Stock Code: 2324
Compal Electronics, Inc.
2015 Annual Report
Notice to readers
This English-version annual report is a summary translation of the Chinese version
and is not an official document approved in a shareholders’ meeting in accordance
with Taiwanese laws. Should any discrepancy arise between the English and
Chinese versions, the Chinese version shall prevail.
Taiwan Stock Exchange Market Observation Post System:
http://newmops.twse.com.tw
Company Annual Report is available at: http://www.compal.com
Printed on May 11, 2016
0
I. Spokesperson
Spokesperson: Gary Lu / Vice President
Deputy Spokesperson: Jack Wang / Director of Accounting Dept.
Tel: 886-2-8797-8588
E-mail: Investor@compal.com
II. Headquarters, Branches and Plant
Headquarters
Address: No.581, Ruiguang Rd., Neihu District, Taipei, Taiwan
Tel: 886-2- 8797-8588
Manufacturing Site
Address: No. 8, South East Rd., Pingzhen City, Taoyuan County
Tel: 886-3-439-1707
III. Share Administration Agency
Chinatrust Transfer Agent
Address: 5F, No. 83, Sec 1, Chung Ching Nan Road, Taipei, Taiwan
Tel: 886-2-6636-5566
Website: https://www.ctbcbank.com
IV. Auditors
CPA Firm: KPMG
Auditors: Kuo, Kuan Ying and Lo, Jui Lan
Address: 68F, No. 7, Sec. 5, Xinyi Road, Taipei, Taiwan
Tel.: 886-2-8101-6666
Website: http://www.kpmg.com.tw
V. Overseas Securities Exchange
Luxembourg Stock Exchange: http://www.bourse.lu
London Stock Exchange http://www.londonstockexchange.com
VI. Corporate Website
http://www.compal.com
1
Table of Contents
3 I. Letter to Shareholders
II. Company Profile
6
6
2.1 Date of Incorporation
2.2 Company History
III. Corporate Governance Report
8
10
33
61
62
3.1 Organization
3.2 Directors, Supervisors and Management Team
3.3 Implementation of Corporate Governance
3.4 Information Regarding the Company’s Audit Fee and Independence
3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major
Shareholders
64
66
3.6 Relationship among the Top Ten Shareholders
3.7 Ownership of shares in Affiliated Enterprises
IV. Capital Overview
68
73
73
74
74
76
76
4.1 Capital and Shares
4.2 Bonds
4.3 Global Depository Receipts
4.4 Employee Warrants
4.5 Subscription of New Shares by Employees and Restricted Shares
4.6 New Share Issuance in Connection with Mergers and Acquisitions
4.7 Financing Plans and Implementation
V. Operational Highlights
5.1 Business Activities
5.2 Market and Sales Overview
5.3 Human Resources
5.4 Environmental Protection Expenditure
5.5 Labor Relations
5.6 Important Contracts
77
81
84
84
85
88
VI. Financial Information
89
97
101
102
102
6.1 Five-Year Financial Summary
6.2 Five-Year Financial Analysis
6.3 Audit Committee’s Report in the Most Recent Year
6.4 Consolidated Financial Statements and Independent Auditors’ Report
6.5 Parent-Company-Only Financial Statements and Independent Auditors’ Report
1
VII. Review of Financial Position, Operating Results, and Risk Management
103
104
105
106
106
7.1 Analysis of Financial Status
7.2 Analysis of Operation Results
7.3 Analysis of Cash Flow
7.4 Major Capital Expenditures
7.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement
Plans and Investment Plans for the Coming Year
108
7.6 Analysis of Risk Management
VIII. Special Disclosure
112
113
113
113
8.1 Summary of Affiliated Companies
8.2 Private Placement of Securities in the Most Recent Year
8.3 Subsidiaries’ Holding of the Company’s Shares in the Most Recent Year
8.4 Events with Significant Impacts
2
I.
Letter to Shareholders
Dear Shareholders:
Thank you all for your support of Compal Electronics, Inc. (hereafter referred to as “Compal”) over the past
year! The year of 2015 was a dramatic year in a way resembling the “chameleon” as a period of time when
the global economic change was indeed beyond everyone’s expectation significantly. Despite the impact of
economic recession and weak market demands, with the endeavors and efforts of the entire staff of Compal,
the annual sales of the company was well maintained and the net profit also showed a growth over the
previous fiscal year. Looking ahead of this year, the global economy is likely to be still in recession.
However, we believe that corporations should continue to strive for research and developments and
vigorously expand new businesses to be ready for the future challenges ahead without using the excuse of
the economic recession. Here, with respect to the operational performance of last year and the operation
outlook of this year, we summarize the following for you:
2015 Financial Performance
The consolidated sales of Compal in 2015 was NT$847,306 million dollars, slightly up by 0.2%
year-on-year, in which the business contribution of non-notebook computer products continued to increase
from 23% to 28%. The consolidated operating profit was NT$11,312 million dollars, down 3% year-on-year.
Nevertheless, with significant improvement in the non-operating segment and reduction of non-operating
loss, the net profit attributed to the parent company was NT$ 8,685 million dollars, up 24% year-on-year.
The earning per share (EPS) of the company was NT$ 2.01.
2015 Business Development
The total shipment of computer products of the Computer Business Group (PCBG) in 2015 was down by
10% less than the previous year, and it was mainly affected by the weaker demands of the overall market
and the global recession. Nevertheless, with the change of the usage habit of the consumers, various types of
demands emerged, such as the demands for ultra-slim notebooks, high-end gaming notebooks and
two-in-one notebooks, of which the products required more precise market segmentation and positioning. In
the fields of slim type material technology, power-saving technology and heat dissipation technology etc.,
the Company will continue to develop state-of-the art innovative and quality products in cooperation with
our clients in order to satisfy the market demands.
The total shipment of the products of the Smart Device Business Group (SDBG) in 2015 was up by 30%
over the previous year. Such rapid growth benefited from the development of the tablet business and the
continuous investment in the development of the new technology of LTE smartphone as well as the
cooperation with our new prospective clients. For tablets, Compal constantly develops new usage models
and integrates with the application of the Internet-of-Things (IoT). For smartphones, the company also
vigorously develops image technology and new designs of software services in order to create unique
products. Accordingly, Compal continues to maintain its leading position in the industry.
3
Corporate Governance & Social Responsibility
During the development of the business, Compal is also committed to invest in the corporate sustainability
for business operations in a long term. With regard to the corporate governance, Compal has established the
Auditing Committee in 2015 and received the award for top 5% ranking in the “First-Term Corporate
Governance Evaluation” by the Taiwan Stock Exchange Corporation (TWSE). With regard to the green
environment, in addition to the promotion on the green and halogen-free products, the company has also
been included in the Climate Disclosure Leadership Index (CDLI) for the first time with recognition by
international institutes. In terms of social welfare, Compal continues to fulfill the corporate social
responsibility and engages in the promotion of the rural children digital learning program. In 2015, the
Commonweath Magazine ranked the company No. 16 in the “CSR Corporate Citizen Awards” for large
corporations, and the commitment of Compal in the corporate sustainability was recognized by society once
again.
2016 New business Development
With years of experience in the technology platform and research and development in the information
technology and communication industry, Compal has been able to rapidly and effectively enter various new
business fields, including the fields of Server, Auto Electronics, Smart Home, IoT Vertical Solution, Smart
Medical and Healthcare and Smart Wearable Devices etc. For the development of new businesses, Compal
develops customized and competitive products according to the demands in each field such that the
company is not merely acting as a hardware supplier but further engages in the development of integrated
system service, and the goal is to establish a new service-oriented business model with sources of revenue.
Moreover, with the emerging trend of aging society and health management and the rise of sports fashion,
we are of the opinion that smart medical and healthcare will soon be an important area and topic for future
industrial development. Considering our solid experience in the information technology and communication
along with the advantages in integration and product developments, not to mention our active cross-industry
alliance, Compal is able to rapidly develop comprehensive and diverse products and services in light of
providing greater sources and developments for the industry of medical and healthcare industry in Taiwan in
the future.
Business Outlook
According to market research firms (IDC), the global market demands for notebook and tablet in 2016 will
be down year-over-year, and the annual growth of the smartphone demand will be reduced. Nevertheless, the
new application fields, such as server, auto electronics, IoT and smart wearable devices are expected to have
opportunities for significant growths and will become competitive areas for all companies. Despite the
global economy still being in its down time, with consideration to the global market condition and the
business development of the company, Compal expects the total shipment of 5C (Computing,
Communication, Consumer, Cloud, Connecting) related electronic products to continue to grow over the
previous year. The revenue contribution of the non-notebook business in 2016 is expected to head toward
the goal of exceeding 30% contribution in total.
4
In the long term, Compal will continue to advance in innovation, to enhance value-added products and
services, to increase the competitiveness of the company and to constantly sustain revenue and profit growth
at the same time as our most vital commitments to all of our shareholders. Once again, we sincerely
appreciate your support and advice for Compal and wish you a peaceful and prosperous year!
Sincerely yours,
Chairman: Sheng-Hsiun Hsu (Rock Hsu)
Chief Executive Officer (CEO): Jui-Tsung Chen (Ray Chen)
Chief Finance Officer (CFO): Ching-Hsiung Lu (Gary Lu)
5
II. Company Profile
2.1
Date of Incorporation: June 1, 1984
2.2 Company History
Company history in the past two years:
Year
2014
2015
Milestones
•
•
•
•
•
•
•
Compal Communication Inc. was officially merged into Compal Electronics Inc. on February 27.
The Company won 11 awards during the 2014 “iF Design Awards,” which made Compal and ASUS
the two Taiwanese companies with the highest number of awards.
Compal ranked 22nd in the world for the number of iF awards won in the last 3 years.
Ranked 1492nd in Forbes’ The World’s Biggest Public Companies 2014.
Ranked 6th in CommonWealth Magazine’s “Top-2000 Manufacturers” and 46th in the “Cross-strait
Top-1000 Survey.”
The Company was awarded a Bronze award by Taiwan Institute for Sustainable Energy during its
“Taiwan Corporate Sustainability Report Award.”
The Company was ranked 36th by CSR Asia Summit during the 2014 “Channel News Asia
Sustainability Ranking.”
The Company’s share capital reached NTD 44.2 billion by the end of 2014.
•
•
The Company earned NTD 845.7 billion in consolidated revenues in 2014.
• Won 6 awards of 2015 “iF design” and ranked 18th on Global Innovation.
•
•
•
Ranked 1412nd on the Fobes Global 2000.
Ranked 423rd on the Fortune Global 500.
Ranked 6th in CommonWealth Magazine’s “Top-2000 Manufacturers” and 44th in the “Cross-strait
Top-1000 Survey.”
Top 5% TWSE –listed companies of the “First Round of Corporate Governance Evaluation”
conducted by TWSE.
Ranked 16th on CommonWealth magazine’s Top 50 CSR in Corporate Citizen Awards.
Ranked 34th on The 100 most sustainable companies in Asia by CSR Asia Summit.
4th National Industrial Innovation Award of Ministry of Economic Affairs, R.O.C for Innovative
Trailblazer Award.
Received Taiwan Corporate Sustainability Report Awards in “2015 Taiwan Corporate Sustainability
Awards.”
IT & IC Manufacturing - The Bronze Medal.
Adopt Taipei Neihu Zhouzi Park No.2 and received 2015 Excellence in Sponsorship of Clean Air
Zones in Taipei.
First-time being included in the 2015 Climate Disclosure Leadership Index (CDLI) by Carbon
Disclosure Project CDP (CDP).
First-time completion of the inspections and verifications of the emissions produced by staff business
•
•
•
•
•
•
•
•
flights of GHG Protocol Scope 3.
6
The Company’s share capital reached NTD 44.7 billion by the end of 2015.
•
•
The Company earned NTD 847.3 billion in consolidated revenues in 2015.
• Won 10 awards of 2016 “iF design” and ranked 15th on Global Innovation.
•
Top 6%-20% TWSE-listed companies of the “Second Round of Corporate Governance Evaluation” by
2016
TWSE.
•
Ranked 4th in CommonWealth Magazine’s “Top-2000 Manufacturers.”
7
III. Corporate Governance Report
3.1 Organization
3.1.1 Organizational Chart (As of Mar 1, 2016)
Shareholder’s Meeting
Board of Directors
President’s Office
Remuneration
Committee
Audit
Committee
Personnel Evaluation Committee
Investment Planning and
Management Office
Legal Affairs Office
Insider Trading Prevention
Office
PC
BG
Smart Device
BG
Auditing Office
Top Management
Committee
Green Sustainability
Office
Corporate Social
Responsibility Office
Accounting
Group
HR &
Administration
8
3.1.2 Major Corporate Functions
Department
Functions
President’s Office
Responsible for the Company’s operation
Investment Planning and
Responsible for investment-related activities, operational analyses, policy making,
Management Office
resource allocation, and budgeting for the entire company
Auditing Office
Conducts internal audits
Legal Affairs Office
Handles the Company’s legal affairs
Green Sustainability Office
Executes “Green Life” projects
Insider Trading Prevention
Office
Corporate Social
Responsibility Office
Implements preventive measures against insider trading
Promotes and executes CSR-related affairs
PC BG
Responsible for the R&D, production, quality control and sale of PC products
Smart Device BG
Responsible for the R&D, production, quality control and sale of smart devices
Accounting Group
Handles accounting, share administration, and funding affairs
HR & Administration Group
Responsible for human resource, training, education, employee relations,
procurement and building management
9
3.2 Directors, Supervisors and Management Team
3.2.1 Directors and Supervisors
Title
Name/Nation
ality
(Note 1)
Elected Date Term
First
Elected
Date
(Note 3)
Shareholding as of elected
date
Current shareholding
Shares held by spouse
and underage children
Shares held by
proxy
Shares
Sharehol
ding
Percenta
ge
(%)
Shares
Shareho
lding
Percenta
ge
(%)
Shares
Shareho
lding
Percenta
ge
(%)
Shares
Sharehol
ding
Percenta
ge
(%)
Chairman
Sheng-Hsiun
Hsu
2015.6.26
3 year
(s)
Director
Jui-Tsung
Chen
2015.6.26
3 year
(s)
Director Wen-Being
Hsu
2015.6.26
3 year
(s)
Director
Kinpo
Electronics
Inc.
Representative:
Shyh-Yong
Shen
2015.6.26
3 year
(s)
Director
Charng-Chyi
Ko (Note 2)
2015.6.26
3 year
(s)
Director
Sheng-Chieh
Hsu (Note 2)
2015.6.26
3 year
(s)
Director
Yen-Chia Chou
(Note 2)
2015.6.26
3 year
(s)
1984.04.16
17,775,401
0.40%
17,775,401 0.40%
30,107,025 0.67%
0 0.00%
1992.04.30
50,782,587
1.14%
50,782,587 1.14%
2,092,405 0.05%
0 0.00%
1984.04.16
4,000,000
0.09%
4,000,000 0.09%
0 0.00%
(Note 3) (Note 3)
1990.06.22
151,628,692
3.39%
151,628,692 3.39%
-
-
0 0.00%
2012.03.14
0
0.00%
0 0.00%
0 0.00%
0 0.00%
1984.04.16
7,896,867
0.18%
7,896,867 0.18%
10,645 0.00%
0 0.00%
1997.05.29
9,119,297
0.20%
9,119,297 0.20%
8,834,928 0.20%
(Note 3) (Note 3)
1987.06.13
8,022,874
0.18%
8,022,874 0.18%
2,502,768 0.06%
0 0.00%
Director
Wen-Chung
Shen
2015.6.26
3 year
(s)
1988.04.08
11,935,968
0.27%
11,935,968 0.27%
101,931 0.00%
0 0.00%
Major career (academic)
achievements
Honorary Doctorate, National
Taiwan Normal University
Chairman of Kinpo and Compal
Electronics Inc.
Department of Electrical
Engineering, National Cheng
Kung University
Chairman of Compal
Communication Inc. & Arcadyan
Technology Corp.
National Tao-Yuan Sr. Vocational
Agricultural & Industrial School
Director of BAOTEK, Inc.
M.B.A., University of Southern
California; PhD, Whittier Law
SchoolMBA WHITTIER
Director and President of Kinpo
Electronics Inc.
National Taiwan University
College of Management
Chairman and President of
Taiwan Biotech Co., Ltd.
Department of Architecture,
Tam-Kang University
Managing Director of Kinpo
Electronics Inc.
Department of Geosciences,
National Taiwan University
Supervisor of Kinpo Electronics
Inc.
Department of Electrical
Engineering, National Taiwan
University
Director of Arcadyan Technology
Corp.
April 26, 2016
Spouse or relatives of second degree or closer
acting as Directors, Supervisors, or department
heads
Title
Name
Relationship
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
(Note 4)
Director
Director
Sheng-Chieh Hsu
Shyh-Yong Shen
Brothers
Father and
son in law
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
Chairman Sheng-Hsiun Hsu
Father and
son in law
(Note 4)
N/A
N/A
N/A
(Note 4)
Chairman Sheng-Hsiun Hsu
Brothers
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
10
Title
Name/Nation
ality
(Note 1)
Elected Date Term
First
Elected
Date
(Note 3)
Shareholding as of elected
date
Current shareholding
Shares held by spouse
and underage children
Shares held by
proxy
Shares
Sharehol
ding
Percenta
ge
(%)
Shares
Shareho
lding
Percenta
ge
(%)
Shares
Shareho
lding
Percenta
ge
(%)
Shares
Sharehol
ding
Percenta
ge
(%)
Director
Yung-Ching
Chang
2015.6.26
3 year
(s)
2000.03.30
3,898,587
0.09%
3,727,587 0.08%
7,259 0.00%
0 0.00%
Director
Chung-Pin
Wong
2015.6.26
3 year
(s)
2007.06.15
4,833,618
0.11%
4,833,618 0.11%
1,398 0.00%
0 0.00%
Director
Chiung-Chi
Hsu
2015.6.26
3 year
(s)
1994.04.23
2,000,731
0.04%
2,000,731 0.04%
30,000 0.00%
0 0.00%
Director
Chao-Cheng
Chen
2015.6.26
1 year
(s)
2014.6.20
4,850,000
0.11%
3,000,000 0.07%
1,428 0.00%
0 0.00%
Independent
Director
Min Chih
Hsuan
2015.6.26
3 year
(s)
2012.6.22
0
0.00%
0 0.00%
0 0.00%
0 0.00%
Independent
Director
Duei Tsai
2015.6.26
3 year
(s)
2012.6.22
0
0.00%
0 0.00%
0 0.00%
0 0.00%
Independent
Director Duh Kung Tsai 2015.6.26
3 year
(s)
2012.6.22
Note: 1. All directors are Republic oof China nationals.
0
0.00%
0 0.00%
0 0.00%
0 0.00%
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
Spouse or relatives of second degree or closer
acting as Directors, Supervisors, or department
heads
Title
Name
Relationship
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
Major career (academic)
achievements
Master’s Defree in Graduate
school of Management, Yuan
Ze University
Chairman of Allied Circuit Co.,
Ltd.
Graduate Institute of
Management Science, National
Chiao Tung University
Chairman of Rayonnant
Technology Co., Ltd.
Master’s Degree, Golden Gate
University, San Francisco, USA
Director of Eb-Bow-Bearing Co.,
Ltd.
Graduate Institute of Electrical
Engineering, National Taiwan
University
President of Compal
Communication Inc.
Honorary Doctorate, National
Chiao Tung University
Chairman of United
Microelectronics Corp. &
Faraday Technology Corp.
PhD, Graduate Institute of
Electrical Engineering, National
Taiwan University
Minister of Transportation and
Communications R.O.C.
Department of Industrial
Engineering, National Taipei
Institute of Technology Chairman
of Powertech Technology Inc.
2. The previous supervisors: Charng-Chyi Ko, Sheng-Chieh Hsu, and Yen-Chia Chou resigned as of June 26, 2015, and were elected as directors in 2015 shareholders meeting. The directors Medica, John Kevin, and Sean
Martin Maloney were resigned as of June 26, 2015. The terms of service of Supervisor Sheng-Chieh Hsu was temporarily discontinued between June 22, 1990 and April 22, 1994.
3. Director Wen-Being Hsu held 5,000,000 shares (0.11%) through proxies, while Supervisor Sheng-Chieh Hsu held 3,500,000 shares (0.08%) through proxies.
4. Selected Current Positions as below:
11
Title
Name
Selected Current Positions
Chairman Sheng-Hsiun Hsu
Director
Jui-Tsung Chen
Chairman: Kinpo Electronics Inc., AcBel Polytech Inc., Cal-Comp Electronics (Thailand) Public Company Limited, Cal-Comp Electronics And communications Co., Ltd., Teleport Access Services, Inc.,
Compal Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Compal Information Research &
Development (Nanjing) Co., Ltd., Kunshan Botai Electronics Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal Electronics
(Chongqing) Co., Ltd., Compal Electronics (China) Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal Investment (Sichuan)
Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd., Gempal Technology Corp., Panpal Technology Corp., Kinpo Electronics (China) Co., Ltd., Hong Ji
Capital Co., Ltd., Hong Jin Investment Co., Ltd., Zhaopal Investment Co., Ltd., Yongpal Investment Co., Ltd., Kaipal Investment Co., Ltd., Jipo Investment Inc., Kinpo Group Management
Consultant Company, Breeze Integrated Development Co., Ltd. and China Productivity Center
Vice Chairman: Straits Exchange Foundation and SINOCON Industrial Standards Foundation
Managing Director: Baotek Industrial Materials Ltd., Taiwan Biotech Co., Ltd. and Taiwan Design Center
Director: Compal System Trading (Kunshan) Co., Ltd., Cal-Comp Optical Electronics (Suzhou) Co., Ltd., Cal-Comp Technology (Suzhou) Co., Ltd., Cal-Comp Electronics and Communications (Suzhou)
Co., Ltd., Crownpo Technology Inc., Cdib & Partners Investment Holding Corp., Acbel Polytech Holdings Inc.、Acbel Polytech (Singapore) Pte. Ltd.、Ascendant Private Equity Investment
Ltd.、Billion Sea Holdings Limited、Big Chance International Co., Ltd.、Center Mind International Co., Ltd.、Compal Display Holding (HK) Limited、Compal Electronics (Holding) Ltd.、
Compal Electronics International Ltd.、Compal International Ltd、Compal Ineternational Holding (HK) Limited.、Compal International Holding Co., Ltd.、Compal Rayonnant Holding
Ltd.、Core Profit Holdings Limited、Flight Global Holding Inc.、Forward International Ltd. 、Fortune Way Technology Corp.、Global Strategic Investment Inc.、Goal Reach Enterprises
Ltd.、HengHao Holding A Co., Ltd.、HengHao Holding B Co., Ltd.、HengHao Trading Co., Ltd.、High Shine Industrial Corp.、Intelligent Universal Enterprise Ltd.、Jenpal International
Ltd.、Just International Ltd.、Kingbolt International (Singapore) Pte. Ltd.、Kinpo International Ltd.、Lipo Holding Co., Ltd.、Prospect Fortune Group Ltd.、Prisco International Co., Ltd.、
Ranashe International Ltd.、Smart International Trading Ltd. and Management Institute in Taipei
Honorary Chairman: Importers and Exporters Association of Taipei
Chairman: Chinese National Federation of Industries (CNFI)
Policy Advisers: Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA)
President: Kinpo Group Management Consultant Company
Chairman: Arcadyan Technology Corp., Ripal Optoelectronics Co., Ltd., Henghao Technology Co., Ltd., Infinno Technology Corp., Huang Feng Communication Co., Ltd., Mactech Co., Ltd., Unicom
Globak, Inc., Compal System Trading (Kunshan) Co., Ltd., General life Biotechnology Co., Ltd., Amexcom Electronics, Inc.
Director: Kinpo Electronics Inc., Compal Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Compal
Information Research & Development (Nanjing) Co., Ltd., Kunshan Botai Electronics Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd.,
Compal Electronics (Chongqing) Co., Ltd., Compal Electronics (China) Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal
Networking (Kunshan) Co., Ltd., Compal (Vietnam) Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd.,
Compal Development & Management (Vietnam) Co., Ltd., Gempal Technology Corp., Panpal Technology Corp., Compal Broadband Networks, Inc., Hong Ji Capital Co., Ltd., Hong Jin
Investment Co., Ltd., Zhaopal Investment Co., Ltd., Yongpal Investment Co., Ltd., Kaipal Investment Co., Ltd., Kinpo Group Management Consultant Company, Ascendant Private Equity
Investment Ltd., Arcadyan Technology N.A. Corporation, Arcadyan Holding (BVI) Corp., Arch Holding (BVI) Corp., Billion Sea Holdings Limited, Big Chance International Co., Ltd., Bizcom
Electronics, Inc., Center Mind International Co., Ltd., Compal Display Holding (HK) Limited, Compal Electronics International Ltd., Compal Electronics (Holding) Ltd., Compal Electronics
Europe Sp. z o.o., Compal International Ltd., Compal International Holding Co., Ltd., Compal International Holding (HK) Limited, Compal Rayonnant Holding Ltd., Compalead Electronics
B.V., Core Profit Holdings Limited, Etrade Management Co., Ltd., Flight Global Holding Inc., Forever Young Technology Inc., Fortune Way Technology Corp., Giant Rank Trading Ltd., Goal
Reach Enterprises Ltd., HengHao Holding A Co., Ltd., HengHao Holding B Co., Ltd., HengHao Trading Co., Ltd., High Shine Industrial Corp., Intelligent Universal Enterprise Ltd., Jenpal
International Ltd., Just International Ltd., Prospect Forture Group Ltd., Prisco International Co., Ltd., Smart International Trading Ltd., Sinoprime Global Inc., Wah Yuen Technology Holding
Ltd. and Webtek Technology Co., Ltd.
President: Compal Electronics Inc., Gempal Technology Corp., Panpal Technology Corp., Hong Ji Capital Co., Ltd., Hong Jin Investment Co., Ltd., Zhaopal Investment Co., Ltd., Yongpal Investment Co.,
Ltd., Kaipal Investment Co., Ltd.
Director Wen-Being Hsu Director: Baotek Industrial Materials Ltd.x`
12
Title
Name
Selected Current Positions
Director
Kinpo Electronics
Inc.
Representative:
Shyh-Yong Shen
Director
Charng-Chyi Ko
Chairman: Cal-Comp biotech Co., Ltd., Castlenet Technology Incorporation, XYZPrinting, Inc., Tung-WAN Kai-Bao Co., Ltd., Cal-Comp Optical Electronics (Suzhou) Co., Ltd., Cal-Comp Technology
(Suzhou) Co., Ltd., Cal-Comp Electronics and Communications (Suzhou) Co., Ltd., Cal-Comp Precision (Wujiang) Co., Ltd., Cal-Comp Precision (Dongguan) Co., Ltd., Avaplas Precision
Plastics (Shanghai) Co., Ltd., XYZprinting (Suzhou), Co., Ltd., Cal Comp (Malaysia) SDN. BHD., Cal-Comp Technology (Philippines), INC., Cal-Comp Electronics de Mexico Co. SA de CV,
Cal-Comp Precision (Singapore) Ltd., Kinpo Electronics (Philippines) Inc., XYZprinting Japan, Inc.
Vice Chairman: Cal-Comp Electronics (Thailand) Public Company Limited and PChome (Thailand) Co., Ltd.
Director: Kinpo Electronics Inc., AcBel Polytech Inc., Cal-Comp Electronics And communications Co., Ltd, Kinpo Electronics (China) Co., Ltd., Dawning Leading Technology Inc., Jipo Investment Inc.,
Kinpo Group Management Consultant Company, Ascendant Private Equity Investment Ltd., Cal-Comp Precision (Malaysia) Sdn. Bhd., Cal-Comp Precision (Thailand) Ltd. , Cal-Comp
Electronics (USA) Co., Ltd.、Cal-Comp Holding (Brasil) S.A., Cal-Comp Industria De Semicondutores S.A. , Cal-Comp USA (San Diego) Co., Ltd., Kinbolt International (Singapore) Pte. Ltd.,
Kinpo International Ltd., Power Station Holdings Ltd., XYZprinting, Inc. (U.S.A), XYZprinting, Inc. (Samoa) and XYZprinting (Thailand) Co. Ltd.
Ascendant Private Equity Investment Ltd., Cal-Comp Precision (Malaysia) Sdn. Bhd., Cal-Comp Precision (Thailand) Ltd., Cal-Comp Electronics (USA) Co., Ltd., Cal-Comp Holding (Brasil) S.A.,
Cal-Comp Industria De Semicondutores S.A., Cal-Comp USA (San Diego) Co., Ltd., Kinbolt International (Singapore) Pte. Ltd., Kinpo International Ltd., Power Station Holdings Ltd.,
XYZprinting, Inc.〈U.S.A〉, XYZprinting, Inc.〈Samoa〉, XYZprinting (Thailand) Co. Ltd.
President: Kinpo Electronics Inc., Cal-Comp Electronics And communications Co., Ltd, Kinpo Electronics (China) Co., Ltd., Cal-Comp Optical Electronics (Suzhou) Co., Ltd., Cal-Comp Technology
(Suzhou) Co., Ltd., Cal-Comp Electronics and Communications (Suzhou) Co., Ltd., Avaplas Precision Plastics (Shanghai) Co., Ltd., XYZprinting (Suzhou), Co., Ltd.,Cal-Comp Electronics
(USA) Co., Ltd., Cal-Comp USA (Indiana) Co., Ltd., Cal-Comp USA (San Diego) Co., Ltd., XYZprinting, Inc.〈U.S.A〉
Chairman: Baotek Industrial Materials Ltd., Taiwan Biotech Co., Ltd., Chang Yao Technology Inc., Evergene Biotech Industrial Co., Ltd., Wecktech Biotech Co., Ltd., Global Biopharma, Inc., Genhealth
Pharma Co., Ltd., Taiwan Veterans Pharmaceutical Co., Ltd., Twin Luck Global Co., Ltd., Young & Health Care Resorts Inc., Yu Yuen Co., Ltd., Taiwan Venture Capital Co., Ltd., Taiwan
Venture Capital Co., Ltd., Siltek International Ltd., Taiwan Chariston Amc Co., Ltd. and Twin Luck Global Co., Ltd.
Director: All Information Co., Ltd., Sintong Animal Pharmaceutical Co., Ltd., Omnihealth Group, Inc., AIM Co., Ltd., Chipgene International Enterprise Co., Ltd., Minsheng Asset Management Co., Ltd.,
Missioncare Co., Ltd., Global Strategic Investment Inc. (Samoa), Gold Precision Ltd., KKXC Intergrated Management Holding (CYPRUS) Ltd., Medinox Inc., Optics Lab Inc. and Syn Pharm
Inc.
Supervisor: Kinpo Electronics Inc., Teleport Access Services, Inc., Cal-Comp Electronics & Communications Company Limited, Gempal Technology Corp., Panpal Technology Corp., Formosan Union
Chemical Corporation, Sunny Special Dyeing & Finishing Co., Ltd., Kenly Precision Industrial Co., Ltd., Hong Ji Capital Co., Ltd., Hong Jin Investment Co., Ltd., Zhaopal Investment Co.,
Ltd., Yongpal Investment Co., Ltd., Kaipal Investment Co., Ltd., Jipo Investment Inc., Commonwealth Magazine Co., Ltd.
President: Baotek Industrial Materials Ltd., Taiwan Biotech Co., Ltd., Siltek International Ltd.
Chairman: Integrate Investment Corp.
Director
Sheng-Chieh Hsu
Director: Kinpo Electronics, Inc., Cal-Comp Electronics(Thailand) Public Company Limited, Cal-Comp Electronics And communications Co., Ltd., Cal-Comp Electronics (Suzhou) Co., Ltd., Kinpo
Electronics (China) Co., Ltd., Tung-WAN Kai-Bao Co., Ltd., Jipo Investment Inc., Kinpo International Ltd.
Director
Yen-Chia Chou
Chairman: Sceptre Industry Co., Ltd.
Director: Micro Metal Electronics Co., Ltd.
Supervisor: Kinpo Electronics, Inc., Full Power Investment Co., Ltd
President: Sceptre Industry Co.,Ltd.
Director Wen-Chung Shen
Director
Yung-Ching
Chang
Director: Arcadyan Technology Corp., Henghao Technology Co., Ltd., Compal Electronics Technology (Kunshan) Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Kunshan Botai Electronics Co.,
Ltd., Arcadyan Technology (Shanghai) Corp., Gempal Technology Corp., Panpal Technology Corp., Zhibao Technology Co., Ltd., Maxima Ventures I, Inc., Hong Ji Capital Co., Ltd., Hong Jin
Investment Co., Ltd., Zhaopal Investment Co., Ltd., Yongpal Investment Co., Ltd., Kaipal Investment Co., Ltd., Amexcom Electronics, Inc., Bizcom Electronics, Inc., Compal Electronics
Europe Sp. z o.o., Compalead Electronics B.V., CENA Electromex S.A. de C.V., LC Future Center Ltd., Mexcom Electronics, LLC Mexcom Technologies, LLC
Executive Vice President: Compal Electronics Inc.
Chairman: Allied Circuit Co., Ltd., Kunshan Botai Electronic Services Co., Ltd.
Director: Mactech Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics
(Chengdu) Co., Ltd., Compal Electronics (Chongqing) Co., Ltd., Compal Electronics (China) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal System Trading (Kunshan)
Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd., Kunshan Allied Circuit Trading Co., Ltd., Utmost Power
Holding Inc., Ubrty Capital Management Corp.,Amexcom Electronics, Inc., LC Future Center Ltd.
13
Title
Name
Selected Current Positions
President: Compal Electronics Technology (Kunshan) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal Electronics (Chongqing) Co., Ltd.,
Compal Display Electronics (Kunshan) Co., Ltd., Compal System Trading (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Kunshan Botai Electronics Co., Ltd.,
Compal Investment (Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd.
Executive Vice President: Compal Electronics Inc.
Chairman: Rayonnant Technology Co., Ltd., Auscom Engineering Inc., Wah Yuen Technology Holding Ltd.
Director: Arcadyan Technology Corp., Allied Circuit Co., Ltd., Henghao Technology Co., Ltd., Lead-Honor Optronics Co., Ltd., Mactech Co., Ltd., Unicom Globak, Inc., ShengBao Precision Electronics
(Taicang) Ltd., Compal Electronic Technology (Chongqing) Co., Ltd., Ripal Optoelectronics Co., Ltd., General life Biotechnology Co., Ltd., Allied Power Holding Corp., Bizcom Electronics,
Inc., Compal Connector Manufacture Ltd., Compal Europe (Poland) Sp. z o.o., Motion Computing, Inc., Primetek Enterprises Ltd., Sirqul Inc.
Supervisor: Hong Ya Technology Corporation, Kunshan Botai Electronic Services Co., Ltd.
Executive Vice President: Compal Electronics Inc.
Chairman: Fubao Investment Co., Ltd.
Director: Plank Optoelectronics Inc., I PAO Bearing Co., Ltd.
Chairman: Compal Broadband Networks Inc., Keppel Communication Pte Ltd (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing) Co., Ltd., HANHELT Communications (Nanjing) Co., Ltd.,
Compal Communication (Nanjing) Inc.
Director
Chung-Pin Wong
Director
Chiung-Chi Hsu
Director
Chao-Cheng Chen
Director: Ripal Optoelectronics Co., Ltd., Huang Feng Communication Co., Ltd., Mactech Co., Ltd., General life Biotechnology Co., Ltd., Kinpo Group Management Consultant Company, Speedlink
Independent
Director
Min Chih Hsuan
Independent
Director
Duei Tsai
Independent
Director
Duh Kung Tsai
Tradings Ltd.
Executive Vice President: Compal Electronics Inc.
Chairman: D-LINK Corporation, Taiwan Memory Corporation, Meridigen Biotech Co., Ltd., Maxima Ventures I, Inc., Maxima Ventures II, Inc.
Director: General Biologicals Corporation, SIPP Technology Corporation, Clientron Corp., Pacgen Biopharmaceuticals Corporation (Canada)
Independent Director: Wistron Corporation, Siliconware Precision Industries Co., Ltd.
Remunerate Committee members: Compal Electronics, Inc., Wistron Corporation, Siliconware Precision Industries Co., Ltd.
Audit Committee members: Compal Electronics, Inc., Wistron Corporation
Independent Director: TaiwanTaxi Corp.
Remunerate Committee members: Compal Electronics, Inc., Getac Technology Corporation, National Aerospace Fasteners Corp., TaiwanTaxi Corp.
Audit Committee members: Compal Electronics, Inc.
Chairman: Powertech Technology Inc., Greatek Electronics Inc.
Director: Powertech Technology (Suzhou) Ltd., Powertech Holding (B.V.I.) Inc., Powertech Technology (Singapore) Pte., PTI Technology (Singapore) Pte. Ltd.
Independent Director: Wistron Corporation, Chicony Power Technology Co., Ltd.
Remunerate Committee members: Compal Electronics, Inc., Wistron Corporation, Chicony Power Technology Co., Ltd.
Audit Committee member: Compal Electronics, Inc., Wistron Corporation
14
Major shareholders of the Company’s corporate shareholders
Name of corporate shareholder
Kinpo Electronics, Inc.
Major shareholders of the corporate shareholder (Note)
Compal Electronics, Inc. (8.51%), Jipo Investment Inc. (3.17%), Nan Shan Life Insurance Company Ltd. (2.89%), Li-Chu Tsai (2.86%), Lai-Chun Shen
Tsai (2.84%), Kun-Chao Shen (2.07%), Sheng-Hsiun Hsu (1.86%), Panpal Technology Corporation (1.59%), Hebao Investment Co., Ltd. (1.52%), KGI
Capital Asia, Standard Chartered in custody of CITIC Hong Kong accounts (1.44%)
Note: If the major shareholder is also a corporate entity, please refer to the following table.
Major shareholders of the Company’s major corporate shareholders
Name of corporate shareholder
Major shareholders of corporate shareholders
Jipo Investment Inc.
Kinpo Electronics Inc. (100%)
Nan Shan Life Insurance
Company Ltd.
First Commercial Bank in its Capacity as Trustee of Ruen Chen Investment Holding (76.46%), Ruen Chen Investment Holding (14.16%), Yong-Zong
Tu (3.25%), Ruen Hua Dyeing & Weaving Co., Ltd. (0.28%), Ruentex Leasing Co., Ltd. (0.15%), Jipin Investment Co., Ltd. (0.11%), Wen-De Kuo
(0.11%), Taishin Bank in its Capacity as Trustee of Nanshan Life Insurance - Equity Trust Account (0.06%), Bao Chi Investment Co., Ltd.(0.05%), Bao
Yi Investment Co., Ltd. (0.05%), Bao Hui Investment Co., Ltd. (0.05%), Bao Huang Investment Co., Ltd. (0.05%)
Panpal Technology Corporation
Compal Electronics Inc. (100%)
Hebao Investment Co., Ltd.
Chieh-Li Hsu (41.52%), Li-Chu Tsai (27.83%), Yong-Hsu Hsu (12.50%), Chun-Chi Hsu (12.50%), Huang-Hsin Hsu (2.83%), Yue-Hsia Huang Hsu
(1.41%), Yue-Chen Hsu (1.41%)
15
Professional qualifications and independence analysis of directors and supervisors
Criteria
Name
Sheng-Hsiun Hsu
Jui-Tsung Chen
Wen-Being Hsu
Kinpo Electronics
Inc.
Representative:
Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Wen-Chung Shen
Yung-Ching Chang
Chung-Pin Wong
Chiung-Chi Hsu
Chao-Cheng Chen
Min Chih Hsuan
Duei Tsai
Duh Kung Tsai
Having Met One of the Following Professional Qualifications, Together with at Least
Five Years Work Experience
An Instructor or Higher
Position in a Department of
Commerce, Law, Finance,
Accounting, or Other
Academic Department Related
to the Business Needs of the
Company in a Public or
Private Junior College,
College or University
A Judge, Public Prosecutor,
Attorney, Certified Public
Accountant, or Other
Professional or Technical
Specialist Who has Passed a
National Examination and been
Awarded a Certificate in a
Profession Necessary for the
Business of the Company
Having Work
Experience in the
Areas of Commerce,
Law, Finance, or
Accounting, or
Otherwise Necessary
for the Business of
the Company
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
Independence Criteria (Note)
1
2
3
4
5
6
7
8
9
10
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director
0
0
0
0
0
0
0
0
0
0
0
0
2
1
2
Note: Tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office.
1. Not an employee of the Company or any of its affiliates.
2. Not a director or supervisor of the Company or any of its affiliates. Not applicable in cases where the person is an independent director of the Company, its
16
parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares.
3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’
names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three
subparagraphs.
5. Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the
Company or who holds shares ranking in the top five holdings.
6. Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business
relationship with the Company.
7. Not a professional individual who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that
provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof.
8. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
9. Not a person of any conditions defined in Article 30 of the Company Act.
10. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.
17
3.2.2 Management Team
Title
Name/Nation
ality
(Note 1)
Date
elected/
appointed
Shares held
Shares held by spouse and
underage children
Shares held by proxy
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdin
g Percentage
(%)
1989.06.01
50,782,587
1.14%
2,092,405
0.05%
0
0.00%
Major career (academic) achievements
Department of Electrical Engineering, National Cheng
Kung University
Chairman of Compal Communication Inc. & Arcadyan
Technology Corp.
April 26, 2016
Spouse or relatives of second degree or closer
acting as managers
Title
Name
Relationship
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
Refer to Page
12-14
Vice President
Bo-Tang
Relative by
Wang
affinity
President
Jui-Tsung
Chen
Executive Vice
President
Wen-Chung
Shen
Executive Vice
President
Yung-Ching
Chang
Executive Vice
President
Chung-Pin
Wong
Executive Vice
President
Chen-Chang
Hsu
Executive Vice
President
Chao-Cheng
Chen
Senior Vice
President
Chun-De
Shen
Senior Vice
President
Kuo-Chuan
Chen
Senior Vice
President
Pei-Yuan
Chen
2002.01.01
11,935,968
0.27%
101,931
0.00%
2003.01.01
3,727,587
0.08%
7,259
0.00%
2007.04.01
4,833,618
0.11%
1,398
0.00%
2011.08.31
0
0.00%
0
0.00%
2014.02.27
3,000,000
0.07%
1,428
0.00%
2007.01.01
2,218,700
0.05%
900,000
0.02%
2007.01.01
955,823
0.02%
82,924
0.00%
2009.10.06
4,487,698
0.10%
1,045,585
0.02%
Senior Vice
President
Senior Vice
President
Chiu-Rui Wei 2010.03.18
113,764
0.00%
142,966
0.00%
Ying Chang 2011.2.24
0
0.00%
0
0.00%
0
0
0
0
0
0
0
0
0
0
0.00%
0.00%
0.00%
Department of Electrical Engineering, National
Taiwan University
Director of Arcadyan Technology Corp.
Master’s Defree in Graduate school of
Management, Yuan Ze University
Director and President of Toppoly Optoelectronics Corp.
Graduate Institute of Management Science, National
Chiao Tung University
Chairman of Rayonnant Technology Co., Ltd.
0.00%
National Chiao Tung University EMBA
Executive Vice President of WINTEK Corporation
0.00%
0.00%
0.00%
0.00%
0.00%
Graduate Institute of Electrical Engineering, National
Taiwan University
President of Compal Communication Inc.
Graduate Institute of Electrical Engineering, National
Taiwan University
Director of Kinpo Electronics Inc.
Department of Physics, Chung Yuan Christian
University
Senior Vice President of Compal Communication Inc.
Department of International Trade, Hsingwu
College
Director of Kinpo Electronics Inc.
Master of Business Administration, University of
Washington, USA
Senior Vice President of Toppoly Optoelectronics
Corp.
0.00%
MBA, University Of Georgia
President of Swenc Technology Co., Ltd.
18
Refer to Page
12-14
Refer to Page
12-14
Refer to Page
12-14
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
Refer to Page
12-14
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Title
Name/Nation
ality
(Note 1)
Date
elected/
appointed
Shares held
Shares held by spouse and
underage children
Shares held by proxy
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdin
g Percentage
(%)
Major career (academic) achievements
Senior Vice
President
Ming-Hsing
Hsu
Senior Vice
President
Sheng-Hua
Peng
2011.8.01
558,392
0.01%
0
0.00%
2014.02.27
100,000
0.00%
0
0.00%
Senior Vice
President
Wen-Da Hsu 2014.02.27
773,000
0.02%
0
0.00%
2004.04.01
390,656
0.01%
0
0.00%
0
0
0
0
0.00%
0.00%
0.00%
0.00%
Department of Engineering, Chung Yuan Christian
University
President of Compal Information (Kunshan) Co., Ltd.
Graduate Institute of Electrical Engineering, National
Taiwan University
Senior Vice President of Compal Communication Inc.
Department of Media Administration, Shih Hsin
University
Senior Vice President of Compal Communication Inc.
Department of Electronic Engineering, Taipei College
of Maritime Technology
Vice President of Cheong Tat Technology
Senior Vice
President
Wei-Cheng
Chen
Senior Vice
President
Ming-Chih
Chang
Vice President
Chih-Chuan
Cheng
Vice President
and head of
finance
Ching-Hsiun
g Lu
Vice President
Vice President
Vice President
Shih-Tung
Wang
Bo-Hsiung
Chang
Tian-Yuan
Tsai
Vice President
Bo-Tang
Wang
2016.02.24
1,919,489
0.04%
0
0.00%
0
0.00%
2003.01.01
1,683,786
0.04%
51,194
0.00%
0
0.00%
Department of Electrical Engineering, Ming Chi
University of Technology
LCFC (Hong Kong) Co., Ltd.
President
Department of Electronic Engineering, Lunghwa
University of Science and Technology
Deputy Manager of Research and Development, Top
Information Technologies Co., Ltd.
2003.01.01
8,642,007
0.19%
0
0.00%
2003.01.01
10,197
0.00%
0
0.00%
2006.02.21
0
0.00%
270
0.00%
2006.06.28
712,715
0.02%
0
0.00%
2007.07.10
239,548
0.01%
486
0.00%
0
0
0
0
0
0.00%
Department of Accounting, Feng Chia University
Director Compal Communication Inc.
0.00%
Graduate Institute of Electrical Engineering, San Jose
State University
Vice President of KC Technology Inc.
0.00%
Department of Electrical Engineering, National Taipei
Institute of Technology
0.00%
0.00%
Graduate Institute of Public Finance, National
Chengchi University
Accountant of KPMG
Department of Computer Science and Information
Engineering, National Taiwan University
President of Vibo Telecom Inc.
19
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
Spouse or relatives of second degree or closer
acting as managers
Title
Name
Relationship
(Note 3)
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
President
Jui-Tsung
Chen
Relative by affinity
Title
Name/Nation
ality
(Note 1)
Date
elected/
appointed
Shares held
Shares held by spouse and
underage children
Shares held by proxy
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdin
g Percentage
(%)
2009.05.01
0
0.00%
0
0.00%
0
0.00%
Major career (academic) achievements
Master of Industrial Design, Cranbrook Academy of
Art
Director of Design and Customer Affairs, Philips
(Hong Kong)
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
Spouse or relatives of second degree or closer
acting as managers
Title
Name
Relationship
(Note 3)
N/A
N/A
N/A
Vice President
Hsi-Kuan
Chen
Vice President
Vice President
Zong-Ming
Wang
Fu-Chuan
Chang
Chi-Hsiang
2009.07.16
148,184
0.00%
0
0.00%
2009.07.16
134,662
0.00%
0
0.00%
Vice President
2011.01.01
52,624
0.00%
0
0.00%
Ma
Yung-Nan
Chang
Sheng-Hung
Li
Vice President
Vice President
2011.01.01
0
0.00%
0
0.00%
2011.07.01
84,574
0.00%
0
0.00%
Vice President Yung-He Su 2011.07.01
120,401
0.00%
0
0.00%
Vice President
Ming-Hsiang
Kan
2011.08.31
0
0.00%
0
0.00%
0
0
0
0
0
0
0
0.00%
National Taipei Institute of Technology
Head of Research and Development, CLEVO
Company
0.00%
National Chin-Yi University of Technology
Production Manager, ADI Corp
0.00%
Department of Business Administration, Fu Jen
Catholic University
Product Manager, MiTAC International Corporation
0.00%
MBA, Pacific Western University
Factory Manager, Delta Electronics Inc.
0.00%
Department of Electronics, National Taipei University
of Science & Technology
0.00%
0.00%
Department of Electrical Engineering, National Taipei
Institute of Technology
Vice President of Arima Photovoltaic & Optical Corp.
University of Leicester (U.K.) MBA
Vice President of NB R&D, Flextronics International
(Taiwan) Ltd.
University of Colorado
Postgraduate Institute of Digital Communication/Vice
President of Wireless Communication, Altek
Corporation
Department of Civil Engineering, Tamkang
University
Vice President of Procurement, ASUS Ltd.
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Vice President
Chih-Hsien
Liang
Vice President
Lung-Hua
Shen
2011.10.31
0
0.00%
0
0.00%
0
0.00%
2012.08.29
0
0.00%
0
0.00%
0
0.00%
Vice President
Ming-Dong
Weng
2013.01.31
63,786
0.00%
0
0.00%
Vice President Yue-Chun Li 2014.02.17
0
0.00%
0
0.00%
0.00%
Master of Business Administration, University of
Washington, USA
Deputy Manager of Sales, Kapok Computer
Company
0.00%
Department of Electronic Engineering, Lee-Ming
Institute of Technology
0
0
20
Title
Name/Nation
ality
(Note 1)
Date
elected/
appointed
Shares held
Shares held by spouse and
underage children
Shares held by proxy
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdin
g Percentage
(%)
Major career (academic) achievements
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
Spouse or relatives of second degree or closer
acting as managers
Title
Name
Relationship
Vice President
Chiao-Lieh
Huang
Vice President
Chung-Hsing
Tan
Vice President
Yi-Yun
Chang
Vice President
Vice President
Hsin-Kung
Mao
Ling-Sheng
Wu
Vice President
Hsin-Hsiung
Huang
Shih-Hung
2014.02.27
23,992
0.00%
0
0.00%
2014.02.27
120,529
0.00%
5,320
0.00%
2014.08.13
110,246
0.00%
0
0.00%
2014.11.13
714
0.00%
0
0.00%
2015.1.22
265,000
0.01%
0
0.00%
2015.1.22
139,001
0.00%
0
0.00%
Chairman’s Special Assistant, Mag Technology Co.,
Ltd.
0.00%
Graduate Institute of Electrical Engineering, National
Taiwan University
Vice President of Compal Communication Inc.
0.00%
0.00%
0.00%
0.00%
Department of Electrical Engineering, Tatung
University
Vice President of Compal Communication Inc.
Graduate Institute of Electrical Engineering, National
Taiwan University
Senior Manager of Compal Communication Inc.
Master of Business Administration, University of
Lincoln
Head of Business, Display BU
Graduate Institute of Electrical Engineering,
University of Southern California; Senior Manager of
Compal Communication Inc.
0.00%
Department of Electronics, Chung Yuan Christian
University
Senior Manager of Compal Communication Inc.
0
0
0
0
0
0
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Master in Control Engineering, National Chiao Tung
University
Director - Coretronic Corporation
N/A
N/A
N/A
N/A
Vice President
2016.02.24
0
0.00%
0
0.00%
0
0.00%
Huang
Yi-Chiang
Vice President
2016.02.24
0
0.00%
Chiu
0
0.00%
0
0.00% Master in Erath Sciences, National Central University
N/A
N/A
N/A
N/A
Vice President Ching-Fa Li 2016.02.24
40,690
0.00%
0
0.00%
0
0.00%
Vice President
2016.02.24
10
0.00%
0
0.00%
0
0.00%
Bo-Heng
Chen
Vice President Jui-Chun Hsu 2016.5.11
0
0.00%
0
0.00%
0
0.00%
Information Engineering Ph.D., National Tsing Hua
University
Vice President – Eten Technology Inc.
COLUMBIA UNIVERSITY
Master of Industrial Engineering and Operations
Management
PhD, Graduate Institute of Electrical Engineering,
National Taiwan University
Photonics Industries International, Inc.
President
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
21
Title
Name/Nation
ality
(Note 1)
Date
elected/
appointed
Shares held
Shares held by spouse and
underage children
Shares held by proxy
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdi
ng
Percentage
(%)
Shares
Shareholdin
g Percentage
(%)
Major career (academic) achievements
Head of Audit
Bo-Wen
Hsieh
2010.10.27
0
0.00%
0
0.00%
0
0.00%
Department of Accounting, National Taiwan
University
Audit Manager, KGT Telecom
Note: 1. All managers are ROC nationals.
Selected Current
Positions held
concurrently in the
company and/or
any other
companyitions
Spouse or relatives of second degree or closer
acting as managers
Title
Name
Relationship
N/A
N/A
N/A
N/A
2. Senior Advisor Medica, John Kevin, and Vice Presidents, Ming-Sung Lin, and Meng-Hsiung Nieh resigned in 2015. Chin-Wen Liao, Vice President resigned in 2016.
3. Concurrent positions in other companies
Title
Name
Concurrent duties in the company and in other companies
Executive Vice
President
Chen-Chang Hsu
Chairman: Henghao Technology (Kunshan) Co., Ltd., Lucom Display Technology (Kunshan) Ltd.
Vice Chairman: Henghao Technology Co., Ltd.,Chenfeng Optronics Corporation
Director: Mactech Co., Ltd.
Vice Chairman: Henghao Technology Co., Ltd., Henghao Technology (Kunshan) Co., Ltd., Lucom Display Technology (Kunshan) Ltd.
Director: Kinpo Electronics Inc., Arcadyan Technology Corp., Allied Circuit Co., Ltd., Compal Information Research & Development (Nanjing) Co., Ltd., Changchun Jing Yu Electronic Technology
Chun-De Shen
Co., Ltd., Auscom Engineering Inc.
President: Compal Information Research & Development (Nanjing) Co., Ltd.
Pei-Yuan Chen
Director: Kinpo Electronics Inc., Infinno Technology Corporation, Fubao Investment Co., Ltd.
Director: Chipbond Technology Corporation, Taiwan Star Telecom Corporation Limited, Rayonnant Technology (HK) Holdings Limited, Zhengying Electronics (Chongqing) Co., Ltd., Suyin
Optronics Corp., Compal Precision Module (Jiangsu) Co., Maxima Ventures I, INC., HWA VI Venture Capital Corp., Hwa Chi Venture Capital Corp., LC Future Center Ltd
Chiu-Rui Wei
Supervisor: Henghao Technology Co., Ltd., Infinno Technology Corporation, Rayonnant Technology Co., Ltd., Ripal Optoelectronics Co., Ltd., Mactech Co., Ltd., Unicom Globak, Inc., Rayonnant
Technology (Taicang) Co., Ltd., General life Biotechnology Co., Ltd,
Remunerate Committee member: Synergy Scientech Corp.
Director: Kunshan Botai Electronic Services Co., Ltd.
President: Compal Information (Kunshan) Co., Ltd., Kunshan Botai Electronic Services Co., Ltd.
Director: Huang Feng Communication Co., Ltd., Keppel Communication Pte Ltd (Nanjing), Compal Digital Communications (Nanjing) Co., Ltd., HANHELT Communications (Nanjing) Co., Ltd.,
Compal Communication (Nanjing) Inc.
Ming-Hsing Hsu
Sheng-Hua Peng
Wen-Da Hsu
Director: HANHELT Communications (Nanjing) Co., Ltd.
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Vice President
and head of
Ching-Hsiung Lu
finance
Director: Zhibao Technology Co., Ltd., Arcadyan Technology (Shanghai) Corp., Keppel Communication Pte Ltd (Nanjing), Compal Digital Communications (Nanjing) Co., Ltd., Compal
Communication (Nanjing) Co., Ltd., Kunshan Botai Electronic Services Co., Ltd., Great Arch Group Ltd., Leading Images Limited
Supervisor: Compal Broadband Networks Inc., Accesstek Inc., Compal Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology
(Kunshan) Co. Ltd., Compal Electronics (China) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal Electronics, (Chongqing)
Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co. Ltd., Compal Networking (Kunshan) Co., Ltd., Kunshan Botai Electronic Services
Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Business Management (Chengdu) Co., Ltd.
22
Title
Vice President
Name
Bo-Hsiung Chang
Vice President
Tian-Yuan Tsai
Director: Unicom Globak, Inc., Avalue Technology Inc.
Chairman: Crownpo Technology Inc.
Managing Director: LIZ Electronics (Kunshan) Co., Ltd., LIZ Electronics (Nantong) Co., Ltd.
President: Crownpo Technology Inc.
Remunerate Committee member: Sanyang Motor Co., Ltd.
Concurrent duties in the company and in other companies
Vice President
Hsi-Kuan Chen
Director: Rayonnant Technology Holdings Ltd., Rayonnant Technology (Taicang) Co., Ltd.
Vice President
Fu-Chuan Chang
President: Compal Optoelectronics (Kunshan) Co., Ltd., Compal Electronics (China) Co., Ltd.
Vice President
Chiao-Lieh Huang
Supervisor: HANHELT Communications (Nanjing) Co., Ltd.
Vice President
Hsin-Kung Mao
President: Compal Electronics Europe Sp. z o.o.
23
3.2.3 Remuneration of Directors, Supervisors, President, and Vice Presidents
Remuneration of Directors
Directors’ remuneration
Remuneration (A)
Pension (B)
Remuneration from
earnings appropriation (C)
Fees for services
rendered (D)
The
Company
All
companies
included
in the
financial
statements
The
Company
All
companies
included in
the
financial
statements
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the
financial
statements
The sum of A, B, C and D
as a percentage of after-tax
profit
Salaries, bonuses, special
allowances etc (E)
Pension (F)
Share of profit as an employee (G)
Remuneration as an employee
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The Company
All companies included in
the financial statements
Cash
Stock
Cash
Stock
Total shares exercisable
through employee
warrants (H)
The
Company
All
companies
included in
the financial
statements
Number of new restricted shares
acquired as an employee (I)
The
Company
All companies
included in the
financial
statements
The sum of A, B, C, D, E, F, and G as a
percentage of after-tax profit
The
Company
All companies
included in the
financial statements
Remuneration from
invested businesses
other than the
subsidiaries (J)
Unit: NTD thousand; thousand shares; %
Title
Name
Chairman
Director
Director
Director
Sheng-Hsiun
Hsu
Jui-Tsung
Chen
Wen-Being
Hsu
Representative
of Kinpo
Electronics
Inc.:
Shyh-Yong
Shen
4,320 4,320
0
0
50,234 50,234 2,699 3,359 0.66%
0.67% 154,474 155,006 651
651
19,902
0
19,902
0
0
0
7,650
7,650
2.67%
2.69%
66,785
Director
Charng-Chyi
Ko
Director
Sheng-Chieh
Director
Director
Director
Director
Director
Hsu
Yen-Chia
Chou
Wen-Chung
Shen
Yung-Ching
Chang
Chung-Pin
Wong
Chiung-Chi
Hsu
Director
Chao-Cheng
Chen
Independent
Min Chih
Director
Hsuan
Independent
Director
Duei Tsai
24
Directors’ remuneration
Title
Name
Remuneration (A)
Pension (B)
Remuneration from
earnings appropriation (C)
Fees for services
rendered (D)
The
Company
All
companies
included
in the
financial
statements
The
Company
All
companies
included in
the
financial
statements
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the
financial
statements
The sum of A, B, C and D
as a percentage of after-tax
profit
Salaries, bonuses, special
allowances etc (E)
Pension (F)
Share of profit as an employee (G)
Remuneration as an employee
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The Company
All companies included in
the financial statements
Cash
Stock
Cash
Stock
Total shares exercisable
through employee
warrants (H)
The
Company
All
companies
included in
the financial
statements
Number of new restricted shares
acquired as an employee (I)
The
Company
All companies
included in the
financial
statements
The sum of A, B, C, D, E, F, and G as a
percentage of after-tax profit
The
Company
All companies
included in the
financial statements
Remuneration from
invested businesses
other than the
subsidiaries (J)
Independent
Duh Kung
Director
Tsai
Vice
Medica, John
Chairman
Kevin
Director
Sean Martin
Maloney
Note: 1. The previous supervisors, Charng-Chyi Ko, Sheng-Chieh Hsu, and Yen-Chia Chou resigned as of June 26, 2015 and were elected as directors in 2015 shareholders meeting. The directors,
Medica, John Kevin and Sean Martin Maloney were resigned as of June 26, 2015.
2. In 2015, the Company made pension contributions totaling NTD 651,000 (including NTD 216,000 under the new system and NTD 435,000 under the old system) for directors who
also assumed managerial roles as employees; meanwhile, all companies reported in the financial statements had made pension contributions totaling NTD 651,000 (including NTD
216,000 under the new system and NTD 435,000 under the old system) for directors who also assumed managerial roles as employees.
3. Directors’ compensation refers to the estimated directors’ compensation approved by Board of Directors meeting on March 30, 2016.
Range of Remuneration
Under NT$ 2,000,000
NT$2,000,000 ~ NT$5,000,000
NT$5,000,000 ~ NT$10,000,000
NT$10,000,000 ~ NT$15,000,000
NT$15,000,000 ~ NT$30,000,000
NT$30,000,000~ NT$50,000,000
NT$50,000,000 ~ NT$100,000,000
Over NT$100,000,000
Total
Number of Directors
Total of (A+B+C+D)
Total of (A+B+C+D+E+F+G+J)
The Company
6 (Note 1)
8 (Note 2)
4 (Note 3)
Companies in the
consolidated financial
statements
6 (Note 4)
8 (Note 5)
4 (Note 6)
The Company
6 (Note 7)
4 (Note 8)
3 (Note 9)
1 (Note 10)
4 (Note 11)
Companies in the
consolidated financial
statements
5 (Note 12)
2 (Note 13)
4 (Note 14)
1 (Note 15)
5 (Note 16)
1 (Note 17)
18
18
18
18
Note: 1. Min Chih Hsuan, Duei Tsai, Duh Kung Tsai, Shyh-Yong Shen, Medica, John Kevin, Sean Martin Maloney
2. Sheng-Chieh Hsu, Yen-Chia Chou, Wen-Chung Shen, Yung-Ching Chang, Chung-Pin Wong, Chiung-Chi Hsu, Chao-Cheng Chen, Kinpo Electronics Inc.
3. Sheng-Hsiun Hsu, Jui-Tsung Chen, Wen-Being Hsu, Charng-Chyi Ko
4. Min Chih Hsuan, Duei Tsai, Duh Kung Tsai, Shyh-Yong Shen, Medica, John Kevin, Sean Martin Maloney
5. Sheng-Chieh Hsu, Yen-Chia Chou, Wen-Chung Shen, Yung-Ching Chang, Chung-Pin Wong, Chiung-Chi Hsu, Chao-Cheng Chen, Kinpo Electronics Inc.
25
6. Sheng-Hsiun Hsu, Jui-Tsung Chen, Wen-Being Hsu, Charng-Chyi Ko
7. Min Chih Hsuan, Duei Tsai, Duh Kung Tsai, Shyh-Yong Shen, Medica, John Kevin, Sean Martin Maloney
8. Sheng-Chieh Hsu, Yen-Chia Chou, Chiung-Chi Hsu, Kinpo Electronics Inc.
9. Sheng-Hsiun Hsu, Wen-Being Hsu, Charng-Chyi Ko
10. Wen-Chung Shen
11. Jui-Tsung Chen, Yung-Ching Chang, Chung-Pin Wong, Chao-Cheng Chen
12. Min Chih Hsuan, Duei Tsai, Duh Kung Tsai, Medica, John Kevin, Sean Martin Maloney
13. Chiung-Chi Hsu, Kinpo Electronics Inc.
14. Wen-Being Hsu, Charng-Chyi Ko, Sheng-Chieh Hsu, Yen-Chia Chou
15. Wen-Chung Shen
16. Sheng-Hsiun Hsu, Yung-Ching Chang, Chung-Pin Wong, Chao-Cheng Chen, Shyh-Yong Shen
17. Jui-Tsung Chen
26
Remuneration of Supervisors
Remuneration (A)
Share of profit (B)
Fees for services rendered (C)
Supervisors’ remuneration
Unit: NTD thousand; thousand shares; %
Sum of A, B and C
as a percentage of after-tax
profit (%)
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The
Company
All companies
included in the
financial
statements
The
Company
All companies
included in the
financial
statements
Remuneration from
invested businesses
other than the
subsidiaries (D)
0
0
0
0
238
238
0.00%
0.00%
0
Title
Name
Supervisor
Supervisor
Supervisor
Charng-Chyi
Ko
Yen-Chia
Chou
Sheng-Chieh
Hsu
Note: 1. The Company elected three independent directors and replace supervisors with an Audit Committee during 2015 shareholders’ meeting. The previous supervisors, Charng-Chyi Ko,
Sheng-Chieh Hsu, and Yen-Chia Chou resigned as of June 26, 2015.
2. There was no retirement pension paid or appropriated to supervisors in 2015.
27
Range of Remuneration
Under NT$ 2,000,000
NT$2,000,000 ~ NT$5,000,000
NT$5,000,000 ~ NT$10,000,000
NT$10,000,000 ~ NT$15,000,000
NT$15,000,000 ~ NT$30,000,000
NT$30,000,000 ~ NT$50,000,000
NT$50,000,000 ~ NT$100,000,000
Over NT$100,000,000
Total
Note: 1. Charng-Chyi Ko, Yen-Chia Chou, Sheng-Chieh Hsu
2. Charng-Chyi Ko, Yen-Chia Chou, Sheng-Chieh Hsu
Number of Supervisors
Total of (A+B+C)
The Company
3 (Note 1)
Total of (A+B+C+D)
Companies in the consolidated
financial statements
3 (Note 2)
3
3
28
Remuneration of the President and Vice Presidents
Salary (A)
Pension (B)
special allowances (C)
Share of profit as an employee (D)
Sum of A, B, C and D as a
percentage of after-tax
profit (%)
Employee warrants
received
Number of new restricted shares
acquired as an employee
The
Company
All
companies
included
in the
financial
statements
The
Company
All
companies
included
in the
financial
statements
The
Company
All
companies
included
in the
financial
statements
The Company
All companies
included in the
financial
statements
The
Company
Cash
Stock
Cash
Stock
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The Company
All companies
included in the
financial
statements
Remuneration
from invested
businesses other
than the
subsidiaries (E)
Unit: NTD thousand; thousand shares; %
115,722 119,992 5,510
5,510 443,964 444,389 76,125
0 76,125
0 7.38%
7.44%
0
0
26,500
26,500
4,871
Title Name
49 employees
including
President
Jui-Tsung
Chen (Note
1)
Note: 1.Managers’ titles and names
‧President: Jui-Tsung Chen - 1 position
‧Executive Vice Presidents: Wen-Chung Shen, Yung-Ching Chang, Chung-Pin Wong, Chen-Chang Hsu, Chao-Cheng Chen - 5 position
‧Senior Vice Presidents: Chun-De Shen, Pei-Yuan Chen, Chiu-Rui Wei, Ying Chang, Ming-Hsing Hsu, Kuo-Chuan Chen, Sheng-Hua Peng, Wen-Da Hsu,
Wei-Cheng Chen, Ming-Chih Chang - 10 positions
‧Vice Presidents: Chih-Chuan Cheng, Ching-Hsiung Lu, Shih-Tung Wang, Bo-Hsiung Chang, Tian-Yuan Tsai, Bo-Tang Wang, Hsi-Kuan Chen, Zong-Ming Wang,
Fu-Chuan Chang, Chi-Hsiang Ma, Yung-Nan Chang, Sheng-Hung Li, Yung-He Su, Ming-Hsiang Kan, Chih-Hsien Liang, Lung-Hua Shen, Ming-Dong Weng,
Yue-Chun Li, Chiao-Lieh Huang, Chung-Hsing Tan, Yi-Yun Chang, Hsin-Kung Mao, Ling-Sheng Wu, Hsin-Hsiung Huang, Shih-Hung Huang, Yi-Chiang Chiu,
Ching-Fa Li, Bo-Heng Chen, Jui-Chun Hsu, Ming-Sung Lin, Meng-Hsiung Nieh, Chin-Wen Liao - 32 positions
‧Senior Advisor: Medica, John Kevin - 1 position
2. Senior Advisor, Medica, John Kevin, and Vice Presidents Ming-Sung Lin, Meng-Hsiung Nieh had resigned in 2015. In 2016, Ming-Chih Chang, Senior Vice President,
Shih-Hung Huang, Vice President, Yi-Chiang Chiu, Vice President, Ching-Fa Li, Vice President, and Bo-Heng Chen, Vice President were either transferred back or
promoted. Jui-Chun Hsu, Vice President, took office; while Chin-Wen Liao, Vice President resigened.
3. No pension benefit was paid in 2015. In the meantime, the Company made pension contributions totaling NTD 5,510,000 (including NTD 3,843,000 under the new
system and NTD 1,667,000 under the old system), while all companies reported in the financial statements made pension contributions totaling NTD 5,510,000
(including NTD 3,843,000 under the new system and NTD 1,667,000 under the old system).
4. Employees’ compensation appropriation was approved by Board of Directors on meeting on March 30, 2016. The compensations of aforementioned managers were not
yet final and will be reviewed based on the list of the date of distribution.
29
Range of Remuneration
Number of President and Vice Presidents
Total of (A+B+C+D)
The Company
Total of (A+B+C+D+E)
Companies in the consolidated
financial statements
Under NT$ 2,000,000
NT$2,000,000 ~ NT$5,000,000
NT$5,000,000 ~ NT$10,000,000
NT$10,000,000 ~ NT$15,000,000
NT$15,000,000 ~ NT$30,000,000
NT$30,000,000 ~ NT$50,000,000
NT$50,000,000 ~ NT$100,000,000
Over NT$100,000,000
Total
Note: 1. Ming-Chih Chang, Jui-Chun Hsu, Medica, John Kevin - 3 positions
3 (Note 1)
10 (Note 2)
7 (Note 3)
18 (Note 4)
7 (Note 5)
4 (Note 6)
3 (Note 7)
7 (Note 8)
7 (Note 9)
20 (Note 10)
8 (Note 11)
4 (Note 12)
49
49
2. Pei-Yuan Chen, Tian-Yuan Tsai, Fu-Chuan Chang, Chi-Hsiang Ma, Shih-Hung Huang, Yi-Chiang Chiu, Ching-Fa Li, Bo-Heng Chen, Ming-Sung Lin, Meng-Hsiung
Nieh - 10 positions
3. Shih-Tung Wang, Yung-Nan Chang, Sheng-Hung Li, Ming-Hsiang Kan, Chih-Hsien Liang, Ling-Sheng Wu, Hsin-Hsiung Huang - 7 positions
4. Wen-Chung Shen, Chiu-Rui Wei, Ming-Hsing Hsu, Wei-Cheng Chen, Chih-Chuan Cheng, Gary Lu, Bo-Hsiung Chang, Bo-Tang Wang, Hsi-Kuan Chen, Zong-Ming
Wang, Yung-He Su, Lung-Hua Shen, Ming-Dong Weng, Yue-Chun Li, Chiao-Lieh Huang, Yi-Yun Chang, Hsin-Kung Mao, Chin-Wen Liao - 18 positions
5. Chen-Chang Hsu, Chun-De Shen, Ying Chang, Kuo-Chuan Chen, Sheng-Hua Peng, Wen-Da Hsu, Chung-Hsing Tan - 7 positions
6. Jui-Tsung Chen, Yung-Ching Chang, Chung-Pin Wong, Chao-Cheng Chen - 4 positions
7. Ming-Chih Chang, Jui-Chun Hsu, Midica, John Kevin - 3 positions
8. Chi-Hsiang Ma, Shih-Hung Huang, Yi-Chiang Chiu, Ching-Fa Li, Bo-Heng Chen, Ming-Sung Lin, Meng-Hsiung Nieh - 7 positions
9. Pei-Yuan Chen, Shih-Tung Wang, Tian-Yuan Tsai, Fu-Chuan Chang, Sheng-Hung Li, Ming-Hsiang Kan, Chih-Hsien Liang - 7 positions
10. Wen-Chung Shen, Chiu-Rui Wei, Wei-Cheng Chen, Chih-Chuan Cheng, Ching-Hsiung Lu, Bo-Hsiung Chang, Bo-Tang Wang, Hsi-Kuan Chen, Zong-Ming Wang,
Yung-Nan Chang, Yung-He Su, Lung-Hua Shen, Ming-Dong Weng, Yue-Chun Li, Chiao-Lieh Huang, Yi-Yun Chang, Hsin-Kung Mao, Ling-Sheng Wu,
Hsin-Hsiung Huang, Chin-Wen Liao - 20 positions
11. Chen-Chang Hsu, Chun-De Shen, Ying Chang, Ming-Hsing Hsu, Kuo-Chuan Chen, Sheng-Hua Peng, Wen-Da Hsu, Chung-Hsing Tan - 8 positions
12. Jui-Tsung Chen, Yung-Ching Chang, Chung-Pin Wong, Chao-Cheng Chen - 4 positions
30
Employee profit sharing granted to the management team
Unit: NTD thousand
Title
Name
Stock dividends
Cash dividends
Total
Total as a percentage to after-tax profit (%)
46 employees including President
Jui-Tsung Chen (Note 1)
0
76,237
76,237
0.88%
Note: 1. Managers’ titles and names
‧President: Jui-Tsung Chen - 1 position
‧Executive Vice Presidents: Wen-Chung Shen, Yung-Ching Chang, Chung-Pin Wong, Chen-Chang Hsu, Chao-Cheng Chen - 5 positions
‧Senior Vice Presidents: Chun-De Shen, Pei-Yuan Chen, Chiu-Rui Wei, Ying Chang, Ming-Hsing Hsu, Kuo-Chuan Chen, Sheng-Hua Peng, Wen-Da Hsu,
‧Vice Presidents: Chih-Chuan Cheng, Ching-Hsiung Lu, Shih-Tung Wang, Bo-Hsiung Chang, Tian-Yuan Tsai, Bo-Tang Wang, Hsi-Kuan Chen, Zong-Ming Wang,
Wei-Cheng Chen, Ming-Chih Chang - 10 positions
Fu-Chuan Chang, Chi-Hsiang Ma, Yung-Nan Chang, Sheng-Hung Li, Yung-He Su, Ming-Hsiang Kan, Chih-Hsien Liang, Lung-Hua Shen,
Ming-Dong Weng, Yue-Chun Li, Chiao-Lieh Huang, Chung-Hsing Tan, Yi-Yun Chang, Hsin-Kung Mao, Ling-Sheng Wu, Hsin-Hsiung Huang,
Shih-Hung Huang, Yi-Chiang Chiu, Ching-Fa Li, Bo-Heng Chen, Jui-Chun Hsu - 29 positions
‧Head of Audit: Bo-Wen Hsieh - 1 position
2. Medica, John Kevin, Senior Advisor, Ming-Sung Lin, Vice Presidents, Meng-Hsiung Nieh, Vice President had resigned in 2015. In 2016, the following five:
Ming-Chih Chang, Senior Vice President, Shih-Hung Huang, Vice President, Yi-Chiang Chiu, Vice President, Ching-Fa Li, Vice President and Bo-Heng Chen, Vice
President were either transferred back or promoted. Jui-Chun Hsu, Vice President took office while Chin-Wen Liao, Vice President resigned.
3. Employees’ compensation appropriation was approved by the Board of Directors at the March 30, 2016 meeting. The compensations of the aforementioned managers
were not finalized and will be reviewed based on the list upon the date of distribution.
31
3.2.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Vice Presidents in the
Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents
and Vice Presidents
A. The percentage of total remuneration paid by the Company and by all companies included in the
consolidated financial statements for the two most recent fiscal years to directors, supervisors, presidents
and vice presidents of the Company, relative to net income.
Item
Directors
Supervisors
Presidents and
Vice Presidents
Net Income
2015
2014 (Note)
Amount
%
Amount
%
Unit: NT$ thousands
Increase (Decrease)
%
Amount
704,167
8.11%
595,919
8.48%
108,248
18.16%
8,684,610
7,024,461
1,660,149
(Note): After retroactive adjustments
B. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining
remuneration, and correlation with business performance.
(cid:2) All remuneration to directors, supervisors and managers are proposed according to the Articles of Incorporation
and HR policies, reviewed by the Remuneration Committee, and resolved by the Board of Directors and
shareholders’ Meeting before proceeding.
(cid:2) The above remuneration is determined mainly based on the Company’s earnings, while taking into account each
individual’s participation, contribution and performance, as well as the level of remuneration paid by peers.
These decisions are also adjusted according to changes in the global economy, the financial market, industry
cycles, future prospects, and business risks in ways that ensure sustainability of the Company’s business and
maximize shareholders’ interests.
32
3.3
Implementation of Corporate Governance
3.3.1 Board of Directors
‧Previous directors term: June 22, 2012 to June 26, 2015.
‧Current directors term: June 26, 2015 to June 25, 2018.
‧There were seven Board meetings during 2015 (A). Director’s attendance records are as shown below:
Title
Name
Chairman
Sheng-Hsiun Hsu
Director
Director
Director
Director
Director
Director
Jui-Tsung Chen
Wen-Being Hsu
Kinpo Electronics, Inc.
Representative:
Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Director
Wen-Chung Shen
Director
Yung-Ching Chang
Director
Chung-Pin Wong
Director
Chiung-Chi Hsu
Director
Independent
Director
Independent
Director
Independent
Director
Chao-Cheng Chen
Min Chih Hsuan
Duei Tsai
Duh Kung Tsai
Vice Chairman Medica, John Kevin
Director
Sean Martin Maloney
Attendance in
Person (B)
By Proxy
Attendance Rate
(%)[B/A]
7
5
7
3
3
3
3
7
5
7
7
5
6
6
3
2
0
0
2
0
4
0
0
0
0
2
0
0
2
1
0
4
0
0
100%
71%
100%
43%
100%
100%
100%
100%
71%
100%
100%
71%
86%
86%
43%
50%
0%
Remarks
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Inaugurated June 26, 2015
Inaugurated June 26, 2015
Inaugurated June 26, 2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Re-elected on June 26,
2015
Resigned June 26, 2015
Resigned June 26, 2015
Note: Vice Chairman Medica, John Kevin and Director Sean Martin Maloney reside in foreign countries and are unable to attend
every board meeting in person. However, the Company either informs them of the meeting agendas in advance, or arranges
to have them participate via teleconferencing so that they have full knowledge of meeting proceedings.
A. Enhance the valuation regarding the target achievement and execution by the Board of Directors in the current and
most recent year:
The Company established a “Remuneration Committee” since 2011. During the election of the 11th Board of
Directors and Supervisors in 2012 shareholders’ meeting, 3 independent directors were elected and appointed to be
the committee members of the Remuneration Committee. Supervisors were replaced with the Audit committee after the
12th Board of Directors was chosen in 2015 shareholders’ meeting.
B. Other notes:
Please refer to page 24-26 of the Chinese annual report.
33
3.3.2 Audit Committee (or Attendance of Supervisors at Board Meetings)
A. Audit Committee:
‧The Company’s Audit Committee has three members.
‧The term of the committee members is from June 26, 2015 to June 25, 2018.
‧There were three Audit Committee meetings during 2015 (A). The attendance records of the
Independent Directors are as follows:
Title
Name
Attendance in Person
(B)
Attendance Rate (%)
[B/A]
Remarks
3
Min Chih Hsuan
Independent
Director
Independent
Director
Independent
Director
Other notes:
1. The matter as listed in Article 14 of 5 the Security Act and other matters which were not approved by the Audit
Inaugurated June 26, 2015
Inaugurated June 26, 2015
Inaugurated June 26, 2015
Duh Kung Tsai
Duei Tsai
100%
100%
33%
3
1
Committee, but had the consent of more than two-thirds of all directors. The Company should record the date of the
Board of Directors’ meeting, the term, the discussion content, the result of the Audit Committee decision and the actions
the Company took in response to decisions made by the Audit Committee: None.
2. The actions of the independent directors with respect to the avoidance of conflict of interest should be disclosed
including the name of the independent director, the matter, the reasons for the avoidance and the voting and attendance
status: None.
3. Communication between the independent directors, internal audit supervisors and CPA.
(cid:2) After the internal audit supervisor has submitted an audit report and follow-up report, he/she should provide the
completion of audit items to the independent directors for their review by the end of the following month. If the
independent directors need clarification of the audit and follow-up, they should contact the internal audit supervisor
at any time. The internal auditor shall report audit results to the Audit Committee on a regular basis and discuss
matters in person. The Company’s Audit Committee has a clear channel of communication with the internal audit
supervisor.
(cid:2) The Audit Committee must communicate with the CPA on a regular basis regarding audit results and the financial
statement and any other requirements of the regulations. The Audit Committee shall also evaluate the selection, the
independence, and suitability of the CPA engaged by the Company.
B. Attendance of Supervisors at Board Meetings
‧The Company has three supervisors.
‧The term of the supervisors is from June 22, 2012, to June 26, 2015.
‧There were four meetings of the Board of Directors during the first half of 2015. The attendance
records are as follows:
34
Title
Name
Attendance in
Person (B)
4
4
4
Attendance Rate (%)
[B/A]
100%
100%
100%
Charng-Chyi Ko
Yen-Chia Chou
Sheng-Chieh Hsu
Supervisor
Supervisor
Supervisor
Note: The Company elected three independent directors and replaced supervisors with an Audit Committee as
resolved in a 2015 shareholders’ meeting. The previous supervisors: Charng-Chyi Ko, Sheng-Chieh Hsu and
Yen-Chia Chou resigned as of June 26, 2015.
Resigned on June 26, 2015.
Resigned on June 26, 2015.
Resigned on June 26, 2015.
Remarks
Other notes:
1. Composition and responsibilities of supervisors:
(1) Communications between supervisors and the Company’s employees and shareholders (e.g. the communication
channels and methods used): Supervisors can directly engage and communicate with the Company’s employees
and shareholders.
(2) Communications between supervisors and the Company’s chief internal auditor and CPA (e.g. topics of
discussion, the methods used, results of financial or operational audits etc.):
The Company’s supervisors are given open channels to communicate with internal and external auditors.
Communication is established mainly through the following means:
(A) Regular reports: the chief auditor is required to submit internal audit reports and worksheets to each
supervisor before the end of the month one month after an audit is completed. The chief auditor attends
board meetings and reports progress of ongoing audit tasks. Meanwhile, the external auditor regularly
reports to supervisors.
(B) Irregular reports: internal and external auditors are required to make written or verbal reports to supervisors
whenever deemed necessary.
2. If a supervisor expresses an opinion during a meeting of the Board of Directors, the date of the meeting, session, the
content of motion, the resolutions of the directors’ meetings and the company’s response to the supervisor’s opinion
should be specified: None
35
3.3.3 Corporate Governance Implementation and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed
Companies”
Assessment criteria
Yes No
Actual governance
Summary description
Yes
The Company’s corporate governance principles were approved by the Board of Directors
on August 11, 2015, and have been disclosed on its official website and MOPS.
Deviation and causes of
deviation from the Corporate
Governance Best-Practice
Principles for TWSE/TPEX
Listed Companies
No deviations were found
I.
II.
1.
2.
3.
4.
Has the company established
and disclosed its corporate
governance principles based on
“Corporate Governance
Best-Practice Principles for
TWSE/TPEX Listed
Companies?”
Shareholding structure and
shareholders’ interests
Has the company implemented
a set of internal procedures to
handle shareholders’
suggestions, queries, disputes
and litigations?
Is the company constantly
informed of the identities of its
major shareholders and the
ultimate controller?
Has the company established
and implemented risk
management practices and
firewalls for companies it is
affiliated with?
Has the company established
internal policies that prevent
insiders from trading securities
against non-public
Yes
Yes
Yes
Yes
The Company has a spokesperson and acting spokesperson who represents the interest of
the shareholders and a unit that specializes in addressing shareholders’ suggestions, queries,
disputes and litigation.
No deviations were found
The Company keeps track of the identity of its ultimate controller by monitoring insider
shareholding positions (including that of directors, supervisors, managers, and shareholders
with more than 10% ownership interest) the shareholder registry is held by the share
administration agency.
The Company has established “Internal Control Policy - Non-trade Activities - Supervision
and Management of Subsidiaries”, “Internal Control Policy - Trade Activities – Invstment
Management,” and “Guidelines on Financial and Business Dealings Between Affiliated
Enterprises” to set up and execute firewalls and risk controls over related parties.
No deviations were found
No deviations were found
To prevent insider trading, the “CO10 Insider Trading Prevention Management” and
“Insider Trading Prevention Procedures” have been included as part of internal control of
the company and details are published on the intranet and linked to the TWSE website to
which employees have access. Both policies have been included as part of the compulsory
No deviations were found
36
Assessment criteria
Yes No
information?
Actual governance
Summary description
Deviation and causes of
deviation from the Corporate
Governance Best-Practice
Principles for TWSE/TPEX
Listed Companies
e-Learning courses for departmental heads, and eCSA questionnaires are issued on a yearly
basis to facilitate self-assessment. Insiders such as directors, supervisors and managers are
given a copy of the TWSE “Insider Share Trading Manual” when they come aboard to make
them aware of the company insider rules.
1.
2.
III. Assembly and obligations of
the board of directors
Has the board devised and
implemented policies to ensure
diversity of its members?
Apart from the Remuneration
Committee and Audit
Committee, has the company
assembled other functional
committees at its own
discretion?
Has the company established a
set of policies and assessment
tools to evaluate the board’s
performance? Is performance
evaluated regularly at least on
an annual basis?
Are external auditors’
independence assessed on a
regular basis?
3.
4.
Yes
The Company board is comprised of members from many different professional
backgrounds and work experience. They possess the collective knowledge, skill and
character needed to accomplish responsible board duties.
No Besides the Remuneration and Audit Committees, the Company also has a CSR Committee.
Wen-Chung Shen, executive VP, is the Chairman and he reports to the Board of Directors
regarding the operating status and results on a regular basis.
No deviations were found
No deviations were found
No At present, the Company does not have policies or assessment tools in place to evaluate
performance of the Board.
Yes
THE CPA issue an “Independent Auditor’s Report” on an annual basis and should avert the
engagement when they may have involved in any direct or material indirect interests. The
Company evaluates the independence and suitability of the CPA at (least once a year), in
accordance with Article 47 of the CPA Law and Bulletin 10 of the Norm of Ethics for
Certified Public Accountants. The CPA cannot be a director supervisor, or shareholder of the
company and may not be on the payroll. It must be confirmed that the CPA is not a related
party. The Company then submits the “CPA independence and suitability evaluation form”
along with the “Independent auditor’s report” to the Audit Committee for review, and before
it is submitted for examination and discussion by the Board of Directors. The same
37
Such policies and tools will be
created after careful
consideration.
No deviations were found
Deviation and causes of
deviation from the Corporate
Governance Best-Practice
Principles for TWSE/TPEX
Listed Companies
No deviations were found
Assessment criteria
Yes No
Actual governance
Summary description
principles apply to whenever there is an internal rotation within the accounting firm.
The Company has created a “Stakeholder Communication Area” on its website to address
stakeholder relations. Separate contact persons, phone numbers and email addresses have
been provided to each type of stakeholder relation to ensuring that queries are directed to the
relevant departments. A “Material Aspects” questionnaire has also been created, through
which stakeholders may identify issues that are of serious concern. The Company will
address stakeholders’ responses properly and take their suggestions as part of the
Company’s goals.
The Chinatrust Commercial Bank – Securities Trust has been appointed as the share
administration agency responsible for handling shareholder affairs and meetings and to
provide share administration services.
No deviations were found
Yes
The Company website (www.compal.com) is regularly updated with information such as
financial performance, corporate governance, and shareholder meetings.
No deviations were found
Yes
(cid:2) The Company website has both Chinese and English pages. The information is gathered
No deviations were found
and disclosed by a specialized company department.
(cid:2) The Company has appointed a spokesperson and an acting spokesperson is also in
(cid:2)
place.
Investor conferences are held regularly and whenever deemed necessary. The
proceedings are posted on the Company’s website and also broadcast using the TWSE
platform (website: http://webpro.twse.com.tw/webportal/ vod/101/).
Yes
IV. Has the company provided
proper communication
channels and created dedicated
sections on its website to
address corporate social
responsibility issues that are of
significant concern to
stakeholders?
V. Does the company engage a
Yes
VI.
1.
2.
share administration agency to
handle shareholder meeting
affairs?
Information disclosure
Has the company established a
website that discloses financial,
business, and corporate
governance-related
information?
Has the company adopted other
means to disclose information
(e.g. English website,
assignment of specific
personnel to collect and
disclose corporate information,
implementation of a
spokesperson system,
broadcasting of investor
conferences via the company
website)?
VII. Does the company have other Yes
(cid:2) Employee welfare and care to employees
No deviations were found
38
Assessment criteria
Yes No
Actual governance
Summary description
Deviation and causes of
deviation from the Corporate
Governance Best-Practice
Principles for TWSE/TPEX
Listed Companies
information that enables a
better understanding of the
company’s corporate
governance practices
(including but not limited to
employee rights, employee
care, investor relations,
supplier relations,
stakeholders’ interests,
continuing education of
directors/supervisors,
implementation of risk
management policies and risk
measurements, implementation
of customer policy, and
insuring against liabilities of
company directors and
supervisors)?
VIII. Has the company prepared a
corporate governance
self-assessment report or
commissioned a professional
organization to compile a
corporate governance
assessment report? (If so,
please state the board of
directors’ opinions, the result
of the self/external assessment,
any major weaknesses or
suggestions raised, and
improvements made.)
Investor relations
(cid:2) Directors and Managers code of conduct; Employee code of conduct
(cid:2)
(cid:2) Supplier relations and execution of customer policy
(cid:2) Stakeholders’ interests
(cid:2) Risk management execution and framework; risk analysis and evaluation
(cid:2)
(cid:2) Directors’, supervisors’ and managers’ ongoing education
(cid:2) Qualification of personnel involved in financial transparency
Insuring against liabilities of company directors and supervisors
Yes
(cid:2)
In 2015, the Company had completed its second round corporate governance
self-assessment within the timeframe specified by TWSE. The assessment results were
published on April 12, 2016, in which the Company was ranked among the top
6%~20%.
(cid:2) Details regarding the Company’s corporate governance practices are also accessible
from the Company’s website.
No deviations were found
39
40
3.3.4 Composition, Responsibilities and Operations of the Remuneration Committee
A. Professional Qualifications and Independence Analysis of Remuneration Committee Members
Criteria
Title
(Note 1)
Name
Independent
Director
Independent
Director
Independent
Director
Min Chih
Hsuan
Duei Tsai
Duh Kung
Tsai
Having Met One of the Following Professional
Qualifications, Together with at Least Five Years Work
Experience
A judge, public
prosecutor, attorney,
Certified Public
Accountant, or other
professional or
technical specialist
who has passed a
national examination
and been awarded a
certificate in a
profession necessary
for the business of the
Company
Having work
experience in
the areas of
commerce, law,
finance, or
accounting, or
otherwise
necessary for the
business of the
Company
An instructor or
higher position in
a department of
commerce, law,
finance,
accounting, or
other academic
department related
to the business
needs of the
Company in a
public or private
junior college,
college or
university
Independence Criteria
(Note 2)
1 2 3 4 5 6 7 8
Number of
Other Public
Companies in
Which the
Individual is
Concurrently
Serving as an
Remuneration
Committee
Member
Remarks
(Note 3)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
(cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1)
2
3
2
Not
applicable
Not
applicable
Not
applicable
Note 1: Please fill in director, independent director, or other in the identification.
Note 2: Please check “(cid:1)” in the box for a member, who during the two years before being elected or during the term
of office, any of the following applied:
(1) Not an employee of the company or any of its affiliates.
(2) Not a director or supervisor of the company or any of its affiliates. (The same does not apply, however, in
cases where the person is an independent director of the company, its parent company, or any subsidiary in
which the company holds, directly or indirectly, more than 50 percent of the voting shares.)
(3) Not a natural-person shareholder or holder of shares, together with those held by a spouse, minor children, or
held by the person under other names, in an aggregate amount of one percent or more of the total number of
issued shares of the company or ranking within the top 10 in holdings.
(4) Not a spouse, relative within a second degree of kinship, or lineal relative within the third degree of kinship,
or a person in compliance with any of the preceding three subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of
the total number of issued shares of the company or that holds shares ranking within the top five in holdings.
(6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified
company or institution that has a financial or business relationship with the company.
(7) Not a professional individual who, as an owner, partner, director, supervisor, or officer of a sole
proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting
services or consultation to the company or to any affiliate of the company, or the spouse thereof.
(8) No matters as noted in Article 30 of Company Law.
Note 3: If the member is also a director, please describe whether he or she also meets the regulation requirement set in
accordance with Article 6-5 of the “Regulations Governing the Appointment and Exercise of Powers by the
Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the
Counter”.
41
B. Attendance of Members at Remuneration Committee Meetings
‧The Company elected three members of the Remuneration Committee.
‧Prior committee member term: June 22, 2012 to June 26, 2015.
‧Current committee member term: July 9, 2015 to June 25, 2018.
‧There were six Remuneration Committee meetings during 2015 (A) and the committee member
qualifications and attendance records are as follows:
Title
Name
Convener
Committee
Member
Committee
Member
Min Chih
Hsuan
Duei Tsai
Duh Kung
Tsai
Attendance in
Person (B)
By Proxy
Attendance Rate (%)
[B/A]
5
5
3
1
0
3
83%
83%
50%
Remarks
Re-elected on July 9,
2015
Re-elected on July 9,
2015
Re-elected on July 9,
2015
Other notes:
1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should
specify the date of the meeting, the session, the nature of motion, the resolution made by the board of directors,
and the Company’s response to the remuneration committee’s opinion (eg., if the amount of remuneration passed
by the Board of Directors exceeds the remuneration committee’s recommended amount, the circumstances and
cause for the difference shall be specified): None.
2. If resolutions of the remuneration committee are objected by members or become subject to a qualified opinion,
which have been recorded or declared in writing, then the date of the meeting, the session, the nature of the
motion, all members’ opinions and the response to members’ opinion should be specified: None.
42
3.3.5 Corporate Social Responsibility
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
I.
1.
2.
3.
4.
Sound corporate governance
Does the company have a
corporate social responsibility
policy or system in place? Is
progress reviewed on a regular
basis?
Does the company organize
social responsibility training on
a regular basis?
Does the company have a unit
that specializes (or is involved)
in CSR practices? Is the CSR
unit run by senior management
and reports its progress to the
board of directors?
Has the company implemented
a reasonable remuneration
system that associates
employees’ performance
appraisals with CSR? Is the
remuneration system supported
by an effective
Yes
The Company’s corporate social responsibility policy was passed by the Board of Directors. CSR
progress is reported to and reviewed by the board on a regular basis.
No deviations were
found
Yes
Yes
Yes
The Company organizes annual CSR training courses in accordance with its Employee Code of
Conduct and CSR-related policies. These training courses cover a broad variety of topics including
corporate policies, HR system, employee code of conduct, personal information protection act and
other areas as the law may require. All training courses are accessible online and have been made as
requisites for new employees. Existing employees may complete courses online at their own
discretion at any time. In 2015, 12,675 employees had completed their training for a total of 23,543
hours.
The Company has a CSR Office that specializes in CSR-related matters. The Board of Directors has
authorized its senior management to perform CSR-related tasks and to update the board on the overall
progress.
Employees’ salary levels are set based upon those of similar responsibilities, with adjustments made
based on individual work performance. Different salary levels may be granted depending on
education, experience, job grade and the assigned duties, but are higher than the statutory minimum in
any case. Furthermore, employees are entitled to a portion of share of the Company’s current year
profits.
The Company has set clear guidelines to reward and penalize employees’ conducts and performance.
Rewards and penalties are decided to depend on the severity and impact of the event involved.
43
No deviations were
found
No deviations were
found
No deviations were
found
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
II.
1.
2.
3.
reward/discipline system?
Fostering a sustainable
environment
Is the company committed to
achieving efficient use of
resources, and using renewable
materials that produce less
impact on the environment?
Has the company developed an
appropriate environmental
management system, given its
distinctive characteristics?
Is the company aware of how
climate changes affect its
business activities? Are there
any actions taken to measure
and reduce greenhouse gas
emission and energy use?
Yes
Yes
Yes
III. Enforcement of public welfare
Has the company developed its
1.
policies and procedures in
accordance with laws and
International Bill of Human
Rights?
Yes
The R&D and production teams are well aware of how the design and production of more
environmentally friendly, green, low-carbon products contribute to mitigating climate changes and
impacts. They respond quickly to customers’ needs in terms of certifications such as Energy Star,
US EPEAT, US & WW EPEAT, China CECP & CEC and Taiwan Green Mark.
No deviations were
found
The Company began its implementation of ISO 14001 Environment Management System in April
1997; quality and environmental safety policies were created in 2005 to guide the Company’s efforts
on employee workplace safety and corporate responsibilities. Operating procedures and
environmental/safety/health management systems have been established based on government
regulations and international standards such as ISO, OHSAS etc. The Company adopts proper
communication channels to convey its environmental and safety policies and goals to employees,
suppliers, contractors, surrounding neighbors and interest groups.
The Company began greenhouse surveys (scopes 1 and 2) and carbon footprint assessments as early
as 2010. The scope of greenhouse gas survey has been progressively expanded to (scope 3) by 2014.
In 2015, Compal was included in the CDP Climate Disclosure Leadership Index (CDLI) for the first
time. The Company actively participates in the Carbon Disclosure Project (CDP) as a means to
improve its response to climate changes. The CDP achieves its purpose by assessing a company’s
carbon emission, reduction progress, compliance risks, and exposure to physical risks such as supply
disruption, shortage of resources, extreme weather, rising sea levels and diseases etc. Once identified,
risks can then be mitigated or even turned into opportunities to ensure a company’s sustainability.
No deviations were
found
No deviations were
found
The Company places great emphasis on equal opportunities and business ethics. It has policies and
systems in place to ensure compliance with international conventions.
The Company and all its subsidiaries throughout the world have established employment guidelines
according to international human rights conventions and local labor regulations. All employment
terms have been assured to conform with the laws of the local country or region. Out of respect
No deviation was
found
44
Assessment criteria
Yes No
Summary description
Actual governance
2.
3.
4.
5.
Yes
Yes
Does the company have means
through which employees may
raise complaints? Are
employee complaints being
handled properly?
Does the company provide
employees with a safe and
healthy work environment? Are
employees trained regularly on
safety and health issues?
Yes
Does the company have means
to communicate with
employees on a regular basis,
and inform them of operational
changes that may be of
significant impact?
Has the company implemented
an effective training program
that helps employees develop
skills over their career?
Yes
towards labor rights, the Company changes its policies and rules in line with the latest regulations,
and announces them to the understanding of all its employees. For the purpose of maintaining
harmonic employer-employee relations, a communication platform has been created to enable
exchange of opinions and information between the Company and its employees.
The Company has set up email contacts through which employees may express their opinions and
offer suggestions. These opinions and suggestions are referred to appropriate units within the
Company; progress and outcomes are reported back to employees as they become available.
The Company is well-aware of how significantly “workplace safety and health” affects a company, its
employees and stakeholders. This was the reason why the Company has enhanced its environmental,
safety and quality policies and obtained OHSAS 18001 certification since 2005, which requires all
departments to implement proper safety and health practices as well as regular training on matters
such as fire safety equipment, utility plans, waste disposal, emergency response procedures etc. The
Company organizes health and safety training for employees on a regular basis as a means to prevent
occupational hazards and ensure workplace safety. In 2015, 2,921 employees had completed their
training for a total of 6,348 hours.
The Company is committed to creating communication platforms where employees may exchange
opinions and information. “Employee opinion boxes” have been made available at the headquarter
and at various plant sites to receive employees’ complaints; “Sunshine Group” and hotlines have been
set up in all plant sites and are run by compassionate people who promptly respond to employees’
opinions so that the Company can rectify its flaws and help solve employees’ problems immediately.
Townhall Meetings are organized regularly at the turn of the year. During which, the CEO will
personally address employees on the Company’s new business developments. Key points of this
meeting are also summarized and delivered to all employees via email.
Annual training programs are tailored to suit the needs of different employees, based on the
Company’s business strategies, policy guidelines, and career roadmaps. The Company constantly
aims to establish itself as a learning organization and coaching management.
45
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
No deviations were
found
No deviations were
found
No deviations were
found
Assessment criteria
6.
7.
8.
9.
Has the company implemented
consumer protection and
grievance policies with regards
to its research, development,
procurement, production,
operating and service
activities?
Has the company complied
with laws and international
standards with regards to the
marketing and labeling of
products and services?
Does the company evaluate
suppliers’ environmental and
social conducts before
commencing business
relationships?
Is the company entitled to
terminate supply agreement at
any time with a major supplier,
if the supplier is found to have
violated its corporate social
responsibilities and caused
significant impacts against the
environment or the society?
IV. Enhanced information
1.
disclosure
Has the company disclosed
relevant and reliable CSR
Yes No
Yes
Yes
Yes
Yes
Actual governance
Summary description
The Company is an OEM/ODM manufacturer, manufacturing TV sets, notebooks, cell phones and
electronics for top brands. There is a dedicated unit responsible for every step in the production
process such as product development and design, shippings, and maintenance and service. Once
customers have launched their products, the Company will continue to support them with services and
parts until the product no longer requires after-sale responsibilities. Customers are given the option to
visit Compal’s website, click on Stakeholder Communication Area and leave messages using an
exclusive link; these messages will then be handled by the appropriate departments.
The Company is an OEM/ODM. It manufactures TV sets, notebooks, cell phones and electronics for
the world’s top brands. All products are printed with customers’ trademarks, names, and labeling that
conform with relevant laws and international guidelines; however, the Company does not print its
own logos or names on the products it produces.
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
No deviations were
found
The Company requests all its suppliers to fulfill their responsibilities with respect to the environment,
labor, management, and ethics. Furthermore, the Company also demands its suppliers to sign and
comply with EICC® (Electronics Industry Supply Chain Code of Conduct) and evaluates suppliers’
performance by their contribution to corporate social responsibilities.
No deviations were
found
The Company requires all major suppliers to comply with local regulations and fulfill their duties to
the environment and the society. They are demanded to immediately rectify any violations found to
ensure the business relationship with the Company.
The Company’s standard procurement contract specifically requires suppliers to comply with EICC®
(Electronics Industry Supply Chain Code of Conduct) and environmental protection laws. The
contract empowers the Company to terminate procurement relationship with any supplier that is found
to have violated the above rules.
No deviations were
found
Yes
A “CSR” section is created on the Company’s website to disclose information in different categories.
A “News” section is also available on the home page where stakeholders are given access to the latest
No deviations were
found
46
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
information on its website and
at the Market Observation Post
System?
information. The Company prepares CSR reports on an annual basis to disclose how it has fulfilled its
social responsibilities. This report may be downloaded from the Company’s website and from Market
Observation Post System (MOPS).
47
5. If the company has established the corporate social responsibility principles based on “Corporate Social Responsibility Best-Practice Principles for
TWSE/TPEX Listed Companies,” please describe any discrepancy between the Principles and their implementation:
■ The Company has established “Compal Corporate Social Responsibility Best Practices” based on “Corporate Social Responsibility Best-Practice Principles for
TWSE/TPEX Listed Companies.” A “CSR Office” has also been introduced specifically for the purpose of promoting social responsibilities, environmental
sustainability, public welfare, and information disclosure. The Company has adopted the principles of EICC by including corporate social responsibilities as part of its
overall business plan, thereby making sure that everything it does confirms with EICC. The CSR Office reports its progress regularly to the Board of Directors, and
publishes annual CSR reports to ensure proper disclosure of CSR information.
■ To contribute to the sustainability of our environment, the Company publishes green knowledge materials on a monthly basis and organizes regular environmental
training courses for the management and general employees. It adopts green product management starting from the design stage and covering all aspects of the supply
chain, which aims to: reduce resource and energy consumption, minimize discharge of pollutants and toxic waste, ensure proper waste disposal, enhance recyclability
and reusability of raw materials and products, maximize usage of available resources, extend product durability, and enhance product/service efficiency. The green
management also aims to prevent pollution to water, air and soil, and embodies a series of strategies to reduce the level of greenhouse gas and carbon emitted during
the Company’s operations. It is our hope to minimize adverse impacts on health and the environment by adopting the best and most feasible pollution controls
available.
6. Other important information to facilitate better understanding of the company’s corporate social responsibility practices:
There is a specific CSR section on the corporate website containing CSR policy, target and management procedures. Please refer to: http://www.compal.com
48
7. A clear statement shall be made below if the corporate social responsibility reports were verified by external certification institutions:
■ Criteria undertaken by institutions to certify the Company’s products:
The Company adopts the green concept right from the design and development stage for all products it manufactures. In addition to making sure that all manufactured
products conform with compulsory regulations and voluntary certifications in countries where they are distributed, the Company also takes the initiative in developing
talents and technologies in relation to energy-saving issues and thereby keeping up with world’s latest trends and challenges. Apart from knowing the latest news in
environmental regulations and certifications, Compal also possesses adequate R&D and execution capacity to quickly respond to customers’ needs for certification
such as IECQ QC 080000, Energy Star, US & EPEAT, US & WW EPEAT, China CECP & CEC, Taiwan Green Mark and Indoor Air Quality Testing & Certification.
■ Criteria undertaken by institutions to certify the Company’s CSR report:
The Company has been preparing annual CSR reports and disclosing them to stakeholders on its website since 2010. The CSR report was first certified by an external
institution in 2012, and later in 2015, the Company adopted Global Reporting Initiative’s G4 guidelines (GRI G4, published in 2013) to prepare its CSR report. The
2014 report was compiled based on stakeholders’ concerned issues and the Company’s key objectives. To ensure the credibility of reported contents, the Company
commissioned the SGS to provide independent assurance based on the criteria specified in AA 1000 AS and GRI G4. After their assurance, the report was certified to
meet AA1000 AS Assurance Standard Type 2, mid-level accountability, and GRI G4 application core requirements. The Company wasawarded a Bronze Award by
Taiwan Institute for Sustainable Energy in two consecutive years during its “Taiwan Corporate Sustainability Report Award.”
49
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
3.3.6 Ethical Corporate Management
Assessment criteria
Yes No
Actual governance
Summary description
I.
1.
2.
3.
Establishment of integrity
policies and solutions
Has the company stated in
its Memorandum or
external correspondence
about the policies and
practices it has to maintain
business integrity? Are the
board of directors and the
management committed in
fulfilling this
commitment?
Does the company have
any measures against
dishonest conducts? Are
these measures supported
by proper procedures,
behavioral guidelines,
disciplinary actions and
complaint systems?
Yes
Yes
Has the company taken
steps to prevent
occurrences listed in
Article 7, Paragraph 2 of
“Ethical Corporate
Management Best Practice
Yes
The Company has clearly outlined the procedures for ethical management and guidelines for conduct in its
HR policies, social responsibility policies, the integrity principles and code of conduct for directors,
supervisors, managers, and the general code of conduct. The Board of Directors and the management have
committed themselves to business integrity. The Company’s “Board of Directors Meeting Guidelines”
contain a conflicting interest clause that requires directors to disassociate from all discussion and voting of
any agenda that poses a conflict of interest between the Company and themselves or the entities they
represent.
The Company has established the “Ethical Corporate Management Best Practice Principles” and “Business
Integrity Procedures and Behaviors” (hereinafter, “Procedures and Behaviors”) as an incentive to insiders
and outsiders to report unethical or unseemly conduct. Any insider who makes a false report or a malicious
accusation shall be subject to disciplinary action and be removed from office if the circumstance
concerned have substance.
This Company has appointed a contact person, and has established a hotline and mailbox that can be used
either through the Intranet of the company website. Any person involved in unethical conduct will be
referred to an authorized department and processed according to the “Business Integrity Procedures and
Behaviors”.
The Company’s “Business Integrity Procedures and Behaviors” govern the following
‧ Prohibition against offering and acceptance of improper gains
‧ Prohibition against lobbying
‧ Prohibition against illegal political donations
‧ Prohibition against improper donations or sponsorships
‧ Prohibition against inappropriate gifts, treatments and illegitimate benefits
No deviations were
found
No deviations were
found
50
Assessment criteria
Yes No
Actual governance
Summary description
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
II.
1.
2.
3.
Principles for
TWSE/TPEX-Listed
Companies” or business
conducts that are prone to
integrity risks?
Integrity actions
Does the company
evaluate the integrity of all
counterparties it has
business relationships
with? Are there any
integrity clauses in the
agreements it signs with
business partners?
Does the company have a
unit that specializes (or is
involved) in business
integrity? Does this unit
report its progress to the
board of directors on a
regular basis?
Does the company have
any policy that prevents
conflict of interest, and
channels that facilitate the
report of conflicting
interests?
‧ Prohibition against unfair competition
‧ Prohibition against leakage of commercial secrets and infringement of intellectual property rights
‧ Prohibition against insider trading and rules of confidentiality
Furthermore, the “Information Security Policy” has introduced measures to prevent violation of
commercial secrets.
Yes
The Company requires all suppliers to sign commitments to EICC® (Electronic Industry Citizenship
Coalition), which binds them to local regulations on workers’, environment, safety, health, management,
and moral conducts, and prevents them against corruptive and unethical behaviors.
No deviations were
found
Yes
The Company has assigned Human Resources, Administrative management, the Business Investment
Management and Legal Groups as authorities to handle Company ethical matters. They set the guidelines
together and the audit group monitors and reports to the Board of Directors on a regular basis.
No deviations were
found
Yes
The Company has established the “Ethical Corporate Management Best Practice Principles” and “Business
Integrity Procedures and Behaviors” (hereinafter, “Procedures and Behaviors”); a Company director,
officer or other stakeholder attending, or present at a board meeting, or a juristic representative whose
presence infers a likelihood that company interests might be prejudiced, may not participate in a discussion
or vote on that proposal, shall recuse themselves from any discussion and voting, and may not exercise
voting rights as proxy on behalf of another director. The directors shall exercise discipline among
themselves, and may not support each other in any inappropriate manner. If, in the course of conducting
company business, an employee of this Corporation discovers that a potential conflict of interest exists
involving themselves or the juristic person that they represent, or that they or their spouse, parents,
51
No deviations were
found
Assessment criteria
Yes No
Actual governance
Summary description
children, or a person with whom they have a relationship of interest is likely to obtain improper benefit,
the matter shall be reported to their immediate supervisor and the responsible unit, and the supervisor shall
provide the employee with the proper instructions.
No employee of this Corporation may use company resources for commercial activities other than those of
this Corporation, nor may his or her job performance be affected by involvement in commercial activities
other than those of this Corporation.
The Company’s HR policy and employee code of conduct have introduced rules to identify, supervise and
manage conflicts of interest for business activities that are more highly prone to dishonest behaviors. There
are channels in place for directors, supervisors, managers, stakeholders, and board meeting participants to
state their conflicting interests with the Company.
To prevent leakage of material non-public information, the Company has established “CO10 Insider
Trading Prevention Management” as part of its internal control and demanded strict compliance from
directors, supervisors, managers, employees, and any party that gains knowledge to the Company’s
material non-public information whether because of their identity, job responsibility or controlling
relationships.
The Company has set “Ethical Corporate Management Best Practice Principles” and focuses on creating
an effective accounting system and internal control system to avoid high-risk or unethical business
activities and the use of external or secret accounts. Self-evaluation is done on a regular basis to make sure
the design and execution of the system is effective.
The Company’s internal audit unit oversees compliance of the system and prepares routine audit reports
for the Board of Directors.
Yes
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
Yes
The Company organizes training courses in accordance with “Regulations Governing Establishment of
Internal Control Systems by Public Companies” and the board-approved “Insider Trading Prevention
Principles.” Insider training prevention courses are organized for vice president-grade employees and
above, while general employees are subjected to training on ethical behaviors on a yearly basis.
No deviations were
found
52
4.
5.
Has the company
implemented effective
accounting and internal
control systems for the
purpose of maintaining
business integrity? Are
these systems reviewed by
internal or external
auditors on a regular
basis?
Does the company
organize internal or
external training on a
regular basis to maintain
business integrity?
Assessment criteria
Yes No
Actual governance
Summary description
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
III.
1.
2.
3.
Implementation of
whistleblowing system
Does the company provide
incentives and means for
employees to report
malpractices? Does the
company assign dedicated
personnel to investigate
the reported malpractices?
Has the company
implemented any standard
procedures or
confidentiality measures
for handling reported
malpractices?
Does the company assure
malpractice reporters that
they will not be mistreated
for making such reports?
IV Enhanced information
Yes
The Company has mailboxes in place to receive malpractice reports from within or outside the Company.
Once a report has been sent to the mailbox, it will be referred to the appropriate department and personnel
depending on the nature of the underlying issue. The identity of the informer and details of the report will
be kept confidential, and may involve internal auditors if the situation requires it.
No deviations were
found
Yes
The Company has specifically instructed case handlers to strictly follow procedures when building,
assigning and investigating cases, and to exercise discretion during the investigation process.
No deviations were
found
Yes
The Company has confidentiality procedures built into its management policies and employee code of
conduct to protect informers and investigators from improper treatments or retaliation.
No deviations were
found
1.
V
Yes
The Company has disclosed corporate governance and business integrity matters and updated the progress
of such efforts in its annual reports, CSR reports and “Investor Relations-corporate governance” and
“CSR” sections of its website.
disclosure
Has the company
disclosed its integrity
principles and progress
onto its website and
MOPS?
If the company has established business integrity policies in accordance with “Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed
Companies,” please describe its current practices and any deviations from the Best Practice Principles:
The Company’s “Business Integrity Principles” and “Business Integrity Procedures and Behaviors” have been passed by the Board of Directors and disclosed at the
Company’s website and MOPS. A specialized unit will be empowered to enforce these policies and ensure employees’ compliance.
No deviations were
found
53
Assessment criteria
Yes No
Actual governance
Summary description
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
VI. Other information relevant to understanding the company’s business integrity (e.g. reviews over business integrity principles):
Courses have been introduced to the e-Learning system so that employees are made aware of the Company’s “Business Integrity Principles” and “Business Integrity
Procedures and Behaviors.”
54
3.3.7 Corporate Governance Guidelines and Regulations
Please refer to the Company’s website.
www.compal.com → Investor Relations → Corporate Governance → Major Internal Policies
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Articles of Incorporation
Rules of Procedure for Shareholders’ Meetings
Regulations for Election of Directors
Board of Directors Meeting Guidelines
Audit Committee Procedures
Remuneration Committee Procedures
Corporate Governance Best-Practice Principles
The Responsibilities and Rules for Independent Directors
Code of Conduct for Directors and Managers
Code of Conduct for Employee
Rules Governing Financial and Business Matters Between this Corporation and its Affiliated Enterprises
Ethical Corporate Management Best Practice Principles
Business Integrity Procedures and Behaviors
Insider Trading Prevention Procedures
Corporate Social Responsibility Best Practice Principles
Guidelines for Handling Acquisition and Disposal of Assets
Derivative Trading Procedures
Third Party Lending Procedures
Endorsement and Guarantee Procedures
3.3.8 Other Important Information Regarding Corporate Governance
Please refer to the Company’s website.
www.compal.com → CSR
•
•
•
•
•
•
•
Corporate Sustainability and Social Responsibility
Environmental Protection
Public Welfare and Feedback
Labor Rights
Corporate Sustainability and Social Responsibility Report
Vision and mission as a member of the “Electronics Industry Citizenship Coalition”
Compal values the leverage benefit with our core partners stakeholders and suppliers
www.compal.com → Stakeholder Communication Area
•
•
•
•
•
•
Issues of Concern
Employee Relations
Customer Relations
Supplier Relations
Investor Relations
Other Affiliates
55
3.3.9 Internal Control Systems
Compal Electronics, Inc.
Statement of the Internal Control System
Date: February 24 2016
Based on the findings of a self-assessment, the Company states the following with regard to its internal control system
for the year of 2015:
1. The Company is fully aware that the establishment, operation, and maintenance of an internal control system is
the responsibility of the Board of Directors and management. The Company has established such a system. It is
aimed at providing reasonable assurance regarding the achievement of objectives in the effectiveness and
efficiency of operations (including profitability, performance, and the safeguard of assets); Reliability, timeliness,
transparency, and regulatory compliance of reporting, and compliance with all the applicable laws and
regulations.
2. An internal control system has inherent limitations. No matter how perfectly designed, it can only provide some
reasonable assurance of the accomplishment of the three objectives mentioned above. Moreover, the effectiveness
of an internal control system may be subject to changes of environment or circumstances. Nevertheless, the
internal control system of the Company contains self-monitoring mechanisms, and corrective action is taken
whenever a deficiency is identified.
3. The Company evaluates the design and operating effectiveness of its internal control system based on the criteria
provided in the “Regulations Governing the Establishment of Internal Control System by Public Companies”
(herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal
control based on the process of management control: (1) control environment, (2) risk assessment, (3) control
activities, (4) information and communication, and (5) monitoring. Each component further contains several
items. Please refer to the Regulations for details.
4. The Company has evaluated the design and operating effectiveness of its internal control system according to the
aforementioned criteria.
5. Based on the findings of the evaluation mentioned in the preceding paragraph, the Company believes that, on
December 31 2015, its internal control system (including the supervision and management of subsidiaries), as
well as internal controls to monitor the effectiveness of its own objectives concerning operational effectiveness
and efficiency, reliability, timeliness, transparency, and regulatory compliance in reporting, and compliance with
applicable laws and regulations, were effective in design and operation, and provided reasonable assurance that
the above-stated objectives would be achieved.
6. This Statement will be an integral part of the Company’s Annual Report and Prospectus, and will be made public.
Any falsehood, concealment, or other illegality of content made public will entail legal liability under Articles 20,
32, 171, and 174 of the Securities and Exchange Law.
7. This Statement has been passed by the Board of Directors at a meeting held on February 24, 2016, with 0 of the
15 attending directors expressing dissenting opinions, the remainder all affirmed the content of this Statement.
Compal Electronics, Inc.
Chairman:
President:
56
3.3.10 Penalties imposed against the company and its staff, or penalties imposed by the company
against its staff for violations of internal control or regulations; state any corrective actions
taken in the most recent years up till the date of the annual report: None.
3.3.11 Major Resolutions Made in Shareholders’ Meeting and Board Meetings
1. Shareholders’ meeting
▓ Time: 9 am, June 26, 2015 (Friday)
Venue: B1, No. 581, Ruiguang Road, Neihu District, Taipei City
▓ Major resolutions:
(1) Ratified the Financial Statement for the year 2014.
(2) Ratified the Distribution of Earnings for the year 2014.
(3) Approved the proposal of cash distribution from capital surplus.
(4) Approved amendments to the Company’s Articles of Incorporation.
(5) Approved the proposal to partially amend the Election of Directors and Supervisors.
(6) Election of 12th Board of Directors.
(cid:2) Elected directors include 12 members as follows: Sheng-Hsiun Hsu, Jui-Tsung Chen, Wen-Being
Hsu, Kinpo Electronics Inc., Charng-Chyi Ko, Sheng-Chieh Hsu, Yen-Chia Chou, Wen-Chung
Shen, Yung-Ching Chang, Chung-Pin Wong, Chiung-Chi Hsu, and Chao-Cheng Chen.
(cid:2) Elected independent directors include three members as follows: Min Chih Hsuan, Duei Tsai and
Duh Kung Tsai.
(7) Resolved to remove non-competition for directors.
(8) Approved the proposal to partially amend the Guidelines for Handling Acquisition and Disposal of
Assets.
(9) Approved the proposal to partially amend the “Procedures for the Handling of Derivatives Trading”.
(10) Approved the proposal to partially amend the “Endorsement and Guarantee Procedures”.
(11) Approved the proposal to partially amend the “Third Party Lending Procedures”.
▓ Post-meeting execution:
(1) The Articles of Incorporation and election of 12th Board of Directors were approved and registered
on file by the Ministry of Economic Affairs on July 17, 2015.
(2) The 2015 distribution of cash dividend and capital reserve are summarized as followed:
(cid:2) The adjustment of the dividend ratio and the ratio of cash distributed from capital reserve results
from cancellation of new restricted employee shares because the criteria were not met by the
intended employees and the impact on outstanding shares is as follows:
(cid:2) Cash dividend: Initial 1 per share, adjusted to $1.00002258 per share.
(cid:2) Cash distributed from capital reserve: Original $0.5/share, adjusted to $0.50001129/share.
˙Ex-dividend date: August 12, 2015.
˙Declaration date: September 3, 2015.
57
2. Board meetings
Date
2015.1.22
2015.2.26
2015.4.7
2015.5.11
2015.7.9
Major resolutions
1. Approve of management changes.
2. Approved new share issue through the employee warrant.
3. Approved the issuance of new shares of the first 2014 restricted employee shares.
4. Approved the financing of Compal subsidiaries through the issue of a Company Letter of Support.
5. Approved of the Company’s financing authorization from the financial institute.
1. Resolved to amend 2014 appropriation rate and amount of director and supervisor compensation.
2. Approved to the distribution of the first 2015 mid-year bonus (Dragon Boat Festival).
3. Approved of 2015 compensation adjustments.
4. Approved of 2014 consolidated and individual financial statements.
5. Approved of 2014 operation report.
6. Approved of 2015 operation plan.
7. Approved for 2014 distribution of earnings.
8. Approved of cash distributed from capital reserve.
9. Approved of the evaluation of the independence and suitability of the Company’s CPA.
10. Approved of 2014 Statement of Internal Control System.
11. Approved of the call of 2015 shareholders’ meeting.
12. Approved Company financial authorization from the financial institute.
1. Approved of the election of 12th Board of Directors.
2. Approved of the nomination of the 12th Board of Directors candidates and their qualifications.
3. Approved for the loan to Henghao Technology Co., Ltd.
4. Approved the financing of Compal subsidiaries through the issue of a Company Letter of Support.
5. Approved of the Company’s financing authorization from the financial institute.
1. Approved of the proposal to partially amend the Articles of Incorporation.
2. Approved the proposal to partially amend the Guidelines for Handling Acquisition and Disposal
of Assets.
3. Approved the proposal to partially amend the Procedures for the Handling of Derivatives Trading.
4. Approved of the proposal to partially amend the Endorsement and Guarantee Procedures.
5. Approved of the proposal to partially amend the Third Party Lending Procedures.
6. Approved the proposal to partially amend the Election of Directors and Supervisors.
7. Approved of the qualifications of the candidates of the 12th Board of Directors.
8. Resolved to remove the non-competition on directors and managers.
9. Resolved to establish CSR policy.
10. Resolved to establish Procedures for Business Integrity Procedures and Behavior.
11. Resolved to appropriate 2015 employee bonus ratio and directors and supervisors compensation.
12. Investment in Rayonnant Technology Co Ltd.
13. Approvedthe Guidance of the second “2014 restricted employee warrant shares”.
14. Approved of the Company’s financing authorization from the financial institute.
1. Approved the appointment of the general manager.
2. Approved the change of managers.
3. Approved the appointment of members of the Remuneration Committee.
4. Approved the proposal to partially amend the Audit Committee Procedures.
5. Approved the proposal to partially amend the Remuneration Committee Procedures.
6. Approved the proposal to partially amend the Board of Directors Meeting Guidelines.
7. Approved the proposal of the 2015 audit plan.
8. Approved the distribution of 2015 cash dividend and capital reserve in cash to shareholders.
9. Approved the financing of re-investment companies through the issue of a Company Letter of
Support.
10. Approved the increase of the intermediate term loan limit from the financial institute.
11. Approved the Company’s financing authorization from the financial institute.
1. Approved the appointment of the Chief Accountant.
2015.8.11
58
Date
Major resolutions
2. Approved the appointment of the Audit Manager.
3. Approved 2014 director and supervisor compensation.
4. Approved the distribution of the second 2014 mid-year bonus (Mid-Autumn Festival).
5. Approved the cancellation of restricted warrant shares to employees who had not met the required
conditions.
6. Approved the loan to Henghao Technology Co., Ltd.
7. Approved the proposal to partially amend the Procedures for the Handling of Derivatives Trading.
8. Approved the proposal to partially amend the Internal Control System.
9. Approved the proposal to partially amend the Procedures for the Internal Control Self-Evaluation
System.
10. Approved the proposal to partially amend Guidance for the Internal Audit.
11. Approved the proposal to partially amend the Corporate Governance Best-Practice Principles.
12. Approved the proposal to partially amend the Code of Conduct for Directors, Supervisors and
Officers.
13. Approved the proposal to partially amend the Code of Conduct.
14. Approved the proposal to partially amend the Ethical Corporate Management Best Practice
Principles.
15. Approved the proposal to partially amend the Business Integrity Procedures and Behaviors.
16. Approved the financing of the re-investment company through the issue of a Company Letter of
Support.
17. Approved the Company financing authorization from the financial institute.
1. Approve of management changes.
2. Approved the 2014 employee bonus.
3. Approved the 2015 year-end bonus (estimated).
4. Approved the cancellation of restricted employee warrant shares where conditions had not been
met by the intended employee.
2015.11.12
5. Approved the proposal to partially amend the Board of Directors Meeting Guidelines.
6. Approved the proposal to partially amend the Procedures of Application to Suspend and Resume
Trading.
7. Approved the proposal of the 2016 audit plan.
8. Approved for the financing of re-investment company through the issuance of the Company’s
Letter of Support.
9. Approved the Company financing authorization from the financial institute.
1. Approve of management changes.
2. Approved the proposal to partially amend the Articles of Incorporation.
3. Approved the proposal to partially amend the 2015 Statement of the Internal Control System.
4. Approved the cancellation of restricted employee warrant shares where conditions had not been
2016.2.24
met by the intended employee.
5. Approved Company financing authorization from the financial institute.
1. Approved the 2015 employee, director, and supervisor compensation.
2. Approved the distribution of the first 2016 mid-year bonus (Dragon Boat Festival).
3. Approved salary adjustment.
4. Approved the 2015 consolidated and individual financial statements.
5. Approved the evaluation of the independence and suitability of the Company CPA.
6. Approved the call for the 2016 shareholder’s meeting.
7. Approved the 2016 CSR goal.
8. Approved Company financing authorization from the financial institute.
1. Approved the appointment of the manager.
2. Approved the change of CPA.
3. Approved the evaluation of the independence and suitability of the Company CPA.
4. Approved the 2015 operation report.
5. Approved the 2016 operation plan.
2016.3.30
2016.5.11
59
Date
Major resolutions
6. Approved the 2015 distribution of earnings.
7. Approved capital surplus to shareholders.
8. Approved the proposal to partially amend the Articles of Incorporation.
9. Resolved to remove non-competition for directors and managers.
10. Approved the 2016 appropriation of directors and employees compensation ratio.
11. Approved the cancellation of restricted employee warrant shares where conditions had not been
met by the intended employee.
12. Approved and authorized the re-investment company to name after Compal.
13. Approved Company financing authorization from the financial institute.
3.3.12 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting
to Important Resolutions Passed by the Board of Directors: None.
3.3.13 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO,
and Heads of Accounting, Finance, Internal Audit and R&D: None.
60
3.4
Information Regarding the Company’s Audit Fee and Independence
3.4.1 Audit Fee
Accounting Firm
Name of CPA
Period Covered by CPA’s Audit
Remarks
KPMG
Kuo, Kuan Ying
Lo, Jui Lan
2015.01.01~2015.12.31
Fee Range
1 Under NT$ 2,000,000
2 NT$2,000,000 ~ NT$4,000,000
3 NT$4,000,000 ~ NT$6,000,000
4 NT$6,000,000 ~ NT$8,000,000
5 NT$8,000,000 ~ NT$10,000,000
6 Over NT$100,000,000
Fee Items
Audit Fee
Non-audit Fee
Total
Unit: NT$ thousands
3,735
3,735
11,780
11,780
(1) Non-audit fees paid to CPA, accounting firm and affiliated companies thereof that amount to
more than 1/4 of audit fees:
Unit: NT$ thousands
Firm
Name of
CPA
Audit
Fee
Non-audit Fee
Period Covered by
System
Design
Company
Registration
Human
Resource
Others Subtotal
CPA’s Audit
Remarks
KPMG
Kuo,
Kuan Ying
Lo,
Jui Lan
11,780
-
233
-
3,502 3,735 2015.01.01~2015.12.31
Note: Other non-audit fees: Transfer pricing report of $525,000, tax consultation of $2,815,000, and Review of the
application of the new restricted employee warrant shares of $162,000.
(2) Changes in the accounting firm that result in lesser audit fees paid in comparison to the previous
year: None
(3) Reduction of audit fees by more than 15% compared to the previous year: None
3.4.2 Replacement of CPA: None.
3.4.3 If the chairman, president, and financial or accounting manager of the Company had worked
for the accounting firm or related parties thereof in the most recent year, the name, title, and
the term of service with the accounting firm or the related party must be disclosed: None.
61
3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders
2015
Up till April 26, 2016
Shares held
Increase
(Decrease)
Shares pledged
Increase
(Decrease)
Shares held
Increase
(Decrease)
Shares pledged
Increase
(Decrease)
Unit: shares
Title
Name
Chairman
Sheng-Hsiun Hsu
Jui-Tsung Chen
Wen-Being Hsu
Kinpo Electronics
, Inc.
Representative:
Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Director and
President
Director
Director
Director
Director
Director
Director and
Executive Vice
President
Director and
Executive Vice
President
Director and
Executive Vice
President
Director
Director and
Executive Vice
President
Wen-Chung Shen
(800,000)
Yung-Ching Chang
(540,000)
Chung-Pin Wong
Chiung-Chi Hsu
0
0
Chao-Cheng Chen
(3,000,000)
Independent Director Min Chih Hsuan
Independent Director Duei Tsai
Independent Director Duh Kung Tsai
Vice Chairman and
Senior Advisor
Director
Executive Vice
President
Chen-Chang Hsu
Medica, John Kevin
Sean Martin Maloney
Senior Vice President Chun-De Shen
Senior Vice President Kuo-Chuan Chen
Senior Vice President Pei-Yuan Chen
Senior Vice President Chiu-Rui Wei
Senior Vice President Ying Chang
Senior Vice President Ming-Hsing Hsu
Senior Vice President Sheng-Hua Peng
Senior Vice President Wen-Da Hsu
Senior Vice President Wei-Cheng Chen
Senior Vice President Ming-Chih Chang
Chih-Chuan Cheng
Vice President
Vice President and
head of finance
Vice President
Vice President
Vice President
Ching-Hsiung Lu
Shih-Tung Wang
Bo-Hsiung Chang
Tian-Yuan Tsai
0
0
0
(1,530,000)
0
0
0
0
0
(220,000)
0
0
0
(27,000)
(10,000)
-
0
(19,000)
0
0
0
62
0
0
0
0
0
0
0
0
0
0
0
0
0
0
650,000
2,224,000
0
0
0
0
0
0
0
0
0
(99,000)
0
0
0
0
0
0
-
-
0
0
0
0
(20,000)
0
0
0
0
0
1,900,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
0
0
0
0
0
Title
Name
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Bo-Tang Wang
Hsi-Kuan Chen
Zong-Ming Wang
Fu-Chuan Chang
Chi-Hsiang Ma
Yung-Nan Chang
Sheng-Hung Li
Yung-He Su
Ming-Hsiang Kan
Chih-Hsien Liang
Lung-Hua Shen
Ming-Dong Weng
Yue-Chun Li
Chiao-Lieh Huang
Chung-Hsing Tan
Yi-Yun Chang
Hsin-Kung Mao
Ling-Sheng Wu
Hsin-Hsiung Huang
Senior Vice President Shih-Hung Huang
Senior Vice President Yi-Chiang Chiu
Vice President
Vice President
Vice President
Head of Audit
Vice President
Vice President
Vice President
Ching-Fa Li
Bo-Heng Chen
Jui-Chun Hsu
Bo-Wen Hsieh
Ming-Sung Lin
Meng-Hsiung Nieh
Chin-Wen Liao
2015
Up till April 26, 2016
Shares held
Increase
(Decrease)
0
0
(20,000)
(10,000)
(20,000)
0
(36,000)
0
0
0
0
0
0
(380,000)
(280,000)
(190,000)
0
(15,000)
0
-
-
-
-
-
0
0
0
0
Shares pledged
Increase
(Decrease)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
-
-
-
-
0
0
0
0
Shares held
Increase
(Decrease)
0
0
(10,000)
0
(30,000)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
0
-
-
0
Shares pledged
Increase
(Decrease)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
0
-
-
0
Note: 1.The Company elected three independent directors and replaced the supervisors with an Audit Committee after the 2015
shareholders’ meeting resolution. The original supervisors: Charng-Chyi Ko, Sheng-Chieh Hsu, Yen-Chia Chou, and directors
Medica, John Kevin, and Sean Martin Maloney resigned in June 26, 2015.
2. In 2015, the following three persons Medica, John Kevin, Senior Advisor, Ming-Sung Lin, Vice President and Meng-Hsiung
Nieh, Vice President, left the Company. In 2016, the following five, Ming-Chih Chang, Senior Vice President; Shih-Hung
Huang, Vice President; Yi-Chiang Chiu, Vice President; Ching-Fa Li, Vice President and Bo-Heng Chen, Vice President,
were called back or promoted. Jui-Chun Hsu, Vice President took office and Chin-Wen Liao, Vice President resigned.
63
Self
Shares held
Shareholdings of spouse
and underage children
Total shares held in the
names of others
Shares held
Unit: shares
Spouse, relative of second
degree or closer, and
relationships among top 10
shareholders.
Shares
Shareholding
Percentage
Shares
Shareholding
Percentage
Shares
151,628,692
3.39%
-
-
17,775,401
0.40% 30,107,025
0.67%
Shareholding
Percentage
0%
Name
Relationship
N/A
N/A
0%
0% N/A
N/A
0
0
0
-
3.5.1 Shares Trading with Related Parties: None
3.5.2 Shares Pledge with Related Parties: None
3.6 Relationship among the Top Ten Shareholders
April 26, 2016
Name
Kinpo Electronics
Inc.
Representative:
Sheng-Hsiun Hsu
JPMorgan Chase
Bank N.A. Taipei
Branch in custody
for Saudi Arabian
Monetary Agency
Deutsch Bank N.A.
Taipei Branch in
custody for First
Japan Bank and
Trust for EastSpring
Investments
Asia-Pacific High
Dividend Yield
Parent Fund
Standard Chartered
in custody for
America GMO
Emerging Markets
Fund
Standard Chartered
in custody for
Fidelity Puritan
Fund: Fidelity
Low-Priced Stock
Fund
Citi (Taiwan)
Commercial Bank
in custody for
Dimensional
Emerging Markets
Value Fund
Citi (Taiwan)
Commercial Bank
in custody for
Government of
Singapore
101,054,000
2.26%
84,327,000
1.89%
76,430,111
1.71%
72,000,000
1.61%
69,793,333
1.56%
69,657,548
1.56%
-
-
-
-
-
-
64
-
0
0% N/A
N/A
-
0
0% N/A
N/A
-
0
0% N/A
N/A
-
0
0% N/A
N/A
-
0
0%
N/A
N/A
Name
Self
Shares held
Shareholdings of spouse
and underage children
Total shares held in the
names of others
Shares held
Shares
Shareholding
Percentage
Shares
Shareholding
Percentage
Shares
Shareholding
Percentage
0%
-
0
Spouse, relative of second
degree or closer, and
relationships among top 10
shareholders.
Name
Relationship
N/A
N/A
Standard Chartered
in custody for
Vanguard Stock
Index Fund
FuBon Insurance
Representative:
Ben-Yuan Zhang
HSBC in custody
for Puxin insurance
Co.
67,174,629
1.50%
64,200,991
0
1.44%
0%
61,109,000
1.37%
-
-
0
-
-
0%
-
0
0
0
0% N/A
0%
N/A
0% N/A
N/A
65
3.7 Ownership of Shares in Affiliated Enterprises
December 31, 2015
Investees (Note 1)
Invested by the Company
Held by directors,
supervisors, managers, and
directly/indirectly
controlled entities
Unit: shares; %
Aggregate investment
Shares
Shareholding
percentage
Shares
Shareholding
percentage
Shares
Shareholding
percentage
Arcadyan Technology Corp.
41,304,504
21.84 27,260,648
14.41 68,565,152
36.25
100.00
96.98
100.00
100.00
100.00
100.00
100.00
100.00
Panpal Technology Corp.
500,000,000
100.00
Henghao Technology Co., Ltd.
317,310,462
Zhaopal Investment Co., Ltd.
200,100,000
Yongpal Investment Co., Ltd.
175,100,000
Hong Ji Capital Co., Ltd.
100,000,000
Gempal Technology Corp.
90,000,000
Kaipal Investment Co., Ltd.
75,100,000
Hong Jin Investment Co., Ltd.
29,500,000
96.98
100.00
100.00
100.00
100.00
100.00
100.00
Rayonnant Technology Holdings
Limited
29,500,000
100.00
-
-
-
-
-
-
-
-
-
- 500,000,000
- 317,310,462
- 200,100,000
- 175,100,000
- 100,000,000
- 90,000,000
- 75,100,000
- 29,500,000
- 29,500,000
100.00
Compal Broadband Networks, Inc.
16,953,810
51.37 15,649,670
47.42 32,603,810
Crownpo Technology Inc.
3,738,668
33.23
6,243,790
55.49
9,982,458
Kinpo Group Management
Consultant Company
300,000
37.50
300,000
37.50
600,000
Allied Circuit Co., Ltd.
10,157,730
20.42
8,197,152
16.47 18,354,882
Infinno Technology Corp.
10,983,719
Lead-Honor Optronics Co., Ltd.
2,772,000
41.03
42.00
-
-
- 10,983,719
- 2,772,000
Accesstek Inc.
Maxima Ventures I, Inc.
899,160
126,000
27.78
319,707
9.88 1,218,867
22.55
1,080
0.46
127,080
Ripal Optoelectronics Co., Ltd.
6,000,000
Core Profit Holdings Ltd.
147,000,000
Flight Global Holding Inc.
Just International Ltd.
89,755,495
48,010,000
High Shine Industrial Corp.
42,700,000
100.00
100.00
100.00
100.00
100.00
Compal International Holding Co.,
Ltd.
46,901,000
100.00
Big Chance International Co., Ltd.
90,820,000
100.00
Compal Rayonnant Holdings
Limited
12,500,000
100.00
Auscom Engineering Inc.
3,000,000
100.00
-
-
-
-
-
-
-
-
-
- 6,000,000
- 147,000,000
- 89,755,495
- 48,010,000
- 42,700,000
- 46,901,000
- 90,820,000
- 12,500,000
- 3,000,000
Lipo Holding Co., Ltd.
98,000
49.00
102,000
51.00
200,000
66
98.79
88.72
75.00
36.89
41.03
42.00
37.66
23.01
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Investees (Note 1)
Invested by the Company
Held by directors,
supervisors, managers, and
directly/indirectly
controlled entities
Aggregate investment
Shares
Shareholding
percentage
Shares
Shareholding
percentage
Shares
Shareholding
percentage
Compal Europe (Poland) Sp. z o.o.
Bizcom Electronics, Inc.
Compal Electronics (Holding) Ltd.
136,080
100,000
1,000
100.00
100.00
100.00
-
-
-
-
136,080
-
100,000
-
1,000
100.00
100.00
100.00
Ascendant Private Equity
Investment Ltd.
31,253,125
34.72 37,250,000
41.39 68,503,125
76.11
Gallery Management Ltd.
3,828,577
41.12
Compalead Electronics B.V.
6,426,516
100.00
Etrade Management Co., Ltd.
46,900,000
100.00
Webtek Technology Co., Ltd.
100,000
100.00
Forever Young Technology Inc.
50,000
100.00
Unicom Global, Inc.
10,000,000
100.00
Huang Feng Communication Co.,
Ltd.
10,000,000
100.00
-
-
-
-
-
-
-
- 3,828,577
- 5,030,000
- 46,900,000
-
100,000
-
50,000
- 10,000,000
41.12
100.00
100.00
100.00
100.00
100.00
- 10,000,000
100.00
Avalue Technology Inc.
14,560,070
21.31
701,000
1.03 15,261,070
Mactech Co., Ltd.
21,756,192
52.88
274,954
0.67 22,031,146
General life Biotechnology Co.,
Ltd.
15,000,000
50.00
-
- 15,000,000
22.34
53.55
50.00
Note: The above investments have been accounted using the equity method.
67
IV. Capital Overview
4.1 Capital and Shares
4.1.1 Source of Capital
Year Month
Issuance
Price
2013
2013
2014
2014
2014
2014
2015
2015
2015
2015
105
9
11
2
5
8
11
1
2
8
9
2
10
10
10
10
10
10
10
10
10
10
10
Authorized capital
Paid-up capital
Shares
Amount (NTD)
Shares
Amount (NTD)
Source of capital
Remarks
Paid in properties
other than cash
Others
6,000,000,000
60,000,000,000
4,412,791,725
44,127,917,250 Exercise of employee warrants totaling NTD 1,391,000
6,000,000,000
60,000,000,000
4,413,154,825
44,131,548,250 Exercise of employee warrants totaling NTD 3,631,000
6,000,000,000
60,000,000,000
4,413,624,425
44,136,244,250 Exercise of employee warrants totaling NTD 4,696,000
6,000,000,000
60,000,000,000
4,413,851,825
44,138,518,250 Exercise of employee warrants totaling NTD 2,274,000
6,000,000,000
60,000,000,000
4,416,128,625
44,161,286,250 Exercise of employee warrants totaling NTD 22,768,000
6,000,000,000
60,000,000,000
6,000,000,000
60,000,000,000
4,421,210,025
4,423,236,625
44,212,100,250 Exercise of employee warrants totaling NTD 50,814,000
44,232,366,250 Exercise of employee warrants totaling NTD 20,266,000
6,000,000,000
60,000,000,000
4,472,596,625
44,725,966,250 Issuance of employees’ restricted shares NTD493,600,000
6,000,000,000
60,000,000,000
4,472,196,625
44,721,966,250 Cancellation of Restricted Employee Shares of $4,000,000
6,000,000,000
60,000,000,000
4,471,126,625
44,711,266,250 Cancellation of Restricted Employee Shares of $10,700,000
6,000,000,000
60,000,000,000
4,470,636,625
44,706,366,250 Cancellation of Restricted Employee Shares of $4,900,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Change of capital approved by the Ministry of Economic Affairs on October 21, 2013
Change of capital approved by the Ministry of Economic Affairs on December 17, 2013
Change of capital approved by the Ministry of Economic Affairs on March 5, 2014
Change of capital approved by the Ministry of Economic Affairs on May 26, 2014
Change of capital approved by the Ministry of Economic Affairs on August 29, 2014
Change of capital approved by the Ministry of Economic Affairs on December 8, 2014
Change of capital approved by the Ministry of Economic Affairs on February 10, 2015
Change of capital approved by the Ministry of Economic Affairs on March 23, 2015
Change of capital approved by the Ministry of Economic Affairs on September 2, 2015
Change of capital approved by the Ministry of Economic Affairs on December 11, 2015
Change of capital approved by the Ministry of Economic Affairs on March 14, 2016
May 11, 2016
Share
Type
Ordinary
shares
Outstanding shares (public listed)
Unissued shares
Total
Authorized capital
4,470,636,625(Note)
1,529,363,375
6,000,000,000
Note: Unconcealed restricted employee shares (RSA) are150, 000 shares.
Approved to include 100,000,000 shares of employees shares and corporate bonds
with warrant in capital.
Remarks
■Shelf registration system information: None
68
4.1.2 Status of Shareholders
Item
Government
Agencies
Financial
Institutions
Other
Institutions
Foreign
Institutions &
Natural Persons
Domestic
Natural
Persons
Treasury
stocks
Total
As of 4/26/2016
Number of
Shareholders
Shareholding
(shares)
3
8
52
251
1,003
162,408
1
163,718
302,805,115
350,914,612
2,356,919,232
1,416,031,658 43,966,000
4,470,636,625
Percentage
0.00%
6.77%
7.85%
52.73%
31.67%
0.98%
100.00%
4.1.3 Share Ownership Distribution
Range of Shareholding
(Unit: Shares)
Number of
Shareholders
Shareholding (Shares)
Percentage
As of 4/26/2016
1 ~ 999
1,000 ~ 5,000
5,001 ~ 10,000
10,001 ~ 15,000
15,001 ~ 20,000
20,001 ~ 30,000
30,001 ~ 40,000
40,001 ~ 50,000
50,001 ~ 100,000
100,001 ~ 200,000
200,001 ~ 400,000
400,001 ~ 600,000
600,001 ~ 800,000
800,001 ~ 1,000,000
1,000,001 and over
Total
51,812
72,495
19,442
6,894
3,492
3,384
1,543
940
1,778
854
407
156
88
55
378
163,718
10,239,882
165,127,083
139,601,274
82,684,054
62,704,249
83,427,922
54,172,077
42,989,105
124,592,375
118,701,365
113,883,268
76,766,032
61,783,918
49,188,160
3,284,775,861
4,470,636,625
0.23%
3.69%
3.12%
1.85%
1.40%
1.87%
1.21%
0.96%
2.79%
2.66%
2.55%
1.72%
1.38%
1.10%
73.47%
100.00%
4.1.4 List of Major Shareholders
Shares
Shareholder’s name
Kinpo Electronics Inc.
JPMorgan Chase Bank N.A. Taipei Branch in custody for Saudi Arabian
Monetary Agency
Deutsch Bank N.A. Taipei Branch in custody for First Japan Bank and Trust for
EastSpring Investments Asia-Pacific High Dividend Yield Parent Fund
Standard Chartered in custody for America GMO Emerging Markets Fund
Standard Chartered in custody for Fidelity Puritan Fund: Fidelity Low-Priced
Stock Fund
Citi (Taiwan) Commercial Bank in custody for Dimensional Emerging Markets
Value Fund
Citi (Taiwan) Commercial Bank in custody for Government of Singapore
Standard Chartered in custody for Vanguard Stock Index Fund
FuBon Insurance
HSBC in custody for Puxin insurance Co.
As of 4/26/2016
Number
Percentage (%)
151,628,692
101,054,000
84,327,000
76,430,111
72,000,000
69,793,333
69,657,548
67,174,629
64,200,991
61,109,000
3.39%
2.26%
1.89%
1.71%
1.61%
1.56%
1.56%
1.50%
1.44%
1.37%
69
4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share
Year
Measurement
Per-share
market
price
Per-share
net worth
(Note 2)
High
Low
Average
Before dividend
After dividend
Earnings
per share
Before
adjustment
After
adjustment
Weighted
average
outstanding
shares
Earnings per
share
Weighted
average
outstanding
shares
Earnings per
share
Cash dividends
Per-share
dividend
Stock
dividends
From
earnings
From capital
reserves
Cumulative unpaid
dividends
P/E ratio
Price to dividends ratio
Cash dividend yield
Analysis
of
investment
returns
2014
30.00
19.40
23.03
23.42
21.88
2015
29.30
15.10
22.23
23.71
22.49
Year-to-date
March 31, 2016
21.50
16.55
19.21
23.92
-
4,312,853,801
4,329,403,194
4,329,403,194
1.63
2.01
0.37
4,312,853,801
4,329,403,194
1.63
1.50
-
-
-
14.13
15.35
6.51%
2.01
1.20
-
-
-
11.06
18.53
5.40%
-
-
-
-
-
-
-
-
-
Note: 1. The 2015 distribution of earning was resolved at the May 11, 2016, Board of Directors’ meeting and will be
submitted to the 2016 shareholders’ meeting for final approval.
2. Starting January 1, 2015, the Company adopted the 2013 version of the International Financial Reporting
Standards endorsed by the Financial Supervisory Commission of the ROC. The consolidated financial
statement is presented with retrospective adjustments effective as of January 1, 2014.
70
4.1.6 Dividend Policy and Implementation Status
(1) Dividend Policy
When the Company makes a profit during the year, 10% of annual net income after appropriating income tax
expense, offsetting any prior deficit, is to be set aside as legal reserve and a special reserve is set aside or reserved in
accordance with the laws and regulations, and an amount less than 2% of the balance is appropriated as remuneration
for the directors and supervisors, and more than 2% as an employee bonus. The balance of earning available for
distribution is composed of the remainder of the said profit and the retained earnings from prior years. The earnings
appropriation, distribution of dividends and bonuses shall be proposed by the Board of Directors and approved at a
Shareholders’ Meeting. The rest of the unappropriated retained earning shall be reserved.
The company is in a growth period of its life cycle. Therefore, for the consideration of future capital needs and to
meet cash flow needs of its shareholders, the Company’s distribution of cash dividend, after closing and has
distribution of earning, shall not be less than 10% of the total of cash and stock dividends.
Although a dividend ratio has not been set in the Company articles of incorporation, the Company shall not
appropriate less than 30% of its income after tax for dividends, after taking into account factors such as the Company
capital needs, the capital budget, long term financial plans, domestic and international competition and the interests of
the shareholders. The board of directors proposed the distribution of earnings and submitted them to the shareholders’
meeting for approval.
As amended by Company Law in May 2015, the employee bonus and directors compensation are no longer part
of the distribution of earnings items. The Company will amend the articles of incorporation prior to the deadline as set
down by the regulations.
(2) Proposed Distribution of Dividend
(cid:3) The proposed 2015 distribution of earning of shareholders’ dividend in the amount of NTD $4,426,670,625 will
be discussed at the 2016 shareholders’ meeting. The aforementioned amount is set to be distributed as an all cash
dividend of $1 per share and incurred capital surplus generated from the excess of the issuance price over the par
value of the capital stock in the amount of NTD $885,334,125, or NTD $0.2 per share. The total cash distribution
amounts to NTD $5,312,004,750.
(cid:3)
Should the Company decide to buy back/recover outstanding shares, transfer treasury stock to employees, reduce
share capital or in any other way alter the number of outstanding shares sometime later, the Board of Directors
shall be authorized to adjust the payment rate of cash dividends and cash capital surplus as deemed necessary at
its discretion.
71
(3) Impact to 2015 Business Performance and EPS resulting from Stock Dividend Distribution:
Not Applicable
4.1.7 Employees’ and Directors’ Compensation
(1) Employees’ directors’ compensation policies as stated in the Articles of Incorporation
The Company has approved the amendment to “Article of Incorporation” by Borad of Directors, and will submit
to discuss in 2016 shareholders’ meeting. According to the amended Articles of Incorporation of the Company, if
there is any profit in a fiscal year, the Company’s pre-tax profits in such fiscal year, prior to deduction of
compensation to employees and directors, shall be distributed to employees as compensation in an amount of
not less than two percent (2%) thereof and to directors as compensation in an amount of not more than two
percent (2%) of such profits. In the event that the Company has accumulated losses, the Company shall reserve
an amount to offset accumulated losses. The compensation to employees as mentioned above may be distributed
in the form of stock or cash. Employees entitled to receive the said stock or cash may include the employees of
the Company’s subordinate companies pursuant to the Company Act.
(2) Basis for estimating employees’ and directors’ compensation and stock dividends, and accounting treatments for
any discrepancies between the amounts estimated and the amounts paid.
(cid:3) Compensation to directors and employees, as denoted in the Articles of Incorporations, shall be estimated
based on income before tax prior to the subtraction of directors and employees compensation during the
current year and multiplied by the ratio as denoted in the Article of Incorporation (shall not be more than
2% or less than 2% of the remainder, respectively.)
(cid:3)
(cid:3)
If the compensation approved for distribution to employees is to be in the form of common shares, the
number of shares is determined by dividing the amount of the compensation by the closing price of the
shares on the day preceding the Board of Directors’ meeting.
If the actual amounts differ from the amounts estimated, the differences are recorded as gains/losses in the
subsequent year as a change in accounting estimate.
(3) 2015 employees compensation proposal passed by the board of directors
(cid:3) Accrued directors and employees compensation amount to NTD $50,233,972 and NTD $949,980,218,
respectively.
(cid:3)
If the estimated distribution amount differs from the amounts estimated in accrued expense, the variance,
reason and resolution should be disclosed: No variance.
(cid:3) The proposed distribution of employee stock compensation, and the size of such an amount as a percentage
of the sum of the after-tax net income stated in the individual financial reports for the current period and
total employee compensation: Not applicable (no employee stock compensation).
(4) Actual distribution of 2014 employee bonus and directors’/supervisors’ remuneration:
(cid:3) The directors and supervisors compensation is NTD $49,379,245 and the employee bonus is NTD
$895,790,158.
(cid:3) The 2014 actual distribution of employee bonus and directors and supervisors compensation was approved
at the 2015 shareholders’ meeting and remained as proposed by the board of directors.
72
4.1.8 Buyback of Treasury Stock
Time of buyback
Purpose of buyback
Buyback period
May 11, 2016
6th
Transfer of shares to employees
From March 26, 2013
until May 25, 2013
NTD 18.27 ~ NTD 31.04 (Note 1)
58,516,000 ordinary shares
NTD 1,126,478,345
14,700,000 shares
43,816,000 shares
Buyback price range
Types and numbers of shares bought back
Value of shares bought back
Number of shares retired and transferred
Cumulative holding of own shares
Cumulative holding of own shares as a percentage to total
outstanding shares (%)
Note:
1. The Company will continue buying back shares even if the share price falls below the specified minimum.
2. Calculations were based on share capital registered with the Ministry of Economic Affairs as at May 11, 2016.
0.98% (Note 2)
4.2
Bonds: None
4.3 Global Depository Receipts
Details
Date of issue:
November 9, 1999
May 21, 2001
Issuance and trading location
Total sum issued
Issuance price per unit
Number of units issued
Luxembourg
USD 122,160,000
USD 15.27
8,000,000 units
Source of represented securities
Participating shareholder(s):
Kinpo Electronics, Inc.
Quantity of represented
securities
40,000,000 ordinary shares of Compal
Electronics
1. Voting rights:
Luxembourg
USD 174,816,000
USD 6.07
28,800,000 units
1. Participating shareholder(s):
44,000,000 shares contributed by
(1) Kinpo Electronics, Inc.
(2) Panpal Technology Corporation
(3) Gempal Technology Corporation
2. New cash issue of Compal shares:
1,000,000,000 shares
144,000,000 ordinary shares of Compal
Electronics
GDR holders’
rights and obligations
Trustee
Depository bank
Custodian
Unredeemed balance
According to the terms of the depository agreement and the laws of the
Republic of China, the beneficiary certificate holder is entitled to the voting
rights of shares represented under the beneficiary certificate.
2. Rights to dividend distribution, share subscription and other rights:
Unless otherwise specified in the agreement, the GDR carries identical rights as
do ordinary shares
N/A
The Bank of New York
Mega International Commercial Bank
3,753,553 units (May 11, 2016)
N/A
The Bank of New York
Mega International Commercial Bank
73
Date of issue:
Details
Allocation of expenses incurred
at issuance and over the duration
Key terms of the depository and
custodian agreements
Per
Unit
Market
Price
2015
Year-to-date
May 11, 2016
High
Low
Average
High
Low
Average
November 9, 1999
May 21, 2001
Borne by participating shareholder(s)
Allocated proportionally between the
Company and participating shareholders
See descriptions below
USD $4.63
USD $2.33
USD $3.52
USD $3.27
USD $2.53
USD $2.92
4.4
Employee Warrants: None
4.5
Subscription of New Shares by Employees and Restricted Shares
4.5.1 Issuance of Restricted Employee Shares
Type of restricted employee shares
Effective date of application
Date of issue:
Number of new restricted employee
shares issued
Issue price
New restricted shares issued as a
percentage to total outstanding
shares
Criteria of entitlement to restricted
employee shares
2014 1st issue
New restricted employee shares
May 11, 2016
October 30, 2014
February 25, 2015
49,360,000 shares
NTD 0 (issued without subscription)
1.10% (Note)
1. Employees may receive the following percentages of the restricted shares
they have been allocated, if they remain employed by the Company after
the duration specified below and satisfy their target performance
appraisals (i.e. a performance grade of B or higher in the latest year
before the duration is due). However, the actual percentage of shares
entitled to employees will be subject to the Company’s performance
criteria, as calculated in Subparagraph 2 of this Paragraph.
After 2 years: 40%
After 3 years: 30%
After 4 years: 30%
2. The Company’s performance criteria is calculated based on the weighted
score of net income and ROE taken from the latest full-year consolidated
financial statements before the duration is due. The following
performance criteria applies:
A. Net Income: increase by 10% or more compared to the Company’s
3-year average
B. Return on equity (ROE): surpass the Company’s 3-year average
Net income is defined as: “current net profit attributable to parent
company shareholders” as shown in audited financial statements;
whereas ROE is defined as: “current net profit attributable to parent
company shareholders” divided by “equity attributable to parent
company shareholders” as shown in audited financial statements.
To align the interests of employees who have participated in this
program and the interests of shareholders, the two performance
indicators above are each assigned a 50% weight. If indicators A and B
are both achieved, employees will be entitled to receive the full
percentage mentioned in Subparagraph 1 of this Paragraph. If only A or
74
Type of restricted employee shares
2014 1st issue
New restricted employee shares
Restricted rights to restricted
employee shares
B is achieved, employees will be entitled to receive half the percentage
mentioned in Subparagraph 1 of this Paragraph.
1. Employees may not sell, pledge, transfer, gift, charge or in any way
dispose the restricted shares for the duration of entitlement.
2. For citizens of the Republic of China, any restricted employee shares
received must be placed immediately under the custody of a custodian
appointed by the Company. Employees may not request to collect
restricted shares for any reason or through any means. For employees of
all other nationalities, any restricted employee shares received will be
placed under the custody of a custodian bank.
3. Restricted employee shares may be allocated cash and stock dividends for
the duration of entitlement. Any cash or stock dividends allocated on
restricted shares will be transferred from the custodian account to
employees’ personal accounts on the date of distribution.
Custody of restricted employee
shares
Held in trust
If the criteria of entitlement is not
met after employees are allocated or
have subscribed to restricted shares
1. Once employees have been allocated restricted shares, the Company may
recover and retire restricted shares that have yet to satisfy their criteria of
entitlement, or from employees who have committed severe mistakes or
violations against their employment contracts or work rules, or from
those who have willingly surrendered entitlement of restricted employee
shares in writing.
2. The Company may recover allocated but unreceived shares from
employees who resign, retire, or are dismissed, made redundant, or
decease for causes unrelated to occupational hazards within 4 years after
the date of distribution.
3. The Company will recover (without compensation) allocated shares from
employees who violate the terms of issuance before the criteria of
entitlement is met.
4. The Company will recover (without compensation) allocated shares that
fail to meet the required criteria over the duration of entitlement. In which
case, the Company shall instruct the custodian institution or custodian
bank to complete book-entry transfers at least 15 business days before the
book closure date of any stock dividend/cash dividend/cash issue.
Number of restricted employee
shares recovered
Number of restricted shares with
restrictions removed
Number of restricted shares with
restrictions intact
Number of restricted shares with
restrictions remaining as a
percentage to total outstanding
shares (%)
2,110,000 shares
0 shares
47,250,000 shares
1.06% (Note)
Impacts on shareholders’ equity
Possible expenses:
A total of 49,360,000 restricted shares have been issued; the issuance price per
share is NTD 0. The fair value of shares is measured on the day they are
distributed; expenses shall be recognized over the duration of entitlement. If
all criteria is met, total expenses of this restricted share scheme should
approximate to NTD 1,112,430,000; of which NTD 400,262,000 is recognized
in 2015, NTD 411,069,000 in 2016, NTD 206,852,000 in 2017, NTD
89,546,000 in 2018, and NTD 4,701,000 in 2019.
Dilution of EPS and other impacts on shareholders' equity:
Based on the 4,470,636,625 shares outstanding as at May 11, 2016, the
restricted share scheme, once expensed, should dilute earnings per share by
NTD 0.09 in 2015, NTD 0.09 in 2016, NTD 0.05 in 2017, NTD 0.02 in 2018,
and NTD 0.00 in 2019. This issue produced limited dilutive effects on the
Company's EPS, and hence should not cause any significant impacts on
shareholders' equity.
Note: Calculations were based on share capital registered with the Ministry of Economic Affairs as at May 11, 2016
75
4.5.2 Information on Name of Managers and Top 10 Employees obtaining Restricted Employee Shares
Restrictions removed
Restrictions intact
Number of
new restricted
New restricted
shares
shares acquired
acquired as an
as a percentage to
employee
total outstanding
(shares)
shares
(Note 1)
26,500,000
0.59%
Title
Name
Managers
33 persons (Note 2)
Employees with
top-10 holding
3,400,000
0.08%
Number of
restricted
shares with
restrictions
removed
(shares)
Number of
restricted shares
Issuance
Issuance
with restrictions
Price
Amount
removed as a
(NTD)
(NTD)
percentage of total
outstanding shares
(Note 1)
Number of
restricted
shares with
restrictions
intact
(shares)
0
0
0
0
0
0
0
0
26,500,000
0
3,400,000
0
0
0
May 11, 2016
Number of
restricted shares
Issuance
Issuance
with restrictions
Price
Amount
intact as a
(NTD)
(NTD)
percentage of total
outstanding shares
(Note 1)
0.59%
0.08%
13 persons (Note 3)
Note:
1. Calculations were based on share capital registered with the Ministry of Economic Affairs as at May 11, 2016.
2. Managers’ titles and names
• Executive Vice Presidents: Yung-Ching Chang, Chung-Pin Wong, Chao-Cheng Chen - 3 persons
• Senior Vice Presidents: Chun-De Shen, Chiu-Rui Wei, Ying Chang, Ming-Hsing Hsu, Kuo-Chuan Chen, Sheng-Hua Peng, Wen-Da Hsu, and Wei-Cheng Chen - 8
positions
• Vice Presidents: Chih-Chuan Cheng, Ching-Hsiung Lu, Bo-Hsiung Chang, Bo-Tang Wang, Zong-Ming Wang, Yung-Nan Chang, Sheng-Hung Li, Yung-He Su,
Chih-Hsien Liang, Lung-Hua Shen, Ming-Dong Weng, Yue-Chun Li, Chiao-Lieh Huang, Chung-Hsing Tan, Yi-Yun Chang, Hsin-Kung Mao, Ling-Sheng Wu,
Hsin-Hsiung Huang, Yi-Chiang Chiu, Shih-Hung Huang, Ching-Fa Li, Bo-Heng Chen - 22 persons.
3. Titles and names of employees with top-10 holding
• Department heads: Jen-Liang Lin, Hsin-Chih Huang, Yao-Chung Tsai, Cheng-Chiang Wang, Yung-Ching Tien - 5 persons.
• Deputy department heads: Nai-Ping Chen, Hsin-Shu Wang, Chi-Bin Li, Bo-An Lin, Ji-Nan Chou, Chang-Wen Lin, Chao-Bin Huang, De-Chih Hsia - 8 persons.
4.6
4.7
Status of New Shares Issuance in Connection with Mergers and Acquisitions: None
Financing Plans and Implementation: None
76
V. Operational Highlights
5.1
Business Activities
5.1.1 Business Scope
(1) Main areas of business operations
The development, designed, manufacture and sales of Notebook PCs, Ultrabook PCs, 2-in-1 PCs, AIO PCs,
Tablet PCs, Server, AE, Smart Home, LCD TVs, LCD Monitor, Public Display, Smart Phone and other Smart
Accessory and Wearable Devices.
(2)
Revenue distribution
Major Divisions
(%) of Total Sales in 2015
Unit: NTD thousands
5C- related products
Other products
Total
(3) New products development
99.5%
0.5%
100.0%
The development and design of IoT Vertical Solution, EMR and hospital management system, Point of Care
management and Smart Garments.
■Notebook PCs
In terms of laptop system hardware , Compal has been using the most efficient R&D methods and has
introduced the latest (sixth generation) Intel Core i3, i5 and i7 series processors, and the AMD central
processor, with graphics incorporated in single silicon chip in the development of the APU, and has
simultaneously launched a new generation of laptop which is compatible with the Windows 10 operating
system, with Compal’s specialization in R&D, system integration and manufacturing, we helped our
customers rapidly deploy the newest specifications of product lines. In response to the market demand for
quality affordable products and slim products, we introduced the competitive priced thin laptop to gain
customers’ interests. The purchase signal in high-end gaming laptop market has been relatively stable.
Gaming laptops have become new ground for brand name companies to gain growth. These companies have
been raising investment in the gaming notebook market, and eating up competition on the global gaming
laptop market. Compal is very experienced in design and development with many years of gaming laptop
OEM. In 2016, the company will follow the market trend and introduce high-end technical specifications,
multi-dimensional graphics chips, the Intel sixth generation high-end H series central processor and launch a
brand new gaming computer. The aim being to work with those clients who dominate the gaming laptop
market. Compal has sustained sophisticated custom design capabilities to gain advantage for its client in the
markets of different countries. Especially in the demand of the commercial notebook market, which is less
impacted by the economic downturn. Compal also invested considerable energy in R&D, aiming to seize the
opportunity in consumer laptop and commercial laptop.
■Ultrabook PCs
Innovative technology and extensive R&D capabilities allow Compal to maintains a leading position in
the industry. Compal produces an ultra-thin notebook (Ultrabook), that uses the latest generation of the Intel
industry-leading 15 Watt standard voltage processor. Not only is it slim, light and hard but it has the most
excellent performance and allows users to stay productive. More Windows 10 Ultrabooks equipped with
standard voltage processors will be launched in 2016. Not only does Compal comply with the new generation
77
of Intel design specifications, but the Company has also introduced a slimmer design with a lower price to
meet the market demand. It maintains the stylish and elegant body but is a more powerful high-performance
computer. Compal will also continue to develop newer and more competitive technologies so not only
consumers can enjoy the world of Compal’s Innovation and variety products, the client can also enter this
market quickly.
■2-in-1 PCs
The 2-in-1 laptop is a new concept product with a variety of patterns for Transformers. There is a
standard laptop keyboard, but it also has Tablet PC touch flexibility. The screen of the PC is a touch sensing
module and in addition the Microsoft Windows 10 operating system is built in. The aim being to attract both
regular laptop and tablet consumers. Compal utilizes its rich experience in R&D to put forward a variety of
innovative concepts. The 2-in-1 notebooks with a variety of different designs and different sizes, equipped
with Compal’s exclusive combination of innovative technologies, materials, and fanless design, can create
new market demand and unanimous praises from customers and consumers.
■AIO PCs
AIO has been on the market for years. It is an elegant combination of screen and computer with a thin,
special shape, and elegant design. The product has replaced the desktop in many households and corporations.
Compal has also enhanced the design to allow the AIO to lie flat and also be portable (Portable AIO). Compal
possesses the basic NB technology used in the AIO and can rapidly create AIO product lines which have been
very well received by clients. We expect to create several more remarkable products following generational
changes in the desktop products market.
■Tablet PCs
Compal has long cultivated Desktop PC technology for industrial, commercial and consumer users. We
will start to manufacture a series of Desktops both low-priced and at high level as well as 3G/LTB enabled
devices to satisfy the needs of our clients and customer support and recognition. We will also extend our
product lines to eBooks and provide more competitive solutions for our name brand clients.
■Server
Cloud application has been a growing market. Partial data storage and calculation analytics have shifted
to the cloud server in the back-end. In order to meet the demand from both Enterprises and Data Centers,
Compal has mastered the R&D of High-density computing power and precision performance management and
is able to design and manufacture a high CP value server.
■AE
Car PC consists of the in-car communication system (Telematics) and in-car AV entertainment system.
The Telematics has special regulations which involve safety and communication control regulations and we
have been long calibrated with car makers to make sure the process in sync. The in-car AV entertainment
system framework is very similar to a computer and has been the first step into the car PC market. With years
of hard work in the field, Compal has been adopted by several major car makers in the world.
■Smart Home
Smart Home has been developed for many years and has focused on media sharing application. With the
era of Internet of Things (IoT), a smart home central control platform will become the key feature in all
industries. Compal has entered into the R&D of Home Gateway by using our production design capacity of
mobile computers and mobile devices. We’ve also developed new products and new business lines by
cultivating on wireless technology and sensor network technology, integrating background cloud computing
services, and focusing on smart energy saving, smart safety, and smart home care. In the future, Compal will
also depend on various areas of the internet, using our core technical and gradually expanding the depth and
breadth of products, to look for a relatively niche market and expand product coverages.
78
■IoT Vertical Solution
Vertical Solution has been one of the key demands in the development of the IoT. A wide range of
applications, both software and hardware, coupled with customized design services based on client demand
satisfy the needs of smart cities, industry 4.0, smarter buildings, smart retail and smart medicine. B2B
customer demand accounts for a high proportion of current IoT and also brings Compal a more immediate
profit. Compal has competitive products for the primary needs of development in many different fields, not
only as a hardware manufacturer, but as a full-Service Provider.
■Smart Medical and Healthcare
The aging population, China’s new two-child policy, the flourishing health care industry, and the rise of
sports fashion, especially the popularity of convenience smart devices, have all contributed to smart healthcare
becoming a focus of attention. It has also become a major matter of cross industry cooperation. Compal has
responded to market demand and the rapid advent of the IoT era by actively cutting into the major hospitals
and Point of Care (POC) market through our integration advantages and rich experience in product
development through strong ICT. This is coupled with cross-industry alliance strategy for such things as
long-term care centers, confinement centers… etc. The designs, which include science, technology, and
humanity help caregivers to provide higher quality services and also give hope of a better quality of life and
personal dignity to those who need healthcare.
■LTD TVs
As consumers change their viewing habits, the interaction experience between users of Smart TVs (or
smart phones) is also redefined by seamless extension of the content on the devices, such as simplification of
TV network setup. This improves user convenience to meet new expectations from such devices as smart TVs.
■LCD Monitor
The UHD products base has advanced to the HDMI 2.0 specification and now supports up to a 4K2K
60Hz input signal, which responds to the needs of the professional graphics design and the B2B business
markets.
■Smartphone
Compal continues to strengthen the operational efficiency of R&D, develop core communications
technologies, and continue the development of innovative technologies to maintain an industry-leading
position. In 2016, we will continue to develop high-end multi-core, no frame, multi-camera image integration,
and special feature cameras. We will also increase the speed for TDD-LTE / FDD-LTE carrier aggregation
smart mobile devices. In addition to continuing to strengthen the competitiveness of low-priced introductory
devices, we will also actively develop cost-effective, good looking, high value products to cope with the rapid
growth and customer needs in emerging markets.
■Smart Accessory and Wearable Devices
Compal has excellent wireless technology and cross-platform integration ability and can rapidly cut into
the product design and manufacturing of smart accessories to cope with the explosion of the smart wearable
accessories market. We have developed a range of intelligent RTOS, Android, and Android Wear system
smart watches which are expected to ship in 2016. We expect to continue this trend in the development of
technology throughout 2016, and hope to expand our client base and develop thinner and lighter power saving
smart accessories and wearable devices.
5.1.2 Industry Overview
Please refer to page 72-79 of the Chinese annual report.
79
5.1.3 Research and Development
Research and Development Expenses in the past year:
Year
R&D expenses
Operating revenues
Unit: NTD thousands; %
R&D expenses as a percentage
to operating revenues
2015
2016 first quarter
12,249,660
2,579,300
847,305,698
176,649,808
1.45%
1.46%
5.1.4 Long-term and Short-term Development
(1) Short-term Development
• We will adapt to market changes, follow current trends, strengthen new design concepts, maintain the focus on
product difference, and launch ahead of our competitors.
• We will enhance operation efficiency, to further increase our product competitiveness and push the sales
growth rate higher than the market average.
• We will improve logistics management and flexibility to shorten delivery time.
• We will elaborate different market strategies for different product markets. Bundle the new technology and
modular features in the mainstream products to enhance value-added products and variety. Use a
forward-looking approach, based on the uniqueness of the products, to develop the design concept of the new
products and become the market focus. In low-priced products, other than pricing competitiveness, the demand
of user functions is also an important consideration.
• Production bases will be diversified to spread the risk of a single production, reduce the cost of manufacturing
and improve product competitiveness.
• We will pay closer attention to market trends and evolution in smart devices and develop product concepts
suitable for OEM customers and the market. We will help customers create differentiated products with
feasible designs.
• Product development times will be further shortened to optimize supply chain management, maintain persistent
high quality, and provide customers with more competitive products.
• More effort will be made to maintain existing customer relations. Continue to increase the volume in product
cooperation. In addition to maintaining a high degree of customer satisfaction. We also seek other
opportunities for cooperation with new customers, aiming to have a better than the market average business
growth rate in the Company’s smart device products.
• We will improve product profitability to achieve the maximum utilization of capacity and enhance overall
operational efficiency and profitability.
• We will tap our accumulated communications industry R&D energy resources to quickly and efficiently cut
into the high-growth networking market.
• A number of different industry alliance strategies will be used for the rapid development of a diversified
product line that will strengthen customer relationships in the shortest possible time.
(2) Long-term Development
• A spirit of innovation will strengthen the value-added Company products and improve long-term core
competitiveness.
• Cooperation with our customers will be improved to allow better product planning, development and
manufacture as well as comprehensive after-sales service.
• Horizontal and vertical integration of all parts and products of the Group’s affiliates will be strengthened
strategically and aligned with customers, to give them more convenient and complete services.
• We will continue to strengthen the core R & D capabilities and technical service capabilities for smart devices.
• Optimization of the quality of sophisticated products will be enhanced by new development and cost structures
and strategic alliances with main parts providers in the supply chain to give customers better and more
competitive products and services.
• Closer horizontal and vertical integration will be made with affiliates in the Group to create and improve the
loyalty of long-term customers.
• Our ability to innovate will be further cultivated, aiming to be able to more accurately predict market trends,
before the client does, and provide them with products and services and high value-added solutions to improve
long-term core competitiveness.
80
• The Company has established a service-oriented business model and new revenue sources through careful
long-term upstream and downstream integration and cooperation.
• We are strengthening the breadth of learning of our team in preparation for future new business and product
development through cross-industry alliances.
• We are cultivating the ability to control key technology, strategize high-end product lines, and gain cooperation
opportunities with big manufacturers around the world.
5.2 Market and Sales Overview
5.2.1 2015 Sales (Service) by Regions
Area
Americas
Europe
Asia (Including Taiwan)
Other Area
Total
Percentage
37.1%
26.6%
33.2%
3.1%
100.0%
5.2.2 Major Products and Their Main Uses
■ Notebook PCs
Analog-digital application hardware platform combined with the use of specific development software, which
has many applications such as data editing processing, clerical editing, layout, graphics applications, web
browsing, communication, digital audio-visual entertainment and gaming applications.
■ Ultrabook PCs
Emphasize laptop that is thin and light-weighted and take into account the performance of the battery
performance to meet the consumer’s needs of portable and productivity.
■ 2-in-1 PCs
The device uses the Windows 10 operating system, has an optional stylus, and satisfies the growing consumer
demand for mobile computing. In addition to multiple operating modes, the laptop has a touch screen which
enables it to be used as a tablet.
■ AIO PCs
Beautiful shape and suitable for household. Emphasizing the touchscreen input interface and software
application with strong computing power.
■ Tablet PCs
Portable touchscreen multimedia tablet and online information application.
■ Servers
Stores and analyzes large data and is compatible with various cloud applications.
■ AE
(cid:2)
Touchscreen car multimedia player.
(cid:2) Voice controlled natural sound navigation.
(cid:2)
Bluetooth wireless phone to answer calls.
(cid:2) WiFi smartphone which allows two-way communications.
(cid:2) Accident alarm
81
(cid:2)
Integrated peripherals safety warning systems such as wireless tire pressure and collision avoidance
radar.
■ Smart Home
Smart appliances control and sensor which provides users with diversified smart living services.
■ IoT Vertical Solution
We provide our clients with complete solutions and services through flexible hardware design and a range of
customized software applications including cloud and big data analysis.
■ Smart Medical and Healthcare
The penetration of households and point-of-care areas using technology, including that of the IoT, and gradual
integration with our own peripheral software products to provide comprehensive solutions, and give
convenient and instant smart health care that will enhance dependence on the products as well as user brand
loyalty.
■ Displays
Graphics and audio display and output
■ Smartphone
Personal communications and Internet use
5.2.3 Supply Status of Main Materials
Main materials include CPU/Chipset, HDD, Memory, ODD, Battery, LCD Panel, and Touch Panel Module.
Regarding their supply status, please refer to page 93-94 of the Chinese annual report.
82
5.2.4 Major Suppliers and Clients
(1) Major Suppliers in the Last Two Calendar Years
Party
Name
Amount
2014
As a
percentage to
2014 net
purchases
(%)
2015
2016 first quarter
Unit: NTD thousand
Relationship
with the issuer
Name
Amount
As a
percentage
to 2015 net
purchases
(%)
Relationship
with the issuer
Name
Amount
As a
percentage to
2016 first
quarter net
purchases (%)
Relationship
with the issuer
196,641,921
1 Company E
2 Company B
94,213,359
Others
522,480,810
Net Purchase 813,336,090
24.18
11.58
64.24
100.00
N/A
N/A
Company E
Company B
Others
Net Purchase
223,294,338
112,207,244
478,425,759
813,927,341
27.43
13.79
58.78
100.00
N/A
N/A
Company E
Company B
Others
Net Purchase
52,843,154
24,024,222
92,300,386
169,167,762
N/A
N/A
31.24
14.20
54.56
100.00
(2) Major Clients in the Last Two Calendar Years
Party
Name
Amount
2014
As a
percentage to
2014 net
sales (%)
Relationship
with the issuer
Name
Amount
2015
2016 first quarter
As a
percentage to
2015 net sales
(%)
Relationship
with the
issuer
Name
Amount
As a
percentage to
2016 first
quarter net
sales (%)
Relationship
with the issuer
Unit: NTD thousand
1 Company a
2 Company c
3 Company d
4 Company e
5 Company f
Others
Net sales
113,261,171
102,730,381
254,615,227
130,230,357
27,993,009
216,870,607
845,700,752
N/A
N/A
N/A
N/A
N/A
13.39
12.15
30.11
15.40
3.31
25.64
100.00
Company a
Company c
Company d
Company e
Company f
Others
Net sales
133,830,636
37,423,624
288,523,817
103,644,690
97,984,283
185,898,648
847,305,698
N/A
N/A
N/A
N/A
N/A
15.79
4.42
34.05
12.23
11.57
21.94
100.00
Company a
Company c
Company d
Company e
Company f
Others
Net sales
27,473,419
1,774,696
70,533,654
18,219,198
25,609,459
33,039,382
176,649,808
N/A
N/A
N/A
N/A
N/A
15.55
1.00
39.93
10.31
14.50
18.71
100.00
83
5.2.5 Production in the Last Two Years
Year
Production
volume/
2014
2015
Unit: devices; NTD thousands
Production
Production
Production
Production
Production
Production
value
capacity
volume
value
capacity
volume
value
Main products
5C electronics
113,708,339
93,904,896
820,180,660
111,129,349
98,758,313
829,209,071
5.2.6 Shipments and Sales in the Last Two Years
Year
2014
Unit: devices; NTD thousands
2015
Sales volume
Domestic sales
Export sales
Domestic sales
Export sales
Main products
Volume
Value
Volume
Value
Volume
Value
Volume
Value
5C electronics
256,798
1,526,790
92,957,355 844,173,962 650,577
3,481,047
96,981,278 843,824,651
5.3 Human Resources
Year
December 31, 2014
December 31, 2015
March 31, 2016
Number of employees
Average age
Average years of service
Academic
qualifications
Doctoral Degree
Master Degree
University
High school
Below high
school/others
79,639
26.66
1.65
0.07%
3.45%
19.07%
56.22%
21.19%
72,796
26.63
1.94
0.07%
3.78%
19.75%
53.86%
22.54%
69,035
27.22
1.92
0.08%
4.04%
20.48%
54.04%
21.36%
5.4
Environmental Protection Expenditure
(1) The Company is an assembler of electronic products, and produces no significant pollution:
To protect the environment and fulfill our social responsibility as well as reduce carbon emissions and the impact
on global warming. The Taiwan and Mainland China plants together incurred expenses of NT$11,130 thousand
on repairs (excluding regular maintenance and green R&D) in 2015. We are keeping the promises we made as an
earth citizen, hoping to make substantial contribution to protection of the global environment. We will continue
our commitment to efforts in this respect.
(2) Compliance with EU RoHS directives:
(cid:3) All Compal products are 100% compliant with EU RoHS Directives. There have been no cases of any
returns for non-compliance with RoHS standards. In addition, Compal has begun demanding that suppliers
84
make timely adjustments for any RoHS exclusions that are scheduled for the near future and restrict the use
of substances such as DEHP, BBP, DBP and DIBP, the ban on these comes into effect in 2019.
(cid:3)
In order to manufacture environmentally friendly green products and meet the requirements of both
international environmental laws and client demand, the Company has implemented “Management
Standards for the Control of Environment-Related Substances in Parts and Materials” that covers all
hazardous substances currently prohibited by law and banned by customers. We have implemented efficient
and effective methods of inspection for hazardous substances using recognized component classification
and risk control to establish a plant monitoring mechanism for oversight and verification. All the products
manufactured by the Company comply with the validation IECQ QC 080000 Electrical and Electronic
Components and Products Hazardous Substance Process Management System Requirements.
(3) Responsive strategies and possible expenses:
(cid:3)
In the future, the Company will continue to implement its environmental responsibilities including the
boosting of staff knowledge of environmental matters, the advocation of updated green living knowledge,
Company response to government policy with respect to green consumption, and the regular priority
assessment of green product content in procurement as well as continuous improvement in the energy
efficiency of our plants. This includes scrutiny for all kinds of possible violations of environmental
regulations in the operations management system, and the mandate to make timely response to all
environmental laws.
5.5
Labor Relations
(1) Availability and execution of employee welfare, education, training and retirement policies. Elaborate on
the agreements between employers and employees, and protection of employees’ rights
■ Employee welfare:
In addition to all their statutory labor rights and to help employees find a balance between work and
personal life, both physical and mental, and to improve their vitality in the workplace, the Company has
established an Employee Benefits Committee, a Life Committee, and other groups responsible for
promoting worker welfare. The employee health benefits and activities include a fitness center, a medical
facility, periodic health checks, recreational team competitions, family activities, travel, the arts, and
leisure and all kinds. Group Life Insurance is covered by the Company that includes accident, medical,
and cancer. The employees dependants may also join the scheme at a discounted rate, but at their own
expense. We also have benefits such as scholarships for employees and their children.
The Company actively supports the government in resolving the low birth rate crisis and childcare
policy in Taiwan. Since 2011, we have provided generous maternity grants for employees and their
spouses and children. By the end of 2015, the Company had provided NT$ 91.34 million in maternity
allowances and bonuses. There were 53 counts of employees who took parenting leave, with the right to
return, in 2015.
■ Education and training:
The Company set training credits and outlined the credit system according to the needs of each level.
The Company also integrate all training records in online learning platform to further assist the competent
staff in keeping abreast of the learning progress.
In 2015, a total of 1,808 training sessions (both internal and external) were organized; these courses
85
delivered 122,188 hours of training and 36,992 persons enrolled. The total training expenses were NT$
8,817 thousand. The training courses included:
Orientation: Organized new hire seminars and corporate culture experience camp to help the new hires
better understand the Company’s culture, the current status of the industry, and the Company
strategy and visions.
Language training: Basic to advance English and Japanese courses which train the employees’ ability to
respond to customers and equip them with a global vision through workspace
situational training.
Managerial skills Training: To establish a comprehensive blueprint of development level, strengthen the
core competency at all levels in such aspects as teamwork, problem analysis,
innovative thinking... and so on, and also to conduct planning for Company
talent training in various stages.
Professional training: Categorized new professional knowledge lectures, courses, and experiences
heritage job training to enhance employees’ expertise and technology. Also to
enhance the Company’s core competitiveness through systematic management.
E-learning: Offers related courses in new hire requisites, IT, 6 sigma, language, management, CSR and
occupational safety. The Company uses Internet learning and resource sharing to offer
real-time learning, maximizing the effect with a complete learning and training mechanism
that utilizes a comprehensive knowledge management system.
■ Retirement system
The Company has developed its retirement system in accordance with the Labor Standards Act and
the Labor Pension Act. For employees who are transferred to affiliated companies, pension benefits are
paid according to employees’ years of service in their respective departments, and out of pension fund
accounts that each department has contributed over the course of employees’ service.
■ Employer-employee communications and enforcement of workers’ rights
The Company has always valued employer-employee relations, and has communication channels
available to facilitate two-way communication between the two parties, thereby allowing the Company to
respond to employees’ thoughts and opinions in a prompt manner. The Company not only has policies in
place to protect employees’ rights, but also makes decisions in the best interests of its employees.
(2) Personnel management
The Company has clear policies in place to manage human resources and to guide employees’
behaviors. There are specific levels of approval authority and detailed rules to guide decisions concerning
employees’ recruitment, promotion, appraisal, assignment, leave of absence, resignation, confidentiality
agreement, reward and discipline. These policies and rules exist to eliminate subjective judgments and to
create a fair, open, and systematic corporate culture.
(3) Work environment
• Buildings are subjected to annual fire safety inspections and reports.
• Buildings, plants and equipment are inspected daily and maintained on a regular basis.
• The Company hires regular cleaning services to ensure the cleanliness of its work environment.
(4) Employees’ safety
• Personnel entry and exit are controlled by security system.
• Security personnel are stationed 24 hours a day to patrol plant premise and monitor the surveillance
system.
• Lectures and rehearsals are organized annually to demonstrate the proper responses in case of an
86
emergency.
(5) Actual or estimated losses arising as a result of employment disputes in the recent year up till the
publication date of this annual report, and any responsive measures taken:
• The Company did not suffer any losses due to employment dispute in the recent year, and nor does it
expect any occurrence in the coming year.
• Responsive strategies and possible expenses: none.
87
5.6
Important Contracts
Agreement
Counterparty
Patent
licensing
agreement
Trading and
manufacturing
agreement
Phoenix Technologies Ltd.
Dell Products L.P.
Trading
agreement
Toshiba Co.
Trading and
manufacturing
agreement
Acer Inc.
Shareholder
agreement
Tatung Co.
Period
Since
2010.1.1
Auto-renewed
upon expiry
Since
1997.06.26
Auto-renewed
upon expiry
Since
1999.09.09
Yearly
Auto-renewed
upon expiry
Since
2001.10.01
Yearly
Auto-renewed
upon expiry
Since
2009.07.21
︱
until completion
of the
underlying
purpose
Major Contents
Restrictions
1. Tool Licenses
2. Source Code licenses
3. Maintenance
Under this agreement, the buyer will
procure computer products developed
and manufactured by the seller, while the
seller will give the buyer proper licenses
to use the products and provide after-sale
technical services thereafter.
Under this agreement, the buyer will
procure computer products developed
and manufactured by the seller, along
with after-sale technical services
provided by the seller.
Under this agreement, the buyer will
procure computer products developed
and manufactured by the seller, along
with after-sale technical services
provided by the seller.
This agreement is related to the private
placement of shares of Chunghwa
Picture Tubes Ltd. (CPT); the terms
enable the subscriber to request for a
buyback of privately placed shares from
the counterparty.
N/A
N/A
N/A
N/A
N/A
88
VI. Financial Information
6.1
Five-Year Financial Summary
6.1.1 Condensed Balance Sheet and Statement of Comprehensive Income – Based on IFRS
(1) Consolidated Condensed Balance Sheet – Based on IFRS
Year
Financial Summary for The Last Five Years (Note 1)
Unit: NT$ thousands
As of March 31, 2016
Item
Current assets
Property, plant, and
equipment
Intangible assets
Other assets
Total assets
Prior to
Current
distribution
liabilities
After
distribution
2011
2012
2013
2014
2015
259,133,608
287,380,820
324,845,249
277,783,476
248,360,406
20,772,790
21,209,228
24,472,732
24,308,631
23,449,956
1,451,181
1,293,643
1,035,162
1,194,193
30,431,001
26,219,123
28,397,575
24,639,275
1,316,847
24,962,750
311,788,580
336,102,814
378,750,718
327,925,575
298,089,959
195,000,133
220,597,261
250,264,267
202,757,075
171,251,778
199,333,956
224,902,606
256,832,412
(Note 2)
-
Non-current assets
1,995,177
15,314,137
22,266,514
15,570,384
16,214,659
Total liabilities
Prior to
distribution
After
distribution
Equity attributable to
owners of parent
Ordinary shares
Capital surplus
Prior to
Retained
distribution
earnings
After
distribution
Other equity interests
Treasury shares
Non-controlling interests
Total equity Prior to
distribution
After
distribution
196,995,310
235,911,398
272,530,781
218,327,459
187,466,437
201,329,133
240,216,743
279,098,926
(Note 2)
-
N/A
106,039,633
95,102,289
101,386,923
103,775,795
104,679,277
44,126,526
16,122,810
44,134,467
44,232,366
16,193,087
14,296,445
44,711,266
12,838,638
44,704,866
12,830,309
55,053,941
44,489,978
47,721,872
51,877,511
53,479,391
50,669,755
42,312,310
43,293,091
(Note 2)
-
(8,382,397)
(7,707,518)
(3,139,021)
(3,926,881)
(881,247)
8,753,637
(2,007,725)
(1,724,739)
(1,724,739)
5,089,127
4,833,014
5,822,321
(4,610,550)
(1,724,739)
5,944,245
114,793,270
100,191,416
106,219,937
109,598,116
110,623,522
110,459,447
95,886,071
99,651,792
(Note 2)
-
Note: 1. Financial information is audited and certified by the CPA every year. The financial information as of March 31, 2016,
has not yet been audited by the CPA.
2. 2015 annual financial statements have not been approved at a shareholders’ meeting. Therefore, the amount after
allocation is not listed.
3. The Company has retroactively adjusted previous amounts in the financial statements effective January 1, 2014, due to
the adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2015.
89
(2) Consolidated Condensed Statement of Comprehensive Income – Based on IFRS
Year
Item
Net sales revenue
Gross profit
Net operating income
Non-operating income and
expense
Net income before tax
Net income from continuing
operations
Net loss from discounting
operations
Net income (loss)
Other comprehensive income
(loss)
(net of tax)
Net income
Net income attributes to
shareholders of the Parent
Net income attributes to
non-controlling interests
Comprehensive income
attributed to owners of parent
Comprehensive income
attributed to non-controlling
interests
Financial Summary for The Last Five Years (Note 1)
2011
2012
2013
2014
2015
Unit: NT$ thousands
As of March 31, 2016
683,913,713 692,748,293
845,700,752
847,305,698
176,649,808
28,749,803
28,110,391
32,364,662
33,378,357
10,054,894
9,234,044
11,664,922
11,312,452
7,482,046
2,776,408
(631,049)
(4,873,662)
(1,937,570)
479,641
(477,627)
9,423,845
4,360,382
9,727,352
11,792,093
2,298,781
7,240,147
2,903,732
7,545,381
9,007,147
1,746,263
-
-
-
-
-
7,240,147
2,903,732
7,545,381
9,007,147
1,746,263
N/A
(59,127)
711,298
4,555,499
(101,970)
(822,277)
7,181,020
3,615,030
12,100,880
8,905,177
923,986
6,399,958
2,467,211
7,024,461
8,684,610
1,601,242
840,189
436,521
520,920
322,537
145,021
6,406,588
3,160,663
11,548,480
8,552,926
803,759
774,432
454,367
552,400
352,251
120,227
Earning per share (unit: dollar)
1.47
0.57
1.63
2.01
0.37
Note: 1. Financial information is audited and certified by the CPA every year. The financial information as of March 31, 2016, has
not yet been audited by the CPA.
2. The 2015 annual financial statement for the current year has not yet been approved at a shareholders’ meeting
3. The Company has retroactively adjusted previous amounts in the financial statements effective January 1, 2014, due to
the adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2015.
90
(3) Parent-Company-Only Condensed Balance Sheet – Based on IFRS
Year
Financial Summary for The Last Five Years (Note 1)
Unit: NT$ thousands
As of March
31, 2016
Item
Current assets
Property, plant, and
equipment
Intangible assets
Other assets
Total assets
Current
liabilities
Prior to
distribution
After
distribution
Non-current assets
Total liabilities
Prior to
distribution
After
distribution
Equity attributable to owners
of parent
Ordinary shares
Capital surplus
Retained
earnings
Prior to
distribution
After
distribution
Other equity interests
Treasury shares
2011
2012
2013
2014
2015
194,403,691
210,646,593
255,609,554
207,496,808
2,295,444
2,218,316
2,230,023
2,181,737
724,106
617,739
412,185
378,454
76,775,902
82,728,525
85,179,353
86,182,040
274,199,143
296,211,173
343,431,115
296,239,039
167,275,463
187,574,634
220,791,532
177,664,877
171,659,649
191,929,970
227,434,703
(Note 2)
884,047
13,534,250
21,252,660
14,798,367
168,159,510
201,108,884
242,044,192
192,463,244
N/A
172,543,696
205,464,220
248,687,363
(Note 2)
-
-
-
-
N/A
44,126,526
16,122,810
44,134,467
44,232,366
44,711,266
16,193,087
14,296,445
12,838,638
55,053,941
44,489,978
47,721,872
51,877,511
50,669,755
42,312,310
43,293,091
(Note 2)
(8,382,397)
(7,707,518)
(3,139,021)
(3,926,881)
(881,247)
(2,007,725)
(1,724,739)
(1,724,739)
Non-controlling interests
-
-
-
-
Total equity
Prior to
distribution
After
distribution
106,039,633
95,102,289
101,386,923
103,775,795
101,705,810
90,796,944
94,818,778
(Note 2)
Note: 1. The financial information is audited and reviewed by the CPA every year.
2. The 2015 annual financial statements have not been approved at a shareholders’ meeting. Therefore, the amount after
allocation is not listed.
3. The Company retroactively adjusted previous amounts in the financial statements effective January 1, 2014, due to the
adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2015.
91
(4) Parent-Company-Only Condensed Statement of Comprehensive Income – Based on IFRS
Year
Item
Net sales revenue
Gross profit
Net operating income
Non-operating income and
expense
Net income before tax
Net income from continuing
operations
Net loss from discounting
operations
Net income (loss)
Income (loss) from other
comprehensive income (net after
tax)
Net income
Net income attributes to
shareholders of the Parent
Net income attributes to
non-controlling interests
Comprehensive income
attributed to owners of parent
Comprehensive income
attributed to non-controlling
interests
Earning per share (unit: dollar)
Financial Summary for The Last Five Years (Note 1)
Unit: NT$ thousands
As of March 31, 2016
2011
2012
2013
2014
608,702,320
15,258,012
4,877,292
632,622,772
16,359,240
5,505,654
803,504,061
21,288,913
7,291,756
2015
802,994,930
22,737,590
7,305,278
2,288,536
(2,503,176)
286,853
2,857,612
7,165,828
3,002,478
7,578,609
10,162,890
6,399,958
2,467,211
7,024,461
8,684,610
-
-
-
-
6,399,958
2,467,211
7,024,461
8,684,610
N/A
6,630
693,452
4,524,019
(131,684)
N/A
6,406,588
3,160,663
11,548,480
8,552,926
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.47
0.57
1.63
2.01
Note: 1. The financial information is audited and reviewed by the CPA every year.
2. The 2015 financial statement has not yet approved by the shareholders’ meeting.
3. The Company retroactively adjusted previous amounts in the financial statements effective January 1, 2014, due to the
adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2015.
92
6.1.2 Condensed Balance Sheet and Statement of Comprehensive Income – Based on ROC GAAP
(1) Consolidated Condensed balance sheet – Based on ROC GAAP
Item
Year
Financial Summary for The Last Five Years
2011
2012
2013
2014
2015
As of March 31,
2016
Unit: NT$ thousands
Prior to distribution
After distribution
Current assets
Funds and investments
Fixed assets
Intangible assets and other assets
Total assets
Prior to distribution
Current
liabilities
After distribution
Long-term and other liabilities
Total
liabilities
Ordinary shares
Capital surplus
Retained
earnings
Currency exchange rate adjustment
Net loss not recognized as pension cost
Unrealized gains and losses of financial
instruments
Treasury shares
Minority interest
Prior to distribution
After distribution
236,063,264
23,908,349
16,951,183
1,923,503
278,846,299
164,527,553
170,632,894
221,146
164,748,699
170,854,040
44,002,554
15,512,401
56,139,782
49,964,431
(1,234,071)
-
257,852,167
28,044,206
21,386,512
2,000,627
309,283,512
192,909,628
197,243,451
1,005,337
193,914,965
198,248,788
44,126,526
15,776,692
56,373,219
51,989,033
(3,134,299)
(165,627)
(7,478,947)
(5,518,799)
(881,247)
8,037,128
(881,247)
8,792,082
N/A
N/A
N/A
N/A
Total
Shareholder’s
equity
Prior to distribution
114,097,600
115,368,547
After distribution
107,992,259
111,034,724
Note: all yearly financial information has been audited.
93
(2) Consolidated Condensed Statement of Income – Based on ROC GAAP
Unit: NT$ thousands
Year
Financial Summary for The Last Five Years
Item
Net sales revenue
Gross profit
Net operating income
Non-operating income and
gains
Non-operating expense and
losses
Income from continuing
2011
2012
2013
2014
2015
693,126,573
682,891,359
33,587,365
13,461,681
29,812,097
10,067,934
2,696,593
2,261,926
2,934,003
2,890,453
As of March 31,
2016
N/A
N/A
N/A
N/A
operations before income
13,224,271
9,439,407
tax
Income from continuing
operations p
11,096,306
7,255,485
Consolidated total income
11,096,306
7,255,485
Net income attributed to
owners of parent
Earning per share retroactive
11,014,680
6,411,027
adjustment
2.53
1.47
(Unit: dollars)
Note: all yearly financial information has been audited.
94
(3) Parent-Company-Only Condensed balance sheet – Based on ROC GAAP
Item
Year
Financial Summary for The Last Five Years
Unit: NT$ thousands
As of March
31, 2016
2011
2012
2013
2014
2015
N/A
N/A
N/A
N/A
Current assets
165,602,004
193,064,991
Funds and long term investments
Fixed assets
Intangible assets
Other assets
Total assets
Current liabilities
Long-term liabilities
Other liabilities
Total liabilities
Ordinary shares
Capital surplus
Retained earnings
Prior to
distribution
After
distribution
Prior to
distribution
After
distribution
Prior to
distribution
After
distribution
Unrealized gains and losses of financial
instruments
67,921,249
76,151,586
2,183,514
2,160,328
743,568
507,276
724,106
189,276
236,957,611
272,290,287
130,872,137
165,490,729
137,047,488
169,874,915
-
-
25,002
223,093
130,897,139
165,713,822
137,072,490
170,098,008
44,002,554
44,126,526
15,512,401
15,776,692
56,139,782
56,373,219
49,964,431
51,989,033
(7,478,947)
(5,518,799)
cumulative exchange rate adjustments
(1,234,071)
(3,134,299)
Net loss not recognized as pension cost
-
(165,627)
Total shareholder’s
equity
Prior to
distribution
After
distribution
106,060,472
106,576,465
99,955,131
102,242,642
Note: all yearly financial information has been audited.
95
(4) Parent-Company-Only Condensed Statement of Income – Based on ROC GAAP
Item
Year
Financial Summary for The Last Five Years
Unit: NT$ thousands
As of March 31,
2016
2011
2012
2013
2014
2015
Net sales revenue
649,477,507
607,679,574
Gross profit
20,573,404
16,228,493
Net operating income
7,758,932
4,869,926
Non-operating
Income and gains
Non-operating
Expense and losses
Continuing operations
Net income (loss)
before tax
Continuing operations
Income (loss)
Income (loss) from
discontinued operations
Income (loss) from
extraordinary items
Cumulative Effect of
Changes
in Accounting Principle
5,177,859
2,620,408
834,458
315,184
12,102,333
7,175,150
11,014,680
6,411,027
-
-
-
-
-
-
Net income
11,014,680
6,411,027
Retroactively adjusted
earnings per share
(Unit: Dollar)
Note: all yearly financial information has been audited.
$1.47
$2.53
6.1.3 Auditors’ Opinions from 2011 to 2015
N/A
N/A
N/A
N/A
CPA
Audit Opinion
Accounting Firm
Year
2011 KPMG
2012 KPMG
2013 KPMG
2014 KPMG
2015 KPMG
Unqualified opinion
Unqualified opinion
Modified unqualified opinion (Note 1)
Modified unqualified opinion (Note 1)
Modified unqualified opinion (Note 2)
Note: 1. Brief disclosures of Company disposal of the equity investment of VIBO Telecom Inc and a record of the
Kuo, Kuan Ying; Lo, Jui Lan
Kuo, Kuan Ying; Lo, Jui Lan
Kuo, Kuan Ying; Lo, Jui Lan
Kuo, Kuan Ying; Lo, Jui Lan
Kuo, Kuan Ying; Lo, Jui Lan
impairment of equity investment in Chunghwa Picture Tubes, Ltd.
2. Impact of retroactive adjustments to the 2014 financial statement due to adoption of the 2013 version of the
International Financial Reporting Standards (IFRS) endorsed by the Financial Supervisory Commission (FSC)
of the ROC.
96
6.2
Five-Year Financial Analysis
A.
Consolidated Financial Analysis – Based on IFRS
Item
Year
Financial Analysis for the Last Five Years
2011
2012
2013
2014
2015
As of
March 31,
2016
Debt ratio
63.18
70.19
71.96
66.58
62.89
Capital Structure (%)
Long term fund to property, plant and
equipment ratio
Current ratio
Liquidity analysis
Quick ratio
Interest coverage
Account receivable turnover (times)
Average collection turnover
Operating
Inventory turnover (times)
Performance
Account payable turnover (times)
Analysis
Average inventory turnover days
Profitability
Analysis
N/A
Fixed assets turnover (times)
Total assets turnover(times)
Return on total assets (%)
Return on equity (%)
Operating income to paid-in capital ratio (%)
Net margin (%)
Earning per share (dollar)
Cash flow ratio (%)
562.22
544.60
525.02
514.91
540.89
132.89
130.27
105.61
106.85
129.80
102.70
137.00
145.03
113.71
118.98
23.88
4.61
79.18
13.29
4.82
27.47
37.81
2.31
2.55
6.34
21.36
1.06
1.47
(Note 1)
9.83
4.02
90.76
12.91
4.67
28.26
33.00
2.14
1.00
2.70
9.88
0.42
0.57
0.25
10.54
4.66
78.25
13.73
5.13
26.59
37.03
2.37
2.33
7.31
21.99
0.89
1.63
13.51
14.11
11.88
4.93
4.76
74.03
76.72
14.31
14.99
5.42
5.73
25.50
24.36
34.74
29.59
2.40
2.74
8.35
26.37
1.06
2.01
4.70
2.26
0.61
1.59
5.14
0.99
0.37
-
-
-
-
-
Cash flow
Cash flow adequacy ratio (%)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
Cash reinvestment ratio (%)
Leverage
Operating leverage
Financial leverage
Note: 1. The ratio is negative.
(Note 1)
(Note 1)
1.58
1.04
1.66
1.06
19.59
1.57
1.10
1.95
1.58
1.09
2. Not applicable as the financial information, for more than five years, in accordance with IFSR has not yet
been disclosed.
3. The financial ratio has changed by up to 20% in the past two years:
(cid:3) Interest coverage (times): is higher than in the last period mainly due to income before tax being higher.
(cid:3) EPS: is higher than in last period mainly due to income after tax in the current period.
(cid:3) Cash flow ratio: the decrease is mainly due to the net inflow from operating activities during this period
being less than in earlier periods.
(cid:3) Cash flow reinvestment ratio: the decrease is mainly due to the net inflow from operating activities in this
period being lower than in prior periods.
4. The financial information is audited and certified by the CPA every year. The financial information as of
March 31, 2016, has not yet audited by the CPA.
5. The Company made retroactive adjustment to previous amounts in the financial statements effective January
1, 2014, due to the adoption of the 2013 International Accounting Standards endorsed by the Financial
Supervisory Commission of the ROC as of January 1, 2015.
6. The 2015 financial statement has not yet been approved at a shareholders’ meeting.
97
Formula:
1. Financial Structure
(1) Debt Ratio = Total liabilities / Total assets
(2) Ratio of long-term capital to property, plant and equipment = (Net shareholders’ equity + Long-term liability) /
Net property, plant and equipment
2. Solvency
(1) Current ratio = Current Assets / Current liability
(2) Quick ratio = (Current assets - Inventory - Prepaid expenses) / Current liability
(3) Interest coverage ratio = Net income before income tax and interest expense / Interest expense
3. Operating Efficiency
(1) Account receivable (including account receivable and notes receivable from business activities) turnover
= Net sales / Average account receivable balance (including account receivable and notes receivable from
business activities)
(2) A/R turnover days = 365 / account receivable turnover
(3) Inventory turnover = Cost of Goods Sold / Average inventory balance
(4) Account payable (including account payable and notes payable from business activities) turnover = Cost of goods
sold / Average account payable balance (including account payable and notes payable from business activities)
(5) Inventory turnover days = 365 / Inventory turnover
(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
(1) Return on assets = [PAT + Interest expense × (1 - interest rate)] / average asset balance
(2) Return on equity = PAT / average net equity
(3) Pre-tax income to paid-in capital = Net income before tax / Issued capital stock
(4) Net profit ratio = PAT / Net sates
(5) EPS = (PAT - preferred stock dividends) / weighted average outstanding shares
5. Cash Flow
(1) Cash flow ratio = Cash flow from operating activities / Current liability
(2) Cash flow adequacy ratio = Most recent 5-year Cash flow from operating activities / Most recent
5-year (Capital expenditure + increases in inventory + cash dividend)
(3) Cash reinvestment ratio = (Cash flow from operating activities - cash dividend) / (Gross fixed assets + long-term
investment + other assets + working capital)
6. Leverage
(1) Operating leverage = (Nest revenue - variable cost of goods sold and operating expense) / operating income
(2) Financial leverage = Operating income / (Operating income - interest expenses)
98
B.
Consolidated Financial Analysis – Based on ROC GAAP
Item
2011
2012
2013
2014
2015
31, 2016
Year
Financial Analysis for the Last Five Years
As of March
Capital Structure
Debt ratio
59.08
62.70
(%)
Long-term capital to fixed assets ratio
673.24
542.02
Current ratio
Liquidity analysis
Quick ratio
143.48
114.10
133.66
106.09
Interest coverage
Account receivable turnover (times)
Average collection turnover
Operating
Inventory turnover (times)
Performance
Account payable turnover (times)
Analysis
Average inventory turnover days
Profitability
Analysis
Fixed assets turnover (times)
Total assets turnover(times)
Return on total assets (%)
Return on shareholder’s equity (%)
Operating
to paid-in capital ratio
income
%
Net margin (%)
Income before
tax
Retroactively adjusted earning per share
(dollar)
Cash flow ratio (%)
Cash flow
Cash flow adequacy ratio (%)
Cash reinvestment ratio (%)
Leverage
Operating leverage
Financial leverage
Note: 1. The ratio is negative.
29.82
4.50
81.15
14.27
4.63
25.57
43.41
2.26
3.75
9.43
23.98
4.66
78.31
13.24
4.81
27.56
35.63
2.32
2.57
6.32
30.59
22.82
30.05
21.39
1.60
2.53
20.94
73.27
17.34
1.45
1.04
1.06
1.47
(Note 1)
46.44
(Note 1)
1.62
1.04
N/A
N/A
N/A
N/A
2. The financial ratio has changed by up to 20% over the past two years: Not applicable.
3. The financial information is audited and reviewed by the CPA every year.
99
Formula:
1. Financial Structure
(1) Debt Ratio = Total liabilities / Total assets
(2) Long-term debts to fixed assets = (Net equity + Long-term debts) / Net fixed assets
2. Solvency
(1) Current ratio = Current Assets / Current liability
(2) Quick ratio = (Current assets - Inventory - Prepaid expenses) / Current liability
(3) Interest coverage ratio = Net income before income tax and interest expense / Interest expense
3. Operating Efficiency
(1) Account receivable (including account receivable and notes receivable from business activities) turnover
= Net sales / Average account receivable balance (including account receivable and notes receivable from
business activities)
(2) A/R turnover days = 365 / account receivable turnover
(3) Inventory turnover = Cost of Goods Sold / Average inventory balance
(4) Account payable (including account payable and notes payable from business activities) turnover = Cost of goods
sold / Average account payable balance (including account payable and notes payable from business activities)
(5) Inventory turnover days = 365 / Inventory turnover
(6) Fixed assets turnover = Net sales / Average Net Fixed Assets
(7) Total assets turnover = Net sales / Average Total assets
4. Profitability
(1) Return on assets = [PAT + Interest expense × (1 - interest rate)] / average asset balance
(2) Return on equity = PAT / average net equity
(3) Net profit ratio = PAT / Net sates
(4) EPS = (PAT - preferred stock dividends) / weighted average outstanding shares
5. Cash Flow
(1) Cash flow ratio = Cash flow from operating activities / Current liability
(2) Cash flow adequacy ratio = Most recent 5-year Cash flow from operating activities / Most recent
5-year (Capital expenditure + increases in inventory + cash dividend)
(3) Cash reinvestment ratio = (Cash flow from operating activities - cash dividend) / (Gross fixed assets + long-term
investment + other assets + working capital)
6. Leverage
(1) Operating leverage = (Nest revenue - variable cost of goods sold and operating expense) / operating income
(2) Financial leverage = Operating income / (Operating income - interest expenses)
100
6.3 Audit Committee’s Report for the Most Recent Year
Report of the Audit Committee.
The 2015 Financial Statement of Compal Electronics, Inc and Subsidiaries (the “Company”) has
been approved by the Audit Committee and the Board of Directors and has been audited and certified by
Gun-Yin Guo, CPA, and Rui-Lan Liu, CPA, of KPMG LLP and an audit report relating to the Financial
Statements has been issued. The Board of Directors has prepared the Company’s 2015 Business Report
and a proposal for the allocation of profits has been reviewed by the Audit Committee which determined
the aforementioned reports are in accordance with Company Law and the related regulations. According to
Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit
this report.
Sincerely
The Company 2016 shareholders’ meeting
Compal Electronics, Inc and Subsidiaries
Audit Committee Chair:
May 11, 2016
101
6.4 Consolidated Financial Statements and Independent Auditors’ Report
Please refer to Attachment I.
6.5
Parent-Company-Only Financial Statements and Independent Auditors’ Report
Please refer to Attachment II.
102
VII. Review of Financial Conditions, Financial Performance, and
Risk Management
7.1 Analysis of Financial Status
Analysis
Year
2015
2014
Unit: NT$ thousands
Difference
Amount
%
Current Assets
Funds & Investments
Property, plant and equipment
Other Assets
Total Assets
Current Liabilities
Other Liabilities
Total Liabilities
Share capital
Capital reserves
Retained Earnings
Other Adjustments
Treasury stock
Non-controlling Equity
277,783,476
324,845,249
(47,061,773)
11,788,042
24,308,631
14,045,426
11,694,855
24,472,732
17,737,882
327,925,575
378,750,718
202,757,075
250,264,267
15,570,384
22,266,514
218,327,459
272,530,781
44,711,266
12,838,638
51,877,511
(3,926,881)
(1,724,739)
5,822,321
44,232,366
14,296,445
47,721,872
(3,139,021)
(1,724,739)
4,833,014
93,187
(164,101)
(3,692,456)
(50,825,143)
(47,507,192)
(6,696,130)
(54,203,322)
478,900
(1,457,807)
4,155,639
(787,860)
-
989,307
Total Shareholders’ Equity
Note: Analysis of variations exceeding 20% and amounting to more than NTD10 million:
106,219,937
109,598,116
3,378,179
(14.49)
0.80
(0.67)
(20.82)
(13.42)
(18.98)
(30.07)
(19.89)
1.08
(10.20)
8.71
25.10
-
20.47
3.18
(cid:3) The decrease in other assets: are mainly due to the increase of the unrealized valuation loss of
available-for-sale financial assets (non-current) and the disposal of available-for-sale financial assets
(non-current).
(cid:3) The decrease in non-current liability: is mainly due to the decrease of long-term debt.
(cid:3) The decrease of other equity: is mainly due to the increase of the unrealized loss of available-for-sale financial
assets, the increase of exchange differences arising from the translation of the financial statements of foreign
operations, and the increase of unearned employee benefits and other increases.
(cid:3) The increase of non-controlling interests: is mainly due to the addition of Company subsidiaries.
(cid:3) The Company retroactively adjusted previous amounts in the financial statements effective January 1, 2014,
due to the adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory
Commission in the Republic of China as of January 1, 2015.
(cid:1) Effect of changes on the company’s financial position: There have been no significant changes to the
Company’s financial position.
(cid:1) Future response actions: Not applicable
103
7.2 Analysis of Financial Performance
Analysis
Year
2015
2014
Net Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Non-operating Income and Expenses
Income Before Tax
Less: Tax Expense
Net Income (loss)
847,305,698
813,927,341
33,378,357
22,065,905
11,312,452
479,641
11,792,093
2,784,946
9,007,147
Unit: NT$ thousands
Difference
Amount
%
1,604,946
591,251
1,013,695
1,366,165
0.19
0.07
3.13
6.60
(352,470)
(3.02)
845,700,752
813,336,090
32,364,662
20,699,740
11,664,922
(1,937,570)
2,417,211
(124.75)
9,727,352
2,181,971
7,545,381
2,064,741
602,975
1,461,766
21.23
27.63
19.37
Other comprehensive income
(101,970)
4,555,499
(4,657,469)
(102.24)
Total comprehensive income
Note:
1. The analytics for change of more than 20%:
8,905,177
12,100,880
(3,195,703)
(26.41)
(cid:3) The increase in net operating income and expenses: is mainly due to the decrease of impairment losses, an
increase in foreign currency exchange losses, and the decrease of the profit recognition in affiliates and joint
ventures using the equity method.
(cid:3) The increase in income before tax: is mainly due to the decrease in the impairment losses.
(cid:3) The increase in income tax expense: due to the current period’s tax on undistributed earnings is higher than in the last
period.
(cid:3) The decrease in other comprehensive gains and losses (net of tax): is due to the decrease of exchange differences
arising from the translation of the financial statements of foreign operations and the increase of the unrealized
valuation loss of available-for-sale financial assets.
(cid:3) The decrease in total net income: is mainly due to the decrease of other comprehensive gains and losses (net of tax).
2. The Company made retroactive adjustment to previous amounts in the financial statements effective January 1,
2014, due to the adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory
Commission of the ROC as of January 1, 2015.
104
7.3 Analysis of Cash Flow
7.3.1 Cash Flow Analysis for the Current Year
Cash and Cash
Equivalents,
Beginning of Year
(1)
74,708,130
Net Cash Flow
from Operating
Activities
(2)
9,534,256
Cash
Outflow
(3)
Cash Surplus
(Deficit)
(1)+(2)-(3)
21,490,844
62,751,542
Note: 1. Analysis of the change of 2015 cash flow changes:
Unit: NT$ thousands
Financing of Cash Deficit
Investment Plans
-
Financing Plans
-
(cid:2) Net cash inflow in operating activities of $9,534,256 thousand: mainly due to a decrease in profit from
operating and net changes of assets and liabilities from operating activities.
(cid:2) Net cash outflow investing activities of $3,821,735 thousand: mainly due to the purchase of property, plant,
and equipment, disposal of investments using the equity method, and the purchase of available-for-sale
financial assets.
(cid:2) The net outflow of financing activities of $19,232,562 thousand: mainly due to the repayment of debt and
cash dividends.
2. The remedy for cash shortfall: Not applicable.
3. Liquidity analysis: current assets to current liability ratio is $137% and liquidity is healthy.
7.3.2 Cash Flow Analysis for the Coming Year
Estimated
Cash and Cash
Equivalents,
Beginning of
Year
(1)
Estimated Net
Cash Flow from
Operating
Activities
(2)
Estimated Cash
Outflow
(Inflow)
(3)
Cash Surplus
(Deficit)
(1)+(2)-(3)
62,751,542
7,677,479
7,460,567
62,968,454
Note: 1. Analysis of the 2016 cash flow changes:
Unit: NT$ thousands
Financing of Cash Surplus (Deficit)
Investment Plans
-
Financing Plans
-
(cid:2) Net cash inflow in operating activities of $7,677,479 thousand: expect sales growth and profit from the
operation.
(cid:2) Net cash outflow in investing activities of $6,691,011 thousand: expect to increase investment expenditures
next year.
(cid:2) Net cash outflow in financing activities of $769,556 thousand: expect to distribute cash dividend and
increase/decrease in long-term and short-term debt next year.
2. Remedy for cash shortfall: Not applicable.
3. Liquidity analysis: the Company expects the cash at the beginning of the year plus expected net cash inflow
from operating activities to be sufficient to handle cash needs from investing and financing activities. The
liquidity is healthy.
105
7.4 Major Capital Expenditures
7.4.1 Major Capital Expenditures and Sources of Capital
Project
Actual or Planned
Actual or Planned
Source of Capital
Date of Completion
Investment in Avalue
Technology Inc.
Private capital
2015
Investment in Lipo
Holding
Note: APE: Ascendant Private Equity Investment Ltd.
Private capital
2015
Unit: NT$ thousands
Actual or Expected Capital
Total Capital
Expenditure
2015
25,096
48,231
25,096
48,231
7.4.2 Expected Benefits
1.
2.
Investment in Avalue Technology Inc: With this strategic investment Compal can extend product
applications into the industrial computer field, cut into the future business opportunities for health care and
IoT, adapt to a future industry development trend, and expand the depth and width of Company operation.
Investment in Lipo Holding: The Company invested in Liz Electronics (NanTong) Co. Ltd through Lipo
Holding Co Ltd, Liz Electronics (NanTong) Co Ltd produces electronic parts such as resistors and diodes
and this investment is intended to enhance the productivity and competitiveness of Liz Electronics
(NanTong) Co Ltd.
7.5
Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and
Investment Plans for the Coming Year
(1)
Investment policy
1. Competition in the industry has accelerated and Compal is in full thrust integration mode. “Enlightened
Living and Computing with a Green Connection” is the Compal vision. Our long-term investment
strategies are to focus on products that relate to our core business, to provide the best quality in
computing, communications, consumer, cloud and connection, to provide full solutions in cost and
technology, and to put emphasis on our partner’s compliance with labor regulations, and the avoidance of
human trafficking and slavery. To strengthen the core resources through vertical integration,
diversification, and strategic investments or acquisitions as well as integration and horizontal
competition.
2. Improve post investment performance, strengthen the integration of Group resources and strategic
partnerships with investment businesses, facilitate the cooperation between the Company and invested
business, and require their full compliance with labor regulations and those against human trafficking and
slavery. Connect related customers to an information network, and form strategic alliances with other
industries. Sustain the performance of operating output in social, economic and environmental aspects
using a high standard of specification. This includes increasing the efficiency and productivity, improving
the rights of the workers, proper economic development, and environmentally friendly production in a
clean operating base. The Company fully supports investment companies with good performance to plan
for IPO to accelerate the realization of good return on investment.
(2) Main causes of profits or losses incurred on investments, and any corrective actions planned
106
The 2015 consolidated profits from investment using the equity method was NT$ 367 million, coming
mainly from the operation of Avalue Technology Inc, Compal Precision Module Co Ltd, and Allied Circuit
Co Ltd. We also consolidated and integrated similar operations between Synchro-Seiki and MacTech Co Ltd
(surviving company), both Company subsidiaries, to improve the efficiency of operation management.
(3) 2016 investment plans
The long-term investment plan next year will be based on the Company’s operating policy to position
ourselves as the pioneer provider of the mobile device solution and provide products, through the integration
of R&D resources and clients, of an all-in-one computer, TV, AE and enterprise servers. The Company
follows the principle of steady operation and always focuses on our core businesses. We expand on the
foundation of our existing businesses, make some vertical integrations where appropriate and expand
horizontally into related activities, while continuing to grow our core business.
In the vertical integration of upstream and downstream businesses, not involved in hardware production,
we also expand the size of our developers and the proportion of software and firmware, to increase the value
of their tangible assets and bring in value from additional sales.
We expect horizontal mergers and expansions to provide full IoT solutions for our clients which include
applications in cross-industry automation, industrial computers, security control, the healthcare industry, cars,
smart cities, smart buildings, restaurants and retail outlets, with the primary aim of providing new
investment opportunities and challenges.
In practice, apart from achieving internal growth under the existing business framework, we also accept
the possibility of mergers, acquisitions, joint ventures, technical calibrations and investment activities
through bilateral or multi-lateral collaboration between business entities.
The Company and its affiliates will proceed with the aforementioned expansion based on the
consideration of whether the expansion can strengthen the Group’s advantage and assessment of reasonable
risks. In terms of reinvestments, we follow the above mentioned principles and set basic principles in the
following three directions:
1. The vertical integration of upstream and downstream businesses to increase the proportion of self-made
parts and improve overall competitiveness.
2. Horizontal mergers and expansion of related products and services as well as other industries that provide
prominent synergy or growth.
3. Develop technology which is beneficial to the Company or its affiliates, or invest in assets that provide
synergy or growth.
107
7.6 Analysis of Risk Management
7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate
Finance, and Future Response Measures
Aspects
Net interest revenue and expense
Net gain on exchange (including valuation of financial instruments)
Net revenues
Pre-tax income (Note)
Net interest revenue/expense to net revenues
Net interest revenue/expense to pre-tax income
Net exchange gains to net revenues
Net exchange gains to pre-tax income
1. Interest rate changes:
Unit: NTD thousand; %
2015
(299,938)
(306,681)
847,305,698
11,792,093
(0.035%)
(2.544%)
(0.036%)
(2.601%)
The most recent US Fed meeting statement showed the US economy is experiencing a moderate growth.
However, the international financial market is still volatile and the United States continues to face global economic
uncertainty. Therefore, the Fed revised the full-year economic growth rate downward to 2.2%, and reduced the rate
hike from four to two. The current federal funds rate is from 0.25 to 0.5%. The Central Bank of Taiwan has cut interest
rates three times since September 2015, lowering the rate by half a base point each time, to maintain stability of the
domestic financial environment and boost the economy. This down- wards revision is a response to the downwards
trend of the global economy, and the domestic economic recovery is still slow, as is the expansion of any quantitative
easing of monetary policy in major countries. The cash balance of the Company, as of the end of 2015, is about
$62.752 billion. The long and short-term bank borrowings are about $58.054 billion and the net interest expense for
the year was $299,938 thousand. These account for 0.035% and 2.544% of net sales and income before tax,
respectively. As of December 31, 2015, all other factors remain unchanged, the increase of 0.25% in interest will cause
an increase in income before tax of $7,629 thousand. The company will watch the change of interest closely and
respond in a timely manner if necessary.
2. Exchange rate changes:
The company is export –oriented. Therefore, the change and movement of exchange rate have a considerable
impact on the annual profit and loss. To minimize the impact on the Company's operating profit or loss, the Company
mainly utilizes hedging such as forward foreign exchange contracts and swaps to minimize the risks of exchange rate
movements. The full year net exchange gains and losses, including the valuation of financial assets, was $(306,681)
thousand, accounting for (0.036%) and (2.601%) of net revenue and net profit before tax, respectively, and this had
some impact on Company operations and profitability. As of December 31, 2015, all other factors remain unchanged,
a 5% appreciation of USD/TWD will increase the income before tax by $2,462,325 thousand. We will take all
necessary actions based on the fluctuation of the exchange rate in the future.
3. Inflation:
According to the Central Bank, the impact of the record low prices of international crude oil and raw material
will widen gap in negative domestic export. The Directorate-General of the Budget, Accounting and Statistics,
forecasts an annual CPI growth rate of 0.69%. While the CP outlook for this year remains stable, we will continue to
watch for potential impact on prices.
7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to
High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives
108
Transactions
1. The Company does not make high-risk, high-leveraged investments.
2. The Company only offers financing to its related parties, mainly providing short-term financing for their
operating needs.
3. The Company is engaged in endorsement and guarantee activities which are only negotiated between
subsidiaries and the parent company. The arrangements are covered by proper Endorsement and Guarantee
Procedures.
4. The Company uses hedging strategy for the assets and liabilities valued using foreign currencies. The
hedging, which is done through forward foreign exchange contracts and swap trading, covers the amount of
net assets and liabilities. At the end of 2015, the Company position in open forward foreign exchange
contracts amounted to USD 20,000 thousand, EUR 59,140 thousand, and GBP 1,000 thousand and swap
contracts of USD 44,000 thousand. We will continue to pay close attention to changes in exchange rates
and execute timely hedging in the future.
5. In addition to prudent evaluation and control of the execution of related policies, the Company also relies
on regulations such as “Guidelines for Handling Acquisition and Disposal of Assets”, “Endorsement and
Guarantee Procedures”, “Third Party Lending Procedures” and “Procedures for the Handling of Derivatives
Trading”.
7.6.3 Future Research & Development Projects and Corresponding Budget
Other than the Company’s efforts in innovation and improvement of computers, TVs, and other peripheral
products, the Company also deems innovative research and development works as the niche for the Company’s
sustainable growth. Various R&D programs are developed and proposed by R&D team based on their forecast of new
technologies, understand of market trends, and intergration of add-on function. They also team with clients to meet
their market planning and detail product developments.
In general, the Company’s usually has less than one year product development cycle and aim to shorten the R&D
cycle year after year. The IT industry is highly competitive, and the timing of product development is of vital
importance. The rapid growth of sales has made the quality, experience and capacity of R&D a decisive factor that
will become the key as to whether the Company can achieve its sales target in 2016 and whether the existing clients
will renew their contracts. The 2016 R&D expense is expected to be more than NT$ 120 billion.
7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance
and Sales
The Company’s management team is paying close attention to any policies or regulations that may impact the
Company’s operation. In 2015, the Company made all the necessary responses to significant change in international
and domestic policies and regulations, without significant impact on Company operation.
7.6.5 Effects of and Response to Changes in Technology and the Industry Relating to Corporate
Finance and Sales
Tech products are always being updated and this changes user habits. The demand for different types of
application is mushrooming. The presence of ARM and Android has also had an impact on Wintel, which used to have
a market monopoly. To cope with these changes, the Company has expanded new business to its existing product lines
to embrace the industry trends. As a result, the Company has established teams for innovative products, technology
and design to strengthen Company research on consumer behavior, and provide more accurate market segregation and
product positioning to satisfy user need. We are also focusing on innovative technology capability and plans for future
product and market opportunities.
109
7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the
Company’s Response Measures
Compal has concentrated on the IT and Communications industry for many years and has firmly adhered to our
business philosophy of transcendence, sincerity, and harmony in a culture of ethics and honesty. We aim to be the best
in world-class professional design, manufacture and services. As we pursue business growth, we always remember our
obligations as a corporate citizen. We have strengthened Company governance, fulfilled our social responsibility, and
have established a good corporate image. In recent years, Company business has expanded, the number of employees
has increased and our global production branches have increased in number. We have become acutely aware of the
need for periodic checks of the external environment, a self-management system and operational strategies for the
early detection of potential corporate crises and the need for concrete and positive response plans and corrective
measures.
In 2015, Compal was again placed amongst the top 500 and top 2000 businesses by Fortune and Forbes
Magazine, respectively. The Company also received the top 5% TWSE-listed Companies award in the first round of
“Cooperate Governance Evaluation”, and was ranked as 16th in CSR Corporate Citizenship by CommonWealth
magazine. Our corporate imaging has once again been publically affirmed. There were no Company crises in 2015 nor
was there any significant event that affected the company image in any way.
7.6.7 Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans
In addition to continued cultivation of the existing IT and IC operations and enhancement of the core profit base,
we are actively seeking out upcoming industries for merger, acquisition, joint venture, technical collaboration and
other patterns. The aim being to move into industrial computing, medical networking, IoT networking, vehicle
networking and the medical equipment market. We will maintain stable development of existing business and also
move ahead of the curve in other areas which have high growth momentum.
The Company will integrate resources to increase R&D capacity, improve operational efficiency, and increase
competitiveness. We expect to benefit from synergy, have positive impact on future shareholder equity, and maintain
adequate control of organizational integration matters and financial risks.
7.6.8 Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans: None
7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and
Excessive Customer Concentration: None
7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in
Shareholdings by Directors, Supervisors, or Shareholders with Shareholdings of over 10%:
None
110
7.6.11 Effects of, Risks Relating to and Response to the Changes in Management: None
7.6.12 Litigation or Non-litigation Matters
The Company and the Company’s subsidiaries, Zhaopal Investment Co., Ltd, Yongpal Investment Co., Ltd, and
Kaipal Investment Co. Ltd. (The Company and its subsidiaries) purchased newly issued shares of Chunghwa Picture
Tubes, Ltd. (“CPT”) through private placement in 2009. The Company and its subsidiaries purchased newly issued
common stocks via the private placement at the cost of NTD $2.5 dollars per share, amount to a total of NTD $7
billion. The Company signed an agreement with Tatung Company (“Tatung”) on such matter. In accordance with the
agreement, the Company has the right to request Tatung to purchase all the CPT shares obtained via the private
placement within certain agreed periods at the price the Company and its subsidiaires originally paid for the CPT
shares plus interest. Despite many requests sent from the Company, Tatung has not fulfilled its obligation in
accordance with the contract. The Company filed an arbitration based on the agreement on March 29, 2013, requesting
Tatung to perform its obligations. The Company received the verdict on May 12, 2014. According to the verdict,
Tatung should pay NTD $2,118,607 thousand to the Company and its subsidiaries for the purchase of all the CPT
shares held by the Company and its subsidiaries. Also, Tatung should pay the interest which is calculated at an annual
rate of 5% for the period from April 3, 2013 to the actual date of payment. Also, Tatung is responsible for one-third of
the legal expenses. With respect to the part which is not favorable to the Company, a civil complaint was lodged with
the Taiwan Taipei District Court on June 13, 2014, to revoke the arbitration award. This was rejected by the Taiwan
Taipei District Court on May 15, 2015. The Company then filed an appeal to the Taiwan High Court on June 12, 2015,
which was rejected on March 29, 2016. The Company appealed to the Taiwan Supreme Court on April 27, 2016.
7.6.13 Other Major Risks
International conglomerates faces many risks such as regulatory compliance, business competition, localization,
and globalization. It is the responsibility of each Company employee to turn such challenges into future opportunity.
Ex ante risk identification, weekly risk assessment and prevention, and post-crisis management, have all been added to
the Company target management cycle (PDCA), key performance indicators (KPI), and control system for internal use.
Such processes allow the dedicated units responsible for these specific risks to establish rigorous and rapid means for
response and a problem-solving culture. By working through regular and irregular reviews and combining education,
training and a performance risk appraisal system, they can cope with significantly different kinds of risk management
based on local conditions. The company was not faced by any significant risk in 2015.
111
VIII. Special Disclosure
8.1
Summary of Affiliated Companies (As of Dec 31, 2015)
Compal Electronics
Technology
Compal Information
(Kunshan) Co.,
(Kunshan) Co., Ltd.
Compal Information
Technology
(Kunshan) Co., Ltd.
Ltd.
Compal Information
Research &
Development (Nanjing)
Co., Ltd.
Compal Digital
Technology
(Kunshan) Co.,
Ltd.
Kunshan Botai
Electronics Co.,
Ltd.
Kunshan Botai
Electronic Services
Co., Ltd.
Compal Investment
(Jiangsu) Co., Ltd.
Compal Display
Electronics
(Kunshan) Co.,
Ltd.
Compal
Electronics
(China) Co.,
Ltd.
Compal
Optoelectronics
(Kunshan) Co.,
Ltd.
Compal System
Trading
(Kunshan) Co.,
Ltd.
Compal Investment
(Sichuan) Co., Ltd.
Compal Electronics
(ChongQing) Co., Ltd.
Compal Electronics
(Chengdu) Co.,
Compal
Management
Ltd.
(Chengdu) Co., Ltd.
Compal (Vietnam) Co.,
Ltd.
Compal Development &
Management (Vietnam)
Co., Ltd.
.
c
n
I
,
s
c
i
n
o
r
t
c
e
l
E
l
a
p
m
o
C
Compal
Communication
(Nanjing) Inc.
Compal Digital
Communications
(Nanjing) Co., Ltd.
Keppel
Communication Pte
Ltd (Nanjing) Co.,
Ltd.
Accesstek Inc.
37.66%
Panpal
Technology Corp.
Gempal Technology
Corp.
Hong Ji Capital
Co., Ltd.
Hong Jin
Investment Co.,
Ltd.
Arcadyan Technology
Corp.
36.04%
Compal Broadband
Networks, Inc.
98.79%
Zhaopal
Investment Co.,
Ltd.
Yongpal
Investment Co.,
Ltd.
Kaipal
Investment Co.,
Ltd.
Mactech Co.,
Ltd.
Henghao
Technology
Co., Ltd.
General life
Biotechnology Co.,
Ltd.
Ripal
Optoelectroni
cs Co., Ltd.
Rayonnant
Technology Co.,
Ltd.
Huang Feng
Communicati
on Co., Ltd.
UNICOM
GLOBAL,
INC.
HANHELT
Communicati
ons Co., Ltd.
112
8.2
Private Placement of Securities in the Most Recent Year: None
8.3
Company Shares Held or Disposed by Subsidiaries in the Most Recent Year:
Name of
Subsidiary
Share Capital
Acquired
Funding
Source
Percentage
of Shares
Held by the
Company
Date of
Acquisition
or
Disposition
Shares and
Amount
Acquired
Shares and
Amount
Disposed
Investme
nt Gain
(Loss)
Shareholdings and
Amount as of March
31, 2016
Collateraliz
ed
Amount of
Endorsements
Made for the
Subsidiary
Amount
Loaned to
the
Subsidiar
y
Unit: NT$ thousands; Shares; %
NTD 5,000,000,000
Panpal
Technology
Corporation
Gempal
Technology
Co., Ltd.
Note: Impacts on the Company’s financial performance and position: none of the subsidiaries had acquired or disposed the Company’s shares in the current year up till the
31,648,082 shares
NTD 559,812,000
18,369,349 shares
NTD 321,435,000
Proprietary
capital
Proprietary
capital
NTD 900,000,000
100%
100%
N/A
N/A
-
-
-
-
-
-
-
-
-
-
-
-
publication date of this annual report, hence there were no impacts.
8.4
Any Events in 2015 and as of the Date of this Annual Report that had Significant Impacts on Shareholders’ Interests or Security Prices as
Stated in Item 2 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan: None
113
Attachment I
Independent Auditors’ Report
To Compal Electronics, Inc.:
We have audited the accompanying consolidated balance sheets of Compal Electronics, Inc. and
subsidiaries as of December 31, 2015, and 2014 (retrospectively adjusted), the consolidated statements of
comprehensive income for the years ended December 31, 2015 and 2014 (retrospectively adjusted), and
changes in stockholders’ equity and cash flows for the years ended December 31, 2015 and 2014
(retrospectively adjusted). These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial reports based on
our audits.
We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants” and the generally accepted auditing standards in the
Republic of China. Those standards and regulations require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial reports are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial reports. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial reports. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial reports referred to above present fairly, in all material respects,
the consolidated financial position of Compal Electronics, Inc. as of December 31, 2015 and 2014
(retrospectively adjusted), and the results of their consolidated operations and their consolidated cash flows
for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports
by Securities Issuers, and International Financial Reporting Standards, International Accounting Standards,
IFRIC Interpretations and SIC Interpretations endorsed by the Financial Supervisory Commission of the
Republic of China.
1
As stated in note (6)(d) of the consolidated financial statements, Compal Electronics, Inc. and its
subsidiaries recognized an impairment loss of NT$4,730,000 thousand on the equity investment in
Chunghwa Picture Tubes, Ltd. for the three months ended March 31, 2014.
As stated in note (3)(a) of the consolidated financial reports, effective January 1, 2015, the consolidated
financial reports of Compal Electronics, Inc. and its subsidiaries are prepared in conformity with
International Financial Reporting Standards (2013), International Accounting Standards (2013), IFRIC
Interpretations (2013) and SIC Interpretations (not including International Financial Reporting Standards 9)
endorsed by the Financial Supervisory Commissions of the Republic of China, are retrospectively adjusted
accordingly the consolidated financial statements for the year ended December 31, 2014. The adjustment
did not have any significant impact to the consolidated financial reports.
Compal Electronics Inc. has prepared the annual parent company only financial reports as of and for the
years ended December 31, 2015 and 2014, on which we have issued a modified unqualified opinion.
Taipei, Taiwan (the Republic of China)
March 30, 2016
Note to Readers
The accompanying financial statements are intended only to present the consolidated financial position, results of operations, and
cash flows in accordance with International Financial Reporting Standards, International Accounting Standards and interpretations
endorsed by the Financial Supervisory Commissions in the Republic of China and not those of any other jurisdictions. The
standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the
Republic of China.
The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version
prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English
and Chinese language versions of the auditors’ report and consolidated financial statements, the Chinese version shall prevail.
(English Translation of Financial Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars)
Assets
Amount
%
December 31, 2015
December 31, 2014
(retrospectively adjusted)
%
Amount
Liabilities and equity
Amount
%
Amount
%
December 31, 2015
December 31, 2014
(retrospectively adjusted)
Current assets:
Cash and cash equivalents
Current financial assets at fair value through
profit or loss
Current available-for-sale financial assets
Current derivative financial assets used for hedging
Current bond investment without active market
Notes and accounts receivable, net
Notes and accounts receivable due from
related parties, net
Other receivables
Inventories, net
Other current assets
Non-current assets:
Investments accounted for using equity method
Non-current available-for-sale financial assets
Non-current financial assets carried at cost
Non-current bond investment without
active market
Property, plant and equipment
Intangible assets
Deferred tax assets
Long-term prepaid rents
Other non-current assets
$
62,751,542
19.1
74,708,130
19.7
25,412
29,738
21,360
350,000
164,799,743
62,245
824,160
46,520,021
2,399,255
277,783,476
11,788,042
9,063,101
103,867
1,050,000
24,308,631
1,194,193
1,377,465
747,066
509,734
50,142,099
-
-
-
0.1
50.3
-
0.3
14.2
0.7
84.7
3.6
2.8
-
0.3
7.4
0.4
0.4
0.2
0.2
15.3
184,093
44,538
-
350,000
178,552,207
343,030
788,334
67,270,875
2,604,042
324,845,249
11,694,855
12,402,009
83,202
1,400,000
24,472,732
1,035,162
1,653,141
735,246
429,122
53,905,469
-
-
-
0.1
47.2
0.1
0.2
17.8
0.7
85.8
3.1
3.3
-
0.4
6.4
0.3
0.4
0.2
0.1
14.2
Total assets
$ 327,925,575
100.0
378,750,718
100.0
Current liabilities:
Short-term borrowings
Current financial liabilities at fair value
through profit or loss
Notes and accounts payable
Notes and accounts payable to related parties
Other payables
Current tax liabilities
Current provisions
Other current liabilities
Unearned revenue
Long-term borrowings, current portion
Non-current liabilities:
Long-term borrowings
Deferred tax liabilities
Net defined benefit liabilities
Non-current liabilities
Total liabilities
Equity attributable to owners of parent:
Ordinary shares
Capital surplus
Retained earnings
Other equity interest
Treasury shares
Non-controlling interests
Total equity
Total liabilities and equity
$
29,481,176
29,215
127,152,784
1,473,760
18,141,188
4,196,978
2,388,710
3,929,073
1,747,574
14,216,617
202,757,075
14,356,563
481,497
545,460
186,864
15,570,384
218,327,459
9.0
-
38.8
0.4
5.5
1.3
0.7
1.2
0.5
4.3
61.7
4.4
0.2
0.2
0.1
4.9
66.6
46,692,373
12.3
39,310
170,739,133
1,167,152
18,216,304
2,180,985
2,066,581
3,233,431
2,294,765
3,634,233
250,264,267
20,504,301
1,136,411
462,009
163,793
22,266,514
272,530,781
-
45.1
0.3
4.8
0.6
0.5
0.9
0.6
1.0
66.1
5.4
0.3
0.1
-
5.8
71.9
44,711,266
12,838,638
51,877,511
(3,926,881)
(1,724,739)
103,775,795
5,822,321
109,598,116
$ 327,925,575
13.6
3.9
15.8
(1.2)
(0.5)
31.6
1.8
33.4
100.0
44,232,366
14,296,445
47,721,872
(3,139,021)
(1,724,739)
101,386,923
4,833,014
106,219,937
378,750,718
11.7
3.8
12.6
(0.8)
(0.5)
26.8
1.3
28.1
100.0
See accompanying notes to the consolidated financial statements.
(English Translation of Financial Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2015 and 2014
(expressed in thousands of New Taiwan Dollars, except net income per share)
Net sales revenue
Cost of sales
Gross profit
Operating expenses :
Selling expenses
Administrative expenses
Research and development expenses
Net operating income
Non-operating income and expenses:
Other gains and losses
Finance costs
Other income
Miscellaneous disbursements
Impairment loss
Share of gain of associates and joint ventures accounted for using equity
method
Total non-operating income and expenses
Profit before tax
Less: tax expense
Profit
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss
Other comprehensive income, before tax, remeasurement of defined benefit
obligation
Share of other comprehensive income of associates and joint ventures
accounted for using equity method that will not be reclassified
subsequently to profit or loss
Less: income tax relating to items that will not be reclassified
subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Other comprehensive income, before tax, exchange differences on
translation of foreign financial statements
Other comprehensive income, before tax, available-for-sale financial assets
Loss on effective portion of cash flow hedges
Share of other comprehensive income of associates and joint ventures
accounted for using equity method that may be reclassified subsequently
to profit or loss
Less: income tax relating to items that may be reclassified
subsequently to profit or loss
Other comprehensive income, net of tax
Total comprehensive income
Profit, attributable to:
Profit, attributable to owners of parent
Profit, attributable to non-controlling interests
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent
Comprehensive income, attributable to non-controlling interests
Earnings per share:
Basic net income per share
Diluted net income per share
2015
2014
(Retrospectively adjusted)
Amount
%
Amount
%
$ 847,305,698
813,927,341
33,378,357
100.0
96.1
3.9
845,700,752
813,336,090
32,364,662
100.0
96.2
3.8
5,011,950
4,804,295
12,249,660
22,065,905
11,312,452
0.6
0.6
1.4
2.6
1.3
3,746,315
4,842,391
12,111,034
20,699,740
11,664,922
(323,839)
(899,702)
1,495,156
(37,562)
(121,574)
-
(0.1)
0.2
-
-
367,162
479,641
11,792,093
2,784,946
9,007,147
(93,596)
(794)
(15,911)
(78,479)
-
0.1
1.4
0.3
1.1
-
-
-
-
1,119,338
(1,019,504)
1,800,129
(37,566)
(4,777,920)
977,953
(1,937,570)
9,727,352
2,181,971
7,545,381
(42,088)
(743)
(6,010)
(36,821)
1,766,330
0.2
2,882,064
(1,629,927)
21,360
(146,939)
(0.2)
-
-
1,667,628
-
81,735
$
$
$
$
$
-
-
-
1.1
1.1
-
1.1
1.0
-
1.0
34,315
(23,491)
(101,970)
8,905,177
8,684,610
322,537
9,007,147
8,552,926
352,251
8,905,177
$
$
2.01
1.97
39,107
4,592,320
4,555,499
12,100,880
7,024,461
520,920
7,545,381
11,548,480
552,400
12,100,880
1.63
1.61
0.4
0.6
1.4
2.4
1.4
0.1
(0.1)
0.2
-
(0.5)
0.1
(0.2)
1.2
0.3
0.9
-
-
-
-
0.3
0.2
-
-
-
0.5
0.5
1.4
0.8
0.1
0.9
1.4
-
1.4
See accompanying notes to the consolidated financial statements.
(English Translation of Financial Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the Years Ended December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars)
Equity attributable to owners of parent
Retained earnings
Ordinary
shares
Capital
surplus
Legal
reserve
Special
reserve
Unappropriated
Total
retained
retained earnings earnings
statements
financial assets and others equity interest
Treasury
shares
Total equity
attributable to
owners of parent
Non-
controlling
interests
Total equity
Other equity interest
Exchange
differences
on translation of
foreign financial available-for-sale
Unrealized gains
(losses)on
Unearned
employee
benefit
Total other
Balance on January 1, 2014
The effect of retroactively adjusted and retrospectively
application
Balance on January 1, 2014 (retrospectively adjusted)
Profit for the year ended December 31, 2014
(retrospectively adjusted)
Other comprehensive income
Comprehensive income (retrospectively adjusted)
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Reversal of special reserve
Cash dividends of ordinary share
Cash dividends from capital surplus
Difference between consideration and carrying amount of
subsidiaries acquired or disposed
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures
accounted for using equity method
Issuance of shares for employee share options exercised
Share-based payment transaction
Adjustment to capital surplus for the company’s cash
dividends received by subsidiaries
Changes in non-controlling interests
Balance on December 31, 2014 (retrospectively adjusted)
Profit for the year ended December 31, 2015
Other comprehensive income
Comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Reversal of special reserve
Cash dividends of ordinary share
Cash dividends from capital surplus
Difference between consideration and carring amount of
subsidiaries acquired or disposed
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures
accounted for using equity method
Share-based payment transaction
Adjustment to capital surplus for the company’s cash
dividends received by subsidiaries
Changes in non-controlling interests
Balance on December 31, 2015
$ 44,134,467 16,193,087
15,621,182 8,818,725
19,820,927
44,260,834
(1,846,674)
(5,860,844)
- (7,707,518)
(2,007,725)
94,873,145
5,089,127
99,962,272
-
-
44,134,467 16,193,087
-
-
-
-
15,621,182 8,818,725
-
-
229,144
20,050,071
7,024,461
229,144
44,489,978
7,024,461
-
(1,846,674)
-
-
(5,860,844)
-
-
-
- (7,707,518)
-
-
-
-
-
-
-
-
-
-
(37,628)
6,986,833
(37,628)
6,986,833
3,018,218
3,018,218
1,543,429
1,543,429
- 4,561,647
- 4,561,647
-
-
-
- (2,177,668)
-
-
-
246,721
-
-
-
-
(1,111,207)
-
-
(246,721)
1,111,207
(2,177,668)
-
-
-
(2,177,668)
-
-
-
3,492
(3,720)
-
97,899
-
24,056
97,818
109,389
-
-
-
-
-
-
-
-
-
-
(1,575,776)
(1,495)
(1,575,776)
(1,495)
-
-
-
-
-
-
-
-
-
-
6,763
-
-
-
-
-
-
-
-
87
-
-
-
-
-
-
49,991
-
44,232,366 14,296,445
-
-
-
-
-
-
-
-
-
-
15,867,903 7,707,518
-
-
-
-
-
-
-
-
24,146,451
8,684,610
(71,032)
8,613,578
-
-
47,721,872
8,684,610
(71,032)
8,613,578
-
-
1,178,307
-
1,624,754
1,624,754
-
-
(4,317,328)
-
(1,693,104)
(1,693,104)
-
-
-
- (2,214,390)
-
-
-
703,408
-
- (4,568,497)
-
-
-
-
(703,408)
4,568,497
(4,428,781)
-
-
-
(4,428,781)
-
-
-
258
28,275
-
478,900
5,824
647,200
-
-
-
-
-
-
-
-
-
(14,572)
(15,956)
1,370
-
(14,572)
(15,956)
1,370
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,850
-
-
-
-
-
-
-
-
- (3,139,021)
-
-
(60,652)
7,698
(60,652)
7,698
-
-
-
-
-
-
-
-
-
-
-
-
-
(727,208)
-
(727,208)
-
-
75,026
-
$ 44,711,266 12,838,638
-
-
-
-
16,571,311 3,139,021
-
-
32,167,179
-
-
51,877,511
-
-
2,803,061
-
-
(6,010,432)
-
-
-
-
(719,510) (3,926,881)
-
(2,007,725)
-
-
-
-
-
-
-
-
-
-
-
282,986
-
-
(1,724,739)
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,724,739)
229,144
95,102,289
7,024,461
-
5,089,127
520,920
229,144
100,191,416
7,545,381
4,524,019
11,548,480
31,480
552,400
4,555,499
12,100,880
-
-
(2,177,668)
(2,177,668)
-
-
-
-
-
-
(2,177,668)
(2,177,668)
(1,565,434)
(5,215)
(630,432)
-
(2,195,866)
(5,215)
24,056
195,717
392,375
-
-
-
24,056
195,717
392,375
49,991
-
101,386,923
8,684,610
(131,684)
8,552,926
-
(178,081)
4,833,014
322,537
29,714
352,251
49,991
(178,081)
106,219,937
9,007,147
(101,970)
8,905,177
-
-
(4,428,781)
(2,214,390)
258
13,703
(10,132)
400,262
-
-
-
-
-
-
-
-
-
-
(4,428,781)
(2,214,390)
258
13,703
(10,132)
400,262
75,026
-
103,775,795
-
637,056
5,822,321
75,026
637,056
109,598,116
See accompanying notes to the consolidated financial statements.
(English Translation of Financial Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars)
Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Depreciation and amortization
Increase (decrease) in allowances for uncollectible accounts
Finance costs
Interest income
Dividends income
Compensation cost of employee share options
Share of profit of associates and joint ventures accounted for using equity method
Gain on disposal of property, plant and equipment
Loss (gain) on disposal of investments
Impairment loss
Long-term prepaid rents
Adjustments to reconcile profit
Changes in operating assets and liabilities:
Changes in operating assets:
Changes in financial assets at fair value through profit or loss
Decrease (increase) in notes and accounts receivable
Decrease (increase) in other receivable
Decrease (increase) in inventories
Decrease (increase) in other current assets
Decrease (increase) in other non-current assets
Total changes in operating assets
Changes in operating liabilities:
Changes in financial liabilities at fair value through profit or loss
Increase (decrease) in notes and accounts payable
Increase (decrease) in other payable
Increase (decrease) in provisions
Increase (decrease) in unearned revenue
Increase (decrease) in other current liabilities
Others
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash flows from (used in) operations
Interest received
Dividend received
Interest paid
Income taxes paid
Cash flows from (used in) investing activities:
Net Cash flows from (used in) operating activities
Acquisition of investments accounted for using equity method, available-for-sale financial
assets and financial assets carried at cost
Proceeds from disposal of investments accounted for using equity method and available-for-sale
financial assets
Redemption from bond investment without active market
Net cash flow from acquisition of subsidiaries
Proceeds from capital reduction and liquidation of investments
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Increase in prepayments for business facilities
Others
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Cash dividends paid
Exercise of employee share options
Treasury shares convert to employee
Acquisition of non-controlling interests
Disposal of ownership interests in subsidiaries (without losing control)
Changes in non-controlling interests
2015
2014
(Retrospectively adjusted)
$
11,792,093
9,727,352
5,924,610
64,767
899,702
(599,764)
(237,232)
431,627
(367,162)
(3,560)
20,718
121,574
15,790
6,271,070
158,681
14,112,026
29,017
20,977,572
235,139
(46,752)
35,465,683
(10,223)
(43,388,753)
251,855
313,461
(729,446)
653,199
46,899
(42,863,008)
(7,397,325)
(1,126,255)
10,665,838
597,659
418,826
(938,675)
(1,209,392)
9,534,256
6,036,864
(10,582)
1,019,504
(1,023,736)
(208,983)
168,012
(977,953)
(46,226)
(18,348)
4,777,920
16,690
9,733,162
(100,321)
9,337,791
108,584
(16,026,011)
(798,821)
(98,042)
(7,576,820)
27,928
20,156,529
1,172,834
390,816
405,746
453,269
(30,487)
22,576,635
14,999,815
24,732,977
34,460,329
975,307
284,335
(946,545)
(975,202)
33,798,224
(187,700)
(1,285,377)
1,718,652
350,000
250,273
68,125
(5,492,667)
128,388
(616,124)
29,518
(70,200)
(3,821,735)
(17,330,697)
12,930,000
(8,555,354)
(6,568,145)
-
-
(13,518)
-
282,154
183,002
-
2,159,000
68,599
(6,565,882)
145,932
(396,954)
(15,332)
17,809
(5,689,203)
(5,315,160)
10,271,167
(663,154)
(4,305,345)
195,717
282,125
(2,304,824)
98,938
(230,546)
Others
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
22,998
(19,232,562)
1,563,453
(11,956,588)
74,708,130
62,751,542
$
58,941
(1,912,141)
1,545,398
27,742,278
46,965,852
74,708,130
Attachment II
To Compal Electronics, Inc.:
Independent Auditors’ Report
We have audited the accompanying balance sheets of Compal Electronics, Inc. as of December 31, 2015
and 2014 (retrospectively adjusted), and the statements of comprehensive income, and changes in equity
and cash flows for the years ended December 31, 2015 and 2014 (retrospectively adjusted). These annual
parent company only financial reports are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these annual parent company only financial reports based on our
audits.
We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants” and the generally accepted auditing standards in the
Republic of China. Those standards and regulations require that we plan and perform the audit to obtain
reasonable assurance about whether the annual parent company only financial reports are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the annual parent company only financial reports. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the annual parent company only financial reports. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the annual parent company only financial reports referred to above present fairly, in all
material respects, the financial position of Compal Electronics, Inc. as of December 31, 2015 and 2014
(retrospectively adjusted), and the results of its operations and its cash flows for the years ended December
31, 2015 and 2014 (retrospectively adjusted), in conformity with the Guidelines Governing the Preparation
of Financial Reports by Securities Issuers.
As stated in note (6)(c) of the annual parent company only financial reports, Compal Electronics, Inc.
recognized both the impairment loss of $1,689,000,000 on the equity investment in Chunghwa Picture
Tubes, Ltd. and the related share of loss of associates and joint ventures accounted for using equity method
of 3,041,000,000 for the three months ended March 31, 2014.
As stated in note (3)(a) of the annual parent company only financial reports, effective January 1, 2015, the
annual parent company only financial reports of Compal Electronics, Inc. are prepared in conformity with
International Financial Reporting Standards (2013), International Accounting Standards (2013), IFRIC
Interpretations (2013) and SIC Interpretations (not including International Financial Reporting Standards 9)
endorsed by the Financial Supervisory Commissions R.O.C., and the annual parent company only financial
reports for the year ended December 31, 2014 are retrospectively adjusted accordingly. The adjustment did
not have any significant impact to the annual parent company only financial reports.
March 30, 2016
Note to Readers
The accompanying financial reports are intended only to present the financial position, results of operations, and cash flows in
accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and not those of any other
jurisdictions. The standards, procedures and practices to audit such financial reports are those generally accepted and applied in
the Republic of China.
The auditors’ report and the accompanying financial reports are the English translation of the Chinese version prepared and used in
the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language
versions of the auditors’ report and financial reports, the Chinese version shall prevail.
COMPAL ELECTRONICS, INC.
Balance Sheets
December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars)
Assets
Current assets:
Cash and cash equivalents
Current financial assets at fair value through
profit or loss
Current available-for-sale financial assets
Current bond investment without active
market
Notes and accounts receivable, net
Notes and accounts receivable due from
related parties, net
Other receivables
Inventories
Other current assets
December 31, 2015
Amount
%
December 31, 2014
(retrospectively adjusted)
Amount
%
$ 30,797,312 10.4
43,095,497 12.5
-
29,738
-
-
114,111
44,538
-
-
350,000
0.1
148,844,537 50.2
350,000
0.1
166,442,177 48.5
973,946
553,185
25,344,975
603,115
0.3
0.3
8.6
0.2
207,496,808 70.1
3,085,099
0.9
427,096
0.1
41,528,853 12.1
522,183
0.2
255,609,554 74.4
Liabilities and equity
Amount
%
Amount
%
December 31, 2015
December 31, 2014
(retrospectively adjusted)
Current liabilities:
Short-term borrowings
Notes and accounts payable
Notes and accounts payable to related
parties
Other payables
Current tax liabilities
Current provisions
Other current liabilities
Unearned revenue
Long-term borrowings, current portion
Non-current liabilities:
Long-term borrowings
Deferred tax liabilities
Non-current net defined benefit liabilities
Other non-current liabilities
$ 22,087,200
63,996,915
7.5
21.6
28,667,700
8.3
101,637,875 29.6
62,361,931
8,957,625
2,200,353
2,034,677
428,602
1,747,574
13,850,000
177,664,877
21.1
3.0
0.7
0.7
0.1
0.6
4.7
60.0
74,153,547
21.6
2.4
0.2
0.5
0.2
0.6
0.9
220,791,532 64.3
8,133,574
583,444
1,676,185
645,522
2,293,685
3,000,000
13,740,000
448,762
469,846
139,759
14,798,367
192,463,244
4.6
0.2
0.2
-
5.0
65.0
5.7
19,660,000
0.3
1,117,063
0.1
399,130
-
76,467
21,252,660
6.1
242,044,192 70.4
Non-current assets:
Investments accounted for using equity
method
Non-current available-for-sale financial
assets
Non-current financial assets at cost
Non-current bond investment without
active market
Property, plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets
Total assets
78,006,762
26.3
73,585,998
21.4
Total liabilities
5,970,903
6,588
2.0
-
8,735,528
6,588
2.6
-
1,050,000
2,181,737
378,454
1,042,365
105,422
0.4
0.7
0.1
0.4
-
88,742,231 29.9
$ 296,239,039 100.0
1,400,000
2,230,023
412,185
1,336,919
114,320
87,821,561 25.6
343,431,115 100.0
0.4
0.7
0.1
0.4
-
Equity attributable to owners of parent:
Ordinary shares
Capital surplus
Retained earnings
Other equity interest
Treasury shares
Total equity
44,711,266
12,838,638
51,877,511
(3,926,881)
(1,724,739)
103,775,795
15.1
4.3
17.5
(1.3)
(0.6)
35.0
44,232,366 12.9
4.2
14,296,445
47,721,872 13.9
(0.9)
(0.5)
101,386,923 29.6
(3,139,021)
(1,724,739)
Total liabilities and equity
$ 296,239,039
100.0
343,431,115 100.0
COMPAL ELECTRONICS, INC.
Statements of Comprehensive Income
For the years ended December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars, except net income per share amounts)
Net sales revenue
Cost of sales
Gross profit
Less: Unrealized profit from sales
Gross profit
Operating expenses:
Selling expenses
Administrative expenses
Research and development expenses
Net operating income
Non-operating income and expenses:
Other gains and losses
Finance costs
Other income
Share of profit of subsidiaries, associates and joint ventures accounted for using
equity method
Impairment loss
Total non-operating income and expenses
Profit before tax
Less: tax expense
Profit
Other comprehensive income:
Items that may not be reclassified subsequently to profit or loss
Other comprehensive income, before tax, remeasurement of defined benefit
plans
Share of other comprehensive income of subsidiaries, associates and joint
ventures accounted for using equity method that may not be reclassified
subsequently to profit or loss
Less: income tax relating to items that may not be reclassified
Items that may not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Other comprehensive income, before tax, exchange differences on translation
Other comprehensive income, before tax, available-for-sale financial assets
Share of other comprehensive income of subsidiaries, associates and joint
ventures accounted for using equity method that may be reclassified
subsequently to profit or loss
Less: income tax relating to items that may be reclassified
Items that may be reclassified subsequently to profit or loss
Other comprehensive income, net of tax
Total comprehensive income
Earnings per share:
Basic net income per share
Diluted net income per share
2015
2014
(retrospectively adjusted)
Amount
%
Amount
%
$ 802,994,930
780,260,207
22,734,723
100.0
97.2
2.8
(2,867)
-
22,737,590
2.8
803,504,061
782,209,491
21,294,570
5,657
21,288,913
100.0
97.4
2.6
-
2.6
3,798,280
2,581,758
9,052,274
15,432,312
7,305,278
0.5
0.3
1.1
1.9
0.9
2,260,919
2,563,289
9,172,949
13,997,157
7,291,756
0.3
0.3
1.1
1.7
0.9
293,589
(604,735)
786,958
-
-
0.1
2,413,800
0.3
(32,000) -
2,857,612
10,162,890
1,478,280
8,684,610
0.4
1.3
0.2
1.1
951,688
0.1
(515,563) (0.1)
0.1
751,602
790,247
0.1
(1,691,121) (0.2)
286,853
7,578,609
554,148
7,024,461
-
0.9
-
0.9
(79,571)
(4,988)
(13,527)
(71,032)
-
-
-
-
(43,607)
(289)
(6,268)
(37,628)
-
-
-
-
2,011,139
(1,695,723) (0.2)
0.2
2,903,749
1,391,202
0.3
0.2
(357,582)
18,486
(60,652)
-
-
-
(131,684) -
1.1
8,552,926
269,533
2,837
4,561,647
4,524,019
11,548,480
-
-
0.5
0.5
1.4
2.01
1.97
1.63
1.61
$
$
$
COMPAL ELECTRONICS, INC.
Statements of Changes in Equity
For the years ended December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars)
Retained earnings
Other equity interest
Balance on January 1, 2014
The effect of retroactive adjustment and retrospective application
Balance on January 1, 2014 (retrospectively adjusted)
Profit for the year ended December 31, 2014 (retrospectively adjusted)
Other comprehensive income
Total comprehensive income (retrospectively adjusted)
Appropriation and distribution of retained earnings (note 1):
Legal reserve appropriated
Reversal of special reserve
Cash dividends of ordinary share
Cash dividends from capital surplus
Difference between consideration and carrying amount arising from
acquisition or disposal of subsidiaries
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted for using
equity method
Issuance of shares for employee share options exercised
Share-based payment transaction
Adjustments of capital surplus for the Company’s cash dividends received
by subsidiaries
Balance on December 31, 2014 (retrospectively adjusted)
Profit for the year ended December 31, 2015
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings (note 2):
Legal reserve appropriated
Reversal of special reserve
Cash dividends of ordinary share
Cash dividends from capital surplus
Difference between consideration and carrying amount arising from
acquisition or disposal of subsidiaries
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted for using
equity method
Share-based payment transaction
Adjustments of capital surplus for the Company’s cash dividends received
Ordinary
shares
$ 44,134,467
-
44,134,467
-
-
-
Capital
surplus
16,193,087
-
16,193,087
-
-
-
Legal
reserve
Special
reserve
-
15,621,182 8,818,725
-
15,621,182 8,818,725
-
-
-
-
-
-
Unappropriated
retained earnings
19,820,927
229,144
20,050,071
7,024,461
(37,628)
6,986,833
Exchange
differences
on translation
Unrealized gains
(losses) on
Total
retained of foreign financial available-for-sale
earnings
44,260,834
229,144
44,489,978
7,024,461
(37,628)
6,986,833
statements
financial assets
(1,846,674)
-
(1,846,674))
-
3,018,218
3,018,218
(5,860,844)
-
(5,860,844)
-
1,543,429
1,543,429
-
-
-
-
-
-
-
97,899
-
-
-
-
(2,177,668)
246,721
-
- (1,111,207)
-
-
-
-
-
(246,721)
-
1,111,207
(2,177,668) (2,177,668)
-
-
3,492
(3,720)
24,056
97,818
109,389
-
-
-
-
-
-
-
-
-
-
(1,575,776)
(1,575,776)
(1,495)
(1,495)
-
-
-
-
-
-
-
-
-
-
6,763
-
-
-
-
-
-
-
-
87
-
-
-
-
-
44,232,366
-
-
-
49,991
14,296,445
-
-
-
-
-
15,867,903 7,707,518
-
-
-
-
-
-
-
24,146,451
8,684,610
(71,032)
8,613,578
-
47,721,872
8,684,610
(71,032)
8,613,578
-
-
-
-
-
-
-
-
-
(2,214,390)
703,408
-
- (4,568,497)
-
-
-
-
-
(703,408)
4,568,497
-
(4,428,781) (4,428,781)
-
-
258
28,275
-
-
-
-
-
-
-
-
-
(14,572)
-
(14,572)
(15,956)
1,370
(15,956)
1,370
-
478,900
5,824
647,200
-
1,178,307
-
1,624,754
1,624,754
-
(4,317,328)
-
(1,693,104)
(1,693,104)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
by subsidiaries
Balance on December 31, 2015
-
$ 44,711,266
75,026
12,838,638
-
-
16,571,311 3,139,021
-
32,167,179
-
51,877,511
-
2,803,061
-
(6,010,432)
Note 1: Directors’ and supervisors’ remuneration amounting to $21,761 and employee bonuses amounting to $314,199 were recognized in the 2013 statement of comprehensive income.
Note 2: Directors’ and supervisors’ remuneration amounting to $49,379 and employee bonuses amounting to $895,790 were recognized in the 2014 statement of comprehensive income.
Unearned
employee
benefit
and others
Total other
equity interest
Treasury
shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,698
7,698
-
-
-
-
-
-
-
(727,208)
-
(719,510)
(7,707,518) (2,007,725)
-
-
(7,707,518) (2,007,725)
-
-
-
-
4,516,647
4,516,647
Total equity
94,873,145
229,145
95,102,289
7,024,461
4,524,019
11,548,480
-
-
-
-
6,850
-
-
-
-
-
-
-
-
-
-
-
-
282,986
-
-
(2,177,668)
(2,177,668)
(1,565,434)
(5,215)
24,056
195,717
392,375
-
-
(3,139,021) (1,724,739)
-
-
-
-
(60,652)
(60,652)
49,991
101,386,923
8,684,610
(131,684)
8,552,926
-
-
-
-
-
-
-
(727,208)
-
-
-
-
-
-
-
-
-
-
(4,428,781)
(2,214,390)
258
13,703
(10,132)
400,262
-
-
(3,926,881) (1,724,739)
75,026
103,775,795
COMPAL ELECTRONICS, INC.
Statements of Cash Flows
For the years ended December 31, 2015 and 2014
(expressed in thousands of New Taiwan dollars)
Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Depreciation and amortization
Increase in allowances for uncollectible accounts
Interest expense
Interest income
Dividends income
Compensation cost arising from share-based payment transaction
Share of profit of subsidiaries, associates and joint ventures accounted for using
equity method
Loss (gain) on disposal of investments
Impairment loss on financial assets
Adjustments to reconcile profit
Changes in operating assets and liabilities:
Changes in operating assets:
Changes in financial assets at fair value through profit or loss
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories
Decrease (increase) in other current assets
Decrease (increase) in other receivable
Total changes in operating assets
Changes in operating liabilities:
Increase (decrease) in notes and accounts payable
Increase (decrease) in other payables
Increase (decrease) in provisions
Increase (decrease) in unearned revenue
Increase (decrease) in other current liabilities
Other
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash flows from (used in) operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Acquisition of investments accounted for using equity method, available-for-sale
financial assets and bond investment without active market
Proceeds from disposal of investments accounted for using equity method and
available-for sale financing assets
Redemption from bond investment without active market
Net cash outflows resulted from business combination
Proceeds from capital reduction and liquidation of investments
Acquisition of property, plant and equipment
Decrease (increase) in other receivable due from related parties
2015
2014
(retrospectively
adjusted)
$ 10,162,890
7,578,609
698,496
27,627
604,735
(153,268)
(170,537)
400,262
(2,413,800)
(405,885)
32,000
(1,380,370)
855,418
7,381
515,563
(158,627)
(147,794)
110,250
(790,247)
46,381
1,691,121
2,129,446
114,111
19,681,148
16,183,878
(80,932)
(150,363)
35,747,842
(40,193)
10,794,135
(11,096,332)
(124,932)
506,306
38,984
(49,432,576)
807,475
358,492
(546,111)
(216,920)
(26,483)
(49,056,123)
(13,308,281)
(14,688,651)
(4,525,761)
160,900
900,359
(588,159)
(240,077)
(4,292,738)
23,378,885
(926,097)
271,965
410,956
231,895
48,003
23,415,607
23,454,591
25,584,037
33,162,646
168,543
750,407
(489,520)
(184,371)
33,407,705
(1,023,451)
(1,421,025)
1,489,852
350,000
-
51,520
(153,958)
27,733
195,597
-
(534,954)
65,776
(110,730)
373,037
Acquisition of intangible assets
Other
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Cash dividends paid
Exercise of employee share options
Treasury shares convert to employee
Other
Net cash flows from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(470,768)
17,144
288,072
(307,808)
16,407
(1,723,700)
(6,580,500)
12,770,000
(7,840,000)
(6,643,171)
-
-
152
(8,293,519)
(12,298,185)
43,095,497
$ 30,797,312
(4,736,756)
10,100,000
(240,000)
(4,355,336)
195,717
282,125
3
1,245,753
32,929,758
10,165,739
43,095,497
Compal Electronics, Inc.
Chairman: Sheng-Hsiun Hsu (Rock Hsu)
Chief Executive Officer (CEO): Jui-Tsung Chen (Ray Chen)