Page 218 - 2017 TSMC Annual Report

The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.
The Company leased factory and office from associates. The lease terms and prices were both determined in accordance with mutual agreements. The rental expenses were paid to associates monthly; the related expenses were both classified under manufacturing expenses.
The Company deferred the disposal gain/loss derived from sales of property, plant and equipment to related parties (transactions with associates), and then recognized such gain/loss over the depreciable lives of the disposed assets.
g. Compensation of key management personnel
The compensation to directors and other key management personnel for the years ended December 31, 2017 and 2016 were as follows:
Short-term employee benefits Post-employment benefits
2017
$ 2,170,280 3,727
$ 2,174,007
$
2016
2,023,971 3,992
Years Ended December 31
$ 2,027,963
The compensation to directors and other key management personnel were determined by the Compensation Committee of TSMC in accordance with the individual performance and the market trends.
35. PLEDGED ASSETS
The Company provided certificate of deposits recorded in other financial assets as collateral mainly for building lease agreements. As of December 31, 2017 and 2016, the aforementioned other financial assets amounted to NT$165,618 thousand and NT$185,698 thousand, respectively.
36. SIGNIFICANT OPERATING LEASE ARRANGEMENTS
The Company’s major significant operating leases are arrangements on several parcels of land, machinery and equipment and office premises.
The Company expensed the lease payments as follows:
Years Ended December 31 2017 2016
Minimum lease payments $ 2,178,054 $ 1,135,735
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