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Financial Highlights
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Condensed Balance Sheet

Condensed Balance Sheet from 2012 to 2014 (Consolidated)

Unit: NT$ thousands

Item

2012

2013

2014

Current Assets

250,325,436

358,486,654

626,566,787

Long-term Investments (Note 1)

65,717,240

89,183,810

30,051,544

Property, Plant and Equipment

617,562,188

792,665,913

818,198,801

Intangible Assets

10,959,569

11,490,383

13,531,510

Other Assets (Note 2)

16,790,075

11,228,217

6,785,203

Total Assets

961,354,508

1,263,054,977

1,495,133,845

Current Liabilities

 

 

 

 Before Distribution

148,473,947

189,777,934

201,014,777

 After Distribution

226,247,254

267,563,785

(Note 3)

Noncurrent Liabilities

89,786,655

225,501,958

248,443,321

Total Liabilities

 

 

 

 Before Distribution

238,260,602

415,279,892

449,458,098

 After Distribution

316,033,909

493,065,743

(Note 3)

Equity Attributable to Shareholders of the Parent

 

 

 

Capital Stock

259,244,357

259,286,171

259,296,624

Capital Surplus

55,675,340

55,858,626

55,989,922

Retained Earnings

 

 

 

 Before Distribution

408,411,468

518,193,152

704,512,664

 After Distribution

330,638,161

440,407,301

(Note 3)

Others

(2,780,485)

14,170,306

25,749,291

Equity Attributable to Shareholders of the Parent

 

 

 

 Before Distribution

720,550,680

847,508,255

1,045,548,501

 After Distribution

642,777,373

769,722,404

(Note 3)

Noncontrolling Interests

2,543,226

266,830

127,246

Total Equity

 Before Distribution

723,093,906

847,775,085

1,045,675,747

 After Distribution

645,320,599

769,989,234

(Note 3)

Note 1: Long-term investments consist of noncurrent available-for-sale financial assets, financial assets carried at cost and investments accounted for using equity method.
Note 2: Other assets consist of deferred income tax assets, refundable deposits, and other noncurrent assets.
Note 3: Pending for shareholders’ approval.

Condensed Balance Sheet from 2010 to 2011 (Consolidated)-R.O.C. GAAP

Unit: NT$ thousands

Item

2010

2011

Current Assets

261,519,317

225,260,396

Long-term Investments

39,775,528

34,458,504

Fixed Assets

388,444,023

490,374,916

Other Assets

29,190,036

24,171,126

Total Assets

718,928,904

774,264,942

Current Liabilities

 

 

 Before Distribution

123,191,113

117,006,687

 After Distribution

200,921,349

194,755,355

Long-term Liabilities

12,050,755

20,458,493

Other Liabilities

4,982,631

4,756,211

Total Liabilities

 

 

 Before Distribution

140,224,499

142,221,391

 After Distribution

217,954,735

219,970,059

Capital Stock

259,100,787

259,162,226

Capital Surplus

55,698,434

55,846,357

Retained Earnings

 

 

 Before Distribution

265,779,571

322,191,155

 After Distribution

188,049,335

244,442,487

Cumulative Transaction Adjustments

(6,543,163)

(6,433,369)

Unrealized Gain/Loss on Financial Instruments

109,289

(1,172,855)

Equity Attributable to Shareholders of the Parent

 

 

 Before Distribution

574,144,918

629,593,514

 After Distribution

496,414,682

551,844,846

Minority Interests

4,559,487

2,450,037

Total Equity

 

 

 Before Distribution

578,704,405

632,043,551

 After Distribution

500,974,169

554,294,883

Condensed Balance Sheet from 2012 to 2014 (Unconsolidated)

Unit: NT$ thousands

Item

2012

2013

2014

Current Assets

205,819,614

257,623,763

370,949,497

Long-term Investments (Note 1)

139,634,200

165,545,159

242,390,122

Property, Plant and Equipment

586,636,036

770,443,494

796,684,361

Intangible Assets

6,449,837

7,069,456

8,996,810

Other Assets (Note 2)

13,597,966

7,897,131

4,023,634

Total Assets

952,137,653

1,208,579,003

1,423,044,424

Current Liabilities

 

 

 

 Before Distribution

144,528,616

187,195,744

178,261,092

 After Distribution

222,301,923

264,981,595

(Note 3)

Noncurrent Liabilities

87,058,357

173,875,004

199,234,831

Total Liabilities

 

 

 

 Before Distribution

231,586,973

361,070,748

377,495,923

 After Distribution

309,360,280

438,856,599

(Note 3)

Equity

 

 

 

Capital Stock

259,244,357

259,286,171

259,296,624

Capital Surplus

55,675,340

55,858,626

55,989,922

Retained Earnings

 

 

 

 Before Distribution

408,411,468

518,193,152

704,512,664

 After Distribution

330,638,161

440,407,301

(Note 3)

Others

(2,780,485)

14,170,306

25,749,291

Total Equity

 

 

 

 Before Distribution

720,550,680

847,508,255

1,045,548,501

 After Distribution

642,777,373

769,722,404

(Note 3)

Note 1: Long-term investments consist of financial assets carried at cost and investments accounted for using equity method.
Note 2: Other assets consist of deferred income tax assets, refundable deposits, and other noncurrent assets.
Note 3: Pending for shareholders’ approval.

Condensed Balance Sheet from 2010 to 2011 (Unconsolidated)-R.O.C. GAAP

Unit: NT$ thousands

Item

2010

2011

Current Assets

192,234,282

158,563,352

Long-term Investments

117,913,756

129,400,844

Fixed Assets

366,854,299

454,373,533

Other Assets

24,237,329

19,070,145

Total Assets

701,239,666

761,407,874

Current Liabilities

 Before Distribution

118,022,260

109,514,430

 After Distribution

195,752,496

187,263,098

Long-term Liabilities

4,500,000

18,000,000

Other Liabilities

4,572,488

4,299,930

Total Liabilities

 

 

 Before Distribution

127,094,748

131,814,360

 After Distribution

204,824,984

209,563,028

Capital Stock

259,100,787

259,162,226

Capital Surplus

55,698,434

55,846,357

Retained Earnings

 

 

 Before Distribution

265,779,571

322,191,155

 After Distribution

188,049,335

244,442,487

Cumulative Transaction Adjustments

(6,543,163)

(6,433,369)

Unrealized Gain/Loss on Financial Instruments

109,289

(1,172,855)

Total Equity

 

 

 Before Distribution

574,144,918

629,593,514

 After Distribution

496,414,682

551,844,846

Condensed Statement of Comprehensive Income/Condensed Statement of Income

Condensed Statement of Comprehensive Income from 2012 to 2014 (Consolidated)

Unit: NT$ thousands (Except EPS: NT$)

Item

2012

2013

2014

Net Revenue

506,745,234

597,024,197

762,806,465

Gross Profit

244,137,107

280,945,507

377,734,375

Income from Operations

181,176,868

209,429,363

295,890,293

Non-operating Income and Expenses

499,588

6,057,759

6,207,253

Income before Income Tax

181,676,456

215,487,122

302,097,546

Net Income

166,123,802

188,018,937

263,780,869

Other Comprehensive Income for the Year, Net of Income Tax

4,252,632

16,352,248

11,834,164

Total Comprehensive Income for the Year

170,376,434

204,371,185

275,615,033

Net Income (Loss) Attributable to:

 Shareholders of the Parent

166,318,286

188,146,790

263,898,794

 Noncontrolling Interests

(194,484)

(127,853)

(117,925)

Total Comprehensive Income (Loss) Attributable to:

 Shareholders of the Parent

170,521,543

204,505,782

275,717,141

 Noncontrolling Interests

(145,109)

(134,597)

(102,108)

Basic Earnings Per Share

6.42*

7.26*

10.18*

*Based on weighted average shares outstanding in each year

Condensed Statement of Income from 2010 to 2011 (Consolidated)-R.O.C. GAAP

Unit: NT$ thousands (Except EPS: NT$)

Item

2010

2011

Net Sales

419,537,911

427,080,645

Gross Profit

207,053,591

194,069,228

Income from Operations

159,175,335

141,557,418

Non-operating Income and Gains

13,136,072

5,358,527

Non-operating Expenses and Losses

2,041,012

1,768,268

Interest Revenue

1,665,193

1,479,514

Interest Expense

425,356

626,725

Income before Income Tax

170,270,395

145,147,677

Net Income

162,281,930

134,453,260

Net Income Attributable to Shareholders of the Parent

161,605,009

134,201,279

Basic Earnings Per Share

6.24*

5.18*

*Based on weighted average shares outstanding in each year

Condensed Statement of Comprehensive Income from 2012 to 2014 (Unconsolidated)

Unit: NT$ thousands (Except EPS: NT$)

Item

2012

2013

2014

Net revenue

500,369,525

591,087,600

757,152,389

Gross Profit

234,850,311

271,644,860

366,911,703

Income from Operations

176,820,141

204,653,892

290,659,658

Non-operating Income and Expenses

6,932,246

11,062,658

10,363,505

Income before Income Tax

183,752,387

215,716,550

301,023,163

Net Income

166,318,286

188,146,790

263,898,794

Other Comprehensive Income for the Year, Net of Income Tax

4,203,257

16,358,992

11,818,347

Total Comprehensive Income for the Year

170,521,543

204,505,782

275,717,141

Basic Earnings Per Share

6.42*

7.26*

10.18*

*Based on weighted average shares outstanding in each year

Condensed Statement of Income from 2010 to 2011 (Unconsolidated)-R.O.C. GAAP

Unit: NT$ thousands (Except EPS: NT$)

Item

2010

2011

Net Sales

406,963,312

418,245,493

Gross Profit

196,989,302

185,560,865

Income from Operations

154,846,508

138,905,763

Non-operating Income and Gains

15,907,968

7,287,046

Non-operating Expenses and Losses

1,464,272

1,484,965

Interest Revenue

764,027

697,196

Interest Expense

214,641

445,887

Income before Income Tax

169,290,204

144,707,844

Net Income

161,605,009

134,201,279

Basic Earnings Per Share

6.24*

5.18*

*Based on weighted average shares outstanding in each year

Financial Analysis

Financial Analysis from 2012 to 2014 (Consolidated)

2012

2013

2014年

Capital Structure Analysis

Debts Ratio (%)

24.78

32.88

30.06

Long-term Fund to Property, Plant and Equipment (%)

131.63

135.40

158.17

Liquidity Analysis

Current Ratio (%)

168.60

188.90

311.70

Quick Ratio (%)

142.39

168.57

278.03

Times Interest Earned (Times)

177.92

82.41

94.35

Operating Performance Analysis

Average Collection Turnover (Times)

9.64

9.11

8.12

Days Sales Outstanding

37.86

40.06

44.95

Average Inventory Turnover (Times)

8.38

8.39

7.42

Average Inventory Turnover Days

43.56

43.49

49.19

Average Payment Turnover (Times)

19.38

20.01

19.39

Property, Plant and Equipment Turnover (Times)

0.91

0.85

0.95

Total Assets Turnover (Times)

0.58

0.54

0.55

Profitability Analysis

Return on Total Assets (%)

19.19

17.11

19.33

Return on Equity attributable to Shareholders of the Parent (%)

24.68

24.00

27.88

Operating Income to Paid-in Capital Ratio (%)

69.89

80.77

114.11

Pre-tax Income to Paid-in Capital Ratio (%)

70.08

83.11

116.51

Net Margin (%)

32.78

31.49

34.58

Basic Earnings Per Share (NT$)

6.42

7.26

10.18

Diluted Earnings Per Share (NT$)

6.41

7.26

10.18

Cash Flow

Cash Flow Ratio (%)

191.93

183.05

209.70

Cash Flow Adequacy Ratio (%) (Note 1)

94.71

88.35

92.15

Cash Flow Reinvestment Ratio (%)

11.46

12.16

13.04

Leverage

Operating Leverage

2.32

2.40

2.15

Financial Leverage

1.01

1.01

1.01

Industry Specific Key
Performance Indicator

Billing Utilization Rate (%) (Note 2)

91

91

97

Advanced Technologies (28-nanometer and below) Percentage of Wafer Sales (%)

12

30

42

Sales Growth (%)

18.7 (Note 3)

17.82

27.77

Net Income Growth (%)

23.9 (Note 3)

13.12

40.26

Analysis of deviation of 2014 vs. 2013 over 20%:
1. Current ratio and quick ratio increased by 65%, mainly due to increase in cash and cash equivalents, available-for-sale financial assets and notes and accounts receivable.
2. Operating income to paid-in capital ratio increased by 41% as a result of increase in operating income.
3. Pre-tax income to paid-in capital ratio increased by 40% as a result of increase in pre-tax income.
4. Basic earnings per share and diluted earnings per share increased by 40% as a result of increase in net income.

Note 1: 2008-2011 operating cash flow are based on R.O.C. GAAP.
Note 2: Capacity includes wafers committed by Vanguard and SSMC.
Note 3: 2011 net sales and net income are based on R.O.C. GAAP

*Glossary
1. Capital Structure Analysis
(1) Debt Ratio = Total Liabilities / Total Assets
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
2. Liquidity Analysis
(1) Current Ratio = Current Assets / Current Liabilities
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
(3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
3. Operating Performance Analysis
(1) Average Collection Turnover = Net Sales / Average Trade Receivables
(2) Days Sales Outstanding = 365 / Average Collection Turnover
(3) Average Inventory Turnover = Cost of Sales / Average Inventory
(4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
(5) Average Payment Turnover = Cost of Sales / Average Trade Payables
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment
(7) Total Assets Turnover = Net Sales / Average Total Assets
4. Profitability Analysis
(1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
(2) Return on Equity Attributable to Shareholders of the Parent = Net Income Attributable to Shareholders of the Parent / Average Equity Attributable to Shareholders of the Parent
(3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
(4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
(5) Net Margin = Net Income / Net Sales
(6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding
5. Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)
6. Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
(2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Financial Analysis from 2010 to 2011 (Consolidated)-R.O.C. GAAP

2010

2011

Capital Structure Analysis

Debts Ratio (%)

19.50

18.37

Long-term Fund to Fixed Assets (%)

152.08

133.06

Liquidity Analysis

Current Ratio (%)

212.29

192.52

Quick Ratio (%)

187.57

170.06

Times Interest Earned (Times)

401.30

229.27

Operating Performance Analysis

Average Collection Turnover (Times)

10.57

10.06

Days Sales Outstanding

34.54

36.29

Average Inventory Turnover (Times)

8.62

8.75

Average Inventory Turnover Days

42.36

41.70

Average Payment Turnover (Times)

17.23

18.77

Fixed Assets Turnover (Times)

1.27

0.97

Total Assets Turnover (Times)

0.64

0.57

Profitability Analysis

Return on Total Assets (%)

24.77

18.08

Return on Equity (%)

30.23

22.30

Operating Income to Paid-in Capital Ratio (%)

61.43

54.62

Pre-tax Income to Paid-in Capital Ratio (%)

65.72

56.01

Net Margin (%)

38.68

31.48

Basic Earnings Per Share (NT$)

6.24

5.18

Diluted Earnings Per Share (NT$)

6.23

5.18

Cash Flow

Cash Flow Ratio (%)

186.28

211.60

Cash Flow Adequacy Ratio (%)

113.91

101.93

Cash Flow Reinvestment Ratio (%)

11.13

11.12

Leverage

Operating Leverage

2.12

2.50

Financial Leverage

1.00

1.00

Industry Specific Key
Performance Indicator

Billing Utilization Rate (%) (Note)

101

91

Advanced Technologies (28-nanometer and below) Percentage of Wafer Sales (%)

-

1

Sales Growth (%)

41.9

1.8

Net Income Growth (%)

81.1

-17.0

Note: Capacity includes wafers committed by Vanguard and SSMC.

*Glossary
1. Capital Structure Analysis
(1) Debt Ratio = Total Liabilities / Total Assets
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
2. Liquidity Analysis
(1) Current Ratio = Current Assets / Current Liabilities
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
(3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
3. Operating Performance Analysis
(1) Average Collection Turnover = Net Sales / Average Trade Receivables
(2) Days Sales Outstanding = 365 / Average Collection Turnover
(3) Average Inventory Turnover = Cost of Sales / Average Inventory
(4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
(5) Average Payment Turnover = Cost of Sales / Average Trade Payables
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment
(7) Total Assets Turnover = Net Sales / Average Total Assets
4. Profitability Analysis
(1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
(2) Return on Equity Attributable to Shareholders of the Parent = Net Income Attributable to Shareholders of the Parent / Average Equity Attributable to Shareholders of the Parent
(3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
(4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
(5) Net Margin = Net Income / Net Sales
(6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding
5. Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)
6. Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
(2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Financial Analysis from 2012 to 2014 (Unconsolidated)

2012

2013

2014

Capital Structure Analysis

Debt Ratio (%)

24.32

29.88

26.53

Long-term Fund to Property, Plant and Equipment Ratio (%)

137.67

132.57

156.25

Liquidity Analysis

Current Ratio (%)

142.41

137.62

208.09

Quick Ratio (%)

117.49

118.35

171.82

Times Interest Earned (Times)

195.42

104.10

120.82

Operating Performance Analysis

Average Collection Turnover (Times)

9.87

9.26

8.29

Days Sales Outstanding

36.98

39.40

44.02

Average Inventory Turnover (Times)

9.13

9.06

7.90

Average Inventory Turnover Days

39.97

40.30

46.19

Average Payment Turnover (Times)

18.22

18.55

18.64

Property, Plant and Equipment Turnover (Times)

0.96

0.87

0.97

Total Assets Turnover (Times)

0.58

0.55

0.58

Profitability Analysis

Return on Total Assets (%)

19.45

17.58

20.22

Return on Equity (%)

24.68

24.00

27.88

Operating Income to Paid-in Capital Ratio (%)

68.21

78.93

112.10

Pre-tax Income to Paid-in Capital Ratio (%)

70.88

83.20

116.09

Net Margin (%)

33.24

31.83

34.85

Basic Earnings Per Share (NT$)

6.42

7.26

10.18

Diluted Earnings Per Share (NT$)

6.41

7.26

10.18

Cash Flow

Cash Flow Ratio (%)

189.88

179.11

230.29

Cash Flow Adequacy Ratio (%) (Note)

93.23

86.78

90.72

Cash Flow Reinvestment Ratio (%)

11.36

12.32

13.29

Leverage

Operating Leverage

2.37

2.46

2.19

Financial Leverage

1.01

1.01

1.01

Analysis of deviation of 2014 vs. 2013 over 20%:
1. Current ratio increased by 51%, mainly due to increase in cash and cash equivalents, receivables from related parties and inventories.
2. Quick ratio increased by 45%, mainly due to increase in cash and cash equivalents, receivables from related parties and inventories.
3. Operating income to paid-in capital ratio increased by 42% as a result of increase in operating income.
4. Pre-tax income to paid-in capital ratio increased by 40% as a result of increase in pre-tax income.
5. Basic earnings per share and diluted earnings per share increased by 40% as a result of increase in net income.
6. Cash flow ratio increased by 29% as a result of increase in cash provided by operating activities.

Note: 2008-2011 operating cash flow are based on R.O.C. GAAP.

*Glossary
1. Capital Structure Analysis
(1) Debt Ratio = Total Liabilities / Total Assets
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
2. Liquidity Analysis
(1) Current Ratio = Current Assets / Current Liabilities
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
(3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
3. Operating Performance Analysis
(1) Average Collection Turnover = Net Sales / Average Trade Receivables
(2) Days Sales Outstanding = 365 / Average Collection Turnover
(3) Average Inventory Turnover = Cost of Sales / Average Inventory
(4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
(5) Average Payment Turnover = Cost of Sales / Average Trade Payables
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment
(7) Total Assets Turnover = Net Sales / Average Total Assets
4. Profitability Analysis
(1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
(2) Return on Equity Attributable to Shareholders of the Parent = Net Income Attributable to Shareholders of the Parent / Average Equity Attributable to Shareholders of the Parent
(3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
(4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
(5) Net Margin = Net Income / Net Sales
(6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding
5. Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)
6. Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
(2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Financial Analysis from 2010 to 2011 (Unconsolidated)-R.O.C. GAAP

2010

2011

Capital Structure Analysis

Debt Ratio (%)

18.12

17.31

Long-term Fund to Fixed Assets Ratio (%)

157.73

142.52

Liquidity Analysis

Current Ratio (%)

162.88

144.79

Quick Ratio (%)

140.07

122.41

Times Interest Earned (Times)

789.71

325.54

Operating Performance Analysis

Average Collection Turnover (Times)

10.93

10.40

Days Sales Outstanding

33.40

35.09

Average Inventory Turnover (Times)

9.44

9.61

Average Inventory Turnover Days

38.67

37.97

Average Payment Turnover (Times)

16.89

18.17

Fixed Assets Turnover (Times)

1.31

1.02

Total Assets Turnover (Times)

0.64

0.57

Profitability Analysis

Return on Total Assets (%)

25.31

18.40

Return on Equity (%)

30.23

22.30

Operating Income to Paid-in Capital Ratio (%)

59.76

53.60

Pre-tax Income to Paid-in Capital Ratio (%)

65.34

55.84

Net Margin (%)

39.71

32.09

Basic Earnings Per Share (NT$)

6.24

5.18

Diluted Earnings Per Share (NT$)

6.23

5.18

Cash Flow

Cash Flow Ratio (%)

188.12

217.99

Cash Flow Adequacy Ratio (%)

109.98

99.13

Cash Flow Reinvestment Ratio (%)

11.20

11.07

Leverage

Operating Leverage

2.17

2.54

Financial Leverage

1.00

1.00

*Glossary
1. Capital Structure Analysis
(1) Debt Ratio = Total Liabilities / Total Assets
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
2. Liquidity Analysis
(1) Current Ratio = Current Assets / Current Liabilities
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
(3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
3. Operating Performance Analysis
(1) Average Collection Turnover = Net Sales / Average Trade Receivables
(2) Days Sales Outstanding = 365 / Average Collection Turnover
(3) Average Inventory Turnover = Cost of Sales / Average Inventory
(4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
(5) Average Payment Turnover = Cost of Sales / Average Trade Payables
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment
(7) Total Assets Turnover = Net Sales / Average Total Assets
4. Profitability Analysis
(1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
(2) Return on Equity Attributable to Shareholders of the Parent = Net Income Attributable to Shareholders of the Parent / Average Equity Attributable to Shareholders of the Parent
(3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
(4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
(5) Net Margin = Net Income / Net Sales
(6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding
5. Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)
6. Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
(2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Auditors’ Opinions from 2010 to 2014

Year CPA Audit Opinion
2010 Hung-Peng Lin, Shu-Chieh Huang An Unqualified Opinion
2011 Hung-Peng Lin, Shu-Chieh Huang An Unqualified Opinion
2012 Hung-Peng Lin, Shu-Chieh Huang An Unqualified Opinion
2013 Yi-Hsin Kao, Hung-Wen Huang An Unqualified Opinion
2014 Yi-Hsin Kao, Hung-Wen Huang An Unqualified Opinion

Deloitte & Touche

12F, No. 156, Sec. 3, Min-Sheng E. Rd., Taipei, Taiwan, R.O.C.

Tel: 886-2-2545-9988

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2014 Business Report, Financial Statements, and proposal for allocation of profits. The CPA firm of Deloitte & Touche was retained to audit TSMC’s Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of Taiwan Semiconductor Manufacturing Company Limited. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

Taiwan Semiconductor Manufacturing Company Limited

Chairman of the Audit Committee: Sir Peter Leahy Bonfield

February 10, 2015

Financial Difficulties

The Company should disclose the financial impact to the Company if the Company and its affiliated companies have incurred any financial or cash flow difficulties in 2014 and as of the date of this Annual Report: None

Consolidated Financial Statements and Independent Auditors’ Report along with Parent Company Only Financial Statements and Independent Auditors’ Report

Please refer to Annual Report section (II), Financial Statements.