
|
$ |
248 |
|
|
$ |
53 |
|
|
$ |
237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax paid (refunded) during the year |
|
$ |
121 |
|
|
($ |
285 |
) |
|
($ |
84 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
9
GIGAMEDIA LIMITED AND SUBSIDIARIES
Notes To Consolidated Financial Statements
December 31, 2012, 2013 AND 2014
NOTE 1.
Principal Activities, Basis of Presentation, and Summary of Significant Accounting Policies
(a) Principal Activities
GigaMedia Limited (referred to hereinafter as GigaMedia, our Company, we, us, or our) is a diversified provider of online and mobile games and cloud computing
services, with headquarters in Taipei, Taiwan.
Our Asian online game and service business operates a suite of play-for-fun online games and provides
related services, mainly targeting online and mobile game players across Asia, including Greater China and Southeast Asia.
We began developing a new
cloud computing business in the second half of 2012. The cloud business aims at providing an integrated platform of services and tools for medium-to-larger enterprises in Greater China to increase flexibility, efficiency and competitiveness, as well
as in bidding for government contracts in Taiwan. We launched the business in April 2013.
In July 2012 we sold a non-controlling interest we held in an
online gaming software and service business to BetClic Everest Group (BEG). (See Note 5, Divestitures, for additional information.) Prior to the disposal, through our equity investment, the gaming software and service
business offered software solutions for online gaming, which was licensed under a software license and support service contract.
(b) Basis of
Presentation
The accompanying consolidated financial statements of our Company have been prepared in accordance with U.S. generally accepted
accounting principles (U.S. GAAP).
Following the completion of the sale of 60 percent interest in our gaming software and service business in
April 2010, we deconsolidated the results of the gaming software and service business and began accounting for the remaining interest under the equity method of accounting until the closing of the disposal transaction in July 2012 when we sold our
remaining ownership. (See Note 5, Divestitures, for additional information.)
10
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
In June 2012, our board of directors approved a plan to liquidate and dissolve JIDI Network Technology
(Shanghai) Co., Ltd. (JIDI), a wholly-owned subsidiary, and Shanghai JIDI Network Technology Co., Ltd. (Shanghai JIDI), a variable-interest entity controlled through a series of contractual arrangements. Therefore the results
of these entities are reported as discontinued operations for all periods presented. (See Note 5, Divestitures, for additional information.)
(c) Summary of significant accounting policies
Principles of Consolidation
The consolidated
financial statements include the accounts of GigaMedia and subsidiaries after elimination of all significant inter-company accounts and transactions. In addition, the accounts of our Companys variable-interest entities are included in the
consolidated financial statements. (See Note 3, Variable-Interest Entities, for additional information.) The accounting policies for other less than majority-owned investments are described in Note 1 below within the paragraphs headed
Marketable Securities and Investments.
Foreign Currency Translation and Transactions
Assets and liabilities denominated in non-U.S. dollars are translated to U.S. dollars at year-end exchange rates. Income and expense items are translated at
weighted-average rates of exchange prevailing during the year. Cumulative translation adjustments resulting from this process are charged or credited to other comprehensive income. Gains and losses on foreign currency transactions are included in
other income and expenses.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management bases
its estimates on historical experience and also on assumptions that it believes are reasonable. Management assesses these estimates on a regular basis; however, actual results could differ from those estimates. Significant items subject to such
estimates and assumptions include the useful lives of property, plant and equipment; allowances for doubtful accounts; the valuation of deferred tax assets, long-lived assets, inventory, investments and
share-based compensation; and accrued pension liabilities, income tax uncertainties and other contingencies.
11
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Revenue Recognition
General
Revenues are recognized when persuasive
evidence of an arrangement exists, delivery occurs and the customer takes ownership and assumes risks or services are rendered, the sales price is fixed or determinable and collectability is reasonably assured.
Sales taxes assessed by governmental authorities on our revenue transactions are presented on a net basis and therefore are excluded from revenues in our
consolidated financial statements.
Multiple-Element Arrangements
Our Company enters into multiple-element revenue arrangements, which may include any combination of services, software, and/or products. To the extent that a
deliverable in a multiple-element arrangement is subject to specific accounting guidance, whether and/or how to separate multiple deliverable arrangements into separate units of accounting (separability) and how to allocate the arrangement
consideration among those separate units of accounting (allocation) for that deliverable is accounted for in accordance with such specific guidance.
In
addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue.
Asian Online Game and Service Revenues
Online
game revenues are earned through the sale of online game points, prepaid cards, game packs, through the sublicensing of certain games to distributors and through licensing fee revenues. Virtual online game points are sold to distributors or
end-users who can make the payments through credit cards, Internet ATMs or telecommunication service operators. Physical prepaid cards and game packs are sold through distributors and convenience stores. Proceeds from sales of physical cards and
game packs, net of sales discounts, and online game points are deferred when received and revenue is recognized upon the actual usage of the playing time or in-game virtual items by the end-users; over the estimated useful life of virtual items; or
when the sold game points expire and can no longer be used to access the online games or products in accordance with our published game points expiration policy. Sublicensing revenues from the distributors are recognized based on end-users
activation to the game system and when the performance obligations have been completed. Licensing fee revenues are recognized when the delivery of licensed products has occurred and the fee is fixed or determinable.
12
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Sales of virtual online game points and licensing fee revenues are reported on a gross basis. In the sales of
virtual online game points and game licenses, we act as principal and we have latitude in establishing price. Fixed percentage fees retained by service providers for payment processing related to our online game services are recognized as cost of
online game revenues. We report sublicensing revenues on a net basis. In the sublicense agreements, we act as agent and the distributors are responsible for the operating and the marketing.
Online game and service revenues also include revenues derived from online advertising arrangements, sponsorship arrangements, or a combination of both. These
service arrangements allow advertisers to place advertisements on particular areas of our Companys websites and online game platforms over a stated period of time. Service revenues from online advertising arrangements are recognized ratably
over the period of the contract when the collectability is reasonably assured.
Cloud Product and Service Revenues
Cloud service revenues are related to cloud computing services provided by our Company. Revenues are recorded net of discounts. Cloud service revenues are
recognized upon acceptance for project services provided, or for the period of time for which we provide services to the customer. Customers of subscriptions have a choice of paying either monthly or in advance for a certain period of time, for
which they receive corresponding discounts. Our Company records any such advanced payment receipts as other current liabilities and amortizes such revenues over the subscription period.
13
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Revenues from the sales of equipment and other related products are recognized upon acceptance.
Deferred Revenues
Deferred revenues consist
mainly of the prepaid income related to our Asian online game and service business. Deferred revenue represents proceeds received relating to the sale of game points and in-game items which are activated or charged to the respective player game
account by players, but which have not been consumed by the players or expired. Deferred revenue is credited to profit or loss when the game points and in-game items are consumed or expired. Pursuant to relevant new requirements in Taiwan, cash
totaling $1.5 million as of December 31, 2014, has been deposited in an escrow account in a bank as a performance bond for the players game points, and is included within restricted cash in the consolidated balance sheets.
Prepaid Licensing and Royalty Fees
Our Company,
through our subsidiaries, routinely enters into agreements with licensors to acquire licenses for using, marketing, distributing, selling and publishing multi-player online games.
Prepaid licensing fees paid to licensors are amortized on a straight-line basis over the shorter of the estimated useful economic life of the relevant online
game or license period, which is usually within two to five years. The annual amortization is modified if the amount computed on the ratio of current gross revenues for a game license over the total of current and anticipated future gross
revenues for that game license is greater than the amount computed using the straight-line method.
Prepaid royalty fees and related costs are initially
deferred when paid to licensors and amortized as operating costs based on certain percentage of revenues generated by the licensee from operating the related online game in the specific country or region over the contract period.
14
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Fair Value Measurements
Our Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We
determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following
fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
|
|
|
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. |
|
|
|
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
|
|
|
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any,
market activity for the asset or liability at measurement date. |
Our Company generally determines or calculates the fair value of financial
instruments using quoted market prices in active markets when such information is available; otherwise we apply appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating adjusted available market
discount rate information and our Companys estimates for non-performance and liquidity risk. These techniques rely extensively on the use of a number of assumptions, including the discount rate, credit spreads, and estimates of future cash
flows. (See Note 9, Fair Value Measurements, for additional information.)
Cash Equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and so near to their maturity that they
present relatively insignificant risk from changes in interest rates. Commercial paper, negotiable certificates of deposit, time deposits and bank acceptances with original maturities of three months or less are considered to be cash equivalents.
Pledged time deposits are excluded from cash and cash equivalents for purposes of the consolidated statements of cash flows.
15
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Marketable Securities
Our Companys investments in marketable securities are classified either as available-for-sale or trading. For the marketable securities classified as
available-for-sale, the investments are stated at fair value with any unrealized gains or losses reported in accumulated other comprehensive income (loss) within equity until realized. For the marketable security classified as trading, we recognize
the changes of the fair value of the investment in our consolidated statements of operations.
Other-than-temporary impairments, if any, are charged to
non-operating expense in the period in which the loss occurs. In determining whether an other-than-temporary impairment has occurred, our Company primarily considers, among other factors, the length of the time and the extent to which the fair value
of an investment has been at a value less than cost. When an other-than-temporary loss is recognized, the fair value of the investment becomes the new cost basis of the investment and is not adjusted for subsequent recoveries in fair value. Realized
gains and losses also are included in non-operating income and expense in the consolidated statements of operations. (See Note 9, Fair Value Measurements, for additional information.)
Investments
Equity investments in non-publicly
traded securities of companies over which our Company has no ability to exercise significant influence are accounted for under the cost method.
For
equity investments accounted for as available-for-sale or trading, cash dividends are recognized as investment income. Stock dividends are recognized as an increase in the number of shares held and do not affect investment income. The cost per share
is recalculated based on the new total number of shares.
16
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
For equity investments accounted under equity method, stock dividends received from investees as a result of
appropriation of net earnings and additional paid-in capital are recognized as an increase in the number of shares held and do not affect investment income. The cost per share is recalculated based on the weighted-average method. Cash dividends are
accounted for as a reduction to the carrying value of the investment.
Equity investments in companies over which our Company has the ability to exercise
significant influence but does not hold a controlling financial interest are accounted for under the equity method. We recognize our share of the earnings or losses of the investee. Under the equity method, the difference between the cost of the
acquisition and our Companys share of the fair value of the net identifiable assets is recognized as goodwill and is included in the carrying amount of the investment. When our Companys carrying value in an equity method investee is
reduced to zero, no further losses are recorded in our consolidated financial statements unless our Company guaranteed obligations of the investee or has committed to additional funding. When the investee subsequently reports income, our Company
will not record its share of such income until it equals the amount of its share of losses not previously recognized.
Unrealized losses that are
considered other-than-temporary, if any, are charged to non-operating expenses. Realized gains and losses, measured against carrying amount, are also included in non-operating income and expenses. (See Note 9, Fair Value Measurements,
for additional information.)
Receivables
Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivable are included in net cash provided by
operating activities in the consolidated statements of cash flows. Our Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management
considers historical losses adjusted to take into account current market conditions and our customers financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. Account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
17
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is recorded on a straight-line basis over useful
lives that correspond to categories as follows:
|
|
|
|
|
Categories |
|
Years |
|
Buildings |
|
|
50 |
|
Information and communication equipment |
|
|
2 to 5 |
|
Office furniture and equipment |
|
|
3 to 5 |
|
Leasehold improvements |
|
|
3 to 5 |
|
Leasehold improvements are amortized over the shorter of the term of the lease or the economic useful life of the assets.
Improvements and replacements are capitalized and depreciated over their estimated useful lives, while ordinary repairs and maintenance are expensed as incurred.
We have entered into agreements to lease certain of our Companys land and buildings to a third party under operating leases, which were renewed in
September and October 2013, and which expire no later than September 2016. As of December 31, 2013 and 2014, the carrying amount of the land and buildings under lease was $1.2 million and $1.1 million, respectively. The rental income under the
operating lease amounted to $74 thousand, $74 thousand and $73 thousand for 2012, 2013 and 2014, respectively. The minimum rental income to be received under this operating lease is $124 thousand through September 2016.
Business Acquisitions
Our Company accounts for
its business acquisitions using the acquisition method. Under this method, our Company recognizes and measures the identifiable assets acquired, the liabilities assumed and any noncontrolling interest at their acquisition-date fair values, with
limited exceptions. Acquisition-related costs are generally expensed as incurred.
18
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Intangible Assets and Goodwill
Intangible assets with finite lives are amortized by the straight-line method over their estimated useful lives, ranging from half a year to nine years.
Intangible assets with indefinite useful lives are not amortized. Goodwill is not amortized.
Impairment of Intangible Assets, Goodwill and
Long-Lived Assets
Goodwill is reviewed for impairment annually or sooner when circumstances indicate an impairment may exist, using a fair-value
approach at the reporting unit level. A reporting unit is the operating segment, or a business, which is one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by
management at the segment level. Components are aggregated as a single reporting unit if they have similar economic characteristics. In connection with our goodwill impairment test, we first assess qualitative factors as a basis for determining
whether it is necessary to perform the two-step goodwill impairment test.
If the two-step goodwill impairment test is required, first, the fair value of
the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform
step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units goodwill over the implied fair value of that goodwill. The implied fair value of
goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of
the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed.
Intangible assets with indefinite useful lives are tested for impairment at the reporting unit level, at least annually, or whenever events or changes in
circumstances indicate that the carrying value of an asset might not be recoverable from its related future discounted cash flows. Impairment is measured as the difference between the carrying amounts and the fair value of the assets, and is
recognized as a loss from operations. In connection with our impairment test for the intangible assets with indefinite useful lives, we first assess qualitative factors as a basis for determining whether it is necessary to perform the quantitative
impairment test.
19
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Long-lived assets other than goodwill and intangible assets not being amortized are reviewed for impairment
at least annually or whenever events or changes in circumstances indicate that the carrying value of an asset might not be recoverable from its related future undiscounted cash flows. If such assets are considered to be impaired, the impairment to
be recognized is measured by the extent to which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. When impairment is identified, the carrying amount of the asset is reduced to its estimated fair value, and is recognized as a loss from operations. (See
Note 9, Fair Value Measurements, for additional information.)
Software Cost
Costs to develop our Asian online game products are capitalized after technological feasibility has been established, and when the product is available for
general release to customers, costs are expensed. Costs incurred prior to the establishment of technological feasibility are expensed when incurred and are included in product development and engineering expenses. Capitalized amounts are amortized
using the straight-line method, which is applied over the estimated useful economic life of the software, ranging from half a year to three years. The annual amortization is modified if the amount computed using the ratio that current gross revenues
for a product bear to the total of current and anticipated future gross revenues for that product is greater than the amount computed using the straight-line method.
We capitalize certain costs incurred to purchase or to internally create and implement internal-use computer software, which includes software coding,
installation, testing and certain data conversion. These capitalized costs are amortized on a straight-line basis over the shorter of the useful economic life of the software or its contractual license period, which is typically three years.
20
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Product Development and Engineering
Product development and engineering expenses primarily consist of research compensation, depreciation and amortization, and are expensed as incurred.
Advertising
Direct-response advertising costs
incurred in relation to the acquisition or origination of a customer relationship are capitalized and deferred. The deferred costs are recognized as expense in the consolidated statements of operations over the estimated lives of customer
relationships. Costs of broadcast advertising are recorded as expenses as advertising airtime is used. Other advertising expenditures are expensed as incurred.
Advertising expenses incurred in 2012, 2013 and 2014 totaled $3.2 million, $676 thousand and $888 thousand, respectively. As of December 31, 2013 and
2014, prepaid advertising amounted to $1 thousand and $12 thousand, respectively.
Leases
Leases for which substantially all of the risks and rewards of ownership remain with the leasing company are accounted for as operating leases. Payments made
under operating leases, net of any incentives received by our Company from the leasing company, are charged to the consolidated statements of operations on a straight-line basis over the lease periods.
Leases are classified as capital leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets
held under capital leases are recognized as assets of our Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the
balance sheet as a lease obligation. Lease payments are apportioned between finance charges and a reduction of the lease obligation in order to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
charged directly to profit or loss.
21
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Share-Based Compensation
Share-based compensation represents the cost related to share-based awards granted to employees. We measure share-based compensation cost at the grant date,
based on the estimated fair value of the award. Share-based compensation is recognized for the portion of the award that is ultimately expected to vest, and the cost is amortized on a straight-line basis (net of estimated forfeitures) over the
vesting period. Our Company estimates the fair value of stock options using the Black-Scholes valuation model. The cost is recorded in operating costs and operating expenses in the consolidated statements of operations based on the employees
respective function.
For shares and stock options granted to non-employees, we measure the fair value of the equity instruments granted at the earlier of
the performance commitment date or when the performance is completed.
Retirement Plan and Net Periodic Pension Cost
Under our defined benefit pension plan, net periodic pension cost, which includes service cost, interest cost, expected return on plan assets, amortization of
unrecognized net transition obligation and gains or losses on plan assets, is recognized based on an actuarial valuation report. We recognize the funded status of pension plans and non-pension post-retirement benefit plans (retirement-related
benefit plans) as an asset or a liability in the consolidated balance sheets.
Under our defined contribution pension plans, net periodic pension cost is
recognized as incurred.
Income Taxes
The
asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between financial reporting and tax bases of assets and liabilities. We recognize the
investment tax credit associated with the purchase of intangible assets and technology, research and development expenditures, employee compensation and certain equity investments using the flow-through method. Deferred tax assets and liabilities
are measured using the enacted tax rate and laws that will be in effect when the related temporary differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that will
more-likely-than-not be realized. In assessing the likelihood of realization, management considers estimates of future taxable income.
22
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
In addition, we recognize the financial statement impact of a tax position when it is more-likely-than-not
that the position will be sustained upon examination. If the tax position meets the more-likely-than-not recognition threshold, the tax effect is measured at the largest amount that is greater than a 50 percent likely of being realized upon
settlement. Interest and penalties on an underpayment of income taxes are reflected as income tax expense in the consolidated financial statements.
Earnings (Loss) Per Share
Basic earnings (loss)
per share is computed by dividing the net income (loss) attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing the
net income (loss) for the period by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares, composed of incremental common shares issuable upon the exercise of warrants and
options in all periods, are included in the computation of diluted earnings (loss) per share to the extent such shares are dilutive. Diluted earnings (loss) per share also takes into consideration the effect of dilutive securities issued by
subsidiaries. In a period in which a loss is incurred, only the weighted average number of common shares issued and outstanding is used to compute the diluted loss per share, as the inclusion of potential common shares would be anti-dilutive.
Therefore, for the years ended December 31, 2012, 2013 and 2014, basic and diluted loss per share are the same.
Noncontrolling Interest
Noncontrolling interest in the equity of a subsidiary is accounted for and reported as equity. Changes in our Companys ownership interest in
a subsidiary that do not result in deconsolidation are accounted for as equity transactions. Any retained noncontrolling equity investment upon the deconsolidation of a subsidiary is initially measured at fair value.
23
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Segment Reporting
We use the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by
our Companys chief operating decision maker for making operating decisions, allocating resources and assessing performance as the source for determining our operating segments. Our Companys chief operating decision maker
(CODM) has been identified as the Chief Executive Officer.
Segment profit and loss is determined on a basis that is consistent with how our
Company reports operating income (loss) in its consolidated statements of operations. Our Company does not report segment asset information to the CODM. Consequently, no asset information by segment is presented. There are no intersegment
transactions.
Discontinued Operations
Discontinued operations are reported when a component of an entity either has been disposed of, or is classified as held for sale, and (a) represents a
separate major line of business or geographical area of operations, (b) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations or (c) is a subsidiary acquired exclusively
with a view to resale. Discontinued operations are presented separately in the accompanying consolidated statements of operations and prior period financial statements are revised to present discontinued operations retrospectively.
(d) Recent Accounting Pronouncements Not Yet Adopted
The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in May 2014. ASU 2014-09 requires an entity to recognize revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity should also disclose sufficient quantitative and
qualitative information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for annual reporting periods
beginning after December 15, 2016. Our Company will implement the provisions of ASU 2014-09 as of January 1, 2017. We have yet to determine the impact of the new standard on our current policies for revenue recognition.
24
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 2. LOSS PER SHARE
The following table provides a reconciliation of the denominators of the basic and diluted per share computations:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousand shares) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Weighted average number of outstanding shares |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
50,720 |
|
|
|
50,720 |
|
|
|
53,927 |
|
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Employee share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
50,720 |
|
|
|
50,720 |
|
|
|
53,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options to purchase 1,444 thousand, 1,149 thousand and 683 thousand shares of common stock were not included in
dilutive securities for the years ended December 31, 2012, 2013 and 2014, respectively, as the effect would be anti-dilutive.
NOTE 3.
VARIABLE-INTEREST ENTITIES
Shanghai JIDI
In order to comply with foreign ownership restrictions and to hold the necessary licenses required, through June 2012 we had operated our Asian online game and
service business in the Peoples Republic of China (PRC) through our VIE, Shanghai JIDI. We had no ownership interest in Shanghai JIDI and relied on a series of contractual arrangements that were intended to give us effective
control over Shanghai JIDI. Those contractual arrangements were duly executed and the share pledge agreements were registered with local government authority in compliance with PRC legal requirements. Therefore, we effectively controlled Shanghai
JIDI, and were the primary beneficiary of Shanghai JIDI. Shanghai JIDI held an Internet Content Provider (ICP) license, an Internet cultural operation license and an Internet publishing license. In June 2012, our board of directors
approved a plan to dispose of Shanghai JIDI. As a result, Shanghai JIDIs operations have been accounted for as discontinued operations. (See Note 5, Divestitures, for additional information.) In May 2013, we were notified by the
competent authority that Shanghai JIDI had completed the dissolution procedures and was duly deregistered.
25
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
For the year ended December 31, 2012, and the period from January to May 2013, total revenues and net
loss of Shanghai JIDI (which are included within discontinued operations) were as follows:
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
Total revenues |
|
$ |
100 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(888 |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
NOTE 4. ACQUISITIONS
FingerRockz
On October 18, 2013, we subscribed in
cash to 405 thousand new common shares of FingerRockz Co., Ltd. (FingerRockz), which represents a controlling financial interest of 51.6 percent of the ownership; thereupon we began consolidating FingerRockz. FingerRockz is a mobile
game developer and publisher in Taiwan, and we acquired it purposely to enhance our research and development capabilities for mobile games. This primary factor among others, contributed to a purchase price in excess of the fair value of the net
identifiable assets acquired and liabilities assumed, and intangible assets. In the acquisition, the most appealing asset to our Company was FingerRockzs creative team. Because the assembled workforce was not an identifiable asset to be
recognized separately from goodwill, the value attributed to it was subsumed into goodwill. The goodwill related to this acquisition is not expected to be deductible for tax purpose.
26
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The following table summarizes the consideration paid for the acquisition and the amounts of estimated fair
value of the assets acquired and liabilities assumed at the acquisition date.
|
|
|
|
|
(In US$ thousands) |
|
Amount |
|
Consideration and noncontrolling interest: |
|
|
|
|
The consideration transferred |
|
$ |
510 |
|
The fair value of noncontrolling interest in FingerRockz |
|
|
478 |
|
|
|
|
|
|
|
|
$ |
988 |
|
|
|
|
|
|
Identifiable assets acquired and liabilities assumed: |
|
|
|
|
Cash, receivables and other current assets |
|
$ |
585 |
|
Customer contracts |
|
|
67 |
|
Payables and other current liabilities |
|
|
(160 |
) |
|
|
|
|
|
Net |
|
|
492 |
|
Goodwill |
|
|
496 |
|
|
|
|
|
|
|
|
$ |
988 |
|
|
|
|
|
|
The following unaudited pro forma results of operations for the years ended December 31, 2012 and 2013 are presented as
if the acquisition had been consummated on January 20, 2012, the inception of FingerRockz:
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31 (unaudited) |
|
(in US$ thousands, except for loss per share) |
|
2012 |
|
|
2013 |
|
Net revenues |
|
$ |
27,477 |
|
|
$ |
15,040 |
|
|
|
|
|
|
|
|
|
|
Net loss attributable to GigaMedia shareholders |
|
$ |
(15,334 |
) |
|
$ |
(34,845 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
|
$ |
(0.30 |
) |
|
$ |
(0.69 |
) |
|
|
|
|
|
|
|
|
|
The above unaudited pro forma information does not reflect any incremental direct costs, including any restructuring charges
to be recorded in connection with the acquisition, or any potential cost savings that may result from the consolidation of certain operations of our Company or FingerRockz. Accordingly, the unaudited pro forma financial information above not
necessarily indicative the actual results that would have occurred had the acquisition of FingerRockz been combined during the periods presented, nor it necessarily indicative of future consolidated results of operations.
27
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 5. DIVESTITURES
IAHGames
In July 2012, we entered into agreements to sell
a 60 percent ownership in IAHGames, together with the sale of a 100 percent ownership in Spring Asia Limited (Spring Asia), which has a 30 percent interest in Game First International Corporation (GFI), to IAHGames
management and Management Capital International Limited (MCIL), a British Virgin Islands company owned by IAHGames management. We retained a 20 percent ownership in IAHGames. Upon the closing of the agreements, we deconsolidated
the results of IAHGames operations and began accounting for our remaining 20 percent interest under the equity method.
Our Company accounted for
the deconsolidation of and the retained noncontrolling investment in IAHGames in August 2012 at fair value.
28
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
In consideration for the sale of IAHGames and Spring Asia, we were to receive $3 million in cash. The
consideration was to be collected in four equal installments, with the first due upon closing, the second due in October 2012, the third due in January 2013 and the fourth due in April 2013. The payments were collateralized by the shares of Spring
Asia and were only released from the escrow in proportion to the payment made upon each installment. The first installment of $750 thousand was received upon the closing on August 15, 2012. However, the buyer had defaulted on the remaining
three installments. Considering the uncertainty as to the collectability of the remaining three installments, we had deferred the disposal gain of $211 thousand against the consideration installments receivable of $2,250 thousand as of
December 31, 2012. The deferred gain was determined as follows:
|
|
|
|
|
(In US$ thousand) |
|
Amount |
|
The fair value of consideration received and receivable, net of any transaction costs, plus |
|
$ |
3,000 |
|
The fair value of the 20% retained noncontrolling investment in IAH at the date of deconsolidation |
|
|
|
|
|
|
|
|
|
|
|
|
3,000 |
|
|
|
|
|
|
The carrying amount (credit balance) of IAHGames at the date of deconsolidation |
|
|
(14,536 |
) |
Net receivables due to GigaMedia from IAHGames waived upon the closing of the sale |
|
|
17,542 |
|
Other comprehensive income component of equity related to IAHGames at the date of the deconsolidation |
|
|
(217 |
) |
|
|
|
|
|
|
|
|
2,789 |
|
|
|
|
|
|
Deferred gain on deconsolidation of IAHGames |
|
$ |
211 |
|
|
|
|
|
|
On April 17, 2013, we entered into a settlement agreement with IAHGames, IAHGames management, and MCIL. Pursuant to
the settlement agreement, either IAHGames or IAHGames management was to pay us $2,258 thousand, which included interest, to fulfill IAHGames obligation under the aforementioned sale of ownership in Spring Asia. In addition, MCIL was to
purchase all of our remaining shares in IAHGames for a consideration of $1,000 thousand. The payments were received in May 2013. Upon the receipt of these payments, the above deferred gain and disposal gain for the remaining shares which totaled
approximately $1.2 million, was recognized as non-operating income.
JIDI Network Technology (Shanghai) Co., Ltd. (JIDI)
In June 2012, our board of directors approved a plan to liquidate and dissolve JIDI, a wholly-owned subsidiary, and Shanghai JIDI, a VIE controlled through a
series of contractual arrangements.
29
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Results for JIDI and Shanghai JIDI operations are reported as discontinued operations for all periods
presented. The carrying amounts of the remaining assets and liabilities, if any, of JIDI and Shanghai JIDI were not significant to our consolidated financial statements as of December 31, 2013, and we recognized a loss of $588 thousand in
connection with the disposal of property, plant and equipment, which was included within discontinued operations in 2012. The process of liquidation and dissolution was completed by the end of 2013. Summarized financial information for discontinued
operations of JIDI and Shanghai JIDI are as follows:
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
Revenue |
|
$ |
100 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations before tax |
|
$ |
(2,521 |
) |
|
$ |
(318 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
|
$ |
(2,521 |
) |
|
$ |
(318 |
) |
|
|
|
|
|
|
|
|
|
Non-controlling Interest in Gaming software and service business
We held a non-controlling equity interest in a gaming software and service business through July 2012, when we entered into another agreement with BEG to sell
our non-controlling ownership interest, along with a shareholder loan, for consideration of $1.7 million. Of this consideration, $985 thousand was paid to us in cash, while the remainder related to the extinguishment of a 2009 tax liability.
The closing of the sale occurred in August 2012. The sale resulted in the recognition of a gain of approximately $2.5 million, net of transaction costs, which was recorded as non-operating income.
30
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 6. GOODWILL
The following table summarizes the changes to our Companys goodwill:
|
|
|
|
|
|
|
|
|
(In US$ thousands) |
|
2012 |
|
|
2013 |
|
Balance at beginning of year |
|
$ |
28,437 |
|
|
$ |
16,934 |
|
AcquisitionFingerRockz (Note 4) |
|
|
|
|
|
|
496 |
|
Impairment chargeFunTown and FingerRockz (Note 9) |
|
|
(12,489 |
) |
|
|
(17,054 |
) |
Translation adjustment |
|
|
986 |
|
|
|
(376 |
) |
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
16,934 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
By the acquisition of FingerRockz in 2013, we obtained its mobile platform development experience which now constitutes an
important complement to FunTowns R&D capacity in mobile games. We reassigned its role and developed our estimates of future cash flows from mobile games accordingly. Therefore, for the purpose of testing goodwill for impairment, we
determined FingerRockz to be an integral part of FunTown with respect to determining reporting unit, and goodwill arising from the acquisition of FingerRockz was reassigned to FunTown.
31
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 7. INTANGIBLE ASSETS NET
The following table summarizes our Companys intangible assets, by major asset class:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
(In US$ thousands) |
|
Gross carrying amount |
|
|
Accumulated amortization |
|
|
Net |
|
With finite-life intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized software development cost |
|
$ |
2,503 |
|
|
$ |
2,300 |
|
|
$ |
203 |
|
Customer relationships |
|
|
5,757 |
|
|
|
5,757 |
|
|
|
|
|
Other |
|
|
71 |
|
|
|
52 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,331 |
|
|
$ |
8,109 |
|
|
$ |
222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013 |
|
(In US$ thousands) |
|
Gross carrying amount |
|
|
Accumulated amortization |
|
|
Net |
|
With finite-life intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
Completed technology |
|
$ |
2,536 |
|
|
$ |
2,536 |
|
|
$ |
|
|
Capitalized software development cost |
|
|
3,130 |
|
|
|
2,471 |
|
|
|
659 |
|
Customer relationships |
|
|
6,112 |
|
|
|
5,433 |
|
|
|
679 |
|
Other |
|
|
141 |
|
|
|
18 |
|
|
|
123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,919 |
|
|
$ |
10,458 |
|
|
$ |
1,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets with finite lives are amortized over their estimated useful lives ranging from 0.5 to 9 years, with the
overall weighted-average life of 5.5 years.
32
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
For the years ended December 31, 2012, 2013 and 2014, total amortization expense of intangible assets
were $2.2 million, $1.9 million and $1.2 million, respectively, which includes amortization of capitalized software development costs of $1.1 million, $1.2 million and $494 thousand. As of December 31, 2014, based on the current amount of
intangibles subject to amortization, the estimated amortization expense for each of the following years is as follows:
|
|
|
|
|
(In US$ thousands) |
|
Amount |
|
2015 |
|
$ |
132 |
|
2016 |
|
|
66 |
|
2017 |
|
|
24 |
|
|
|
|
|
|
|
|
$ |
222 |
|
|
|
|
|
|
NOTE 8. PREPAID LICENSING AND ROYALTY FEES
The following table summarizes changes to our Companys prepaid licensing and royalty fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Balance at beginning of year |
|
$ |
7,103 |
|
|
$ |
8,644 |
|
|
$ |
4,666 |
|
Addition |
|
|
5,848 |
|
|
|
14 |
|
|
|
1,498 |
|
Amortization and usage |
|
|
(3,671 |
) |
|
|
(706 |
) |
|
|
(264 |
) |
Exchange difference |
|
|
218 |
|
|
|
(216 |
) |
|
|
(258 |
) |
DeconsolidationIAHGames |
|
|
(152 |
) |
|
|
|
|
|
|
|
|
Impairment charges (Note 9) |
|
|
(702 |
) |
|
|
(3,070 |
) |
|
|
(1,259 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
8,644 |
|
|
$ |
4,666 |
|
|
$ |
4,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents the carrying amounts and estimated fair values of our Companys financial instruments at December 31, 2013 and 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
|
Carrying amount |
|
|
Fair value |
|
|
Carrying amount |
|
|
Fair value |
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
58,801 |
|
|
$ |
58,801 |
|
|
$ |
50,640 |
|
|
$ |
50,640 |
|
Marketable securitiescurrent |
|
|
21,460 |
|
|
|
21,460 |
|
|
|
29,340 |
|
|
|
29,340 |
|
Accounts receivable |
|
|
2,027 |
|
|
|
2,027 |
|
|
|
1,298 |
|
|
|
1,298 |
|
Restricted cash |
|
|
|
|
|
|
|
|
|
|
8,991 |
|
|
|
8,991 |
|
Marketable debt securitiesnoncurrent |
|
|
6,048 |
|
|
|
6,048 |
|
|
|
4,744 |
|
|
|
4,744 |
|
Refundable deposits |
|
|
306 |
|
|
|
306 |
|
|
|
302 |
|
|
|
302 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
4,361 |
|
|
|
4,361 |
|
|
|
18,641 |
|
|
|
18,641 |
|
Accounts payable |
|
|
1,178 |
|
|
|
1,178 |
|
|
|
771 |
|
|
|
771 |
|
Accrued compensation |
|
|
380 |
|
|
|
380 |
|
|
|
796 |
|
|
|
796 |
|
Accrued expenses |
|
|
2,617 |
|
|
|
2,617 |
|
|
|
3,465 |
|
|
|
3,465 |
|
The carrying amounts shown in the table are included in the consolidated balance sheets under the indicated captions.
The fair values of the financial instruments shown in the above table as of December 31, 2013 and 2014 represent the amounts that would be received to
sell those assets or that would be paid to transfer those liabilities in an arms length transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. In situations where there is
little market activity for the asset or liability at the measurement date, the fair value measurement reflects our Companys own judgments about the assumptions that market participants would use in pricing the asset or liability. Those
judgments are developed by us based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable
inputs.
34
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The following methods and assumptions were used to estimate the fair value of each class of financial
instruments:
|
|
|
Cash and cash equivalents, accounts receivable, restricted cash, accounts payable, accrued compensation and expenses, and short-term borrowings: The carrying amounts, at face value or cost plus accrued interest,
approximate fair value because of the short maturity of these instruments. |
|
|
|
Marketable securities: Open-end fund, debt and equity securities are measured using quoted market prices at the reporting date multiplied by the quantity held. Redeemable preferred shares are measured using valuation
techniques. |
|
|
|
Refundable deposits: Measurement of refundable deposits with no fixed maturities is based on carrying amounts. |
Significant Unobservable Inputs
The table below presents
the ranges of significant unobservable inputs used to value our Companys level 3 financial instruments. These ranges represent the significant unobservable inputs that were used in the valuation of each type of financial instrument. These
inputs are not representative of the inputs that could have been used in the valuation of any one financial instrument. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements
of our level 3 financial instruments.
35
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
|
|
|
|
|
Level 3 Financial
Instruments |
|
Significant Unobservable Inputs
by Valuation Technique |
|
Range of Significant
Unobservable Inputs as of
December 2014 |
Debt securities -
Preferred shares with redemption rights |
|
Price/Sales per share ratio for selective comparable
companies Discount for lack of marketability |
|
2.0 times ~ 14.0 times
25% |
|
|
|
Level 3 Financial
Instruments |
|
Significant Unobservable Inputs by Valuation
Technique |
|
Range of Significant
Unobservable Inputs as of
December 2013 |
Debt securities -
Preferred shares with redemption rights |
|
Price/Sales per share ratio for selective comparable
companies Discount for lack of marketability |
|
2.5 times ~ 5.9 times
25% |
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
Our Company has segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most
appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below.
36
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Assets and liabilities measured at fair value on a recurring basis are summarized as below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Fair Value Measurement Using |
|
|
Year Ended |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
December 31, 2014 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalentstime deposits |
|
$ |
|
|
|
$ |
12,112 |
|
|
$ |
|
|
|
$ |
12,112 |
|
Restricted cashtime deposits |
|
|
|
|
|
|
8,991 |
|
|
|
|
|
|
|
8,991 |
|
Marketable securitiescurrent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open-end fund |
|
|
318 |
|
|
|
|
|
|
|
|
|
|
|
318 |
|
Equity securities |
|
|
29,022 |
|
|
|
|
|
|
|
|
|
|
|
29,022 |
|
Marketable securitiesnoncurrent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities |
|
|
|
|
|
|
|
|
|
|
4,744 |
|
|
|
4,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
29,340 |
|
|
$ |
21,103 |
|
|
$ |
4,744 |
|
|
$ |
55,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Fair Value Measurement Using |
|
|
Year Ended |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
December 31, 2013 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalentstime deposits |
|
$ |
|
|
|
$ |
14,638 |
|
|
$ |
|
|
|
$ |
14,638 |
|
Marketable securitiescurrent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open-end fund |
|
|
336 |
|
|
|
|
|
|
|
|
|
|
|
336 |
|
Equity securities |
|
|
21,124 |
|
|
|
|
|
|
|
|
|
|
|
21,124 |
|
Marketable securitiesnoncurrent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities |
|
|
|
|
|
|
2,109 |
|
|
|
3,939 |
|
|
|
6,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
21,460 |
|
|
$ |
16,747 |
|
|
$ |
3,939 |
|
|
$ |
42,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our Companys accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the
event or change in circumstances that caused the transfer. There were no transfers into or out of Level 1 for the years ended December 31, 2013 and 2014.
37
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Level 1 and 2 measurements:
Cash equivalentstime deposits and restricted cashtime deposits are convertible into a known amount of cash and are subject to an insignificant risk
of change in value. Certain marketable securities are valued using a market approach based on the quoted market prices of identical instruments when available, or other observable inputs such as trading prices of identical instruments in inactive
markets. The fair values of the marketable equity securities that have publicly quoted trading prices are valued using those observable prices, unless adjustments are required to available observable inputs.
In 2012, 2013 and 2014, we recognized unrealized gains (losses) of ($24.0) million, $4.7 million and $101 thousand, respectively, on marketable securities
valued using market observable inputs, which are included in other comprehensive income.
Level 3 measurements:
For assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during 2013 and 2014, a reconciliation of the beginning
and ending balances are presented as follows:
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Marketable Securities - Debt and Equity Securities |
|
|
2013 |
|
|
2014 |
|
Balance at beginning of year |
|
$ |
4,292 |
|
|
$ |
3,939 |
|
Total gains or (losses) (realized/unrealized) |
|
|
|
|
|
|
|
|
included in earnings |
|
|
985 |
|
|
|
|
|
included in other comprehensive income |
|
|
1,212 |
|
|
|
805 |
|
Sale |
|
|
(2,550 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
3,939 |
|
|
$ |
4,744 |
|
|
|
|
|
|
|
|
|
|
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still
held at the reporting date. |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
38
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Realized and unrealized gains (or losses) included in the consolidated financial statements for 2012, 2013
and 2014 for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are reported in the consolidated financial statements as follows:
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Gain on sales of marketable securities |
|
|
Impairment loss on marketable securities and investments |
|
Total gains (losses) included in earnings |
|
|
|
|
|
|
|
|
for 2012 |
|
$ |
3,370 |
|
|
$ |
(493 |
) |
for 2013 |
|
|
985 |
|
|
|
|
|
for 2014 |
|
|
|
|
|
|
|
|
Change in unrealized gains
(losses) relating to assets still
held at the reporting date |
|
|
|
|
|
|
|
|
for 2012 |
|
$ |
|
|
|
$ |
(493 |
) |
for 2013 |
|
|
|
|
|
|
|
|
for 2014 |
|
|
|
|
|
|
|
|
The fair values of the marketable debt and equity securities are derived using a discounted cash flow method with unobservable
inputs or adopting a market approach using observable inputs of guideline public companies that market participants would use in pricing the securities. The discounted cash flow method incorporates adjusted available market discount rate information
and our Companys estimates of liquidity risk, and other cash flow model related assumptions.
In 2012, 2013 and 2014, we recognized
other-than-temporary impairments of $493 thousand, $0 and $0, respectively, related to marketable debt and equity securities, which is included in non-operating expenses within impairment loss on marketable securities and investments in
the consolidated statements of operations.
39
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The unrealized gain recognized in our consolidated statement of operations due to the difference between fair
value of the equity investment at December 31, 2014 and its acquisition cost in June 2014 was $75 thousand.
Assets and Liabilities that are
Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities measured at fair value on a nonrecurring basis include measuring
impairment when required for long-lived assets. For GigaMedia, long-lived assets measured at fair value on a nonrecurring basis include investments accounted for under the equity method and cost method, property, plant, and equipment, intangible
assets, prepaid licensing and royalty fees, and goodwill.
Assets and liabilities measured at fair value on a nonrecurring basis that were determined to
be impaired as of December 31, 2013 and 2014 are summarized as below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Fair Value measurement Using |
|
|
Year Ended December 31, |
|
|
Total Impairment |
|
Assets |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
2014 |
|
|
Losses |
|
(a) Property, plant and equipmentInformation and communication equipment |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
28 |
|
(c) Intangible assetsCapitalized software cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115 |
|
(d) Prepaid licensing and royalty fees |
|
|
|
|
|
|
|
|
|
|
3,033 |
|
|
|
3,033 |
|
|
|
1,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
3,033 |
|
|
$ |
3,033 |
|
|
$ |
1,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Fair Value measurement Using |
|
|
Year Ended December 31, |
|
|
Total Impairment |
|
Assets |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
2013 |
|
|
Losses |
|
(b) GoodwillResulting from acquisition of FunTown and FingerRockz |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
17,054 |
|
(c) Intangible assetsTrade name and Capitalized software cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,251 |
|
(d) Prepaid licensing and royalty fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
33,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Impairment losses on certain property, plant, and equipment which were determined to be impaired: |
In 2014, we
recognized an impairment loss of $28 thousand against our information and communication equipment. The impairment charges are included in operating expenses within impairment losses on property, plant and equipment in the consolidated
statements of operations. The impairment charge for the equipment was related to servers used for certain product and service lines within our cloud product and service business for which the carrying amount was determined not to be recoverable from
its related future undiscounted cash flows. This equipment was valued using unobservable inputs such as discounted cash flows, incorporating adjusted available market discount rate information and our Companys estimates for liquidity risk, and
other cash flow model related assumptions.
41
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(b) Impairment losses on goodwill which was determined to be impaired:
The fair value of the Asian online game reporting unit was determined based on the present value of estimated future net cash flows discounted at the weighted
average cost of capital. In 2013, due to a continued slowdown in demand for our causal online games and the loss of a key licensed game, we experienced significant decline in revenues and negative operating margin in Taiwan from our previous future
cash flow expectations from this reporting unit. Further, in the Fall of 2013 we went through an internal restructuring of our operations and made a business decision to transition from PC-based games to browser/mobile games and social casino games.
Also our market capitalization had also fallen below our net book value based on the quoted market price of our common stock for a sustained period of time. Based on these qualitative factors, we determined it was more likely than not the revised
fair value of this reporting unit may be less than its carrying value, and the related recovery the remaining goodwill could be impaired. Using the same methodology as in the past to determine the estimated fair value of this reporting unit, we
developed our expected future net cash flows based on historical data and internal developed estimates as part of our updated long-term strategic plan and included a terminal value of $0. Other significant estimates and assumptions used in
developing the future net cash flows included an assumed average revenue decline of 28% and a weighted average cost of capital to discount these expected future cash flows of 13%. As a result, the carrying value of this reporting unit exceeded its
fair value, and the implied fair value of the goodwill was determined to be $0. Consequently, a goodwill impairment charge of $17.0 million was recognized in 2013.
(c) Impairment losses on certain intangible assets which were determined to be impaired:
In 2013, the trade name arising from the acquisition of FunTown and certain capitalized software development costs were fully written down, resulting in
impairment charges of $13.3 million, included in operating expenses within impairment loss on intangible assets in the consolidated statements of operations. The impairment charge for the trade name of FunTown is a result of our
repositioning of it as described above, while the impairment charges for the capitalized software costs were the result of certain projects within our Asian online game and service business that we ceased further development on, and as a result, we
recorded a full impairment of the carrying value of the assets related to these projects.
In 2014, certain capitalized and prepaid software development
costs for our cloud product and service business were fully written down, resulting in impairment charges of $115 thousand, included in operating expenses within impairment loss on intangible assets in the consolidated statements of
operations. The impairment charge is for certain product lines within our cloud product and service business that we decided to shift focus from, and as a result, we recorded a full impairment of the carrying value of the assets related to these
items.
42
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(d) Impairment losses on certain prepaid licensing and royalty fees which were determined to be impaired:
In 2013 and 2014, certain prepaid licensing and royalty fees were written down to $0 and $3.0 million, respectively, resulting in impairment charges of
$2.8 million and $1.3 million, respectively. This impairment is included in operating expenses in the consolidated statements of operations. The impairment charges for the prepaid licensing and royalty fees related to certain licensed games within
our Asian online game and service business that we stopped operating or for which the carrying amounts of the related assets were determined not to be recoverable from their expected future undiscounted cash flows. The licensing fee games and
related royalties are re-valued on when impairment exists, using unobservable inputs such as discounted cash flows, incorporating adjusted available market discount rate information and our Companys estimates for liquidity risk, along with
other cash flow model related assumptions.
NOTE 10. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Cash and savings accounts |
|
$ |
44,163 |
|
|
$ |
38,529 |
|
Time deposits |
|
|
14,638 |
|
|
|
21,102 |
|
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents |
|
|
58,801 |
|
|
|
59,631 |
|
Less: Cash restricted as collateral and performance bond |
|
|
|
|
|
|
(8,991 |
) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents reported on the consolidated statements of cash flows |
|
$ |
58,801 |
|
|
$ |
50,640 |
|
|
|
|
|
|
|
|
|
|
43
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
As of December 31, 2014, cash amounting to $1.5 million has been deposited in an escrow account in a
bank as a performance bond for our players game points, and certain time deposits amounting to $7.5 million have also been pledged as collateral for borrowings from financial institutions. These deposits are restricted and are included in
restricted cash in the consolidated balance sheets.
We maintain cash and cash equivalents, as well as restricted cash, in bank accounts with major
financial institutions with high credit ratings located in the following jurisdictions:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Taiwan |
|
$ |
55,661 |
|
|
$ |
49,829 |
|
China |
|
|
|
|
|
|
6,055 |
|
Hong Kong |
|
|
2,956 |
|
|
|
2,178 |
|
Singapore |
|
|
|
|
|
|
1,418 |
|
Malaysia |
|
|
133 |
|
|
|
|
|
Others |
|
|
51 |
|
|
|
151 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
58,801 |
|
|
$ |
59,631 |
|
|
|
|
|
|
|
|
|
|
NOTE 11. MARKETABLE SECURITIES CURRENT
Marketable securities current consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Equity securities |
|
$ |
21,124 |
|
|
$ |
29,022 |
|
Open-end fund |
|
|
336 |
|
|
|
318 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
21,460 |
|
|
$ |
29,340 |
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 and 2014, the balances of unrealized gains for marketable securities current were $17.9
million and $9.4 million, respectively. For 2014, unrealized gains of $75 thousand on certain marketable securities held at year-end were included in Non-operating income Other. During 2012, 2013 and 2014, realized gains from the disposal of
marketable securities current amounted to $2.3 million, $754 thousand, and $8.8 million, respectively. The costs for calculating gains on disposal were based on each securitys average cost.
44
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 12. ACCOUNTS RECEIVABLE NET
Accounts receivable consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Accounts receivable |
|
$ |
2,082 |
|
|
$ |
1,354 |
|
Less: Allowance for doubtful accounts |
|
|
(55 |
) |
|
|
(56 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
2,027 |
|
|
$ |
1,298 |
|
|
|
|
|
|
|
|
|
|
The following is a summary of the changes in our Companys allowance for doubtful accounts during the years ended
December 31, 2012, 2013 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Balance at beginning of year |
|
$ |
2,594 |
|
|
$ |
130 |
|
|
$ |
55 |
|
Additions: Provision for bad debt expense |
|
|
169 |
|
|
|
37 |
|
|
|
37 |
|
Less: Write-offs |
|
|
(269 |
) |
|
|
(109 |
) |
|
|
(33 |
) |
Deconsolidation - IAHGames |
|
|
(2,370 |
) |
|
|
|
|
|
|
|
|
Translation adjustment |
|
|
6 |
|
|
|
(3 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
130 |
|
|
$ |
55 |
|
|
$ |
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 13. OTHER CURRENT ASSETS
Other current assets consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Loans receivable current |
|
$ |
3,394 |
|
|
$ |
27 |
|
Less: Allowance for loans receivable current |
|
|
(3,394 |
) |
|
|
(27 |
) |
Deferred income tax assets current, net (Note 25) |
|
|
|
|
|
|
|
|
Other |
|
|
293 |
|
|
|
325 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
293 |
|
|
$ |
325 |
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of changes in our Companys allowance for loans receivablecurrent during the
years ended December 31, 2012, 2013 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Balance at beginning of year |
|
$ |
5,057 |
|
|
$ |
3,437 |
|
|
$ |
3,394 |
|
Less: Writes-offs |
|
|
(1,620 |
) |
|
|
|
|
|
|
(3,359 |
) |
Less: Reversal for collection of bad debt |
|
|
|
|
|
|
(54 |
) |
|
|
|
|
Translation adjustment |
|
|
|
|
|
|
11 |
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
3,437 |
|
|
$ |
3,394 |
|
|
$ |
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 14. MARKETABLE DEBT SECURITIES NONCURRENT
Marketable debt securities noncurrent consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Available-for-sale securities |
|
|
|
|
|
|
|
|
Debt securities |
|
$ |
6,048 |
|
|
$ |
4,744 |
|
|
|
|
|
|
|
|
|
|
Our Companys marketable securities noncurrent are invested in convertible preferred shares and corporate bonds
and are classified as available-for-sale securities.
46
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The preferred shares are convertible into common shares on 1:1 basis, subject to certain adjustments, and
shall be automatically converted upon certain conditions outlined in the agreements. The convertible preferred shares are all redeemable based upon certain agreed-upon conditions.
The embedded conversion options of the convertible preferred shares do not meet the definition of derivative instruments and therefore are not bifurcated from
the preferred share investment.
We have also considered and determined whether our investments in preferred shares are in-substance common shares which
should be accounted for under the equity method. Given that our convertible preferred shares have substantive redemption rights and thus do not meet the criteria of in-substance common shares, we have accounted for them as debt securities.
As of December 31, 2013 and 2014, the balances of unrealized gains for marketable securities noncurrent were $1.2 million and $2.0 million,
respectively. During 2012, 2013 and 2014, realized gains (losses) from the disposal of marketable securities non-current amounted to $3.4 million, $985 thousand and ($171) thousand, respectively. Gains
(losses) on disposal were based on the securitys average cost.
NOTE 15. EQUITY INVESTMENTS
Equity investments consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Investments accounted for under the equity method |
|
$ |
5,822 |
|
|
$ |
5,781 |
|
|
|
|
|
|
|
|
|
|
47
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Our Companys investments accounted for under the equity method primarily consist of the following:
(a) from July 2012 to May 2013, a 20 percent equity interest investment in Infocomm Asia Holdings Pte Ltd. (IAHGames), an online game operator, publisher and distributor in Southeast Asia (See Note 5 Divestitures, for
additional information); (b) an 18 percent equity interest investment in East Gate Media Contents & Technology Fund (East Gate), a Korean Fund Limited Partnership that invests in online game businesses and films; and
(c) a 22.86 percent equity interest investment in Double2 Network Technology Co., Ltd. (Double2), a Taiwanese company that mainly engaged in development of causal gaming software.
In July 2012, we entered into agreements to sell a 60 percent ownership in IAHGames to IAHGames management and Management Capital International Limited
(MCIL), a British Virgin Islands company owned by IAHGames management. As we only retained a 20 percent ownership in IAHGames, upon the closing of the agreements, we deconsolidated the results of IAHGames operations and began
accounting for our remaining 20 percent interest under the equity method up to May 2013 when we sold the remaining interest in IAHGames to IAHGames management and MCIL. (See Note 5, Divestitures for additional information.)
Our Company has an 18 percent interest in East Gate, a Korean Limited Partnership. We account for this limited partnership investment under the equity method
accounting since we have the ability to exercise significant influence over partnership operating and financial policies based on the terms of the partnership agreement.
NOTE 16. SHORT-TERM BORROWINGS
As of
December 31, 2013 and 2014, short-term borrowings totaled $4.4 million and $18.6 million, respectively. These amounts were borrowed from certain financial institutions. The annual interest rates on these borrowings ranged from 1.50 percent to
1.60 percent for 2013 and from 1.35 percent to 1.95 percent for 2014. The maturity dates fell in late January 2014 as of December 31, 2013, and fell in January and July 2015 as of December 31, 2014. As of December 31, 2013 and 2014,
the weighted-average interest rate on total short-term borrowings was 1.52 percent and 1.72 percent, respectively.
48
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
As of December 31, 2013 and 2014, the total amount of unused lines of credit available for borrowing
under these agreements was approximately $9.9 million and $1.1 million, respectively.
We pledged certain time deposits as collateral for borrowings from
financial institutions. The pledged time deposits amounted to $0 and $7.5 million as of December 31, 2013 and 2014, respectively, and are included in restricted cash in the consolidated balance sheets.
NOTE 17. ACCRUED EXPENSES
Accrued expenses
consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Accrued outsourced development |
|
$ |
|
|
|
$ |
838 |
|
Accrued professional fees |
|
|
740 |
|
|
|
603 |
|
Accrued royalties |
|
|
128 |
|
|
|
308 |
|
Accrued advertising expenses |
|
|
421 |
|
|
|
613 |
|
Accrued incentive to distributors |
|
|
137 |
|
|
|
71 |
|
Accrued director compensation and liability insurance |
|
|
424 |
|
|
|
155 |
|
Other |
|
|
767 |
|
|
|
877 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,617 |
|
|
$ |
3,465 |
|
|
|
|
|
|
|
|
|
|
49
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 18. OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Income taxes payable |
|
$ |
1,560 |
|
|
$ |
1,542 |
|
Deferred tax liabilities (Note 25) |
|
|
1,987 |
|
|
|
|
|
Other |
|
|
315 |
|
|
|
176 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,862 |
|
|
$ |
1,718 |
|
|
|
|
|
|
|
|
|
|
NOTE 19. PENSION BENEFITS
Our Company and our subsidiaries have defined benefit and defined contribution pension plans that cover substantially all of our employees.
Defined Benefit Pension Plan
We have a defined
benefit pension plan in accordance with the Labor Standards Law of the Republic of China (R.O.C.) for our employees located in Taiwan, covering substantially all full-time employees for services provided prior to July 1, 2005, and employees who
have elected to remain in the defined benefit pension plan subsequent to the enactment of the Labor Pension Act on July 1, 2005. Under the defined benefit pension plan, employees are entitled to a lump sum retirement benefit upon retirement
equivalent to the aggregate of 2 months pensionable salary for each of the first 15 years of service and 1 months pensionable salary for each year of service thereafter subject to a maximum of 45 months pensionable salary. The
pensionable salary is the monthly average salary or wage of the final six months prior to approved retirement.
We use a December 31 measurement date
for our defined benefit pension plan. As of December 31, 2013 and 2014, the accumulated benefit obligation amounted to $360 thousand and $196 thousand, respectively, and the funded status of accrued pension liability (prepaid pension assets)
amounted to $170 thousand and ($45) thousand, respectively. The fair value of plan assets amounted to $300 thousand and $303 thousand as of December 31, 2013 and 2014, respectively. The accumulated other comprehensive income amounted to $0 and
$0 as of December 31, 2013 and 2014, respectively. The net periodic benefit cost (income) for 2012, 2013 and 2014 amounted to $30 thousand, ($77) thousand and ($199) thousand, respectively.
50
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The following table sets forth the plans benefit obligations, fair value of plan assets, and funded
status at December 31, 2013 and 2014:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Benefit Obligation |
|
$ |
470 |
|
|
$ |
258 |
|
Fair value of plan assets |
|
|
300 |
|
|
|
303 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
170 |
|
|
$ |
(45 |
) |
|
|
|
|
|
|
|
|
|
Amounts recognized in the balance sheet consist of: |
|
|
|
|
|
|
|
|
Noncurrent liabilities (assets) |
|
$ |
170 |
|
|
$ |
(45 |
) |
Accumulated other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount recognized |
|
$ |
170 |
|
|
$ |
(45 |
) |
|
|
|
|
|
|
|
|
|
Amounts recognized in accumulated comprehensive income consist of: |
|
|
|
|
|
|
|
|
Unrecognized net gain |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, 2013 and 2014, the net period pension cost consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Service cost |
|
$ |
14 |
|
|
$ |
15 |
|
Interest cost |
|
|
10 |
|
|
|
9 |
|
Expected return on plan assets |
|
|
(5 |
) |
|
|
(6 |
) |
Amortization of prior service cost |
|
|
(50 |
) |
|
|
|
|
Amortization of net loss |
|
|
1 |
|
|
|
|
|
Curtailment gain |
|
|
(47 |
) |
|
|
(217 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(77 |
) |
|
$ |
(199 |
) |
|
|
|
|
|
|
|
|
|
51
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Weighted average assumptions used to determine benefit obligations for 2013 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2013 |
|
|
2014 |
|
Discount rate |
|
|
2.00 |
% |
|
|
2.00 |
% |
Rate of compensation increase |
|
|
1.50 |
% |
|
|
1.50 |
% |
Weighted average assumptions used to determine net periodic benefit cost for end of fiscal year were as follows:
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
2014 |
|
Discount rate |
|
|
1.75 |
% |
|
|
2.00 |
% |
Rate of return on plan assets |
|
|
1.75 |
% |
|
|
2.00 |
% |
Rate of compensation increase |
|
|
1.50 |
% |
|
|
1.50 |
% |
Management determines the discount rate and rate of return on plan assets based on the yields of twenty year ROC central
government bonds which is in line with the respective employees remaining service period and the historical rate of return on the above mentioned Fund mandated by the ROC Labor Standard Law.
We have contributed an amount equal to 2 percent of the salaries and wages paid to all qualified employees located in Taiwan to a pension fund (the
Fund). The Fund is administered by a pension fund monitoring committee (the Committee) and deposited in the Committees name in the Bank of Taiwan. Our Company makes pension payments from our account in the Fund unless
the Fund is insufficient, in which case we make payments from internal funds as payments become due. We seek to maintain a normal, highly liquid working capital balance to ensure payments are made timely.
We expect to make a contribution of $14 thousand to the Fund in 2015. We expect to make benefit payments of $1 thousand from 2015 to 2019 and $1 thousand from
2020 to 2024.
Defined Contribution Pension Plans
We have provided defined contribution plans for employees located in Taiwan and Hong Kong. Contributions to the plans are expensed as incurred.
52
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Taiwan
Pursuant to the new Labor Pension Act enacted on July 1, 2005, our Company has a defined contribution pension plan for our employees located
in Taiwan. For eligible employees who elect to participate in the defined contribution pension plan, we contribute no less than 6 percent of an employees monthly salary and wage and up to the maximum amount of NT$9 thousand (approximately
$284), to each of the eligible employees individual pension accounts at the Bureau of Labor Insurance each month. Pension payments to employees are made either by monthly installments or in a lump sum from the accumulated contributions and
earnings in employees individual accounts.
Hong Kong
According to the relevant Hong Kong regulations, we provide a contribution plan for the eligible employees in Hong Kong. We must contribute at least 5
percent of the employees total salaries. For this purpose, the monthly relevant contribution to their individual contribution accounts is subject to a cap of HK$1.5 thousand (approximately $193). After the termination of employment, the
benefits still belong to the employees in any circumstances.
The total amount of defined contribution pension expenses pursuant to our defined
contribution plans for the years ended December 31, 2012, 2013, and 2014 were $585 thousand, $357 thousand, and $364 thousand, respectively.
NOTE
20. OTHER LIABILITIES OTHER
Other liabilities consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
(in US$ thousands) |
|
2013 |
|
|
2014 |
|
Deferred tax liabilities (Note 25) |
|
$ |
|
|
|
$ |
1,928 |
|
Other |
|
|
11 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11 |
|
|
$ |
1,938 |
|
|
|
|
|
|
|
|
|
|
53
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 21. SUBSIDIARY PREFERRED SHARES
In connection with our acquisition of a controlling financial interest in IAHGames, that subsidiary had Class A preferred shares, which were owned by the
noncontrolling shareholders. As August 15, 2012 when we deconsolidated IAHGames, these Class A preferred shares were valued at $1.3 million, and represented 8.9 percent of IAHGames accumulated voting interest. The holder of the
Class A preferred shares was entitled to cumulative dividends at 10 percent per annum. The preferred shares were redeemable at the holders option at any time after the expiration of certain licensed games, and were convertible into
ordinary shares at any time. Pursuant to agreements entered into in connection with our acquisition of IAHGames in July 2010, all Class A preferred shares were to be converted to ordinary shares of IAHGames at the acquisition date. The
preferred shares were fully converted into ordinary shares by the closing date when we sold 60 percent of IAHGames. (See Note 5, Divestitures, for additional information.)
Since the Class A preferred shares were never currently redeemable and it was not probable that they would become redeemable as a result of our
acquisition of IAHGames, the subsequent adjustment for accretion was not required. However, the cumulative dividends and the reversal of dividends upon the conversion described above for these Class A preferred shares of ($469) thousand for the
period from January 1, 2012 to July 31, 2012 are included as a component of net income (loss) attributable to the noncontrolling interest in the consolidated statement of operations.
NOTE 22. EQUITY
In accordance with Singapore law,
the holders of ordinary shares that do not have par value, are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the general meeting of our company. All shares rank equally with regard to our
companys residual assets. In addition, we are not required to have a number of authorized common shares to be issued.
54
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
In accordance with R.O.C. law, an appropriation for legal reserve amounting to 10 percent of a companys
net profit is required until the reserve equals the aggregate par value of such Taiwan companys issued capital stock. As of December 31, 2013 and 2014, the legal reserves of Hoshin GigaMedia Center Inc. (Hoshin GigaMedia) were
$3.0 million for each period. The reserve can only be used to offset a deficit or be distributed as a stock dividend of up to 50 percent of the reserve balance when the reserve balance has reached 50 percent of the aggregate paid-in capital of
Hoshin GigaMedia.
NOTE 23. COMPREHENSIVE INCOME
The accumulated balances for each classification of other comprehensive income are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Foreign currency items |
|
|
Unrealized gain on securities |
|
|
Pension and post retirement benefit plans |
|
|
Accumulated other comprehensive income (loss) |
|
Balance at January 1, 2012 |
|
$ |
(24,367 |
) |
|
$ |
38,410 |
|
|
$ |
308 |
|
|
$ |
14,351 |
|
Net current period change |
|
|
1,814 |
|
|
|
(18,339 |
) |
|
|
(323 |
) |
|
|
(16,848 |
) |
Reclassification adjustments for gains reclassified into income |
|
|
|
|
|
|
(5,665 |
) |
|
|
|
|
|
|
(5,665 |
) |
Deconsolidation of subsidiaries |
|
|
(217 |
) |
|
|
|
|
|
|
|
|
|
|
(217 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012 |
|
|
(22,770 |
) |
|
|
14,406 |
|
|
|
(15 |
) |
|
|
(8,379 |
) |
Net current period change |
|
|
(801 |
) |
|
|
6,437 |
|
|
|
15 |
|
|
|
5,651 |
|
Reclassification adjustments for gains reclassified into income |
|
|
864 |
|
|
|
(1,739 |
) |
|
|
|
|
|
|
(875 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2013 |
|
|
(22,707 |
) |
|
|
19,104 |
|
|
|
|
|
|
|
(3,603 |
) |
Net current period change |
|
|
(176 |
) |
|
|
906 |
|
|
|
|
|
|
|
730 |
|
Reclassification adjustments for gains reclassified into income |
|
|
7 |
|
|
|
(8,621 |
) |
|
|
|
|
|
|
(8,614 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014 |
|
$ |
(22,876 |
) |
|
$ |
11,389 |
|
|
$ |
|
|
|
$ |
(11,487 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no significant tax effects allocated to each component of other comprehensive income for the years ended
December 31, 2012, 2013 and 2014.
55
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
NOTE 24. SHARE-BASED COMPENSATION
The following table summarizes the total stock-based compensation expense recognized in our consolidated statements of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Cost of online game and service revenues |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Product development & engineering expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses |
|
|
20 |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
159 |
|
|
|
219 |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax stock-based compensation expense |
|
|
179 |
|
|
|
219 |
|
|
|
21 |
|
Income tax (benefit) expense |
|
|
(41 |
) |
|
|
27 |
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation expense reported in continuing operations |
|
$ |
138 |
|
|
$ |
246 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation expense reported in discontinued operations, net of tax |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no significant capitalized stock-based compensation costs at December 31, 2013 and 2014. There was no
recognized stock-based compensation tax benefit for the years ended December 31, 2013 and 2014, as our Company recognized a full valuation allowance on net deferred tax assets as of December 31, 2013 and 2014.
(a) Overview of Stock-Based Compensation Plans
2002 Employee Share Option Plan
At the June 2002
annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2002 Employee Share Option Plan (the 2002 Plan) under which up to three million common shares of our Company have been reserved for
issuance. All employees, officers, directors, supervisors, advisors, and consultants of our Company are eligible to participate in the 2002 Plan. The 2002 Plan is administered by a committee designated by the board of directors. The committee as
plan administrator has complete discretion to determine the exercise price for the option grants, the eligible individuals who are to receive option grants, the time or times when options grants are to be made, the number of shares subject to grant
and the vesting schedule. The maximum contractual term for the options under the 2002 Plan is 10 years.
56
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
2004 Employee Share Option Plan
At the June 2004 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2004 Employee Share Option Plan (the
2004 Plan) under which up to seven million common shares of our Company have been reserved for issuance. All employees, officers, directors, supervisors, advisors, and consultants of our Company are eligible to participate in the 2004
Plan. The 2004 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the exercise price for the option grants, the eligible individuals who are to receive
option grants, the time or times when options grants are to be made, the number of shares subject to grant and the vesting schedule. The maximum contractual term for the options under the 2004 Plan is 10 years.
2006 Equity Incentive Plan
At the June 2006
annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2006 Equity Incentive Plan (the 2006 Plan) under which up to one million common shares of our Company have been reserved for issuance.
The 2006 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the grant of awards under the 2006 Plan. The maximum contractual term for the options under
the 2006 Plan is 10 years.
2007 Equity Incentive Plan
At the June 2007 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2007 Equity Incentive Plan (the
2007 Plan) under which up to two million common shares of our Company have been reserved for issuance. The 2007 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete
discretion to determine the grant of awards under the 2007 Plan. The maximum contractual term for the options under the 2007 Plan is 10 years.
57
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
2008 Equity Incentive Plan
At the June 2008 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2008 Equity Incentive Plan (the
2008 Plan) under which up to one million common shares of our Company have been reserved for issuance. The 2008 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete
discretion to determine the grant of awards under the 2008 Plan. The maximum contractual term for the options under the 2008 Plan is 10 years.
2008
Employee Share Purchase Plan
At the June 2008 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia
Limited 2008 Employee Share Purchase Plan (the 2008 ESPP) under which up to two hundred thousand common shares of our Company were reserved for issuance. Any person who is regularly employed by our Company or our designated subsidiaries
shall be eligible to participate in the 2008 ESPP. Pursuant to the 2008 ESPP, our Company would offer the shares to qualified employees on favorable terms. Employees are also subject to certain restrictions on the amount that may be invested to
purchase the shares and to other terms and conditions of the 2008 ESPP. The 2008 ESPP is administered by a committee designated by the board of directors. As of December 31, 2014, no shares have been subscribed by qualified employees under the
2008 ESPP.
2009 Equity Incentive Plan
At the
June 2009 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2009 Equity Incentive Plan (the 2009 Plan) under which up to one and a half million common shares of our Company have been
reserved for issuance. The 2009 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the grant of awards under the 2009 Plan. The maximum contractual term
for the options under the 2009 Plan is 10 years.
58
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
2009 Employee Share Purchase Plan
At the June 2009 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2009 Employee Share Purchase Plan (the
2009 ESPP) under which up to two hundred thousand common shares of our Company have been reserved for issuance. To be eligible, employees must be regularly employed by us or our designated subsidiaries. Employees are also subject to
certain restrictions on the amount that may be invested to purchase the shares and to other terms and conditions of the 2009 ESPP. The 2009 ESPP is administered by a committee designated by the board of directors. As of December 31, 2014, no
shares have been issued to employees under the 2009 ESPP.
2010 Equity Incentive Plan
At the June 2010 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2010 Equity Incentive Plan (the
2010 Plan) under which up to one million common shares of our Company have been reserved for issuance. The 2010 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete
discretion to determine the grant of awards under the 2010 Plan. The maximum contractual term for the options under the 2010 Plan is 10 years.
2010
Employee Share Purchase Plan
At the June 2010 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia
Limited 2010 Employee Share Purchase Plan (the 2010 ESPP) under which up to two hundred thousand common shares of our Company have been reserved for issuance. To be eligible, employees must be regularly employed by us or our designated
subsidiaries. Employees are also subject to certain restrictions on the amount that may be invested to purchase the shares and to other terms and conditions of the 2010 ESPP. The 2010 ESPP is administered by a committee designated by the board of
directors. As of December 31, 2014, no shares have been issued to employees under the 2010 ESPP.
59
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Summarized below are the general terms of our stock-based compensation plans, for which awards have been
granted as of December 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based
compensation plan |
|
Granted awards |
|
|
Vesting schedule |
|
Options exercise price |
|
RSUs grant date fair value |
|
2002 Plan |
|
|
3,000,000 |
|
|
immediately upon granting |
|
$0.79 |
|
|
|
|
2004 Plan |
|
|
7,875,185 |
(1) |
|
immediately upon granting to four years |
|
$0.79~$2.55 |
|
|
|
|
2006 Plan |
|
|
1,223,333 |
(2) |
|
immediately upon granting to four years |
|
$0.8101~$16.60 |
|
$ |
2.91~$16.01 |
|
2007 Plan |
|
|
3,355,217 |
(3) |
|
immediately upon granting to four years |
|
$1.20~$18.17 |
|
$ |
2.47~$15.35 |
|
2008 Plan |
|
|
1,000,000 |
|
|
immediately upon granting to six years |
|
$2.47~$4.24 |
|
|
|
|
2009 Plan |
|
|
2,500,000 |
(4) |
|
immediately upon granting to four years |
|
$0.955~$2.47 |
|
|
|
|
2010 Plan |
|
|
2,200,000 |
(5) |
|
three years |
|
$0.8101~$1.14 |
|
|
|
|
(1) |
The granted awards, net of forfeited or canceled shares, were within reserved shares of 7 million common shares. |
(2) |
The granted awards, net of forfeited or canceled shares, were within reserved shares of 1 million common shares. |
(3) |
The granted awards, net of forfeited or canceled shares, were within reserved shares of 2 million common shares. |
(4) |
The granted awards, net of forfeited or canceled shares, were within reserved shares of 1.5 million common shares. |
(5) |
The granted awards, net of forfeited or canceled shares, were within reserved shares of 1 million common shares. |
Options and Restricted Stock Units (RSUs) generally vest over the schedule described above. Certain RSUs provide for accelerated vesting if there
is a change in control. All options and RSUs are expected to be settled by issuing new shares.
(b) Options
In 2012, 2013 and 2014, 0, 3,000 and 4,538,685 options were exercised, and cash received from the exercise of stock options was $0, $2 thousand and $3.6
million, respectively, which resulted in no significant tax benefit realized on a consolidated basis.
60
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Our Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted
to employees. The following table summarizes the assumptions used in the model for options granted during 2013 and 2014:
|
|
|
|
|
|
|
2013 |
|
2014 |
Option term (years) |
|
5.8 |
|
5.9 |
Volatility |
|
59.46%~61.84% |
|
58.75%~59.27% |
Weighted-average volatility |
|
61% |
|
59% |
Risk-free interest rate |
|
0.930%~1.610% |
|
1.968%~2.065% |
Dividend yield |
|
0% |
|
0% |
Weighted-average fair value of option granted |
|
$0.60 |
|
$0.68 |
Option term. The expected term of the options granted represents the period of time that they are expected to be outstanding.
Our Company estimates the expected term of options granted based on historical experience with grants and option exercises.
Expected volatility rate. An
analysis of historical volatility was used to develop the estimate of expected volatility.
Risk-free interest rate. The risk-free interest rate is based
on yields of U.S. Treasury bonds for the expected term of the options.
Expected dividend yield. The dividend yield is based on our Companys current
dividend yield.
61
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Option transactions during the last three years are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
|
|
Weighted Avg. Exercise Price |
|
|
No. of Shares (in thousands) |
|
|
Weighted Avg. Exercise Price |
|
|
No. of Shares (in thousands) |
|
|
Weighted Avg. Exercise Price |
|
|
No. of Shares (in thousands) |
|
|
Weighted- Average Remaining Contractual Term |
|
|
Aggregate Intrinsic Value (in thousands) |
|
Balance at January 31 |
|
$ |
2.13 |
|
|
|
9,493 |
|
|
$ |
1.97 |
|
|
|
9,210 |
|
|
$ |
1.95 |
|
|
|
9,223 |
|
|
|
|
|
|
|
|
|
Options granted |
|
|
0.96 |
|
|
|
2,070 |
|
|
|
1.09 |
|
|
|
620 |
|
|
|
1.23 |
|
|
|
328 |
|
|
|
|
|
|
|
|
|
Options exercised |
|
|
|
|
|
|
|
|
|
|
0.79 |
|
|
|
(3 |
) |
|
|
0.79 |
|
|
|
(4,539 |
) |
|
|
|
|
|
|
|
|
Options Forfeited / canceled / expired |
|
|
1.74 |
|
|
|
(2,353 |
) |
|
|
1.28 |
|
|
|
(604 |
) |
|
|
1.13 |
|
|
|
(1,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31 |
|
$ |
1.97 |
|
|
|
9,210 |
|
|
$ |
1.95 |
|
|
|
9,223 |
|
|
$ |
4.06 |
|
|
|
3,130 |
|
|
|
5.21 |
|
|
$ |
1,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31 |
|
$ |
2.15 |
|
|
|
7,584 |
|
|
$ |
2.13 |
|
|
|
7,770 |
|
|
$ |
4.67 |
|
|
|
2,595 |
|
|
|
4.53 |
|
|
$ |
1,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest at December 31 |
|
$ |
1.97 |
|
|
|
9,210 |
|
|
$ |
1.95 |
|
|
|
9,223 |
|
|
$ |
4.06 |
|
|
|
3,130 |
|
|
|
5.21 |
|
|
$ |
1,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between
GigaMedias closing stock price on the last trading day of 2014 and the fair value of the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on
December 31, 2014. This amount changes based on the fair market value of GigaMedias stock. The total intrinsic value of options exercised for the years ended December 31, 2012, 2013, and 2014 were $0, $1 thousand, and $1,855
thousand, respectively.
As of December 31, 2014, there was approximately $121 thousand of unrecognized compensation cost related to nonvested
options. That cost is expected to be recognized over a period of 1.29 years.
62
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The following table sets forth information about stock options outstanding at December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding |
|
|
Option currently exercisable |
|
Exercise price |
|
No. of Shares (in thousands) |
|
|
Weighted average remaining contractual life |
|
|
Exercise price |
|
No. of Shares (in thousands) |
|
Under $1 |
|
|
520 |
|
|
|
7.88 years |
|
|
Under $1 |
|
|
264 |
|
$1~$10 |
|
|
1,994 |
|
|
|
5.31 years |
|
|
$1~$10 |
|
|
1,715 |
|
$10~$20 |
|
|
616 |
|
|
|
2.65 years |
|
|
$10~$20 |
|
|
616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,130 |
|
|
|
|
|
|
|
|
|
2,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) RSUs
The fair
value of RSUs is determined and fixed on the grant date based on our stock price. No RSUs were granted during the years ended December 31, 2012, 2013 and 2014.
As of December 31 2013 and 2014, there was no unrecognized compensation cost related to nonvested RSUs. Our Company received no cash from employees as a
result of employee stock award vesting and the forfeiture of RSUs during 2012, 2013 and 2014.
NOTE 25. INCOME TAXES
Income (loss) from continuing operations before income taxes by geographic location is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands ) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Taiwan operations |
|
$ |
(14,871 |
) |
|
$ |
(33,077 |
) |
|
$ |
(13,158 |
) |
Non-Taiwan operations |
|
|
1,946 |
|
|
|
(1,605 |
) |
|
|
8,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(12,925 |
) |
|
$ |
(34,682 |
) |
|
$ |
(5,063 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
63
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The components of income tax expense (benefit) from continuing operations by taxing jurisdiction are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands ) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Taiwan: |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
410 |
|
|
$ |
(131 |
) |
|
$ |
(74 |
) |
Deferred |
|
|
46 |
|
|
|
379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
456 |
|
|
$ |
248 |
|
|
$ |
(74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Taiwan: |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
215 |
|
|
$ |
(187 |
) |
|
$ |
1 |
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
215 |
|
|
$ |
(187 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current income tax expense (benefit) |
|
$ |
625 |
|
|
$ |
(318 |
) |
|
$ |
(73 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred income tax expense (benefit) |
|
$ |
46 |
|
|
$ |
379 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income tax expense (benefit) |
|
$ |
671 |
|
|
$ |
61 |
|
|
$ |
(73 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Our ultimate parent company is based in Singapore.
A reconciliation of our effective tax rate related to continuing operations to the statutory tax rate in Taiwan, where our major operations are based, is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
Taiwan statutory rate, including taxes on income and retained earnings |
|
|
23.85 |
% |
|
|
23.85 |
% |
|
|
23.85 |
% |
Foreign tax differential |
|
|
(0.17 |
%) |
|
|
(3.71 |
%) |
|
|
42.23 |
% |
Non-deductible items - impairment charges on goodwill |
|
|
(16.43 |
%) |
|
|
(11.73 |
%) |
|
|
0.00 |
% |
Non-deductible items - bad debts |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
(5.16 |
%) |
Changes in unrecognized tax benefits |
|
|
0.00 |
% |
|
|
(4.12 |
%) |
|
|
(3.15 |
%) |
Tax-exempted income in foreign jurisdictions |
|
|
0.00 |
% |
|
|
3.12 |
% |
|
|
0.00 |
% |
Adjustment for prior year payable |
|
|
0.00 |
% |
|
|
0.54 |
% |
|
|
1.81 |
% |
Change in valuation allowance |
|
|
(4.00 |
%) |
|
|
(8.83 |
%) |
|
|
(52.97 |
%) |
Tax effect of earnings for equity method investees and certain subsidiaries |
|
|
(4.38 |
%) |
|
|
0.00 |
% |
|
|
0.00 |
% |
Other |
|
|
(4.06 |
%) |
|
|
0.70 |
% |
|
|
(5.16 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective rate |
|
|
(5.19 |
%) |
|
|
(0.18 |
%) |
|
|
1.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
64
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The expense (benefit) for income taxes attributable to discontinued operations was $0 for each of the years
ended December 31, 2012, 2013 and 2014, respectively.
Significant components of our deferred tax assets consist of the following:
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
December 31 |
|
|
2013 |
|
|
2014 |
|
Net operating loss carryforwards |
|
$ |
3,610 |
|
|
$ |
5,895 |
|
Share-based compensation |
|
|
267 |
|
|
|
242 |
|
Intangible assets and goodwill |
|
|
738 |
|
|
|
509 |
|
Property, plant and equipment |
|
|
86 |
|
|
|
6 |
|
Prepaid licensing and royalty fees |
|
|
1 |
|
|
|
369 |
|
Other |
|
|
108 |
|
|
|
126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,810 |
|
|
|
7,147 |
|
Less: valuation allowance |
|
|
(4,754 |
) |
|
|
(7,147 |
) |
|
|
|
|
|
|
|
|
|
Deferred tax assetsnet |
|
$ |
56 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 and 2014, $0 and $0, respectively, of the net deferred tax assets were reported as current and
included in other current assets on the balance sheet.
Significant components of our deferred tax liabilities consist of the following:
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
December 31 |
|
|
2013 |
|
|
2014 |
|
Investment in affiliated companies, principally due to undistributed income |
|
$ |
1,987 |
|
|
$ |
1,928 |
|
Capitalized software development costs |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
$ |
2,043 |
|
|
$ |
1,928 |
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 and 2014, $0 and $1.9 million, respectively, of deferred tax liabilities were reported as
non-current deferred tax liabilities and included in other liabilities.
65
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
A reconciliation of the beginning and ending amounts of our valuation allowance on deferred tax assets for
the years ended December 31, 2012, 2013 and 2014 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Balance at beginning of year |
|
$ |
25,256 |
|
|
$ |
18,333 |
|
|
$ |
4,754 |
|
Subsequent utilization of valuation allowance |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
|
|
Additions to valuation allowance |
|
|
214 |
|
|
|
3,063 |
|
|
|
2,682 |
|
Divestitures |
|
|
(7,026 |
) |
|
|
(16,616 |
) |
|
|
|
|
Exchange differences |
|
|
(107 |
) |
|
|
(19 |
) |
|
|
(289 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
18,333 |
|
|
$ |
4,754 |
|
|
$ |
7,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under ROC Income Tax Acts, the tax loss carryforward in the preceding ten years would be deducted from income tax for Taiwan
operations. The Statutory losses would be deducted from undistributed earnings tax and were not subject to expiration from Taiwan operations. As of December 31, 2014, we have net operating loss carryforward of our Taiwan operations for
undistributed earnings tax purpose of $21.1 million which are available to reduce future undistributed earnings, if any, over an indefinite period.
As of
December 31, 2014, we had net operating loss carryforwards available to offset future income, amounting to $28.0 million. Below is the breakdown of the expiration of the net operating loss carryforwards in major jurisdictions:
|
|
|
|
|
|
|
|
|
Jurisdiction |
|
Amount |
|
|
Expiring year |
|
Hong Kong |
|
|
10,551 |
|
|
|
indefinite |
|
Taiwan |
|
|
17,417 |
|
|
|
2020~2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
27,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding the effects of accrued interest) for the years 2012, 2013 and 2014
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Balance at beginning of year |
|
$ |
4,714 |
|
|
$ |
4,202 |
|
|
$ |
8,798 |
|
Current year increase (decrease) |
|
|
|
|
|
|
4,173 |
|
|
|
|
|
Increase (decrease) related to prior year tax positions |
|
|
573 |
|
|
|
375 |
|
|
|
|
|
Deconsolidation of IAHGames |
|
|
(1,072 |
) |
|
|
|
|
|
|
|
|
Exchange differences |
|
|
(13 |
) |
|
|
48 |
|
|
|
(511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year |
|
$ |
4,202 |
|
|
$ |
8,798 |
|
|
$ |
8,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2012, 2013 and 2014, there were $4.2 million, $8.8 million and $8.3 million of unrecognized tax
benefits that if recognized would affect the effective tax rate. As of December 31, 2012, 2013 and 2014, $2.8 million, $6.7 million and $6.4 million of the total unrecognized tax benefit were presented as a reduction of a deferred tax asset
that, if recognized, would be offset by a valuation allowance.
There were no interest and penalties related to income tax liabilities recognized for the
years ended December 31, 2012, 2013 and 2014.
Our major tax paying components are all located in Taiwan. As of December 31, 2014, the income
tax filings in Taiwan have been examined for the years through 2012, but we have filed appeals for the 2008, 2009, 2011 and 2012 tax filings.
In 2012,
2013 and 2014, our unrecognized tax benefits were related to amortization of goodwill and intangible assets resulting from the acquisition of FunTown in 2006. The income tax authority has made decisions on the amortization for our tax filings
through 2012. We have filed appeals against the unfavorable parts of the decision regarding these amortization adjustments, pending further response from the tax authority.
67
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The amount of unrecognized tax benefits may increase or decrease in the future for various reasons such as
current year tax positions, expiration of statutes of limitations, litigation, legislative activity, or other changes in facts regarding realizability. Taiwanese entities are customarily examined by the tax authorities and it is reasonably possible
that a future examination may result in positive or negative adjustment to our unrecognized tax benefit within the next 12 months; however management does not expect that the total amount of unrecognized tax benefit will change significantly within
the next 12 months of December 31, 2014.
NOTE 26. RELATED-PARTY TRANSACTIONS
During 2014, we have outsourced certain development of software to Double2 Network Technology Co., Ltd., an equity-method investee. The operating costs
amounted to $113 thousand for the year ended December 31, 2014.
NOTE 27. COMMITMENTS AND CONTINGENCIES
Commitments
(a) Operating Leases
We rent certain properties which are used as office premises under lease agreements that expire at various dates through 2017. The following table
sets forth our future aggregate minimum lease payments required under these operating leases, as of December 31, 2014:
|
|
|
|
|
(in US$ thousands) |
|
Amount |
|
2015 |
|
|
910 |
|
2016 |
|
|
235 |
|
2017 |
|
|
4 |
|
|
|
|
|
|
|
|
$ |
1,149 |
|
|
|
|
|
|
Rental expense for operating leases amounted to $1.8 million, $1.0 million and $1.0 million for the years ended
December 31, 2012, 2013 and 2014, respectively.
68
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
(b) License Agreements
We have contractual obligations under various license agreements to pay the licensors license fees and minimum guarantees against future royalties. The
following table summarizes the committed license fees and minimum guarantees against future royalties set forth in our significant license agreements as of December 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
License fees |
|
|
Minimum guarantees against future royalties |
|
|
Total |
|
Minimum required payments: |
|
|
|
|
|
|
|
|
|
|
|
|
In 2015 |
|
$ |
1,129 |
|
|
$ |
1,300 |
|
|
$ |
2,429 |
|
After 2015 |
|
|
5,000 |
|
|
|
1,500 |
|
|
|
6,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,129 |
|
|
$ |
2,800 |
|
|
$ |
8,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The initial minimum guarantees against future royalties and license fees are not required to be paid until the licensed games
are commercially released or until certain milestones are achieved, as stipulated in the individual license agreements. The remaining minimum guarantees are generally required to be paid within three years subsequent to the commercial release dates
of the licensed games.
Contingencies
We are
subject to legal proceedings and claims that arise in the normal course of business. Currently there are no outstanding claims or litigations against us.
NOTE 28. SEGMENT, PRODUCT, GEOGRAPHIC AND OTHER INFORMATION
We currently have two operating segments: an Asian online game and service business segment, and a cloud service business segment (began in 2013). The Asian
online game and service business segment mainly derives its revenues from recognizing the usage of game playing time or in-game items by the end-users. The cloud service business segment mainly derives its revenues from providing cloud products and
services to medium-to-larger enterprises as well as public sectors.
69
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Financial information for each operating segment was as follows for the years ended December 31, 2012,
2013, and 2014:
|
|
|
|
|
|
|
Asian online |
|
(in US$ thousands) |
|
game and service |
|
2012: |
|
|
|
|
Net revenue from external customers |
|
$ |
27,470 |
|
|
|
|
|
|
Loss from operations |
|
$ |
(12,271 |
) |
|
|
|
|
|
Share-based compensation |
|
$ |
199 |
|
|
|
|
|
|
Impairment loss on intangible assets |
|
$ |
15 |
|
|
|
|
|
|
Impairment loss on prepaid licensing and royalty fees |
|
$ |
702 |
|
|
|
|
|
|
Impairment loss on goodwill |
|
$ |
12,489 |
|
|
|
|
|
|
Contract termination costs |
|
$ |
49 |
|
|
|
|
|
|
Interest income |
|
$ |
9 |
|
|
|
|
|
|
Interest expense |
|
$ |
44 |
|
|
|
|
|
|
Gain on sales of marketable securities |
|
$ |
5,665 |
|
|
|
|
|
|
Foreign exchange gain |
|
$ |
55 |
|
|
|
|
|
|
Gain on equity method investmentsnet |
|
$ |
234 |
|
|
|
|
|
|
Impairment loss on marketable securities and investments |
|
$ |
1,193 |
|
|
|
|
|
|
Depreciation |
|
$ |
1,059 |
|
|
|
|
|
|
Amortization, including intangible assets |
|
$ |
2,181 |
|
|
|
|
|
|
Income tax expense |
|
$ |
710 |
|
|
|
|
|
|
70
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Asian online game and service |
|
|
Cloud service business |
|
|
Total |
|
2013: |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue from external customers |
|
$ |
14,106 |
|
|
$ |
926 |
|
|
$ |
15,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
$ |
(33,677 |
) |
|
$ |
(1,218 |
) |
|
$ |
(34,895 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
$ |
(225 |
) |
|
$ |
69 |
|
|
$ |
(156 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on intangible assets |
|
$ |
13,251 |
|
|
$ |
|
|
|
$ |
13,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on prepaid licensing and royalty fees |
|
$ |
2,752 |
|
|
$ |
|
|
|
$ |
2,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on goodwill |
|
$ |
17,054 |
|
|
$ |
|
|
|
$ |
17,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
9 |
|
|
$ |
|
|
|
$ |
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
8 |
|
|
$ |
|
|
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of marketable securities |
|
$ |
1,739 |
|
|
$ |
|
|
|
$ |
1,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain |
|
$ |
236 |
|
|
$ |
|
|
|
$ |
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on equity method investments - net |
|
$ |
526 |
|
|
$ |
|
|
|
$ |
526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
$ |
336 |
|
|
$ |
8 |
|
|
$ |
344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization, including intangible assets |
|
$ |
1,862 |
|
|
$ |
42 |
|
|
$ |
1,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
150 |
|
|
$ |
78 |
|
|
$ |
228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
Asian online game and service |
|
|
Cloud service business |
|
|
Total |
|
2014: |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue from external customers |
|
$ |
8,199 |
|
|
$ |
1,580 |
|
|
$ |
9,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
$ |
(8,639 |
) |
|
$ |
(1,510 |
) |
|
$ |
(10,149 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
$ |
93 |
|
|
$ |
7 |
|
|
$ |
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on property, plant and equipment |
|
$ |
|
|
|
$ |
28 |
|
|
$ |
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on intangible assets |
|
$ |
|
|
|
$ |
115 |
|
|
$ |
115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on prepaid licensing and royalty fees |
|
$ |
1,259 |
|
|
$ |
|
|
|
$ |
1,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
31 |
|
|
$ |
|
|
|
$ |
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
243 |
|
|
$ |
|
|
|
$ |
243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of marketable securities - net |
|
$ |
8,792 |
|
|
$ |
|
|
|
$ |
8,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) |
|
$ |
(306 |
) |
|
$ |
|
|
|
$ |
(306 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on equity method investments - net |
|
$ |
(531 |
) |
|
$ |
|
|
|
$ |
(531 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
$ |
239 |
|
|
$ |
28 |
|
|
$ |
267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization, including intangible assets |
|
$ |
1,124 |
|
|
$ |
71 |
|
|
$ |
1,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefits) |
|
$ |
(92 |
) |
|
$ |
|
|
|
$ |
(92 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
72
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
The reconciliations of segment information to GigaMedias consolidated totals are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
(12,271 |
) |
|
$ |
(34,895 |
) |
|
$ |
(10,149 |
) |
Other** |
|
|
7 |
|
|
|
|
|
|
|
|
|
Adjustment* |
|
|
(8,310 |
) |
|
|
(3,592 |
) |
|
|
(3,324 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
(20,574 |
) |
|
$ |
(38,487 |
) |
|
$ |
(13,473 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
199 |
|
|
$ |
(156 |
) |
|
$ |
100 |
|
Adjustment* |
|
|
(20 |
) |
|
|
375 |
|
|
|
(79 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
179 |
|
|
$ |
219 |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on property, plant and equipment: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
|
|
|
$ |
|
|
|
$ |
28 |
|
Adjustment* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
|
|
|
$ |
|
|
|
$ |
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
15 |
|
|
$ |
13,251 |
|
|
$ |
115 |
|
Adjustment* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
15 |
|
|
$ |
13,251 |
|
|
$ |
115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on prepaid licensing and royalty fees: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
702 |
|
|
$ |
2,752 |
|
|
$ |
1,259 |
|
Adjustment* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
702 |
|
|
$ |
2,752 |
|
|
$ |
1,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
9 |
|
|
$ |
9 |
|
|
$ |
31 |
|
Adjustment* |
|
|
274 |
|
|
|
229 |
|
|
|
651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
283 |
|
|
$ |
238 |
|
|
$ |
682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
44 |
|
|
$ |
8 |
|
|
$ |
243 |
|
Adjustment* |
|
|
203 |
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
247 |
|
|
$ |
49 |
|
|
$ |
243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on sales of marketable securities - net: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
5,665 |
|
|
$ |
1,739 |
|
|
$ |
8,792 |
|
Adjustments* |
|
|
|
|
|
|
|
|
|
|
(171 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
5,665 |
|
|
$ |
1,739 |
|
|
$ |
8,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
55 |
|
|
$ |
236 |
|
|
$ |
(306 |
) |
Adjustments* |
|
|
379 |
|
|
|
(191 |
) |
|
|
(250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
434 |
|
|
$ |
45 |
|
|
$ |
(556 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
73
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Gain (loss) on equity method investmentsnet: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
234 |
|
|
$ |
526 |
|
|
$ |
(531 |
) |
Other** |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
234 |
|
|
$ |
526 |
|
|
$ |
(531 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on marketable securities and investments: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
1,193 |
|
|
$ |
|
|
|
$ |
|
|
Adjustment* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
1,193 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
1,059 |
|
|
$ |
344 |
|
|
$ |
267 |
|
Adjustments* |
|
|
165 |
|
|
|
64 |
|
|
|
39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
1,224 |
|
|
$ |
408 |
|
|
$ |
306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
2,181 |
|
|
$ |
1,904 |
|
|
$ |
1,195 |
|
Adjustments* |
|
|
23 |
|
|
|
3 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
2,204 |
|
|
$ |
1,907 |
|
|
$ |
1,211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
$ |
710 |
|
|
$ |
228 |
|
|
$ |
(92 |
) |
Other** |
|
|
37 |
|
|
|
|
|
|
|
|
|
Adjustments* |
|
|
(76 |
) |
|
|
(167 |
) |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GigaMedia consolidated |
|
$ |
671 |
|
|
$ |
61 |
|
|
$ |
(73 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Adjustment items include corporate and certain back-office costs and expenses not attributable to any specific segment. As of December 31, 2012, 2013 and 2014, the compensation related was approximately $4.2
million, $2.1 million and $1.7 million, respectively; accrued professional fees was approximately $911 thousand, $125 thousand and $174 thousand, respectively. |
** |
Other items relate to the results of operations arising from our non-controlling interest in the online gaming software and service business before we disposed of it in July 2012. |
74
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Major Product Lines
Revenues from the Companys major product lines are summarized as follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands) |
|
2012 |
|
|
2013 |
|
|
2014 |
|
MahJong and casino casual games |
|
$ |
13,120 |
|
|
$ |
7,065 |
|
|
$ |
4,301 |
|
MMOs* |
|
|
8,550 |
|
|
|
6,968 |
|
|
|
1,908 |
|
RPGs** |
|
|
|
|
|
|
|
|
|
|
1,914 |
|
Cloud computing services |
|
|
|
|
|
|
926 |
|
|
|
1,580 |
|
Others |
|
|
5,800 |
|
|
|
73 |
|
|
|
76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,470 |
|
|
$ |
15,032 |
|
|
$ |
9,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
MMOs: Massively multiplayer online games |
** |
RPGs: Role playing games |
Major Customers
No single customer represented 10 percent or more of GigaMedias consolidated total net revenues in any period presented.
75
GIGAMEDIA LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
Geographic Information
Revenues by geographic area are attributed by country of the server location. Revenue from by geographic region is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands)
Geographic region / country |
|
2012 |
|
|
2013 |
|
|
2014 |
|
Taiwan |
|
$ |
18,744 |
|
|
$ |
11,793 |
|
|
$ |
7,413 |
|
Hong Kong |
|
|
4,703 |
|
|
|
3,239 |
|
|
|
2,366 |
|
Singapore |
|
|
2,004 |
|
|
|
|
|
|
|
|
|
Malaysia |
|
|
1,550 |
|
|
|
|
|
|
|
|
|
Thailand |
|
|
204 |
|
|
|
|
|
|
|
|
|
Others |
|
|
265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,470 |
|
|
$ |
15,032 |
|
|
$ |
9,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible long-lived assets by geographic region are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ thousands)
Geographic region / country |
|
December 31, |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
Taiwan |
|
$ |
1,932 |
|
|
$ |
1,657 |
|
|
$ |
1,641 |
|
Hong Kong |
|
|
17 |
|
|
|
20 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,949 |
|
|
$ |
1,677 |
|
|
$ |
1,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 29. SUBSEQUENT EVENT
We completed the disposal of an equity securities investment during the period between April 13, 2015 and April 15, 2015 in the Taiwan open market
through block sales. The total selling price of this investment was slightly higher than its 2014 acquisition cost. Upon settlement, we received approximately US$18 million in cash.
76
Exhibit 99.4
GigaMedia Limited
and
its subsidiaries
Registration Number: 199905474H
Annual Report
Year ended
31 December 2014
GigaMedia Limited and its subsidiaries
Directors report
Year ended 31 December 2014
Directors report
We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year
ended 31 December 2014.
Directors
The directors in office at the date of this report are as follows:
|
|
|
|
|
|
|
Chen, Dirk Chi-Ching |
|
|
|
|
Chien, Mo-Na |
|
|
|
|
Hong, Chin Fock (Damian) |
|
|
|
|
Huang, John Ping Chang |
|
|
|
|
Huang, Billy Bing-Yuan |
|
|
|
|
Hwang, Collin |
|
|
|
|
Liu, Nick Chia-En |
|
|
|
|
Tung, Casey Kuo Chong |
|
|
|
|
Wong, King Wai Alfred |
|
|
Directors interests
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), the particulars
of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related corporations (other than
wholly-owned subsidiaries) are as follows:
|
|
|
|
|
|
|
|
|
Name of director and corporation in
which interests are held |
|
Holdings at
beginning of the
financial year |
|
|
Holdings at
end of the
financial year |
|
Hwang, Collin |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- ordinary shares |
|
|
|
|
|
|
|
|
- interests held |
|
|
961,200 |
|
|
|
1,458,138 |
|
- option to subscribe for ordinary shares |
|
|
1,000,000 |
|
|
|
500,000 |
|
Chien, Mo-Na |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
20,000 |
|
|
|
20,000 |
|
1
GigaMedia Limited and its subsidiaries
Directors report
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
Name of director and corporation in
which interests are held |
|
Holdings at
beginning of the financial year |
|
|
Holdings at
end of the
financial year |
|
Huang, John Ping Chan |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
20,000 |
|
|
|
20,000 |
|
Huang, Billy Bing-Yuan |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
20,000 |
|
|
|
20,000 |
|
Liu, Nick Chia-En |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
20,000 |
|
|
|
20,000 |
|
Tung, Casey Kuo Chong |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
20,000 |
|
|
|
20,000 |
|
Wong, King Wai Alfred |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
|
|
|
|
20,000 |
|
Hong, Chin Fock (Damian) |
|
|
|
|
|
|
|
|
GigaMedia Limited |
|
|
|
|
|
|
|
|
- option to subscribe for ordinary shares |
|
|
|
|
|
|
20,000 |
|
Except as disclosed in this report, no director who held office at the end of the financial year had interests
in shares, debentures, warrants or share options of the Company or of related corporations either at the beginning of the financial year, or at the end of the financial year.
Except as disclosed under the Share Options section of this report, neither at the end of, nor at any time during the financial
year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body
corporate.
Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in note 29 to the financial
statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member,
or with a company in which he has a substantial financial interest.
2
GigaMedia Limited and its subsidiaries
Directors report
Year ended 31 December 2014
Share options
2002 Employee Share Option Plan
At the June 2002 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2002 Employee Share
Option Plan (the 2002 Plan) under which up to three million common shares of the Company have been reserved for issuance. All employees, officers, directors, supervisors, advisors, and consultants of the Group are eligible to participate
in the 2002 Plan. The 2002 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the exercise price for the option grants, the eligible individuals who are
to receive option grants, the time or times when options grants are to be made, the number of shares subject to grant and the vesting schedule. The maximum contractual term for the options under the 2002 Plan is 10 years.
2004 Employee Share Option Plan
At the June 2004 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2004 Employee Share
Option Plan (the 2004 Plan) under which up to seven million common shares of the Company have been reserved for issuance. All employees, officers, directors, supervisors, advisors, and consultants of the Group are eligible to participate
in the 2004 Plan. The 2004 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the exercise price for the option grants, the eligible individuals who are
to receive option grants, the time or times when options grants are to be made, the number of shares subject to grant and the vesting schedule. The maximum contractual term for the options under the 2004 Plan is 10 years.
2006 Equity Incentive Plan
At the June 2006 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2006 Equity Incentive
Plan (the 2006 Plan) under which up to one million common shares of the Company have been reserved for issuance. The 2006 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has
complete discretion to determine the grant of awards under the 2006 Plan. The maximum contractual term for the options under the 2006 Plan is 10 years.
2007 Equity Incentive Plan
At the June 2007 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2007 Equity Incentive
Plan (the 2007 Plan) under which up to two million common shares of the Company have been reserved for issuance. The 2007 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has
complete discretion to determine the grant of awards under the 2007 Plan. The maximum contractual term for the options under the 2007 Plan is 10 years.
2008 Equity Incentive Plan
At the June 2008 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2008 Equity Incentive
Plan (the 2008 Plan) under which up to one million common shares of the Company have been reserved for issuance. The 2008 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has
complete discretion to determine the grant of awards under the 2008 Plan. The maximum contractual term for the options under the 2008 Plan is 10 years.
3
GigaMedia Limited and its subsidiaries
Directors report
Year ended 31 December 2014
2008 Employee Share Purchase Plan
At the June 2008 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2008 Employee Share
Purchase Plan (the 2008 ESPP) under which up to two hundred thousand common shares of the Company were reserved for issuance. Any person who is regularly employed by the Company or its designated subsidiaries shall be eligible to
participate in the 2008 ESPP. Pursuant to the 2008 ESPP, the Company would offer the shares to qualified employees on favorable terms. Employees are also subject to certain restrictions on the amount that may be invested to purchase the shares and
to other terms and conditions of the 2008 ESPP. The 2008 ESPP is administered by a committee designated by the board of directors. As of the date of this annual report, no shares have been subscribed by qualified employees under the 2008 ESPP.
2009 Equity Incentive Plan
At the June 2009 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2009 Equity Incentive
Plan (the 2009 Plan) under which up to one and a half million common shares of the Company have been reserved for issuance. The 2009 Plan is administered by a committee designated by the board of directors. The committee as plan
administrator has complete discretion to determine the grant of awards under the 2009 Plan. The maximum contractual term for the options under the 2009 Plan is 10 years.
2009 Employee Share Purchase Plan
At the June 2009 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2009 Employee Share
Purchase Plan (the 2009 ESPP) under which up to two hundred thousand common shares of the Company have been reserved for issuance. To be eligible, employees must be regularly employed by the Company or its designated subsidiaries.
Employees are also subject to certain restrictions on the amount that may be invested to purchase the shares and to other terms and conditions of the 2009 ESPP. The 2009 ESPP is administered by a committee designated by the board of directors. As of
the date of this annual report, no shares have been subscribed by qualified employees under the 2009 ESPP.
2010 Equity Incentive
Plan
At the June 2010 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2010
Equity Incentive Plan (the 2010 Plan) under which up to one million common shares of the Company have been reserved for issuance. The 2010 Plan is administered by a committee designated by the board of directors. The committee as plan
administrator has complete discretion to determine the grant of awards under the 2010 Plan. The maximum contractual term for the options under the 2010 Plan is 10 years.
4
GigaMedia Limited and its subsidiaries
Directors report
Year ended 31 December 2014
2010 Employee Share Purchase Plan
At the June 2010 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2010 Employee Share
Purchase Plan (the 2010 ESPP) under which up to two hundred thousand common shares of the Company have been reserved for issuance. To be eligible, employees must be regularly employed by the Company or its designated subsidiaries.
Employees are also subject to certain restrictions on the amount that may be invested to purchase the shares and to other terms and conditions of the 2010 ESPP. The 2010 ESPP is administered by a committee designated by the board of directors. As of
the date of this annual report, no shares have been subscribed by qualified employees under the 2010 ESPP.
Summarised below are the
general terms of its share-based compensation plans as of 31 December 2014.
|
|
|
|
|
|
|
|
|
Share-based compensation
plan |
|
Granted
awards |
|
|
Vesting
schedule |
|
Options
exercise price US$ |
2002 plan |
|
|
3,000,000 |
|
|
Immediately upon granting |
|
$0.79 |
2004 plan |
|
|
7,875,185 |
* |
|
Immediately upon
granting to four years |
|
$0.79 ~ $2.55 |
2006 plan |
|
|
1,223,333 |
** |
|
Immediately upon
granting to four years |
|
$0.81 ~ $16.60 |
2007 plan |
|
|
3,355,217 |
*** |
|
Immediately upon
granting to four years |
|
$1.20 ~ $18.17 |
2008 plan |
|
|
1,000,000 |
|
|
Immediately upon
granting to six years |
|
$2.47 ~ $4.24 |
2009 plan |
|
|
2,500,000 |
**** |
|
Immediately upon
granting to four years |
|
$0.96 ~ $2.47 |
2010 plan |
|
|
2,200,000 |
***** |
|
Three years |
|
$0.81 ~ $1.14 |
* |
The granted awards, net of forfeited or cancelled shares, were within reserved shares of seven million common shares. |
** |
The granted awards, net of forfeited or cancelled shares, were within reserved shares of one million common shares. |
*** |
The granted awards, net of forfeited or cancelled shares, were within reserved shares of two million common shares. |
**** |
The granted awards, net of forfeited or cancelled shares, were within reserved shares of one and a half million common shares. |
***** |
The granted awards, net of forfeited or cancelled shares, were within reserved shares of one million common shares. |
All options are expected to be settled by issuing new shares.
5
GigaMedia Limited and its subsidiaries
Directors report
Year ended 31 December 2014
Auditors
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
|
|
|
|
|
On behalf of the Board of Directors |
|
|
|
|
|
CHIEN, MO-NA |
|
|
Director |
|
|
|
|
|
|
|
HWANG, COLLIN |
|
|
Director |
|
|
|
|
28 April 2015 |
6
GigaMedia Limited and its subsidiaries
Statement by Directors
Year ended 31 December 2014
Statement by Directors
In our opinion:
|
(a) |
the financial statements set out on pages FS1 to FS66 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2014 and the results, changes in
equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and |
|
(b) |
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. |
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
|
|
|
|
|
On behalf of the Board of Directors |
|
|
|
|
|
CHIEN, MO-NA |
|
|
Director |
|
|
|
|
|
|
|
HWANG, COLLIN |
|
|
Director |
|
|
|
|
28 April 2015 |
7
|
|
|
|
|
|
|
|
|
KPMG LLP |
|
|
|
|
|
|
16 Raffles Quay #22-00 |
|
Telephone |
|
+65 6213 3388 |
|
|
Hong Leong Building |
|
Fax |
|
+65 6225 0984 |
|
|
Singapore 048581 |
|
Internet |
|
www.kpmg.com.sg |
Independent auditors report
Members of the Company
GigaMedia Limited
Report on the financial statements
We have audited the
accompanying financial statements of GigaMedia Limited (the Company) and its subsidiaries (the Group), which comprise the statements of financial position of the Group and the Company as at 31 December 2014, the
statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as
set out on pages FS1 to FS66.
Managements responsibility for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore
Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against
loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of
assets.
Auditors responsibility
Our
responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
8
GigaMedia Limited and its subsidiaries
Independent auditors report
Year ended 31 December 2014
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance
with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2014 and the results, changes in equity and cash flows of the
Group for the financial year ended on that date.
Report on other legal and regulatory requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the
Act.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
28 April 2015
9
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Statements of financial position
As at 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
Note |
|
31/12/2014 |
|
|
31/12/2013 |
|
|
31/12/2014 |
|
|
31/12/2013 |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
4 |
|
|
1,835 |
|
|
|
1,863 |
|
|
|
|
|
|
|
|
|
Intangible assets and goodwill |
|
5 |
|
|
222 |
|
|
|
1,461 |
|
|
|
|
|
|
|
|
|
Subsidiaries |
|
6 |
|
|
|
|
|
|
|
|
|
|
79,201 |
|
|
|
88,487 |
|
Associates |
|
7 |
|
|
5,781 |
|
|
|
5,822 |
|
|
|
|
|
|
|
|
|
Other investments |
|
8 |
|
|
4,744 |
|
|
|
6,048 |
|
|
|
|
|
|
|
|
|
Other assets (non-current) |
|
9 |
|
|
4,736 |
|
|
|
4,982 |
|
|
|
|
|
|
|
|
|
Deferred tax assets |
|
10 |
|
|
|
|
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
17,318 |
|
|
|
20,232 |
|
|
|
79,201 |
|
|
|
88,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
11 |
|
|
1,427 |
|
|
|
2,238 |
|
|
|
5,148 |
|
|
|
2,671 |
|
Other investments |
|
8 |
|
|
29,340 |
|
|
|
21,460 |
|
|
|
|
|
|
|
|
|
Other assets (current) |
|
12 |
|
|
760 |
|
|
|
832 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
13 |
|
|
59,631 |
|
|
|
58,801 |
|
|
|
668 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
91,158 |
|
|
|
83,331 |
|
|
|
5,816 |
|
|
|
2,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
108,476 |
|
|
|
103,563 |
|
|
|
85,017 |
|
|
|
91,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
14 |
|
|
213,238 |
|
|
|
209,645 |
|
|
|
213,238 |
|
|
|
209,645 |
|
Reserves |
|
15 |
|
|
6,271 |
|
|
|
13,839 |
|
|
|
(3,434 |
) |
|
|
1,819 |
|
Accumulated losses |
|
|
|
|
(140,318 |
) |
|
|
(134,850 |
) |
|
|
(124,973 |
) |
|
|
(120,435 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of the Company |
|
|
|
|
79,191 |
|
|
|
88,634 |
|
|
|
84,831 |
|
|
|
91,029 |
|
Non-controlling interests |
|
|
|
|
10 |
|
|
|
(147 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
|
|
79,201 |
|
|
|
88,487 |
|
|
|
84,831 |
|
|
|
91,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS1
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Statements of financial position (contd)
As at 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
Note |
|
31/12/2014 |
|
|
31/12/2013 |
|
|
31/12/2014 |
|
|
31/12/2013 |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits |
|
16 |
|
|
|
|
|
|
170 |
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
10 |
|
|
1,928 |
|
|
|
2,043 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
10 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
1,938 |
|
|
|
2,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
17 |
|
|
5,032 |
|
|
|
4,175 |
|
|
|
186 |
|
|
|
191 |
|
Loans and borrowings |
|
18 |
|
|
18,641 |
|
|
|
4,361 |
|
|
|
|
|
|
|
|
|
Other current liabilities |
|
19 |
|
|
2,122 |
|
|
|
2,756 |
|
|
|
|
|
|
|
|
|
Current tax liabilities |
|
|
|
|
1,542 |
|
|
|
1,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
27,337 |
|
|
|
12,852 |
|
|
|
186 |
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
29,275 |
|
|
|
15,076 |
|
|
|
186 |
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities |
|
|
|
|
108,476 |
|
|
|
103,563 |
|
|
|
85,017 |
|
|
|
91,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS2
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Consolidated statement of profit or loss
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
|
2014 US$000 |
|
|
2013 US$000 |
|
Continuing operations |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
20 |
|
|
9,779 |
|
|
|
15,032 |
|
Cost of sales |
|
|
|
|
(7,835 |
) |
|
|
(7,584 |
) |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
1,944 |
|
|
|
7,448 |
|
Other income |
|
21 |
|
|
115 |
|
|
|
1,095 |
|
|
|
|
|
|
|
|
|
|
|
|
Product development and engineering expenses |
|
|
|
|
(892 |
) |
|
|
(1,698 |
) |
Selling and marketing expenses |
|
|
|
|
(6,708 |
) |
|
|
(4,815 |
) |
General and administrative expenses |
|
|
|
|
(6,381 |
) |
|
|
(6,340 |
) |
Other operating expenses |
|
22 |
|
|
(1,439 |
) |
|
|
(33,098 |
) |
|
|
|
|
|
|
|
|
|
|
|
Results from operating activities |
|
|
|
|
(13,361 |
) |
|
|
(37,408 |
) |
Finance income |
|
|
|
|
9,625 |
|
|
|
1,977 |
|
Finance expenses |
|
|
|
|
(1,109 |
) |
|
|
(81 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net finance income |
|
23 |
|
|
8,516 |
|
|
|
1,896 |
|
Share of (loss)/profit of associates, net of tax |
|
7 |
|
|
(531 |
) |
|
|
526 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss before tax |
|
|
|
|
(5,376 |
) |
|
|
(34,986 |
) |
Tax benefit/(expense) |
|
24 |
|
|
73 |
|
|
|
(61 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
|
|
|
(5,303 |
) |
|
|
(35,047 |
) |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
|
25 |
|
|
|
|
|
|
(318 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
26 |
|
|
(5,303 |
) |
|
|
(35,365 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to: |
|
|
|
|
|
|
|
|
|
|
Owners of the Company |
|
|
|
|
|
|
|
|
|
|
- Continuing operations |
|
|
|
|
(5,468 |
) |
|
|
(34,766 |
) |
- Discontinued operations |
|
|
|
|
|
|
|
|
(318 |
) |
|
|
|
|
|
(5,468 |
) |
|
|
(35,084 |
) |
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
- Continuing operations |
|
|
|
|
165 |
|
|
|
(281 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,303 |
) |
|
|
(35,365 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share (cents) |
|
27 |
|
|
(0.10 |
) |
|
|
(0.69 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss per sharecontinuing operations |
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share (cents) |
|
27 |
|
|
(0.10 |
) |
|
|
(0.68 |
) |
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS3
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Consolidated statement of comprehensive income
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Loss for the year |
|
|
(5,303 |
) |
|
|
(35,365 |
) |
Other comprehensive income: |
|
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
Defined benefit plan remeasurements |
|
|
|
|
|
|
37 |
|
Items that are or may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
Net change in fair value of available-for-sale financial assets |
|
|
1,336 |
|
|
|
4,420 |
|
Net change in fair value of available-for-sale financial assets reclassified to profit or loss |
|
|
(8,741 |
) |
|
|
|
|
Foreign currency translation differencesforeign operations |
|
|
(182 |
) |
|
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,587 |
) |
|
|
4,462 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income for the year, net of tax * |
|
|
(7,587 |
) |
|
|
4,499 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
|
|
(12,890 |
) |
|
|
(30,866 |
) |
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
Owners of the Company |
|
|
(13,053 |
) |
|
|
(30,579 |
) |
Non-controlling interests |
|
|
163 |
|
|
|
(287 |
) |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
|
|
(12,890 |
) |
|
|
(30,866 |
) |
|
|
|
|
|
|
|
|
|
* |
There was no tax effect on the components included in other comprehensive income. |
The
accompanying notes form an integral part of these financial statements.
FS4
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Consolidated statement of changes in equity
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to owners of the Company |
|
|
|
|
|
|
|
|
|
Note |
|
|
Share
capital |
|
|
Share option reserve |
|
|
Statutory reserves |
|
|
Accumulated losses |
|
|
Fair value reserve |
|
|
Foreign currency translation reserve |
|
|
Total |
|
|
Non-
controlling interests |
|
|
Total
equity |
|
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
At 1 January 2013 |
|
|
|
|
|
|
209,643 |
|
|
|
12,557 |
|
|
|
3,022 |
|
|
|
(99,803 |
) |
|
|
15,256 |
|
|
|
(21,683 |
) |
|
|
118,992 |
|
|
|
(338 |
) |
|
|
118,654 |
|
Total comprehensive income for the
year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35,084 |
) |
|
|
|
|
|
|
|
|
|
|
(35,084 |
) |
|
|
(281 |
) |
|
|
(35,365 |
) |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48 |
|
|
|
48 |
|
|
|
(6 |
) |
|
|
42 |
|
Defined benefit plan remeasurements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
37 |
|
|
|
|
|
|
|
37 |
|
Net change in fair value of available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,420 |
|
|
|
|
|
|
|
4,420 |
|
|
|
|
|
|
|
4,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income, net of
tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37 |
|
|
|
4,420 |
|
|
|
48 |
|
|
|
4,505 |
|
|
|
(6 |
) |
|
|
4,499 |
|
Total comprehensive income for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35,047 |
) |
|
|
4,420 |
|
|
|
48 |
|
|
|
(30,579 |
) |
|
|
(287 |
) |
|
|
(30,866 |
) |
Transactions with owners, recorded directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares |
|
|
14 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
2 |
|
Share-based payment transactions |
|
|
15 |
|
|
|
|
|
|
|
219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
219 |
|
|
|
|
|
|
|
219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contributions by and distributions to owners |
|
|
|
|
|
|
2 |
|
|
|
219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221 |
|
|
|
|
|
|
|
221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in ownership interest in subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of subsidiary with non-controlling interests |
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
478 |
|
|
|
478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total changes in ownership interest in subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
478 |
|
|
|
478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transactions with owners |
|
|
|
|
|
|
2 |
|
|
|
219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221 |
|
|
|
478 |
|
|
|
699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
|
|
|
|
209,645 |
|
|
|
12,776 |
|
|
|
3,022 |
|
|
|
(134,850 |
) |
|
|
19,676 |
|
|
|
(21,635 |
) |
|
|
88,634 |
|
|
|
(147 |
) |
|
|
88,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS5
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Consolidated statement of changes in equity
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to owners of the Company |
|
|
|
|
|
|
|
|
|
Note |
|
Share
capital |
|
|
Share option reserve |
|
|
Statutory reserves |
|
|
Accumulated losses |
|
|
Fair value reserve |
|
|
Foreign currency translation reserve |
|
|
Total |
|
|
Non-
controlling interests |
|
|
Total
equity |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
At 1 January 2014 |
|
|
|
|
209,645 |
|
|
|
12,776 |
|
|
|
3,022 |
|
|
|
(134,850 |
) |
|
|
19,676 |
|
|
|
(21,635 |
) |
|
|
88,634 |
|
|
|
(147 |
) |
|
|
88,487 |
|
Total comprehensive income for the
year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,468 |
) |
|
|
|
|
|
|
|
|
|
|
(5,468 |
) |
|
|
165 |
|
|
|
(5,303 |
) |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(180 |
) |
|
|
(180 |
) |
|
|
(2 |
) |
|
|
(182 |
) |
Defined benefit plan remeasurements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in fair value of available-for-sale financial assets reclassified to
profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,741 |
) |
|
|
|
|
|
|
(8,741 |
) |
|
|
|
|
|
|
(8,741 |
) |
Net change in fair value of available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,336 |
|
|
|
|
|
|
|
1,336 |
|
|
|
|
|
|
|
1,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income, net of
tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,405 |
) |
|
|
(180 |
) |
|
|
(7,585 |
) |
|
|
(2 |
) |
|
|
(7,587 |
) |
Total comprehensive income for the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,468 |
) |
|
|
(7,405 |
) |
|
|
(180 |
) |
|
|
(13,053 |
) |
|
|
163 |
|
|
|
(12,890 |
) |
Transactions with owners, recorded directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares |
|
14 |
|
|
3,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,593 |
|
|
|
|
|
|
|
3,593 |
|
Share-based payment transactions |
|
15 |
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contributions by and distributions to owners |
|
|
|
|
3,593 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,610 |
|
|
|
|
|
|
|
3,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in ownership interest in subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation of subsidiary with non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total changes in ownership interest in subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transactions with owners |
|
|
|
|
3,593 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,610 |
|
|
|
(6 |
) |
|
|
3,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
|
|
213,238 |
|
|
|
12,793 |
|
|
|
3,022 |
|
|
|
(140,318 |
) |
|
|
12,271 |
|
|
|
(21,815 |
) |
|
|
79,191 |
|
|
|
10 |
|
|
|
79,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS6
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Consolidated statement of cash flows
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Loss before tax |
|
|
|
|
|
|
|
|
- continuing operations |
|
|
(5,376 |
) |
|
|
(34,986 |
) |
- discontinued operations |
|
|
|
|
|
|
(318 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
Allowance for doubtful receivables |
|
|
37 |
|
|
|
37 |
|
Amortisationintangible assets |
|
|
1,201 |
|
|
|
1,904 |
|
Depreciation of property, plant and equipment |
|
|
310 |
|
|
|
411 |
|
Gain on sale of associate (continued operations) |
|
|
|
|
|
|
(1,000 |
) |
Gain on sale of available-for-sale financial assets |
|
|
(8,621 |
) |
|
|
(1,739 |
) |
Dividend income |
|
|
(247 |
) |
|
|
|
|
Net change in fair value of financial assets designated at fair value through profit or loss |
|
|
(75 |
) |
|
|
|
|
Impairment loss on property, plant and equipment |
|
|
28 |
|
|
|
|
|
Impairment loss on prepaid licensing fees |
|
|
1,259 |
|
|
|
2,752 |
|
Impairment loss on intangible assets and goodwill |
|
|
115 |
|
|
|
30,305 |
|
(Gain)/Loss on disposal of property, plant and equipment |
|
|
(2 |
) |
|
|
4 |
|
Interest expense |
|
|
243 |
|
|
|
49 |
|
Interest income |
|
|
(682 |
) |
|
|
(238 |
) |
Share-based compensation |
|
|
21 |
|
|
|
219 |
|
Share of loss/(profit) of associates, net of tax |
|
|
531 |
|
|
|
(526 |
) |
Unrealised foreign exchange loss on other investments |
|
|
310 |
|
|
|
77 |
|
|
|
|
|
|
|
|
|
|
Operating loss before working capital changes |
|
|
(10,948 |
) |
|
|
(3,049 |
) |
Trade and other receivables |
|
|
484 |
|
|
|
595 |
|
Other assets |
|
|
(943 |
) |
|
|
961 |
|
Trade and other payables |
|
|
845 |
|
|
|
(2,218 |
) |
Other liabilities |
|
|
(562 |
) |
|
|
(976 |
) |
Employee benefits |
|
|
(215 |
) |
|
|
(111 |
) |
|
|
|
|
|
|
|
|
|
Cash used in operating activities |
|
|
(11,339 |
) |
|
|
(4,798 |
) |
Tax refunded |
|
|
80 |
|
|
|
285 |
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(11,259 |
) |
|
|
(4,513 |
) |
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS7
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Consolidated statement of cash flows (contd)
Year ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
|
2014 |
|
|
2013 |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
Acquisition of business, net of cash acquired |
|
32 |
|
|
|
|
|
|
73 |
|
Dividends received |
|
|
|
|
247 |
|
|
|
|
|
Acquisition of an associate |
|
7 |
|
|
(667 |
) |
|
|
|
|
Acquisition of financial assets designated at fair value through profit or loss |
|
|
|
|
(18,885 |
) |
|
|
|
|
Interest received |
|
|
|
|
744 |
|
|
|
261 |
|
Net cash inflow from disposal of IAHGames and Spring Asia |
|
|
|
|
|
|
|
|
2,258 |
|
Proceeds from disposal of associate (continued operations) |
|
|
|
|
|
|
|
|
1,000 |
|
Proceeds from disposal of available-for-sale financial assets |
|
|
|
|
18,692 |
|
|
|
3,419 |
|
Proceeds from disposal of property, plant and equipment |
|
|
|
|
2 |
|
|
|
35 |
|
Purchase of available-for-sale financial assets |
|
|
|
|
(6,490 |
) |
|
|
(2,460 |
) |
Purchase of property, plant and equipment |
|
|
|
|
(420 |
) |
|
|
(225 |
) |
Purchase of intangible assets |
|
|
|
|
(110 |
) |
|
|
(1,229 |
) |
Refundable deposit |
|
|
|
|
(4 |
) |
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)/from investing activities |
|
|
|
|
(6,891 |
) |
|
|
3,215 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from/(Repayment of) short-term borrowings |
|
|
|
|
15,232 |
|
|
|
(3,146 |
) |
Cash received from the exercise of stock option |
|
|
|
|
3,593 |
|
|
|
2 |
|
Deposits pledged |
|
|
|
|
(8,991 |
) |
|
|
|
|
Interest paid |
|
|
|
|
(233 |
) |
|
|
(53 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash from/(used in) financing activities |
|
|
|
|
9,601 |
|
|
|
(3,197 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
|
|
(8,549 |
) |
|
|
(4,495 |
) |
Cash and cash equivalents at 1 January |
|
|
|
|
58,801 |
|
|
|
62,731 |
|
Effect of exchange rate fluctuations on cash held in foreign currencies |
|
|
|
|
388 |
|
|
|
565 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at 31 December |
|
13 |
|
|
50,640 |
|
|
|
58,801 |
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of these financial statements.
FS8
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Notes to the financial statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 28 April 2015.
1 |
Domicile and activities |
GigaMedia Limited (the Company) is a limited
liability company domiciled and incorporated in Singapore. The address of its registered office is at 80 Robinson Road, #02-00, Singapore 068898. Its principal place of business is at 8th Floor, No.22, Ln. 407, Sec. 2, Tiding Blvd., Taipei, Taiwan,
114 Republic of China.
The financial statements of the Group as at and for the year ended 31 December 2014 comprise the Company and
its subsidiaries (together referred to as the Group and individually as Group entities) and the Groups interest in associates.
The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are providing online
entertainment software and services and investment holding.
2.1 |
Statement of compliance |
The financial statements have been prepared in accordance with
Singapore Financial Reporting Standards (FRS).
The financial statements have been prepared on the historical cost basis
except as otherwise described in the notes below.
2.3 |
Functional and presentation currency |
The Companys functional currency is New Taiwan
dollars. Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates. The financial statements are presented in United States dollars
(US$) which is the Companys presentation currency as the Company is listed on the NASDAQ Stock Market at United States. All financial information presented in United States dollars have been rounded to the nearest thousand, unless
otherwise stated.
FS9
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
2.4 |
Use of estimates and judgements |
The preparation of financial statements in conformity with
FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that
have the most significant effect on the amounts recognised in the financial statements is included in the following note:
|
|
|
|
|
Note 3.4(iii) |
|
- |
|
capitalisation of software development costs as intangible assets |
Information about assumption and estimation uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are included in the following notes:
|
|
|
|
|
Note 4 |
|
- |
|
measurement of recoverable amounts of property, plant and equipment; |
Note 5 |
|
- |
|
measurement of recoverable amounts of intangible assets; |
Note 6 |
|
- |
|
measurement of recoverable amounts of subsidiaries; |
Note 7 |
|
- |
|
measurement of recoverable amounts of associates; |
Note 8 |
|
- |
|
measurement of fair values of available-for-sale financial assets; |
Note 9 |
|
- |
|
assessment of impairment loss on prepaid licensing and royalty fees; |
Note 16 |
|
- |
|
measurement of defined benefit obligations; |
Note 24 |
|
- |
|
estimation of provision for current and deferred taxation; |
Note 32 |
|
- |
|
fair value determination of assets, liabilities and contingent liabilities; and acquired in business combination. |
Measurement of fair values
A number of the Groups accounting policies and disclosures require the measurement of fair values, for both financial and non-financial
assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a
valuation team that has overall responsibility for all significant fair value measurements, including Level 3 fair values, and reports directly to the Chief Financial Officer.
The Chief Financial Officer regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as
broker quotes or pricing services, is used to measure fair values, then the valuation team assesses and documents the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of FRS, including the
level in the fair value hierarchy in which such valuations should be classified.
FS10
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
When measuring the fair value of an asset or a liability, the Group uses market observable
data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
|
|
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. |
|
|
|
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). |
|
|
|
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). |
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement (with Level 3 being the lowest).
Further information about the assumptions made in measuring fair values is included in the following notes:
|
|
|
Note 8 other investments; |
|
|
|
Note 15 share option reserve; |
|
|
|
Note 16 employee benefits; and |
|
|
|
Note 30 financial instruments. |
2.5 |
Changes in accounting policies |
(i) |
Fair value measurement |
FRS 113 Fair Value Measurement establishes a single
framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other FRSs. In particular, it unifies the definition of fair value as the price at which an orderly
transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. It also replaces and expands the disclosure requirements about fair value measurements in other FRSs, including FRS 107
Financial Instruments: Disclosures.
From 1 January 2014, in accordance with the transitional provisions of FRS 113, the
Company has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the
Companys assets and liabilities.
(ii) |
Disclosure of interests in other entities |
From 1 January 2014, as a result of FRS
112 Disclosure of Interests in Other Entities, the Group has expanded its disclosures about its interests in associates (see note 7).
FS11
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
(iii) |
Offsetting of financial assets and financial liabilities |
Under the Amendments to FRS 32
Financial Instruments: PresentationOffsetting Financial Assets and Financial Liabilities, to qualify for offsetting, the right to set off a financial asset and a financial liability must not be contingent on a future event and must be
enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all counterparties.
As a result of FRS 110 Consolidated Financial Statements, the Group
has changed its accounting policy for determining whether it has control over and consequently whether it consolidates its investees. FRS 110 introduces a new control model that focuses on whether the Group has power over an investee, exposure or
rights to variable returns from its involvement with the investee and ability to use its power to affect those returns.
In accordance with
the transitional provisions of FRS 110, the Group reassessed the control conclusion for its investees at 1 January 2014 and there is no change in control conclusion for its investment in subsidiaries.
Except as described above, the adoption of the various new standards and amendments did not have a significant effect on the Groups
financial statements.
3 |
Significant accounting policies |
The accounting policies set out below have been applied
consistently to all periods presented in these financial statements, and have been applied consistently by Group entities, except as explained in note 2.5, which addresses changes in accounting policies.
3.1 |
Basis of consolidation |
Business combinations
Business combinations are accounted for using the acquisition method in accordance with FRS 103 Business Combination as at the
acquisition date, which is the date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
|
|
|
the fair value of the consideration transferred; plus |
|
|
|
the recognised amount of any non-controlling interests in the acquiree; plus |
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if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, |
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
FS12
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Any contingent consideration payable is recognised at fair value at the acquisition date and
included in the consideration transferred. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration
are recognised in profit or loss.
Non-controlling interests that are present ownership interests and entitle their holders to a
proportionate share of the acquirees net assets in the event of liquidation are measured either at fair value or at the non-controlling interests proportionate share of the recognised amounts of the acquirees identifiable net
assets, at the acquisition date. The measurement basis taken is elected on a transaction-by-transaction basis. All non-controlling interest are measured at acquisition-date fair value, unless another measurement basis is required by FRSs.
Costs related to the acquisition, other than those associated with the issue of equity securities, that the Group incurs in connection with a
business combination are expensed as incurred.
Changes in the Groups interest in a subsidiary that do not result in a loss of
control are accounted for as transactions with owners in their capacity as owners and therefore no adjustments are made to goodwill and no gain or loss is recognised in profit or loss. Adjustments to non-controlling interests arising from
transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is expected to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until
the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies
adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
Loss of control
Upon the
loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in
profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an
available-for-sale financial asset depending on the level of influence retained.
Associates
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating
policies. Significant influence is presumed to exist when the Group holds between 20% and 50% or more of the voting power of another entity.
FS13
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Investments in associates are accounted for using the equity method and are recognised
initially at cost. The cost of the investments includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Groups share of the profit or loss and other comprehensive income of associate,
after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.
When the Groups share of losses exceeds its interest in an associate, the carrying amount of the investment, including any long-term
interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Groups interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Subsidiaries in the
separate financial statements
Investments in subsidiaries are stated in the Companys statement of financial position at cost
less accumulated impairment losses.
(i) |
Foreign currency transactions |
Transactions in foreign currencies are translated
to the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at
the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and
the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities
denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms
of historical cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on
retranslation are recognised in profit or loss.
FS14
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
The assets and liabilities of foreign operations, excluding
goodwill and fair value adjustments arising on acquisition, are translated to United States dollars at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to United States dollars at
exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and are translated at the exchange rates at the end
of the reporting period. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used.
Foreign
currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. However, if the foreign operation is a non-wholly-owned subsidiary, then the relevant
proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence is lost, the cumulative amount in the translation reserve related to
that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion
of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the relevant proportion of the
cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to form part of a net investment in a foreign operation are recognised in other
comprehensive income, and are presented in the translation reserve in equity.
3.3 |
Property, plant and equipment |
(i) |
Recognition and measurement |
Items of property, plant and equipment are measured
at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed assets includes:
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the cost of materials and direct labour; |
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any other costs directly attributable to bringing the assets to a working condition for their intended use; |
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when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and |
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capitalised borrowing costs. |
Purchased software that is integral to the functionality of the
related equipment is capitalised as part of that equipment.
FS15
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property,
plant and equipment (calculated as the difference between the net proceeds from disposal with the carrying amount of the item), and is recognised in profit or loss.
The cost of replacing a component of an item of property, plant
and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced
component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Depreciation is based on the cost of an asset less its residual
value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an
item of property, plant and equipment, unless it is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term. Freehold land is not depreciated.
Depreciation is recognised from the date that the property,
plant and equipment are installed and are ready for use.
The estimated useful lives for the current and comparative years are as follows:
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Buildings |
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50 years |
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Leasehold improvements |
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3 to 5 years |
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Information and communication equipment |
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2 to 5 years |
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Office furniture and equipment |
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3 to 5 years |
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and
adjusted if appropriate.
3.4 |
Intangible assets and goodwill |
Goodwill that arises upon the acquisition of subsidiaries is included
in intangible assets. For the measurement of goodwill at initial recognition, see note 3.1.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
FS16
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Trademarks acquired in a business combination are identified and
recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair values can be measured reliably. Trademarks are measured initially at cost. The cost of trademarks is their fair value at the acquisition
date.
Subsequent to initial recognition, trademarks acquired in a business combination are measured at cost less accumulated amortisation
and any accumulated impairment losses, on the same basis as intangible assets acquired separately.
Trademarks with indefinite useful lives
are tested for impairment annually, or at the cash-generating unit level. Trademarks are not amortised. The useful life of trademarks with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be
supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
(iii) |
Other intangible assets |
Other intangible assets represents the capitalised
software development costs and customer relationship.
Development activities involve a plan or design for the production of new or
substantially improved software. Development expenditure is capitalised only if development costs can be measured reliably, the software is technically and commercially feasible, future economic benefits are probable, and the Group intends to and
has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the direct labour and overhead costs that are directly attributable to preparing the asset for its intended use. Other development
expenditure is recognised in profit or loss as incurred.
Other intangible assets with finite useful lives are measured at cost less
accumulated amortisation and accumulated impairment losses.
(iv) |
Subsequent expenditure |
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.
Amortisation is calculated based on the cost of the asset, less its
residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible
assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative years are as follows:
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Capitalised software costs |
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0.5 to 3 years |
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Customer relationship |
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9 years |
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and
adjusted if appropriate.
FS17
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
3.5 |
Financial instruments |
(i) |
Non-derivative financial assets |
The Group initially recognises loans and
receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to
receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained
by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in
the statement of financial position when and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the assets and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss,
loans and receivables and available-for-sale financial assets.
Financial assets at fair value through profit or loss
A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon
initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Groups documented risk
management or investment strategy. Attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein, which takes into account any
dividend income, are recognised in profit or loss.
Financial assets designated at fair value through profit or loss comprise equity
securities that otherwise would have been classified as available-for-sale.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise trade and other receivables, other assets and cash and cash equivalents.
FS18
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Cash and cash equivalents comprise cash balances and short-term deposits with maturities of
three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments. For the purpose of the consolidated statement of cash
flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and that form an integral part of the Groups cash management are included in cash and cash equivalents.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any
of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes
therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the
gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise equity securities, debt
securities and open-end funds.
(ii) |
Non-derivative financial liabilities |
All other financial liabilities are
recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group
has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Other financial liabilities comprise trade and other payables and loans and borrowings.
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.
FS19
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
(i) |
Non-derivative financial assets |
A financial asset not carried at fair value
through profit or loss, including an interest in an associate, is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a
loss event(s) has occurred after the initial recognition of the asset, and that the loss event(s) has an impact on the estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic
conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of
impairment.
Loans and receivables
The Group considers evidence of impairment for loans and receivables financial assets at both a specific asset and collective level. All
individually significant loans and receivables are assessed for specific impairment.
In assessing collective impairment, the Group uses
historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for managements judgement as to whether current economic and credit conditions are such that the actual losses are likely to be
greater or less than suggested by historical trends.
Losses are recognised in profit or loss and reflected in an allowance account against
loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or
loss.
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in
equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss
recognised previously in profit or loss. Changes in cumulative impairment provisions attributable to application of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an
impaired available-for-sale equity security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed. The amount of the reversal is recognised in
profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.
FS20
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Associates
An impairment loss in respect of an associate is measured by comparing the recoverable amount of the investment with its carrying amount in
accordance with note 3.6 (ii). An impairment loss is recognised in profit or loss. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.
(ii) |
Non-financial assets |
The carrying amounts of the Groups non-financial
assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. For
goodwill and intangible assets, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Subject to an
operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is
monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.
The Groups corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets are allocated
to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are
assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Payments made under operating leases are recognised in profit or loss on a
straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease
adjustment is confirmed.
FS21
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Inventories are measured at the lower of cost and net realisable value. The cost
of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other cost incurred in bringing them to their existing location and condition. In the
case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated
costs necessary to make the sale.
A provision is recognised if, as a result of a past event, the Group has a present
legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
3.10 |
Finance income and finance costs |
Finance income comprises interest income on funds invested
(including available-for-sale financial assets), dividend income, gains on disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss, and reclassifications of net gains previously
recognised in other comprehensive income. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Groups right to receive payment
is established, which in the case of quoted equity securities is normally the ex-dividend date.
Finance costs comprise interest expense on
borrowings, losses on disposal of available-for-sale financial assets, impairment losses recognised on financial assets (other than trade receivables), and reclassification of net losses previously recognised in other comprehensive income.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in
profit or loss using the effective interest method.
Foreign currency gains and losses on financial assets and financial liabilities are
reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in net gain or net loss position.
(i) |
Defined contribution plans |
A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an
employee benefit expense in profit or loss in the periods during which related services are rendered by employees.
FS22
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Defined benefits plan
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Groups net obligation in respect of
defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present
value. The fair value of any plan assets is deducted. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at
the beginning of the annual period to the net defined benefit liability (asset).
The calculation is performed annually by a qualified
actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions
in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given o any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is
realisable during the life of the plan, or on settlement of the plan liabilities.
Remeasurements from defined benefit plans comprise
actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Group recognises them immediately in other comprehensive income and all expenses related to defined
benefit plans in employee benefits expense in profit or loss.
When the benefits of a plan are changed, or when a plan is curtailed, the
portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in profit or loss when the plan amendment or curtailment occurs.
The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on settlement is
the difference between the present value of the defined benefit obligation being settled as determined on the date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the Group in
connection with the settlement.
(ii) |
Share-based payment transactions |
The grant date fair value of share-based
payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to
reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and
non-market performance conditions at vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
The fair value of the amount payable to employees in respect of share appreciation rights, which are
settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based
on the fair value of the share appreciation rights. Any changes in the fair value of the liability are recognised as employee benefits expense in profit or loss.
FS23
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
Revenue comprises the fair value for the sale of goods and
rendering of services net of value added tax, rebates and discounts, after eliminating sales within the Group.
Asian online game
and service revenues
Online game revenues are earned through the sale of online game points, prepaid cards, game packs and also
through the sublicensing of certain games to distributors. Virtual online game points are sold to distributors or end-users who can make the payments through credit cards, internet banking or telecommunication service operators. Physical prepaid
cards and game packs are sold through distributors and convenience stores. Proceeds from sales of physical cards and game packs, net of sales discounts, and online game points are deferred when received and revenue is recognised upon the actual
usage of the playing time or in-game virtual items by the end-users; over the estimated useful life of virtual items; or when the sold game points expire and are no longer eligible to access the online games or products in accordance with the
Groups published game points expiration policy. Sublicensing revenues from the distributors are recognised based on end users activation to the game system and when the performance obligations have been completed. Licensing fee revenues
are recognized when the delivery of licensed products has occurred and the fee is fixed or determinable.
The Group reports sales of
virtual online game points on a gross basis. In the sales of virtual online game points, the Group acts as principal and the Group has latitude in establishing price. Fixed percentage fees retained by service providers for payment processing related
to the Groups online game services are recognised as cost of online game revenues. The Group reports sublicensing revenues on a net basis. In the sublicense agreements, the Group acts as agent and the distributors are responsible for the
operating and the marketing.
Online game and service revenues also include revenues derived from online advertising arrangements,
sponsorship arrangements, or a combination of both. These service arrangements allow advertisers to place advertisements on particular areas of the Groups Web sites and online games platforms over a stated period of time. Service revenues from
online advertising arrangements are recognised ratably over the period of the contract when the collectability is reasonably assured.
Cloud product and service revenues
Cloud service revenues are related to cloud computing services provided by the Group. Revenues are recorded net of discounts. Cloud service
revenues are recognised for the period of time for which the Group provide services to the customer. Customers have a choice of paying either monthly or in advance for a certain period of time, for which they receive corresponding discounts. The
Group records any such advanced payment receipts as other current liabilities and amortises such revenues over the subscription period.
Revenue from the sales of equipment and other related products are recognised upon acceptance. The Group reports the sales of equipment and
other related products on a gross basis. In the sales of equipment and other related products, the Group acts as principal as the Group is the primary obligor in the transaction and has the latitude in establishing price.
FS24
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised
in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of
temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
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temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; |
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|
|
temporary differences related to investments in subsidiaries and associates entities to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that they
will not reverse in the foreseeable future; and |
|
|
|
taxable temporary differences arising on the initial recognition of goodwill. |
The measurement
of deferred taxes reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. For investment property that is
measured at fair value, the presumption that the carrying amount of the investment property will be recovered through sale has not been rebutted. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when
they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities
are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is
recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
In determining
the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax
years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become
available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
FS25
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
3.14 |
Discontinued operations |
A discontinued operation is a component of the Groups business,
the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:
|
|
|
Represents a separate major line of business of geographical area of operations; |
|
|
|
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or |
|
|
|
Is a subsidiary acquired exclusively with a view to resale. |
Classification as a discontinued
operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss is re-presented as if the
operation had been discontinued from the start of the comparative year.
The Group presents basic and diluted earnings per share data for its
ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held.
Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential
ordinary shares, which comprise share options granted to employees.
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups other components. All operating segments operating results are reviewed regularly by the
Board of Directors (the chief operating decision maker) to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Companys headquarters), head office expenses and tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, investment property, and
intangible assets other than goodwill.
3.17 |
New standards and interpretations not adopted |
A number of new standards, amendments to
standards and interpretations are effective for annual periods beginning after 1 January 2014 and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements
of the Group and the Company. The Group does not plan to adopt these standards early.
FS26
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
4 |
Property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freehold land |
|
|
Buildings |
|
|
Leasehold improvements |
|
|
Information and communication equipment |
|
|
Office
furniture
and equipment |
|
|
Equipment
under
installation |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2013 |
|
|
765 |
|
|
|
1,304 |
|
|
|
455 |
|
|
|
4,857 |
|
|
|
288 |
|
|
|
28 |
|
|
|
7,697 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
29 |
|
|
|
183 |
|
|
|
13 |
|
|
|
|
|
|
|
225 |
|
Disposals |
|
|
|
|
|
|
|
|
|
|
(351 |
) |
|
|
(94 |
) |
|
|
(43 |
) |
|
|
|
|
|
|
(488 |
) |
Reclassification |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27 |
|
|
|
|
|
|
|
(27 |
) |
|
|
|
|
Currency translation difference |
|
|
(20 |
) |
|
|
(34 |
) |
|
|
(10 |
) |
|
|
(114 |
) |
|
|
(6 |
) |
|
|
(1 |
) |
|
|
(185 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
745 |
|
|
|
1,270 |
|
|
|
123 |
|
|
|
4,859 |
|
|
|
252 |
|
|
|
|
|
|
|
7,249 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
289 |
|
|
|
4 |
|
|
|
120 |
|
|
|
420 |
|
Disposals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(400 |
) |
|
|
(72 |
) |
|
|
|
|
|
|
(472 |
) |
Reclassification |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44 |
|
|
|
|
|
|
|
(44 |
) |
|
|
|
|
Currency translation difference |
|
|
(43 |
) |
|
|
(74 |
) |
|
|
(7 |
) |
|
|
(256 |
) |
|
|
(8 |
) |
|
|
(3 |
) |
|
|
(391 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
702 |
|
|
|
1,196 |
|
|
|
123 |
|
|
|
4,536 |
|
|
|
176 |
|
|
|
73 |
|
|
|
6,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2013 |
|
|
218 |
|
|
|
418 |
|
|
|
375 |
|
|
|
4,273 |
|
|
|
269 |
|
|
|
|
|
|
|
5,553 |
|
Depreciation charge to profit or loss |
|
|
|
|
|
|
17 |
|
|
|
46 |
|
|
|
340 |
|
|
|
8 |
|
|
|
|
|
|
|
411 |
|
Depreciation capitalised in intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Disposals |
|
|
|
|
|
|
|
|
|
|
(350 |
) |
|
|
(59 |
) |
|
|
(40 |
) |
|
|
|
|
|
|
(449 |
) |
Currency translation difference |
|
|
(5 |
) |
|
|
(11 |
) |
|
|
(8 |
) |
|
|
(101 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
(131 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
213 |
|
|
|
424 |
|
|
|
63 |
|
|
|
4,455 |
|
|
|
231 |
|
|
|
|
|
|
|
5,386 |
|
Depreciation charge to profit or loss |
|
|
|
|
|
|
17 |
|
|
|
35 |
|
|
|
251 |
|
|
|
7 |
|
|
|
|
|
|
|
310 |
|
Disposals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(400 |
) |
|
|
(72 |
) |
|
|
|
|
|
|
(472 |
) |
Impairment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
28 |
|
Currency translation difference |
|
|
(13 |
) |
|
|
(25 |
) |
|
|
(5 |
) |
|
|
(231 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
(281 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
200 |
|
|
|
416 |
|
|
|
93 |
|
|
|
4,103 |
|
|
|
159 |
|
|
|
|
|
|
|
4,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2013 |
|
|
547 |
|
|
|
886 |
|
|
|
80 |
|
|
|
584 |
|
|
|
19 |
|
|
|
28 |
|
|
|
2,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
532 |
|
|
|
846 |
|
|
|
60 |
|
|
|
404 |
|
|
|
21 |
|
|
|
|
|
|
|
1,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
502 |
|
|
|
780 |
|
|
|
30 |
|
|
|
433 |
|
|
|
17 |
|
|
|
73 |
|
|
|
1,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS27
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
5 |
Intangible assets and goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
Trademarks |
|
|
Others |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2013 |
|
|
29,651 |
|
|
|
12,211 |
|
|
|
12,494 |
|
|
|
54,356 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
1,229 |
|
|
|
1,229 |
|
Disposal |
|
|
|
|
|
|
|
|
|
|
(1,552 |
) |
|
|
(1,552 |
) |
Acquisitions through business combination |
|
|
496 |
|
|
|
|
|
|
|
67 |
|
|
|
563 |
|
Effect of movements in exchange rates |
|
|
(773 |
) |
|
|
(316 |
) |
|
|
(319 |
) |
|
|
(1,408 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
29,374 |
|
|
|
11,895 |
|
|
|
11,919 |
|
|
|
53,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2014 |
|
|
29,374 |
|
|
|
11,895 |
|
|
|
11,919 |
|
|
|
53,188 |
|
Additions |
|
|
|
|
|
|
|
|
|
|
110 |
|
|
|
110 |
|
Disposals |
|
|
|
|
|
|
|
|
|
|
(3,133 |
) |
|
|
(3,133 |
) |
Effect of movements in exchange rates |
|
|
(1,707 |
) |
|
|
(691 |
) |
|
|
(565 |
) |
|
|
(2,963 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
27,667 |
|
|
|
11,204 |
|
|
|
8,331 |
|
|
|
47,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2013 |
|
|
12,717 |
|
|
|
|
|
|
|
9,030 |
|
|
|
21,747 |
|
Amortisation for the year |
|
|
|
|
|
|
|
|
|
|
1,904 |
|
|
|
1,904 |
|
Disposal |
|
|
|
|
|
|
|
|
|
|
(1,547 |
) |
|
|
(1,547 |
) |
Impairment loss |
|
|
17,054 |
|
|
|
11,943 |
|
|
|
1,308 |
|
|
|
30,305 |
|
Effect of movements in exchange rates |
|
|
(397 |
) |
|
|
(48 |
) |
|
|
(237 |
) |
|
|
(682 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
29,374 |
|
|
|
11,895 |
|
|
|
10,458 |
|
|
|
51,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2014 |
|
|
29,374 |
|
|
|
11,895 |
|
|
|
10,458 |
|
|
|
51,727 |
|
Amortisation for the year |
|
|
|
|
|
|
|
|
|
|
1,201 |
|
|
|
1,201 |
|
Disposals |
|
|
|
|
|
|
|
|
|
|
(3,133 |
) |
|
|
(3,133 |
) |
Impairment loss |
|
|
|
|
|
|
|
|
|
|
115 |
|
|
|
115 |
|
Effect of movements in exchange rates |
|
|
(1,707 |
) |
|
|
(691 |
) |
|
|
(532 |
) |
|
|
(2,930 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
27,667 |
|
|
|
11,204 |
|
|
|
8,109 |
|
|
|
46,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2013 |
|
|
16,934 |
|
|
|
12,211 |
|
|
|
3,464 |
|
|
|
32,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
|
|
|
|
|
|
|
|
1,461 |
|
|
|
1,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2014 |
|
|
|
|
|
|
|
|
|
|
222 |
|
|
|
222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS28
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, the entire goodwill is allocated to the Groups cash-generating unit (CGU)FunTown Group
(FunTown), whose operations is that of Asian online game and service operating segment. The carrying amount is as follows:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
FunTown |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(The FunTown refers to a sub-group of operating entities held by Funtown World Limited, a wholly owned
subsidiary of GigaMedia Limited, incorporated in the British Virgin Islands.)
In 2013, with the acquisition of FingerRockz Co., Ltd.
(FingerRockz), the Group obtained its mobile platform development team. FingerRockz now constitutes an important complement to FunTowns research and development capacity in mobile games. Consequently, the Group reassigned its role
and developed its estimates of future cash flows from mobile games accordingly. For the purpose of testing goodwill for impairment, the Group has determined that FingerRockz is an integral part of FunTown and goodwill arising from the acquisition of
FingerRockz was reassigned to FunTown.
The recoverable amount of a FunTown was determined based on value-in-use calculations. The fair
value of the FunTown was determined based on the present value of estimated future net cash flows over a five year period discounted at the weighted average cost of capital. Cash flows beyond the five-year period were extrapolated using the
estimated growth rates stated below. The growth rate did not exceed the long-term average growth rate for the business in which the FunTown operates.
Key assumption used in discounted cash flow projection calculations:
|
|
|
|
|
|
|
2013 |
|
|
|
FunTown |
|
|
|
% |
|
Group |
|
|
|
|
Budgeted operating margin |
|
|
(26.0 |
) |
Growth rate |
|
|
0.0 |
|
Discount rate |
|
|
13.0 |
|
|
|
|
|
|
Management determined budgeted operating margin based on past performance and its expectations of the game
market development. The weighted average growth rate used was consistent with the forecasts included in industry reports and the Groups historical performance. Management recognised that the speed of technological change and the possibility of
new entrants can had a significant impact on operating margin and growth rate assumptions.
The discount rate used was a post-tax measure
estimated based on past experience, and industry average weighted average cost of capital.
FS29
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
In 2013, due to the continual slowdown in demand for casual online games and loss of a key
licensed game, the Group experienced significant decline in revenues and negative operating margin in Taiwan as compared to its previous future cash flow expectations. In 2013, the Group went through an internal restructuring of its operations and
made a business decision to transit from PC-based games to browser/mobile games and social casino games. In addition, its market capitalisation had also fallen below its net book value based on the quoted market price of its common stock for a
sustained period of time. Based on these qualitative factors, the Group had determined its fair value of FunTown may be less than its carrying value, and the recoverable amount of the remaining goodwill could be impaired. Using the same methodology,
the Group developed its expected future net cash flows based on historical data and internally developed estimates. Based on the abovementioned, the Group had assumed a terminal value of zero. Other significant estimates and assumptions used in
developing the future net cash flows include an assumed average revenue decline of 28% and a discount rate of 13%. As a result, the carrying value of FunTown exceeded its fair value, and the implied fair value of the goodwill was determined to be
US$Nil. Consequently, a goodwill impairment charge of US$17,054,000 was recognised in 2013. Under FRS 36 Impairment of Assets, the impairment loss recognised for goodwill shall not be reversed afterwards.
Trademarks
Trademarks have indefinite useful lives and are not amortised as management expects to continue the related business indefinitely. All
conditions required for treatment as an intangible with indefinite useful life has been met.
In 2013, the Group recorded an impairment
charge of US$11,943,000 relating to impairment on the trade name arising from the acquisition of FunTown, and the carrying amount of the trademarks was reduced to US$Nil. The impairment for the trademarks of FunTown is a result of the Groups
repositioning itself as described above, and no reversal of the impairment loss was recognised for the trademarks during the current year.
Others
During the
year, the Group recorded an impairment loss of US$115,000 (2013: US$1,308,000) relating to impairment on capitalised software development costs as a result of the cessation of development in Cloud product and service segment (2013: certain projects
within its Asian online game and service segment).
|
|
|
|
|
|
|
|
|
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
At beginning of year |
|
|
88,487 |
|
|
|
118,514 |
|
Impairment loss made |
|
|
(4,324 |
) |
|
|
(27,075 |
) |
Currency alignment |
|
|
(4,962 |
) |
|
|
(2,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
79,201 |
|
|
|
88,487 |
|
|
|
|
|
|
|
|
|
|
FS30
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
At the reporting date, the Company has assessed the recoverable amount of its investment in
subsidiaries. The recoverable amount has been determined based on the fair value less costs to sell. Fair value is based on the revalued net asset value of the subsidiaries at the reporting date as, in the opinion of the management of the Company,
the revalued net asset value of the investment reasonably approximates the fair value. This resulted in an impairment loss of US$4,324,000 (2013: US$27,075,000) being charged to the statement of comprehensive income of the Company.
Details of the subsidiaries are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of subsidiaries |
|
Principal activities |
|
Country of incorporation |
|
Percentage
ownership interest |
|
|
|
|
|
|
|
2014 % |
|
|
2013 % |
|
Held by the Company |
|
|
|
|
|
|
|
|
|
|
|
|
GigaMedia International Holdings Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Held by GigaMedia International Holdings Limited |
|
|
|
|
|
|
|
|
|
|
|
|
Cambridge Entertainment Software Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
GigaMedia (HK) Limited |
|
Holding company |
|
Hong Kong |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
GigaMedia Online Entertainment Corp. |
|
Holding company |
|
Cayman Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Held by GigaMedia Online Entertainment Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
FunTown World Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
GigaMedia Asia Pacific Limited |
|
Holding company |
|
British Virgin Islands |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
Skyace Pacific Limited |
|
Online games |
|
British Virgin Islands |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
GigaMedia Capital Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Dragon Mark Holdings Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
FS31
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of subsidiaries |
|
Principal activities |
|
Country of incorporation |
|
Percentage
ownership interest |
|
|
|
|
|
|
|
2014 % |
|
|
2013 % |
|
Held by GigaMedia Online Entertainment Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Premiere Vantage Holdings Limited |
|
Holding company |
|
British Virgin Islands |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
GigaMedia Freestyle Holdings Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Spring Asia Limited |
|
Holding company |
|
Labuan |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
GigaMedia (Labuan) Limited |
|
Holding company |
|
Labuan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Megabiz Limited |
|
Holding company |
|
British Virgin Islands |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
Held by FunTown World Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
FunTown Hong Kong Limited |
|
Online games |
|
Hong Kong |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Held by Skyace Pacific Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dragongate Enterprises Limited |
|
Online games |
|
British Virgin Islands |
|
|
|
** |
|
|
70 |
|
|
|
|
|
|
Held by Dragongate Enterprises Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GigaMedia Dragongate Limited |
|
Online games |
|
Labuan |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
Held by Cambridge Entertainment Software Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cambridge Interactive Development Corporation |
|
Software development and application services |
|
U.S.A. |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Internet Media Licensing Limited |
|
Software development and application services |
|
British Virgin Islands |
|
|
|
* |
|
|
100 |
|
FS32
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of subsidiaries |
|
Principal activities |
|
Country of incorporation |
|
Percentage
ownership interest |
|
|
|
|
|
|
|
2014 % |
|
|
2013 % |
|
Held by Internet Media Licensing Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra Internet Media S.A. (UIM) |
|
Holding company |
|
Nevis |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
Held by Dragon Mark Holdings Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wolverine Holdings Group Limited |
|
Holding company |
|
British Virgin Islands |
|
|
|
* |
|
|
100 |
|
|
|
|
|
|
Held by GigaMedia (Labuan) Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leisure Alliance Sdn. Bhd. |
|
Holding company |
|
Malaysia |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Held by Leisure Alliance Sdn. Bhd. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hoshin GigaMedia Center Inc. |
|
Online games |
|
Taiwan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
GigaMedia Cloud Services Co., Ltd. |
|
Cloud computing services |
|
Taiwan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Giga Development Corporation |
|
Holding company |
|
Taiwan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Held by Hoshin GigaMedia Center Inc |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Play2gether Digital Technology Co., Ltd. |
|
Online games |
|
Taiwan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
PerfectPairs Gaming Co., Ltd. |
|
Online games |
|
Taiwan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
Gaminfinity Publishing Co., Ltd. |
|
Online games |
|
Taiwan |
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
FingerRockz Co., Ltd. |
|
Online games |
|
Taiwan |
|
|
51.6 |
|
|
|
51.6 |
# |
FS33
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of subsidiaries |
|
Principal activities |
|
Country of incorporation |
|
Percentage
ownership interest |
|
|
|
|
|
|
|
2014 % |
|
|
2013 % |
|
|
|
|
|
|
Held by GigaMedia (HK) Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shanghai Pontoon Networking Technology Co., Ltd. |
|
Online games |
|
China |
|
|
100 |
|
|
|
|
|
|
|
|
|
|
Held by Giga Development Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wen He Investment Ltd. |
|
Holding company |
|
Taiwan |
|
|
100 |
|
|
|
|
|
* |
Dormant /investment holding companies liquidated or deregistered with no material financial impact during the year. |
** |
Dormant/investment holding company liquidated with no material financial impact during the year and no longer consolidated in the Groups financial positions. Deregistration will only be completed in 2015.
|
# |
The fair value of the net assets acquired and the effect of the acquisition to the Groups financial position is in this note 32. |
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 US$000 |
|
|
2013 US$000 |
|
Equity shares at cost |
|
|
5,722 |
|
|
|
5,055 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
|
|
|
|
|
|
At 1 January |
|
|
5,822 |
|
|
|
5,223 |
|
Share of (loss)/profit, net of tax |
|
|
(531 |
) |
|
|
526 |
|
Acquisition of an associate |
|
|
667 |
|
|
|
|
|
Currency translation differences |
|
|
(177 |
) |
|
|
73 |
|
|
|
|
|
|
|
|
|
|
At 31 December |
|
|
5,781 |
|
|
|
5,822 |
|
|
|
|
|
|
|
|
|
|
FS34
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
The Group has two (2013: one) associates that are material to the Group. All are equity
accounted. The followings are for the material associates:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of associates |
|
Nature of
relationship with the
Group |
|
Principal place
of business/ Country
of incorporation |
|
Effective equity
held by the Group |
|
|
|
|
|
|
|
2014 % |
|
|
2013 % |
|
East Gate Media Contents & Technology Fund (East Gate) |
|
Online game business and films |
|
Korea |
|
|
18 |
|
|
|
18 |
|
Double2 Network Technology Co., Ltd. (Double2) |
|
Online games |
|
Taiwan |
|
|
23 |
|
|
|
|
|
The following summarises the financial information of the Groups material associates based on their
respective (consolidated) financial statements prepared in accordance with FRS, modified for fair value adjustments on acquisition and differences in the Groups accounting policies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Gates |
|
|
Double2 |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
3,588 |
|
|
|
202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
|
(2,771 |
) |
|
|
(183 |
) |
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
(2,771 |
) |
|
|
(183 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to associates shareholders |
|
|
(2,771 |
) |
|
|
(183 |
) |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
25,566 |
|
|
|
71 |
|
|
|
|
|
Current assets |
|
|
4,365 |
|
|
|
1,366 |
|
|
|
|
|
Current liabilities |
|
|
(532 |
) |
|
|
(120 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
29,399 |
|
|
|
1,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to associates shareholders |
|
|
29,399 |
|
|
|
1,317 |
|
|
|
|
|
|
|
|
|
Groups interest in net assets of investee at beginning of the year |
|
|
5,822 |
|
|
|
|
|
|
|
5,822 |
|
Groups share of: |
|
|
|
|
|
|
|
|
|
|
|
|
- Loss for the year |
|
|
(489 |
) |
|
|
(42 |
) |
|
|
|
|
- other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
- total comprehensive income |
|
|
(489 |
) |
|
|
(42 |
) |
|
|
(531 |
) |
|
|
|
|
Groups contribution during the year |
|
|
|
|
|
|
667 |
|
|
|
667 |
|
Currency translation differences |
|
|
(144 |
) |
|
|
(33 |
) |
|
|
(177 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount of interest in investee at end of the year |
|
|
5,189 |
|
|
|
592 |
|
|
|
5,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS35
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
East Gates |
|
|
|
US$000 |
|
2013 |
|
|
|
|
Revenue |
|
|
5,530 |
|
|
|
|
|
|
|
|
Profit from the year |
|
|
2,980 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
2,980 |
|
|
|
|
|
|
|
|
Attributable to non-controlling interest |
|
|
|
|
Attributable to associates shareholders |
|
|
2,980 |
|
|
|
Non-current assets |
|
|
26,100 |
|
Current assets |
|
|
7,187 |
|
Current liabilities |
|
|
(299 |
) |
|
|
|
|
|
Net assets |
|
|
32,988 |
|
|
|
|
|
|
|
|
Attributable to non-controlling interest |
|
|
|
|
Attributable to associates shareholders |
|
|
32,988 |
|
|
|
Groups interest in net assets of investee at beginning of the year |
|
|
5,223 |
|
Groups share of: |
|
|
|
|
- profit for the year |
|
|
526 |
|
- other comprehensive income |
|
|
|
|
- total comprehensive income |
|
|
526 |
|
|
|
Groups contribution during the year |
|
|
|
|
Currency translation differences |
|
|
73 |
|
|
|
|
|
|
Carrying amount of interest in investee at end of the year |
|
|
5,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Non-current investments |
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
- Debt instrument (unquoted) |
|
|
4,744 |
|
|
|
6,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,744 |
|
|
|
6,048 |
|
|
|
|
|
|
|
|
|
|
Current investments |
|
|
|
|
|
|
|
|
Available-for-sale financial assets: |
|
|
|
|
|
|
|
|
- Equity instrument (quoted) |
|
|
11,131 |
|
|
|
21,124 |
|
- Open-end fund |
|
|
318 |
|
|
|
336 |
|
Financial assets designated at fair value through profit or loss |
|
|
|
|
|
|
|
|
- Equity instrument (quoted) |
|
|
17,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,340 |
|
|
|
21,460 |
|
|
|
|
|
|
|
|
|
|
FS36
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Debt securities classified as available-for-sale investments of the Group with a carrying
amount of US$4,744,000 at 31 December 2014 (2013: US$6,048,000) have stated interest rates of 3.85% to 6.875% (2013: 4% to 6.25%) and will be maturing between 2018 and 2022.
The equity securities have been designated at fair value through profit or loss because they are managed on a fair value basis and their
performance is actively managed.
For information on determination of fair value, refer to note 30.
9 |
Other assets (non-current) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
Note |
|
2014 |
|
|
2013 |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
Refundable deposits |
|
|
|
|
302 |
|
|
|
306 |
|
Prepaid licensing and royalty fees |
|
|
|
|
5,642 |
|
|
|
7,418 |
|
Prepaid pension assets |
|
16 |
|
|
45 |
|
|
|
|
|
Others |
|
|
|
|
6 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,995 |
|
|
|
7,734 |
|
Less: Impairment loss on prepaid licensing and royalty fees |
|
|
|
|
(1,259 |
) |
|
|
(2,752 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,736 |
|
|
|
4,982 |
|
|
|
|
|
|
|
|
|
|
|
|
In 2014, the Group recorded an impairment charge of US$1,259,000 (2013: US$2,752,000) relating to prepaid
licensing and royalty fees.
In 2014, the impairment charge for the prepaid licensing and royalty fees related to one licensed Asian online
game based on value-in-use calculation. The recoverable amount of the licensed Asian online game was determined based on the present value of estimated future net cash flows over a four year period (the expected launching period one year plus its
full licensed period three year), discounted at the weighted average cost of capital. No cash flow beyond the four-year period was estimated. The estimate of value in use was determined using a discount rate of 11.47% based on past experience, and
industry average weighted average cost of capital. The estimated of growth rate was assumed using revenue decline rates of 50% and 67% year-over-year for the second and the third years of licensed period, respectively, management determined budgeted
operating margin based on past performance and its expectations of the game market development. Management recognised that the speed of technological change and the possibility of new entrants can had a significant impact on operating margin and
growth rate assumptions. As a result, the carrying value of the licensed Asian online game exceeded its recoverable amount by approximately US$1,259,000. Consequently, an impairment charge of US$1,259,000 was recognised in 2014.
In 2013, the impairment charge for the prepaid licensing and royalty fees related to certain licensed games within its Asian online game and
service segment that the Group has stopped operating or for which the carrying amounts of the related assets was determined not to be recoverable from its related future undiscounted cash flows. The Group recorded a full impairment on the games that
the Group stopped operating.
The licensed games and related royalties are valued when indication for impairment exists, using unobservable
inputs such as discounted cash flows, incorporating available market discount rate information and the Groups estimates for liquidity risk, and other cash flow model related assumptions.
FS37
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Movement in temporary differences during the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1/1/2013 |
|
|
Reclassifi-
cation |
|
|
Payment |
|
|
Recognised in profit or loss (note 24) |
|
|
Currency translation difference |
|
|
At 31/12/2013 |
|
|
Reclassifi- cation |
|
|
Payment |
|
|
Recognised in profit or loss (note 24) |
|
|
Currency translation difference |
|
|
At 31/12/2014 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax loss carry-forward |
|
|
659 |
|
|
|
|
|
|
|
|
|
|
|
(650 |
) |
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payment transactions |
|
|
234 |
|
|
|
|
|
|
|
|
|
|
|
(230 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
(1 |
) |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
(56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
949 |
|
|
|
|
|
|
|
|
|
|
|
(879 |
) |
|
|
(14 |
) |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
(56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
(255 |
) |
|
|
|
|
|
|
|
|
|
|
253 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend withholding tax from investees |
|
|
|
|
|
|
(2,207 |
) |
|
|
220 |
|
|
|
|
|
|
|
|
|
|
|
(1,987 |
) |
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,928 |
) |
Intangible assets |
|
|
(306 |
) |
|
|
|
|
|
|
|
|
|
|
247 |
|
|
|
3 |
|
|
|
(56 |
) |
|
|
|
|
|
|
|
|
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(561 |
) |
|
|
(2,207 |
) |
|
|
220 |
|
|
|
500 |
|
|
|
5 |
|
|
|
(2,043 |
) |
|
|
59 |
|
|
|
|
|
|
|
56 |
|
|
|
|
|
|
|
(1,928 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the current year, the Group has reclassified the income tax provisions from current to non-current
liabilities in the statement of financial position for certain dividend withholding tax since the distribution of dividends is highly unlikely to happen within a 12-month period, or in case if it happens, it will be immaterial.
FS38
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to set off current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts are shown on the statement of financial position as follows:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Deferred income tax assets: |
|
|
|
|
|
|
56 |
|
Deferred income tax liabilities: |
|
|
(1,928 |
) |
|
|
(2,043 |
) |
|
|
|
|
|
|
|
|
|
As of 31 December 2014, the Group has net operating losses carried forward, available to offset future
income, amounting to US$27,968,000. Below is the breakdown of the expiration of the net operating losses carried forward in major jurisdictions:
|
|
|
|
|
|
|
Jurisdiction |
|
Amount (US$000) |
|
|
Expiring year |
Hong Kong |
|
|
10,551 |
|
|
Indefinite |
Taiwan |
|
|
17,417 |
|
|
2020-2024 |
|
|
|
|
|
|
|
|
|
|
27,968 |
|
|
|
|
|
|
|
|
|
|
As of 31 December 2013, the Company has net operating losses carried forward, available to offset future
income, amounting to US$20,145,000. Below is the breakdown of the expiration of the net operating losses carried forward in major jurisdictions:
|
|
|
|
|
|
|
Jurisdiction |
|
Amount (US$000) |
|
|
Expiring year |
Hong Kong |
|
|
9,975 |
|
|
Indefinite |
Taiwan |
|
|
10,170 |
|
|
2020-2023 |
|
|
|
|
|
|
|
|
|
|
20,145 |
|
|
|
|
|
|
|
|
|
|
Out of the above tax losses, an amount of US$27,968,000 (2013: US$20,145,000) relating to unutilised tax
losses, has not been recognised due to the unpredictability of future profit streams. Consequently, the Group did not recognise the deferred tax assets of US$7,147,000 (2013: US$4,754,000).
11 |
Trade and other receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Trade receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- third parties |
|
|
1,273 |
|
|
|
2,061 |
|
|
|
|
|
|
|
|
|
Less: Allowance for doubtful receivables |
|
|
(56 |
) |
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,217 |
|
|
|
2,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS39
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Notes receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- third parties |
|
|
81 |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- subsidiaries |
|
|
|
|
|
|
|
|
|
|
5,148 |
|
|
|
2,669 |
|
- third parties |
|
|
129 |
|
|
|
211 |
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129 |
|
|
|
211 |
|
|
|
5,148 |
|
|
|
2,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
1,427 |
|
|
|
2,238 |
|
|
|
5,148 |
|
|
|
2,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The non-trade amounts due from subsidiaries are unsecured, interest-free and repayable on demand.
The Group and the Companys exposure to credit and currency risks, and impairment losses related to trade and other receivables are
disclosed in note 30.
12 |
Other assets (current) |
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Prepayments |
|
|
564 |
|
|
|
750 |
|
Others |
|
|
196 |
|
|
|
82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
760 |
|
|
|
832 |
|
|
|
|
|
|
|
|
|
|
13 |
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Bank balances |
|
|
38,529 |
|
|
|
44,163 |
|
|
|
668 |
|
|
|
62 |
|
Short-term deposits |
|
|
21,102 |
|
|
|
14,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents in the statements of financial position |
|
|
59,631 |
|
|
|
58,801 |
|
|
|
668 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Restricted cash |
|
|
(8,991 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents in the statement of cash flows |
|
|
50,640 |
|
|
|
58,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average effective interest rate per annum relating to the fixed deposits at the reporting date
for the Group is 1.81% (2013: 1.48%). Depending on the terms of the deposit, interest rates reprice every quarterly and half-yearly.
Restricted cash of US$7,481,000 relates to funds pledged to bank as securities other loans and borrowings (see note 18). Restricted cash of
US$1,510,000 relates to deposits pledged for unutilised game point cards.
FS40
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
No. of shares |
|
|
No. of shares |
|
|
|
000 |
|
|
000 |
|
Company |
|
|
|
|
|
|
|
|
In issue at beginning of the year |
|
|
50,723 |
|
|
|
50,720 |
|
Issuance under option exercised |
|
|
4,539 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
In issue at end of the year |
|
|
55,262 |
|
|
|
50,723 |
|
|
|
|
|
|
|
|
|
|
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are
entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Companys residual assets.
All
issued shares are fully paid, with no par value.
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at
meetings of the Company. All rights attached to the Companys shares held by the Group are suspended until those shares are reissued.
Issue of ordinary shares
In 2014, 4,539,000 (2013: 3,000) ordinary shares were issued as a result of the exercise of vested options arising from 4,539,000 (2013: 3,000)
share option programme granted to employee. Options were exercised at an average price of US$0.79 (2013: US$0.79).
Capital management
The Groups primary objective when managing capital is to safeguard the Groups ability to continue as a going concern while
looking for appropriate opportunities to expand its business. In order to do so, the Group may obtain new borrowings or issue new shares.
The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns, taking
into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The
Group currently does not adopt any formal dividend policy.
The Groups policy is to keep its debt-to-equity ratio below 1.00 and with
sufficient current assets to cover its current liabilities. The Groups debt-to-equity ratio and current ratio at the end of the reporting period were as follows:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
Debt-to-equity ratio |
|
|
0.37 |
|
|
|
0.17 |
|
Current ratio |
|
|
3.33 |
|
|
|
6.48 |
|
|
|
|
|
|
|
|
|
|
There were no changes in the Groups approach to capital management during the year.
FS41
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Share option reserve |
|
|
12,793 |
|
|
|
12,776 |
|
|
|
12,793 |
|
|
|
12,776 |
|
Statutory reserve |
|
|
3,022 |
|
|
|
3,022 |
|
|
|
|
|
|
|
|
|
Fair value reserve |
|
|
12,271 |
|
|
|
19,676 |
|
|
|
|
|
|
|
|
|
Translation reserve |
|
|
(21,815 |
) |
|
|
(21,635 |
) |
|
|
(16,227 |
) |
|
|
(10,957 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,271 |
|
|
|
13,839 |
|
|
|
(3,434 |
) |
|
|
1,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share option reserve
Employee share options represent the equity-settled share option granted to employees and executive director of the Group, the details of which
are disclosed in the directors report. The reserve is made up of the cumulative value of services received from employee and executive directors recorded over the vesting period commencing from the grant date of share options, and is reduced
by the expiry or exercise of the share options.
At the end of the financial year, details of the options granted are as follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of outstanding share options |
|
|
|
|
Range of |
|
At
beginning |
|
|
Granted during the |
|
|
Expired/ forfeited during |
|
|
Exercised during |
|
|
At end of |
|
|
Weighted average remaining |
|
exercise price |
|
of the year |
|
|
year |
|
|
the year |
|
|
the year |
|
|
the year |
|
|
exercise |
|
|
|
000 |
|
|
000 |
|
|
000 |
|
|
000 |
|
|
000 |
|
|
period |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under US$1 |
|
|
6,188 |
|
|
|
150 |
|
|
|
(1,279 |
) |
|
|
(4,539 |
) |
|
|
520 |
|
|
|
7.88 years |
|
US$1-US$10 |
|
|
2,419 |
|
|
|
178 |
|
|
|
(603 |
) |
|
|
|
|
|
|
1,994 |
|
|
|
5.31 years |
|
US$10-US$20 |
|
|
616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
616 |
|
|
|
2.65 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,223 |
|
|
|
328 |
|
|
|
(1,882 |
) |
|
|
(4,539 |
) |
|
|
3,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under US$1 |
|
|
6,211 |
|
|
|
|
|
|
|
(20 |
) |
|
|
(3 |
) |
|
|
6,188 |
|
|
|
1.88 years |
|
US$1-US$10 |
|
|
2,383 |
|
|
|
620 |
|
|
|
(584 |
) |
|
|
|
|
|
|
2,419 |
|
|
|
5.72 years |
|
US$10-US$20 |
|
|
616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
616 |
|
|
|
3.65 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,210 |
|
|
|
620 |
|
|
|
(604 |
) |
|
|
(3 |
) |
|
|
9,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,595,000 options (2013: 7,770,000) out of 3,130,000 options (2013: 9,223,000) are exercisable at the end of
the year.
The weighted average share price at the date of exercise of share options exercised in 2014 was US$0.79 (2013: US$0.79).
FS42
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
As at 31 December 2014, approximately US$121,000 (2013: US$348,000) of unrecognised
compensation cost relates to non-vested options. That cost is expected to be recognised over a period of 1.29 years (2013: 2.16 years).
The Company has used the Black-Scholes option-pricing model to derive the fair value of share options granted to employees. The following
summarises the assumptions used:
|
|
|
|
|
|
|
|
|
|
|
31/12/2014 |
|
|
31/12/2013 |
|
Option term (years) |
|
|
5.9 |
|
|
|
5.8 |
|
Volatility |
|
|
58.75% 59.27% |
|
|
|
59.46% 61.84% |
|
Weighted average volatility |
|
|
59% |
|
|
|
61% |
|
Weighted average share price |
|
|
US$1.23 |
|
|
|
US$1.09 |
|
Risk- free interest rate |
|
|
1.968% 2.065% |
|
|
|
0.930% 1.610% |
|
Dividend yield |
|
|
0% |
|
|
|
0% |
|
Weighted-average fair value of option granted during the year |
|
|
US$0.68 |
|
|
|
US$0.60 |
|
Option term
Option term represents the period of time that they are expected to be outstanding. Management estimates this based on historical trends.
Expected volatility rate
An analysis of historical volatility was used to develop the estimate of expected volatility.
Risk-free interest rate
The risk-free interest rate is based on yields of U.S. Treasury bonds for the expected term of the options.
Expected dividend yield
Expected dividend yield is based on the Companys current dividend yield.
Statutory reserves
In accordance with R.O.C. law, an appropriation for legal reserve amounting to 10% of a companys net profit is required until the reserve
equals the aggregate par value of such Taiwan companys issued capital stock. As of 31 December 2014 and 2013, the legal reserves of Hoshin GigaMedia Center Inc. (Hoshin GigaMedia), were both US$3.0 million. The reserve can
only be used to offset a deficit or be distributed as a stock dividend of up to 50% of the reserve balance when the reserve balance has reached 50% of the aggregate paid-in capital of Hoshin GigaMedia.
Under PRC laws and regulations, there were certain foreign exchange restrictions on the Groups PRC subsidiaries with respect to
transferring certain of their net assets to the Group either in the form of dividends, loans or advances. As of 31 December 2014 and 2013, the Groups total restricted net assets, which include paid up capital and the net assets of those
subsidiaries in which the Group has no legal ownership, were approximately US$Nil and US$Nil, respectively.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the
investments are derecognised or impaired.
FS43
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign
operations.
The Group has defined benefit and defined contribution pension plans
that covered substantially all of the Groups employees.
Defined benefit pension plan
In accordance with the Labor Standards Law of the Republic of China, the Group has a defined benefit pension plan for its employees in Taiwan.
The pension plan covers substantially all full-time employees for services provided prior to 1 July 2005, and employees who have elected to remain in the defined benefit pension plan subsequent to the enactment of the Labor Pension Act on
1 July 2005. Under the defined benefit pension plan, employees are entitled to twice the monthly salary for each year of service for the first 15 years, and an additional one month for every additional year of service, up to a maximum of 45
months. The pension payment to employees is computed based on the average monthly salary for the six months prior to approved retirement.
The Group has contributed an amount equal to 2 percent of the salaries and wages paid to all qualified employees located in Taiwan to a pension
fund (the Fund). The Fund is administered by a pension fund monitoring committee (the Committee) and deposited in the Committees name in the Bank of Taiwan. The Group makes pension payments from its account in the Fund
unless the Fund is insufficient, in which case the Group makes payments from internal funds as payments become due. The Group seeks to maintain a normal, highly liquid working capital balance to ensure payments are made timely.
The following provides fund status of the plan and a reconciliation of employee benefits.
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Fair value of plan assets |
|
|
(303 |
) |
|
|
(300 |
) |
Projected benefit obligation |
|
|
258 |
|
|
|
470 |
|
|
|
|
|
|
|
|
|
|
(Other assets)/Employee benefits |
|
|
(45 |
) |
|
|
170 |
|
|
|
|
|
|
|
|
|
|
Expense recognised in profit or loss |
|
|
|
|
|
|
|
|
Current service costs |
|
|
15 |
|
|
|
14 |
|
Net interest on net defined benefit liability |
|
|
3 |
|
|
|
5 |
|
Past service cost |
|
|
|
|
|
|
73 |
|
Gain on curtailments and settlements |
|
|
(248 |
) |
|
|
(73 |
) |
|
|
|
|
|
|
|
|
|
Employee benefits |
|
|
(230 |
) |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
Movement in the present value of the defined benefit obligations |
|
|
|
|
|
|
|
|
Projected benefit obligation at 1 January |
|
|
470 |
|
|
|
572 |
|
Service cost |
|
|
15 |
|
|
|
15 |
|
Interest cost |
|
|
9 |
|
|
|
10 |
|
Actuarial loss/(gain) |
|
|
32 |
|
|
|
(39 |
) |
Curtailment gain |
|
|
(248 |
) |
|
|
(73 |
) |
Currency translation difference |
|
|
(20 |
) |
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
Defined benefit obligation at 31 December |
|
|
258 |
|
|
|
470 |
|
|
|
|
|
|
|
|
|
|
FS44
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Movement in the fair value of plan assets |
|
|
|
|
|
|
|
|
Fair value of plan assets at 1 January |
|
|
300 |
|
|
|
291 |
|
Expected return on plan assets |
|
|
6 |
|
|
|
5 |
|
Actuarial losses |
|
|
1 |
|
|
|
(1 |
) |
Contributions by employer |
|
|
15 |
|
|
|
13 |
|
Currency translation difference |
|
|
(19 |
) |
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
Fair value of plan assets at 31 December |
|
|
303 |
|
|
|
300 |
|
|
|
|
|
|
|
|
|
|
Return on plan assets |
|
|
|
|
|
|
|
|
Expected return on plan assets |
|
|
6 |
|
|
|
5 |
|
Actuarial losses |
|
|
1 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
Actual return on plan assets |
|
|
7 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
Assets Categories |
|
|
|
|
|
|
|
|
Cash |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
Actuarial assumptions
Weighted-average assumptions used to determine defined benefit obligations as at 31 December 2014 and 2013 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
Discount rate |
|
|
2.00 |
% |
|
|
2.00 |
% |
Rate of compensation increase |
|
|
1.50 |
% |
|
|
1.50 |
% |
|
|
|
|
|
|
|
|
|
Weighted-average assumptions used to determine defined benefit costs for the year ended 31 December 2014
and 2013 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
Discount rate |
|
|
2.00 |
% |
|
|
1.75 |
% |
Rate of return on plan assets |
|
|
2.00 |
% |
|
|
1.75 |
% |
Rate of compensation increase |
|
|
1.50 |
% |
|
|
1.50 |
% |
|
|
|
|
|
|
|
|
|
The Group expects to make a contribution of US$14,000 to the Fund in 2015. The Group expect to make benefit
payments of US $1,000 from 2015 to 2024.
Defined contribution pension plan
The Group has provided defined contribution plans for employees located in Taiwan and Hong Kong. Contributions to the plans are expensed as
incurred.
FS45
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Taiwan
Pursuant to the new Labor Pension Act enacted on 1 July 2005, the Group set up a defined contribution pension plan for its
employees located in Taiwan. For eligible employees who elect to participate in the defined contribution pension plan, the Group contribute no less than 6% of the employees salaries and wages paid each month, up to the maximum amount of
NT$9,000 (approximately US$284 per individual), to the employees individual pension accounts at the Bureau of Labor Insurance. Pension payments to employees are made either by monthly installments or in a lump sum from the accumulated
contributions and earnings in employees individual accounts.
Hong Kong
According to the relevant Hong Kong regulations, the Group provides a contribution plan for the eligible employees in Hong Kong. The Group must
contribute at least 5 percent of their total salaries, up to the maximum amount of HK$1,500 (approximately US$193 per individual), to their individual contribution accounts of the authorities monthly. After the termination of employment, the
benefits still belong to the employees in any circumstances.
The total amount of defined contribution pension expenses pursuant to defined
contribution plans for the years ended 31 December 2014 were US$364,000 (2013: US$357,000).
17 |
Trade and other payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Trade payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- third parties |
|
|
771 |
|
|
|
1,178 |
|
|
|
|
|
|
|
|
|
Accrued expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- third parties |
|
|
4,261 |
|
|
|
2,997 |
|
|
|
186 |
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
5,032 |
|
|
|
4,175 |
|
|
|
186 |
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group and the Companys exposure to currency and liquidity risks related to trade and other payables
are disclosed in note 30.
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Secured bank loans |
|
|
6,319 |
|
|
|
|
|
Unsecured bank loans |
|
|
12,322 |
|
|
|
4,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
18,641 |
|
|
|
4,361 |
|
|
|
|
|
|
|
|
|
|
FS46
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Terms and debt repayment schedule
Terms and conditions of outstanding loans and borrowings are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency |
|
Nominal
interest rate |
|
Year of maturity |
|
|
Face
value |
|
|
Carrying amount |
|
|
|
|
|
|
|
|
|
|
US$000 |
|
|
US$000 |
|
At 31 December 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured bank loans |
|
TWD |
|
1.35% |
|
|
2015 |
|
|
|
6,319 |
|
|
|
6,319 |
|
Unsecured bank loans |
|
TWD |
|
1.89% 1.95% |
|
|
2015 |
|
|
|
12,322 |
|
|
|
12,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,641 |
|
|
|
18,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured bank loans |
|
TWD |
|
1.5% 1.6% |
|
|
2014 |
|
|
|
4,361 |
|
|
|
4,361 |
|
The secured bank loans of the Group are secured over deposits pledged of US$7,481,000 (2013: Nil) (see note
13).
Intra-group financial guarantee
Intra-group financial guarantee comprises guarantees given by the Company to banks in respect of unsecured bank loans. The details are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
|
|
Amount |
|
|
Expiry date |
|
Amount |
|
|
Expiry date |
|
|
|
US$000 |
|
|
|
|
US$000 |
|
|
|
|
Intra-group financial guarantee |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured bank loans |
|
|
6,319 |
|
|
31 May 2015 |
|
|
6,709 |
|
|
|
31 May 2014 |
|
Unsecured bank loans |
|
|
7,109 |
|
|
31 August 2015 |
|
|
7,548 |
|
|
|
31 August 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,428 |
|
|
|
|
|
14,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the reporting date, the Company does not consider it probable that a claim will be made against the Company
under the guarantee.
19 |
Other liabilities (current) |
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Deferred revenue |
|
|
1,946 |
|
|
|
2,441 |
|
Others |
|
|
176 |
|
|
|
315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,122 |
|
|
|
2,756 |
|
|
|
|
|
|
|
|
|
|
FS47
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Asian online game and service revenues |
|
|
8,199 |
|
|
|
14,106 |
|
Others |
|
|
1,580 |
|
|
|
926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9,779 |
|
|
|
15,032 |
|
|
|
|
|
|
|
|
|
|
21 |
Other operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
Note |
|
2014 |
|
|
2013 |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
Gain on disposal of associate |
|
|
|
|
|
|
|
|
1,000 |
|
Gain on disposal of property, plant and equipment |
|
|
|
|
2 |
|
|
|
|
|
Others |
|
|
|
|
113 |
|
|
|
95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115 |
|
|
|
1,095 |
|
|
|
|
|
|
|
|
|
|
|
|
22 |
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Loss on disposal of property, plant and equipment |
|
|
|
|
|
|
4 |
|
Impairment loss on prepaid licensing fees |
|
|
1,259 |
|
|
|
2,752 |
|
Impairment loss on intangible assets and goodwill |
|
|
115 |
|
|
|
30,305 |
|
Impairment loss on property, plant and equipment |
|
|
28 |
|
|
|
|
|
Allowance for doubtful receivables |
|
|
37 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,439 |
|
|
|
33,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Recognised in profit or loss |
|
|
|
|
|
|
|
|
Interest income |
|
|
682 |
|
|
|
238 |
|
Dividend income on financial assets designated at fair value through profit or loss |
|
|
247 |
|
|
|
|
|
Net change in fair value of financial assets designated at fair value through profit or loss |
|
|
75 |
|
|
|
|
|
Net gain on sale of available-for-sale financial assets reclassified from equity |
|
|
8,621 |
|
|
|
1,739 |
|
|
|
|
|
|
|
|
|
|
Finance income |
|
|
9,625 |
|
|
|
1,977 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(243 |
) |
|
|
(49 |
) |
Net foreign exchange loss |
|
|
(866 |
) |
|
|
(32 |
) |
|
|
|
|
|
|
|
|
|
Finance costs |
|
|
(1,109 |
) |
|
|
(81 |
) |
|
|
|
|
|
|
|
|
|
Net finance income |
|
|
8,516 |
|
|
|
1,896 |
|
|
|
|
|
|
|
|
|
|
FS48
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Current tax benefit/(expense) |
|
|
|
|
|
|
|
|
Current year |
|
|
(19 |
) |
|
|
120 |
|
Adjustment for prior years |
|
|
92 |
|
|
|
198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
73 |
|
|
|
318 |
|
|
|
|
|
|
|
|
|
|
Deferred tax expense |
|
|
|
|
|
|
|
|
Origination and reversal of temporary differences |
|
|
|
|
|
|
(379 |
) |
|
|
|
|
|
|
|
|
|
Tax benefit/(expense) from continuing operations |
|
|
73 |
|
|
|
(61 |
) |
|
|
|
|
|
|
|
|
|
Reconciliation of effective tax rate |
|
|
|
|
|
|
|
|
Loss before tax |
|
|
|
|
|
|
|
|
- continuing operations |
|
|
(5,376 |
) |
|
|
(34,986 |
) |
- discontinued operations |
|
|
|
|
|
|
(318 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(5,376 |
) |
|
|
(35,304 |
) |
|
|
|
|
|
|
|
|
|
Tax calculated at 17% (2013: 17%) |
|
|
914 |
|
|
|
6,001 |
|
Effect of tax rates in foreign jurisdictions |
|
|
2,433 |
|
|
|
884 |
|
Non-deductible expenses |
|
|
60 |
|
|
|
(4,490 |
) |
Tax exempt income |
|
|
|
|
|
|
694 |
|
Current year losses for which no deferred tax asset was recognised |
|
|
(3,111 |
) |
|
|
(3,526 |
) |
Over provided in prior years |
|
|
92 |
|
|
|
198 |
|
Others |
|
|
(315 |
) |
|
|
178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
73 |
|
|
|
(61 |
) |
|
|
|
|
|
|
|
|
|
Source of estimation uncertainty
The Group has exposure to income taxes in several jurisdictions. Significant judgment is involved in determining the group-wide provision for
income taxes. These are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognised liabilities for expected tax issues based on estimation of whether
additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
FS49
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
25 |
Loss from discontinued operations |
JIDI Network Technology (Shanghai) Co., Ltd.
(JIDI)
In June 2012, the board of directors approved the plan to liquidate and dissolve JIDI Network Technology (Shanghai) Co., Ltd.
(JIDI), a wholly-owned subsidiary in the Peoples Republic of China, and Shanghai JIDI Network Technology Co., Ltd. (Shanghai JIDI), a variable interest entity (VIE) controlled through a series of contractual
arrangements. Accordingly, results of JIDI and Shanghai JIDI operations are reported as discontinued operations since 31 December 2013. As at 31 December 2013, Shanghai JIDI had completed the dissolution procedure and was duly
deregistered.
The carrying amounts of the remaining assets and liabilities, if any, of JIDI and Shanghai JIDI are insignificant to the
Group as 31 December 2013.
|
|
|
|
|
|
|
Group |
|
|
|
2013 |
|
|
|
US$000 |
|
Results of discontinued operation |
|
|
|
|
Revenue |
|
|
|
|
Expenses |
|
|
(318 |
) |
|
|
|
|
|
Results from operating activities, net of tax |
|
|
(318 |
) |
Gain on sale of discontinued operation |
|
|
|
|
|
|
|
|
|
Loss for the year |
|
|
(318 |
) |
|
|
|
|
|
Basic loss per share (cents) |
|
|
(0.01 |
) |
|
|
|
|
|
Diluted loss per share (cents) |
|
|
(0.01 |
) |
|
|
|
|
|
Cash flows from discontinued operations |
|
|
|
|
Net cash used in operating activities |
|
|
(168 |
) |
Net cash from investing activities |
|
|
|
|
Net cash from financing activities |
|
|
(468 |
) |
|
|
|
|
|
Net cash flows for the year |
|
|
(636 |
) |
|
|
|
|
|
There is no effect of disposal on the financial position of the Group as at 31 December 2013.
The following items have been included in arriving at loss for the
year:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Employee benefits expense (see below) |
|
|
8,712 |
|
|
|
8,484 |
|
Amortisation charge on intangible assets |
|
|
1,201 |
|
|
|
1,904 |
|
Depreciation of property, plant and equipment |
|
|
310 |
|
|
|
411 |
|
Rental expenses |
|
|
895 |
|
|
|
882 |
|
|
|
|
|
|
|
|
|
|
FS50
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Employee benefits expense |
|
|
|
|
|
|
|
|
Wages and salaries |
|
|
8,197 |
|
|
|
7,596 |
|
Employee equity-settled share-based payment |
|
|
21 |
|
|
|
219 |
|
Employee expense relating to defined benefit and contribution pension plans |
|
|
165 |
|
|
|
280 |
|
Termination benefits |
|
|
329 |
|
|
|
389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
8,712 |
|
|
|
8,484 |
|
|
|
|
|
|
|
|
|
|
The calculation of basic loss per share at 31 December 2014 was
based on the loss attributable to ordinary shareholders of US$5,468,000 (2013: US$35,084,000), and a weighted average number of ordinary shares outstanding of 53,927,000 (2013: 50,720,000), calculated as follows:
Loss attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
Continuing operations |
|
|
Discontinued operation |
|
|
Total |
|
|
Continuing operations |
|
|
Discontinued operation |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Loss for the year |
|
|
(5,468 |
) |
|
|
|
|
|
|
(5,468 |
) |
|
|
(34,766 |
) |
|
|
(318 |
) |
|
|
(35,084 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
31/12/2014 |
|
|
31/12/2013 |
|
|
|
000 |
|
|
000 |
|
Issued ordinary shares at 1 January |
|
|
50,723 |
|
|
|
50,720 |
|
Effect of share options exercised |
|
|
3,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares during the year |
|
|
53,927 |
|
|
|
50,720 |
|
|
|
|
|
|
|
|
|
|
The Group leases offices premises under operating leases, where the
lease agreements expire in 2017. The following table sets forth the future minimum lease payments required under these operating leases:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Payable: |
|
|
|
|
|
|
|
|
Within 1 year |
|
|
910 |
|
|
|
941 |
|
After 1 year but within 5 years |
|
|
239 |
|
|
|
892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,149 |
|
|
|
1,833 |
|
|
|
|
|
|
|
|
|
|
FS51
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
The Group has contractual obligations under various license
agreements to pay the licensors license fees and minimum guarantees against future royalties. The following table summarises the committed licensing fees and minimum guarantees against future royalties set forth in the major licenses agreements as
at year end.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License fees |
|
|
Minimum guarantees against future royalties |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
31 December 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Minimum required payments: |
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year |
|
|
1,129 |
|
|
|
1,300 |
|
|
|
2,429 |
|
After 1 year |
|
|
5,000 |
|
|
|
1,500 |
|
|
|
6,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,129 |
|
|
|
2,800 |
|
|
|
8,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Minimum required payments: |
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year |
|
|
100 |
|
|
|
100 |
|
|
|
200 |
|
After 1 year |
|
|
5,300 |
|
|
|
1,500 |
|
|
|
6,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,400 |
|
|
|
1,600 |
|
|
|
7,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The initial minimum guarantees against future royalties and license fees are not required to be paid until the
licensed games are commercially released or until certain milestones are achieved, as stipulated in the individual license agreements. The remaining minimum guarantees are generally required to be paid within three years subsequent to the commercial
release dates of the licensed games.
29 |
Related party transactions |
Except for the following transactions, the Group was not a
party to any transaction with any related party that did not arise in the ordinary course of business or that was material to it.
Share options granted to key management
As at the end of the financial year, the total outstanding number of share options granted to key management of the Group was 840,000 (2013:
1,646,000).
Transaction with key management personnel
Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and controlling the
activities of the entity. The directors are considered as key management personnel of the Group.
FS52
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Key management personnel compensation comprised:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Wages and salaries |
|
|
1,026 |
|
|
|
1,088 |
|
Director fee |
|
|
155 |
|
|
|
159 |
|
Share-based payments |
|
|
(90 |
) |
|
|
488 |
|
Other benefit |
|
|
18 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,109 |
|
|
|
1,752 |
|
|
|
|
|
|
|
|
|
|
Other related party transactions
During 2014, the Group have outsourced certain development of software to its associate, Double2. The operating costs amounted to US$113,000
(2013: Nil) for the year ended 31 December 2014.
Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
This note presents information about the Groups exposure to each of the
above risks, the Groups objectives, policies and processes for measuring and managing risk, and the Groups management of capital.
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Groups risk management framework. The Board
has established the Audit Committee, which is responsible for overseeing the Groups risk management policies. The Audit Committee reports regularly to the Board of Directors on its activities.
The Groups risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Groups activities. The Group, through its training and management standards
and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Audit Committee oversees how management monitors compliance with the Groups risk management policies and procedures, and reviews the
adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the Audit Committee.
FS53
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Credit risk
The customers of the Group settle the payments in accordance with one of the following ways: (1) by bank transfer or credit card and
(2) by advanced payment. The Group is subject to credit risk only for those receivables with credits granted.
None of the
Groups customers accounted for over 10 percent of net operating revenues in 2014 and 2013 or of the balance of notes and trade receivables as of 31 December 2014 and 2013. The Group has provided for trade receivables based on estimated
irrecoverable amounts from the sale of goods and services, determined by reference to past default experience.
The credit risk of the
Groups and the Companys other financial assets, which comprise bank deposits and other receivables, the maximum exposure to credit risk is the carrying amounts of these instruments.
Trade and other receivables
The quantitative data in respect of the Groups exposure to credit risk arising from trade and other receivables (including notes
receivables) is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
Gross |
|
|
Impairment losses |
|
|
Gross |
|
|
Impairment losses |
|
|
Gross |
|
|
Impairment losses |
|
|
Gross |
|
|
Impairment losses |
|
|
|
2014 |
|
|
2014 |
|
|
2013 |
|
|
2013 |
|
|
2014 |
|
|
2014 |
|
|
2013 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Not past due |
|
|
1,279 |
|
|
|
(40 |
) |
|
|
2,009 |
|
|
|
(55 |
) |
|
|
5,148 |
|
|
|
|
|
|
|
2,671 |
|
|
|
|
|
Past due 0 90 days |
|
|
80 |
|
|
|
|
|
|
|
265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past due 91 180 days |
|
|
12 |
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
More than 180 days |
|
|
112 |
|
|
|
(16 |
) |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,483 |
|
|
|
(56 |
) |
|
|
2,293 |
|
|
|
(55 |
) |
|
|
5,148 |
|
|
|
|
|
|
|
2,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect
of trade and other receivables. The allowance is a specific loss component that rebates to individual significant exposures. Based on historical default rates, the Group believes that no additional impairment is necessary.
Movements in allowance for impairment losses on loans and receivables during the year were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
At 1 January |
|
|
55 |
|
|
|
130 |
|
|
|
|
|
|
|
|
|
Impairment loss recognised |
|
|
37 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
Amounts utilised |
|
|
(33 |
) |
|
|
(109 |
) |
|
|
|
|
|
|
|
|
Translation difference |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December |
|
|
56 |
|
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS54
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Cash and cash equivalents
The Group held cash and cash equivalents of US$59,631,000 as at 31 December 2014 (2013: US$58,801,000), which represents its maximum
credit exposure on these assets. The cash and cash equivalents are held with banks, which are regulated.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Groups approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Groups reputation.
The following are the
contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
Within
1 year |
|
|
After 1 year but within
5 years |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities (non-current) |
|
|
10 |
|
|
|
|
|
|
|
10 |
|
|
|
10 |
|
Trade and other payables |
|
|
5,032 |
|
|
|
5,032 |
|
|
|
|
|
|
|
5,032 |
|
Loans and borrowings |
|
|
18,641 |
|
|
|
18,641 |
|
|
|
|
|
|
|
18,641 |
|
Other current liabilities (current)# |
|
|
176 |
|
|
|
176 |
|
|
|
|
|
|
|
176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,859 |
|
|
|
23,849 |
|
|
|
10 |
|
|
|
23,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities (non-current) |
|
|
11 |
|
|
|
|
|
|
|
11 |
|
|
|
11 |
|
Trade and other payables |
|
|
4,175 |
|
|
|
4,175 |
|
|
|
|
|
|
|
4,175 |
|
Loans and borrowings |
|
|
4,361 |
|
|
|
4,366 |
|
|
|
|
|
|
|
4,366 |
|
Other current liabilities (current)# |
|
|
315 |
|
|
|
315 |
|
|
|
|
|
|
|
315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,862 |
|
|
|
8,856 |
|
|
|
11 |
|
|
|
8,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
186 |
|
|
|
186 |
|
|
|
|
|
|
|
186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognised financial liabilities |
|
|
186 |
|
|
|
186 |
|
|
|
|
|
|
|
186 |
|
Intra-group financial guarantee |
|
|
|
|
|
|
12,322 |
|
|
|
|
|
|
|
12,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
186 |
|
|
|
12,508 |
|
|
|
|
|
|
|
12,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
191 |
|
|
|
191 |
|
|
|
|
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognised financial liabilities |
|
|
191 |
|
|
|
191 |
|
|
|
|
|
|
|
191 |
|
Intra-group financial guarantee |
|
|
|
|
|
|
4,361 |
|
|
|
|
|
|
|
4,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
191 |
|
|
|
4,552 |
|
|
|
|
|
|
|
4,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# |
Excludes deferred revenue. |
FS55
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Groups income of the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns.
Foreign currency risk
The subsidiaries of the Group assessed and concluded that most of its business transactions are denominated in its own functional currencies;
therefore the foreign currency risks derived from operations are not significant. However, the Group holds some assets or liabilities in foreign currency other than functional currency and the value of these assets and liabilities are subject to
foreign currency risks resulting from fluctuations in exchange rates between the foreign currency and the functional currency. The currencies in which these assets are denominated are the US dollar (USD), Korean on (KRW), Taiwan dollar (TWD),
Renminbi (RMB), Hong Kong dollar (HKD).
The Groups and Companys exposures to foreign currencies in US dollar equivalent are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
KRW |
|
|
TWD |
|
|
RMB |
|
|
HKD |
|
|
Other |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
48,690 |
|
|
|
152 |
|
|
|
2,883 |
|
|
|
5,542 |
|
|
|
2,308 |
|
|
|
56 |
|
|
|
59,631 |
|
Other investments (current) |
|
|
|
|
|
|
11,131 |
|
|
|
18,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,340 |
|
Trade and other receivables |
|
|
87 |
|
|
|
|
|
|
|
1,230 |
|
|
|
4 |
|
|
|
106 |
|
|
|
|
|
|
|
1,427 |
|
Other investments (non-current) |
|
|
|
|
|
|
4,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,744 |
|
Refundable deposits |
|
|
|
|
|
|
|
|
|
|
263 |
|
|
|
|
|
|
|
39 |
|
|
|
|
|
|
|
302 |
|
Trade and other payables |
|
|
(1,151 |
) |
|
|
|
|
|
|
(3,210 |
) |
|
|
(306 |
) |
|
|
(365 |
) |
|
|
|
|
|
|
(5,032 |
) |
Short-term borrowings |
|
|
|
|
|
|
|
|
|
|
(18,641 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,641 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial assets/ (liabilities) |
|
|
47,626 |
|
|
|
16,027 |
|
|
|
734 |
|
|
|
5,240 |
|
|
|
2,088 |
|
|
|
56 |
|
|
|
71,771 |
|
Less: Net financial (assets)/liabilities denominated in the respective entities functional currencies |
|
|
(45,894 |
) |
|
|
|
|
|
|
(743 |
) |
|
|
|
|
|
|
(2,100 |
) |
|
|
(56 |
) |
|
|
(48,793 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exposure |
|
|
1,732 |
|
|
|
16,027 |
|
|
|
(9 |
) |
|
|
5,240 |
|
|
|
(12 |
) |
|
|
|
|
|
|
22,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS56
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
KRW |
|
|
TWD |
|
|
RMB |
|
|
HKD |
|
|
Other |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
42,180 |
|
|
|
51 |
|
|
|
10,145 |
|
|
|
3,553 |
|
|
|
2,808 |
|
|
|
64 |
|
|
|
58,801 |
|
Other investments (current) |
|
|
|
|
|
|
21,124 |
|
|
|
336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,460 |
|
Trade and other receivables |
|
|
209 |
|
|
|
|
|
|
|
1,865 |
|
|
|
|
|
|
|
164 |
|
|
|
|
|
|
|
2,238 |
|
Other investments (non-current) |
|
|
2,109 |
|
|
|
3,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,048 |
|
Refundable deposits |
|
|
|
|
|
|
|
|
|
|
267 |
|
|
|
|
|
|
|
39 |
|
|
|
|
|
|
|
306 |
|
Trade and other payables |
|
|
(1,043 |
) |
|
|
|
|
|
|
(2,906 |
) |
|
|
(3 |
) |
|
|
(223 |
) |
|
|
|
|
|
|
(4,175 |
) |
Short-term borrowings |
|
|
|
|
|
|
|
|
|
|
(4,361 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,361 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial assets/ (liabilities) |
|
|
43,455 |
|
|
|
25,114 |
|
|
|
5,346 |
|
|
|
3,550 |
|
|
|
2,788 |
|
|
|
64 |
|
|
|
80,317 |
|
Less: Net financial (assets)/liabilities denominated in the respective entities functional currencies |
|
|
(42,140 |
) |
|
|
|
|
|
|
(5,346 |
) |
|
|
|
|
|
|
(2,788 |
) |
|
|
(61 |
) |
|
|
(50,335 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exposure |
|
|
1,315 |
|
|
|
25,114 |
|
|
|
|
|
|
|
3,550 |
|
|
|
|
|
|
|
3 |
|
|
|
29,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
TWD |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Company |
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
668 |
|
|
|
|
|
|
|
668 |
|
Trade and other receivables |
|
|
2,502 |
|
|
|
2,646 |
|
|
|
5,148 |
|
Trade and other payables |
|
|
(22 |
) |
|
|
(164 |
) |
|
|
(186 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial assets |
|
|
3,148 |
|
|
|
2,482 |
|
|
|
5,630 |
|
Less: Net financial assets denominated in the respective entities functional currencies |
|
|
|
|
|
|
(2,482 |
) |
|
|
(2,482 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exposure |
|
|
3,148 |
|
|
|
|
|
|
|
3,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
62 |
|
|
|
|
|
|
|
62 |
|
Trade and other receivables |
|
|
1,875 |
|
|
|
796 |
|
|
|
2,671 |
|
Trade and other payables |
|
|
(32 |
) |
|
|
(159 |
) |
|
|
(191 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial assets |
|
|
1,905 |
|
|
|
637 |
|
|
|
2,542 |
|
Less: Net financial assets denominated in the respective entities functional currencies |
|
|
|
|
|
|
(637 |
) |
|
|
(637 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exposure |
|
|
1,905 |
|
|
|
|
|
|
|
1,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS57
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Sensitivity analysis
A 10% strengthening of the foreign currencies against USD at 31 December would have decreased/ (increased) loss before tax or
increased/(decreased) equity by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the same basis for the previous financial year ended 31 December 2013. Similarly, a 10% weakening would have the equal but opposite effect.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
Company |
|
|
|
Loss before tax |
|
|
Equity |
|
|
Loss before tax |
|
|
Equity |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
31 December 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KRW (10% strengthening) |
|
|
490 |
|
|
|
1,113 |
|
|
|
|
* |
|
|
|
* |
RMB (10% strengthening) |
|
|
524 |
|
|
|
|
|
|
|
|
* |
|
|
|
* |
31 December 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KRW (10% strengthening) |
|
|
399 |
|
|
|
2,112 |
|
|
|
|
* |
|
|
|
* |
RMB (10% strengthening) |
|
|
355 |
|
|
|
|
|
|
|
|
* |
|
|
|
* |
* |
The amount is less than US$1,000. |
Interest rate risk
The Group and Company are not exposed to significant interest rate risk.
Equity price risk
The Group has investment in quoted equity securities which are listed in Korea. A 10% increase/(decrease) in the underlying equity prices at
the reporting dates would increase/(decrease) equity by the following amounts:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
2014 |
|
|
2013 |
|
|
|
Equity |
|
|
Equity |
|
|
|
US$000 |
|
|
US$000 |
|
Quoted equity investments available-for-sale |
|
|
1,113 |
|
|
|
2,112 |
|
|
|
|
|
|
|
|
|
|
This analysis assumes that all other variables remain constant.
FS58
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Accounting classifications and fair values
The carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy are as
follows. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
Fair value |
|
|
|
Note |
|
Loans and receivables |
|
|
Designated at fair value |
|
|
Available- for-sale |
|
|
Liabilities at amortised cost |
|
|
Total carrying amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale debt securities (non-current) |
|
8 |
|
|
|
|
|
|
|
|
|
|
4,744 |
|
|
|
|
|
|
|
4,744 |
|
|
|
|
|
|
|
|
|
|
|
4,744 |
|
|
|
4,744 |
|
Available-for-sale equity securities (current) |
|
8 |
|
|
|
|
|
|
|
|
|
|
11,449 |
|
|
|
|
|
|
|
11,449 |
|
|
|
11,449 |
|
|
|
|
|
|
|
|
|
|
|
11,449 |
|
Designated at fair value through profit or loss equity securities |
|
8 |
|
|
|
|
|
|
17,891 |
|
|
|
|
|
|
|
|
|
|
|
17,891 |
|
|
|
17,891 |
|
|
|
|
|
|
|
|
|
|
|
17,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,891 |
|
|
|
16,193 |
|
|
|
|
|
|
|
34,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
11 |
|
|
1,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets (current)# |
|
12 |
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
13 |
|
|
59,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities (non-current) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,032 |
) |
|
|
(5,032 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings |
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,641 |
) |
|
|
(18,641 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities (current)## |
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(176 |
) |
|
|
(176 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23,859 |
) |
|
|
(23,859 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS59
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
Fair value |
|
|
|
Note |
|
Loans and receivables |
|
|
Designated at fair value |
|
|
Available- for-sale |
|
|
Liabilities at amortised cost |
|
|
Total carrying amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale debt securities (non-current) |
|
8 |
|
|
|
|
|
|
|
|
|
|
6,048 |
|
|
|
|
|
|
|
6,048 |
|
|
|
|
|
|
|
2,109 |
|
|
|
3,939 |
|
|
|
6,048 |
|
Available-for-sale equity securities (current) |
|
8 |
|
|
|
|
|
|
|
|
|
|
21,460 |
|
|
|
|
|
|
|
21,460 |
|
|
|
21,460 |
|
|
|
|
|
|
|
|
|
|
|
21,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,508 |
|
|
|
|
|
|
|
27,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
11 |
|
|
2,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets (current)# |
|
12 |
|
|
82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
13 |
|
|
58,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities (non-current) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11 |
) |
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,175 |
) |
|
|
(4,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings |
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,361 |
) |
|
|
(4,361 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities (current)## |
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(315 |
) |
|
|
(315 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,862 |
) |
|
|
(8,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
## |
Excludes deferred revenue |
FS60
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
|
Note |
|
Loans and receivables |
|
|
Available- for-sale |
|
|
Liabilities at amortised cost |
|
|
Total carrying amount |
|
|
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
11 |
|
|
5,148 |
|
|
|
|
|
|
|
|
|
|
|
5,148 |
|
Cash and cash equivalents |
|
13 |
|
|
668 |
|
|
|
|
|
|
|
|
|
|
|
668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,816 |
|
|
|
|
|
|
|
|
|
|
|
5,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
17 |
|
|
|
|
|
|
|
|
|
|
(186 |
) |
|
|
(186 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
11 |
|
|
2,671 |
|
|
|
|
|
|
|
|
|
|
|
2,671 |
|
Cash and cash equivalents |
|
13 |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,733 |
|
|
|
|
|
|
|
|
|
|
|
2,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
17 |
|
|
|
|
|
|
|
|
|
|
(191 |
) |
|
|
(191 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measurement of fair values
(i) |
Valuation techniques and significant unobservable inputs |
The following tables show the
valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.
Financial instruments measured at fair value
|
|
|
|
|
|
|
Type |
|
Valuation technique |
|
Significant
unobservable inputs |
|
Inter-relationship between key unobservable inputs and
fair value measurement |
|
|
|
|
Group Debt
securities |
|
Market comparison technique: The fair value is based on Price/Sales per share ratio derived from quoted prices and financial statements of companies comparable to the investee. The estimate is adjusted for the
effect of the lack of marketability of the debt securities. |
|
Price/Sales per share ratio for selective comparable companies (2.0 times ~ 14.0 times (2013:
2.5 times ~ 5.9 times)) |
|
The estimated fair value would increase (decrease) if: |
|
|
|
the Price/Sales per share ratio was higher (lower) |
|
|
Discount for lack of marketability (25% (2013: 25%)) |
|
the discount for lack of marketability was lower (higher) |
FS61
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Financial instruments not measured at fair value
|
|
|
|
|
Type |
|
Valuation technique |
|
Significant unobservable inputs |
|
|
|
Group |
|
|
|
|
Loans and borrowings |
|
Discounted cash flows |
|
Not applicable |
(ii) |
Transfers between the levels |
There were no transfers between the levels during the
year.
(iii) |
Level 3 fair values |
The following table shows a reconciliation from the beginning
balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
Group |
|
|
|
Available-for-sale debt securities |
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
At 1 January |
|
|
3,939 |
|
|
|
3,082 |
|
Total gains and losses for the period included in other comprehensive income |
|
|
1,115 |
|
|
|
934 |
|
Currency translation difference |
|
|
(310 |
) |
|
|
(77 |
) |
|
|
|
|
|
|
|
|
|
At 31 December |
|
|
4,744 |
|
|
|
3,939 |
|
|
|
|
|
|
|
|
|
|
Management considers that changing one or more of the significant unobservable inputs used to other reasonably
possible alternative assumptions would not result in a significant change in the estimated fair value.
Business segments
The Group has 2 reportable segments as described below. For each of the reportable segment, the Groups chief operating decision maker
reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Groups reportable segments:
|
|
|
Asian online game and service: |
|
The development and licensure of online games and investment in associates and available-for-sale financial assets. |
|
|
Cloud service business: |
|
The provision of cloud products and services to small-to-medium and larger enterprises |
FS62
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Information regarding the results of each reportable segment is included below. Performance
is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Groups chief operating decision maker. Segment profit is used to measure performance as management believes that such
information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arms length basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asian online game and service** |
|
|
Cloud service business |
|
|
Total |
|
|
|
US$000 |
|
|
US$000 |
|
|
US$000 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
External revenues |
|
|
8,199 |
|
|
|
1,580 |
|
|
|
9,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
31 |
|
|
|
|
|
|
|
31 |
|
Interest expense |
|
|
243 |
|
|
|
|
|
|
|
243 |
|
Depreciation and amortisation |
|
|
1,363 |
|
|
|
99 |
|
|
|
1,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment loss before tax |
|
|
(918 |
) |
|
|
(1,515 |
) |
|
|
(2,433 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of loss of associates |
|
|
531 |
|
|
|
|
|
|
|
531 |
|
Tax benefit |
|
|
(92 |
) |
|
|
|
|
|
|
(92 |
) |
Other material non-cash items: |
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on prepaid licensing fees |
|
|
1,259 |
|
|
|
|
|
|
|
1,259 |
|
Impairment loss on intangible assets and goodwill |
|
|
|
|
|
|
115 |
|
|
|
115 |
|
Impairment loss on property, plant and equipment |
|
|
|
|
|
|
28 |
|
|
|
28 |
|
Reportable segment assets |
|
|
52,257 |
|
|
|
806 |
|
|
|
53,063 |
|
Investment in associates |
|
|
5,781 |
|
|
|
|
|
|
|
5,781 |
|
Capital expenditure |
|
|
445 |
|
|
|
72 |
|
|
|
517 |
|
Reportable segment liabilities |
|
|
25,696 |
|
|
|
899 |
|
|
|
26,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
External revenues |
|
|
14,106 |
|
|
|
926 |
|
|
|
15,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
9 |
|
|
|
|
|
|
|
9 |
|
Interest expense |
|
|
8 |
|
|
|
|
|
|
|
8 |
|
Depreciation and amortisation |
|
|
2,198 |
|
|
|
50 |
|
|
|
2,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment loss before tax |
|
|
(29,398 |
) |
|
|
(1,218 |
) |
|
|
(30,616 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associates |
|
|
526 |
|
|
|
|
|
|
|
526 |
|
Tax expense |
|
|
150 |
|
|
|
|
|
|
|
150 |
|
Other material non-cash items: |
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on prepaid licensing fees |
|
|
2,752 |
|
|
|
|
|
|
|
2,752 |
|
Impairment loss on intangible assets and goodwill |
|
|
30,305 |
|
|
|
|
|
|
|
30,305 |
|
Reportable segment assets |
|
|
50,829 |
|
|
|
1,261 |
|
|
|
52,090 |
|
Investment in associates |
|
|
5,822 |
|
|
|
|
|
|
|
5,822 |
|
Capital expenditure |
|
|
1,657 |
|
|
|
257 |
|
|
|
1,914 |
|
Reportable segment liabilities |
|
|
12,539 |
|
|
|
1,354 |
|
|
|
13,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** |
The discontinued operation JIDI was taken out of the Asian online game and service segment. |
FS63
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and
other material items:
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Interest income |
|
|
|
|
|
|
|
|
Total segments |
|
|
31 |
|
|
|
9 |
|
Adjustments * |
|
|
651 |
|
|
|
229 |
|
|
|
|
|
|
|
|
|
|
Total for continuing operations |
|
|
682 |
|
|
|
238 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
Total segments |
|
|
243 |
|
|
|
8 |
|
Adjustments * |
|
|
|
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
Total for continuing operations |
|
|
243 |
|
|
|
49 |
|
|
|
|
|
|
|
|
|
|
Loss before tax |
|
|
|
|
|
|
|
|
Total segments |
|
|
(2,433 |
) |
|
|
(30,616 |
) |
Adjustments * |
|
|
(2,943 |
) |
|
|
(4,370 |
) |
|
|
|
|
|
|
|
|
|
Consolidated loss before tax |
|
|
(5,376 |
) |
|
|
(34,986 |
) |
|
|
|
|
|
|
|
|
|
Tax benefit/(expense) |
|
|
|
|
|
|
|
|
Total segments |
|
|
92 |
|
|
|
(150 |
) |
Adjustments * |
|
|
(19 |
) |
|
|
89 |
|
|
|
|
|
|
|
|
|
|
Total for continuing operations |
|
|
73 |
|
|
|
(61 |
) |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Total assets for reportable segments |
|
|
53,063 |
|
|
|
52,090 |
|
Unallocated corporate assets |
|
|
|
|
|
|
|
|
- Cash and cash equivalents |
|
|
53,677 |
|
|
|
47,326 |
|
- Property, plant and equipment |
|
|
1,311 |
|
|
|
1,436 |
|
- Others |
|
|
425 |
|
|
|
2,711 |
|
|
|
|
|
|
|
|
|
|
Consolidated total assets |
|
|
108,476 |
|
|
|
103,563 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Total liabilities for reportable segments |
|
|
26,595 |
|
|
|
13,893 |
|
Unallocated corporate liabilities |
|
|
|
|
|
|
|
|
- Accrued expense |
|
|
831 |
|
|
|
1,147 |
|
- Others |
|
|
1,849 |
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
Consolidated total liabilities |
|
|
29,275 |
|
|
|
15,076 |
|
|
|
|
|
|
|
|
|
|
* |
Adjustment items relate to other business operations such as investment holding which is included as corporate and certain back-office costs and expenses not attributable to any specific segment. |
Major Customers
No single customer represented 10 percent or more of GigaMedias total net revenues in 2014 and 2013.
FS64
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
Geographic Information
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of revenue sources.
Segment assets are based on the geographical location of the assets.
Revenue
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
US$000 |
|
|
US$000 |
|
Taiwan |
|
|
7,413 |
|
|
|
11,793 |
|
Hong Kong |
|
|
2,366 |
|
|
|
3,239 |
|
|
|
|
|
|
|
|
|
|
Consolidated revenue |
|
|
9,779 |
|
|
|
15,032 |
|
|
|
|
|
|
|
|
|
|
Non-current assets# |
|
|
|
|
|
|
|
|
Taiwan |
|
|
7,125 |
|
|
|
8,136 |
|
Hong Kong |
|
|
260 |
|
|
|
226 |
|
Korea |
|
|
5,189 |
|
|
|
5,822 |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
12,574 |
|
|
|
14,184 |
|
|
|
|
|
|
|
|
|
|
# |
Excludes other investments |
On 18 October 2013, the Group obtained control of FingerRockz Co.,
Ltd. (FingerRockz), by acquiring in cash 405,000 common shares of the Company, which represents 51.6% of voting interests. FingerRockz is a mobile game developer and publisher based in Taiwan, and the Group acquired it so as to enhance
the research and development capacity of mobile games. This primary factor among others, contributed to a purchase price in excess of the fair value of the net identifiable assets acquired and liabilities assumed, and intangible assets.
The following summarises the major class of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at
the acquisition date:
Identifiable assets acquired and liabilities assumed
|
|
|
|
|
|
|
|
|
Note |
|
US$000 |
|
Trade receivables and other receivables |
|
|
|
|
2 |
|
Cash and cash equivalents |
|
|
|
|
583 |
|
Intangible assets |
|
|
|
|
67 |
|
Trade and other payables |
|
|
|
|
(160 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
492 |
|
Goodwill |
|
5 |
|
|
496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
988 |
|
|
|
|
|
|
|
|
Net cash inflow from acquisition of subsidiary |
|
|
|
|
|
|
Consideration paid in cash |
|
|
|
|
(510 |
) |
Cash and cash equivalents |
|
|
|
|
583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
73 |
|
|
|
|
|
|
|
|
FS65
GigaMedia Limited and its subsidiaries
Financial statements
Year
ended 31 December 2014
The trade receivables comprise gross contractual amounts due of US$2,000 and were expected to
be collectible at the acquisition date.
From the date of acquisition to 31 December 2013, FingerRockz contributed revenue of US$308
and loss for the period of US$300,000 to the Groups results. If the acquisition had occurred on 1 January 2013, the Groups revenue for the period ended 31 December 2013 would have increased by US$17,000 and loss for the period
would have increased by US$64,000.
Goodwill
Goodwill was recognised as a result of the acquisition as follows:
|
|
|
|
|
|
|
US$000 |
|
Total cash consideration transferred |
|
|
510 |
|
Non-controlling interests, based on their proportionate interest in the recognised amounts of the asset and liabilities of the
acquiree |
|
|
478 |
|
Fair value of identifiable net assets |
|
|
(492 |
) |
|
|
|
|
|
Goodwill |
|
|
496 |
|
|
|
|
|
|
In the acquisition, the most appealing asset to the Group was FingerRockzs creative team. However, the
assembled workforce was not an identifiable asset to be recognised separately from goodwill so that the value attributed to it was subsumed into goodwill. The goodwill related to this acquisition is not expected to be deductible for tax purpose.
The Group completed the disposal of financial assets designated at
fair value through profit or loss during the period between 13 April 2015 and 15 April 2015 in the Taiwan open market through block sales. The total selling price of this investment approximates US$18 million.
FS66
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