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Equity
 12 Months Ended
Dec. 31, 2021
Disclosure Of Classes Of Share Capital [Abstract]  
Equity

30.

EQUITY

 

a.

Share capital

 

1)

Common stocks

 

 

 

December 31

 

 

 

2020

 

 

2021

 

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Number of authorized shares

 

 

12,000

 

 

 

12,000

 

Authorized shares

 

$

120,000

 

 

$

120,000

 

Number of issued and paid shares

 

 

7,757

 

 

 

7,757

 

Issued and outstanding shares

 

$

77,574

 

 

$

77,574

 

Each issued common stock with par value of $10 entitled the right to vote and receive dividends.

 

2)

Global depositary receipts

The MOTC and some stockholders sold some common stocks of Chunghwa in an international offering of securities in the form of American Depositary Shares (“ADS”) (one ADS represents 10 common stocks) in July 2003, August 2005, and September 2006.  The ADSs were traded on the New York Stock Exchange since July 17, 2003.  As of December 31, 2021, the outstanding ADSs were 202 million common stocks, which equaled 20 million units and represented 2.60% of Chunghwa’s total outstanding common stocks.

The ADS holders generally have the same rights and obligations as other common stockholders, subject to the provision of relevant laws.  The exercise of such rights and obligations shall comply with the related regulations and deposit agreement, which stipulate, among other things, that ADS holders are entitled to, through deposit agents:

 

a)

Exercise their voting rights,

 

b)

Sell their ADSs, and

 

c)

Receive dividends declared and subscribe to the issuance of new shares.

 

b.

Additional paid-in capital

The adjustments of additional paid-in capital for the years ended December 31, 2019, 2020 and 2021 were as follows:

 

 

Share

Premium

 

 

Movements of

Additional

Paid-in

Capital

for Associates

and Joint

Ventures

Accounted for

Using Equity

Method

 

 

Movements of

Additional

Paid-in

Capital

Arising from

Changes in

Equities of

Subsidiaries

 

 

Difference

between

Consideration

Received and

Carrying

Amount of the

Subsidiaries’

Net Assets

upon Disposal

 

 

Donated

Capital

 

 

Stockholders’

Contribution

Due to

Privatization

 

 

Total

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Balance on January 1, 2019

 

$

126,045

 

 

$

—

 

 

$

2,064

 

 

$

987

 

 

$

18

 

 

$

20,648

 

 

$

149,762

 

Unclaimed dividend

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Share-based payment transactions of subsidiaries

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

Balance on December 31, 2019

 

$

126,045

 

 

$

—

 

 

$

2,063

 

 

$

987

 

 

$

19

 

 

$

20,648

 

 

$

149,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance on January 1, 2020

 

$

126,045

 

 

$

—

 

 

$

2,063

 

 

$

987

 

 

$

19

 

 

$

20,648

 

 

$

149,762

 

Unclaimed dividend

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Change in additional paid-in capital for not proportionately

     participating in the capital increase of subsidiaries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Share-based payment transactions of subsidiaries

 

 

—

 

 

 

—

 

 

 

26

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

26

 

Balance on December 31, 2020

 

$

126,045

 

 

$

—

 

 

$

2,089

 

 

$

987

 

 

$

21

 

 

$

20,648

 

 

$

149,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance on January 1, 2021

 

$

126,045

 

 

$

—

 

 

$

2,089

 

 

$

987

 

 

$

21

 

 

$

20,648

 

 

$

149,790

 

Unclaimed dividend

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Change in additional paid-in capital from investments in

     associates and joint ventures accounted for

     using equity method

 

 

—

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

Share-based payment transactions of subsidiaries

 

 

—

 

 

 

—

 

 

 

17

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17

 

Balance on December 31, 2021

 

$

126,045

 

 

$

1

 

 

$

2,106

 

 

$

987

 

 

$

23

 

 

$

20,648

 

 

$

149,810

 

Under the R.O.C. relevant laws, additional paid-in capital from share premium, donated capital and the difference between consideration received and the carrying amount of the subsidiaries’ net assets upon disposal may be utilized to offset deficits.  Furthermore, when Chunghwa has no deficit, it may be distributed in cash or capitalized, which however is limited to a certain percentage of Chunghwa’s paid-in capital except the additional paid-in capital arising from unclaimed dividend can only be utilized to offset deficits.

The additional paid-in capital from movements of paid-in capital arising from changes in equities of subsidiaries may only be utilized to offset deficits.

Among additional paid-in capital from movements of investments in associates and joint ventures accounted for using equity method, the portion arising from the difference between consideration received and the carrying amount of the subsidiaries’ net assets upon disposal may be utilized to offset deficits; furthermore, when the Company has no deficit, it may be distributed in cash or capitalized.  However, other additional paid-in capital recognized in proportion of share ownership may only be utilized to offset deficits.

 

c.

Retained earnings and dividends policy

In accordance with the Chunghwa’s Articles of Incorporation, Chunghwa must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10% of its net income before distributing a dividend or making any other distribution to stockholders, except when the accumulated amount of such legal reserve equals to Chunghwa’s total issued capital, and depending on its business needs or requirements, may also set aside or reverse special reserves.  No less than 50% of the remaining earnings comprising remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed as stockholders’ dividends, of which cash dividends to be distributed shall not be less than 50% of the total amount of dividends to be distributed.  If cash dividend to be

distributed is less than $0.10 per share, such cash dividend shall be distributed in the form of common stocks.

Special reserve was appropriated in accordance with the relevant laws and regulations or as requested by local authority.  Pursuant to existing regulations, the Company should appropriate a special reserve when the net amount of other equity items is negative at the end of reporting period upon the earnings distribution.  Distributions can be made out of any subsequent reversal of the debit to other equity items.

The appropriation for legal reserve shall be made until the accumulated reserve equals the aggregate par value of the outstanding capital stock of Chunghwa.  This reserve can only be used to offset a deficit, or when the legal reserve has exceeded 25% of Chunghwa’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of the 2019 and 2020 earnings of Chunghwa approved by the stockholders in their meetings on May 29, 2020 and August 20, 2021, respectively, were as follows:

 

 

Appropriation of Earnings

 

 

Dividends Per Share

(NT$)

 

 

 

For Fiscal

Year 2019

 

 

For Fiscal

Year 2020

 

 

For Fiscal

Year 2019

 

 

For Fiscal

Year 2020

 

Cash dividends

 

$

32,783

 

 

$

33,404

 

 

$

4.226

 

 

$

4.306

 

The appropriations of earnings for 2021 had been proposed by Chunghwa’s Board of Directors on February 23, 2022.  The appropriations and dividends per share were as follows:

 

 

 

Appropriation

of Earnings

 

 

Dividends

Per Share (NT$)

 

 

 

 

 

 

 

 

 

 

Special reserve

 

$

408

 

 

 

 

 

Cash dividends

 

 

35,746

 

 

$

4.608

 

The appropriations of earnings for 2021 are subject to the resolution of the stockholders’ meeting planned to be held on May 27, 2022.

 

d.

Others

 

1)

Exchange differences arising from the translation of the foreign operations

The exchange differences arising from the translation of the foreign operations from their functional currency to New Taiwan dollars were recognized as exchange differences arising from the translation of the foreign operations in other comprehensive income. 

 

 

2)

Unrealized gain or loss on financial assets at FVOCI

 

 

Year Ended December 31

 

 

 

2019

 

 

2020

 

 

2021

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Beginning balance

 

$

538

 

 

$

735

 

 

$

1,240

 

Unrealized gain or loss for the year

 

 

 

 

 

 

 

 

 

 

 

 

     Equity instruments

 

 

197

 

 

 

522

 

 

 

(1,188

)

     Transferred accumulated gain or loss to unappropriated

         earnings resulting from the disposal of equity

         instruments (Note 9)

 

 

—

 

 

 

(17

)

 

 

(60

)

Ending balance

 

$

735

 

 

$

1,240

 

 

$

(8

)

 

 

e.

Noncontrolling interests

 

 

 

Year Ended December 31

 

 

 

2019

 

 

2020

 

 

2021

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Beginning balance

 

$

9,837

 

 

$

10,115

 

 

$

11,158

 

Attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

Net income for the year

 

 

974

 

 

 

1,285

 

 

 

1,431

 

Exchange differences arising from the translation of the

     foreign operations

 

 

8

 

 

 

(14

)

 

 

—

 

Unrealized gain or loss on financial assets at FVOCI

 

 

(26

)

 

 

(3

)

 

 

2

 

Remeasurements of defined benefit pension plans

 

 

15

 

 

 

17

 

 

 

(5

)

Income tax relating to remeasurements of defined benefit

     pension plans

 

 

(3

)

 

 

(3

)

 

 

1

 

Share of other comprehensive loss of associates and

     joint ventures accounted for using equity method

 

 

(1

)

 

 

(1

)

 

 

—

 

Cash dividends distributed by subsidiaries

 

 

(710

)

 

 

(775

)

 

 

(896

)

Share-based payment transactions of subsidiaries

 

 

22

 

 

 

63

 

 

 

56

 

Change in additional paid-in capital for not proportionately

   participating in the capital increase of subsidiaries

 

 

—

 

 

 

—

 

 

 

—

 

Change in additional paid-in capital from investments in

   associates and joint ventures accounted for using equity method

 

 

—

 

 

 

(2

)

 

 

—

 

Net increase (decrease) in noncontrolling interests

 

 

(1

)

 

 

476

 

 

 

—

 

Ending balance

 

$

10,115

 

 

$

11,158

 

 

$

11,747