Stock Code: 2324
Compal Electronics, Inc.
2016 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 15, 2017
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& 581-1, 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 Au, Yiu Kwan
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
64
67
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
69
70
3.6 Relationship among the Top Ten Shareholders
3.7 Ownership of shares in Affiliated Enterprises
IV. Capital Overview
73
79
79
80
80
82
82
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
83
87
90
90
91
93
VI. Financial Information
94
102
106
107
107
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
108
109
110
111
111
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
113
7.6 Analysis of Risk Management
VIII. Special Disclosure
117
121
121
121
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 for your support to Compal Electronics, Inc. (hereafter referred to as “Compal”) over the past
years! The year 2016 was a year of changes. The global political and economic situations have brought
along new changes, and industry developments have been facing new challenges. The growth of the
hardware device markets stagnated; the demands even went into recession; and that made Compal
experience a hard year. However, many internal efforts have been made, which including actively adoption
of systematic management and full implementation has been driven all the way from R&D side to the
production process. Thus our operational efficiency and costmanagement have been further improved in
2016. In addition, the investment in innovation and new business has started to pay off at the customers;
therefore, on the way to year 2017, we gradually to see some light inside the tunnel of doom. We herein
summarize the operational results of the last year and the business outlook of this year as follows:
2016 Financial Performance
Compal’s 2016 consolidated revenue was NT$766,810 million, declined 9.5% year-over-year, given the
impact of consumer demand recession. However, owing to the efforts of all the company employees to
actively improve the efficiency, the 2016 consolidated gross margin has reached 4.3%, and the consolidated
operating profit margin has reached 1.4%, both were improved over the previous year. The non-operating
incomes were increased year-over-year, due to higher contribution from equity-investments. Therefore,
Compal’s 2016 consolidated pre-tax profits were NT$11,813 million, which maintained at the previous
year's NT$11,792 million level, of which the net profit attributed to the parent company was NT$8,131
million, and the earnings per share (EPS) was NT$1.88.
Business Development
As to the business development, due to the demand declines of the notebook and tablet market, and the
smartphone market growth stagnation last year, Compal’s total shipment of 5C-related electronic products
decreased 4% from the previous year. However, given the commercial PC replacement demand has been
gradually warming up since this year, and Compal’s continued efforts in innovation designs and efficient
manufacturing to attract customer cooperation, we expect Compal’s computer related business to regain
growth momentum in 2017. For the Smart Device business, to fully implement the risk control and
efficiency improvement, and achieve better profits across all the product lines will be the main goal of this
year.
With the rapid growth of the Internet of Things (IoT) market, Compal is putting full efforts into the
developments of new business, including the fields of Wearable Devices, Smart Homes, Auto Electronics,
Servers, and Industrial PCs and so on, and has started to pay off at the customer side, particularly in the
wearable business. The alliance and co-development with Google and Qualcomm on the wearable devices
has brought the successful results, therefore, we have wonover the top-tier customers andachieved
3
breakthrough in shipments in 2016. The primary target of the new business development remains to be
continuously developing innovative technologies and diversifying product lines for more business
opportunities in 2017.
In addition, Compal has continued to invest in Smart Medical and Healthcare since it has engaged in the
medical business in year 2015. According to the estimates of the National Development Council, in 2018,
the percentage of senior persons (over 65 ages) will account for 14% of the population in Taiwan and it will
enter into an “aged society”. In 2025, the percentage will be weighing up to 20% for a “super-aged society”.
Based on that, we believe the consumer consumptions and industrial developments will have big change in
the future. While, for the medical investment, we realize it needs to involve in more cross industry
collaboration. Therefore, starting from 2016, we began to talk with hospitals, medical institutions, and
long-term caring centers in Taiwan regarding the establishment of the medical platform system and the
cooperation of medical equipment. Compal’s smart medical team has also actively participated in public
health issues and became the co-developer for New Taipei City’s “Fit for Age” Project in 2016. We believe
our investment in Smart Medical and Healthcare will become the company’s new business driver over the
next 3-5 years.
Honors and awards
With all the continuous efforts invested in innovations, Compal has won 10 awards from the German 《iF》
product designs in 2016. The total 39 awards accumulated over the past 5 years have made Compal become
the 15th in the Global Innovation ranking. With regard to the corporate governance, Compal received the
award for top 20% ranking in the Corporate Governance Evaluation by the Taiwan Stock Exchange
Corporation (TWSE) in 2016, and it has been consecutively selected as a Stock Exchange Corporate
Governance Index constituent stock for many years. Moreover, the CommonWealth Magazine ranked the
Company No. 26 in the “CSR Corporate Citizen Awards” for large corporations in 2016. With regard to the
green environment, Compal was on the list of participants of the United Nations Climate Change
Framework Convention 2050 greenhouse gas reduction path platform for the first time, and became one of
the three Taiwanese companies in it. Compal was once again recognized by the public for its investments
towards sustainability.
2017 Business Outlook
Looking ahead to 2017, although the global macro still have uncertainties, for Compal, we think the most
difficult year has passed, and we are ready to greet some light in the business. According to the market
research firm (IDC), the global notebook, tablet, smartphone, and wearable device market in 2017 will grow
+0.6%, -8.0%, +4.2% and +28.6%, respectively comparing to the previous year. With the consideration of
the global market condition and the company’s business development itself, we expect Compal’s total
shipment of 5C-related electronic products to grow 10% year-over-year in 2017. Furthermore, we expect the
revenue of non-PC products to continuously march for exceeding 30% contribution.
Meanwhile, Compal is committed to strengthen the enterprise constitution continually, to put efforts in the
comprehensive organization innovations, collaborations, resource integrations, efficiency improvement, and
4
to further enhance profitability and competitive position in the industry. 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
2015
2016
Milestones
Ranked 423rd on the Fortune Global 500.
• Won 6 awards of 2015 “iF design” and ranked 18th on Global Innovation.
•
•
•
Ranked 1412nd on the Fobes Global 2000.
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.” – ICT Manufacturing - The Bronze Medal.
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.
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.
•
Ranked within top 6%~20% TWSE-listed companies of the “Second Round of Corporate
Governance Evaluation” by TWSE
Ranked 4th in CommonWealth Magazine’s “Top-2000 Manufacturers.”
Ranked 48th in CommonWealth Magazine’s “Cross-strait Top 1000 Survey.
Ranked 400th on the Fortune Global 500.
Ranked 1467th on the Forbes Global 2000.
Ranked 26th on CommonWealth Magazine’s Top 50 CSR in Corporate Citizen Awards.
Ranked 25th on The 100 most sustainable companies in Asia by CSR Asia Summit.
Received Taiwan Corporate Sustainability Report Awards in “2016 TCSA” – ICT Manufacturing –
The Silver Medal.
The Company’s share capital reached NTD 44.2 billion by the 2016.
The Company earned NTD 766.8 billion in consolidated revenues in 2016.
•
•
•
•
•
•
•
•
•
6
2017
• Won 4 awards of 2017 “iF design” and ranked 31th on Global Innovation.
•
Ranked within top 6%~20% TWSE-listed companies of the “Third Round of Corporate Governance
Evaluation” by TWSE.
•
•
Ranked 5th in CommonWealth Magazine’s “Top-2000 Manufacturers”.
Ranked 53th in CommonWealth Magazine’s “Cross-strait Top 1000 Survey.
7
III. Corporate Governance Report
3.1 Organization
3.1.1 Organizational Chart (As of Jan 1, 2017)
Shareholders
Board of Directors
President’s Office
Remuneration
Committee
Audit
Committee
Personnel Evaluation Committee
Investment 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 Office
Responsible for investment-related activities
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/
Nationality/Gender
(Note 1)
Elected
Date
Ter
m
First
Elected
Date
(Note 3)
Shareholding as of
elected date
Current shareholding
Shares held by
spouse and underage
children
Current shareholding
Shares held by
proxy
Shares
Shareho
lding
Percent
age
(%)
Shares
Shareh
olding
Percent
age
(%)
Shares
Shareh
olding
Percent
age
(%)
Shares
Shareh
olding
Percent
age
(%)
Chairman Hseng-Hsiun Hsu 2015.6.26
Director
Jui-Tsung Chen 2015.6.26
Director Wen-Being Hsu 2015.6.26
3
years
3
years
3
years
Director
Kinpo Electronics,
Inc.
Representative:
Shyh-Yong Shen
2015.6.26
3
years
Director
Charng-Chyi
Ko(Note 2)
2015.6.26
3
years
1984.04.16
17,775,401
0.40%
8,975,401
0.20%
17,107,025
0.39%
0
0.00%
1992.04.30
50,782,587
1.14%
40,352,587
0.91%
1,069,405
0.02%
0
0.00%
1984.04.16
4,000,000
0.09%
4,000,000
0.09%
0
0.00% (Note3) (Note 3)
1990.06.22
151,628,692
3.39%
151,628,692
3.43%
-
-
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%
Director
Sheng-Chieh Hsu
(Note 2)
2015.6.26
1997.05.29
9,119,297
0.20%
9,119,297
0.21%
8,834,928
0.20% (Note 3) (Note 3)
3
years
3
2015.6.26
years 1987.06.13
8,022,874
0.18%
8,022,874
0.18%
2,502,768
0.06%
0
0.00%
Director
Yung-Chia Chou
(Note 2)
Director Wen-Chung Shen 2015.6.26
3
years
1998.04.08
11,935,968
0.27%
11,935,968
0.27%
101,931
0.00%
0
0.00%
10
April 24, 2017
Spouse or relatives of second degree
or
as Directors,
acting
Supervisors, or department heads
closer
Title
Name
Relations
hip
Selected
Current
Positions
held
concurrently
in the
company
and/or any
other
companies
(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
Hseng-Hsiun
Hsu
Father and
son in law
(Note 4)
N/A
N/A
N/A
(Note 4)
Chairman
Hseng-Hsiun
Hsu
Brothers
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
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 School
MBA 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.
Title
Name/
Nationality/Gender
(Note 1)
Elected
Date
Ter
m
First
Elected
Date
(Note 3)
Shareholding as of
elected date
Current shareholding
Shares held by
spouse and underage
children
Current shareholding
Shares held by
proxy
Shares
Shareho
lding
Percent
age
(%)
Shares
Shareh
olding
Percent
age
(%)
Shares
Shareh
olding
Percent
age
(%)
Shares
Shareh
olding
Percent
age
(%)
Director Yung-Ching Chang 2015.6.26
Director
Chung-Pin Wong 2015.6.26
Director
Chiung-Chi Hsu 2015.6.26
Director Chao-Cheng Chen 2015.6.26
Independent
Director Min-Chih Hsuan 2015.6.26
Independent
Director
Duei Tsai
2015.6.26
Independent
Director
Duh-Kung Tsai 2015.6.26
3
years
3
years
3
years
3
years
3
years
3
years
3
years
2000.03.30
3,898,587
0.09%
3,178,587
0.07%
7,259
0.00%
0
0.00%
2007.06.15
4,833,618
0.11%
5,853,618
0.13%
1,398
0.00%
0
0.00%
1994.04.23
2,000,731
0.04%
2,000,731
0.05%
30,000
0.00%
0
0.00%
2014.6.20
4,850,000
0.11%
4,020,000
0.09%
1,428
0.00%
0
0.00%
2012.6.22
0
0.00%
0
0.00%
0
0.00%
0
0.00%
2012.6.22
0
0.00%
0
0.00%
0
0.00%
0
0.00%
2012.6.22
0
0.00%
0
0.00%
0
0.00%
0
0.00%
Selected
Current
Positions
held
concurrently
in the
company
and/or any
other
companies
Spouse or relatives of second degree
or
as Directors,
acting
Supervisors, or department heads
closer
Title
Name
Relations
hip
(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 Degree 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
Holdings Ltd.
Master’s Degree, Golden Gate
University, San Francisco, USA
Director of I PAO 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.
Note: All directors are Republic of China nationals and male.
2. The previous supervisors Charng-Chyi Ko, Sheng-Chieh Hsu and Yung-Chia Chou resigned as of June 26, 2015 and were elected as directors in 2015 shareholders meeting. The 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
Chairman
Sheng-Hsiun
Hsu
Director
Jui-Tsung
Chen
Selected Current Positions
Chairman: Kinpo Electronics, Inc, Acbel Polytech Holdings Inc., Teleport Access Services Inc., New Kinpo Group, TAS - Teleport Access Services Gempal
Technology Corp., Panpal Technology Corporation, 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, 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., Kunshan Botai Electronics Co., Ltd.,
Compal Investment (Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd., Kinpo Electronics (China) Co.,
Ltd.,
Managing Director: Taiwan Biotech Co., Ltd.
Director: Baotek Industrial Materials Ltd., Crownpo Technology Inc., Compal System Trading (Kunshan) Co., Ltd., Cal-Comp Optical Electronics (Suzhou) Co., Ltd.,
Cal-Comp Technology (Suzhou) Co., Ltd., Cal-Comp Electronics and Communication (Suzhou) Co., Ltd., 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 International 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 so forth
President: Kinpo Group Management Consultant Company
Other: Chinese National Federation of Industries President,Importers and Exporters Association of Taipei Honorary President,, Taiwan Electrical and Electronic
Manufacturers’ Association Strategy Consultant, China Productivity Center Chairman, Straits Exchange Foundation Vice Chairman,SINOCON Industrial
Standards Foundation Vice Chairman,Taiwan Design Center Managing Director, Management Institute in Taipei Director
Chairman: Arcadyan Technology Corp., Ripal Optoelectronics Co., Ltd. Infinno Technology Corporation, Huang Feng Communication Co., Ltd., UNICOM GLOBAL
INC., General life Biotechnology Co., Ltd., Unico Cell Biomed Co., Ltd., Compal System Trading (Kunshan) Co., Ltd., Amexcom Electronics, Inc.
Director: New Kinpo Group, Compal Broadband Networks, Inc., Henghao Technology Co., Ltd., Mactech Co., Ltd., Gempal Technology Corp., Panpal Technology
Corp., Reber Biotech Co., Ltd., Hong Ji Capital Co., Ltd., Hong Jin Investment Co., Ltd., Zhaopal Investment Co., Ltd., Yongpal Investment Co., Ltd.,
Kaipal Investment Co., Ltd., Compal Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information
Technology (Kunshan) Co., Ltd., Compal Information Research & Development (Nanjing) 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 Network Information (Kunshan) Co., Ltd., Kunshan Botai Electronic
Services Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd., Compal
(Vietnam) Co., Ltd., Compal Development & Management (Vietnam) Co., Ltd., 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 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.,
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.
12
Title
Director
Name
Wen-Being
Hsu
Director: Baotek Industrial Materials Ltd.
Selected Current Positions
Chairman: CastleNet Technology Inc., Cal-Comp Biotech Co., Ltd.、Cal-Comp Big Data, Inc, XYZprinting Co., Ltd., Kaipo Electronics Co., Ltd. Cal-Comp
Optoelectronic (Suzhou) Co., Ltd., Cal-Comp Technology (Suzhou) Co., Ltd., Cal-Comp Electronics & Communications (Suzhou) Co., Ltd., Peifeng
(Kunshan) Co., Ltd., Xinli (Shanghai) Network Technology 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 Electronics de Mexico Co.
S.A. de CV, Cal-Comp Precision (Philippines) Ltd., Cal-Comp Precision (Singapore) Ltd., Cal-Comp Technology (Philippines), INC., Kinpo Electronics
(Philippines) Inc., XYZLife (Philippines) Inc., XYZprinting Japan, Inc.
Vice Chairman: Cal-Comp Technology Co., Ltd., and PChome (Thailand) Co., Ltd.
Director: New Kinpo Group, AcBel Polytech Inc., Cal-Comp Electronics & Communications (Suzhou) Co., Ltd., Qbit Semiconductor Ltd., Dawning Leading
Technology Inc., Jipo Investment Inc., Kinpo Group Management Consultant Company, Kinpo Electronics (China) Co., Ltd., Ascendant Private Equity
Investment Ltd., Cal-Comp Big Data International Ltd., Cal-Comp Electronics (USA) Co., Ltd., Cal-Comp Holding (Brasil) S.A., Cal-Comp Industria De
Semicondutores S.A., Cal-Comp Precision (Malaysia) Sdn. Bhd., Cal-Comp Precision (Thailand) Ltd., Cal-Comp USA (San Diego) Co., Ltd., Castlenet
Techology (BVI) Inc., Kinbolt International (Singapore) Pte. Ltd., Kinpo International Ltd., Power Station Holdings Ltd., QBit Semiconductor Holding,
Ltd., XYZprinting, Inc. (Korea), XYZprinting, Inc. (Samoa), XYZprinting, Inc. (U.S.A), XYZprinting Netherlands, B.V., XYZprinting (Thailand) Co. Ltd.
President: New Kinpo Group, Cal-Comp Electronics & Communications Co., Ltd., Cal-Comp Big Data, Inc, Kinpo Electronics (China) Co., Ltd., Cal-Comp
Optoelectronic (Suzhou) Co., Ltd., Cal-Comp Technology (Suzhou) Co., Ltd., Cal-Comp Electronics & Communications (Suzhou) Co., Ltd., Xinli
(Shanghai) Network Technology 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., SMARTINT, INC., Evergene Biotech Industrial Co., Ltd., Wei Ke Biotech Co., Ltd., Global
BioPharma, Inc. ,Genhealth Pharma Co., Ltd., Taiwan Veterans Pharmaceutical Co., Ltd., Chao Chien Industrial Co., Ltd., You Yuen Co., Ltd., Taiwan
Venture Capital Association, Chang Yi Investment Co., Ltd., Yin Feng International Co., Ltd., Charleston Asset Management Co., Ltd., Twin Luck Global
Co., Ltd.
Director: New Kinpo Group, Tong Tong Information Co., Ltd., Sintong Animal Pharmaceutical Co., Ltd., OmniHealth Group, Inc., AIM PIC/S GMP, Chi Ji
International Co., Ltd., Min-Sheng Asset Management Co., Ltd., Min-Sheng Healthcare Co., Ltd., Global Strategic Investment Inc. (Samoa), Gold Precision
Ltd., KKXC Intergrated Management Holding (CYPRUS) Ltd., Medinox Inc., Optics Lab Inc., Syn Pharm Inc.
Supervisor: Teleport Access Services Inc., Cal-Comp Electronics & Communications Co., Ltd., Kenly Precision Industrial Co., Ltd., Formosan Union Chemical Corp.,
Sunny Special Dyeing & Finishing Co., Ltd., Zhaopal Investment Co., Ltd., Yongpal Investment Co., Ltd., Kaipal Investment Co., Ltd., CommonWealth
Magazine Group
President: Baotek Industrial Materials Ltd., Yin Feng International Co., Ltd.
Chairman: Cheng Chi Investment Co., Ltd.
Director: New Kinpo Group, Cal-Comp Technology Co., Ltd., Cal-Comp Electronics & Communications Co., Ltd., Jipo Investment Inc., Kinpo Electronics (China)
Co., Ltd., , Kaipo Electronics Co., Ltd., Kinpo International Ltd.
Supervisor: Gempal Technology Corp., Panpal Technology Corp., Hong Ji Capital Co., Ltd., Hong Jin Investment Co., Ltd.
Chairman: Sceptre Industry Co., Ltd.
Director: New Kinpo Group, Micro Metal Electronics Co., Ltd.
Supervisor: Full Power Investment Co., Ltd.
President: Sceptre Industry Co., Ltd.
Director
Kinpo
Electronics Inc.
Representative:
Shyh-Yong Shen
Director
Charng-Chyi
Ko
Director
Sheng-Chieh
Hsu
Director
Yen-Chia
Chou
13
Title
Director
Name
Wen-Chung
Shen
Director
Yung-Ching
Chang
Director
Chung-Pin
Wong
Director
Chiung-Chi
Hsu
Director
Chao-Cheng
Chen
Independent
Director
Min Chih
Hsuan
Independent
Director
Duei Tsai
Selected Current Positions
Director: Arcadyan Technology Corp., Topower Co., Ltd., Arcadyan Technology (Shanghai) Corp., Maxima Ventures I, LC Future Center Ltd
Senior Consultant: Compal Electronics, Inc.
Chairman: Allied Circuit Co., Ltd., Mactech Co., Ltd.
Director: Kunshan Allied Circuit Co., Ltd., Wei Chu Holding Co., Ltd., Bo Feng Capital Management Co., Ltd.,
Senior Consultant: Compal Electronics, Inc.
Chairman: Henghao Technology Co., Ltd., Jui Hong Technology Co., Ltd., Kunshan Botai Electronic Services Co., Ltd., Auscom Engineering Inc., Wah Yuen
Technology Holding Ltd.
Director: Arcadyan Technology Corp., Allied Circuit Co., Ltd, Mactech Co., Ltd., Panpal Technology Corp., Ripal Optoelectronics Co., Ltd., UNICOM GLOBAL
INC., General life Biotechnology Co., Ltd., Unico Cell Biomed Co., Ltd.,, Sanga Taiwan Co., Ltd., Hong Ji Capital Co., Ltd., Zhaopal Investment Co., Ltd.,
Yongpal Investment Co., Ltd., Kaipal Investment Co., Ltd., Compal System Trading (Kunshan) Co., Ltd., Compal Information Technology (Kunshan)
Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Electronics Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal
Electronic Technology (Chongqing) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal
Management (Chengdu) Co., Ltd., Changbao Electronic Technology (Chongqqing) Co., Ltd., Allied Power Holding Corp., Amexcom Electronics, Inc.,
Bizcom Electronics, Inc., Compal Connector Manufacture Ltd., Compal Europe (Poland) Sp. z o.o., Primetek Enterprises Ltd., Sirqul Inc.
Supervisor: Hong Ye Technology Corporation
Executive Vice President: Compal Electronics Inc.
Chairman: Full Power Investment Co., Ltd.
Director: Plank Optoelectronics Inc., Eb Bearing Co., Ltd., Chienhsinbao Hardware Co., Ltd.
Chairman: Compal Broadband Networks Inc., Compal Wireless Communications (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing) Co., Ltd., Compal
Communications (Nanjing) Co. Ltd., HANHELT Communications (Nanjing) Co., Ltd.
Director: Mactech Co., Ltd., Henghao Technology Co., Ltd., Gempal Technology Corp., Huang Feng Communication Co., Ltd., Ripal Optoelectronics Co., Ltd.,
General Life Biotechnology Co., Ltd., Unico Cell Biomed Co., Ltd., Hong Jing Co., Ltd., Kinpo Group Management Consultant Company, Compal
Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal Electronics (China) Co., Ltd., Kunshan Botai Electronic
Services Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Amexcom Electronics, Inc., Bizcom Electronics, Inc., CENA Electromex S. A. de C. V.,
Compalead Electronics, B. V., Mexcom Electronics, LLC, Mexcom Technologies, LLC, Speedlink Tradings Ltd.
President: Compal Investment (Jiangsu) Co., Ltd.
Executive Vice President: Compal Electronics Inc.
Chairman: Taiwan Memory Corporation, Meridigen Biotech Co., Ltd., Maxima Ventures I, Inc., Maxima Ventures II, Inc.
Director: D-Link Corporation, Alpha Networks Inc., Murad Chia Jei Biotechnology Co., Ltd., General Biologicals Corporation, SIPP Technology Corporation,
Clientron Corp., Pacgen Biopharmaceuticals Corporation (Canada)
Independent Director: Wistron Corporation, Siliconware Precision Industries Co., Ltd.
Remunerate Committee member: Compal Electronics, Inc., Wistron Corporation, Siliconware Precision Industries Co., Ltd.
Audit Committee member :Compal Electronics, Inc., Wistron Corporation, Siliconware Precision Industries Co., Ltd.
Independent Director: Getec Technology Corporation,TaiwanTaxi Corp., TTY Biopharm
Remunerate Committee member: Compal Electronics, Inc.,Getec Technology Corporation, TaiwanTaxi Corp., TTY Biopharm
Audit Committee member:Compal Electronics, Inc., TTY Biopharm
Chairman: Powertech Technology Inc., Greatek Electronics Inc.
Director: Powertech Technology (Suzhou) Ltd., Powertech Holding (B.V.I.) Inc., Powertech Technology (Singapore) Pte. Ltd. and PTI Technology (Singapore) Pte.
Independent
Director
Duh Kung Tsai
Ltd.
Independent Director: Wistron Corporation, Chicony Power Technology Co., Ltd.
Remunerate Committee member: 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. (8.52%), Jipo Investment Inc.(3.17%), Nan Shan Life Insurance Company Ltd. (2.85%), Lai-Shun Shen Tsai (2.84%), Panpal
Technology Corporation(1.59%), Citibank Taiwan in its Capacity as Trustee of NBIM Investment Account (1.58%)、Hebao Investment Co., Ltd.
(1.50%), Li-Chu Tsai (1.49%), Standard Chartered in custody of CITIC Hong Kong accounts (1.44%), Kun-Chao Shen (1.39%)
April 25, 2017
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%), Ying-Zong Tu
(3.25%), Ruen Hua Dyeing & Weaving Co., Ltd.(0.28%), Ruentax Leasing Co., Ltd.(0.15%), Wen-De Kuo (0.11%), Jipin Investment Co., Ltd.(0.11%),
Bao Chi Investment Co., Ltd. (0.05%), Bao Yi Investment Co., Ltd.(0.05%), Bao Hui Investment Co., Ltd. (0.05%) and 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
Independence Criteria (Note)
1
2
3
4
5
6
7
8
9
10
Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director
(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) (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)
0
0
0
0
0
0
0
0
0
0
0
0
2
3
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.
16
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
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/
National
ity/
Gender
(Note 1)
Date
elected /
appointed
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares held by
spouse and
underage children
Subsidiary
shareholding
Total shares held in
the names of others
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares
Sharehol
ding
Percentag
e
(%)
Major career (academic)
achievements
Selected Current
Positions
1989.06.01
40,352,587
0.91%
1,069,405
0.02%
0
0.00%
Department of Electrical Engineering, National
Cheng Kung University
Chairman of Compal Communication Inc. &
Arcadyan Technology Corp.
Graduate Institute of Management Science,
2007.04.01
5,853,618
0.13%
1,398
0.00%
2014.02.27
4,020,000
0.09%
1,428
0.00%
2011.08.31
0
0.00%
0
0.00%
2002.01.01
11,935,968
0.27%
101,931
0.00%
0
0
0
0
0.00%
National Chiao Tung University
Rayonnant Technology Co., Ltd.Chairman
Graduate Institute of Electrical Engineering,
0.00%
National Taiwan University
President of Compal Communication Inc.
National Chiao Tung University EMBA
Corporation
Department of Electrical Engineering, National
0.00%
Taiwan University
2003.01.01
3,178,587
0.07%
7,259
0.00%
0
0.00%
Director of Arcadyan Technology Corp.
Master’s Degree in Graduate School of
Management, Yuan Ze University
Director and President of Toppoly
Optoelectronics Corp.
Graduate Institute of Electrical Engineering,
President
Jui-Tsung
Chen
Executive Vice
Chung-Pin
President
Wong
Executive Vice
Chao-Cheng
President
Chen
Executive Vice
Chen-Chang
President
Hsu
Senior Advisor
Wen-Chung
Shen
Senior Advisor
Yung-Ching
Chang
Senior Vice
President
Chun-De
Shen
Senior Vice
President
Kuo-Chuan
Chen
April 24, 2017
Spouse or relatives of second
degree or closer acting as
managers
Title
Name
Relatio
nship
Vice
President
Bo-Tang
Wang
Relative
by
affinity
N/A
N/A
N/A
N/A
N/A
N/A
Refer to
Page 12-14
Refer to
Page 12-14
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
2007.01.01
2,638,700
0.06%
900,000
0.02%
0
0.00%
National Taiwan University
(Note 3)
N/A
N/A
N/A
Director of Kinpo Electronics Inc.
Department of Physics, Chung Yuan Christian
2007.01.01
1,140,823
0.03%
10,924
0.00%
0
0.00%
University
N/A
N/A
N/A
N/A
Senior Vice President of Compal
18
0.00%
Executive Vice President of WINTEK
(Note 3)
N/A
N/A
N/A
Title
Name/
National
ity/
Gender
(Note 1)
Date
elected /
appointed
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares held by
spouse and
underage children
Subsidiary
shareholding
Total shares held in
the names of others
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares
Sharehol
ding
Percentag
e
(%)
Major career (academic)
achievements
Selected Current
Positions
Spouse or relatives of second
degree or closer acting as
managers
Title
Name
Relatio
nship
2009.10.06
3,487,698
0.08%
1,045,585
0.02%
0
0.00%
College
(Note 3)
N/A
N/A
N/A
Communication Inc.
Department of International Trade, Hsingwu
Senior Vice
Pei-Yuan
President
Chen
Senior Vice
Chiu-Rui
President
Wei
Senior Vice
President
Ming-Chih
Chang
Senior Vice
President
Sheng-Hua
Peng
Senior Vice
President
Wen-Da
Hsu
Senior Vice
President
Wei-Cheng
Chen
Senior Vice
President
Hsi-Kuan
Chen
Senior Vice
President
Chih-Wei
Wen
2010.03.18
200,000
0.00%
142,966
0.00%
0
0.00%
Senior Vice
President
Ying Chang 2011.02.24
420,000
0.01%
0
0.00%
2011.08.01
1,919,489
0.04%
0
0.00%
0
0
0.00%
0.00%
2014.02.27
520,000
0.01%
0
0.00%
0
0.00%
2014.02.27
1,093,000
0.02%
0
0.00%
0
0.00%
2004.04.01
630,656
0.01%
0
0.00%
0
0.00%
2009.05.01
0
0.00%
0
0.00%
2017.05.10
0
0.00%
0
0.00%
0
0
0.00%
0.00%
19
Director of Kinpo Electronics Inc.
Master of Business Administration, University
of Washington, USA
Senior Vice President of Toppoly
Optoelectronics Corp.
MBA, University Of Georgia
President of Swenc Technology Co., Ltd.
Department of Electrical Engineering, Ming
Chi University of Technology
LCFC (Hefei) Co., Ltd. CEO
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
Master of Industrial Design, Cranbrook
Academy of Art
Director of Design and Customer Affairs,
Philips (Hong Kong)
Department of Electrical Engineering, Fu Jen
Catholic University
(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
(Note 3)
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
Title
Name/
National
ity/
Gender
(Note 1)
Date
elected /
appointed
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares held by
spouse and
underage children
Subsidiary
shareholding
Total shares held in
the names of others
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares
Sharehol
ding
Percentag
e
(%)
Major career (academic)
achievements
Selected Current
Positions
Spouse or relatives of second
degree or closer acting as
managers
Title
Name
Relatio
nship
2003.01.01
1,923,786
0.04%
51,194
0.00%
0
0.00%
2003.01.01
8,762,007
0.20%
0
0.00%
0
0.00%
2003.01.01
10,197
0.00%
0
0.00%
0
0.00%
2006.02.21
132,000
0.00%
270
0.00%
0
0.00%
2007.07.10
459,548
0.01%
486
0.00%
0
0.00%
Inventec Corp. Vice President
Department of Electronic Engineering,
Lunghwa University of Science and
Technology
Deputy Manager of Research and
Development, Top Information Technologies
Co., Ltd.
Department of Accounting, Feng Chia
University
Director Compal Communication Inc.
Graduate Institute of Electrical Engineering,
San Jose State University
KC Technology Inc.Vice President
Department of Electrical Engineering, National
Taipei Institute of Technology
UNICOM GLOBAL., Inc. Director
Department of Computer Science and
Information Engineering, National Taiwan
University
President of Vibo Telecom Inc.
2009.07.16
318,184
0.01%
0
0.00%
2009.07.16
124,662
0.00%
0
0.00%
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
Vice President
Chih-Chuan
Cheng
Vice
President
and head of
finance
Ching-Hsiu
ng Lu
Vice President
Shih-Tung
Wang
Vice President
Bo-Hsiung
Chang
Vice President
Bo-Tang
Wang
Vice President
Vice President
Zong-Ming
Wang
Fu-Chuan
Chang
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
N/A
President
Jui-Tsung
Chen
Relative
by
affinity
N/A
N/A
N/A
N/A
(Note 3)
N/A
N/A
N/A
20
Major career (academic)
achievements
Selected Current
Positions
Spouse or relatives of second
degree or closer acting as
managers
Title
Name
Relatio
nship
Title
Name/
National
ity/
Gender
(Note 1)
Date
elected /
appointed
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares held by
spouse and
underage children
Subsidiary
shareholding
Total shares held in
the names of others
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares
Sharehol
ding
Percentag
e
(%)
Vice President
2011.01.01
52,624
0.00%
0
0.00%
0
0.00%
Chi-Hsiang
Ma
Yung-Nan
Vice President
2011.01.01
0
0.00%
0
0.00%
Vice President
Chang
Sheng-Hung
Li
2011.07.01
324,574
0.01%
0
0.00%
Vice President Yung-He Su 2011.07.01
320,401
0.01%
0
0.00%
Department of Business Administration, Fu Jen
Catholic University
Product Manager, MiTAC International
Corporation
0
0
0
0.00%
MBA, Pacific Western University
Factory Manager, Delta Electronics Inc.
0.00%
Department of Electronics, National Taipei
Institute of Technology
0.00%
Department of Electrical Engineering, National
Taipei Institute of Technology
Vice President of Arima Photovoltaic &
Optical Corp.
Vice President
Ming-Hsian
g Kan
Vice President
Chih-Hsien
Liang
Vice President
Lung-Hua
Shen
Vice President
Ming-Dong
Wong
Vice President
Yue-Chun
Li
2011.08.31
0
0.00%
0
0.00%
0
0.00%
2011.10.31
160,000
0.00%
0
0.00%
0
0.00%
2012.08.29
240,000
0.01%
0
0.00%
0
0.00%
2013.01.31
383,786
0.01%
0
0.00%
0
0.00%
2014.02.17
240,000
0.01%
0
0.00%
0
0.00%
21
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.
Master of Business Administration, University
of Washington, USA
Deputy Manager of Sales, Kapok Computer
Company
Department of Electronic Engineering,
Lee-Ming Institute of Technology
Chairman's Special Assistant, Mag Technology
Co., Ltd.
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
Title
Name/
National
ity/
Gender
(Note 1)
Date
elected /
appointed
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares held by
spouse and
underage children
Subsidiary
shareholding
Total shares held in
the names of others
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares
Sharehol
ding
Percentag
e
(%)
Major career (academic)
achievements
Selected Current
Positions
Spouse or relatives of second
degree or closer acting as
managers
Title
Name
Relatio
nship
Vice President
Chiao-Lieh
Huang
Vice President
Chung-Hsin
g Tan
Vice President
Yi-Yun
Chang
Vice President
Vice President
Hsin-Kung
Mao
Ling-Sheng
Wu
Vice President
Hsin-Hsiun
g Huang
Shih-Hung
2014.02.27
118,992
0.00%
0
0.00%
2014.02.27
250,000
0.01%
5,320
0.00%
2014.08.13
350,246
0.01%
0
0.00%
2014.11.13
240,714
0.01%
0
0.00%
2015.01.22
285,000
0.01%
0
0.00%
2015.01.22
299,001
0.01%
0
0.00%
Vice President
2016.02.24
160,000
0.00%
0
0.00%
0
0.00%
Huang
Yi-Chiang
Vice President
2016.02.24
160,000
0.00%
0
0.00%
0
0.00%
Chiu
Vice President Ching-Fa Li 2016.02.24
200,690
0.00%
0
0.00%
0
0.00%
Vice President
2016.02.24
160,010
0.00%
0
0.00%
0
0.00%
Bo-Heng
Chen
22
0
0
0
0
0
0
0.00%
Graduate Institute of Electrical Engineering,
National Taiwan University
Vice President of Compal Communication Inc.
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
0.00%
U. of Southern California; Senior Manager of
Compal Communication Inc.
0.00%
Department of Electronics, Chung Yuan
Christian University
Senior Manager of Compal Communication
Inc.
Master in Control Engineering, National Chiao
Tung University
Director - Coretronic Corporation
Master in Earth Sciences, National Central
University
Information Engineering Ph.D., National Tsing
Hua University
Vice General Manager – Eten Technology Inc.
COLUMBIA UNIVERSITY
Master of Industrial Engineering and
Operations Management
(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
Title
Name/
National
ity/
Gender
(Note 1)
Date
elected /
appointed
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares held by
spouse and
underage children
Subsidiary
shareholding
Total shares held in
the names of others
Shares held
Shares
Shareho
lding
Percent
age
(%)
Shares
Sharehol
ding
Percentag
e
(%)
Vice President
Jui-Chun
Hsu
2016.05.11
0
0.00%
0
0.00%
0
0.00%
Vice President Shih-An Li 2016.06.29
76,071
0.00%
4,259
0.00%
0
0.00%
Vice President
Ta-Chun
Wang
Vice President
Fei-Long
Chen
Advisor
Tian-Yuan
Tsai
Head of Audit
Bo-Wen
Hsieh
2016.06.29
204,200
0.00%
4,119
0.00%
0
0.00%
2016.06.29
9,000
0.00%
0
0.00%
2006.06.28
712,715
0.02%
0
0.00%
0
0
0.00%
0.00%
2010.10.27
0
0.00%
0
0.00%
0
0.00%
Major career (academic)
achievements
Selected Current
Positions
Spouse or relatives of second
degree or closer acting as
managers
Title
Name
Relatio
nship
PhD, Graduate Institute of Electrical
Engineering, National Taiwan University
Photonics Industries International,
Inc.President
Department of Navigation, Taipei College of
Maritime Technology
LCFC Taiwan Branch Vice CEO
Master of Industrial Engineering, University of
Illinois
Shanghai Real Industrial Co., Ltd. Managing
Vice President
PhD, Industrial Engineering, Auburn Uni.,
USA
Kunshan MYZY Technology Co., Ltd. CTO
Graduate Institute of Public Finance, National
Chengchi University
Accountant of KPMG
Department of Accounting, National Taiwan
University
Audit Manager, KGT Telecom
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
(Note 3)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Note: 1. All managers are ROC nationals; with the exception of Senior Vice President Chui-Rui Wei, all other managers are male.
2. Senior Vice President Min-Hsing Hsu and Vice President Chin-Wen Liao resigned in 2016.
3. Concurrent positions in other companies
23
Title
Name
Executive
Vice
President
Chen-Chang
Hsu
Senior Vice
President
Senior Vice
Chun-De
Shen
Pei-Yuan
President
Chen
Senior Vice
President
Chiu-Rui
Wei
Senior Vice
President
Sheng-Hua
Peng
3. Concurrent positions in other companies
Chairman: Henghao Technology (Kunshan) Co., Ltd., Lucom Display Technology (Kunshan) Ltd.
Vice Chairman: Henghao Technology Co., Ltd., Optronics Corporation
Director: Mactech Co., Ltd.
President: Henghao Technology Co., Ltd., Henghao Technology (Kunshan) Co., Ltd., Lucom Display Technology (Kunshan) Ltd.
Director: Kinpo Electronics Inc., Compal Information Research & Development (Nanjing) Co., Ltd., Auscom Engineering Inc.
President: Compal Information Research & Development (Nanjing) Co., Ltd.
Director: Kinpo Electronics In., Infinno Technology Corporation, Full Power Investment Co., Ltd.
Chairman: Allmedi Electronic Co., Ltd. Rapha Bio Ltd.
Director: Chipbond Technology Corporation, Taiwan Star Telecom Corporation Limited, Suyin Optronics Corp., Trust Bio-Sonic Co., Ltd. ,Maxima Ventures I,
Inc., HWA VI Venture Capital Corp., Hwa Chi Venture Capital Corp., ,CDIB Partners Investment Holding Corp., Zhengying Electronics (Chongqing)
Co., Ltd., Compal Precision Model (Jiangsu) Co., ShengBao Precision Electronics (Taicang) Co., Ltd. , Rayonnant Technology (HK) Holdings Limited,
LC Future Center Ltd
Supervisor: Henghao Technology Co., Ltd., Infinno Technology Corporation, Rayonnant Technology Co., Ltd., Ripal Optoelectronics Co., Ltd., Mactech Co., Ltd.,
Unicom Global Inc., General life Biotechnology Co., Ltd., Global Pharma Co., Ltd., Unico Cell Biomed Co., Ltd., Rayonnant Precision Technology
(Taicang) Co., Ltd.
Independent Director: Synergy Scientech Corp.
Remunerate Committee member: Synergy Scientech Corp.
Director: Huang Feng communication Co., Ltd., Compal Wireless Communications (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing) Co., Ltd.,
Compal Communications (Nanjing) Co. Ltd., HANHELT Communications (Nanjing) Co., Ltd., CENA Electromex S. A. de C. V., Compal Electronics
India Private Limited
President: Compal Display Electronics (Kunshan) Co., Ltd., Kunshan Botai Electronic Services Co., Ltd.
Senior Vice
President
Wen-Da Hsu Director: HANHELT Communications (Nanjing) Co., Ltd.
Senior Vice
President
Ming-Chih
Chang
Vice
Hsi-Kuan
Chen
President
Vice
President
and head of
finance
Director: Kunshan Botai Electronic Services Co., Ltd., LC Future Center Ltd.
President: Compal System Trading (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal
Electronics Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal Electronic Technology (Chongqing) Co., Ltd., Compal
Digital Technology (Kunshan) Co., Ltd., Kunshan Botai Electronic Services Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal Management
(Chengdu) Co., Ltd.
Director: Rayonnant Technology Holdings Ltd., Rayonnant Technology (Taicang) Co., Ltd.
Ching-Hsiung
Lu
Director: ZHI-PAL Technology Inc., Arcadyan Technology (Shanghai) Corp., Compal Wireless Communications (Nanjing) Co., Ltd., Compal Digital
Communications (Nanjing) Co., Ltd., Compal Communications (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.,
24
Title
Name
3. Concurrent positions in other companies
Compal Information Technology (Kunshan) Co., Ltd., Compal Electronics (China) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal
Electronics (Chengdu) Co., Ltd., Compal Electronic Technology (Chongqing) Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display
Electronics (Kunshan) Co., Ltd., Compal Network Information (Kunshan) Co., Ltd., Kunshan Botai Electronic Services Co., Ltd., Compal Investment
(Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd.
Vice
Bo-Hsiung
President
Chang
Vice
Fu-Chuan
President
Chang
Vice
Chiao-Lieh
President
Huang
Advisor
Tian-Yuan
Tsai
Director: Unicom Global Inc., Avalue Technology Inc.
President: Compal Optoelectronics (Kunshan) Co., Ltd., Compal Electronics (China) Co., Ltd.
Supervisor: HANHELT Communications (Nanjing) Co., Ltd.
Chairman: Crownpo Technology Inc.
Managing Director: LIZ Electronics (Kunshan) Co., Ltd., LIZ Electronics (Nantong) Co., Ltd.
President: Crownpo Technology Inc.
Remuneration Committee member: Sanyang Motor Co., Ltd.
25
3.2.3
Remuneration of Directors, Supervisors, President, and Vice Presidents
Remuneration of Directors
Directors' remuneration
Remuneration
from earnings
appropriation
(C)
Pension (B)
Remuneration
(A)
The
Compa
ny
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Com
pany
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Compa
ny
All
compan
ies
include
d in the
financi
al
stateme
nts
Business
department
implementation
Fees for services
rendered (D)
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Compa
ny
Remuneration as an employee
Unit: NTD thousand; thousand shares; %
The sum of A,
B, C and D as a
percentage of
after-tax profit
Salaries, bonuses,
special allowances
etc (E)
Retirement
Pension (F)
Share of profit as an employee (G)
The
Compa
ny
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Company
All
companie
s
included
in the
financial
statement
s
The
Compa
ny
All
companie
s
included
in the
financial
statement
s
The Company All companies included in
the financial statements
Cash
Amount
Stock
Amoun
t
Cash
Stock
The sum of A, B, C, D,
E, F, and G as a
percentage of after-tax
profit
The
Compa
ny
All companies
included in
the financial
statements
Remuneration
from invested
businesses other
than the
subsidiaries (H)
4,320
4,320
0
0
46,323 46,323 2,759
3,419 0.66% 0.66% 146,994 147,059
678
678
14,795
0
14,795
0
2.65%
2.66%
68,139
Title
Name
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director
Sheng-Hsiun
Hsu
Jui-Tsung
Chen
Wen-Being
Hsu
Representativ
e of Kinpo
Electronics
Inc.:
Shyh-Yong
Shen
Charng-Chyi
Ko
Sheng-Chieh
Hsu
Yen-Chia
Chou
Wen-Chung
Shen
Yung-Ching
Chang
Chung-Pin
Wong
26
Directors' remuneration
Remuneration
from earnings
appropriation
(C)
Pension (B)
Remuneration
(A)
The
Compa
ny
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Com
pany
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Compa
ny
All
compan
ies
include
d in the
financi
al
stateme
nts
Business
department
implementation
Fees for services
rendered (D)
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Compa
ny
The sum of A,
B, C and D as a
percentage of
after-tax profit
Salaries, bonuses,
special allowances
etc (E)
Remuneration as an employee
Retirement
Pension (F)
Share of profit as an employee (G)
The
Compa
ny
All
compan
ies
include
d in the
financi
al
stateme
nts
The
Company
All
companie
s
included
in the
financial
statement
s
The
Compa
ny
All
companie
s
included
in the
financial
statement
s
The Company All companies included in
the financial statements
Cash
Amount
Stock
Amoun
t
Cash
Stock
The sum of A, B, C, D,
E, F, and G as a
percentage of after-tax
profit
The
Compa
ny
All companies
included in
the financial
statements
Remuneration
from invested
businesses other
than the
subsidiaries (H)
Title
Name
Director
Director
Chiung-Chi
Hsu
Chao-Cheng
Chen
Independent
Min Chih
Director
Hsuan
Independent
Director
Duei Tsai
Independent
Duh Kung
Director
Note: 1. In 2016, the Company made pension contributions totaling NTD 678,000 (including NTD 216,000 under the new system and NTD 462,000 under the old system) for directors who
Tsai
also assumed managerial roles as employees; meanwhile, all companies reported in the financial statements had made pension contributions totaling NTD 678,000 (includingNTD
216,000 under the new system and NTD 462,000 under the old system).
2. Directors’compensation refers to the estimated directors’ compensation approved by the Board of Directors meeting on March 28, 2017.
27
Range of Remuneration
The Company
4 (Note 1)
11 (Note 2)
1 (Note 3)
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. Min-Chih Hsuan, Duei Tsai, Duh-Kung Tsai and Shyh-Yong Shen- 4 positions
16
Number of Directors
Total of (A+B+C+D)
Total of (A+B+C+D+E+F+G+H)
Companies in the
consolidated financial
statements
4 (Note 4)
10 (Note 5)
2 (Note 6)
The Company
4 (Note 7)
6 (Note 8)
1 (Note 9)
1 (Note 10)
1 (Note 11)
2 (Note 12)
1 (Note 13)
Companies in the
consolidated financial
statements
3 (Note 14)
4 (Note 15)
2 (Note 16)
1 (Note 17)
1 (Note 18)
4 (Note 19)
1 (Note 20)
16
16
16
2. Jui-Tsung Chen, Wen-Being Hsu, Charng-Chi Ko, Sheng-Chieh Hsu, Yung-Chia Chou, Wen-Chung Shen, Yung-Ching Chang, Chung-Pin Wong, Chiung-Chi Hsu, Chao-Cheng Chen,
Kinpo Electronics Inc.- 11 positions
3. Sheng-Hsiun Hsu - 1 positions
4. Min-Chih Hsuan, Duei Tsai, Duh-Kung Tsai and Shyh-Yong Shen - 4 positions
5. Wen-Being Hsu, Charng-Chi Ko, Sheng-Chieh Hsu, Yen-Chia Chou, Wen-Chung Shen, Yung-Ching Chang, Chung-Pin Wong, Chiung-Chi Hsu, Chao-Cheng Chen, Kinpo
Electronics Inc. - 10 positions
6. Sheng-Hsiun Hsu and Jui-Tsung Chen - 2 positions
7. Min-Chih Hsuan, Duei Tsai, Duh-Kung Tsai and Shyh-Yong Shen - 4 positions
8. Wen-Being Hsu, Charng-Chi Ko, Sheng-Chieh Hsu, Yen-Chia Chou, Chiung-Chi Hsu, Kinpo Electronics Inc. - 6 positions
9. Sheng-Hsiun Hsu - 1 positions
10. Wen-Chung Shen - 1 positions
11. Yung-Ching Chang - 1 positions
12. Chung-Pin Wong, Chao-Cheng Chen - 2 positions
13. Jui-Tsung Chen - 1 positions
14. Min-Chih Hsuan, Duei Tsai and Duh-Kung Tsai - 3 positions
15. Wen-Being Hsu, Yen-Chia Chou, Chiung-Chi Hsu, Kinpo Electronics Inc. - 4 positions
16. Charng-Chi Ko, Sheng-Chieh Hsu - 2 positions
17. Wen-Chung Shen - 1 positions
18. Yung-Ching Chang - 1 positions
19. Sheng-Hsiun Hsu, Chung-Pin Wong, Chao-Cheng Chen and Shyh-Yong Shen - 4 positions
20. Jui-Tsung Chen - 1 positions
Remuneration of Supervisors: Not Applicable (The Company adopts an Audit Committee system)
28
Remuneration of the President and Vice Presidents
Salary (A)
Pension (B)
Bonus and
special allowances (C)
Share of profit as an employee (D)
The
Company
All
companies
included in
the
financial
statements
The
Compa
ny
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
Amount
Stock
Amount
Cash
Amount
Stock
Amount
Unit: NTD thousand; thousand shares; %
Sum of A, B, C and D as a
percentage of after-tax
profit (%)
The
Company
All companies
included in the
financial
statements
Remuneration
from invested
businesses other
than the
subsidiaries (E)
124,608
131,767
6,163
6,163
426,690
427,042
69,501
0
69,501
0
7.71%
7.80%
3,915
Title
Name
50 employees
including President
Jui-Tsung Chen
(Note1)
Note: 1.Managers’ titles and names
‧President: Jui-Tsung Chen – 1 position
‧Executive Vice Presidents and Senior Advisors: Chung-Pin Wong, Cheng-Chao Chen, Chen-Chang Hsu, Wen-Chung Shen and Yung-Ching Chang – 5 positions
‧Senior Vice Presidents: Chun-De Shen, Kuo-Chuan Chen, Pei-Yuan Chen, Chiu-Rui Wei, Ying Chang, Ming-Chih Chang, Shen-Hua Peng, Wen-Da Hsu, Wei-Cheng
Chen, Hsi-Kuan Chen, Chih-Wei Wen, Ming-Hsing Hsu – 12 positions
‧Vice Presidents and Advisors: Chih-Chuan Cheng, Ching-Hsiung Lu, Shih-Tung Wang, Bo-Hsiung Chang, Bo-Tang Wang, 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 Wen,
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, Shih-An Li, Ta-Chun Wang, Fei-Lung Chen, Tian-Yuan Tsai,
Chin-Wen Liao – 32 positions
2. In 2016, Ming-Chih Chang, Senior Vice President, Hsi-Kuan Chen, Senior Vice President, Shih-Hung Huang, Vice President, Yi-Chiang Chiu, Vice President,
Bo-Heng Chen, Vice President were either transferred back or promoted. Jui-Chun Hsu, Vice President, Shih-An Li, Vice President, Ta-Chun Wang, Vice President
and Fei-Lung Chen, Vice President took office while Ming-Hsing Hsu, Senior Vice President and Chin-Wen Liao, Vice President resigned. In 2017, Chih-Wei Wen,
Senior Vice President, took office.
3. No pension benefit was paid in 2016. In the mean time, the Company made pension contributions totaling NTD 6,163,000 (including NTD 4,367,000 under the new
system and NTD 1,796,000 under the old system); while all companies reported in the financial statements made pension contributions totaling NTD 6,163,000
(including NTD 4,367,000 under the new system and NTD 1,796,000 under the old system).
4. Employees’ compensation appropriation was approved by Board of Directors on meeting on March 28, 2017. The compensations of the aforementioned managers
were not yet final and will be reviewed based on the list of the date of distribution.
29
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. Ming-Hsing Hsu, Chin-Wen Liao and Chih-Wei Wen - 3 positions
Number of President and Vice Presidents
Total of (A+B+C+D)
The Company
3 人(註 1)
9persons (Note2)
8persons(Note3)
17persons(Note4)
10persons(Note5)
2persons(Note6)
1 persons (Note 7)
Total of (A+B+C+D+E)
Companies in the consolidated
financial statements
3 persons (Note 8)
5 persons (Note 9)
12 persons (Note 10)
17 persons (Note 11)
10 persons (Note 12)
2 persons (Note 13)
1 persons (Note 14)
50
50
2. Pei-Yuan Chen, Fu-Chuan Chang, Chi-Hsiang Ma, Yung-Nan Chang, Jui-Chun Hsu, Shih-An Li, Ta-Chun Wang, Fei-Lung Chen and Tian-Yuan Tsai – 9 positions
3. Shih-Tung Wang, Ming-Hsiang Kan, Chih-Hsien Liang, Ling-Sheng Wu, Shih-Hung Huang, Yi-Chiang Chiu, Ching-Fa Li and Bo-Heng Chen – 8 positions
4. Wen-Chung Shen, Yung-Ching Chang, Chiu-Jui Wei, Wei-Chang Chen, Hsi-Kuan Chen, Chih-Chuan Cheng, Ching-Hsiung Lu, Bo-Hsiung Chang, Bo-Tang
Wang, Zong-Ming Wang, Sheng-Hung-Li, Yung-He Su, Lung-Hua Shen, Chiao-Lieh Huang, Yi-Yun Chang, Hsin-Kong Mao and Hsin-Hsiung Huang – 17
positions
5. Chen-Chang Hsu, Chun-De Shen, Kuo-Chuan Chen, Ying Chang, Min-Chih Chang, Sheng-Hua Peng, Wen-Da Hsu, Min-Tung Wong, Yue-Chun Li and
Chung-Hsing Tan – 10 positions
6. Chung-Pin Wong and Chao-Cheng Chen – 2 positions
7. Jui-Tsung Chen – 1 position
8. Ming-Hsing Hsu, Chin-Wen Liao and Chih-Wei Wen – 3 positions
9. Chi-Hsiang Ma, Jui-Chun Hsu, Shih-An Li, Ta-Chun Wang and Fei-Lung Chen - 5 positions
10. Pei-Yuan Chen, Shih-Tung Wang, Fu-Chuan Chang, Yung-Nan Chang, Ming-Hsiang Kan, Chih-Hsien Liang, Ling-Sheng Wu, Shih-Hung Huang, Yi-Chiang
Chiu, Ching-Fa Li, Bo-Heng Chen and Tian-Yuan Tsai – 12 positions
11. Wen-Chung Shen, Yung-Ching Chang, Chiu-Jui Wei, Wei-Chang Chen, Hsi-Kuan Chen, Chih-Chuan Cheng, Ching-Hsiung Lu, Bo-Hsiung Chang, Bo-Hsiung
Chang, Bo-Tang Wang, Zong-Ming Wang, Sheng-Hung-Li, Yung-He Su, Lung-Hua Shen, Chiao-Lieh Huang, Yi-Yun Chang, Hsin-Kong Mao and Hsin-Hsiung
Huang – 17 positions
12. Chen-Chang Hsu, Chun-De Shen, Kuo-Chuan Chen, Ying Chang, Min-Chih Chang, Sheng-Hua Peng, Wen-Da Hsu, Min-Tung Wong, Yue-Chun Li and Chung-Hsing
Tan – 10 positions
13. Chung-Pin Wong and Chao-Cheng Chen – 2 positions
14. Jui-Tsung Chen – 1 position
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 (%)
49 employees including President
Jui-Tsung Chen (Note 1)
0
69,646
69,646
0.86%
Note: 1.Managers’ titles and names
‧President: Jui-Tsung Chen -1 position
‧ Executive Vice Presidents and Senior Advisors: Chung-Pin Wong, Cheng-Chao Chen, Chen-Chang Hsu, Wen-Chung Shen and Yung-Ching Chang – 5 positions
‧Senior Vice Presidents: Chun-De Shen, Kuo-Chuan Chen, Pei-Yuan Chen, Chiu-Rui Wei, Ying Chang, Ming-Chih Chang, Shen-Hua Peng, Wen-Da Hsu,
Wei-Chang Chen, Hsi-Kuan Chen and Chih-Wei Wen – 11 positions
‧Vice Presidentsand Advisors: Chih-Chuan Cheng, Ching-Hsiung Lu, Shih-Tung Wang, Bo-Hsiung Chang, Bo-Tang Wang, 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, Min-Tung Wong,
Yue-Chun Li , Chiao-Lieh Huang, Chung-Hsing Tan, Yi-Yun Chang, Hsin-Kong Mao, Ling-Sheng Wu, Hsin-Hsiung Huang, Shih-Hung
Huang, Yi-Chiang Chiu,Ching-Fa Li,Bo-Heng Chen, Jui-Chun Hsu, Shih-An Li, Ta-Chun Wang,Fei-Lung Chen andTian-Yuan Tsai – 31
positions
‧Head of Audit: Bo-Wen Hsieh - 1 position
2. In 2016, Ming-Chih Chang, Senior Vice President, Hsi-Kuan Chen, Senior Vice President, Shih-Hung Huang, Vice President, Yi-Chiang Chiu, Vice President,
Bo-Heng Chen, Vice President were either transferred back or promoted. Jui-Chun Hsu, Vice President, Shih-An Li, Vice President, Ta-Chun Wang, Vice President
and Fei-Lung Chen, Vice President took office while Ming-Hsing Hsu, Senior Vice President and Chin-Wen Liao, Vice President resigned. In 2017, Chih-Wei Wen,
Senior Vice President, took office.
3. Employees’ compensation appropriation was approved by the Board of Directors at the March 28, 2017 meeting. The compensations of the aforementioned managers
have not been 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.
Analysis
Directors
Supervisors
Presidents and
Vice Presidents
Net Income
2016
2015 (Note)
Amount
%
Amount
%
Unit: NT$ thousands
Increase (Decrease)
%
Amount
688,535
8.47%
701,829
8.08%
(13,294)
(1.89)%
8,130,890
8,684,610
(553,720)
Note: 2015 is the actual amount.
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
‧The term of the Board of Directos is from June 26, 2015 to June 25, 2018.
‧There were six Board meetingsduring 2016 (A). Director’s attendance records are as shown below:
Title
Name
Sheng-Hsiun Hsu
Chairman
Director
Jui-Tsung Chen
Director Wen-Being Hsu
Director
Director
Director
Director
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
Director
Chiung-Chi Hsu
Chao-Cheng Chen
Independent
Director
Independent
Director
Independent
Director
Min Chih Hsuan
Duei Tsai
Duh Kung Tsai
Attendance in
Person (B)
6
6
5
3
6
6
5
5
6
5
5
5
6
6
4
By Proxy
Attendance Rate
(%)[B/A]
Remarks
0
0
1
3
0
0
1
1
0
1
1
1
0
0
2
100%
100%
83%
50%
100%
100%
83%
83%
100%
83%
83%
83%
100%
100%
67%
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 23-25 of the Chinese annual report.
3.3.2 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 four Audit Committee meetings during 2016 (A). The attendance records of the Independent
Directors are as follows:
33
Title
Name
Independent
Director
Independent
Director
Independent
Director
Min Chih Hsuan
Duei Tsai
Duh Kung Tsai
Attendance in Person
(B)
4
4
3
By Proxy
0
0
1
Attendance Rate (%)
[B/A]
100%
100%
75%
Remarks
-
-
-
Other notes:
1. The Company should record the date of the Board of Directors’ meeting, the term, content of discussion, the result
of the Audit Committee’s decision and the actions the Company has taken in response should any of the
following situations arise in the operation of the Audit Committee:
(1) Matters listed in Item 5, Article 14 of the Security Act:
Board of
Directors
5th
Meeting of
the 12th
term of
Board of
Directors
2016.3.30
6th
Meeting of
the 12th
term of
Board of
Directors
2016.5.11
8th
Meeting of
the 12th
term of
Board of
Directors
105.8.11
Content of discussion and actions taken in response
1. To review and approve the consolidated and individual
financial statements for 2015.
2. To review and approve the independence and fitness
of the CPA engaged by the Company for the financial
statements.
˙Decisions by the Audit Committee (2016.3.30):
Matters listed in
Item 5, Article 14
of the Security Act
V
V
Not approved by the Audit
Committee but had the
consent of more than
two-thirds of all directors.
N/A
N/A
The motion was moved with unanimous support from all committee members in attendance
when inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision:
The motion was moved with unanimous support from all board members in attendance when
inquired by the Chair.
1. To approve the motion of changing the Company’s
CPA.
2. To review and approve the independence and fitness
of the CPA engaged by the Company for the financial
statements.
˙Decisions by the Audit Committee (2016.5.11):
V
V
N/A
N/A
The motion was moved with unanimous support from all committee members in attendance
when inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision:
The motion was moved with unanimous support from all board members in attendance when
inquired by the Chair.
1. The consolidated financial statement for the 1st half of
2016 was presented to the Board for review and
approval.
2. To review and approve the loan to be made to
Henghao Technology Co., Ltd.
˙Decisions by the Audit Committee (2016.8.11):
V
V
N/A
N/A
The motion was moved with unanimous support from all committee members in attendance
when inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision for motion No. 1:
not applicable (the motion was a report intended for the board of directors)
˙Actions taken by the Company in response to the Audit Committee’s decision for motion No. 2:
As directors Jui-Tsung Chen, Wen-Chung Shen and Chung-Pin Wong were also serving
concurrently as directors of Henghao Technology Co., Ltd., they were excluded from the
discussion and voting in order to avoid conflicts of interest per rules and procedures of board of
directors meeting. The motion was moved with unanimous support from the remaining board
members in attendance when inquired by the Chair.
34
Board of
Directors
9th
Meeting of
the 12th
term of
Board of
Directors
2016.11.9
Content of discussion and actions taken in response
1. To review and approve the draft of “Annual Audit
Plan for 2017”.
2. To review and approve the request by a spinoff
business for a letter of support from the Company
needed for a loan from a financial institution.
3. To review and approve the release of the Company’s
guaranteed obligation to Compalead Eletrônica do
Brasil Indústria e Comércio Ltda.
˙Decisions by the Audit Committee (2016.11.9):
Matters listed in
Item 5, Article 14
of the Security Act
V
V
V
Not approved by the Audit
Committee but had the
consent of more than
two-thirds of all directors.
N/A
N/A
N/A
The motion was moved with unanimous support from all committee members in attendance
when inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision:
The motion was moved with unanimous support from all board members in attendance when
inquired by the Chair.
1. To review and approve the consolidated and individual
financial statements for 2016.
2. To review and approve the Company’s internal control
declaration for 2016.
11th
Meeting of
the 12th
term of
Board of
Directors
2017.3.28
3. To review and approve the independence and fitness
of the CPA engaged by the Company for the financial
statements.
4. To review and approve Compal Information
Technology (Kunshan) Co., Ltd. (100% owned by
the Company)’s investment in Leshi Zhixin
Electronic Technology (Tianjin) Limited.
˙Decisions by the Audit Committee (2017.3.28):
V
V
V
V
N/A
N/A
N/A
N/A
The motion was moved with unanimous support from all committee members in attendance
when inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision:
The motion was moved with unanimous support from all board members in attendance when
inquired by the Chair.
1. To review and approve the motion to revise the
“Procedures for Acquisition or Disposal of Assets”.
2. To review and approve the motion to lift the
non-competition restriction for directors and
managers.
3. To review and approve the request by Compal Europe
(Poland) Sp.z o.o. (100% owned by the Company)
for a letter of support from the Company needed for
factory lease escrow.
˙Decisions by the Audit Committee (2017.5.10):
V
V
V
N/A
N/A
N/A
The motion was moved with unanimous support from all committee members in attendance when
inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision for motions No. 1
and 3:
The motions were moved with unanimous support from all board members in attendance when
inquired by the Chair.
˙Actions taken by the Company in response to the Audit Committee’s decision for motion No.2:
As directors and managers Jui-Tsung Chen, Chung-Pin Wong and Chao-Cheng Chen were
directly involved in the matter, they were excluded from the discussion and voting in order to
avoid conflicts of interest per rules and procedures of board of directors meeting. The motion
was moved with unanimous support from the remaining board members in attendance when
35
12th
Meeting of
the 12th
term of
Board of
Directors
106.5.10
Board of
Directors
Content of discussion and actions taken in response
inquired by the Chair.
Matters listed in
Item 5, Article 14
of the Security Act
Not approved by the Audit
Committee but had the
consent of more than
two-thirds of all directors.
(2) With the exception of the aforementioned matter, other matters not approved by the Audit Committee but had the
consent of more than two-thirds of all directors: 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. Status of communication between independent directors, internal audit supervisor and accountant:
1. Method of communication between independent directors, internal audit supervisor and accountant:
˙After the internal audit supervisor has submitted an audit report and follow-up report, he/she should
provide the completed audited items to the independent directors for their review by the end of the
following month. Should the independent directors require 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 quarterly basis and discuss relevant matters in person with the
committee.
˙The independent directors must communicate with the CPA on a yearly basis through the Audit
Committee or Board of Directors’ Meeting. The CPA shall report to the independent directors on the
results of financial statement audit and other pertinent legal requirements while the Audit
Committee shall also evaluate the selection, independence, and fitness of the CPA engaged by the
Company.
2. Summary of the communications between independent directors and internal audit supervisor:
Date
Key point of communication
2016 March 30
Report on audits carried out between 2015/11/1~2016/3/4
2016 May 11
Report on audits carried out between 2016/3/5~2016/5/4
2016 August 11
Report on audits carried out between 2016/5/5~2016/7/31
2016 November 9
Report on audits carried out between 2016/8/1~2016/10/31 and the compilation of
Audit Plan for 2017
2017 March 28
Report on audits carried out between 2016/11/1~2017/1/31, internal audit
2017 May 10
Report on audits carried out between 2017/2/1~2017/4/20
self-evaluation review results and internal audit declaration
3. Summary of the communications between independent directors and accountant:
Date
Key point of communication
2016 March 30
Report on the outcome of audit for 2015 consolidated and individual financial
statements
2017 February 8
Report on the key audit items for 2016 consolidated and individual financial statements
2017 March 28
Report on the outcome of audit for 2016 consolidated and individual financial
statements
36
3.3.3 Corporate Governance Implementation and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed
Companies”
Assessment criteria
Yes
No
Yes
Yes
Yes
Yes
I. Has the company established and disclosed
its corporate governance principles based
on "Corporate Governance Best-Practice
Principles for TWSE/TPEX Listed
Companies?"
II. Shareholding structure and shareholders’
interests
1. Has the company implemented a set of
internal procedures to handle shareholders’
suggestions, queries, disputes and
litigations?
2. Is the company constantly informed of the
identities of its major shareholders and the
ultimate controller?
3. Has the company established and
implemented risk management practices
and firewalls for companies it is affiliated
with?
4. Has the company established internal
Yes
policies that prevent insiders from trading
securities against non-public information?
Actual governance
Summary description
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
The Company has a spokesperson and acting spokesperson that represent the
interest of the shareholders and a unit that specializes in addressing shareholders’
suggestions, queries, disputes and litigations.
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), with 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.
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
No deviations were found
No deviations were found
No deviations were found
37
Assessment criteria
Yes
No
Summary description
Actual governance
III. Assembly and obligations of the board of
directors
1. Has the board devised and implemented
Yes
policies to ensure diversity of its members?
2. Apart from the Remuneration Committee
and Audit Committee, has the company
assembled other functional committees at
its own discretion?
as part of the compulsorye-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.
The Company has established rules and regulations such as the “Corporate
Governance Guidelines” and “Rules for Director Election” to ensure diversified
board member composition in addition to drafting suitable guidelines for
diversification based on the Board’s operation, the Company’s operating format and
its needs and developments. And as such, board members are required to possess the
required knowledge, skills and character in order to accomplish the goal of ideal
corporate governance. For more information on the diversification of board
members, please refer to page 42.
No Apart from the Remuneration and Audit Committees, the Company has also
established a CSR Committee headed by Advisor Wen-Chung Shen, who in turn
reports to the Board of Directors regarding the operating status and results of the
committee on a yearly basis.
3. Has the Company established a set of
No At present, the Company has yet to establish any policy or assessment tool to
evaluate Board performance.
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
No deviations were found
No deviations were found
Such policies and tools
will be created after
careful consideration.
policies and assessment tools to evaluate
the board’s performance? Is performance
evaluated regularly at least on an annual
basis?
4. Are external auditors’ independence
Yes
assessed on a regular basis?
The CPA issues an “Independent Auditor’s Report” on an annual basis and is
required to decline engagement should he/she be involved in any direct or indirect
material interest. The Company evaluates the independence and suitability of the
No deviations were found
38
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
Summary description
Actual governance
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 or
be a related party to the Company. The Company then submits the “CPA
Independence and Fitness Evaluation Form” along with the “Independent Auditor’s
Report” to the Audit Committee for review before it is submitted to the Board of
Directors for examination and discussion. The same principles apply to whenever
there is an internal rotation within the accounting firm.
VP Ching-Hsiung Lu has been appointed to take charge of and supervise affairs
pertaining to corporate governance in accordance with the Company’s “Corporate
Governance Guidelines”, while the HQ Accounting Department was assigned as the
Company’s responsible unit for corporate governance to handle relevant affairs
including organizing director and shareholder meetings as required by pertinent
regulations, preparing the agendas for board of directors’ meeting/shareholders’
meeting, processing changes in company registration, periodically examining and
revising the Company’s corporate governance guidelines and relevant procedures,
providing the requisite information/data to directors or auditors to perform their
improve disclosure
duties and ensuring
transparency,safeguard shareholder rights and promote better corporate governance .
legal compliance
so as
to
IV. Has the company established dedicated
Yes
unit or full time (or part time) personnel
responsible for corporate governance
related affairs (including but not limited
to providing the requisite
information/data to directors or
supervisors to perform their duties,
organizing director and shareholder
meetings as required by pertinent
regulations, processing company
registration and/or changes in
registration, preparing the agendas for
board of directors’ meeting/shareholders’
meeting)?
V. Has the company provided proper
Yes
communication channels and created
The Company has created a "Stakeholder Communication Area" on its website to
address stakeholder relations. Separate contact persons, phone numbers, and email
No deviations were found
39
Assessment criteria
Yes
No
Summary description
Actual governance
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
dedicated sections on its website to
address corporate social responsibility
issues that are of significant concern to
stakeholders (including but not limited
to shareholders, employees, customers
and suppliers)?
VI. Does the company engage a share
administration agency to handle
shareholder meeting affairs?
VII. Information disclosure
1. Has the company established a website that
discloses financial, business and corporate
governance-related information?
2. 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)?
Yes
Yes
Yes
addresses have been provided to each type of stakeholder relation to ensuring that
queries are directed to the relevant departments. In addition, 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
while offering share administration services.
No deviations were found
The Company website at (www.compal.com) is regularly updated with information
such as financial performance, corporate governance and shareholder meetings.
No deviations were found
˙The Company website has both Chinese and English pages. The information is
No deviations were found
gathered and disclosed by a dedicated department.
˙The Company has also appointed a spokesperson and an acting spokesperson in
place.
˙Investor conferences are held regularly and whenever deemed necessary. The
proceedings are posted on the Company’s website and also broadcasted on the
TWSE platform (at http://webpro2.twse.com.tw/webportal/schedule/).
40
Assessment criteria
Yes
No
Summary description
Actual governance
VIII. Does the company offer other vital
Yes
information (including but not limited to
employee rights, employee care, investor
relationship, supplier relationship,
stakeholders’ interests, continuing
education of directors/supervisors, risk
management policies, risk assessment
standard implementation status,
implementation status of customer
policies, insuring against liabilities of
company directors and supervisors) that
would enable a better understanding of
the company’s corporate governance
practices?
•
•
•
•
•
•
•
•
•
Employee welfare and care to employees
Directors and Managers code of conduct; Employee code of conduct
Investor relations
Supplier relations and execution of customer policy
Stakeholders’ interests
Risk management execution and framework; risk analysis and evaluation
Insuring against liabilities of company directors and supervisors
Directors’, supervisors’ and managers’ ongoing education
Qualification of personnel involved in financial transparency
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
No deviations were found
IX. State the improvements that have been made with regards to the results of the latest Corporate Governance Evaluation conducted by TWSE in the most recent year; for
items that have yet to be improved upon, state the company’s priorities and measures for improvement.
In the “3rd Round of Corporate Governance Evaluation” by TWSE, Compal was placed in the top 6%~20% listed companies. Units responsible for the promotion
of ethical operation have reported to the Board of Directors routinely regarding the status of ethical operation. The Company will make improvements by increasing the
frequency of reporting to the Board of Directors. With regards to the continuing education for directors (including independent directors), the Company will promote and
encourage directors to participate while having the affiliate Kinpo Group Management Consultant Company to organize relevant courses that are compliant with pertinent
regulations or other external organizations to host relevant training. Pursuant to the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
(revised on September 30, 2016), the Company has already amended its “Corporate Governance Guidelines” and appointed relevant personnel to be responsible for
affairs relating to corporate governance and include the status of liability insurance coverage for directors, supervisors and other key personnel in the latest Board of
Directors’ Meeting Minutes.
41
A. Status of board member diversification :
Core items for
diversification
Gender
Name of director
Sheng-Hsiun Hsu
Jui-Tsung Chen
Wen-Being Hsu
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
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Male
Operation
management
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
Leadership
and
decision-making
V
Knowledge
of the
industry
V
International
market
perspective
V
Finance
and
accounting
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
B. Other vital information on the operating status of corporate governance:
Please refer to page 31-35 of the Chinese annual report.
(1) Purchasing liability coverage for the Company’s directors, supervisors and managers
Starting from 2002, the Company has been purchasing liability coverage for directors, supervisors and
managers. The amount for their liability insurance in 2016 came to USD 50,000 thousand, which was roughly
equivalent to NTD 1,612,500 thousand. Vital information relating to their liability insurance was reported to the
Board of Directors on February 8, 2017.
(2) Continuing education for directors, supervisors and managers
All directors and managers are equipped with relevant professional knowledge and skills. In addition to
offering relevant information both on a regular and irregular basis to directors and managers, the Company would
also organize seminars and workshops when deemed necessary. Trainings completed by directors and managers in
2016 include:
Title
Name
Independent
Director
Min-Chih
Hsuan
Date of
training
2016.11.3 Securities and Futures
Organized by
Institute
2016.12.2 Taiwan Corporate
Course title
Case study of recognized revenue
fraud in financial statements
Hours
of training
3
The offense and defense of hostile
6
Head of
Finance
Ching-Hsi
ung Lu
105.12.26~
105.12.27
Governance
merger – from the perspective of
Association
Accounting Research
and Development
Foundation
merger and litigation
Continuing Education for Principal
Accounting Officers of Issuers,
Securities Firms and Stock Exchanges
12
42
Title
Name
Head of Audit Bo-Wen
Hsieh
Date of
training
105.01.13 Accounting Research
Organized by
and Development
Foundation
105.03.09 Accounting Research
and Development
Foundation
105.05.25 Accounting Research
and Development
Foundation
Course title
Corporate Governance Evaluation and
CSR Report
Hours
of training
6
Accounting and Tax Audit Practice
and Case Studies for Taiwanese
Businesses in China
Internal audit and control practice for
ERP system corresponding to
enterprise transaction cycles
6
6
(3) Certificate and qualification acquisition status for personnel involved in financial information transparency
Name of certificate
CPA qualification
USCPA qualification
Senior Securities Specialist
Securities Specialist
Futures Specialist
Securities Investment Trust and Consulting
Professional
Certified Internal Auditor - Taiwan
Certified Internal Auditor
Chartered Financial Analyst
No. of persons
7 persons
2 persons
12 persons
8 persons
7 persons
5 persons
4 persons
4 persons
1 person
43
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
(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
-
-
-
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.
44
B. Attendance of Members at Remuneration Committee Meetings
‧The Company elected three members of the Remuneration Committee.
‧The term of the committee members is from June 26, 2015 to June 25, 2018.
‧There were five Remuneration Committee meetings during 2016(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)
5
5
4
By Proxy
0
0
1
Attendance Rate (%)
[B/A]
100%
Remarks
100%
80%
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.
45
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
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 2016, 2,457 employees had completed their training for a total of 12,304
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.
No deviations were
found
No deviations were
found
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.
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
II.
1.
2.
3.
by an effective
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
Rewards and penalties are decided to depend on the severity and impact of the event involved
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 its greenhouse gas surveys (scopes 1 and 2) and carbon footprint inventory as
early as 2010. Starting from 2014, the Company has conducted greenhouse gas inventory and
validation on a yearly basis. In 2015, Compal was included in the CDP Climate Disclosure
Leadership Index for the first time (CDLI). The Company has actively participated 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. And as such, Compal participated in UNFCCC’s 2050 pathways platform
initiative in 2016 in the hopes of reducing operational risks and costs through autonomous carbon
reduction or even turn risks into opportunities to ensure the Company’s sustainability.
No deviations were
found
No deviations were
found
47
Assessment criteria
Yes No
Summary description
Actual governance
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
2.
3.
4.
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
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
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 2016, 2,384 employees had completed their
training for a total of 5,442 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.
48
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
No deviation was
found
No deviations were
found
No deviations were
found
No deviations were
found
Assessment criteria
Yes No
Summary description
Actual governance
significant impact?
Has the company implemented
an effective training program
that helps employees develop
skills over their career?
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,
5.
6.
7.
8.
9.
Yes
Yes
Yes
Yes
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.
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.
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
Yes
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.
No deviations were
found
49
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
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
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
information on its website and
at the Market Observation Post
System?
Yes
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.
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
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).
No deviations were
found
50
V. 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.
VI. 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
51
VII. 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 2016, 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 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
AA 1000 AS Standard Type 2, mid-level accountability and GRI G4 application core requirements. The Company was awarded a Silver or Bronze Awards by Taiwan
Institute for Sustainable Energy in three consecutive years for its “Taiwan Corporate Sustainability Report Award”.
52
3.3.6 Ethical Corporate Management
Assessment criteria
Yes No
Summary description
Actual governance
I.
1.
2.
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
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.
Yes
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”.
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
No deviations were
found
3.
Has the company taken
steps to prevent occurrences
listed in Article 7, Paragraph
Yes
The Company’s “Business Integrity Procedures and Behaviors” govern the following
‧ Prohibition against offering and acceptance of improper gains
No deviations were
found
53
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
2 of “Ethical Corporate
Management Best Practice
Principles for
TWSE/TPEX-Listed
Companies” or business
conducts that are prone to
integrity risks?
II.
1.
2.
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?
‧ Prohibition against lobbying
‧ Prohibition against illegal political donations
‧ Prohibition against improper donations or sponsorships
‧ Prohibition against inappropriate gifts, treatments and illegitimate benefits
‧ 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 appointed its Human Resources, Administrative management and Legal Affairs
Office as the competent unit in charge of the Company’s ethical matters. Together, these units set the
guidelines and policies, which are monitored by the auditors and reports to the Board of Directors on
a yearly basis. To prevent potential conflicts of interest, the Company has established the “Ethical
Corporate Management Best Practice Principles” and “Business Integrity Procedures and Behaviors”
in 2014 and 2015 respectively. In addition, the Company has also designed relevant course for its
No deviations were
found
54
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
3.
Yes
Does the company have any
policy that prevents conflict
of interest, and channels that
facilitate the report of
conflicting interests?
online e-Learning, including legal affairs related training on information security, personal
information protection act, relevant company policies and employees’ code of conduct so as to
familiarize all employees with the aforementioned guidelines and thereby facilitate the promotion of
honest management. In 2016, a total of 2,457 trainees participated in the trainings and completed a
total of 12,304 hours of training.
The Company has established the “Ethical Corporate Management Best Practice Principles” and
“Business Integrity Procedures and Behaviors” (hereinafter, “Procedures and Behaviors”); a
No deviations were
found
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, 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
55
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
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.
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?
III.
1.
Implementation of
whistleblowing system
Does the company provide
incentives and means for
Yes
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.
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
No deviations were
found
yearly basis.
Yes
The Company has mailboxes in place to receive malpractice reports from within or outside the No deviations were
found
56
Assessment criteria
Yes No
Summary description
Actual governance
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
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?
2.
3.
IV Enhanced information
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.
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
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.
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.
No deviations were
found
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.”
57
3.3.7 Corporate Governance Guidelines and Regulations
Please refer to the Company’s website→ Investor Relations → Corporate Governance → Major Internal
Policies http://www.compal.com/investor-relations/corporate-governance/#major-internal
˙Framework of Corporate Governance
˙Articles of Incorporation
˙Rules of Procedure for Shareholders’ Meetings
˙Regulations for Election of Directors
˙Procedures for Acquisition or Disposal of Assets
˙Procedures for Financial Derivatives Transactions
˙Procedures for Lending Funds to Other Parties
˙Procedures for Endorsement and Guarantee
˙Board of Directors Meeting Guidelines
˙The Responsibilities and Rules for Independent Directors
˙Audit Committee Procedures
˙Remuneration Committee Procedures
˙Corporate Governance Best-Practice Procedures
˙Code of Conduct for Directors and Managers
˙Code of Conduct for Employees
˙Ethical Corporate Management Best Practice Principles
˙Business Integrity Procedures and Behaviors
˙Insider Trading Prevention Procedures
˙Corporate Social Responsibility Best Practice Principles
˙Rules Governing Financial and Business Matters Between this Corporation and its Affiliated Enterprises
˙Procedures of Application to Suspend and Resume Trading
3.3.8 Other Important Information Regarding Corporate Governance
Please refer to the Company’s website→ CSR http://www.compal.com/CSR/
˙Sustainable Management
˙Employee Relationship
˙Charity
˙Environment
˙Supply Chain Management
˙Stakeholders
˙Download CSR Report
Please refer to the Company’s website→ Stakeholder Communication
http://www.compal.com/stakeholder-communication-area/
•
•
•
•
•
•
Issues of Concern
Employee Relations
Customer Relations
Supplier Relations
Investor Relations
Other Affiliates
58
3.3.9 Internal Control Systems
Compal Electronics, Inc.
Statement of the Internal Control System
Date: March 28 2017
Based on the findings of a self-assessment, the Company states the following with regard to its internal control system
for the year of 2016:
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,
onDecember 31 2016, 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 March 28, 2017, with 0 of the 14
attending directors expressing dissenting opinions; the remainder all affirmed the content of this Statement.
Compal Electronics, Inc.
Chairman:
President:
59
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 24, 2016 (Friday)
Venue: B1, No. 581, Ruiguang Road, Neihu District, Taipei City
▓Major resolutions:
(1) Passed amendments to the Company's "Articles of Incorporation."
(2) Passed to distribute capital reserves in cash.
(3) Passed amendments to the Company's "Derivative Trading Procedures."
(4) Passed the removal of restrictions imposed against directors for involving in competing businesses.
(5) Ratified the Financial Statement for the year 2015.
(6) Ratified the Distribution of Earnings for the year 2015.
▓ Post-meeting execution:
(1) The amendments to the Company’s Articles of Incorporation were approved and registered on file
by the Ministry of Economic Affairs on July 21, 2016.
(2) The 2016 distribution of cash dividend and capital reserve are summarized as followed:
˙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:
˙Cash dividend: Initial NTD 1 per share, adjusted to NTD 1.00044974 per share.
˙Cash distributed from capital reserve: Initial NTD 0.2 per share, adjusted to NTD 0.20008994
per share.
˙Ex-dividend date: August 1, 2016.
˙Declaration date: August 23, 2016.
60
2. Board meetings
Date
12th term
4th meeting
105.2.24
12th term
5th meeting
105.3.30
12th term
6th meeting
105.5.11
12th term
7th meeting
105.6.29
12th term
8th meeting
105.8.11
12th term
9th meeting
105.11.9
Major resolutions
1. Approved management changes.
2. Approved amendment to the Company’s Articles of Incorporation.
3. Approved 2015 Statement of Internal Control System.
4. Approved the cancellation of new restricted employee shares because the criteria were not met by
the intended employees
5. Approved of the Company’s financing authorization from financial institute.
1. Approved 2015 appropriation rate and amount for employees and directors.
2. Approved the distribution of the first 2016 mid-year bonus (Dragon Boat Festival).
3. Approved the 2016 compensation adjustments
4. Approved the 2015 consolidated and individual financial statements.
5. Approved the evaluation of the independence and fitness of the Company’s CPA.
6. Approved the call of 2016 shareholders’ meeting.
7. Approved the 2016 CSR goal.
8. Approved of the Company’s financing authorization from financial institute.
1. Approved the appointment of the manager.
2. Approved the change of CPA.
3. Approved the evaluation of the independence and fitness of the Company CPA.
4. Approved the 2015 operation report.
5. Approved the 2016 operation plan.
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 of the Company’s financing authorization from financial institute.
1. Approved the appointment of manager.
2. Approved the distribution of 2015 cash dividend and capital reserve in cash to shareholders.
3. Approved the retirement of treasury stocks.
4. Approved the financing of re-investment companies through the issue of a Company Letter of
Support.
5. Approved the termination of the Company’s liabilities and obligations as a guarantor of
Compalead Eletrônica do Brasil Indústria e Comércio Ltda.
6. Approved of the Company’s financing authorization from financial institute.
1. Approved the 2015 director compensation.
2. Approved the distribution of the second 2016 mid-year bonus (Mid-Autumn Festival).
3. Approved the cancellation of restricted employee warrant shares where conditions had not been
met by the intended employee.
4. Approved the loan to Henghao Technology Co., Ltd.
5. Approved of the Company’s financing authorization from financial institute.
1. Approved the 2015 employee bonus.
2. Approved the 2016 year-end bonus.
3. Approved the cancellation of restricted employee warrant shares where conditions had not been
met by the intended employee.
4. Approved the proposal to partially amend the Procedures of Application to Suspend and Resume
Trading.
5. Approved the proposal to partially amend the Corporate Governance Best-Practice Principles.
61
Date
Major resolutions
6. Approved the Company’s new registered address.
7. Approved the submission of application for the business license for “F108031 Wholesale of
Drugs, Medical Goods” and “F208031 Retail Sale of Medical Equipments” to the competent
authority.
8. Approved the 2017 audit plan.
9. Approved the financing of the re-investment company through the issue of a Company Letter of
Support.
10. Approved the termination of the Company’s liabilities and obligations as a guarantor of
Compalead Eletrônica do Brasil Indústria e Comércio Ltda.
11. Approved financing for suppliers.
12. Approved of the Company’s financing authorization from financial institute.
1. Approved the promotion of managers.
2. Approved the cancellation of restricted employee warrant shares where conditions had not been
met by the intended employee.
3. Approved the settlement of CPT shares between the Company along with subdiairies Zhaopal
Investment Co., Ltd., Yongpal Investment Co., Ltd., and Kaipal Investment Co., Ltd with Tatung
Company Per arbitration No. 103814 issued in 2014.
4. Approved the cap of short-term loans from financial institutions.
5. Approved of the Company’s financing authorization from financial institute.
1. Approved the 2016 employee and director compensation.
2. Approved the distribution of the first 2017 mid-year bonus (Dragon Boat Festival).
3. Approved the 2017 salary adjustment.
4. Approved the 2016 consolidated and individual financial statements.
5. Approved 2016 Statement of Internal Control System.
6. Approved the call of 2017 shareholders’ meeting.
7. Approved the 2017 CSR goal.
8. Approved the evaluation of the independence and suitability of the Company CPA.
9. Approved the submission of application for the business license for “CF01011 Medical Materials
and Equipment Manufacturing” to the competent authority.
10. Approved the investment in Leshi Zhixin Electronic Technology (Tianjin) Limited. through
Compal Information Technology (Kunshan) Co., Ltd. (100% owned by the Company).
11. Approved the amendment of Corporate Governance Best-Practice Principles.
12. Approved the change of endorsement and guarantee seal custodian.
13. Approved the financing of the re-investment company through the issue of a Company Letter of
Support.
14. Approved of the Company’s financing authorization from financial institute.
1. Approved the appointment of the manager.
2. Approved the 2016 operation report.
3. Approved the 2017 operation plan.
4. Approved the 2016 distribution of earnings.
5. Approved capital surplus to shareholders.
6. Approved the amendments to “Guidelines for Handling Acquisition and Disposal of Assets”.
7. Resolved to remove non-competition for directors and managers.
8. Approved the 2017 appropriation of director and employee compensation ratio.
9. Approved the cancellation of restricted employee warrant shares where conditions had not been
met by the intended employee.
10. Approved the issuance of Corporate Guarantee by the Company to extend factory lease
fulfillment guarantee for Compal Europe (Poland) Sp.z o.o. (100% owned subsidiary in Europe.
12th term
10th meeting
106.2.8
12th term
11th meeting
106.3.28
12th term
12th meeting
106.5.10
62
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.
63
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
Au, Yiu Kwan
2016.01.01~2016.12.31
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
10,095
8,515
8,515
10,095
(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
Au,
Yiu-Kwan
10,095
275
8,240 8,515
2016.01.01~2016.12.31
Note: Other non-audit fees: Transfer pricing report of $525,000, tax consultation of $7,620,000, and others of
$95,000.
(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
64
3.4.2 Replacement of CPA
(1) About the former CPA
Date of replacement
Approved by the Board of Directors on May 11, 2016
Reason and explanation for
replacement
Due to adjustments in work and duties at KPMG in 2016, the CPAs were changed
from Kuo, Kuan-Ying and Lo, Jui-Lan to Kuo, Kuan-Ying and Au, Yiu-Kwan.
Party involved
Situation
Voluntarily terminated
the commission
Will no longer accept
(continue) the
commission
CPA
Commissioner
Not applicable
Not applicable
Not applicable
Not applicable
State whether the commissioner
or the CPA terminated the
service or declined the
commission
Other audit report opinions and
causes issued within the last
two years other than unqualified
opinion
Did he/she have opinions that
differed from that of the
publisher?
Yes
N/A
Description
Other items of disclosure
(Contents that should be
disclosed as covered in Clauses
1.4~1.7, Section 6, Article 10 of
this guideline)
(II) About the succeeding CPA
Name of accounting firm
KPMG
N/A
Accounting principles or practices
Disclosure of financial report
Scope or step of auditing
Other
V
N/A
Name of CPA
Date commissioned
Items of consultation and
results on the accounting
methods for specific
transactions, accounting
principles and potential
opinions for financial report
prior to commissioning
Written opinion from
succeeding CPA on items of
disagreement with the former
CPA
Kuo, Kuan-Ying, Au, Yiu-Kwan
Approved by the Board of Directors on May 11, 2016
N/A
N/A
65
(3) Response from the former CPA on Clauses 1 and Clause 2.3, Section 6, Article 10 of this guideline:
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.
66
3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders
Title
Name
2016
Up till April 24, 2017
Shares held
Increase
(Decrease)
Shares pledged
Increase
(Decrease)
Shares held
Increase
(Decrease)
Shares pledged
Increase
(Decrease)
Unit: shares
Chairman
Sheng-Hsiun Hsu
0
(1,172,555)
(8,800,000)
Director and
President
Director
Director
Director
Director
Director
Director and
Senior Advisor
Director and
Senior Advisor
Director and
Executive Vice President
Director
Director and
Executive Vice President
Jui-Tsung Chen
(200,000)
Wen-Being Hsu
Kinpo Electronics
, Inc.
Representative:
Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Wen-Chung Shen
0
0
0
0
0
0
0
Yung-Ching Chang
(252,000)
Chung-Pin Wong
Chiung-Chi Hsu
Chao-Cheng Chen
Independent Director Min-Chih Hsuan
Independent Director Duei Tsai
Independent Director Duh-Kung Tsai
Executive Vice President Chen-Chang Hsu
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-Chih Chang
Senior Vice President Sheng-Hua Peng
Senior Vice President Wen-Da Hsu
Senior Vice President Wei-Cheng Chen
Senior Vice President Hsi-Kuan Chen
Senior Vice President Chih-Wei Wen
Vice President
Vice President
and head of finance
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Chih-Chuan Cheng
Ching-Hsiung Lu
Shih-Tung Wang
Bo-Hsiung Chang
Bo-Tang Wang
Zong-Ming Wang
Fu-Chuan Chang
Chi-Hsiang Ma
Yung-Nan Chang
Sheng-Hung Li
0
0
0
0
0
0
0
0
(135,000)
(1,000,000)
(133,764)
0
1,900,000
0
0
0
0
-
0
(120,000)
0
0
(10,000)
(50,000)
0
(30,000)
0
0
67
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
(10,230,000)
0
0
0
0
0
0
0
(396,000)
1,020,000
0
1,020,000
0
0
0
0
420,000
320,000
0
200,000
420,000
0
420,000
320,000
240,000
0
0
240,000
240,000
0
132,000
230,000
210,000
(10,000)
0
0
240,000
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
2016
Up till April 24, 2017
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
Vice President
Advisor
Head of Audit
Yung-He Su
Ming-Hsiang Kan
Chih-Hsien Liang
Lung-Hua Shen
Ming-Dong Wong
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
Shih-An Li
Ta-Chun Wang
Fei-Lung Chen
Tian-Yuan Tsai
Bo-Wen Hsieh
Senior Vice President Ming-Hsing Hsu
Vice President
Chin-Wen Liao
Shares held
Increase
(Decrease)
0
0
0
0
0
0
0
(120,529)
0
0
(30,000)
0
0
0
0
0
0
0
0
0
0
0
0
0
Shares pledged
Increase
(Decrease)
Shares held
Increase
(Decrease)
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
200,000
0
160,000
240,000
320,000
240,000
95,000
250,000
240,000
240,000
50,000
160,000
160,000
160,000
160,000
160,000
0
0
0
9,000
0
0
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
-
Note: In 2016, the following five people, Ming-Chih Chang, Senior VP, His-Kuan Chen, Senior VP, Shih-Hung Huang, VP,
Yi-Chiang Chiu, VP and Bo-Heng Chen, VP were called back or promoted. Jui-Chun Hsu, VP, Shih-An Li, Ta-Chun Wang,
Fei-Lung Chen took office. Ming-Hsing Hsu, VP and Chin-Wen Liao, VP, resigned. In 2017, Chih-Wei Wen, Senior VP, took
office.
68
3.5.1 Shares Trading with Related Parties:
Name
Reason
for
transfer
Transaction
date
Counterparty
Counterparty's relationship with the
Company, Directors, Supervisors,
and shareholders with more than
10% ownership interest
Shares
Transaction price
Jui-Tsung
Gift
106.03.24 Hsin-Chong Chen
Father and son
10,230,000
19.15
Chen
Ching-Hsiung
Gift
105.07.07
Shao-Hsuan Lu
Father and Daughter
120,000
20.25
Lu
3.5.2 Shares Pledge with Related Parties: None
3.6 Relationship among the Top Ten Shareholders
April 24, 2017
Name
Self
Shares held
Shareholdings of spouse and
underage children
Total shares held in the
names of others
Shares held
Shares
Kinpo Electronics
Inc.
151,628,69
2
Shareholding
Percentage
3.43%
Shares
Shareholding
Percentage
-
-
8,975,401
0.20% 17,107,025
0.39%
Shareholding
Percentage
0%
0%
Unit: Shares
Spouse, relative of
second degree or closer,
and relationships among
top 10 shareholders.
Name
Relationship
N/A
N/A
Representative:
Sheng-Hsiun Hsu
Bank of Taiwan in
custody for
Silchester
International
Investors
International Value
Standard Chartered
in custody for
Vanguard Stock
Index 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
Yung-Kun Hsieh
FuBon Insurance
Representative:
Ming-Hsing Tsai
76,904,000
1.74%
75,897,629
1.72%
72,000,000
1.63%
67,242,333
1.52%
64,598,000
64,200,991
1.46%
1.45%
0
0%
-
-
-
-
-
0
69
Shares
0
0
0
0
0
-
-
-
0% N/A
N/A
0% N/A
N/A
0% N/A
N/A
-
0
0% N/A
N/A
(Note)
0
0% N/A
N/A
-
0%
Name
Self
Shares held
Shareholdings of spouse and
underage children
Shares
Shares
Shareholding
Percentage
1.41%
Shareholding
Percentage
-
Total shares held in the
names of others
Shares held
Shares
Shareholding
Percentage
Spouse, relative of
second degree or closer,
and relationships among
top 10 shareholders.
Name
Relationship
-
0
0
0
0%
0%
N/A
1.25%
0% N/A
55,367,000
62,330,500
Shin Kong Life
Insurance Co., Ltd.
Representative:
Eugene Wu
JPMorgan Chase
Bank N.A. Taipei
Branch in custody
for Saudi Arabian
Monetary Agency
Citi (Taiwan)
Commercial Bank
in custody for
Norges Bank
Note: The Company has sent the request to Yung-Kun Hsieh for the relevant infoamtion, but did not receive the reply
until the annual report was published.
53,620,697
0% N/A
0% N/A
1.21%
N/A
N/A
0
0
-
-
-
-
3.7 Ownership of Shares in Affiliated Enterprises
December 31, 2016
Unit: Shares; %
Investees (Note)
Invested by the Company
Panpal Technology Corp.
500,000,000
Shares
Shareholding
percentage
100.00
Gempal Technology Corp.
90,000,000
100.00
Hong Ji Capital Co., Ltd.
100,000,000
100.00
Hong Jin Investment Co., Ltd.
29,500,000
100.00
Zhaopal Investment Co., Ltd.
200,100,000
100.00
Yongpal Investment Co., Ltd.
175,100,000
100.00
Kaipal Investment Co., Ltd.
75,100,000
100.00
Rayonnant Technology Co., Ltd.
29,500,000
100.00
RiPAL Optotronics Co., Ltd.
6,000,000
100.00
Unicom Global Inc.
10,000,000
100.00
Huang Feng Communication
Co., Ltd.
10,000,000
100.00
Henghao Technology Co., Ltd.
205,795,414
96.98
Held by directors,
supervisors, managers, and
directly/indirectly
controlled entities
Shares
Shareholding
percentage
Aggregate investment
Shares
Shareholding
percentage
-
-
-
-
-
-
-
-
-
-
-
-
- 500,000,000
- 90,000,000
- 100,000,000
- 29,500,000
- 200,100,000
- 175,100,000
- 75,100,000
- 29,500,000
- 6,000,000
- 10,000,000
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
- 10,000,000
100.00
- 205,795,414
96.98
95.40
88.72
Compal Broadband Networks
Inc.,
26,418,342
49.61 24,384,413
45.79
50,802,755
Crownpo Technology Co., Ltd.
3,738,668
33.23 6,243,082
55.49
9,981,750
70
Investees (Note)
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
Kinpo Group Management
Consultant Company
300,000
37.50
300,000
37.50
600,000
Mactech Co., Ltd.
21,756,192
52.88
274,954
0.67
22,031,146
General life Biotechnology Co.,
Ltd.
Li Hong Optoelectronic Co.,
Ltd.
15,000,000
50.00
-
-
15,000,000
2,772,000
42.00
-
- 2,772,000
Infinno Technology Corporation
10,983,719
41.03
-
-
10,983,719
Accesstek Inc.
899,160
27.78
319,707
9.88
1,218,867
Allied Circuit Co., Ltd.
10,157,730
20.42 8,212,152
16.50
18,369,882
Arcadyan Technology Corp.,
41,304,504
21.84 27,192,437
14.37
68,496,941
Maxima Ventures I, Inc.
126,000
22.55
3,000
0.54
129,000
Avalue Technology Inc.
14,600,070
21.07
672,000
0.97 15,272,070
Core Profit Holdings Ltd.
147,000,000
100.00
Flight Global Holding Inc.
89,755,495
100.00
Just International Ltd.
48,010,000
100.00
High Shine Industrial Corp.
42,700,000
100.00
Compal International Holding
Co., Ltd.
Big Chance International Co.,
Ltd.
Compal Rayonnant Holdings
Limited
Auscom Engineering Inc.
Compal Europe (Poland) Sp. z
o.o.
Bizcom Electronics, Inc.
Compal Electronics (Holding)
Ltd.
47,001,000
100.00
90,820,000
100.00
12,500,000
100.00
3,000,000
100.00
136,080
100.00
100,000
100.00
1,000
100.00
Compalead Electronics B.V.
6,426,516
100.00
-
-
-
-
-
-
-
-
-
-
-
-
- 147,000,000
- 89,755,495
- 48,010,000
- 42,700,000
- 12,500,000
- 3,000,000
-
136,080
-
100,000
-
1,000
- 6,424,516
Etrade Management Co., Ltd.
46,900,000
90.37 5,000,000
9.63 51,900,000
Webtek Technology Co., Ltd.
100,000
100.00
Forever Young Technology Inc.
50,000
100.00
-
-
-
100,000
-
50,000
Lipo Holding Co., Ltd.
98,000
49.00
102,000
51.00
200,000
71
75.00
53.55
50.00
42.00
41.03
37.66
36.92
36.21
23.09
22.04
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
- 47,001,000
100.00
- 90,820,000
100.00
Investees (Note)
Invested by the Company
Held by directors,
supervisors, managers, and
directly/indirectly
controlled entities
Aggregate investment
Ascendant Private Equity
Investment Ltd.
Shares
Shareholding
percentage
Shares
Shareholding
percentage
Shares
Shareholding
percentage
31,253,125
34.72 37,253,825
42.50
68,506,950
77.22
72
IV. Capital Overview
4.1 Capital and Shares
4.1.1 Source of Capital
Authorized capital
Paid-up capital
Year Month
Issuanc
e
Price
Shares
Amount (NTD)
Shares
Amount (NTD)
Source of capital
2015
1
10
6,000,000,000 60,000,000,000
2015
2
10
6,000,000,000 60,000,000,000
4,423,236,625 44,232,366,250 Exercise of employee warrants totaling NTD
20,266,000
4,472,596,625 44,725,966,250 Issuance of employees’ restricted shares
2015
8
10
6,000,000,000 60,000,000,000
4,472,196,625 44,721,966,250
2015
9
10
6,000,000,000 60,000,000,000
4,471,126,625 44,711,266,250
NTD493,600,000
Cancellation of Restricted Employee Shares of
$4,000,000
Cancellation of Restricted Employee Shares of
$10,700,000
Cancellation of Restricted Employee Shares of
$4,900,000
2016
2016
2
5
10
10
6,000,000,000 60,000,000,000
4,470,636,625 44,706,366,250
6,000,000,000 60,000,000,000
4,470,486,625 44,704,866,250 Cancellation of Restricted Employee Shares of
2016
6
10
6,000,000,000 60,000,000,000
$1,500,000
4,426,670,625 44,266,706,250 Retirement of treasury stock $438,160,000
2016
8
10
6,000,000,000 60,000,000,000
4,424,680,625 44,246,806,250 Cancellation of Restricted Employee Shares of
$19,900,000
2016
11
10
6,000,000,000 60,000,000,000
4,424,510,625 44,245,106,250 Cancellation of Restricted Employee Shares of
$1,700,000
2017
2
10
6,000,000,000 60,000,000,000
4,422,464,625 44,224,646,250 Cancellation of Restricted Employee Shares of
$20,460,000
73
May 15, 2017
Remarks
Paid in
properties
other than
cash
Others
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
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
Change of capital approved by the Ministry of Economic
Affairs on June 2, 2016
Change of capital approved by the Ministry of Economic
Affairs on July 21, 2016
Change of capital approved by the Ministry of Economic
Affairs on August 29, 2016
Change of capital approved by the Ministry of Economic
Affairs on November 29, 2016
Change of capital approved by the Ministry of Economic
Affairs on February 24, 2017
Share
Type
Ordinary
shares
Outstanding shares (public listed)
Unissued shares
Total
Authorized capital
4,422,464,625 (Note)
1,577,535,375
6,000,000,000
Note: Unconcealed restricted employee shares (RSA) are 312, 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
74
4.1.2 Status of Shareholders
Analysis
Government
Agencies
Financial
Institutions
Other
Institutions
Foreign
Institutions &
Natural Persons
Domestic
Natural
Persons
Treasury
stocks
Total
April 24, 2017
Number of
Shareholders
Shareholding
(shares)
Percentage
3
8
42
242
1,009
159,113
1
160,410
246,855,469
344,505,872
2,433,096,828
1,397,694,448
312,000
4,422,464,625
0.00%
5.58%
7.79%
55.02%
31.60%
0.01%
100.00%
4.1.3 Share Ownership Distribution
Range of Shareholding
(Unit: Shares)
Number of
Shareholders
Shareholding (Shares)
Percentage
April 24, 2017
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
49,981
71,868
18,921
6,742
3,372
3,331
1,537
935
1,809
827
413
156
80
49
389
160,410
9,779,162
163,997,690
136,610,284
81,005,069
60,596,826
82,047,829
54,059,597
42,858,140
127,919,729
115,854,490
115,748,714
76,533,792
55,508,252
44,383,320
3,255,561,731
4,422,464,625
0.22%
3.71%
3.09%
1.83%
1.37%
1.86%
1.22%
0.97%
2.89%
2.62%
2.62%
1.73%
1.26%
1.00%
73.61%
100.00%
4.1.4 List of Major Shareholders
Shares
Shareholder’s name
Kinpo Electronics Inc.
Bank of Taiwan in custody for Silchester International Investors International
Value
Standard Chartered in custody for Vanguard Stock Index 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
Yung-Kun Hsieh
FuBon Insurance
Shin Kong Life Insurance Co., Ltd.
JPMorgan Chase Bank N.A. Taipei Branch in custody for Saudi Arabian
Monetary Agency
Citi (Taiwan) Commercial Bank in custody for Norges Bank
75
April 24, 2017
Shares held
Percentage (%)
151,628,692
76,904,000
75,897,629
72,000,000
67,242,333
64,598,000
64,200,991
62,330,500
55,367,000
53,620,697
3.43%
1.74%
1.72%
1.63%
1.52%
1.46%
1.45%
1.41%
1.25%
1.21%
4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share
Year
Measurement
Per-share
market
price
Per-share
net worth
(Note)
High
Low
Average
Before dividend
After dividend
2015
29.30
15.10
22.23
23.71
22.49
2016
21.65
16.55
19.24
24.19
22.98
Year-to-date
March 31, 2017
20.25
18.45
19.20
23.62
-
Earnings
per share
Weighted
average
Before
adjustment
outstanding
shares
Earnings per
share
Weighted
average
After
adjustment
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
4,329,403,194
4,329,403,194
4,341,770,936
2.01
1.88
0.25
4,329,403,194
4,329,403,194
2.01
1.20
-
-
-
11.06
18.53
5.40%
1.88
1.20
-
-
-
10.23
16.03
6.24%
-
-
-
-
-
-
-
-
-
Note: The 2016 distribution of earning was resolved at the May 10, 2017 Board of Directors’ Meeting and will be
submitted to the 2017 shareholders’ meeting for final approval.
76
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 pertinent laws and regulations. The balance of earning available for distribution is composed
of the remainder of the said profit and the retained earning from previous years. The earnings appropriation,
distribution of dividends and bonuses shall be proposed by the Board of Directors and approved at a
Shareholder’s Meeting. The rest of the unappropriated earning shall be reserved.
The Company is in a growth period of its life cycle. And as such, 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 be no less than 10% of the total cash and stock dividends.
Although a dividend ratio has not been specified in the Company’s 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’s capital needs, the capital budget, long term financial plans, domestic and international competition
and the interests of the shareholders. The board of directors shall propose the distribution of earnings and submit
them to the shareholders’ meeting for approval.
(2) Proposed Distribution of Dividend
(cid:3) The proposed 2016 distribution of earning of shareholders’ dividend in the amount of NTD 4,422,152,625 will
be discussed at the 2017 shareholders’ meeting. The aforementioned amount is set to be distributed as an all cash
dividend of NTD 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 884,430,525, or NTD 0.2 per share. The total cash
distribution amounts to NTD 5,306,583,150.
(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.
(3) Impact to 2016 Business Performance and EPS resulting from Stock Dividend Distribution: Not
Applicable.
77
4.1.7 Employees’ and Directors’ Compensation
(1) Employees’ and directors’ compensation policies as stated in the Articles of Incorporation
When the Company makes a profit in a fiscal year, the Company’s pre-tax profits in such fiscal year, prior to the
deduction of compensation to employees and directors, shall be distributed to employees as compensation in the
amount of no less than two percent (2%) thereof and to director as compensation in an amount of no 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 the accumulated losses.
The compensation to employees as mentioned above may be distributed in the form of stock or cash and
employees entitled to receive said stock/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) 2016 employees compensation proposal passed by the board of directors
(cid:3) Accrued employees compensation is NTD $876,027,690 and directors compensation is NTD $46,323,438.
(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 2015 employee and directors compensation:
(cid:3) The employee compensation is NTD $949,980,218 and the directors compensation is NTD $50,233,972.
(cid:3) The 2015 actual distribution of employee and directors compensation was approved at the 2016
shareholders’ meeting and remained as proposed by the board of directors.
78
4.1.8 Company Buyback of Own Shares
Per resolution reached at the 8th Board of Directors Meeting (11th term) on March 25, 2013, the Company
planned to buy back its own shares for transferring to employees. Between April 1, 2013 and May 17, 2013, the
Company bought a total of 58,516,000 shares. Up to May 16, 2016, i.e., three years have passed since the buyback of
Company’s own shares for transferring to employees, a total of 14,700,000 shares have been transferred to employees.
The expiration date for the remaining 43,816,000 has elapsed. The resolutions to cancel the registration of these
shares and perform the amendment to corporate registration for capital reduction and the cancellation of shares with
the competent authority were passed at the 7th Board of Directors Meeting (12th term) on June 29, 2016. The
amendment to corporate registration was completed and the Company has received the MOEA’s approval dated July
21, 2016 (MOEA’s Notice No. 10501169070).
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
Allocation of expenses
incurred at issuance and over
the duration
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 Mega International Commercial Bank
6,624,177 units (May 15, 2017)
N/A
The Bank of New York
Borne by participating shareholder(s)
Allocated proportionally between the
Company and participating shareholders
79
Date of issue:
Details
Key terms of the depository
and custodian agreements
Per
Unit
Market
Price
2016
Year-to-date
May 10, 2017
High
Low
Average
High
Low
Average
4.4
Employee Warrants: None
November 9, 1999
May 21, 2001
See descriptions below
USD $3.38
USD $2.53
USD $2.98
USD $3.42
USD $2.89
USD $3.17
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 15, 2017
October 30, 2014
February 25, 2015
49,360,000 shares
NTD 0 (issued without subscription)
1.12% (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 B is achieved, employees
will be entitled to receive half the percentage mentioned in Subparagraph
1 of this Paragraph.
Restricted rights to restricted
1. Employees may not sell, pledge, transfer, gift, charge or in any way
80
Type of restricted employee shares
2014 1st issue
New restricted employee shares
employee shares
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 (%)
6,718,000Shares
16,200,000Shares
26,442,000Shares
0.60% (Note)
Impacts on shareholders’ equity
Possible expenses:
A total of49,360,000 restricted shares have been issued; the issuance price per
share is NTD0. 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 NTD1,009,493,000; of which NTD400,262,000 is recognized
in 2015, NTD373,429,000 in 2016, NTD147,897,000 in 2017, NTD
83,520,000 in 2018, and NTD4,385,000 in 2019.
Dilution of EPS and other impacts on shareholders' equity:
Based on the 4,422,464,625 shares outstanding as at May 11, 2017, the
restricted share scheme, once expensed, should dilute earnings per share by
NTD0.09 in 2015, NTD0.08 in 2016, NTD0.03 in 2017, NTD0.02 in 2018,
and NTD0.00 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 15, 2017
81
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)
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)
24,200,000
0.55%
9,020,000
18.90
170,478,000
0.20%
15,180,000
Title
Name
Managers
32 persons (Note 2)
Employees with
top-10 holding
3,200,000
0.07%
1,280,000
18.90
24,192,000
0.03%
1,920,000
12 persons (Note 3)
Note:
1. Calculations were based on share capital registered with the Ministry of Economic Affairs as at May 15, 2017.
May 15, 2017
Number of
restricted shares
Issuance
Issuance
with restrictions
Price
Amount
intact as a
(NTD)
(NTD)
percentage of total
outstanding shares
0
0
0
0
(Note 1)
0.34%
0.04%
2. Managers' titles and names
‧Executive VP and Senior Advisors: Chung-Pin Wong, Chao-Cheng Chen and Yung-Ching Chang – 3 persons.
‧Senior VP: Chun-De Shen, Chiu-Rui Wei, Ying Chang, Kuo-Chuan Chen, Sheng-Hua Peng, Wen-Da Hsu, Wei-Chang Chen – 7 persons.
‧VP: 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, Min-Dong Wong, 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 and Bo-Heng Chen – 22 persons.
3. Titles and names of employees with top – 10 holding
‧Director: Jen-Liang Lin, Hsin-Chih Huang, Yao-Chung Tsai, Cheng-Chiang Wang, Yung-Ching Tian and De-Chi Hsia – 6 persons.
‧Deputy Director: Nai-Ping Chen, Hsin-Shu Wang, Chi-Bin Li, Bo-An Lin, Chang-Wen Lin and Chao-Bin Huang – 6 persons.
4.6
4.7
Status of New Shares Issuance in Connection with Mergers and Acquisitions: None
Financing Plans and Implementation: None
82
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 2016
Unit: NTD thousands
5C electronics
Other products
Total
(3) New products development
99.4%
0.6%
100.0%
The development and design of IoT Vertical Solution, EMR and hospital management system, Point of Care
management system, and smart Sport.
■ Notebook PCs
For notebook PC hardware, Compal has adopted the most efficient R&D methods in 2016 to launch the
latest (6th generation) Intel Core i3, i5 and i7 series processors and AMD central processors, with graphics
incorporated in single silicon chip in the development of the APU on top of launching a new generation of laptop
which is compatible with the Windows 10 operating system. Compal possesses special expertise in system
integration, R&D and manufacturing to assist customers in developing and mass-producing new products with
the latest specifications under relatively short time. Compal's price-competitive, slim-type notebooks were
launched a time when the market favored more affordable and portable devices, and for which it received positive
responses from consumers. The purchase signal in high-end gaming laptop market has been relatively stable,
making gaming laptops a new ground for brand name companies to vie for growth. These companies have
injected more investments in the gaming notebook market and launched the global market for gaming notebook
into intense competition. After years of operation as an OEM of gaming notebooks for our brand partners,
Compal has accumulated profound experience in design and development and in 2017, the Company shall
continue to keep up with the market trends by introducing high-end technical specifications, multi-dimensional
graphics chips and Intel’s 7th generation high-end H series central processor to launch a new brand of gaming
computer. Together with our clients, we shall secure our share in the gaming laptop market. Compal has also been
improving its ability to design customized models for customers across different countries and markets. A
significant amount of resources has been devoted to developing commercial notebooks, given how their demands
are resilience against economic downturns. Overall, Compal aims to attain industry-leading R&D capabilities in
both consumer and commercial markets.
■ Ultrabook PCs
Innovative technology and extensive R&D capabilities allow Compal to maintain 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 and light but it has the most excellent
83
performance and allows users to stay productive. More Windows 10 Ultrabooks equipped with standard voltage
processors are scheduled for launch in 2017. Apart from compatibility with Intel’s design specifications for its
latest generation products, we will also be introducing products of a slimmer design at a lower price to meet
market demand. The product will feature the stylish and elegant body that is typical of Compal products yet offer
powerful computing power that can rival high-performance PCs. Compal will also continue to develop newer and
more competitive technologies so that not only consumers around the world will get to enjoy Compal’s
innovations but also enables our customers to access this market more quickly.
■ 2-in-1 PCs
The 2-in-1 laptop is a novel product that borrows the concept of “Transformers” – in addition to having a
standard laptop keyboard for diverse functional operations, the product also features Tablet PC touch versatility.
With a touch-sensing display module coupled with Microsoft’s latest Windows 10 OS, the product is aimed at
attracting the consumer base for standard laptops and tablet PCs. Utilizing our rich R&D experience, Compal has
presented a number of innovative concepts to incorporate the Company’s exclusive technologies, materials and
fan-less design in 2-in-1 PCs of different designs and form factors, the Company is poised to create new market
demands and earn unanimous praises from customers and consumers alike.
■ 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). Since
Compal possess the fundamental technical capabilities required for notebook PCs featured in the AIOs, the
Company is therefore able to commence production in the shortest time possible. Our AIO product lines have
been very well received by clients.
■ Smart Home
Smart Home has been in development for many years and with the dawn of the IoT (Internet of Things) era,
the central control platform for smart home will no doubt become the focal point of competition for relevant
industries. Compal has ventured into the development of Home Gateway platform using our production and
design capacity for mobile computers and devices. We have also developed new products and business lines by
cultivating wireless technology and sensor network technologies, integrating background cloud computing
services and focusing on smart energy saving, smarter safety and smart home care. In the future, Compal will also
rely on its core capabilities to gradually expand its products width and depth in different domains of IoT in order
to locate corresponding niche markets to expand product coverage.
■ Server
Cloud application has been a growing market. A significant portion of data storage and computing analytics
have shifted to cloud servers 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, with the capacity to design and manufacture servers of higher C/P value.
■ Tablet PCs
Compal has long cultivated tablet PC technology for industrial, commercial and consumer users. We will
continue to develop a series of tablet PCs and LTE compatible products at affordable price points in order to
satisfy the needs of our clients while winning the support and recognition from consumers. We will also extend
our product lines to eBooks and deliver more competitive solutions to name brand clients.
■ LCD 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
84
network setup. This improves user convenience to meet new expectations from such devices as smart TVs.
■ LCD Monitor
Existing UHD products have advanced to HDMI 2.0 specification and now supports up to 4K2K 60Hz input
signal and USB Type-C connectivity to achieve comprehensive connection interface in order to accommodate the
demand for professional graphics design and B2B market.
■ 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 the near future, we will continue to develop high-end smart mobile devices that feature multi-core, frameless,
multi-camera image integration and special feature camera. We will also increase the speed for TDD-LTE/
FDD-LTE carrier aggregation. Apart from continuing to strengthen the competitiveness of low-priced entry-level
products, we will also actively develop cost-effective, visually appealing products to cope with the rapid growth
and customer needs in emerging markets.
■ Smart Accessory+Wearable Devices
Compal began shipping its wearable devices in 2016 and with our design capacity for smart products and
capabilities for mass production, we have made significant progress in terms of shipping quantity for Android
Wear smart watches. Apart from continuing to develop even more compact and energy efficient smart watches in
the near future, we will also aggressively expand our production lines for other wearable products in the hopes of
achieving greater success in the future.
■ AE
Car PCs consists of in-car communication system (Telematics) and in-car AV entertainment system
(in-Vehicle-Infotainment). As telematics systems are governed by special regulations on safety and
communication control, we have long been working with car manufacturers to ensure relevant processes were in
sync. Due to the similiarity in system framework between in-car AV entertainment and PCs, the field became a
natural starting point for Compal’s foray into the car PC market. After years of hard work in the field, Compal
products have been adopted by several major car manufacturers around the world.
■ IoT Vertical Solution
Vertical solutions have been one of the key demands in the development of IoT with an extensive range of
applications covering smart cities, Industry 4.0, smart buildings, smart retail and smart medical care. Such
solutions feature integrated software and hardware and are designed specifically to accommodate clients’ needs.
Demands from B2B customers not only account for a higher portion in the existing IoT market but also bring
Compal more immediate profit. Compal offers competitive products to address the primary needs of development
in many different fields not just as a hardware manufacturer, but also 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 foraying into the healthcare market
by reaching out to major hospitals and point of care (POC)s such as long-term care centers and post-partum care
centers through our strengths in integration and profound experience in product development. 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.
85
5.1.2 Industry Overview
Please refer to page 74-82 of the Chinese annual report.
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
2016
2017 first quarter
11,961,428
2,397,542
766,810,035
187,427,921
1.6%
1.3%
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. Main stream products will be
bundled with new technology and modular features to boost the added value and diversity of products. For
featured products, we will adopt a prospective standpoint in our design concept for new products in order to
become the focal point of the product market. For low-price products, apart from pricing competitiveness, user
functionality should also be taken into 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. Apart from maintaining a high degree of
customer satisfaction, we will work towards increasing the volume of product cooperation. We will also seek
other opportunities for cooperation with new customers in order to achieve a growth rate that is superior to the
market average for 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.
• 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
86
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.
• 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.
• In addition, we will continue to strengthen our core R&D capability and capacity for technical services for
smart devices
5.2 Market and Sales Overview
5.2.1 2016 Sales (Service) by Regions
Area
Americas
Europe
Asia (Including Taiwan)
Other Area
Total
Percentage
38.5%
27.1%
31.6%
2.8%
100.0%
5.2.2 Major Products and Their Main Uses
■ Notebook PCs
Analog-digital application hardware platform combined with dedicated software to enable a variety of
applications such as data editing/processing, word processing, layout, graphics application, web browsing,
communications, digital multimedia entertainment, gaming and so forth.
■ 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 that
enables it to be used as a tablet.
■ AIO PCs
Beautiful aesthetics suited for home use, with emphasis on touch screen input interface, software applications
and high computing power.
■ Smart Home
87
Smart appliances, controls and sensors that provide users with diversified services for smart lifestyle.
■ Server
Designed with high computing power, capable of storing massive amount of data and compatible with
different processing programs for data analysis; built to accommodate different applications required at
enterprises, data centers and cloud platforms.
■ Tablet PCs
Portable touch screen multimedia, mobile viewing and online information applications.
■ Displays
Graphics display and audio output.
■ Smartphone
Personal communication and internet access.
■ AE
˙Touch screen Car multimedia player.
˙Voice controlled natural sound navigation.
˙Bluetooth wireless phone to answer calls.
˙WiFi smartphone that enables two-way communications.
˙Accident alarm
˙Integrated peripheral safety warning systems such as wireless tire pressure and collision avoidance radar.
■ IoT Vertical Solution
Through flexible hardware design and a range of customized software applications along with cloud and big
data analysis for horizontal alliance, we offer clients with complete solutions and services by creating novel
applications.
■ 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.
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 96-98 of the Chinese annual report.
88
5.2.4 Major Suppliers and Clients
(1) Major Suppliers in the Last Two Calendar Years
2016
2017 first quarter
Unit: NTD thousand
Party
Name
Amount
2015
As a
percentage to
2015 net
purchases
(%)
Relationship
with the issuer
Name
Amount
As a
percentage
to 2016 net
purchases
(%)
Relationship
with the issuer
Name
Amount
223,294,338
1 Company E
112,207,244
2 Company B
478,425,759
Others
Net Purchase 813,927,341
27.43
13.79
58.78
100.00
N/A
N/A
Company E
Company B
Others
Net Purchase
235,953,445
102,218,447
395,801,173
733,973,065
32.15
13.93
53.92
100.00
N/A
N/A
Company E
Company B
Others
Net Purchase
63,144,635
23,186,399
93,272,462
179,603,496
As a
percentage to
2017 first
quarter net
purchases (%)
35.16
12.91
51.93
100.00
Relationship
with the issuer
N/A
N/A
(2) Major Clients in the Last Two Calendar Years
Party
Name
Amount
2015
As a
percentage to
2015 net
sales (%)
Relationship
with the issuer
Name
Amount
2016
2017 first quarter
As a
percentage to
2016 net sales
(%)
Relationship
with the
issuer
Name
Amount
As a
percentage to
2017 first
quarter net
sales (%)
Relationship
with the issuer
Unit: NTD thousand
1 Company a
2 Company d
3 Company e
4 Company f
Others
Net sales
133,830,636
288,523,817
103,644,690
97,984,283
223,322,272
847,305,698
15.79
34.05
12.23
11.57
26.36
100.00
N/A
N/A
N/A
N/A
Company a
Company d
Company e
Company f
Others
Net sales
119,219,545
306,571,029
93,254,993
95,357,708
152,406,760
766,810,035
N/A
N/A
N/A
N/A
15.55
39.98
12.16
12.44
19.87
100.00
Company a
Company d
Company e
Company f
Others
Net sales
27,986,164
81,253,846
23,620,097
24,711,557
29,856,257
187,427,921
N/A
N/A
N/A
N/A
14.93
43.35
12.60
13.18
15.94
100.00
89
5.2.5 Production in the Last Two Years
Year
Production
volume/
2015
2016
Unit: thousand devices; NTD thousands
Production
Production
Production
Production
Production
Production
value
capacity
volume
value
capacity
volume
value
Main products
5C electronics
114,324
101,644
829,209,071
125,442
100,575
734,512,835
5.2.6 Shipments and Sales in the Last Two Years
Year
2015
Unit: devices; NTD thousands
2016
Sales volume
Domestic sales
Export sales
Domestic sales
Export sales
Main products
Volume
Value
Volume
Value
Volume
Value
Volume
Value
5C electronics
651
3,481,047
99,902
843,824,651
456
1,938,470
100,429 764,871,565
5.3 Human Resources
Year
December 31, 2015
December 31, 2016
March 31, 2017
Number of employees
Average age
Average years of service
Academic
qualifications
Doctoral Degree
Master Degree
University
High school
Below high
school/others
72,796
26.63
1.94
0.07%
3.78%
19.75%
53.86%
22.54%
64,728
27.36
1.99
0.07%
4.24%
21.81%
53.84%
20.04%
74,956
27.53
1.86
0.05%
3.64%
19.00%
54.07%
23.24%
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$23,680 thousand
(excluding regular maintenance and green R&D) in 2016. 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
90
returns for non-compliance with RoHS standards. In addition, Compal has begun demanding that suppliers
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 2016, the Company had provided NT$113.25 million in maternity
allowances and bonuses. There were 39 counts of employees who took parenting leave, with the right to
return, in 2016.
■ Education and training:
The Company set training credits and outlined the credit system according to the needs of each level.
The Company also integrates all training records in online learning platform to further assist the
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competent staff in keeping abreast of the learning progress.
In 2016, a total of 1,668 training sessions (both internal and external) were organized; these courses
delivered 104,062 hours of training and 31,940 persons enrolled. The total training expenses were
NT$10,080 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 that 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
soon, 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 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.
92
• Lectures and rehearsals are organized annually to demonstrate the proper responses in case of an
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.
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.
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
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.
N/A
N/A
N/A
N/A
93
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, 2017
Analysis
Current assets
Property, plant, and
equipment
2012
2013
2014
2015
2016
259,133,608
287,380,820
324,845,249
277,783,476
300,469,007
289,710,910
20,772,790
21,209,228
24,472,732
24,308,631
20,952,677
19,289,173
Intangible assets
1,451,181
1,293,643
1,035,162
1,194,193
1,291,281
30,431,001
26,219,123
28,397,575
24,639,275
24,303,146
311,788,580
336,102,814
378,750,718
327,925,575
347,016,111
331,952,737
195,000,133
220,597,261
250,264,267
202,757,075
209,232,199
197,483,353
199,333,956
224,902,606
256,832,412
208,009,032
(Note 2)
-
1,205,308
21,747,346
Non-current assets
1,995,177
15,314,137
22,266,514
15,570,384
25,500,097
24,737,741
196,995,310
235,911,398
272,530,781
218,327,459
234,732,296
222,221,094
201,329,133
240,216,743
279,098,926
223,579,416
(Note 2)
-
106,039,633
95,102,289
101,386,923
103,775,795
105,804,389
103,268,810
Other assets
Total assets
Prior to
Current
distribution
liabilities
After
distribution
Total liabilities
Prior to
distribution
After
distribution
Equity attributable to
parent company
shareholders
Ordinary shares
Capital reserves
16,122,810
16,193,087
14,296,445
12,838,638
11,779,274
44,126,526
44,134,467
44,232,366
44,711,266
44,241,606
44,224,346
11,769,686
Prior to
Retained
distribution
earnings
After
distribution
55,053,941
44,489,978
47,721,872
51,877,511
55,289,409
56,366,197
50,669,755
42,312,310
43,293,091
47,450,840
(Note 2)
-
Other equity interests
(8,382,397)
(7,707,518)
(3,139,021)
(3,926,881)
(4,624,653)
(8,210,172)
Treasury stock
(881,247)
(2,007,725)
(1,724,739)
(1,724,739)
Non-controlling interests
8,753,637
5,089,127
4,833,014
5,822,321
(881,247)
6,479,426
(881,247)
6,462,833
Total equity Prior to
distribution
After
distribution
114,793,270
100,191,416
106,219,937
109,598,116
112,283,815
109,731,643
110,459,447
95,886,071
99,651,792
104,346,159
(Note 2)
-
Note: 1. The financial information is audited and certified by the CPA every year. The financial information as of March 31,
2017, has not yet been audited by the CPA.
2. 2016 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, 2015, due to
the adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2014.
94
(2) Consolidated Condensed Statement of Comprehensive Income – Based on IFRS
Year
Analysis
Financial Summary for The Last Five Years (Note 1)
2012
2013
2014
2015
2016
Unit: NT$ thousands
As of March 31, 2017
Net sales revenue
683,913,713
692,748,293
845,700,752
847,305,698
766,810,035
187,427,921
Gross profit
28,749,803
28,110,391
32,364,662
33,378,357
32,836,970
Net operating income
10,054,894
9,234,044
11,664,922
11,312,452
11,063,645
7,824,425
2,949,361
Non-operating income and
expense
(631,049)
(4,873,662)
(1,937,570)
479,641
749,700
(1,494,276)
Net income before tax
9,423,845
4,360,382
9,727,352
11,792,093
11,813,345
1,455,085
Net income from continuing
operations
Net loss from discounting
operations
7,240,147
2,903,732
7,545,381
9,007,147
8,968,006
1,108,146
-
-
-
-
-
-
Net income (loss)
7,240,147
2,903,732
7,545,381
9,007,147
8,968,006
1,108,146
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
(59,127)
711,298
4,555,499
(101,970)
(1,265,546)
(3,698,266)
7,181,020
3,615,030
12,100,880
8,905,177
7,702,460
(2,590,120)
6,399,958
2,467,211
7,024,461
8,684,610
8,130,890
1,073,335
840,189
436,521
520,920
322,537
837,116
34,811
6,406,588
3,160,663
11,548,480
8,552,926
6,916,562
(2,570,306)
attributed to non-controlling
774,432
454,367
552,400
352,251
785,898
(19,814)
interests
Earning per share (unit: dollar)
1.47
0.57
1.63
2.01
1.88
0.25
Note: 1. The financial information is audited and certified by the CPA every year. The financial information as of March 31, 2017,
has not yet been audited by the CPA.
2. The 2016 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, 2015, due to
the adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2014.
95
(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, 2017
2012
2013
2014
2015
2016
Analysis
Current assets
194,403,691
210,646,593
255,609,554
207,496,808
237,412,415
Property, plant, and
equipment
Intangible assets
Other assets
Total assets
Current
liabilities
Prior to
distribution
After
distribution
2,295,444
2,218,316
2,230,023
2,181,737
2,132,114
724,106
617,739
412,185
378,454
268,316
76,775,902
82,728,525
85,179,353
86,182,040
88,808,075
274,199,143
296,211,173
343,431,115
296,239,039
328,620,920
167,275,463
187,574,634
220,791,532
177,664,877
197,566,162
171,659,649
191,929,970
227,434,703
182,976,882
(Note 2)
Non-current assets
884,047
13,534,250
21,252,660
14,798,367
25,250,369
Total liabilities
Prior to
distribution
After
distribution
Equity attributable to parent
company shareholders
168,159,510
201,108,884
242,044,192
192,463,244
222,816,531
172,543,696
205,464,220
248,687,363
197,775,249
(Note 2)
-
-
-
-
-
N/A
Ordinary shares
44,126,526
44,134,467
44,232,366
44,711,266
44,241,606
Capital reserves
16,122,810
16,193,087
14,296,445
12,838,638
11,779,274
Retained
earnings
Prior to
distribution
After
distribution
55,053,941
44,489,978
47,721,872
51,877,511
55,289,409
50,669,755
42,312,310
43,293,091
47,450,840
(Note 2)
Other equity interests
(8,382,397)
(7,707,518)
(3,139,021)
(3,926,881)
(4,624,653)
Treasury stock
(881,247)
(2,007,725)
(1,724,739)
(1,724,739)
(881,247)
Non-controlling interests
-
-
-
-
-
Total equity
Prior to
distribution
After
distribution
106,039,633
95,102,289
101,386,923
103,775,795
105,804,389
101,705,810
90,796,944
94,818,778
98,523,838
(Note 2)
Note: 1.The financial information is audited and reviewed by the CPA every year.
2. The 2016 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, 2015, due to the
adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2014.
96
(4) Parent-Company-Only Condensed Statement of Comprehensive Income – Based on IFRS
Year
Analysis
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)
Unit: NT$ thousands
As of March 31, 2017
Financial Summary for The Last Five Years (Note 1)
2012
608,702,320
15,258,012
4,877,292
2013
632,622,772
16,359,240
5,505,654
2014
803,504,061
21,288,913
7,291,756
2015
802,994,930
22,737,590
7,305,278
2016
725,653,095
21,281,652
5,972,854
2,288,536
(2,503,176)
286,853
2,857,612
3,398,892
7,165,828
3,002,478
7,578,609
10,162,890
9,371,746
6,399,958
2,467,211
7,024,461
8,684,610
8,130,890
-
-
-
-
-
6,399,958
2,467,211
7,024,461
8,684,610
8,130,890
6,630
693,452
4,524,019
(131,684)
(1,214,328)
N/A
6,406,588
3,160,663
11,548,480
8,552,926
6,916,562
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.47
0.57
1.63
2.01
1.88
Note: 1.The financial information is audited and reviewed by the CPA every year.
2. The 2016 financial statement has not yet approved by the shareholders’ meeting.
3. The Company retroactively adjusted previous amounts in the financial statements effective January 1, 2015, due to the
adoption of the 2013 International Accounting Standards endorsed by the Financial Supervisory Commission of the
ROC as of January 1, 2014.
97
6.1.2 Condensed Balance Sheet and Statement of Comprehensive Income – Based on ROC GAAP
(1) Consolidated Condensed balance sheet – Based on ROC GAAP
Analysis
Year
Financial Summary for The Last Five Years
2012
2013
2014
2015
2016
As of March 31,
2017
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 reserves
Retained
earnings
Currency exchange rate adjustment
Net loss not recognized as pension cost
Unrealized gains and losses of financial
instruments
Treasury stock
Minority interest
Prior to distribution
After distribution
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)
(5,518,799)
(881,247)
8,792,082
N/A
N/A
N/A
N/A
N/A
Total
Shareholder’s
equity
Prior to distribution
115,368,547
After distribution
111,034,724
Note: All yearly financial information has been audited.
98
(2) Consolidated Condensed Statement of Income – Based on ROC GAAP
Year
Financial Summary for The Last Five Years
Analysis
Net sales revenue
Gross profit
Net operating income
Non-operating income and
gains
Non-operating expense and
losses
Income from continuing
2012
2013
2014
2015
2016
682,891,359
29,812,097
10,067,934
2,261,926
2,890,453
Unit: NT$ thousands
As of March 31,
2017
N/A
N/A
N/A
N/A
N/A
operations before income
9,439,407
tax
Income from continuing
operations
7,255,485
Consolidated total income
7,255,485
Net income attributed to
owners of parent
Earning per share retroactive
6,411,027
adjustment
1.47
(Unit: dollars)
Note: All yearly financial information has been audited.
99
(3) Parent-Company-Only Condensed balance sheet – Based on ROC GAAP
Year
Financial Summary for The Last Five Years
Unit: NT$ thousands
As of March
31, 2017
Analysis
Current assets
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 reserves
Retained earnings
Prior to
distribution
After
distribution
Prior to
distribution
After
distribution
Prior to
distribution
After
distribution
Unrealized gains and losses of financial
instruments
2012
2013
2014
2015
2016
193,064,991
76,151,586
2,160,328
724,106
189,276
272,290,287
165,490,729
169,874,915
-
223,093
165,713,822
170,098,008
44,126,526
15,776,692
56,373,219
51,989,033
(5,518,799)
N/A
N/A
N/A
N/A
N/A
cumulative exchange rate adjustments
(3,134,299)
Net loss not recognized as pension cost
(165,627)
Total shareholder’s
equity
Prior to
distribution
After
distribution
106,576,465
102,242,642
Note: All yearly financial information has been audited.
100
(4) Parent-Company-Only Condensed Statement of Income – Based on ROC GAAP
Financial Summary for The Last Five Years
Unit: NT$ thousands
As of March 31,
2017
2012
2013
2014
2015
2016
607,679,574
16,228,493
4,869,926
2,620,408
315,184
7,175,150
6,411,027
-
-
-
N/A
N/A
N/A
N/A
N/A
Analysis
Year
Net sales revenue
Gross profit
Net operating income
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
Net income
6,411,027
Retroactively adjusted
earnings per share
(Unit: Dollar)
Note: All yearly financial information has been audited.
1.47
6.1.3 Auditors’ Opinions
Accounting Firm
Year
2012 KPMG
2013 KPMG
2014 KPMG
2015 KPMG
2016 KPMG
CPA
Audit Opinion
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; Au, Yiu Kwan
Unqualified opinion
Modified unqualified opinion (Note 1)
Modified unqualified opinion (Note 1)
Modified unqualified opinion (Note 2)
Unqualified opinion
Note: 1. Brief disclosures of Company disposal of the equity investment of VIBO Telecom Inc and a record of the
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.
101
6.2
Five-Year Financial Analysis
A.
Consolidated Financial Analysis – Based on IFRS
Year
Financial Analysis for the Last Five Years
2012
2013
2014
2015
2016
As of
March 31,
2017
Debt ratio
63.18
70.19
71.96
66.58
67.64
66.94
Analysis
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
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 (%)
Cash flow
Cash flow adequacy ratio (%)
Cash reinvestment ratio (%)
Leverage
Operating leverage
Financial leverage
Note: 1.The ratio is negative.
562.22
544.60
525.02
514.91
657.59 697.12
132.89
105.61
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)
(Note 2)
(Note 1)
1.58
1.04
130.27
106.85
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
129.80
102.70
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
(Note 2) (Note 2)
19.59
(Note 1)
1.57
1.66
1.10
1.06
137.00
113.71
14.11
4.93
74.03
14.31
5.42
25.50
34.74
2.40
2.74
8.35
26.37
1.06
2.01
4.70
(Note 2)
1.95
1.58
1.09
143.60 146.70
120.22 119.52
6.99
13.47
4.47
4.50
81.65
81.11
14.22
15.51
5.67
5.68
25.66
23.53
37.26
33.88
2.20
2.27
0.38
2.87
0.99
8.08
3.29
26.70
0.59
1.16
0.25
1.88
-
0.61
-
42.42
-
(Note 1)
-
1.57
-
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) Long term fund to property, plant and equipment ratio: mainly due to increase in long term fund compared
to earlier period.
(cid:3) Cash flow adequacy ratio: mainly due to the cash inflow from operating activies
(cid:3) Cash reinvestment ratio: mainly due to the cash inflow from operating activies was lower than the earlier
period.
4. The financial information is audited and certified by the CPA every year. The financial information as of
March 31, 2017, has not yet audited by the CPA.
5. The Company made retroactive adjustment to previous amounts in the financial statements effective January
1, 2015, due to the adoption of the 2013 International Accounting Standards endorsed by the Financial
Supervisory Commission of the ROC as of January 1, 2014.
6. The 2016 financial statement has not yet been approved at a shareholders’ meeting.
102
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)
103
B.
Consolidated Financial Analysis – Based on ROC GAAP
Year
Financial Analysis for the Last Five Years
2012
2013
2014
2015
2016
As of March
31, 2017
Analysis
Capital Structure
Debt ratio
(%)
Long-term capital to fixed assets 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
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.
62.70
542.02
133.66
106.09
23.98
4.66
78.31
13.24
4.81
27.56
35.63
2.32
2.57
6.32
22.82
21.39
1.06
1.47
(Note 1)
46.44
(Note 1)
1.62
1.04
N/A
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.
104
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)
105
6.3 Audit Committee’s Report for the Most Recent Year
Audit Committee’s Review Report
The Company’s 2016 financial statements have been approved by the Audit Committee and
by the Board of Directors. Kuan-Ying Kuo and Yiu-Kwan Au, certified public accountants of
KPMG, have completed the audit of the financial statements and issued an audit report
relating thereto. In addition, the Board of Directors has prepared and submitted to us the
Company’s 2016 business report and proposal for distribution of earnings. We, the Audit
Committee members, have duly examined and determined such business report and proposal
for distribution of earnings to be in line with the requirements under the Company Law and
relevant laws and regulations. According to Article 14-4 of the Securities and Exchange Act
and Article 219 of Company Law, we hereby submit this report.
Compal Electronics, Inc.
Chairman of the Audit Committee:
May 15, 2017
106
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.
107
VII. Review of Financial Conditions, Financial Performance, and
Risk Management
7.1 Analysis of Financial Status
Unit: NT$ thousands
Analysis
Year
2016
2015
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
300,469,007
277,783,476
11,726,370
20,952,677
13,868,057
347,016,111
209,232,199
11,788,042
24,308,631
14,045,426
327,925,575
202,757,075
25,500,097
15,570,384
234,732,296
218,327,459
44,241,606
11,779,274
55,289,409
(4,624,653)
(881,247)
6,479,426
44,711,266
12,838,638
51,877,511
(3,926,881)
(1,724,739)
5,822,321
22,685,531
(61,672)
(3,355,954)
(177,369)
19,090,536
6,475,124
9,929,713
16,404,837
(469,660)
(1,059,364)
3,411,898
(697,772)
843,492
657,105
Total Shareholders’ Equity
Note: Analysis of variations exceeding 20% and amounting to more than NTD10 million:
(cid:3) The increase in non-current liabilities: mainly due to increase in long-term loans.
(cid:3) The decrease in treasury stock: mainly due to the retirement of treasury stock.
109,598,116
112,283,815
2,685,699
%
8.17
(0.52)
(13.81)
(1.26)
5.82
3.19
63.77
7.51
(1.05)
(8.25)
6.58
17.77
(48.91)
11.29
2.45
(cid:1) Effect of changes on the company’s financial position: Judging from the aforementioned causes, the effect
from changes on the Company’s financial position in the last two years are normal outcomes from standard
operating activities.
(cid:1) Future response actions: Not applicable
108
7.2 Analysis of Financial Performance
Analysis
Year
2016
2015
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)
766,810,035
733,973,065
32,836,970
21,773,325
11,063,645
749,700
11,813,345
2,845,339
8,968,006
847,305,698
813,927,341
(79,954,276)
33,378,357
22,065,905
11,312,452
479,641
11,792,093
2,784,946
9,007,147
(541,387)
(292,580)
(248,807)
270,059
21,252
60,393
(39,141)
Unit: NT$ thousands
Difference
Amount
(80,495,663)
%
(9.50)
(9.82)
(1.62)
(1.33)
(2.20)
56.30
0.18
2.17
(0.43)
Other comprehensive income
(1,265,546)
(101,970)
(1,163,576)
1141.10
Total comprehensive income
Note: The analytics for change of more than 20%:
7,702,460
8,905,177
(1,202,717)
(13.51)
(cid:3) Increase in net operating income and expenses: Mainly due to the decrease in 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) Increase in other comprehensive (net of tax) losses: mainly due to the decrease of exchange differences arising
from the conversion of financial statements of foreign operations, increase in unrealized valuation loss of
available-for-sale financial assets, the decrease of profit recognition in affiliates and joint ventures using the
equity method and increase in other comprehensive losses.
109
7.3 Analysis of Cash Flow
7.3.1 Cash Flow Analysis for the Current Year
Cash and Cash
Equivalents,
Beginning of Year
(1)
Net Cash Flow
from Operating
Activities
(2)
Cash
Inflow
(Outflow)
(3)
Cash Surplus
(Deficit)
(1)+(2)+(3)
62,751,542
1,287,662
8,911,392
72,950,596
Note: 1.Analysis of the change of 2016 cash flow changes:
Unit: NT$ thousands
Financing of Cash Deficit
Investment Plans
-
Financing Plans
-
•
•
Net cash inflow in operating activities of $1,287,662 thousand: mainly due to a decrease in profit from
operating and net changes of assets and liabilities from operating activities.
Net cash outflow in investing activities of $3,181,966: mainly due to the purchase of real-estate property,
plant and equipment.
Net outflow of financing activities of $11,913,185 thousand: mainly due to the increase in loan and
distribution of cash dividend.
2. Financing of cash deficits: not applicable.
3. Liquidity analysis: current asset to current liability ratio is 143.6% and liquidity is healthy.
•
7.3.2 Cash Flow Analysis for the Coming Year
Estimated
Cash and Cash
Equivalents,
Beginning of
Year
(1)
Estimated Net
Cash Flow from
Operating
Activities
(2)
Estimated Cash
Inflow
(Outflow)
(3)
Cash Surplus
(Deficit)
(1)+(2)+(3)
72,950,596
9,712,808
(9,969,162)
72,694,242
Note:1.Analysis of the 2017 cash flow changes:
Unit: NT$ thousands
Financing of Cash Surplus (Deficit)
Investment Plans
-
Financing Plans
-
•
•
•
Net cash inflow in operating activities of $9,712,808 thousand: expect sales growth and profit from the
operation.
Net cash outflow in investing activities of $1,894,059 thousand: expect to increase investment
expenditures next year.
Net cash outflow in financing activities of $5,772,954 thousand: expect to distribute cash dividend and
increase/decrease in long-term and short-term debt next year.
2. Financing of cash deficits: not applicable.
3. Liquidity analysis: The Company should be able to mainly sound liquidity, as opening cash balance plus net
cash inflows from operating activities are adequate in meeting the Company's investing and financing needs.
110
7.4 Major Capital Expenditures
7.4.1 Major Capital Expenditures and Sources of Capital
Project
Actual or Planned
Actual or Planned
Source of Capital
Date of Completion
Total Capital
Unit: NT$ thousands
Actual or Expected Capital Expenditure
2016
Global BioPharma
Inc.
Private capital
2016
100,000
100,000
7.4.2 Expected Benefits
The investment in healthcare and biotechnology industries has been one of Compal’s many directions of
development as it gradually transitions from the ICT (information and communication technologies). In
addition to establishing an R&D team to focus on the development of biotech, medical and healthcare
devices, relevant healthcare software and service platforms, the Company has also invested in new drug
development (Global BioPharma Inc. specializes in new cancer drug development) in 2016 and long-term
care in the hopes of utilizing Compal’s core software/hardware capabilities from years of operation in the
ICT industry would speed up the digitization and systemization for the healthcare/biotech industry.
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. 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
The 2016 consolidated profits from investment using the equity method came to approximately NTD
1.07 billion, coming mainly from the outstanding performance of LCFC and Compal Precision Module Co.,
Ltd.
(3) 2017 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
111
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 integration 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 softwareand 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.
112
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
Net interest revenue and expense
Items
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; %
2016
(384,996)
(1,242,728)
766,810,035
11,813,345
(0.050%)
(3.259%)
(0.162%)
(10.52%)
The most recent US Fed meeting statement showed that the US economy is experiencing a continued moderate
growth, with solid growth in employment. In light of the status of the employment market and inflation, the federal
fund rate has been increased by one quarter point from 0.75% to 1%. Not only that, the Fed even hinted that there
would be two more hikes in 2017. As for interest rate for NTD, the Central Bank of Taiwan has noted that in light of
the high degree of uncertainty in US and European economic policies and the slow recovery of domestic economy,
with current inflation and future inflation forecast remaining moderate, in order to facilitate economic recovery, the
Central Bank would maintain the current rate at 1.375%. The Company’s cash balance, as of the end of 2016, came to
approximately NTD 72.951 billion. The long and short-term bank loans came to about NTD 75.402 billion, with net
interest expense for the year at NTD 384,996 thousand. The amount accounted for 0.050% and 3.259% of net sales
and income before tax respectively. As of December 31, 2016, all other factors remain unchanged, the increase of
0.25% in interest will cause a decrease in income before tax by NTD 32,415 thousand. The Company will watch the
change of interest rate closely and respond in a timely manner.
2. Exchange rate changes:
The Company is export-oriented. And as such, the change and movement of exchange rate have a considerable
impact on annual profit and loss. To mimimize the impact on the Company’s operating profit/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, came to
$(1,242,728) thousand, accounting for (0.162%) and (10.52%) of net revenue and net profit before tax respectively. As
of December 31, 2016, with all other factors remain unchanged, a 5% appreciation of USD/TWD will increase income
before tax by $1,608,957 thousand. We will take all necessary actions based on the fluctuation of the exchange rate in
the future.
3. Inflation:
According to relevant data published by the Central Bank, while imported raw materials such as crude oil are
expected to increase in prices this year, the recent growth in NTD has effectively alleviated imported inflation. With
domestic demand gradually dwindling, the output gap remained in the negative. The CPI for the year was expected to
grow by 1.25% and while CP outlook should remain stable, we will continue to watch for potential impact on prices.
113
7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to
High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives
Transactions
1. The Company does not make high-risk, high-leveraged investments.
2. The Company only offers financing to its related parties, mainly providing short-term financing for their
operating needs.
3. The Company is engaged in endorsement and guarantee activities which are only negotiated between
subsidiaries and the parent company. The arrangements are covered by proper Endorsement and Guarantee
Procedures.
4. The Company uses hedging strategy for assets and liabilities valued in foreign currencies. Such hedging,
done through forward foreign exchange contracts and swap trading, covers the amount of net assets and
liabilities to achieve the objective of risk aversion. At the end of 2016, the Company’s position in open
forward foreign exchange contracts amounted to USD$ 55,000 thousand, EUR 51,000 thousand, GBP
3,000 thousand and swap contracts of USD$ 31,600 thousand. The Company 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 2017 and whether the existing clients
will renew their contracts. The 2017 R&D expense is expected to be more than NT$ 12.5 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 2016, 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
114
product and market opportunities.
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.
For many years, Compal has placed amongst the top 500, top 2000 businesses and top 2000 manufacturers in
Taiwan by Fortune, Forbes Magazine and CommonWealth Magazine respectively. In 2016, the Company placed
within the top 20% in the TWSE-listed Companies in the second round of “Corporate Governance Evaluation” and
ranked 26th in CSR CRopraote Citizenship by CommonWealth Magazine. These prestigious awards once again
reaffirmed the Company’s corporate image. There had been no company crisis in 2016 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 information and communication technology (ICT) 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, with 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
115
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. The Taiwan Supreme Court
dismissed the third instance of the Company’s appeal on January 11, 2017 and per arbitration, the Company and its
subsidiaries has sold all CPT shares to Tatung on February 9 2017 at a total of NTD $ 2,272,104 thousand (including
interest) at a loss of NTD$ 4,252 thousand. The aforementioned amount has been recovered in full.
7.6.13 Other Major Risks
International conglomerates face 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 2016.
116
VIII. Special Disclosure
8.1
Summary of Affiliated Companies (As of Dec 31, 2016)
117
118
Overview of Operating Status for Affliated Companies in 2016
Unit: NTD thousand
Company Name
Capital Net asset value Total liabilities
Net worth
Operating
revenue
Operating
income
44,241,606
328,620,920 222,816,531 105,804,389
725,653,095
5,972,854
1,606,780
85,960,669
54,200,407
31,760,262
88,993,461
2,963,367
2,335,151
Net loss/profit
for the period
(after tax)
8,130,890
EPS (in NTD)
(After tax)
1.88
49.68
Compal Electronics, Inc.
Compal International Holding Co.,
Ltd. and its subsidiaries
Just International Ltd.
and its subsidiaries
Big Chance International Co., Ltd.
and its subsidiaries
Core Profit Holdings Ltd.
High Shine Industrial Corp.
and its subsidiaries
Panpal Technology Corporation
and its subsidiaries
Gempal Technology Co., Ltd.
Hong Ji Capital Co., Ltd.
Hong Jin Investment Co., Ltd.
Accesstek Inc.
and its subsidiaries
Arcadyan Technology Corp.
and its subsidiaries
Compal Broadband Networks Inc.
and its subsidiaries
Zhaopal Investment Co., Ltd.
Yongpal Investment Co., Ltd.
1,480,509
15,393,029
6,820,486
8,572,543
21,161,984
1,180,223
768,478
16.01
2,636,051
12,424,050
6,858,662
5,565,388
7,436,027
(3,370)
133,413
4,318,860
5,147,628
-
5,147,628
1,346,814
1,124,503
241,932
882,571
-
-
-
400,455
(53,086)
(44,935)
(1.05)
1.47
2.72
5,000,000
8,162,452
2,622,524
5,539,928
5,466,931
1,462
130,900
900,000
1,000,000
295,000
1,923,116
1,034,048
338,634
32,369
37,969
131
105
71
866
1,922,985
1,033,943
338,563
37,103
-
-
-
-
(293)
(232)
(222)
(104)
97,287
63,243
31,699
80
1,891,190
15,217,137
6,121,974
9,095,163
23,910,479
1,794,183
1,357,473
532,525
4,968,537
3,595,136
1,373,401
5,221,031
120,614
133,949
2,001,000
1,751,000
648,100
568,156
51
50
648,049
568,106
-
-
(76)
(76)
(76)
(76)
0.26
1.08
0.63
1.07
0.02
7.19
2.52
-
-
119
Company Name
Capital Net asset value Total liabilities
Net worth
Operating
revenue
Operating
income
751,000
243,384
50
243,334
-
(76)
2,122,127
6,920,203
5,573,203
1,347,000
8,000,828
(585,666)
(784,892)
411,458
60,000
584,315
30,123
165,568
8,634
418,747
21,489
260,698
26,047
(100,990)
(8,238)
(31,325)
(8,073)
300,000
319,768
67,061
252,707
211,946
(11,465)
(11,447)
Net loss/profit
for the period
(after tax)
(76)
EPS (in NTD)
(After tax)
-
(3.70)
(0.76)
(1.35)
(0.38)
295,000
171,187
37,502
133,685
-
(30,990)
(5,500)
(0.19)
377,328
1,373,649
1,138,542
235,107
1,777,939
(54,033)
(8,781)
(0.70)
3,031
90,156
101,747
2,754,741
197,463
555,004
210,512
192,662
4,114,094
558,302
112,150
208,699
74,789
86,868
-
442,854
1,813
117,873
4,027,226
558,302
565,697
726,056
172,055
-
1,579,087
28,324
53,478
11,256
(119)
15,089
19,092
38,427
1,820
384,469
398,853
190.92
282.39
0.61
4.28
62.06
1,693,279
10,221,162
10,589,033
(367,871)
35,295,560
(444,216)
(436,731)
(8.41)
3,340
5,864,181
4,468,685
1,395,496
35,238,625
(10,940)
(18,108)
(181.08)
1,575
18,689,073
17,130,918
1,558,155
70,578,185
(5,222)
587
11.74
100,000
207,620
330,297
(122,677)
100,116
(147,311)
(147,223)
(14.72)
100,000
142,424
31,587
110,837
74,370
3,776
4,001
0.40
life Biotechnology Co.,
Kaipal Investment Co., Ltd.
Henghao Technology Co., Ltd.
and its subsidiaries
Mactech Co., Ltd.
Ripal Optoelectronics Co., Ltd.
General
Ltd.
Rayonnant Technology Holdings
Ltd.,
Compal Rayonnant Holdings Ltd.
and its subsidiaries
Bizcom Electronics, Inc.
Compal Europe (Poland) Sp.z o.o.
Auscom Engineering Inc.
Flight Global Holding Inc.
Compalead Electronics B.V.
Etrade Management Co., Ltd and its
subsidiaries
Webtek Technology Co., Ltd
Forever Young Technology Inc. and
its subsidiaries
Unicom Global Inc.,
Huang Feng Communication Co.,
Ltd.
Compal Electronics (Holding) Ltd.
34
3,798,619
-
3,798,619
-
-
-
-
120
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, 2017
Collateraliz
ed
Amount of
Endorsements
Made for the
Subsidiary
Amount
Loaned to
the
Subsidiar
y
Unit: NT$ thousands; Shares; %
Panpal
Technology
Corporation
Gempal
Technology
Co., Ltd.
Note:
NTD 5,000,000,000
NTD 900,000,000
Proprietary
capital
Proprietary
capital
100%
-
100%
-
-
-
-
-
-
-
31,648,082 shares
NTD 559,812,000
18,369,349 shares
NTD 321,435,000
N/A
N/A
-
-
-
-
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 publication date of this annual report, hence there were no impacts.
8.4
Any Events in 2016 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
121
Attachment I
Independent Auditor’s Report
To COMPAL ELECTRONICS, INC.:
Opinion
We have audited the consolidated financial statements of COMPAL ELECTRONICS, INC. and its subsidiaries
(the “Group”), which comprise the consolidated statement of financial position as of December 31, 2016 and
2015, and the consolidated statement of comprehensive income, consolidated statements of changes in equity
and consolidated statement of cash flows for the years ended December 31, 2016 and 2015, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at December 31, 2016 and 2015, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with the Regulations
Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial
Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), interpretation as well as related
guidance endorsed by the Financial Supervisory Commission of the Republic of China.
Basis for Opinion
We conducted our audit in accordance with the “Regulations Governing Auditing and Certification of Financial
Statements by Certified Public Accountants” and the auditing standards generally accepted in the Republic of
China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”),
and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
1. Account receivable valuation
Please refer to Note (4)(f) and Note (5) for the accounting policy of accounts receivable, as well as the
estimation and assumption uncertainly of the valuation of accounts receivable, respectively. Information of
account receivable valuation are shown in Note (6)(e) of the parent company only financial statements.
Description of key audit matters:
The Company devotes to develop new product lines and customers in emerging countries, and the credit risks
of these customers are higher than other world leading corporations. Therefore, valuation of accounts
receivable has been identified as a key audit matter.
Our key audit procedures performed in report of the above area included the following:
In order to evaluate the reasonableness of the Company’s estimations for bad debts, our key audit procedures
included analyzing the aging of accounts receivable, examining the historical recovery records, and the
current credit status of customers, as well as inspecting the amount received in the subsequent period.
2. Provision of sales returns and allowances
Please refer to Note (4)(o) and Note (5) for the policy of the estimation of sales returns and allowance
provisions, as well as the estimation and assumption uncertainly of sales returns and allowances provisions,
respectivley. Information on sales returns and allowances provisions are shown in Note (6)(m) of the parent
company only financial statements.
Description of key audit matters:
Part of the sales need to provide allowance and return to the customers, the estimation of the above items
affects the net sales. Since the said matter is subject to management's judgment, the rationality of the basis
is one of the key audit matters.
Our key audit procedures performed in report of the above area included the following:
Our key audit procedures included reviewing the appropriateness of accounting policy and disclosure of
provision for sales return and allowance, and evaluating the historical accuracy of the estimation of sales
return and allowance, as well as evaluating the appropriateness of estimation in the following year. In
addition, to evaluate if there is a significant misstatement, we analyzed the trend of sales by main customers
and by products, to compare to the changes of provision sales returns and allowances.
3. Inventory valuation
Please refer to Note (4)(g) and Note (5) for the accounting policy of inventory valuation, as well as the
estimation and assumption uncertainly of the valuation of inventory, respectively. Information of estimation
of the valuation of inventory are shown in Note (6)(f) of the parent company only financial statements.
Description of key audit matters:
The inventory is measured at the lower of cost or net realizable value. The short life cycle of electronic
products may cause significant changes in customers’ demand and sales of related products. Consequently,
the book value of inventory may be lower than the net realizable value of inventory. Therefore, the valuation
of inventory is one of the key audit matters.
Our key audit procedures performed in report of the above area included the following:
In order to verify the rationality of assessment of inventory valuation estimated by the Company, our key
audit procedures included reviewing the consistency of accounting policy, inspecting the Company’s
inventory aging reports, analyzing the change of inventory aging, as well as verifying the inventory aging
reports and the calculation of lower of cost or net realizable value.
Other Matter
Compal Electronics Inc, has prepared the annual parent company only financial statements as of and for
the years ended December 31, 2016 and 2015, on which we have issued an unqualified opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
The management is responsible for the preparation and fair presentation of the consolidated financial statements
in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and
IFRSs, IASs, interpretation as well as the related guidance endorsed by the Financial Supervisory Commission
of the Republic of China, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the auditing standards generally accepted in the Republic of China will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the consolidated individual financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated individual financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditor’s report are Kuan Ying Kuo and Yiu
Kwan Au.
KPMG
Taipei, Taiwan (Republic of China)
March 28, 2017
Notes to Readers
The accompanying consolidated financial statements are intended only to present the consolidated statement of financial position,
financial performance and its cash flows in accordance with the accounting principles and practices generally accepted 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 auditor’s 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 auditor’s report and consolidated financial statements, the Chinese version shall prevail.
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND ITS SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2016 and 2015
(Expressed inThousands of New Taiwan Dollars)
Assets
Current assets:
Cash and cash equivalents (note (6)(a))
Current financial assets at fair value through profit or loss (note (6)(b))
Current available-for-sale financial assets (note (6)(d))
Current derivative financial assets used for hedging (note (6)(c))
Current bond investments without active market (note (6)(f))
Notes and accounts receivable, net (notes (6)(g) and 8)
Notes and accounts receivable due from related parties, net (notes (6)(g)
and 8)
Other receivables, net (notes (6)(g) and 8)
Inventories (note (6)(h))
Other current assets (note 8)
Non-current assets:
Investments accounted for using equity method (note (6)(i))
Non-current available-for-sale financial assets (note (6)(d))
Non-current financial assets at cost (note (6)(e))
Non-current investments without active market (note (6)(f))
Property, plant and equipment (notes (6)(n) and (8))
Intangible assets
Deferred tax assets (note (6)(t))
Long-term prepaid rents (note (6)(r))
Other non-current assets (note (6)(s))
1100
1110
1125
1135
1147
1170
1180
1200
1310
1470
1550
1523
1543
1546
1600
1780
1840
1985
1990
December 31, 2016
Amount
%
December 31, 2015
%
Amount
$
72,950,596 21.0
62,751,542 19.1
86,440
48,631
-
-
-
-
25,412
29,738
21,360
-
-
-
350,000
0.1
350,000
0.1
175,318,313 50.5
164,799,743 50.3
70,972 -
62,245 -
1,082,607
0.3
824,160
0.3
48,105,125 13.9
46,520,021 14.2
2,456,323
0.7
2,399,255
0.7
300,469,007 86.5
277,783,476 84.7
11,726,370
9,556,461
3.4
2.8
11,788,042
9,063,101
3.6
2.8
71,820
-
103,867
-
700,000
20,952,677
0.2
6.0
1,291,281
0.4
1,262,986
594,520
0.4
0.2
390,989
0.1
1,050,000
24,308,631
1,194,193
1,377,465
747,066
509,734
0.3
7.4
0.4
0.4
0.2
0.2
46,547,104 13.5
50,142,099 15.3
2100
2120
2170
2180
2200
2230
2250
2300
2313
2320
2540
2570
2640
2670
3110
3200
3300
3400
3500
Liabilities and Equity
Current liabilities:
Short-term borrowings (note (6)(o))
Current financial liabilities at fair value through profit or loss (note (6)(b))
Notes and accounts payable
Notes and accounts payable to related parties (note (7))
Other payables
Current tax liabilities
Current provisions (note (6)(q))
Other current liabilities
Unearned revenue
Long-term borrowings, current portion (note (6)(f))
Non-Current liabilities:
Long-term borrowings (note (6)(p))
Deferred tax liabilities (note (6)(t))
Non-current net defined benefit liabilities (note (6)(s))
Non-current liabilities
Total liabilities
Equity attributable to parent company shareholders:
Ordinary share (notes (6)(u) and (t))
Capital surplus (note (6)(u))
Retained earnings (note (6)(u))
Other equity interest (note (6)(u))
Treasury shares (note (6)(u))
Total assets
$
347,016,111 100.0
327,925,575 100.0
36XX
Non-controlling interests
Total equity
Total liabilities and equity
December 31, 2016
December 31, 2015
Amount
%
Amount
%
$
43,480,777 12.5
29,481,176
9.0
137,489
-
29,215
-
127,523,732 36.7
127,152,784 38.8
1,958,211
17,853,264
0.6
5.1
3,795,925
1.1
1,842,094
2,899,674
0.5
0.9
1,774,158
0.5
1,473,760
18,141,188
4,196,978
2,388,710
3,929,073
1,747,574
7,966,875
2.3
14,216,617
0.4
5.5
1.3
0.7
1.2
0.5
4.3
209,232,199 60.2
202,757,075 61.7
23,954,688
746,962
7.0
0.2
631,821
0.2
166,626
-
14,356,563
481,497
545,460
186,864
25,500,097
7.4
15,570,384
4.4
0.2
0.2
0.1
4.9
234,732,296 67.6
218,327,459 66.6
44,241,606 12.8
44,711,266 13.6
11,779,274
3.4
12,838,638
3.9
55,289,409 15.9
51,877,511 15.8
(4,624,653) (1.3)
(3,926,881) (1.2)
(881,247) (0.3)
(1,724,739) (0.5)
(5,505,900) (1.6)
(5,651,620) (1.7)
105,804,389 30.5
103,775,795 31.6
6,479,426
1.9
5,822,321
1.8
112,283,815 32.4
109,598,116 33.4
$
347,016,111 100.0
327,925,575 100.0
See accompanying notes to financial statements.
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND ITS SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2016 and 2015
(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)
Net sales revenue (notes (6)(x) and 7)
Cost of sales (notes (6)(h), (s), 7 and 12)
Gross profit
Operating expenses: (notes (6)(r), (s) and 12)
Selling expenses
Administrative expenses
Research and development expenses
Net operating income
Non-operating income and expenses:
Other gains and losses (notes (6)(d), (i), (l) and (z))
Finance costs
Other income (notes (6)(r) and (z))
Miscellaneous disbursements
Impairment loss (notes(6)(d), (e) and (n))
Share of profit of associates and joint ventures accounted for using equity method (note 6(i))
Total non-operating income and expenses
Profit before tax
Less: Tax expense (note (6)(t))
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
Income tax relating to items that will not be reclassified (note 6(t))
Items that will be reclassified subsequently to profit or loss
Items that will be reclassified subsequently to profit or loss
%
2015
2016
Amount
$ 766,810,035 100.0 847,305,698 100.0
733,973,065 95.7 813,927,341 96.1
3.9
4.3
Amount %
32,836,970
33,378,357
5,270,267
4,541,630
11,961,428
21,773,325
11,063,645
0.7
0.6
1.6
2.9
1.4
5,011,950
4,804,295
12,249,660
22,065,905
11,312,452
(1,042,285)
(946,893)
1,961,554
(54,672)
(239,989)
1,071,985
749,700
11,813,345
2,845,339
8,968,006
(0.1)
(0.1)
0.3
-
-
0.1
0.2
1.6
0.4
1.2
(323,839)
(899,702)
1,495,156
(37,562)
(121,574)
367,162
479,641
11,792,093
2,784,946
9,007,147
0.6
0.6
1.4
2.6
1.3
-
(0.1)
0.2
-
-
-
0.1
1.4
0.3
1.1
(97,739)
(1,673)
16,616
(82,796)
-
-
-
-
(93,596)
(794)
15,911
(78,479)
-
-
-
-
Other comprehensive income, before tax, exchange differences on translation of foreign financial
(938,426)
(0.1)
1,766,330
0.2
statement
Other comprehensive income, before tax, available-for-sale financial assets
Gains (losses) on effective portion of cash flow hedges
Share of other comprehensive income of associates and joint ventures accounted for using equity
458,015
(21,360)
(702,159)
-
-
(0.1)
(1,629,927)
21,360
(146,939)
(0.2)
-
-
method
Income tax relating to items that will be reclassified (note 6(t))
Items that will be reclassified subsequently to profit or loss
Other comprehensive income, net
Comprehensive income
Profit, attributable to:
Profit, attributable to parent company shareholders
Profit, attributable to non-controlling interests
Comprehensive income attributable to:
Comprehensive income, attributable to parent company shareholders
Comprehensive income, attributable to non-controlling interests
Earnings per share (note 6(w))
Basic earnings per share
Diluted earnings per share
21,180
(1,182,750)
(1,265,546)
7,702,460
-
(0.2)
(0.2)
1.0
8,130,890
837,116
8,968,006
6,916,562
785,898
7,702,460
1.2
-
1.2
1.0
-
1.0
1.88
1.84
$
$
$
$
$
$
$
(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
-
-
-
1.1
1.1
-
1.1
1.0
-
1.0
2.01
1.97
4000
5000
6100
6200
6300
7020
7050
7190
7590
7670
7770
7900
7950
8300
8310
8311
8320
8349
8360
8361
8362
8363
8370
8399
8300
8500
8610
8620
8710
8720
9750
9850
See accompanying notes to financial statements.
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND ITS SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2016 and 2015
(Expressed in Thousands of New Taiwan Dollars)
Equity attributable to parent company shareholders
Retained earnings
Other equity items
Ordinary
shares
44,232,366
$
Capital
reserves
Legal reserve
Special reserve
14,296,445
15,867,903
-
-
-
-
-
-
-
-
-
-
478,900
-
-
-
-
-
-
-
(2,214,390)
258
28,275
5,824
647,200
75,026
-
-
-
-
-
703,408
-
-
-
-
-
-
-
-
-
44,711,266
12,838,638
16,571,311
-
-
-
-
-
-
-
-
-
(31,500)
-
-
-
-
-
-
-
(885,334)
22
1,723
(40,846)
60,048
-
(438,160)
44,241,606
$
-
(194,977)
11,779,274
-
-
-
868,461
-
-
-
-
-
-
-
-
-
17,439,772
-
(4,568,497)
-
-
-
-
-
-
-
-
3,139,021
-
-
-
60,653
-
-
-
-
-
-
-
Unappropriated
retained earnings
24,146,451
8,684,610
(71,032)
8,613,578
7,707,518
-
-
-
Total retained
earnings
47,721,872
8,684,610
(71,032)
8,613,578
-
-
(4,428,781)
-
-
(703,408)
4,568,497
(4,428,781)
-
-
(14,572)
(15,956)
(14,572)
(15,956)
1,370
1,370
-
-
32,167,179
8,130,890
(74,452)
8,056,438
(868,461)
(60,653)
(4,426,671)
-
(658)
(10,527)
-
-
51,877,511
8,130,890
(74,452)
8,056,438
-
-
(4,426,671)
-
(658)
(10,527)
3,671
3,671
-
-
Exchange
differences on
translation of
foreign
financial
statements
Unrealized
gains (losses)
on
available-for-sa
le financial
assets
(4,317,328)
1,178,307
-
1,624,754
1,624,754
-
-
-
-
-
-
-
-
-
-
2,803,061
-
(1,478,779)
(1,478,779)
-
-
-
-
-
-
-
-
-
(1,693,104)
(1,693,104)
-
-
-
-
-
-
-
-
-
-
(6,010,432)
-
346,602
346,602
-
-
-
-
-
-
-
-
-
-
(5,663,830)
Unearned
employee
benefit and
others
-
-
7,698
7,698
Total other
equity interest
Treasury stock
Total equity
attributable
to owners of
parent
Non-control
ling
interests
(3,139,021)
-
(60,652)
(60,652)
(1,724,739) 101,386,923
8,684,610
(131,684)
8,552,926
-
-
-
4,833,014
322,537
29,714
352,251
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(727,208)
-
-
(719,510)
-
(7,699)
(7,699)
(727,208)
-
-
(3,926,881)
-
(1,139,876)
(1,139,876)
-
-
-
-
-
-
-
-
-
-
-
-
(4,428,781)
(2,214,390)
258
13,703
(10,132)
400,262
75,026
-
(1,724,739) 103,775,795
8,130,890
(1,214,328)
6,916,562
-
-
-
-
-
-
-
-
-
-
-
-
Total equity
106,219,937
9,007,147
(101,970)
8,905,177
-
-
(4,428,781)
(2,214,390)
258
13,703
(10,132)
400,262
75,026
637,056
5,822,321
837,116
(51,218)
785,898
637,056
109,598,116
8,968,006
(1,265,546)
7,702,460
-
-
-
-
-
-
442,104
-
-
-
(285,105)
-
-
-
-
-
-
442,104
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,426,671)
(885,334)
(636)
(8,804)
373,429
60,048
-
-
-
-
-
-
-
-
-
-
(4,426,671)
(885,334)
(636)
(8,804)
373,429
60,048
-
843,492
-
-
(128,793)
-
(128,793)
-
(4,624,653)
(881,247) 105,804,389
6,479,426
112,283,815
-
-
3,199,674
-
(210,355)
34,649,963
-
(210,355)
55,289,409
-
-
1,324,282
Balance at January 1, 2015
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 on ordinary shares
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
Share-based payments transaction
Adjustments of capital surplus for the company's cash
dividends received by subsidiaries
Changes in non-controlling interests
Balance at December 31, 2015
Profit for the year ended December 31, 2016
Comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends on ordinary shares
Cash dividends from capital surplus
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted
for using equity method
Share-based payments transaction
Adjustments of capital surplus for the company's cash
dividends received by subsidiaries
Changes in non-controlling interests
Retirement of treasury share
Balance at December 31, 2016
See accompanying notes to financial statements.
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC. AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2016 and 2015
(Expressed in Thousands of New Taiwan Dollars)
Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation and amortization
Increase (decrease) in allowance for uncollectible accounts
Interest expense
Interest income
Dividend income
Compensation cost of employee share-based payment
Share of profit of associates and joint ventures accounted for using equity method
Loss (gain) on disposal of property, plant and equipment
Loss (gain) on disposal of investments
Impairment loss on financial assets
Long-term prepaid rents
Adjustments to reconcile profit (loss)
Changes in working capital assets and liabilities:
Changes in working capital 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
Other
Total changes in working capital liabilities
Total changes in working capital assets and liabilities
Total adjustments
Cash flows from (used in) operations
Interest received
Dividends received
Interest paid
Income taxes paid
Cash flows from (used in) investing activities:
Net cash flows from (used in) operating activities
2016
2015
$
11,813,345
11,792,093
5,668,112
643,362
946,893
(561,897)
(191,333)
398,302
(1,071,985)
(87,995)
(112,448)
239,989
14,171
5,885,171
(61,028)
(11,651,155)
(306,896)
(1,605,047)
127,598
153,782
(13,342,746)
108,274
953,860
(52,699)
(546,616)
26,584
(607,250)
197,107
79,260
(13,263,486)
(7,378,315)
4,435,030
552,344
313,080
(905,672)
(3,107,120)
1,287,662
5,924,610
64,736
899,702
(599,764)
(237,232)
431,627
(367,162)
(3,560)
20,718
121,574
15,790
6,271,039
158,681
14,112,057
29,017
20,977,572
235,139
(46,752)
35,465,714
(10,223)
(43,388,753)
251,855
313,461
(729,446)
653,199
46,899
(42,863,008)
(7,397,294)
(1,126,255)
10,665,838
597,659
418,826
(938,675)
(1,209,392)
9,534,256
Acquisition of investments accounted for using equity method, available-for-sale financial assets and
(186,052)
(187,700)
financial assets at cost
Proceeds from disposal of investments accounted for using equity method and available-for-sale financial
assets
Redemption from bond investments without active market
Net cash flow from acquisition of subsidiaries
Net cash flow from disposal 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
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
Acquisition of non-controlling interests
Change in non-controlling interests
Other
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
See accompanying notes to financial statements.
345,026
350,000
-
(139,401)
47,695
(3,595,770)
519,243
(579,740)
57,033
(3,181,966)
13,999,601
23,515,000
(20,166,617)
(5,251,957)
(8,643)
(153,961)
(20,238)
11,913,185
180,173
10,199,054
62,751,542
72,950,596
1,718,652
350,000
250,273
-
68,125
(5,492,667)
128,388
(616,124)
(40,682)
(3,821,735)
(17,330,697)
12,930,000
(8,555,354)
(6,568,145)
(13,518)
282,154
22,998
(19,232,562)
1,563,453
(11,956,588)
74,708,130
62,751,542
$
Attachment II
Independent Auditor’s Report
To COMPAL ELECTRONICS, INC.:
Opinion
We have audited the financial statements of COMPAL ELECTRONICS, INC.(“the Company”), which comprise
the statements of financial position as of December 31, 2016 and 2015, and the statements of comprehensive
income, statements of changes in equity and cash flows for the years ended December 31, 2016 and 2015, and
notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of the Company as ofDecember 31, 2016 and 2015, and its financial performance and its cash flows for
the years ended December 31, 2016 and 2015 in accordance with the Regulations Governing the Preparation of
Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audit in accordance with the “Regulations Governing Auditing and Attestationof Financial
Statements by Certified Public Accountants” and the auditing standards generally accepted in the Republic of
China. Our responsibilities under those standards are further described in the section of the Auditor’s
Responsibilities for the Audit of the Financial Statements . We are independent of the Company in accordance
with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and other
ethical responsibilities in accordance with the Code have been fulfilled. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
1. Account receivable valuation
Please refer to Note (4)(f) and Note (5) for the accounting policy of accounts receivable, as well as the
estimation and assumption uncertainty of the valuation of accounts receivable, respectively. Information of
account receivable valuation are disclosed in Note (6)(e) of the parent company only financial statements.
Description of key audit matters:
The Company devotes to develop new product lines and customers in emerging countries, and the credit risks
of these customers are higher than other world leadingenterprises. Therefore, valuation of accounts receivable
has been identified as a key audit matter.
Our key audit procedures performed in report of the above area included the following:
In order to evaluate the reasonableness of the Company’s estimations for bad debts, our key audit procedures
included analyzing the aging of accounts receivable, examining the historical recovery records, and the
current credit status of customers, as well as inspecting the amount collected in the subsequent period.
2. Provision of sales returns and allowances
Please refer to Note (4)(o) and Note (5) for the policy of the estimation of sales returns and allowance
provisions, as well as the estimation and assumption uncertainty of sales returns and allowances provisions,
respectively. Information on sales returns and allowances provisions are disclosedin Note (6)(m) of the
parent company only financial statements.
Description of key audit matters:
Part of the sales need to provide allowance and return to the customers, and the estimation of the above items
affects the net sales. Since the said matter is subject to management's judgment, the rationality of the basis
is one of the key audit matters.
Our key audit procedures performed in report of the above area included the following:
Our key audit procedures included reviewing the appropriateness of accounting policy and disclosure of
provision for sales return and allowance, and evaluating the historical accuracy of the estimation of sales
return and allowance, as well as evaluating the appropriateness of estimation in the following year. In
addition, to evaluate if there is a significant misstatement, we analyzed the trend of sales by main customers
and by products to compare with the changes of provision of sales returns and allowances.
3. Inventory valuation
Please refer to Note (4)(g) and Note (5) for the accounting policy of inventory valuation, as well as the
estimation and assumption uncertainty of the valuation of inventory, respectively. Information of estimation
of the valuation of inventory are disclosedin Note (6)(f) of the parent company only financial statements.
Description of key audit matters:
The inventory is measured at the lower of cost or net realizable value. The short life cycle of electronic
products may cause significant changes in customers’ demand and sales of related products. Consequently,
the book value of inventory may be lower than the net realizable value of inventory. Therefore, the valuation
of inventory is one of the key audit matters.
Our key audit procedures performed in report of the above area included the following:
In order to verify the rationality of assessment of inventory valuation estimated by the Company, our key
audit procedures included reviewing the consistency of accounting policy, inspecting the Company’s
inventory aging reports, analyzing the change of inventory aging, as well as verifying the inventory aging
reports and the calculation of lower of cost or net realizable value.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal
control as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the auditing standards generally accepted in the Republic of China will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the parent companyonlyfinancial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in
other entities accounted for using the equity method to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the audit. We remain solely responsible for our
audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be consideredto bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the parent companyonlyfinancial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report, unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditor’s report are Kuan-Ying Kuo and
Yiu-Kwan Au.
KPMG
Taipei, Taiwan (Republic of China)
March 28, 2017
Notes to Readers
The accompanying financial statements are intended only to present the statement of financial position, financial performance and its cash
flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other
jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the
Republic of China.
The auditor’s report and the accompanying 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
auditor’s report and financial statements, the Chinese version shall prevail.
Assets
Current assets:
Cash and cash equivalents
Current available-for-sale financial assets
Current bond investments without active market
Notes and accounts receivable, net
Notes and accounts receivable due from related parties, net
Other receivables
Inventories
Other current assets
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
1100
1125
1147
1170
1180
1200
1310
1470
1550
1523
1543
1546
1600
1780
1840
1990
(English Translation of Financial Statements and Report Originally Issued in Chinese)
Compal Electronics, Inc.
Consolidated Balance Sheets
December 31, 2016 and 2015
(Expressed inNew Taiwan Dollars)
December 31, 2016
Amount
%
December 31, 2015
%
Amount
$
43,392,135 13.2
30,797,312 10.4
48,631
-
29,738
-
350,000
0.1
350,000
0.1
162,701,780 49.5
148,844,537 50.2
2,177,705
0.7
314,439
0.1
973,946
553,185
27,969,011
8.5
25,344,975
458,714
0.1
603,115
0.3
0.3
8.6
0.2
237,412,415 72.2
207,496,808 70.1
80,626,717 24.5
78,006,762 26.3
6,349,202
1.9
5,970,903
2.0
2,333
-
6,588
-
700,000
0.2
2,132,114
0.8
268,316
0.1
1,050,000
2,181,737
378,454
1,012,590
0.3
1,042,365
0.4
0.7
0.1
0.4
117,233
-
105,422
-
91,208,505 27.8
88,742,231 29.9
Liabilities and Equity
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 liabilities, current portion
Non-Current liabilities:
Long-term borrowings
Deferred tax liabilities
Non-current net defined benefit liabilities
Other non-current liabilities
Total liabilities
Equity attributable to parent company shareholders:
Ordinary share
Capital reserves
Retained earnings
Other equity items
Treasury stock
Total equity
2100
2170
2180
2200
2230
2250
2300
2313
2320
2540
2570
2640
2670
3110
3200
3300
3400
3500
December 31, 2016
Amount
%
December 31, 2015
%
Amount
$
30,443,750
9.3
22,087,200
7.5
72,535,568 22.0
63,996,915 21.6
73,903,066 22.5
62,361,931 21.1
7,725,946
2.4
1,024,690
0.3
1,532,250
0.5
926,734
0.3
8,957,625
2,200,353
2,034,677
428,602
1,774,158
0.5
1,747,574
7,700,000
2.3
13,850,000
3.0
0.7
0.7
0.1
0.6
4.7
197,566,162 60.1
177,664,877 60.0
23,635,000
7.2
13,740,000
699,875
0.2
541,693
0.2
373,801
0.1
4.6
0.2
0.2
448,762
469,846
139,759
-
25,250,369
7.7
14,798,367
5.0
222,816,531 67.8
192,463,244 65.0
44,241,606 13.5
44,711,266 15.1
11,779,274
3.6
12,838,638
4.3
55,289,409 16.8
51,877,511 17.5
(4,624,653) (1.4)
(3,926,881) (1.3)
(881,247) (0.3)
(1,724,739) (0.6)
105,804,389 32.2
103,775,795 35.0
Total assets
$
328,620,920 100.0
296,239,039 100.0
Total liabilities and equity
$
328,620,920 100.0
296,239,039 100.0
(English Translation of Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC.
Statements of Comprehensive Income
For the years ended December 31, 2016 and 2015
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)
2016
2015
4000
5000
5910
6100
6200
6300
7020
7050
7190
7370
7900
7950
8300
8310
8311
8330
Net sale 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, net
Finance costs
Other income
Share of profit of subsidiaries, 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 subsidiaries, associates and joint ventures accounted for
using equity method that will not be reclassified subsequently to profit or loss
8349
Income tax relating to items that will not be reclassified
Items that will not be reclassified subsequently to profit or loss
Items that maybe reclassified subsequently to profit or loss
%
Amount %
Amount
$ 725,653,095 100.0 802,994,930 100.0
704,371,443 97.1 780,260,207 97.2
2.8
2.9
-
-
2.8
2.9
21,281,652
481
21,281,171
22,734,723
(2,867)
22,737,590
4,060,832
2,395,657
8,851,828
15,308,317
5,972,854
0.6
0.3
1.2
2.1
0.8
3,798,280
2,581,758
9,052,274
15,432,312
7,305,278
(581,031)
(719,294)
933,004
3,766,213
3,398,892
9,371,746
1,240,856
-
(0.1)
0.1
0.5
0.5
1.3
0.2
261,589
(604,735)
786,958
2,413,800
2,857,612
10,162,890
1,478,280
0.5
0.3
1.1
1.9
0.9
-
-
0.1
0.3
0.4
1.3
0.2
8,130,890
1.1
8,684,610
1.1
(82,021)
(6,375)
13,944
(74,452)
-
-
-
-
(79,571)
(4,988)
13,527
(71,032)
-
-
-
-
8360
8361
8362
8380
Other comprehensive income, before tax, exchange differences on translation of foreign financial
(1,004,076)
(0.1)
2,011,139
0.2
statements
Other comprehensive income, before tax, available-for-sale financial assets
Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for
362,179
(521,847)
-
-
(1,695,723)
(357,582)
(0.2)
-
using equity method that maybe reclassified subsequently to profit or loss
8399
Income tax relating to items that maybe reclassified
Items that maybe reclassified subsequently to profit or loss
8300
8500
9750
9850
Other comprehensive income, net of tax
Total comprehensive income
Earnings per share:
Basic earnings per share
Diluted earnings per share
23,868
(1,139,876)
(1,214,328)
6,916,562
-
(0.1)
(0.1)
1.0
(18,486)
(60,652)
-
-
(131,684)
8,552,926
-
1.1
1.88
1.84
2.01
1.97
$
$
$
(English Translation of Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC.
Statements of Changes in Equity
For the years ended December 31, 2016 and 2015
(Expressed in Thousands of New Taiwan Dollars)
Retained earnings
Other equity items
Legal reserve
15,867,903
Special
reserve
Total retained
earnings
Unappropriated
retained earnings
24,146,451
8,684,610
(71,032)
8,613,578
Balance onJanuary 1, 2015
Profit for the year ended December 31, 2015
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Reversal of special reserve
Cash dividends on ordinary shares
Cash dividends from capital surplus
Difference between consideration and carrying amount arising from acquisition or
disposal of subsidiaries
Ordinary
shares
44,232,366
$
-
-
-
-
-
-
-
-
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted for using equity method
Share-based payments transaction
Adjustments of capital surplus for the Company’s cash dividends received by
-
-
478,900
Capital
reserves
14,296,445
-
-
-
-
-
-
(2,214,390)
258
28,275
5,824
647,200
subsidiaries
Balance onDecember 31, 2015
Profit for the year ended December 31, 2016
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends on ordinary shares
Cash dividends from capital surplus
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted for using equity method
Share-based payments transaction
Adjustments of capital surplus for the Company's cash dividends received by
subsidiaries
Retirement of treasury share
Balance onDecember 31, 2016
$
-
44,711,266
75,026
12,838,638
-
-
-
-
-
-
-
-
-
(31,500)
-
-
-
-
-
-
(885,334)
22
1,723
(40,846)
-
-
-
703,408
-
-
-
-
-
-
-
-
16,571,311
-
-
-
868,461
-
-
-
-
-
-
7,707,518
-
-
-
-
(4,568,497)
-
-
-
-
-
-
-
3,139,021
-
-
-
60,653
-
-
-
-
-
-
-
(438,160)
44,241,606
60,048
(194,977)
11,779,274
-
-
17,439,772
-
-
3,199,674
Exchange
differences on
translation of
foreign
financial
statements
Unrealized
gains
(losses) on
available-for-
sale financial
assets
(4,317,328)
47,721,872
8,684,610
(71,032)
8,613,578
-
-
(4,428,781)
-
-
(14,572)
(15,956)
1,370
-
51,877,511
8,130,890
(74,452)
8,056,438
-
-
(4,426,671)
-
(658)
(10,527)
3,671
-
(210,355)
55,289,409
1,178,307
-
1,624,754
1,624,754
-
-
-
-
-
-
-
-
-
2,803,061
-
(1,478,779)
(1,478,779)
-
-
-
-
-
-
-
-
-
1,324,282
-
(1,693,104)
(1,693,104)
-
-
-
-
-
-
-
-
-
(6,010,432)
-
346,602
346,602
-
-
-
-
-
-
-
-
-
(5,663,830)
(703,408)
4,568,497
(4,428,781)
-
-
(14,572)
(15,956)
1,370
-
32,167,179
8,130,890
(74,452)
8,056,438
(868,461)
(60,653)
(4,426,671)
-
(658)
(10,527)
3,671
-
(210,355)
34,649,963
Total other
equity
interest
(3,139,021)
-
(60,652)
(60,652)
Others
-
-
7,698
7,698
-
-
-
-
-
-
-
(727,208)
-
(719,510)
-
(7,699)
(7,699)
-
-
-
-
-
-
442,104
-
-
(285,105)
-
-
-
-
-
-
-
(727,208)
-
-
(1,139,876)
(1,139,876)
-
-
-
-
-
-
442,104
-
-
(4,624,653)
Treasury
stock
(1,724,739)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total equity
101,386,923
8,684,610
(131,684)
8,552,926
-
-
(4,428,781)
(2,214,390)
258
13,703
(10,132)
400,262
75,026
103,775,795
8,130,890
(1,214,328)
6,916,562
-
-
(4,426,671)
(885,334)
(636)
(8,804)
373,429
-
843,492
(881,247)
60,048
-
105,804,389
(3,926,881)
(1,724,739)
Note:Employees’ compensation amounting to $876,028 and $949,980 and directors’ compensation amounting to $46,323 and $50,234 were recognized in the statements of comprehensive income for the years ended December 31, 2016 and 2015, respectively.
(English Translation of Financial Statements and Report Originally Issued in Chinese)
COMPAL ELECTRONICS, INC.
Statements of Cash Flows
For the years ended December 31, 2016 and 2015
(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
Finance costs
Interest income
Dividend income
Compensation cost arising fromshare-based payment transaction
Share of profit of subsidiaries,associates and joint ventures accounted for using equity method
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 other receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
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
Others
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:
Redemption from bond investment without active market
Acquisition of investments accounted for using equity method and available-for-sale financial assets
Proceeds from disposal of investments accounted for using equity method and available-for sale
financing assets
Proceeds from capital reduction and liquidation of investments
Acquisition of property, plant and equipment
Decrease (Increase) in other receivables due from related parties
Acquisition of intangible assets
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
Others
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
2016
2015
$
9,371,746
10,162,890
609,655
714,682
719,294
(119,754)
(133,485)
373,429
(3,766,213)
-
13,403
(1,588,989)
-
(15,775,684)
175,486
(2,624,036)
144,401
(18,079,833)
20,079,788
(1,220,679)
(502,427)
26,584
498,132
(9,738)
18,871,660
791,827
(797,162)
8,574,584
110,209
359,324
(730,294)
(2,097,820)
6,216,003
698,496
27,627
604,735
(153,268)
(170,537)
400,262
(2,413,800)
(405,885)
32,000
(1,380,370)
114,111
19,681,148
(150,363)
16,183,878
(80,932)
35,747,842
(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)
350,000
(303,702)
350,000
(1,023,451)
-
1,489,852
25,630
(159,703)
(20,939)
(290,200)
(11,811)
(410,725)
8,356,550
23,515,000
(19,770,000)
(5,312,005)
-
6,789,545
12,594,823
30,797,312
43,392,135
51,520
(153,958)
27,733
(470,768)
17,144
288,072
(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
$
Compal Electronics, Inc.
Chairman: Sheng-Hsiun Hsu (Rock Hsu)
Chief Executive Officer (CEO): Jui-Tsung Chen (Ray Chen)