Stock Code: 2324
Compal Electronics, Inc.
2019 Annual Report
Notice to readers
This English version annual report is a translation of the Mandarin version. This document is
created for the sole purpose of the convenience for its non-Mandarin readers and is not an official
document to represent the financial status of the Company per Taiwan laws. Should any
discrepancy arise between the English and Mandarin versions, the Mandarin version shall prevail.
Taiwan Stock Exchange Market Observation Post System:
http://newmops.twse.com.tw
The Company's Annual Report is available at:
http://www.compal.com
Printed on May 13, 2020
I.
Spokesperson
Spokesperson: Ching-Hsiung Lu/Vice President
Deputy Spokesperson: Cheng-Chiang Wang /Vice President 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 City
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 Taiwan
Auditors: Chien, Szu Chuan 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
4
I. Letter to Shareholders
II. Company Profile
6
6
2.1 Date of Incorporation
2.2 Company History
III. Corporate Governance Report
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 Replacement of CPA
3.6 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
3.7 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders
3.8 Relationship among the Top Ten Shareholders
3.9 Ownership of shares in Affiliated Enterprises
IV. Capital Overview
4.1 Capital and Shares
4.2 Bonds
4.3 Preferred shares
4.4 Global Depository Receipts
4.5 Employee Warrants
4.6 Subscription of New Shares by Employees and Restricted Shares
4.7 New Share Issuance in Connection with Mergers and Acquisitions
4.8 Financing Plans and Implementation
8
10
33
94
95
95
95
98
99
101
106
107
108
110
110
110
110
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
111
132
152
153
153
156
2
VI. Financial Information
157
161
165
166
166
166
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 (Attachment I)
6.5 Parent-Company-Only Financial Statements and Independent Auditors’ Report (Attachment II)
6.6 Status of financial difficulties for the Company and its subsidiaries
VII. Review of Financial Position, Operating Results, and Risk Management
167
168
169
169
170
171
176
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
7.6 Analysis of Risk Management
7.7 Other material issues
VIII. Special Disclosure
177
205
205
205
205
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 Other supplementary notes, where applicable
8.5 Events with Significant Impacts
Attachment
I
II
Consolidated Financial Statements and Independent Auditors’ Report
Parent-Company-Only Financial Statements and Independent Auditors’ Report
3
I. Letter to Shareholders
Dear shareholders,
2019 has been a year of many challenges. With the gloomy economy, global GDP experienced slow growth.
Although the growth of Taiwan’s GDP maintained stable, the US-China trade dispute has significantly
disrupted the global supply chain system, posing a sense of uncertainty among industry. In the face of
challenges in our industry, the business of Compal has remained steady and we have delivered a number of
decent results, continuing to build a strong foundation for future development. We would like to present the
following summary of our financial and operational results for last year and the business outlook for this year:
2019 Financial Performance
Compal’s 2019 consolidated revenue came to NT$980,442 million, up NT$12,736 million or 1% from the
previous year. The total overall shipping volume of 5C related electronic products reached 92 million units,
an increase of 9 million units with an annual growth of 11%. Thanks to the collaborative efforts from all
Compal employees to continue to improve product service value and focus on profitability, the 2019
consolidated operating profit totaled NT$10,586 million which translates to an increase of 14%. With non-
operating income and income tax accounted for, the net profit attributed to the parent company came to
NT$6,956 million, with the EPS at NT$1.60.
Core Business and Technology Development
In terms of business development, Compal’s Notebook PC business has continued to rank as the world’s
number 1 in the industry, accounting for 25% of global market share. Under the successful cultivation of
technology as well as customers, diversified products including servers, wearables and auto electronic parts
have more than doubled in 2019. With the stronger demand, Compal’s AIOT business, in which we have been
a leader in its long-term planning, has also shown the decent growth momentum. We believe that, with the
integration of AI and 5G technologies in the future, our AIOT business will keep accelerating, gaining even
more development opportunities. Furthermore, since 2015, we have continued to invest in and planned the
layout of our new field “Smart Medical and Healthcare”. Up to now, we have invested in more than ten
medical technology new ventures and have accumulated a large amount of knowledge through various
collaborations of external resources. The non-Notebook PC business has contributed 34% to the Company’s
revenue in 2019, up 2% compared to the previous year. We aim to achieve our goals at a steady but firm
pace.
Production Diversification and Smart Manufacturing
From the US-China trade disputes starting in 2018 to the recent novel coronavirus (COVID-19) outbreak in
the beginning of this year, the demand for production diversification and smart manufacturing seems to have
come to a new inflection point. Although the global supply chain may appear chaotic, it also poses as a
beginning of a new era. To fulfill customers’ demand, we have conducted strategic capacity relocation in 2019
for various customers simultaneously, including investing in Taiwan and reestablishing and expanding
4
production sites in Vietnam. We will also continue to invest in smart manufacturing and automation
equipment. Meanwhile, we have pro-actively recruited talents and teams from the industry, combined with
supply chain logistic planning, to cope with this new era.
Corporate Governance and Sustainability
The business philosophy of “sustainability” allows Compal to be widely recognized by the world in terms of
environment, society and corporate governance. In 2019, Compal was once again honored to receive "Taiwan
Corporate Sustainability Awards" from Taiwan Institute for Sustainable Energy and has maintained its ranking
in the top 6%-20% among Taiwanese listed companies during the latest "Corporate Governance Evaluation"
on the Taiwan Stock Exchange (TWSE). We have also been selected as an index constituent of FTSE4Good
Index for a number of years. In the “2019 Happy Enterprise Award” poll organized by a top job bank, Compal
have gained the honor of being voted as one of the top 20 in Taiwan’s technology industry, indicating how
much we value our talents and how essential they are to the growth of our sustainability and smart
transformation.
2020 Business Outlook
Looking ahead, changes in the global economy and industry still pose many uncertainties to lead year 2020
to be another challenging year. We believe volatilities may become a new normality for enterprises. With the
decent results of last year, other than staying on top of the industry, we must accelerate the diversification
on our product portfolio, production and supply chain. In the meantime, we believe that only by establishing
a solid foundation of technology, operation and finance, can we face future uncertainties with flexibility.
Therefore, in respect to technology, AI, 5G and Cloud will be the key focus, so that Compal is able to expand
the business not only with the quantity increase but also with the quality enhancement, creating more value
for customers. For operation, we will continue to enforce digitalization and automation, aiming to be a
leading manufacturer in smart manufacturing. With regards to finance, based on our solid financial structure
fundamental, we will keep the balance between the business growth as well as the long-term shareholders’
returns, so that our company can readily face and manage the risks brought by the industry fluctuations.
Once again, we sincerely appreciate shareholders’ long-term support and advice for Compal and wish you a
peaceful and prosperous year ahead.
Sincerely,
Chairman: Sheng-Hsiung Hsu (Rock Hsu)
CEO: Chung-Pin Wong (Martin Wong)
Head of Accounting: Cheng-Chiang Wang (Jack Wang)
5
II. Company Profile
2.1
Date of Incorporation: June 1, 1984
2.2
Company History
■ Company history in the past two years:
2018
•
•
•
•
•
•
•
•
•
•
•
2019
•
•
•
•
•
•
•
•
•
•
•
Won 11 awards at the 2018 “iF design” awards and ranked 18th in Global Innovation.
Selected to take part in the CDP climate change program for four consecutive years (2014-2017) and
received an overall CDP rating of B at the Management Level in 2017.
Ranked within the top 6%~20% of TWSE-listed companies in the “4th Round of Corporate Governance
Evaluations” by TWSE
Chairman Rock Hsu received the Economic Profession Medal (First Rank).
Ranked 6th in CommonWealth Magazine’s “Top-2000 Manufacturers."
Ranked 59th in CommonWealth Magazine’s “Cross-strait Top 1000 Survey."
Ranked 404th on the Fortune Global 500.
Ranked 1500th on the Forbes Global 2000.
Received Taiwan Corporate Sustainability Report Awards at the “2018 TCSA” – ICT Manufacturing –
The Platinum Medal.
The Company’s share capital reached NTD 44.1 billion in 2018.
The Company earned NTD 967.7 billion in consolidated revenues in 2018.
Won 13 awards at the 2019 “iF design” awards and ranked 17th in Global Innovation. Ranked World
Design Index - TOP 3 Taiwan, Top 10 Asia, Top 10 Computer, and Top 25 Companies 2015~2019
Selected to take part in the CDP climate change program for five consecutive years (2014-2018) and
received an overall CDP rating of B- at the Management Level for 2018.
Ranked within top the 6%~20% TWSE-listed companies of the “5th Round of Corporate Governance
Evaluations” by TWSE.
Ranked 6th in CommonWealth Magazine’s “Top-2000 Manufacturers."
Ranked 62nd in CommonWealth Magazine’s “Cross-strait Top 1000 Survey."
Won the Platinum Medal of 2019 Taiwan Corporate Sustainability Report Award of TCSA.
Selected into the FTSE4GOOD Index for four consecutive years and in
the FTSE4GOOD TIP Taiwan ESG Index for the second consecutive years .
Ranked 390th on the Fortune Global 500.
Ranked 1463th on Forbes Global 2000.
Top 20 of 2019 Happiness Enterprise online voting by 1111 Human resource agency.
6
•
•
2020
•
•
•
The Company’s share capital reached NTD 44.1 billion in 2019.
The Company earned NTD 980.4 billion in consolidated revenues in 2019.
Won 18 honors at the 2020 “iF design awards” and a third consecutive Gold Award. Ranked 11th in
the iF Global Innovation Companies Ranking.
Selected to take part in the CDP climate change program for 6 consecutive years (2014-2019) and
received an overall CDP rating of B- at the Management Level for 2019.
Ranked within top the 6%~20% TWSE-listed companies of the “6th Round of Corporate Governance
Evaluations” by TWSE.
■ Any changes to the management rights, significant changes of the management mode or business
content, and other important matters that can affect shareholders' equity and their impact on the
Company in the most recent year and up to the date of printing of the annual report: None.
7
3.1
Organization
3.1.1 Organizational Chart (As of Jan 1, 2020)
Shareholders
Board of Directors
President Office
Remuneration
Committee
Audit
Committee
Personnel Evaluation Committee
Investment Planning & Management
Office
Legal Affairs Office
Insider Trading Prevention Office
Auditing Office
Top Management Committee
Digital Transformation Committee
Green Sustainability Office
Corporate Social
Responsibility Office
Occupational Safety & Health Office
P
C
B
G
P
C
O
B
G
G
O
B
G
S
D
B
G
H
R
&
A
D
M
G
r
o
u
p
A
c
c
o
u
n
t
i
n
g
G
r
o
u
p
8
3.1.2 Major Corporate Functions
Department
Functions
President’s Office
Responsible for the Company’s operation
Investment Planning &
Management 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
Occupational Safety & Health
Office
PCBG
GOBG
SDBG
PCOBG
Implements preventive measures against insider trading
Promotes and executes CSR-related affairs
Implementing a comprehensive occupational health and safety program
Responsible for the R&D, production, quality control and the sale of PC products
Responsible for production, quality control, and worldwide operation affairs
Responsible for the R&D, production, quality control, and the sale of smart
devices
Responsible for production and quality control of NB Products
Accounting Group
Handles accounting, share administration, and funding affairs
HR & Administration Group
Responsible for human resource, training, education, employee relations,
general affairs, and building management
9
3.2
Directors and Management Team
3.2.1 Directors
Title
Name/
Nationality/Gender
(Note 1, 2)
Elected
Date
Term
First
Elected
Date
Shareholding as of elected
date
Current shareholding
Shares held by spouse and
underage children
Current shareholding
Shares held by proxy
Major career (academic)
achievements
April 21, 2020
Spouse or relatives of second degree or
closer acting as Directors, Supervisors, or
department heads
Selected
Current
Positions
held
concurrent
ly in the
company
and/or any
other
companies
Shareholding
Shareholding
Shareholding
Shareholding
Shares
Percentage
Shares
Percentage
Shares
Percentage
Shares
Percentage
Title
Name
Relationship
(%)
(%)
(%)
(%)
Chairman
Sheng-Hsiung Hsu
2018.6.22
1984.04.16
8,975,401
0.20%
8,975,401
0.20%
17,107,025
0.39%
0
0.00%
3
years
3
years
Vice
Chairman
Director
Director
Jui-Tsung Chen
2018.6.22
1992.04.30
35,352,587
0.80%
35,352,587
0.80%
1,069,405
0.02%
Binpal Investment
Co., Ltd.
Representative: Wen-
Being Hsu
Kinpo Electronics,
Inc.
Representative: Shyh-
Yong Shen
2018.6.22
3
years
2018.6.22
3
years
2018.6.22
5,000,000
0.11%
5,000,000
0.11%
1984.04.16
4,000,000
0.09%
5,000,000
0.11%
1990.06.22 151,628,692
3.43%
151,628,692
3.44%
2012.03.14
0
0.00%
0
0.00%
-
0
-
0
-
0.00%
-
0.00%
0
0
0
0
0
0.00%
0.00%
0.00%
0.00%
0.00%
Director
Charng-Chyi Ko
2018.6.22
3
years
1984.04.16
7,896,867
0.18%
7,896,867
0.18%
30,645
0.00%
0
0.00%
Director
Sheng-Chieh Hsu
2018.6.22
3
years 1997.05.29
9,119,297
0.21%
8,714,297
0.20%
8,152,928
0.18%
(Note 3)
(Note 3)
10
Honorary Doctorate, National
Taiwan Normal University
Chairman of Kinpo and
Compal Electronics, Inc.
Honorary Doctorate, National
Cheng Kung University
Chairman of Compal
Communication Inc. &
Arcadyan Technology Corp.
National Tao-Yuan Sr.
Vocational Agricultural &
Industrial School
Director of BAOTEK, Inc.
MBA, University of Southern
California, USA, Ph.D, Law,
Whittier Law School, USA
Director and President of
Kinpo Electronics Inc.
National Taiwan University
College of Management
PhD, Lincoln University,
USA
Chairman and President of
Taiwan Biotech Co., Ltd.
Department of Architecture,
Tam-Kang University
Managing Director of Kinpo
Electronics Inc.
(Note 4)
Director
Director
Sheng-
Chieh Hsu
Shyh-Yong
Shen
Brothers
Father and son
in law
(Note 4) N/A
N/A
N/A
(Note 4) N/A
N/A
N/A
(Note 4) Chairman
Sheng-
Hsiung Hsu
Father and son
in law
(Note 4) N/A
N/A
N/A
(Note 4) Chairman
Sheng-
Hsiung Hsu
Brothers
Director
Yen-Chia Chou
2018.6.22
Director
Chung-Pin Wong
2018.6.22
Director
Chiung-Chi Hsu
2018.6.22
Director
Ming-Chih Chang
2018.6.22
Director
Anthony Peter
Bonadero
2018.6.22
Director
Sheng-Hua Peng
2018.6.22
Independent
Director
Min-Chih Hsuan
2018.6.22
Independent
Director
Duei Tsai
2018.6.22
Independent
Director
Duh-Kung Tsai
2018.6.22
3
years
3
years
3
years
3
years
3
years
3
years
3
years
3
years
3
years
1987.06.13 8,022,874
0.18%
8,022,874
0.18%
2,502,768
0.06%
0
0.00%
2007.06.15 6,618,618
0.15%
6,618,618
0.15%
1,398
0.00%
0
0.00%
1994.04.23 2,000,731
0.05%
2,117,731
0.05%
30,000
0.00%
0
0.00%
2018.6.22
1,919,489
0.04%
1,919,489
0.04%
0
0.00%
2018.6.22
0
0.00%
0
0.00%
0
0.00%
0
0
0.00%
0.00%
2018.6.22
835,000
0.02%
835,000
0.02%
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%
2012.6.22
0
0.00%
0
0.00%
0
0.00%
0
0.00%
Department of Geosciences,
National Taiwan University
Supervisor of Kinpo
Electronics Inc.
Graduate Institute of
Management Science,
National Chiao Tung
University
Chairman of Compal
Broadband Networks, Inc.
Master’s Degree, Golden Gate
University, San Francisco,
USA
Director of I PAO Bearing
Co., Ltd.
Master’s degree in San
Francisco Golden Gate
University.
Director of Mactech Co., Ltd.
Texas A&M University
EVP of Auscom Engineering
Inc.
Graduate Institute of
Electronics Engineering of
National Taiwan University
Director of Arcadyan
Technology Corp.
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 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
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
Note: 1. All directors are male; except for Anthony Peter Bonadero who is a U.S. citizen, the remaining are ROC nationals.
2. The Chairman, Chief Strategy Officer and President of the Company are not the same person, spouses, or related to each other.
3. Director Sheng-Chieh Hsu held 3,041,000 shares (0.08%) through proxies.
11
4. Selected Current Positions as below:
Title
Name
Chairman
Sheng-
Hsiung Hsu
Vice
Chairman
Jui-Tsung
Chen
Selected Current Positions
Chairman: Kinpo Electronics, Inc., AcBel Polytech Inc., Cal-Comp Electronics(Thailand) Public Company Limited, Teleport Access Services, Inc., AcSacca Solar Energy
Co., Ltd., Cal-Comp Electronics And communications Co., Ltd., Gempal Technology Corp., Panpal Technology Corp., Hong Ji Capital Co., Ltd., Hong Jin
Investment Co., Ltd., Jipo Investment Inc., Kinpo Group Management Consultant Company, NTNU Innovation Investment Holding Company, Compal
Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Compal
Digital Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal Electronics (ChongQing) Co., Ltd., Compal Electronics, (China)
Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Kunshan Botai Electronics Co., Ltd., Compal
Smart Device (Chongqing) 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: 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 Communications (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 Holdings 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 Holdings A
Co., Ltd., HengHao Holdings B Co., Ltd., HengHao Trading Co., Ltd., High Shine Industrial Corp., Intelligent Universal Enterprise Ltd., Jenpal
International Ltd., Just International Ltd., Kinpo 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.
President: Kinpo Group Management Consultant Company
Other: Honorary Chairman of Chinese National Federation of Industries, Honorary Chairman of Importers and Exporters Association of Taipei, Chairman of
The Third Wednesday Club-, Policy Consultant of Taiwan Electrical and Electronic Manufacturers’ Association, Chairman of China Productivity Center,
Vice Chairman of Straits Exchange Foundation, Vice Chairman of Sinocon Industrial Standards Foundation, Managing Director of Taiwan Design
Research Institute, Director of Management Institute in Taipei
Chairman: Arcadyan Technology Corporation, Ripal Optotronics Co., Ltd., Palcom International Corporation, General Life Biotechnology Co., Ltd., Raycore Biotech
Co., Ltd., Arce Therapeutics, Inc., Rally Biopharma Co., Ltd., UniCore Biomedical Co., Ltd., Aco Smartcare Co.,Ltd., Ray-Kwong Medical Management
Consulting Co., Ltd., Compal System Trading (Kunshan) Co., Ltd.
Director: Kinpo Electronics, Inc., Compal Broadband Networks, Inc., HengHao Technology Co. Ltd., Mactech Co., Ltd., Gempal Technology Corp., Panpal
Technology Corp., Unicom Global, Inc.,Hong Ji Capital Co., Ltd., Hong Jin Investment Co., Ltd., Kinpo Group Management Consultant Company,
Compal Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd.,
Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics (Chengdu) Co., Ltd., Compal Electronics (ChongQing) Co., Ltd., Compal Electronics,
(China) Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal Networking (Kunshan) Co.,
Ltd., Kunshan Botai Electronics Co., Ltd., Compal Smart Device (Chongqing) 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 Holdings Ltd., Compalead Electronics B.V., Core Profit Holdings Limited, Etrade
12
Title
Name
Selected Current Positions
Management Co., Ltd., Flight Global Holding Inc., Forever Young Technology Inc., Fortune Way Technology Corp., Giant Rank Trading Ltd., Goal Reach
Enterprises Ltd., High Shine Industrial Corp., Intelligent Universal Enterprise Ltd., Jenpal International Ltd., Just International Ltd., Prospect Fortune
Group Ltd., Prisco International Co., Ltd., Smart International Trading Ltd., Sinoprime Global Inc., Wah Yuen Technology Holding Ltd., Webtek
Technology Co., Ltd.
Chief Strategy Officer: Compal Electronics, Inc.
President: Gempal Technology Corp., Panpal Technology Corp., Hong Ji Capital Co., Ltd., Hong Jin Investment Co., Ltd.
Director
Director
Representative
of Binpal
Investment
Co., Ltd.: Wen-
Being Hsu
Kinpo
Electronics
Inc.
Director
Representative
of Kinpo
Electronics
Inc.: Shyh-Yong
Shen
Director
Charng-
Chyi Ko
Chairman: Binpal Investment Co., Ltd.
Director: AcBel Polytech Inc., CastleNet Technology Inc., Teleport Access Services, Inc., Crownpo Technology Inc., Cal-Comp Biotech Co., Ltd., iHELPER Inc., Cal-
Comp Big Data, Inc., XYZprinting, Inc., Norm Pacific Automation Corp., Kinpo Group Management Consultant Company, Cal-Comp Asset Management,
Inc., Jipo Investment Inc., PK Venture Capital Corp., Prudence Venture Investment Corp., NTNU Innovation Investment Holding Company
Supervisor: Cal-Comp Biotech Co., Ltd., Jipo Investment Inc.
Chairman: CastleNet Technology Inc., Cal-Comp Biotech Co., Ltd., QBit Semiconductor Ltd., New Era AI Robotic Inc., iHELPER Inc., Cal-Comp Big Data, Inc.,
XYZprinting, Inc., Dongguan Kaipo Electronics Co., Ltd., Cal-Comp Optical Electronics (Suzhou) Co., Ltd., Cal-Comp Technology (Suzhou) Co., Ltd., Cal-
Comp Electronics and Communications (Suzhou) Co., Ltd., Cal-Comp Optical Electronics (Yueyang) Co., Ltd. Yueyang, ICKP (Beijing) Technology
Development Co., Ltd., CastleNet Technology Inc (Kunshan)., XYZprinting (Shanghai) cloud technology Co.,Ltd., XYZprinting (suzhou) Co., Ltd., Cal-
Comp Precision (Yueyang) Co., Ltd., Cal-Comp Precision (Wujiang) Co., Ltd., Cal-Comp Precision (Dongguan) Co., Ltd., Cal Comp (Malaysia) SDN. BHD.,
Cal-Comp Electronics de Mexico Co. S.A. de C.V., Cal-Comp Precision (Philippines), Inc., Cal-Comp Technology (Philippines), Inc., Kinpo Electronics
(Philippines), Inc., New Era AI Robotic Ltd., XYZLife (Philippines) Inc., XYZprinting Japan, Inc.
Vice Chairman: Cal-Comp Electronics (Thailand) Public Company Limited, PChome (Thailand) Co., Ltd.
Director: Kinpo Electronics, Inc., AcBel Polytech Inc., Cal-Comp Electronics And communications Co., Ltd., Jipo Investment Inc., Kinpo Group Management
Consultant Company, Cal-Comp Asset Management, Inc., Cal-Comp Brazil Holding Co., Ltd., Cal-Comp Precision Holding Co., Ltd., Kinpo Electronics
(China) Co., Ltd., NKG Advanced Intelligence and Technology Development (Yue Yang) Co., Ltd., Ascendant Private Equity Investment Ltd., Cal-Comp
Big Data International Ltd., Cal-Comp Electronics (USA) Co., Ltd., Cal-Comp (India) Private Ltd., Cal-Comp Automation and Industrial 4.0 Service
(Thailand) Co., Ltd., Cal-Comp Holding (Brasil) S.A., Cal-Comp Industria De Semicondutores S.A., Cal-Comp Precision (Malaysia) SDN. BHD., Cal-Comp
Precision (Singapore) Ltd., Cal-Comp Precision (Thailand) Ltd., Cal-Comp USA (Indiana), Co., Inc., Cal-Comp USA (San Diego), Co., Inc., Castlenet
Technology (BVI) Inc., Kinpo International (Singapore) Pte. Ltd., Kinpo International Ltd., Nexa3D Inc., Power Station Holdings Ltd., QBit
Semiconductor Holding, Ltd., XYZprinting, Inc. (Samoa), XYZprinting, Inc. (USA), XYZprinting Netherlands, B.V., XYZprinting (Thailand) Co., Ltd.
President: Cal-Comp Electronics And communications Co., Ltd., Kinpo Electronics (China) Co., Ltd., Cal-Comp Optical Electronics (Suzhou) Co., Ltd., Cal-Comp
Technology (Suzhou) Co., Ltd., Cal-Comp Electronics and Communications (Suzhou) Co., Ltd., Cal-Comp Optical Electronics (Yueyang) Co., Ltd.
Yueyang, Cal-Comp Precision (Yueyang) Co., Ltd., XYZprinting (Shanghai) cloud technology Co.,Ltd., XYZprinting (suzhou) Co., Ltd., Cal-Comp
Electronics (USA) Co., Ltd., Cal-Comp USA (Indiana), Co., Inc., Cal-Comp USA (San Diego), Co., Inc., XYZprinting, Inc. (USA)
Chairman: Taiwan Biotech Co., Ltd., Evergene Biotech Industrial Co., Ltd., Weck Tech Biotech Co., Ltd., Global BioPharma, Inc., Genhealth Pharma Co., Ltd., Taiwan
Veterans Pharmaceutical Co., Ltd., Aseptic Innovative Medicine Co., Ltd., Young & Health Care Resorts Inc., Taiwan Venture Capital Co., Ltd., Long
Yee Investment Co. Ltd., Yinfeng International, Inc., Taiwan Chariston AMC Corp., Ltd, Twin Luck Global Company Ltd.
Director: Kinpo Electronics, Inc., Baotek Industrial Materials Ltd., Formosan Union Chemical Corp., Chang Yao Technology Inc., OmniHealth Group, Inc., All
Information Inc., Spiregene Biotech Co., Ltd., All For Health Biotech Co., Ltd., Chipgene International Enterprise Co., Ltd., Minsheng Medical Holding
13
Title
Name
Selected Current Positions
Inc., Global Strategic Investment Inc. (Samoa), Gold Precision Ltd., KKXC Intergrated Management Holding (CYPRUS) Ltd., Optics Lab Inc., Syn Pharm
Inc.
Supervisor: Teleport Access Services, Inc., Sunny Special Dyeing & Finishing Co., Ltd., Commonwealth Magazine Co, Ltd.
Other: Managing Supervisor of Cross-Strait Health Care and Leisure Activities Association, Director of Health, Welfare & Environment Foundation, Chairman of
Yang Bi Li Education Foundation Of Management
Director
Sheng-
Chieh Hsu
Director
Yen-Chia
Chou
Chairman: Integrate Investment Corp.
Director: Kinpo Electronics, Inc., Cal-Comp Electronics(Thailand) Public Company Limited, Cal-Comp Electronics And communications Co., Ltd., Jipo Investment
Inc., Kinpo Electronics (China) Co., Ltd., Dongguan 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., Mega Plastic Industry Co., Ltd.
Director: Kinpo Electronics, Inc., Micro Metal Electronics Co., Ltd.
Supervisor: Full Power Investment Co., Ltd.
President: Sceptre Industry Co., Ltd.
Chairman: Compal Broadband Networks, Inc., HengHao Technology Co. Ltd., Rayonnant Technology Co., Ltd., HippoScreen Neurotech Corp., Shennona Co., Ltd.,
Unicom Global, Inc.,Wah Yuen Technology Holding Ltd.
Executive Director: Compower Global Service Co., Ltd.
Director: Arcadyan Technology Corporation, Mactech Co., Ltd., Panpal Technology Corp., Ripal Optotronics Co., Ltd., Infinno Technology Corp., , General Life
Director
Chung-Pin
Wong
Director
Chiung-Chi
Hsu
Director
Ming-Chih
Chang
Director
Anthony
Peter
Bonadero
Biotechnology Co., Ltd., UniCore Biomedical Co., Ltd., Aco Smartcare Co.,Ltd., Kinpo Group Management Consultant Company, Taiwan Sanga Co.,
Ltd., Hong Jin Investment Co., Ltd., Maxima Ventures I, Inc.,Taiwan, 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 Electronics (ChongQing) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Investment (Sichuan) Co., Ltd., Compal
Management (Chengdu) Co., Ltd., Allied Power Holding Corp., Amexcom Electronics, Inc., Auscom Engineering Inc., Bizcom Electronics, Inc., Compal
Connector Manufacture Ltd., HengHao Holdings A Co., Ltd., HengHao Holdings B Co., Ltd., HengHao Trading Co., Ltd., Primetek Enterprises Ltd.,
Shennona Corporation, Sirqul Inc.
Supervisor: Hong Ya Technology Corporation
President: Compal Electronics, Inc.
Chairman: Full Power Investment Co., Ltd
Director: Plank Optoelectronics Inc., E-Bow Bearing Co., Ltd., Juan Hsin Bao Hardware co., Ltd.
Director: Mactech Co., Ltd., Kunshan Botai Electronics Co., Ltd., Compal Europe (Poland) Sp. z o. o.
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 Electronics (ChongQing) Co., Ltd., Compal Digital
Technology (Kunshan) Co., Ltd., Kunshan Botai Electronics Co., Ltd., Compower Global Service Co., Ltd., Compal Investment (Sichuan) Co., Ltd.,
Compal Management (Chengdu) Co., Ltd.
Executive Vice President: Compal Electronics, Inc.
Executive Vice President: Auscom Engineering Inc.
14
Title
Name
Selected Current Positions
Chairman: Compal Wireless Communications (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing) Co., Ltd., HANHELT Communications (Nanjing) Co., Ltd.,
Director
Sheng-Hua
Peng
Independent
Director
Min-Chih
Hsuan
Independent
Director
Duei Tsai
Independent
Director
Duh-Kung
Tsai
Compal Communications (Nanjing) Co., Ltd.
Director: Arcadyan Technology Corporation, Gempal Technology Corp., Palcom International Corporation, Ripal Optotronics Co., Ltd., UniCore Biomedical Co.,
Ltd., Hong Ji Capital Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal Electronics, (China)
Co., Ltd., Compal Smart Device (Chongqing) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Amexcom Electronics, Inc., Bizcom Electronics, Inc.
Supervisor: General Life Biotechnology Co., Ltd.
President: Palcom International Corporation, Compal Investment (Jiangsu) Co., Ltd., Compal Display Electronics (Kunshan) Co., Ltd., Compal Wireless
Communications (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing) Co., Ltd., HANHELT Communications (Nanjing) Co.,Ltd, Compal Smart
Device (Chongqing) Co., Ltd., Compal Communications (Nanjing) Co., Ltd.
Executive Vice President: Compal Electronics, Inc.
Chairman: Taiwan Memory Company, Fusionvax, Inc., TC-1 Culture Fund, Vital First Investment Corporation, Maxima Ventures I, Inc., Taiwan, Maxima Ventures
II, Inc.
Director: General Biologicals Corporation, SIPP, Inc., Clientron Corp., Meridigen Biotech Co., Ltd., Elevant Biopharma Co., Ltd., Tonghua United Capsules Co., Ltd.,
Angeluca Science Ltd. (Republic of Seychelles), Pacgen Biopharmaceuticals Corporation (Canada)
Supervisor: Meribank Biotech Co., Ltd.
Remuneration Committee Member: Compal Electronics, Inc.
Audit Committee Member: Compal Electronics, Inc.
Independent Director: Taiwan Taxi Co., Ltd. INC, TTY Biopharm Company Ltd.
Remuneration Committee Member: Compal Electronics, Inc., Taiwan Taxi Co., Ltd. Inc., TTY Biopharm Company Ltd.
Audit Committee Member: Compal Electronics, Inc., TTY Biopharm Company Ltd.
Chairman: Powertech Technology Inc., Greatek Electronics Inc.
Director: Powertech Technoloyg (Suzhou) Ltd., Powertech Technology Akita Inc., Powertech Holding (B.V.I.) Inc., Powertech Technology (Singapore) Pte. Ltd., PTI
Technology (Singapore) Pte. Ltd., Tera Probe, Inc.
Business Executive Representative: Powertech Technology Japan Ltd.
Independent Director: Chicony Power Technology Co., Ltd.
Remuneration Committee Member: Compal Electronics, Inc., Chicony Power Technology Co., Ltd.
Audit Committee Member: Compal Electronics, Inc., Chicony Power Technology Co., Ltd.
Chief Strategy Officer: Powertech Technology Inc.
15
Major shareholders of the Company’s corporate shareholders
Name of corporate shareholder
Major shareholders of the corporate shareholder (Note)
Kinpo Electronics, Inc.
Compal Electronics, Inc. (8.46%), Cathay Life Insurance Co., Ltd. (5.36%), Jipo Investment Inc.(3.15%), Lai-Shun Shen, Tsai (2.85%), Nan Shan Life
Insurance Co., Ltd. (2.79%,), Citi (Taiwan) Bank Custodian for Norges Bank (2.27%), JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard
Total International Stock Index Fund, a series of Vanguard Star Funds (1.61%), Panpal Technology Corp. (1.58%), Ho Bao Investment Co., Ltd. (1.53%),
April 24, 2020
Note: If the major shareholder is also a corporate entity, please refer to the following table.
Li-Chu Tsai(1.48%)
Major shareholders of the Company’s major corporate shareholders
Name of corporate shareholder
Major shareholders of corporate shareholders
Cathay Life Insurance Co.,Ltd.
Cathay Financial Holding Co., Ltd. (100%)
Jipo Investment Inc.
Kinpo Electronics, Inc. (100%)
First Commercial Bank Trustee Account For Representative of Ruen Chen Investment Holding Co., Ltd. (60.01%), Representative of Ruen Chen
Nan Shan Life Insurance Co., Ltd.
Investment Holding Co., Ltd. (29.54%), Ying-Tsong Du (2.90%), Ruen Tai Shing Co., Ltd. (0.30%), Ruen Hua Dyeing & Weaving Co., Ltd. (0.27%), Ruentex
Development Co., Ltd. (0.23%), Ruentex Industries Ltd. (0.21%), Taishin International Bank Trust Account of Nan Shan Life Insurance Co., Ltd. (0.21%),
Panpal Technology Corporation
Compal Electronics, Inc. (100%)
Yen Sin Corporation (0.16%), Ruentex Leasing Co., Ltd. (0.13%,)
Ho Bao Investment Co., Ltd.
Chieh-Li Hsu (42.93%), Li-Chu Tsai (27.83%), Chun-Chi Hsu (13.91%), Yung-Hsu Hsu (12.50%), Hsin-Hsu, Huang (2.83%)
16
Professional qualifications and independence analysis of directors
Criteria
Name
Sheng-Hsiung Hsu
Jui-Tsung Chen
Representative of Binpal
Investment Co., Ltd.:
Wen-Being Hsu
Representative of Kinpo
Electronics Inc.:
Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Chung-Pin Wong
Chiung-Chi Hsu
Ming-Chih Chang
Anthony Peter
Bonadero
Sheng-Hua Peng
Min Chih Hsuan
Duei Tsai
Duh-Kung Tsai
Having Met One of the Following Professional Qualifications combined 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
11
12
Number of
Other Public
Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
0
0
0
0
0
0
0
0
0
0
0
0
0
2
1
Note: If the director or supervisor meets the following conditions in the two years before the election and during the term of office, please mark “✔” in the space below each condition code.
(1) Not an employee of the Company or its affiliated enterprises.
(2) Not a director or a supervisor of the Company or its affiliated enterprises (except for concurrent independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance
with this Act or local laws and regulations).
17
A natural person shareholder who or whose spouse or minor children or in another person’s name does not hold more than 1% of the total issued shares of the Company or is not a top-ten shareholder.
(3)
(4) Not a manager in (1) or the spouse, second-tier relatives, or third-tier relatives of the persons listed in (2) or (3).
(5)
A director, supervisor, or employee of a corporate shareholder who does not directly hold more than 5% of the total issued shares of the Company, is a top-five shareholder, or is designated as a representative to serve as a director
or supervisor of the Company in accordance with paragraph 1 or 2 of Article 27 of the Company Act (except for concurrent independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same
parent company in accordance with this Act or local laws and regulations).
A director, supervisor, or employee of another company who does not have a seat on the board of directors or more than half of the shares with voting rights are controlled by the same person of this company (except for concurrent
independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
A director, supervisor, or employee of another company or institution who is not the same person or spouse as the Chairman, President, or an equivalent position of the Company (except for concurrent independent directors of the
Company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
A director, supervisor, or manager of another company or institution which does not have financial or business dealings with the Company, or a shareholder holding more than 5% of the shares of the Company (not applicable if the
Company or institution holds more than 20% but no more than 50% of the total issued shares of the Company, with concurrent independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same
parent company in accordance with this Act or local laws and regulations).
A professional, sole proprietor, partner, business owner or partner, director, supervisor, manager, or the spouse of the above of a company or institution which does not provide audit services to the Company or its affiliated enterprises
or the cumulative remuneration amount of which in the past two years does not exceed NT$500,000 for business, legal affairs, finance or accounting related services. However, this does not apply to the members of the remuneration
committee, public takeover review committee, or special merger and acquisition committee who perform their functions in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
(6)
(7)
(8)
(9)
(10) Not a spouse or have a second-tier relative relationship with other directors.
(11) There are no such circumstances as in Article 30 of the Company Act.
(12) Not the government, legal person, or their representatives are elected as stipulated in Article 27 of the Company Act.
18
3.2.2 Management Team
Name/
Shares held
minors
names of others
Major career (academic) achievements
Shares held by spouse and
Total shares held in the
Title
Nationality/
Date elected
Gender
/appointed
Subsidiary shareholding
Shares held
Shareholding
Shareholding
Shareholding
(Note 1, 2)
Shares
Percentage
Shares
Percentage
Shares
Percentage
(%)
(%)
(%)
April 21, 2020
Selected
Current
Positions
Spouse or relatives of second degree or
closer acting as managers
Title
Name
Relationship
Chief Strategy
Officer
Jui-Tsung Chen
2018.07.04
35,352,587
0.80%
1,069,405
0.02%
0
0.00%
Honorary Doctorate, National Cheng Kung
University
Refer to
Vice
Po-Tang
Relative by
Chairman of Compal Communication Inc. &
Page12-13
President
Wang
affinity
President
Chung-Pin Wong
2018.07.04
6,618,618
0.15%
1,398
0.00%
Executive
Vice
Ming-Chih Chang 2018.07.04
1,919,489
0.04%
President
Executive
Vice
Sheng-Hua Peng
2018.07.04
835,000
0.02%
President
Executive
Vice
Chen-Chang Hsu
2011.08.31
0
0.00%
0
0
0
0.00%
0.00%
0.00%
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Chun-Te Shen
2007.01.01
2,953,700
0.07%
900,000
0.02%
Kuo-Chuan Chen
2007.01.01
829,823
0.02%
10,924
0.00%
Pei-Yuan Chen
2009.10.06
3,487,698
0.08%
1,045,585
0.02%
Chyou-Jui Wei
2010.03.18
0
0.00%
0
0.00%
0
0
0
0
0
0
0
0
19
Arcadyan Technology Corp.
Graduate Institute of Management Science,
0.00%
National Chiao Tung University
Chairman of Compal Broadband Networks,
Inc.
Department of Electrical Engineering, Ming
0.00%
Chi University of Technology
Director of Mactech Co., Ltd.
Graduate Institute of Electrical Engineering,
0.00%
National Taiwan University
Director of Arcadyan Technology Corp.
National Chiao Tung University EMBA
Refer to
Page 14
Refer to
Page 14
Refer to
Page 15
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.00%
Executive Vice President of WINTEK
(Note 4)
N/A
N/A
N/A
Corporation
Graduate Institute of Electrical Engineering,
0.00%
National Taiwan University
(Note 4)
N/A
N/A
N/A
Director of Kinpo Electronics Inc.
Department of Physics, Chung Yuan Christian
0.00%
University
Senior Vice President of Compal
Communication Inc.
Department of International Trade, Hsingwu
N/A
N/A
N/A
N/A
0.00%
College
(Note 4)
N/A
N/A
N/A
Director of Kinpo Electronics Inc.
Master of Business Administration, University
0.00%
of Washington, USA
(Note 4)
N/A
N/A
N/A
Senior Vice President of Toppoly
Name/
Shares held
minors
names of others
Major career (academic) achievements
Shares held by spouse and
Total shares held in the
Title
Nationality/
Date elected
Gender
/appointed
Subsidiary shareholding
Shares held
Shareholding
Shareholding
Shareholding
Selected
Current
Positions
Spouse or relatives of second degree or
closer acting as managers
(Note 1, 2)
Shares
Percentage
Shares
Percentage
Shares
Percentage
Title
Name
Relationship
(%)
(%)
(%)
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Ying Chang
2011.02.24
735,000
0.02%
Wen-Da Hsu
2014.02.27
1,333,000
0.03%
Wei-Chang Chen
2004.04.01
810,656
0.02%
Shi-Kuan Chen
2009.05.01
Chi-Wai Wan
2017.05.10
0
0
0.00%
0.00%
Min-Tung Weng
2018.12.01
623,786
0.01%
Lo-Chun Lee
2018.12.01
420,000
0.01%
Sheng-Hung Li
2019.11.11
504,574
0.01%
Bor-Heng Chen
2020.05.13
280,010
0.01%
0.00%
0.00%
Optoelectronics Corp.
MBA, University Of Georgia
President of Swenc Technology Co., Ltd.
Department of Media Administration, Shih
Hsin University
Senior Vice President of Compal
Communication Inc.
Department of Electronic Engineering, Taipei
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
0.00%
College of Maritime Technology
(Note 4)
N/A
N/A
N/A
0.00%
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
(Note 4)
N/A
N/A
N/A
0.00%
Catholic University
N/A
N/A
N/A
N/A
Inventec Corp. Vice President
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.
Department of Electronics, National Taipei
Institute of Technology
COLUMBIA UNIVERSITY
0.00%
0.00%
0.00%
(Note 4)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.00%
Master of Industrial Engineering and
N/A
N/A
N/A
N/A
Operations Management
0
0
0
0
0
0
0
0
0
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0
0
0
0
0
0
0
0
0
20
Name/
Shares held
minors
names of others
Major career (academic) achievements
Shares held by spouse and
Total shares held in the
Title
Nationality/
Date elected
Gender
/appointed
Subsidiary shareholding
Shares held
Shareholding
Shareholding
Shareholding
Selected
Current
Positions
Spouse or relatives of second degree or
closer acting as managers
(Note 1, 2)
Shares
Percentage
Shares
Percentage
Shares
Percentage
Title
Name
Relationship
(%)
(%)
(%)
Vice
Chih-Chuan
President
Cheng
2003.01.01
2,103,786
0.05%
51,194
0.00%
0
0.00%
Vice
President
Vice
President
Ching-Hsiung Lu
2003.01.01
7,597,007
0.17%
910,000
0.02%
Po-Tang Wang
2007.07.10
559,548
0.01%
486
0.00%
Vice
Tzong-Ming
President
Wang
2009.07.16
293,184
0.01%
Fu-Chuan Chang
2009.07.16
170,662
0.00%
Yung-Nan Chang
2011.01.01
0
0.00%
0
0
0
0.00%
0.00%
0.00%
Yong-Ho Su
2011.07.01
500,401
0.01%
73,000
0.00%
Jyh-Shyan Liang
2011.10.31
105,000
0.00%
Chiao-Lie Huang 2014.02.27
38,992
0.00%
0
0
0.00%
0.00%
Chung-Hsing Tan
2014.02.27
0
0.00%
5,320
0.00%
Vice
President
Vice
President
Vice
President
Vice
President
Vice
President
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
N/A
N/A
N/A
N/A
0.00%
University
(Note 4)
N/A
N/A
N/A
0.00%
Director Compal Communication Inc.
Department of Computer Science and
Information Engineering, National Taiwan
University
President of Vibo Telecom Inc.
National Taipei Institute of Technology
N/A
Chief
Strategy
Officer
Jui-Tsung
Relative by
Chen
affinity
0.00%
Head of Research and Development, CLEVO
N/A
N/A
N/A
N/A
Company
0.00%
0.00%
National Chin-Yi University of Technology
Production Manager, ADI Corp
MBA, Pacific Western University
Factory Manager, Delta Electronics Inc.
Department of Electrical Engineering,
0.00%
National Taipei Institute of Technology
Vice President of Arima Photovoltaic &
Optical Corp.
University of Colorado
0.00%
Postgraduate Institute of Digital
Communication/Vice President of Wireless
Communication, Altek Corporation
Graduate Institute of Electrical Engineering,
(Note 4)
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
0.00%
National Taiwan University
(Note 4)
N/A
N/A
N/A
Vice President of Compal Communication Inc.
Department of Electrical Engineering, Tatung
University
0.00%
(Note 4)
N/A
N/A
N/A
0
0
0
0
0
0
0
0
0
21
Name/
Shares held
minors
names of others
Major career (academic) achievements
Shares held by spouse and
Total shares held in the
Title
Nationality/
Date elected
Gender
/appointed
Subsidiary shareholding
Shares held
Shareholding
Shareholding
Shareholding
Selected
Current
Positions
Spouse or relatives of second degree or
closer acting as managers
(Note 1, 2)
Shares
Percentage
Shares
Percentage
Shares
Percentage
Title
Name
Relationship
(%)
(%)
(%)
Vice
President
Vice
President
Yi-Yun Chang
2014.08.13
300,246
0.01%
Hsin-Kung Mao 2014.11.13
420,714
0.01%
Vice
Hsin-Hsiung
President
Huang
2015.01.22
419,001
0.01%
Shih-Hong Huang 2016.02.24
280,000
0.01%
Yi-Chiang Chiu
2016.02.24
280,000
0.01%
Jui-Chun Shyur
2016.05.11
0
0.00%
0
0
0
0
0
0
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Shyh-An Lee
2016.06.29
76,071
0.00%
4,000
0.00%
Ta-Chun Wang
2016.06.29
204,200
0.00%
4,119
0.00%
Vice
President
Vice
President
Vice
President
Vice
President
Vice
President
Vice
President
0
0
0
0
0
0
0
0
Vice President of Compal Communication Inc.
Graduate Institute of Electrical Engineering,
0.00%
National Taiwan University
Senior Manager of Compal Communication
Inc.
Master of Business Administration, University
0.00%
of Lincoln
Director of Avalue Technology Inc.
Department of Electronics, Chung Yuan
Christian University
Senior Manager of Compal Communication
0.00%
Inc.
Master in Control Engineering, National Chiao
N/A
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
(Note 4)
N/A
N/A
N/A
0.00%
Tung University
N/A
N/A
N/A
N/A
0.00%
0.00%
Director of Coretronic Corporation
Master in Earth Sciences, National Central
University
PhD, Graduate Institute of Electrical
Engineering, National Taiwan University
Photonics Industries International,
Inc.President
Department of Navigation, Taipei College of
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.00%
Maritime Technology
(Note 4)
N/A
N/A
N/A
0.00%
LCFC Taiwan Branch Vice CEO
Master of Industrial Engineering, University of
Illinois
Shanghai Real Industrial Co., Ltd. Managing
Vice President
Department of Industrial Engineering, Feng
Chia University
Director of Operations Division, Compal Fab
No. 2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Jen-Liang Lin
2018.03.06
100,500
0.00%
0
0.00%
0
0.00%
22
Name/
Shares held
minors
names of others
Major career (academic) achievements
Shares held by spouse and
Total shares held in the
Title
Nationality/
Date elected
Gender
/appointed
Subsidiary shareholding
Shares held
Shareholding
Shareholding
Shareholding
Selected
Current
Positions
Spouse or relatives of second degree or
closer acting as managers
(Note 1, 2)
Shares
Percentage
Shares
Percentage
Shares
Percentage
Title
Name
Relationship
Peng-Hong Chan 2018.05.09.
0
0.00%
(%)
Wei-Chia Wang
2018.12.01
120,000
0.00%
(%)
0.00%
0.00%
0
0
General
Counsel
Vice
President
Accounting &
Corporate
Cheng-Chiang
2018.07.04
Governance
Wang
2019.05.13
955,808
0.02%
30
0.00%
Officer
Vice
President
Vice
President
Cheng-Hui Su
2018.12.01
105,000
0.00%
0
0.00%
Tu-Chuan Tu
2018.12.01
593,081
0.01%
62,105
0.00%
Vice
Chang-Chieh
President
Tien
2018.12.01
403
0.00%
0
0.00%
Vice Presiden
Vice Presiden
Internal Audit
Officer
Hsiao-Wei Lo
2019.11.11
20,000
0.00%
100
0.00%
Guo-Dung Yu
2019.11.11
60,000
0.00%
Po-Wen Hsieh
2019.11.11
0
0.00%
0
0
0.00%
0.00%
0
0
0
0
0
0
0
0
0
(%)
0.00%
Master of Cornell University Law School
CSO, Pou Chen Group
Chung Yuan Christian University, Electrical
0.00%
Engineering
Senior Director of LCFC
Fu Jen Catholic University, Department of
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.00%
Accounting
(Note 4)
N/A
N/A
N/A
Financial officer of Allied Circuit Co., Ltd.
0.00% Tulane University Master of MBA
N/A
N/A
N/A
0.00% Vanung University, Electrical Engineering
N/A
N/A
N/A
0.00%
0.00%
National Chiao Tung University,Transportation
Management
Tamkang University Bachelor of International
Trade
George Washington University Master of
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.00%
Accounting
(Note 4)
N/A
N/A
N/A
Financial officer of Arcadyan Technology Corp.
Department of Accounting, National Taiwan
0.00%
University
N/A
N/A
N/A
N/A
Audit Manager, KGT Telecom
Note: 1. All managers are ROC nationals; except for Senior Vice President Chyou-Jui Wei, all other managers are male.
2. The Chairman, Chief Strategy Officer, and President of the Company are not the same person, spouses, or related to each other.
3. Vice President Po-Hsiung Chang, Tsing-Fa Lee, and Fei-Long Chen resigned in 2019.
4. Concurrent positions in other companies
23
Title
Name
Concurrent positions in other companies
Executive
Vice
President
Senior Vice
President
Senior Vice
President
Chen-Chang Hsu
Chairman: HengHong Optoelectronics Technology (Kunshan) Co., Ltd., LUCOM Display Technology (KunShan) Limited
Vice Chairman: HengHao Technology Co. Ltd.
Director: Mactech Co., Ltd.
President: HengHao Technology Co. Ltd., HengHong Optoelectronics Technology (Kunshan) Co., Ltd., LUCOM Display Technology (KunShan)
Limited
Chun-Te Shen Director: Kinpo Electronics, Inc., HippoScreen Neurotech Corp., Auscom Engineering Inc., Shennona Corporation
Pei-Yuan Chen Director: Kinpo Electronics, Inc., Full Power Investment Co., Ltd.
Senior Vice
President
Chyou-Jui Wei
Chairman: Rapha Bio Ltd.
Director: Taiwan Star Telecom Co., Ltd, Chenfeng Optronics Corp., UniCore Biomedical Co., Ltd., Trust Bio-sonics, Inc., General Life Biotechnology
Co., Ltd., Raycore Biotech Co., Ltd., Maxima Ventures I, Inc., Taiwan, Hua Vi Venture Capital Corporation, Hua VII Venture Capital
Corporation, Cdib & Partners Investment Holding Corp., Compal Electronic Technology (Chongqing) Co., Ltd., ZhengYing Electronics
(Chongqing) Co., Ltd., Compal Precision Module(Jiangsu) Co., Ltd., ShengBao Precision Electronics (Taicang) Ltd., Rayonnant
Technology (HK) Holdings Limited
Supervisor: HengHao Technology Co. Ltd., Infinno Technology Corp., Rayonnant Technology Co., Ltd., Ripal Optotronics Co., Ltd., Mactech Co.,
Ltd., Unicom Global, Inc., Global BioPharma, Inc., Arce Therapeutics, Inc., Aco Smartcare Co., Ltd., Ray-Kwong Medical
Management Consulting Co., Ltd., Rayonnant Technology (Taicang) Co., Ltd.
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Vice
President
and head of
finance
Independent Director: SYNergy ScienTech Corp.
Remuneration Committee Member: SYNergy ScienTech Corp.
Audit Committee Member: SYNergy ScienTech Corp.
Ying Chang
Director: Allied Circuit Co., Ltd.
Wen-Da Hsu
Director: HANHELT Communications (Nanjing) Co., Ltd.
Wei-Chang
Chen
Director: HippoScreen Neurotech Corp., Shennona Corporation
Hsi-Kuan Chen Director: Rayonnant Technology Co., Ltd., Rayonnant Technology (Taicang) Co., Ltd.
Min-Tung
Weng
Director: Auscom Engineering Inc.
President: Auscom Engineering Inc.
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., Leading Images Limited
Ching-Hsiung Lu
Supervisor: Compal Electronics Technology (Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal Information Technology
(Kunshan) Co., Ltd., Compal Electronics, (China) Co., Ltd., Compal Digital Technology (Kunshan) Co., Ltd., Compal Electronics
(Chengdu) Co., Ltd., Compal Electronics (ChongQing) Co., Ltd., Compal Optoelectronics (Kunshan) Co., Ltd., Compal Display
24
Title
Name
Concurrent positions in other companies
Electronics (Kunshan) Co., Ltd. , Compal Networking (Kunshan) Co., Ltd., Kunshan Botai Electronics Co., Ltd., Compal Investment
(Sichuan) Co., Ltd., Compal Investment (Jiangsu) Co., Ltd., Compal Management (Chengdu) Co., Ltd.
Vice
President
Vice
President
Vice
President
Vice
President
Vice
President
Po-Tang Wang Director: Bizcom Electronics, Inc., Compal Europe (Poland) Sp. z o. o.
Fu-Chuan Chang President: Compal Optoelectronics (Kunshan) Co., Ltd., Compal Electronics, (China) Co., Ltd.
Chiao-Lieh Huang Supervisor: HANHELT Communications (Nanjing) Co., Ltd
Chung-Shing
Tan
Director: HANHELT Communications (Nanjing) Co., Ltd
Hsin-Kung Mao
Technologies, LLC
Director: Avalue Technology Inc., Unicom Global, Inc., Amexcom Electronics, Inc., Compalead Electronics B.V., Mexcom Electronics, LLC, Mexcom
Vice
President
Vice
President
Accounting
& Corporate
Governance
Officer
Vice
President
Hsin-Hsiung
Huang
Shyh-An
Lee
Cheng-Chiang
Wang
Guo-Dung Yu
President: Amexcom Electronics, Inc.
Director: Compal Wireless Communications (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing) Co., Ltd., Compal Communications
(Nanjing) Co., Ltd.
Director: Infinno Technology Corp., Rayonnant Technology (Taicang) Co., Ltd.
Director: Zhi-pal Technology Inc., HengHao Technology Co. Ltd., Palcom International Corporation, Compal Electronics India Private Limited
Supervisor: HippoScreen Neurotech Corp., Compal System Trading (Kunshan) Co., Ltd., Compower Global Service Co., Ltd., HengHong
Optoelectronics Technology (Kunshan) Co., Ltd., Compal Smart Device (Chongqing) Co., Ltd.
Chairman: Compal Electronics India Private Limited
Supervisor: Palcom International Corporation, Compal Wireless Communications (Nanjing) Co., Ltd., Compal Digital Communications (Nanjing)
Co., Ltd., Compal Communications (Nanjing) Co., Ltd.
President: Compal Electronics India Private Limited
25
3.2.3
Remuneration of Directors and Independent Directors
Remuneration of Directors, Independent Directors, President and Vice Presidents
Directors' remuneration
The sum of A, B, C
and D as a
percentage of after-
tax profit
Remuneration as an employee
Unit: NTD thousand; thousand shares; %
The sum of A, B, C, D,
E, F, and G as a
percentage of after-
tax profit
Remuneration
from ventures
other than
subsidiaries or
from the
parent
company
(H)
Title
Name
Remuneration (A)
Pension (B)
Remuneration from
earnings
appropriation
(C)
Business department
implementation
Fees for services
rendered (D)
Salaries, bonuses,
special allowances
etc (E)
Retirement
Pension (F)
Share of profit as an employee (G)
The
Compa
ny
All
companie
s included
in the
financial
statement
s
The
Compa
ny
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
The
Compa
ny
All
companie
s included
in the
financial
statement
s
The
Compa
ny
All
companies
included in
the
financial
statements
The
Compan
y
All
companie
s included
in the
financial
statement
s
The Company
All companies included
in the financial
statements
Cash
Amount
Stock
Amount
Cash
Stock
The
Company
All
companie
s included
in the
financial
statement
s
0
0
0
0 38,671
38,671
2,284
3,064 0.5888%
0.6000%
58,895
106,144
708
708
31,700
0
31,700
0
1.9014%
2.5919%
95,769
Chairman
Vice
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director
Sheng-Hsiung Hsu
Jui-Tsung Chen
Representative: of
Binpal Investment
Co., Ltd.
Wen-Being Hsu
Representative of
Kinpo Electronics
Inc.:
Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Chung-Pin Wong
Chiung-Chi Hsu
Ming-Chih Chang
Anthony Peter
Bonadero
Sheng-Hua Peng
Min-Chih Hsuan
Director
Independent
Director
Independent
Director
Independent
Director
1. Please state the remuneration payment policy, system, standard and structure of independent directors, and the relationship between factors such as the responsibilities, risks and time devoted, and the amount of
Duh-Kung Tsai
475 0.1103%
Duei Tsai
0.1103%
0.1103%
0.1103%
7,200
7,200
475
0
0
0
0
0
0
0
0
0
0
0
0
remuneration:
The remuneration of Independent Directors shall be submitted by the remuneration committee to the Board of Directors and decided by the Board of Directors, which depended on personal partake-in, contribution to the
Company’s business and benchmarks in the same industry according to the “Articles of Incorporation."
0
2. Remuneration collected by Directors for their services (i.e. acting as advisor for non-employees) as disclosed in the Financial Report in the most recent year not shown in the table: 0
26
Note: 1. In 2019, the Company made pension contributions totaling NT$ 708 thousand (including NT$ 324 thousand under the new system and NT$ 384 thousand under the old system) for
directors who also assumed managerial roles as employees; Meanwhile, all companies reported in the financial statements had made pension contributions totaling NT$ 708
thousand (including NT$ 324 thousand under the new system and NT$ 384 thousand under the old system).
2. Directors’ compensation refers to the estimated directors’ compensation approved by the Board of Directors meeting on March 30, 2020.
Total of (A+B+C+D)
Total of (A+B+C+D+E+F+G+H)
Number of Directors
The Company
2 (Note 1)
11 (Note 2)
3 (Note 3)
1 (Note 4)
Companies in the
consolidated financial
statements
2 (Note 5)
11 (Note 6)
3 (Note 7)
1 (Note 8)
The Company
2 (Note 9)
8 (Note 10)
2 (Note 11)
1 (Note 12)
2 (Note 13)
2 (Note 14)
Companies in the
consolidated financial
statements
1 (Note 15)
5 (Note 16)
2 (Note 17)
2 (Note 18)
2 (Note 19)
5 (Note 20)
17
17
17
17
Range of Remuneration
Under NT$ 1,000,000
NT$1,000,000 ~ NT$2,000,000 (exclusive)
NT$2,000,000 ~ NT$3,500,000 (exclusive)
NT$3,500,000 ~ NT$5,000,000 (exclusive)
NT$5,000,000 ~ NT$10,000,000 (exclusive)
NT$10,000,000 ~ NT$15,000,000 (exclusive)
NT$15,000,000 ~ NT$30,000,000 (exclusive)
NT$30,000,000~ NT$50,000,000 (exclusive)
NT$50,000,000 ~ NT$100,000,000 (exclusive)
Over NT$100,000,000 (inclusive)
Total
Note:
1. Wen Being Hsu, Shyh-Yong Shen – 2 positios
2.
3.
4.
5. Wen Being Hsu, Shyh-Yong Shen – 2 positions
6.
Sheng-Chieh Hsu, Yen-Chia Chou, Chung-Pin Wong, Chiung-Chi Hsu, Ming-Chih Chang, Anthony Peter Bonadero, Sheng-Hua Peng, Min-Chih Hsuan, Duei Tsai, Duh-Kung
Tsai, Kinpo Electronics, Inc.– 11 positions
Jui-Tsung Chen, Charng-Chyi Ko, Binpal Investment Co., Ltd. – 3 position
Sheng-Hsiung Hsu –1 position
Sheng-Chieh Hsu, Yen-Chia Chou, Chung-Pin Wong, Chiung-Chi Hsu, Ming-Chih Chang, Anthony Peter Bonadero, Sheng-Hua Peng, Min-Chih Hsuan, Duei Tsai, Duh-Kung
Tsai, Kinpo Electronics, Inc. – 11 positions
Jui-Tsung Chen, Charng-Chyi Ko, Binpal Investment Co., Ltd. – 3 positions
Sheng-Hsiung Hsu –1 position
7.
8.
9. Wen Being Hsu, Shyh-Yong Shen – 2 positions
10. heng-Chieh Hsu, Yen-Chia Chou, Chiung-Chi Hsu, Anthony Peter Bonadero, Min-Chih Hsuan, Duei Tsai, Duh-Kung Tsai, Kinpo Electronics, Inc. – 8 positions
11. Charng-Chyi Ko, Binpal Investment Co., Ltd. – 2 positions
27
Jui-Tsung Chen, Chung-Pin Wong– 2 positions
12. Sheng-Hsiung Hsu – 1 position
13. Ming-Chih Chang, Sheng-Hua Peng – 2 positions
14.
15. Wen Being Hsu -1 position
16. Yen-Chia Chou, Chiung-Chi Hsu, Min-Chih Hsuan, Duei Tsai, Duh-Kung Tsai – 5 positions
17. Binpal Investment Co., Ltd., Kinpo Electronics, Inc.– 2 positions
18. Charng-Chyi Ko, Sheng-Chieh Hsu-- 2 positions
19. Ming-Chih Chang, Sheng-Hua Peng- 2 positions
20. Sheng-Hsiung Hsu, Jui-Tsung Chen, Shyh-Yong Shen, Chung-Pin Wong, Anthony Peter Bonadero- 5 positions
28
Remuneration of Supervisors: Not Applicable (The Company adopts an Audit Committee system)
Remuneration of the President and Vice Presidents
Salary (A)
Pension (B)
Bonus and
special allowances (C)
Share of profit as an employee (D)
Unit: NTD thousand; thousand shares; %
Sum of A, B, C and D as a
percentage of after-tax
profit (%)
Remuneration from
ventures other than
subsidiaries or
from the parent
company (E)
The
Company
All
companies
included in
the financial
statements
The
Company
All
companies
included in
the financial
statements
The
Company
All companies
included in
the financial
statements
The Company
All companies included in
the financial statements
Cash
Amount
Stock
Amount
Cash
Amount
Stock
Amount
The Company
All companies
included in the
financial
statements
122,319
128,737
6,130
6,130
208,759
209,348
102,600
0
102,600
0
6.32281%
6.42354%
1,052
Title
Name
48 employees
including CSO
Jui-Tsung Chen
(Note1)
Note: 1.Managers’ titles and names
‧Chief Strategy Officer: Jui-Tsung Chen – 1 position
‧President: Chung-Pin Wong – 1 position
‧Executive Vice Presidents: Ming-Chih Chang, Shen-Hua Peng, Chen-Chang Hsu – 3 positions
‧Senior Vice Presidents: Chun-Te Shen, Kuo-Chuan Chen, Pei-Yuan Chen, Chyou-Jui Wei, Ying Chang, Wen-Da Hsu, Wei-Chang Chen, Shi-Kuan Chen, Chi-Wai Wan, Min-Tung Weng, Lo-
Chun Lee, Sheng-Hung Li, Bor-Heng Chen– 13 positions
‧Vice Presidents: Chih-Chuan Cheng, Ching-Hsiung Lu, Po-Tang Wang, Tzong-Ming Wang, Fu-Chuan Chang, Yung-Nan Chang, Yong-Ho Su, Jyh-Shyan Liang, Chiao-Lie Huang, Chung-
Hsing Tan, Yi-Yun Chang, Hsin-Kung Mao, Hsin-Hsiung Huang, Shih-Hong Huang, Yi-Chiang, Jui-Chun Shyur, Shyh -An Lee, Ta-Chun Wang, Liang-Jen Lin, Peng-Hong Chan, Wei-Chia Wang,
Cheng- Chiang Wang, Cheng-Hui Su, Tu-Chuan Tu, Chang-Chieh Tien, Hsiao-Wei Lo, Guo-Dung Yu, Po-Hsiung Chang, Tsing-Fa Lee, Fei-Long Chen– 30 positions
2. The Company made pension contributions totaling NT$ 6,130 thousand (including NT$ 4,495, thousand under the new system and NT$ 1,635 thousand under the old system). While
all companies reported in the financial statements made pension contributions totaling NT$ 6,130 thousand (including NTD NT$ 4,495, thousand under the new system and NT$ 1,635
thousand under the old system).
3. Employees’ compensation appropriation was approved by the Board of Directors at the meeting on March 30, 2020. 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$ 1,000,000
NT$1,000,000 ~ NT$2,000,000 (exclusive)
NT$2,000,000 ~ NT$3,500,000 (exclusive)
NT$3,500,000 ~ NT$5,000,000 (exclusive)
NT$5,000,000 ~ NT$10,000,000 (exclusive)
NT$10,000,000 ~ NT$15,000,000 (exclusive)
NT$15,000,000 ~ NT$30,000,000 (exclusive)
NT$30,000,000~ NT$50,000,000 (exclusive)
NT$50,000,000 ~ NT$100,000,000 (exclusive)
Over NT$100,000,000 (inclusive)
Total
Number of President and Vice Presidents
Total of (A+B+C+D)
The Company
Total of (A+B+C+D+E)
Companies in the consolidated
financial statements
1 (Note 1)
2 (Note 2)
2 (Note 3)
3 (Note 4)
26 (Note 5)
8 (Note 6)
4 (Note 7)
2 (Note 8)
1 (Note 9)
2 (Note 10)
2 (Note 11)
1 (Note 12)
28 (Note 13)
8 (Note 14)
4 (Note 15)
2 (Note 16)
48
48
Note:
1.
Po-Hsiung Chang – 1 position
2.
Tsing-Fa Lee, Fei-Long Chen – 2 positions
3. Hsiao-Wei Lo, Guo-Dung Yu – 2 positions
4.
5.
Fu-Chuan Chang, Yung-Nan Chang, Chang-Chieh Tien – 3 positions
Kuo-Chuan Chen, Pei-Yuan Chen, Chyou-Jui Wei, Ying Chang, Wen-Da Hsu, Chih-Chuan Cheng, Ching-Hsiung Lu, Po-Tang Wang, Tzong-Ming Wang, Yong-Ho Su, Jyh-
Shyan Liang, Chiao-Lie Huang, Yi-Yun Chang, Hsin-Kung Mao, Hsin-Hsiung Huang, Shih-Hong Huang, Yi-Chiang Chiu, Jui-Chun Shyur, Shyh-An Lee, Ta-Chun Wang, Liang-
Jen Lin, Peng-Hong Chan, Wei-Chia Wang, Cheng-Chiang Wang, Cheng-Hui Su, Tu-Chuan Tu – 26 positions
Chun-Te Shen, Wei-Chang Chen, Shi-Kuan Chen, Min-Tung Weng, Lo-Chun Lee, Sheng-Hung Li, Chung-Hsing Tan, Bor-Heng Chen– 8 positions
6.
7. Ming-Chih Chang, Shen-Hua Peng, Chen-Chang Hsu, Chi-Wai Wan – 4 positions
8.
9.
10. Tsing-Fa Lee, Fei-Long Chen – 2 positions
11. Hsiao-Wei Lo, Guo-Dung Yu – 2 positions
12. Chang-Chieh Tien – 1 position
13. Kuo-Chuan Chen, Pei-Yuan Chen, Chyou-Jui Wei, Ying Chang, Wen-Da Hsu, Chih-Chuan Cheng, Ching-Hsiung Lu, Po-Tang Wang, Tzong-Ming Wang, Fu-Chuan Chang,
Yung-Nan Chang, Yong-Ho Su, Jyh-Shyan Liang, Chiao-Lie Huang, Yi-Yun Chang, Hsin-Kung Mao, Hsin-Hsi Yi-Chiang Chiu, Jui-Chun Shyur, Shyh-An Lee, Ta-Chun Wang,
Liang-Jen Lin, Peng-Hong Chan, Wei-Chia Wang, Cheng-Chiang Wang, Cheng-Hui Su, Tu-Chuan Tu – 28 positions
Jui-Tsung Chen, Chung-Pin Wong – 2 positions
Po-Hsiung Chang – 1 position
30
14. Chun-Te Shen, Wei-Chang Chen, Shi-Kuan Chen, Min-Tung Weng, Lo-Chun Lee, Sheng-Hung Li, Chung-Hsing Tan, Bor-Heng Chen – 8 positions
15. Ming-Chih Chang, Shen-Hua Peng, Chen-Chang Hsu, Chi-Wai Wan –4 positions
16. Jui-Tsung Chen, Chung-Pin Wong – 2 positions
Employee profit sharing granted to the management team
Unit: NTD thousand
Title
Name
Stock dividends
Cash dividends
Total
Total as a percentage to after-tax profit (%)
46 employees including
CSO Jui-Tsung Chen (Note 1)
0
102,819
102,819
1.47816%
Note: 1.Managers’ titles and names
‧Chief Strategy Officer: Jui-Tsung Chen – 1 position
‧President: Chung-Pin Wong – 1 position
‧Executive Vice Presidents: Ming-Chih Chang, Shen-Hua Peng, Chen-Chang Hsu– 3 positions
‧Senior Vice Presidents: Chun-Te Shen, Kuo-Chuan Chen, Pei-Yuan Chen, Chyou-Jui Wei, Ying Chang, Wen-Da Hsu, Wei-Chang Chen, Shi-Kuan Chen, Chi-Wai Wan, Min-
Tung Weng, Lo-Chun Lee, Sheng-Hung Li, Bor-Heng Chen– 13 positions
‧Vice Presidents :Chih-Chuan Cheng, Ching-Hsiung Lu, Po-Tang Wang, Tzong-Ming Wang, Fu-Chuan Chang, Yung-Nan Chang, Yong-Ho Su, Jyh-Shyan Liang, Chiao-Lie
Huang, Chung-Hsing Tan, Yi-Yun Chang, Hsin-Kung Mao, Hsin-Hsiung Huang, Shih-Hong Huang, Yi-Chiang Chiu, Jui-Chun Shyur, Shyh -An Lee, Ta-Chun Wang, Liang-
Jen Lin, Peng-Hong Chan, Wei-Chia Wang, Cheng- Chiang Wang, Cheng-Hui Su, Tu-Chuan Tu, Chang-Chieh Tien, Hsiao-Wei Lo, Guo-Dung Yu – 27 positions
‧Other: Po-Wen Hsieh - 1 position
2. Vice President Po-Hsiung Chang, Tsing-Fa Lee, and Fei-Long Chen resigned in 2019.
3. Employees’ compensation appropriation was approved by the Board of Directors at the March 30, 2020 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.
2019
2018 (Note)
Increase (Decrease)
Amount
%
Amount
%
Amount
%
Unit: NT$ thousand
542,598
7.80%
413,080
4.63%
129,518
31.35%
Analysis
Directors
CSO,
Presidents, and
Vice Presidents
Net Income
6,955,899
8,913,365
(1,957,466)
Note: 2018 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.
‧
Remuneration paid by the Company to Directors has been made in accordance with the Articles of
Incorporation. When the Company makes profit in a year, no more than 2% of the Company’s pre-tax profit
(not including remuneration for employees and Directors) shall be paid to Directors as remuneration along
with reasonable compensation based on other factors such as the Company’s operational performance and
the individual Director’s contribution to the Company’s performance taken into consideration.
‧
The Company’s remuneration policy for Managers has been established based on various factors,
including the Company’s wage policy, the average wage offered by competitors for the same position, the
duties and responsibilities for the position in question, and the Manager’s actual contribution to the
Company’s operational objectives.
‧
The Company’s procedure for determining remuneration not only takes into account the Company’s
overall operational performance but also includes employee’s personal performance and their contribution
to the Company’s performance in order to determine a reasonable compensation. Relevant wages and
compensations are reviewed by the Remuneration Committee and resolved by the Board of Directors. The
Company will also be keeping a close eye on the latest developments in the global economy, international
financial environment, and state of the industry in order to predict its operational development, profit status,
operational risks and changes in pertinent regulations in the near future in order to review the compensation
system, thereby striving for an ideal balance between the Company’s sustainable operation and relevant risk
control.
32
3.3
Implementation of Corporate Governance
3.3.1 Board of Directors
‧The term of the 13th committee is from June 22, 2018 to June 21, 2021.
‧There were Six Board meetings during 2019 (A). Director’s attendance records are as shown
below:
Title
Name
Chairman
Sheng-Hsiung Hsu
Director
Jui-Tsung Chen
Director
Wen-Being Hsu
Director
Director
Kinpo Electronics, Inc.
Representative: Shyh-Yong
Shen
Charng-Chyi Ko
Director
Sheng-Chieh Hsu
Director
Yen-Chia Chou
Director
Chung-Pin Wong
Director
Chiung-Chi Hsu
Director
Ming-Chih Chang
Director
Anthony Peter Bonadero
Director
Sheng-Hua Peng
Independent
Director
Independent
Director
Independent
Director
Min-Chih Hsuan
Duei Tsai
Duh-Kung Tsai
Attendance in
Person (B)
5
5
6
1
6
6
5
5
5
3
2
4
5
5
4
By Proxy
Attendance Rate
(%)[B/A]
Remarks
1
1
0
5
0
0
0
1
1
2
2
2
1
1
1
83%
83%
100%
17%
100%
100%
83%
83%
83%
50%
33%
67%
83%
83%
67%
․In 2019, Independent Director’s attendance records are as shown below:
Title
Name
Independent
Director
Independent
Director
Independent
Director
Min-Chih Hsuan
Duei Tsai
Duh-Kung Tsai
1st
Meeting
2nd
Meeting
3rd
Meeting
4th
Meeting
5th
Meeting
6th
Meeting
●
★
◎
●
●
●
●
●
●
★
●
●
●
●
★
●
●
●
Note: ●: Attendance in Person; ★: By Proxy; ◎: Absent
Other notes:
1. For board of directors meetings that meet any of the following descriptions, state the date, session,
the discussed topics, independent directors' opinions, and how the company has responded to such
opinions:
(1) Conditions described in Article 14-3 of the Securities and Exchange Act: Not applicable (the
Company has assembled the Audit Committee in place of supervisors)
(2) Any other documented objections or qualified opinions raised by independent directors against
board resolutions in relation to matters other than those described above: None.
33
2. Disclosure regarding avoidance of interest-conflicting agendas, including the names of directors
concerned, the agendas, the nature of conflicting interests, and the voting outcome:
Board of
Directors
Meeting
Meeting
(13th Term)
2019.5.13
9th Meeting
(13thT Term)
2019.8.13
The agendas, the nature of conflicting interests, and the voting outcome
・Approved the release of non-competition restrictions for the managers
An interested party relationship existed among Directors Jui-Tsung Chen, Chung-Pin Wong,
Ming-Chih Chang, and Sheng-Hua Peng. In order to avoid conflict of interest, these Directors
recused themselves from discussion and voting on this proposal. Upon solicitation of
comments by the Chairman of the meeting, there was no objection addressed and the
resolution was adopted unanimously by the remaining Directors present.
・Approved the establishment of Compal Electronics Kaohsiung Branch Office
An interested party relationship existed in Director Chung-Pin Wong. In order to avoid
conflict of interest, the Director recused himself from discussion and voting on this proposal.
Upon solicitation of comments by the Chairman of the meeting, there was no objection
addressed and the resolution was adopted unanimously by the remaining Directors present.
・Approve the first mid-year employees’ bonus of 2019
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, if an interested party relationship exists among any Directors and any
agenda proposals, such Directors should recuse themselves during discussion of and voting
on those proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen,
Chung-Pin Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial
officers of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
・Approve employees’ salary adjustment of 2019
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, if an interested party relationship exists among any Directors and any
agenda proposals, such Directors should recuse themselves during discussion of and voting
on those proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen,
Chung-Pin Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial
officers of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
・Passed the compensation of Directors’ Remuneration of 2018
Chairman Sheng-Hsiung Hsu asked the Independent Director Min-Chih Hsuan to act as a
deputy chairman to preside at this meeting for discussion and voting on this proposal. Since
an interested party relationship existed, the Directors (i.e., Sheng-Hsiung Hsu, Jui-Tsung
Chen, Wen Being Hsu, Shyh-Yong Shen［attended by proxy of Sheng-Hsiung Hsu］, Charng-
Chyi Ko, Sheng-Chieh Hsu, Yen-Chia Chou, Chung-Pin Wong, Chiung-Chi Hsu, Ming-Chih
Chang, Sheng-Hua Peng), recused themselves from discussion and voting on this proposal
to avoid conflict of interest. Upon solicitation of comments by the deputy chairman, there
was no objection addressed and the resolution was adopted unanimously by the remaining
Directors present.
・Approve the second mid-year employees’ bonus of 2019
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, if an interested party relationship exists between any Directors and any
agenda proposals, such Directors should recuse themselves during discussion of and voting
on those proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen,
34
10th Meeting
(13thT Term)
2019.11.11
13th Meeting
(13thT Term)
2020.5.13
Chung-Pin Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial
officers of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
・Approved the compensation of Employee bonuses in cash of year 2018
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, if an interested party relationship exists between any Directors and any
agenda proposals, such Directors should recuse themselves during discussion of and voting
on those proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen,
Chung-Pin Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial
officers of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
・Approved the proposal for 2019 year-end employees’ bonus
In accordance with the Company’s Regulations Governing the Proceedings of Board of Directors
Meetings, if an interested party relationship exists between any Directors and any agenda
proposals, such Directors should recuse themselves during discussion of and voting on those
proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen, Chung-Pin
Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial officers of
Compal, avoided discussion and voting on this proposal. Upon solicitation of comments by the
chairman, there was no objection addressed and the resolution was adopted unanimously by
the remaining Directors present.
・Approved the release of non-competition restrictions for the managers
A conflict of interest relationship between multiple parties exists among Directors Jui-Tsung
Chen, Chung-Pin Wong and Sheng-Hua Peng. In order to avoid conflict of interest, these
Directors recused themselves from discussion and voting on this proposal. Upon solicitation
of comments by the Chairman of the meeting, there was no objection addressed and the
resolution was adopted unanimously by the remaining Directors present.
・Approved the first mid-year employees’ bonus of the year 2020
・Approved the proposal for 2019 year-end employees’ bonus
In accordance with the Company’s Regulations Governing the Proceedings of Board of Directors
Meetings, if an interested party relationship exists between any Directors and any agenda
proposals, such Directors should recuse themselves during discussion of and voting on those
proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen, Chung-Pin
Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial officers of
Compal, avoided discussion and voting on this proposal. Upon solicitation of comments by the
chairman, there was no objection addressed and the resolution was adopted unanimously by
the remaining Directors present.
・Approved employees’ salary adjustment of the year 2020
・Approved the proposal for 2019 year-end employees’ bonus
In accordance with the Company’s Regulations Governing the Proceedings of Board of Directors
Meetings, if an interested party relationship exists between any Directors and any agenda
proposals, such Directors should recuse themselves during discussion of and voting on those
proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen, Chung-Pin
Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial officers of
Compal, avoided discussion and voting on this proposal. Upon solicitation of comments by the
chairman, there was no objection addressed and the resolution was adopted unanimously by
the remaining Directors present.
・Approved the proposal for the appropriate percentage for the remuneration of employees
and Directors of the year 2020
・Approved the proposal for 2019 year-end employees’ bonus
35
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, if an interested party relationship exists between any Directors and any
agenda proposals, such Directors should recuse themselves during discussion of and voting
on those proposals. Accordingly, to avoid conflict of interest, Directors Jui-Tsung Chen,
Chung-Pin Wong, Ming-Chih Chang, and Sheng-Hua Peng, who are also acting as managerial
officers of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
3. Self-Evaluation of the Board of Directors:
The Board of Directors enacted the “Rules of Self-Evaluation of the Board of Directors and Functional
Committees Performance” on March 30, 2020.
Evaluation
cycles
Evaluation
periods
Scope of
evaluation
Method of
evaluation
Once a year
From June 1, 2019 to May 31, 2020
Board of Directors, Functional Committees (Including Audit Committee, Remuneration
Committee), individual directors
Internal self-evaluation of Board of Directors and Functional Committees
(Including Audit Committee, Remuneration Committee), Self-evaluation of individual
directors
◆Criteria for evaluating the performance of the Board of Directors, which should cover the
following five aspects:
1.Participation in the operation of the Company;
2.Improvement of the quality of the Board of Directors' decision making;
3.Composition and structure of the Board of Directors;
4.Election and continuing education of the Directors; and
5.Internal control
◆Criteria for evaluating the performance of the Functional Committees, which should cover
Content of
evaluation
the following five aspects:
1.Participation in the operation of the Company;
2.Awareness of the duties of the Functional Committee;
3.Improvement of quality of decisions made by the Functional Committee;
4.Makeup of the Functional Committee and election of its members; and
5. Internal control.
◆Criteria for evaluating the performance of the individual directors, which should cover the
following five aspects:
1.Alignment of the goals and missions of the Company;
2.Awareness of the duties of a Director;
3.Participation in the operation of the Company;
4.Management of internal relationship and communication;
5.The Director's professionalism and continuing education; and
6. Internal control.
4. 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” in 2011. During the election of the 11th
Board of Directors and Supervisors at the 2012 annual shareholders’ meeting, 3 independent
directors were elected and appointed to be the committee members of the Remuneration
36
Committee.
Supervisor positions were replaced with the Audit committee after the 12th Board of Directors
was elected at the 2015 annual shareholders’ meeting.
In 2019, the “Rules and Procedures for Board of Directors Meetings” was amended in accordance
with the “Key points for the establishment and compliance of exercising duties of powers of the
Board of Directors by TWSE Listed Companies” and “Company Act,” and the Company shall appoint
a chief corporate governance officer to execute corporate governance matters.
In 2020, to implement corporate governance, enhance the Board of Directors function and set up
the performance targets, the “Rules of Self-Evaluation of the Board of Directors and Functional
Committees Performance” was enacted to strengthen their operation efficiency.
37
3.3.2 Audit Committee
‧The Company’s Audit Committee has three members.
‧The term of the 2nd committee is from June 22, 2018 to June 21, 2021.
‧There were four Audit Committee meetings during 2019 (A). The attendance records of the
Independent Directors are as follows:
Title
Name
Attendance in
Person (B)
By Proxy
Attendance Rate
(%) [B/A]
Remarks
Independent Director Min-Chih Hsuan
Independent Director
Duei Tsai
Independent Director
Duh Kung Tsai
4
4
3
0
0
1
100%
100%
75%
-
-
-
■ Duties of the Audit Committee
The Audit Committee exists as an enhancement to the Company's supervisory and
management function. It assists the Board of Directors in various decisions such as review of financial
statements, internal control policies, internal audits, accounting policies and procedures, major asset
transactions, appointment/dismissal/independence/suitability of certified public accountants,
appointment/dismissal of the chief accountant and chief auditor, etc., thereby ensuring that the
Company operates in compliance with the competent authority's instructions and relevant laws.
■ The powers of the Committee are as follows:
1. The adoption of or amendments to the internal control system pursuant to Article 14-1 of the
Securities and Exchange Act.
2. Assessment of the effectiveness of the internal control system.
3. The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the
procedures for handling financial or business activities of a material nature, such as acquisition or
disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees
for others.
4. Matters in which a director is an interested party.
5. Asset transactions or derivatives trading of a material nature.
6. Loans of funds, endorsements, or provision of guarantees of a material nature.
7. The offering, issuance, or private placement of equity-type securities.
8. The hiring or dismissal of a certified public accountant, or their compensation.
9. The appointment or discharge of a financial, accounting, or internal audit officer.
10. Annual financial reports which are signed or sealed by the chairperson, managerial officer, and
accounting officer.
11. Other material matters as may be required by this Corporation or by the competent authority.
38
■ The major audit items of the Audit Committee in 2019 are as follows:
1. 2018 Financial Statement
2. To evaluate the CPAs’ independence and competence for performing the financial report audit.
3. To approve the amendment to the “Procedures for Acquisition or Disposal of Assets," “Procedures
for Financial Derivatives Transactions," “Procedures for Endorsement and Guarantee," “Procedures
for Lending Funds to Other Parties” and “Ethical Corporate Management Best Practice Principles
4. Appointment of the manager of the Kaohsiung Branch Office.
5. A matter bearing on the personal interest of the director and Manager
6. A material monetary loan
7. A material asset transaction.
8. Assessment of the design and operation effectiveness of the internal control system.
9. The defects, irregularities, and the status of corrections in the internal control system.
10. Annual audit plan for year 2020
11. Compliance with the relevant laws and regulations by this Corporation.
■ 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
Meeting
6th Meeting
(13th Term)
2019.3.22
Content of discussion and actions taken in response
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.
1. To review and approve the Consolidated and
Individual Financial Statements for 2018.
2. To review and approve the Company’s Internal
Control Declaration for 2018.
3. To review and approve the independence and
fitness of the CPA engaged by the Company for the
Financial Statements.
V
V
V
None
None
None
▲ Resolution adopted by the Audit Committee (2019.3.22):
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in response to opinion of the Audit Committee:
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Directors present.
9th Meeting
(13th Term)
2019.5.13
1.To approve the amendment to the “Procedures for
Acquisition or Disposal of Assets”
2.To approve the amendment to the “Procedures for
Financial Derivatives Transactions”
3.To approve the amendment to the “Procedures for
Endorsement and Guarantee”
4.To approve the amendment to the “Procedures for
Lending Funds to Other Parties”
5. To review and approve the motion to lift the non-
competition restriction for Managers.
6. To propose the manager of the Kaohsiung Branch
Office.
7.To approve fund loan to100% owned subsidiary
39
V
V
V
V
V
V
V
None
None
None
None
None
None
None
Compal (Vietnam) Co., Ltd.
8.To approve fund loan to 100% owned subsidiary
Compalead Eletrônica do Brasil Indústria e Comércio
Ltda.
V
▲ Resolution adopted by the Audit Committee (2019.5.13):
None
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in response to the opinion of the Audit Committee:
・Motion 1~4 and Motion 7~8:
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Directors present.
‧ Motion 5:
An interested party relationship existed among Directors Jui-Tsung Chen, Chung-Pin Wong,
Ming-Chih Chang, and Sheng-Hua Peng. In order to avoid conflict of interest, these Directors
recused themselves from discussion and voting on this proposal. Upon solicitation of
comments by the Chairman of the meeting, there was no objection addressed and the
resolution was adopted unanimously by the remaining Directors present.
‧ Motion 6:
An interested party relationship exited in Director Chung-Pin Wong. In order to avoid conflict
of interest, the Director recused himself from discussion and voting on this proposal. Upon
solicitation of comments by the Chairman of the meeting, there was no objection addressed
and the resolution was adopted unanimously by the remaining Directors present.
1.To approve for a loan to Henghao Technology Co. Ltd.
2.To approve for a loan to Unicom Global, Inc.
▲ Resolution adopted by the Audit Committee (2019.8.13):
None
None
V
V
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in response to opinion of the Audit Committee:
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Directors present.
1.To propose for approval of annual audit plan for year
2020
2.To approve the amendment to the “Ethical Corporate
Management Best Practice Principles”
3.To approve the proposal of leasing the office
(building) and car parking lots, with Shin Kong Life
Insurance Co., Ltd.
V
V
V
None
None
None
▲ Resolution adopted by the Audit Committee (2019.11.11):
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in response to opinion of the Audit Committee:
Upon solicitation of comments by the Chairman, there was no objection addressed and the
resolution was adopted unanimously by the Directors present.
9th Meeting
(13thT Term)
2019.8.13
10th Meeting
(13thT Term)
2019.11.11
(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.
40
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, and the reasons for the
avoidance, and the voting and attendance status: None.
3. Status of communication between Independent Directors, Internal Audit Officer, and CPA:
(1) Method of communication between Independent Directors, the Internal Audit Officer, and CPA:
After the Internal Audit Officer 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
the audit results to the Audit Committee on a quarterly basis and discuss the 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 the 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 Officer:
Date
2019.3.22
Content of discussion
1. Report on operational status of
the internal audit activities
2.To approve the Internal Control
System Statement for the year
2018
1. Report on operational status of
the internal audit activities
2019.5.13
2019.8.13
1. Report on operational status of
the internal audit activities
2019.11.11
1. Report on operational status of
the internal audit activities
2. To propose for approval of annual
audit plan for year 2020
2020.3.30
1. Report on operational status of
the internal audit activities
2.To approve the Internal Control
System Statement for the year
2019
1. Report on operational status of
the internal audit activities
2020.5.13
Results
The report was reviewed by the Audit
Committee whereupon independent directors
raised no objection or further instruction.
The proposal was approved by the Audit
Committee and will be resolved by the Board of
Directors
The report was reviewed by the Audit
Committee whereupon independent directors
raised no objection or further instruction.
The report was reviewed by the Audit
Committee whereupon independent directors
raised no objection or further instruction.
The report was reviewed by the Audit
Committee whereupon independent directors
raised no objection or further instruction.
The proposal was approved by the Audit
Committee and will be resolved by the Board of
Directors
The report was reviewed by the Audit
Committee whereupon independent directors
raised no objection or further instruction.
The proposal was approved by the Audit
Committee and will be resolved by the Board of
Directors
The report was reviewed by the Audit
Committee whereupon independent directors
raised no objection or further instruction.
41
(3) Summary of the communications between the Independent Directors and CPA:
Content of discussion
Results
Date
2019.3.22
The proposal was approved by the
Audit Committee and will be
resolved by the Board of Directors
The proposal was approved by the
Audit Committee and will be
resolved by the Board of Directors
1. To approve 2018 Audited Consolidated
Financial Statements and Parent Company
Only Financial Statements
˙Explanation of key audit items
˙Financial statements and major accounting
items analysis
2020.3.30
1. To approve 2019 Audited Consolidated
Financial Statements and Parent Company
Only Financial Statements
˙Explanation of key audit items
˙Financial statements and major accounting
items analysis
˙Description of the Company's self-made
financial report process
42
3.3.3 Corporate Governance Implementation and Deviations from the “Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies”
Actual governance
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
No
Summary description
The Company’s corporate governance principles were approved by the Board of Directors on May
13, 2020, and have been disclosed on its official website and MOPS.
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
Assessment criteria
Yes
Yes
I. Has the company established
and disclosed its corporate
governance principles based
on the “Corporate
Governance Best-Practice
Principles for TWSE/TPEX
Listed Companies?”
II. Shareholding structure and
shareholders’ interests
1. Has the company
Yes
implemented a set of internal
procedures to handle
shareholders’ suggestions,
queries, disputes, and
litigations?
2. Is the company constantly
Yes
The Company keeps track of the identity of its ultimate controller by monitoring insider
informed of the identities of its
major shareholders and the
ultimate controller?
shareholding positions (including that of directors, supervisors, managers, and shareholders with
more than 10% ownership interest), with the shareholder registry held by the share
administration agency.
3. Has the company established
Yes
The Company has established “Internal Control Policy - Non-trade Activities - Supervision and
and implemented risk
management practices and
firewalls for companies it is
affiliated with?
4. Has the company established
internal policies that prevent
insiders from trading securities
against non-public
information?
Yes
Management of Subsidiaries," “Internal Control Policy - Trade Activities – Investment
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 the internal control of the Company
and details are published on the intranet and linked to the TWSE website to which employees have
access. Both policies have been included as part of the compulsory e-Learning courses for
departmental heads, and eCSA questionnaires are issued on a yearly basis to facilitate self-
assessment. Insiders such as directors, supervisors, and managers are given a copy of the TWSE
43
No deviations were
found
No deviations were
found
No deviations were
found
Assessment criteria
Actual governance
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
III. Assembly and obligations of
the board of directors
1. Has the board devised and
implemented policies to ensure
the diversity of its members?
Yes
No
Summary description
“Insider Share Trading Manual” when they come aboard to make them aware of the company
insider rules.
Yes
The Company has established rules and regulations such as the “Corporate Governance
Guidelines” and “Rules for Director Election” to ensure a 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. 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 50.
No deviations were
found
2. Apart from the Remuneration
Yes
Committee and Audit
Committee, has the company
assembled other functional
committees at its own
discretion?
Apart from the Remuneration and Audit Committees, the Company has also established a CSR
Committee headed by President & CEO Chung-Pin Wong, who in turn reports to the Board of
Directors regarding the operating status and results of the committee on a yearly basis.
No deviations were
found
3. Has the Company established
Yes
performance evaluation
measures and methods for the
board of directors, conducted
performance evaluation
annually and regularly,
The Board of Directors enacted the “Rules of Self-Evaluation of the Board of Directors and
Functional Committees Performance” on March 30, 2020. The performance evaluation scope
covers the evaluation of the Board as a whole, individual directors and Functional Committees.
Methods of evaluations included the Self-Evaluation of the Board of Directors and Functional
Committees, self-evaluation by individual board members, or other appropriate methods. The
evaluation results, being submitted to the Remuneration Committee analytical review and
No deviations were
found
44
Assessment criteria
Actual governance
Yes
No
Summary description
reported the results of
performance evaluation to the
board of directors and applied
them to the reference of salary
and remuneration of individual
directors and nomination and
renewal? )
4. Is the independence of
Yes
external auditors assessed on a
regular basis?
IV. Is the listed or OTC company
Yes
equipped with competent
and appropriate number of
corporate governance
personnel and has its
designated corporate
governance director to be
responsible for corporate
governance related matters
(including but not limited to
providing information
required by directors and
supervisors to carry out
business, assisting directors
reported to the Board of Directors for discussion and improvement, shall be used as reference in
determining individual Directors compensation and their nomination of next office term.
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 CPA at least once a year, in accordance with
Article 47 of the CPA Law and Bulletin 10 of the Norms 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 Cheng-Chiang Wang 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 BOD secretariat was assigned as the Company’s responsible unit for corporate
governance to handle relevant affairs.
VP Cheng-Chiang Wang and the designated personnel responsible for corporate governance have
more than 25 years of experience in stock affairs and meeting-related management for publicly
traded companies.
They are primarily responsible for handling corporate governance affairs, such as handling matters
relating to board meetings and shareholders meetings according to the laws, producing minutes of
board meetings and shareholders meetings, assisting in onboarding and continuous development
of directors, furnishing information required for duty execution by directors and members of the
audit committee, ensuring legal compliance and taking other matters set out in the articles or
corporation or contracts, periodically examining and revising the Company’s corporate governance
45
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
Assessment criteria
Actual governance
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
and supervisors to comply
with laws and regulations,
managing related matters of
the board of directors’
meeting and shareholders'
meeting in accordance with
laws, taking minutes of the
board of directors’ meeting
and shareholders' meeting,
etc.)
V. Has the company provided
proper communication
channels and created
dedicated sections on its
website to address
corporate social
responsibility issues that are
of significant concern to
stakeholders (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
Yes
No
Summary description
guidelines and relevant procedures, improving disclosure transparency, safeguarding shareholder
rights and promoting better corporate governance. For more information on the status of Compal’s
corporate governance operations for 2019, refer to page 51.
Yes
The Company has addressed its stakeholder relations on its corporate website, CSR report, and CSR
Sustainability website. Separate contact persons, phone numbers, and e-mail addresses have been
provided for each type of stakeholder relation to ensure that queries are directed to the relevant
departments. In addition, an online “Material Aspects” questionnaire has also been created for
stakeholders to identify issues that are of significant concern. The Company will address
stakeholders’ responses properly and take their suggestions as part of the Company’s goals.
No deviations were
found
Yes
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
Yes
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
46
Actual governance
Yes
No
Summary description
Yes
‧The Company website has both Chinese and English pages. The information is 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 broadcast on the TWSE platform (at
https://www.compal.com/investor-relations/financial-release/).
No
The Company financial reports were not able to be announced and filed within two months after
the fiscal year end. However, the date of the Company's announcing and filing financial reports
for annual and quarterly, such as first, second, third, as well as business operational results for
each month were earlier than that of statutory request.
Assessment criteria
information?
2. Has the company adopted
other means to disclose
information (e.g. an 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)?
3. Does the Company announce
and declare the annual
financial report within two
months after the end of the
fiscal year and announce and
declare the first, second, and
third quarter financial reports
and the operation of each
month ahead of the required
time limit?
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
No deviations were
found
The Company will
carefully assess the
probability of
announcing and
filing annual financial
reports within two
months after the
fiscal year end.
47
Actual governance
Summary description
• Employee rights and care for employees (page 52)
• Code of conduct for directors, managers, and employees (page 52)
• Investor relations (page 53)
• Supplier relations and execution of customer policy (page 53-54)
• Stakeholders’ interests (page 54)
• Risk management practice and framework (page 54-56), Risk analysis (page 171-176)
• Purchasing liability coverage for the company’s directors, supervisors, and managers (page 56)
• Continuing education for directors and managers (page 57-58)
• Succession plan for Board members and key Management team (page 58)
• Certificate and qualification acquisition status for personnel (page 59)
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
No deviations were
found
No
Yes
Yes
Assessment criteria
VIII. Does the company offer
other vital information
(including but not limited to
employee rights, employee
care, investor relationships,
supplier relationships,
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?
48
Assessment criteria
Actual governance
Deviation and causes of
deviation from the
Corporate Governance
Best-Practice Principles
for TWSE/TPEX Listed
Companies
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.
Yes
No
Summary description
• With regards to the further education of Directors (including Independent Directors), Compal has advocated and encouraged Directors to take part in courses on the
pertinent regulations offered by subsidiary Kinpo Group Management Consultant Company or training provided by external professional organizations. In 2019,
members of the Board of Directors completed a total of 24 hours of training.
• In 2019, the amendment to the “Articles of Incorporation," “Procedures for Acquisition or Disposal of Assets," “Procedures for Financial Derivatives Transactions,"
“Procedures for Endorsements and Guarantees," “Procedures for Lending Funds to Other Parties," “Corporate Governance Best-Practice Principles," “Rules and
Procedures for Board of Directors Meetings” and “Ethical Corporate Management Best Practice Principles” were proposed to accommodate the business needs and the
requirements of applicable laws and regulations. The Board of Directors approved the policies that were based on integrity accordingly. In addition, the Board of
Directors and the management had issued "The statement of compliance with the Ethical Corporate Management Best Principles".
• In 2019, with setting forth a performance target to improve the operation efficiency of the Board of Directors, the "Rules of Self-Evaluation of the Board of Directors and
Functional Committees Performance” was enacted. , In addition, the enactment to the "Colleague Integrity Code" has made and the amendment to the “"Rules and
Procedures for Board of Directors Meetings," "Audit Committee Charter," "Remuneration Committee Charter," "Corporate Governance Best-Practice Principles,"
"Corporate Social Responsibility Best Practice Principles" and "Procedures for Ethical Management and Guidelines for Conduct" are completed to accommodate the
business needs and the requirements of applicable laws and regulations.
• In the “6th Round of Corporate Governance Evaluations” by TWSE, Compal was placed in the top 6%~20% listed companies.
• The Company will provide the quarterly financial report in English from the first quarter of 2020.
49
Operation
management
Leadership
and decision-
making
Knowledge
of the
industry
International
market
perspective
Finance
and
accounting
Legal
A. Status of board member diversification :
Core items for
diversification
Name of director
Sheng-Hsiung Hsu
Jui-Tsung Chen
Representative of Binpal
Investment Co., Ltd.:Wen-
Being Hsu
Representative of Kinpo
Electronics Inc.: Shyh-Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Chung-Pin Wong
Chiung-Chi Hsu
Ming-Chih Chang
Anthony Peter Bonadero
Sheng-Hua Peng
Min-Chih Hsuan
Duei Tsai
Duh-Kung Tsai
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
Item
31 ~ 50 years old
51~65 years old
65 years and over
Male
Female
Republic of China
United States
Age
Gender
Country of
Citizenship
Employee Status (Note)
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
Director
Independent Director
1
5
6
12
0
11
1
5
0
0
3
3
0
3
0
0
Note: Concurrently an employee of the Company, subsidiaries companies.
50
B. The status of Compal’s corporate governance operations for 2019 is as follows:
●
●
●
●
Compiled and prepared relevant documents needed for the Audit Committee and the Board of
Directors’ Meetings in accordance with pertinent regulations and operational/financial needs; and be
responsible for coordination of relevant units and coordination of proposal making from different
relevant units.
Pursuant to amendments to pertinent regulations, operations needs and corporate governance, partial
revisions have been made to the “Articles of Incorporation," “Procedures for Acquisition or Disposal of
Assets," “Procedures for Financial Derivatives Transactions," “Procedures for Endorsement and
Guarantee," “Procedures for Lending Funds to Other Parties," “Corporate Governance Best-Practice
Principles," “Rules and Procedures for Board of Directors Meetings," “Ethical Corporate Management
Best Practice Principles” and the Company formulates policies that are based on integrity accordingly,
all of which have been submitted to the Board of Directors for approval.
Planned the communication meeting between Independent Directors, Internal Audit Supervisors and
CPA to have the Audit Committee determine the independence and fitness of the CPA engaged by the
Company as a measure to ensure sound corporate governance. For the records of the communication
meetings, access Compal’s website.
Pursuant to “Directions for the Implementation of Continuing Education for Directors and Supervisors
of TWSE Listed and TPEx Listed Companies," Compal has advocated and encouraged Directors to take
part in the courses on pertinent regulations offered by subsidiary Kinpo Group Management Consultant
Company or by external professional organizations.
●
●
● Disclosed and announced important information in conjunction with Board of Directors Meetings,
Shareholders Meetings, financial and sales information; in addition, the Company has also held investor
conferences at least two times annually, and has been invited to attend domestic/overseas investor
conferences to help investors better understand the Company’s status of operation.
Registered the date for Shareholders Meetings as required by law; prepared meeting notifications
within the scheduled deadline, meeting handbook and meeting minutes and filing; coordinated relevant
units, agents for stock affairs, CPA, attorneys and so forth.
․Contents on the chapter for corporate governance – responsible for the collection of data, compilation
of stock affairs data, coordination of different units and editing.
Corporate governance evaluation – responsible for the collection of data, compilation of stock affairs
data, coordination of different units and website maintenance.
The Company has offered liability coverage for directors, supervisors and managers. The amount for
their liability insurance in 2019 came to USD 50,000 thousand, which was roughly equivalent to NTD
1,525,000 thousand. Vital information relating to their liability insurance was reported to the Board of
Directors on the meeting of the Board of Directors.
Continuing education for the Corporate Governance Officer is offered in total 21 hours. The exact
education program, please see page 58.
●
●
●
51
X. Other vital information on the operating status of corporate governance:
■ Employees' rights and care for employees
Compal respects employees' rights and tends to their needs. All internal policies are updated constantly
to reflect the latest labor regulations, and published to ensure understanding and compliance from
employees. Compal's subsidiaries in the USA, China, Brazil, Vietnam, and India have all established
employment guidelines in accordance with local labor regulations, and all terms of employment are
compliant with the laws of the local countries and regions.
The Company's support for equal work opportunities and respect for employees' freedom of association
have led to the assembly of a union at Kunshan Factory. Employees are offered equal compensation for
equal work, whereas salary details are approved based on the nature of work involved and individual
performance. The Company has nursery rooms available throughout the organization. It actively prevents
and resolves sexual harassment incidents, grants workers the break and overtime pay they deserve,
purchases social insurance coverage, and contributes to employees' pension funds.
Compal is committed to creating communication platforms where employees may exchange opinions and
information. A “Sunshine Group” and hotlines have been set up at all plant sites and are run by
compassionate people who promptly respond to employees' thoughts. By providing employees with the
means to express feelings and complaints, the Company is able to help employees resolve difficulties in a
timely manner. In an attempt to create a joyful work environment where talents are assigned to suitable
positions, Compal publishes recruitment information internally and offers employees the freedom to
choose or transfer to positions they consider suitable, and thereby assures satisfaction across the work
force and protects employees' interest.
Compal provides employees with the following health-related facilities and services outside of work:
‧
Common dining: Employee dining facilities have been made available to serve nutritional and healthy
foods.
Recreation center: Places where employees may hold club activities, exercise, and make friends.
Spiritual, health, and arts seminars: The Company organizes health seminars, spiritual seminars,
musical performances, and art exhibitions from time to time, and uses them as a means of stress relief
to cater to employees' physical and mental health.
Infirmary and stationed physicians: Employees may consult physicians and access timely medical
assistance for them and their family members.
‧
‧
‧
・ Employee assistance services are available. Employees can consult with consultants on work, family,
relationships, physical and mental health, mental illness, finance, legal, and management issues through
a dedicated line or E-mail.
■ Codes of conduct for directors, managers, and employees
Compal has established an ethics policy as described below to enforce business integrity and to guide
employees toward complying with laws and ethics for the protection of Compal's and stakeholders' assets,
interests, and reputation:
‧
‧
Comply with government regulations.
Protect the interests of employees, customers, shareholders, suppliers, communities, and relevant
52
‧
‧
organizations.
Uphold business integrity and the principles of fair trade, fair advertising, and fair competition. Refrain
from making illicit gains. Make information transparent to stakeholders while at the same time
respecting intellectual property rights, privacy, and identity protection. Prohibit retaliation and make
responsible purchase of minerals.
Continually improve, execute, and convey the Company's ethics policy to relevant organizations.
In addition to implementing an ethics policy, Compal has also established a Human Resource
Management Policy, Director and Manager Code of Conduct, and Employee Code of Conduct not only in
the employees' best interest, but also to communicate with stakeholders about the moral standards and
behavioral guidelines that employees are bound to obey when carrying out their duties. All employees
are required to sign a "Confidentiality Commitment Letter" when coming on board, which is a declaration
to abide by the Company's rules, the Human Resources Management Policy and to maintain
confidentiality of the Company's business secrets.
■
Investor relations
The Company has an Investor Relations Department available to handle shareholders' recommendations.
The department bridges communication between the Company and its investors. In addition to hosting
investor seminars on a regular and ad-hoc basis, the department has also created an Investor Relations
section on the Company's website to facilitate complete and fair disclosure of Compal's latest progress,
and thereby provide investors with full understanding of the Company's business performance and long-
term goals. In 2019, Compal organized two investor conferences on its own and was invited to participate
in four investor forums hosted by foreign brokers, which it used as a means to promote investors'
understanding towards the Company's operations.
■ Supplier relations and execution of customer policy
The Company signs contracts with all suppliers and customers not only to protect the interests of both
parties, but also to maintain a strong working relationship.
With respect to green products and parts, the Company coordinates closely and systematically with
partnered suppliers, and follows a robust review and certification process to ensure effective
communication, tracking, management, and elimination of parts that contain prohibited chemical
substances. Every supplier and business partner thereof is able to inquire about the latest "Compal
Environmental Management Standard for Parts and Materials" through the SDCP (Supplier Design
Cooperation Portal: sdcp.compal.com)/GPMS (Green Product Management System). They are also
required to provide assurance that all raw materials supplied are free of substances that may potentially
harm the environment.
The Company's R&D, production and quality assurance departments and all major customers are able to
learn information concerning chemical composition and content of green products through the use of
this system, and take measures such as sample testing and on-site inspection as deemed necessary.
The Company operates throughout Europe, America, and Asia, and has service centers established at
main business locations to provide customers with safe and high-quality products, as well as complete
and correct product information. The Company addresses customer complaints actively and immediately.
53
It accepts customers' audit requests, participates in customers' activities, and handles critical
correspondences in a confidential manner. The Company has always been protective of customers' secrets.
It has firewalls in place to block exchange of confidential information between customers, teams, office
areas, and factories. A specialized team has been assembled to monitor the security of network
information from time to time for the protection of customers' interests. Meanwhile, all employees are
required to sign a confidentiality agreement that prohibits them from openly discussing customers' details.
It is the organization's goal to provide customers with the most comprehensive service network and the
best protection anywhere in the world. There has been no violation of law concerning the offering and
use of products or services.
■ Stakeholders' interests
Stakeholders are able to communicate with and make suggestions to the Company for the protection of
their interests. The Company provides safe and high-quality products along with complete and accurate
product information to customers. Customers' complaints are addressed immediately.
■ Risk management
1. Risk management practice
(1) One of the purposes of the risk management policy is to discover any risk factors in advance that might
adversely affect operations, so that the Company may then apply appropriate assessments and
treatments to transfer risks and mitigate or prevent losses. Another purpose is to enable timely detection
and warning of changes in the internal and external environment, and thereby allow employees
worldwide to execute risk management practices within their areas of responsibility in a timely manner.
The Company has established its own financial, sales, and accounting system, and a system for monitoring
financial and business information of its subsidiaries in accordance with "Regulations Governing the
Establishment of Internal Control Systems by Public Companies". The Company has also set up relevant
guidelines for supplier management, customer relations, R&D, human resources, financial affairs,
credit/endorsement/guarantee arrangements with affiliated businesses, and acquisition/disposal of key
assets. These policies, risk assessment standards, and procedures serve as a guideline by which
employees may abide for risk assessment and management. Dedicated personnel have been appointed
in every department to manage, control, minimize, and prevent Company risks.
(2) The Internal Control System developed by the Company is distinguished between the Overall Level
and Operation Level. Five elements (Control Environment, Risk Assessment, Control Operation,
Information and Communication, Supervision) have been incorporated into each transaction cycle at the
operation level. In recent years, the Company has made enhancements to corporate risk management
based on the latest Regulations Governing Establishment of Internal Control Systems by Public Companies,
corporate governance practice, internal audit theory, technology, and various codes of conduct by
adopting robust risk detection, assessment, reporting, handling, and prevention measures.
The Company's risk control mechanism operates on three levels:
‧
The first level involves the organizer or handling officer, who is responsible for risk discovery,
54
‧
‧
level
involves heads of various divisions
assessment and control at first contact, as well as designing preventive measures against risks.
The second
(offices), headquarters, business
departments/centers and regional business groups/centers, Executive Vice Presidents and the
President. This level comprises members of the senior management, who are responsible for
assessing the feasibility of various operations as well as identifying, handling, and preventing
operational risks.
The third level involves review by Legal Affairs, the Auditing Office, the Board of Directors, and the
Audit Committee. The Company involves all employees as part of the risk management system and
implements layered controls over day-to-day operations.
(3) From the implementation perspective, all the divisions of the company evaluate various business risks
to make contingency plans, while preparing annual budget and work plan. At the same time, the internal
audit office drafts the annual audit plans for the coming year based on the risk assessment of operating
activities. The annual audit plan is implemented after being approved by the Board of Directors, and the
execution status is also reported to the Board of Directors. Given the Company's role as an ODM for 5C
electronics, we review and assess business risks on an annual basis, and reflect our findings in the financial
statements under accounts such as allowance for doubtful debts, warranty reserves, and royalties. All
provisioning policies are submitted to the CPA for review whenever adjustments are made. This is to
ensure that financial reports present a fair view of the Company's operations. Furthermore, the Company
has dedicated personnel appointed to monitor and control exchange rate risks, and take hedging
measures as necessary (please refer to page 171).
(4) If an important operating activity is identified with a potential urgent risk, it can be reported to the
supervisor immediately for proper prevention. For extremely important matters, such as investments or
engineering bidding, will be jointly reviewed by relevant departments. Audits will be performed on a
regular or irregular basis.
2. Risk management framework
Key risk areas
‧Interest rate, exchange rate,
inflation and financial risks
‧High-risk or highly leveraged
investment, loan to third
party, endorsement,
guarantee, trading of
derivatives and treasury
investment
‧R&D planning
‧Changes in policy and law
‧Changes in technology and
industry
‧Changes in corporate image
‧Investment, subsidiary and
Front line unit
(Business organizer)
(Level 1)
Risk review and control
(Executive management
meeting)
(Level 2)
‧Finance Department ‧Operation Team
Board of directors, Audit
Committee, Legal Affairs
Office, Auditing Office
(Level 3)
‧Legal Affairs Office:
Oversees legal affairs
and makes
suggestions on risk
identification,
assessment and
prevention
‧Business
‧Corporate investment
departments/centers
(Note 1)
‧Common
departments (Note 3)
review
‧Executive management
meeting
‧Subsidiaries monitoring
and management report
‧Auditing Office:
Risk inspection,
evaluation,
supervision,
improvement and
reporting
55
M&A benefits
‧Expansion of factory,
production site and
equipment
‧Centralized purchase or sale
‧Equity transfer involving
directors, supervisors, and
major shareholders
‧Change of management
‧Litigation and non-contentious
cases
‧Business
‧Monthly operating
departments/centers
(Note 1)
‧Common
departments (Note 3)
‧Share administration
meeting
‧Production and
marketing meeting
‧Share administration
affairs
‧Board of Directors
affairs
‧Head of
‧Product risk
management
Finance/Accounting
‧Legal affairs
‧Business groups/centers
‧Handling of product safety
‧Managers of all levels
(Note 2)
‧Board of Directors,
Audit Committee:
Decision-making and
ultimate control over
risk evaluation
incidents
‧Other operational affairs
‧Personnel behaviors, ethics,
and conduct
‧Rules (including SOP), internal
control system and
compliance with regulations
‧Managers of all levels
‧HR & Administration
‧Managers of all levels ‧Legal Affairs Office
‧Personnel Evaluation
Committee
‧Investment Planning
and Management Office
‧Auditing Office
‧Finance
‧Accounting
‧HR & Administration
‧IT
‧Board of Directors Meetings ‧Share administration
affairs
‧Secretary of the
Board of Directors
‧Legal Affairs Office
‧Auditing Office
‧Prevention of insider trading ‧Managers of all levels ‧Insider Trading
‧Information security
‧Managers of all levels ‧Information Security
Prevention Office
management
(ISMS) Committee
‧Information Security
Team
Notes: 1. Business departments/centers: America/Europe, Asia Pacific, Operations, Enterprise Products, Auto
Electronics, Creativity, Quality Assurance, Procurement, R&D, Manufacturing, and Sales, etc.
2. Business groups/centers: PC Business Group, Smart Devices Business Group, Global Operations, etc.
3. Common departments: Finance, Accounting, HR & Administration, Investment Planning and Management
Office, Legal Affairs Office, etc.
■ 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 2019 came to USD 50,000,000, which was roughly
equivalent to NTD 1,525,000,000. Vital information relating to their liability insurance was reported to the
Board of Directors on February 14, 2020.
56
■ Continuing education for directors 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 intermittent basis to directors and managers, the
Company would also organize seminars and workshops when deemed necessary. Training completed by
directors and managers in 2019 include:
Date of
training
Organized by
Course title
Hours of
training
Title
Name
Director
Director
Charng-Chyi
Ko
Chiung-Chi
Hsu
Independen
t Director
Min Chih
Hsuan
Independen
t Director
Duei Tsai
Independen
t Director
Duh Kung
Tsai
2019.07.23 Kinpo Group
Management
Consultant Company
2019.07.23 Kinpo Group
Management
Consultant Company
Taiwan Corporate
Governance Association
2019.12.18
Global Economy and Foreign
Exchange Rate Outlook in the
Storm of Trade War
Global Economy and Foreign
Exchange Rate Outlook in the
Storm of Trade War
Compliance of Company Law and
Director's Supervision Obligation
2019.12.18
Taiwan Corporate
Governance Association
2019.07.23 Kinpo Group
Management
Consultant Company
Taiwan Corporate
Governance Association
2019.09.17
2019.11.25
2019.11.13
Taiwan Corporate
Governance Association
Taiwan Corporate
Governance Association
2019.11.13
Taiwan Corporate
Governance Association
How insider trading is avoided in
Corporate, Directors and
Supervisors?
Global Economy and Foreign
Exchange Rate Outlook in the
Storm of Trade War
Introduction of important contract
terms of corporate mergers and
acquisitions
Risk of global and Corporate Social
Responsibility
Understanding and case analysis of
money laundering prevention and
combating capital terrorism
Management and prevention of
new generation enterprise threat :
Analysis of big data and detection
of company fraud
Vice
President
Vice
President
Vice
President
Vice
President
Vice
President
Accounting
Officer
Cheng-Hui Su 2019.02.01 Compal Electronics, Inc. Management for the prevention of
insider trading (Senior managers)
Tu-Chuan Tu 2019.02.01 Compal Electronics, Inc. Management for the prevention of
insider trading (Senior managers)
Chang-Chieh
Tien
2019.02.01 Compal Electronics, Inc. Management for the prevention of
insider trading (Senior managers)
2019.02.15 Compal Electronics, Inc. Management for the prevention of
Cheng-Chiang
Wang
Guo-Dung Yu 2019.12.31 Compal Electronics, Inc. Management for the prevention of
insider trading (Senior managers)
Cheng-Chiang
Wang
2019.12.9~
2019.12.10
Accounting Research
and Development
Foundation
insider trading (Senior managers)
“Training program for the new
Accounting Officer”
The class for the new Accounting
Officer, requested due to the
company share
exchange/transaction on public
57
2
2
3
3
2
3
3
3
3
0.58
0.58
0.58
0.58
0.58
12
Title
Name
Date of
training
Organized by
Course title
Hours of
training
Corporate
Governance
Officer
Cheng-Chiang
Wang
(Note)
2019.08.21 Accounting Research
and Development
Foundation
2019.11.1
Taiwan Corporate
Governance Association
2019.12.09 Accounting Research
and Development
Foundation
2019.12.09 Accounting Research
2019.12.13
2020.02.18
and Development
Foundation
Taiwan Corporate
Governance Association
Taiwan Corporate
Governance Association
Internal
Audit
Officer
2020.03.06
Taiwan Corporate
Governance Association
Powen Hsieh 2019.12.16 Accounting Research
and Development
Foundation
2019.12.20 Accounting Research
and Development
Foundation
place.
Compliance for listed companies in
the matter of appointment of
independent directors & audit
committees
Key audit matters and
corresponding strategies for the
board of directors to learn
Application and legal liability in
Business Judgment Rule under
economic crime
Rules and practices in compliance
with the Corporate Governance
Roadmap 2018~2020
The practice of Audit Committee
Functions and tasks of corporate
governance personnel under the
corporate governance blueprint
Shareholders meeting planning
and case study
How to respond the impact of the
Corporate Governance Roadmap
(2018~2020) for internal audit
Regulatory issues and common risk
patterns of the information
security and personal privacy for
internal audit
3
3
3
3
3
3
3
6
6
Note: Corporate Governance Officer Cheng-Chiang Wang took office on May 13, 2019.
■ Succession plan for Board members and key Management team
Compal launched the succession plan for Board members and the key management team in 2018. The former
President Jui-Tsung Chen (Ray Chen) was promoted to the position of Vice Chairman and Chief Strategy
Officer of the Company, responsible for the Company’s long-term strategy development and implementation.
The President's position was taken by Executive VP Chung-Pin Wong, who joined Compal in 1989 and has full
experience in various positions, such as marketing, procurement, sales, etc. In addition, Anthony Peter
Bonadero, Sheng-Hua Peng (Eric Peng), and Ming-Chih Chang (Mage Chang) were promoted from Senior VP
to Executive VP positions and were appointed to lead the three business group: PCBG, SDBG, and GOBG,
separately. They were also elected as the 13th Board of Directors in 2018. By this, Compal has successfully
completed the succession of the Board members and the key management team that symbolizes transition
into a new generation.
In response to the future growth, the Company will continue to invest in the talents and promote the key
management team’s experience sharing and inheritance, through the arrangement of the regular “Group
General Managers Meetings” and “Executive Management Meetings." This plan and mechanism will enable
the Company to achieve its long-term sustainability goals.
58
■ Certificate and qualification acquisition status for personnel involved in financial information
transparency
Name of certificate
No. of persons
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
6 persons
2 persons
11 persons
5 persons
4 persons
5 persons
2 persons
2 persons
1 person
59
3.3.4 Composition, Responsibilities, and Operations of the Remuneration Committee
A. Professional Qualifications and Independence Analysis of Remuneration Committee Members
Having work
experience in
the areas of
commerce,
law, finance, or
accounting, or
otherwise
necessary for
the business of
the Company
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
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
9
10
Number of
Other Public
Companies in
Which the
Individual is
Concurrently
Serving as an
Remuneration
Committee
Member
Remarks
✔
✔
✔
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
0
2
1
-
-
-
Criteria
Title
(Note 1)
Name
Independent
Director
Independent
Director
Independent
Director
Min-Chih
Hsuan
Duei Tsai
Duh-
Kung Tsai
Note: If the director or supervisor meets the following conditions in the two years before the election and during the term of office, please
mark “✔” in the space below each condition code.
(1) Not an employee of the Company or its affiliated enterprises.
(2) Not a director or supervisor of the Company or its affiliated enterprises (except for concurrent independent directors of the Company
and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(3) A natural person shareholder who or whose spouse or minor children or in another person’s name does not hold more than 1% of the
total issued shares of the Company or is not a top-ten shareholder.
(4) Not a manager in (1) the spouse, second-tier relatives, or third-tier relatives of the persons listed in (2) or (3).
(5) A director, supervisor, or employee of a corporate shareholder who does not directly hold more than 5% of the total issued shares of the
Company or is a top-five shareholder or is designated as a representative to serve as a director or supervisor of the Company in
accordance with paragraph 1 or 2 of Article 27 of the Company Act (except for concurrent independent directors of the Company and its
parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(6) A director, supervisor, or employee of another company who does not have a seat on the board of directors or more than half of the
shares with voting rights are controlled by the same person of this company (except for concurrent independent directors of the Company
and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(7) A director, supervisor, or employee of another company or institution who is not the same person or spouse as the Chairman, President,
or an equivalent position of the Company (except for concurrent independent directors of the Company and its parent company,
subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(8) A director, supervisor, or manager of another company or institution which does not have financial or business dealings with the Company
or a shareholder holding more than 5% of the shares of the Company (not applicable if the Company or institution holds more than 20%
but no more than 50% of the total issued shares of the Company, with concurrent independent directors of the Company and its parent
company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(9) A professional, sole proprietor, partner, business owner or partner, director, supervisor, manager, or the spouse of the above of a company
or institution which does not provide audit services to the Company or its affiliated enterprises or the cumulative remuneration amount
of which in the past two years does not exceed NT$500,000 for business, legal affairs, finance or accounting related services. However,
this does not apply to the members of the remuneration committee, public takeover review committee, or special merger and acquisition
committee who perform their functions in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions
Act. .
(10) There are no such circumstances as in Article 30 of the Company Act.
60
B. Attendance of Members at Remuneration Committee Meetings
‧The Company elected three members of the Remuneration Committee.
‧The term of the 4th committee is from July 4, 2018 to June 21, 2021.
‧There were four Remuneration Committee meetings during 2019(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)
4
4
3
By Proxy
0
0
1
Attendance Rate (%)
[B/A]
100%
100%
75%
Remarks
-
-
-
■ Functions and Tasks of the Remuneration Committee
• Prescribe and periodically review the performance review and remuneration policy, system,
standards, and structure for directors/independent directors, and managerial officers.
• Periodically evaluate and prescribe the remuneration of directors/independent directors, and
managerial officers.
"Remuneration" as used in the preceding two paragraphs includes cash compensation, stock options, profit
sharing and stock ownership, retirement benefits or severance pay, allowances or stipends of any kind, and
other substantive incentive measures.
■ The discussion of the salary and Remuneration Committee and the outcome of the resolution, as well
as the actions the Company has taken in response should any of the situations arise in the operation
of the Remuneration Committee.
Board of
Directors
Meeting
6th Meeting
(13th Term)
2019.3.22
8th Meeting
(13th Term)
2019.5.13
Resolution Adopted by the Remuneration Committee
1. To approve the distribution of compensation to employees and directors for 2018
▲ Resolution Adopted by the Remuneration Committee (2019.3.22):
Upon solicitation of comments by the Chairman, there was no objection addressed and
the resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in Response to the Opinion of the Remuneration
Committee:
Upon solicitation of comments by the Chairman, there was no objection addressed and
the resolution was adopted unanimously by the Directors present.
1. To approve the 1st mid-year bonus of 2019
2. Salary adjustment of 2019
3.To approve the percentage of compensation to employees and directors for 2019
▲ Resolution Adopted by the Remuneration Committee (2019.5.13):
Upon solicitation of comments by the Chairman, there was no objection addressed and
the resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in Response to the Opinion of the Remuneration
Committee:
・Motion 1 and 2:
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, to avoid conflict of interest, Directors Jui-Tsung Chen, Chung-Pin
Wong, Ming-Chih Chang and Sheng-Hua Peng, who are also acting as managerial
61
Board of
Directors
Meeting
9th Meeting
(13th Term)
2019.8.13
10th Meeting
(13th Term)
2019.11.11
Resolution Adopted by the Remuneration Committee
officers of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
・Motion 3:
Upon solicitation of comments by the Chairman, there was no objection addressed and
the resolution was adopted unanimously by the Directors present
1. To approve the Directors' remuneration of 2018
2. To approve the 2nd mid-year bonus of 2019
▲ Resolution Adopted by the Remuneration Committee (2019.8.13):
Upon solicitation of comments by the Chairman, there was no objection addressed and
the resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in Response to the Opinion of the Remuneration
Committee:
・Motion 1:
Chairman Sheng-Hsiung Hsu asked the Independent Director Min-Chih Hsuan to act as a
deputy chairman to preside at this meeting for discussion and voting on this proposal.
Since an interested party relationship exists, the Directors (i.e., Sheng-Hsiung Hsu, Jui-
Tsung Chen, Wen Being Hsu, Shyh-Yong Shen［attended by proxy of Sheng-Hsiung
Hsu］, Charng-Chyi Ko, Sheng-Chieh Hsu, Yen-Chia Chou, Chung-Pin Wong, Chiung-Chi
Hsu, Ming-Chih Chang, Sheng-Hua Peng), recused themselves from discussion and voting
on this proposal to avoid conflict of interest. Upon solicitation of comments by the
deputy chairman, there was no objection addressed and the resolution was adopted
unanimously by the remaining Directors present.
・Motion 2:
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, to avoid conflict of interest, Directors Jui-Tsung Chen, Chung-Pin
Wong, Ming-Chih Chang and Sheng-Hua Peng, who are also acting as managerial officers
of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
1. To approve employee compensation in cash of 2018
2. To approve the year-end bonus payment of 2019
▲ Resolution Adopted by the Remuneration Committee (2019.11.11):
Upon solicitation of comments by the Chairman, there was no objection addressed and
the resolution was adopted unanimously by the Committee Members present.
▲ Action taken by the Company in Response to the Opinion of the Remuneration
Committee:
・Motion 1 and 2:
In accordance with the Company’s Regulations Governing the Proceedings of Board of
Directors Meetings, to avoid conflict of interest, Directors Jui-Tsung Chen, Chung-Pin
Wong, Ming-Chih Chang and Sheng-Hua Peng, who are also acting as managerial officers
of Compal, avoided discussion and voting on this proposal. Upon solicitation of
comments by the chairman, there was no objection addressed and the resolution was
adopted unanimously by the remaining Directors present.
62
■ Other notes:
1.
If the board of directors declines to adopt or modify 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 (e.g., 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 to by members or become subject to a
qualified opinion, which has 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’ opinions should
be specified: None.
63
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
3.3.5
Corporate Social Responsibility
Assessment criteria
Yes No
Summary description
Actual governance
1. Does the Company conduct
Yes
risk assessment on
environmental, social, and
corporate governance issues
related to the Company's
operation in accordance with
the principle of materiality and
formulate relevant risk
management policies or
strategies?
2. Has the Company set up a full-
Yes
time (or part-time) unit to
promote corporate social
responsibility, which is
authorized by the board of
directors to be handled by the
senior management and
reported to the board of
directors?
3. Environmental issues.
(1) Has the Company established an
Yes
appropriate environmental
management system according to
its industrial characteristics?
The Company at least once a year in accordance with CSR materiality collects and reviews issues
that stakeholders concern about, evaluates risks on material issues and formulates strategies and
goals to respond to the risks as well as completely implements the strategies and goals.
.
In 2019, the Company collects material issues on economic, environment and social to formulate
strategies and implement management.
The Company has established a CSR Committee and a dedicated unit responsible for the prevention
of insider trading. The Committee consists of members of senior management authorized by the
Board of Directors to oversee affairs pertaining to CSR and integrity management. In addition,
Compal has also initiated its CSR Office with designated personnel to handle the promotion of
relevant tasks resolved by the CSR Committee. For the 2019 Corporate Social responsibility
operation and implementation please refer to page 69, the targets and plans of 2020 Corporate
Social Responsibility please refer to page70. The results of implementation are also disclosed in our
Annual Report, CSR Report, and on our corporate website/CSR sustainability website.
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 45001. The Company adopts proper
communication channels to convey its environmental and safety policies and goals to employees,
suppliers, contractors, surrounding neighbors, and interest groups.
No deviations were
found
64
Assessment criteria
(2) Is the Company committed to
improving the efficiency of
resource utilization and using
recycled materials with a low
impact on the environment?
Yes No
Yes
(3) Does the Company assess the
Yes
potential risks and opportunities
of climate change for the
enterprise now and in the future
and take measures to deal with
climate-related issues?
Actual governance
Summary description
Throughout the "product life cycle," we consider the environmental impacts of raw material
procurement, manufacturing, transportation and distribution, consumer use and disposal, etc., at
the beginning of product design. In addition to focusing on user needs, functionality and additional
Value, the R&D team is more focused on product development and design from the perspective of
“environmental load minimization” at each stage, covering at least the three core directions of “green
materials," “energy efficiency," and “ease of dis-assembly/recycling."
Improve production line yield and energy efficiency, develop, and use recycled materials stably,
design energy-saving products to reduce energy consumption during reuse, and increase the
recoverable proportion of waste entering the waste phase
Extreme weather conditions caused by global warming and climate change have caused significant
impact to the world and Taiwan and posed unprecedented challenges to mankind. Apart from
mitigation, we must also begin adaptation operations since climate change is inevitable. Adaptation
applies not only to individuals, but to corporations as well, for it is important for companies to
minimize business risks caused by extreme weather, which will require extensive and thorough risk
assessments in order to turn risks into opportunities. Attach a climate-related risk and opportunity
identification table, Please see page 72.
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
65
Yes No
Yes
Assessment criteria
(4) Does the Company prepare
statistics of greenhouse gas
emissions, water consumption,
and the total weight of waste in
the past two years and formulate
policies for energy conservation
and carbon reduction, greenhouse
gas reduction, water consumption
reduction, or other waste
management?
Deviation and causes
of deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
Actual governance
Summary description
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 (scopes 3) inventory
on a yearly basis. In 2015, Compal was included in the CDP Climate Disclosure Leadership Index
(“CDLI”) for the first time. 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 emissions, reduction progress, compliance risks and exposure to
physical risks in the hopes of reducing operational risks and costs through autonomous carbon
reduction or even turning risks into opportunities to ensure the Company’s sustainability.
In order to reduce the environmental impact of Compal's operations, we actively promote water
saving and waste reduction in each plant area, and record the water consumption and the total
amount of various types of waste of the latest 2 years attached as follows:
Items
Total greenhouse gas emissions
Total water consumption
Total waste
2018
282,796
2,286,986
19,035
Unit: Tons
2019
301,471
2,184,654
11,759
Note: For the detailed contents, please refer to CSR Reports.
4. Social issues
(1) Has the Company formulated
Yes
relevant management policies and
specific management plans in
accordance with relevant laws and
regulations and International
Human Rights Conventions?
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 to
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.
No deviations were
found
66
Yes No
Yes
Assessment criteria
(2) Has the Company established
and implemented reasonable
employee welfare measures
(including compensation, vacation,
and other benefits) and properly
reflected the operating
performance or the results of
employee compensation?
(3) Does the Company provide
Yes
employees with a safe and healthy
work environment? Are
employees trained regularly on
safety and health issues?
Actual governance
Summary description
The Company has enacted the work rules including the regulations of wage, working hours, leave,
pension, social insurance and occupational disaster compensation…etc. and has set up Committee
of employees' welfare for benefit planning and execution. Pursuant to the Articles of Incorporation,
when the Company makes profit in a year, no more than 2% of the Company’s pre-tax profit (not
including remuneration for employees and Directors) shall be appropriated to employees. The
aforementioned bonus, adjustment in wages, and employee compensations are reviewed by the
Remuneration Committee and resolved by the Board of Directors. The Company's remuneration
policy is based on personal ability, contribution to the company, performance, and is considered to
be a correlation between operating performance and the positive correlation.
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 ISO14001 and ISO45001 certification, 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 2019, 2,246 employees
had completed their training for a total of 4,623 hours.
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
(4) Has the Company established an
effective career development
training program for its
employees?
Yes
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.
No deviation was
found
(5) Does the Company follow
Yes
relevant laws and regulations and
international standards for
customer health and safety,
customer privacy, marketing and
labeling of products and services
and formulate relevant policies and
grievance procedures to protect
the rights and interests of
consumers?
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. Until customers have officially launched their
products, employees are not allowed to disclose product appearance, design, specifications, or
technical information in any way. Compal is committed to protecting customers' information in every
step along the way and is operated based on the policy and plans of Compal’s “Information Security
Committee.”
Compal aim for customers’ health and safety. Maintaining customer health and safety is the most
basic and important issue. All products produced by Compal have passed the IEC 60950-1
67
No deviations were
found
Assessment criteria
Yes No
Summary description
Actual governance
(6) Does the Company have a
Yes
supplier management policy that
requires suppliers to follow
relevant specifications and their
implementation in environmental
protection, occupational safety
and health, or labor human rights
issues?
Yes
5. Does the Company prepare the
Corporate Sustainability and
Social Responsibility Report and
other reports that disclose the
Company's non-financial
information in accordance with
the international reporting
standards or guidelines? Is the
aforesaid report confirmed or
guaranteed by a third-party
verification unit?
certification standard, and have never violated product safety and health regulations and voluntary
regulations and the development of Halogen-free products and construction of a more robust
production capacity are our promise and responsibility.
Compal adopts the policy of signing procurement agreements with every new supplier it engages
with. The purpose of such agreements are to prohibit any unfair, unjust or discriminative behaviors
in the procurement process, and to reiterate that: all products supplied to Compal must conform to
international, national, and regional environmental regulations. Suppliers will be held responsible for
any violations against the agreement. Apart from procurement contracts, starting from 2009, all new
suppliers collaborating with Compal have been required to sign a contract of compliance to abide by
RBA’s code of conduct and standards, with contents covering the five major aspects of RBA’s code of
conduct: Labor, Health and Safety, Environment, Ethic, Management along with an additional clause
on the non-use of conflict minerals. The policy has been effective ever since.
Each year, we select suppliers involved in transactions of substantial amounts with greater
disruption risks as the target of audit. We adopt RBA’s VAP for our audit process. We audited 24
suppliers in China in 2019.
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. The Company
adopted Global Reporting Initiative’s most updated guidelines (GRI Standards, published in 2016) to
prepare its 2019 CSR report. The report was compiled based on issues concerning stakeholders 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 Standards. After their assurance, the report was certified to meet AA 1000 AS Standard Type
2, mid-level accountability and GRI Standards application core requirements.
The Company was awarded Silver or Bronze Awards by Taiwan Institute for Sustainable Energy for its
“Taiwan Corporate Sustainability Report Award” in 2014-2019 and a Platinum Award in 2019.
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
68
■ The operation and implementation of Corporate Social Responsibility in 2019
Item
Corporate
Governance
Supply Chain
Management
Green
Environment
Results
1. We were awarded the 5th Corporate Governance Evaluation top 6-20% in the Public
traded company group, which was held by Taiwan Stock Exchange (“TWSE”).
2. We were selected into the FTSE4GOOD Index for four consecutive years and in the
FTSE4Good TIP Taiwan ESG Index for the second consecutive years.
3.We were ranked 390th of Fortune Top 500, 1463th of Forbes Top 2000, 6th of Common
Wealth Magazine’s Top 2000 Manufacturers and 62th of CommonWealth Magazine’s
Top1000 in China, Taiwan and Hong Kong.
4. The Compal CSR report in 2019 was certified by SGS Taiwan Ltd., by using the assurance
standards of the AA1000 and GRI Standards core options. Meanwhile, the report won
the Platinum Medal of 2019 Taiwan Corporate Sustainability Report Award of TCSA.
5. We were ranked Taiwan TOP3 of Germany iF Product Design Award From 2015 ~ 2019
and 17th of iF Worldwide Design Award Gold in 2019.
1. We implement the training and promotion of Corporate Social Responsibility (“CSR”) and
the code of conduct of Responsible Business Alliance (“RBA”) for employees and
suppliers. In 2019, we implemented the non-use of conflict minerals policy and
completed a Survey (CMRT) of 988 suppliers' conflict minerals with a completion rate of
100%.
2. To reinforce CSR audit and management on Tier 1 suppliers, we have audited 24 suppliers
and tracked the finding correcting plans in 2019.
3. We launched the project of supply chain management on-line platform in 2019, with an
estimated construction in 2 years, and 80% completed by the end of 2019.
1. We participated in the Carbon Disclosure Project (“CDP”), finished the questionnaire of
climate change and water safety. The 2019 climate change questionnaire achieved the
management level.
2. We constantly promote energy management. In 2019, Kunshan Plant 3, Pingzhen Plant
and Chengdu Plant obtained ISO 50001 certification. Meanwhile, we applied the
management model to other plants.
3. To Promote waste reduction and recycling, Nanjing plant obtained UL2799 waste zero-
landfill platinum certification.
4. We participated in the "Waste 3C Recycling Activities" of customers. 265 Compal
employees joined the event.
5. To respond to the United Nations "SDGs 14 Life Below Water" sustainable development
goals, we held a beach clean-up activity, a crab protection activity in Kenting and a
“Caring for the Marine Ecology” with Nuan-nuan Elementary School at the National
Museum of Marine Science & Technology.
Green Product
1. In 2019, we produced 87 halogen-free notebooks, 10 halogen-free smart phones and 34
halogen-free wearable devices.
2. Our products obtained the latest Energy Star certification, including 88.24% of NB (V7.1),
100% of the server (V3.0), and six LCDs (V8.0). 5 models of The LCD monitor passed CECP
certification, and 3 models passed TCO8.0 certification.
Social Welfare
1. We continue participating in charities with the HCI foundation. In 2019, 730 employees
donated more than NT$ 3 million.
2. We sponsored a children theater of W3 Troupe in Yunlin. Also, we held a charity painting
exhibition and sale for autistic youth artists of Taiwan Curio.
3.To promote digital mobile learning in schools in remote areas, we donated tablets, held a
Taoyuan Maker Education Winter Camps and participated in Chiao Tung University's
"Science and Technology Downward Plan" to help promote the information technology
education for school to achieve SDGs-4 Quality Education of UN.
4. We regularly hold volunteer service activities. In 2019, we had 9 volunteer service
activities with 167 participants. We also held blood donation activities. (424 employees
donated 641 units of blood)
Employee
Care
1. We offer diverse care. We arrange health counseling services for employees every
week. 948 employees used the service in 2019. There are various employee health
69
Item
Results
promotion activities, including weight loss courses, health lectures and community
activities to take care of employees' physical and mental health.
2. We officially introduced the Employee Assistance Program (EAP) in 2019. EAP counseled
a total of 52 cases about family issue, parenting issue, law issue and management issue.
Meanwhile, we held 3 health lectures about emotion care.
3. To improve fertility rates, we provide a NT$ 66,000 maternity subsidy to employees for
each newborn baby. 254 Compal babies were born in 2019.
The programs
of personnel
training
We organize a GOLF academic alliance with AUO and Wistron.
In 2019, we successfully admitted 121 students to participate in a one-year internship.
Also we had 193 students to register online courses and host 13 on-campus business
internship sessions with a total of more than 1,000 students participating.
■ The targets and plans of Corporate Social Responsibility in 2020
NO.
1
Target
Focus on the product life
cycle, enhance energy
efficiency, reduce
greenhouse gas emissions,
and constantly strengthen
response capabilities on
extreme climate.
2
3
4
Strengthen the supply
chain management
mechanism and complete
CSR on-line platform of
supply chain management
Consistently implement the
physical and mental health
care in the workplace for
employees and promote
health and charity projects
which link health care and
public welfare
participation.
Focus on SDGs3 Good
health & well-being, and
SDGs4 Quality Education
Plans
(1)Use the temperature rise of 2 ° C as the benchmark for scenario
analysis, identify risks related to climate change, improve the
competitiveness of exhibits based on energy saving, and grasp
green business opportunities.
(2)Pay attention to energy consumption based on a product life cycle
to strengthen or improve energy-saving from product design.
(3)From the perspective of river basin water resources, in response to
the change of natural water resources during the high and low
seasons, implement water-saving measures on a quarterly basis.
(4)In the case of constant changes in the plant area and production
line, continue to promote Lean production, control the use of
energy resources, create economic effects, and improve
environmental efficiency and corporate competitiveness.
(1)Complete CSR on-line platform of supply chain management by the
end of 2020.
(2)Complete the CSR data collection, analysis and tracking
improvement by suppliers on the platform.
(1)We actively manage health promotion for employees who are in
the moderate and high-risk group of cardiovascular diseases based
on health examination results, and achievement rate is 80%.
(2)Strengthen education and training on anti-violence in the
workplace in order to protect employees’ safety.
(3)Integrate and promote the health projects with charity to achieve a
win-win situation for employee health and public welfare
participation.
(1)Pay attention to good health and well-being of disadvantaged
school kids. Also, consistently participate in charities with the HCI
foundation to support life, educational quality and spiritual growth
activities in rural areas.
(2)Cooperate with the Rural Education Center of Fu Jen University on
“Kangaroo Project” to enhance the quality of teaching and learning
afterschool in rural areas
(3)Continue implementing “Compal Reading Volunteer Program” to
promote reading education in rural areas.
(4)Hold beach clean-up activities every year, pay attention to the
quality of environmental education and take action to protect the
ocean.
(5)Continue committing to “Action Digital Learning Program” to
70
enhance the quality of popular science education for school kids in
rural areas.
71
Risk and Influence
Adaption and Opportunity
■ Climate-related risk and opportunity identification table
Type
Transfer
of Risk
‧
Strategy and Law
International trends and the environmental regulations in China have become
stricter. Therefore, we are faced with fines or risks of plants closing down
resulting from more environmental requests. There are also possibilities that the
suppliers close down the plants or reduce the production due to environmental
problems, which will lead to unstable supply and indirectly influence the
efficiency of our assembly line.
The amendment draft of the “Renewable Energy Development Act” of Taiwan
adds an article that electricity consumers who have the capacity contract higher
than 800 kW must set up a renewable energy generation device or replace it
with energy storage, purchase of renewable energy certificates, and payment of
subsidies, which might lead to the increase of operation costs in the short term.
‧
Technology
Products are faced with stricter instructions, regulations, and standards. New
materials might influence reliability.
‧
Market
Customers have gradually put emphasis on and chosen low-carbon and eco-
friendly products.
‧
Reputation
If we do not coordinate with the environmental standards and regulations in
advance, the client might transfer the order.
Concrete
Risks
‧
Acute
Climate change might lead to rainfall type change and the increase of frequency
in rainstorms, droughts, and typhoons. These will bring about the block of road
transportation, the increase of burden on AC devices, health problems and poor
attendance of employees, and damage to plants and machines due to floods.
‧
Chronic
1. Areas with stricter laws and regulations help us distinguish fine green suppliers and enable us
to construct a complete green supply chain.
2. We voluntarily review our internal environmental disadvantages, undergoing improvement of
personnel behavior and device updates to boost our green production competitiveness.
1. Accelerating the development of green electricity and improving the energy management.
Escalating energy productivity and saving energy expenses to cut down costs.
2. The price fluctuation of the oil and electricity will influence the operation costs directly.
Therefore, we effectively control the operation costs through the erection of renewable energy
devices and the boost of energy management ability.
We have to handle regulations and standards from the globe and the market certainly to
coordinate, research, develop, and trial run in advance. We also have to construct the
development and the production capacity of green products to boost our competitiveness.
We are equipped with the ability to mass produce low-carbon products, and we continue to
develop new products to complete the ability of creating a green product market.
We actively engage in external advocacy to learn the international trends and bring in external
guidance and the audit system, constructing complete risk assessment of climate change and the
coordination strategy.
1. We monitor the rainstorm alarm system and implement an alert plan to elevate the plants
located on lower land, reducing the risk of floods.
2. We established a healthcare department designated to provide fine healthcare counseling
for the employees.
1. We established a plan for water use and a drought operating team to effectively monitor and use water resources, reduce the risk of water use, and cut down the expense on
water.
2. We promote the propaganda of knowledge on climate change and rescue exercises and enforce the medical resources preparation and epidemic prevention exercises to
improve the health and safety awareness of employees.
72
6.
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 the “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 RBA
by including corporate social responsibilities as part of its overall business plan, thereby making sure that
everything it does confirms with RBA. The CSR Office reports its progress regularly to the Board of Directors,
and publishes annual CSR reports to ensure proper disclosure of CSR information.
■
In order to implement the development of a sustainable environment, maintain an environmental
management system, the Company regularly organizes environmental education courses for management
and employees. At the same time, green management has been introduced from the product design stage
and the supply chain. Reduce the energy consumption of products and services, effectively manage harmful
substances, reduce the generation of waste water and waste, and properly handle and adopt the best
feasible pollution prevention and control technology measures. Improve product life and reliability, and
maximize the sustainable use of renewable resources with the concept of easy disassembly and recycling.
Formulate the Company's energy conservation and carbon reduction targets, carry out greenhouse gas
reduction operations, and do its utmost to reduce the adverse impact of the Company's operations on
human health and the natural environment.
7. Other important information to facilitate better understanding of the Company’s corporate social
responsibility practices:
■ External initiatives and participation
As a significant member of the Earth, the Company actively participates in global and local environmental
initiatives and actions. Since 2009, Compal has been participating in CDP's questionnaires on climate
change, water, and supply chain carbon management. In addition, the Company takes part in the GHG
Protocol developed by World Business Council for Sustainable Development (“WBCSD”) and World
Resources Institute (“WRI”), and the “Business Transformation Carbon Footprint Program” introduced by
the Industrial Technology Research Institute (“ITRI”) and Taiwan Electrical and Electronic Manufacturers'
Association (“TEEMA”). The Company has been named a “Low-carbon pioneer," and is a current participant
of DSJI and the Supply Chain GHG Task Force under the International Sustainability Index Promotion
Alliance for Taiwanese Businesses, and took part in the Taipei Earth Day Corporate Environment Education
Commitment campaign. In 2014, Compal was invited to the annual meeting of Taiwan's “Cradle to Cradle”
platform. In 2015, Compal was selected as part of CDP's Climate Disclosure Leadership Index (“CDLI”) for
the first time. In 2019, Compal received an overall CDP Management score of B-.
■ Energy management system
Increasing productivity per unit of energy is the most fundamental solution to reducing energy
consumption and greenhouse gas emission, the Company has detailed planning and implementation since
2017. The Company has completed the certification of the energy management system of PCP, KS3 and CD
Plants in 2019, and has extended relevant experience to other plants.
73
■ Supply chain carbon management
Being one of the world's key IT producers, Compal uses “information platform” and “workshops” to keep
suppliers informed of the latest energy/carbon reduction technologies and green living, and inspires them
to commit to active care for the local environment.
The Company requires all its suppliers to be certified for ISO9001 (quality management system) and
ISO14001 (environmental management system), and follow EICC guidelines by signing a letter of
commitment to the behavioral standards of the RBA Code of Conduct. Under this commitment, upstream
suppliers are bound to comply with international, national, and local regulations with respect to all
activities. In the second half of 2019, Compal launched its “Supply Chain GHG Management Program” and
held seminars at various factories as a means to communicate with suppliers on how they are expected to
contribute and assist in Compal's global environmental protection and quality management initiatives.
Compal also took the opportunity to exchange and share experiences on CSR issues with suppliers.
■ Corporate environmental education
The Company continued to incorporate environmental education and green experience into employees'
training throughout 2019. Including ecological and cultural lectures such as low-carbon comfort food
promotion in the local eating season, North Beach clean beach, Keelung River ecological cultural history
tour, North Coast mountain conservation lecture and rehabilitation activities. The Company had provided
full support from the top-down, while employees and their family members enthusiastically participated
in a series of “experiential” environmental education. We rallied our employees to exercise our influence
as consumers to select safe foods and sponsor quality rice fields and tea farms. The crops are later
presented to clients as Chinese New Year gifts. By modifying demand, we hope to change supply and
promote more sustainable agriculture, forestry, animal husbandry, and fishery. All new recruits are required
to undergo 0.5 hours of online environmental training in their initial year. The course covers a variety of
topics from green living, preservation of ecosystems, climate change, to green design. In the future, the
Company will also make “green products” a mandatory course and introduce more advanced courses on
green design issues. A core team will be assembled specifically for the purpose of improving green energy
efficiency, and building up Compal's distinguished values in the ICT (Information and Communication
Technologies) industry.
■ Supporting social enterprises
In recent years, many social enterprises have emerged with goals to protect the environment and improve
public interest. In support of their efforts, the Company encourages employees to purchase products and
services offered by social enterprises, hoping that by redirecting purchasing power, we may be able to
muster positive energy to solve society's problems. In 2019, Compal collaborated with Mennonite Hualien
County Sheltered Workshop, I Can Sheltered Workshop, Hanner Family, Taiwan Mountain and Maritime
Protection Society, and managed to raise several hundred thousand dollars of donations from employees.
■ Community engagement
‧
The Company has long been sponsoring the maintenance and management of Zhouzi Park No. 2 in
Neihu in order to provide community residents and industrial park workers an ideal place for leisure
74
and recreation activities.
‧
Compal supports the “1st Neihu Technology Park Blood Donation Event” and a total of 209 employees
donating 76,000 ml of blood.
■ Social services
‧
Compal's employees have been running the “Compal Volunteer Club” since 2004. Members of this
club visit disadvantaged children during weekends and guide them to reading good books. The goal
of this program is to help them develop the habit of reading and the ability to think independently,
and hence prepare them for the future. The volunteers have also been working with Hsu Chauing
Social Welfare and Charity Foundation to provide extra-curriculum education for immigrant children.
Since 2009, they have been visiting Jong Jen Elementary School, Wuhan Elementary School, Nan-Shi
Primary School, Chung Ping Elementary School, Shuang Long Elementary School, Neihai Elementary
School, Nan Sing Elementary School, Hsiang An Elementary School, Tien Hsin Elementary School, Hua
Hsun Elementary School, Wu Cyuan Elementary School, San He Elementary School, Chung-Shing
Elementary School, Sin-Jie Elementary School, Xin Lu Elementary School, Fu An Elementary School,
Dacheng Elementary School, Long-Sing Primary School, San Keng Primary School, Shanghu Primary
School, Yisheng Elementary School, Shi-Hai Primary School, Te-Long Elementary School, Sha Keng
Elementary School, Da Po Elementary School and Haibin Elementary School in Taoyuan during public
holidays to accompany children in their reading activities. By the end of 2019, the volunteers had
assisted 2,668 immigrant children and children from disadvantaged families.
‧
Compal has been encouraging college volunteer clubs to join the Company's “reading volunteers”
initiative and provide study aids to children from low-income families in the neighborhood. By
sharing good reading materials and environmental awareness, the Company hopes to contribute to
the learning progress of disadvantaged children.
■ Social welfare
(1) Budget sponsorship
‧
Sponsoring of budgets for college volunteer clubs- In an attempt to encourage college students to
participate in volunteer service, the Company has been contributing NT$600,000 every year since
2004 to sponsor college clubs in promoting children's reading, after-school classes, and environmental
education in locations that lack resources and for low-income households. A total of 21 college clubs
applied for sponsorship and 355 volunteers participated in sponsored volunteer activities in 2019, for
which the Company contributed a sum of NT$600,000 that benefited 1,524 students.
‧
‧
Sponsoring of W3 Troupe's charity performance - Compal donated NT$700,000 and invited more than
1,000 disadvantaged children and their teachers to W3 Troupe's show - “Fantasy Valley I - Finding Lost
Courage." Through art therapy, we hope to give children the right influence they need to develop a
positive mind, and encourage them to listen, see, and experience for themselves the wonders of life.
In addition to charity involvement, the Company also provides strong support to academic and
industrial organizations including: Taiwan Foundation For Rare Disorders, Taipei City Friends of the
Police Association Neihu Office, Taiwan PoAi Care Animal Association, Taoyuan Enterprise Chamber,
Taiwan Curio Association, Taiwan District of Kiwanis International, Management Institute in Taipei
Foundation, National Taipei University, National Chiao Tung University, Kenting National Park
75
Headquarters, Spinal Cord Injury Foundation, Taoyuan County Volunteer Fire Fourth Brigade . A sum
of NT$8,556,205 was donated to the above mentioned entities in 2019.
(2) Donation of supplies
‧
20 tablets, 40 NB were donated to support the digital learning Program in remote areas.
The Company donated 20 tablets to three digital centers located in Sansing Township Library of Yilan
County, Yuli Township of Hualien Country, Hualien City Office of Hualien County. In addition, the
Company donated 40 NBs to Xinzhuang elementary school in Taoyuan City, and assisted Township
schools and communities to help promote digital mobile learning.
(3) Compal Charity Art Show “The Fantasyland of Stars”
This year marked the sixth time of the charity art show. From recruiting artworks from employees for
charity sales to inviting vulnerable groups to give art performances and exhibit their works, Compal
maintains respect for life diversity, takes care of the vulnerable, and contributes to society. Through
ceaseless efforts to promote the charity art show with employees. Through face-to-face close
encounters, the organizers of this exhibition hope that the public can understand more about the
situation of autistic spectrum disorder (ASD) patients and let ASD patients to demonstrate their unique
gifts and talent through finding and fulfilling their purpose of life and progressively fuse with society
through their own strength. Apart from supporting “respect for life diversity” through real actions,
limited edition products were sold at the show for charity to express Compal and employees’ care about
corporate social responsibilities. All exhibits were on sale for charity. We donated NT$130,848 to the
Taiwan Curio.
■ Human rights
The Company respects the human rights of all employees. In addition to prohibiting the use of child labor
and overtime working, the Company treats all employees of different ethnicities, religious beliefs, skin
color, gender, nationality, age and physical features with equal respect and fairness. It has been explicitly
stated in the Human Resource Management Policy that “The Company shall recruit employees based on
knowledge, morality, skills, experience and suitability for the position/job in question. Under no
circumstances may the Company reject recruitment for reasons such as gender, ethnicity, religion, political
association, nationality, sexual preference, or age." The Company also refrains from using involuntary
workers and child labor.
■ Safety and health
At a time when financial performance is as important as environmental protection, the Company considers
“occupational safety and health” to be an important issue that no business shall neglect. Only by creating
a safe work environment are employees able to unleash their full potential, which is a driving force behind
the Company's progress. For this reason, the Company not only ensures that every operation is compliant
with environmental, safety, and health rules, but also commits to eliminate or reduce safety and health
risks to employees, suppliers, contractors and stakeholders that are caused by production procedures,
facilities, and activities. At Compal, we see financial performance, environmental protection, and
occupational safety and health as three co-existing and complementing factors of business administration.
The Company created its official environmental safety and quality policies to guide employees toward
76
protection in the workplace and social responsibilities. Furthermore, these policies also provide employees
and external stakeholders (such as suppliers, contractors, customers, environmental organizations,
government agencies and community residents) with a better understanding of the Company's
environmental safety efforts and its resolve to protect and minimize risks to the environment. Ultimately,
we hope to direct the attention of our partnered vendors to environmental protection, safety and health,
and work together towards accomplishing our goals.
(1) Environment safety policy:
‧
‧
Comply with environmental, safety and health laws, and related requirements.
Conduct environment safety and health training to raise employees' awareness towards individual
responsibilities as well as safety and health concerns of the surrounding environment, while at the
same time encouraging their participation in relevant issues.
‧
‧
‧
Continually improve environmental, safety and health performance through programs such as
pollution prevention, accident prevention, energy/resource conservation, waste reduction, and
responsible care.
Pay attention to the control of pollution sources and reducing waste from production. Enhance safety
and health facilities to prevent pollution and minimize risks.
Establish proper communication channels to convey the Company's environmental safety policy,
requirements, and goals to employees, suppliers, contractors, nearby residents and concerned
organizations.
(2) Environmental safety and health systems/measures:
In an attempt to minimize losses on occupational hazards and rectify hidden dangers and recurring
safety incidents for more harmonic labor-management relations, the Company subsequently assembled
an Environment Safety Promotion Committee that specializes in the development of environment safety
plans. Any environment safety-related policies and goals proposed are subject to review during the
Environmental Safety Management Review Meeting. Once reviewed, the Committee becomes
responsible for supervising work safety units in the implementation of safety and health-related
measures, auto inspections, maintenance, and training to eliminate hazardous factors in the
environment. In addition, the Committee also supervises relevant departments in completing hazard
prevention and loss control systems.
(3) Execution
‧
Fire safety equipment (facility) plans and execution: Appropriateness and adequacy of fire safety
equipment (facilities) are reviewed whenever there is a change to the layout of the business premises.
Locations of fire safety equipment (facility) and evacuation routes are clearly labeled on each floor.
The Company also engages professional and qualified fire safety inspectors to conduct annual fire
safety inspections and reports according to law.
‧
Water/power plans and execution: The Company promotes proper awareness and implements
appropriate control on all uses of water and power equipment for more effective conservation of
energy and resources. The administrative department is responsible for the day-to-day inspection of
power usage, power systems, and water equipment. All inspection findings are detailed in the “Safety
77
and Health Equipment Inspection Log” and any issues discovered are rectified immediately.
‧
Cleaning, monitoring, and control of industrial waste: Handled by the Factory Affairs Division of various
factories and General Affairs Department of the headquarters. Waste generated from factories can be
classified into the following categories:
a. Hazardous waste: Sorted according to “Standards for Defining Hazardous Industrial Waste”
stipulated by the Environmental Protection Administration (EPA), Executive Yuan, and collected
by certified contractors for subsequent treatment.
b. Industrial waste: Industrial waste other than hazardous industrial waste is collected and treated
by certified contractors.
78
‧Emergency response procedures: These procedures have been established to guide the Company through
disruption of production, information, and raw material supply in the occurrence of natural or man-made
disasters. Incident resolution procedures:
Hazard alert occurs
Incident reporting
Confirmation of
Hazard
YES
Activate emergency
response
NO
Update
records
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e
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Confirmation of
damage control
NO
Request external
support
YES
Level 1 hazard:
Post-disaster recovery
Any death or 3 major injuries or
Incident investigation and proposal
of preventive measures
higher
Loss of work hour exceeding 1
day
Loss of property above US$1
million
SP: Occurrence of Level 1
hazard must be escalated to
the Senior Risk Management
Committee
(4) Quality Policy (pursuing continuous improvement to meet customer needs): We commit to
. Implement customer-oriented performance management.
. Create competitive advantages in products and services.
79
3.3.6
Ethical Corporate Management
Assessment criteria
Actual governance
Yes No
Summary description
I.
Establishment of integrity
policies and solutions
1. Does the Company have an
Yes
ethical corporate
management policy
approved by the board of
directors and clearly state
the ethical corporate
management policy and
practice in the internal
regulations and external
documents, as well as the
commitment of the board
of directors and senior
management to actively
implement the corporate
management policy?
The Company has established the “Ethical Corporate Management Best Practice Principles” and
“Procedures for Ethical Management and Guidelines for Conduct” and, in addition, clearly outlined
the procedures for ethical management and guidelines to 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 Company’s “Board of Directors Meeting Guidelines”
contain a conflicting interest clause that requires directors to disassociate from all discussion and
voting on any agenda that poses a conflict of interest between the Company and themselves or the
entities they represent.
The Board of Directors approved the policies that were based on integrity accordingly in 2019 as well.
The Board of Directors and the management had issued "The statement of compliance with the
Ethical Corporate Management Best Principles," committed themselves to business integrity.
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
2. Has the Company
Yes
established an evaluation
mechanism for the risk of
unethical behavior,
regularly analyzed and
evaluated the business
activities with high
unethical behavior risk
within the business scope
and formulated a plan to
prevent unethical behavior
accordingly which at least
When the Company internal audit prepared the next year audit plan, unethical behavior was included
in the scope of risk assessment. The relevant audits are performed accordingly, and the “Procedures
for Ethical Management and Guidelines for Conduct” was enacted to govern the of follows items:
‧ Prohibition against offering and acceptance of improper gains
‧ Prohibition against lobbying
‧ Prohibition against illegal political donations
‧ Prohibition against improper donations or sponsorships
‧ Prohibition against inappropriate gifts, treatments and illegitimate benefits
‧ 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
No deviations were
found
80
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
Actual governance
Yes No
Summary description
commercial secrets.
Assessment criteria
covers the preventive
measures for the behaviors
in paragraph 2, Article 7 of
the “Ethical Corporate
Management Best Practice
Principles for TWSE/GTSM
Listed Companies”?
3. Does the Company
Yes
stipulate the operating
procedures, behavior
guidelines, and disciplinary
and grievance systems in
its unethical behavior
prevention plan and
implement them and
regularly review and revise
the plan?
II.
1.
Yes
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?
The Company has established the “Ethical Corporate Management Best Practice Principles” and
“Procedures for Ethical Management and Guidelines for Conduct” (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 has 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 or the official Company website. Any person
involved in unethical conduct will be referred to an authorized department and processed according
to the “Procedures for Ethical Management and Guidelines for Conduct."
The Company carries out regular reviews and revises for relevant measures every year. Also, we
arrange related training on Ethical Corporate Management and announce the request to follow Ethical
Corporate Management Best Practice Principles.
The Company requires all suppliers to sign the Letter of Undertaking for Compliance with the
Responsible Business Alliance (“RBA”) Code of Conduct by Vendors, which binds them to local
regulations on workers, environment, safety, health, management, and moral conduct, and prevents
them against corruption and unethical behaviors.
No deviations were
found
2.
Has the Company set up a
dedicated unit under the
board of directors to
Yes
The Company has appointed its Human Resources, Administrative Management and Legal Affairs
Office as the competent units in charge of the Company’s ethical matters. These units jointly set the
guidelines and policies, which are monitored by the auditors and reports to the Board of Directors on
No deviations were
found
81
Assessment criteria
promote ethical corporate
management and regularly
(at least once a year)
report to the board of
directors its ethical
corporate management
policy and plan to prevent
unethical behavior as well
as its supervision of the
implementation?
Actual governance
Yes No
Summary description
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
a yearly basis. To prevent potential conflicts of interest, the Company has established the “Ethical
Corporate Management Best Practice Principles” and “Procedures for Ethical Management and
Guidelines for Conduct," In addition, the Company has also designed relevant course for its 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.
Status of Operation and Implementation in 2019:
The Company requires suppliers to follow the RBA code of conduct, and sign the RBA Code of Conduct
commitment or complete the RBA Code of Conduct questionnaire. A total of 1,180 suppliers with
transaction records, 1,090 have signed the RBA Code of Conduct commitment or completed the RBA
Code of Conduct questionnaire, and the signing completion rate is 92.37%. In addition, a total of 8,886
employees completed a total of 20,867 hours of integrity management related training, including:
‧
Orientation training for new employees and group activities, covering topics such as:
Company policies, corporate culture, human resource system, ethical corporate
management best practice principles, trade secrets,
information security, Personal
Information Protection Act, and so forth.
Management for the prevention of insider trading (for senior managers), covering topics such
as: What is insider trading, 5 W for insider trading, Criminal liability and civil liability for insider
trading, the difference between “insider trading “and "non-insider trading," Case Study of
Insider Trading.
Responsible Business Alliance
Introduction to intellectual property rights, understanding information security, and Personal
Information Protection Act, and case studies.
‧
‧
‧
3.
Yes
Does the company have
any policy that prevents
conflict of interest, and
channels that facilitate the
report of conflicting
interests?
The Company has established the “Ethical Corporate Management Best Practice Principles” and
“Procedures for Ethical Management and Guidelines for Conduct” (hereinafter, “Procedures and
Behaviors”). A Company director, officer or other stakeholder attending, or present at a board
meeting, or a juristic representative whose presence infers a likelihood that company interests might
be prejudiced may not participate in a discussion or vote on that proposal, shall recuse themselves
from any discussion and voting, and may not exercise voting rights as a 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
82
No deviations were
found
Assessment criteria
Actual governance
Yes No
Summary description
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
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 nonpublic information, the Company has established “CO10 Insider
Trading Prevention Management” as part of its internal control and demanded strict compliance from
directors, supervisors, managers, employees, and any party that gains knowledge to the Company’s
material non-public information whether because of their identity, job responsibility, or controlling
relationships.
The Company has set “Ethical Corporate Management Best Practice Principles” and focuses on
creating an effective accounting system and internal control system to avoid high-risk or unethical
business activities and the use of external or secret accounts. Self-evaluation is done on a regular
basis to make sure the design and execution of the system is effective.
When the Company internal audit prepared the next year audit plan, unethical behavior was
included in the scope of risk assessment, and relevant audits are performed accordingly since 2019.
83
4.
Yes
Has the Company
established an effective
accounting system and
internal control system for
the implementation of
ethical corporate
management and has the
internal audit unit,
according to the
assessment results of the
risk of unethical behavior,
drawn up relevant audit
plans to check the status of
unethical behavior
prevention accordingly, or
entrusted an independent
auditor to carry out the
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
No deviations were
found
Assessment criteria
Actual governance
Yes No
Summary description
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
5.
III.
1.
audit?
Yes
Yes
Does the company
organize internal or
external training on a
regular basis to maintain
business integrity?
Implementation of
whistleblowing system
Does the company provide
incentives and means for
employees to report
malpractice? Does the
company assign dedicated
personnel to investigate
the reported malpractice?
2. Has the Company
Yes
established the standard
operating procedures for
the investigation of
accused matters, follow-up
measures after
investigation, and the
relevant confidentiality
mechanism?
Yes
3.
IV
Does the company assure
malpractice reporters that
they will not be mistreated
for making such reports?
Enhanced information
disclosure
The Company organizes training courses
in accordance with “Regulations Governing the
Establishment of Internal Control Systems by Public Companies” and the board-approved “Insider
Trading Prevention Principles." Insider training prevention courses are organized for vice president-
grade employees and above, while general employees are subjected to training on ethical behaviors
on a yearly basis.
No deviations were
found
The Company has mailboxes in place to receive malpractice reports from within or outside the
Company. Once a report has been sent to the mailbox, it will be referred to the appropriate
department and personnel depending on the nature of the underlying issue to handle or conduct
related checks.
No deviations were
found
The Company has established procedures to report the matter for filing, assigning, verifying, etc.,
and requires the In-change person to take relevant actions depending on the results of the
investigation. The case content and whistleblower information shall be processed in confidential.
No deviations were
found
The Company's relevant regulations and employee code of conduct are clearly regulated, requiring
the In-change unit or person not to disclose the content of the case and the identity of the
whistleblower, and to take necessary protective actions to ensure that the whistleblower is not
treated inappropriately or retaliated.
No deviations were
found
84
Assessment criteria
Actual governance
Yes No
Summary description
Deviation and causes
of deviation from
Integrity Best-Practice
Principles for
TWSE/TPEX Listed
Companies
1.
V
Yes
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."
85
3.3.7 Corporate Governance Guidelines and Regulations
Please refer to the Company’s website→ Investor Relations → Corporate Governance → Major Internal
Policies
https://www.compal.com/investor-relations/corporate-governance/
‧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 Endorsements and Guarantees
‧Board of Directors Meeting Guidelines
‧The Responsibilities and Rules for Independent Directors
‧Audit Committee Procedures
‧Remuneration Committee Procedures
‧CSR Committee Procedure
‧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
‧Rules of Self-Evaluation of the Board of Directors and Functional Committees Performance
86
3.3.8 Other Important Information Regarding Corporate Governance
Please refer to the Company’s website→ CSR
https://www.compal.com/CSR/ZH/
‧Sustainable Management
‧Stakeholders
‧Supply Chain Management
‧Environment
‧Employee Relationship
‧Charity
‧Download Report
Please refer to the Company’s website→ Stakeholder Communication
https://www.compal.com/stakeholder-communication-area/
‧Employee Relations
‧Customer Relations
‧Supplier Relations
‧Investor Relations
87
3.3.9
Internal Control Systems
1. Statement of the Internal Control System
Compal Electronics, Inc.
Statement of the Internal Control System
Date: March 30, 2020
The Company states the following with regard to its internal control system during fiscal year 2019, based
on the findings of a self-assessment:
1. The Company is fully aware that establishing, operating, and maintaining an internal control
system are the responsibility of its Board of Directors and management. The Company has
established such a system aimed at providing reasonable assurance of the achievement of
objectives in the effectiveness and efficiency of operations (including profits, performance, and
safeguard of asset security), reliability, timeliness, transparency, and regulatory compliance of
reporting, and compliance with applicable laws, regulations, and bylaws.
2. An internal control system has inherent limitations. No matter how perfectly designed, an
effective internal control system can provide only reasonable assurance of accomplishing the
three goals mentioned above. Furthermore, the effectiveness of an internal control system may
change along with changes in environment or circumstances. The internal control system of the
Company contains self-monitoring mechanisms, however, and the Company takes corrective
actions as soon as a deficiency is identified.
3. The Company judges the design and operating effectiveness of its internal control system based
on the criteria provided in the Regulations Governing the Establishment of Internal Control
Systems by Public Companies (herein below, the “Regulations”). The internal control system
judgment criteria adopted by the Regulations divide internal control into five elements based on
the process of management control: 1. control environment 2. risk assessment 3. control
activities 4. information and communications 5. monitoring activities. Each element further
contains several items. Please refer to the Regulations for details.
4. The Company has assessed the design and operating effectiveness of its internal control system
according to the aforesaid criteria.
5. Based on the findings of the assessment mentioned in the preceding paragraph, the Company
believes that as of Dec 31, 2019 its internal control system (including its supervision and
management of subsidiaries), encompassing internal controls for knowledge of the degree of
achievement of operational effectiveness and efficiency objectives, reliability, timeliness,
transparency, and regulatory compliance of reporting, and compliance with applicable laws,
regulations, and bylaws, is effectively designed and operating, and reasonably assures the
achievement of the above-stated objectives.
6. This Statement will become a major part of the content of the Company's Annual Report and
Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the
content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities
and Exchange Act.
7. This Statement has been passed by the Board of Directors Meeting of the Company held on
March 30, 2020, where 0 of the 15 attending directors expressed dissenting opinions, and the
remainder all affirmed the content of this Statement.
Compal Electronics, Inc.
Chairman: Sheng-Hsiung Hsu (Rock Hsu)
President: Chung-Pin Wong (Martin Wong)
88
2. If an independent auditor is entrusted with reviewing the internal control system, the independent auditor’s report:
None.
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
to the date of the annual report: None.
3.3.11 Major Resolutions Made in Shareholders’ Meeting and Board Meetings
1. Shareholders’ meeting
▓ Time: 9:00 am, June 21, 2019
▓ Place: B1, No. 581, Ruiguang Rd., Neihu District, Taipei City 11492, Taiwan (R.O.C.)
▓ Major Resolutions:
(1) Ratified the Business Report and Financial Statements for 2018.
(2) Ratified the Distribution of Earnings for 2018.
(3) Approval cash distribution from capital surplus.
(4) Approval of the amendment to the “Articles of Incorporation”
(5) Approval of the amendment to the “Procedures for Acquisition or Disposal of Assets”
(6) Approval of the amendment to the “Procedures for Financial Derivatives Transactions”
(7) Approval of the amendment to the “Procedures for Endorsement and Guarantee”
(8) Approval of the amendment to the “Procedures for Lending Funds to Other Parties”
(9) Approval of the release of non-competition restrictions for Directors.
▓ 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 29, 2019.
(2) The 2019 distribution of cash dividends and capital reserves are summarized as follows:
‧Cash Dividends: NTD 1 per share
‧Cash Distributed from Capital Reserve: NTD 0.2 per share
‧Ex-dividend Date: July 21, 2019.
‧Declaration Date: August 9, 2019.
89
2. Board meetings
Board of Directors
Meeting
5th Meeting
(13th Term)
2019.2.22
1. Approved of the Company obtaining credit facilities from financial institutions
Major Resolutions
1. Approved the Internal Control System Statement for the year 2018
2. Approved the proposal of the distribution of compensation to employees and directors for
2018
3. Approved the 2018 audited Financial Statements and Consolidated Financial Statements
4. Approved the Business Report for 2018
5. Approved the Business Plan for 2019
6. Approved the proposal for Distribution of Earnings for 2018
7. Approved the proposal of cash distribution from Capital Surplus
8. Approved the CPAs’ independence and competence of performing the financial report
audit.
6th Meeting
(13th Term)
2019.3.22
9. Approved the convention of the 2019 Annual General Shareholders’ Meeting
10. Approved the targets and plans of the 2019 Corporate Social Responsibility
11.Approved the issuance of the Letter of Support by the Company to facilitate its
subsidiaries in obtaining credit facilities from financial institutions
12. Approved of the Company obtaining credit facilities from financial institutions
90
Board of Directors
Meeting
Major Resolutions
1. Approved the amendment to the “Articles of Incorporation”
2. Approved the amendment to the “Procedures for Acquisition or Disposal of Assets”
3. Approved the amendment to the “Procedures for Financial Derivatives Transactions”
4. Approved the amendment to the “Procedures for Endorsement and Guarantee”
5. Approved the amendment to the “Procedures for Lending Funds to Other Parties”
6. Approved the amendment to the “Corporate Governance Best-Practice Principles”
7. Approved the amendment to the “Rules and Procedures for Board of Directors Meetings”
8. Approved the release of non-competition restrictions for the managers
9. Approved the release of non-competition restrictions for Directors
10. Approved the establishment of Compal Electronics Kaohsiung Branch Office
11. Approved the appointment of the Corporate Governance Officer
12. Approved the first mid-year employees’ bonus of 2019
13. Approved employees’ salary adjustment of 2019
14. Approved the proposal for the appropriate percentage for the remuneration of
employees and Directors of 2019
15. Approved the loan to the 100% owned subsidiary Compal (Vietnam) Co., Ltd.
16. Approved the loan to the 100% owned subsidiary Compalead Eletrônica do Brasil
Indústria e Comércio Ltda.
17. Approved the issuance of the Letter of Support by the Company to facilitate its subsidiary
in obtaining credit facilities from financial institutions
18. Approved of the Company obtaining credit facilities from financial institutions
1. Approved the relevant matters regarding the distribution of the year 2018 cash dividends
and cash distribution from capital surplus to shareholders
2. Approved the issuance of Letter of Support by the Company to facilitate its subsidiary in
obtaining credit facilities from financial institutions
3. Approved the Company to obtain credit facilities from financial institutions
1. Approved the Directors’ Remuneration of 2018
2. Approved 2nd mid-year employees’ bonus of 2019
3. Approved for a loan to Henghao Technology Co. Ltd.
4. Approved for a loan to Unicom Global, Inc.
5. Approved the Company to obtain credit facilities from financial institutions
1. Approved for senior level management change
2. Approved the compensation of Employee bonuses in cash of year 2018
3. Approved the proposal for 2019 year-end employees’ bonus
4. Approved for approval of annual audit plan for year 2020
5. Approved the amendment to the “Ethical Corporate Management Best Practice Principles”
and related matters
6. Approved the proposal of leasing the office (building) and car parking lots, with Shin Kong
Life Insurance Co., Ltd.
7. Approved the issuance of Letter of Support by the Company to facilitate its subsidiaries in
obtaining credit facilities from financial institution
8. Approved the Company to obtain credit facilities from financial institutions
7th Meeting
(13th Term)
2019.5.13
8th Meeting
(13th Term)
2019.6.27
9th Meeting
(13th Term)
2019.8.13
10th Meeting
(13th Term)
2019.11.11
11th Meeting
(13th Term)
2020.2.14
1. Approved for the issuance of Letter of Support by the Company to facilitate its subsidiaries
in obtaining credit facilities from financial institutions
2. To authorize the Company to obtain credit facilities from financial institutions
91
Board of Directors
Meeting
Major Resolutions
12th Meeting
(13th Term)
2020.3.30
13th Meeting
(13th Term)
2020.5.13
1. Approved for the Internal Control System Statement for the year 2019
2. Approved for the proposal of the distribution of compensation to employees and
directors for the year 2019
3. Approved for 2019 Audited Consolidated Financial Statements and Parent Company Only
Financial Statements
4. Approved for the Business Report for the year 2019
5. Approved for the Business Plan for the year 2020
6. Approved for the proposal for Distribution of Earnings for the year 2019
7. Approved for the proposal for cash dividends from Earnings for the year 2019
8. Approved for the proposal of cash distribution from Capital Surplus
9. Approved for the convention of 2020 Annual General Shareholders’ Meeting
10. Approved for the targets and plans of Corporate Social Responsibility for the year 2020
11. Approved for the CPAs’ independence and competence of performing financial report
audit.
12. Approved for the rove the enactment to the “Rules of Self-Evaluation of the Board of
Directors and Functional Committees Performance”
13. Approved for the enactment to the “Colleague Integrity Code”
14. Approved for the Company to obtain credit facilities from financial institutions
1. Approved for senior level management change
2. Approved for the amendment to the “Rules and Procedures for Board of Directors
Meetings”
3. Approved for the amendment to the “Audit Committee Charter”
4. Approved for the amendment to the “Remuneration Committee Charter”
5. Approved for the amendment to the “Corporate Governance Best-Practice Principles”
6. Approved for the amendment to the “Corporate Social Responsibility Best Practice
Principles”
7. Approved for the release of non-competition restrictions for the managers
8. Approved for the release of non-competition restrictions for Directors
9. Approved for the first mid-year employees’ bonus of the year 2020
10. Approved for employees’ salary adjustment of the year 2020
11. Approved for e the proposal for the appropriate percentage for the remuneration of
employees and Directors of the year 2020
12. Approved for fund loan to 100% owned subsidiary Compalead Eletrônica do Brasil
Indústria e Comércio Ltda.
13. Approved for the issuance of Letter of Support by the Company to facilitate its subsidiary
in obtaining credit facilities from financial institutions
14. Approved for authorize the Company to obtain credit facilities from financial institutions
92
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, Corporate Governance and R&D: None.
93
3.4
Information Regarding the Company’s Audit Fees and Independence
3.4.1 Audit Fees
Accounting Firm
Name of CPA
Period Covered by CPA’s Audit
Remarks
KPMG
Chien, Szu Chuan
Au, Yiu Kwan
2019.01.01~2019.12.31
-
Fee Range
1
2
3
4
5
6
Under NT$ 2,000,000
NT$2,000,000 ~ NT$4,000,000
NT$4,000,000 ~ NT$6,000,000
NT$6,000,000 ~ NT$8,000,000
NT$8,000,000 ~ NT$10,000,000
Over NT$100,000,000
Fee Items
Audit Fee
Non-audit Fee
-
-
-
-
-
10,420
-
5,950
-
-
-
-
Unit: NT$ thousand
Total
-
5,950
-
-
-
10,420
(1) Non-audit fees paid to CPAs, accounting firms, and affiliated companies thereof that amount to
more than 1/4 of the audit fees:
Non-Audit Fee
Period Covered by
CPA’s Audit
Remarks
Unit: NT$ thousands
System
Company
Human
Others
Design
Registration
Resource
(Note)
Subtotal
Firm
Name of CPA Audit Fee
Chien, Szu-
Chuan
KPMG
10,420
-
80
-
5,870
5,950
2019.01.01~2019.12.31
-
Au, Yiu-Kwan
Note: Other non-audit fees: Transfer pricing report of $600,000, tax consultation of $4,974,000, and others of $296,000.
(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
94
3.5
Replacement of CPA: None.
3.6
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.
3.7
Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders
Title
Name
Chairman
Sheng-Hsiung Hsu
Vice Chairman
And CSO
Jui-Tsung Chen
Binpal Investment Co.,
Ltd.
Representative: Wen-
Being Hsu
Kinpo Electronics, Inc.
Representative: Shyh-
Yong Shen
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Chung-Pin Wong
Director
Director
Director
Director
Director
Director and
President
Director
Chiung-Chi Hsu
Director
And EVP
Ming-Chih Chang
Director
Anthony Peter Bonadero
Director
And EVP
Independent
Director
Independent
Director
Independent
Director
Executive Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
Sheng-Hua Peng
Min-Chih Hsuan
Duei Tsai
Duh-Kung Tsai
Chen Chang Hsu
Chun-Te Shen
Kuo-Chuan Chen
Pei-Yuan Chen
2019
Up till April 21, 2020
Shares held
Increase
(Decrease)
Shares pledged
Increase
(Decrease)
Shares held
Increase
(Decrease)
Shares pledged
Increase (Decrease)
Unit: shares
0
0
0
1,000,000
0
0
0
(405,000)
0
0
0
0
0
0
0
0
0
0
0
0
0
95
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(162,000)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Chyou-Jui Wei
(120,000)
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Ying Chang
Wen-Da Hsu
Wei-Chang Chen
Shi-Kuan Chen
Chi-Wai Wan
Min-Tung Weng
Lo-Chun Lee
Sheng-Hung Li
Vice President Chih-Chuan Cheng
Senior Vice
President
Bor-Heng Chen
Vice President Ching-Hsiung Lu
Vice President Po-Tang Wang
Vice President Tzong -Ming Wang
Vice President Fu-Chuan Chang
Vice President Yung-Nan Chang
Vice President Yong-Ho Su
Vice President
Jyh-Shyan Liang
Vice President Chiao-Lie Huang
Vice President Chung-Hsing Tan
Vice President Yi-Yun Chang
Vice President Hsin-Kung Mao
Vice President Hsin-Hsiung Huang
Vice President Shih-Hong Huang
Vice President Yi-Chiang Chiu
Jui-Chun Shyur
Vice President
Vice President Shyh-An Lee
Vice President Ta-Chun Wang
Vice President
Jen-Liang Lin
General Counsel Peng-Hong Chan
Vice President Wei-Chia Wang
Accounting &
Corporate
Governance
Officer
Vice President
Cheng-Hui Su
Cheng-Chiang Wang
0
0
0
0
0
0
0
0
0
0
(110,000)
0
(30,000)
30,000
(54,000)
0
(15,000)
0
(70,000)
0
0
0
0
8,000
0
0
0
0
0
0
0
0
96
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20,000
0
0
0
0
0
0
0
0
0
(8,000)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Vice President
Vice President
Tu-Chuan Tu
Chang-Chieh Tien
Vice President Hsiao-Wei Lo
Vice President Guo-Dung Yu
Internal Audit
Officer
Po-Wen Hsieh
Vice President Po-Hsiung Chang
Vice President Tsing-Fa Lee
Vice President Fei-Long Chen
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
-
-
0
0
20,000
0
0
-
-
-
0
0
0
0
0
Note: Vice Presidents Hsiao-Wei Lo, Guo-Dung Yu were promoted and Vice Presidents Po-Hsiung Chang, Tsing-Fa Lee,
and Fei-Long Chen resigned in 2019.
3.7.1 Shares Trading with Related Parties:
Reason
Name
for
transfer
Transaction
date
Counterparty's
relationship with the
Company, Directors,
Counterparty
Supervisors, Managers,
Shares
Transaction price
and shareholders with
more than 10%
ownership interest
Ching-Hsiung Lu
Gift
2019/6/28
Shao-Hsuan Lu
Father and Daughter
110,000
20.15
3.7.2
Shares Pledged with Related Parties: None
97
3.8
Relationship among the Top Ten Shareholders
April 21, 2020 Unit: Shares
Name
Self
Shares held
Shareholdings of spouse
and minors
Total shares held in
the names of others
Shares held
Shares
Shareholding
Percentage
Shares
Shareholding
Percentage
Shares
Shareholding
Percentage
Spouse, relative of
second degree or
closer, and
relationships among
top 10 shareholders
Name Relationship
0
0
0
0
0
0
0
0
0
0
0
0
0% N/A
N/A
0% N/A
0%
N/A
0% N/A
N/A
0% N/A
N/A
0% N/A
0% N/A
0% N/A
N/A
N/A
N/A
0% N/A
N/A
0% N/A
0% N/A
0% N/A
N/A
N/A
N/A
Silchester International
Investors International
Value Equity Trust
Kinpo Electronics Inc.
Representative: Sheng-
Hsiung Hsu
Silchester International
Investors International
Value Equity Group
Trust
Yuanta/P-shares
Taiwan Dividend Plus
ETF
New Labor Pension
Fund
Labor Insurance Fund
Silchester International
Investors International
Value Equity Taxable
Trust
JPMorgan Chase Bank
N.A., Taipei Branch in
custody for Vanguard
Total International
Stock Index Fund, a
series of Vanguard Star
Funds
Fubon Life Insurance
Co., Ltd
Representative: Ming-
Hsing Tsai
Vanguard Emerging
Markets Stock Index
Fund, A Series of
Vanguard International
Equity Index Funds
232,018,000
5.26%
-
-
151,628,692
8,975,401
-
3.44%
0.20% 17,107,025
-
0.39%
116,881,000
2.65%
104,411,487
2.37%
89,120,000
2.02%
79,747,331
78,322,000
1.81%
1.78%
74,595,652
1.69%
64,200,991
1.46%
0
0%
60,877,900
1.38%
-
-
-
-
-
-
-
0%
-
-
-
-
-
-
-
-
0
-
98
3.9
Ownership of Shares in Affiliated Enterprises
December 31, 2019 Unit: Shares; %
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
Panpal Technology Corp.
Gempal Technology Corp.
Hong Ji Capital Co., Ltd.
Hong Jin Investment Co., Ltd.
HippoScreen Neurotech Corp.
SHENNONA CO.,Ltd.
Aco Smartcare Co.,Ltd.
Rayonnant Technology Co.,
Ltd.
RiPAL Optotronics Co., Ltd.
Unicom Global Inc.
Palcom International
Corporation
Henghao Technology Co., Ltd.
Compal Broadband Networks
Inc.,
Crownpo Technology Co., Ltd.
Kinpo Group Management
Consultant Company
Mactech Co., Ltd.
General life Biotechnology
Co., Ltd.
Lead-honor Optoelectronic
Co., Ltd.
Infinno Technology
Corporation
Accesstek Inc.
Allied Circuit Co., Ltd.
Arcadyan Technology Corp.
Maxima Ventures I, Inc.
Avalue Technology Inc.
Core Profit Holdings Ltd.
Flight Global Holding Inc.
Just International Ltd.
High Shine Industrial Corp.
Compal International Holding
Co., Ltd.
Big Chance International Co.,
Ltd.
Compal Rayonnant Holdings
Limited
500,000,000
90,000,000
100,000,000
29,500,000
42,000,000
600,000
100,000,000
100.00
100.00
100.00
100.00
70.00
100.00
52.04
29,500,000
100.00
6,000,000
10,000,000
100.00
100.00
10,000,000
100.00
20,014,952
100.00
-
-
-
-
-
-
-
-
-
-
-
-
- 500,000,000
-
90,000,000
- 100,000,000
29,500,000
-
42,000,000
-
600,000
-
- 100,000,000
29,500,000
6,000,000
10,000,000
10,000,000
-
-
-
-
-
29,060,176
43.45 13,672,854
20.44 42,733,030
3,738,668
33.23 6,184,135
54.97
9,922,803
300,000
37.50
300,000
37.50
600,000
21,756,192
52.88
274,954
0.67
22,031,146
20,014,952
100.00
15,000,000
50.00
2,772,000
42.00
-
-
-
15,000,000
- 2,772,000
42.00
5,649,625
27.20
154,308
0.75
5,803,933
899,160
10,157,730
41,304,504
126,000
15,240,070
147,000,000
89,755,495
48,010,000
42,700,000
3,000
27.78
319,707
20.42 7,232,701
19.81 32,006,132
22.55
21.40
682,000
100.00
-
100.00
-
100.00
-
53.58 37,000,000
9.88
1,218,867
14.54 17,390,431
15.35 73,310,636
129,000
0.54
15,706,070
0.97
- 147,000,000
89,755,495
-
48,010,000
-
79,700,000
46.42
53,001,000
100.00
90,820,000
100.00
12,500,000
100.00
99
-
-
-
-
-
-
53,001,000
90,820,000
100.00
12,500,000
100.00
100.00
100.00
100.00
100.00
70.00
100.00
52.04
100.00
100.00
100.00
100.00
63.89
88.20
75.00
53.55
50.00
27.95
37.66
34.96
35.16
23.09
22.37
100.00
100.00
100.00
100.00
100.00
Shareholding
percentage
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Investees (Note)
Invested by the Company
Held by directors,
supervisors, managers, and
directly/indirectly
controlled entities
Aggregate investment
Shares
Shareholding
percentage
Shares
3,000,000
100.00
Shareholding
percentage
-
-
Shares
3,000,000
Auscom Engineering Inc.
Compal Europe (Poland) Sp. z
o.o.
Bizcom Electronics, Inc.
Compal Electronics (Holding)
Ltd.
136,080
100.00
100,000
100.00
1,000
100.00
Compalead Electronics B.V.
6,426,516
100.00
-
-
-
-
-
-
-
-
136,080
100,000
1,000
6,424,516
Etrade Management Co., Ltd.
46,900,000
65.23 25,000,000
34.77
71,900,000
Webtek Technology Co., Ltd.
100,000
100.00
Forever Young Technology
Inc.
50,000
100.00
-
-
-
-
100,000
50,000
100.00
Lipo Holding Co., Ltd.
98,000
49.00
102,000
51.00
200,000
100.00
Ascendant Private Equity
Investment Ltd.
31,253,125
34.72 41,754,275
46.39 73,007,400
81.11
UniCore BioMedical Co., Ltd.
20,000,000
100.00
Shennona Corporation
2,600,000
100.00
Note: Investments made by the Company using the Equity Method.
20,000,000
2,600,000
100.00
100.00
100
IV. Capital Overview
4.1
Capital and Shares
4.1.1
Source of Capital
Year Month
Issuance
Price
Authorized capital
Paid-up capital
Shares
Amount (NTD)
Shares
Amount (NTD)
Source of capital
Remarks
Paid in properties
other than cash
Others
May 13, 2020
2018
2018
3
5
Share
Type
Ordinary
shares
10
6,000,000,000
60,000,000,000
4,419,191,625
44,191,916,250
Cancellation of Restricted Employee
N/A
Change of capital approved by the Ministry of
Shares of $10,890,000
Economic Affairs on March 21, 2018
10
6,000,000,000
60,000,000,000
4,407,146,625
44,071,466,250
Cancellation of Restricted Employee
N/A
Change of capital approved by the Ministry of
Shares of $120,450,000
Economic Affairs on May 29, 2018
Outstanding shares (public listed)
Unissued shares
Total
Authorized capital
Remarks
4,407,146,625
1,592,853,375
6,000,000,000
Approved to include 100,000,000 shares of employees shares and corporate
bonds with warrant in capital.
■ Shelf registration system information: None
101
4.1.2 Status of Shareholders
Analysis
Government
Agencies
Financial
Institutions
Other
Institutions
Foreign
Institutions &
Natural Persons
Domestic
Natural
Persons
Treasury
stocks
Total
Number of
Shareholders
Shareholding
(shares)
Percentage
3
40
290
1,016
188,531
0
189,880
8 139,275,291 580,813,193
2,133,825,795 1,553,232,338
0 4,407,146,625
0.00%
3.16%
13.18%
48.42%
35.24%
0.00%
100.00%
April 21, 2020
4.1.3 Share Ownership Distribution
Range of Shareholding
(Unit: Shares)
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
Number of
Shareholders
Shareholding (Shares)
Percentage
April 21, 2020
44,039
97,449
23,923
8,420
4,735
4,088
1,838
1,194
2,094
984
445
166
94
59
352
189,880
8,559,129
222,417,897
180,761,010
103,725,875
86,370,813
102,588,897
65,209,237
55,149,410
150,141,809
135,628,716
122,624,594
82,857,102
65,963,617
51,974,136
2,973,174,383
4,407,146,625
0.19%
5.05%
4.10%
2.35%
1.96%
2.33%
1.48%
1.25%
3.41%
3.08%
2.78%
1.88%
1.50%
1.18%
67.46%
100.00%
4.1.4 List of Major Shareholders
Shares
Shareholder’s name
Silchester International Investors International Value Equity Trust
Kinpo Electronics Inc.
Silchester International Investors International Value Equity Group
Trust
Yuanta/P-shares Taiwan Dividend Plus ETF
New Labor Pension Fund
Labor Insurance Fund
102
April 21, 2020
Shares held
Percentage (%)
232,018,000
151,628,692
116,881,000
104,411,487
89,120,000
79,747,331
5.26%
3.44%
2.65%
2.37%
2.02%
1.81%
Silchester International Investors International Value Equity Taxable
Trust
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard
Total International Stock Index Fund, a series of Vanguard Star Funds
Fubon Life Insurance Co., Ltd
Vanguard Emerging Markets Stock Index Fund, A Series of Vanguard
International Equity Index Funds
78,322,000
1.78%
74,595,652
64,200,991
60,877,900
1.69%
1.46%
1.38%
4.1.5
Market Price, Net Worth, Earnings, and Dividends per Share
Year
Measurement
Per-share
market
price
High
Low
Average
Per-share
net worth
(Note)
Before dividend
After dividend
2018
22.15
16.65
19.16
24.26
23.05
2019
20.65
17.05
18.79
24.32
23.11
Year-to-date
March 31, 2020
19.25
15.30
18.05
23.13
-
Before
adjustment
After
adjustment
Weighted average
outstanding
shares
Earnings per
share
Weighted average
outstanding
shares
Earnings per
share
Cash dividends
Stock
dividends
From earnings
From capital
reserves
Cumulative unpaid
dividends
P/E ratio
Price to dividends ratio
Cash dividend yield
Earnings per
share
Per-share
dividend
Analysis of
investment
returns
4,356,447,549
4,357,129,194
4,357,129,194
2.05
1.60
0.14
4,356,447,549
4,357,129,194
2.05
1.20
-
-
-
9.35
15.97
6.26%
1.60
1.20
-
-
-
11.74
15.66
6.39%
-
-
-
-
-
-
-
-
-
Note: The 2019 distribution of earnings was resolved at the March 30, 2020 Board of Directors’ Meeting and will be
submitted to the 2020 shareholders’ meeting for final approval.
4.1.6 Dividend Policy and Implementation Status
(1)
Dividend Policy
If there is any profit after closing of books in a given year, the Company shall first defray tax due, cover
accumulated losses and set aside ten percent (10%) of it as legal reserve and then set aside or reverse a special
reserve in accordance with laws and regulations. The balance of earnings available for distribution is
composed of the remainder of the said profit and the unappropriated retained earnings of previous years. The
board of directors may set aside a certain amount to cope with the business operation conditions, and shall
prepare the proposal for distribution of the balance amount thereof after a resolution has been adopted and
103
then allocated in accordance with Second Paragraph of this Article or Article 29.
The Company authorizes the board of director to distribute all or part of the dividends and bonuses, capital
surplus or legal reserve in cash to shareholders after a resolution has been adopted by a majority vote at a
meeting of the board of directors attended by at least two-thirds of the total number of directors; and in
addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.
The lifecycle of the industry of the Company is in the growing stage. To meet the future capital needs and in
consideration of capital budget, long-term financial planning and onshore and offshore competition condition,
as well as the need of shareholders for cash flow, if there is any profit after close of books, the dividend and
bonds to be distributed to shareholders should not be less than thirty percent (30%) of the after-tax profit of
such year and the cash dividend allocated by the Company each year shall not be lower than ten percent (10%)
of the total dividend (including cash and share dividend) for such year.
(2)
The board of directors' resolution on dividend distribution
●
●
The 2019 distribution of earnings of shareholders’ dividends in the amount of NTD 4,407,146,625 was
approved by the Board of Directors Meeting on March 30, 2020. 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 881,429,325, or
NTD 0.2 per share. The total cash distribution amounts to NTD 5,288,575,950.
For the proposal for Dividend Distribution Plan and Cash Distribution from Capital Surplus, if the number
of outstanding shares is changed, the distribution ratio for the cash dividend or the cash distribution from
capital surplus must be adjusted accordingly. Chairman was granted full authority by the Board of
Directors to deal with this matter.
(3) When there is a significant change in the expected dividend policy, it should be stated: None.
4.1.7 Impact to 2019 Business Performance and EPS resulting from Stock Dividend Distribution:
Not Applicable (The Company did not disclose 2020 annual financial forecast)
4.1.8 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 directors 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.
Employees entitled to receive the said stock or cash may include the employees of the Company’s subordinate
companies who meet certain requirements.
(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.
●
●
●
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.)
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.
104
(3)
(4)
2019 employees compensation proposal passed by the board of directors
●
●
Accrued employees compensation is NTD $731,321,511 and directors compensation is NTD $38,671,525.
If the estimated distribution amount differs from the amounts estimated in accrued expenses, the
variance, reason, and resolution should be disclosed: No variance.
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).
●
Actual distribution of 2018 employee and directors compensation:
●
●
The employee compensation is NTD $930,857,503 and the directors compensation is NTD $49,222,782.
The 2018 actual distribution of employee and directors compensation remained as proposed by the board
of directors.
4.1.9 Company Buyback of Own Shares: None
105
4.2
Bonds:
4.2.1 Oversea Corporate Bonds: None
4.2.2
Domestic Corporate Bonds: (Information for the subsidiary Arcadyan Technology Corp.)
1. Corporate Bonds
Type of corporate bonds
First domestic unsecured convertible corporate bonds
Issue (Execute) date
Face value
June 6, 2019
NT$100 thousand
Issuance and trading location
Republic of China; listed in Taipei Exchange
Issue price
Total amount
Coupon rate
Tenor
Issued at 101% of par value
NT$1,000,000 thousand
0%
Three year, expiry date: June 6, 2022
Credit guarantee institution
None.
Trustee
Underwriter
Legal counsel
CPAs
Redemption
KGI Bank Co., Ltd
KGI Securities
Handsome Attorneys-at-Law: Chiu Ya-Wen
KPMG
Kuo Kuan-Ying, Yen Hsin-Fu
Except where the holders of the convertible corporate bond
convert it into Arcadyan’s common shares in accordance with
Article 10 of the regulations governing the issuance of
Arcadyan’s corporate bonds, or Arcadyan repurchases the
convertible corporate bond at the business premises of
securities firms and cancel it, Arcadyan shall redeem this
corporate bond in cash at its maturity in one go in accordance
with the par value of the bond.
Outstanding
NT$1,000,000 thousand
Redemption or early repayment clause
Covenants
None.
None.
Credit rating agency, date of rating, rating
of corporate bond
Not applicable.
Other rights of
Bondholders
The amount of converted
(exchanged or subscribed)
ordinary shares, global
depository receipts or
other securities as of the
publication date of the
annual report
Issuance and conversion
(exchange or
subscription) method
No conversion initiated by Bondholder as yet.
Please refer to the regulations governing the issuance and
conversion method of Arcadyan’s first domestic unsecured
convertible corporate bonds.
Dilution effect and other adverse effects According to the current conversion price, if all corporate
106
on existing Shareholders
bonds are converted to common shares, Arcadyan is required
to re-issue 10,752,688 common shares. The dilution rate
amounts to 4.9%. Further, the coupon rate of this corporate
bond is 0%, which allows Arcadyan to obtain a low-cost
financing and reduce interest expenses. Moreover, the
conversion price is issued by referring to the premium price of
common share. As such, the effect on existing shareholders is
limited.
Custodian
Not applicable.
2. Convertible Bonds
Type of corporate bonds
First domestic unsecured convertible corporate bonds
Year
Item
Market price
of convertible
bonds
Highest
Lowest
Average
Conversion Price
2019
120.80
104.35
110.33
(Note)
As of April 30, 2020 for the current year
112.50
100.50
105.61
93
Issue date: June 6, 2019, conversion price at issuance was NT$98.3.
Issue (Execute) date and
conversion price at issuance
Conditions for conversion
Note: Conversion price between June 6, 2019 and August 9, 2019 was NT$98.3; conversion price
between August 10, 2019 and November 14, 2019 was NT$94.7; conversion price between
November 15, 2019 and December 31, 2019 was NT$93.0.
Issuance of new shares
4.2.3 Exchangeable Bonds: None
4.2.4 Blanket declaration of issued corporate bonds: None
4.4.5 Corporate bonds with warrants: None
4.3
Preferred shares: None
107
4.4 Global Depository Receipts
1.
Issuance
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
Key terms of the depository
and custodian agreements
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
3,991,275 units (May 13, 2020)
N/A
The Bank of New York
Borne by participating shareholder(s)
Allocated proportionally between the
Company and participating
shareholders
See descriptions below
Per
Unit
Market
Price
2019
Year-to-date
May 13, 2020
High USD
Low USD
Average USD
High USD
Low USD
Average USD
$ 3.32
$ 2.77
$ 3.04
$ 3.21
$ 2.55
$ 3.04
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2. Key terms of the depository and custodian agreement
(1) Key terms of the depository agreement
■ Depository receipts
Each depository certificate represents 5 Compal ordinary shares.
■ Transfer/settlement
Ownership and transfer of depository receipts shall be certified through the book-entry settlement system
of The Depositary Trust Company ("DTC"). Depository receipts shall be settled over DTC's book-entry system.
Unless otherwise specified by law, ownership and transfer of depository receipts may only be completed over
DTC's records. In Europe, depository receipts are still held under DTC, but transactions are settled through the
book-entry system of Euroclear or Clearstream.
■ Deposit and redemption of Compal shares
Three months after issuance of depository receipts, holders may request to redeem and receive shares
represented by the depository receipt after paying the relevant charges according to the terms of the depository
contract, or request the depository institution to sell shares represented by the depository receipt (provided
that Compal has placed an adequate quantity of ordinary shares for sale with the depository institution). Once
the shares represented by the depository receipt have been sold, the depository institution shall deduct the
relevant charges, taxes, and government levies from the sales proceeds, and convert the remainder into USD
before paying the depository receipt holder who has requested redemption. Subsequent issues of depository
receipts are subject to the procedures outlined by the Securities and Futures Institute of the Republic of China,
the terms of the depository contract, and the consent of both Compal and the depository institution.
The depository receipts have been listed on the Luxembourg Stock Exchange and are traded through the
PORTAL of National Association of Securities Dealers Inc.
■ Distribution of dividends, gains, and rights
For cash dividends on Compal shares, the depository institution is required to convert the amount of cash
received into USD according to the laws of the Republic of China, deduct taxes and relevant charges, and
distribute the remainder to depository receipt holders based on the percentage of shares represented in each
depository receipt.
For stock dividends on Compal shares (including shares issued against capitalized earnings and reserves),
the depository institution is required to adjust the number of shares represented in each depository receipt
according to the laws of the Republic of China and terms of the depository contract. DTC will then produce
additional depository receipts based on the size currently held and distribute them to the respective holders.
Sale of stock dividends is subject to compliance with the terms of the depository contract and laws of the
Republic of China.
■ Tax
Any dividends (cash or stock) paid to the depository institution are subject to withholding tax at the
prevailing tax rate when payment is made.
Holders who request the redemption of depository receipts by having the depository institution sell the
underlying shares through the Taiwan Stock Exchange Corporation (TWSE) will be charged securities
transaction tax at the prevailing rate when the sale takes place.
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Capital gains tax on securities transactions is currently suspended according to the laws of the Republic
of China. Practices may be adjusted to reflect changes in the laws of the Republic of China.
(2) Key terms of the custodian agreement
■ Placing securities for the issuance of global depository receipts
Compal is required to place securities with the custodian and hand over all documents mentioned in the
custodian contract, which provide the basis for the issuance of global depository receipts.
■ Notifying the depository institution for the issuance of depository receipts
Once the custodian has received Compal's ordinary shares, the custodian shall immediately notify the
depository institution for the issuance of global depository receipts. As soon as the depository institution
receives the above notice, it shall produce and issue global depository receipts representing the number of
entitled securities to the parties mentioned in the custodian's notice above.
■ Delivery of securities upon redemption of depository receipt
If a holder requests the redemption of depository receipts, the depository institution shall immediately
notify the custodian to transfer the number of securities represented to the party specified by the depository
institution. The custodian may collect a sum sufficient to cover the taxes or expenses incurred from the party
specified by the depository institution as a result.
■ Confirmation of share quantity on baseline date
The custodian is required to report to the depository institution the number of securities held in custody
by the end of each baseline date.
4.5
Employee Warrants: None
4.6
Subscription of New Shares by Employees and Restricted Shares: None
4.7
Status of New Shares Issuance in Connection with Mergers and Acquisitions: None
4.8
Financing Plans and Implementation:
(1) Execution of the previous issue or private placement of securities that have not been completed: None
(2) The latest three-year issuance or private placement of securities has been completed and the project benefits
have not yet been revealed: none
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V. Operational Highlights
5.1
Business Activities
5.1.1 Business Scope
(1) Main areas of business operations
The development, design, manufacture, and sales of Notebooks, Ultra slim notebooks, 2 in-1 Notebooks,
AIO, 5G Module & Products, Tablets, Smartphones, Smart Wearable Devices, Smart Hearable Devices, Smart
Display Products, AR/VR Smart Devices, Smart Home Devices, IoT Vertical Solutions, Smart Medical and
Healthcare, Auto electronics, and Servers.
(2)
2019 Revenue distribution
Major Divisions
(%) of Total Sales
Unit: NTD thousands
5C electronics
Other products
Total
(3) New product development
■ Notebooks
99.7%
0.3%
100%
In 2019, Compal adopted the most efficient R&D methods for the launch of their latest notebook PC hardware,
which included laptops with Intel 9th and 10th generation processors and the AMD new Ryzen platform. Compal
has special expertise in system integration, R&D, and manufacturing to assist clients in the development and mass-
production of new products with the latest specifications in a relatively short time. The Compal price-competitive,
slim, and stylish notebooks were launched at a time when the market favored more affordable and portable
devices. They received mostly positive responses from consumers. The purchase signal in the high-end gaming
laptop market has been relatively stable, making the gaming laptop market new ground for brand name
companies to vie for growth. The injection of more money into this aspect of the notebook market has intensified
competition in the global gaming notebook market. After years of operation as an ODM of gaming laptops for our
brand partners, Compal has accumulated profound experience in their design and development. 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 in different countries and markets. Significant resources have been
devoted to the development of commercial notebooks. Compal invests a significant amount into R&D resources
to create a win-win situation with our customers.
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■ Ultra slim Notebooks
Innovative technology and extensive R&D capabilities have allowed Compal to maintain a leading position in
the industry. Compal produces an ultra-thin Notebook, which uses the latest generation processor from Intel and
AMD. Not only is it slim and light but it has most excellent performance and allows users to really be productive.
Compal will introduce more Ultra slim notebooks in 2020. In addition to compatibility with the Intel design
specifications, like “Project Athena,” for their latest generation products, we will also be introducing slimmer
products at a lower price to meet market demand. They will feature the stylish and elegant body that is typical of
Compal products, yet offer computing power that can rival a high-performance PC. Compal will also continue to
develop newer and more competitive technologies that consumers around the world will get to enjoy, but will
also give our clients faster access to these markets. In addition, gaming notebooks, which usually cannot have a
slim design will start to phase in nVIDIA Max-Q technology to achieve both high-performance and an Ultra slim
design.
■ 2-in-1 Notebooks
The 2-in-1 Notebook 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.
The touch-sensing display module coupled with the latest Microsoft Windows 10 OS attracts both the consumer
base for standard laptops as well as that for tablet PCs. We have utilized our rich R&D experience to present
several innovative concepts that incorporate exclusive technology as well as materials. The fan-less design of the
2-in-1 Notebook with its different designs and form factors, has allowed the Company to create new market
demand and earn unanimous praise from clients and consumers alike. 5G will become a hot topic for 2-in-1
notebooks which focus on mobility.
■ All-in-one (AIO)
The AIO has been on the market for years. It is an elegant design combination of screen and computer with
a thin, special shape. The product has replaced the desktop in many households and corporations. Compal has
also enhanced the design to allow the AIO to lie flat while also being portable (Portable AIO). Because Compal has
the fundamental technical capabilities required for notebook PCs as featured in the AIOs, it can also commence
production in a very short time. Our AIO product lines have been very well received by clients.
■ 5G Module & Products
5G communication and 5G applications are global development trends. The three major use scenarios
provided by 5G communication are mobile broadband service (eMBB), multi-machine type communication
(mMTC), ultra-high reliability and ultra-low-latency communication (URLCC). In coming years, 5G communication
will be widely deployed in various industries and various domain applications.
Compal adheres to its long-term technical advantages in the communication field, provides 5G
communications solutions, the 5G universal integrated module complies with 3GPP Release R15 specification, is
backward compatible with 4G LTE / 3G WCDMA, supports high-speed LTE Cat20, and supports both 5G NSA & SA
networking modes. Modules with multi-band support include WCDMA/ TDD-LTE/ FDD-LTE, 5G FR1 (Sub-6GHz) &
5G FR2 millimeter waves etc. Modules also built with GPS / GNSS global positioning system, eSim and other
functions, are all needed features of coming 5G IOT (Internet of Things) applications & devices.
Based on the long-term experience in consumer electronics design, research & development, and product
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manufacturing, Compal also provides all kinds of reference designs of 5G terminal products, collaborates with
existing customers and partners, to provide 5G products such as 5G Mifi, 5G routers, 5G CPE, 5G notebook, 5G
AR/VR, 5G drone, 5G robots… etc. These 5G Products will be widely used in various industries such as
entertainment, culture, tourism, finance, health, transportation, education, industry, agriculture, government,
and power utilities, etc.
■ Tablets
Compal has been deeply cultivating tablet and e-book products used by industrial, commercial, and
consumers for a long time, and has a rich mass production record, with high performance, technical design
experience, and reliable production quality. In recent years, global tablet product shipments have slowed down.
Compal focuses on breakthroughs in technologies, focusing on special applications in a rugged commercial market,
and the benefits of extended products have gradually emerged.
■ Smartphones
Compal targets variant groups of smartphone users and general consumers, and the pioneers of technology
continue to strengthen technical design and operation efficiency to develop core communication technologies.
Since 2019, we have invested in the design of 5G smartphone models and promoted 5G models to maintain our
leadership in the industry. In the future, we will develop mid-end 5G smartphone models, equipped with under-
screen fingerprint recognition, under-screen camera technology, hundred-million-pixel camera, narrower bezel
design, and high-speed fast charging technology to meet market demands and customer expectations. At the
same time, it has also continued to dig deep into the design of rugged mobile phones, improved the anti-
scratch, anti-panel crack, drop resistance, and waterproof and dustproof designs for rugged outdoor usage. The
stylish appearance reverses the traditional & monotonous shape of rugged phones and can meet the military
standard requirements, also bringing a new & fashion ID look to rugged smartphones.
■ Smart Wearable Devices
Compal began to ship wearable devices starting in 2016. Based on the design engineering capabilities and
manufacturing experience with smart devices, we have made great progress in terms of the shipping quantities
for Google Wear OS-based smart watches. In addition to the development of more compact and energy efficient
smart watches, we are also devoted to expanding our wearable product lines to satisfy various requirements from
our customers.
■ Smart Hearable Devices
The trend to remove audio jack on smartphones is one key driver to the fast-booming Smart hearable market.
Convenience of usage and affordable price also stimulate the market demand. Based on our rich experiences in
wireless and acoustic technology, Compal aggressively joins into the smart hearable market. In addition to the
consumer Bluetooth headset and TWS earbuds, we also have deep cooperation with hearing experts to develop
hearable and acoustics related products with AI technology.
■ Smart Display Products
Smart display products equipped with intelligent voice assistants are already a trend. We continue to deepen
and strengthen the development of related technologies for smart TVs and smart video products such as,
integrating far-field microphones, ultra-high-resolution 8K display solutions, Mini and Micro LED backlight solution,
the introduction of artificial intelligence (AI) image processing and sound processing technologies, to improve the
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product's interactive convenience in use, visual and auditory immersive experience, to create and meet users'
expectation in the new generation of smart display products.
■ AR/VR Smart Devices
Worldwide leading technical companies have invested in the development of VR (virtual reality) and AR
(augmented reality) for many years. In recent years, with the leap forward of semiconductor process technology,
breakthroughs in optical display technology and the development of AI, AR, & VR are expected to be part of the
next generation personal computing platform.
A Compal base in product manufacture, mobility design, and communication capabilities, applied to AR/VR
devices and cooperated deeply with Qualcomm. In the future, for vertical customers, Compal will combine
hardware, software solutions, and 5G communication into a standard 5G AR/VR solution to meet customer needs.
■ Smart Home Devices
Smart Home has been in development for many years, and the rise of the Internet of Things (IoT) and AI
technologies, has allowed the speaker hub with smart voice assistants to become the focal point of competition
in several relevant industries. We have already received client recognition for our development of the Smart
Speaker and Smart Camera by Compal design and development capability. In the future, Compal will also use its
core capabilities to expand product coverage in many different applications and devices in Smart Home.
■ IoT Vertical Solutions
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 client needs.
Demands from B2B customers not only account for a higher portion of the existing IoT market but also bring
Compal more immediate profit. As Artificial Intelligence (AI) applications have become more popular, Compal is
now offering 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 Solution 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 popular and convenient 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 active engagement in the healthcare market. The Company
has reached out to major hospitals and point of care (POC) centers such as those engaged in long term or
postpartum care, using our strengths in integration and extensive 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.
■ Auto electronics (AE)
Car PCs consist of an in-car communication system (Telematics) and an in-car AV entertainment system (in-
Vehicle-Infotainment). As telematics systems are governed by special regulations on safety and communications
control, we have long been working with car manufacturers to ensure the relevant processes were in sync. Due to
the similarity in system framework between in-car AV entertainment and PCs, the field became a natural starting
point for a Compal foray into the car PC market. After years of hard work in the field, Compal products have been
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adopted by several major car manufacturers around the world.
■ Servers
The Cloud application market is growing, and a significant portion of data storage and computing analytics
have shifted to cloud servers in the back end. To meet the demand from both Enterprises and Data Centers,
Compal has mastered the R&D of High-density computing power and precision performance management and
has the capacity to design and manufacture servers with high C/P value.
5.1.2
Industry Overview
1. Current and future industry prospects
■ Notebooks
The growth of the notebook market over recent years has been driven by corporate equipment renewals and
educational purchases. However, the shipment is limited by Intel CPU shortage issues. According to IDC, notebook
shipments amounted to 170 million units worldwide in 2019, up 4% from 2018. Commercial replacement demand
will be a little bit cooling down because of Windows 7 EOS in January 2020. Moreover, COVID-19 will impact the
global economy, and the notebook shipment will be declined in 2020. As the PC industry matures, brand
manufacturers are shifting focus towards higher priced and more featured products, such as Ultra slim Notebooks,
2-in-1s, gaming notebooks and creator PCs in search of more market opportunities, revenue and profit. This
transformation requires more precise market segmentation, product positioning and innovative design. Compal,
with its extensive industrial experience, fine craftsmanship and proprietary patents, can coordinate with suppliers
and customers in creating market demand by developing innovative products that progress with time.
■ Ultra slim Notebooks
Slimness and lightweight continue to be two dominant design trends in the PC market today. As solid-state
drives (SSD) become popular, Ultra slim Notebooks no longer present a luxury that only high-end consumers can
afford but are gradually becoming accessible to mainstream consumers as more affordable models become
available. According to IDC, the shipment of ultra slim notebooks (<21mm thick) in 2019 was close to 83.5 million
units worldwide, representing an annual growth rate of 23%. Ultra slim notebooks are expected to account for
49% of the total notebook shipment worldwide by 2020 and will officially become the mainstream variant.
However, Compal will continue exploring new lightweight materials, power-saving solutions, and cooling
technologies to help our clients provide the most competitive products and earn market recognition.
■ 2-in-1 Notebooks
Owing to effort across the entire supply chain, the cost and selling price of 2-in-1s have dropped considerably,
which has made them more available and acceptable by a wider group of consumers. There are two types of 2-in-
1: flip-screen and detachable. Flip-screen notebooks can be physically converted for use under different scenarios,
such as video sharing, multi-user sharing and tablet mode. In recent years, manufacturers have introduced
notebooks with flip screens that are both lightweight and thin, making them even more appealing. Detachable
notebooks are characterized by smaller screen size. This is a feature that appeals to both tablet and notebook
users. The smaller form factor combined with a detachable keyboard can better satisfy users who have higher
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need for portability. According to IDC, the shipment of 2-in-1 devices totaled about 52.6 million units worldwide
in 2019, and manufacturers are expected to introduce more diverse products with 5G/ AI in 2020. This has the
potential to increase shipment by nearly 29% to more than 68 million units. These 2-in-1 Notebooks will inject
new vitality into the notebook PC market.
■ All-in-one (AIO)
The AIO market is currently dominated by HP, Lenovo, Dell and Apple. Those top brands account for more
than 85% of market share today. The AIO market is currently divided between two extremes. One end of the
spectrum is characterized by the use of entry-level CPUs such as Intel Celeron and Pentium. Their main purpose
being to replace desktop PCs as learning machines for children. On the other end of the spectrum there lies the
mid-range and high-priced products. Their main advertised features include multimedia playback, a high-end
desktop or notebook CPU, an advanced video processor, and a large touch screen panel. These high-end
specifications combined with aesthetic design have revolutionized the PC market and these products are starting
to replace desktops. According to IDC, the 3-year decline of AIOs has ended and shipments should remain stable
with 11.7 million units in 2020. In terms of design trend, the market should expect touch-based applications,
graphical user interfaces or e-sport grade AIOs in the future. The potential for AIOs to replace desktop PCs in
broader scenarios should further stimulate product growth.
■ 5G Module & Products
According to the GSA, by March 2020, there are 63 operators officially providing 5G network communication
products & services in more than 35 countries worldwide. Cisco Annual Internet Report states that by 2023, about
70% of the world's population (5.7 billion) will have mobile network communication, at least 10% of which is
provided by 5G communication. There are more than 250 5G consumer products available in the global market.
Include 16 product categories such as mobile phones, tablet, network sharing devices (CPE/MiFi), router, dongle,
notebook, TVs, robots, vending machine etc. Many products have adopted Compal 5G solutions already. Compal
will continue to expand partners in different 5G domains to develop more 5G application services and consumer
products.
■ Tablet
The continuous growth of smartphones with large displays has weakened the demand for tablets. The global
tablet market continued to decline in the year 2019. The overall annual recession rate was about 1.5%, and global
tablet shipments totaled 144 million units. The cost-effectiveness of the product is the key factor of consumers.
The demand for voice tablets is relatively stable. There will be 5G tablets coming to market soon and Compal also
continues to pay attention to and respond to these changes in the market and provides consumers with
competitive and diverse types of tablet products.
■ Smartphone
According to IDC, the global smartphone sales volume in 2019 was about 137.1 million units, with a decline
YOY rate of 2.25%. The overall decline in sales is due to the lower shipment growth in the China market. Observe
that consumers are waiting for the upcoming 5G network deployment and the launch of 5G smartphones into the
market. Compal aggressively invests in the development of new technologies for 5G smartphones, and provides
built-in AI (artificial intelligence) enhancement, virtual personal voice assistants, and a more intuitive user
interface. In addition, it will also bring a more attractive new generation of smartphone products.
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■ Smart Wearable Devices
According to IDC, smartwatch shipment increased steadily by 23% YoY in 2019. This dynamic growth is being
led by strong sales of the Apple watch. Other major players also launched new generation 4G LTE smart watches
in the second half of 2019. Providing technology support and manufacturing services timely, Compal is also
planning to release an original designed LTE watch this year. To build our core value for customers, Compal not
only consults our upstream partners, but also provides diversified designs and solutions to meet various needs of
the end users.
■ Smart Hearable Devices
According to the market research data, TWS earbuds shipment surpassed 100 million units in 2019, revealing
double to triple growth compared to the shipment in 2018. Apple Airpods have dominated and driven the whole
market since its launch in 2017. Stimulated by the popularity of Apple Airpods, smartphone and traditional
earphone vendors are also eager to develop TWS earbuds products. Global tech giants such as Amazon, Microsoft,
and Google have also joined in order to spread AI voice assistants through mobile devices.
In addition to music streaming and smart assistants, TWS earbuds also have new features like hearing
protection. According to the World Health Organization (WHO), about 460 million people worldwide have hearing
loss problems, and about 1 billion people have potential risk of hearing loss due to loudspeakers and long-term
listening to entertainment headphones. Compal develops smart hearable products and co-works with professional
research centers to bring customers a great sound and music experience.
■ Smart Display Products
According to statistics from the IHS Markit, the overall annual growth rate of global LCD TV industry shipments
in 2019 was only 0.7%, and the total number of global shipments was about 222 million units, of which the UHD
specification ratio was nearly 60% together with the proportion of Smart TVs also exceeded 80% in the fourth
quarter. Looking forward to 2020, we will actively develop smart TV and smart video-related products with ultra-
high picture quality, immersive audio quality and built-in voice assistants, and continue to cultivate strategic
partnerships to maintain a good business and keep flexibility to respond to market dynamics.
■ AR/VR Smart Devices
In response to the use of new forms of media and information technology, humans can accelerate the
efficiency of processing, solving problems in work, life, and entertainment. Through VR experience, learning,
training, and AR (augmenting reality) to solve problems in a timely manner. Therefore, AR/VR applications have
gradually become the main force for the development of technology giants in various fields, especially Microsoft,
Facebook, and Google. The application of AR/VR head-mounted display devices has achieved breakthrough
development in vertical markets such as smart factories, smart healthcare, and remote collaboration. Personal
gaming and 3D holographic streaming media have also been produced in entertainment. In the future, AR/VR will
further deepen computer vision, AI (artificial intelligence), and IoT applications, and become the new personal
computing platform.
■ Smart Home Devices
Mobile devices have become an inseparable part of daily life. As wireless technology matures, an “Always
Connected” environment is starting to take shape to cater for our work, living, and leisure needs. Smart Home
applications have become a mainstream development topic for technology giants such as Amazon and Google.
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Smart voice assistants and AI embedded smart devices have been a breakthrough for progress in Smart Home
applications. More and more players are joining this market. In the future, there will be more applications based
on voice interaction, image recognition and interaction, as well as security. The implementation of AI technology
will provide users with a more convenient and intuitive experience.
■ IoT Vertical Solutions
Industries have maintained high interest in IoT over the last few years. We hope to resolve the inherent
problems in collaboration with ICT businesses. In this sector, we have engaged in cross-sector alliances with
leaders of other industries to develop automated guided vehicles (AGVs) to enhance plant production efficiency
and smart cameras equipped with artificial intelligence (AI) for use on brand-new retail solutions or smart cold-
chain transportation to resolve the long-time pain point of businesses. To Compal Electronics, this is a favorable
opportunity to enter the IoT market.
■ Smart Medical and Healthcare
Increasing shortages of medical staff over recent years has imposed a heavy burden on medical personnel.
The result is that medical institutions are desperately searching for more efficient ways to manage personnel and
resources. In the United States, hospitals have responded to this crisis with the full implementation of digital
charts and modern hospital management systems. Compal is actively introducing promising solutions from abroad
to help Taiwanese medical institutions provide better service for patients.
Furthermore, the aging population and shifting focus of medical technology towards convenience have
resulted in a change in healthcare practice from always being hospital-based to some home-based and
personalized solutions. In light of this, Compal has invested significant resources in the development of integrated
products that make it possible for many healthcare services to be carried out at home or at other fixed locations.
Compal also develops smart sports solutions and smart assistive tools, and is collaborating with professional
athlete training centers, both local and abroad, in the development of exclusive high-end products for professional
athletes.
■ Auto electronics (AE)
In recent years, governments all over the world have been tightening the exhaust emissions standard and
safety standards of vehicles and have set a timeframe for implementation. Therefore, electrification, connectivity,
and ADAS/AD have become the three main trends in automotive development.
To keep up with these trends, traditional suppliers have made disruptive innovation and changes. IT
companies (e.g. Google), startups (e.g. AI and sensor startups), and service platforms (e.g. Uber) enter the
automotive industry, while automakers also adjust its business structure and purchasing model under the
influence of new technology implementation. In response to such an industrial change, we passed the certification
of ISO 26262 Road vehicles — Functional safety system (the first automotive electronics manufacturer in Taiwan
to acquire the ISO 26262 certificate) and engaged in the R&D of ADAS-related technologies in 2017, hoping to
cultivate new product and market business opportunities under the existing EV business.
■ Servers
Server shipments have grown progressively at about 2.8% per year mainly due to increased demand for cloud
services. According to IDC, shipment of x86 servers totaled 11.2 million units in 2019. This is expected to rise to
nearly 11.4 million units in 2020. X86 servers accounted for 95% of total server shipments. Rack mounted servers
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represent a higher market share because they are both energy efficient and expandable.
2. Association between upstream, midstream, and downstream industry participants
■ Notebooks
The notebook industry is now mature and Taiwanese manufacturers have developed comprehensive
partnerships with upstream, mid-stream, and downstream suppliers. This fully-fledged supply system gives
manufacturers the advantage of being able to quickly and flexibly adjust to market changes. It also enables Compal
to keep up to date with the latest technology and pricing of key components such as CPUs, chipsets, LCD panels,
hard disk drives (HDD), and solid-state drives (SSD). However, we still suffer the tariff issue between the US and
China and trade disputes between Japan and Korea, as it has caused difficulty in global production and logistics
since 2018. Compal and other Taiwanese ODMs/OEMs possess distinctive know-how on system integration, from
design to manufacturing, as well as operational management. Taiwan now accounts for more than 80% of the
world's notebook ODM/OEM production. The downstream customers including brand manufacturers such as Dell,
Lenovo, HP, Acer, Asus, and Apple all have strong marketing strategies and comprehensive sales support systems
to ensure success.
■ Ultra slim Notebooks
As an Ultra slim Notebook supplier, access to metal for casings and lightweight carbon fiber materials is
especially important. Compal has already developed a robust upstream, mid-stream, and downstream supply
system, and acquired the equipment and technology to produce the needed metal products for customer
satisfaction. Compal will now shift focus gradually towards products in the mainstream price range, such as Ultra
slim Notebooks made with plastic materials. This will ensure quick launch of new customer products and growth
in this market.
■ 2-in-1 Notebooks
The supply chain and manufacturers of 2-in-1s are generally identical to those of convention notebooks, with
the addition of some tablet parts suppliers and manufacturers. Support of the existing supply system and its
advantage of integration across suppliers, allows Compal to maintain full control of the development of key
components. This speeds up research and innovation of new features because brand manufacturers and users of
2-in-1s continue to add new requirements. Despite the increasing complexity and challenges ahead, Compal
remains confident and continues to make improvements as well as continuing to bring new products and concepts
to the market.
■ All-in-one (AIO)
The supply chain and manufacturers of AIOs are generally identical to those of conventional notebooks. The
upstream supply structure is similar to that for general PCs, with the addition of suppliers of large touch screen
panels. HP, Lenovo, and Dell focus not only on commercial users but also home multimedia users. Apple’s
emphasis is on professional applications and usage.
■ 5G Module & Products
Compal 5G module and the reference device design has combined upstream and downstream and dozens of
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well-known customers and operators to establish a complete 5G product ecosystem, providing flexible and
diversified 5G related products to fulfill various 5G domains services & requirements.
■ Tablet
In addition to relying on the existing supplier chain and industry advantages, Compal also actively explores
competitive suppliers to ensure that the price and quality of its products conform to both customer and market
expectations.
■ Smartphone
Compal actively explores competitive suppliers to ensure the quality of sourced material meets both
customer and market needs. Furthermore, Compal is building up a 5G related component supplier chain, as well
as new technology, to assist customers in remaining competitive.
■ Smart Wearable Devices
Compal works closely with suppliers for chipsets, sensors, wearable displays, and touchscreen modules to
secure parts for wearable devices. In addition to coordinating with upstream suppliers and developing new
technologies for new customers, Compal also reaches out to suppliers with advanced technologies. From the
technical collaboration between Compal and Tech partners, Compal can quickly adjust the supply chain and
product development strategies to accommodate the fast-changing market.
■ Smart Hearable Devices
Compal has plenty of resources for smart hearable platforms and related components based on our past
development experiences in smart devices. We have built strict standards for acoustic, reliability, and regulation
tests so that we can guarantee to our customers that Compal can deliver reliable and high-quality products.
■ Smart Display Products
Affected by the uncertainties of the China-US tariff dispute, the supply chain began to develop outside China
to diversify risks. We continue to integrate resources across regions from upstream to downstream, deploy
production base resources, control and manage operating costs, and provide flexible order fulfillment to meet
customer’s demands.
■ AR/VR Smart Devices
For AR/VR application, Compal provides a complete set of software and hardware solutions, combined with
5G communication to provide high-performance application solutions. Compal has also built up a strong
partnership with Qualcomm to provide the standard device reference design, creating a highly cost-effective
solution for customers, which can further seize consumer market applications and take leadership in future
personal computing platforms.
■ Smart Home Devices
Compal provides diversified terminal devices such as smart speakers and smart cameras for this application
segment. Compal also coordinates across upstream, mid-stream, and downstream partners, to provide all kinds
of customized hardware devices, software support, and platform solutions on demand. This allows different
system integration providers and our many industrial customers, to fulfill all kinds of Smart Home applications.
■ IoT Vertical Solution
As product positioning and requirements vary in different regions, countries, customers, and applications,
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fulfilling the specific specifications and stringent environmental requirements in product design is the main
difference between vertical specific industry and ordinary consumer computers. In addition, we began to
develop integrated system services and products, such as computer-vision AI applications, in collaboration with
suppliers with respect to the customer’s application requirements.
■ Smart Medical and Healthcare
(1) Management system:
• Digital charts and smart ward solutions
Compal has been introducing digital charts through an alliance with some foreign partners. Unlike the
conventional management system adopted by existing medical institutions, this product offers the potential to
provide both diagnostic aid to physicians and also reduces the workload on nurses. It can also be integrated with
many different data management systems currently used in hospitals. Digital transformation is already happening
within the healthcare system. Compal is currently working with several hospitals to develop digital charts and
smart ward solutions. Medical institutions will no longer have to operate in isolation but will be able to coordinate
their activities with each other towards the establishment of a uniform standard to reduce the wastage of medical
resources.
• Point of care solutions
Compal aims to address the recent increase in demand, as well as the shortage of manpower, at nursing and
postpartum centers. This is being done by the introduction of human-operated healthcare solutions, such as
proprietary bedside systems that are compatible with the instruments and specifications of other manufacturers.
However, flexibility and the ability to customize products to customer needs will still be maintained. The most
important feature of this product is that it works with different types of Smart Home devices and medical
instruments, and also supports multiple services. It is intended to provide at home comfort in nursing and
postpartum centers, while also allowing professional care facilities to be set up at home.
(2) Instruments, equipment, and accessories:
• Smart sports
Compal has invested substantial resources into the development and integration of smart sports vital sign
monitors. These can gather measurable data and are also useful for professional course design. Compal solutions
can be further combined with the services of professional fitness training centers to provide users and trainers
with physiological information in real-time. This information can be exchanged over the cloud to facilitate remote
training and communication between athletes and trainers. This helps athletes undertake the most effective
physical and technical training methods and helps to avoid sports injuries.
• Smart assistance devices and healthcare-related products
Compal is actively investing in the digital transformation of medical equipment. With the incorporation of
Internet connectivity, data from medical equipment can be exchanged and calculations can be made in real-time
over the cloud. This can make various user services available, such as auto record-keeping, reminders, behavior
prediction, and so on. These devices can even be connected to advanced and back-end medical service providers
for professional medical consultation, to accomplish the Compal vision of a mobile and real-time medical service.
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•
Innovative medical devices
Compal has been working with partners in both the industry and the medical segment for several years and
has invested in the development of some rather innovative medical devices. These include: CGM (Continuous
Glucose Monitoring), 24-hour BPM (24 hour blood pressure monitoring), handheld smart ultrasound, i-AED, and
others. We expect to provide users and physicians with many more options to help develop a smart medical
industry and improve the quality of healthcare.
(3) Medical AI
• Cardiovascular disease prediction
To reduce the problem of a lack of medical manpower, Compal has been working with the Chi-Mei Hospital
and medical center on the development of AI in medicine. Using the existing abundant medical resources of the
hospital, Compal is helping to build up a cardiovascular disease prediction AI system which can be used in hospitals
and medical centers. The product will include long term tracking and users may be able to predict the timing and
probability of cardiovascular complication. This will allow preventative action to be taken and reduce the risk of
such events as stroke, myocardial infarction, etc. Compal also expects to help with the medical technology upgrade
after the integration of the products in professional medical establishments in Taiwan.
■ Auto electronics (AE)
The mid-stream players in the supply of auto electronics are represented by tier 1 AE integrated system
providers. This integrated system handles in-car information, communications and entertainment, and is also
linked to other auto parts. These products are sold to downstream automobile makers, which places the Company
between the midstream and upstream of the AE supply chain.
■ Servers
Server technology is a highly mature industry and one in which Taiwanese manufacturers have
developed a comprehensive supply system of upstream, mid-stream, and downstream partners. Main parts such
as CPUs, memory, and storage drives are easily secured and downstream customers such as HPE, DELL, and Lenovo
all have long-term notebook manufacturing relationships with Compal. Compal has now developed extensive
experience and has a reputation for the design and manufacturing of server products.
3. Product trends and competition
■ Notebooks
‧ The Notebook has matured to a point where brand manufacturers are shifting focus towards higher
priced and more fully featured products, such as ultra slim notebooks, 2-in-1s, and gaming notebooks in
a search for greater market opportunities, revenue, and profit.
‧ More user scenarios for notebooks, for example, gaming notebooks for eSports and creator PCs for
content creation.
‧ The Intel 10th generation CPUs were the mainstream processors used in 2019.
‧ AMD started to gain CPU market share in 2018 2H because of Intel’s CPU shortage issue. In 2020, AMD
will launch the new 7nm CPU.
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‧ The increasing popularity of mobile devices and online applications have called for more robust and
diverse security functions, from fingerprints, to facial and voice recognition. These are all intended to
enhance information flow and convenience without compromising security.
■ Ultra slim Notebooks
‧
Light weight, slimness, and high-quality design will become the main decision factors for consumers.
‧ The new CPUs will provide consumers with adequate power for multi-tasking and the handling of day-
to-day computing tasks.
‧
Long-lasting batteries will free users from the need for frequent recharging when traveling.
‧ Metallic casing material allows thinner, lighter, and higher value products.
■ 2-in-1 Notebooks
‧ Consumers nowadays expect more from 2-in-1s than light weight and portability. Multi-tasking
processors, long-lasting batteries and the capacitive stylus have become the new mainstream features.
‧ 5G will bring more modern usage for 2-in-1 notebooks.
■ All-in-one (AIO)
‧ High-end home entertainment AIOs and new flat, portable AIOs present new opportunities.
‧ There is room for improvement in touch-based applications and graphical user interfaces.
‧ The product exterior can be designed to match interior decoration and furniture.
‧ Portable products can be designed with screens that can move in several directions.
The AIO target market is no longer confined to first-time PC users, or as replacement for conventional
office desktops. More advanced components are becoming available and these devices will benefit from
broadened applications to achieve higher market acceptance.
■ 5G Module & Products
5G communication and applications have expected explosive growth in the coming 5 years. 5G terminal &
consumer products will come out with different product categories such as network devices (CPE / Mifi), notebook
computers, routers, televisions, and robots… etc.
5G requirements come from various industries. Compal provides the leading communication technology,
product manufacturing and technical know-how. Our integrated 5G module solutions provide complete technical
support and development tools to help our customers develop their 5G products & services.
■ Tablet
‧ Extend R&D technology to 5G communications.
‧ Focus on higher cost/performance ratio and better quality design.
‧ Explore collaborative opportunities with content providers or telecommunications operators.
‧ Explore opportunities in education, for kids, industrial, and medical applications.
‧ Develop tablets for the Smart Home and IoT and use them as control centers or as multi-functional
platforms.
The Tablet is a mature product, and what manufacturers should focus on for the next step is the exploration
of new use cases and more convenient user operation and support for more diversified applications. Education,
kids, e-commerce, Smart Home hub, and IoT applications are all possibilities that Compal is actively exploring.
■ Smartphone
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4G Smartphones are the mainstream products in the smartphone market. In 2020, the communication
technology enters into the next generation: 5G communications. In addition to mobile broadband service (eMBB),
multi-machine type communication (mMTC), ultra-high reliability and ultra-low-latency communication (URLCC),
these features will increase consumer demand for entertainment, application, and services.
‧
Integrates multi-core architecture and strengthens 4G&5G carrier aggregation mobile broadband
communication to provide faster transmission speed & data throughput.
‧ Support AI image processing & applications, drive video streaming services to meet the needs of
consumers in daily work and life entertainment.
‧ Higher screen ratio, high picture quality, narrower border touch products.
‧
Integrating under-screen fingerprint recognition technology and under-screen camera technology to
create full screen experience for consumers.
‧ Continuously improve the functions required for rugged mobile phones, scratch-resistant, crack-
resistant, drop-resistant, waterproof, dustproof, etc.
■ Smart Wearable Devices
‧ More and more smart, fashionable, and compact watches for sports and health are following Apple to
the market.
‧ Customers who use smart wearable devices for sports also want high accuracy GPS, steps count, heart
rate monitoring, and other bio-measurements. However, power efficiency remains a key requirement
common to all users.
‧ Customers who use smart wearable devices for health reasons need accurate algorithms and convenient
user operation. This will be one of the key success factors of the products.
To satisfy customer needs, Compal not only continues to make more power-efficient and compact designs,
but also enhances the flexibility of its production processes.
■ Smart Hearable Devices
Evolving due to keen competition, smart hearable devices will not only serve for music streaming, but also
include more advanced features such as active noise cancellation, smart assistant, bio-detection, etc. Besides the
functionality enhancements, the design will also aim to improve user experiences like water resistance,
ergonomics for comfortable wearing, and applications with AI technologies to make it smarter.
Compal has been professional in both hardware and software development for a long time. We have also co-
worked with hearing experts for more professional acoustic products development to create product
differentiation and make us more competitive in the market.
■ Smart Display Products
We team up with strategic partners to develop high-end models, integrating far-field microphones, ultra-
high-resolution 8K display solutions, Mini and Micro LED backlight solutions, and introducing technologies such
as artificial intelligence image processing and artificial intelligence sound processing, continue to accumulate the
latest technology and experience, make use of the essence of innovation, and integrate research and development
resources across fields, combining applications in mobile phones, wearables and home networking products to
create an industrial ecological chain, improve user experience, stay on top of the industry's technology, and
maintain long-term competitiveness.
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■ AR/VR Smart Devices
‧ AR head-mounted displays and spatial sensing modules have been adopted by vertical application
customers and entered the European and American markets.
‧ AR/VR Qualcomm Platform (XR Platform) completed the development stage and entered mass
production in 2020.
■ Smart Home Devices
‧ The voice input and interaction provided, and AI enhanced applications of the smart speaker and smart
camera are trends of the future Smart Home devices. Compal will create more intuitive and convenient
Smart Home products.
‧ Software services are integrated with cloud computing, and data analysis and user behavior learning will
be the key competitiveness of Smart Home products.
■ I IoT Vertical Solution
Given the high entry barriers, not may investors have engaged in the vertical specific industry over time.
The rise of IoT has also attracted increasing competitors. As an ICT leader, therefore, we will implement some
new technologies, such as AI and the design capacity of energy-efficient devices, to increase our competitive
strengths.
■ Smart Medical and Healthcare
(1) Management system:
‧ Digital charts and smart ward solutions
The United States currently has the most popular (Level 7) digital chart and hospital management system,
and other countries around the world are following closely behind. The purpose of this product is to deliver
functions that will be of assistance to physicians and nurses while still being easy to operate. Alliances with world
industry leaders has made it possible for Compal to introduce the solution to medicine in Taiwan, where its success
will be replicated in our medical systems and it will also be moved to other countries in Asia.
‧ Point of care solutions
An aging society, combined with a need for differentiated medical services, make nursing centers and
postpartum care centers especially popular in Taiwan. This management system provides them with a
comprehensive solution and makes it possible for communications to be established between several different
medical devices while patient privacy remains protected. Compal has invested in the development of related
hardware and software and is working with existing medical instrument suppliers on the growth in this market.
(2) Instruments, equipment, and accessories:
‧ Smart sports
There is already a strong and growing demand from professional athletes for assistive technologies and
devices. Compal has invested significant R&D effort in collaboration with top world sports experts for the
development of products that are more suitable for professional athletes. Compal is also working with fitness
centers on the creation of customized, exclusive packages that deliver the most effective sports solutions and
communications to users and businesses.
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‧ Medical equipment and healthcare-related products
Medical equipment with Internet connectivity is a trend of the future. Devices that have functionality
that allows access to information from a health management platform will be easier to operate and is also more
competitive in the market. Compal will continue investing in the development of medical instruments and
equipment with such connectivity and will bring better quality services to customers with the help of a
management platform and cloud service.
‧
Innovative medical devices
As the new biosensors and related hardware such as MCU/firmware/ biomaterials and software have
matured over recent years, development of the innovative medical devices industry has also moved to another
stage. Continuous investment and development by Compal have led to more and more customers gaining trust in
our design and development capacity, and the market trend is now moving towards an alternative device
generation.
■ Auto electronics (AE)
Telematics and in-vehicle-infotainment.
■ Servers
The rack-mounted server is still the mainstream product today because it can be easily maintained and
expanded as business grows. Tower servers are still favored among SMEs for their low cost, but the market share
has been steadily declining. Blade servers are relatively expensive to set up and may gradually be replaced by
more simplified High Density servers.
‧ The number of servers required for Data Centers has increased continuously year after year. Although
the demand for conventional enterprise-grade servers has gone down a little, demand for both types of
servers will ultimately reach equilibrium.
‧
In addition to cost-performance, design flexibility and quick response to customer needs are the two most
decisive factors for a product’s success.
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5.1.3 Research and Development
1. Research and Development Expenses over the past year:
Year
R&D expenses
Operating revenue
Unit: NTD thousands; %
R&D expenses as a percentage
of operating revenue
2019
2020 first quarter
14,156,793
3,181,272
980,442,346
182,047,046
1.5
1.8
2. New products developed
■ Notebooks
• High-end products: These are high-performance professional models combined with an ultra-high definition
display and a powerful GPU that targets users who seek ultimate performance such as gamers or creators.
• Mainstream products: 15.6-inch and 14-inch products with slim bezel design that are powered by the latest
CPU from Intel or AMD, are distinguished by integrated or discrete GPU models.
• Business products: Business notebooks designed specifically for corporate users. These products feature
enhanced structural design and security, and are offered to large corporations, SME, and the education sector.
Security mechanisms such as fingerprint, facial or voice recognition are incorporated to satisfy the user’s need
for security and data confidentiality.
• Special products: Compal has directed resources into developing notebooks of extreme slimness and will lead
the industry in technological innovation in this area. Dual screen and foldable notebooks will be a hot new
topic.
■ Ultra slim Notebooks
• Compal has successfully mass-produced and launched many Ultra slim Notebooks, and its designs have been
recognized by several international awards.
• Performance will not be sacrificed.
• Not only thinner but also lighter are key requirements for good user experience.
• New ultra slim notebook will feature thin frame displays for a more fashionable and cleaner appearance; the
display quality will also be improved.
■ 2-in-1 Notebooks
• Compal has successfully designed, mass-produced devices and launched a new 2-in-1.
• An innovative hinge design is being developed to provide a more secure and precise connection while allowing
easier detachment, this allows better user convenience when 2-in-1s are used in different scenarios.
■ All-in-one (AIO)
• Compal has successfully designed, mass-produced, and launched AIOs for mainstream users.
• Compal has successfully designed, mass-produced, and launched a new flat type of AIO.
• Compal has developed, mass-produced, and launched AIOs that are targeted at e-sports.
• Compal plans to acquire touch control technologies with pen support and introduce AIOs in sizes ranging from
19" to 27."
• Compal has successfully designed AIOs with a wireless charging dock.
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■ 5G Module & Products
• 5G M.2 / LGA module will be mass-produced in 2020.
• 5G M.2 / LGA module obtained product certification, including GCF, CE, CCC, TELEC, FCC, and PTCRB…etc.
• 5G products obtain interoperability test and certification from major worldwide 5G operators.
• 5G indoor/ outdoor CPE, and MiFi will be in development and MP in 2020. To extend 5G module to various
types of devices.
■ Tablet
• Compal has successfully developed and mass-produced WiFi tablets of high performance-to-cost ratio for video
streaming and entertainment.
• Compal has successfully developed and mass-produced a new generation of e-books.
■ Smartphone
• Compal has successfully developed and mass-produced smartphones with 3CA (carrier aggregation) technology
that work on 4G LTE (TDD-LTE/FDD-LTE).
• Mass-produced various smartphones equipped with 21: 9 aspect ratio FHD + large full-screen smartphones.
• Mass-produced the world's first thinnest rugged mobile phone, with a stylish appearance, and military-grade
requirements, bringing a new ID look to rugged smartphones.
• Successfully developed a 5G smartphone, which is planned to be shipped in 2020.
■ Smart Wearable Devices
• More than 40 models launched in 2019.
• Compal supports a variety of product types, such as luxurious material and design, wireless charging, offline
map, high accuracy GPS, and high-level water resistant for sports watches. Customized product design and more
power efficient to support 3C and fashion brand requests.
• A new generation of lighter, smaller, narrow border, multi-purpose smart watches with diversified designs will
be introduced soon.
• LTE smart watches and other wearable devices have also been scheduled for mass production.
■ Smart Hearable Devices
• Bluetooth headset with smart assistant is developed and in mass production.
• Long-term investing in high-end AI technology to develop Bluetooth headset with more intelligent noise
cancellation features.
■ Smart Display Products
Compal has successfully developed up to 65-inch UHD TV with Dolby Vision HDR, DTS Virtual X and built-in smart
assistant models for the North American market.
■ AR/VR Smart Devices
•
In the industrial markets, Compal has developed VR/ AR all-in-one and spatial sensing integrated optical
modules, which have been adopted by customers to integrate in enterprise-specific systems.
• Deeply cooperating with Qualcomm to develop the next generation 5G+AR/VR device reference design, Compal
will be the leader in 5G+AR/VR device & ecosystem.
■ Smart Home Devices
• Compal has successfully launched several smart display & smart speaker products for the Worldwide Smart
Home market.
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• Compal has successfully developed several smart camera devices that will be launched soon.
■ IoT Vertical Solution
• The development of computer-vision AI products was completed, and shipping to foreign customers has
begun.
• Mass production of the shield-type and uplift-type AVGs has begun. Apart from implementing all Compal
plants, we have started cooperation with system integrators to promote products to the industry.
■ Smart Medical and Healthcare
• Digital charts and a smart ward solution
Compal is promoting business opportunities in this respect. Several hospitals have begun adopting and
exploring our smart ward solution this year.
• Point of care solutions
More than 10 point-of-care centers in Taiwan have begun trials and official use of this solution. In addition to
this, several prominent nursing centers in China have also shown interest and commenced collaborating in the
use of this solution.
• Smart sports
Smart sports solutions have been introduced at several places in Taiwan and promotion in the Taiwan and China
market is ongoing. A case has also been built up in Kaohsiung.
•
Innovative medical devices
Many innovative medical device cases have been executed and plans for the achievement of FDA/ NMPA/CE
certification have been established. Launch is expected by the end of 2019 and 2020.
■ Auto Electronics (AE)
• Compal has mass-produced various systems and modularized several products that it has designed and
developed.
■ Servers
• General Purpose Rack-mounted Servers
According to the Intel product roadmap, the launch of 1U and 2U general purpose rack-mounted servers is
undemanding and the factory can quickly fulfill customer requirements by a simple BOM Option change.
• Edge Computing Servers
The system has been designed for 5G telecommunication facilities in collaboration with China telecom service
providers. This system provides tremendous and responsive acceleration for all aspects of edge computing.
• High Capacity Storage Servers
The 4U server includes 36 3.5inch hard drives and dual Intel Xeon processors, to provide cloud service providers
with massive computing performance and huge capacity to fulfill any user scenario.
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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 operational 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. Mainstream 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 to become
the focal point of the product market. User functionality should be taken into consideration as well as
competitive pricing for lower priced products.
• Production bases will be diversified to spread the risk of single production, reduce the cost of manufacturing
and improve product competitiveness. Globalized production can reduce the political and economic impacts in
the region.
• 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 of feasible
design.
• 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 to achieve a growth rate that is better than 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 5G networking market.
• Several 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 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 customer needs, to give them more convenient and complete services.
• Optimization of the quality of sophisticated products will be enhanced by new development and cost structures
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and strategic alliances with main parts providers to give customers better and more competitive products and
services.
• Closer horizontal and vertical integration will be made with affiliates in the Group to create and improve the
loyalty of long-term customers.
• Our ability to innovate will be further cultivated, aimed at more accurate prediction of market trends, before
the clients do, 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 technology & communication capability and capacity
for integrated services for smart devices.
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5.2 Market and Sales Overview
5.2.1 Market Analysis
1. 2019 Sales (Service) by Regions
Area
Americas
Europe
Asia (Including Taiwan)
Other Area
Total
2. Market Share
■ Notebook
Percentage
42.1%
28.6%
26.8%
2.5%
100.0%
According to IDC statistics, the total number of notebook PCs sold around the world in 2019 came to
approximately 170 million units. In terms of total shipping quantity, Compal’s notebook PCs have approximately
25% of the global market share and the Company remains a world leading manufacturer of this product. As the
market for notebook PCs is entering the era of vertical integration, Compal will continue to improve upon its
technological capabilities, broaden the scope of its influence, and expand the market scale while challenging the
limits and striving for continual improvement to maintain our lead over the competition.
■ Smartphones & 5G Products
The Smartphone market has become quite saturated. However, Compal will continue to ship smartphone
products with customers and regional carriers. Expand investment in 5G smartphone technology, provide
customized solutions, product reference designs, and flexible ODM / JDM / EMS and services. Compal continues
to catch market trends and develop new applications to meet market needs.
■ Smart Wearable Devices
Compal is the biggest ODM supplier for more than 50 models of Google Wear OS Smartwatch. The
smartwatch market is expected to maintain its high growth for the next three years. Compal will endeavor to win
more world-wide brand customers while studying market demand and adjusting the direction of product
development to meet market trends.
■ Smart Hearable Devices
Compal already shipped several models of smart hearable products, including Bluetooth headsets and TWS
earbuds. Because smart hearable products requires high accuracy and miniature manufacturing, Compal is also
devoting to optimize the product design and improve manufacturing process to enhance production efficiency.
■ Smart Display Products
Developed mass-produced ultra-high-resolution smart TVs and successfully gained 7% of the North American
smart TV market. Understanding the market needs in advance to adjust the product development direction is
crucial to successfully winning the existing customer cooperation plan. In the future, we will continue to maintain
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the momentum of shipments, and actively expand new product lines to maintain stable growth.
■ AR/VR Smart Devices
Successfully developed the AR/VR all-in-one model, which was adopted by several industrial information
system integration companies in Taiwan as an exemplary solution. AR/VR modules are also adopted by some China
companies, for health, manufacturers used to develop and integrate into various applications. So far, high-end
AR/VR devices are dominated by vertical market applications. In the future, in accordance with the AR/VR market
trend and the 5G communication deployment, Compal will invest more resources to develop both commercial
and consumer products.
3. Future Supply and Demand Situation and Growth of the Market
■ Notebooks
According to IDC statistics, the global shipping quantity for notebook PCs in 2019 grew by 4%. Looking
towards 2020, Commercial replacement demand will be a little bit cooling down because of Windows 7 EOS in
January 2020. Moreover, COVID-19 will impact the global economy, and the notebook shipment will decline in
2020.
■ Ultra slim Notebooks
The Ultrabook PC has been well-received and is not limited to the premium market. More and more mid-
line and entry-level models have also shifted towards more compact design. IDC statistics show the global shipping
quantity for Ultra slim laptops (no thicker than 21mm) in 2019 was approximately 83.6 million units. An annual
growth rate of 23% is expected for 2020 with a total shipping quantity exceeding 84.6 million units.
■ 2-in-1 Notebooks
Much effort and hard work from the industrial chain, has resulted in the costs and prices for 2-in-1
Notebooks to become substantially lower as consumers have gradually become more receptive and familiar with
the product. IDC statistics show the global shipping quantity for 2-in-1 Notebooks in 2019 was approximately 52.6
million units. It is expected by that 2020, different manufacturers will offer more diversified products and new
features such as 5G/ AI. It will contribute to an annual growth rate of close to 29%, with a global shipping quantity
exceeding 68 million units. 2-in-1 Notebooks will inject new vitality into the notebook PC market.
■ All-in-one (AIO)
IDC statistics show the global shipping quantity for AIO PCs in 2019 was 12.2 million units and the number
is expected to remain about the same at 11.7 million units in 2020. Compal will continue to cultivate the market.
■ 5G Module & Products
Cisco internet report points out that in the next 3 years, 70% of the world's population (5.7 billion people)
will have mobile networks, and at least 10.6% (600 million people) of mobile networks will be enabled by 5G
networks. 5G products will have rapid growth, and it’s estimated more than 2 billion 5G devices of various types
(average 2 to 3.6 connected devices per person) will be purchased. Compal will develop 5G products with
customers and various 5G domain partners.
■ Tablet
Forecasts predict a continued decline in terms of shipping quantity for tablets in 2020. However, Compal still
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anticipates some gradual growth in demand. This will be the result of increased network coverage and
telecommunication facilities, as well as active promotion of 4G connectivity by the service providers in emerging
regions. Compal will direct its experience in smartphone design towards the development of tablets with carrier
access and also design entry-level tablets, also with carrier access, to accommodate the growing demand.
■ Smartphone
According to IDC's, the impact of the COVID-19 epidemic in 2020 will impact the short-term global
outlook. It is estimated that the global smartphone market will recover in the second half of 109 and the world
will return to strong replacement demand from the third quarter 2020. Compal invests in high cost-effectiveness
5G Smartphone models with existing customers, also expands to new customers, to ensure stable sales
momentum.
■ Smart Wearable Devices
IDC predicts that smart watches will continue high growth until 2022 with CAGR 23% and shipping volume
of 115 million units. To be well-prepared for the potential momentum, Compal is developing more advanced
features such as sensors for activity detection, 4G LTE for always connection, Voice control and AI integration.
Compal will continue to accumulate the relevant technologies to extend its reach into more diversified wearable
device product lines.
■ Smart Hearable Devices
According to research from IDC, the global hearable market will remain strong until 2023, driven by different
marketing strategies: independent product or accessory of smartphone and smartwatch. More vendors join into
the market and it becomes more competitive. To create more value, Compal is focusing on new technologies for
longer battery life, better sound quality, more efficient connection, and smarter user interaction.
■ Smart Display Products
According to IHS estimates, the global LCD TV in 2020 was affected by the COVID-19 epidemic and is expected
to decline by more than 10%. However, the market's development of high-end LCD TV products will continue to
focus on such as artificial intelligence image processing and artificial intelligence sound processing, 8K ultra-high
resolution, built-in voice assistant, Mini and Micro LED backlight solutions, large size, high dynamic range (HDR)
and wide color gamut (WCG), makes TV pictures closer to natural scenes when rendered, and provides consumers
with true-to-life audiovisual enjoyment.
■ AR/VR Smart Devices
According to IDC estimation, the annual average growth rate (CGAR) of AR/VR will exceed 80%, the global
AR/VR device shipments have strong growth power. Compal actively taps into both commercial and consumer
markets.
■ Smart Home Devices
According to Strategy Analytics, Smart Home sales will continue to grow with 11% CGAR and more than 15%
worldwide households will have one or more Smart Home devices. Compal will actively establish its presence in
the Smart Home market.
■ IoT Vertical Solution
According to the Gartner forecast, in 2020, over one billion devices will use vertical solutions for smart
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manufacturing, smart transportation, and smart retail, suggesting that the market demand is escalating.
■ Smart Medical and Healthcare
(1) Management Systems:
• Electronic Medical Records (EMR) and Smart Ward Solutions: According to estimates by FMI, the global
market for Electronic Medical Records (EMR) and management systems is expected to grow from USD
11.4 billion in 2015 to USD19.7 billion by 2025, with an annual growth rate of 5.6%.
• Point of Care Solutions: A report published by Markets and Markets, shows that factors such as the aging
populations and digital medical services, will cause the global market for patient and point of care
solution related management systems to reach USD 16 billion by 2020 with an annual growth rate of
19.7%.
(2) Instruments, Equipment, and Accessories:
• Smart sports products: Estimates of Market Reports Hub show that the value of smart sports goods will
increase to US$15 billion in 2021, with professional athletes, professional teams, amateur athletes, and
highly self-demanding trainers as the major consumer groups.
• Medical devices and healthcare-related products: Estimates of Research and Markets show that the
scale of the global medical device market will expand from US$370 billion in 2018 to over US$400 million
in 2023, with an annual growth of 4.5%.
•
Innovative medical devices: The sales of innovative medical devices, such as the continuous blood sugar
monitoring system, reached US$1.8 million in 2018 and will hit US$2.5 billion in 2026, with a CAGR of
33%.
• Severe cardiovascular diseases monitoring AI: Estimates of Global Markets Insights show that the scale
of the global medical AI market will reach US$13 billion in 2025, with a CAGR of 40%.
■ Auto electronics (AE)
IHS estimated average global light vehicle production will stay stable at 90 million units annually, with 1.5%
CAGR from 2019 to 2022.
■ Server
IDC statistics show that the demand for x86 servers was 112 million sets in 2019 and will reach 114 million
sets in 2020. The server demand will continue to rise in the next few years as boosted by the cloud computing
demand, which is the major source of x86 server demand accounting for nearly 99% of the shipping volume. As
the frame-type server has a higher market share, we have actively engaged in the server market.
4. Competitive advantage:
Compal is a long-time player in the IT industry and has committed to its role as an ODM. The following is a
description of our competitive advantages in terms of R&D and mass production capacity:
■ Notebooks
The Company has been manufacturing notebooks since 1989 and is one of the most experienced notebook
manufacturers in Taiwan. Products designed by the Company have won many Editor's Choice awards from
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renowned magazines worldwide as well as awards from the Taiwan External Trade Development Council.
Furthermore, our design team has great sensitivity and responds to market changes with new
commercialized products. To enhance product competitiveness, Compal has assembled an R&D team that
specializes in the research of new materials and technologies as well as to adding more value to products. The
Company also has an intellectual property rights system in place to protect new technologies developed by the
R&D team.
The demand for notebooks by general consumers has dwindled consistently due to the rise of handheld
devices. This has forced manufacturers to switch competitive strategy towards faster response and more
ergonomic design. The Company has always been sensitive to changes in the market and product trends. The next
generation of products is planned well in advance to capture market opportunities and generate revenue.
■ Ultra slim Notebooks
Compal continues to stay ahead of its competitors in terms of technology advancement and R&D and
strives to bring innovation to its designs. The Company expects to maintain this advantage in 2020 and will actively
assist customers in the development of more competitive Ultra slim Notebooks.
■ 2-in-1 Notebooks
Compal has extensive experience in the development and manufacture of both notebooks and tablets. By
adding a bit of innovation, Compal is confident of their ability to create new demand for this product.
■ All-in-one (AIO)
Compal possesses the advantage and ability to commercialize products quickly in this respect. To further
emphasize product differentiation, a dedicated software development team has been assembled to carry out
software development and man-machine interface integration, to make the products more suitable for consumer
needs.
■ 5G Module & Products
Compal has long-term communication technology development and has involved itself in the evolution
of global communications standards (2/3/4/5G). With complete technical capabilities and manufacturing
advantages, Compal can provide customers and partners with the most competitive and flexible solutions.
• One-stop capability & services from communication and whole machine design and manufacturing
• Obtained carrier Interoperability test (IOT) and certification
• Obtained product certifications, including GCF, CE, CCC, TELEC, FCC, and PTCRB ... etc.
■ Tablet
Compal remains somewhat optimistic about the future of the tablet market. We will continue to introduce
differentiated and competitively priced products to consumers. The Company will also explore the possibility of
introducing products that support 4G/LTE/5G CA (Carrier Aggregation), using the experience and knowledge
accumulated in smartphone manufacture, to meet rising demand.
■ Smartphone
Compal has accumulated many years of experience in smartphones. The ability to develop software and
hardware and incorporate research outcomes and technologies into products has earned us the recognition of
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customers all over the world. Furthermore, the advantage of producing at a scaled economy provides exceptional
bargaining power with respect to the pricing and timing of material supply. This allows much more flexibility and
control over raw material purchases.
• Development of 5G communication technology and keeping pace with emerging technologies.
• The introduction of AI, the virtual personal assistant and a more intuitive user interface.
• The enhanced application of biometric technologies.
• Consolidate the research and development of 5G system and RF antenna design.
•
Integrating upstream and downstream supply chains, providing ODM / JDM / EMS flexible product design
solutions.
■ Smart Wearable Devices
Compal has developed many different types of wearable device ahead of international peers. We have
long-term strategic partnerships with technology leading companies such as Google and Qualcomm for
development of innovative technology. Compal currently offers an extensive range of products, and leads the
industry in many advanced technologies, including video, audio, wireless, and wearable materials.
■ Smart Hearable Devices
Compal has years of experience in acoustic, wireless communication, mechanical structure design for
smart mobile devices. We have experienced engineering teams, systematic development processes, and
complete test processes and facilities. We can also provide supply chain management service and excellent cost
and quality control. All these can be beneficial to our brand customers or distributors.
■ Smart Display Products
• Continue to develop artificial intelligence in the improvement of picture and sound quality and the
application of voice assistants, integrate cross-domain product research, and development resources to
expand the industrial ecological chain.
• Continue to cultivate strategic partnerships between customers and suppliers, and actively adjust the
allocation of resources between production bases and supply chains, further improving our competitive
advantage in order to create a win-win business and strive for market share.
■ AR/VR Smart Devices
Compal continues tight cooperation with Qualcomm, in the R&D and design capabilities of the existing
product line, linked to 5G communications capabilities and develop cloud software platforms, to provide
customers full software and hardware solutions, and also provide customized services to fulfill market & user
requirements.
■ Smart Home Devices
Compal will leverage its hardware design, software, and firmware capabilities in consumer devices and
communication fields, and invest in the development of a cloud computing software/ platform. To provide the
complete Smart Home solutions and bring customers more integrated solutions and customizable applications to
meet customer & market users’ expectations.
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■ IoT Vertical Solution
Compal aims to expand its notebook design capabilities to that of industrial computers with different
capabilities and specifications to provide customers with the most comprehensive solutions. Furthermore,
Compal will be re-designing its factory production lines to conform with special specifications and test
requirements for new product applications for medial and vertical industries. AI will be incorporated in vertical
solutions as needed to complement the overall service package and to ensure greater reliability of the products
offered.
■ Smart medical and healthcare
Compal will leverage its existing ITC capabilities and cloud platform to explore cross-industry alliances
and opportunities to satisfy customer needs with diverse products and services.
■ Auto electronics (AE)
In response to the three main trends of automotive development (electrification, connectivity, and ADAS/AD),
we will continue to integrate key technologies and demonstrate the characteristics and features of the IT industry
based on our foundation in related industries to engage in synchronous development with customers, provide
various cost-effective, and 0 ppm IVI systems and ICT solutions, and combine it with new product technologies
developed progressively to strive for new product, customer, and market business opportunities.
■ Servers
Compal has many years of experience in the design and manufacturing of computers, and this has helped
with our entry into the server industry. Compal's existing business relationships with world leading server
manufacturers also works in our favor.
5. Future opportunities, threats, and responsive strategies
■ Opportunities
• New product concepts such as the 2-in-1, Ultra slim Notebook, and e-sports will continue stimulating market
demand.
• Renewal demands for corporate notebooks remain consistent following new products introduced by Intel and
Microsoft.
•
Innovation from world leading brands puts the Company in a position to dictate new products and markets.
• Expansion of software development, aesthetic design and man-machine interface talent has greatly improved
the ergonomics of products manufactured by Compal, which adds both value and appeal to customers.
• Compal's strong R&D, manufacturing and operational management experience has earned the trust of world-
renowned brands.
• Compal has rigorous processes in place to monitor cost from initial R&D to manufacturing and is therefore able
to maintain a competitive edge with our products.
• A rational pricing strategy supported by an alliance with parts suppliers helps secure market growth.
• Connectivity not only brings convenience, but also adds value and competitiveness to the products offered.
• Compal actively forms alliances with participants in different industries. This helps the Company to increase
product and customer diversity.
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• Compal remains active in developing innovative technologies and exploring new product concepts. The
Company works alongside customers in developing new product lines, and in so doing secures access to new
products and technologies.
• The growing scale of 4G LTE infrastructures in emerging markets provides users with the incentive to renew
mobile devices and supports the growth of smartphone demand.
• Demand for entry-level tablets and tablets with voice features continue to rise. The Company offers some of
the most competitive products in the industry to meet this demand.
• Compal has the technical capabilities to make smartphones and tablets in ways that support new IoT
applications such as smart speakers, smart voice assistance, etc. as well as the ability to explore new
opportunities across different industries.
• Driven by growing demand for wearable devices, Compal continues to mass-produce products and develop new
proposals and innovations with major customers, continuing to maintain the Company’s position as the leading
producer of wearable devices.
• Compal is aggressively investing in 5G development and puts much innovative energy into 5G and product
development to provide the 5G applications requested by their customers.
• The US trade war is expected to enhance Compal’s design opportunities and slow down the price competition
among China manufacturers.
•
•
Integrate 5G communication capabilities with partners inside and outside the Compal group to develop various
5G domain & industrial applications.
Integrate holographic 3D streaming media, 5G communication technology, artificial intelligence (AI) to build the
next generation AR / VR.
• Actively apply for audio and voice analysis patents to enhance global patent deployment.
• Enhance artificial intelligence technology as the foundation of the next generation of smart devices.
■ Threats
• CPU shortage and weak consumer demand continued to affect the shipment of notebooks in the first half of
2020.
• New Chinese manufacturers have joined the race with competitively priced mid-range and high-end notebooks.
This has intensified price competition in this product category.
• The industry now competes in terms of vertical integration as opposed to specialization, which involves more
costly investment, higher market complexity and more challenging business management. Faced with the rise
of the Chinese supply chain, Taiwanese notebook manufacturers need to coordinate operations to be able to
match the integrated design, development and assembly capacity from China.
• The Notebook is a highly matured product and requires more diverse, value-adding, and innovative features for
differentiation from other market participants.
• Products with Internet connectivity tend to involve many different communication protocols at the same time,
this poses a challenge in product development and can make products unacceptable to some consumers.
• Too many competitors in the IoT market can give rise to inconsistent quality and make competition in the
industry more difficult.
• Ongoing price competition among smartphones has a significant impact on large-brand customers.
• Overall demand for tablets has declined, which adds to the competitive pressure.
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• Wearable devices are still in the early stages of development and require sustained periods of expansion to
reach an economy of scale.
• Due to the outbreak of COVID-19 pneumonia, the consumer market demand was lower than expected.
• 5G will be used in various domains, while many industries are in the infrastructure construction and POC stage.
Many 5G innovative new business models are still under development, and large scale applications still take
time.
■ Strategies
• Accelerating the manufacturing recovery to reduce the impact from COVID-19.
• The Company will adopt strategies that focus primarily on innovation, product added value, and service.
• Quality and production efficiency will be improved to reduce manufacturing costs.
• The use of land and human resources in emerging countries throughout the world will be optimized to reduce
the cost of production and basic R&D.
• We will enhance product design review and develop a comprehensive database of documents to improve
design efficiency and quality while reducing costs.
• New customers and new product lines will be explored in emerging markets.
• Launch ultra slim notebooks integrating high performance and portability in response to the machine renewal
demand in the commercial market to seize the commercial market together with customers.
• The gaming market has grown in diversity with new technologies constantly being introduced to entice
consumers into replacing old products. Compal is in the position to offer gaming notebooks at various price
levels to meet consumer demand.
• Offer complete solutions and form alliances across industries to quickly tap into market demand while retaining
the flexibility to satisfy customer needs.
• Progressively nurture innovative talent within the organization, enhance the development capacity for high-
end medical equipment and engage world-renowned medical equipment suppliers in strategic, long-term, and
mutually beneficial cooperation.
• Continue to strengthen working relationships with platform operators by providing hardware and software
solutions.
• Continuous to extend 5G communication capabilities to various 5G domains and types of product, build up
leadership in 5G, and provide complete total solutions.
• Provide complete AR/VR solutions and collaborate with various domain partners, to create market penetration,
and increase customer satisfaction.
• Continuously develop high-end acoustic technologies for smart hearable products, and collaborate with audio
professors and Taiwan Top acoustic research centers.
• Cultivate internal R&D talents of AI (artificial intelligence) technologies, hold artificial intelligence seminars, and
training courses.
5.2.2 Major Products and Their Main Uses
1. Main product applications
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■ Notebooks
An analog-digital application hardware platform combined with dedicated software to enable a variety of
applications such as data editing/processing, word processing, layout, graphics applications, web browsing,
communications, digital multimedia entertainment, gaming, and others.
■ Ultra slim Notebooks
A laptop that emphasizes thinness and is lightweight and takes into account computing as well as battery
performance to meet the consumer need for both portability and productivity.
■ 2-in-1 Notebooks
These devices use the Windows 10 operating system, have an optional stylus, and satisfy the growing
consumer demand for mobile computing. In addition to multiple operating modes, the device has a touch screen
that enables it to be used as a tablet.
■ All-in-one (AIO)
Beautiful aesthetics suited for home, commercial, and design use, with emphasis on a touch screen input
interface, a range of software applications and high computing power.
■ Smart Home Devices
Smart appliances, controls and sensors that provide users with diversified services for a smart lifestyle.
■ Tablets
Portable touch screen multimedia, mobile viewing, and online information applications.
■ Smart Display Products
Graphics displays with audio output.
■ Smartphones and Modules
Personal communication and internet access.
■ IoT Vertical Solutions
Flexible hardware designs allow a range of customized software applications along with the cloud and big
data analysis for horizontal alliance. We offer clients complete solutions and services by the creation of novel
applications. Unlikely conventional IT products, such as AGV and AI products usually need customization for
various needs, but they elicit greater brand loyalty.
■ Smart Medicine and Healthcare
Penetration into households and point-of-care areas using technology, including that of the IoT, and
gradual integration with our own peripheral software products allows the provision of comprehensive solutions.
These can give convenient and instant smart health care that will enhance dependence on the products as well
as engender user brand loyalty.
■ Auto electronics (AE)
•
In-Vehicle Infotainment system
• Vehicle communication (3G/4G) system.
• Voice controlled natural sound navigation.
• Android Auto/Carplay connection. Smartphone Connection.
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• Smartphone Auto connection
• Accident alarm.
•
Integrated peripheral safety warning systems such as wireless tire pressure and collision avoidance radar.
■ Servers
Designed for high power computing, capable of storing massive amounts of data and compatible with
different processing programs for data analysis. Built to accommodate different applications required by
enterprises, data centers, and cloud platforms.
2. Production processes of main products
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■ Notebooks
143
Casing of logic board Preparation of LCD display Assembly Preparation of main board Preparation of keyboard Fasten LED board Inspect LCD panel Input inspection Input inspection Prepare plunger + frame Fasten power switch board Fasten interface board to lower casing Fasten motherboard to frame Parts processing Install frame onto metal board Produce LED frame Fix LCD panel to lower casing Prepare battery spring SMT (surface mount technology) Apply double-sided tape Apply hook to casing Prepare battery wire Insert add-ons Insert keys Combine upper & lower casing Prepare disk drives Visual inspection Press keys and check Assemble LCD casing & logic board upper casing Fasten disk drives+motherboard to bottom casing Soldering furnace Production process inspection Fasten power board to motherboard Remove board Install PCB to lower casing Production process inspection Trip conductor Install wires to lower casing & fasten Fasten LCD casing & bottom casing Machine wash Assemble upper casing Battery assembly Apply heat sink Prepare name plate Keyboard installation Secondary soldering Process quality inspection Function test Brush clean Accelerated aging test Visual observation Function test Repair Prepare name plate & paste onto unit Process quality inspection Wipe down unit Automated machine testing Exterior inspection Accelerated aging test Unit packaging Automated machine testing QA testing
■ LCD TVs and Monitors
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Display panel Power panel Assembly of LCD TV & monitor ↓ ↓ ↓ Parts processing Parts processing Prepare parts ↓ ↓ ↓ SMT SMT Assemble LCD panel ↓ ↓ ↓ SMT visual inspection SMT visual inspection Fasten metal parts ↓ ↓ ↓ Manually insert add-ons Manually insert add-ons Assemble display panel ↓ ↓ ↓ Visual inspection Visual inspection Assemble power panel ↓ ↓ ↓ Auto soldering Auto soldering Install connecting wires ↓ ↓ ↓ Manual soldering Manual soldering Assemble back casing ↓ ↓ ↓ Apply heat sink Apply glue Structural inspection ↓ ↓ Apply glue Functional test ↓ ↓ Substrate test Accelerated aging test ↓ ↓ QA random inspection Screen adjustment ↓ Pressure test ↓ Electrical test ↓ Wipe down exterior ↓ Exterior inspection ↓ Paste front and back name plates ↓ QA testing ↓ Packaging ↓ Box and package ↓ Final product inspection
IMEI
OK
Packaging
OK
Shipment
■ Smartphones and tablet PCs
Design/analyze
OK
Input material
OK
SQE test
OK
Install PCB SMD
OK
Welding of parts
OK
Base band TEST
OK
Assembly
OK
Vibration &
appearance
OK
Function test
OK
FINAL TEST
OK
CALL TEST
OK
Current IDEL
OK
Exterior
NO
NO
NO
NO
NO
NO
NO
NO
Repair
Repair
Repair
Repair
Repair
Repair
Repair
Repair
OK
OK
OK
OK
OK
OK
OK
OK
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5.2.3 Supply Status of Main Materials
■ CPU/Chipset
● Notebooks
To solve the shortage situation, Intel invested 1 billion US dollars in 2018 to increase production capacity and
began mass production in 2019Q3. Because of the trade war between China and the USA, most brands have
prepared the material in advance and that makes too much demand for the market. Also, Intel’s 10 Nano yield
rate did not improve that much and there is some problem with 14 Nano yield that makes less production in the
second half of 2019. Plus, the demand for server and cloud drive has increased so that makes CPU out of stocks
in the first half of 2020. Intel estimates that the shortage will not be relieved until the second quarter of 2020.
The shortage of Intel in 2019Q4 continues to increase, making the proportion of AMD models continue to
increase. Most companies have started to use AMD CPU in their consumer model, the attach rate comes to 16.7%.
But the proportion of consumer models decreases slightly in 2020 Q1 because AMD CPUs are usually equipped in
standard models and the proportion falls sharply in this quarter. In this situation, AMD’s consumer model rises a
little but the whole percentage decreases to 16.2%.
In terms of Intel ’s new products, 14-nanometer high-end products will launch an eight-core 14-nanometer
Comet Lake H in the second quarter of 2020, and the mid-range product Rocket Lake will be launched at the end
of the fourth quarter of 2020 and will be used to Continue 14nm Nano Comet Lake. As for 10-nanometer, the
eight-core Tiger Lake H for high-end products is expected to be launched in the first quarter of 2011 but the
memory only supports DDR4. The mid-range product Tiger Lake UP3 will be launched in the third quarter of 2020.
It will support LPDDR5. Low-end CPUs for low-power Chromebooks and small notebook computers are expected
to be launched in the fourth quarter of 2020 with Jasper Lake at 10 nm.
Overall, even though Intel’s shipping strategy in 2020 has 14-nm Comet Lake CPUs supporting brand customer
shipments, the main shipment will focus on 10-nanometer Ice Lake CPU and Tiger Lake CPU which will be launched
in the third quarter of 2020. In 2021, Intel will only launch 10 nanometer Alder Lake and no 14-nanometer product
will be released.
●
Smartphones and Modules
The end of 2019 with 5G Network global market, 61 operators around the world have provided 5G service,
and more Devices have been released. Most 5G markets are still in the niche and early stage of development, the
major factor is that many operators are still observing the business working model from 5G Network. Investment
costs and infrastructure construction will take time, 5G is an important technology. Beyond faster speeds, 5G
offers low latency, increased capacity, and higher data rates. Once realized, 5G will be a massive improvement
from 4G and will signify a new chapter of next-gen connectivity.
Although 5G communication technology and application can optimize the current 4G communication quality
and expand the scope of application, there are still limitations. In order to achieve high-speed transmission rates,
5G needs to have a larger bandwidth than 4G. Therefore, 5G is mainly based on Sub-6GHz and mmWave.
The 5G smartphones need to support more frequencies and multi-modes compared to 4G, and need to solve
the inherent limitation of high-frequency wireless communication in the mmWave. There would be a number of
RFFE modules and antennas needed to be increased accordingly, as well as the design and integration of RF
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components. Therefore, SoC, baseband chips, complete RF front-end (RFFE) will support sub-6GHz to millimeter
wave (mmWave) antennas and other end-to-end product portfolio applications.
■ Memory
●
DRAM
When it comes to using DRAM, mobile stands for 41%, followed by server 28%, consumer 12%, PC 14% and
graphics 5%. The trade war between China and the USA caused uncertainty in tariffs and import and export trade
and there were no breakthroughs in 3C products. As a result, consumer expectations for replacement are weak,
and market demand may be postponed, causing an oversupply of DRAM in the market and DRAM prices falling to
the bottom. After the factories have begun to reduce production, DRAM's inventory has reached a healthy level,
and the price downward tendency has ended at the end of 2019.
It is estimated that the average server capacity GB / sys in 2020 will grow from 303.17GB to 396.33GB, and
the annual shipment growth will be about 10%; the average smartphone capacity GB / sys will grow from 3.82GB
to 4.49GB, and the annual shipment decline will be about 2.4 %. The average PC loading capacity has grown from
7.5GB to 8.2GB, and the number of PC shipments has declined by about 7.1% annually.
In terms of DRAM process, the top three suppliers Samsung, SK Hynix, and Micron have moved their
mainstream products from 1xnm to 1ynm. Samsung and SK Hynix have also entered the 1znm generation. DDR5
is expected to be launched in 2020Q3, and the frequency can reach 6400Mbps. However, since INTEL NB CPU
equipped with DDR5 was mass-produced in 2021Q3, DDR5 for servers will be launched this year.
The mobile market will have new generation designs such as 5G, multi-lens, foldable phones or tablets in
2020. As the functions become more powerful, the demand for LPDDR on each device increases. The mobile
phone with 12GB memory appeared in 2019, and the mobile phone with 16GB memory will make a debut in the
first quarter of 2020, this increases the demand for LPDDR. As for new products, Samsung first used the world’s
first 12GB LPDDR5 as a mobile DRAM, which is expected to be equipped with 5G functions and high-end
smartphones that implement AI applications. The situation is unclear for the mobile device, increasing memory
capacity has become one of the major growth drivers to suppliers. Since the second half of 2019, DRAM prices
have begun to stabilize due to product reduction and inventory closeout. It is expected that DRAM prices will
continue to rise in 2020.
As for Graphic Memory, since Nvidia launched the N18 refresh version in 2020Q2, NB and graphics cards have
launched new models simultaneously, making the demand for Q2-Q3 to rise, and this brings about graphic
memory being out of stock and the price getting higher and higher.
The three major manufacturers observed that consumer products were affected by the Coronavirus, and the
buying popularity gradually declined. Suppliers began to adjust their production, making mobile and PC switch to
servers. The server market benefited from the launch of INTEL Cascade Lake, AMD Rome new platforms and the
demand from Microsoft and Amazon upturned. In 2020, new bids for Q1 China Data Center were launched one
after another, and the overall demand was strong, resulting in the current market shortage and price increase. If
the three major manufacturers continue to switch to the server, it is estimated that the supply may exceed the
demand in the second half of 2020. Also, if the inventory of North American and Chinese data center customers
reaches a certain level, they will quickly stop purchasing and the price for memory may collapse.
Looking forward to 2020, the global economic recession caused by COVID-19 will reduce the demand for the
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DRAM market. Hand-held devices, personal computers, consumer electronics, etc., have all been impacted by the
sales aspect. Although the server market continues to develop in 5G / AI / IoT, and COVID-19 unexpectedly brought
about the demand for data centers, it is estimated that the overall DRAM shipments in 2020 will still decline
compared to 2019. As for the extent of the recession, it will depend on the control of the Coronavirus.
■ NAND flash
For the past three quarters of 2019, due to the weak demand for servers and the low replacement rate of
mobile phones, the price of NAND Flash dropped sharply. Nevertheless, in 2018Q4 KIOXIA (Toshiba memory name
change to KIOXIA since 2019/10/1) caused a power outage issue, and purchase demand increased in the peak
season, which caused prices to rise in 2019 Q4. The price of SATA-SSD rose about 4-7% and PCIe-SSD rose about
6-9%. As for the SSD, the attach rate was 77% in 2018, and will expect to increase to 80-85% in 2020. The capacity
in the PC market is still dominated by 256GB, with 512GB replacing 128GB as the second-largest mainstream
capacity. Because of the continued rise in 2020, the current 512GB attach rate has been revised to become the
mainstream capacity in 2021.
In terms of the process to each manufacturer, Samsung / Hynix / Micron will focus on 96-layer 3D TLC
products this year. In the future, due to increased capacity, the three manufacturers will all introduce 128-layer
3D TLC in 2020, 112-layer 3D TLC will be launched in Q3 of 2020. As for the 3D QLC process, there are few suppliers
actively promoting it, only Samsung and Micron have 3D QLC SSD products on the market, and Hynix will introduce
QLC products this year. In the future, whether manufacturers will follow up on 3D QLC or INTEL 144-layer QLC can
be accepted by customers is two big issues in 2020.
According to the impact of the Coronavirus this year, long-distance work and home economics have brought
the demand for servers to a peak. 5G smartphones and new game consoles XBOX-X / PS5 are about to be launched,
and it has taken the majority of NAND FLASH Capacity. Due to the impact of the epidemic, all major suppliers have
expressed reservation to capacity expansion, making the SSD market even scarcer. It is expected that the price of
NAND FLASH will continue to rise this year, but it may converge as the epidemic gets worse.
As for eMMC, since 5G smartphones are an important topic this year, the demand for transmission speed has
exceeded the load of eMMC. The UFS with better performance than eMMC is expected to greatly increase the
attach rate this year and make more shipments of 256GB / 512GB products.
■ HDD
The attach rate for HDD has been reduced year by year because of the improvement of cloud storage and the
weight of notebooks has become lighter than before. Most notebooks have equipped SSD and that makes the
attach rate of HDD down to 20% in 2020.
The usage rate of 1TB was the highest in 2019. In 2020, the usage rate of 500G may become 40%, 1TB about
58%, and 2TB around 2%. As for price in 2020, 500G may not change, 1TB may decrease 0.7% and 2TB may
decrease 2.4%.
As for new technology, WD is developing MAMR technology to make the capacity to 18TB and 20TB, which
is the new product named “Ultrastar” series; Seagate came up with HAMR technology as a response which can
also make the capacity to 20TB. The new product gives the Company another option to store their inactive
information.
148
HDD is still having a price advantage when compared to SSD and because the price of SSD rises, it can slow
down the trend of HDD being replaced by SSD.
■ ODD
ODD’s functions have been replaced by other technology like external hard drives, USD, and cloud storage.
This reason makes fewer models which are still using ODD. The attach rate may decrease to 12% in 2020.
There will be no new models in 2020, so most notebooks may still equip DVD-RW. Due to the high price and
fully developed technology of social media, Blu-ray drives may only be specially equipped in some models. Inactive
information storage may be a big issue soon. Panasonic and Sony have cooperated to develop AD drives for
information centers to store these messages, so it may be a trend in further future.
■ Batteries
Looking back on 2019, the shipment of cylindrical battery cells increased by 6% compared with 2018. The
growth of shipments mainly came from automotive batteries (EV, E-Motorcycle), which grew by 5% and E-
Motorcycle 23%. Besides, in the shipment of Polymer batteries, the growth came from 17% of NB and 69% of
wearable devices, but there was no growth in the mobile phone market, making the overall shipment increase
only 20% in 2019. It is estimated that due to the impact of the coronavirus in 2020, the overall mobile phone
battery shipment will decline by 9%. Although the NB part has increased the demand for remote work and
teaching due to the epidemic, the overall European and American consumer markets have turned weak. It is
estimated that NB battery shipments will decline by about 10% in the first half of 2020.
Although the overall global car sales fell by about 4.7% in 2019, the number of electric vehicle sales is still
growing at the rate of 20%. Major automakers are still investing resources in the development of electric vehicles.
Cylindrical’ s demand for automotive batteries (EV, E-Motorcycle) still showed no signs of weakening in 2020.
Many battery manufacturers have shifted their production to Cylindrical’ s capacity to automotive batteries. To
view from other angles of notebook market supply, because Japanese manufacturers (Panasonic) and Korean
factories (LGC, SDI), which mainly produce Cylindrical have quit the market, only a few old organic models and
selectively order, making Chinese manufacturers to enter the market. The Polymer segment topped the list with
13.4% growth in ATL shipments, followed by CosMX at the rate of 12.8%. While at the Polymer suppliers with
larger NB shipments, SDI and LGC grew 9% and 3% respectively, while BYD decreased 11%.
It is estimated that in 2020, the benefit of lithium-ion batteries and the demand for servers will continue
to increase. As for backup power for cloud data centers, lithium-ion batteries will gradually replace traditional
lead-acid batteries in the future. Although lead-acid batteries are still the bulk of current backup batteries in data
centers, lithium-ion batteries have the advantage of long service life, faster speed of charging and smaller size, it
may replace lead-acid batteries in the future. In 2019, lithium-ion batteries stand for 12% of the backup batteries
in the data center, and it is estimated that it will rise to 16% in 2020.
■
LCD panels and Touch control modules
Factors such as Brexit, Japan’s weak economy, US-China trade war, and China ’s economic slowdown in 2019
contributed to the slowdown in the global economy. The growth rate of the global economy in 2018-2019 slowed
from 3.2% to 2.8%.
149
Due to the condition of mentioned above, affecting the growth of demand is not as expected, the prosperity
of the panel industry continues to decline, further makes global output value still unable to resist recession,
however due to the rapid growth of China's panel production capacity, drive the panel component industry boom
to a steady trend, According to statistics, the output value of global LCD panel components in 2019 is about 42.8
billion US dollars, no big difference compared with 2018, the annual growth rate declined by 0.09% .
For touch modules, in 2019 the dependence rate on NB will increase by 15%, accounting for about 20% of all
NBs. According to statistics, touch panels used in smartphones in the first half of 2020 are the most versatile
application products, accounting for about 85% of the total shipments. The second is the use of tablet and
notebook computers, accounting for about 9%; automotive applications are 1.5%; others are about 4.5%
(industrial equipment / automatic cash registers, etc.). In 2020 many brands will try dual-screen design, it is
expected that the proportion of NB will still improve, and the market’s acceptance of dual-screen design will be
the growth of the main factor for touch in NB.
For OLED panels, Korean manufacturers look forward to their excellent display quality, and have been
investing in product development for a long time. As the demand for mobile phones gradually increases, further
which affects their output value, the China manufacturers also believe OLED flexible characteristics and better
display quality with development potential. They were gradually mass-produced, according to statistics, the
annual growth rate of the annual output value of 2019 was about 20%. The growth strength is obviously better
than other products, and it has also become one of the main growth items of the panel component industry. The
growth rate in 2020 is expected to be 15%. The main application market is still in the field of mobile phones,
because the current OLED technology is not as good as the LCD in terms of cost and service life, and the yield rate
has not yet stabilized for production. In the future, the product life extension and improved yield rate will be the
main key of market share.
Evaluation of industry development in 2020, technology has entered the 5G era, is expected to drive the
gradual growth of related demand, various new market developments will emerge, including smart transportation,
large medical industries, wearable devices, robots, etc. All are to drive the growth of the demand for human-
machine interfaces, and the demand for panel / touch modules is expected to maintain a stable growth trend. In
addition to the expansion of production capacity, the development of new products and the introduction of
differentiated technologies to improve competitiveness, the most important thing for the manufacturer to do is
actively invest in new niche markets or new business models to expand profitability.
Looking forward to 2020, under the influence of the epidemic, facing the shrinking of products and weak
demand, it can be predicted that the global economy will remain at a low level, which will further impact the
products demand. Therefore, the annual growth rate of panel and touch module production capacity will slow
down, and the global economic situation will still not be improved. After the outbreak of the epidemic, it is
estimated that the recession rate in the first half of the year will be about 10-12%. In the second half of the year,
the new market analysis will depend on the epidemic situation control state.
150
5.2.4 Major Suppliers and Clients
(1) Major Suppliers in the Last Two Years
Unit: NTD thousand
2018
2019
Party
1
2
Name
Amount
As a
percentage
to 2018 net
purchases
(%)
Relations
hip with
the issuer
Name
Amount
As a
percentage
to 2019 net
purchases
(%)
Relationshi
p with the
issuer
Name
Company E
Company B
Others
Net
Purchase
328,103,409
113,241,981
475,877,885
35.77
12.35
51.88
917,223,275
100.00
N/A Company E
N/A Company B
Others
Net
Purchase
301,780,015
89,789,108
527,842,635
32.82
9.77
57.41
919,411,758
100.00
N/A Company E
N/A Company B
Others
Net
Purchase
2020 first quarter
As a
percentage
to 2020 first
quarter net
purchases
(%)
Amount
67,063,738
15,711,786
105,966,807
35.53
8.33
56.14
188,742,331
100.00
Relationship
with the
issuer
N/A
N/A
(2) Major Clients in the Last Two Years
Unit: NTD thousand
2018
2019
2020 first quarter
Party
Name
Amount
As a
percentage
to 2018 net
sales (%)
Relationship
with the
issuer
Name
Amount
As a
percentage
to 2019 net
sales (%)
Relationshi
p with the
issuer
Name
Amount
As a
percentage
to 2020 first
quarter net
sales (%)
Relationshi
p with the
issuer
1
2
3
4
Company a
Company d
Company e
Company f
Others
Net sales
128,790,649
414,474,616
66,783,151
187,925,666
169,732,329
967,706,411
13.31
42.83
6.90
19.42
17.54
100.00
N/A Company a
N/A Company d
N/A Company e
N/A Company f
Others
Net sales
96,591,070
390,210,303
105,890,275
212,262,458
175,488,240
980,442,346
9.85
39.80
10.80
21.65
17.90
100.00
N/A Company a
N/A Company d
N/A Company e
N/A Company f
Others
Net sales
15,692,413
83,841,867
15,202,473
42,406,589
24,903,704
182,047,046
8.62
46.06
8.35
23.29
13.68
100.00
N/A
N/A
N/A
N/A
151
5.2.5 Production in the Last Two Years
Unit: thousand devices; NTD thousands
Year
Production
volume/
value
Main products
2018
2019
Production capacity
Production volume
Production value
Production capacity
Production volume
Production value
5C electronics
122,631
106,027
934,122,749
136,388
115,443
942,905,972
5.2.6 Shipments and Sales in the Last Two Years
Unit: devices; NTD thousands
Year
Sales volume
Main products
5C electronics
5.3
Human Resources
2018
2019
Domestic sales
Export sales
Domestic sales
Export sales
Volume
398
Value
1,818,019
Volume
102,797
Value
Volume
Value
965,888,392
266
1,134,242
Volume
117,245
Value
979,308,104
Year
December 31, 2018
December 31, 2019
March 31, 2020
Number of employees
Average age
Average years of service
Academic
qualifications
Doctoral Degree
Master’s degree
University
High school / Below/
others
82,374
27.69
2.06
0.05%
3.64%
18.83%
77.48%
81,743
95,765
28.84
2.08
0.05%
3.81%
19.33%
76.81%
152
29.54
1.82
0.04%
3.26%
16.88%
79.82%
5.4
Environmental Protection Expenditure
(1) Compal is an assembler of electronic products and produces no significant pollution:
The Company is an information electronic product assembly plant, a non-high energy consumption, high
water consumption and high pollution industry. In order to protect the environment, it fulfills its social
responsibilities, saves energy and reduces carbon, and reduces the impact of global warming. The Taiwan and
Mainland China plants together incurred expenses of NT$766,350(excluding regular maintenance and green R&D)
in 2019. We are keeping the promises we made as an earth citizen and hope to make substantial contributions to
the protection of the global environment. We will continue our commitment to efforts in this respect. In 2019 and
as of the date of report published, Compal had no violation of environmental laws, and will keep abreast of
relevant regulatory updates and respond immediately to reduce the risk of violations.
(2) Compliance with EU RoHS directives:
All Compal products are 100% compliant with EU RoHS Directives. There have been no cases of returns for
non-compliance. Compal requires suppliers to adjust the revised exclusion clause, and the relevant specifications
for the use of plasticizers DEHP, BBP, DBP and DIBP, which came into effect in 2019, and have been effective since
July 2, 2018.
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.
(3) Responsive strategies and possible expenses:
In the future, the Company will continue to implement its environmental responsibilities including the
boosting of staff knowledge of environmental matters, and the advocation of updated green living knowledge, the
Company’s 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 have a timely response to all environmental laws.
5.5
Labor Relations
(1) Availability and execution of employee welfare, education, training, and retirement policies. Elaboration of
the agreements between employers and employees, and protection of employee 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,
153
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. Employee dependents 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 2019, the Company had provided NT$167.44 million in maternity allowances and bonuses. There
were 30 counts of employees who took parenting leave, with the right to return, in 2019.
■
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 an online learning platform to further assist the competent staff
in keeping abreast of learning progress.
In 2019, a total of 891 training sessions (both internal and external) were organized; these courses delivered
179,984 hours of training and 50,948 persons enrolled. The total training expenses were NT$23,532 thousand.
The training courses included:
‧ Orientation: New hire seminars and corporate culture experience camps were organized to help
new hires better understand Company culture, the current status of the industry, and Company
strategy and vision.
‧ Language training: Basic to advanced English and Japanese courses that train employees to respond
to customers and gives them a global vision through workspace situational training.
‧ Managerial skills Training: To establish a comprehensive blueprint of development level, strengthen
core competency at all levels in such aspects as teamwork, problem analysis, innovative thinking...
and soon, to conduct planning for Company talent training at various stages.
‧ Professional training: Categorized new professional knowledge lectures, courses, and experience
heritage job training to enhance employee expertise and technology and to enhance Company 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. The effect is maximized with a complete learning and training mechanism that utilizes
a comprehensive knowledge management system.
■
Retirement system
To arrange retirement for employees, the Company has issued regulations of labor retirement, which
stipulate the conditions and standards for retirement, application, as well as operation of labor Pension
Preparation Fund based on law. The supervisory committee of workers’ retirement preparation fund has also been
established. According to the Regulations for the Allocation and Management for the Pension Preparation Fund,
we contribute and deposit labor pension preparation funds into the dedicated account of the Bank of Taiwan per
month to protect employees’ rights. Adopted the Labor Pension Act in the meanwhile, we have contributed 6%
pension into personal account for befitted employees. Also, for those who volunteered to contribute pension,
voluntary withholding rate is deducted from the employees’ monthly wage to the individual retirement account
of the Labor Insurance Bureau since 1st July in 2005.
154
■
Employer-employee communications and the enforcement of worker rights.
The Company has always valued employer-employee relations and has communication channels available
to facilitate two-way communication that allows the Company to respond to the thoughts and opinions of
employees in a prompt manner. The Company not only has policies in place to protect employee 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 employee behavior.
There are specific levels of approval authority and detailed rules to guide decisions concerning employee
recruitment, promotion, appraisal, assignment, leave of absence, resignation, confidentiality agreements,
reward and discipline. These policies and rules exist to eliminate subjective judgment 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) Employee safety
‧ Personnel entry and exit is controlled by a security system.
‧ Security personnel are stationed 24 hours a day to patrol plant premises and monitor the
surveillance system.
‧ Lectures and rehearsals are organized annually to demonstrate proper responses to cases of
emergency.
(5) Actual or estimated losses arising as a result of employment disputes in the recent year up to 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. However, the Company
was found to have violated the Labor Standards Act because of the results of the labor inspection. (i) the
Company was issued a fine for NT$900,000 following a labor inspection result dated April 8, 2019 due to
overtime applications not being timely processed (Labor Standards Act Article 24); working hours exceeding
the permitted limit (Labor Standards Act Article 32) and the attendance records were not be registered the
attendance of workers on a daily basis to the minute (Labor Standards Act Article 30). (ii) the Company was
issued a fine for NT$600,000 following a labor inspection result dated July 25, 2019 due to working hours
exceeding the permitted limit (Labor Standards Act Article 32) and (iii) the Company was issued a fine for
NT$100,000 following a labor inspection result dated Aug 20, 2019 due to working hours exceeding the
permitted limit (Labor Standards Act Article 32). The Company has reviewed the working hour management
155
N/A
N/A
process and strengthened communication to employees to better manage overtime application.
‧ Responsive strategies and possible expenses: none.
5.6
Important Contracts
Agreement
Counterparty
Patent
Phoenix
licensing
Technologies
agreement
Co
Period
Since
2010.1.1
Auto-renewed
upon expiry
1. Tool Licenses
2. Source Code licenses
3. Maintenance
Major Contents
Restrictions
Trading and
manufacturing
agreement
Under this agreement, the buyer will
Since
procure computer products developed and
Dell Products
1997.06.26
manufactured by the seller, while the seller
L.P.
Auto-renewed
will grant the buyer proper licenses to use
upon expiry
the products and provide after-sales
Trading and
manufacturing
Acer Inc.
agreement
Since 2001.10.01
Yearly
Auto-renewed
upon expiry
technical services.
Under this agreement, the buyer will
procure computer products developed and
manufactured by the seller, along with
N/A
after-sales technical services provided by
the seller.
156
VI. Financial Information
6.1
Five-Year Financial Summary
▓ Consolidated Condensed Balance Sheet – Based on IFRS
Year
Financial Summary for The Last Five Years (Note 1)
Unit: NT$ thousands
As of March 31,
2020
Analysis
Current assets
Property, plant, and
equipment
Intangible assets
Other assets
Total assets
Prior to
Current
distribution
liabilities
After
distribution
2015
2016
2017
2018
2019
277,783,476
300,469,007
321,782,654
362,745,250
343,154,813
316,194,904
24,308,631
20,952,677
18,179,367
20,418,228
19,972,347
19,934,781
1,194,193
1,291,281
1,284,660
1,516,253
24,639,275
24,303,146
22,109,740
15,115,092
1,553,342
17,967,917
1,624,402
17,183,570
327,925,575
347,016,111
363,356,421
399,794,823
382,648,419
354,937,657
202,757,075
209,232,199
231,955,732
274,207,898
255,820,033
233,467,179
208,009,032
214,478,756
237,184,287
279,436,453
(Note 2)
-
Non-current assets
15,570,384
25,500,097
22,752,717
12,425,077
12,069,042
12,279,244
Total liabilities
Prior to
distribution
After
distribution
Equity attributable to
parent company
shareholders
Ordinary shares
Capital reserves
Prior to
Retained
distribution
earnings
After
distribution
218,327,459
234,732,296 254,708,449
286,632,975
267,889,075
245,746,423
223,579,416
239,978,853 259,937,004
291,861,530
(Note 2)
-
103,775,795
105,804,389
101,895,584
105,723,646
105,972,633
100,796,178
44,711,266
44,241,606
44,191,916
44,071,466
44,071,466
44,071,466
12,838,638
11,779,274
10,938,773
9,932,434
9,159,259
8,338,999
51,877,511
55,289,409
56,557,146
60,060,381
57,726,604
53,924,166
47,450,840
50,867,256
52,149,999
55,653,234
(Note 2)
-
Other equity interests
(3,926,881)
(4,624,653)
(8,911,004)
(7,459,388)
(4,103,449)
(4,657,206)
Treasury stock
(1,724,739)
(881,247)
(881,247)
Non-controlling interests
5,822,321
6,479,426
6,752,388
(881,247)
7,438,202
(881,247)
8,786,711
(881,247)
8,395,056
Total equity Prior to
distribution
After
distribution
109,598,116
112,283,815 108,647,972
113,161,848
114,759,344
109,191,234
104,346,159
107,037,258 103,419,417
107,933,293
(Note 2)
-
Note: 1. The financial information is audited and certified by the CPA every year. The financial information as of March 31, 2020,
is reviewed by the CPA.
2. The 2019 annual financial statements have not been approved at a shareholders’ meeting. Therefore, the amount after
allocation is not listed.
157
▓ Consolidated Condensed Statement of Comprehensive Income – Based on IFRS
Year
Financial Summary for The Last Five Years (Note 1)
Unit: NT$ thousands
As of March 31,
2020
Analysis
Net sales revenue
Gross profit
2015
2016
2017
2018
2019
847,305,698
766,810,035
887,656,959
967,706,411
980,442,346
182,047,046
33,378,357
32,836,970
31,964,569
30,567,091
33,908,828
5,945,911
Net operating income
11,312,452
11,063,645
9,208,429
9,261,746
10,586,368
905,849
Non-operating income and
expense
479,641
749,700
(1,094,152)
2,527,839
(578,492)
182,811
Net income before tax
11,792,093
11,813,345
8,114,277
11,789,585
10,007,876
1,088,660
Net income from continuing
operations
Net loss from discounting
operations
9,007,147
8,968,006
6,158,037
9,589,301
7,895,719
771,302
-
-
-
-
-
-
Net income (loss)
9,007,147
8,968,006
6,158,037
9,589,301
7,895,719
771,302
Income (Loss) from Other
comprehensive income (loss)
(101,970)
(1,265,546)
(4,604,412)
387,887
(1,534,980)
(494,144)
(net after tax)
Comprehensive income
8,905,177
7,702,460
1,553,625
9,977,188
6,360,739
277,158
Net income attributes to
shareholders of the Parent
Net income attributes to non-
controlling interests
Comprehensive income
attributed to owners of parent
Comprehensive income
8,684,610
8,130,890
5,749,525
8,913,365
6,955,899
605,011
322,537
837,116
408,512
675,936
939,820
166,291
8,552,926
6,916,562
1,189,818
9,278,187
5,456,508
51,428
attributed to non-controlling
352,251
785,898
363,807
699,001
904,231
225,730
interests
Earnings per share (unit:
dollar)
2.01
1.88
1.32
2.05
1.60
0.14
Note: 1. The financial information is audited and certified by the CPA every year. The financial information as of March 31, 2020
is reviewed by the CPA.
2. The 2019 annual financial statement for the current year has not yet been approved at a shareholders’ meeting.
158
▓ 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, 2020
Analysis
2015
2016
2017
2018
2019
Current assets
207,496,808
237,412,415
240,677,588
265,372,906
245,522,829
Property, plant, and
equipment
2,181,737
2,132,114
2,092,272
2,128,181
2,620,638
Intangible assets
378,454
268,316
146,813
378,745
438,334
Other assets
Total assets
Prior to
Current
distribution
liabilities
After
distribution
86,182,040
88,808,075
85,179,393
87,932,981
89,201,687
296,239,039
328,620,920
328,096,066
355,812,813
337,783,488
177,664,877
197,566,162
203,492,102
237,882,742
220,871,943
182,976,882
202,872,746
208,780,678
243,171,318
(Note 2)
Non-current assets
14,798,367
25,250,369
22,708,380
12,206,425
10,938,912
Prior to
Total
distribution
liabilities
After
distribution
Ordinary shares
Capital reserves
Prior to
Retained
distribution
earnings
After
distribution
192,463,244
222,816,531
226,200,482
250,089,167
231,810,855
197,775,249
228,123,115
231,489,058
255,377,743
(Note 2)
N/A
44,711,266
44,241,606
44,191,916
44,071,466
44,071,466
12,838,638
11,779,274
10,938,773
9,932,434
9,159,259
51,877,511
55,289,409
56,557,146
60,060,381
57,726,604
47,450,840
50,867,256
52,149,999
55,653,234
(Note 2)
Other equity interests
(3,926,881)
(4,624,653)
(8,911,004)
(7,459,388)
(4,103,449)
Treasury stock
(1,724,739)
(881,247)
(881,247)
(881,247)
(881,247)
Total
equity
Prior to
distribution
After
distribution
103,775,795
105,804,389
101,895,584
105,723,646
105,972,633
98,523,838
100,557,832
96,667,029
100,495,091
(Note 2)
Note: 1.The financial information is audited by the CPA every year.
2. The 2019 annual financial statements have not been approved at a shareholders’ meeting. Therefore, the amount after
allocation is not listed.
159
▓ Parent-Company-Only Condensed Statement of Comprehensive Income – Based on IFRS
Year
Financial Summary for The Last Five Years (Note 1)
Analysis
Net sales revenue
Gross profit
Net operating income
Non-operating income
and expense
2015
2016
2017
2018
2019
802,994,930
725,653,095
841,309,602
911,050,122 916,280,028
22,737,590
21,281,171
21,544,440
21,880,841
24,849,149
7,305,278
5,972,854
5,170,549
6,936,706
8,536,952
2,857,612
3,398,892
1,508,171
3,021,610
(713,273)
Unit: NT$ thousands
As of March
31, 2020
Net income before tax
10,162,890
9,371,746
6,678,720
9,958,316
7,823,679
Net income from
continuing operations
Net loss from discounting
operations
8,684,610
8,130,890
5,749,525
8,913,365
6,955,899
-
-
-
-
N/A
-
Net income (loss)
8,684,610
8,130,890
5,749,525
8,913,365
6,955,899
Income (loss) from other
comprehensive income
(131,684)
(1,214,328)
(4,559,707)
364,822
(1,499,391)
(net after tax)
Comprehensive income
8,552,926
6,916,562
1,189,818
9,278,187
5,456,508
Earnings per share(unit:
dollar)
2.01
1.88
1.32
2.05
1.60
Note: 1.The financial information is audited by the CPA every year.
2. The 2019 financial statement has not yet approved by the shareholders’ meeting.
Auditors’ Opinions
Year
2015
2016
2017
2018
2019
Accounting Firm
KPMG
KPMG
KPMG
KPMG
KPMG
CPA
Audit Opinion
Kuo, Kuan Ying; Lo, Jui Lan
Kuo, Kuan Ying; Au, Yiu Kwan
Kuo, Kuan Ying; Au, Yiu Kwan
Chien, Szu Chuan; Au, Yiu Kwan
Chien, Szu Chuan; Au, Yiu Kwan
Modified unqualified opinion (Note)
Unqualified opinion
Unqualified opinion
Unqualified opinion
Unqualified opinion
Note: 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.
160
6.2 Five-Year Financial Analysis
▓
Consolidated Financial Analysis – Based on IFRS
Analysis
Year
Financial Analysis for the Last Five Years
As of
March 31,
2020
Debt ratio
66.58
67.64
70.09
71.70
70.01
69.23
2015
2016
2017
2018
2019
Capital Structure (%)
Long term fund to property, plants, and
equipment ratio
Current ratio (%)
Liquidity analysis
Quick ratio (%)
Operating
Performance
Analysis
Interest coverage
Accounts receivable turnover (times)
Average collection turnover
Inventory turnover (times)
Accounts payable turnover (times)
Average inventory turnover days
Property, plant and equipment turnover
(times)
Total assets turnover(times)
Return on total assets (%)
Return on equity (%)
514.91
657.59
722.80
615.07
635.02 609.33
137.00
113.71
143.60
138.72
120.22
108.19
132.29
103.06
134.14 135.43
102.94
96.96
14.11
4.93
74.03
14.31
5.42
25.50
13.47
4.50
81.11
15.51
5.68
7.25
5.03
72.56
14.55
6.30
23.53
25.08
5.47
5.08
71.85
12.61
6.33
28.95
4.67
4.96
3.84
4.20
73.58
86.90
12.01
6.34
8.46
4.91
30.39
43.14
34.74
33.88
45.36
50.14
48.55
36.49
2.40
2.74
8.35
2.27
2.87
8.08
2.49
2.01
5.57
2.54
3.08
8.65
2.51
2.57
6.93
Profitability Analysis
Operating income to paid-in capital ratio (%)
26.37
26.70
18.36
26.75
22.71
Net margin (%)
Earnings 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.
1.06
2.01
4.70
1.16
1.88
0.69
1.32
0.99
2.05
0.61
(Note1)
(Note1)
(Note2)
1.95
42.42
(Note1)
1.58
1.09
1.57
1.09
48.05
(Note1)
1.63
1.16
44.84
(Not1)
1.60
1.40
0.81
1.60
8.18
37.92
9.89
1.61
1.35
1.97
0.28
0.68
2.47
0.42
0.14
-
-
-
-
-
2. Not applicable as 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:
‧Earnings per share: Mainly due to the decrease in profit compared to the earlier period.
‧Cash flow ratio: Mainly due to net cash inflow in operating activities.
‧Cash reinvestment ratio: Mainly due to net cash inflow in operating activities.
4. The financial information is audited and certified by the CPA every year. The financial information as of March
31, 2020, is reviewed by the CPA.
5.The 2019 financial statement has not yet been approved at a shareholders’ meeting
161
▓ Formula
Financial Structure
1.
(1) Debt Ratio = Total liabilities/Total assets
(2) Ratio of long-term capital to property, plants, and equipment = (Net shareholders’ equity + Long-term
liability)/Net property, plants, and equipment
Solvency
2.
(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) Accounts receivable (including accounts receivable and notes receivable from business activities) turnover
= Net sales/Average accounts receivable balance (including accounts receivable and notes receivable from
business activities)
Inventory turnover = Cost of Goods Sold/Average inventory balance
(2) A/R turnover days = 365/accounts receivable turnover
(3)
(4) Accounts payable (including accounts payable and notes payable from business activities) turnover = Cost of
goods sold/Average accounts payable balance (including accounts payable and notes payable from business
activities)
Inventory turnover days = 365/Inventory turnover
(5)
(6) Property, plants, and equipment turnover = Net sales/Average Net Property, plants, 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)
Leverage
6.
(1) Operating leverage = (Nest revenue - variable cost of goods sold and operating expense)/operating income
(2) Financial leverage = Operating income/(Operating income - interest expenses)
162
▓
Parent-Company-Only Financial Analysis – Based on IFRS
Year
Financial Analysis for the Last Five Years
As of
March 31,
2020
Analysis
Capital Structure
(%)
Debt ratio
Long term fund to property, plants,
and equipment ratio
Current ratio (%)
Liquidity analysis
Quick ratio (%)
Operating
Performance
Analysis
Interest coverage
Accounts receivable turnover (times)
Average collection turnover
Inventory turnover (times)
Accounts payable turnover (times)
Average inventory turnover days
property, plants, and equipment
turnover (times)
Total assets turnover(times)
Return on total assets (%)
Return on equity (%)
Profitability
Operating income to paid-in capital
Analysis
ratio (%)
Net margin (%)
Earnings 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.
2015
2016
2017
2018
2019
64.97
67.80
68.94
70.29
68.63
5,434.85 6,146.71 5,955.44
5,541.36 4,461.19
116.79
120.17
118.27
111.56
111.16
102.28
105.89
96.92
89.79
88.45
17.81
14.03
5.03
4.61
72.57
79.14
23.34
26.42
5.16
5.16
7.85
5.06
72.13
23.11
5.65
6.14
5.08
4.97
4.97
71.80
73.46
18.82
17.55
5.95
5.86
15.64
13.81
15.79
19.39
20.79
364.02
336.43
398.31
431.73 385.90
N/A
2.51
2.87
8.47
2.32
2.79
7.76
2.56
2.00
5.54
2.66
3.06
8.59
2.64
2.46
6.57
22.73
21.18
15.11
22.60
17.75
(Note1)
(Note2)
(Note1)
1.08
2.01
1.12
1.88
0.68
1.32
0.98
2.05
3.15
(Note1)
(Note1)
38.20
11.48
5.45
(Note1)
0.68
(Note1)
(Note1)
2.41
1.09
2.74
1.14
2.86
1.23
2.59
1.39
0.76
1.60
6.80
8.29
2.43
1.30
2. Not applicable as the financial information, for more than five years, in accordance with IFRS has not yet been
disclosed.
3. The financial ratio has changed by up to 20% in the past two years:
‧Return on Equity: Mainly due to the decrease in net income compared to the earlier period.
‧Operating Income to Paid-in Capital Ratio: Mainly due to the decrease in income before tax compared to the
earlier period.
‧Net Margin: Mainly due to the decrease in net income compared to the earlier period.
‧Earnings Per Share: Mainly due to the decrease in net income compared to the earlier period.
‧Cash flow ratio: Mainly due to the increase in net cash inflow from operating activities compared to the
earlier period.
‧Cash flow adequacy ratio: Mainly due to the decrease in net cash inflow from operating activities for the last
five years compared to the earlier period.
‧Cash reinvestment ratio: Mainly due to the increase in net cash inflow from operating activities compared to
the earlier period.
4. The financial information is audited and certified by the CPA every year.
5. The 2019 financial statement has not yet been approved at a shareholders’ meeting.
163
▓ Formula
Financial Structure
1.
(1) Debt Ratio = Total liabilities/Total assets
(2) Ratio of long-term capital to property, plants, and equipment = (Net shareholders’ equity + Long-term
liability)/Net property, plants, and equipment
Solvency
2.
(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) Accounts receivable (including accounts receivable and notes receivable from business activities) turnover
= Net sales/Average accounts receivable balance (including accounts receivable and notes receivable from
business activities)
Inventory turnover = Cost of Goods Sold/Average inventory balance
(2) A/R turnover days = 365/accounts receivable turnover
(3)
(4) Accounts payable (including accounts payable and notes payable from business activities) turnover = Cost of
goods sold/Average accounts payable balance (including accounts payable and notes payable from business
activities)
Inventory turnover days = 365/Inventory turnover
(5)
(6) Property, plants, and equipment turnover = Net sales/Average Net Property, plants, 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)
Leverage
6.
(1) Operating leverage = (Nest revenue - variable cost of goods sold and operating expense)/operating income
(2) Financial leverage = Operating income/(Operating income - interest expenses)
164
6.3
Audit Committee’s Report for the Most Recent Year
Audit Committee’s Review Report
The Company’s 2019 financial statements have been approved by the Audit Committee and
by the Board of Directors. Szu-Chuan Chien 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 2018 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:
March 30, 2020
165
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.
Status of Financial Difficulties for the Company and its Subsidiaries
6.6
Incidence of financial difficulties for the Company and subsidiaries between the period of 2019 to the
publication date of this annual report: None.
166
VII. Review of Financial Conditions, Financial Performance, and Risk
Management
Unit: NT$ thousands
Difference
Amount
(19,590,437)
%
7.1
Analysis of Financial Status
Analysis
Year
2019
2018
Current Assets
Investments accounted for using
equity method
Property, plant and equipment
Other Assets
Total Assets
Current Liabilities
Other Liabilities
Total Liabilities
Ordinary Share
Capital surplus
Retained Earnings
Other Equity Interests
Treasury stock
Non-controlling Equity
343,154,813
362,745,250
7,319,086
7,364,485
(45,399)
19,972,347
12,202,173
382,648,419
255,820,033
12,069,042
267,889,075
20,418,228
9,266,860
399,794,823
274,207,898
12,425,077
286,632,975
(445,881)
2,935,313
(17,146,404)
(18,387,865)
(356,035)
(18,743,900)
44,071,466
9,159,259
57,726,604
(4,103,449)
(881,247)
8,786,711
114,759,344
44,071,466
9,932,434
60,060,381
(7,459,388)
(881,247)
7,438,202
113,161,848
-
(773,175)
(2,333,777)
3,355,939
-
1,348,509
1,597,496
-5.40
-0.62
-2.18
31.68
-4.29
-6.71
-2.87
-6.54
-
-7.78
-3.89
-44.99
-
18.13
1.41
Total Equity
Note: Analysis of variations exceeding 20% and amounting to more than NTD10 million:
Decrease in losses in other equity interests: Mainly due to the decrease in unrealized losses on financial assets
Increase in other assets: Mainly due to increase in the Right-of-use assets
measured at fair value through other comprehensive income.
Effect of changes on the company’s financial position and Future response actions::
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.
167
7.2 Analysis of Financial Performance
Analysis
Year
2019
2018
Unit: NT$ thousands
Difference
Amount
%
Net Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Non-operating Income and Expenses
Profit Before Tax
Less: Income Tax Expense
Net Profit (loss)
Other Comprehensive Income (after
tax)
980,442,346
967,706,411
12,735,935
946,533,518
937,139,320
30,567,091
21,305,345
9,261,746
9,394,198
3,341,737
2,017,115
1,324,622
1.32
1.00
10.93
9.47
14.30
2,527,839
(3,106,331)
-122.88
11,789,585
(1,781,709)
2,200,284
(88,127)
9,589,301
(1,693,582)
-15.11
-4.01
-17.66
33,908,828
23,322,460
10,586,368
(578,492)
10,007,876
2,112,157
7,895,719
(1,534,980)
387,887
(1,922,867)
-495.73
Total Comprehensive Income
6,360,739
9,977,188
(3,616,449)
-36.25
Note: Analysis of variations exceeding 20%:
Income decrease in Non-operating income and expenses: Mainly due to the decrease in gains on
disposal of investments, decrese in gains on financial assets and liabilities at fair value through profit or
loss, decrease in foreign currency exchange losses.
Income decrease in other comprehensive income (after tax): Mainly due to the decrease of gains of
exchange differences on translation of foreign financial statements and decrease in unrealized losses
from investments in equity instruments measured at fair value through other comprehensive income.
Income decrease in total comprehensive Income: Mainly due to the decrease in other comprehensive
income (after tax).
■ Forecast for sales for next year and basis for the forecast. Potential impact on the Company’s finances
and sales in the future and response plan:
Forecast for sales for next year and basis for the forecast
Due to the global consumer demand and economic slowdown caused by the COVID-19 epidemic, several
market research institutions estimate that the market outlook for both computing products and smart devices
will be challenging and may face the single-digit to double-digit annual shipment declines in year 2020. While
Compal is in the global technology product supply chain, it will be inevitably affected by the industry fluctuations.
However, besides the negative impact of the epidemic, it also bought about changes in people’s lifestyles. More
online work, learning, entertainment and trading activities also bought many new opportunities, such as the
increasing demand in commercial and educational devices, cloud servers, and stable and faster networks.
Compal will capture those new opportunities via related technologies and products development and be
prepared for the Company’s long-term sustainable growth. The related market analysis please refer to page115
～119 for “Industry Overview–current and future industry prospects”.
Potential impact on the Company’s finances and sales in the future and response plan:
In light of the growth in operation and future investments, the Company has established relevant financial
strategies.
168
7.3 Analysis of Cash Flow
7.3.1 Cash Flow Analysis for the Current Year
Cash and Cash
Equivalents,
Beginning of Year
(1)
70,296,545
Net Cash Flow
from Operating
Activities
(2)
20,921,069
Other Cash
Inflow
(Outflow)
(3)
(24,658,217)
Cash Surplus
(Deficit)
(1)+(2)+(3)
66,559,397
Financing of Cash Deficit
Investment Plans
-
Financing Plans
-
Unit: NT$ thousands
Note: 1. Other Cash Inflow (Outflow) includes the Cashflow in investing activities, financing activities, and
foreign exchange impacts.
2. Analysis of the change of 2019 cash flows:
•Net cash inflow in operating activities: Mainly due to profit making and increase of net changes of assets and
liabilities from operating activities.
•Net cash outflow in investing activities: Mainly due to the purchase of property, plants, and equipment,
right-of-use assets and the disposal of financial assets at fair values through profit or loss as well as financial
assets at fair values through other comprehensive income.
•Net outflow of financing activities: Mainly due to the repay loan and distribution of cash dividend.
3. Financing of cash deficits and liquidity analysis: There is no cash deficits situation.
7.3.2 Cash Flow Analysis for the Coming Year
The Company takes the prudent planning and aims to maintain the stable cash liquidity, as the cash balance in
the beginning of the year plus the net cash inflows from operating activities are adequate in meeting the Company’s
investing and financing needs.
7.4 Major Capital Expenditures
7.4.1 Major Capital Expenditures and Sources of Capital
Project
Actual or Planned
Source of Capital
Actual or Planned
Date of Completion
Total Capital
Unit: NT$ thousands
Actual or Expected Capital
Expenditure 2019
Property, plant and
equipment
Cash flow
generated from
operations and
loans
7.4.2 Expected Benefits
2019
5,850,532
5,850,532
The Company’s major capital expenditure is invested to meet the needs of business growth and capacity expansion.
Meanwhile to increase the automation equipment to enhance the production efficiency and achieve the goal of smart
manufacturing, in which to build the Company’s long-term competitiveness.
169
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. We also want to strengthen the core resources, through vertical integration,
diversification, and strategic investments or acquisitions as well as integration and horizontal competition.
2. Improve post investment performance, strengthen the integration of Group resources and strategic
partnerships with investment businesses, facilitate the cooperation between the Company and invested
business, and require their full compliance with labor regulations and those against human trafficking and
slavery. Connect related customers to an information network, and form strategic alliances with other
industries. Sustain the performance of operating output in social, economic, and environmental aspects
using a high standard of specification. This includes increasing the efficiency and productivity, improving
the rights of the workers, proper economic development, and environmentally friendly production in a
clean operating base. The Company fully supports investment companies with good performance to plan
for IPO to accelerate the realization of good returns on investments.
(2) Main causes of profits or losses incurred on investments, and any corrective actions planned
The 2019 consolidated profits from investment using the equity method came to approximately NTD 198
million, coming mainly from the performance of Compal Precision Module Co., Ltd., ALLIED CIRCUIT CO., LTD,
and Avalue Technology Incorporation.
(3) 2019 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 mobile device solutions and provide products, through the integration
of R&D resources and clients, of an all-in-one computer, TV, AE and enterprise servers. The Company follows
the principle of steady operation and always focuses on our core businesses. We will 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 that are not involved in hardware
production, we also will expand the size of our developers and the proportion of software and firmware, to
increase the value of their tangible assets and bring in value from additional sales.
We expect horizontal mergers and expansions to provide full IoT solutions for our clients which include
applications in cross-industry automation, industrial computers, security control, the healthcare industry,
cars, smart cities, smart buildings, restaurants and retail outlets, with the primary aim of providing new
investment opportunities and challenges.
In practice, apart from achieving internal growth under the existing business framework, we also accept
the possibility of mergers, acquisitions, joint ventures, technical calibrations, and investment activities
through bilateral or multi-lateral collaboration between business entities.
The Company and 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:
170
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.
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
Items
Net interest revenue and expense
Net gain and loss on foreign 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 foreign exchange gain/loss to net revenues
Net foreign exchange gain/loss to pre-tax income
Unit: NTD thousand; %
2019
(1,060,761)
(273,264)
980,442,346
10,007,876
(0.108%)
(10.600%)
(0.028%)
(2.730%)
1. Interest rate changes:
According to the U.S. Fed meeting statement, the coronavirus outbreak weighed on economic activity in the near
term and will pose risks to the economic outlook. In light of these developments, the Committee decided to lower the
target range for the federal funds rate to 0 to 0.25%. The Committee expected to maintain this target range until it is
confident that the economy has weathered recent events and is on track to achieve its maximum employment and
price stability goals. With regards to the interest rate for NTD, in light of the coronavirus pandemic, to help support
business continuity and to caution against the adverse implications of massive cross-border capital flows for financial
stability, the Central Bank decided to reduce the discount rate by 0.25%. As of the end of 2019, the Company’s cash
balance came to approximately NTD 66.559 billion. The long and short-term bank loans came to about NTD 86.700
billion, with net interest income and expenses for the year at NTD (1,060,761) thousand. The amount accounted for
(0.108%) and (10.600%) of the Company’s net sales and income before tax, respectively. The Company will continue
to monitor 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 minimize 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 instruments, came to NTD
(273,264) thousand, accounting for (0.028%) and (2.730%) of net revenue and net profit before tax, respectively. We
171
will take all necessary actions based on the fluctuation of the exchange rate in the future.
3. Inflation:
In terms of the inflation outlook, considering the adverse impact on domestic consumption demand caused by
the spread of the coronavirus, combined with plunging international oil and raw material prices, the Central Bank
trimmed the forecasts of the CPI and core CPI annual growth rates for 2020 to 0.59% and 0.55%, respectively. We will
continue to watch for potential impact on prices.
7.6.2 Policies, Main Causes of Gain or Loss, and Future Response Measures with Respect to High-risk,
High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives 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 a 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. 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 a 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 integration of add-on function. They also team with clients to meet
their market planning and detail product developments.
In general, the Company usually has less than a one year product development cycle and aims 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 business target and whether the existing customers continue their
cooperation with the Company. The 2020 R&D expenses are expected to be NT$ 14.6 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 2019, the Company made all the necessary responses to significant changes in international
172
and domestic policies and regulations, without a 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
The constant arrival of new technology products to replace dated ones has changed the habits of users. This has
consequently led to the emergence of different demands, and the development of ARM and Android has also impacted
Wintel, which used to monopolize the market. Not only that, the emergence of cloud applications has also resulted in
significant changes in the traditional PC market. The rising technology trend of IOT, Artificial Intelligence (AI), and 5G
communication will also bring significant developments of industry as well as market opportunities. To cope with these
changes, the Company has expanded new businesses to its existing product lines to embrace the latest industrial
trends. As such, the Company has established its Innovation Center that is responsible for following and studying the
latest developments in market trends. Not only that, the Innovation Center is also involved in the development of
innovative products, technologies, and designs to strengthen the Company’s research on consumer behavior and
thereby provide more accurate market segregation and product positioning to satisfy user needs. At the same time,
we will also focus on boosting our innovative technology capabilities and plans for future 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, manufacturing, and services. As we pursue business growth, we always
remember our obligations as a corporate citizen. We have strengthened corporate governance, fulfilled corporate
social responsibility, and have established a good corporate image. In recent years, the 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 2019, the Company placed within
the top 6%-20% in the TWSE-listed Companies in the 5th round of “Corporate Governance Evaluation” and the
distinction of the Award in the “Taiwan Corporate Sustainability Award” organized by the Taiwan Institute of
Sustainable Energy. These prestigious awards once again reaffirmed the Company’s corporate image. There was no
company crisis in 2019 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
173
development of existing businesses 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 a 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
7.6.11 Effects of, Risks Relating to, and Response to the Changes in Management: None
7.6.12 Litigation or Non-litigation Matters
Qualcomm Inc., filed litigation against the Company regarding a dispute over payment of royalties for a
patent licensed on May 17, 2017. In response, the Company filed a counter suit against Qualcomm Inc., in
the United States on July 19, 2017 for violation of the antitrust law. The above case was settled on April 16,
2019, and the two parties agreed to revoke the lawsuit filed against the other party.
In August 2019, Inventec Corporation filed a lawsuit to the Taiwan Taipei District Prosecutors Office against
the Company concerning its former employees who joined the Group. This is deemed as an act of violation
according to the Trade Secret Law and Copyright Law. The Company engaged lawyers to defend its right on
this matter. Currently, the case is still in progress; therefore, the Group cannot make any reasonable
estimation regarding the possible impact on its business operation.
7.6.13 Other Major Risks
Information Security
In order to maintain the competitive advantage and precious intellectual property of the Company, the business
division of Compal Electronics, Inc. followed the “Compal Information Security Management System” to establish
information management processes and protection specifications in accordance with the government information
security related laws and regulations to ensure the interests of the Company, customers and employees, and maintain
the competitiveness of the Company. With the implementation of the Plan-Do-Check-Act (PDCA) management cycle,
we continued to improve our information security system and comply with customer contracts properly to ensure the
information security of the customers. Compal Electronics, Inc. had no proven complaints regarding intrusions to
customer privacy or the loss of customer data in 2019. In response to external changes and the evolving of attack
techniques, we continuously focus and invest in new information security knowledge and technologies for the
effective advanced protection and detection of new information security threats to reduce operational risks.
174
Compal Electronics, Inc. passed the ISO 27001:2005 information security certification in 2005, received the
“Information Security Management System ISO 27001:2005” certification issued by the certification agency British
Standards Institution (BSI) and gradually expanded the certification range while conducting regular tracking twice a
year as well as reviewing audits every three years. In 2015 and 2017, we also passed the ISO 27001:2013 certification
and received the “Information Security Management System ISO 27001:2013” certification, meeting the requirements
of the new specifications.
The scope of certification includes the information headquarters, research and development for portable
computer products, research and development for all-in-one computer products, research and development for
vehicle electronics, and research and development for server products. In April and October of 2019, we also passed
external audit reviews and obtained certifications as valid proof based on the review results, ensuring the effective
operations of the information security management systems. After the integration of the smart device business group
information security system, the Company has further enforced information security policies, as well as executing the
risk assessment of the information assets duly, and maintaining the confidentiality, integrity and availability of
important information assets.
In order to fulfill our commitment to “sustainable operations and customer satisfaction,” the Company has
assembled an “Information Committee” to serve as the highest governing body of information security within the
Company meeting semi-annually for management reviews, the Committee is responsible for coordinating issues
concerning information security projects, policies, goals, and resources, and ensuring participation from all employees
for the protection of information security.
The six major information security goals are measured monthly to monitor the control measures of
information security management.
Business Continuity Planning (“BCP”) recovery exercises are executed regularly to ensure the validity of the
BCP plan and that it meets the system recovery goals.
Internal and external audits are executed regularly every six months to ensure that the management system
is followed and improved continuously.
Risk assessment is executed regularly every six months. Risk evaluation is performed through asset values and
business processes, and risk processing measures are performed for the high-level risks evaluated.
To boost employees’ awareness of information security, our employees are required to receive social
engineering exercises and a briefing on information security and training.
Year
Information security training
completion rate
2018
93.28 %
2019
95.57 %
Others
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 intermittent 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 did not face any significant risk in 2019.
175
7.7 Other material issues: None.
176
VIII. Special Disclosure
8.1
Summary of Affiliated Companies (As of Dec 31, 2019)
8.1.1 Affiliated enterprises report
1. Chart
177
4 1 Mithera Capital Io LP 99.00% 46.42% Compal Broadband Networks Netherlands B.V. 100% Shennona Corporation 100%
178
4 Arcadyan Technology Affiliated Business Organization Chart Henghao Technology Co., Ltd. Affiliated Organization Chart Allied Power Affiliatedcal Business Organization Chart General Life Biotechnology Affiliated Business Organization Chart UniCore Biomedical Affiliated Business Organization Chart Arcadyan Technology (Vietnam) Co., Ltd. 100% Great Arch Group Ltd. Leading Images Limited Astoria Networks Inc. Astoria Networks GmbH 31.6% 100% 100% 100% 100% 100%
2. Backgrounds of affiliated enterprises (December 31, 2019)
Company name
Compal Electronics,
Inc.
Date of
establishment
1984.06.01
No. 581 and 581-1, Ruiguang
Road, Neihu District, Taipei City
Address
Paid-up capital Main business activities or products
Unit: thousand dollars
2000.01.12
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
2008.08.11
Room 511, 5F, Silvercord Tower
1, No. 30 Canton Road, Tsim Sha
Tsui, Kowloon, Hong Kong
Compal
International
Holding Co., Ltd.
Compal
International
Holding (HK)
Limited
Compal Electronics
Technology
(Kunshan) Co., Ltd.
Compal
Information
(Kunshan) Co., Ltd.
Compal
Information
Technology
(Kunshan) Co., Ltd.
Compal Digital
Technology
(Kunshan) Co., Ltd.
2000.05.19
2003.01.07
2003.06.20
2010.03.05
Kunshan Botai
Electronics Co., Ltd.
2001.08.20
Compower Global
Service Co., Ltd.
2012.04.23
Prospect Fortune
Group Ltd.
Jenpal International
Ltd.
Fortune Way
Technology Corp.
2000.01.18
2010.12.27
2015.12.18
Just International
Ltd.
Compal Display
Holding (HK)
Limited
Compal Electronics
(China) Co., Ltd.
1992.08.25
2008.08.11
1995.12.25
Compal Smart
Device (Chongqing)
Co.,LTD.
2018.04.13
NT$44,071.466 Manufacturing, processing and trading
of notebooks, computer monitors, LCD
TVs, cellphones, and electronic parts
General investments
US$53,001
US$74,803
General investments
US$12,000
Production of notebooks, cellphones
and electronics
US$12,000
Production of notebooks, tablets and
electronics
US$24,000
Production of notebooks and
electronics
US$20,000
Production and sale of notebooks,
cellphones and digital products
US$1,000
Production and after-sale service of
notebooks and cellphones
RMB $ 2,000
Maintenance and after-sale service of
notebooks and cellphones
US$1
General investments
US$7,350
General investments
US$14,900
General investments
US$48,010
General investments
US$62,298
General investments
US$37,000
Manufacturing and sale of displays
RMB$60,000
Development, production and sale of
communication equipment,
cellphones, computers and smart
watches, and provision of relevant
technical services
No. 25, Third Avenue, A Zone,
Kunshan Comprehensive Free
Trade Zone, Kunshan, Jiangsu,
China
No. 15, Third Avenue, A Zone,
Kunshan Comprehensive Free
Trade Zone, Kunshan, Jiangsu,
China
No. 58, First Avenue, A Zone,
Kunshan Comprehensive Free
Trade Zone, Kunshan, Jiangsu,
China
No. 9, Second Avenue, A Zone,
Kunshan Comprehensive Free
Trade Zone, Kunshan, Jiangsu,
China
No. 1881, Liji Road, Shipai,
Bacheng Town, Kunshan City,
Jiangsu, China
No. 58, First Avenue, A Zone,
Kunshan Comprehensive Free
Trade Zone, Kunshan, Jiangsu,
China
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
P.O. Box 4342, Road Town,
Tortola, VIRGIN ISLANDS,
BRITISH
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
Room 511, 5F, Silvercord Tower
1, No. 30 Canton Road, Tsim Sha
Tsui, Kowloon, Hong Kong
No. 988 Tongfengdong Road,
Kunshan City Development
Area, Jiangsu, China
NO.18-5,BAOHONG
AVENUE,LIANGJIANG NEW
DISTRICT,CHONGQING,CHINA(N
O.D05,ZONE D,AIR PORT
SECTION OF LIANGLU CUNTAN
FREE TRADE PORT
179
Company name
Compal
Optoelectronics
(Kunshan) Co., Ltd.
Compal System
Trading (Kunshan)
Co., Ltd.
Compal Investment
(Jiangsu) Co., Ltd.
Date of
establishment
2003.02.28
2007.10.24
2011.02.17
Compal Display
Electronics
(Kunshan) Co., Ltd.
Compal
International Ltd.
Compal Electronics
International Ltd.
Smart International
Trading Ltd.
Amexcom
Electronics, Inc.
Mexcom
Technologies, LLC
Mexcom
Electronics, LLC
Big Chance
International Co.,
Ltd.
Center Mind
International Co.,
Ltd.
Compal Investment
(Sichuan) Co., Ltd.
Compal Electronics
(Chengdu) Co., Ltd.
2011.03.30
1997.04.15
1997.04.22
1998.09.03
2011.07.22
2011.07.22
2011.07.22
2011.04.01
2011.04.01
2011.04.02
Compal
Management
(Chengdu) Co., Ltd.
Prisco International
Co., Ltd.
Compal Electronics
(Chongqing) Co.,
Ltd.
2011.05.25
2011.06.02
2011.06.02
Core Profit Holdings
Ltd.
2012.04.02
Address
Paid-up capital Main business activities or products
No. 988 Tongfengdong Road,
Kunshan City Development
Area, Jiangsu, China
No. 435 Weiye Road, Kunshan
City Development Area, Jiangsu,
China
China Business Section,
Kunshan Economic &
Technological Development
Zone, Jiangsu, China (south of
Zhonghuayuan Road and west
of Renmin South Road)
No. 1881, Liji Road, Shipai,
Bacheng Town, Kunshan City,
Jiangsu, China
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
318 N. Carson Street, #208,
Carson City, NV 89701
318 N. Carson Street, #208,
Carson City, NV 89701
318 N. Carson Street, #208,
Carson City, NV 89701
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
US$12,100
Production and sale of LCD TVs
US$1,400
International trade and distribution of
computers and electronic components
US$15,600
General investments
US$15,000
Production and sale of LCD TVs
US$500
US$9,245
Sale of monitors, LCD TVs and related
parts
General investments
US$1
General investments
US$1,000
Sale and maintenance of LCD TVs
US$1
General investments
US$8,234
General investments
US$90,820
General investments
US$80,820
US$80,000
US$800
US$10,000
US$10,000
External investment and consultation
service
Development and production of
notebooks, tablets, digital products,
network switches, wireless APs, and
auto electronics
Management consultation, training,
business information, tax advisory,
investment consultation, and
investment management
General investments
Development, production and sale of
notebooks and related components,
and provision of maintenance and
after-sale services
US$147,000
General investments
No. 6, Shenglong Street, Wuhou
District, Chengdu, Sichuan
No. 88, Sec.1, ZongBao Avenue
Chengdu Hi-tech
Comprehensive Bonded
Zone,Shuangliu County,
Chengdu, Sichuan, China
No. 6, Shenglong Street, Wuhou
District, Chengdu, Sichuan
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
No.10-3,BaoHong Avenue,
YuBei District, ChongQing,
China (NO.A03,ZoneA,AirPort
Section of LiangLu CunTan Free
Trade Port Area)
Vistra Corporate Services
Centre, Wickhams Cay II,
Tortola VG1110, British Virgin
Islands
180
2011.04.01
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
US$80,820
General investments
Company name
Billion Sea Holdings
Ltd.
Date of
establishment
2012.04.02
Mithera Capital Io
LP
2019.06.01
High Shine
Industrial Corp.
2007.07.04
Intelligent Universal
Enterprise Ltd.
2007.08.02
Compal (Vietnam)
Co., Ltd.
2007.10.04
2007.07.03
2007.07.03
Goal Reach
Enterprises Ltd.
Compal
Development &
Management
(Vietnam) Co., Ltd.
Panpal Technology,
Inc.
Gempal
Technology, Inc.
Hong Ji Capital, Inc. 2004.06.28
1997.08.20
1997.10.29
Hong Jin
Investment, Inc.
Compalead
Eletrônica do Brasil
Indústria e
Comércio Ltda.
Compal Electronics
India Private
Limited
Accesstek Inc., Inc.
Arcadyan
Technology
Corporation
Arcadyan
Technology N.A.
Corp.
Arcadyan Germany
Technology GmbH
Arcadyan
Technology
Corporation Korea
Arcadyan do Brasil
Ltda.
2004.07.02
2008.07.15
1996.05.21
2000.08.18
2003.05.09
2003.07.30
2007.04.11
2014.10.16
2015.04.24
Address
Paid-up capital Main business activities or products
US$147,000
General investments
US$5,000
General investments
US$79,700
General investments
US$67,000
General investments
VND1,398,683,500 Production, development, sale and
repair of notebooks, computer
monitors, LCD TVs and electronic
components
General investments
US$12,700
VND216,428,500 Construction and investment of
infrastructures at Ba-Thien Industrial
Zone, Vietnam
NT$5,000,000
General investments
NT$900,000
General investments
NT$1,000,000
General investments
NT$295,000
General investments
BRL20,109
Production and after-sale service of
notebooks, cellphones and electronics
INR386,000
Production and after-sale service of
cellphones
NT$32,369
NT$2,085,350
US$669
EUR25
KRW100,000
Design, manufacturing and trading of
optical disc writers and kits
Research, development, production
and sale of WLAN, integrated digital
home and mobile office products
Sale of wireless network products
Sale and technical support of wireless
networking products
Sale of wireless networking products
BRL9,682
Sale of wireless network products
Vistra Corporate Services
Centre, Wickhams Cay II,
Tortola VG1110, British Virgin
Islands
PO Box 472, 2nd Floor, Harbour
Place, 103 South Church Street,
George Town, Grand Cayman
KY1-1106, Cayman Islands
P.O. Box 4342, Road Town,
Tortola, VIRGIN ISLANDS,
BRITISH
P.O. Box 4342, Road Town,
Tortola, VIRGIN ISLANDS,
BRITISH
Ba Thien Industrial Zone, Binh
Xuyen County, Vinh Phuc
Province, Vietnam
P.O. Box 2221, Road Town,
Tortola, British Virgin Islands
Ba Thien Industrial Zone, Binh
Xuyen County, Vinh Phuc
Province, Vietnam
No. 581, Ruiguang Road, Neihu
District, Taipei City
No. 581, Ruiguang Road, Neihu
District, Taipei City
No. 581, Ruiguang Road, Neihu
District, Taipei City
No. 581, Ruiguang Road, Neihu
District, Taipei City
Rua Kanebo 175, Galpões C1 a
C6, e C12 Distrito Industrial,
Jundiaí, São Paulo, CEP:13213-
090, Brazil
B-4, Ecotech 1 Ext., Surajpur
Kasna Rd., Greater Noida-
201308, UP, India
5F-1, No. 65, Lane 525, Section
1, Guangfu Road, Hsinchu City
8F, No. 8, Section 2, Guangfu
Road, East District, Hsinchu City
5450 Thornwood Dr, Unit J
Floor 2 San Jose CA 95123-
1222, USA
Koelner Strasse 10b D-65760
Eschborn, Germany
103-1109RM SK Ventium 166,
Gosan-ro, Gunpo-si, Gyeonggi-
do, Republic of Korea 15850
Avenida Dr. Delfim Moreira,
356-SL 202, Centro, Minas
Gerais, Santa Rita, Brazil, CEP
37540-000
181
Company name
Arcadyan
Technology Limited
Arcadyan
Technology
Australia Pty Ltd
Arcadyan Holding
(BVI) Corp.
Sinoprime Global
Inc.
Arcadyan
Technology
(Shanghai) Corp.
Arcadyan
Technology
(Vietnam) Co., Ltd.
Arch Holding (BVI)
Corp.
Compal Network
Information
Technology
(Kunshan) Co., Ltd.
Zhi-pal Technology
Inc
Tatung Technology
Inc.
2007.03.07
2004.12.29
2002.04.17
2019.03.26
2007.05.24
2006.06.26
2009.08.10
2008.01.21
2012.12.11
2018.11.22
Tatung Technology
of Japan Co., Ltd.
Quest International
Group Co., Ltd.
Exquisite Electronic
Co., Ltd.
Tatung Home
Appliances (Wu
Jiang) Co., Ltd.
Acbel Telecom Inc. 2004.11.29
2012.02.03
2001.02.13
Leading Images
Limited
Astoria Networks
GmbH
Compal Broadband
Networks Inc.
2008.01.02
2008.09.22
2009.08.19
Date of
establishment
2016.08.16
2018.03.28
Address
Paid-up capital Main business activities or products
183 Fraser Road, Sheffield,
S80JP, United Kingdom
37 Midlothian Street Malvern
East VIC 3145
GBP50
AUD 50
Technical support for wireless
networking products
Sale of wireless networking products
Portcullis TrustNet Chambers,
P.O. Box 3444, Road Town,
Tortola, British Virgin Islands
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
4F, Block 2, No. 80 Huashen
Road, Free Economic Pilot Zone,
Shanghai, China
Ba Thien Industrial Park, Ba
Hien commune, Binh Xuyen
district, Vinh Phuc Province
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
No. 520 Nanbang Road,
Economic & Technological
Development Zone, Kunshan,
Jiangsu, China, China
5F, No. 58, Lane 188, Ruiguang
Road, Neihu District, Taipei City
10F, No. 288, Section 6, Civic
Boulevard, Xinyi District, Taipei
City
1 Chome-2-18, Mita, Minato-ku,
Tokyo-to, Japan
Level 2, Lotemau Centre, Vaea
Street, Apia, Samoa.
Level 2, Lotemau Centre, Vaea
Street, Apia, Samoa.
No. 508 Youming Road, Songling
Town, Wujiang District, Suzhou,
Jiangsu, China
5F, No. 58, Lane 188, Ruiguang
Road, Neihu District, Taipei City
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
Koelner Strasse 10b D-65760
Eschborn, Germany
13F-1, No. 1, Taiyuan 1st Street,
Zhubei City, Hsinchu County
US$59,780
General investments
US$9,050
General investments
US$13,100
Development and sale of WLAN
products
US$9,000
Manufacturing of WLAN products
US$10,550
General investments
US$12,450
Production and sale of WLAN products
NT$349,800
General investments
NT$410,000
Development and sale of digital home
electronics
JPY 15,000
Sale of digital home electronics
US$1,200
General investments
US$1,170
General investments
US$3,350
Production and sale of digital home
electronics
NT$87,990
General investments
US$50
EUR25
NT$668,871
General investments
Sale of wireless networking products
Development and sale of cable
modems, set-top boxes and
communication products
Import and export of broadband
network products and related
components, and provision of technical
support and consultation services
Import and export of broadband
network products and related
components, and provision of technical
support and consultation services
Compal Broadband
Networks Belgium
BVBA
Compal Broadband
Networks
Netherlands B.V.
2017.01.01
Bekersveld 19, 2630 Aartselaar,
BELGIUM
EUR$200
2019.11.25
Het Poortgebouw Beech
Avenue 54-62 Schiphol 1119
PW Netherlands
EUR$200
182
Company name
Henghao
Technology Co., Ltd.
Address
Date of
establishment
2010.12.10 No. 2-1, Wenhua Rd., Hsin-chu
Industrial Park, Hukou Shiang,
Hsin-chu County 30352, Taiwan
R.O.C.
Paid-up capital Main business activities or products
NT$200,150
Manufacturing of electronic
components, computers and
peripherals
2010.12.10
P.O. Box 2221, Road Town,
US$46,882
General investments
Tortola, British Virgin Island
2010.12.14
P.O. Box 2221, Road Town,
US$46,882
General investments
HengHao Holdings
A Co., Ltd.
HengHao Holdings
B Co., Ltd.
HengHao
Optoelectronics
Technology
(Kunshan) Co., Ltd.
HengHao Trading
Co., Ltd.
Lucom Display
Technology
(Kunshan) Ltd.
Mactech Inc.
2010.05.07
2010.12.15
2010.11.01
2000.05.23
Ripal Optotronics
Co, Ltd.
2013.8.26
Rayonnant
Technology Co., Ltd
Compal Rayonnant
Holdings Ltd.
Allied Power
Holding Corp.
2010.03.23
2011.12.02
2005.04.07
Primetek
Enterprises Ltd.
Rayonnant
Technology
Holdings (HK) Co.,
Ltd.
Rayonnant
Technology
(Taicang) Co., Ltd.
Bizcom Electronics,
Inc.
Compal Europe
(Poland) Sp. z o.o.
Auscom
Engineering Inc.
Flight Global
Holding Inc.
Compalead
Electronics B.V.
General Life
Biotechnology Co.,
Ltd.
2005.01.28
2010.03.31
2010.06.04
1992.04.13
2008.03.05
2008.10.27
2007.08.09
2014.02.19
1999.01.16
Tortola, British Virgin Island
NO.520, Nanbang Rd., Kunshan
City, Jiangsu Province, China
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
NO.520, Nanbang Rd., Kunshan
City, Jiangsu Province, China
No. 89, Land 36, Section 2,
Tanxing Road, Tanyang Village,
Tanzi District, Taichung City
2F, No. 256, Section 3,
Zhongzheng Road, Rende
District, Tainan City
No. 581, Ruiguang Road, Neihu
District, Taipei City
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
P.O. Box 4342, Road Town,
Tortola, VIRGIN ISLANDS,
BRITISH
P.O. Box 2221, Road Town,
Tortola, British Virgin Island.
Room 1904, 19 F, phuket
commercial centre, 5 Hanoi
road, Tsim Sha Tsui, Kowloon,
Hong Kong
No.9 Tainan Road,Industry Park,
Taicang, Jiangsu, China
1171 Montague Express Way,
Milpitas, CA 95035, USA
Techniczna 792-518 Lodz,
Poland
One Dell Way, MSC PS2-88,
Round Rock, Texas 78682, USA
P.O. Box 4342 Road Town,
Tortola, VIRGIN ISLANDS,
BRITISH
Prins Bernhardplein 200, 1097
JB Amsterdam, the Netherlands
No.581-1, Ruiguang Rd., Neihu
Dist., Taipei City
183
US$40,000
Production touch panels and related
components
US$10
Trading
US$15,000
Production touch panels and LCD
displays
NT$411,458
NT$60,000
Manufacturing of machinery and
lighting equipment, retail sale of
machinery, and international trade
Manufacturing of home appliances and
audiovisual electronics
NT$295,000
US$12,500
Manufacturing and sale of computers
and peripherals
General investments
US$21,151
General investments
US$3,151
General investments
US$18,000
General investments
US$18,000
US$100
PLN6,804
US$3,000
US$89,755
Development and production of
aluminum and magnesium alloy-based
products
Marketing and after-sale of computer
monitors and notebooks
Maintenance and after-sale service of
notebooks and cellphones
Development of notebooks and related
components, hardware and software
General investments
US$6,427
General investments
NT$300,000
Production and wholesaling of medical
equipment
Address
Paid-up capital Main business activities or products
Company name
Rapha Bio Ltd.
Date of
establishment
2011.09.29
Etrade
Management Co.,
Ltd.
Compal
Communications
(Nanjing) Co., Ltd.
Compal Digital
Communications
(Nanjing) Co., Ltd.
2000.07.05
2003.09.23
2004.03.26
Compal Wireless
Communications
(Nanjing) Co., Ltd.
Webtek Technology
Co., Ltd.
Forever Young
Technology Inc.
2006.02.13
2000.07.07
2004.11.25
Giant Rank Trading
Limited
HANHELT
Communications
(Nanjing) Co., Ltd.
2004.11.25
2009.03.11
Unicom Global. Inc 2006.03.21
Palcom
International
Corporation
Compal Electronics
(Holding) Ltd.
UniCore Biomedical
Co., Ltd.
Raycore Biotech
Co., Ltd.
Shennona
Corporation
HippoScreen
Neurotech Corp.
2006.03.22
1997.04.22
2018.01.25
2017.10.18
2018.01.10
2019.01.28
5F, No.240, Shinshu Rd., Shin
Juang Dist., New Taipei City
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
No.68-2, Suyuan Road, Export
Processing Zone (South Area).
Jiangning Nanjing China
No.77 Gaohu Street, Jiangning
Economic & Technological
Development Zone, Nanjing,
China
No.68-2, Suyuan Road, Export
Processing Zone (South Area).
Jiangning Nanjing China
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
P.O. Box 4342, Road Town,
Tortola, VIRGIN ISLANDS,
BRITISH
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
Room 301 3rd floor 43#,
Headquarters Park,N0.70#
Phoenix Road Jiangning District,
Nanjing, China
No. 581, Ruiguang Road, Neihu
District, Taipei City
8F, No. 385, Yangguang St.,
Neihu District, Taipei City
P.O. Box 2221, Road Town,
Tortola, British Virgin Island
1F, No. 50, Section 1, Jiuzong
Road, Neihu District, Taipei city
No. 581-1, Ruiguang Road,
Neihu District, Taipei City
1171 Montague Express Way,
Milpitas, CA 95035, USA
No. 581-1, Ruiguang Road,
Neihu District, Taipei City
SHENNONA CO.,
LTD.
2019.03.21
No. 581-1, Ruiguang Road,
Neihu District, Taipei City
NT$6,000
Aco Smartcare
Co.,Ltd.
2019.02.20
No. 141, Ln. 89, Sec. 1, Guangfu
Rd., East Dist., Hsinchu City
NT$30,748
184
NT$12,750
In vitro test supplies and equipment
US$71,900
General investments
US$22,000
Production of cellphones and tablets
US$5,800
Production of cellphones and tablets
US$49,000
Production of cellphones and tablets
US$100
General investments
US$50
General investments
US$ -
Sale of cellphones
US$2,000
Development of electronic
communication equipment
NT$100,000
NT$100,000
Manufacturing and retail of computers
and electronic components
Sale of cellphones
US$1
General investments
NT$200,000
NT$25,000
US$1,100
NT$600
Management consultation, leasing, and
wholesale/retail of medical equipment
Wholesaling and retailing of veterinary
drugs
Medical care IOT business
Management consultation, leasing,
wholesale/retail of Precision
Instruments and International Trade
Management consultation, leasing,
wholesale/retail of Precision
Instruments and International Trade
wholesale/retail of Computer
Software, Software Design Services,
Data Processing Services, Electrical
Machinery, Supplies Manufacturing,
wholesale/retail of Electronic
Materials, wholesale/retail of Precision
Instruments, Product Designing,
Biotechnology Services and
International Trade
3. Business activities and relationships of affiliated enterprises (December 31, 2019)
Industry
category
Investment
holding
company
Name of affiliated enterprise
Business relationship with other affiliated enterprises
Compal International Holding Co., Ltd.
Compal International Holding (HK)
Limited
Jenpal International Ltd.
Fortune Way Technology Corp.
Just International Ltd.
Compal Display Holding (HK) Limited
Compal Investment (Jiangsu) Co., Ltd.
Compal Electronics International Ltd.
Mexcom Technologies, LLC
Mexcom Electronics, LLC
Big Chance International Co., Ltd.
Center Mind International Co., Ltd.
Compal Investment (Sichuan) Co., Ltd.
Prisco International Co., Ltd.
Core Profit Holdings Ltd.
Billion Sea Holdings Ltd.
Mithera Capital Io LP
High Shine Industrial Corp.
Intelligent Universal Enterprise Ltd.
Goal Reach Enterprises Ltd.
Panpal Technology Corporation
Gempal Technology Co., Ltd.
Hong Ji Capital Co., Ltd.
Hong Jin Investment Co., Ltd.
Compal Rayonnant Holdings Ltd.
Allied Power Holding Corp.
Flight Global Holding Inc.
Compalead Electronics B.V.
Etrade Management Co., Ltd.
Compal Electronics (Holding) Ltd.
Arcadyan Holding (BVI) Corp.
Arch Holding (BVI) Corp.
Zhi-pal Technology Inc
Holds investment interest in Compal International Holding (HK)
Limited, Prospect Fortune Group Ltd., Jenpal International Ltd., and
Fortune Way Technology Corp.
Holds investment interest in Compal Electronics Technology
(Kunshan) Co., Ltd., Compal Information (Kunshan) Co., Ltd., Compal
Information Technology (Kunshan) Co., Ltd.,Compal Digital
Technology (Kunshan) Co., Ltd., Kunshan Botai Electronics Co., Ltd.,
and Compal Investment (Jiangsu, China) Co., Ltd.
General investments
General investments
Holds investment interest in Compal Display Holding (HK) Limited,
Compal International Ltd., and Compal Electronics International Ltd.
Holds investment interest in Compal Electronics (China) Co., Ltd.,
Compal Optoelectronics (Kunshan) Co., Ltd., Compal System Trading
(Kunshan) Co., Ltd., and Compal Investment (Jiangsu, China) Co., Ltd.
Holds investment interest in Compal Display Electronics (Kunshan)
Co., Ltd.
Holds investment interest in Smart International Trading Ltd.,
Amexcom Electronics, Inc., Mexcom Technologies, LLC, and Mexcom
Electronics, LLC
General investments
General investments
Holds investment interest in Center Mind International Co., Ltd. and
Prisco International Co., Ltd.
Holds investment interest in Compal Investment (Sichuan) Co., Ltd.
Holds investment interest in Compal Electronics (Chengdu) Co., Ltd.
and Compal Management (Chengdu) Co., Ltd.
Holds investment interest in Compal Electronics (Chongqing) Co., Ltd.
Holds investment interest in Billion Sea Holdings Ltd.
Holds investment interest in High Shine Industrial Corp. and Mithera
Capital Io LP.
General investments
Holds investment interest in Intelligent Universal Enterprise Ltd. and
Goal Reach Enterprises Ltd.
Holds investment interest in Compal (Vietnam) Co., Ltd.
Holds investment interest in Compal Development & Management
(Vietnam) Co., Ltd.
General investments
General investments
General investments
General investments
General investments
General investments
General investments
General investments
General investments
General investments
Holds investment interest in Sinoprime Global Inc., Arch Holding
(BVI) Corp., and Shanghai Guangzhi Technology Development Co.,
Ltd.
Holds investment interest in Compal Network Information
Technology (Kunshan) Co., Ltd.
Holds investment interest in Compal Broadband Networks Inc. and
Arcadyan do Brasil Ltda.
185
Industry
category
Name of affiliated enterprise
Business relationship with other affiliated enterprises
Quest International Group Co., Ltd.
Exquisite Electronic Co., Ltd.
Acbel Telecom Inc.
Holds investment interest in Exquisite Electronic Co., Ltd.
Holds investment interest in Tatung Home Appliances (Wu Jiang) Co.,
Ltd.
Holds investment interest in Leading Images Limited and Great Arch
Group Ltd.
Holds investment interest in Astoria Networks GmbH
Holds investment interest in Arcadyan Technology (Vietnam) Co., Ltd.
General investments
Leading Images Limited
Sinoprime Global Inc.
Rayonnant Technology Holdings (HK) Co.,
Ltd.
HengHao Holdings A Co., Ltd.
General investments
HengHao Holdings B Co., Ltd.
General investments
Primetek Enterprises Ltd.
General investments
Prospect Fortune Group Ltd.
General investments
Compal International Ltd.
General investments
Webtek Technology Co., Ltd.
General investments
Forever Young Technology Inc.
General investments
Smart International Trading Ltd.
General investments
Compal System Trading (Kunshan) Co.,
International trade and distribution of computers and electronic
Ltd.
components
Giant Rank Trading Limited
Sale of cellphones
Palcom International Corporation
Sale of cellphones
Sale of wireless networking products
Arcadyan Technology N.A. Corp.
Arcadyan Technology Corporation Korea Sale of wireless networking products
Sale of wireless networking products
Arcadyan do Brasil Ltda.
Sale of wireless networking products
Arcadyan Technology Australia Pty Ltd.
Development and sale of digital home electronics
Tatung Technology Inc.
Sale of digital home electronics
Tatung Technology of Japan Co., Ltd.
Sale of wireless networking products
Astoria Networks GmbH
Sale and technical support of wireless networking products
Arcadyan Germany Technology GmbH
Trading
HengHao Trading Co., Ltd.
Import and export of broadband network products and related
Compal Broadband Networks Belgium
components, and provision of technical support and consultation
BVBA
services
Import and export of broadband network products and related
components, and provision of technical support and consultation
services
wholesale/retail of Computer Software, Software Design Services,
Data Processing Services, Electrical Machinery, Supplies
Manufacturing, wholesale/retail of Electronic Materials,
wholesale/retail of Precision Instruments, Product Designing,
Biotechnology Services, International Trade
Manufacturing, processing and trading of notebooks, computer
monitors, LCD TVs, cellphones, and electronic parts
Production of notebooks, cellphones and electronics
Compal Broadband Networks
Netherlands B.V.
Compal Electronics, Inc.
Aco Smartcare Co.,Ltd.
Compal Electronics Technology (Kunshan)
Co., Ltd.
Compal Information (Kunshan) Co., Ltd. Production of notebooks, tablets and electronics
Compal Information Technology
(Kunshan) Co., Ltd.
Compal Digital Technology (Kunshan) Co.,
Ltd.
Kunshan Botai Electronics Co., Ltd.
Compal Electronics (China) Co., Ltd.
Compal Smart Device (Chongqing) Co.,
Ltd.
Production of notebooks and electronics
Production and after-sale service of notebooks and cellphones
Manufacturing and sale of displays
Development, production and sale of communication equipment,
cellphones, computers and smart watches, and provision of relevant
technical services
Production and sale of LCD TVs
Production and sale of notebooks, cellphones and digital products
Compal Optoelectronics (Kunshan) Co.,
186
Electronic
products
wholesaling
Electronic
products
manufacturing
Industry
category
Name of affiliated enterprise
Business relationship with other affiliated enterprises
Ltd.
Compal Display Electronics (Kunshan)
Co., Ltd.
Amexcom Electronics, Inc.
Compal Electronics (Chengdu) Co., Ltd.
Production and sale of LCD TVs
Sale and maintenance of LCD TVs
Development and production of notebooks, tablets, digital products,
network switches, wireless APs, and auto electronics
Compal Electronics (Chongqing) Co., Ltd. Development, production and sale of notebooks and related
Compal (Vietnam) Co., Ltd.
Compalead Eletrônica do Brasil Indústria
e Comércio Ltda.
Unicom Global. Inc
Accesstek Inc.
Arcadyan Technology Corp.
Compal Broadband Networks Inc.
Henghao Technology Co., Ltd.
Mactech Co., Ltd.
components, and provision of maintenance and after-sale services
Production, development, sale and repair of notebooks, computer
monitors, LCD TVs and electronic components
Production and after-sale service of notebooks, cellphones and
electronics
Manufacturing and retail of computers and electronic components
Design, manufacturing and trading of optical disc writers and kits
Research, development, production and sale of WLAN, integrated
digital home and mobile office products
Development and sale of cable modems, set-top boxes and
communication products
Manufacturing of electronic components, computers and peripherals
Manufacturing of machinery and lighting equipment, retail sale of
machinery, and international trade
Manufacturing and sale of computers and peripherals
Production of cellphones and tablets
Production of cellphones and tablets
Production of cellphones and tablets
Rayonnant Technology Co., Ltd.
Compal Communications (Nanjing) Co.,
Ltd.
Compal Digital Communications (Nanjing)
Co., Ltd.
Compal Wireless Communications
(Nanjing) Co., Ltd.
RiPAL Optotronics Co., Ltd.
Compal Electronics India Private Limited Production and after-sale service of cellphones
Compal Information Technology
(Kunshan) Co., Ltd.
Arcadyan Technology (Vietnam) Co., Ltd. Production and sale of WLAN products
Tatung Home Appliances (Wu Jiang) Co.,
Ltd.
HengHao Optoelectronics Technology
(Kunshan) CO., LTD
Rayonnant Technology (Taicang) Co., Ltd. Development and production of aluminum and magnesium alloy-
Manufacturing of home appliances and audiovisual electronics
Production touch panels and related components
Production and sale of digital home electronics
Production and sale of WLAN products
Technology
service
Lucom Display Technology (Kunshan) Ltd. Production touch panels and LCD displays
Compower Global Service Co., Ltd.
Compal Management (Chengdu) Co., Ltd. Management consultation, training, business information, tax
Maintenance and after-sale service of notebooks and cellphones
based products
HANHELT Communications (Nanjing) Co.,
Ltd.
Bizcom Electronics, Inc.
Compal Europe (Poland) Sp. z o.o.
Auscom Engineering Inc.
Arcadyan Technology (Shanghai) Corp.
Arcadyan Technology Limited
Compal Development & Management
(Vietnam) Co., Ltd.
advisory, investment consultation, and investment management
Development of electronic communication equipment
Marketing and after-sale of computer monitors and notebooks
Maintenance and after-sale service of notebooks and cellphones
Development of notebooks and related components, hardware and
software
Development and sale of WLAN products
Technical support for wireless networking products
Construction and investment of infrastructures at Ba-Thien Industrial
Zone, Vietnam
UniCore Biomedical Co., Ltd.
Management consultation, leasing, and wholesale/retail of medical
equipment
187
Construction
and
development
Leading and
management
Industry
category
Name of affiliated enterprise
Business relationship with other affiliated enterprises
consulting
HippoScreen Neurotech Corp.
Management consultation, leasing, wholesale/retail of Precision
Instruments and International Trade
SHENNONA CO., LTD.
Management consultation, leasing, wholesale/retail of Precision
Raycore Biotech Co., Ltd.
Instruments and International Trade
Wholesaling and retailing of veterinary drugs
General Life Biotechnology Co., Ltd.
Rapha Bio Ltd.
Manufacturing and sale of medical equipment
Sale of test instruments and supplies
Shennona Corporation
Medical care IOT business
Wholesale and
retail of
veterinary
drugs
Manufacturing
and sale of
medical
equipment
Medical care
4. Directors, supervisors, and President of affiliated enterprises
December 31, 2019 Unit: NTD thousands; shares; %
Company name
Title
Name or name of representative
Compal Electronics,
Inc.
Chairman
Director and
President
Director
Director
Sheng-Hsiung Hsu
Jui-Tsung Chen
Binpal Investment Co., Ltd.
(Representative: Wen-Being Hsu )
Kinpo Electronics, Inc.
(Representative: Shyh-Yong Shen)
Charng-Chyi Ko
Sheng-Chieh Hsu
Yen-Chia Chou
Chung-Pin Wong
Director
Director
Director
President and
Director
Director
Chiung-Chi Hsu
Director
Ming-Chih Chang
Director
Anthony Peter Bonadero
Sheng-Hua Peng
Director
Independent Director Min-Chih Hsuan
Independent Director Duei Tsai
Independent Director Duh Kung Tsai
Representative
Representative
Director
Compal
International
Holding Co., Ltd.
Compal
International
Holding (HK)
Limited
Compal Electronics
Technology
(Kunshan) Co., Ltd.
Director
Director
Director
Chairman
Director
Wen-Being Hsu
Shyh-Yong Shen
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal International Holding Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal International Holding Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal International Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal International Holding (HK) Limited
(Representative: Jui-Tsung Chen )
188
Shares held
Shares (Note)
8,975,401
35,352,587
5,000,000
151,628,692
7,896,867
8,714,297
8,022,874
6.618,618
2,117,731
1,919,489
0
835,000
0
0
0
5,000,000
0
Shareholding
percentage
0.20%
0.80%
0.11%
3.44%
0.18%
0.20%
0.18%
0.15%
0.05%
0.04%
0%
0.02%
0.00%
0.00%
0.00%
0.11%
0.00%
53,001,000
100.00%
53,001,000
100.00%
74,802,500
100.00%
74,802,500
100.00%
NT$359,760
100.00%
NT$359,760
100.00%
Company name
Title
Name or name of representative
Compal Information
(Kunshan) Co., Ltd.
Compal Information
Technology
(Kunshan) Co., Ltd.
Compal Digital
Technology
(Kunshan) Co., Ltd.
Kunshan Botai
Electronics Co., Ltd.
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
Compower Global
Service Co., Ltd.
President
Managing Director
Supervisor
President
Director
Director
Jenpal International
Ltd.
Director
Director
Fortune Way
Director
Compal International Holding (HK) Limited
(Representative: Chung-Pin Wong)
Compal International Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal International Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal International Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal International Holding (HK) Limited
(Representative: Chung-Pin Wong)
Compal International Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal International Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal International Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal International Holding (HK) Limited
(Representative: Chung-Pin Wong)
Compal International Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal International Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal International Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal International Holding (HK) Limited
(Representative: Chung-Pin Wong)
Compal International Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal International Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal International Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal International Holding (HK) Limited
(Representative: Ming-Chih Chang)
Compal International Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Kunshan Botai Electronics Co., Ltd.
(Representative: Chung-Pin Wong)
Kunshan Botai Electronics Co., Ltd.
(Representative: Cheng-Chiang Wang)
Ming-Chih Chang
Compal International Holding Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal International Holding Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal International Holding Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal International Holding Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal International Holding Co., Ltd.
189
Shares held
Shares (Note)
Shareholding
percentage
NT$359,760
100.00%
NT$359,760
100.00%
0
0.00%
NT$359,760
100.00%
NT$359,760
100.00%
NT$359,760
100.00%
NT$359,760
100.00%
0
0.00%
NT$719,520
100.00%
NT$719,520
100.00%
NT$719,520
100.00%
NT$719,520
100.00%
0
0.00%
NT$599,600
100.00%
NT$599,600
100.00%
NT$599,600
100.00%
NT$599,600
100.00%
0
NT$29,980
0.00%
100.00%
NT$29,980
100.00%
NT$29,980
100.00%
NT$29,980
0
NT$8,607
NT$8,607
0
100.00%
0.00%
100.00%
100.00%
0.00%
1,000
100.00%
7,350,000
100.00%
7,350,000
14,900,000
100.00%
100.00%
Prospect Fortune
Group Ltd.
100.00%
1,000
Company name
Title
Name or name of representative
Shares held
Shares (Note)
Shareholding
percentage
Technology Corp.
Just International
Ltd.
Compal Display
Holding (HK)
Limited
Director
Director
Director
Director
Director
Compal Electronics
(China) Co., Ltd.
Chairman
Compal Smart
Device (Chongqing)
Co., Ltd.
Compal
Optoelectronics
(Kunshan) Co., Ltd.
Compal System
Trading (Kunshan)
Co., Ltd.
Compal Investment
(Jiangsu) Co., Ltd.
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
(Representative: Sheng-Hsiung Hsu )
Compal International Holding Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Just International Ltd.
(Representative: Sheng-Hsiung Hsu )
Just International Ltd.
(Representative: Jui-Tsung Chen )
Compal Display Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal Display Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal Display Holding (HK) Limited
(Representative: Sheng-Hua Peng)
Compal Display Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Fu-Chuan Chang
Compal Electronics (China) Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics (China) Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal Electronics (China) Co., Ltd.
(Representative: Sheng-Hua Peng)
Compal Electronics (China) Co., Ltd.
(Representative: Cheng-Chiang Wang)
Sheng-Hua Peng
Compal Display Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal Display Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal Display Holding (HK) Limited
(Representative: Sheng-Hua Peng)
Compal Display Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Fu-Chuan Chang
Compal Display Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal Display Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal Display Holding (HK) Limited
(Representative: Chung-Pin Wong)
Compal Display Holding (HK) Limited
(Representative: Cheng-Chiang Wang)
Ming-Chih Chang
Compal International Holding (HK) Limited
& Compal Display Holding (HK) Limited
(Representative: Sheng-Hsiung Hsu )
Compal International Holding (HK) Limited
& Compal Display Holding (HK) Limited
(Representative: Jui-Tsung Chen )
Compal International Holding (HK) Limited
& Compal Display Holding (HK) Limited
190
14,900,000
100.00%
48,010,000
100.00%
48,010,000
100.00%
62,297,500
100.00%
62,297,500
100.00%
NT$1,109,260
100.00%
NT$1,109,260
100.00%
NT$1,109,260
100.00%
NT$1,109,260
100.00%
0
0.00%
NT$258,198
100.00%
NT$258,198
100.00%
NT$258,198
100.00%
NT$258,198
100.00%
0
0.00%
NT$362,758
100.00%
NT$362,758
100.00%
NT$362,758
100.00%
NT$362,758
100.00%
0
NT$41,972
0.00%
100.00%
NT$41,972
100.00%
NT$41,972
100.00%
NT$41,972
0
100.00%
0.00%
NT$467,688
100.00%
NT$467,688
100.00%
NT$467,688
100.00%
Company name
Title
Name or name of representative
Shares held
Shares (Note)
Shareholding
percentage
Supervisor
President
Chairman
Director
Director
Supervisor
President
Director
Director
Director
Director
Compal Display
Electronics
(Kunshan) Co., Ltd.
Compal
International
Ltd.
Compal Electronics
International Ltd.
Smart International
Trading Ltd.
Director
Amexcom
Electronics, Inc.
Mexcom
Technologies, LLC
Mexcom
Electronics, LLC
Big Chance
International Co.,
Ltd.
Center Mind
International Co.,
Ltd.
Director
Director
Director
Director
President
Director
Director
Director
Director
Director
Director
Compal Investment
(Sichuan) Co., Ltd.
Chairman
Director
Director
(Representative: Sheng-Hua Peng)
Compal International Holding (HK) Limited
& Compal Display Holding (HK) Limited
(Representative: Ching-Hsiung Lu)
Sheng-Hua Peng
Compal Investment (Jiangsu, China) Co.,
Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal Investment (Jiangsu, China) Co.,
Ltd.
(Representative: Jui-Tsung Chen )
Compal Investment (Jiangsu, China) Co.,
Ltd.
(Representative: Sheng-Hua Peng)
Compal Investment (Jiangsu, China) Co.,
Ltd.
(Representative: Ching-Hsiung Lu)
Sheng-Hua Peng
Just International Ltd.
(Representative: Sheng-Hsiung Hsu )
Just International Ltd.
(Representative: Jui-Tsung Chen )
Just International Ltd.
(Representative: Sheng-Hsiung Hsu )
Just International Ltd.
(Representative: Jui-Tsung Chen )
Compal Electronics International Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics International Ltd.
(Representative: Jui-Tsung Chen )
Compal Electronics International Ltd.
(Representative: Sheng-Hua Peng)
Compal Electronics International Ltd.
(Representative: Hsin-Kung Mao)
Compal Electronics International Ltd.
(Representative: Chung-Pin Wong)
Hsin-Kung Mao
Compal Electronics International Ltd.
(Representative: Hsin-Kung Mao )
Compal Electronics International Ltd.
(Representative: Hsin-Kung Mao )
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Big chance International Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Big chance International Co., Ltd.
(Representative: Jui-Tsung Chen )
Center Mind International Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Center Mind International Co., Ltd.
(Representative: Jui-Tsung Chen )
Center Mind International Co., Ltd.
191
NT$467,688
100.00%
0
0.00%
NT$449,700
100.00%
NT$449,700
100.00%
NT$449,700
100.00%
NT$449,700
100.00%
0
500,000
0.00%
100.00%
500,000
100.00%
9,245,000
100.00%
9,245,000
100.00%
1,000
1,000
100.00%
100.00%
1,000,000
100.00%
1,000,000
100.00%
1,000,000
0
NT$30
100.00%
0.00%
100.00%
NT$246,855
100.00%
90,820,000
100.00%
90,820,000
100.00%
80,820,000
100.00%
80,820,000
100.00%
NT$2,422,984
100.00%
NT$2,422,984
NT$2,422,984
100.00%
100.00%
Company name
Title
Name or name of representative
Shares held
Shares (Note)
Shareholding
percentage
Compal Electronics
(Chengdu) Co., Ltd.
Compal
Management
(Chengdu) Co., Ltd.
Prisco International
Co., Ltd.
Compal Electronics
(Chongqing) Co.,
Ltd.
Core Profit Holdings
Ltd.
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Director
Director
Chairman
Director
Director
Supervisor
President
Director
Director
Billion Sea Holdings
Ltd.
Director
Director
Director
Mithera Capital Lo
LP
High Shine
Industrial Corp.
Director
Director
Intelligent Universal
Enterprise Ltd.
Director
Director
(Representative: Chung-Pin Wong)
Center Mind International Co., Ltd.
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal Investment (Sichuan) Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal Investment (Sichuan) Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal Investment (Sichuan) Co., Ltd.
(Representative: Chung-Pin Wong)
Compal Investment (Sichuan) Co., Ltd.
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal Investment (Sichuan) Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal Investment (Sichuan) Co., Ltd.
(Representative: Jui-Tsung Chen )
Compal Investment (Sichuan) Co., Ltd.
(Representative: Chung-Pin Wong)
Compal Investment (Sichuan) Co., Ltd.
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Big chance International Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Big chance International Co., Ltd.
(Representative: Jui-Tsung Chen )
Prisco International Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Prisco International Co., Ltd.
(Representative: Jui-Tsung Chen )
Prisco International Co., Ltd.
(Representative: Chung-Pin Wong)
Prisco International Co., Ltd.
(Representative: Ching-Hsiung Lu)
Ming-Chih Chang
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Core Profit Holdings Ltd.
(Representative: Sheng-Hsiung Hsu )
Core Profit Holdings Ltd.
(Representative: Jui-Tsung Chen )
Billion Sea Holdings Ltd.
(Representative: David Liu )
Compal Electronics, Inc. & Billion Sea
Holdings Ltd.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc. & Billion Sea
Holdings Ltd.
(Representative: Jui-Tsung Chen )
High Shine Industrial Corp.
(Representative: Sheng-Hsiung Hsu )
High Shine Industrial Corp.
192
NT$2,422,984
100.00%
0
0.00%
NT$2,398,400
100.00%
NT$2,398,400
100.00%
NT$2,398,400
100.00%
NT$2,398,400
100.00%
0
NT$23,984
0.00%
100.00%
NT$23,984
100.00%
NT$23,984
100.00%
NT$23,984
0
10,000,000
100.00%
0.00%
100.00%
10,000,000
100.00%
NT$299,800
100.00%
NT$299,800
100.00%
NT$299,800
100.00%
NT$299,800
100.00%
0
0.00%
147,000,000
100.00%
147,000,000
100.00%
147,000,000
100.00%
147,000,000
100.00%
NT$149,900
99.00%
79,700,000
100.00%
79,700,000
100.00%
67,000,000
67,000,000
100.00%
100.00%
Company name
Title
Name or name of representative
Compal (Vietnam)
Co., Ltd.
Goal Reach
Enterprises Ltd.
Director
Director
Director
Director
Compal
Development &
Management
(Vietnam) Co., Ltd.
Panpal Technology Chairman
Director and
President
Director
Supervisor
Gempal Technology
Co., Ltd.
Chairman
Hong Ji
Capital Co., Ltd.
Director and
President
Director
Supervisor
Chairman
Director and
President
Director
Supervisor
Hong Jin
Investment Co., Ltd.
Chairman
Director and
President
Director
Supervisor
President
President
Director
Director
Supervisor
Chairman
Director
Compalead
Eletrônica do Brasil
Indústria e
Comércio Ltda.
Compal Electronics
India Private
Limited
Accesstek Inc.
Arcadyan
Technology Corp.
(Representative: Jui-Tsung Chen )
Intelligent Universal Enterprise Ltd.
(Representative: Jui-Tsung Chen )
High Shine Industrial Corp.
(Representative: Sheng-Hsiung Hsu )
High Shine Industrial Corp.
(Representative: Jui-Tsung Chen )
Goal Reach Enterprises Ltd.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Sheng-Chieh Hsu)
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
(Representative: Sheng-Chieh Hsu)
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
(Representative: Sheng-Chieh Hsu)
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Sheng-Chieh Hsu)
Hsiao-Li Chao
Guo-Dung Yu
UJJAWAL SINGH KATIYAR
Cheng-Chiang Wang
Panpal Technology Corporation
(Representative: Ching-Hsiung Lu)
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
193
Shares held
Shares (Note)
Shareholding
percentage
NT$2,008,660
100.00%
12,700,000
100.00%
12,700,000
100.00%
NT$380,746
100.00%
500,000,000
100.00%
500,000,000
100.00%
500,000,000
100.00%
500,000,000
100.00%
90,000,000
100.00%
90,000,000
100.00%
90,000,000
100.00%
90,000,000
100.00%
100,000,000
100.00%
100,000,000
100.00%
100,000,000
100.00%
100,000,000
100.00%
29,500,000
100.00%
29,500,000
100.00%
29,500,000
100.00%
29,500,000
100.00%
0
0
0
0
159,742
41,304,504
41,304,504
0.00%
0.00%
0.00%
0.00%
4.94%
19.81%
19.81%
Company name
Title
Name or name of representative
Director
Director
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Chung-Pao Liu)
Arcadyan
Technology N.A.
Corp.
Arcadyan Germany
Technology GmbH
Arcadyan
Technology
Corporation Korea
Arcadyan do Brasil
Ltda.
Arcadyan
Technology Limited
Arcadyan
Technology
Australia Pty Ltd.
Arcadyan Holding
(BVI) Corp.
Sinoprime Global
Inc.
Arcadyan
Technology
(Vietnam)Co., Ltd
Arch
Holding
(BVI) Corp.
Arcadyan
Technology
(Shanghai) Corp.
Che-He Wei
Compal Electronics, Inc.
(Representative: Chao-Peng Tseng)
Director
Director and
President
Independent Director Ying-Jen Li
Independent Director Ching-Jang Wen
Independent Director Wen-An Yang
Director
Director
President
Managers
Director
Arcadyan Technology Corp.
(Representative: Jui-Tsung Chen )
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Chao-Peng Tseng
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Managers
Nien-Che, Hsiung
Director
Director
Director
Director
Director
Chairman
Director
Chairman
Director
Chairman
Director
Chairman
Director
Chairman
Director
Director
Director
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Technology Corp.
(Representative: Keng-Tien Lin)
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Technology Corp.
(Representative: Fong-Yu, Lu) )
Arcadyan Technology Corp.
(Representative: Linda, Chu )
Arcadyan Technology Corp.
(Representative: Jui-Tsung Chen )
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Holding (BVI) Corp.
(Representative: Jui-Tsung Chen )
Arcadyan Holding (BVI) Corp.
(Representative: Chao-Peng Tseng)
Sinoprime Global Inc.
(Representative: Chao-Peng Tseng)
Arcadyan Holding (BVI) Corp.
(Representative: Jui-Tsung Chen )
Arcadyan Holding (BVI) Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Holding (BVI) Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Holding (BVI) Corp.
(Representative: Ching-Hsiung Lu)
Arcadyan Holding (BVI) Corp.
(Representative: Fong-Yu, Lu) )
Arcadyan Holding (BVI) Corp.
194
Shares held
Shares (Note)
Shareholding
percentage
41,304,504
19.81%
41,304,504
0
41,304,504
0
0
0
1,000
1,000
0
500
19.81%
0.00%
19.81%
0.00%
0.00%
0.00%
100.00%
100.00%
0.00%
100.00%
20,000
100.00%
964,510
99.00%
50,000
50,000
50,000
50,000
50,000
100.00%
100.00%
100.00%
100.00%
100.00%
59,780,148
100.00%
59,780,148
100.00%
9,050,000
100.00%
9,050,000
100.00%
NT$269,820
100.00%
34,900
34,900
100.00%
100.00%
NT$392,738
100.00%
NT$392,738
100.00%
NT$392,738
NT$392,738
100.00%
100.00%
Company name
Title
Name or name of representative
Shares held
Shares (Note)
Shareholding
percentage
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Director
Supervisor
President
Chairman
Director
Director
Director
Director
Director
Director
Supervisor
Supervisor
Supervisor
President
Director
Director
Compal Network
Information
Technology
(Kunshan) Co., Ltd.
Zhi-pal Technology
Inc
Tatung Technology
Inc.
Tatung Technology
of Japan Co., Ltd.
Quest International
Group Co., Ltd.
Director
Director
Exquisite Electronic
Co., Ltd.
Director
(Representative: Chung-Pao, Liu)
Arcadyan Holding (BVI) Corp.
(Representative: Chien-Lin Chen )
Arcadyan Holding (BVI) Corp.
(Representative: Shih-Wei Huang)
Chung-Pao, Liu
Arch Holding (BVI) Corp.
(Representative: Fong-Yu, Lu) )
Arch Holding (BVI) Corp.
(Representative: Jui-Tsung Chen )
Arch Holding (BVI) Corp.
(Representative: Chao-Peng Tseng)
Arch Holding (BVI) Corp.
(Representative: Ching-Hsiung Lu)
Chung-Pao, Liu
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Technology Corp.
(Representative: Sheng-Hua Peng)
Arcadyan Technology Corp.
(Representative: Ching-Hsiung Lu)
Arcadyan Technology Corp.
(Representative: Fong-Yu, Lu) )
Arcadyan Technology Corp.
(Representative: Shih-Wei Huang)
Chao-Peng Tseng
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Technology Corp.
(Representative: Fong-Yu, Lu) )
Arcadyan Technology Corp.
(Representative: Chien-Lin Chen)
Arcadyan Technology Corp.
(Representative: Nien-Che, Hsiung)
Arcadyan Technology Corp.
(Representative: Li-Wei Dang)
Shang Chi Investment Co., Ltd.
(Representative: Chia-Tien Lin )
Chunghwa Investment Holding Company
(Representative: Chih-Chen Chien)
Shih-Wei Huang
Yi-Yu Liang
Chi Sheng Investment Co., Ltd.
(Representative: Chang-Chuan Lin)
Li-Wei Dang
Tatung Technology Inc.
(Representative: Li-Wei Dang)
Tatung Technology Inc.
(Representative: Chao-Peng Tseng)
Tatung Technology Inc.
(Representative: Chao-Peng Tseng)
Tatung Technology Inc.
(Representative: Li-Wei Dang)
Quest International Group Co., Ltd.
(Representative: Chao-Peng Tseng)
195
NT$392,738
100.00%
NT$392,738
100.00%
0
0.00%
NT$373,251
100.00%
NT$373,251
100.00%
NT$373,251
100.00%
NT$373,251
100.00%
0
0.00%
34,980,000
100.00%
34,980,000
100.00%
34,980,000
100.00%
34,980,000
100.00%
34,980,000
100.00%
0
25,027,910
0.00%
61.04%
25,027,910
61.04%
25,027,910
61.04%
25,027,910
61.04%
25,027,910
61.04%
1,027,056
2.51%
4,570,830
11.15%
0
0
2,727,272
1,062,935
300
300
0.00%
0.00%
6.65%
2.59%
100.00%
100.00%
1,200,000
100.00%
1,200,000
100.00%
1,170,000
100.00%
Company name
Title
Name or name of representative
Tatung Home
Appliances (Wu
Jiang) Co., Ltd.
Director
Chairman
Director
Director
Supervisor
President
Acbel Telecom Inc. Chairman
Director
Director
Supervisor
President
Director
Director
Director
Managers
Managers
Leading
Images Limited
Astoria
Networks
GmbH
Compal Broadband
Networks Inc.
Chairman
Director
Director
Director
Quest International Group Co., Ltd.
(Representative: Li-Wei Dang)
Exquisite Electronic Co., Ltd.
(Representative: Fong-Yu, Lu) )
Exquisite Electronic Co., Ltd.
(Representative: Chao-Peng Tseng)
Exquisite Electronic Co., Ltd.
(Representative: Li-Wei Dang)
Exquisite Electronic Co., Ltd.
(Representative: Shih-Wei Huang)
Li-Wei Dang
Arcadyan Technology Corp.
(Representative: Chao-Peng Tseng)
Arcadyan Technology Corp.
(Representative: Fong-Yu, Lu) )
AcBel Polytech Inc.
(Representative: Ching-Shang Kao)
Shih-Wei Huang
Fong-Yu, Lu
Acbel Telecom Inc.
(Representative: Chao-Peng Tseng)
Acbel Telecom Inc.
(Representative: Ching-Hsiung Lu)
Acbel Telecom Inc.
(Representative: Chung-Pao, Liu)
Leading Images Limited
(Representative: Tsai-Yen Chuang)
Leading Images Limited
(Representative: Yu-Yu Wang)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Realsun Investment Co., Ltd
(Representative: Tsai , Jon-Jinn )
Compal Electronics, Inc.
(Representative: Yu- Ho Wang)
Independent Director Wong, Jen-Zen
Independent Director Mao, Yin-Wen
Independent Director Chen, Miao- Ling
President
Director
Yu- Ho Wang
Compal Broadband Networks Inc.
(Representative: Yu- Ho Wang)
Compal Broadband
Networks Belgium
BVBA
Compal Broadband
Networks
Netherlands B.V.
Henghao
Technology Co.,Ltd.
Shares held
Shares (Note)
Shareholding
percentage
1,170,000
100.00%
NT$100,433
100.00%
NT$100,433
100.00%
NT$100,433
100.00%
NT$100,433
100.00%
0
4,494,111
4,494,111
4,292,216
0
0
50,000
50,000
50,000
25,000
25,000
0.00%
51.08%
51.08%
48.78%
0.00%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
29,060,176
43.45%
29,060,176
43.45%
3,575,000
5.34%
29,060,176
43.45%
0
0
0
1,086,810
0.00%
0.00%
0.00%
1.62%
20,300
100.00%
Director
Compal Broadband Networks Inc.
(Representative: Shao- Yang Chiu )
20,300
100.00%
Chairman
Vice Chairman
and President
Director
Director
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Chen-Chang Hsu)
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
196
20,014,952
100.00%
20,014,952
100.00%
20,014,952
100.00%
20,014,952
100.00%
Company name
Title
Name or name of representative
HengHao Holdings
A Co., Ltd.
HengHao Holdings
B Co., Ltd.
HengHao
Optoelectronics
Technology
(Kunshan) CO., LTD
HengHao Trading
Co., Ltd.
Lucom Display
Technology
(Kunshan) Ltd.
Mactech Inc.
Rayonnant
Technology Co., Ltd.
Supervisor
Director
Director
Director
Director
Chairman
Director
Director
Supervisor
President
Director
Director
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Director
Director
Director
Director
Supervisor
Chairman
Director and
President
Director
Supervisor
Compal Rayonnant
Holdings Ltd.
Director
Director
Chyou-Jui Wei
Henghao Technology Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
Henghao Technology Co., Ltd.
(Representative: Chung-Pin Wong)
HengHao Holdings A Co., Ltd.
(Representative: Sheng-Hsiung Hsu )
HengHao Holdings A Co., Ltd.
(Representative: Chung-Pin Wong)
HengHao Holdings B Co., Ltd.
(Representative: Chen-Chang Hsu)
HengHao Holdings B Co., Ltd.
(Representative: Chia-Tien Liu
HengHao Holdings B Co., Ltd.
(Representative: Jui-Hsiang Yang)
HengHao Holdings B Co., Ltd.
(Representative: Cheng-Chiang Wang)
Chen-Chang Hsu
HengHao Holdings B Co., Ltd.
(Representative: Sheng-Hsiung Hsu)
HengHao Holdings B Co., Ltd.
(Representative: Chung-Pin Wong)
HengHao Holdings B Co., Ltd.
(Representative: Chen-Chang Hsu)
HengHao Holdings B Co., Ltd.
(Representative: Chia-Tien Liu )
HengHao Holdings B Co., Ltd.
(Representative: Jui-Hsiang Yang )
HengHao Holdings B Co., Ltd.
(Representative: Hsiu-Chuan Hsu)
Chen-Chang Hsu
Compal Electronics, Inc.
(Representative: Yung-Ching Chang)
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Chen-Chang Hsu)
Compal Electronics, Inc.
(Representative: Ming-Chih Chang)
Wen-Pin Kuo
Chuan-Kuei Lin
Chyou-Jui Wei
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Pao-Jui Cheng)
Compal Electronics, Inc.
(Representative: Hsi-Kuan Chen)
Compal Electronics, Inc.
(Representative: Chyou-Jui Wei)
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
197
Shares held
Shares (Note)
0
46,882,022
46,882,022
46,882,022
46,882,022
Shareholding
percentage
0.00%
100.00%
100.00%
100.00%
100.00%
NT$1,199,200
100.00%
NT$1,199,200
100.00%
NT$1,199,200
100.00%
NT$1,199,200
0
10,000
10,000
NT$449,700
NT$449,700
NT$449,700
NT$449,700
0
21,756,192
100.00%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
0.00%
52.88%
21,756,192
52.88%
21,756,192
52.88%
21,756,192
52.88%
21,756,192
52.88%
1,301,505
1,609,172
0
3.16%
3.91%
0.00%
29,500,000
100.00%
29,500,000
100.00%
29,500,000
100.00%
29,500,000
100.00%
12,500,000
12,500,000
100.00%
100.00%
Company name
Title
Name or name of representative
Shares held
Shares (Note)
Shareholding
percentage
Allied Power
Holding Corp.
Primetek
Enterprises Ltd.
Rayonnant
Technology
Holdings (HK) Co.,
Ltd.
Rayonnant
Technology
(Taicang) Co., Ltd.
Bizcom Electronics,
Inc.
Compal Europe
(Poland) Sp. z o.o.
Auscom
Engineering Inc.
Flight Global
Holding Inc.
Director
Director
Director
Director
Director
Director
Chairman
Director
Director
Supervisor
President
Director
Director
Director
Director
Director
Director
Chairman
Director and
President
Director
Director
Director
RiPAL Optotronics
Co., Ltd.
Chairman
Director
Director
Supervisor
(Representative: Jui-Tsung Chen )
Compal Rayonnant Holdings Ltd.
(Representative: Chung-Pin Wong)
Rayonnant Technology Co., Ltd.
(Representative: Pao-Jui Cheng)
Allied Power Holding Corp.
(Representative: Chung-Pin Wong)
Allied Power Holding Corp.
(Representative: Pao-Jui Cheng)
Allied Power Holding Corp.
(Representative: Chyou-Jui Wei)
Allied Power Holding Corp.
(Representative: Pao-Jui Cheng)
Rayonnant Technology Holdings (HK) Co.,
Ltd.
(Representative: Pao-Jui Cheng)
Rayonnant Technology Holdings (HK) Co.,
Ltd
(Representative: Shyh-An Lee).
Rayonnant Technology Holdings (HK) Co.,
Ltd.
(Representative: Hsi-Kuan Chen)
Rayonnant Technology Holdings (HK) Co.,
Ltd.
(Representative: Chyou-Jui Wei)
Pao-Jui Cheng
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Po-Tang Wang )
Compal Electronics, Inc.
(Representative: Po-Tang Wang )
Compal Electronics, Inc.
(Representative: Ming-Chih Chang)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Min-Tung Weng)
Compal Electronics, Inc.
(Representative: Chun-Te Shen)
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
198
12,500,000
59.10%
8,651,000
40.90%
3,151,000
100.00%
3,151,000
100.00%
18,000,000
100.00%
18,000,000
100.00%
NT$539,640
100.00%
NT$539,640
100.00%
NT$539,640
100.00%
NT$539,640
100.00%
0
100,000
0.00%
100.00%
100,000
100.00%
100,000
100.00%
100,000
100.00%
136,080
100.00%
136,080
100.00%
3,000,000
100.00%
3,000,000
100.00%
3,000,000
100.00%
89,755,495
100.00%
89,755,495
100.00%
6,000,000
100.00%
6,000,000
100.00%
6,000,000
6,000,000
100.00%
100.00%
Company name
Title
Name or name of representative
Shares held
Shares (Note)
Shareholding
percentage
Compal Electronics
(Holding) Ltd.
Etrade
Management Co.,
Ltd.
Compal
Communications
(Nanjing) Co., Ltd.
Compal Digital
Communications
(Nanjing) Co., Ltd.
Compal Wireless
Communications
(Nanjing) Co., Ltd.
Webtek Technology
Co., Ltd
Forever Young
Technology Inc.
HANHELT
Communications
(Nanjing) Co., Ltd.
Director
Director
Director
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Chairman
Director
Director
Supervisor
President
Director
Director
Chairman
Director
Director
Supervisor
Unicom Global. Inc. Chairman
Director
Director
Supervisor
(Representative: Chyou-Jui Wei)
Compal Electronics, Inc.
(Representative: Sheng-Hsiung Hsu )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Etrade Management Co., Ltd.
(Representative: Sheng-Hua Peng)
Etrade Management Co., Ltd.
(Representative: Ching-Hsiung Lu)
Etrade Management Co., Ltd.
(Representative: Hsin-Hsiung Huang)
Etrade Management Co., Ltd.
(Representative: Guo-Dung Yu)
Sheng-Hua Peng
Etrade Management Co., Ltd.
(Representative: Sheng-Hua Peng)
Etrade Management Co., Ltd.
(Representative: Ching-Hsiung Lu)
Etrade Management Co., Ltd.
(Representative: Hsin-Hsiung Huang)
Etrade Management Co., Ltd.
(Representative: Guo-Dung Yu)
Sheng-Hua Peng
Etrade Management Co., Ltd.
(Representative: Sheng-Hua Peng)
Etrade Management Co., Ltd.
(Representative: Ching-Hsiung Lu)
Etrade Management Co., Ltd.
(Representative: Hsin-Hsiung Huang)
Etrade Management Co., Ltd.
(Representative: Guo-Dung Yu)
Sheng-Hua Peng
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative:Jui-Tsung Chen )
Forever Young Technology Inc.
(Representative: Sheng-Hua Peng)
Forever Young Technology Inc.
(Representative: Chung-Shing Tan)
Forever Young Technology Inc.
(Representative: Wen-Da Hsu)
Forever Young Technology Inc.
(Representative: Chiao-Lie Huang)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen)
Compal Electronics, Inc.
(Representative: Hsin-Kung Mao)
Compal Electronics, Inc.
(Representative: Chyou-Jui Wei)
199
1,000
1,000
100.00%
100.00%
46,900,000
65.23%
NT$659,560
100.00%
NT$659,560
100.00%
NT$659,560
100.00%
NT$659,560
100.00%
0
0.00%
NT$173,884
100.00%
NT$173,884
100.00%
NT$173,884
100.00%
NT$173,884
100.00%
0
0.00%
NT$1,469,020
100.00%
NT$1,469,020
100.00%
NT$1,469,020
100.00%
NT$1,469,020
100.00%
0
100,000
0.00%
100.00%
50,000
100.00%
NT$59,960
100.00%
NT$59,960
100.00%
NT$59,960
100.00%
NT$59,960
100.00%
10,000,000
100.00%
10,000,000
100.00%
10,000,000
100.00%
10,000,000
100.00%
Company name
Title
Name or name of representative
Palcom
International
Corporation
Compalead
Electronics B.V.
General Life
Biotechnology Co.,
Ltd.
Rapha Bio Ltd.
Chairman
Director
Director
Supervisor
Director
Director
Chairman
Director
Director
Director
Director
Supervisor
Supervisor
Chairman
Director
Director
Supervisor
Giant Rank Trading
Limited
UniCore Biomedical
Co., Ltd.
Director
Chairman
Director
Director
Director
Director
Supervisor
Chairman
Director
Director
Supervisor
Director
Director
Raycore Biotech
Co., Ltd.
Shennona
Corporation
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
(Representative: Cheng-Chiang Wang)
Compal Electronics, Inc.
(Representative: Guo-Dung Yu)
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Hsin-Kung Mao)
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Chyou-Jui Wei)
Alltek Technology Corp.
(Representative: Yu-Wen Wu)
WK Technology Fund IV
China Development Industrial Bank
Sheng-Hua Peng
General Life Biotechnology Co., Ltd.
(Representative: Chyou-Jui Wei)
General Life Biotechnology Co., Ltd.
(Representative: Cheng-Ta Chen)
General Life Biotechnology Co., Ltd.
(Representative: Tung-Pang Lin)
General Life Biotechnology Co., Ltd.
(Representative: Kuo-Hsiung Chung)
Forever Young Technology Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Jui-Tsung Chen )
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Sheng-Hua Peng)
Compal Electronics, Inc.
(Representative: Tzu-Chen Yen)
Compal Electronics, Inc.
(Representative: Chyou-Jui Wei)
Compal Electronics, Inc.
(Representative: Shu-Fen Ning)
UniCore Biomedical Co., Ltd.
(Representative:Jui-Tsung Chen )
Raypal Biomedical Co., Ltd.
(Representative: Yen-Liang Lin)
UniCore Biomedical Co., Ltd.
(Representative: Chyou-Jui Wei)
Shu-Fen Ning
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
200
Shares held
Shares (Note)
Shareholding
percentage
10,000,000
100.00%
10,000,000
100.00%
10,000,000
100.00%
10,000,000
100.00%
6,426,516
100.00%
6,426,516
100.00%
15,000,000
50.00%
15,000,000
50.00%
15,000,000
50.00%
6,922,940
604,800
2,520,000
0
1,275,000
1,275,000
1,275,000
1,275,000
-
23.08%
2.02%
8.40%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
20,000,000
100.00%
20,000,000
100.00%
20,000,000
100.00%
20,000,000
100.00%
20,000,000
100.00%
20,000,000
100.00%
1,275,000
51.00%
1,225,000
49.00%
1,275,000
0
2,600,000
2,600,000
51.00%
0.00%
100.00%
100.00%
Company name
Title
Name or name of representative
HippoScreen
Neurotech Corp.
SHENNONA CO.,
LTD.
Aco Smartcare
Co.,Ltd.
Director
Chairman
Director
Director
Director
Director
Supervisor
Chairman
Chairman
Director
Director
Director
Director
Supervisor
(Representative: Wei Chang Chen )
Compal Electronics, Inc.
.(Representative: Chun-Te Shen)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Wei Chang Chen)
Compal Electronics, Inc.
(Representative Chun-Te Shen)
Po-Jen Liu
Long-Song Lin
Cheng-Chiang Wang
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative:Jui-Tsung Chen)
Compal Electronics, Inc.
(Representative: Chung-Pin Wong)
Compal Electronics, Inc.
(Representative: Hsuan-Bin Chen)
Jian-Hung Liu
Shu-Chin Su
Chyou-Jui Wei
Shares held
Shares (Note)
Shareholding
percentage
2,600,000
100.00%
4,200,000
4,200,000
4,200,000
684,000
180,000
0
600,000
70.00%
70.00%
70.00%
11.40%
3.00%
0.00%
100.00%
100,000,000
52.04%
100,000,000
52.04%
100,000,000
22,227,778
22,227,778
0
52.04%
11.57%
11.57%
0.00%
Note: Limited liability companies are shown in terms of amount and percentage of capital contribution. (Exchange
rates for amount of capital contribution: USD 1: TWD 29.98, CNY 1: TWD 4.3033, and VND 1: TWD 0.001297.)
201
Compal International Holding Co.,
Ltd. and subsidiaries
Just International Ltd.
and subsidiaries
Big Chance International Co., Ltd.
and subsidiaries
High Shine Industrial Corp.
and subsidiaries
Panpal Technology Corporation
and subsidiaries
Gempal Technology Co., Ltd.
Hong Ji Capital Co., Ltd.
Hong Jin Investment Co., Ltd.
Accesstek Inc.
and subsidiaries
UniCore Biomedical Co., Ltd. and
subsidiaries
5. Overview of Operating Status for Affiliated Companies in 2019
Company Name
Capital
Net asset value
Total liabilities
Net worth
Operating
Operating
Net loss/profit for the
EPS (in NTD)
revenue
income
period (after tax)
(After tax)
Unit: NTD thousand
Compal Electronics, Inc.
44,071,466
337,783,488
231,810,855
105,972,633
916,280,028
8,536,952
6,955,899
1,787,680
110,899,804
76,354,283
34,545,521
199,880,145
290,325
473,752
1,480,509
21,116,483
13,161,582
7,954,901
33,547,573
(48,000)
209,804
Core Profit Holdings Ltd.
4,318,860
7,670,141
483
7,669,658
-
(3,489)
2,636,051
26,843,341
20,662,304
6,181,037
28,125,522
273,906
296,502
232,282
2,465,140
5,257,887
3,570,173
1,687,714
4,571,653
(214,925)
(180,050)
(2.26)
5,000,000
10,820,535
4,923,880
5,896,655
11,566,319
308,457
900,000
1,000,000
295,000
1,948,710
1,078,704
342,239
32,369
32,268
1,909
253
70
1,508
1,946,801
1,078,451
342,169
30,760
-
-
-
-
(295)
(238)
(208)
(930)
251,626
97,031
61,266
29,773
(6,575)
200,000
182,631
19,985
162,646
17,593
(23,229)
(18,865)
Shennona Corporation
32,665
1,372
-
1,372
-
(7,151)
(7,150)
Arcadyan Technology Corp.
and subsidiaries
Compal Broadband Networks Inc.
and subsidiaries
2,085,350
25,530,985
14,190,051
11,340,934
32,897,900
1,727,512
1,356,986
668,871
2,632,528
927,587
1,704,941
2,832,098
763
10,514
Henghao Technology Co., Ltd.
200,150
5,740,252
6,225,326
(485,074)
7,071,841
(450,834)
(569,058)
202
1.60
8.94
4.37
3.26
1.58
0.50
1.08
0.61
1.01
(2.03)
(0.94)
(2.75)
6.85
0.16
(28,43)
Company Name
Capital
Net asset value
Total liabilities
Net worth
Operating
Operating
Net loss/profit for the
EPS (in NTD)
revenue
income
period (after tax)
(After tax)
and subsidiaries
Mactech Co., Ltd.
411,458
Ripal Optotronics CO, LTD. Co., Ltd.
60,000
606,582
137,585
91,767
60,953
514,815
76,632
334,365
108,490
14,929
24,859
General life Biotechnology Co., Ltd.
and subsidiaries
300,000
795,052
403,852
391,200
612,922
95,396
Rayonnant Technology Holdings Ltd.,
295,000
99,674
36,726
62,948
-
(25,146)
377,328
965,555
833,855
131,700
1,274,880
32,369
Compal Rayonnant Holdings Ltd. and
subsidiaries
Bizcom Electronics, Inc.
Compal Europe (Poland) Sp.z o.o.
Auscom Engineering Inc.
3,031
90,156
101,747
572,796
221,302
184,530
Flight Global Holding Inc.
2,754,741
4,543,626
Compalead Electronics B.V.
197,463
827,325
126,606
203,929
57,931
80,753
3,896
446,190
17,373
126,699
4,462,873
823,429
296,359
263,765
170,946
-
-
12,648
11,104
11,182
(111)
(937)
Etrade Management Co., Ltd and
subsidiaries
Webtek Technology Co., Ltd
Forever Young Technology Inc. and
subsidiaries
Unicom Global Inc.
Palcom International Corporation
Compal Electronics (Holding) Ltd.
HippoScreen Neurotech Corp.
SHENNONA CO., LTD.
Aco Smartcare Co.,Ltd.
3,340
1,575
100,000
100,000
34
600
732,743
-
732,743
34,565,202
(2,548)
1,946,829
492,996
1,453,833
22,334,087
(4,966)
423,520
138,897
882,816
33,274
3,531,243
-
37,715
5,722
12,775
3,297
6,000
17,067
30,748
115,076
(459,296)
105,623
3,531,243
31,993
4,292
(79,013)
(3,550)
-
546,070
118,368
-
-
9,635
(1,726)
111,779
-
(7,934)
6. Common shareholders in controlling and controlled companies: None
203
25,927
24,978
90,284
24,014
27,808
16,483
(11,992)
3,918
131,815
16,393
2,206
1,519
(83,033)
(2,710)
-
(1,708)
(7,729)
0.63
4.16
3.01
0.81
2.22
164.83
(88.12)
1.31
1.47
2.55
(1.67)
22.07
30.38
(8.30)
(0.27)
-
(1.70)
(2.85)
(0.04)
2,295,154
8,312,012
8,902,214
(590,202)
29,134,208
68,410
(120,091)
(10,324)
(10,187)
8.1.2
Consolidated financial statements of affiliated enterprises
Representation Letter
The entities that are required to be included in the combined financial statements of COMPAL ELECTRONICS, INC. as of and for the year ended December 31, 2019 under the
Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those
included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory
Commission, "Consolidated and Separate Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the
consolidated financial statements. Consequently, COMPAL ELECTRONICS, INC. and its subsidiaries do not prepare a separate set of combined financial statements.
Company name: COMPAL ELECTRONICS, INC.
Chairman: Sheng-Hsiung Hsu (Rock Hsu)
Date: March 30, 2020
8.1.3 Affiliation reports: None
204
8.2
8.3
Private Placement of Securities in the Most Recent Year: None
Company Shares Held or Disposed by Subsidiaries in the Most Recent Year:
Name of
Share Capital
Funding
of Shares
Subsidiary
Acquired
Source
Held by the
Percentage
Company
Panpal
Technology
NTD 5,000,000,000
Corporation
Gempal
Technology
NTD 900,000,000
Co., Ltd.
Proprietary
capital
100%
Proprietary
capital
100%
Date of
Shares and
Shares and
Acquisition or
Amount
Amount
Disposition
Acquired
Disposed
Investment
Gain (Loss)
Shareholdings and
Amount as of March
Collateralized
31, 2020
Amount of
Endorsements
Made for the
Subsidiary
Amount Loaned
to the
Subsidiary
Unit: NT$ thousands; Shares; %
-
-
-
-
-
-
-
-
31,648,082 shares
NTD 559,812,000
18,369,349 shares
NTD 321,435,000
N/A
N/A
-
-
-
-
Note: Impacts on the Company’s financial performance and position: none of the subsidiaries had acquired or disposed the Company’s shares in the current year up till the
publication date of this annual report, hence there were no impacts.
8.4
Other supplementary notes, where applicable: None
8.5
Any Events in 2019 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
205
1
Compal Electronics, Inc.
Chairman: Sheng-Hsiung Hsu (Rock Hsu)
Chief Executive Officer (CEO): Chung-Pin Wong (Martin Wong)
Attachment I
1
Stock Code:2324
COMPAL ELECTRONICS, INC.
AND SUBSIDIARIES
Consolidated Financial Statements
With Independent Auditors’ Report
For the Years Ended December 31, 2019 and 2018
Address:
Telephone:
No.581 & 581-1, Ruiguang Rd., Neihu District, Taipei, Taiwan
(02)8797-8588
Table of contents
2
Contents
Page
1. Cover Page
2. Table of Contents
3. Representation Letter
4. Independent Auditors’ Report
5. Consolidated Balance Sheets
6. Consolidated Statements of Comprehensive Income
7. Consolidated Statements of Changes in Equity
8. Consolidated Statements of Cash Flows
9. Notes to the Consolidated Financial Statements
(1) Company history
(2) Approval date and procedures of the consolidated financial statements
(3) New standards, amendments and interpretations adopted
(4) Summary of significant accounting policies
(5) Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6) Explanation of significant accounts
(7) Related-party transactions
(8) Pledged assets
(9) Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
1
2
3
4
5
6
7
8
9
9
9～12
12～41
41
42～95
95～97
98
98
98
98
99
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in Mainland China
(14) Segment information
99, 103～114
100, 115～119
100, 120～122
100～102
Representation Letter
3
The entities that are required to be included in the combined financial statements of COMPAL ELECTRONICS,
INC. as of and for the year ended December 31, 2019 under the Criteria Governing the Preparation of
Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated
Enterprises are the same as those included in the consolidated financial statements prepared in conformity with
International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission,
"Consolidated and Separate Financial Statements." In addition, the information required to be disclosed in the
combined financial statements and is included in the consolidated financial statements. Consequently,
COMPAL ELECTRONICS, INC. and Subsidiaries do not prepare a separate set of combined financial
statements.
Company name: COMPAL ELECTRONICS, INC.
Chairman: Sheng-Hsiung Hsu (Rock Hsu)
Date: March 30, 2020
4
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 balance sheets as of December 31, 2019 and 2018, and the
consolidated statement of comprehensive income, changes in equity and cash flows for the years ended
December 31, 2019 and 2018, 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 of December 31, 2019 and 2018, and its consolidated financial
performance and its consolidated cash flows for the years then ended December 31, 2019 and 2018, 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” ),
Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the
former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory
Commission of the Republic of China.
Basis for Opinion
We conducted our audit of the consolidated financial statements as of and for the year ended December 31,
2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by
Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and the
auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the
consolidated financial statements as of and for the year ended December 31, 2018 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)(g) for the accounting policy of accounts receivable. Information of account
receivable valuation are shown in Note (6)(f) of the consolidated financial statements.
4-1
Description of key audit matters:
The Group devotes to develop new product lines and customers in emerging countries, and the credit risks of
these customers are higher than other world leading enterprises. Therefore, valuation of accounts receivable
has been identified as a key audit matter.
Our key audit procedures performed in respect of the above area included the following:
In order to evaluate the reasonableness of the Group's estimations for bad debts, our key audit procedures
included reviewing if the measurement of impairment loss of accounts receivable is accordance with
accounting policy, examining the historical recovery records, analyzing the aging of accounts receivable, and
the current credit status of customers, as well as inspecting the amount collected in the subsequent period.
2. Inventory valuation
Please refer to Note (4)(h) 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 disclosed in Note (6)(g) of the consolidated 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 respect of the above area included the following:
In order to verify the rationality of assessment of inventory valuation estimated by the Group, our key audit
procedures included reviewing the consistency of prior year and accounting policy, inspecting the Group'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 its parent-company-only financial statements as of and for the years ended
December 31, 2019 and 2018, on which we have issued an unqualified opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
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 with
the IFRSs, IASs, IFRC, SIC, endorsed and issued into effect 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 (including the Audit committee) are responsible for overseeing the Group’ s
financial reporting process.
4-2
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 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 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 auditors’ report are Szu-Chuan Chien and
Yiu-Kwan Au.
4-3
Taipei, Taiwan (Republic of China)
March 30, 2020
The accompanying consolidated financial statements are intended only to present the consolidated statement of financial position,
financial performance and 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.
Notes to Readers
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars)
Assets
Current assets:
December 31, 2019
December 31, 2018
Amount
%
Amount
%
Cash and cash equivalents (note (6)(a))
$
66,559,397
17.4
70,296,545
17.6
Current financial assets at fair value through profit or loss (note (6)(b))
1,346,379
0.4
4,611,134
1.1
Current derivative financial assets for hedging (note (6)(d))
Current financial assets at amortized cost (note (6)(e))
Notes and accounts receivable, net (note (6)(f))
61
-
-
-
-
-
350,000
0.1
191,692,152
50.1
203,715,965
51.0
Notes and accounts receivable due from related parties, net (notes (6)(f) and (7))
44,512
-
58,106
-
Other receivables, net (notes (6)(f) and (7))
Inventories (note (6)(g))
Other current assets (note (8))
Non-current assets:
2,006,113
0.5
1,665,249
0.4
78,433,538
20.5
79,148,922
19.8
3,072,661
0.8
2,899,329
0.7
343,154,813
89.7
362,745,250
90.7
Investments accounted for using equity method (note (6)(h))
7,319,086
1.9
7,364,485
1.9
Non-current financial assets at fair value through profit or loss (note (6)(b))
Non-current financial assets at fair value through other comprehensive income (note (6)(c))
Property, plant and equipment (notes (6)(l) and (8))
Right-of-use assets (note (6)(m))
Intangible assets
Deferred tax assets (note(6)(u))
Long-term prepaid rents (note(6)(s))
Other non-current assets (note (8))
115,359
4,928,053
19,972,347
3,350,172
1,553,342
1,637,626
-
-
1.3
5.2
0.9
0.4
0.4
-
617,621
0.2
69,390
5,172,295
20,418,228
-
1,516,253
1,023,948
891,147
593,827
39,493,606
10.3
37,049,573
-
1.3
5.1
-
0.4
0.3
0.2
0.1
9.3
1100
1110
1135
1136
1170
1180
1200
1310
1470
1550
1510
1517
1600
1755
1780
1840
1985
1990
Total assets
$
382,648,419 100.0
399,794,823 100.0
See accompanying notes to consolidated financial statements.
Liabilities and Equity
Current liabilities:
Short-term borrowings (note (6)(n))
Current financial liabilities at fair value through profit or loss (note (6)(b))
Current derivative financial liabilities for hedging (note (6)(d))
Current contract liabilities (note (6)(y))
Notes and accounts payable
Notes and accounts payable to related parties (note (7))
Other payables (note (7))
Current tax liabilities
Current provisions (note (6)(r))
Current lease liabilities (note (6)(q))
Other current liabilities
Current refund liabilities
Long-term borrowings, current portion (note (6)(o))
Non-Current liabilities:
Bonds payable (note (6)(p))
Long-term borrowings (note (6)(o))
Deferred tax liabilities (note(6)(u))
Non-current lease liabilities (note (6)(q))
Non-current net defined benefit liability (note (6)(t))
Non-current liabilities, others (note (6)(h))
Total liabilities
Equity:
Equity attributable to owners of parent (notes (6)(v) and (6)(x)):
Ordinary share
Capital surplus
Retained earnings
Other equity interest
Treasury shares
2100
2120
2125
2130
2170
2180
2200
2230
2250
2280
2300
2365
2322
2530
2540
2570
2580
2640
2670
3110
3200
3300
3400
3500
36XX
Non-controlling interests
Total equity
Total liabilities and equity
5
December 31, 2019
December 31, 2018
Amount
%
Amount
%
$
60,951,844
15.9
72,350,197
18.1
5,854
4,932
-
-
26,913
-
-
-
956,455
0.2
1,476,304
0.4
142,940,869
37.4
152,300,093
38.1
1,504,908
21,916,685
4,428,716
830,757
717,021
1,990,243
1,382,374
18,189,375
0.4
5.7
1.2
0.2
0.1
0.5
0.4
4.8
1,976,620
19,558,007
3,722,191
426,981
-
3,255,135
1,579,832
17,535,625
0.5
4.9
0.9
0.1
-
0.8
0.4
4.4
255,820,033
66.8
274,207,898
68.6
966,492
7,559,063
1,009,218
1,550,067
738,164
246,038
0.3
2.0
0.3
0.4
0.2
-
-
10,998,438
478,169
-
710,146
238,324
12,069,042
3.2
12,425,077
-
2.7
0.1
-
0.2
0.1
3.1
267,889,075
70.0
286,632,975
71.7
44,071,466
11.5
44,071,466
11.0
9,159,259
2.4
9,932,434
2.5
57,726,604
15.1
60,060,381
15.0
(4,103,449)
(1.1)
(7,459,388)
(1.8)
(881,247)
(0.2)
(881,247)
(0.2)
105,972,633
27.7
105,723,646
26.5
8,786,711
2.3
7,438,202
1.8
114,759,344
30.0
113,161,848
28.3
$
382,648,419 100.0
399,794,823 100.0
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)
6
Net sales revenue (notes (6)(y) and (7))
Cost of sales (notes (6)(g), (6)(t), (7) and (12))
Gross profit
Operating expenses: (notes (6)(s), (6)(t) and (12))
Selling expenses
Administrative expenses
Research and development expenses
Net operating income
Non-operating income and expenses:
Other gains and losses, net (notes (6)(d), (6)(h), (6)(j), (6)(aa) and (6)(ac))
Finance costs (notes (6)(n) and (6)(o))
Other income (note (6)(aa))
Miscellaneous disbursements
Share of profit (loss) of associates and joint ventures accounted for using equity method (note (6)(h))
Total non-operating income and expenses
Profit from continuing operations before tax
Less: Income tax expenses (note (6)(u))
Profit
Other comprehensive income:
2019
2018
Amount
%
Amount
%
$ 980,442,346 100.0
967,706,411 100.0
946,533,518
96.5
937,139,320
96.8
33,908,828
3.5
30,567,091
3.2
4,961,131
4,204,536
14,156,793
23,322,460
10,586,368
0.5
0.4
1.5
2.4
1.1
4,319,991
4,204,419
12,780,935
21,305,345
9,261,746
0.4
0.4
1.4
2.2
1.0
(166,133)
-
2,256,958
0.2
(2,725,564)
(0.3)
(2,636,443)
(0.3)
2,151,357
0.2
2,132,864
0.2
(35,160)
197,008
-
-
(22,908)
-
797,368
(578,492)
(0.1)
2,527,839
10,007,876
2,112,157
7,895,719
1.0
0.2
0.8
11,789,585
2,200,284
9,589,301
0.1
0.2
1.2
0.2
1.0
Components of other comprehensive income that will not be reclassified to profit or loss
Gains (losses) on remeasurements of defined benefit plans
Unrealized gains (losses) from investments in equity instruments measured at fair value through other
comprehensive income
Share of other comprehensive income of associates and joint ventures accounted for using equity method,
components of other comprehensive income that will not be reclassified to profit or loss
Income tax related to components of other comprehensive income that will not be reclassified to profit or
loss (note (6)(u))
Components of other comprehensive income that will not be reclassified to profit or loss
Components of other comprehensive income (loss) that will be reclassified to profit or loss
(40,786)
407,276
109,246
35,847
439,889
-
-
-
-
-
(16,260)
-
(1,188,635)
(0.1)
(124,949)
(75,832)
-
-
(1,254,012)
(0.1)
Exchange differences on translation of foreign financial statements
(1,711,990)
(0.2)
1,807,381
0.1
Gains (losses) on hedging instrument (note (6)(ab))
Share of other comprehensive income of associates and joint ventures accounted for using equity method,
components of other comprehensive income that will be reclassified to profit or loss
Income tax related to components of other comprehensive income that will be reclassified to profit or loss
(note (6)(u))
Components of other comprehensive income that will be reclassified to profit or loss
Other comprehensive income
Total comprehensive income
Profit, attributable to:
Profit, attributable to owners of parent
Profit, attributable to non-controlling interests
Comprehensive income attributable to:
Comprehensive income (loss), attributable to owners of parent
Comprehensive income (loss), attributable to non-controlling interests
Earnings per share (note 6(x))
Basic earnings per share
Diluted earnings per share
(4,871)
(268,686)
(10,678)
(1,974,869)
(1,534,980)
6,360,739
6,955,899
939,820
7,895,719
5,456,508
904,231
6,360,739
-
-
-
(0.2)
(0.2)
0.6
0.7
0.1
0.8
0.5
0.1
0.6
1.60
1.58
$
$
$
$
$
$
$
-
(162,189)
3,293
1,641,899
387,887
9,977,188
8,913,365
675,936
9,589,301
9,278,187
699,001
9,977,188
-
-
-
0.1
-
1.0
0.9
0.1
1.0
0.9
0.1
1.0
2.05
2.02
4000
5000
6100
6200
6300
7020
7050
7190
7590
7770
7900
7950
8300
8310
8311
8316
8320
8349
8360
8361
8368
8370
8399
8300
8500
8610
8620
8710
8720
9750
9850
See accompanying notes to consolidated financial statements.
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars)
Equity attributable to owners of parent
7
Retained earnings
Special
reserve
4,339,549
-
-
-
-
4,491,599
-
-
-
-
-
-
-
-
8,831,148
-
-
-
-
(1,363,317)
-
-
-
-
-
-
-
Unappropriated
retained
earnings
34,458,787
8,913,365
14,094
8,927,459
(574,953)
(4,491,599)
(4,407,147)
-
(521,643)
Total
retained
earnings
57,051,197
8,913,365
14,094
8,927,459
-
-
(4,407,147)
-
(521,643)
(1,156)
36,141
(1,156)
36,141
-
-
(1,024,470)
-
32,401,419
6,955,899
(30,420)
6,925,479
(891,336)
1,363,317
(4,407,147)
(1,024,470)
-
60,060,381
6,955,899
(30,420)
6,925,479
-
-
(4,407,147)
-
-
(27,199)
(27,199)
-
-
-
-
-
7,467,831
30,539,623
(4,824,910)
(4,824,910)
-
57,726,604
Balance at January 1, 2018
Profit for the year ended December 31, 2018
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends of ordinary share
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 company's cash
dividends received by subsidiaries
Disposal of investments in equity instruments
measured at fair value through other comprehensive
income
Changes in non-controlling interests
Balance at December 31, 2018
Profit for the year ended December 31, 2019
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends of ordinary share
Cash dividends from capital surplus
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures
accounted for using equity method
Adjustments of capital surplus for company's cash
dividends received by subsidiaries
Disposal of investments in equity instruments
measured at fair value through other comprehensive
income
Changes in non-controlling interests
Balance at December 31, 2019
Ordinary
shares
$ 44,191,916
-
-
-
Capital
surplus
10,938,773
-
-
-
-
-
-
-
-
-
(120,450)
-
-
-
(881,429)
(32,706)
(459)
(151,766)
-
60,021
Legal
reserve
18,252,861
-
-
-
574,953
-
-
-
-
-
-
-
-
-
44,071,466
-
-
-
-
-
-
-
-
-
-
-
-
9,932,434
-
-
-
-
-
-
(881,429)
43,473
4,760
60,021
-
-
18,827,814
-
-
-
891,336
-
-
-
-
-
-
-
-
$ 44,071,466
-
-
9,159,259
-
-
19,719,150
See accompanying notes to consolidated financial statements.
Total
equity
attributable
to owners of
parent
Treasury
shares
(881,247) 101,895,584
8,913,365
364,822
9,278,187
-
-
-
Non-
controlling
interests Total equity
108,647,972
9,589,301
387,887
9,977,188
6,752,388
675,936
23,065
699,001
Total other equity interest
Unrealized
gains
(losses) on
financial
assets
measured at
fair value
through other
comprehensive
income
Unearned
employee
benefit and
others
Exchange
differences on
translation of
foreign
financial
statements
(3,477,376)
(5,847,823)
-
1,624,424
1,624,424
-
(1,273,696)
(1,273,696)
(79,856)
-
-
-
Total other
equity
interest
(9,405,055)
-
350,728
350,728
-
-
-
-
489,483
1,130
79,856
-
79,856
1,024,470
-
(7,459,388)
-
(1,706)
(1,706)
(1,468,971)
(1,468,971)
-
-
-
-
-
-
-
-
-
-
-
-
(4,407,147)
(881,429)
(64,866)
(485)
(156,219)
60,021
-
-
(881,247) 105,723,646
6,955,899
(1,499,391)
5,456,508
-
-
-
-
-
-
-
-
-
-
4,824,910
-
-
-
-
-
-
-
-
-
-
-
-
(4,407,147)
(881,429)
43,473
(22,439)
60,021
-
-
(1,706)
(4,103,449)
(881,247) 105,972,633
-
-
-
-
-
-
-
-
-
-
-
-
-
-
489,483
1,130
-
-
1,024,470
-
(1,852,952)
(5,606,436)
-
(1,942,028)
(1,942,028)
-
474,763
474,763
-
-
-
-
-
-
-
-
-
(3,794,980)
-
-
-
-
-
-
-
4,824,910
-
(306,763)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,407,147)
(881,429)
(64,866)
(485)
(156,219)
60,021
-
(13,187)
7,438,202
939,820
(35,589)
904,231
-
(13,187)
113,161,848
7,895,719
(1,534,980)
6,360,739
-
-
-
-
-
-
-
-
-
-
(4,407,147)
(881,429)
43,473
(22,439)
60,021
-
444,278
8,786,711
444,278
114,759,344
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2019 and 2018
(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 expected credit loss
Net loss (gain) on financial assets or liabilities at fair value through profit or loss
Finance cost
Interest income
Dividend income
Compensation cost of share-based payments
Share of loss (profit) of associates and joint ventures accounted for using equity method
Loss (gain) on disposal of property, plant and equipment
Gain on disposal of investments
Long-term prepaid rents
Others
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease (increase) 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
Decrease (increase) in other non-current assets
Total changes in operating assets
Changes in operating liabilities:
Increase (decrease) in financial liabilities at fair value through profit or loss
Increase (decrease) in notes and accounts payable
Increase (decrease) in other payables
Increase (decrease) in refund liabilities
Increase (decrease) in provisions
Increase (decrease) in contract liabilities
Increase (decrease) in other current liabilities
Others
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow (outflow) generated from 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 financial assets at amortized cost
Acquisition of financial assets at fair value through profit or loss and through other comprehensive income
Proceeds from disposal of financial assets at fair value through profit or loss and through other comprehensive income
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity method
Net cash flow from disposal of subsidiaries
Proceeds from capital reduction of investments
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Acquisition of right-of-use assets
Increase in long-term prepaid rents
Others
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term borrowings
Proceeds from issuing bonds
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
Cash dividends paid
Acquisition of non-controlling interests
Change in non-controlling interests
Others
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
See accompanying notes to consolidated financial statements.
8
2019
2018
$
10,007,876
11,789,585
6,419,421
(10,355)
(24,217)
2,725,564
(1,664,803)
(127,349)
125,281
(197,008)
(40,245)
(66,837)
-
16,668
7,156,120
2,630,896
12,043,387
(571,592)
715,384
(174,770)
(66,117)
14,577,188
(21,059)
(9,831,480)
2,735,002
(197,458)
403,776
(519,849)
(991,160)
6,789
(8,415,439)
6,161,749
13,317,869
23,325,745
1,898,096
266,110
(3,112,013)
(1,456,869)
20,921,069
350,000
(264,261)
1,511,226
(43,200)
18,033
143,495
10,120
(5,850,532)
168,226
(498,402)
(281,637)
-
110,944
(4,625,988)
(11,398,353)
1,007,240
66,462,300
(69,247,925)
(832,815)
(5,228,555)
-
258,360
(34,005)
(19,013,753)
(1,018,476)
(3,737,148)
70,296,545
66,559,397
$
4,940,672
(17,449)
(117,677)
2,636,443
(1,463,658)
(279,044)
(121,765)
(797,368)
23,228
(2,513,207)
13,302
-
2,303,477
(3,936,569)
(26,227,099)
(680,718)
(9,691,835)
551,607
(101,686)
(40,086,300)
2,450
12,258,889
1,434,494
60,526
39,834
(189,017)
231,592
50,649
13,889,417
(26,196,883)
(23,893,406)
(12,103,821)
1,403,559
414,120
(2,399,912)
(2,576,795)
(15,262,849)
350,000
(155,814)
1,003,163
-
7,386,224
-
15,082
(5,154,447)
48,354
(575,232)
-
(315,395)
(163,176)
2,438,759
15,834,672
-
34,267,200
(33,186,025)
-
(5,228,555)
(1,801)
(110,954)
58,117
11,632,654
1,425,268
233,832
70,062,713
70,296,545
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)
9
(1) Company history
Compal Electronics, Inc. (the “Company”) was incorporated in June 1984 as a company limited by shares
and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company's registered
office is No.581 and No.581-1 Ruiguang Rd., Neihu Dist., Taipei City, Taiwan. In accordance with
Article 19 of the Business Mergers and Acquisitions Act, the Company merged its subsidiary, Compal
Communications, Inc. (“ CCI” ) (the “ Merger” ), pursuant to the resolutions of the Board of Directors in
November, 2013. The Company was the surviving company and CCI was the dissolved company. The
effective date of the Merger was February 27, 2014. The Company and its subsidiaries (together referred
to as the “Group” and individually as the “Group entities”) primarily are involved in the manufacture and
sale of notebook personal computers (“notebook PCs”), monitors, LCD TVs, mobile phones and various
components and peripherals.
(2) Approval date and procedures of the consolidated financial statements:
These consolidated financial statements were authorized for issuance by the Board of Directors and issued
on March 30, 2020.
(3) New standards, amendments and interpretations adopted:
(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial
Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.
The following new standards, interpretations and amendments have been endorsed by the FSC and
are effective for annual periods beginning on or after January 1, 2019.
New, Revised or Amended Standards and Interpretations
IFRS 16 “Leases”
IFRIC 23 “Uncertainty over Income Tax Treatments”
Effective date
per IASB
January 1, 2019
January 1, 2019
Amendments to IFRS 9 “Prepayment features with negative compensation”
January 1, 2019
Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”
January 1, 2019
Amendments to IAS 28 “Long-term interests in associates and joint ventures”
January 1, 2019
Annual Improvements to IFRS Standards 2015–2017 Cycle
January 1, 2019
Except for the following items, the Group believes that the adoption of the above IFRSs would not
have any material impact on its consolidated financial statements. The extent and impact of
significant changes are as follows:
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
10
(i)
IFRS 16“Leases”
IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining
Whether an Arrangement Contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27
Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
The Group applied IFRS 16 using the modified retrospective approach, there was no effect on
retained earnings on January 1, 2019. The details of the changes in accounting policies are
disclosed below,
1)
Definition of a lease
Previously, the Group determined at contract inception whether an arrangement is or
contains a lease under IFRIC 4. Under IFRS 16, the Group assesses whether a contract is
or contains a lease based on the definition of a lease, as explained in note (4)(l).
On transition to IFRS 16, the Group elected to apply the practical expedient to
grandfather the assessment of which transactions are leases. The Group applied IFRS 16
only to contracts that were previously identified as leases. Contracts that were not
identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a
lease. Therefore, the definition of a lease under IFRS 16 was applied only to contracts
entered into or changed on or after January 1, 2019.
2)
As a lessee
As a lessee, the Group previously classified leases as operating or finance leases based
on its assessment of whether the lease transferred significantly all of the risks and
rewards incidental to ownership of the underlying asset to the Group. Under IFRS 16, the
Group recognizes right-of-use assets and lease liabilities for most leases – i.e. these
leases are on-balance sheet.
The Group decided to apply recognition exemptions to short-term leases of machinery
and leases of office equipment.
●
Leases classified as operating leases under IAS 17
At transition, lease liabilities were measured at the present value of the remaining
lease payments, discounted at the Group’s incremental borrowing rate as at January
1, 2019. Right-of-use assets are measured at an amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments – the Group
applied this approach to all leases.
In addition, the Group used the following practical expedients when applying IFRS
16 to leases.
－ Applied a single discount rate to a portfolio of leases with similar
characteristics.
－ Applied the exemption not to recognize right-of-use assets and liabilities for
leases with less than 12 months of lease term.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
11
－ Excluded initial direct costs from measuring the right-of-use asset at the date
of initial application.
－ Used hindsight when determining the lease term if the contract contains
options to extend or terminate the lease.
●
Leases previously classified as finance leases
For leases that were classified as finance leases under IAS 17, the carrying amount
of the right-of-use asset and the lease liability at January 1, 2019 are determined at
the carrying amount of the lease asset and lease liability under IAS 17 immediately
before that date.
3)
As a lessor
The Group is not required to make any adjustments on transition to IFRS 16 for leases in
which it acts as a lessor. The Group accounted for its leases in accordance with IFRS 16
from the date of initial application.
4)
Impacts on financial statements
On transition to IFRS 16, the Group recognized additional $2,981,097 of right-of-use
assets and $2,089,950 of lease liabilities, recognizing the difference in long-term prepaid
rents. When measuring lease liabilities, the Group discounted lease payments using its
incremental borrowing rate at January 1, 2019. The weighted-average rate applied is
2.78%.
The explanation of differences between operating lease commitments disclosed at the
end of the annual reporting period immediately preceding the date of initial application,
and lease liabilities recognized in the statement of financial position at the date of initial
application disclosed as follows:
Operating lease commitment at December 31, 2018 as disclosed in
the Group’s consolidated financial statements
Recognition exemption for:
short-term leases
leases of low-value assets
Variable lease payment based on an index or a rate
Discounted using the incremental borrowing rate at January 1, 2019
Finance lease liabilities recognized as at December 31, 2018
Lease liabilities recognized at January 1, 2019
January 1, 2019
2,280,672
$
$
$
$
(56,654)
(176)
(28,660)
2,195,182
2,089,950
-
2,089,950
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
12
(b) The impact of IFRS endorsed by FSC but not yet effective
The following new standards, interpretations and amendments have been endorsed by the FSC and
are effective for annual periods beginning on or after January 1, 2020 in accordance with Ruling No.
1080323028 issued by the FSC on July 29, 2019:
New, Revised or Amended Standards and Interpretations
Amendments to IFRS 3 “Definition of a Business”
Effective date
per IASB
January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform”
January 1, 2020
Amendments to IAS 1 and IAS 8 “Definition of Material”
January 1, 2020
The Group assesses that the adoption of the above-mentioned standards would not have any material
impact on its consolidated financial statements.
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC
As of the date, the following IFRSs that have been issued by the International Accounting Standards
Board (“IASB”), but have yet to be endorsed by the FSC:
New, Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between
an Investor and Its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Effective date
per IASB
Effective date to
be determined
by IASB
January 1, 2021
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
January 1, 2022
The Group is evaluating the impact of its initial adoption of the above-mentioned standards or
interpretations on its consolidated financial position and consolidated financial performance. The
results thereof will be disclosed when the Group completes its evaluation.
(4)
Summary of significant accounting policies:
The significant accounting policies presented in the consolidated financial statements are summarized as
follows. The following accounting policies were applied consistently throughout the periods presented in
the financial statements.
(a)
Statement of compliance
These consolidated financial statements have been prepared in accordance with the Regulations
Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as the
Regulations), the International Financial Reporting Standards, the International Accounting
Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC
(hereinafter referred to as the IFRS endorsed by the FSC).
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
13
(b) Basis of preparation
(i)
Basis of measurement
Except for the following significant accounts in the statement of financial position, the
consolidated financial statements have been prepared on the historical cost basis:
1)
2)
3)
4)
Financial instruments (including derivative financial instruments) measured at fair value
through profit or loss are measured at fair value;
Financial instruments measured at fair value through other comprehensive income are
measured at fair value;
Hedging financial instruments are measured at fair value;
The defined benefit liability (or asset) is recognized as plan assets less the present value
of the defined benefit obligation and the effect of the asset ceiling mentioned in note
(4)(r).
(ii) Functional and presentation currency
The functional currency of each Group entities is determined based on the primary economic
environment in which the entities operates. The consolidated financial statements are presented
in New Taiwan Dollar, which is the Company's functional currency. All financial information
presented in New Taiwan Dollar has been rounded to the nearest thousand.
(c) Basis of consolidation
(i)
Principles of preparation of the consolidated financial statements
The consolidated financial statements comprise the Company and its subsidiaries. The Group
controls an entity when it is exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its control over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. Intra-group balances
and transactions, and any unrealized income and expenses arising from intra-group
transactions are eliminated in preparing the consolidated financial statements. Losses
applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.
Accounting policies of subsidiaries have been adjusted to ensure consistency with the policies
adopted by the Group.
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions. Any differences between the Group’ s share of net
assets before and after the change, and any considerations received or paid, are adjusted to or
against the Group reserves.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
14
When the Group loses control over a subsidiary, it derecognizes the assets (including any
goodwill) and liabilities of the subsidiary, and any related non-controlling interests and other
components of equity. Any interest retained in the former subsidiary is measured at fair value
when control is lost, with the resulting gain or loss being recognized in profit or loss. The
Group recognizes as gain or loss in profit or loss the difference between (i) the fair value of the
consideration received as well as any investment retained in the former subsidiary at its fair
value at the date when control is lost; and (ii) the assets (including any goodwill), liabilities of
the subsidiary as well as any related non-controlling interests at their carrying amounts at the
date when control is lost, as gain or loss in profit or loss. When the Group loses control of its
subsidiary, it accounts for all amounts previously recognized in other comprehensive income in
relation to that subsidiary on the same basis as would be required if it had directly disposed of
the related assets or liabilities.
(ii) List of subsidiaries in the consolidated financial statements
Name of
investor
The Company
Name of Subsidiary
Panpal Technology Corp.
(“Panpal”)
Nature of Operation
Investment
〞
〃
〃
〃
〃
Gempal Technology Corp.
(“Gempal”)
Hong Ji Capital Co., Ltd.
(“Hong Ji”)
Hong Jin Investment Co.,
Ltd. (“Hong Jin”)
Zhaopal Investment Co.,
Ltd. (“Zhaopal”)
Kaipal Investment Co., Ltd.
(“Kaipal”)
〃
〃
〃
〃
〃
The Company,
Panpal, et al.
Accesstek, Inc. (“ATK”) Design, manufacturing and sales of
optical disk drives and components
〃
Arcadyan Technology
Corp. (“Arcadyan”)
The Company
Rayonnant Technology
〃
Co., Ltd. (“Rayonnant
Technology”)
HengHao Technology Co.,
Ltd. (“HengHao”)
R&D, manufacturing and sales of
wireless network, integrated household
electronics, and mobile office products
Manufacturing and sales of PCs,
computer periphery devices, and
electronic components
Manufacturing and sales of PCs,
computer periphery devices, and
electronic components
Percentage of
ownership
December
31, 2019
100%
December
31, 2018
Description
100% Panpal held 31,648
100%
thousand shares of the
Company as of December
31, 2019, which represented
0.7% of the Company’s
outstanding shares.
100% Gempal held 18,369
thousand shares of the
Company as of December
31, 2019, which represented
0.4% of the Company’s
outstanding shares.
100%
100%
100%
100%
-
-
38%
35%
100% The liquidation procedures
had been completed in
February 2019.
100% The liquidation procedures
had been completed in May
2019.
38% The Group had control over
ATK, which was liquidated
on November 20, 2019,
wherein the liquidation
procedures has yet to be
completed.
35% The Group had the ability to
control Arcadyan.
100%
100%
100%
100%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
15
Name of
investor
The Company
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
The Company
and BSH
The Company
〃
〃
〃
〃
Panpal and
Gempal
〃
Name of Subsidiary
Ripal Optoelectronics Co.,
Ltd. (“Ripal”)
Mactech Co., Ltd
(“Mactech”)
General Life Biotechnology
Co., Ltd. (“GLB”)
Unicore BioMedical Co.,
Ltd. (“Unicore”)
Hippo Screen Neurotech
Co., Ltd. (“Hippo
Screen”)
Shennona Taiwan Co., Ltd.
(“Shennona TW”)
Aco Smartcare Co., Ltd.
(“Aco Smartcare”)
Shennona Corporation
(“Shennona”)
Auscom Engineering Inc.
(“Auscom”)
Just International Ltd.
(“Just”)
Compal International
Holding Co., Ltd.
(“CIH”)
Compal Electronics
(Holding) Ltd. (“CEH”)
Bizcom Electronics, Inc.
(“Bizcom”)
Flight Global Holding Inc.
(“FGH”)
Nature of Operation
Manufacturing of electric appliance and
audiovisual electric products
Manufacturing of equipment and
lighting, retailing of equipment and
international trading
Manufacturing and sales of medical
equipment
Management consulting services, rental
and leasing business, wholesale and
retail sale of medical equipment
Management consulting services, rental
and leasing business, wholesale and
retail sale of precision instruments and
international trading
Management consulting services, rental
and leasing business, wholesale and
retail sale of precision instruments and
international trading
Wholesale and retail sale of computer
software, software design services, data
processing services, wholesale and retail
sale of electronic materials, wholesale
and retail sale of precision instruments,
and biotechnology services
Medical care IOT business
R&D of notebook PC related products
and components
Investment
〃
〃
Warranty services and marketing of
monitors and notebook PCs
Investment
High Shine Industrial Corp.
〃
Maintenance and warranty services of
notebook PCs
Investment
〃
〃
〃
Manufacturing of notebook PCs
(“HSI”)
Compal Europe (Poland)
Sp. z o.o. (“CEP”)
Big Chance International
Co., Ltd. (“BCI”)
Compal Rayonnant
Holdings Limited
(“CRH”)
Core Profit Holdings
Limited (“CORE”)
Compalead Electronics
B.V. (“CPE”)
Compalead Eletronica do
Brasil Industria e
Comercio Ltda.
(“CEB”)
Compal Electronics India
Private Limited
(“CEIN”)
Description
Percentage of
ownership
December
31, 2019
December
31, 2018
100%
100%
53%
53%
50%
50%
100%
100%
70%
100%
52%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
70% shares of Hippo Screen
were acquired in February
2019.
Shennona TW was
established in March 2019.
52% shares of Aco
Smartcare were acquired in
July 2019.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Manufacturing and warranty service of
mobile phones
100%
100%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
16
Name of
investor
Just
〃
〃
CDH (HK)
〃
〃
Name of Subsidiary
Compal Display Holding
(HK) Limited
(“CDH (HK)”)
Compal Electronics
International Ltd.
(“CII”)
Compal International Ltd.
(“CPI”)
Compal Electronics
(China) Co., Ltd.
(“CPC”)
Compal Optoelectronics
(Kunshan) Co., Ltd.
(“CPO”)
Compal System Trading
(Kunshan) Co., Ltd.
(“CST”)
Nature of Operation
Investment
Percentage of
ownership
December
31, 2019
December
31, 2018
100%
100%
Description
〃
100%
100%
Sales of monitors, LCD TVs and related
components
Manufacturing and sales of monitors
100%
100%
100%
100%
Manufacturing and sales of LCD TVs
100%
100%
International trade and distribution of
computers and electronic components
100%
100%
CPC
Compal Smart Device
(Chongqing) Co., Ltd.
(“CSD”)
CII
Smart International
Research, manufacture and sales of
communication devices, mobile phones,
electronic computer, smart watch, and
provide related technical service
Investment
〃
〃
〃
Trading Ltd. (“Smart”)
Amexcom Electronics Inc.
(“AEI”)
Sales and maintenance of LCD TVs
Mexcom Electronics, LLC
Investment
(“MEL”)
Mexcom Technologies,
LLC (“MTL”)
〃
MEL and MTL CENA Electromex S.A. de
CIH
〃
〃
〃
CIH (HK)
〃
〃
〃
〃
C.V. (“CMX”)
Compal International
Holding (HK) Limited
(“CIH (HK)”)
Jenpal International Ltd.
(“Jenpal”)
Prospect Fortune Group
Ltd. (“PFG”)
Fortune Way Technology
Corp. (“FWT”)
Compal Electronics
Technology (Kunshan)
Co., Ltd. (“CET”)
Compal Information
(Kunshan) Co., Ltd.
(“CIC”)
Compal Information
Technology (Kunshan)
Co., Ltd. (“CIT”)
Kunshan Botai Electronics
Co., Ltd. (“BT”)
Compal Information
Research and
Development (Nanjing)
Co., Ltd. (“CIN”)
Manufacturing, sales, and maintenance
of LCD TVs
Investment
〃
〃
〃
Manufacturing of notebook PCs
〃
〃
〃
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100% CMX was disposed in
August 2019.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Software and hardware R&D of
computers, mobile phones and electronic
components
-
100% The liquidation procedures
has been completed in
September 2019.
〃
Compal Digital
Technology (Kunshan)
Co., Ltd. (“CDT”)
Manufacturing and sales of notebook
PCs, mobile phones, and digital products
100%
100%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
17
Name of
investor
BT
CDH (HK)
and CIH (HK)
CIJ
Name of Subsidiary
Compower Global Service
Co., Ltd. (“CGS”)
Compal Investment
(Jiansu) Co., Ltd.
(“CIJ”)
Compal Display
Nature of Operation
Maintenance and warranty service of
notebook PCs
Investment
Percentage of
ownership
December
31, 2019
December
31, 2018
100%
100%
100%
100%
Description
Manufacturing and sales of LCD TVs
100%
100%
Electronics (Kunshan)
Co., Ltd. (“CDE”)
Etrade Management Co.,
The Company
and Webtek
The Company Webtek Technology Co.,
Ltd. (“Etrade”)
〃
〃
〃
Etrade
Ltd. (“Webtek”)
Forever Young Technology
Inc. (“Forever”)
UniCom Global, Inc.
(“UCGI”)
Palcom International
Corporation (“Palcom”)
Compal Communication
(Nanjing) Co., Ltd.
(“CCI Nanjing”)
〃
Compal Digital
〃
Forever
〃
ATK
〃
Communication
(Nanjing) Co., Ltd.
(“CDCN”)
Compal Wireless
Communication
(Nanjing) Co., Ltd.
(“CWCN”)
Hanhelt Communication
(Nanjing) Co., Ltd.
(“Hanhelt”)
Giant Rank Trading Ltd.
(“GIA”)
OptoRite Inc.
MSI-ATK Otpics Holding
Corporation
(“MSI-ATK”)
Investment
〃
〃
Manufacturing and sales of computers
and electronic components
Sales of mobile phones
Manufacturing and processing of mobile
phones and tablet PCs
〃
〃
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
R&D and manufacturing of electronic
communication equipment
100%
100%
Sales of mobile phones
Sales of optical disc drives
Investment
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
〃
Maitek (BVI) Corporation
〃
(“Maitek”)
Arcadyan
Arcadyan Technology N.A.
Sales of wireless network products
〃
〃
〃
〃
〃
Corp. (“Arcadyan
USA”)
Arcadyan Germany
Technology GmbH
(“Arcadyan Germany”)
Arcadyan Technology
Corporation Korea
(“Arcadyan Korea”)
Arcadyan Holding (BVI)
Corp. (“Arcadyan
Holding”)
Arcadyan Technology
Limited (“Arcadyan
UK”)
Arcadyan Technology
Australia Pty Ltd.
("Arcadyan AU")
Technical support of wireless network
products
100%
100%
Sales of wireless network products
100%
100%
Investment
100%
100%
Technical support of wireless network
products
100%
100%
Sales of wireless network products
100%
100%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
18
Name of
investor
Arcadyan and
Zhi-pal
Arcadyan
〃
〃
The Company,
Arcadyan, and its
subsidiaries
CBN
〃
〃
Name of Subsidiary
Arcadyan do Brasil Ltda.
(“Arcadyan Brasil”)
Zhi-pal Technology Inc.
(“Zhi-pal”)
Tatung Technology Inc.
(“TTI”)
AcBel Telecom Inc.
(“AcBel Telecom”)
Compal Broadband
Network Inc. (“CBN”)
Speedlink Tradings
Limited (“Speedlink”)
Compal Broadband
Networks Belgium
BVBA (“CBNB”)
Compal Broadband
Nature of Operation
Sales of wireless network products
Investment
R&D and sales of household digital
electronic products
Investment
R&D and sales of cable modem, digital
set-up box, and other communication
products
Import and export business
Import and export business, technical
support and consulting service of
broadband networks
〃
〃
Arcadyan
Holding
Networks Netherlands
B.V. (“CBNN”)
Sinoprime Global Inc.
(“Sinoprime”)
Arcadyan Technology
(Shanghai) Corp. (“SVA
Arcadyan”)
Arch Holding (BVI) Corp.
(“Arch Holding”)
Arch Holding Compal Networking
(Kunshan) Co., Ltd.
(“CNC”)
Arcadyan Technology
(Vietnam) Co., Ltd.
(“Arcadyan Vietnam”)
Sinoprime
〃
Investment
R&D and sales of wireless network
products
Investment
Manufacturing of wireless network
products
Manufacturing of wireless network
products
AcBel Telecom Leading Images Ltd.
Investment
(“Leading Images”)
Leading Images Astoria Networks GmbH
Sales of wireless network products
TTI
〃
Quest
Exquisite
HSI
〃
IUE
Goal
(“Astoria GmbH”)
Quest International Group
Co., Ltd. (“Quest”)
Tatung Technology of
Japan Co., Ltd.
(“TTJC”)
Exquisite Electronic Co.,
Ltd. (“Exquisite”)
Tatung Home Appliances
(Wujiang) Co., Ltd.
(“THAC”)
Intelligent Universal
Enterprise Ltd. (“IUE”)
Goal Reach Enterprises
Ltd. (“Goal”)
Compal (Vietnam) Co.,
Ltd. (“CVC”)
Compal Development &
Management (“Vietnam”)
Co., Ltd. (“CDM”)
Investment
Sales of household digital electronic
products
Investment
Manufacturing of household digital
electronic products
Investment
〃
R&D, manufacturing, sales, and
maintenance of notebook PCs, computer
monitors, LCD TVs and electronic
components
Construction of and investment in
infrastructure in Ba-Thien industrial
district of Vietnam
Percentage of
ownership
December
31, 2019
December
31, 2018
Description
100%
100%
61%
51%
64%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
61%
51%
64%
100%
100%
(note 1)
-
CBNN was established in
February 2019.
100%
100%
100%
100%
-
Arcadyan Vietnam was
established in March 2019.
(note 2)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
19
Percentage of
ownership
December
31, 2019
December
31, 2018
100%
100%
100%
100%
100%
100%
Description
Manufacturing and sales of aluminum
alloy and magnesium alloy products
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Manufacturing of touch panels and LCD
TVs
100%
100%
Name of
investor
Rayonnant
Technology
and CRH
APH
〃
Rayonnant
Technology
(HK)
HengHao
Name of Subsidiary
Allied Power Holding
Corp. (“APH”)
Nature of Operation
Investment
〃
〃
Primetek Enterprises
Limited (“PEL”)
Rayonnant Technology
(HK) Co., Ltd.
(“Rayonnant
Technology (HK)”)
Rayonnant Technology
(Taicang) Co., Ltd.
(“Rayonnant
Technology (Taicang)”)
HengHao Holdings A Co.,
Ltd. (“HHA”)
Investment
HHA
HengHao Holdings B Co.,
〃
Ltd. (“HHB”)
HengHao Trading Co., Ltd. Marketing and international trade
HengHao Optoelectronics
Technology (Kunshan)
Co., Ltd. (“HengHao
Kunshan”)
Production of touch panels and related
components
Lucom Display Technology
(Kunshan) Limited
(“Lucom”)
Center Mind International
Co., Ltd. (“CMI”)
Prisco International Co.,
Ltd. (“PRI”)
Compal Investment
(Sichuan) Co., Ltd. (“CIS”)
Compal Electronics
(Chongqing) Co., Ltd.
(“CEQ”)
Compal Electronics
(Chengdu) Co., Ltd.
(“CEC”)
Compal Management
(Chengdu) Co., Ltd.
(“CMC”)
Investment
〃
Outward investment and consulting
services
R&D, manufacturing and sales of
notebook PCs, related components,
related maintenance and warranty
services
R&D and manufacturing of notebook
PCs, tablet PCs, digital products,
network switches, wireless AP, and
automobile electronic products
Corporate management consulting,
training and education, business
information consulting, financial and tax
consulting, investment consulting, and
investment management services
Investment
Investment
CORE
BSH
Billion Sea Holdings
Limited (“BSH”)
Mithera Capital Io LP
(“Mithera”)
GLB
Unicore
Rapha Bio Ltd. (“RBL”) Detector and feature
Raycore Biotech Co., Ltd.
Animal medication retail and wholesale
(“Raycore”)
HHB
〃
〃
BCI
〃
CMI
PRI
CIS
〃
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
99%
100%
51%
- Mithera was established in
June 2019.
100%
51%
Note 1: The shares were recovered in November 2019. As of December 31, 2019, Speedlink has yet to complete its liquidation
procedures.
Note 2: Astoria GmbH applied for liquidation in December 2018.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
20
(d)
Foreign currency
(i)
Foreign currency transaction
Transactions in foreign currencies are translated to the respective functional currencies of the
Group at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are retranslated to the functional
currency at the exchange rate at that date. The foreign currency gain or loss on monetary items
is the difference between the amortized cost in the functional currency at the beginning of the
year adjusted for the effective interest and payments during the period, and the amortized cost
in foreign currency translated at the exchange rate at the reporting date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair
value are retranslated to the functional currency at the exchange rate at the date that the fair
value was determined. Non-monetary items in a foreign currency that are measured based on
historical cost are translated using the exchange rate at the date of translation.
Foreign currency differences arising on retranslation are recognized in profit or loss, except for
the following differences which are recognized in other comprehensive income arising on the
retranslation:
1)
2)
fair value through other comprehensive income financial assets;
a financial liability designated as a hedge of the net investment in a foreign operation to
the extent that the hedge is effective; or
3)
qualifying cash flow hedges to the extent the hedge is effective
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on acquisition, are translated to the Group entities' functional currency at exchange
rates of the reporting date. The income and expenses of foreign operations, excluding foreign
operations in hyperinflationary economies, are translated to the Group entities' functional
currency at average rate. Foreign currency differences are recognized in other comprehensive
income, and presented in the foreign currency translation differences in equity.
When a foreign operation is disposed of such that control, significant influence or joint control
is lost, the cumulative amount in the translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes
of any part of its interest in a subsidiary that includes a foreign operation while retaining
control, the relevant proportion of the cumulative amount is reattributed to non-controlling
interest. When the Group disposes of only part of investment in an associate of joint venture
that includes a foreign operation while retaining significant or joint control, the relevant
proportion of the cumulative amount is reclassified to profit or loss.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
21
When the settlement of a monetary item receivable from or payable to a foreign operation is
neither planned nor likely in the foreseeable future, foreign currency gains and losses arising
from such items are considered to form part of a net investment in the foreign operation and
are recognized in other comprehensive income, and presented in the translation reserve in
equity.
(e) Classification of current and non-current assets and liabilities
An asset is classified as current under one of the following criteria, and all other assets are classified
as non-current.
(i)
It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii)
It holds the asset primarily for the purpose of trading;
(iii)
It expects to realize the asset within twelve months after the reporting period; or
(iv) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or
used to settle a liability for at least twelve months after the reporting period.
A liability is classified as current under one of the following criteria, and all other liabilities are
classified as non-current.
(i)
It expects to settle the liability in its normal operating cycle;
(ii)
It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) The Group does not have an unconditional right to defer settlement of the liability for at least
twelve months after the reporting period. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity instruments do not impact its
classification.
(f) Cash and cash equivalents
Cash comprise cash on hand and demand deposits. Cash equivalents are subject to an insignificant
risk of changes in their fair value, and are used by the Group in the management of its short-term
commitments.
The time deposits which meet the above definition and are held for the purpose of meeting short-
term cash commitments rather than for investment or other purposes are reclassified as cash
equivalents.
(g)
Financial instruments
(i)
Financial assets
Financial assets are classified into the following categories: measured at amortized cost, fair
value through other comprehensive income (“ FVOCI” ) and fair value through profit or loss
(“FVTPL”).
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
22
The Group shall reclassify all affected financial assets only when it changes its business model
for managing its financial assets.
1)
Financial assets measured at amortized cost
A financial asset is measured at amortized cost if it meets both of the following
conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
•its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
A financial asset measured at amortized cost is initially recognized at fair value, plus any
directly attributable transaction costs. These assets are subsequently measured at
amortized cost using the effective interest method. The amortized cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses, and impairment
loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in
profit or loss. A regular way purchase or sale of financial assets is recognized and
derecognized, as applicable, using trade date accounting.
2)
Fair value through other comprehensive income (“FVOCI”)
A debt investment is measured at FVOCI if it meets both of the following conditions and
is not designated as at FVTPL:
• it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
•its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Some accounts receivables are held within a business model whose objective is achieved
by both collecting contractual cash flows and selling by the Group, therefore, those
receivables are measured at FVOCI and presented as accounts receivable.
On initial recognition of an equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment’ s fair value in other
comprehensive income. This election is made on an instrument-by-instrument basis.
A financial asset measured at FVOCI is initially recognized at fair value, plus any
directly attributable transaction costs. These assets are subsequently measured at fair
value. Interest income calculated using the effective interest method, foreign exchange
gains and losses, and impairment losses, deriving from debt investments are recognized
in profit or loss; whereas dividends deriving from equity investments are recognized as
income in profit or loss, unless the dividend clearly represents a recovery of part of the
cost of the investment. Other net gains and losses of financial assets measured at FVOCI
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
23
are recognized in OCI. On derecognition, gains and losses accumulated in OCI of debt
investments are reclassified to profit or loss. However, gains and losses accumulated in
OCI of equity investments are reclassified to retain earnings instead of profit or loss. A
regular way purchase or sale of financial assets is recognized and derecognized, as
applicable, using trade date accounting.
Dividend income derived from equity investments is recognized on the date that the
Group’s right to receive payment is established, which in the case of quoted securities is
normally on the date the shareholders' meeting approved the earning distribution.
3)
Fair value through profit or loss (“FVTPL”)
All financial assets not classified as amortized cost or FVOCI described as above are
measured at FVTPL, including derivative financial assets. On initial recognition, the
Group may irrevocably designate a financial asset, which meets the requirements to be
measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Financial assets in this category are measured at fair value at initial recognition.
Attributable transaction costs are recognized in profit or loss as incurred. Subsequent
changes that are measured at fair value, which take into account any dividend and
interest income, are recognized in profit or loss. A regular way purchase or sale of
financial assets is recognized and derecognized, as applicable, using trade date
accounting.
4)
Impairment of financial assets
The Group recognizes loss allowances for expected credit losses on financial assets
measured at amortized cost (including cash and cash equivalents, financial assets
measured at amortized costs, notes and accounts receivable, other receivable, guarantee
deposit and other financial assets), debt investments measured at FVOCI, and accounts
receivable measured at FVOCI.
The Group measures loss allowances at an amount equal to lifetime expected credit loss
(“ECL”), except for the following which are measured as 12-month ECL:
•debt securities that are determined to have low credit risk at the reporting date; and
• other debt securities and bank balances for which credit risk (i.e. the risk of default
occurring over the expected life of the financial instrument) has not increased
significantly since initial recognition.
Loss allowance for trade receivables and contract assets are always measured at an
amount equal to lifetime ECL.
Lifetime ECLs are the ECLs that result from all possible default events over the expected
life of a financial instrument.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
24
12-month ECLs are the portion of ECLs that result from default events that are possible
within the 12 month after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual
period over which the Group is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly
since initial recognition and when estimating ECL, the Group considers reasonable and
supportable information that is relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and analysis based on the Group’s
historical experience and informed credit assessment as well as forward-looking
information.
The Group considers a debt security to have low credit risk when its credit risk rating is
equivalent to the globally understood definition of “investment grade which is considered
to be BBB- or higher per Standard & Poor’ s, Baa3 or higher per Moody’ s or twA or
higher per Taiwan Ratings”.
The Group assumes that the credit risk on a financial asset has increased significantly if
it is more than 30 days past due.
The Group considers a financial asset to be in default when the financial asset is more
than 90 days past due or the borrower is unlikely to pay its credit obligations to the
Group in full.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to
the Group in accordance with the contract and the cash flows that the Group expects to
receive). ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the Group assesses whether financial assets carried at amortized
cost and debt securities at FVOCI are credit-impaired. A financial asset is credit-
impaired when one or more events that have a detrimental impact on the estimated future
cash flows of the financial asset have occurred. An evidence that a financial assets is
credit-impaired includes the following observable data:
•significant financial difficulty of the borrower or issuer;
•a breach of contract such as a default or being more than 90 days past due;
•the lender of the borrower, for economic or contractual reasons relating to the
borrower's financial difficulty, having granted to the borrower a concession that the
lender would not otherwise consider;
•it is probable that the borrower will enter bankruptcy or other financial reorganization;
or
•the disappearance of an active market for a security because of financial difficulties.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
25
Loss allowances for financial assets measured at amortized cost are deducted from the
gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is
recognized in other comprehensive income instead of reducing the carrying amount of
the asset. The Group recognizes the amount of expected credit losses (or reversal) in
profit or loss, as an impairment gain or loss.
The gross carrying amount of a financial asset is written off (either partially or in full) to
the extent that there is no realistic prospect of recovery. This is generally the case when
the Group determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts subject to the write-off. However,
financial assets that are written off could still be subject to enforcement activities in
order to comply with the Group’s procedures for recovery of amounts due.
5)
Derecognition of financial assets
Financial assets are derecognized when the contractual rights to the cash flows from the
assets expire, or when the Group transfers substantially all the risks and rewards of
ownership of the financial assets.
On derecognition of a debt instrument in its entirety, the Group recognizes the difference
between its carrying amount and the sum of the consideration received or receivable and
any cumulative gain or loss that had been recognized in other comprehensive income and
presented in “ other equity – unrealized gains or losses on fair value through other
comprehensive income” , in profit or loss, and presented it in the line item of non-
operating income.
On derecognition of a financial asset other than in its entirety, the Group allocates the
previous carrying amount of the financial asset between the part it continues to recognize
under continuing involvement, and the part it no longer recognizes on the basis of the
relative fair values of those parts on the date of the transfer. The difference between the
carrying amount allocated to the part that is no longer recognized and the sum of the
consideration received for the part no longer recognized and any cumulative gain or loss
allocated to it that had been recognized in other comprehensive income is recognized in
profit or loss, and presented in the line item of non-operating income and expenses. A
cumulative gain or loss that had been recognized in other comprehensive income is
allocated between the part that continues to be recognized and the part that is no longer
recognized on the basis of the relative fair values of those parts.
(ii) Financial liabilities and equity instruments
1)
Classification of debt or equity
Debt or equity instruments issued by the Group are classified as financial liabilities or
equity in accordance with the substance of the contractual agreement.
Equity instruments refer to surplus equities of the assets after the deduction of all the
debts for any contracts. Equity instruments issued are recognized as the amount of
consideration received, less, the direct cost of issuing.
Interest and loss or gain related to financial liabilities are recognized as profit or loss and
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
26
are reported under non-operating income and expenses. Financial liabilities are
reclassified as equity when converted, and conversions do not generate profit or loss.
2)
Financial liabilities at fair value through profit or loss
A financial liability is classified in this category if acquired principally for the purpose of
selling in the short term. This type of financial liability is measured at fair value at the
time of initial recognition, and attributable transaction costs are recognized in profit or
loss as incurred. Financial liabilities at fair value through profit or loss are measured at
fair value, and changes therein, which take into account any interest expense, are
recognized in profit or loss, and are included in non-operating income or expenses.
3)
Other financial liabilities
Financial liabilities not classified as held-for-trading or designated as at fair value
through profit or loss, which comprise loans and borrowings, and trade and other
payable, are measured at fair value, plus, any directly attributable transaction cost at the
time of initial recognition. Subsequent to initial recognition, they are measured at
amortized cost calculated using the effective interest method other than significant
interest on short-term loans and payables. Interest expense not capitalized as capital cost
is recognized in profit or loss, and is included in non-operating income or expenses.
4)
Derecognition of financial liabilities
The Group derecognizes a financial liability when its contractual obligation has been
discharged, cancelled or expired. The difference between the carrying amount of a
financial liability removed and the consideration paid (including any non-cash assets
transferred or liabilities assumed) is recognized in profit or loss, and is included in non-
operating income or expenses.
5)
Offsetting of financial assets and liabilities
The Group presents financial assets and liabilities on a net basis when the Group has the
legally enforceable right to offset and intends to settle such financial assets and liabilities
on a net basis or to realize the assets and settle the liabilities simultaneously.
(iii) Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency and interest rate
exposures. Derivatives are initially measured at fair value. Any attributable transaction costs
thereof are recognized in profit or loss as incurred. Subsequent to initial recognition,
derivatives are measured at fair value, and changes therein are recognized in profit or loss and
are included in the line item of non-operating income. When a derivative is designated as, and
effective for, a hedging instrument, its timing of recognition in profit or loss is determined
based on the nature of the hedging relationship. When the fair value of a derivative instrument
is positive, it is classified as a financial asset, whereas when the fair value is negative, it is
classified as a financial liability.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
27
Embedded derivatives are separated from the host contract and accounted for separately if the
economic characteristics and risks of the non-financial asset’ s host contract are not closely
related to the embedded derivatives and the host contract is not measured at FVTPL.
The Group designates its hedging instruments, including derivatives, embedded derivatives,
and non-derivative instruments for a hedge of a foreign currency risk, as a fair value hedge,
cash flow hedge, or hedge of a net investment in a foreign operation. Foreign exchange risks of
firm commitments are treated as fair value hedges.
At initial designated hedging relationships, the Group documents the risk management
objectives and strategy for undertaking the hedge. The Group also documents the economic
relationship between the hedged item and the hedging instrument, including whether the
changes in cash flows of the hedged items and hedging instrument are expected to offset each
other.
The Group shall discontinue hedge accounting prospectively only when the hedging
relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after
taking into account any rebalancing of the hedging relationship, if applicable). This includes
instances when the hedging instrument expires or is sold, terminated or exercised.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion
of changes in the fair value of the derivative is recognized in other comprehensive
income and accumulated in “other equity－gains (losses) on hedging instruments”. The
effective portion of changes in the fair value of the derivative that is recognized in other
comprehensive income is limited to the cumulative change in fair value of the hedged
item, determined on a present value basis, from inception of the hedge. Any ineffective
portion of changes in the fair value of the derivative is recognized immediately in profit
or loss, and is presented in the line item of non-operating income and expenses in the
statement of comprehensive income.
The Group designates only the change in fair value of the spot element of the forward
exchange contract as the hedging instrument in cash flow hedging relationships. The
change in fair value of the forward element of the forward exchange contracts is
separately accounted for as a cost of hedging and accumulated in a separate component
within equity.
When the hedged item is recognized in profit or loss, the amount accumulated in equity
and retained in other comprehensive income is reclassified to profit or loss in the same
period or in the periods during which the hedged item affects the profit or loss, and is
presented in the same accounting item with the hedged item recognized in the
consolidated statement of comprehensive income. However, for a cash flow hedge of a
forecast transaction recognized as a nonfinancial asset or liability, the amount
accumulated in “ other equity－ gains (losses) on hedging instruments in cash flow
hedging securities” and retained in other comprehensive income is reclassified as the
initial cost of the nonfinancial asset or liability. In addition, if that amount is a loss and
the Group expects that all or a portion of that loss will not be recovered in future periods,
it shall immediately reclassify the amount in profit or loss.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
28
When hedge accounting for cash flow hedges is discontinued, the amount that has been
accumulated in the cash flow hedge reserve (and costs of hedging) remains in equity until
the hedged future cash flows are no longer expected to occur. Otherwise, that amount
would be adjusted within the carrying amount of the non-financial item. For other cash
flow hedges, the amount is reclassified to profit or loss in the same period or in the
periods as the hedged expected future cash flows affect the profit or loss. However, if the
hedged future cash flows are no longer expected to occur, the amount shall immediately
be reclassified from cash flow reserve (and the cost of hedging reserve) to profit or loss.
(h)
Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is
based on the weighted-average-cost principle and includes expenditure incurred in acquiring the
inventories, production or transition costs, and other costs incurred in bringing them to their existing
location and condition. In the case of manufactured inventories and work in progress, cost includes
an appropriate share of production overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less, the
estimated costs of completion and selling expenses.
(i)
Investment in associates
Associates are those entities in which the Group has significant influence, but not control or join
control, over the financial and operating policies.
Investments in associates are accounted for using the equity method and are recognized initially at
cost. The cost of the investment includes transaction costs. The carrying amount of the investment
in associates includes goodwill arising from the acquisition, less, any accumulated impairment
losses.
The consolidated financial statements include the Group’ s share of the profit or loss and other
comprehensive income of equity-accounted investees after adjustments to align the accounting
policies with those of the Group from the date that significant influence commences until the date
that significant influence ceases. When changes in an associate’s equity are not recognized in profit
or loss or other comprehensive income of the associate and such changes do not affect the Group’s
ownership percentage of the associate, the Group recognizes the changes in ownership interests of its
associate in capital surplus in proportion to its ownership.
Unrealized profits resulting from the transactions between the Group and an associate are eliminated
to the extent of the Group’ s interest in the associate. Unrealized losses on transactions with
associates are eliminated in the same way, except to the extent that the underlying asset is impaired.
When the Group’ s share of losses exceeds its interest in associates, the carrying amount of the
investment, including any long-term interests that form part thereof, is reduced to zero, and the
recognition of further losses is discontinued except to the extent that the Group has an obligation or
has made payments on behalf of the investee.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
29
The Group shall discontinue the use of the equity method from the date when its investment ceases
to be an associate or a joint venture. The Group shall measure the retained interest at fair value. The
difference between the fair value of retained interest and proceeds from disposal, and the carrying
amount of the investment at the date the equity method was discontinued is recognized in profit or
loss. The Group shall account for all the amounts previously recognized in other comprehensive
income in relation to that investment on the same basis as would have been required if the associates
had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in
other comprehensive income would be reclassified to profit or loss on the disposal of the related
assets or liabilities, the entity shall reclassify the gain or loss from equity to profit or loss when the
equity method is discontinued. If an entity’s ownership interest in an associate or a joint venture is
reduced while the entity continues to apply the equity method, the entity shall reclassify the
proportion of the gain or loss that had previously been recognized in other comprehensive income
relating to that reduction in ownership interest to profit or loss.
If an investment in an associate becomes an investment in a joint venture or an investment in a joint
venture becomes an investment in an associate, the Group shall continue to apply the equity method
without remeasuring the retained interest.
When the Group subscribes to additional shares in an associate at a percentage different from its
existing ownership percentage, the resulting carrying amount of the investment differs from the
amount of the Group’s proportionate interest in the net assets of the associate. The Group records
such a difference as an adjustment to investments with the corresponding amount charged or credited
to capital surplus, however, when the balance of the capital surplus arising from the investment was
insufficient, the difference charged or credited to retained earnings. If the Group’ s ownership
interest is reduced due to the additional subscription to the shares of associate by other investors, the
proportionate amount of the gains or losses previously recognized in other comprehensive income in
relation to that associate shall be reclassified to profit or loss on the same basis as would be required
if the associate had directly disposed of the related assets or liabilities.
(j)
Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
(i.e. joint ventures) have rights to the net assets of the arrangement. A joint venture shall recognize
its interest in a joint venture as an investment and shall account for that investment using the equity
method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless, the entity
is exempted from applying the equity method as specified in that Standard.
When assessing the classification of a joint arrangement, the Group shall consider the structure and
legal form of the arrangement, the terms in the contractual arrangement and other facts and
circumstances. The Group had previously reviewed the contractual structure of the joint
arrangement, and has now decided to reclassify the investments in “Jointly Controlled Entities” to
“Joint Ventures”. Although the investments have been reclassified, they are still recorded under the
equity method. Thus, there is no effect in the recognized assets, liabilities and other comprehensive
income.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
30
(k)
Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses. Cost includes expenditure that is directly attributed to the
acquisition of the asset. The cost of the software is capitalized as part of the property, plant
and equipment if the purchase of the software is necessary for the property, plant and
equipment to be capable of operating.
Each part of an item of property, plant and equipment with a cost that is significant in relation
to the total cost of the item shall be depreciated separately, unless the useful life and the
depreciation method of a significant part of an item of property, plant and equipment are the
same as the useful life and depreciation method of another significant part of that same item.
The gain or loss arising from the derecognition of an item of property, plant and equipment
shall be determined as the difference between the net disposal proceeds, if any, and the
carrying amount of the item, and it shall be recognized as other gains and losses.
(ii) Subsequent cost
Subsequent expenditure is capitalized only when it is probable that the future economic
benefits associated with the expenditure will flow to the Group. The carrying amount of those
parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as
incurred.
(iii) Depreciation
The depreciable amount of an asset is determined after deducting its residual amount, and it
shall be allocated on a systematic basis over its useful life. Items of property, plant and
equipment with the same useful life may be grouped in determining the depreciation charge.
The remainder of the items may be depreciated separately. The depreciation charge for each
period shall be recognized in profit or loss.
The depreciable amount of a leased asset is allocated to each accounting period during the
period of expected use on a systematic basis consistent with the depreciation policy the lessee
adopts for depreciable assets that are owned. If there is reasonably certainty that the lessee
will obtain ownership by the end of the lease term, the period of expected use is the useful life
of the asset; otherwise, the asset is depreciated over the shorter of the lease term and its useful
life.
Land has an unlimited useful life and therefore is not depreciated.
The estimated useful lives for the current and comparative years of significant items of
property, plant and equipment are as follows:
1)
2)
Buildings: 9~50 years
Building improvement: 0.5~20 years
3) Machinery and equipment: 1~10 years
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
31
4)
Research equipment: 1~10 years
5) Modeling equipment: 0.5~5 years
6)
Other equipment: 1~15 years
Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If
expectations differ from the previous estimates, the change is accounted for as a change in an
accounting estimate.
(l)
Leases
Applicable after January 1, 2019
(i)
Identifying a lease
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether:
1)
2)
3)
the contract involves the use of an identified asset – this may be specified explicitly or
implicitly, and should be physically distinct or represent substantially all of the capacity
of a physically distinct asset. If the supplier has a substantive substitution right, then the
asset is not identified; and
the Group has the right to obtain substantially all of the economic benefits from use of
the asset throughout the period of use; and
the Group has the right to direct the use of the asset when it has the decision-making
rights that are most relevant to changing how and for what purpose the asset is used. In
rare cases where the decision about how and for what purpose the asset is used is
predetermined, the Group has the right to direct the use of an asset if either:
－ the Group has the right to operate the asset and the providers do not have the right
to vary; or
－ the Group designed the asset in a way that predetermines how and for what purpose
it will be used.
At inception or on reassessment of a contract that contains a lease component, the Group
allocates the consideration in the contract to each lease component on the basis of their relative
stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the
Group has elected not to separate non-lease components and account for the lease and non-
lease components as a single lease component.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
32
(ii) As a lessee
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the
end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate implicit in the lease or, if
that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the
Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
－ fixed payments, including in-substance fixed payments
－ variable lease payments that depend on an index or a rate, initially measured using the
index or rate as at the commencement date;
－ amounts expected to be payable under a residual value guarantee; and
－ payments for purchase or termination options that are reasonably certain to be exercised.
The lease liability is measured at amortized cost using the effective interest method. It is
remeasured when:
－ there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Group’s estimate of the amount expected to be payable under a
residual value guarantee; or
－ there is a change in the lease term resulting from a change of its assessment on whether
it will exercise an option to purchase the underlying asset, or
－ there is a change of its assessment on whether it will exercise an extension or termination
option; or
－ there is any lease modifications
When the lease liability is remeasured, other than lease modifications, a corresponding
adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the
carrying amount of the right-of-use asset has been reduced to zero.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
33
When the lease liability is remeasured to reflect the partial or full termination of the lease for
lease modifications that decrease the scope of the lease, the Group accounts for the
remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset
to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or
loss relating to the partial or full termination of the lease.
The Group presents right-of-use assets that do not meet the definition of investment and lease
liabilities as a separate line item respectively in the statement of financial position.
The Group has elected not to recognize right-of-use assets and lease liabilities for short-term
leases of machinery and office equipment that have a lease term of 12 months or less and
leases of low-value assets. The Group recognizes the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.
(iii) As a lessor
When the Group acts as a lessor, it determines at lease commencement whether each lease is a
finance lease or an operating lease. To classify each lease, the Group makes an overall
assessment of whether the lease transfers to the lessee substantially all of the risks and rewards
of ownership incidental to ownership of the underlying asset. If this is the case, then the lease
is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the
Group considers certain indicators such as whether the lease is for the major part of the
economic life of the asset.
Applicable before January 1, 2019
(i) As lessor
Lease income from operating lease is recognized in income on a straight-line basis over the
lease term. Initial direct costs incurred in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and recognized as an expense over the lease
term on the same basis as the lease income. Incentives granted to the lessee to enter into the
operating lease are spread over the lease term on a straight-line basis so that the lease income
received is reduced accordingly.
(ii) As lessee
Operating leases are not recognized in the Group’s balance sheets.
Payments made under operating lease (excluding insurance and maintenance expenses) are
recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives
received are recognized as an integral part of the total lease expense, over the term of the lease.
(m)
Intangible assets
(i) Goodwill
1)
Initial recognition
Goodwill arising from acquisition of subsidiaries is included in intangible assets. The
measurement of initial recognition of goodwill, please refer to note (4)(u).
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
34
2)
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
Goodwill related to an investment accounted for using equity method is included in the
carrying amount of the investment, and not allocated to any asset, including goodwill,
forms part of the carrying amount of the investment accounted for using the equity
method.
(ii) Research & Development
During the research phase, activities are carried out to obtain and understand new scientific or
technical knowledge. Expenditures during this phase are recognized in profit or loss as
incurred.
Expenditures arising from the development phase shall be recognized as an intangible asset if
all the conditions described below can be demonstrated; otherwise, they will be recognized in
profit or loss as incurred.
1)
2)
3)
4)
5)
6)
The technical feasibility of completing the intangible asset so that it will be available for
use or sale.
Its intention to complete the intangible asset and use or sell it.
Its ability to use or sell the intangible asset.
How the intangible asset will generate probable future economic benefits.
The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset.
Its ability to measure reliably the expenditure attributable to the intangible asset during
its development.
Capitalized expenditure arising from the development phase is measured at cost less
accumulated amortization and accumulated impairment losses.
(iii) Other intangible assets
Other intangible assets that are acquired by the Group are measured at cost, less accumulated
amortization and any accumulated impairment losses.
(iv) Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognized in profit or loss as incurred.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
35
(v) Amortization
The amortizable amount is the cost of an asset, or other amount substituted for cost, less its
residual value.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful
lives of intangible assets, other than goodwill and intangible assets with all indefinite useful
life, from the date that they are available for use. The estimated useful lives for the current and
comparative periods are as follows:
1)
2)
3)
4)
Patents: the shorter of contract period and estimated useful lives
Royalty: amortized by contract period
Computer software: 1~10 years
Copyright: 10 years
The residual value, the amortization period, and the amortization method for an intangible
asset with a finite useful life shall be reviewed at least annually at each fiscal year-end. Any
change shall be accounted for as changes in accounting estimates.
(n)
Impairment of non-derivative financial assets
Non-derivative financial assets except for inventories, deferred tax assets, assets arising from
employee benefits and non-current assets classified as held for sale are assessed at the end of each
reporting period whether there is any indication that an asset may be impaired. If any such
indication exists, the Group shall estimate the recoverable amount of the asset. If it is not possible to
determine the recoverable amount (fair value less cost to sell and value in use) for the individual
asset, then the Group will have to determine the recoverable amount for the asset's cash-generating
unit.
The Group assesses goodwill and intangible assets, which have indefinite useful lives and are not
available for use, on an annual basis and recognizes an impairment loss on excess of carrying value
over the recoverable amount.
The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair
value, less costs to sell and its value in use. If, and only if, the recoverable amount of an asset is less
than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount.
That reduction is an impairment loss. An impairment loss shall be recognized immediately in profit
or loss.
For the purpose of impairment testing, goodwill acquired in a business combination shall, from the
acquisition date, be allocated to each of the acquirer’ s cash-generating units, or groups of cash-
generating units that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquire are assigned to those units or group of units. If the
carrying amount of the cash-generating units exceeds the recoverable amount of the unit, the entity
shall recognize the impairment loss and the impairment loss shall be allocated to reduce the carrying
amount of each asset in the unit. Reversal of an impairment loss for goodwill is prohibited.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
36
The Group assesses at the end of each reporting period whether there is any indication that an
impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or
may have decreased. An impairment loss recognized in prior periods for an asset other than
goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine
the asset’s recoverable amount since the last impairment loss was recognized. If this is the case, the
carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal
of an impairment loss.
(o)
Provisions
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects the current market assessments of the time value of money
and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
A provision for warranties is recognized when the underlying products or services are sold. The
provision is based on historical warranty data and a weighting of all possible outcomes against their
associated probabilities.
(p) Treasury stock
Repurchased shares are recognized under treasury shares (a contra-equity account) based on its
repurchase price (including all directly accountable costs), and net of tax. Gains on disposal of
treasury shares should be recognized under Capital Reserve – Treasury Shares Transactions; losses
on disposal of treasury shares should be offset against existing capital reserves arising from similar
types of treasury shares. If there are insufficient capital reserves to be offset against, then such
losses should be accounted for under retained earnings. The carrying amount of treasury shares
should be calculated using the weighted average different types of repurchase.
During the cancellation of treasury shares, Capital Reserve – Share Premiums and Share Capital
should be debited proportionately. Gains on cancellation of treasury shares should be recognized
under existing capital reserves arising from similar types of treasury shares; losses on cancellation of
treasury shares should be offset against existing capital reserves arising from similar types of
treasury shares. If there are insufficient capital reserves to be offset against, then such losses should
be accounted for under retained earnings.
(q) Recognition of Revenue
Revenue from contracts with customers
Revenue is measured based on the consideration to which the Group expects to be entitled in
exchange for transferring goods or services to a customer. The Group recognizes revenue when it
satisfies a performance obligation by transferring control of a good or a service to a customer. The
accounting policies for the Group’s main types of revenue are explained below.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
37
(i)
Sale of goods
The Group manufactures and sells electronic products to electronic products brand vendor. The
Group recognizes revenue when control of the products has transferred, being when the
products are delivered to the customer, the customer has full discretion over the channel and
price to sell the products, and there is no unfulfilled obligation that could affect the customer’s
acceptance of the products. Delivery occurs when the products have been shipped to the
specific location, the risks of obsolescence and loss have been transferred to the customer, and
either the customer has accepted the products in accordance with the sales contract, the
acceptance provisions have lapsed, or the Group has objective evidence that all criteria for
acceptance have been satisfied.
The Group assesses sales discounts based on historical experience, management's judgment
and other known reasons. Such allowances are recognized as a deduction of sales revenue in
the same period in which sales are made. The aforementioned provisions are expected to settle
over the next year. A refund liability is recognized for expected discounts payable to customers
in relation to sales made until the end of the reporting period. No element of financing is
deemed present as the sales of electronic products are made with a credit term which is
consistent with the market practice.
A receivable is recognized when the goods are delivered as this is the point in time that the
Group has a right to an amount of consideration that is unconditional.
(ii) Financing components
The Group does not expect to have any contracts where the period between the transfer of the
promised goods or services to the customer and payment by the customer exceeds one year. As
a consequence, the Group does not adjust any of the transaction prices for the time value of
money.
(r)
Employee benefits
(i) Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognized as an
employee benefit expense in profit or loss in the periods during which services are rendered by
employees.
(ii) Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. The Group’ s net obligation in respect of defined benefit pension plans is calculated
separately for each plan by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior periods; that benefit is discounted to
determine its present value. The fair value of any plan assets is deducted. The discount rate is
the yield at the reporting date on government bonds that have maturity dates approximating the
terms of the Group’s obligations and that are denominated in the same currency in which the
benefits are expected to be paid.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
38
The calculation of defined benefit obligation is performed annually by a qualified actuary
using the projected unit credit method. When the calculation results in a benefit to the Group,
the recognized asset is limited to the total of the present value of economic benefits available
in the form of any future refunds from the plan or reductions in future contributions to the
plan. In order to calculate the present value of economic benefits, consideration is given to any
minimum funding requirements that apply to any plan in the Group. An economic benefit is
available to the Group if it is realizable during the life of the plan, or on settlement of the plan
liabilities.
If the benefits of a plan are improved, the pension cost incurred from the portion of the
increased benefit relating to past service by employees, is recognized immediately in profit or
loss.
Re-measurement of net defined benefit liability (asset) (including actuarial gains, losses and
the return on plan asset and changes in the effect of the asset ceiling, excluding any amounts
included in net interest) is recognized in other comprehensive income (loss). The effect of re-
measurement of the defined benefit plan is charged to retained earnings.
The Group recognizes gains or losses on the curtailment or settlement of a defined benefit plan
when the curtailment or settlement occurs. The gain or loss on curtailment comprises any
resulting change in the fair value of plan assets and change in the present value of defined
benefit obligation.
(iii) Short term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
(s)
Share-based payment
The grant-date fair value of share-based payment awards granted to employee is recognized as
employee expenses, with a corresponding increase in equity, over the period that the employees
become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to
reflect the number of awards which the related service and non-market performance conditions are
expected to be met, such that the amount ultimately recognized as an expense is based on the number
of award that meet the related service and non-market performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-
based payment is measured to reflect such conditions, and there is no true-up for differences
between expected and actual outcomes.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
39
(t)
Income taxes
Income tax expenses include both current taxes and deferred taxes. Except for expenses related to
business combinations or recognized directly in equity or other comprehensive income, all current
and deferred taxes shall be recognized in profit or loss.
Current taxes include tax payables and tax deduction receivables on taxable gains (losses) for the
year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as
well as tax adjustments related to prior years.
Deferred taxes arise due to temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be
recognized for the following exceptions:
(i) Assets and liabilities that are initially recognized but are not related to the business
combination and have no effect on net income or taxable gains (losses) during the transaction.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where
there is a high probability that such temporary differences will not reverse.
(iii)
Initial recognition of goodwill.
Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled based on tax rates that have been enacted
or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities may be offset against each other if the following criteria are met:
(i)
The entity has the legal right to settle tax assets and liabilities on a net basis; and
(ii)
the taxing of deferred tax assets and liabilities fulfill one of the below scenarios:
1)
2)
levied by the same taxing authority; or
levied by different taxing authorities, but where each such authority intends to settle tax
assets and liabilities (where such amounts are significant) on a net basis every year of the
period of expected asset realization or debt liquidation, or where the timing of asset
realization and debt liquidation is matched.
A deferred tax asset should be recognized for the carry-forward of unused tax losses, unused tax
credits, and deductible temporary differences to the extent that it is probable that future taxable
profit will be available against which the unused tax losses, unused tax credits, and deductible
temporary differences can be utilized. Such unused tax losses, unused tax credits, and deductible
temporary differences shall also be re-evaluated every year on the financial reporting date, and they
shall be adjusted based on the probability that future taxable profit that will be available against
which the unused tax losses, unused tax credits, and deductible temporary differences can be
utilized.
The surtax on unappropriated earnings is recoded as current tax expense in the following year after
the resolution to appropriate retained earnings is approved in a stockholders’ meeting.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
40
(u) Business combination
Goodwill is measured as an aggregation of the consideration transferred (which generally is
measured at fair value at the acquisition date) and as an amount of any non-controlling interest in the
acquiree, net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed (generally at fair value). If the residual balance is negative, the Group shall re-assess
whether it has correctly identified all of the assets acquired and liabilities assumed, and recognize a
gain on the bargain purchase thereafter.
All the transaction costs incurred for the business combination are recognized immediately as the
Group’s expenses when incurred, except for the issuance of debt or equity instruments.
If the business combination is achieved in stages, the Group shall measure any non-controlling
equity interest in the acquire, either at fair value or at the non-controlling interest’ s proportionate
share of the acquiree’s identifiable net assets. Other non-controlling interest is measured (1) at fair
value at the acquisition date or (2) by using other valuation techniques acceptable under the IFRS as
endorsed by the FSC.
In a business combination achieved in stages, the Group shall re-measure its previously held equity
interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss, if
any, in profit or loss. In prior reporting periods, the Group may have recognized changes in the
value of its equity interest in the acquiree in other comprehensive income. If so, the amount that was
recognized in other comprehensive income shall be recognized on the same basis as would be
required if the Group had disposed directly of the previously held equity interest. If the disposal of
the equity interest required a reclassification to profit or loss, such an amount shall be reclassified to
profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the Group shall report in its financial statements provisional
amounts for the items for which the accounting is incomplete. During the measurement period, the
Group shall retrospectively adjust the provisional amounts recognized at the acquisition date, or
recognize additional assets or liabilities to reflect new information obtained about facts and
circumstances that existed as of the acquisition date. The measurement period shall not exceed one
year from the acquisition date.
(v) Earnings per share
The Group discloses the basic and diluted earnings per share attributable to ordinary equity holders
of the Group. The calculation of basic earnings per share is based on the profit attributable to the
ordinary shareholder of the Group divided by weighted average number of ordinary shares
outstanding. The calculation of diluted earnings per share is based on the profit attributable to
ordinary shareholders of the Group divided by weighted average number of ordinary shares
outstanding after adjustment for the effects of all dilutive potential ordinary shares. Dilutive
potential ordinary shares comprise restricted employee stock and employee compensation not yet
approved by the Board of Directors.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
41
(w) Operating segments
An operating segment is a component of the Group that engages in business activities from which it
may incur revenues and incur expenses (including revenues and expenses relating to transactions
with other components of the Group). Operating results of the operating segment are regularly
reviewed by the Group’ s chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance. Each operating segment consists of standalone
financial information.
(5)
Significant accounting assumptions and judgments, and major sources of estimation uncertainty:
The preparation of the consolidated financial statements in conformity with the IFRSs endorsed by the
FSC requires management to make judgments, estimates, and assumptions that affect the application of the
accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results
may differ from these estimates.
The management continues to monitor the accounting estimates and assumptions. The management
recognizes any changes in accounting estimates during the period and the impact of those changes in
accounting estimates in the next period.
There are no critical judgments in applying the accounting policies that have significant effect on the
amounts recognized in the consolidated financial statements. In addition, information about assumptions
and estimation uncertainties that have a significant risk of resulting in a material adjustment within the
next financial year is as follows:
(a) Recognition and measurement of refund liabilities
Because of the sales returns and allowances, the Group records a refund liabilities (sales returns and
allowance provisions) for estimated returns and other allowances in the same period the related
revenue is recorded. The estimate is made based on historical experience, market and economic
conditions, and any other known factors using the expected value or the most likely amount and it
could be different from actual sales returns and allowances, therefore, the management periodically
reviews the adequacy of the estimation used.
(b) Valuation of inventories
As inventories are stated at the lower of cost or net realizable value, the net realizable value of the
inventory is mainly determined based on assumptions as to future demand within a specific time
horizon. Due to the rapid industrial changes, there may be significant differences in the net realizable
value of inventories. Refer to note (6)(g) for further description of the valuation of inventories.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
42
(6) Explanation of significant accounts:
(a) Cash and cash equivalents
Cash on hand
Checking accounts and demand deposits
Time deposits
Bonds purchased under resale agreements
December
31, 2019
December
31, 2018
$
19,217
10,834
10,455,819
12,389,146
56,034,361
57,033,555
50,000
863,010
$
66,559,397
70,296,545
Please refer to note (6)(ac) for the disclosure of the exchange rate risk, the interest rate risk and the
fair value sensitivity analysis of the financial assets and liabilities of the Group.
(b)
Financial assets and liabilities at fair value through profit or loss
Mandatorily measured at fair value through profit or loss:
Non-derivative financial assets
Structured deposits
Stock listed in domestic markets
Stock unlisted in domestic markets
Fund in domestic or foreign markets
Derivative instruments not used for hedging
Foreign exchange contracts
Swap contracts
Total
Current
Non-current
Financial liabilities held-for-trading:
Derivative instruments not used for hedging
Foreign exchange contracts
Total
December
31, 2019
December
31, 2018
$
1,330,458
3,965,062
-
24,350
91,009
466
15,455
633,859
-
69,390
10,168
2,045
1,461,738
4,680,524
1,346,379
4,611,134
115,359
69,390
1,461,738
4,680,524
December
31, 2019
December
31, 2018
5,854
5,854
26,913
26,913
(Continued)
$
$
$
$
$
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
43
The Group uses derivative instruments to hedge foreign currency risk the Group is exposed to
arising from its operating activities. The following derivative instruments not applied hedge
accounting were classified as mandatorily measured at fair value through profit or loss and held-for-
trading financial liabilities :
December 31, 2019
Contract amount
(in thousand)
Currency
Maturity date
Derivative financial assets:
Foreign exchange contracts:
Forward exchange purchased
USD 84,500
USD to BRL
January 14~May 26, 2020
Swap contracts:
Currency Swap
Derivative financial liabilities:
Foreign exchange contracts:
USD 55,000
USD to TWD January 13~March 30, 2020
Forward exchange sold
EUR 21,000
EUR to USD January 10~March 13, 2020
Forward exchange purchased
USD 1,000
USD to BRL
September 23, 2020
December 31, 2018
Contract amount
(in thousand)
Currency
Maturity date
Derivative financial assets:
Foreign exchange contracts:
Forward exchange sold
USD 30,200
EUR to USD January 14~March 28, 2019
Swap contracts:
Currency swap
Derivative financial liabilities:
Foreign exchange contracts:
USD 27,300
USD to TWD February 14, 2019
Forward exchange sold
EUR 21,000
EUR to USD January 10~March 28, 2019
Forward exchange sold
EUR
1,000
EUR to TWD March 25, 2019
Forward exchange purchased
USD 136,900
USD to BRL
January 3~April 16, 2019
The market risk related to the financial instruments please refer to note (6)(ac).
As of December 31, 2019 and 2018, the Group did not provide any aforementioned financial assets
as collaterals for its loans.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
44
(c)
Financial assets at fair value through other comprehensive income
Equity investments at fair value through other comprehensive
income:
Stock listed in domestic markets
Stock listed in foreign markets
Stock unlisted in domestic markets
Stock unlisted in foreign markets
Total
December
31, 2019
December
31, 2018
$
2,055,890
2,730,648
448,110
400,184
2,246,932
1,990,100
177,121
51,363
$
4,928,053
5,172,295
The purpose that the Group invests in the above-mentioned equity securities is for long-term
strategies, but rather for trading purpose. Therefore, these equity securities are designated as at
FVOCI.
For the year ended December 31, 2019, the Group had sold all of its shares in PrimeSensor
Technology Inc., Macroblock Inc., and Innolux Corporation (“ Innolux” ), which were measured at
fair value through other comprehensive income. The fair value of the shares was $845,202 when
disposed and the cumulative losses amounted to $4,824,910, which had been transferred to retained
earnings from other comprehensive income.
For the year ended December 31, 2018, the Group has sold parts of its shares held in Innolux
Corporation and Parawin Venture Capital Corp., which were measured at fair value through other
comprehensive income. The fair value of the shares was $428,635 when disposed, and the
cumulative losses amounted to $1,513,953, which has been transferred to retained earnings from
other equity.
If there is an increase (decrease) in the market price by 5% on the reporting date of the equity
securities hold by the Group, the increase (decrease) in other comprehensive income (pre-tax) for the
years ended December 31, 2019 and 2018, will be $246,403 and $258,615, respectively. These
analyses are performed on the same basis for the period and assume that all other variables remain
the same.
The Group’s information of market risk please refer to note (6)(ac).
As of December 31, 2019 and 2018, the Group did not provide any financial assets at fair value
through other comprehensive income as collaterals for its loans.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
45
(d)
Financial instruments used for hedging
(i)
Financial instruments used for hedging were as follows:
Cash flow hedge:
Financial assets used for hedging:
Forward exchange contracts
Financial liabilities used for hedging:
Forward exchange contracts
(ii) Cash flow hedge
December
31, 2019
December
31, 2018
$
$
61
4,932
-
-
The Group’ s strategy is to use forward exchange contracts to hedge its foreign currency
exposure in respect of forecasted future sales.
As of December 31, 2018, the Group did not enter into any hedge contract. As of December
31, 2019, the amount related to the items designated as hedge instruments were as follows:
December 31, 2019
Contract amount
(in thousands)
Currency Maturity period
Average
strike price
Derivative financial
assets used for
hedging
Forward exchange
EUR 6,000
EUR to USD
January 31~
1.1278
sold
Derivative financial
liabilities used for
hedging
June 29, 2020
Forward exchange
USD 39,000
EUR to USD
January 31~
1.1327
sold
December 29, 2020
Forward exchange
USD 3,589
USD to MXN
February 26~
19.507
purchased
March 30, 2020
(iii) For the years ended December 31, 2019 and 2018, the ineffective portion of cash flow hedge
recognized in profits (losses) amounted of $(5,934) and $559, respectively, recorded as “other
gains and losses, net”.
(iv) For the years ended December 31, 2019 and 2018, the profits (losses) of changes in fair value
of derivative financial instruments used for hedging reclassified from other equity to profit or
loss is recognized as revenue in the statement of comprehensive income. Please refer to note
(6)(ab).
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
46
(e) Current financial assets measured at amortized costs
Common bonds – Taiwan Star Telecom Corporation Limited
(“Taiwan Star”)
December
31, 2019
December
31, 2018
$
-
350,000
The Group has assessed that these financial assets are held to maturity to collect contractual cash
flows, which consist solely of payments of principal and interest on the principal amount
outstanding. Therefore, these investments were classified as financial assets measured at amortized
cost.
As of December 31, 2018, the Group did not provide the aforementioned financial assets as
collaterals for its loans.
(f) Notes and accounts receivable
Notes receivables from operating activities
December
31, 2019
December
31, 2018
$
42,418
102,775
Accounts receivables – measured at amortized cost
167,615,217
184,671,402
Accounts receivables – fair value through other comprehensive
income
Less: allowance for uncollectible accounts
Notes and accounts receivable
Notes and accounts receivable – related parties
28,007,745
23,020,497
195,665,380
207,794,674
(3,928,716)
(4,020,603)
$ 191,736,664
203,774,071
$ 191,692,152
203,715,965
$
44,512
58,106
The Group has assessed a portion of its trade receivables that was held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets;
therefore, such trade receivables were measured at fair value through other comprehensive income.
The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of
lifetime expected loss provision for all receivables. To measure the expected credit losses, trade
receivables have been grouped based on shared credit risk characteristics and the days past due, as
well as incorporated forward looking information.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
47
(i)
The loss allowance provision of IT product segment of the Group was determined as follows:
December 31, 2019
Carrying
amount of
accounts
receivable
172,692,844
13,008,324
3,817,340
189,518,508
Weighted-
average
ECL rate
0%
0.547%
100%
December 31, 2018
Carrying
amount of
accounts
receivable
186,203,302
11,907,279
3,830,424
201,941,005
Weighted-
average
ECL rate
0%
1.208%
100%
$
$
$
$
Credit rating
Level A
Level B
Level C
Credit rating
Level A
Level B
Level C
Lifetime ECLs
-
71,101
3,817,340
3,888,441
Lifetime ECLs
-
143,862
3,830,424
3,974,286
Credit-
impaired
No
No
Yes
Credit-
impaired
No
No
Yes
(ii) The loss allowance provision of strategically integrated product segment of the Group was
determined as follows:
December 31, 2019
Carrying
amount of
accounts
receivable
2,620,806
2,713,406
783,004
-
29,656
6,146,872
Weighted-
average
ECL rate
0%
0.10%
1.00%
100%
Credit rating
Level A
Level B
Level C
Level D~E
Level F
$
$
Lifetime ECLs
-
2,789
7,830
-
29,656
40,275
Credit-
impaired
No
No
No
-
Yes
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
48
December 31, 2018
Carrying
amount of
accounts
receivable
1,550,848
3,024,709
1,247,546
-
30,566
5,853,669
Weighted-
average
ECL rate
0.01%
0.11%
1.00%
-
100%
Credit rating
Level A
Level B
Level C
Level D~E
Level F
$
$
Lifetime ECLs
82
3,194
12,475
-
30,566
46,317
Credit-
impaired
No
No
No
-
Yes
The aging analysis of notes and accounts receivable were determined as follows:
Overdue 1 to 180 days
Overdue 181 to 365 days
Overdue 365 days and over
December
31, 2019
December
31, 2018
$
1,707,265
2,919,586
285
-
15,809
25,555
$
1,707,550
2,960,950
The movement in the allowance for notes and accounts receivable was as follows:
Balance at January 1
Impairment losses recognized
Amounts written off
Effect of changes in exchange rates
Balance at December 31
2019
2018
4,020,603
4,021,894
(7,790)
(85,907)
1,810
(1,085)
-
(206)
3,928,716
4,020,603
$
$
Allowance for uncollectible account is the balance of accounts receivable which are uncollectable.
Except for evaluating the situation of the customers’ payment records and widely analyzing the
credit rating of customers, the Group also takes all the necessary procedures for collection. The
Group believes that there is no doubt for the recovery of the due but unimpaired accounts receivable,
therefore, no allowance recognized.
The Group entered into accounts receivable factoring agreements with banks. As of December 31,
2019 and 2018, except for the amount used under the actual sales amount in accordance with certain
agreements, the factoring amount granted by the banks was USD 1,000,000 thousand and EUR
59,700 thousand, USD 950,000 thousand and EUR 20,000 thousand, respectively. Based on the
agreements, the Group is not responsible for guaranteeing the ability of the accounts receivable
obligor to make payment when it is affected by credit risk. Thus, this is a non-recourse accounts
receivable factoring. The Group derecognized the above accounts receivable because it has
transferred substantially all of the risks and rewards of their ownership and it does not have any
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
49
continuing in involvement in them. After the transfer of the accounts receivable, the Group can
request partial advanced amount, while the interest calculated at an agreed rate is paid to the bank in
the period during the time of receiving advance and the accounts receivable is collected. The
remaining amounts with no advance are received when the accounts receivable are settled by the
customers. As of December 31, 2019 and 2018, accounts receivable factored were recovered and
derecognized since the conditions of derecognition were met.
The Company, customers, and banks signed the three-party contracts in which the banks purchase
accounts receivable from the Company. The total amount of the accounts receivable should not
exceed the facility limit provided by the banks to the Company’s customers. Based on the contracts,
the banks have no right to request the Company to repurchase the accounts receivable. Thus, this is
a non-recourse accounts receivable transfer. As of December 31, 2019 and 2018, accounts receivable
factored were recovered and derecognized since the conditions of derecognition were met.
As of December 31, 2019 and 2018, the details of the factored accounts receivable but unsettled
were as follows:
Accounts
receivable
factored
(gross)
Purchaser
Financial
Institution $ 25,672,764
Accounts
receivable
factored
(gross)
Purchaser
Financial
Institution $ 32,098,074
December 31, 2019
Amount advanced
Paid
Unpaid
Amount
recognized
in other
receivable
Amount
Collateral
derecognized Interest rate
-
25,672,764
-
-
25,672,764 2.21%~2.80%
December 31, 2018
Amount advanced
Paid
Unpaid
Amount
recognized
in other
receivable
Amount
Collateral
derecognized Interest rate
-
32,098,074
-
-
32,098,074 3.02%~3.52%
As of December 31, 2019 and 2018, the Group did not provide any aforementioned notes and
accounts receivable as collaterals.
(g)
Inventories
Finished goods
Work in progress
Raw materials
Raw materials in transit
December
31, 2019
30,269,057
$
December
31, 2018
33,463,627
6,455,035
6,830,625
41,213,675
38,526,674
495,771
327,996
$
78,433,538
79,148,922
(i) During the years ended December 31, 2019 and 2018, inventory cost recognized as cost of
sales amounted to $946,533,518 and $937,139,320, respectively.
(ii) The write-down of inventories to net realizable value amounted to $587,759 and $263,774, for
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
50
the years ended December 31, 2019 and 2018, respectively.
(iii) As of December 31, 2019 and 2018, the Group did not provide any inventories as collaterals
for its loans.
(h)
Investments accounted for using equity method
A summary of the Group’s financial information for equity-accounted investees at the reporting date
is as follows:
Associates
Joint venture
Plus: credit balance of investment in equity
method (other non-current liability)
Less: unrealized profits or losses
(i) Associates
December
31, 2019
December
31, 2018
$
7,410,134
7,469,153
(14,725)
16,180
7,395,409
7,485,333
41,719
-
(118,042)
(120,848)
$
7,319,086
7,364,485
1)
The fair value of the shares of listed company based on the closing price was as follow:
Allied Circuit Co., Ltd. (“Allied Circuit”)
Avalue Technology Inc. (“Avalue”)
December
31, 2019
December
31, 2018
$
$
1,838,621
1,147,839
2,986,460
1,061,543
586,743
1,648,286
2)
The Group’s share of the net gain (loss) of associates was as follows:
The Group’s share of the gain (loss) of associates
$
229,152
2019
2018
813,796
3)
The Group’s financial information for investments accounted for using the equity method
that are individually immaterial was as follows:
Carrying amount of individually immaterial associates
$
7,410,134
7,469,153
December
31, 2019
December
31, 2018
The Group’s share of the net income (loss) of associates:
Profit (loss) from continuing operations
Other comprehensive income
2019
2018
229,152
813,796
(159,440)
(287,138)
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
51
Total comprehensive income
$
69,712
526,658
4)
5)
In October 2019, the Group had sold part of its shares held in Avalue Technology Inc.
(“ Avalue” ), with a consideration (net of costs of disposal) amounting to $18,033. The
transaction has been completed and the price has been fully recovered, wherein the
Group recognized a gain of $8,990, which was accounted for as other gain and loss.
In August 2018, the Group has sold all of its shares held in LC Future Center Limited
Ltd. (“LCFC”), with consideration (net of costs of disposal) amounting to USD 246,792
thousands. The transaction has been completed and the price has been fully recovered.
The Group recognized a gain of $2,511,085 (USD 83,925 thousands), which was
accounted for as other gain and loss.
(ii)
Joint venture
In April 2010, the Group and another company established a jointly controlled entity, Compal
Connector Manufacture Ltd. (“CCM”), and obtained an ownership interest of 51%. CCM’s
actual paid-in capital amounted to USD10,000 thousands. Moreover, in May 2014, the Group
and another company established a jointly controlled entity, Zheng Ying Electronics
(Chongqing) Co., Ltd., (“ Zheng Ying” ), and obtained an ownership interest of 51%. Zheng
Ying’s actual paid-in capital amounted to USD2,500 thousands.
The Group’s financial information for investment accounted for using the equity method that
are individually insignificant was as follows:
December
31, 2019
December
31, 2018
The carrying amount of the Group’s interests in all individually
insignificant joint ventures
$
(14,725)
16,180
The Group’s share of the net income (loss) of joint ventures:
Losses from continuing operations (also the total
comprehensive losses)
$
(32,144)
(16,428)
2019
2018
(iii) As of December 31, 2019 and 2018, the Group did not provide any investments accounted for
using equity method as collaterals for its loans.
(i)
Changes in subsidiaries’ equity
(i)
Changes in ownership interests while retaining control (increase in ownership interest)
The Group purchased shares of TTI from non-controlling interest amounting to $634 in 2018.
The following summarizes the effect of changes in equity of the parent due to changes in the
ownership interest of the subsidiaries:
Acquisition of non-controlling interest (carrying amount)
2018
$
631
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
52
Consideration paid for the non-controlling interest
Difference
Capital surplus – changes in ownership interests in subsidiaries
(634)
(3)
(3)
$
$
(ii) Changes in subsidiaries’ equity did not result in the Group’s loss of control
1)
Subsidiaries’ employee stock options exercised
CBN issued 69 thousand and 351 thousand new shares because of its employees'
exercised stock options in 2019 and 2018, respectively, which resulted in the reduce of
the Group’s ownership of CBN by 0.07% and 0.41%, respectively.
2)
Issuance of new shares for cash of subsidiaries
The Group purchased newly issued shares of Arcadyan amounting to $323,917 at a
percentage different from its existing ownership percentage in the fourth quarter of 2019,
resulting in a decrease in the ownership of the Group in Arcadyan by 0.37%.
The Group did not purchase newly issued shares of CBN in the fourth quarter of 2018,
which resulted in a decrease in the ownership of the Group’s in CBN by 7.27%.
3)
Issuance and cancellation of subsidiaries’ restricted shares
Arcadyan canceled 84 thousand restricted shares and issued 4,500 thousand restricted
new shares in the years ended December 31, 2019 and 2018, respectively, which resulted
in an increase of 0.01% and a decrease of 0.84%, respectively, of the ownership of the
Group in Arcadyan.
4)
The following summarizes the effect of changes in equity of the parent due to changes in
the ownership interest of subsidiaries:
Capital surplus – changes in ownership interest
in subsidiaries
Retained earnings
2019
2018
$
$
43,473
-
43,473
(32,703)
(32,160)
(64,863)
(j)
Loss control of subsidiaries
The Group had sold all of its shares in CMX, at the amount of $218,133, to a third party in August
2019, resulting in its losing control over CMX. The entire amount had been fully received. The gain
on disposal amounting to $58,107 was recorded as other gains and losses.
The carrying amounts of assets and liabilities of CMX were as follows:
Cash and cash equivalents
Other current assets
$
74,638
2,918
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
53
Property, plant and equipment
Notes and accounts payable
Other payables
Other current liabilities
Carrying amount net assets
117,625
(644)
(33,716)
(966)
$
159,855
(k) Material non-controlling interests of subsidiaries
The material non-controlling interests of subsidiaries were as follows:
Subsidiaries
Arcadyan Technology
Corporation
Main operation place
Taiwan
Percentage of
non-controlling interests
December
December
31, 2018
31, 2019
%65
%65
The following information of the aforementioned subsidiaries have been prepared in accordance
with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Included
in these information are the fair value adjustment made during the acquisition and relevant
difference in accounting principles between the Group as at the acquisition date. Intra-group
transactions were not eliminated in this information.
Arcadyan’s collective financial information
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Non-controlling interests
Sales revenue
Net income
Other comprehensive income
Comprehensive income
Profit, attributable to non-controlling interests
Comprehensive income, attributable to non-controlling interests
December
31, 2019
22,052,835
$
December
31, 2018
18,638,678
3,478,150
2,614,802
(13,044,806)
(11,620,412)
(1,145,245)
(159,270)
11,340,934
9,473,798
7,625,040
6,330,768
2019
2018
32,897,900
26,621,262
1,356,986
(53,703)
1,303,283
894,962
859,763
880,183
31,652
911,835
567,101
587,791
$
$
$
$
$
$
$
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
54
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
$
2,496,825
1,815,108
(837,786)
(369,128)
2,779
(30,312)
702,117
16,667
Net increase (decrease) in cash and cash equivalents
$
1,631,506
2,164,764
(l)
Property, plant and equipment
The cost, depreciation, and impairment of the property, plant and equipment of the Group for the
years ended December 31, 2019 and 2018, were as follows:
Buildings
and building
improvement Machinery
Other
equipment
Land
Under
construction
and
prepayment
for purchase of
equipment
Total
Cost:
Balance on January 1, 2019
$
1,772,214
17,020,270
26,201,597
10,642,904
1,003,490
56,640,475
Additions
25,888
382,049
1,956,846
1,900,557
1,561,601
5,826,941
Disposals and derecognitions
(93,905)
(440,934)
(773,288)
(1,003,600)
-
(2,311,727)
Reclassifications
-
221,513
406,831
104,464
(1,007,468)
(274,660)
Effect of movements in exchange rates
1,023
(216,119)
(747,345)
(354,892)
(247,065)
(1,564,398)
Balance on December 31, 2019
Balance on January 1, 2018
Additions
Disposals and derecognitions
Reclassifications
Effect of movements in exchange rates
Balance on December 31, 2018
Depreciation and impairments loss:
Balance on January 1, 2019
Depreciation for the period
Disposals and derecognitions
Effect of movements in exchange rates
Balance on December 31, 2019
Balance on January 1, 2018
Depreciation for the period
Disposals and derecognitions
Effect of movements in exchange rates
Balance on December 31, 2018
Carrying amounts:
Balance on December 31, 2019
Balance on January 1, 2018
Balance on December 31, 2018
$
$
$
$
$
$
$
$
$
$
1,705,220
16,966,779
27,044,641
11,289,433
1,310,558
58,316,631
1,769,326
15,100,906
23,268,462
9,759,017
1,136,868
51,034,579
-
-
-
1,787,027
3,354,838
1,467,955
83,609
6,693,429
(55,743)
(109,254)
(423,779)
-
(588,776)
5,030
104,891
104,690
(214,611)
-
2,888
183,050
(417,340)
(264,979)
(2,376)
(498,757)
1,772,214
17,020,270
26,201,597
10,642,904
1,003,490
56,640,475
-
-
-
-
-
-
-
-
-
-
10,105,653
18,441,703
7,674,891
802,230
2,524,504
1,778,318
(413,292)
(662,693)
(990,010)
(142,157)
(453,255)
(321,608)
10,352,434
19,850,259
8,141,591
9,239,452
17,548,800
6,066,960
738,622
2,309,302
1,547,601
(22,941)
(95,177)
(399,077)
150,520
(1,321,222)
459,407
10,105,653
18,441,703
7,674,891
-
-
-
-
-
-
-
-
-
-
36,222,247
5,105,052
(2,065,995)
(917,020)
38,344,284
32,855,212
4,595,525
(517,195)
(711,295)
36,222,247
1,705,220
6,614,345
7,194,382
3,147,842
1,310,558
19,972,347
1,769,326
5,861,454
5,719,662
3,692,057
1,136,868
18,179,367
1,772,214
6,914,617
7,759,894
2,968,013
1,003,490
20,418,228
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
55
As of December 31, 2019 and 2018, part of the Group’ s property, plant and equipment were
provided as collateral for long-term borrowings. Please refer to note (8).
(m) Right-of-use assets
The Group leases many assets including land and buildings, machinery and vehicles. Information
about leases for which the Group as a lessee is presented below:
Land
Buildings Machinery
Vehicles
and Other
Cost:
Balance on January 1, 2019
$
-
-
Adjustment on initial application of IFRS 16
891,147
1,934,899
Balance on January 1, 2019 per IFRS 16
891,147
1,934,899
Additions
Deductions
245,220
1,142,076
-
(226,448)
Effect of movements in exchange rates
(25,554)
(40,536)
Balance on December 31, 2019
$
1,110,813
2,809,991
Depreciation and impairment loss:
Balance on January 1, 2019
$
Adjustment on initial application of IFRS 16
Balance on January 1, 2019 per IFRS 16
-
-
-
-
-
-
-
87,482
87,482
9,460
(9,067)
(1,214)
86,661
-
-
-
Total
-
2,981,097
2,981,097
1,422,883
-
67,569
67,569
26,127
(4,403)
(239,918)
(581)
(67,885)
88,712
4,096,177
-
-
-
-
-
-
Depreciation for the period
32,106
770,753
22,615
43,834
869,308
Deductions
-
(104,216)
-
Effect of movements in exchange rates
(519)
(7,070)
(345)
(4,403)
(6,750)
(108,619)
(14,684)
Balance on December 31, 2019
$
31,587
659,467
22,270
32,681
746,005
Carrying amount:
Balance on December 31, 2019
$
1,079,226
2,150,524
64,391
56,031
3,350,172
The Group leases land, offices, warehouses and factory facilities under an operating lease for the
year ended December 31, 2018, please refer to note (6)(s).
(n)
Short-term borrowings
The details of short-term borrowings were as follows:
Unsecured bank loans
Unused credit line for short-term borrowings
Range of interest rates
December
31, 2019
60,951,844
$
December
31, 2018
72,350,197
$ 107,077,000
83,720,000
0.66%~5.05% 0.45%~5.87%
For information on the Group’s interest risk, foreign currency risk and liquidity risk, please refer to
note (6)(ac).
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
56
(o) Long-term borrowings
The details of long-term borrowings were as follows:
Unsecured bank loans
December 31, 2019
Currency
TWD
Annual range of
interest rate
0.73%~1.18%
Maturity year
2020~2023
Secured bank loans
TWD
1.67%
2022
Less: current portion
Total
Unused credit lines for
long-term borrowings
Unsecured bank loans
December 31, 2018
Currency
TWD
Annual range of
interest rate
0.79%~1.22%
Maturity year
2019~2021
Secured bank loans
TWD
1.67%
2022
Less: current portion
Total
Unused credit lines for
long-term borrowings
Amount
25,650,000
98,438
(18,189,375)
7,559,063
12,047,000
Amount
28,396,250
137,813
(17,535,625)
10,998,438
5,443,000
$
$
$
$
$
$
For information on the Group’s interest risk, foreign currency risk and liquidity risk, please refer to
note (6)(ac).
The Group pledged property, plant and equipment as collateral for its partial long-term borrowings.
Please refer to note (8).
(p) Unsecured convertible corporate bonds
(i)
The Company’ s subsidiary, Arcadyan, issued the first domestic unsecured convertible
corporate bonds on June 6, 2019. The details was as follows:
Total convertible corporate bonds issued
Unamortized discounts on corporate bonds payable
Balance of corporate bonds payable as of December 31, 2019
Conversion options included in equity component (classified as capital surplus and
non-controlling interests)
December
31, 2019
1,000,000
(33,508)
966,492
48,667
$
$
$
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
57
Interest expenses
2019
$
7,919
The effective interest rate of the first issued convertible corporate bonds was 1.3284%.
(ii) The main terms of issuing the above-mentioned convertible corporate bonds was as follows:
1)
2)
3)
Coupon rate: 0%
Duration: three years (June 6, 2019~June 6, 2022)
Repayment
Put option and call option are excluded from the issuance of convertible corporate bonds.
Except that the bondholders convert the bonds to Arcadyan’ s common shares or the
bonds are repurchased and cancelled by Arcadyan from the securities firm’ s business
office, the bonds will be repaid in cash at par value when the bonds expired.
4)
Terms of conversion
a)
The bondholder may opt to have its bonds converted into the Arcadyan’s common
shares, with the approval of Taiwan Depository & Clearing Corporation through
securities firms, at any time between three months after the issuance date
(September 7, 2019) and the day before the maturity day (June 6, 2022), except for
the following:
- The closing period in accordance with the applicable law;
- The period starting from the first day of the first fifteen working days prior to
the date of record for determination wherein the shareholders are entitled to
receive the distributions or rights to subscribe for new shares in a capital
increase for cash, and ends on the date of record for the distribution of the
rights/benefits;
- The period starts from the date of record of the capital decrease and ends on the
date prior to the trading of the reissuance shares after the capital decrease.
b)
Conversion price is determined as NT$98.3 per share upon issuance. Arcadyan paid
cash dividends and issued new shares for cash in 2019; therefore, the conversion
price has been adjusted to NT$93 per share.
(q) Lease liabilities
The details of leases liabilities were as follows:
Current
Non-current
December
31, 2019
$
717,021
$ 1,550,067
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the maturity analysis, please refer to note (6)(ac).
The amounts recognized in profit or loss were as follows:
Interest on lease liabilities
Variable lease payments not included in the measurement of lease liabilities
Expenses relating to leases of low-value assets, excluding short-term leases
The amounts recognized in the statement of cash flows for the Group was as follows:
Total cash outflow for leases
(i)
Real estate leases
58
2019
48,758
4,579
117,545
$
$
$
2019
$ 1,003,697
The Group leases land leasehold rights, leases buildings for its office and plant space. The
leases of office space typically run for a period of 1 ~19 years, and of land leasehold rights for
50 years.
(ii) Other leases
The Group leases vehicles and equipment, with lease terms of 1~5 years.
The Group also leases some equipments and vehicles with contract terms of 1~3 years. These
leases are short-term or leases of low-value items. The Group has elected not to recognize
right-of-use assets and lease liabilities for these leases.
(r)
Provisions
Balance on January 1, 2019
Provisions made during the period
Provisions used during the period
Provisions reversed during the period
Balance on December 31, 2019
Balance on January 1, 2018
Provisions made during the period
Provisions used during the period
Provisions reversed during the period
Balance on December 31, 2018
Warranties
426,981
$
$
$
721,303
(305,236)
(12,291)
830,757
387,147
398,735
(313,832)
(45,069)
$
426,981
Provisions relate to sales of products are assessed based on historical experience, management's
judgment and other known reasons. Such allowances are recognized as a deduction of sales revenue
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
59
in the same period in which sales are made. The aforementioned provisions are expected to settle
over the next year.
(s) Operating lease
(i)
The Group as lessee
1)
The rental payables of the non-cancellable operating lease are as follows:
Less than one year
Between one and five years
More than five years
$
December
31, 2018
569,275
598,996
116,349
$
1,284,620
The Group leased several office areas under operating leases with the leasing terms from
1 to 19 years and had an option to renew the leases when the leases expired.
For the year ended December 31, 2018, expenses recognized in profit or loss under
operating leases amounted to $612,239.
The lease contract includes those of the land and building, with their residual values
being assumed by the landlord. The rental is regularly adjusted based on the current
market price. Based on the risks and rewards of leased assets not transferred to the
Group, the Group recognized the lease as operating lease.
2)
Long-term prepaid rent – land leasehold rights
The Group acquired land leasehold rights under operating lease and was expensed
equally over 50 years. As of December 31, 2018, land leasehold rights accounted as long-
term prepaid rents amounted to $891,147.
For the year ended December 31, 2018, expenses recognized in profit or loss under
operating lease amounted to $13,302.
(t)
Employee benefits
(i) Defined benefit plans
Reconciliation of defined benefit obligations at present value and plan assets at fair value were
as follows:
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
60
Present value of defined benefit obligations
Fair value of plan assets
Net defined benefit liabilities
December
31, 2019
(1,486,824)
December
31, 2018
(1,447,375)
748,660
737,229
(738,164)
(710,146)
$
$
The Group makes defined benefit plan contributions to the pension fund account with Bank of
Taiwan that provides pensions for employees upon retirement. The plans (covered by the
Labor Standards Law) entitle a retired employee to receive retirement benefits based on years
of service and average salary for the six months prior to retirement.
1)
Composition of plan assets
The Group allocates pension funds in accordance with the Regulations for Revenues,
Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds
are managed by the Labor Pension Fund Supervisory Committee. With regard to the
utilization of the funds, minimum earnings in the annual distributions on the final
financial statements shall be no less than the earnings attainable from the amounts
accrued from two-year time deposits with interest rates offered by local banks.
The balance of the Group’ s labor pension reserve account in the Bank of Taiwan
amounted to $746,865 (excluding the ending balance of interest receivable) as of
December 31, 2019. For information on the utilization of the labor pension fund assets
including the asset allocation and yield of the fund, please refer to the website of the
Bureau of Labor Funds, Ministry of Labor.
2) Movements in the present value of the defined benefit obligations
The movements in the present value of defined benefit obligations for the Group were as
follows:
Defined benefit obligations on January 1
$
(1,447,375)
2019
Benefit paid by the plan
Current service costs and interest
Remeasurements of net benefit liabilities
50,196
(24,942)
(64,703)
2018
(1,418,645)
33,560
(26,745)
(35,545)
Defined benefit obligations on December 31
$
(1,486,824)
(1,447,375)
3) Movements of the fair value of defined benefit plan assets
The movements in the fair value of the defined benefit plan assets for the Group were as
follows:
2019
2018
Fair value of plan assets on January 1
$
Expected return on plan assets
737,229
9,432
712,835
9,841
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
61
Remeasurements of net benefit plan assets
Contributions paid by the employer
Benefits paid by the plan
Fair value of plan assets on December 31
$
23,917
28,278
(50,196)
748,660
19,280
28,833
(33,560)
737,229
4)
Expenses recognized in profit or loss
The expenses recognized in profit or loss were as follows:
2019
2018
Current service cost
Net interest on the net defined benefit liability
(asset)
Cost of sales
Selling expenses
Administrative expenses
Research and development expenses
$
$
$
$
6,401
9,109
15,510
689
812
3,686
10,323
15,510
7,023
9,881
16,904
817
986
3,880
11,221
16,904
5)
Actuarial assumptions
The following were the Group’s principal actuarial assumptions at the reporting date:
Discount rate
December 31,
2019
0.90%~1.00%
December 31,
2018
1.30%~1.375%
Future salary increasing rate
3.00%
3.00%
The expected allocation payment made by the Group to the defined benefit plans for the
one year period after the reporting date is $28,677.
The weighted-average lifetime of the defined benefit plan is 9.9~14.74 years.
6)
Sensitivity analysis
If the main actuarial assumptions had changed, the impact on the present value of the
defined benefit obligation shall be as follows:
Effects to the defined
benefit obligation
Increased
0.25%
Decreased
0.25%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
62
December 31, 2019
Discount rate
Future salary increasing rate
December 31, 2018
Discount rate
Future salary increasing rate
(36,821)
37,254
(37,146)
37,746
38,220
(36,089)
38,572
(36,552)
Reasonably possible changes at the reporting date to one of the relevant actuarial
assumptions, holding other assumptions constant, would have affected the defined
benefit obligation by the amounts shown above. The method used in the sensitivity
analysis is consistent with the calculation on the net defined benefit liabilities in the
balance sheets.
The method and assumption used in the sensitivity analysis is consistent with prior
period.
(ii) Defined contribution plans
The Group allocates 6% of each employee’ s monthly wages to the labor pension personal
account at the Bureau of the Labor Insurance in accordance with the provisions of the Labor
Pension Act. Under this defined contribution plan, the Group allocates the labor pension at a
specific percentage to the Bureau of the Labor Insurance without additional legal or
constructive obligations.
The Company and all subsidiaries in domestic recognized the pension costs under the defined
contribution method amounting to $413,479 and $381,455 for the years ended December 31,
2019 and 2018, respectively. Payment was made to the Bureau of Labor Insurance.
Other subsidiaries recognized the pension expenses, basic endowment insurance expenses, and
social welfare expenses amounting to $1,294,677 and $1,319,260 for the years ended
December 31, 2019 and 2018, respectively.
(u)
Income taxes
(i)
Income tax expenses
1)
The amount of income tax for the years ended December 31, 2019 and 2018, was as
follows:
2019
2018
Current tax expense
Recognized during the period
$
2,364,140
10% surtax on unappropriated earnings
Tax credit of investment
Deferred tax expense
294,326
(438,511)
2,219,955
2,092,686
27,288
(183,384)
1,936,590
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
63
Recognition and reversal of temporary
differences
Adjustment in tax rate
(107,798)
-
(107,798)
393,967
(130,273)
263,694
Income tax expense
$
2,112,157
2,200,284
2)
The amount of income tax recognized in other comprehensive income for the years ended
December 31, 2019 and 2018, was as follows:
Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of the defined benefit
obligation
Unrealized gains (losses) on equity instruments
at fair value through other comprehensive
income
Items that will be reclassified subsequently to
profit or loss:
Foreign currency translation differences of
foreign operations
2019
2018
(8,157)
(33,202)
44,004
35,847
(42,630)
(75,832)
(10,678)
3,293
$
$
$
3)
The income tax expense that was reconciled between the actual income tax expense and
profit before tax for the years ended December 31, 2019 and 2018, was as follows:
Profit before tax
Income tax calculated based on tax rate
Adjustment in tax rate
Estimated tax effect of tax exemption on investment
$
$
2019
10,007,876
2,743,666
-
2018
11,789,585
3,454,689
(130,273)
(984,537)
(133,869)
(183,384)
(11,635)
162,005
27,288
(155,231)
(25,237)
(438,511)
(150,199)
(156,657)
294,326
$
2,112,157
2,200,284
(Continued)
income, net
Realized investment loss
Investment tax credit
Changes in temporary differences
Adjustment of estimated difference
Surtax on unappropriated earnings
(ii) Deferred tax assets and liabilities
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
64
Changes in the amount of deferred tax assets and liabilities for 2019 and 2018 were as follows:
Refund
liabilities
Contract
liabilities
Unrealized
exchange
losses, net
Others
Total
Deferred tax assets:
Balance on January 1, 2019
$
178,025
164,955
Recognized in profit or loss
(57,422)
(105,526)
Recognized in other
comprehensive income
Balance on December 31, 2019
Balance on January 1, 2018
$
$
-
120,603
259,546
-
59,429
176,283
163,265
586,948
-
750,213
411,518
517,703
171,280
1,023,948
595,280
18,398
707,381
504,024
18,398
1,637,626
1,351,371
Recognized in profit or loss
(81,521)
(11,328)
(248,253)
(16,683)
(357,785)
Recognized in other
comprehensive income
-
-
-
Balance on December 31, 2018
$
178,025
164,955
163,265
30,362
517,703
30,362
1,023,948
Deferred tax liabilities:
Balance on January 1, 2019
Recognized in profit or loss
Recognized in other comprehensive income
Balance on December 31, 2019
Balance on January 1, 2018
Recognized in profit or loss
Recognized in other comprehensive income
Balance on December 31, 2018
(iii) Unrecognized deferred tax assets
Unrealized
exchange
gains, net
$
$
$
$
-
(497,092)
-
(497,092)
(171,868)
171,868
-
-
Others
Total
(478,169)
9,610
(43,567)
(512,126)
(442,569)
(77,777)
42,177
(478,169)
(478,169)
(487,482)
(43,567)
(1,009,218)
(614,437)
94,091
42,177
(478,169)
Deferred tax assets have not been recognized in respect of the following items:
Tax effect of deductible temporary differences
Tax effect of loss carryforward
December 31,
2019
December
31, 2018
$
$
827,365
716,848
1,121,433
1,249,171
The Group assesses and considers that some of the income tax reduction items may be
unrealized, hence they are not recognized as deferred tax assets. In addition, according to
Income Tax Act, the loss carryforward are the losses incurred in past 10 years assessed by
ROC tax authorities which can be deducted from the net profit of current year before levied.
The items are not recognized as deferred income tax assets due to the fact that the Group may
not have sufficient taxable income in the future for the losses.
As of December 31, 2019, the tax effects on loss carryforward that have not been recognized
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
65
as deferred tax assets were as follows:
Year of loss
2010 (Assessed)
2011 (Assessed)
2012 (Assessed)
2013 (Assessed)
2014 (Assessed)
2015 (Assessed)
2016 (Assessed)
2017 (Assessed)
2018 (Assessed/Filed)
2019 (Estimated)
Expiry year
2020
Deductible amount
14,492
$
2021
2022
2023
2024
2025
2026
2027
2028
2029
399,926
689,013
228,258
41,534
636,827
1,443,859
950,585
550,579
652,091
$
5,607,164
(iv) Unrecognized deferred tax assets and liabilities related to investments in subsidiaries
The temporary differences associated with investment in subsidiaries were not recognized as
deferred income tax assets and liabilities as the Company has the ability to control the reversal
of these temporary differences which are not expected to reverse in the foreseeable future.
As of December 31, 2019 and 2018, the aggregate deductible temporary differences relating to
investments in subsidiaries not recognized as deferred tax assets amounted to $1,894,891 and
$2,162,721, respectively.
As of December 31, 2019 and 2018, the aggregate taxable temporary differences relating to
investments in subsidiaries not recognized as deferred tax liabilities amounted to $53,923,241
and $54,732,941, respectively.
(v) Examination and approval
The Company’ s tax returns for the years through 2017 were assessed by the Taipei National
Tax Administration.
The ROC tax authorities have assessed the income tax returns of Panpal, Gempal, Hong Jin,
Palcom, Acbel Telecom, Ripal, Zhipal, Rayonnant Technology, UCGI, Mactech, RBL, CBN,
Unicore, Raycore, TTI, GLB and HengHao through 2017, of HongJi through 2018, of
Arcadyan through 2017 except for 2016, and of ATK through November, 2019.
(v) Capital and other equities
As of December 31, 2019 and 2018, the Company’ s authorized common stock consisting of
6,000,000 thousand shares with a par value of 10 New Taiwan dollar per share amounted to
$60,000,000 of which 4,407,147 thousand shares, were issued. All issued shares were paid up upon
issuance.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
66
(i) Ordinary shares
In 2015, the Company issued its employee restricted shares amounting to $493,600, wherein
the amount of $120,450 had been cancelled due to failure in meeting the vested requirements
in the year ended December 31, 2018. As of December 31, 2018, the registration procedure
had been completed.
(ii) Capital surplus
The balances of capital surplus were as follows:
Additional paid-in capital
Treasury share transactions
December
31, 2019
December
31, 2018
$
6,302,490
2,481,885
7,183,919
2,421,864
Difference between consideration and carrying amount arising
from acquisition or disposal of subsidiaries
Recognition of changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted
36,766
59,115
36,766
15,642
for using equity method
279,003
274,243
$
9,159,259
9,932,434
In accordance with the ROC Company Act, realized capital reserves can only be used to
increase the common stock or distributed as cash dividends after offsetting losses. The
aforementioned capital reserves include share premiums and donation gains. In accordance
with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be
reclassified under share capital shall not exceed 10% of the actual share capital amount.
The Company’s shareholders’ meeting held on June 21, 2019 and June 22, 2018, approved to
distribute the cash dividend of $881,429 (representing 0.2 New Taiwan Dollars per share), by
using the additional paid-in-capital.
A resolution was approved during the Board of Directors' meeting held on March 30, 2020 to
distribute the cash dividend of $$881,429, with a par value of NTD 0.2 per share, by using the
additional paid-in capital. The related information can be accessed through the Market
Observation Post system website after the Board of Directors' meeting.
(iii) Retained earnings
Based on the Company’s articles of incorporation amended on June 21, 2019, if there is any
profit after closing of books in a given year, the Company shall first defray tax due, cover
accumulated losses and set aside ten percent of it as legal reserve and then set aside or reverse
a special reserve in accordance with laws and regulations. The balance of earnings available
for distribution is composed of the remainder of the said profit and the unappropriated retained
earnings of previous years. The Board of Directors may set aside a certain amount to cope with
the business operation conditions, and shall prepare the proposal for distribution of the balance
amount thereof after a resolution has been adopted and then allocated by the Board of
Directors. The Company authorizes the Board of Directors to distribute all or part of the
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
67
dividends and bonuses, capital surplus or legal reserve in cash after a resolution has been
adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the
total number of directors; and in addition thereto a report of such distribution shall be
submitted to the General shareholders’ meeting.
Based on the Company’s articles of incorporation before amended on June 21, 2019, if there is
any profit after closing of books in a given year, the Company shall first defray tax due, cover
accumulated losses and set aside ten percent of it as legal reserve and then set aside or reverse
a special reserve in accordance with laws and regulations. The balance of earnings available
for distribution is composed of the remainder of the said profit and the unappropriated retained
earnings of previous years. The earnings appropriation proposal to distribute dividend and
bonus shall be proposed by the Board of Directors and approved by the General Shareholders
Meeting. The rest of the unappropriated retained earnings shall be reserved.
The lifecycle of the industry of the Company is in the growing stage. To consider the need of
the Company for the future capital, capital budget, long-term financial planning, domestic and
foreign competition, the need of shareholders for cash flow and other factors, if there is any
profit after close of books, the dividend and bonus to be distributed to shareholders shall not be
less than thirty percent of profit after tax for such year and the cash dividend allocated by the
Company each year shall not be lower than ten percent of the total dividend (including cash
and share dividend) for such year.
According to the law, when there is a deduction from stockholders' equity (excluding treasury
stock and unearned employee benefit) during the year, an amount equal to the deduction item
is set aside as a special reserve before the earnings are appropriated. A special reserve is made
available for earning distribution only after the deduction of the related shareholders’ equity
has been reversed.
1)
Legal reverse
When a company incurs no loss, it may, in pursuant to a resolution to be adopted by the
shareholders’ meeting as required, distribute its legal reserve by issuing new shares and
distributing stock dividends or distributing cash to shareholders. Only the portion of the
legal reserve which exceeds 25% of the paid-in capital may be distributed.
2)
Special reverse
In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a
portion of current earnings and previous unappropriated earnings shall be set aside as a
special reserve during earnings distribution. The amount to be set aside should equal the
total amount of contra accounts that are accounted for as deductions to other equity
interests. A portion of previous unappropriated earnings shall be set aside as a special
reserve, which should not be distributed, to account for cumulative changes to other
equity interests pertaining to prior periods. The special reserve shall be made available
for appropriation when the net deductions of other equity interests are reversed in the
subsequent periods.
3)
Earnings distribution
Earnings distribution for 2018 and 2017 was approved by the shareholders during their
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
68
annual meetings held on June 21, 2019 and June 22, 2018, respectively. The relevant
information was as follows:
2018
2017
Amount
per share
Total
amount
Amount
per share
Total
amount
Cash dividends distributed
to common shareholders
$
1.0
4,407,147
1.0
4,407,147
Earnings distribution for 2019 was approved by the Board of Directors on March 30,
2020. The relevant information was as follows:
2019
Amount
per share
Total
amount
Cash dividends distributed to common shareholders from
the unappropriated earnings
$
1.0
4,407,147
The related information of the earnings distribution for the year ended December 31,
2019, can be accessed through the Market Observation Post System website after the
related meeting.
(iv) Treasury stock
The subsidiaries of the Company did not sell the ordinary shares of the Company in the years
ended December 31, 2019 and 2018. As of December 31, 2019, Panpal and Gempal,
subsidiaries of the Company, held 50,017 thousand shares of ordinary shares of the Company,
recorded as the Company’s treasury stock, with a book value of 17.6 New Taiwan dollars per
share. The total cost was $881,247. The fair value of the ordinary shares of the Company was
18.85 and 17.45 New Taiwan dollars per share as of December 31, 2019 and 2018,
respectively.
Pursuant to the Securities and Exchange Act, the number of treasury shares purchased cannot
exceed 10% of the number of shares issued. The total purchase cost cannot exceed the sum of
retained earnings, paid-in capital in excess of par value and realized capital surplus. The
shares purchased for the purpose of transferring to employees shall be transferred within three
years from the date of share repurchase. Those not transferred within the said limit shall be
deemed as not issued by the Company and it should be cancelled. Furthermore, treasury stock
cannot be pledged for debts, and treasury stock does not carry any shareholder rights until it is
transferred.
(Continued)
69
Total
(7,459,388)
3,315,411
197,934
(157,406)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(v) Other equity interests (net-of-taxes)
Exchange
differences on
transaction of
foreign operation
financial
statements
Unrealized gain
(loss) from
financial assets at
fair value through
other
comprehensive
income
Unearned
compensation
for restricted
employee shares
and others
Balance on January 1, 2019
$
(1,852,952)
(5,606,436)
The Company
Subsidiaries
Associates
Balance on December 31, 2019
Balance on January 1, 2018
$
$
The Company
Subsidiaries
Associates
(1,620,812)
4,936,223
(52,530)
(268,686)
252,170
111,280
(3,794,980)
(306,763)
(3,477,376)
(5,847,823)
1,853,763
(67,150)
(34,596)
401,300
(162,189)
(125,317)
Balance on December 31, 2018
$
(1,852,952)
(5,606,436)
-
-
-
-
-
-
(w) Share-based payment
(i)
The Company – employee restricted shares
(1,706)
(1,706)
(4,103,449)
(79,856)
(9,405,055)
79,856
1,899,023
334,150
(287,506)
(7,459,388)
At the meeting held on June 20, 2014, the Company’ s Shareholders’ Meeting adopted a
resolution to issue 100,000 thousand new shares of employee restricted shares with no
consideration to those full time employees who meet certain requirements. The first issuance
of 50,000 thousand shares had been approved by the FSC on October 30, 2014. Moreover, the
Company’s Board of Directors resolved to issue 49,980 thousand shares on January 22, 2015,
and 49,360 thousand shares had actually been issued, in which the effective date of the share
issuance was on February 25, 2015.
40%, 30% and 30% of the aforementioned restricted shares are vested, respectively, when the
employees continue to provide service for at least 2 year, 3 years and 4 years from the
registration and effective date and in the meantime, meet the performance requirement. After
the issuance, the restricted shares are kept by a trust, which is appointed by the Company,
before they are vested. These restricted shares shall not be sold, pledged, transferred, gifted or
by any other means of disposal to third parties during the custody period. The voting rights of
these shares are executed by the custodian, and the custodian shall act based on law and
regulations. If the shares remain unvested after the vesting period, the Company will purchase
all the unvested shares without consideration and cancel the shares thereafter. Restricted
shares could receive cash and stock dividends. The aforementioned cash and stock dividends
are not considered as restricted.
The information of the Company’s restricted shares (in thousands) is as follows:
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Outstanding shares on January 1
Vested during the period
Canceled during the period
Outstanding shares on December 31
70
2018
23,571
(11,526)
(12,045)
-
For the year ended December 31, 2018, due to the failure in meeting the vested requirements of
the employee restricted shares, the Group reversed compensation cost amounted to $156,219
and capital surplus － employee restricted shares amounted to $318,209. Besides, due to meet
the vested requirements of the employee restricted shares, the Group recognized capital surplus
－ additional paid-in capital amounted to $155,601.
(ii) Arcadyan – employee restricted shares
At the meeting held on June 21, 2018, the Arcadyan’ s Board of Directors decided to issue
4,500,000 shares of employee restricted shares to Arcadyan’ s full-time employees who meet
certain requirements. The restricted shares have been registered with, and approved by, the
Securities and Futures Bureau of FSC. The Board of Directors decided to issue all the
restricted shares on November 6, 2018, which is also the effective date of the share issuance.
3,500,000 shares of the aforementioned restricted shares are issued without consideration.
30%, 30% and 40% of the 3,500,000 restricted shares are vested when the employees continue
to provide service for at least 2 year, 3 years and 4 years, respectively, from the registration
and the effective date, and at the same time, meet the performance requirement. In addition,
when earnings per share in two consecutive and complete fiscal years from the registration and
effective date are no less than NT$4, and at the same time, the employees with the restricted
shares meet the performance requirement, the other 1,000,000 shares of the restricted shares
are vested 100% at the date the shareholders approved the financial statements for the second
fiscal year. If the earnings per share in two consecutive and complete fiscal years from the
registration and effective date are between NT$3 to NT$4, and at the same time, the employees
with the restricted shares meet the performance requirement, the restricted shares are vested
75% at the date the shareholders approved the financial statements for the second fiscal year. If
the earnings per share in two consecutive and complete fiscal years from the registration and
effective date are less than NT$3, the employees with restricted shares, whether or not they
meet the performance requirement, no restricted shares are vested at the date the shareholders
approved the financial statements for the second fiscal year. The earnings per share mentioned
above are calculated based on the profit approved by the shareholders and the weighted
average number of ordinary shares outstanding at the date of the restricted shares have been
approved by the authority.
After the issuance, the restricted shares are kept by a trust, which is appointed by Arcadyan,
before they are vested. These restricted shares shall not be sold, transferred, pledged, gifted, or
disposed by any other means, to third parties during the custody period. The voting rights of
these shares are executed by the custodian, and the custodian shall act based on the law and
regulations. If the shares remain unvested after the vesting period, Arcadyan will redeem all
the unvested shares without consideration and cancel the shares thereafter. Restricted shares
could be received in cash and stock dividends, or could be used to participate in cash injection.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
71
The aforementioned new shares are not considered as restricted shares.
The information of Arcadyan’s restricted shares is as follows:
Outstanding shares on January 1
Granted during the period
Canceled during the period
Outstanding shares on December 31
Unit: in thousands of shares
2019
-
4,500
(84)
4,416
2018
-
-
4,500
4,500
As of December 31, 2019 and 2018, the unearned employee benefit was $119,897 and
$219,616, respectively.
The compensation cost related to the restricted shares amounted to $99,719 and $33,240,
respectively, for the years ended December 31, 2019 and 2018.
(iii) Arcadyan － cash injection reserved for employees
Arcadyan’ s Board of Directors resolved to implement cash injection on April 9, 2019, of
which 15,000 thousand shares were reserved for employees. As of December 31, 2019, the
relevant information was as follows:
Grant date
Number of shares granted (in thousands)
Recipients
Vested condition
2019.10.16
15,000
(Note 1)
Vest immediately
(Note 1) Arcadyan’s full-time employees who meet certain requirements.
The compensation cost, recorded as operating expense and cost of sales related to the cash
injection reserved for employees, amounted to $27,000 in 2019.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
72
(iv) TTI – employee stock options
The information about share-based payment of TTI in 2019 and 2018 was as follows:
Grant date
Granted shares (in
thousand)
Contract period
Recipients
Employee stock options
2015.10.29
1,000
7 years
Employees of TTI
Vested condition
Please refer to the issuance terms of the stock options as follows
The issuance terms of the stock options are as follows:
1)
2)
Exercise price: NT$13.5 per share.
Exercisable duration: The employees who received stock options that exceed two years
and meet the performance requirements can exercise a specific percentage in each period
as below. The exercisable duration of the options is seven years. No transfer is allowed
except for inheritance.
Exercisable
40 ％
30 ％
Period and performance requirements to exercise options
The share purchase right is effectively vested after the satisfaction
of 2 conditions: (1) Years of service must exceed 2 years after the
issuance of the right. (2) Upon vesting, the average earnings per
share of TTI for the past 2 years must exceed NT$3. If the
criteria for the said earnings per share are not fulfilled, then the
measurement period will be extended to 3 years; under this
extension, the average of the earnings per share of any 2 years
within the 3 year period must exceed NT$3.
The share purchase right is effectively vested after the satisfaction
of 2 conditions: (1) Years of service must exceed 3 years after the
issuance of the right. (2) Upon vesting, the performance
requirements need to be met, otherwise, the earnings per share of
TTI for the following year must exceed NT$3. If the criteria for
the said earnings per share are not fulfilled, then the measurement
period will be extended to another 1 year; the earnings per share
must exceed NT$3 during the extension period.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
73
Exercisable
30 ％
Period and performance requirements to exercise options
The share purchase right is effectively vested after the satisfaction
of 2 conditions: (1) Years of service must exceed 4 years after the
issuance of the right. (2) Upon vesting, the performance
requirements need to be met, otherwise, the earnings per share of
TTI for the following year must exceed NT$3. If the criteria for
the said earnings per share are not fulfilled, then the measurement
period will be extended to another 1 year; the earnings per share
must exceed NT$3 during the extension period.
The total measurement periods mentioned above may not exceed
6 years.
The earnings per share mentioned above are based on the financial statements that had
been audited and certified by a certified public accountant.
3)
4)
Exercise method: TTI would issue new shares as the options are exercised.
Exercise procedure: In accordance with TTI’ s issuance and exercise rules. After
receiving the payment for share options, the entitlement certification of share options
exercised is registered as ordinary shares.
The information on total options issued was as follows:
2019
2018
Weighted-
average
exercise price
(NT dollars)
Shares
(in thousands)
Weighted-
average
exercise price
(NT dollars)
Shares
(in thousands)
13.5
13.5
-
-
600
(300)
300
-
13.5
13.5
13.5
13.5
1,000
(400)
600
-
Outstanding shares on
January 1
Canceled during the
period
Outstanding shares on
December 31
Exercisable shares on
December 31
The exercise price range of TTI’ s outstanding employee stock options and weighted-
average remaining contractual life of the outstanding options are as follows:
Exercise price range
Weighted average remaining contract period
December 31,
2019
December 31,
2018
13.5
2.83
13.5
3.83
The reverse related to the share-based payment amounted to $1,326 and $496 for the
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
74
years ended December 31, 2019 and 2018, respectively.
(v) CBN－employee stock options
At the meeting held on May 30, 2012, May 26, 2014 and May 17, 2016, CBN’ s Board of
Directors resolved to issue 1,000,000, 800,000 and 1,500,000 units of employee stock options,
respectively, with an exercisable right of one share of CBN’ s ordinary shares per unit. The
information on total options issued was as follows:
1)
The first employee stock option plan
The employee stock options have been fully exercised in 2017.
2)
The second employee stock option plan
2019
2018
Outstanding shares on January 1
Expired during the period
Exercised during the period
Outstanding shares on December 31
Exercisable shares on December 31
Weighted-
average
exercise price
(NT dollars)
10
Shares
8,910 $
Weighted-
average
exercise price
(NT dollars)
10
Shares
283,767 $
-
(8,910)
-
-
-
-
-
(2,565)
10
(272,292)
8,910
8,910
10
10
10
10
As of December 31, 2018, the weighted-average remaining contractual life of the outstanding
options was 2.67 years. The employee stock options above have been fully exercised in 2019.
3)
The third employee stock option plan
2019
2018
Outstanding shares on January 1
Expired during the period
Exercised during the period
Outstanding shares on December 31
Exercisable shares on December 31
Weighted-
average
exercise price
(NT dollars)
10
Shares
153,600 $
Weighted-
average
exercise price
(NT dollars)
10
Shares
234,000 $
(7,500)
(58,300)
87,800
87,800
10
10
10
10
-
(80,400)
153,600
153,600
-
10
10
10
As of December 31, 2019 and 2018, the weighted-average remaining contractual life of the
outstanding options was 1.67 and 2.67 years, respectively.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
75
The issuance terms of the share options are as follows.
1)
2)
Exercise price: NT$10 per share.
Exercisable duration:
a)
The first employee stock options plan:
The employees who received share options being granted over two years can
exercise a specific percentage in each period as below. The exercisable duration of
the options is seven years. No transfer is allowed except for inheritance. After the
expiration of the exercisable duration, the unexercised options will be canceled by
CBN and not be re-issued anymore.
Period to exercise options
2 years after options received
3 years after options received
4 years after options received
Exercisable percentage (cumulative)
40 ％
70 ％
100 ％
b)
The second employee stock option plan:
The employees who received share options being granted over two years and are
still employed by CBN and meet requirements can exercise a specific percentage in
each period as stated below. The exercisable duration of the options is seven years.
No transfer is allowed except for inheritance. After the expiration of the
exercisable duration, the unexercised options will be canceled by CBN and not re-
issued anymore.
Period to exercise options
2 years after options received
3 years after options received
4 years after options received
Exercisable percentage (cumulative)
40 ％
70 ％
100 ％
c)
The third employee stock option plan:
The employees who received share options being granted over five months and are
still employed by CBN and meet requirements can exercise a specific percentage in
each period as stated below. The exercisable duration of the options is five years.
No transfer is allowed except for inheritance. After the expiration of the
exercisable duration, the unexercised options will be canceled by CBN and not re-
issued anymore.
Period to exercise options
5 months after options received
Exercisable percentage (cumulative)
100 ％
d)
e)
Exercise method: CBN would issue new shares as the options are exercised.
Exercise procedure: In accordance with CBN’s issuance and exercise rules, after
receiving the consideration of share options, the entitlement certification of share
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
76
options exercised is registered as ordinary shares once a quarter.
The compensation cost for the years ended December 31, 2019 and 2018 were $(112) and
$657, respectively.
CBN adopted the Black-Scholes model to estimate the fair value on the grant date, and the
assumptions are summarized as follows:
A.
The first employee stock option plan:
Original exercise price (NT dollars)
Current price (NT dollars)
Expected dividend yield rate
Expected volatility
Risk-free interest rate
Expected life of the option
10
25
0％
38.25~38.64％
0.91~1.02％
4.5~5.5 years
Weighted average fair value (NT dollars per share)
16.10~16.49
B.
The second employee stock option plan:
Original exercise price (NT dollars)
Current price (NT dollars)
Expected dividend yield rate
Expected volatility
Risk-free interest rate
Expected life of the option
10
37.02
0％
31.07~32.77％
1.17~1.33％
4.5~5.5 years
Weighted average fair value (NT dollars per share)
27.62~27.92
C.
The third employee stock option plan:
Original exercise price (NT dollars)
Current price (NT dollars)
Expected dividend yield rate
Expected volatility
Risk-free interest rate
Expected life of the option
Weighted average fair value (NT dollars per share)
10
24.62
0％
35.87％
0.56％
2.55 years
14.96
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
77
(vi) CBN－Cash injection reserved for employees
CBN's Board of Directors resolved to implement cash injection on June 27, 2018, of which 917
thousand shares were reserved for employees. As of December 31, 2019, the relevant
information was as follows:
Grant date
Number of shares granted (in thousands)
Recipients
Vested condition
2018.11.14
917
(Note 1)
Vest immediately
(Note 1) Those CBN’s full-time employees who meet certain requirements.
The compensation cost recorded as operating expense related to the cash injection
reserved for employees amounted to $1,053 in 2018.
(x) Earnings per share
The Group’s basic and diluted earnings per share are calculated as follows:
Basic earnings per share:
Profit attributable to ordinary shareholders of the Company
Weighted-average number of outstanding ordinary shares (in thousands)
6,955,899
4,357,130
8,913,365
4,356,448
2019
2018
Diluted earnings per share:
Profit attributable to ordinary shareholders of the Company (after
adjustment of potential diluted ordinary shares)
Weighted-average number of outstanding ordinary shares of potential
diluted ordinary shares
6,955,899
8,913,365
Weighted-average number of outstanding ordinary shares (in thousands)
4,357,130
4,356,448
Effect of potential diluted common stock
Employee compensation (in thousands)
Employee restricted shares (in thousands)
Weighted-average number of ordinary shares (after adjustment of
potential diluted ordinary shares) (in thousands)
49,860
-
59,637
682
4,406,990
4,416,767
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(y) Revenue from contracts with customers
(i) Disaggregation of revenue
Primary geographical markets:
United states
China
Netherlands
United Kingdom
India
Germany
Others
Major products:
5C related electronics products
Others
Primary geographical markets:
United states
China
Netherlands
United Kingdom
Germany
Japan
India
Others
Major products:
5C related electronics products
Others
2019
Strategically
Integrated
Product
Segment
2,539,578
456,189
977,438
512,219
3,853,215
9,532,350
15,024,418
32,895,407
32,478,954
416,453
32,895,407
2018
Strategically
Integrated
Product
Segment
1,701,587
437,494
1,242,067
2,181,037
7,269,974
1,703,425
504,966
11,559,255
26,599,805
26,112,499
487,306
26,599,805
IT Product
Segment
376,459,888
103,116,226
97,981,478
43,967,861
40,566,291
29,552,389
255,902,806
947,546,939
945,416,514
2,130,425
947,546,939
IT Product
Segment
362,250,918
120,591,947
109,628,794
43,595,382
30,999,459
29,805,482
28,181,426
216,053,198
941,106,606
939,105,238
2,001,368
941,106,606
$
$
$
$
$
$
$
$
78
Total
378,999,466
103,572,415
98,958,916
44,480,080
44,419,506
39,084,739
270,927,224
980,442,346
977,895,468
2,546,878
980,442,346
Total
363,952,505
121,029,441
110,870,861
45,776,419
38,269,433
31,508,907
28,686,392
227,612,453
967,706,411
965,217,737
2,488,674
967,706,411
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
79
(ii) Contract balances
Notes and accounts receivable
(including related parties)
Less: allowance for impairment
Total
Contract liabilities
$
$
$
December 31,
2019
December 31,
2018
January 1,
2018
195,665,380
207,794,674
181,487,633
(3,928,716)
191,736,664
956,455
(4,020,603)
203,774,071
1,476,304
(4,021,894)
177,465,739
1,665,321
For the details on accounts receivable and allowance for impairment, please refer to note
(6)(f).
The amount of revenue recognized for the years ended December 31, 2019 and 2018 that were
included in the balance of contract liability at the beginning of the period was $1,419,929 and
$1,633,141, respectively.
The major change in the balance of contract assets and contract liabilities is the difference
between the time frame in the performance obligation to be satisfied and the payment to be
received.
(z) Employees’ and directors’ compensations
Based on the Company’ s articles of incorporation, if there is any profit in a fiscal year, the
Company’s pre-tax profits in such fiscal year, prior to deduction of compensations to employees and
directors, shall be distributed to employees as compensations in an amount of not less than two
percent (2%) thereof and to directors as compensations in an amount of not more than two percent
(2%) of such profits. In the event that the Company has accumulated losses, the Company shall
reserve an amount to offset accumulated losses. The compensations to employees as mentioned
above may be distributed in the form of stock or cash. Employees entitled to receive the said stock or
cash may include the employees of the Company’s subordinate companies pursuant to the Company
Act (Employees entitled to receive the said stock or cash may include the employees of the
Company’ s subordinate companies who meet certain conditions after the Company’ s articles of
incorporation amended on June 21, 2019).
The Company accrued and recognized its employee compensation of $731,322 and $930,857, and
directors’ compensation of $38,672 and $49,223 for the years ended December 31, 2019 and 2018,
respectively. The estimated amounts mentioned above are based on the net profit before tax without
the compensations to employees and directors of each respective ending period, multiplied by the
percentage of the compensation to employees and directors, which was approved by the
management. The estimations are recorded under operating expenses and cost. The differences
between the amounts estimated and recognized in the financial statements, if any, are accounted for
as changes in accounting estimates and recognized as profit or loss in the distribution year. If the
Board of Directors approve to distribute employee compensation in the form of stock, the number of
the shares of the employee compensation is based on the closing price of the day before the Board of
Directors’ meeting, the related information can be accessed through the Market Observation Post
System website. There is no differences between the amount approved in the Board of Directors’
meeting and those recognized in the financial statements in 2019 and 2018.
There is no differences between the amount estimated and recognized in the financial statements in
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
80
2018. The related information can be accessed through the Market observation Post System website.
(aa) Non-operating income and expenses
(i) Other income
The other income for the years ended December 31, 2019 and 2018, were as follows:
Interest income
Financial assets at amortized cost
Bank deposits
Others
Dividend revenue
Overdue payable reversed as other income
Other revenue
(ii) Other gains and losses
2019
2018
$
$
2,992
1,656,317
5,494
127,349
1,478
357,727
2,151,357
9,992
1,448,053
5,613
279,044
41,116
349,046
2,132,864
The other gains and losses for the years ended December 31, 2019 and 2018, were as follows:
Gains on disposal of investments
Gains (losses) on financial assets and liabilities at fair
$
value through profit or loss, net
Foreign currency exchange losses, net
Gains (losses) on disposal of property, plant, and
equipment, net
Others
$
2019
2018
66,837
2,513,207
408,943
(682,207)
40,245
49
(166,133)
640,835
(873,855)
(23,229)
-
2,256,958
(ab) Reclassification of the components of other comprehensive income
The details of reclassification of the components of other comprehensive income for the years ended
December 31, 2019 and 2018, were as follows:
Cash flow hedge:
Gains (losses) from current period
Less: reclassification of gains and losses included in profit or loss
Profit (loss) recognized in other comprehensive income
$
$
(26,649)
(21,778)
(4,871)
3,655
3,655
-
2019
2018
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
81
(ac) Financial instruments
(i)
Credit risk
1)
The carrying amount of financial assets represents the maximum amount exposed to
credit risk.
The Group’ s customers are mainly from the high-tech industry. The Group does not
concentrate on a specific customer and the sales regions are widely spread, thus there
should be no concern on the significant concentrations of accounts receivable credit risk.
And in order to mitigate accounts receivable credit risk, the Group constantly assesses
the financial status of the customers.
2)
Receivables and debt securities
Information of exposure to credit risk of notes and accounts receivable, please refer to
note (6)(f).
Other financial assets at amortized cost include other receivables, investments in
corporate bonds and time deposits. These financial assets are considered to have low
risk, and thus, the impairment provision recognized during the period was limited to 12
months expected losses. (Regarding how the financial instruments are considered to have
low credit risk, please refer to note (4)(g)). Due to the counter parties and the performing
parties of the Group’s time deposits are financial institutions with investment grade and
above, these time deposits are considered to have low credit risk.
The movements in the allowance for the year ended December 31, 2019 and 2018 were
as follows:
Balance on January 1, 2019
Impairment losses reversed
Balance on December 31, 2019
Balance on January 1, 2018
Impairment losses reversed
The write-off amount which was not be recovered in the period
Effect of changes in exchange rates
Balance on December 31, 2018
Other
receivables
3,577
(2,565)
1,012
82,014
(16,364)
(62,071)
(2)
3,577
$
$
$
$
(ii) Liquidity risk
The following are the contractual maturities of financial liabilities. In addition to excluding
estimated interest payments.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
82
December 31, 2019
Non-derivative financial liabilities
Secured borrowings
Unsecured borrowings
Lease liabilities－current and
non-current
Notes and accounts payable
Other payables
Bonds payable
Derivative financial liabilities
Carrying
Amount
Contractual
cash flows Within 1 year
1 ~ 2 years
Over 2 years
$
98,438
86,601,844
(98,438)
(86,601,844)
(39,375)
(79,101,844)
(39,375)
(1,925,000)
(19,688)
(5,575,000)
2,267,088
144,445,777
15,414,717
966,492
(2,369,246)
(144,445,777)
(15,414,717)
(1,000,000)
(754,412)
(144,445,777)
(15,414,717)
-
Forward exchange contracts:
5,854
Outflow
Inflow
Forward exchange contracts used
(736,484)
732,377
(736,484)
732,377
for hedging:
Outflow
Inflow
4,932
(1,423,089)
1,433,921
(249,923,297)
(1,423,089)
1,433,921
(239,749,400)
$ 249,805,142
December 31, 2018
Non-derivative financial liabilities
Secured borrowings
Unsecured borrowings
Notes and accounts payable
Other payables
Derivative financial liabilities
$
137,813
100,746,447
154,276,713
14,790,757
(137,813)
(100,746,447)
(154,276,713)
(14,790,757)
(39,375)
(89,846,447)
(154,276,713)
(14,790,757)
Forward exchange contracts:
26,913
Outflow
Inflow
(5,016,249)
4,978,708
(269,989,271)
(5,016,249)
4,978,708
(258,990,833)
$ 269,978,643
(416,167)
(1,198,667)
-
-
-
-
-
-
-
-
-
(1,000,000)
-
-
-
-
(2,380,542)
(7,793,355)
(39,375)
(8,600,000)
(59,063)
(2,300,000)
-
-
-
-
-
-
-
-
(8,639,375)
(2,359,063)
The Group is not expecting that the cash flows included in the maturity analysis could occur
significantly earlier or at significantly different amounts.
(iii) Currency risk
1)
Exposure to foreign currency risk
The Group’s significant exposure to foreign currency risk was as follows:
Financial assets
Monetary items
USD to TWD
USD to CNY
EUR to TWD
CNY to USD
Non-monetary items
THB to TWD
December 31, 2019
Exchange
rate
Foreign
currency
TWD
Foreign
currency
December 31, 2018
Exchange
rate
TWD
$
7,070,270
10,525
88,303
2,577,002
29.98 211,966,695
6.9667
315,540
33.59
2,966,098
0.1435
11,086,598
7,189,719
3,986
95,397
1,726,768
30.715 220,832,219
6.8672
122,430
35.2
3,357,974
0.1456
7,722,286
446,859
1.0028
448,110
423,027
0.946
400,184
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
83
Financial liabilities
Monetary items
USD to TWD
USD to CNY
USD to BRL
EUR to TWD
CNY to USD
2)
Sensitivity analysis
December 31, 2019
Exchange
rate
Foreign
currency
TWD
Foreign
currency
December 31, 2018
Exchange
rate
TWD
6,441,501
5,424
142,432
42,554
3,182,008
29.98 193,116,200
6.9667
162,612
3.8322
4,270,111
33.59
1,429,389
0.1435
13,689,412
7,145,553
5,451
140,772
31,186
2,778,232
30.715 219,475,660
6.8672
167,427
3.872
4,323,812
35.2
1,097,747
0.1456
12,424,542
The Group’s exposure to foreign currency risk arises from the translation of the foreign
currency exchange gains and losses on cash and cash equivalents, accounts receivable,
other receivables, loans and borrowings, accounts payable, and other payables that are
denominated in foreign currency. Assuming all other variable factors remain constant, a
strengthening (weakening) 5% of appreciation (depreciation) of the each major foreign
currency against Group entities’ functional currency as of December 31, 2019 and 2018,
would have increased (decreased) the net profit before tax as follows. The analysis is
performed on the same basis for both periods.
December 31,
2019
December 31,
2018
USD (against the TWD)
Strengthening 5%
Weakening 5%
USD (against the CNY)
Strengthening 5%
Weakening 5%
USD (against the BRL)
Strengthening 5%
Weakening 5%
EUR (against the TWD)
Strengthening 5%
Weakening 5%
CNY (against the USD)
Strengthening 5%
Weakening 5%
$
942,525
(942,525)
7,646
(7,646)
(213,506)
213,506
76,835
(76,835)
(130,141)
130,141
67,828
(67,828)
(2,250)
2,250
(216,191)
216,191
113,011
(113,011)
(235,113)
235,113
3)
Exchange gains and losses of monetary items
As the Group deals with diverse foreign currencies, gains or losses on foreign exchange
were summarized as a single amount. For the years ended December 31, 2019 and 2018,
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
84
the foreign exchange losses, including both realized and unrealized, amounted to
$682,207 and $873,855, respectively.
(iv)
Interest rate analysis
The interest risk exposure from financial assets and liabilities has been disclosed in the note of
liquidity risk management.
The following sensitivity analysis is based on the risk exposure to interest rate on the
derivative and non-derivative financial instruments on the reporting date. Regarding the assets
and liabilities with variable interest rates, the analysis is on the basis of the assumption that the
amount of assets and liabilities outstanding at the reporting date were outstanding throughout
the year. The rate of change is expressed as the interest rate increase or decrease by 0.25%,
when reporting to management internally, which also represents the assessment of the Group’s
management for the reasonably possible interval of interest rate change.
Assuming all other variable factors remaining constant, if the interest rate had increased or
decreased by 0.25%, the impact to the net profit before tax would be as follows for the years
ended December 31, 2019 and 2018, which would be mainly resulted from the bank savings
and borrowings with variable interest rates.
Interest increased by 0.25%
Interest decreased by 0.25%
(v)
Fair value information
2019
2018
$
(13,164)
13,164
(10,551)
10,551
1)
The categories and fair value of financial instruments
The Group’ s financial assets at fair value through profit or loss and financial assets at
fair value through other comprehensive income were measured at fair value on a
recurring basis. The following table shows the carrying amounts and fair values of
financial assets and financial liabilities, including their levels in the fair value hierarchy.
It shall not include fair value information of the financial assets and financial liabilities
not measured at fair value if the carrying amount is a reasonable approximation of fair
value and investments in equity instruments which do not have any quoted price in an
active market in which the fair value cannot be reasonably measured.
December 31, 2019
Fair Value
Book value
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit
or loss–current and non-current
Derivative financial assets for non-hedging $
Non-derivative financial assets mandatorily
measured at fair value through profit or
loss
Subtotal
Financial assets used for hedging
15,921
1,445,817
1,461,738
61
-
-
-
15,921
-
15,921
1,330,458
115,359
1,445,817
61
-
61
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
85
December 31, 2019
Fair Value
Book value
Level 1
Level 2
Level 3
Total
Financial assets at fair value through
other comprehensive income
Stocks listed on domestic markets
Stocks listed on foreign markets
Stocks unlisted on domestic markets
Stocks unlisted on foreign markets
Accounts receivable
Subtotal
Financial assets measured at amortized
cost
Cash and cash equivalents
Notes and accounts receivable, net
Notes and accounts receivable due from
related parties, net
Other receivables
Refundable deposits
Subtotal
Total
Financial liabilities at fair value through
profit or loss
Derivative financial liabilities for non-
hedging
Financial liabilities used for hedging
Financial liabilities measured at
amortized cost
Short-term borrowings
Notes and accounts payable
Notes and accounts payable to related
parties
Other payables
Bonds payable
Lease liabilities－current and non-current
Long-term borrowings current portion
Long-term borrowings
Deposits received
Subtotal
Total
2,055,890
2,055,890
448,110
448,110
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,246,932
177,121
28,007,745
32,935,798
66,559,397
163,684,407
44,512
2,006,113
335,897
232,630,326
$ 267,027,923
$
5,854
4,932
60,951,844
142,940,869
1,504,908
15,414,717
966,492
2,267,088
18,189,375
7,559,063
188,815
249,983,171
$ 249,993,957
-
-
-
-
-
-
2,055,890
448,110
2,246,932
2,246,932
177,121
177,121
28,007,745
5,854
4,932
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,007,745
5,854
4,932
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
86
Financial assets at fair value through profit
or loss–current and non-current
Derivative financial assets for non-hedging $
Non-derivative financial assets mandatorily
measured at fair value through profit or
loss
Subtotal
Financial assets at fair value through
other comprehensive income
Stocks listed on domestic markets
Stocks listed on foreign markets
Stocks unlisted on domestic markets
Stocks unlisted on foreign markets
Accounts receivable
Subtotal
Financial assets measured at amortized
cost
Cash and cash equivalents
Corporate bonds－current
Notes and accounts receivable, net
Notes and accounts receivable due from
related parties, net
Other receivables
Refundable deposits
Subtotal
Total
1,990,100
51,363
23,020,497
28,192,792
70,296,545
350,000
180,695,468
58,106
1,665,249
401,753
253,467,121
$ 286,340,437
Financial liabilities at fair value through
profit or loss
Derivative financial liabilities for non-
hedging
$
26,913
Financial liabilities measured at
amortized cost
Short-term borrowings
Notes and accounts payable
Notes and accounts payable to related
parties
Other payables
Long-term borrowings current portion
Long-term borrowings
Deposits received
Subtotal
72,350,197
152,300,093
1,976,620
14,790,757
17,535,625
10,998,438
209,354
270,161,084
December 31, 2018
Fair Value
Book value
Level 1
Level 2
Level 3
Total
12,213
-
12,213
-
12,213
4,668,311
4,680,524
633,859
3,965,062
69,390
4,668,311
2,730,648
2,730,648
400,184
400,184
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,730,648
400,184
1,990,100
1,990,100
51,363
51,363
23,020,497
-
-
-
-
-
-
26,913
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23,020,497
-
-
-
-
-
-
26,913
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
87
Total
Book value
$ 270,187,997
December 31, 2018
Fair Value
Level 1
Level 2
Level 3
Total
2)
Fair value valuation technique of financial instruments not measured at fair value
The Group estimates financial instruments that not measured at fair value by methods
and assumption as follows:
a)
Financial liabilities measured at amortized cost
If there is quoted price generated by transactions, the recent transaction price and
quoted price data is used as the basis for fair value measurement. However, if no
quoted prices are available, the discounted cash flows are used to estimate fair
values.
3)
Fair value valuation technique of financial instruments measured at fair value
a)
Non-derivative financial instruments
Financial instruments trade in active markets is based on quoted market prices. The
quoted price of a financial instrument obtained from main exchanges and on-the-
run bonds from Taipei Exchange can be used as a base to determine the fair value
of the listed companies’ equity instrument and debt instrument of the quoted price
in an active market.
If a quoted price of a financial instrument can be obtained in time and often from
exchanges, brokers, underwriters, industrial union, pricing institute, or authorities
and such price can reflect those actual trading and frequently happen in the market,
then the financial instrument is considered to have a quoted price in an active
market. If a financial instrument is not in accord with the definition mentioned
above, then it is considered to be without a quoted price in an active market. In
general, market with low trading volume or high bid-ask spreads is an indication of
a non-active market.
The fair value of the listed company is determined by reference to the market
quotation.
The measurements on fair value of the financial instruments without an active
market are determined using the valuation technique or the quoted market price of
its competitors. Fair value measured using the valuation technique can be
extrapolated from similar financial instruments, discounted cash flow method, or
other valuation techniques which include the model used in calculating the
observable market data at the consolidated balance sheet date.
The measurement of fair value of a non-active market financial instruments held by
the Group which do not have quoted market prices are based on the comparable
market approach, with the use of key assumptions of price-book ratio multiple or
earnings multiple of comparable listed companies as its basic measurement. These
assumptions have been adjusted for the effect of discount without the marketability
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
88
of the equity securities.
b)
Derivative financial instruments
Measurement of the fair value of derivative instruments is based on the valuation
techniques that are generally accepted by the market participants. For instance,
discount method or option pricing models. Fair value of forward currency exchange
is usually determined by using the forward currency rate.
4)
Transfer from one level to another
investment
The Group he ld an
in equity of Crystalvue Medical Corporation
(“ Crystalvue” ), with a fair value $18,736 and $11,287, which were classified as fair
value through other comprehensive income as of December 31, 2019 and 2018,
respectively. The fair value of the investment was categorized as level 3 as of December
31, 2018, because the shares were not listed on the exchange market and there were no
recent observable arm’s length transactions in the shares. In December 2019, Crystalvue
listed its equity shares in the exchange market, wherein they are actively traded.
Currently, the equity shares have a published price quotation in an active market;
therefore, the category was transferred from level 3 to level 1 as of December 31, 2019.
There was no transfer from one level to another in 2018.
5) Changes in level 3
The change in level 3 at fair value in the years ended December 31, 2019 and 2018, were
as follow:
Financial assets at
fair value through
profit or loss
Financial assets
at fair value
through other
comprehensive
income
Total
Balance on January 1, 2019
$
69,390
2,041,463
2,110,853
Total gains and losses recognized:
In profit or loss
In other comprehensive income
Purchased
Disposal
Proceeds of capital reduction of
investment
Transferred out from Level 3
Effect of changes in exchange rates
Balance on December 31, 2019
Balance on January 1, 2018
$
$
Total gains and losses recognized:
In profit or loss
In other comprehensive income
-
-
-
-
-
-
(9,627)
-
55,596
115,359
48,709
210,191
208,665
(791)
(10,120)
(20,498)
(4,857)
2,424,053
2,427,182
(3,064)
-
(475,442)
107,877
Purchased
23,745
(9,627)
210,191
264,261
(791)
(10,120)
(20,498)
(4,857)
2,539,412
2,475,891
(3,064)
(475,442)
131,622
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
89
Financial assets at
fair value through
profit or loss
Financial assets
at fair value
through other
comprehensive
income
Total
Proceeds of capital reduction of
investment
Disposal
-
-
(15,082)
(3,072)
(15,082)
(3,072)
Balance on December 31, 2018
$
69,390
2,041,463
2,110,853
For the years ended December 31, 2019 and 2018, total gains and losses that were
included in “other gains and losses, net” and “other comprehensive income, before tax,
equity instruments at fair value through other comprehensive income” were as follows:
Total gains and losses recognized:
In profit or loss before tax (as “other gains and
losses, net”)
In other comprehensive income (as “other
comprehensive income, before tax, equity
instruments at fair value through other
comprehensive income”)
$
$
2019
2018
(9,627)
(3,064)
210,191
(475,442)
6)
The quantified information for significant unobservable inputs (level 3) used in fair value
measurement
The Group’ s financial instruments that use level 3 input to measure fair values include
financial assets at fair value through other comprehensive income－equity instruments,
financial assets at fair value through profit or loss－equity securities investment.
Most of fair value measurements of the Group which are categorized as equity
investment into level 3 have several significant unobservable inputs. Significant
unobservable inputs of equity investments without quoted price are independent of each
other.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
90
The quantified information for significant unobservable inputs was as follows:
Item
Financial assets at fair
value through other
comprehensive
income－equity
investment without an
active market
Valuation
technique
Comparable
market approach
(Price-Book ratio
method and
Earnings
multiplier
method)
Financial assets at fair
value through other
comprehensive
income
Financial assets at fair
value through profit
or loss – investment
in private equity fund
Net asset value
method
Net asset value
method
Significant
unobservable inputs
Price-Book ratio
multiples (1.4~5.64
and 1.33~5.86
respectively, on
December 31, 2019
and 2018)
Multiples of earnings
(3.12~16.6 and
2.32~14.97
respectively, on
December 31, 2019
and 2018)
Lack-of-Marketability
discount rate
(35%~82% and
40%~82%
respectively, on
December 31, 2019
and 2018)
Net asset value
Inter-relationships
between significant
unobservable inputs
and fair value
The higher the
multiple is, the
higher the fair value
will be.
The higher the
multiple is, the
higher the fair value
will be.
The higher the Lack-
of-Marketability
discount rate is, the
lower the fair value
will be.
Inapplicable
Net asset value
Inapplicable
7)
Sensitivity analysis for fair value of financial instruments using level 3 inputs
The Group’ s fair value measurement on financial instruments is reasonable. However,
the measurement would be different if different valuation models or valuation parameters
are used. For financial instruments using level 3 inputs, if the valuation parameters
changed, the impact on other comprehensive income or loss are as follows:
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
91
Input
Price-Book ratio
multiples
December 31, 2019
Financial assets at fair
value through other
comprehensive
income
December 31, 2018
Financial assets at fair
value through other
comprehensive
income
Multiples of earnings
Lack-of-Marketability
discount rate
Price-Book ratio
multiples
Multiples of earnings
Lack-of-Marketability
discount rate
Move up
or down
Other comprehensive income
Unfavorable
change
Favorable
change
5%
5%
5%
5%
5%
5%
$
$
$
$
$
$
28,209
27,261
21,481
12,886
19,524
12,938
28,137
28,119
28,210
2,093
27,202
2,053
The favorable and unfavorable changes reflect the movement of the fair value, in which
the fair value is calculated by using the different unobservable inputs in the valuation
technique. The table above shows the effects of one unobservable input, without
considering the inter-relationships with another unobservable input for financial
instrument, if there are one or more unobservable inputs.
8) Offsetting financial assets and financial liabilities
The Group has financial instruments transactions applicable to the International
Financial Reporting Standards NO. 32 Sections 42 endorsed by the FSC which requested
for offsetting. Financial assets and liabilities relating to those transactions are recognized
in the net amount of the balance sheets.
The following tables present the aforesaid offsetting financial assets and financial
liabilities.
Unit: thousands of New Taiwan Dollars / thousands of US Dollars
December 31, 2019
Financial assets that are offset which have an exercisable master netting arrangement or similar agreement
Gross amounts
of recognized
financial assets
(a)
104,757,401
Gross amounts
of financial
liabilities offset
in the balance
sheet
(b)
104,757,401
Net amount of
financial assets
presented in
the balance
sheet
(c)=(a)-(b)
-
Amounts not offset in the
balance sheet (d)
Financial
instruments
-
Cash
collateral
received
-
Net amount
(e)=(c)-(d)
-
Other current assets
$
(USD
3,494,243 )
(USD 3,494,243 )
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
92
December 31, 2019
Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement
Gross amounts of
recognized
financial liabilities
(a)
104,757,401
Gross amounts
of financial
assets offset in
the balance
sheet
(b)
104,757,401
(USD
3,494,243 )
(USD 3,494,243 )
Net amount of
financial
liabilities
presented in
the balance
sheet
(c)=(a)-(b)
-
Amounts not offset in the
balance sheet (d)
Financial
instruments
-
Cash
collateral
received
-
Net amount
(e)=(c)-(d)
-
Short-term borrowings $
December 31, 2018
Financial assets that are offset which have an exercisable master netting arrangement or similar agreement
Gross amounts
of recognized
financial assets
(a)
Gross amounts
of financial
liabilities offset
in the balance
sheet
(b)
Other current assets
$
306,259
306,259
(USD
9,971 )
(USD
9,971 )
Net amount of
financial assets
presented in
the balance
sheet
(c)=(a)-(b)
-
Amounts not offset in the
balance sheet (d)
Financial
instruments
-
Cash
collateral
received
-
Net amount
(e)=(c)-(d)
-
December 31, 2018
Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement
Gross amounts of
recognized
financial liabilities
(a)
Gross amounts
of financial
assets offset in
the balance
sheet
(b)
Short-term borrowings $
306,259
306,259
(USD
9,971 )
(USD
9,971 )
Net amount of
financial
liabilities
presented in
the balance
sheet
(c)=(a)-(b)
-
Amounts not offset in the
balance sheet (d)
Financial
instruments
-
Cash
collateral
received
-
Net amount
(e)=(c)-(d)
-
(ad) Financial risk management
(i) Overview
The Group is exposed to the following risks arising from financial instruments:
1) Credit risk
2)
Liquidity risk
3) Market risk
In this note expressed the information on risk exposure and objectives, policies and procedures
of risk measurement and management of the Group. For detailed information, please refer to
the related notes of each risk.
(ii)Structure of risk management
The Group’ s finance management department provides business services for the overall
internal department. It sets the objectives, policies and processes for managing the risk and the
methods used to measure the risk arising from both the domestic and international financial
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
93
market operations.
The Group minimizes the risk exposure through derivative financial instruments. The Board
of Directors regulated the use of derivative financial instruments in accordance with the
Group’ s policy about risks arising from financial instruments such as currency risk, interest
rate risk, credit risk, the use of derivative and non-derivative financial instruments and the
investments of excess liquidity. The internal auditors of the Group continue with the review of
the amount of the risk exposure in accordance with the Group’ s policies and the risk
management policies and procedures. The Group has no transactions in financial instruments
(including derivative financial instruments) for the purpose of speculation.
(iii) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Group’ s
receivables from customers and investment securities.
1) Accounts receivable and other receivables
The Group has established a credit policy under which each new customer is analysed
individually for creditworthiness before the Group’ s standard payment and delivery
terms and conditions are offered. The Group’ s review includes external ratings, when
available, and in some cases bank references. Purchase limits are established for each
customer, and these limits are reviewed periodically.
2)
Investments
The credit risks exposure in the bank deposits, investments with fixed income and other
financial instruments are measured and monitored by the Group’ s finance department.
the contractually obligated
Since
counterparties are banks, financial institutes and corporate organizations with good
credits, there are no compliance issues, and therefore, no significant credit risk.
transaction counterparties and
the Group’ s
3) Guarantees
Pursuant to the Group’s policies, it is only permissible to provide financial guarantees to
subsidiaries and companies that the Group has business with. As of December 31, 2019
and 2018, the Group did not provide any guarantees to other companies besides its
subsidiaries.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations
associated with its financial liabilities which be settled by delivering cash or another financial
asset.
The Group manages and maintains sufficient cash and cash equivalents so as to cope with its
operations and mitigate the effects of fluctuations in cash flows. The Group’ s management
supervises the banking facilities and ensures in compliance with the terms of the loan
agreements. Please refer to notes (6)(n) and (6)(o) for unused credit lines of short-term and
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
94
long-term borrowings as of December 31, 2019 and 2018.
(v) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices which will affect the Group’ s income or the value of its holdings of
financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimizing the return.
1) Currency risk
The Group is exposed to currency risk on sales, purchases and borrowings that are
denominated in a currency other than the functional currencies of the Group. The
currencies used in these transactions are primarily denominated in TWD, USD, EUR and
CNY.
As for other monetary assets and liabilities denominated in other foreign currencies,
when short-term imbalance takes place, the Group buys or sells foreign currencies at spot
rate to ensure that the net exposure is kept on an acceptable level.
2)
Interest rate risk
The Group borrows funds on fixed and variable interest rates, which has a risk exposure
to changes in fair value and cash flow. Therefore, the Group manages the interest rates
risk by maintaining an adequate combination of fixed and variable interest rates.
3) Other price risk
The Group is exposed to equity price risk arising from investments in listed equity
securities.
(ae) Capital management
The policy of capital management made by the Board of Directors is to maintain a strong capital
base so as to stabilize the confidence of the investors, creditors and the public market and to sustain
future development of the business. Capital consists of ordinary shares, capital surplus, retained
earnings and non-controlling interests. The Board of Directors monitors the return on capital as well
as the level of dividends to ordinary shareholders.
The Group monitors the capital structure by way of periodical review the debt ratio. As of
December 31, 2019 and 2018, the debt ratio was as follows:
Total liabilities
Total assets
Debt ratio
December 31,
2019
December 31,
2018
267,889,075
286,632,975
382,648,419
399,794,823
$
$
70%
72%
The Group could purchase its own shares in the public market in accordance with the corresponding
rules and regulations. The timing of the purchases depends on market prices.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
95
As of December 31, 2019, there were no changes in the Group’s approach of capital management.
(af)
Investing and financing activities not affecting current cash flow
The Group's investing and financing activities which did not affect the current cash flow in the year
ended December 31, 2019 were acquisition of right-of-use assets by leasing, please refer to note
(6)(m). There were no investing and financing activities which did not affect the current cash flow in
the year ended December 31, 2018.
Reconciliation of liabilities arising from financing activities were as follows:
Short-term borrowings
Proceeds from issuance of convertible
bonds
Long-term borrowings
Lease liabilities
January 1,
2019
$ 72,350,197
Cash flow
(11,398,353)
Other
non-cash
changes
-
December
31, 2019
60,951,844
-
1,007,240
(40,748)
966,492
28,534,063
(2,785,625)
-
25,748,438
2,089,950
(832,815)
1,009,953
2,267,088
Guarantee deposits and others
238,324
(34,005)
41,719
246,038
Total liabilities from financing activities $ 103,212,534
(14,043,558)
1,010,924
90,179,900
Short-term borrowings
Long-term borrowings
January 1,
2018
$ 56,515,525
Cash flow
15,834,672
December
31, 2018
72,350,197
27,452,888
1,081,175
28,534,063
Guarantee deposits and others
180,207
58,117
238,324
Total liabilities from financing activities $ 84,148,620
16,973,964
101,122,584
(7) Related-party transactions:
(a) Name and relationship with related parties
The followings are the entities that have had transactions with the Group during the periods covered
in the financial statement.
Name of related party
Relationship with the Group
Compal Precision Module (Jiangsu) Co., Ltd.
Changbao Electronic Technology (Chongqing) Co.,
An associate
An associate
Ltd.
LCFC (Note 1)
Avalue Technology Inc. (“Avalue”)
Crownpo Technology Inc. (“Crownpo”)
Allied Circuit Co., Ltd. (“Allied Circuit”)
Kinpo Group Management Consultant Company
(“Kinpo Group Management”)
An associate
An associate
An associate
An associate
An associate
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
96
Name of related party
LIZ Electronics (Kunshan) Co., Ltd.
Compal Connector Manufacture Ltd. (“CCM”)
AcBel Polytech Inc. (“AcBel”) and its subsidiaries
Relationship with the Group
An associate
A joint venture company
The same Chairman of the Board with the
Company
Note 1: In August 2018, the Group has sold all its shares of LCFC and no longer has significant
influence over it. Therefore, LCFC is not a related-party of the Group from September
2018.
(b) Transactions with key management personnel
Key management personnel remunerations comprised:
Short-term employee benefits
Post-employment benefits
Share-based payments
2019
671,762
8,225
30,276
710,263
$
$
2018
660,609
7,984
(78,216)
590,377
There are no termination benefits and other long-term benefits. Please refer to note (6)(w) for
explanations related to share-based payments.
(c)
Significant related-party transactions
(i)
Sale of goods to related parties
The amounts of significant sales transactions between the Group and related parties were as
follows:
Associates
Other related parties
2019
2018
$
$
288,629
24
288,653
323,587
4,455
328,042
Sales prices for related parties were similar to those of the third-party customers. The
collection period was 60~120 days for related parties.
(ii) Purchase of goods from related parties
The amounts of significant purchase transactions between the Group and related parties were
as follows:
Associates
Other related parties
Joint venture
$
2019
3,678,644
1,663,747
31,150
2018
4,010,999
1,365,892
95,900
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
97
Purchase prices and payment period from related parties were similar to those from third-party
suppliers. The payment period was 60~165 days for related parties.
$
5,373,541
5,472,791
(iii) Receivables due from relate parties
The receivables arising from the transactions mentioned above and others on behalf of related
parties were as follows:
Account
Notes and accounts receivable
Notes and accounts receivable
Other receivables
Other receivables
(iv) Payables to related parties
Related party
categories
December
31, 2019
December
31, 2018
Associates
Other related parties
Other related parties
Joint venture
$
$
44,493
19
62
-
44,574
56,701
1,405
-
120
58,226
The payables arising from the transactions mentioned above and rendering of services from
other related parties were as follows:
Account
Related party
categories
December
31, 2019
Notes and accounts payable
Associates
$
Notes and accounts payable
Other related parties
Notes and accounts payable
Other payables
Joint venture
Associates
764,129
740,742
37
-
December
31, 2018
1,245,574
705,761
25,285
1,019
$
1,504,908
1,977,639
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
98
(8) Pledged assets:
The carrying values of pledged assets were as follows:
Pledged Assets
Other current assets
Subject
December
31, 2019
December
31, 2018
Bail for court mandatory execution
$
41,090
41,090
Property, plant and
Long-term borrowings (including current portion)
equipment
(note)
249,445
715,913
Other non-current assets Guarantee of post-release duty payment to the
customs and guarantee of the customs
500
500
$
291,035
757,503
Note:Part of long-term borrowings had been settled in 2015, and the assets on property－ land were no
longer pledged as collaterals in 2019.
(9) Commitments and contingencies:
The details of commitments and contingencies were as follows:
(a) On May 17, 2017, Qualcomm Inc. filed a lawsuit to the Southern District Court of California, USA
against the Group for not paying the royalties of the patent license agreement. The Group has filed
counterclaims against Qualcomm Inc. based on the antitrust law in the same court on July 19, 2017.
The lawsuits was settled on April 16, 2019. The Group had compromised and both parties had
agreed to drop the lawsuits.
(b)
In August 2019, Inventec Corporation filed a lawsuit to the Taiwan Taipei District Prosecutors
Office against the Group concerning its former employees who joined the Group. This is deemed as
an act of violation according to the Trade Secret Law and Copyright Law. The Group engaged
lawyers to defend its right on this matter. Currently, the case is still in progress; therefore, the Group
cannot make any reasonable estimation regarding the possible impact on its business operation.
(c) The Group entered into various patent license agreements with third parties, and was required to
make royalty payments of a predetermined amount periodically.
(d) As of December 31, 2019 and 2018, the Group's signed commitments to purchase property, plant and
equipment amounted to $548,202 and $187,872, respectively.
(10) Losses due to major disasters: None
(11) Subsequent events: None
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
99
(12) Other:
The employee benefits, depreciation and amortization expenses by categorized function are summarized as
follows:
By function
By item
Employee benefits
Operating
costs
2019
Operating
expenses
Total
Operating
costs
Salary
Labor and health insurance
Pension
Others
Depreciation
Amortization
18,163,713
909,916
1,219,607
2,075,648
5,029,744
77,908
12,202,863
816,727
504,059
623,657
944,616
367,153
30,366,576
1,726,643
1,723,666
2,699,305
5,974,360
445,061
17,181,336
826,628
1,242,331
2,641,948
4,100,520
55,897
2018
Operating
expenses
11,515,507
744,593
475,288
578,881
495,005
289,250
Total
28,696,843
1,571,221
1,717,619
3,220,829
4,595,525
345,147
(13) Other disclosures:
(a)
Information on significant transactions
The following were the information on significant transactions required by the “ Regulations
Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the year
ended December 31, 2019:
(i)
Loans to other parties: Please refer to Table 1
(ii) Guarantees and endorsements for other parties: Please refer to Table 2
(iii) Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and
joint ventures): Please refer to Table 3
(iv)
Individual securities acquired or disposed of with accumulated amount exceeding the lower of
NT$300 million or 20% of the capital stock: Please refer to Table 4
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or
20% of the capital stock: None
(vi) Disposals of individual real estate with amount exceeding the lower of NT$300 million or 20%
of the capital stock: None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of
NT$100 million or 20% of the capital stock: Please refer to Table 5
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20%
of the capital stock: Table 6
(ix) Trading in derivative instruments: Please refer to notes (6)(b) and (6)(d)
(x) Business relationships and significant intercompany transactions: Please refer to Table 7
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
100
(b)
Information on investees: Please refer to Table 8
(c)
Information on investment in Mainland China: Please refer to Table 9
(14) Segment information:
(a) General information
The Group’ s information technology product segment is primarily engaged in the development,
manufacture and sale of information technology products and mobile communication products. The
strategy integrate product segment is primarily engaged in the research, development, manufacture
and sale of networking products.
(b) Reportable segments and operating segment information
Accounting policies for the operating segments correspond to those stated in note 4. The profit and
loss of the operating segment of the Group is measured by earnings before taxes and as the basis for
performance measurement. The amount of the Group's reportable segments consistent with the one
of the report that the operating decision maker used, and the Group does not allocate assets and
liabilities to the reportable segments for the purpose of operating decisions to measure assets and
liabilities of segments.
The operating segment information was as follows:
For the year ended December 31, 2019
Information
technology
product segment
Strategy
integrated
product segment
Adjustment and
elimination
Total
Revenue
Revenue from external
customers
Interest revenue
Total revenue
Interest expense
Depreciation and amortization
Investment gain (loss)
Other significant non-cash
items:
$
$
$
947,546,939
32,895,407
1,593,904
70,899
949,140,843
32,966,306
2,669,003
5,991,303
197,008
56,561
428,118
-
-
Impairment of assets
-
Reportable segment profit
$
8,307,224
1,700,652
Reportable segment assets
Reportable segment
liabilities
-
-
-
-
-
-
-
-
980,442,346
1,664,803
982,107,149
2,725,564
6,419,421
197,008
-
10,007,876
382,648,419
267,889,075
$
$
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
101
For the year ended December 31, 2018
Information
technology
product segment
Strategy
integrated
product segment
Adjustment and
elimination
Total
Revenue
Revenue from external
$
941,106,606
26,599,805
customers
Interest revenue
Total revenue
Interest expense
$
$
Depreciation and amortization
Investment gain (loss)
Other significant non-cash
items:
1,420,529
43,129
942,527,135
26,642,934
2,599,996
4,692,636
797,368
36,447
248,036
-
-
Impairment of assets
-
Reportable segment profit
$
10,714,350
1,075,235
Reportable segment assets
Reportable segment
liabilities
(c)
Products information
The information of revenue from external customers:
-
-
-
-
-
-
-
-
967,706,411
1,463,658
969,170,069
2,636,443
4,940,672
797,368
-
11,789,585
399,794,823
286,632,975
$
$
Products and services
5C related electronic products
Others
(d) Geographic information
2019
977,895,468
2018
965,217,737
2,546,878
2,488,674
980,442,346
967,706,411
$
$
Stated below are the geographic information on the Group’s sales presented by destination of sales
and non-current assets presented by location.
(i)
Revenue from external customers:
Country
United States
China
Netherlands
Others
2019
378,999,466
$
2018
363,952,505
103,572,415
121,029,441
98,958,916
110,870,861
398,911,549
371,853,604
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
102
(ii) Non-current assets:
Country
China
Taiwan
Others
$
980,442,346
967,706,411
2019
13,525,794
10,389,632
1,578,056
2018
15,023,523
7,345,390
1,050,542
25,493,482
23,419,455
$
$
Non-current assets include plant, property, and equipment, intangible assets, and other assets,
excluding deferred tax assets.
(e) The details of sales revenue from external customers more than 10% of the amount of consolidated
statement of comprehensive income are as follows:
D Company
F Company
A Company
E Company
2019
2018
$
390,210,303
414,474,616
212,262,458
187,925,666
96,591,070
128,790,649
105,890,275
66,783,151
$
804,954,106
797,974,082
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
103
Table 1 Loans to other parties:
(December 31, 2019)
Name of
lender
No.
0 The
Name of
borrower
CVC
Company
0 The
UCGI
Company
0 The
HengHao
Company
0 The
CEB
Company
1 CIH
CEP
2 CPI
CVC
3 CPC
CDE
3 CPC
CIC
Account
name
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
4 CIT
4 CIT
CCI
Nanjing
Other
receivables
Rayonnant
(Taicang)
Other
receivables
5 PFG
CEB
Other
receivables
6 CPO
HengHao
Kunshan
Other
receivables
6 CPO
CIT
7 CET
BT
8 Panpal
HengHao
9 Arcadyan Acradyan
Brasil
Other
receivables
Other
receivables
Other
receivables
Other
receivables
9 Arcadyan Arcadyan
UK
Other
receivables
9 Arcadyan Arcadyan
AU
Other
receivables
9 Arcadyan Arcadyan
Vietnam
Other
receivables
10 Zhi-pal
Acradyan
Brasil
Other
receivables
11 Arcadyan
Holding
CNC
Other
receivables
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Highest balance
of financing to
other parties
during the
period
316,000
Related
party
Y
Ending
balance
-
Actual
usage
amount
during the
period
-
Range of
interest rates
during the
period
3.20%
Purposes of
fund
financing
for the
borrower
Short-term
financing
Short-term
financing
500,000
250,000
220,000
1.20%
405,369
200,000
200,000
1.2%~2.82% Short-term
financing
1,580,000
1,499,000
1,499,000
3.50%
110,600
104,930
43,471
3.50%
316,000
-
-
3.20%
1,380,900
1,291,500
1,291,500
2.20%
430,500
430,500
-
2.20%
2,212,000
2,098,600
2,098,600
2.76%
69,045
64,575
64,575
4.35%
308,950
-
-
2.50%
644,420
602,700
602,700
4.35%
645,750
645,750
-
2.20%
274,800
258,300
64,575
2.20%
600,000
600,000
600,000
1.20%
246,160
60,040
39,026
1.00%
219,730
210,140
126,400
-
284,400
270,180
34,760
33,022
-
-
-
-
1.00%
1.00%
1.00%
1.00%
523,940
510,340
510,340
1.00%
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Transaction
for business
between two
parties
Transaction
for business
between two
parties
Transaction
for business
between two
parties
Short-term
financing
Short-term
financing
Transaction
amount for
business
between two
parties
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Reasons
for
short-
term
financing
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
financing
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
financing
4,503,000
1,501,000
600,400
-
-
-
-
-
Operating
financing
Operating
financing
Allowance
for
bad debt
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(In Thousands of New Taiwan Dollars)
Individual
funding loan
limits
21,194,526
Maximum
limit of fund
financing
42,389,053
Note
(Note 1)
21,194,526
42,389,053
(Note 1)
21,194,526
42,389,053
(Note 1)
21,194,526
42,389,053
(Note 1)
34,545,521
34,545,521
(Note 2)
890,733
890,733
(Note 3)
2,096,417
2,096,417
(Note 4)
2,096,417
2,096,417
(Note 4)
20,539,992
20,539,992
(Note 5)
20,539,992
20,539,992
(Note 5)
435,070
435,070
(Note 6)
2,777,160
2,777,160
(Note 7)
2,777,160
2,777,160
(Note 7)
4,625,117
4,625,117
(Note 8)
5,896,656
5,896,656
(Note 9)
2,180,945
4,361,890
(Note 10)
2,180,945
4,361,890
(Note 10)
1,200,800
4,361,890
(Note 10)
480,320
4,361,890
(Note 10)
41,642
166,568
(Note 11)
2,003,996
2,003,996
(Note 12)
Collateral
Item Value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note 1:
According to the Company’ s Procedures of Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of the Company. When a short-term financing facility
with the Company is necessary, the total amount for lending to any company shall not exceed 80% of the borrower’s net worth, nor shall it be more than 50% of the Company’s lendable amount limit, and
shall be combined with the company’s endorsements/guarantees for calculation. In addition, the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company is unrestricted by
Note 2:
Note 3:
the aforesaid restriction of 80%, but the maximum amount shall not exceed 50% of the Company’s lendable limit, and shall be combined with the company’s amount of loans to others when calculating.
According to CIH’s Procedures for Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of CIH. When a shortterm financing facility with CIH is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIH’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIH, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CPI’s Procedures for Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of CPI. When a shortterm financing facility with CPI is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPI’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPI, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
104
Table 1 Loans to other parties:
(December 31, 2019)
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
According to CPC’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPC. When a shortterm financing facility with CPC is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower ’s net worth, nor shall it exceed 50% of CPC’s total amount of capital lent, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPC, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CIT ’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CIT. When a shortterm financing facility with CIT is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower ’s net worth, nor shall it exceed 50% of CIT ’ s total amount of capital lent, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIT, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to PFG’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of PFG. When a shortterm financing facility with PFG is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of PFG’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of PFG, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CPO’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPO. When a shortterm financing facility with CPO is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPO’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPO, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CET’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CET. When a shortterm financing facility with CET is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CET’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CET, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to Panpal’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Panpal. When a shortterm financing facility with Panpal
is necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of Panpal’s total amount of lendable capital, and shall be combined with
the company’s endorsements/guarantees for calculation. In addition, when lending to the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company, or the ultimate parent
company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited by the two aforesaid restrictions of 80%, but the maximum amount shall not exceed the of
Panpal, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
According to Arcadyan’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Arcadyan. To borrowers having business relationship
with Arcadyan, the total amount for lending the borrower shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount for the current year, nor shall it exceed 20% of the
net worth of Arcadyan. Also, the amount shall be combined with the Arcadyan ’ s endorsements/guarantees for the borrower when calculating. When a short-term financing facility is necessary, the
borrower should be Arcadyan’s investee. The total amount for lending the borrower shall not exceed 80% of the net worth of the borrower, nor shall it exceed 20% of the net worth of Arcadyan, and shall
be combined with the Arcadyan’s endorsements/guarantees for the borrower when calculating.
The total amount of loans to others shall not exceed 40% of the net worth of Zhi-pal. To borrowers having business relationship with Zhi-pal, the total amount for lending the borrower shall not exceed 80%
of the transaction amount in the last fiscal year or the expecting amount for the current year, nor shall it exceed 20% of the net worth of Zhi-pal. When a short-term financing facility is necessary, the
borrower should be Zhi-pal’s investee, and the total amount for lending the borrower shall not exceed 10% of the net worth of the borrower.
According to Arcadyan Holding’s Procedures of Lending Funds to Other Parties, the total amount of loans to others shall not exceed the net worth of Arcadyan Holding. When a short-term financing
facility is necessary, the borrower should be Arcadyan Holding’s investee. The total amount for lending the borrower shall not exceed the net worth of Arcadyan Holding, and shall be combined with the
Arcadyan Holding’s endorsements/ guarantees for the borrower when calculating.
The transactions had been eliminated in the consolidated financial statements.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
105
Table 2 Guarantees and endorsements for other parties:
(December 31, 2019)
Counter-party of
guarantee and
endorsement
Name of
No.
guarantor
0 The Company CEB
Name
Relationship
with the
Company
(Note 3)
Limitation on
amount of
guarantees
and
endorsements
for a specific
enterprise
26,493,158
Highest
balance for
guarantees
and
endorsements
during the
period
63,200
Balance of
guarantees
and
endorsements
as of
reporting date
59,960
Property
pledged for
guarantees
and
endorsements
(Amount)
-
Actual usage
amount
during the
period
59,960
Ratio of
accumulated
amounts of
guarantees and
endorsements to
net worth of the
latest financial
statements
0.06%
Maximum
amount
for guarantees
and endorsements
(Note 1)and(Note 4)
52,986,316
(In Thousands of New Taiwan Dollars)
Parent
company
endorsements
/guarantees
to third
parties on
behalf of
subsidiary
Y
Subsidiary
endorsements
/guarantees
to third
parties on
behalf of
parent
company
-
Endorsements
/ guarantees
to third
parties on
behalf of
companies in
Mainland
China
-
0 The Company CEP
(Note 2)
26,493,158
260,766
195,702
195,702
1 Arcadyan
Arcadyan
Brasil
(Note 5)
1,453,963
246,160
-
-
-
-
0.18%
52,986,316
-
4,361,890
Y
Y
-
-
-
-
Note 1:
According to the Company’ s Procedures for Endorsement and Guarantee, the total amount of endorsements/ guarantees the Company or the Group is permitted to make shall not exceed 50% of the
Company’s net worth. Endorsements/ guarantees the Company and the Group are permitted to make for a single company shall not exceed 25% of the Company’s net worth. For entities having business
relationship with the Company, the amount of endorsements/ guarantees for a single company shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount of the current
year, and shall be combined with the amount lend to others when calculating. The amount of endorsements/ guarantees permitted to make between subsidiaries whose over 90% of its voting shares are
owned, directly or indirectly, by the Company shall be no more than 10% of the net worth of the Company. The amount of endorsements/ guarantees permitted to make between directly or indirectly
wholly owned subsidiaries is not limited by the aforementioned restriction, only the maximum amount shall be no more than 25% of the net worth of the Company.
Note 2: Subsidiary whose over 50% common stock is directly owned.
Note 3: Subsidiary whose over 50% common stock is indirectly owned.
Note 4:
According to Arcadyan's Procedures for Endorsement and Guarantee, the total amount shall not exceed 40% of the net worth for latest financial statements audited or reviewed by Certified Public
Accountants, and the amount for a single company shall not exceed 1/3 of the total amount.
Note 5: Subsidiary whose 100% common stock is directly owned by Arcadyan.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
106
Table 3 Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and joint ventures):
(December 31, 2019)
Name of
holder
Category and name of security
The Company Taiwan Star
Relationship with
security issuer
‑
Kinpo Electronics, Inc. (“Kinpo”)
The same chairman
of the Company
Cal-Comp Electronics (Thailand) Public
Co., Ltd.
The same chairman
of the Company
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
Innolux Corporation (“Innolux”)
HWA VI Venture Capital Corp.
HWA Chi Venture Capital Corp.
mProbe Ltd.
Global BioPharma, Inc.
Chen Feng Optoelectronics
PrimeSensor Technology Inc.
Macroblock, Inc.
IIH Biomedical Venture Fund
UBS Extendible Money Mkt Cert.
Others
Total
Account name
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-non current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss and other
comprehensive income
-
-
Ending balance
The highest holdings in the
period
Shares/Units
(thousands)
98,046
Carrying
value
680,442
Holding
percentage
(%)
3%
Fair value
680,442
Shares/Units
(thousands)
98,046
Holding
percentage
(%)
3%
Note
(In Thousands of shares/ units)
124,044
1,593,962
9%
1,593,962
124,044
9%
239,631
448,110
5%
448,110
239,631
5%
-
-
-
-
134,877
1%
290
25,397
10%
25,397
290
10%
842
23,933
11%
23,933
1,053
11%
4,000
40,920
2%
40,920
4,000
3%
2,000
34,260
3%
34,260
2,000
3%
6,685
97,866
11%
97,866
6,685
13%
861
7,266
3%
7,266
1,357
3%
-
-
-
748,656
2%
2,500
24,350
8%
24,350
2,500
8%
149,888
-
149,888
-
-
113,984
3,240,378
Panpal
Compal Electronics, Inc.
The parent company Financial assets at fair value
31,648
596,566
1%
596,566
31,648
1%
(Note 1)
Kinpo
The same chairman
of the Company
CDIB Partners Investment Holding
Corp.
‑
AcBel
The same chairman
of the Company
Chipbond Technology Corp.
Taiwan Biotech Co., Ltd.
Others
Total
‑
‑
‑
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
23,172
297,766
2%
297,766
23,172
2%
54,000
941,220
5%
941,220
54,000
5%
5,677
137,092
1%
137,092
5,677
1%
-
-
-
-
5,251
4,897
134,085
3%
134,085
4,897
1%
3%
103,583
2,210,312
Gempal
Compal Electronics, Inc.
The parent company Financial assets at fair value
18,369
346,262
-
346,262
18,369
-
(Note 1)
Lian Hong Art. Co., Ltd.
Global BioPharma, Inc.
‑
‑
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
2,140
65,670
8%
65,670
2,140
8%
2,000
34,265
3%
34,265
2,000
3%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
107
Table 3 Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and joint ventures):
(December 31, 2019)
Name of
holder
Category and name of security
Gempal
Others
Relationship with
security issuer
‑
Total
Hong Ji
SUYIN Optronics Co., Ltd.
(“SUYIN Optronics”)
Hong Jin
SUYIN Optronics
Arcadyan
GeoThings Inc.
AirHop Communication Inc.
Adant Technologies Inc.
IOT EYE, Inc.
TIEF FUND L.P.
Chimei Motor Electronics Co., LTD
Total
Mactech
Taichung International Golf
Country Club
HHB
HWALLAR OPTRONICS
(Fuzhou) CO., LTD.
Mithera
Beyond Limits, Inc.
CPC
CET
CEC
CEQ
Structured deposits–SPD Bank
Yield Plus Structured Deposit
Structured deposits–SPD Bank
Yield Plus Structured Deposit
Structured deposits–Bank of
Communications Yun Tong Cai Fu,
Structured Deposit
Structured deposits–Bank of
Communications Yun Tong Cai Fu,
Structured Deposit
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
Account name
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss-current
Note 1:The transaction had been eliminated in the consolidated financial statements.
Note 2:The carrying value is the remaining amount after deducting accumulated impairment.
Ending balance
The highest holdings in the
period
Shares/Units
(thousands)
Carrying
value
2,699
Holding
percentage
(%)
Fair value
Shares/Units
(thousands)
Holding
percentage
(%)
Note
(In Thousands of shares/ units)
448,896
380
182
1%
182
380
1%
332
160
1%
160
332
1%
200
1,152
349
60
-
-
-
-
9%
5%
5%
14%
-
-
-
-
200
9%
(Note 2)
1,152
7%
(Note 2)
349
5%
(Note 2)
60
6%
(Note 2)
44,262
7%
44,262
1,650
49,500
9%
49,500
93,762
7,530
-
7,530
-
-
7%
1,650
9%
-
-
19%
-
19%
(Note 2)
873
134,910
394,013
437,840
219,070
129,647
-
-
-
-
-
134,910
873
-
394,013
437,840
219,070
129,647
‑
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
108
Table 4 Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Name of
counter-party
-
Relationship
with the
company
-
Beginning Balance
Purchases
Shares/ Units
(thousands)
4,593
Amount
284,768
Shares/ Units
(thousands)
-
Amount
-
Shares/ Units
(thousands)
4,593
Price
307,207
Cost
307,207
Gain (loss)
on disposal
-
Shares/ Units
(thousands)
-
Sales
Others
Ending Balance
(In Thousands of New Taiwan Dollars)
Name of
company
The
Company
Category and name
of security
Chipbond
The
Company
Innolux Corporation
Panpal
Chipbond
BSH
HSI
HSI
IUE
IUE
CVC
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Structured deposits-
Bank of
Communications
Yun Tong Cai Fu.
Structured Deposit
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Structured deposits-
Bank of
Communications
Yun Tong Cai Fu.
Structured Deposit
Structured deposits-
Bank of
Communications
Yun Tong Cai Fu.
Structured Deposit
Structured deposits-
Industrial Bank
Structured Deposits
Structured deposits-
Bank of
Communications
Yun Tong Cai Fu.
Structured Deposit
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Account
name
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through other
comprehensive
income-non-
current
Financial assets
at fair value
through profit
or loss-current
Investments
accounted for
using equity
method
Investments
accounted for
using equity
method
Investments
accounted for
using equity
method
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
-
-
Issued for cash
Issued for cash
Issued for cash
Shanghai Pudong
Development
Bank
Bank of
Communications
Shanghai Pudong
Development
Bank
Bank of
Communications
Bank of
Communications
Industrial Bank
Co.,Ltd
Bank of
Communications
Shanghai Pudong
Development
Bank
Bank of China
Structured deposits-
The RMB "Open on
schedule" Financial
Product
Financial assets
at fair value
through profit
or loss-current
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Financial assets
at fair value
through profit
or loss-current
Shanghai Pudong
Development
Bank
Structured deposits-
Win-win Interest
Rate Structure RMB
Structural Deposits
Financial assets
at fair value
through profit
or loss-current
China CITIC
Bank
Structured deposits-
Bank of
Communications
Yun Tong Cai Fu.
Structured Deposit
Structured deposits-
Agricultural Bank of
China "HuiLiFeng"
customization RMB
structured deposit
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Structured deposits-
The RMB "Open on
schedule" Financial
Product
Financial assets
at fair value
through profit
or loss-current
Bank of
Communications
Agricultural Bank
of China
Bank of China
CPC
CIT
CIT
CEC
CEQ
CEQ
CPO
CPO
CPO
CIC
CIC
CET
CET
CET
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
109,227
1,061,690
5,251
325,560
-
-
-
-
109,227
763,181
763,181
-
5,251
344,843
344,843
-
-
-
37,000
1,109,260
30,000
455,400
37,000
1,109,260
30,000
480,087
37,000
1,109,260
-
-
-
-
-
-
-
-
-
-
-
-
-
-
179,963
-
-
576,466
260,029
259,705
448,948
480,285
-
179,699
-
225,651
676,881
451,154
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,203,551
894,833
894,833
1,825,461
501,107
259,502
-
-
447,417
1,073,801
447,417
1,118,542
447,417
223,708
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
989,834
979,843
910,892
894,833
910,892
894,833
2,196,103
2,174,447
633,487
626,384
526,798
519,004
451,877
447,416
482,449
478,736
456,614
447,417
1,265,163
1,252,768
450,405
447,417
1,360,587
1,342,250
1,129,780
1,118,542
667,681
671,125
-
-
-
9,991
(Note 2)
16,059
(Note 2)
16,059
(Note 2)
21,656
(Note 2)
7,103
(Note 2)
7,794
(Note 2)
4,461
(Note 2)
3,713
(Note 2)
9,197
(Note 2)
12,395
(Note 2)
2,988
(Note 2)
18,337
(Note 2)
11,238
(Note 2)
6,556
(Note 2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shares/ Units
(thousands)
-
Amount
-
-
-
-
-
37,000
1,109,260
Amount
22,439
(Note 1)
(298,509)
(Note 1)
19,283
(Note 1)
-
(Note 3)
(202,793)
(Note 3)
67,000
1,361,867
(203,384)
(Note 3)
67,000
1,385,963
333
(Note 1)
16,059
(Note 1)
16,059
(Note 1)
13,246
(Note 1)
1,998
(Note 1)
7,591
(Note 1)
2,929
(Note 1)
2,164
(Note 1)
9,197
(Note 1)
11,663
(Note 1)
2,988
(Note 1)
16,394
(Note 1)
5,482
(Note 1)
2,819
(Note 1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
394,013
-
-
219,070
129,647
-
-
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
109
Table 4 Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Name of
company
CET
Category and name
of security
Structured deposits-
SPD Bank Yield Plus
Structured Deposit
Account
name
Financial assets
at fair value
through profit
or loss-current
Name of
counter-party
Shanghai Pudong
Development
Bank
Relationship
with the
company
-
Beginning Balance
Purchases
Shares/ Units
(thousands)
-
Amount
-
Shares/ Units
(thousands)
-
Amount
1,297,509
Shares/ Units
(thousands)
-
Sales
Others
Ending Balance
Price
858,447
Cost
850,092
Gain (loss)
on disposal
8,355
(Note 2)
Shares/ Units
(thousands)
-
Amount
(1,222)
(Note 1)
Shares/ Units
(thousands)
-
Amount
437,840
(In Thousands of New Taiwan Dollars)
CET
Structured deposits-
Win-win Interest
Rate Structure RMB
Structural Deposits
Financial assets
at fair value
through profit
or loss-current
China CITIC
Bank
Arcadyan Arcadyan Holding
Issued for cash
Investments
accounted for
using equity
method
-
-
-
-
-
1,297,509
32,780
1,221,252
27,000
823,505
-
-
1,307,480
1,297,509
9,971
(Note 2)
-
-
-
-
-
9,971
(Note 1)
-
-
(87,955)
(Note 3)
59,780
1,956,802
Note 1:Others were valuation gains and losses and foreign exchange gains and losses.
Note 2:Including gains and losses on disposal and foreign exchange gains and losses.
Note 3:Including share of profit (loss) accounted for using equity method and exchange differences on translation of foreign financial statements.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
110
Table 5 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Transaction details
Transactions with terms
different from others
Notes/Accounts receivable
(payable)
(In Thousands of New Taiwan Dollars)
Purchase/
(Sale)
Sale
Amount
(195,680)
Percentage
of total
purchases/
(sales)
-
Payment terms
120 days
Unit price
Similar to non-
related parties
Payment Terms
There is no significant
difference
Company
Name
The
Company
Counter
party
UCGI
CBN
CIH and its
subsidiaries
Nature of
relationship
Subsidiaries wholly
owned by the
Company
The Company's
subsidiaries
Subsidiaries wholly
owned by the
Company
Just and its
subsidiaries
Subsidiaries wholly
owned by the
Company
HSI and its
subsidiaries
Subsidiaries wholly
owned by the
Company
BCI and its
subsidiaries
Subsidiaries wholly
owned by the
Company
Etrade and its
subsidiaries
Subsidiaries wholly
owned by the
Company
Webtek
Palcom
Forever
Subsidiaries wholly
owned by the
Company
Subsidiaries wholly
owned by the
Company
Subsidiaries wholly
owned by the
Company
Just and its
subsidiaries
Webtek
With the same
ultimate parent
company
Sale
(962,973)
(0.1)%
90 days
Purchase
189,074,111
21.6%
120 days
Purchase
102,586,790
11.7%
120 days
Purchase
4,571,105
0.5%
120 days
Purchase
24,316,409
2.8%
120 days
Similar to non-
related parties
Similar to non-
related parties
Similar to non-
related parties
Similar to non-
related parties
Markup based on
BCI and its
subsidiaries's cost
Purchase
19,044,223
2.2% Net 60 days from purchase Markup based on
Etrade and its
subsidiaries's cost
Purchase
34,469,915
3.9% Net 60 days from purchase Markup based on
Webtek's cost
Sale
(105,081)
-
Net 60 days from delivery Similar to non-
related parties
Purchase
18,139,071
2.1% Net 60 days from purchase Markup based on
Forever's cost
Sale
(24,375,017)
(19.0)% Net 60 days from delivery According to
Compal Electronic,
Inc.
Parent company
Sale
(102,586,790)
(45.0)%
120 days
Forever
With the same
ultimate parent
company
Sale
(6,892,761)
(34.0)% Net 60 days from delivery Similar to non-
related parties
CIH and its
subsidiaries
Compal Electronic,
Inc.
Parent company
Sale
(189,320,860)
(77.7)%
120 days
Sale
(196,173)
-
120 days
CEB
Forever
With the same
ultimate parent
company
With the same
ultimate parent
company
Sale
(9,187,778)
(20.1)% Net 60 days from delivery According to
markup pricing
CBN
BCI and its
subsidiaries
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Parent company
Purchase
959,522
52.0% Net 90 days from purchase
-
Parent company
Sale
(24,324,646)
(84.1)%
120 days
CEB
With the same
ultimate parent
company
Sale
(1,962,595)
(7.0)%
120 days
Webtek
Compal Electronic,
Inc.
Parent company
Sale
(34,469,915)
(100.0)% Net 60 days from delivery According to
markup pricing
Etrade and its
subsidiaries
With the same
ultimate parent
company
Purchase
10,091,875
29.0% Net 60 days from purchase According to
markup pricing
markup pricing
Similar to non-
related parties
Similar to non-
related parties
Similar to non-
related parties
Markup based on
BCI and its
subsidiaries's cost
According to
markup pricing
There is no significant
difference
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
Adjustments will be
made based on
demand for funding
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
Adjustments will be
made based on
demand for funding
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
There is no significant
difference, and
adjustments will be
made based on
demand for funding if
necessary
Adjustments will be
made based on
demand for funding
There is no significant
difference
Adjustments will be
made based on
demand for funding
There is no significant
difference
Adjustments will be
made based on
demand for funding
Adjustments will be
made based on
demand for funding
Percentage
of total
notes/accounts
receivable
(payable)
-
Ending
Balance
45,158
Note
(Note 2)
330,670
0.2% (Note 2)
(51,022,067)
(34.2)% (Note 2)
(6,799,206)
(4.6)% (Note 2)
(2,369,841)
(1.6)% (Note 2)
(7,460,959)
(5.0)% (Note 2)
(5,904,962)
(4.0)% (Note 2)
(556,913)
(0.4)% (Note 2)
22,720
(778,369)
-
6,799,206
-
51,022,056
51,912
-
-
-
-
-
-
(Note 2)
(0.5)% (Note 2)
(Note 2)
20.0% (Note 2)
(Note 2)
37.8% (Note 2)
(Note 2)
(Note 2)
(331,111)
(64.0)% (Note 2)
7,460,959
78.4% (Note 2)
772,909
4.7% (Note 2)
556,913
100.0% (Note 2)
-
-
(Note 2)
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
111
Table 5 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Nature of
relationship
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
Company
Name
Webtek
Counter
party
JUST and its
subsidiaries
CEB
BCI and its
subsidiaries
CIH and its
subsidiaries
Etrade and its
subsidiaries
Webtek
Compal Electronic,
Inc.
Forever
Compal Electronic,
Inc.
Transaction details
Transactions with terms
different from others
Notes/Accounts receivable
(payable)
(In Thousands of New Taiwan Dollars)
Purchase/
(Sale)
Purchase
Amount
24,375,017
Percentage
of total
purchases/
(sales)
Payment terms
Unit price
71.0% Net 60 days from purchase According to
markup pricing
Payment Terms
Adjustments will be
made based on
demand for funding
Percentage
of total
notes/accounts
receivable
(payable)
-
Note
(Note 2)
Ending
Balance
-
Purchase
1,944,054
17.1%
120 days
Similar to non-
related parties
There is no significant
difference
(765,855)
(47.8)% (Note 2)
Purchase
202,987
1.8%
120 days
Similar to non-
related parties
There is no significant
difference
(51,677)
(3.2)% (Note 2)
Sale
(10,091,875)
(35.0)% Net 60 days from delivery According to
markup pricing
Parent company
Sale
(19,044,223)
(65.0)% Net 60 days from delivery According to
markup pricing
Parent company
Sale
(18,139,071)
(85.0)% Net 60 days from delivery According to
markup pricing
CIH and its
subsidiaries
JUST and its
subsidiaries
With the same
ultimate parent
company
With the same
ultimate parent
company
Purchase
9,187,778
43.0% Net 60 days from purchase Similar to non-
related parties
Purchase
6,892,761
32.0% Net 60 days from purchase Similar to non-
related parties
Adjustments will be
made based on
demand for funding
Adjustments will be
made based on
demand for funding
Adjustments will be
made based on
demand for funding
Adjustments will be
made based on
demand for funding
Adjustments will be
made based on
demand for funding
-
-
(Note 2)
5,904,962
100.0% (Note 2)
778,369
100.0% (Note 2)
-
-
-
-
(Note 2)
(Note 2)
Parent company
Purchase
195,680
68.2%
120 days
Similar to non-
related parties
There is no significant
difference
(45,124)
(86.5)% (Note 2)
Parent company
Purchase
105,081
100.0% Net 60 days from purchase Similar to non-
related parties
There is no significant
difference
(22,720)
-
(Note 2)
UCGI
Palcom
Compal Electronic,
Inc.
Compal Electronic,
Inc.
HSI and its
subsidiaries
Compal Electronic,
Inc.
Arcadyan
CNC
Acradyan
Vietnam
Acradyan
Germany
Acradyan
USA
Acradyan
AU
Acradyan
Germany
Acradyan
USA
Acradyan
AU
CNC
Acradyan
Vietnam
Arcadyan
THAC
Arcadyan
Arcadyan
Arcadyan
Arcadyan
THAC
TTI
CNC
TTI
THAC
Parent company
Sale
(4,571,105)
(100.0)%
120 days
Similar to non-
related parties
Adjustments will be
made based on
demand for funding
-
-
-
According to
markup pricing
According to
markup pricing
According to
markup pricing
-
-
-
-
Arcadyan's subsidiary
Sale
(1,465,691)
(5.0)% Net 120 days from delivery
Arcadyan's subsidiary
Sale
(2,992,401)
(11.0)% Net 60 days from the end of
the month of delivery
Arcadyan's subsidiary
Sale
(2,444,741)
(9.0)% Net 45 days from the end of
the month of delivery
Arcadyan's subsidiary Purchase
11,451,395
31.0% Net 45 days from the end of
Arcadyan's subsidiary Purchase
1,026,793
the month of delivery
(3.0)% Net 180 days from the end
of the month of delivery
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
Sale
(11,451,395)
(100.0)% Net 45 days from the end of
the month of delivery
Sale
(158,620)
(1.0)% Net 90 days from the end of
the month of delivery
Sale
(1,026,793)
(100.0)% Net 180 days from the end
of the month of delivery
Purchase
1,465,691
100.0% Net 120 days from delivery
Purchase
2,992,401
100.0% Net 60 days from the end of
the month of delivery
Purchase
2,444,741
100.0% Net 45 days from the end of
the month of delivery
Sale
(378,225)
(100.0)% Net 60 days from the end of
the month of delivery
According to
markup pricing
Purchase
158,620
2.0% Net 90 days from the end of
the month of delivery
Purchase
378,225
8.0% Net 60 days from the end of
the month of delivery
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note 1: The remaining balance is the net value of commissioned processing and sales of raw material.
Note 2: The transactions had been eliminated in the consolidated financial statements.
Note 3: The amount of other receivables (other payables) on December 31, 2019 is 362,695 thousand dollars.
Note 4: The amount of unearned sales revenue (prepayment for purchases) on December 31,2019 is 103,079 thousand dollars.
2,383,869
100.0% (Note 2)
392,466
6.0% (Note 2)
2,683,393
38.0% (Note 2)
634,154
9.0% (Note 2)
(3,117,484)
(44.0)% (Note 1、2)
(Note 3)
3,117,484
23,396
(Note 3)
-
-
(Note 1、2)
99.0% (Note 1、2)
1.0% (Note 1、2)
(Note 2)
(392,466)
(100.0)% (Note 2)
(2,683,393)
(100.0)% (Note 2)
(634,154)
(100.0)% (Note 2)
(Note 4)
-
(Note 1、2)
(23,396)
(54.0)% (Note 1、2)
(Note 4)
-
(Note 1、2)
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
112
Table 6 Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
Overdue
Ending Balance
Turnover
rate
330,670
1.80
Amount
-
Action taken
-
(In Thousands of New Taiwan Dollars)
Amounts received in
subsequent period
238,935 (Note 1)
Allowance
for bad
debts
-
(December 31, 2019)
Name of Company
The Company
Counter-party
CBN
Just and its
subsidiaries
CIH and its
subsidiaries
BCI and its
subsidiaries
BCI and its
subsidiaries
Forever
Webtek
Etrade and its
subsidiaries
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Compal Electronic,
Inc.
CEB
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Nature of
relationship
The Company's
subsidiary
Parent company
6,799,206
28.09
Parent company
51,022,056
Parent company
With the same
ultimate parent
company
Parent company
Parent company
7,460,959
772,909
778,369
556,913
Parent company
5,904,962
3.78
5.92
2.94
1.68
9.04
3.42
HSI and its
subsidiaries
Compal Electronic,
Inc.
Parent company
2,383,869
3.80
Arcadyan
Arcadyan
Arcadyan
Arcadyan
Arcadyan Germany Arcadyan's subsidiary
Arcadyan's subsidiary
Arcadyan USA
Arcadyan AU
Arcadyan's subsidiary
Arcadyan Vietnam Arcadyan's subsidiary
Arcadyan
TTI
Arcadyan's subsidiary
CNC
Arcadyan
With the same
ultimate parent
company
Note 1:Balance as of March 13, 2020.
Note 2:Balance as of February 21, 2020.
Note 3:Other receivables due to processing and sales of raw material.
Note 4:Other receivables due to processing.
392,466
2,683,393
634,154
362,695
(Note 3)
55,769
(Note 3)
3,117,484
(Note 4)
2.45
2.15
3.59
2.11
18.18
3.51
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,224,612 (Note 1)
48,763,927 (Note 1)
7,282,087 (Note 1)
197,195 (Note 1)
-
-
(Note 1)
(Note 1)
5,843,969 (Note 1)
-
(Note 1)
75,366 (Note 2)
708,279 (Note 2)
509,314 (Note 2)
(Note 2)
-
18,864 (Note 2)
450,187
(Note 2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
113
Table 7 Business relationships and significant intercompany transactions:
(For the year ended December 31, 2019)
Intercompany transactions
(In Thousands of New Taiwan Dollars)
No.
(Note 1) Company name
Counter party
0
The Company
CBN
Relationship
(Note 2)
1
Accounts name
Sale Revenue
Amount
962,973
0
The Company
UCGI
1
1
1
2
2
2
3
3
JUST and its
subsidiaries
Webtek
JUST and its
subsidiaries
Forever
JUST and its
subsidiaries
The Company
CIH and its
subsidiaries
The Company
CIH and its
subsidiaries
Forever
CIH and its
subsidiaries
CEB
BCI and its
subsidiaries
The Company
BCI and its
subsidiaries
CEB
4
Webteck
The Company
5
5
Etrade and its
subsidiaries
Webtek
Etrade and its
subsidiaries
The Company
6
Forever
The Company
Accounts Receivable
Sale Revenue
330,670
195,680
Accounts Receivable
Sale Revenue
45,158
24,375,017
Sale Revenue
6,892,761
Sale Revenue
102,586,790
Accounts Receivable
Sale Revenue
6,799,206
189,320,860
Accounts Receivable
Sale Revenue
51,022,056
9,187,778
Sale Revenue
196,173
Accounts Receivable
Sale Revenue
51,912
24,324,646
Accounts Receivable
Sale Revenue
7,460,959
1,962,595
Accounts Receivable
Sale Revenue
772,909
34,469,915
Accounts Receivable
Sale Revenue
556,913
10,091,875
Sale Revenue
19,044,223
Accounts Receivable
Sale Revenue
5,904,962
18,139,071
1
3
3
2
2
3
3
2
3
2
3
2
2
Terms
There is no significant difference
of price to non-related parties.
The credit period is net 90 days.
〃
The price is based on the
operating cost. The credit period
is net 120 days, and will be
adjusted if necessary.
〃
The price is based on the
operating cost. The credit period
is net 60 days from delivery, and
will be adjusted if necessary.
There is no significant difference
of price to non-related parties.
The credit period is net 60 days
from delivery, and will be
adjusted if necessary.
There is no significant difference
of price to non-related parties.
The credit period is net 120 days,
and will be adjusted if necessary.
〃
There is no significant difference
of price to non-related parties.
The credit period is net 120 days,
and will be adjusted if necessary.
〃
There is no significant difference
of price to non-related parties.
The credit period is net 60 days
from delivery, and will be
adjusted if necessary.
There is no significant difference
of price to non-related parties.
The credit period is net 60 days
from delivery, and will be
adjusted if necessary.
〃
There is no significant difference
of price to non-related parties.
The credit period is net 120 days,
and will be adjusted if necessary.
〃
There is no significant difference
of price to non-related parties.
The credit period is net 120 days.
〃
The price is based on the
operating cost. The credit period
is net 60 days from delivery, and
will be adjusted if necessary.
〃
The price is based on the
operating cost. The credit period
is net 60 days from delivery, and
will be adjusted if necessary.
The price is based on the
operating cost. The credit period
is net 60 days from delivery, and
will be adjusted if necessary.
〃
The price is based on the
operating cost. The credit period
is net 60 days from delivery, and
will be adjusted if necessary.
Accounts Receivable
778,369
〃
Percentage of the
consolidated net
revenue or total
assets
-
-
-
-
0.1%
0.1%
2.5%
0.7%
10.5%
1.8%
19.3%
13.3%
0.9%
2.5%
1.9%
0.2%
0.2%
3.5%
0.1%
1.0%
1.9%
1.5%
1.9%
0.2%
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
114
Table 7 Business relationships and significant intercompany transactions:
(For the year ended December 31, 2019)
Intercompany transactions
(In Thousands of New Taiwan Dollars)
No.
(Note 1) Company name
Counter party
7
HSI
The Company
Relationship
(Note 2)
2
Accounts name
Sale Revenue
Amount
4,571,105
8
Arcadyan
Arcadyan
Germany
8
Arcadyan
TTI
8
Arcadyan
Arcadyan USA
8
Arcadyan
Arcadyan AU
8
Arcadyan
Arcadyan Vietnam
9
CNC
Arcadyan
9
CNC
THAC
10
Arcadyan Vietnam Arcadyan
11
THAC
TTI
3
3
3
3
3
3
3
3
3
Accounts Receivable
Sale Revenue
2,383,869
1,465,691
Accounts Receivable
Other Receivable
392,466
55,769
Sale Revenue
2,992,401
Accounts Receivable
Sale Revenue
2,683,393
2,444,741
Terms
There is no significant difference
of price to non-related parties.
The credit period is net 120 days,
and will be adjusted if necessary.
〃
There is no significant difference
of price to non-related parties.
The credit period is net 120 days
from delivery.
〃
The price is based on the
operating cost. The credit period
is net 90 days from the end of
month of delivery.
There is no significant difference
of price to non-related parties.
The credit period is net 60 days
from the end of the month of
〃
There is no significant difference
of price to non-related parties.
The credit period is net 45 days
from delivery.
Accounts Receivable
Other Receivable
634,154
362,695
〃
The credit period is net 180 days
Processing Revenue
11,451,395
Accounts Receivable
Processing Revenue
3,117,484
158,620
Accounts Receivable
Processing Revenue
23,396
1,026,793
Processing Revenue
378,225
from the end of the month of
invoice date and depended on
funding demand.
The price is based on the
operating cost. The credit period
is net 45 days from the end of the
month of delivery and depended
on funding demand.
〃
The price is based on the
operating cost. The credit period
is net 90 days from the end of
month of delivery.
〃
The credit period is net 180 days
from the end of the month of
invoice date and depended on
funding demand.
The price is based on the
operating cost. The credit period
is net 60 days from the end of the
month of delivery and depended
on funding demand.
Contract Liability
103,079
〃
Note 1: The numbers filled in as follows:
1.0 represents the Company.
2. Subsidiaries are sorted in a numerical order starting from 1.
Note 2: Transactions labeled as follows:
1. represents transactions between the parent company and its subsidiaries.
2. represents transactions between the subsidiaries and the parent company.
3. represents transactions between subsidiaries.
Percentage of the
consolidated net
revenue or total
assets
0.5%
0.6%
0.1%
0.1%
-
0.3%
0.7%
0.2%
0.2%
0.1%
1.2%
0.8%
0.1%
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
115
Table 8 The following is the information on investees for the year ended December 31, 2019 (excluding information on
investees in Mainland China):
(December 31, 2019)
Investor
Company
Investee
Company
The Company Bizcom
Main Businesses
and Products
Milpitas, USA Warranty services and
Location
December 31,
2019
December 31,
2018
36,369
36,369
Shares
100
Original Investment Amount
(In Thousands of New Taiwan Dollars/ shares)
Ending Balance
Percentage
of
Ownership
100%
The highest holdings in
the period
Carrying
Value
446,195
Shares
100
Percentage
of
Ownership
100%
Net income
(losses) of
investee
Share of
profits/losses of
investee
16,485
16,485
Note
(Note 2)
Just
CIH
Panpal
Gempal
marketing of LCD TVs and
notebook PCs
Investment
British Virgin
Islands
British Virgin
Islands
Investment
1,480,509
1,480,509
48,010
100%
7,954,899
48,010
100%
209,804
209,804
(Note 2)
1,787,680
1,787,680
53,001
100% 34,558,369
53,001
100%
473,752
473,752
(Note 2)
Taipei City
Investment
5,171,837
5,171,837
500,000
100%
5,304,500
500,000
100%
251,199
213,221
(Note 2)
(Note 1)
Taipei City
Investment
900,036
900,036
90,000
100%
1,603,518
90,000
100%
96,808
74,765
(Note 2)
Kinpo Group management
consultant company (“Kinpo Group
management”)
Ripal
Unicore
Taipei City
Consultation, training
services, etc.
Tainan City Manufacturing of electric
appliance and audiovisual
electric products
Management&Consultant,
rental and leasing business
and wholesale and retail of
medical equipments
Taipei City
Lead-Honor Optronics. Co., Ltd.
(“Lead-Honor”)
CEH
Shennona Taiwan
Taoyuan City Manufacturing of electric
appliance and audiovisual
electric products
Investment
British Virgin
Islands
Taipei City
Management&Consultant,
rental and leasing business,
wholesale and retail sale of
precision instruments and
International Trade
3,000
3,000
300
38%
4,628
300
38%
237
90
(Note 1)
60,000
60,000
6,000
100%
76,632
6,000
100%
24,978
24,834
(Note 2)
200,000
200,000
20,000
100%
145,664
20,000
100%
(18,865)
(18,984)
(Note 2)
42,000
42,000
2,772
42%
-
2,772
42%
34
34
1
100%
3,533,243
1
100%
-
-
-
-
(Note 2)
6,000
-
600
100%
4,292
600
100%
(1,708)
(1,708)
(Note 2)
Allied Circuit
Taoyuan City Production and sales of PCB
395,388
395,388
10,158
20%
318,932
10,158
20%
222,022
45,327
Maxima Ventures I, Inc.
(“Maxima”)
Aco Smartcare
Lipo Holding Co., Ltd.(“Lipo”)
CPE
ATK
Taipei City
boards
Investment
Hsinchu City Wholesale and retail sale of
computer software, software
design services, data
processing services, wholesale
and retail sale of electronic
materials, wholesale and retail
sale of precision instruments,
and biotechnology services
Investment
Cayman
Islands
The
Netherlands
Hsinchu City Design, research &
Investment
Crownpo Technology
Inc. (“Crownpo”)
Taipei City
development, and selling of
DVD, Combo, CD-RW Drives
Manufacturing, processing,
and selling resistor chips,
networking chips, diodes,
multilayer ceramic capacitors,
semiconductor devices, and
selling electronic products
1,260
1,260
126
23%
2,693
126
23%
(201)
37
90,000
-
100,000
52%
85,978
100,000
52%
(10,302)
(4,022)
(Note 2)
489,450
489,450
98
49%
508,166
98
49%
(255,302)
(125,098)
197,463
197,463
6,427
100%
823,429
6,427
100%
16,394
16,394
(Note 2)
202,908
202,908
899
28%
8,545
899
28%
(6,575)
(1,826)
(Note 2)
149,547
149,547
3,739
33%
55,769
3,739
33%
(49,191)
(16,347)
Hong Ji
Hong Jin
Mactech
Auscom
Arcadyan
FGH
Shennona
HSI
CEP
Zhaopal
Yongpal
Kaipal
Hippo Screen Neurotech Co., Ltd.
Taipei City
Taipei City
Taipei City
Taipei City
Investment
Taipei City
Taipei City
Investment
Taichung City Manufacturing of equipment
1,000,000
295,000
219,601
1,000,000
295,000
219,601
100,000
29,500
21,756
100%
100%
53%
1,078,453
342,169
237,496
100,000
29,500
21,756
100%
100%
53%
61,267
29,774
25,927
61,267
29,774
12,703
(Note 2)
(Note 2)
(Note 2)
and lighting, retailing of
equipment and international
trading
R&D of notebook PC related
products and components
Austin, TX
USA
Hsinchu City R&D, manufacturing and sales
of wireless network, integrated
household electronics, and
mobile office products
101,747
101,747
3,000
100%
126,700
3,000
100%
3,919
3,919
(Note 2)
1,325,132
1,325,132
41,305
20%
2,260,060
41,305
21% 1,313,498
278,206
(Note 2)
British Virgin
Islands
Delaware,
USA
British Virgin
Islands
Poland
Investment
2,754,741
2,754,741
89,755
100%
4,462,874
89,755
100%
131,815
131,815
(Note 2)
Medical care IOT business
32,665
29,558
2,600
100%
1,372
2,600
100%
(7,150)
(7,150)
(Note 2)
Investment
1,346,814
1,346,814
42,700
54%
541,383
42,700
100%
(180,050)
(180,050)
(Note 2)
Maintenance and warranty
services of notebook PCs
Investment
Investment
Investment
Management&Consultant,
Rental and Leasing Business,
wholesale and retail sale of
precision instruments and
International Trade
90,156
90,156
136
100%
17,372
136
100%
2,224
2,224
(Note 2)
-
-
-
42,000
1,358,000
1,188,500
510,500
-
-
-
-
4,200
-
-
-
70%
-
-
-
34,869
-
-
-
4,200
-
-
-
1
-
-
70%
(10,187)
1
-
-
(7,131)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
116
Table 8 The following is the information on investees for the year ended December 31, 2019 (excluding information on
investees in Mainland China):
(December 31, 2019)
Investor
Company
Investee
Company
The Company Infinno Technology Corporation
(“Infinno”)
Location
Hsinchu
County
HengHao
Taipei City
BCI
CBN
British Virgin
Islands
Hsinchu
County
Rayonnant
Taipei City
CRH
Acendant Private Equity
Investment Ltd. (“APE”)
Etrade
Webtek
Forever
UCGI
Palcom
Avalue Technology, Inc.
CORE
GLB
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
Taipei City
Taipei City
New Taipei
City
British Virgin
Islands
New Taipei
City
Original Investment Amount
December 31,
2019
109,837
December 31,
2018
109,837
Shares
5,650
Ending Balance
Percentage
of
Ownership
27%
The highest holdings in
the period
Carrying
Value
17,199
Shares
5,650
Percentage
of
Ownership
27%
Net income
(losses) of
investee
(16,010)
Share of
profits/losses of
investee
(4,354)
Note
(In Thousands of New Taiwan Dollars/ shares)
5,529,757
5,329,757
20,015
100%
(485,074)
63,815
100%
(569,058)
(569,058)
(Note 2)
2,636,051
2,636,051
90,820
100%
6,181,036
90,820
100%
296,503
296,503
(Note 2)
284,827
284,827
29,060
43%
734,059
29,060
43%
10,514
4,619
(Note 2)
295,000
295,000
29,500
100%
62,310
29,500
100%
24,012
22,907
(Note 2)
377,328
377,328
12,500
100%
131,698
12,500
100%
27,806
27,806
(Note 2)
943,922
943,922
31,253
35%
1,061,446
31,253
35%
205,756
71,442
1,532,029
1,532,029
46,900
65%
(606,199)
46,900
65%
(354,085)
(311,924)
(Note 2)
3,340
1,575
3,340
1,575
100
50
100%
527,529
100%
1,453,833
100
50
100%
(39,957)
(39,957)
(Note 2)
100%
1,497
1,497
(Note 2)
100,000
100,000
10,000
100%
(459,297)
10,000
100%
(83,034)
(83,034)
(Note 2)
100,000
559,189
100,000
559,189
10,000
15,024
100%
21%
105,623
646,573
10,000
15,240
100%
22%
(2,453)
453,494
(2,453)
99,281
(Note 2)
Main Businesses
and Products
Manufacturing of electronic
components, wholesale and
retail sale of precision
instruments and electronic
materials
Manufacturing of PCs,
computer periphery devices,
and electronic components
Investment
R&D and sales of cable
modem, digital setup box, and
other communication products
Manufacturing and sales of
PCs, computer periphery
devices, and electronic
components
Investment
Investment
Investment
Investment
Investment
Manufacturing and retail sale
of computers and electronic
components
Selling of mobile phones
Manufacturing, processing,
and import and export
business of industrial
motherboards
Investment
4,318,860
4,318,860
147,000
100%
7,668,192
147,000
100%
232,282
232,282
(Note 2)
Manufacturing and wholesale
of medical equipment
246,860
246,860
15,000
50%
305,987
15,000
50%
90,284
45,053
(Note 2)
Panpal
Arcadyan
Hsinchu City Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
279,202
180,968
8,192
4%
493,017
8,192
4% 1,313,498
81,883,115
Allied Circuit
Taoyuan City Production and selling of PCB
148,263
148,263
2,927
6%
91,903
2,927
6%
222,022
Gempal
Others
Arcadyan
boards
Hsinchu City Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
306,655
203,500
9,279
4%
582,145
583,444
9,279
4% 1,313,498
Allied Circuit
Taoyuan City Production and selling of PCB
53,645
53,645
3,220
6%
101,093
3,220
6%
222,022
Hong Ji
Others
Arcadyan
boards
Hsinchu City Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
306,655
203,500
9,279
4%
3,274
583,444
9,279
4% 1,313,498
Allied Circuit
Taoyuan City Production and selling of PCB
12,274
12,274
1,041
2%
26,724
1,041
2%
222,022
Hong Jin
Arcadyan
boards
Hsinchu City Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
131,942
112,569
4,609
2%
274,806
4,609
2% 1,313,498
1,022,912
Investment
gain(losses)
recognized by
Panpal
(Note 2)
Investment
gain(losses)
recognized by
Panpal
Investment
gain(losses)
recognized by
Gempal
Investment
gain(losses)
recognized by
Gempal
Investment
gain(losses)
recognized by
Hong Ji
Investment
gain(losses)
recognized by
Hong Ji
Investment
gain(losses)
recognized by
Hong Jin
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
117
Table 8 The following is the information on investees for the year ended December 31, 2019 (excluding information on
investees in Mainland China):
(December 31, 2019)
(In Thousands of New Taiwan Dollars/ shares)
Investor
Company
Investee
Company
Just
CDH (HK)
Location
Hong Kong
Main Businesses
and Products
Investment
December 31,
2019
1,867,679
December 31,
2018
1,867,679
Shares
62,298
Original Investment Amount
Ending Balance
Percentage
of
Ownership
100%
The highest holdings in
the period
Carrying
Value
5,559,135
Shares
62,298
Percentage
of
Ownership
100%
Net income
(losses) of
investee
121,268
CII
CPI
CII
Smart
AEI
MEL
MTL
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
277,165
277,165
9,245
100%
252,744
9,245
100%
38,910
14,990
14,990
500
100%
887,886
500
100%
12,474
30
30
1
100%
385
1
100%
(6)
U.S.A
Sales and maintenance of LCD
TVs
29,980
29,980
1,000
100%
48,020
1,000
100%
(256)
U.S.A
Investment
246,855
246,855
U.S.A
Investment
30
30
-
-
-
100%
204,349
100%
30
-
-
100%
(49,788)
100%
-
-
-
32,903
1
(12,236)
MEL
and MTL
CMX
Mexico
Manufacturing, sales and
maintenance of LCD TVs
-
241,339
CIH
CIH (HK)
Hong Kong
Investment
2,242,579
2,242,579
74,803
100% 32,770,648
74,803
100%
597,121
Jenpal
PFG
FWT
CCM
HSI
IUE
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
220,353
220,353
7,350
100%
105,192
7,350
100%
2,742
30
30
1
100%
435,070
1
100%
24,092
446,702
446,702
14,900
100%
447,152
14,900
100%
152
152,898
152,898
5,100
51%
26,994
5,100
51%
(57,524)
2,008,660
899,400
67,000
100%
1,361,867
67,000
100%
(197,879)
Goal
British Virgin
Islands
Investment
380,746
380,746
12,700
100%
316,738
12,700
100%
17,829
IUE
CVC
Vietnam
Goal
CDM
Vietnam
R&D, manufacturing, sales,
and maintenance of notebook
PCs, computer monitors, LCD
TVs and electronic
components
Construction of and
investment in infrastructure in
Ba-Thien industrial district of
Vietnam
2,008,660
899,400
67,000
100%
1,385,963
67,000
100%
(197,879)
380,746
380,746
12,700
100%
373,914
12,700
100%
17,829
BCI
CMI
British Virgin
Islands
Investment
2,422,984
2,422,984
80,820
100%
3,855,996
80,820
100%
164,336
PRI
British Virgin
Islands
Investment
299,800
299,800
10,000
100%
2,325,040
10,000
100%
132,167
CORE
BSH
British Virgin
Islands
Investment
4,407,060
4,407,060
147,000
100%
7,668,193
147,000
100%
232,282
BSH
Mithera
Cayman
Islands
Investment
149,900
HSI
British Virgin
Islands
Investment
1,109,260
-
-
-
99%
146,594
-
99%
(3,444)
37,000
46%
1,109,260
37,000
46%
(180,050)
Share of
profits/losses of
investee
Investment
gain(losses)
recognized by
Just
Investment
gain(losses)
recognized by
Just
Investment
gain(losses)
recognized by
Just
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
MEL and MTL
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
HSI
Investment
gain(losses)
recognized by
HSI
Investment
gain(losses)
recognized by
IUE
Investment
gain(losses)
recognized by
Goal
Investment
gain(losses)
recognized by
BCI
Investment
gain(losses)
recognized by
BCI
Investment
gain(losses)
recognized by
CORE
Investment
gain(losses)
recognized by
BSH
Investment
gain(losses)
recognized by
BSH
Note
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
118
Table 8 The following is the information on investees for the year ended December 31, 2019 (excluding information on
investees in Mainland China):
(December 31, 2019)
(In Thousands of New Taiwan Dollars/ shares)
Investor
Company
Forever
GIA
Investee
Company
Main Businesses
and Products
Selling of mobile phones
December 31,
2019
-
December 31,
2018
-
Shares
-
Location
British Virgin
Islands
Original Investment Amount
Ending Balance
Percentage
of
Ownership
100%
Carrying
Value
-
The highest holdings in
the period
Percentage
of
Ownership
100%
Net income
(losses) of
investee
-
Shares
-
Webtek
Etrade
British Virgin
Islands
Investment
749,500
749,500
25,000
35%
(205,213)
25,000
35%
(354,085)
Unicore
Raycore
Taipei City
Animal medication retail and
wholesale
25,500
25,500
1,275
51%
17,675
1,275
51%
(9,082)
Arcadyan
Arcadyan Holding
British Virgin
Islands
Investment
2,064,032
1,240,526
59,780
100%
1,956,802
59,780
100%
(24,302)
Arcadyan USA
U.S.A
Sales of wireless network
products
23,055
23,055
1
100%
(250,530)
1
100%
14,289
Arcadyan Germany
Germany
Technology support and sales
of wireless network products
1,125
1,125
0.5
100%
68,318
0.5
100%
7,022
Arcadyan Korea
Korea
Sales of wireless network
products
2,879
2,879
20
100%
7,047
20
100%
(310)
Zhi-Pal
Taipei City
Investment
48,000
48,000
34,980
100%
416,421
34,980
100%
2,169
TTI
Taipei City
R&D and sales of household
digital products
308,726
308,726
25,028
61%
627,585
25,028
61%
105,625
AcBel Telecom
Taipei City
Investment
23,000
23,000
4,494
51%
36,163
4,494
51%
4,784
Arcadyan UK
UK
Technical support of wireless
network products
1,988
1,988
50
100%
3,170
50
100%
452
Arcadyan AU
Australia
Sales of wireless network
products
1,161
1,161
50
100%
27,970
50
100%
29,187
CBN
Hsinchu
County
Sales of communication and
electronic components
11,925
11,925
533
1%
13,581
533
1%
10,514
Arcadyan
Golden Smart Home
Technology Corp.
Taipei City
Selling of hardware and
software integration of high-
tech systems
15,692
15,692
1,229
11%
-
1,229
11%
(36,152)
Arcadyan and
Zhi-pal
Arcadyan Brasil
Brazil
Sales of wireless network
products
81,593
81,593
968
100%
(7,767)
968
100%
(22,421)
Arcadyan
Holding
Sinoprime
British Virgin
Islands
Investment
271,681
271,681
9,050
100%
188,856
9,050
100%
(86,152)
Arch Holding
British Virgin
Islands
Investment
330,550
330,550
35
100%
871,120
35
100%
57,002
TTI
Quest
Samoa
Investment
36,024
36,024
1,200
100%
77,839
1,200
100%
10,673
TTJC
Japan
Sales of household digital
electronic products
4,130
1,341
0.3
100%
2,015
0
100%
(1,550)
Quest
Exquisite
Samoa
Investment
35,123
35,123
1,170
100%
80,994
1,170
100%
10,665
AcBel
Telecom
Leading Images
British Virgin
Islands
Investment
1,501
1,501
50
100%
13,985
50
100%
4,623
Sinoprime
Arcadyan Vietnam
Vietnam
Manufacturing of wireless
network products
270,180
-
-
100%
184,443
-
100% (88,285)
Share of
profits/losses of
investee
Investment
gain(losses)
recognized by
Forever
Investment
gain(losses)
recognized by
Webtek
Investment
gain(losses)
recognized by
Unicore
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Holding
Investment
gain(losses)
recognized by
Arcadyan
Holding
Investment
gain(losses)
recognized by
TTI
Investment
gain(losses)
recognized by
TTI
Investment
gain(losses)
recognized by
Quest
Investment
gain(losses)
recognized by
AcBel Telecom
Investment
gain(losses)
recognized by
Sinoprime
Note
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Continued)
Note
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note 2)
(Note
2、3)
(Note 2)
Investment
gain(losses)
recognized by
Zhi-Pal
Investment
gain(losses)
recognized by
Rayonnant
Investment
gain(losses)
recognized by
Rayonnant
Investment
gain(losses)
recognized by
CRH
Investment
gain(losses)
recognized by
APH
Investment
gain(losses)
recognized by
APH
Investment
gain(losses)
recognized by
HHT
Investment
gain(losses)
recognized by
HHA
Investment
gain(losses)
recognized by
HHB
Investment
gain(losses)
recognized by
CBN
Investment
gain(losses)
recognized by
CBN
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
119
Table 8 The following is the information on investees for the year ended December 31, 2019 (excluding information on
investees in Mainland China):
(December 31, 2019)
(In Thousands of New Taiwan Dollars/ shares)
Investor
Company
Leading
Images
Investee
Company
Astoria GmbH
Location
Germany
Main Businesses
and Products
Sales of wireless network
products
Zhi-Pal
CBN
Rayonnant
APH
Hsinchu
County
Produces and sales of
communication and electronic
components
British Virgin
Islands
Investment
Original Investment Amount
December 31,
2019
December 31,
2018
841
841
Shares
25
Ending Balance
Percentage
of
Ownership
100%
The highest holdings in
the period
Carrying
Value
13,599
Shares
25
Percentage
of
Ownership
100%
Net income
(losses) of
investee
Share of
profits/losses of
investee
4,637
Investment
gain(losses)
recognized by
Leading Images
36,272
36,272
13,140
20%
334,669
13,140
20%
10,514
257,454
257,454
8,651
41%
85,269
8,651
41%
47,050
Forming Co., Ltd.
Taoyuan City R&D and manufacturing of
27,300
27,300
1,820
21%
-
1,820
21%
-
CRH
APH
APH
PEL
electronic materials
British Virgin
Islands
Investment
British Virgin
Islands
Investment
374,750
374,750
12,500
59%
131,698
12,500
59%
47,050
94,467
94,467
3,151
100%
36,058
3,151
100%
(16,756)
Rayonnant(HK)
Hong Kong
Investment
539,640
539,640
18,000
100%
172,950
18,000
100%
63,805
HHT
HHA
HHA
HHB
British Virgin
Islands
Investment
British Virgin
Islands
Investment
1,429,235
1,429,235
46,882
100%
(27,044)
46,882
100%
(281,360)
1,405,523
1,405,523
46,882
100%
(9,895)
46,882
100%
(281,375)
HHB
HengHao Trading Co., Ltd.
British Virgin
Islands
Marketing and international
trade
300
300
10
100%
479
10
100%
90
CBN
Speedlink
British Virgin
Islands
Import and export business
-
1,514
-
-
-
CBNB
Belgium
CBNN
The
Netherlands
The import and export
business of broad band
network products and related
components, as well as
technical support and advisory
services
The import and export
business of broad band
network products and related
components, as well as
technical support and advisory
services
6,842
6,842
20
100%
6,338
7,016
-
20
100%
6,724
-
-
-
-
-
-
86
(279)
(Note 2)
-
Investment
gain(losses)
recognized by
CBN
FGH
Wah Yuen Technology Holding
Ltd. and its subsidiaries
Mauritius
Investment
2,690,870
2,690,870
95,862
37%
4,531,552
95,862
37%
361,173
GLB
Rapha
New Taipei
City
Mactech
Taiwan Intelligent Robotics
Company, LTD.
Taipei City
City
Detectors and test strip
6,500
6,500
1,275
100%
298
1,275
100%
(162)
Manufacturing of equipment
43,200
-
2,160
20%
39,468
2,160
20%
(19,504)
(Note 2)
Investment
gain(losses)
recognized by
FGH
Investment
gain(losses)
recognized by
GLB
Investment
gain(losses)
recognized by
Mactech
Note 1: The carrying value had been deducted $559, 812 and $321, 435 of the Company’s stock held by Panpal and Gempal, respectively.
Note 2: The transactions had been eliminated in the consolidated financial statements.
Note 3: CBN had received the capital returned from Speedlink in November 2019, however, the liquidation procedures of Speedlink has not been completed as of December 31, 2019.
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
120
Table 9 Information on investment in Mainland China:
(December 31, 2019)
(i) The names of investees in Mainland China, the main businesses and products, and other information:
Name of
investee
CPC
CDT
CET
CSD
Zheng Ying
Electronics
(Chongqing)
Co., Ltd.
BT
CGS
LIZ
Electronics (Kunshan)
Co., Ltd.
LIZ
Electronics (Nantong)
Co., Ltd.
CIC
CPO
CIT
Main businesses and
products
Manufacturing and
sales of monitors
Manufacturing and
sales of notebook PCs,
mobile phones, and
Digital products
Manufacturing of
notebook PCs
Manufacturing of
notebook PCs
Research &
development, and
manufacturing latest
electronic components,
precision cavity mold,
design and
manufacturing for
standard parts for
molds, and selling self
-produced products
Maintenance and
warranty service of
notebook PCs
Production and
processing
chipresistors, ceramic
capacitors, diodes, and
other latest electronic
components and
related precision
electronic equipment;
selling self-produced
products
Research &
development, and
manufacturing chip
components( chip
resistors, ceramic chip
diode； selling self-
produced products and
providing after-sales
service. Performing
wholesale and trading
business of electronic
components,
semiconductors,
special materials for
electronic components,
and spare parts
Research, manufacture
and sales of
communication
devices, mobile
phones, electronic
computer, smart watch,
and provide related
technology service
Manufacturing of
notebook PCs
Manufacturing and
sales of LCD TVs
Manufacturing of
notebook PCs
Accumulated
outflow of
investment
from Taiwan
as of January
1, 2019
1,109,260
Total amount of
paid-in capital
1,109,260
Method of
investment
(Note 1)
599,600
(Note 2)
599,600
359,760
(Note 2)
359,760
258,200
(Note 2)
(Note 3)
67,890
(Note 2)
(Note 3)
29,980
(Note 2)
29,980
8,607
(Note 2)
(Note 3)
Investment flows
Outflow Inflow
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(In Thousands of New Taiwan Dollars/ shares)
Accumulated
outflow of
investment
from Taiwan
as of
December 31,
1,109,260
Net income
(losses) of the
investee
Percentage
of
ownership
Investment
income
(losses)
(Note 4)
108,135
100%
108,135
Book value
2,104,710
Accumulated
remittance of
earnings in
current
period
-
599,600
(82,463)
100%
(82,463)
111,528
359,760
(86,495)
100%
(86,495)
4,633,042
-
-
50,016
100%
50,016
(194,926)
(5,369)
51%
(2,738)
(41,719)
29,980
(49,888)
100%
(49,888)
(241,226)
-
9,113
100%
9,113
(27,249)
-
-
-
-
-
-
959,360
(Note 1)
399,633
-
-
399,633
(265,239)
43%
(114,530)
372,172
-
599,600
(Note 1)
44,071
-
-
44,071
(134,637)
48%
(64,155)
362,578
-
359,760
(Note 2)
359,760
362,758
(Note 1)
362,758
719,520
(Note 2)
719,520
-
-
-
-
-
-
359,760
238,365
100%
238,365
7,523,588
362,758
89,531
100%
89,531
2,777,145
719,520
601,984
100%
601,984
20,539,996
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
121
Table 9 Information on investment in Mainland China:
(December 31, 2019)
(i) The names of investees in Mainland China, the main businesses and products, and other information:
Investment flows
Outflow Inflow
Accumulated
outflow of
investment
from Taiwan
as of January
1, 2019
41,972
Total amount of
paid-in capital
41,972
Method of
investment
(Note 2)
59,960
(Note 2)
59,960
299,800
(Note 2)
152,898
467,688
(Note 2)
467,688
449,700
(Note 2)
(Note 3)
2,422,984
(Note 1)
2,422,984
2,398,400
(Note 2)
(Note 3)
-
-
-
-
-
-
-
23,984
(Note 2)
(Note 3)
-
299,800
(Note 1)
299,800
-
Name of
investee
CST
CIN
Sheng Bao Precision
Electronics (Taicang)
Co., Ltd.
CIJ
CDE
CIS
CEC
CMC
CEQ
Main businesses and
products
International trade and
distribution of
computers and
electronic components
Software and hardware
R&D of computers,
mobile phones and
electronic components
Research &
development, and
manufacturing latest
electronic components,
precision cavity mold,
design and
manufacturing for
standard parts for
molds, and selling self-
produced products
Investment and
consulting services
Manufacturing and
sales of LCD TVs
Outward investment
and consulting services
R&D and
manufacturing of
notebook PCs, tablet
PCs, digital products,
network switches,
wireless AP, and
automobile electronic
products
Corporate management
consulting, financial
and tax consulting,
investment consulting,
and investment
management
consulting services
R&D, manufacturing
and sales of notebook
PCs and related
components. Also
provides related
maintenance and
warranty services
Compal Precision
Module (Jiangsu) Co.,
Ltd.
Manufacturing and
selling of magnesium
alloy injection molding
12,291,800
(Note 2)
2,477,157
Changbao Electronic
Technology
(Chongqing) Co., Ltd.
Rayonnant (Taicang)
CCI Nanjing
CDCN
CWCN
Production and
marketing of
magnesium alloy
molding
Manufacturing and
sales of aluminum
alloy and magnesium
alloy products
Manufacturing and
processing of mobile
phones and tablet PCs
Manufacturing and
processing of mobile
phones and tablet PCs
Manufacturing and
processing of mobile
phones and tablet PCs
1,798,800
(Note 2)
343,451
539,640
(Note 2)
374,750
659,560
(Note 1)
659,560
173,884
(Note 1)
173,884
1,469,020
(Note 1)
569,620
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(In Thousands of New Taiwan Dollars/ shares)
Accumulated
outflow of
investment
from Taiwan
as of
December 31,
41,972
Net income
(losses) of the
investee
Percentage
of
ownership
Investment
income
(losses)
(Note 4)
(834)
100%
(834)
Book value
47,429
Accumulated
remittance of
earnings in
current
period
-
59,960
(2)
-
(2)
-
152,898
(52,865)
51%
(26,961)
31,056
467,688
(99,921)
100%
(99,921)
832,860
-
(104,887)
100%
(104,887)
799,252
2,422,984
164,336
100%
164,336
3,855,996
-
-
164,343
100%
164,343
3,825,842
20
100%
20
23,833
299,800
132,167
100%
132,167
2,325,040
2,477,157
669,692
37%
245,241
5,703,239
343,451
(273,107)
37%
(100,012)
884,827
374,750
6,381
100%
6,381
173,536
659,560
45,661
100%
45,661
(966,915)
173,884
1,484
100%
1,484
83,584
569,620
(167,898)
100%
(167,898)
261,396
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
122
Table 9 Information on investment in Mainland China:
(December 31, 2019)
(i) The names of investees in Mainland China, the main businesses and products, and other information:
Name of
investee
Hanhelt
Arcadyan
SVA Arcadyan
CNC
THAC
HengHao
HengHao
Optoelectronic
Technology (Kunshan)
Co., Ltd.
(“HengHao Kunshan”)
Main businesses and
products
R&D and
manufacturing of
electronic
communication
equipment
R&D and sales of
wireless network
products
Manufacturing and
wireless network
products
Manufacturing of
household electronics
products
Production of touch
panels and related
components
Accumulated
outflow of
investment
from Taiwan
as of January
1, 2019
Investment flows
Outflow Inflow
59,960
-
Total amount of
paid-in capital
59,960
Method of
investment
(Note 1)
393,262
(Note 1)
373,749
(Note 1)
100,567
(Note 1、
10)
552,969
(Note 7)
330,550
(Note 8)
34,523
1,199,200
(Note 1)
1,193,294
-
-
-
-
(In Thousands of New Taiwan Dollars/ shares)
Net income
(losses) of the
investee
Percentage
of
ownership
Investment
income
(losses)
(Note 4)
(31)
100%
(31)
Book value
2,998
Accumulated
remittance of
earnings in
current
period
-
Accumulated
outflow of
investment
from Taiwan
as of
December 31,
59,960
-
552,969
5,750
100%
5,750
127,495
330,550
57,002
100%
57,002
871,090
34,523
10,665
100%
10,665
80,484
1,193,294
(282,492)
100%
(282,492)
(159,874)
194,841
1,027
100%
1,027
132,650
-
-
-
-
-
-
-
-
-
-
-
Lucom Display
Technology (Kunshan)
Limited(“Lucom”)
Manufacturing of
notebook PCs and
related modules
449,700
(Note 2)
194,841
-
(Note 12)
(ii) Limitation on investment in Mainland China:
Names of
Company
The Company
Arcadyan
HengHao
Accumulated Investment in Mainland China
as of December 31, 2019
16,325,219
(US$544,537)
(Note 5)
918,042
1,405,223
(US$30,581)
(US$46,872)
Investment Amounts Authorized by
Investment Commission of Ministry of
Economic Affairs
22,523,344 (US$751,279)
Limitation on investment in Mainland China by
Investment Commission of Ministry of Economic
Affairs
(Note 6)
(In Thousands of USD)
918,042 (US$30,581)
1,405,223 (US$46,872)
6,542,836
(Note 13)
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Indirectly investment in Mainland China through companies registered in the third region.
Indirectly investment in Mainland China through an existing company registered in the third region.
Investees held by Kunshan Botai Electronics Co., Ltd. (“BT”), Compal Investment (Jiansu) Co., Ltd. (“CIJ”), Compal Electronic (Sichuan)
Co., Ltd. (“CIS”), and Compal Electronics (China) Co., Ltd. (“CPC”) through their own funds.
The investment income (loss) was determined based on the financial report audited by the CPAs.
Including the investment amount of sold or dissolved companies, including Beijing Compower Xuntong Electronic Technology Co., Ltd., VAP
Optoelectronics (NanJing) Corp., Flextronics Technology (Shanghai) Ltd., Lucom, LCFC (HeFei) Electronics Technology Co., Ltd. and the
increased investment amount form merging with Compal Communication Co., Ltd.
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
As the Company has obtained the certificate of being qualified for operating headquarters, issued by Industrial Development Bureau, MOEA,
the upper limit on investment in mainland China is not applicable.
Arcadyan paid US$18,420 thousands and acquired 100% shares of SVA Arcadyan from Accton Asia through Arcadyan Holding in 2010.
Arcadyan paid US$8,561 thousands and acquired 100% shares of CNC from Just through Arcadyan Holding in 2007.
SVA Arcadyan decreased its capital amounting to US$15,000 thousands to offset accumulated losses in March 2009.
Arcadyan’s subsidiary, TTI, obtained the control over THAC with US$1,150 thousands on February 28, 2013 (the date of stock transferring).
The amounts in New Taiwan Dollars were translated at the exchange rates at the balance sheet date or the average exchange rate.
The Company had an accumulated investment amounting to US$7,350 thousands in the previous years. In the first half of 2014, HengHao
paid the Company and LG US$3,184 thousands and US$3,315 thousands, respectively, for organization restructure, to obtain 100%
ownership of Lucom.
Note 13:
The net equity of HengHao is negative at December 31, 2019.
(iii) Significant transactions:
For the year ended December 31, 2019, the significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of
consolidated financial statements, are disclosed in “Information on significant transactions” and “Business relationships and significant intercompany transactions”.
Attachment II
1
Stock Code:2324
COMPAL ELECTRONICS, INC.
Parent Company Only Financial Statements
With Independent Auditors’ Report
For the Years Ended December 31, 2019 and 2018
Address:
Telephone:
No.581 & 581-1, Ruiguang Rd., Neihu District, Taipei, Taiwan
(02)8797-8588
Table of contents
2
Contents
Page
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Parent-Company-Only Financial Statements
(1) Company history
(2) Approval date and procedures of the financial statements
(3) New standards, amendments and interpretations adopted
(4) Summary of significant accounting policies
(5) Significant accounting assumptions and judgments, and major
sources of estimation uncertainty
(6) Explanation of significant accounts
(7) Related-party transactions
(8) Pledged assets
(9) Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
1
2
3
4
5
6
7
8
8
8～11
11～31
31～32
32～66
66～73
73
73
73
73
73～74
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in Mainland China
(14) Segment information
9. List of major accounting items
74～75, 86~95
75, 96~101
75, 102~104
75
76～85
3
Independent Auditor’s Report
To COMPAL ELECTRONICS, INC.:
Opinion
We have audited the financial statements of COMPAL ELECTRONICS, INC. (the “ Company” ), which
comprise the balance sheets as of December 31, 2019 and 2018, the statement of comprehensive income,
changes in equity and cash flows for the years ended December 31, 2019 and 2018, 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 of December 31, 2019 and 2018, and its financial performance and its cash flows
for the years then ended December 31, 2019 and 2018, in accordance with the Regulations Governing the
Preparation of Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audit of the financial statements as of and for the year ended December 31, 2019 in
accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified
Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and the auditing
standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the financial
statements as of and for the year ended December 31, 2018 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 Auditors’ Responsibilities for the Audit of Financial Statements section of our report. We are independent of
the Company 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 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) for the accounting policy of accounts receivable. Information of account
receivable valuation are shown in Note (6)(e) of the financial statements.
3-1
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 enterprises. Therefore, valuation of accounts
receivable has been identified as a key audit matter.
Our key audit procedures performed in respect 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 reviewing if the measurement of impairment loss of accounts receivable is accordance with
accounting policy, examining the historical recovery records, analyzing the aging of accounts receivable, and
the current credit status of customers, as well as inspecting the amount collected in the subsequent period.
2. 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 disclosed in Note (6)(g) of the 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 respect 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 prior year and 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 (including members of the Audit Committee) are responsible for overseeing the
Company’s financial reporting process.
3-2
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 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 the 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 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 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 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 auditors’ report are Szu-Chuan Chien and
Yiu-Kwan Au.
3-3
KPMG
Taipei, Taiwan (Republic of China)
March 30, 2020
The accompanying parent company only financial statements are intended only to present the financial position, financial performance
and 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 parent company only financial statements are those
generally accepted and applied in the Republic of China.
Notes to Readers
Assets
Current assets:
December 31, 2019
Amount
%
December 31, 2018
Amount
%
Cash and cash equivalents (note (6)(a))
$
13,459,969
4.0
20,446,378
1100
1110
1136
1170
1180
1200
1310
1470
1550
1510
1517
1600
1755
1780
1840
1990
Current financial assets at fair value through profit or loss (note (6)(b))
Current financial assets at amortized cost (note (6)(d))
Notes and accounts receivable, net (note (6)(e))
Notes and accounts receivable due from related parties, net (notes (6)(e) and 7)
Other receivables, net (notes (6)(f) and 7)
Inventories (note (6)(g))
Other current assets
Non-current assets:
Investments accounted for using equity method (note (6)(h))
Non-current financial assets at fair value through profit or loss (note (6)(b))
Non-current financial assets at fair value through other comprehensive income (note (6)(c))
Property, plant and equipment (note (6)(j))
Right-of-use assets (note (6)(k))
Intangible assets
Deferred tax assets (note (6)(q))
Other non-current assets
COMPAL ELECTRONICS, INC.
Balance Sheets
December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars)
5.7
0.1
0.1
149,888
-
-
-
284,768
350,000
176,967,731
52.4
189,496,594
53.3
1,052,131
3,110,607
0.3
0.9
1,318,230
1,418,750
0.4
0.4
50,048,069
14.9
51,517,159
14.5
734,434
0.2
541,027
0.1
245,522,829
72.7
265,372,906
74.6
83,430,169
24.7
83,299,238
23.5
71,097
-
23,745
-
3,019,393
2,620,638
1,387,615
438,334
1,166,808
0.9
0.8
0.4
0.1
0.4
3,731,918
2,128,181
-
378,745
760,580
1.0
0.6
-
0.1
0.2
126,605
-
117,500
-
Liabilities and Equity
Current liabilities:
Short-term borrowings (note (6)(l))
Current contract liabilities (note (6)(u))
Notes and accounts payable
Notes and accounts payable to related parties (note 7)
Other payables (note 7)
Current tax liabilities
Current lease liabilities (note (6)(n))
Other current liabilities
Current refund liabilities
Long-term borrowings, current portion (note (6)(m))
Non-Current liabilities:
Long-term borrowings(note (6)(m))
Deferred tax liabilities (note (6)(q))
Non-current lease liabilities (note (6)(n))
Non-current net defined benefit liability (note (6)(p))
Non-current liabilities, others (note (6)(h))
2100
2130
2170
2180
2200
2230
2280
2300
2365
2322
2540
2570
2580
2640
2670
4
December 31, 2019
Amount
%
December 31, 2018
Amount
%
$
39,363,800
11.7
51,305,682
14.4
877,822
74,138,921
74,925,238
9,390,399
2,107,283
387,499
348,480
1,182,501
18,150,000
0.3
21.9
22.2
2.8
0.6
0.1
0.1
0.4
5.3
1,405,452
77,050,816
78,376,843
8,392,511
1,787,434
-
587,308
1,480,446
17,496,250
0.4
21.7
22.0
2.4
0.5
-
0.2
0.4
4.9
220,871,943
65.4
237,882,742
66.9
7,500,000
893,232
1,010,933
643,253
891,494
10,938,912
2.2
0.3
0.3
0.2
0.2
3.2
10,900,000
386,555
-
621,581
298,289
12,206,425
3.0
0.1
-
0.2
0.1
3.4
Total assets
$
337,783,488
100.0
355,812,813
100.0
Total liabilities and equity
Equity (notes (6)(r) and (6)(s)):
3110
3200
3300
3400
3500
Ordinary share
Capital surplus
Retained earnings
Other equity interest
Treasury shares
Total equity
44,071,466
13.1
44,071,466
12.4
9,159,259
2.7
9,932,434
2.8
57,726,604
17.1
60,060,381
16.9
(4,103,449)
(1.2)
(7,459,388)
(2.1)
(881,247)
(0.3)
(881,247)
(0.3)
105,972,633
31.4
105,723,646
29.7
$
337,783,488
100.0
355,812,813
100.0
92,260,659
27.3
90,439,907
25.4
Total liabilities
231,810,855
68.6
250,089,167
70.3
See accompanying notes to financial statements.
COMPAL ELECTRONICS, INC.
Statements of Comprehensive Income
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)
5
2019
2018
Amount
%
Amount
%
4000
5000
5910
6100
6200
6300
7020
7050
7190
7370
7900
7950
8300
8310
8311
8316
8330
8349
8360
8361
8380
8399
8300
8500
9750
9850
Net sales revenue (notes (6)(u) and 7)
Cost of sales (notes (6)(g), (6)(p), 7 and 12)
Gross profit
Less: Unrealized profit (loss) from sales
Gross profit
Operating expenses: (notes (6)(o), (6)(p) and 12)
Selling expenses
Administrative expenses
Research and development expenses
Net operating income
Non-operating income and expenses:
Other gains and losses, net (note (6)(w))
Finance costs
Other income (notes (6)(o) and (6)(w))
Share of profit of associates and joint ventures accounted for using equity method(note (6)(h))
Total non-operating income and expenses
Profit from continuing operations before tax
Less: Income tax expenses (note (6)(q))
Profit
Other comprehensive income:
Components of other comprehensive income (loss) that will not be reclassified to profit or
loss
Gains (losses) on remeasurements of defined benefit plans
Unrealized gains (losses) from investments in equity instruments measured at fair value
through other comprehensive income
Share of other comprehensive income of subsidiaries, associates and joint ventures accounted
for using equity method, components of other comprehensive income that will not be
reclassified to profit or loss
Income tax related to components of other comprehensive income that will not be reclassified
to profit or loss
Components of other comprehensive income that will not be reclassified to profit or loss
Components of other comprehensive income (loss) that will be reclassified to profit or loss
$916,280,028 100.0 911,050,122 100.0
97.6
2.4
-
2.4
97.3 889,171,625
21,878,497
(2,344)
21,880,841
891,431,772
24,848,256
(893)
24,849,149
2.7
-
2.7
3,532,483
2,318,452
10,461,262
16,312,197
8,536,952
(420,923)
(1,969,101)
653,839
1,022,912
(713,273)
7,823,679
867,780
6,955,899
0.4
0.3
1.1
1.8
0.9
-
(0.2)
0.1
0.1
-
0.9
0.1
0.8
3,157,897
2,389,356
9,396,882
14,944,135
6,936,706
(126,030)
(1,938,044)
887,354
4,198,330
3,021,610
9,958,316
1,044,951
8,913,365
0.3
0.3
1.0
1.6
0.8
-
(0.2)
0.1
0.4
0.3
1.1
0.1
1.0
(32,645)
120,897
359,147
3,056
444,343
-
-
-
-
-
(20,189)
-
(1,096,846)
(0.1)
(212,493)
(69,926)
-
-
(1,259,602)
(0.1)
Exchange differences on translation of foreign financial statements
(1,620,812)
(0.2)
1,853,763
0.1
Share of other comprehensive income of subsidiaries, associates and joint ventures accounted
for using equity method, components of other comprehensive income that will be
reclassified to profit or loss
Income tax related to components of other comprehensive income that will be reclassified to
profit or loss
(322,922)
-
-
-
(229,339)
-
-
-
Components of other comprehensive income that will be reclassified to profit or loss
(1,943,734)
(0.2)
1,624,424
0.1
Other comprehensive income
Total comprehensive income
Earnings per share (note 6(t))
Basic earnings per share
Diluted earnings per share
(1,499,391)
(0.2)
364,822
-
5,456,508
0.6
9,278,187
1.0
1.60
1.58
2.05
2.02
$
$
$
See accompanying notes to financial statements.
COMPAL ELECTRONICS, INC.
Statements of Changes in Equity
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars)
6
Retained earnings
Special
reserve
4,339,549
-
-
-
-
4,491,599
-
-
-
-
-
-
-
8,831,148
-
-
-
-
(1,363,317)
-
-
-
-
-
-
7,467,831
Unappropriated
retained
earnings
34,458,787
8,913,365
14,094
8,927,459
(574,953)
(4,491,599)
(4,407,147)
-
(521,643)
Total
retained
earnings
57,051,197
8,913,365
14,094
8,927,459
-
-
(4,407,147)
-
(521,643)
(1,156)
36,141
(1,156)
36,141
-
-
(1,024,470)
32,401,419
6,955,899
(30,420)
6,925,479
(891,336)
1,363,317
(4,407,147)
(1,024,470)
60,060,381
6,955,899
(30,420)
6,925,479
-
-
(4,407,147)
-
-
(27,199)
(27,199)
-
(4,824,910)
30,539,623
(4,824,910)
57,726,604
-
-
-
Total other equity interest
Unrealized
gains
(losses) on
financial
assets
measured at
fair value
through other
comprehensive
income
Unearned
employee
benefit and
others
Exchange
differences on
translation of
foreign
financial
statements
(3,477,376)
(5,847,823)
-
1,624,424
1,624,424
-
(1,273,696)
(1,273,696)
(79,856)
-
-
-
Total other
equity
interest
(9,405,055)
-
350,728
350,728
-
-
-
-
489,483
1,130
79,856
-
79,856
1,024,470
(7,459,388)
-
(1,706)
(1,706)
(1,468,971)
(1,468,971)
-
-
-
-
-
-
-
(1,706)
4,824,910
(4,103,449)
Treasury
shares
Total equity
(881,247) 101,895,584
8,913,365
364,822
9,278,187
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,407,147)
(881,429)
(64,866)
(485)
(156,219)
60,021
-
(881,247) 105,723,646
6,955,899
(1,499,391)
5,456,508
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,407,147)
(881,429)
43,473
(22,439)
60,021
-
(881,247) 105,972,633
-
-
-
-
-
-
-
-
-
(1,852,952)
-
(1,942,028)
(1,942,028)
-
-
-
-
-
-
-
-
(3,794,980)
-
-
-
-
489,483
1,130
-
-
1,024,470
(5,606,436)
-
474,763
474,763
-
-
-
-
-
-
-
4,824,910
(306,763)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at January 1, 2018
Profit for the year ended December 31, 2018
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends of ordinary share
Cash dividends from capital surplus
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted for using equity
method
Ordinary
shares
$ 44,191,916
-
-
-
Capital
surplus
10,938,773
-
-
-
-
-
-
-
-
-
-
-
-
(881,429)
(32,706)
(459)
(151,766)
Legal
reserve
18,252,861
-
-
-
574,953
-
-
-
-
-
-
-
Share-based payments transaction
Adjustments of capital surplus for company's cash dividends received by
(120,450)
subsidiaries
-
60,021
Disposal of investments in equity instruments measured at fair value through
other comprehensive income
Balance at December 31, 2018
Profit for the year ended December 31, 2019
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends of ordinary share
Cash dividends from capital surplus
Changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted for using equity
method
Adjustments of capital surplus for company's cash dividends received by
subsidiaries
Disposal of investments in equity instruments measured at fair value through
-
44,071,466
-
-
-
-
-
-
-
-
-
-
-
9,932,434
-
-
-
-
-
-
(881,429)
43,473
4,760
60,021
-
18,827,814
-
-
-
891,336
-
-
-
-
-
-
other comprehensive income
Balance at December 31, 2019
-
$ 44,071,466
-
9,159,259
-
19,719,150
See accompanying notes to financial statements.
COMPAL ELECTRONICS, INC.
Statements of Cash Flows
For the years ended December 31, 2019 and 2018
(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 in expected credit loss
Net gain on financial assets or liabilities at fair value through profit or loss
Finance cost
Interest income
Dividend income
Compensation cost of share-based payments
Share of profit of subsidiaries, associates and joint ventures accounted for using equity method
Loss on disposal of investments
Others
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease (increase) 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 refund liabilities
Increase (decrease) in contract liabilities
Increase (decrease) in other current liabilities
Others
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow (outflow) generated from 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 financial assets at amortized cost
Acquisition of financial assets at fair value through profit or loss and through other comprehensive income
Proceeds from disposal of financial assets at fair value through profit or loss and through other comprehensive income
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity method
Proceeds from capital reduction of investments
Acquisition of property, plant and equipment
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
Payment of lease liabilities
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
See accompanying notes to financial statements.
7
2019
2018
$
7,823,679
9,958,316
1,017,058
1,537
(14,195)
1,969,101
(184,607)
(71,778)
-
(1,022,912)
(8,990)
(48)
1,685,166
(149,888)
12,793,425
(316,517)
1,469,090
(193,407)
13,602,703
(6,363,500)
1,176,316
(297,945)
(527,630)
(238,828)
(11,365)
(6,262,952)
7,339,751
9,024,917
16,848,596
231,795
536,175
(2,147,529)
(450,537)
15,018,500
350,000
(74,992)
1,152,409
(341,107)
18,034
22,426
(761,929)
(1,587,080)
(384,816)
(6,244)
(1,613,299)
(11,941,882)
66,503,625
(69,249,875)
(414,856)
(5,288,576)
(46)
(20,391,610)
(6,986,409)
20,446,378
13,459,969
$
456,117
1,065
(95,526)
1,938,044
(332,905)
(212,129)
(156,219)
(4,198,330)
-
-
(2,599,883)
-
(23,179,534)
(629,912)
(8,531,796)
63,537
(32,277,705)
11,759,347
1,172,349
40,154
(212,174)
(77,610)
(12,315)
12,669,751
(19,607,954)
(22,207,837)
(12,249,521)
314,650
592,252
(1,769,911)
(684,300)
(13,796,830)
-
350,000
(131,622)
865,964
(29,558)
8,054
(203,186)
(321,840)
(521,722)
(10,572)
5,518
9,919,682
34,258,000
(32,994,950)
-
(5,288,576)
-
5,894,156
(7,897,156)
28,343,534
20,446,378
COMPAL ELECTRONICS, INC.
Notes to the Parent-Company-Only Financial Statements
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)
8
(1) Company history
Compal Electronics, Inc. (the “Company”) was incorporated in June 1984 as a company limited by shares
and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company's registered
office is No.581 and No.581-1 Ruiguang Rd., Neihu Dist., Taipei City, Taiwan. In accordance with
Article 19 of the Business Mergers and Acquisitions Act, the Company merged its subsidiary, Compal
Communications, Inc. (“ CCI” ) (the “ Merger” ), pursuant to the resolutions of the Board of Directors in
November, 2013. The Company was the surviving company and CCI was the dissolved company. The
effective date of the Merger was February 27, 2014. The Company is primarily involved in the
manufacture and sale of notebook personal computers (“ notebook PCs” ), monitors, LCD TVs, mobile
phones and various components and peripherals.
(2) Approval date and procedures of the financial statements:
The accompanying parent-company-only financial statements were authorized for issuance by the Board
of Directors and issued on March 30, 2020.
(3) New standards, amendments and interpretations adopted:
(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial
Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.
The following new standards, interpretations and amendments have been endorsed by the FSC and
are effective for annual periods beginning on or after January 1, 2019.
New, Revised or Amended Standards and Interpretations
IFRS 16 “Leases”
IFRIC 23 “Uncertainty over Income Tax Treatments”
Effective date
per IASB
January 1, 2019
January 1, 2019
Amendments to IFRS 9 “Prepayment features with negative compensation”
January 1, 2019
Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”
January 1, 2019
Amendments to IAS 28 “Long-term interests in associates and joint ventures”
January 1, 2019
Annual Improvements to IFRS Standards 2015–2017 Cycle
January 1, 2019
Except for the following items, the Company believes that the adoption of the above IFRSs would
not have any material impact on its financial statements. The extent and impact of significant
changes are as follows:
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
9
(i)
IFRS 16“Leases”
IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining
Whether an Arrangement Contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27
Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
The Company applied IFRS 16 using the modified retrospective approach, there was no effect
on retained earnings on January 1, 2019. The details of the changes in accounting policies are
disclosed below,
1)
Definition of a lease
Previously, the Company determined at contract inception whether an arrangement is or
contains a lease under IFRIC 4. Under IFRS 16, the Company assesses whether a
contract is or contains a lease based on the definition of a lease, as explained in note
(4)(k).
On transition to IFRS 16, the Company elected to apply the practical expedient to
grandfather the assessment of which transactions are leases. The Company applied IFRS
16 only to contracts that were previously identified as leases. Contracts that were not
identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a
lease. Therefore, the definition of a lease under IFRS 16 was applied only to contracts
entered into or changed on or after January 1, 2019.
2)
As a lessee
As a lessee, the Company previously classified leases as operating or finance leases
based on its assessment of whether the lease transferred significantly all of the risks and
rewards incidental to ownership of the underlying asset to the Company. Under IFRS 16,
the Company recognizes right-of-use assets and lease liabilities for most leases – i.e.
these leases are on-balance sheet.
●
Leases classified as operating leases under IAS 17
At transition, lease liabilities were measured at the present value of the remaining
lease payments, discounted at the Company’ s incremental borrowing rate as at
January 1, 2019. Right-of-use assets are measured at an amount equal to the lease
liability, adjusted by the amount of any prepaid or accrued lease payments – the
Company applied this approach to all leases.
In addition, the Company used the following practical expedients when applying
IFRS 16 to leases.
－ Applied a single discount rate to a portfolio of leases with similar
characteristics.
－ Applied the exemption not to recognize right-of-use assets and liabilities for
leases with less than 12 months of lease term.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
10
－ Excluded initial direct costs from measuring the right-of-use asset at the date
of initial application.
－ Used hindsight when determining the lease term if the contract contains
options to extend or terminate the lease.
●
Leases previously classified as finance leases
For leases that were classified as finance leases under IAS 17, the carrying amount
of the right-of-use asset and the lease liability at January 1, 2019 are determined at
the carrying amount of the lease asset and lease liability under IAS 17 immediately
before that date.
3)
As a lessor
The Company is not required to make any adjustments on transition to IFRS 16 for
leases in which it acts as a lessor. The Company accounted for its leases in
accordance with IFRS 16 from the date of initial application.
4)
Impacts on financial statements
On transition to IFRS 16, the Company recognized additional $821,816 thousands of
right-of-use assets and lease liabilities. When measuring lease liabilities, the Group
discounted lease payments using its incremental borrowing rate at January 1, 2019. The
weighted-average rate applied is 1.2%.
The explanation of differences between operating lease commitments disclosed at the
end of the annual reporting period immediately preceding the date of initial application,
and lease liabilities recognized in the statement of financial position at the date of initial
application disclosed as follows:
Operating lease commitment at December 31, 2018 as disclosed in
the Company’s financial statements
Discounted using the incremental borrowing rate at January 1, 2019
Finance lease liabilities recognized as at December 31, 2018
Lease liabilities recognized at January 1, 2019
January 1, 2019
$
$
$
837,450
821,816
-
821,816
(b) The impact of IFRS endorsed by FSC but not yet effective
The following new standards, interpretations and amendments have been endorsed by the FSC and
are effective for annual periods beginning on or after January 1, 2020 in accordance with Rule No.
1080323028 issued by the FSC on July 29, 2019:
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
11
New, Revised or Amended Standards and Interpretations
Amendments to IFRS 3 “Definition of a Business”
Effective date
per IASB
January 1, 2020
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
January 1, 2020
Amendments to IAS 1 and IAS 8 “Definition of Material”
January 1, 2020
The Company assesses that the adoption of the above mentioned standards would not have any
material impact on its financial statements.
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC
As of the date, the following IFRSs that have been issued by the International Accounting Standards
Board (“IASB”), but have yet to be endorsed by the FSC:
New, Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between
an Investor and Its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Effective date
per IASB
Effective date to
be determined
by IASB
January 1, 2021
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
January 1, 2022
The Company is evaluating the impact of its initial adoption of the above-mentioned standards or
interpretations on its financial position and financial performance. The results thereof will be
disclosed when the Company completes its evaluation.
(4)
Summary of significant accounting policies:
The significant accounting policies presented in the parent-company-only financial statements are
summarized as follows. The following accounting policies were applied consistently throughout the
periods presented in the parent-company-only financial statements.
(a)
Statement of compliance
These parent-company-only financial statements have been prepared in accordance with the
Regulations Governing the Preparation of Financial Reports by Securities Issuers.
(b) Basis of preparation
(i)
Basis of measurement
Except for the following significant accounts in the statement of financial position, the parent-
company-only financial statements have been prepared on the historical cost basis:
1)
2)
Financial instruments measured at fair value through profit or loss are measured at fair
value;
Financial instruments measured at fair value through other comprehensive income are
measured at fair value;
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
12
3)
The defined benefit liability (or asset) is recognized as plan assets less the present value
of the defined benefit obligation and the effect of the asset ceiling mentioned in note
(4)(q).
(ii) Functional and presentation currency
The functional currency of the Company is determined based on the primary economic
environment in which the Company operates. The parent-company-only financial statements
are presented in New Taiwan Dollar, which is the Company’ s functional currency. All
financial information presented in New Taiwan Dollar has been rounded to the nearest
thousand.
(c)
Foreign currency
(i)
Foreign currency transaction
Transactions in foreign currencies are translated to the respective functional currencies of the
Company at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are retranslated to the functional
currency at the exchange rate at that date. The foreign currency gain or loss on monetary items
is the difference between the amortized cost in the functional currency at the beginning of the
year adjusted for the effective interest and payments during the period, and the amortized cost
in foreign currency translated at the exchange rate at the reporting date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair
value are retranslated to the functional currency at the exchange rate at the date that the fair
value was determined. Non-monetary items in a foreign currency that are measured based on
historical cost are translated using the exchange rate at the date of translation.
Foreign currency differences arising on retranslation are recognized in profit or loss, except for
the following differences which are recognized in other comprehensive income arising on the
retranslation:
1)
2)
fair value through other comprehensive income financial assets financial assets;
a financial liability designated as a hedge of the net investment in a foreign operation to
the extent that the hedge is effective; or
3)
qualifying cash flow hedges to the extent the hedge is effective
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on acquisition, are translated to the Company’s functional currency at exchange rates of
the reporting date. The income and expenses of foreign operations, excluding foreign
operations in hyperinflationary economies, are translated to the Company’ s functional
currency at average rate. Foreign currency differences are recognized in other comprehensive
income, and presented in the foreign currency translation differences in equity.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
13
When a foreign operation is disposed of such that control, significant influence or joint control
is lost, the cumulative amount in the translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal. When the Company
disposes of any part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount is reattributed to non-
controlling interest. When the Company disposes of only part of investment in an associate of
joint venture that includes a foreign operation while retaining significant or joint control, the
relevant proportion of the cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is
neither planned nor likely in the foreseeable future, foreign currency gains and losses arising
from such items are considered to form part of a net investment in the foreign operation and
are recognized in other comprehensive income, and presented in the translation reserve in
equity.
(d) Classification of current and non-current assets and liabilities
An asset is classified as current under one of the following criteria, and all other assets are classified
as non-current.
(i)
It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii)
It holds the asset primarily for the purpose of trading;
(iii)
It expects to realize the asset within twelve months after the reporting period; or
(iv) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or
used to settle a liability for at least twelve months after the reporting period.
A liability is classified as current under one of the following criteria, and all other liabilities are
classified as non-current.
(i)
It expects to settle the liability in its normal operating cycle;
(ii)
It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at
least twelve months after the reporting period. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not impact its
classification.
(e) Cash and cash equivalents
Cash comprise cash on hand and demand deposits. Cash equivalents are subject to an insignificant
risk of changes in their fair value, and are used by the Company in the management of its short-term
commitments.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
14
The time deposits which meet the above definition and are held for the purpose of meeting short-
term cash commitments rather than for investment or other purposes are reclassified as cash
equivalents.
(f)
Financial instruments
(i)
Financial assets
Financial assets are classified into the following categories: measured at amortized cost, fair
value through other comprehensive income (“ FVOCI” ) and fair value through profit or loss
(“FVTPL”).
The Company shall reclassify all affected financial assets only when it changes its business
model for managing its financial assets.
1)
Financial assets measured at amortized cost
A financial asset is measured at amortized cost if it meets both of the following
conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
•its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
A financial asset measured at amortized cost is initially recognized at fair value, plus any
directly attributable transaction costs. These assets are subsequently measured at
amortized cost using the effective interest method. The amortized cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses, and impairment
loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in
profit or loss. A regular way purchase or sale of financial assets is recognized and
derecognized, as applicable, using trade date accounting.
2)
Fair value through other comprehensive income (“FVOCI”)
A debt investment is measured at FVOCI if it meets both of the following conditions and
is not designated as at FVTPL:
• it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
•its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Some accounts receivables are held within a business model whose objective is achieved
by both collecting contractual cash flows and selling by the Company, therefore, those
receivables are measured at FVOCI and presented as accounts receivable.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
15
On initial recognition of an equity investment that is not held for trading, the Company
may irrevocably elect to present subsequent changes in the investment’ s fair value in
other comprehensive income. This election is made on an instrument-by-instrument
basis.
A financial asset measured at FVOCI is initially recognized at fair value, plus any
directly attributable transaction costs. These assets are subsequently measured at fair
value. Interest income calculated using the effective interest method, foreign exchange
gains and losses, and impairment losses, deriving from debt investments are recognized
in profit or loss; whereas dividends deriving from equity investments are recognized as
income in profit or loss, unless the dividend clearly represents a recovery of part of the
cost of the investment. Other net gains and losses of financial assets measured at FVOCI
are recognized in OCI. On derecognition, gains and losses accumulated in OCI of debt
investments are reclassified to profit or loss. However, gains and losses accumulated in
OCI of equity investments are reclassified to retain earnings instead of profit or loss. A
regular way purchase or sale of financial assets is recognized and derecognized, as
applicable, using trade date accounting.
Dividend income derived from equity investments is recognized on the date that the
Company’s right to receive payment is established, which in the case of quoted securities
is normally the date the shareholders' meeting approved the earning distribution.
3)
Fair value through profit or loss (“FVTPL”)
All financial assets not classified as amortized cost or FVOCI described as above are
measured at FVTPL, including derivative financial assets. On initial recognition, the
Company may irrevocably designate a financial asset, which meets the requirements to
be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Financial assets in this category are measured at fair value at initial recognition.
Attributable transaction costs are recognized in profit or loss as incurred. Subsequent
changes that are measured at fair value, which take into account any dividend and
interest income, are recognized in profit or loss. A regular way purchase or sale of
financial assets is recognized and derecognized, as applicable, using trade date
accounting.
4)
Impairment of financial assets
The Company recognizes loss allowances for expected credit losses on financial assets
measured at amortized cost (including cash and cash equivalents, financial assets
measured at amortized costs, notes and accounts receivable, other receivable, guarantee
deposit and other financial assets), debt investments measured at FVOCI, and accounts
receivable measured at FVOCI.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
16
The Company measures loss allowances at an amount equal to lifetime expected credit
loss (“ECL”), except for the following which are measured as 12-month ECL:
•debt securities that are determined to have low credit risk at the reporting date; and
• other debt securities and bank balances for which credit risk (i.e. the risk of default
occurring over the expected life of the financial instrument) has not increased
significantly since initial recognition.
Loss allowance for trade receivables and contract assets are always measured at an
amount equal to lifetime ECL.
Lifetime ECLs are the ECLs that result from all possible default events over the expected
life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible
within the 12 month after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual
period over which the Company is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly
since initial recognition and when estimating ECL, the Company considers reasonable
and supportable information that is relevant and available without undue cost or effort.
This includes both quantitative and qualitative information and analysis based on the
Company’ s historical experience and informed credit assessment as well as forward-
looking information.
The Company considers a debt security to have low credit risk when its credit risk rating
is equivalent to the globally understood definition of “ investment grade which is
considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or
twA or higher per Taiwan Ratings”.
The Company assumes that the credit risk on a financial asset has increased significantly
if it is more than 30 days past due.
The Company considers a financial asset to be in default when the financial asset is more
than 90 days past due or the borrower is unlikely to pay its credit obligations to the
Company in full.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to
the Company in accordance with the contract and the cash flows that the Company
expects to receive). ECLs are discounted at the effective interest rate of the financial
asset.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
17
At each reporting date, the Company assesses whether financial assets carried at
amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is
‘ credit-impaired’ when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred. An evidence that a
financial asset is credit-impaired includes the following observable data:
•significant financial difficulty of the borrower or issuer;
•a breach of contract such as a default or being more than 90 days past due;
•the lender of the borrower, for economic or contractual reasons relating to the
borrower's financial difficulty, having granted to the borrower a concession that the
lender would not otherwise consider;
•it is probable that the borrower will enter bankruptcy or other financial reorganization;
or
•the disappearance of an active market for a security because of financial difficulties.
Loss allowances for financial assets measured at amortized cost are deducted from the
gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is
recognized in other comprehensive income instead of reducing the carrying amount of
the asset. The Company recognizes the amount of expected credit losses (or reversal) in
profit or loss, as an impairment gain or loss.
The gross carrying amount of a financial asset is written off (either partially or in full) to
the extent that there is no realistic prospect of recovery. This is generally the case when
the Company determines that the debtor does not have assets or sources of income that
could generate sufficient cash flows to repay the amounts subject to the write-off.
However, financial assets that are written off could still be subject to enforcement
activities in order to comply with the Company’ s procedures for recovery of amounts
due.
5)
Derecognition of financial assets
Financial assets are derecognized when the contractual rights to the cash flows from the
assets expire, or when the Company transfers substantially all the risks and rewards of
ownership of the financial assets.
On derecognition of a debt instrument in its entirety, the Company recognizes the
difference between its carrying amount and the sum of the consideration received or
receivable and any cumulative gain or loss that had been recognized in other
comprehensive income and presented in “other equity – unrealized gains or losses on fair
value through other comprehensive income”, in profit or loss, and presented it in the line
item of non-operating income.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
18
On derecognition of a financial asset other than in its entirety, the Company allocates the
previous carrying amount of the financial asset between the part it continues to recognize
under continuing involvement, and the part it no longer recognizes on the basis of the
relative fair values of those parts on the date of the transfer. The difference between the
carrying amount allocated to the part that is no longer recognized and the sum of the
consideration received for the part no longer recognized and any cumulative gain or loss
allocated to it that had been recognized in other comprehensive income is recognized in
profit or loss, and presented in the line item of non-operating income and expenses. A
cumulative gain or loss that had been recognized in other comprehensive income is
allocated between the part that continues to be recognized and the part that is no longer
recognized on the basis of the relative fair values of those parts.
(ii) Financial liabilities and equity instruments
1)
Classification of debt or equity
Debt or equity instruments issued by the Company are classified as financial liabilities or
equity in accordance with the substance of the contractual agreement.
Equity instruments refer to surplus equities of the assets after the deduction of all the
debts for any contracts. Equity instruments issued are recognized as the amount of
consideration received, less, the direct cost of issuing.
Interest and loss or gain related to financial liabilities are recognized as profit or loss and
are reported under non-operating income and expenses. Financial liabilities are
reclassified as equity when converted, and conversions do not generate profit or loss.
2)
Financial liabilities at fair value through profit or loss
A financial liability is classified in this category if acquired principally for the purpose of
selling in the short term. This type of financial liability is measured at fair value at the
time of initial recognition, and attributable transaction costs are recognized in profit or
loss as incurred. Financial liabilities at fair value through profit or loss are measured at
fair value, and changes therein, which take into account any interest expense, are
recognized in profit or loss, and are included in non-operating income or expenses.
3)
Other financial liabilities
Financial liabilities not classified as held-for-trading or designated as at fair value
through profit or loss, which comprise loans and borrowings, and trade and other
payable, are measured at fair value, plus, any directly attributable transaction cost at the
time of initial recognition. Subsequent to initial recognition, they are measured at
amortized cost calculated using the effective interest method other than significant
interest on short-term loans and payables. Interest expense not capitalized as capital cost
is recognized in profit or loss, and is included in non-operating income or expenses.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
19
4)
Derecognition of financial liabilities
The Company derecognizes a financial liability when its contractual obligation has been
discharged, cancelled or expired. The difference between the carrying amount of a
financial liability removed and the consideration paid (including any non-cash assets
transferred or liabilities assumed) is recognized in profit or loss, and is included in non-
operating income or expenses.
5)
Offsetting of financial assets and liabilities
The Company presents financial assets and liabilities on a net basis when the Company
has the legally enforceable right to offset and intends to settle such financial assets and
liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.
(iii) Derivative financial instruments
The Company holds derivative financial instruments to hedge its foreign currency and interest
rate exposures. Derivatives are initially measured at fair value. Any attributable transaction
costs thereof are recognized in profit or loss as incurred. Subsequent to initial recognition,
derivatives are measured at fair value, and changes therein are recognized in profit or loss and
are included in the line item of non-operating income. When a derivative is designated as, and
effective for, a hedging instrument, its timing of recognition in profit or loss is determined
based on the nature of the hedging relationship. When the fair value of a derivative instrument
is positive, it is classified as a financial asset, whereas when the fair value is negative, it is
classified as a financial liability.
Embedded derivatives are separated from the host contract and accounted for separately if the
economic characteristics and risks of the non-financial asset’ s host contract are not closely
related to the embedded derivatives and the host contract is not measured at FVTPL.
(g)
Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is
based on the weighted-average-cost principle and includes expenditure incurred in acquiring the
inventories, production or transition costs, and other costs incurred in bringing them to their existing
location and condition. In the case of manufactured inventories and work in progress, cost includes
an appropriate share of production overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less, the
estimated costs of completion and selling expenses.
(h)
Investment in associates
Associates are those entities in which the Company has significant influence, but not control or join
control, over their financial and operating policies.
Investments in associates are accounted for using the equity method and are recognized initially at
cost. The cost of the investment includes transaction costs. The carrying amount of the investment
in associates includes goodwill arising from the acquisition, less, any accumulated impairment
losses.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
20
The parent-company-only financial statements include the Company’s share of the profit or loss and
other comprehensive income of equity-accounted investees after adjustments to align the accounting
policies with those of the Company from the date that significant influence commences until the date
that significant influence ceases. When changes in an associate’s equity are not recognized in profit
or loss or other comprehensive income of the associate and such changes do not affect the
Company’ s ownership percentage of the associate, the Company recognizes the changes in
ownership interests of its associate in capital surplus in proportion to its ownership.
Unrealized profits resulting from the transactions between the Company and an associate are
eliminated to the extent of the Company’s interest in the associate. Unrealized losses on transactions
with associates are eliminated in the same way, except to the extent that the underlying asset is
impaired.
When the Company’ s share of losses exceeds its interest in associates, the carrying amount of the
investment, including any long-term interests that form part thereof, is reduced to zero, and the
recognition of further losses is discontinued except to the extent that the Company has an obligation
or has made payments on behalf of the investee.
The Company shall discontinue the use of the equity method from the date when its investment
ceases to be an associate or a joint venture. The Company shall measure the retained interest at fair
value. The difference between the fair value of retained interest and proceeds from disposal, and the
carrying amount of the investment at the date the equity method was discontinued is recognized in
profit or loss. The Company shall account for all the amounts previously recognized in other
comprehensive income in relation to that investment on the same basis as would have been required
if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously
recognized in other comprehensive income would be reclassified to profit or loss on the disposal of
the related assets or liabilities, the entity shall reclassify the gain or loss from equity to profit or loss
(as a reclassification adjustment) when the equity method is discontinued. If an entity’s ownership
interest in an associate or a joint venture is reduced while the entity continues to apply the equity
method, the entity shall reclassify the proportion of the gain or loss that had previously been
recognized in other comprehensive income relating to that reduction in ownership interest to profit
or loss.
If an investment in an associate becomes an investment in a joint venture or an investment in a joint
venture becomes an investment in an associate, the Company shall continue to apply the equity
method without remeasuring the retained interest.
When the Company subscribes to additional shares in an associate at a percentage different from its
existing ownership percentage, the resulting carrying amount of the investment differs from the
amount of the Company’ s proportionate interest in the net assets of the associate. The Company
records such a difference as an adjustment to investments with the corresponding amount charged or
credited to capital surplus, however, when the balance of the capital surplus arising from the
investment was insufficient, the difference charged or credited to retained earnings. If the
Company’s ownership interest is reduced due to the additional subscription to the shares of associate
by other investors, the proportionate amount of the gains or losses previously recognized in other
comprehensive income in relation to that associate shall be reclassified to profit or loss on the same
basis as would be required if the associate had directly disposed of the related assets or liabilities.
(i)
Investment in subsidiaries
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
21
When preparing the parent-company-only financial statements, investment in subsidiaries which are
controlled by the Company is accounted for using the equity method. Under the equity method, the
amounts of net income, other comprehensive income and equity attributable to shareholders of the
Company in the parent-company-only financial statement are equal to those in the consolidated
financial statements.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions
(j)
Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses. Cost includes expenditure that is directly attributed to the
acquisition of the asset. The cost of the software is capitalized as part of the property, plant
and equipment if the purchase of the software is necessary for the property, plant and
equipment to be capable of operating.
Each part of an item of property, plant and equipment with a cost that is significant in relation
to the total cost of the item shall be depreciated separately, unless the useful life and the
depreciation method of a significant part of an item of property, plant and equipment are the
same as the useful life and depreciation method of another significant part of that same item.
The gain or loss arising from the derecognition of an item of property, plant and equipment
shall be determined as the difference between the net disposal proceeds, if any, and the
carrying amount of the item, and it shall be recognized as other gains and losses.
(ii) Subsequent cost
Subsequent expenditure is capitalized only when it is probable that the future economic
benefits associated with the expenditure will flow to the Company. The carrying amount of
those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as
incurred.
(iii) Depreciation
The depreciable amount of an asset is determined after deducting its residual amount, and it
shall be allocated on a systematic basis over its useful life. Items of property, plant and
equipment with the same useful life may be grouped in determining the depreciation charge.
The remainder of the items may be depreciated separately. The depreciation charge for each
period shall be recognized in profit or loss.
The depreciable amount of a leased asset is allocated to each accounting period during the
period of expected use on a systematic basis consistent with the depreciation policy the lessee
adopts for depreciable assets that are owned. If there is reasonably certainty that the lessee
will obtain ownership by the end of the lease term, the period of expected use is the useful life
of the asset; otherwise, the asset is depreciated over the shorter of the lease term and its useful
life.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
22
Land has an unlimited useful life and therefore is not depreciated.
The estimated useful lives for the current and comparative years of significant items of
property, plant and equipment are as follows:
1)
2)
3)
4)
Buildings: 35~50 years
Building improvement: 8~15 years
Research equipment: 3 years
Other equipment: 0.5~5 years
Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If
expectations differ from the previous estimates, the change is accounted for as a change in an
accounting estimate.
(k) Leases
Applicable after January 1, 2019
(i)
Identifying a lease
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Company assesses whether:
1)
2)
3)
the contract involves the use of an identified asset – this may be specified explicitly or
implicitly, and should be physically distinct or represent substantially all of the capacity
of a physically distinct asset. If the supplier has a substantive substitution right, then the
asset is not identified; and
the Company has the right to obtain substantially all of the economic benefits from use of
the asset throughout the period of use; and
the Company has the right to direct the use of the asset when it has the decision-making
rights that are most relevant to changing how and for what purpose the asset is used. In
rare cases where the decision about how and for what purpose the asset is used is
predetermined, the Company has the right to direct the use of an asset if either:
－ the Company has the right to operate the asset and the providers do not have the
right to vary; or
－ the Company designed the asset in a way that predetermines how and for what
purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Company
allocates the consideration in the contract to each lease component on the basis of their relative
stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the
Company has elected not to separate non-lease components and account for the lease and non-
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
23
lease components as a single lease component.
(ii) As a lessee
The Company recognizes a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the
end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate implicit in the lease or, if
that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally,
the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
－ fixed payments, including in-substance fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the
index or rate as at the commencement date;
－ amounts expected to be payable under a residual value guarantee; and
－ payments for purchase or termination options that are reasonably certain to be exercised.
The lease liability is measured at amortized cost using the effective interest method. It is
remeasured when:
－ there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Company’s estimate of the amount expected to be payable under
a residual value guarantee; or
－ there is a change in the lease term resulting from a change of its assessment on whether it
will exercise an option to purchase the underlying assets, or
－ there is a change of its assessment on whether it will exercise an extension or termination
option; or
－ there is any lease modifications
When the lease liability is remeasured, other than lease modifications, a corresponding
adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the
carrying amount of the right-of-use asset has been reduced to zero.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
24
When the lease liability is remeasured to reflect the partial or full termination of the lease for
lease modifications that decrease the scope of the lease, the Company accounts for the
remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset
to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or
loss relating to the partial or full termination of the lease.
The Company presents right-of-use assets that do not meet the definition of investment and
lease liabilities as a separate line item respectively in the statement of financial position.
The Company has elected not to recognize right-of-use assets and lease liabilities for short-
term leases of machinery and office equipment that have a lease term of 12 months or less and
leases of low-value assets. The Company recognizes the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.
(iii) As a lessor
When the Company acts as a lessor, it determines at lease commencement whether each lease
is a finance lease or an operating lease. To classify each lease, the Company makes an overall
assessment of whether the lease transfers to the lessee substantially all of the risks and rewards
of ownership incidental to ownership of the underlying asset. If this is the case, then the lease
is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the
Company considers certain indicators such as whether the lease is for the major part of the
economic life of the asset.
Applicable before January 1, 2019
(i) As lessor
Lease income from operating lease is recognized in income on a straight-line basis over the
lease term. Initial direct costs incurred in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and recognized as an expense over the lease
term on the same basis as the lease income. Incentives granted to the lessee to enter into the
operating lease are spread over the lease term on a straight-line basis so that the lease income
received is reduced accordingly.
(ii) As lessee
Operating leases are not recognized in the Company’s balance sheets.
Payments made under operating lease (excluding insurance and maintenance expenses) are
recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives
received are recognized as an integral part of the total lease expense, over the term of the lease.
(l)
Intangible assets
(i) Goodwill
1)
Initial recognition
Goodwill arising from acquisition of subsidiaries is included in intangible assets. The
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
25
measurement of initial recognition of goodwill, please refer to note (4)(t).
2)
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
Goodwill related to an investment accounted for using equity method is included in the
carrying amount of the investment, and not allocated to any asset, including goodwill,
forms part of the carrying amount of the investment accounted for using the equity
method.
(ii) Research & Development
During the research phase, activities are carried out to obtain and understand new scientific or
technical knowledge. Expenditures during this phase are recognized in profit or loss as
incurred.
Expenditures arising from the development phase shall be recognized as an intangible asset if
all the conditions described below can be demonstrated; otherwise, they will be recognized in
profit or loss as incurred.
1)
2)
3)
4)
5)
6)
The technical feasibility of completing the intangible asset so that it will be available for
use or sale.
Its intention to complete the intangible asset and use or sell it.
Its ability to use or sell the intangible asset.
How the intangible asset will generate probable future economic benefits.
The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset.
Its ability to measure reliably the expenditure attributable to the intangible asset during
its development.
Capitalized expenditure arising from the development phase is measured at cost less
accumulated amortization and accumulated impairment losses.
(iii) Other intangible assets
Other intangible assets that are acquired by the Company are measured at cost, less
accumulated amortization and any accumulated impairment losses.
(iv) Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognized in profit or loss as incurred.
(v) Amortization
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
26
The amortizable amount is the cost of an asset, or other amount substituted for cost, less its
residual value.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful
lives of intangible assets, other than goodwill and intangible assets with all indefinite useful
life, from the date that they are available for use. The estimated useful lives for the current and
comparative periods are as follows:
1)
2)
Patents: the shorter of contract period and estimated useful lives
Computer software: 1~3 years
The residual value, the amortization period, and the amortization method for an intangible
asset with a finite useful life shall be reviewed at least annually at each fiscal year-end. Any
change shall be accounted for as changes in accounting estimates.
(m)
Impairment of non-derivative financial assets
Non-derivative financial assets except for inventories, deferred tax assets, and assets arising from
employee benefits are assessed at the end of each reporting period whether there is any indication
that an asset may be impaired. If any such indication exists, the Company shall estimate the
recoverable amount of the asset. If it is not possible to determine the recoverable amount (fair value
less cost to sell and value in use) for the individual asset, then the Company will have to determine
the recoverable amount for the asset's cash-generating unit.
The Company assesses goodwill and intangible assets, which have indefinite useful lives and are not
available for use, on an annual basis and recognizes an impairment loss on excess of carrying value
over the recoverable amount.
The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair
value, less costs to sell and its value in use. If, and only if, the recoverable amount of an asset is less
than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount.
That reduction is an impairment loss. An impairment loss shall be recognized immediately in profit
or loss.
For the purpose of impairment testing, goodwill acquired in a business combination shall, from the
acquisition date, be allocated to each of the acquirer’ s cash-generating units, or groups of cash-
generating units that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquire are assigned to those units or group of units. If the
carrying amount of the cash-generating units exceeds the recoverable amount of the unit, the entity
shall recognize the impairment loss and the impairment loss shall be allocated to reduce the carrying
amount of each asset in the unit. Reversal of an impairment loss for goodwill is prohibited.
The Company assesses at the end of each reporting period whether there is any indication that an
impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or
may have decreased. An impairment loss recognized in prior periods for an asset other than
goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine
the asset’s recoverable amount since the last impairment loss was recognized. If this is the case, the
carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal
of an impairment loss.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
27
(n)
Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probably that an outflow of economic
benefits will be required to settle the obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects the current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the discount is recognized as
finance cost.
(o) Treasury stock
Repurchased shares are recognized under treasury shares (a contra-equity account) based on its
repurchase price (including all directly accountable costs), and net of tax. Gains on disposal of
treasury shares should be recognized under Capital Reserve – Treasury Shares Transactions; losses
on disposal of treasury shares should be offset against existing capital reserves arising from similar
types of treasury shares. If there are insufficient capital reserves to be offset against, then such
losses should be accounted for under retained earnings. The carrying amount of treasury shares
should be calculated using the weighted average different types of repurchase.
During the cancellation of treasury shares, Capital Reserve – Share Premiums and Share Capital
should be debited proportionately. Gains on cancellation of treasury shares should be recognized
under existing capital reserves arising from similar types of treasury shares; losses on cancellation of
treasury shares should be offset against existing capital reserves arising from similar types of
treasury shares. If there are insufficient capital reserves to be offset against, then such losses should
be accounted for under retained earnings.
(p) Recognition of revenue
(i)
Revenue from contracts with customers
Revenue is measured based on the consideration to which the Company expects to be entitled
in exchange for transferring goods or services to a customer. The Company recognizes revenue
when it satisfies a performance obligation by transferring control of a good or a service to a
customer. The accounting policies for the Company’ s main types of revenue are explained
below.
1)
Sale of goods
The Company manufactures and sells electronic products to electronic products brand
vendor. The Company recognizes revenue when control of the products has transferred,
being when the products are delivered to the customer, the customer has full discretion
over the channel and price to sell the products, and there is no unfulfilled obligation that
could affect the customer’ s acceptance of the products. Delivery occurs when the
products have been shipped to the specific location, the risks of obsolescence and loss
have been transferred to the customer, and either the customer has accepted the products
in accordance with the sales contract, the acceptance provisions have lapsed, or the
Company has objective evidence that all criteria for acceptance have been satisfied.
The Company assesses sales discounts based on historical experience, management's
judgment and other known reasons. Such allowances are recognized as a deduction of
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
28
sales revenue in the same period in which sales are made. The aforementioned provisions
are expected to settle over the next year. A refund liability is recognized for expected
discounts payable to customers in relation to sales made until the end of the reporting
period. No element of financing is deemed present as the sales of electronic products are
made with a credit term which is consistent with the market practice.
A receivable is recognized when the goods are delivered as this is the point in time that
the Company has a right to an amount of consideration that is unconditional.
2)
Financing components
The Company does not expect to have any contracts where the period between the
transfer of the promised goods or services to the customer and payment by the customer
exceeds one year. As a consequence, the Company does not adjust any of the transaction
prices for the time value of money.
(q) Employee benefits
(i) Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognized as an
employee benefit expense in profit or loss in the periods during which services are rendered by
employees.
(ii) Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. The Company’s net obligation in respect of defined benefit pension plans is calculated
separately for each plan by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior periods; that benefit is discounted to
determine its present value. The fair value of any plan assets is deducted. The discount rate is
the yield at the reporting date on government bonds that have maturity dates approximating the
terms of the Company’s obligations and that are denominated in the same currency in which
the benefits are expected to be paid.
The calculation of defined benefit obligation is performed annually by a qualified actuary
using the projected unit credit method. When the calculation results in a benefit to the
Company, the recognized asset is limited to the total of the present value of economic benefits
available in the form of any future refunds from the plan or reductions in future contributions
to the plan. In order to calculate the present value of economic benefits, consideration is given
to any minimum funding requirements that apply to any plan in the Company. An economic
benefit is available to the Company if it is realizable during the life of the plan, or on
settlement of the plan liabilities.
If the benefits of a plan are improved, the pension cost incurred from the portion of the
increased benefit relating to past service by employees, is recognized immediately in profit or
loss.
Re-measurement of net defined benefit liability (asset) (including actuarial gains, losses and
the return on plan asset and changes in the effect of the asset ceiling, excluding any amounts
included in net interest) is recognized in other comprehensive income (loss). The effect of re-
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
29
measurement of the defined benefit plan is charged to retained earnings.
The Company recognizes gains or losses on the curtailment or settlement of a defined benefit
plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises any
resulting change in the fair value of plan assets and change in the present value of defined
benefit obligation.
(iii) Short term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Company has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
(r)
Share-based payment
The grant-date fair value of share-based payment awards granted to employee is recognized as
employee expenses, with a corresponding increase in equity, over the period that the employees
become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to
reflect the number of awards which the related service and non-market performance conditions are
expected to be met, such that the amount ultimately recognized as an expense is based on the number
of award that meet the related service and non-market performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-
based payment is measured to reflect such conditions, and there is no true-up for differences
between expected and actual outcomes.
(s)
Income taxes
Income tax expenses include both current taxes and deferred taxes. Except for expenses related to
business combinations or recognized directly in equity or other comprehensive income, all current
and deferred taxes shall be recognized in profit or loss.
Current taxes include tax payables and tax deduction receivables on taxable gains (losses) for the
year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as
well as tax adjustments related to prior years.
Deferred taxes arise due to temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be
recognized for the following exceptions:
(i) Assets and liabilities that are initially recognized but are not related to the business
combination and have no effect on net income or taxable gains (losses) during the transaction.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where
there is a high probability that such temporary differences will not reverse.
(iii)
Initial recognition of goodwill.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
30
Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled based on tax rates that have been enacted
or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities may be offset against each other if the following criteria are met:
(i)
The entity has the legal right to settle tax assets and liabilities on a net basis; and
(ii)
the taxing of deferred tax assets and liabilities fulfill one of the below scenarios:
1)
2)
levied by the same taxing authority; or
levied by different taxing authorities, but where each such authority intends to settle tax
assets and liabilities (where such amounts are significant) on a net basis every year of the
period of expected asset realization or debt liquidation, or where the timing of asset
realization and debt liquidation is matched.
A deferred tax asset should be recognized for the carry-forward of unused tax losses, unused tax
credits, and deductible temporary differences to the extent that it is probable that future taxable
profit will be available against which the unused tax losses, unused tax credits, and deductible
temporary differences can be utilized. Such unused tax losses, unused tax credits, and deductible
temporary differences shall also be re-evaluated every year on the financial reporting date, and they
shall be adjusted based on the probability that future taxable profit that will be available against
which the unused tax losses, unused tax credits, and deductible temporary differences can be
utilized.
The surtax on unappropriated earnings is recoded as current tax expense in the following year after
the resolution to appropriate retained earnings is approved in a stockholders’ meeting.
(t)
Business combination
Goodwill is measured as an aggregation of the consideration transferred (which generally is
measured at fair value at the acquisition date) and as an amount of any non-controlling interest in the
acquiree, net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed (generally at fair value). If the residual balance is negative, the Company shall re-assess
whether it has correctly identified all of the assets acquired and liabilities assumed, and recognize a
gain on the bargain purchase thereafter.
All the transaction costs incurred for the business combination are recognized immediately as the
Company’s expenses when incurred, except for the issuance of debt or equity instruments.
If the business combination is achieved in stages, the Company shall measure any non-controlling
equity interest in the acquire, either at fair value or at the non-controlling interest’ s proportionate
share of the acquiree’s identifiable net assets. Other non-controlling interest is measured (1) at fair
value at the acquisition date or (2) by using other valuation techniques acceptable under the IFRS as
endorsed by the FSC.
In a business combination achieved in stages, the Company shall re-measure its previously held
equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or
loss, if any, in profit or loss. In prior reporting periods, the Company may have recognized changes
in the value of its equity interest in the acquiree in other comprehensive income. If so, the amount
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
31
that was recognized in other comprehensive income shall be recognized on the same basis as would
be required if the Company had disposed directly of the previously held equity interest. If the
disposal of the equity interest required a reclassification to profit or loss, such an amount shall be
reclassified to profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the Company shall report in its financial statements provisional
amounts for the items for which the accounting is incomplete. During the measurement period, the
Company shall retrospectively adjust the provisional amounts recognized at the acquisition date, or
recognize additional assets or liabilities to reflect new information obtained about facts and
circumstances that existed as of the acquisition date. The measurement period shall not exceed one
year from the acquisition date.
(u) Earnings per share
The Company discloses the basic and diluted earnings per share attributable to ordinary equity
holders of the Company. The calculation of basic earnings per share is based on the profit
attributable to the ordinary shareholder of the Company divided by weighted average number of
ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit
attributable to ordinary shareholders of the Company divided by weighted average number of
ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.
Dilutive potential ordinary shares comprise restricted employee stock and employee compensation
not yet approved by the Board of Directors.
(v) Operating segments
The operating segment information is disclosed within the consolidated financial statements but not
disclosed in the parent-company-only financial statements.
(5)
Significant accounting assumptions and judgments, and major sources of estimation uncertainty:
The preparation of the financial statements in conformity with the IFRSs endorsed by the FSC requires
management to make judgments, estimates, and assumptions that affect the application of the accounting
policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ
from these estimates.
The management continues to monitor the accounting estimates and assumptions. The management
recognizes any changes in accounting estimates during the period and the impact of those changes in
accounting estimates in the next period.
There are no critical judgments in applying the accounting policies that have significant effect on the
amounts recognized in the financial statements. In addition, information about assumptions and estimation
uncertainties that have a significant risk of resulting in a material adjustment within the next financial year
is as follows:
(a) Recognition and measurement of refund liabilities
Because of the sales returns and allowances, the Company records refund liabilities (sales returns
and allowances provisions) for estimated returns and other allowances in the same period the related
revenue is recorded. The estimate is made based on historical experience, market and economic
conditions, and any other known factors using the expected value or the most likely amount, and it
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
32
could be different from actual sales returns and allowances, therefore, the management periodically
reviews the adequacy of the estimation used.
(b) Valuation of inventories
As inventories are stated at the lower of cost or net realizable value, the net realizable value of the
inventory is mainly determined based on assumptions as to future demand within a specific time
horizon. Due to the rapid industrial changes, there may be significant differences in the net realizable
value of inventories. Refer to note (6)(g) for further description of the valuation of inventories.
(6) Explanation of significant accounts:
(a) Cash and cash equivalents
Cash on hand
Checking accounts and demand deposits
Time deposits
Bonds purchased under resale agreements
December
31, 2019
December
31, 2018
$
1,527
1,596
3,523,187
3,972,558
9,885,255
15,609,214
50,000
863,010
$
13,459,969
20,446,378
Please refer to note (6)(x) for the disclosure of the exchange rate risk, the interest rate risk and the
fair value sensitivity analysis of the financial assets and liabilities of the Company.
(b)
Financial assets and liabilities at fair value through profit or loss
Mandatorily measured at fair value through profit or loss:
Non-derivative financial assets
Structured deposits
Stock listed in domestic markets
Stock unlisted in domestic markets
Fund in domestic or foreign market
Total
Current
Non-current
December
31, 2019
December
31, 2018
$
149,888
-
-
24,350
46,747
220,985
149,888
71,097
220,985
$
$
$
284,768
-
23,745
308,513
284,768
23,745
308,513
The market risk related to the financial instruments please refer to note (6)(x).
As of December 31, 2019 and 2018, the Company did not provide any aforementioned financial
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
33
assets as collaterals for its loans.
(c)
Financial assets at fair value through other comprehensive income
Equity investments at fair value through other comprehensive
income:
Stock listed in domestic markets
Stock listed in foreign markets
Stock unlisted in domestic markets
Stock unlisted in foreign markets
Total
December
31, 2019
December
31, 2018
$
1,614,565
2,383,976
448,110
914,507
42,211
400,184
896,395
51,363
$
3,019,393
3,731,918
The purpose that the Company invests in the abovementioned equity securities is for long-term
strategies, but rather for trading purpose. Therefore, these equity securities are designated as at
FVOCI.
For the year ended December 31, 2019, the Company had sold all of its shares in PrimeSensor
Technology Inc., Macroblock Inc., and Innolux Corporation (“ Innolux” ), which were measured at
fair value through other comprehensive income. The fair value of the shares was $845,202 when
disposed and the cumulative losses amounted to $4,824,910, which had been transferred to retained
earnings from other comprehensive income.
For the year ended December 31, 2018, the Company has sold parts of its shares held in Innolux
Corporation measured at fair value through other comprehensive income. The fair value of the
shares was $291,435 when disposed, and the cumulative losses amounted to $1,024,470, which had
been transferred to retained earnings from other comprehensive income.
If there is an increase (decrease) in the market price by 5% on the reporting date of the equity
securities hold by the Company, the increase (decrease) in other comprehensive income (pre-tax) for
the years ended December 31, 2019 and 2018, will be $150,970 and $186,596, respectively. These
analyses are performed on the same basis for the period and assume that all other variables remain
the same.
The Company’s information of market risk please refer to note (6)(x).
As of December 31, 2019 and 2018, the Company did not provide any financial assets at fair value
through other comprehensive income as collaterals for its loans.
(d) Current financial assets measured at amortized costs
Common bonds – Taiwan Star Telecom Corporation Limited
(“Taiwan Star”)
December
31, 2019
December
31, 2018
$
-
350,000
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
34
The Company has assessed that these financial assets are held to maturity to collect contractual cash
flows, which consist solely of payments of principal and interest on the principal amount
outstanding. Therefore, these investments were classified as financial assets measured at amortized
cost.
As of December 31, 2018, the Company did not provide the aforementioned financial assets as
collaterals for its loans.
(e) Notes and accounts receivable
Notes receivable from operating activities
December
31, 2019
December
31, 2018
$
1,104
1,218
Accounts receivable – measured as amortized cost
154,482,480
171,635,955
Accounts receivable – fair value through other comprehensive
income
Less: allowance for uncollectible accounts
Notes and accounts receivable
Notes and accounts receivable – related parties
27,170,468
22,896,211
181,654,052
194,533,384
(3,634,190)
(3,718,560)
$ 178,019,862
190,814,824
$ 176,967,731
189,496,594
$
1,052,131
1,318,230
The Company has assessed a portion of its trade receivables that was held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets;
therefore, such trade receivables were measured at fair value through other comprehensive income.
The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of
lifetime expected loss provision for all receivables. To measure the expected credit losses, trade
receivables have been grouped based on shared credit risk characteristics and the days past due, as
well as incorporated forward looking information.
The loss allowance provision of the Company were determined as follows:
December 31, 2019
Carrying
amount of
notes and
accounts
receivable
$
$
173,733,360
4,296,955
3,623,737
181,654,052
Weighted-
average
ECL rate
0%
0.243%
100%
Credit rating
Level A
Level B
Level C
Lifetime ECLs
-
10,453
3,623,737
3,634,190
Credit-
impaired
No
No
Yes
December 31, 2018
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
35
Carrying
amount of
notes and
accounts
receivable
$
$
187,485,567
3,424,080
3,623,737
194,533,384
Weighted-
average
ECL rate
0%
2.769%
100%
Credit rating
Level A
Level B
Level C
Lifetime ECLs
-
94,823
3,623,737
3,718,560
Credit-
impaired
No
No
Yes
The aging analysis of notes and accounts receivable, were determined as follows:
Overdue 1 to 180 days
December
31, 2019
December
31, 2018
$
497,543
1,770,814
The movement in the allowance for notes and accounts receivable were as follow:
Balance at January 1
Impairment losses recognized
Amounts written off
Balance at December 31
2019
2018
3,718,560
3,717,495
1,537
(85,907)
1,065
-
3,634,190
3,718,560
$
$
Allowance for uncollectible account is the balance of accounts receivables which are uncollectable.
Except for evaluating the situation of the customers’ payment records and widely analyzing the
credit rating of customers, the Company also takes all the necessary procedures for collection. The
Company believes that there is no doubt for the recovery of the due but unimpaired account
receivable, therefore, no allowance recognized.
The Company entered into accounts receivable factoring agreements with banks. As of December
31, 2019 and 2018, except for the amount used under the actual sales amount in thousand accordance
with certain agreements, the factoring amount granted by the banks was USD 1,000,000 thousands
and USD 950,000 thousands, respectively. Based on the agreements, the Company is not
responsible for guaranteeing the ability of the accounts receivable obligor to make payment when it
is affected by credit risk. Thus, this is a non-recourse accounts receivable factoring. The Company
derecognized the above account receivables because it has transferred substantially all of the risks
and rewards of their ownership and it does not have any continuing involvement in them. After the
transfer of the accounts receivable, the Company can request partial advanced amount, while the
interest calculated at an agreed rate is paid to the bank in the period during the time of receiving
advance and the accounts receivable is collected. The remaining amounts with no advance are
received when the accounts receivable are settled by the customers. As of December 31, 2019 and
2018, account receivable factored were recovered and derecognized since the conditions of
derecognition were met.
The Company, customers, and banks signed the three-party contracts in which the banks purchase
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
36
accounts receivable from the Company. The total amount of the accounts receivable should not
exceed the facility limit provided by the banks to the Company’s customers. Based on the contracts,
the banks have no right to request the Company to repurchase the accounts receivable. Thus, this is
a non-recourse accounts receivable transfer. As of December 31, 2019 and 2018, accounts receivable
factored were recovered and derecognized since the conditions of derecognition were met.
The details of the factored accounts receivable at the reporting date were as follows:
December 31, 2019
Purchaser
Accounts
transferred
Amount advanced
Paid
Unpaid
Amount
recognized
in other
receivables
Amount
Collateral
derecognized Interest rate
Financial
Institution $ 25,672,764
-
25,672,764
-
-
25,672,764 2.21%~2.80%
December 31, 2018
Purchaser
Accounts
transferred
Amount advanced
Paid
Unpaid
Amount
recognized
in other
receivables
Amount
Collateral
derecognized Interest rate
Financial
Institution $ 32,098,074
-
32,098,074
-
-
32,098,074 3.02%~3.52%
As of December 31, 2019 and 2018, the Company did not provide any aforementioned notes and
accounts receivable as collaterals.
(f) Other receivables
Other receivables - loans to subsidiaries
Other receivables - related parties
Others
December
31, 2019
December
31, 2018
$
1,719,000
149,120
1,242,487
301,137
144,455
973,158
$
3,110,607
1,418,750
As of December 31, 2019 and 2018, none of other receivables were past due.
(g)
Inventories
Finished goods
Work in progress
Raw materials
December
31, 2019
13,454,860
$
December
31, 2018
18,779,873
152,421
44,008
36,440,788
32,693,278
$
50,048,069
51,517,159
(i) During the years ended December 31, 2019 and 2018, inventory cost recognized as cost of
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
37
sales amounted to $891,431,772 and $889,171,625, respectively.
(ii) The Company reversed its allowance for inventory valuation loss amounting to $66,336 due to
the sale and disposal of its obsolete inventories in the year ended December 31, 2019. The
write-down of inventories to net realizable value amounted to $171,790, in the year ended
December 31, 2018.
(iii) As of December 31, 2019 and 2018, the Company did not provide any inventories as
collaterals for its loans.
(h)
Investments accounted for using equity method
A summary of the Company’s financial information for equity-accounted investees at the reporting
date is as follows:
Subsidiaries
Associates
Plus: Other receivables–related parties
Credit balance of investment in equity method (other non-
current liability)
Less: unrealized profits or losses
December
31, 2019
79,267,709
$
December
31, 2018
79,891,379
2,615,406
2,619,501
81,883,115
82,510,880
659,296
494,744
891,274
(3,516)
298,023
(4,409)
$
83,430,169
83,299,238
(i)
Subsidiaries
Please refer to the consolidated financial statement for the year ended December 31, 2019.
(ii) Associates
1)
The fair value of the shares of listed company based on the closing price was as follow:
Allied Circuit Co., Ltd. (“Allied Circuit”)
Avalue Technology Inc. (“Avalue”)
December
31, 2019
December
31, 2018
$
$
1,076,719
1,147,839
2,224,558
621,653
586,743
1,208,396
2)
The Company’s share of the net gain (loss) of associates was as follows:
The Company’s share of the gain of associates
2019
$
70,378
2018
483,812
3)
The Company’ s financial information for investments accounted for using the equity
method that are individually immaterial was as follows:
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
38
December
31, 2019
December
31, 2018
Carrying amount of individually immaterial associates
$
2,615,406
2,619,501
The Company’s share of the net income (loss) of
associates:
Profit from continuing operations
Other comprehensive income (loss)
Total comprehensive income (loss)
2019
2018
$
$
70,378
(158,336)
(87,958)
483,812
(97,800)
386,012
4)
In October 2019, the Company had sold part of its shares held in Avalue Technology Inc.
(“ Avalue” ), with a consideration (net of costs of disposal) amounting to $18,034. The
transaction has been completed and the price has been fully recovered, wherein the
Company recognized a gain of $8,990, which was accounted for as other gain and loss.
(iii) As of December 31, 2019 and 2018, the Company did not provide any investments accounted
for using equity method as collaterals for its loans.
(i)
Changes in subsidiaries’ equity
(i)
Changes in ownership interests while retaining control (increase in ownership interest)
The Company’ s subsidiary, Arcadyan Technology Corp. (“ Arcadyan” ), purchased shares of
other subsidiaries from non-controlling interest amounting to $634, in 2018.
The following summarizes the effect of changes in equity of the parent due to changes in the
ownership interest of the subsidiaries:
Acquisition of non-controlling interest (carrying amount)
Consideration paid for the non-controlling interest
Difference
Capital surplus – changes in ownership interests in subsidiaries
2018
631
(634)
(3)
(3)
$
$
$
(ii) Changes in subsidiaries’ equity did not result in the Company’s loss of control
1)
Subsidiaries’ employee stock options exercised
Compal Broadband Network Inc. (“ CBN” ) issued 69 thousand and 351 thousand new
shares because of its employees’ exercised stock options in 2019 and 2018, respectively,
resulting in a decrease in the ownership of the Company and its subsidiaries in CBN by
0.07% and 0.41%, respectively.
2)
Issuance of new shares for cash of subsidiaries
The Company and its subsidiaries purchased newly issued shares of Arcadyan amounting
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
39
to $323,917 at a percentage different from its existing ownership percentage in the fourth
quarter of 2019, resulting in a decrease in the ownership of the Company and its
subsidiaries in Arcadyan by 0.37%.
The Company and its subsidiaries did not purchase newly issued shares of CBN in the
fourth quarter of 2018, resulting in a decrease in the ownership of the Company and its
subsidiaries in CBN by 7.27%.
3)
Issuance and cancellation of subsidiaries’ restricted shares
Arcadyan canceled 84 thousand restricted shares and issued 4,500 thousand restricted
new shares in the years ended December 31, 2019 and 2018, respectively, resulting in an
increase of 0.01% and a decrease of 0.84% interest, respectively, of the ownership of the
Company and its subsidiaries in Arcadyan.
4)
The following summarizes the effect of changes in equity of the parent due to changes in
the ownership interest of subsidiaries:
Capital surplus – changes in ownership interest in
subsidiaries
Retained earnings
2019
2018
$
$
43,473
-
43,473
(32,703)
(32,160)
(64,863)
(j)
Property, plant and equipment
The cost, depreciation, and impairment of the property, plant and equipment of the Company for the
years ended December 31, 2019 and 2018, were as follows:
Buildings
and building
improvement
Other
equipment
Land
Under
construction
and
prepayment
for purchase of
equipment
Total
Cost:
Balance on January 1, 2019
$
1,047,797
2,194,761
2,112,018
36,487
5,391,063
Additions
Disposals and derecognitions
Reclassifications
Balance on December 31, 2019
Balance on January 1, 2018
Additions
Disposals and derecognitions
Reclassifications
-
-
-
138,731
343,873
279,325
761,929
(6,637)
(137,960)
-
(144,597)
63,420
64,147
(127,567)
-
$
$
1,047,797
2,390,275
2,382,078
188,245
6,008,395
1,047,797
2,173,951
2,002,114
27,007
5,250,869
-
-
-
18,716
124,095
60,375
203,186
(476)
(62,516)
-
(62,992)
2,570
48,325
(50,895)
-
Balance on December 31, 2018
$
1,047,797
2,194,761
2,112,018
36,487
5,391,063
Depreciation and impairments loss:
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
40
Balance on January 1, 2019
Depreciation for the period
Disposals and derecognitions
Balance on December 31, 2019
Balance on January 1, 2018
Depreciation for the period
Disposals and derecognitions
Balance on December 31, 2018
Carrying amounts:
Balance on December 31, 2019
Balance on January 1, 2018
Balance on December 31, 2018
Buildings
and building
improvement
1,368,955
Other
equipment
1,893,927
Land
-
Under
construction
and
prepayment
for purchase of
equipment
-
-
-
-
-
-
-
-
80,891
185,219
(6,112)
(135,123)
1,443,734
1,944,023
1,312,069
1,846,528
57,362
108,965
(476)
(61,566)
1,368,955
1,893,927
-
-
-
-
-
-
-
Total
3,262,882
266,110
(141,235)
3,387,757
3,158,597
166,327
(62,042)
3,262,882
1,047,797
946,541
438,055
188,245
2,620,638
1,047,797
861,882
155,586
27,007
2,092,272
1,047,797
825,806
218,091
36,487
2,128,181
$
$
$
$
$
$
$
As of December 31, 2019 and 2018, the Company did not provide property, plant and equipment as
collateral for its borrowing.
(k) Right-of-use assets
The Company leases many assets including buildings and vehicles. Information about leases for
which the Company as a lessee is presented below:
Cost:
Balance on January 1, 2019
Adjustment on initial application of IFRS 16
Balance on January 1, 2019 per IFRS 16
Additions
Deductions
Balance on December 31, 2019
Depreciation:
Balance on January 1, 2019
Adjustment on initial application of IFRS 16
Balance on January 1, 2019 per IFRS 16
Depreciation for the period
Deductions
Balance on December 31, 2019
Carrying amount:
Balance on January 1, 2019
Balance on December 31, 2019
$
$
$
$
$
$
Buildings
Vehicles
Total
-
781,756
781,756
979,422
(73,832)
1,687,346
-
-
-
407,103
(73,832)
333,271
-
40,060
40,060
12,098
(2,038)
50,120
-
-
-
18,618
(2,038)
16,580
-
821,816
821,816
991,520
(75,870)
1,737,466
-
-
-
425,721
(75,870)
349,851
781,756
1,354,075
40,060
33,540
821,816
1,387,615
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
41
The Company leases land, offices, warehouses and factory facilities under an operating lease for the
year ended December 31, 2018, please refer to note (6)(o).
(l)
Short-term borrowings
The details of short-term borrowings were as following:
Unsecured bank loans
Unused credit line for short-term borrowings
Range of interest rates
December
31, 2019
39,363,800
December 31,
2018
51,305,682
57,478,000
40,694,000
0.66%~2.49% 0.72%~3.56%
$
$
For information on the Company’s interest risk, foreign currency risk and liquidity risk, please refer
to note (6)(x).
(m) Long-term borrowings
The details of long-term borrowings were as follows:
Unsecured bank loans
Less: current portion
Total
Unused credit line for
long-term borrowings
Unsecured bank loans
Less: current portion
Total
Unused credit line for
long-term borrowings
December 31, 2019
Currency
TWD
Annual range of
interest rates
0.73%~1.18%
Maturity year
2020~2023
December 31, 2018
Currency
TWD
Annual range of
interest rates
0.79%~1.22%
Maturity year
2019~2021
Amount
25,650,000
(18,150,000)
7,500,000
11,807,000
Amount
28,396,250
(17,496,250)
10,900,000
5,414,750
$
$
$
$
$
$
For information on the Company’s interest risk, foreign currency risk and liquidity risk, please refer
to note (6)(x).
(n) Lease liabilities
Current
December
31, 2019
$
387,499
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
42
Non-current
$ 1,010,933
For the maturity analysis, please refer to note (6)(x).
The amounts recognized in profit or loss was as follows:
Interest on lease liabilities
Expenses relating to leases of low-value assets, excluding short-term leases of
low-value assets
2019
13,549
3,325
$
$
The amounts recognized in the statement of cash flows for the Company was as follows:
Total cash outflow for leases
(i)
Building leases
2019
$
431,730
The Company leases buildings for its office and factory space, typically run for a period of 1~8
years.
(ii) Other leases
The Company leases vehicles with lease terms of 1~5 years.
The Company also leases some equipments and vehicles with contract terms of 1~3 years.
These leases are short-term or leases of low-value items. The Company has elected not to
recognize right-of-use assets and lease liabilities for these leases.
(o) Operating lease – Company as lessee
The rental payables of the non-cancellable operating lease was as follows:
Less than one year
Between one and five years
December
31, 2018
$
$
264,145
257,020
521,165
The Company leased several office areas under operating leases with the leasing terms from 1 to 5
years and had an option to renew the leases when the leases expired.
For the year ended December 31, 2018, expenses recognized in profit or loss under operating leases
amounted to $297,582.
The lease contract includes those of the land and building, with their residual values being assumed
by the landlord. The rental is regularly adjusted based on the current market price. Based on the
risks and rewards of leased assets not transferred to the Company, the Company recognized the lease
as operating lease.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
43
(p) Employee benefits
(i) Defined benefit plans
Reconciliation of defined benefit obligations at present value and plan assets at fair value were
as follows:
Present value of defined benefit obligations
Fair value of plan assets
Net defined benefit liabilities
December
31, 2019
(1,270,206)
December
31, 2018
(1,246,221)
626,953
624,640
(643,253)
(621,581)
$
$
The Company makes defined benefit plan contributions to the pension fund account with Bank
of Taiwan that provides pensions for employees upon retirement. The plans (covered by the
Labor Standards Law) entitle a retired employee to receive retirement benefits based on years
of service and average salary for the six months prior to retirement.
1)
Composition of plan assets
The Company allocates pension funds in accordance with the Regulations for Revenues,
Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds
are managed by the Labor Pension Fund Supervisory Committee. With regard to the
utilization of the funds, minimum earnings in the annual distributions on the final
financial statements shall be no less than the earnings attainable from the amounts
accrued from two-year time deposits with interest rates offered by local banks.
The balance of the Company’ s labor pension reserve account in the Bank of Taiwan
amounted to $620,933 (excluding the ending balance of interest receivable) as of
December 31, 2019. For information on the utilization of the labor pension fund assets
including the asset allocation and yield of the fund, please refer to the website of the
Bureau of Labor Funds, Ministry of Labor.
2) Movements in the present value of the defined benefit obligations
The movements in the present value of defined benefit obligations for the Company were
as follows:
Defined benefit obligations on January 1
$
(1,246,221)
2019
Current service costs and interest
Remeasurements of net benefit liabilities
Benefit paid by the plan
(21,108)
(53,073)
50,196
2018
(1,220,613)
(22,168)
(37,000)
33,560
Defined benefit obligations on December 31
$
(1,270,206)
(1,246,221)
3) Movements of the fair value of defined benefit plan assets
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
44
The movements in the fair value of the defined benefit plan assets for the Company were
as follows:
2019
2018
Fair value of plan assets on January 1
$
Expected return on plan assets
Remeasurements of net benefit plan assets
Contributions paid by the employer
Benefits paid by the plan
Fair value of plan assets on December 31
$
624,640
7,875
20,428
24,206
(50,196)
626,953
608,482
8,141
16,811
24,766
(33,560)
624,640
4)
Expenses recognized in profit or loss
The expenses recognized in profit or loss for the Company were as follows:
2019
2018
Current service cost
Net interest on the net defined benefit liability
(asset)
Cost of sales
Selling expenses
Administrative expenses
Research and development expenses
$
$
$
$
5,314
7,919
13,233
517
631
3,239
8,846
13,233
5,635
8,392
14,027
436
745
3,395
9,451
14,027
5)
Actuarial assumptions
The following were the Company’s principal actuarial assumptions at the reporting date:
Discount rate
Future salary increase rate
December 31,
2019
0.90%
December 31,
2018
1.30%
3.00%
3.00%
The expected allocation payment made by the Company to the defined benefit plans for
the one year period after the reporting date is $24,554.
The weighted-average lifetime of the defined benefit plan is 9.9 years.
6)
Sensitivity analysis
If the main actuarial assumptions had changed, the impact on the present value of the
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
45
defined benefit obligation shall be as follows:
December 31, 2019
Discount rate
Future salary increasing rate
December 31, 2018
Discount rate
Future salary increasing rate
Effects to the defined
benefit obligation
Increased
0.25%
Decreased
0.25%
(30,821)
31,239
(31,218)
31,779
31,967
(30,287)
32,390
(30,797)
Reasonably possible changes at the reporting date to one of the relevant actuarial
assumptions, holding other assumptions constant, would have affected the defined
benefit obligation by the amounts shown above. The method used in the sensitivity
analysis is consistent with the calculation on the net defined benefit liabilities in the
balance sheets.
The method and assumption used in the sensitivity analysis is consistent with prior
period.
(ii) Defined contribution plans
The Company allocates 6% of each employee’s monthly wages to the labor pension personal
account at the Bureau of Labor Insurance in accordance with the provisions of the Labor
Pension Act. Under these defined contribution plans, the Company allocates the labor pension
at a specific percentage to the Bureau of the Labor Insurance without additional legal or
constructive obligations.
The Company recognized the pension costs under the defined contribution method amounting
to $335,403 and $306,912 for the years ended December 31, 2019 and 2018, respectively.
Payment was made to the Bureau of Labor Insurance.
(q)
Income taxes
(i)
Income tax expenses
1)
The amount of income tax for the years ended December 31, 2019 and 2018, was as
follows:
Current tax expense
Recognized during the period
Undistributed earnings additional tax
Tax credit of investment
2019
2018
$
934,581
274,317
1,010,943
-
(438,511)
(183,384)
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
46
Deferred tax expense
Recognition and reversal of temporary differences
Adjustment in tax rate
Income tax expense
$
770,387
827,559
97,393
-
97,393
867,780
292,600
(75,208)
217,392
1,044,951
2)
The amount of income tax recognized in other comprehensive income for the years ended
December 31, 2019 and 2018, was as follows:
Items that will not be reclassified subsequently to profit
or loss:
Remeasurement of defined benefit obligation
Unrealized gains (losses) on equity instruments at fair
value through other comprehensive income
2019
2018
$
$
(6,529)
(32,146)
9,585
3,056
(37,780)
(69,926)
3)
The income tax expense that was reconciled between the actual income tax expense and
profit before tax for the years ended December 31, 2019 and 2018, was as follows:
Profit before tax
Income tax calculated based on tax rate
Undistributed earnings additional tax
Adjustment in tax rate
Estimated tax effect of tax exemption on investment
income, net
Realized investment loss
Investment tax credit
Changes in temporary differences
Adjustment of estimated difference and other
$
$
2019
7,823,679
1,564,736
274,317
-
(55,294)
(25,237)
(438,511)
(211,637)
(240,594)
2018
9,958,316
1,991,663
-
(75,208)
(877,600)
(133,869)
(183,384)
(56,660)
380,009
Income tax expense
$
867,780
1,044,951
(ii) Deferred tax assets and liabilities
Changes in the amount of deferred tax assets and liabilities for 2019 and 2018 were as follows:
Exchange
differences on
translation
Refund
liabilities
Contract
liabilities
Unrealized
exchange
losses, net
Others
Total
Deferred tax assets:
Balance on January 1, 2019
$
9,823
178,025
164,955
Recognized in profit or loss
-
(57,422)
(105,526)
106,526
563,739
301,251
(1,092)
760,580
399,699
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
47
Recognized in other
comprehensive income
Balance on December 31, 2019 $
Balance on January 1, 2018
$
Recognized in profit or loss
Recognized in other
comprehensive income
9,823
9,823
-
-
-
-
120,603
259,546
-
59,429
176,283
-
670,265
365,646
(81,521)
(11,328)
(259,120)
-
-
-
Balance on December 31, 2018 $
9,823
178,025
164,955
106,526
6,529
306,688
253,814
15,291
32,146
301,251
6,529
1,166,808
1,065,112
(336,678)
32,146
760,580
Unrealized
exchange
gains, net
Others
Total
Deferred tax liabilities:
Balance on January 1, 2019
$
-
(386,555)
Recognized in profit or loss
(497,092)
-
Recognized in other
comprehensive income
Balance on December 31, 2019
Balance on January 1, 2018
Recognized in profit or loss
Recognized in other
comprehensive income
Balance on December 31, 2018
$
$
$
-
(497,092)
(171,868)
171,868
(9,585)
(396,140)
(371,753)
(52,582)
-
-
37,780
37,780
(386,555)
(386,555)
(386,555)
(497,092)
(9,585)
(893,232)
(543,621)
119,286
(iii) Unrecognized deferred tax assets
Deferred tax assets have not been recognized in respect of the following items:
Tax effect of deductible temporary differences
December
31, 2019
December
31, 2018
$
398,919
362,131
The Company assesses and considers that some of the income tax reduction items may be
unrealized, hence they are not recognized as deferred tax assets.
(iv) Unrecognized deferred tax assets and liabilities related to investments in subsidiaries
The temporary differences associated with investment in subsidiaries were not recognized as
deferred income tax assets and liabilities as the Company has the ability to control the reversal
of these temporary differences which are not expected to reverse in the foreseeable future.
As of December 31, 2019 and 2018, the aggregate deductible temporary differences relating to
investments in subsidiaries not recognized as deferred tax assets amounted to $1,894,891 and
$2,162,721, respectively.
As of December 31, 2019 and 2018, the aggregate taxable temporary differences relating to
investments in subsidiaries not recognized as deferred tax liabilities amounted to $53,620,982
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
48
and $54,430,545, respectively.
(v) Examination and approval
The Company’ s tax returns for the year through 2017 were assessed by the Taipei National
Tax Administration.
(r) Capital and other equities
As of December 31, 2019 and 2018, the Company’ s authorized common stock consisting of
6,000,000 thousand shares with a par value of 10 New Taiwan dollar per share amounted to
$60,000,000 of which 4,407,147 thousand shares were issued. All issued shares were paid up upon
issuance.
(i) Ordinary shares
In 2015, the Company issued its employee restricted shares amounting to $493,600, wherein
the amount of $120,450 had been cancelled due to failure in meeting the vested requirements
in the year ended December 31, 2018. As of December 31, 2018, the registration procedure
had been completed.
(ii) Capital surplus
The balances of capital surplus were as follows:
Additional paid-in capital
Treasury share transactions
December
31, 2019
December
31, 2018
$
6,302,490
2,481,885
7,183,919
2,421,864
Difference between consideration and carrying amount arising
from acquisition or disposal of subsidiaries
Recognition of changes in ownership interests in subsidiaries
Changes in equity of associates and joint ventures accounted
36,766
59,115
36,766
15,642
for using equity method
279,003
274,243
$
9,159,259
9,932,434
In accordance with the ROC Company Act, realized capital reserves can only be used to
increase the common stock or distributed as cash dividends after offsetting losses. The
aforementioned capital reserves include share premiums and donation gains. In accordance
with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be
reclassified under share capital shall not exceed 10% of the actual share capital amount.
The Company’s shareholders’ meeting held on June 21, 2019 and June 22, 2018, approved to
distribute the cash dividend of $881,429 (representing 0.2 New Taiwan dollars per share), by
using the additional paid-in capital.
A resolution was approved during the Board of Directors’ meeting held on March 30, 2020 to
distribute the cash dividend of $881,429, with representing 0.2 New Taiwan dollars per share,
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
49
by using the additional paid-in capital. The related information can be accessed through the
Market Observation Post system website after the Board of Directors’ meeting.
(iii) Retained earnings
Based on the Company’s articles of incorporation amended on June 21, 2019, if there is any
profit after closing of books in a given year, the Company shall first defray tax due, cover
accumulated losses and set aside ten percent of it as legal reserve and then set aside or reverse
a special reserve in accordance with laws and regulations. The balance of earnings available
for distribution is composed of the remainder of the said profit and the unappropriated retained
earnings of previous years. The Board of Directors may set aside a certain amount to cope with
the business operation conditions, and shall prepare the proposal for distribution of the balance
amount thereof after a resolution has been adopted and then allocated by the Board of
Directors. The Company authorizes the Board of Directors to distribute all or part of the
dividends and bonuses, capital surplus or legal reserve in cash after a resolution has been
adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the
total number of directors; and in addition thereto a report of such distribution shall be
submitted to the General shareholders’ meeting.
Based on the Company’s articles of incorporation before amended on June 21, 2019, if there is
any profit after closing of books in a given year, the Company shall first defray tax due, cover
accumulated losses and set aside ten percent of it as legal reserve and then set aside or reverse
a special reserve in accordance with laws and regulations. The balance of earnings available
for distribution is composed of the remainder of the said profit and the unappropriated retained
earnings of previous years. The earnings appropriation proposal to distribute dividend and
bonus shall be proposed by the Board of Directors and approved by the General Shareholders
Meeting. The rest of the unappropriated retained earnings shall be reserved.
The lifecycle of the industry of the Company is in the growing stage. To consider the need of
the Company for the future capital, capital budget, long-term financial planning, domestic and
foreign competition, the need of shareholders for cash flow and other factors, if there is any
profit after close of books, the dividend and bonus to be distributed to shareholdres shall not be
less than thirty percent of profit after tax for such year and the cash dividend allocated by the
Company each year shall not be lower than ten percent of the total dividend (including cash
and share dividend) for such year.
According to the law, when there is a deduction from stockholders' equity (excluding treasury
stock and unearned employee benefit) during the year, an amount equal to the deduction item
is set aside as a special reserve before the earnings are appropriated. A special reserve is made
available for earning distribution only after the deduction of the related shareholders’ equity
has been reversed.
1)
Legal reverse
When a company incurs no loss, it may, in pursuant to a resolution to be adopted by the
shareholders’ meeting as required, distribute its legal reserve by issuing new shares and
distributing stock dividends or distributing cash to shareholders. Only the portion of the
legal reserve which exceeds 25% of the paid-in capital may be distributed.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
50
2)
Special reverse
In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a
portion of current earnings and previous unappropriated earnings shall be set aside as a
special reserve during earnings distribution. The amount to be set aside should equal the
total amount of contra accounts that are accounted for as deductions to other equity
interests. A portion of previous unappropriated earnings shall be set aside as a special
reserve, which should not be distributed, to account for cumulative changes to other
equity interests pertaining to prior periods. The special reserve shall be made available
for appropriation when the net deductions of other equity interests are reversed in the
subsequent periods.
3)
Earnings distribution
Earnings distribution for 2018 and 2017 was approved by the shareholders during their
annual meeting held on June 21, 2019 and June 22, 2018, respectively. The relevant
information was as follows:
2018
2017
Amount
per share
Total
amount
Amount
per share
Total
amount
Cash dividends distributed to
common shareholders
$
1.0
4,407,147
1.0
4,407,147
Earnings distribution for 2019 was approved by the Board of Directors on March 30,
2020. The relevant information was as follows:
2019
Amount
per share
Total
amount
Cash dividends distributed to common shareholders from
the unappropriated earnings
$
1.0
4,407,147
The related information of the earnings distribution for the year ended December 31,
2019, can be accessed through the Market Observation Post System website after the
related meeting.
(iv) Treasury stock
The subsidiaries of the Company did not sell the ordinary shares of the Company in the years
ended December 31, 2019 and 2018. As of December 31, 2019, Panpal and Gempal,
subsidiaries of the Company, held 50,017 thousand shares of ordinary shares of the Company,
recorded as the Company’s treasury stock, with a book value of 17.6 New Taiwan dollars per
share. The total cost was $881,247. The fair value of the ordinary shares of the Company was
18.85 and 17.45 New Taiwan dollars per share as of December 31, 2019 and 2018,
respectively.
Pursuant to the Securities and Exchange Act, the number of treasury shares purchased cannot
exceed 10% of the number of shares issued. The total purchase cost cannot exceed the sum of
retained earnings, paid-in capital in excess of par value and realized capital surplus. The shares
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
51
purchased for the purpose of transferring to employees shall be transferred within three years
from the date of share repurchase. Those not transferred within the said limit shall be deemed
as not issued by the Company and it should be cancelled. Furthermore, treasury stock cannot
be pledged for debts, and treasury stock does not carry any shareholder rights until it is
transferred.
(v) Other equity interests (net-of-taxes)
Exchange
differences on
transaction of
foreign operation
financial
statements
Unrealized gain
(loss) from
financial assets at
fair value through
other
comprehensive
income
Unearned
compensation
for restricted
employee shares
and others
Balance on January 1, 2019
$
(1,852,952)
(5,606,436)
The Company
Subsidiaries
Associates
(1,620,812)
4,936,223
(52,530)
(268,686)
252,170
111,280
Balance on December 31, 2019
$
(3,794,980)
(306,763)
Balance on January 1, 2018
(3,477,376)
(5,847,823)
The Company
Subsidiaries
Associates
1,853,763
(34,596)
(67,150)
401,300
(162,189)
(125,317)
Balance on December 31, 2018
$
(1,852,952)
(5,606,436)
-
-
-
-
-
-
(s)
Share-based payment
Total
(7,459,388)
3,315,411
(1,706)
197,934
(157,406)
(1,706)
(4,103,449)
(79,856)
(9,405,055)
79,856
1,899,023
334,150
(287,506)
(7,459,388)
At the meeting held on June 20, 2014, the Company’s Shareholders’ Meeting adopted a resolution to
issue 100,000 thousand new shares of employee restricted stock with no consideration to those full
time employees who meet certain requirements. The first issuance of 50,000 thousand shares had
been approved by the FSC on October 30, 2014. Moreover, the Company’ s Board of Directors
resolved to issue 49,980 thousand shares on January 22, 2015, and 49,360 thousand shares had
actually been issued, in which the effective date of the share issuance was on February 25, 2015.
40%, 30% and 30% of the aforementioned restricted shares are vested, respectively, when the
employees continue to provide service for at least 2 years, 3 years and 4 years from the registration
and effective date and in the meantime, meet the performance requirement. After the issuance, the
restricted shares are kept by a trust, which is appointed by the Company, before they are vested.
These restricted shares shall not be sold, pledged, transferred, gifted or by any other means of
disposal to third parties during the custody period. The voting rights of these shares are executed by
the custodian, and the custodian shall act based on law and regulations. If the shares remain
unvested after the vesting period, the Company will purchase all the unvested shares without
consideration and cancel the shares thereafter. Restricted shares could receive cash and stock
dividends. The aforementioned cash and stock dividends are not considered as restricted.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
The information of the Company’s restricted shares (in thousands) is as follows:
Outstanding shares on January 1
Vested during the period
Canceled during the period
Outstanding shares on December 31
52
2018
23,571
(11,526)
(12,045)
-
For the year ended December 31, 2018, due to the failure in meeting the vested requirements of the
employee restricted shares, the Company reversed compensation cost amounted to $156,219 and
capital surplus － employee restricted shares amounted to $318,209. Besides, due to meet the vested
requirements of the employee restricted shares, the Company recognized capital surplus–additional
paid-in capital amounted to $155,601.
(t)
Earnings per share
The Company’s basic and diluted earnings per share are calculated as follows:
2019
2018
Basic earnings per share:
Profit attributable to ordinary shareholders of the Company
$
6,955,899
8,913,365
Weighted-average number of outstanding ordinary shares (in
thousands)
Diluted earnings per share:
4,357,130
4,356,448
Profit attributable to ordinary shareholders of the Company (after
adjustment of potential diluted ordinary shares)
$
6,955,899
8,913,365
Weighted-average number of outstanding ordinary shares of
potential diluted ordinary shares
Weighted-average number of outstanding ordinary shares (in
thousands)
Effect of potential diluted common stock
Employee compensation (in thousands)
Employee restricted shares (in thousands)
4,357,130
4,356,448
49,860
-
59,637
682
Weighted-average number of ordinary shares (after adjustment of
potential diluted ordinary shares) (in thousands)
4,406,990
4,416,767
(u) Revenue from contracts with customers
(i) Disaggregation of revenue
Primary geographical markets:
United states
2019
IT Product
Segment
$ 376,228,186
2018
IT Product
Segment
361,991,920
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
53
Netherlands
China
United Kingdom
Others
Major products：
5C related electronic products
Others
(ii) Contract balance
98,084,239
109,185,154
90,543,393
110,187,798
43,940,021
43,573,507
307,484,189
286,111,743
$ 916,280,028
911,050,122
$ 915,421,296
910,647,211
858,732
402,911
$ 916,280,028
911,050,122
Notes and accounts receivable (including
related parties)
Less: allowance for impairment
Total
Contract liabilities
December
31, 2019
$ 181,654,052
December
31, 2018
194,553,384
January
1, 2018
171,353,850
(3,634,190)
$ 178,019,862
877,822
$
3,718,560
190,834,824
1,405,452
(3,717,495)
167,636,355
1,617,626
For the details on accounts receivable and allowance for impairment, please refer to note
(6)(e).
The amount of revenue recognized for the years ended December 31, 2019 and 2018 that was
included in the contract liability balance at the beginning of the period were $1,405,452 and
$1,585,446, respectively.
The major change in the balance of contract assets and contract liabilities is the difference
between the time frame in the performance obligation to be satisfied and the payment to be
received.
(v) Employees’ and directors’ compensations
Based on the Company’ s articles of incorporation, if there is any profit in a fiscal year, the
Company’s pre-tax profits in such fiscal year, prior to deduction of compensations to employees and
directors, shall be distributed to employees as compensations in an amount of not less than two
percent (2%) thereof and to directors as compensations in an amount of not more than two percent
(2%) of such profits. In the event that the Company has accumulated losses, the Company shall
reserve an amount to offset accumulated losses. The compensations to employees as mentioned
above may be distributed in the form of stock or cash. Employees entitled to receive the said stock or
cash may include the employees of the Company’s subordinate companies pursuant to the Company
Act (Employees entitled to receive the said stock or cash may include the employees of the
Company’ s subordinate companies who meet certain conditions after the Company’ s articles of
incorporation amended on June 21, 2019).
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
54
The Company accrued and recognized its employee compensation of $731,322 and $930,857,
respectively, and directors’ compensation of $38,672 and $49,223 for the years ended December 31,
2019 and 2018, respectively. The estimated amounts mentioned above are based on the net profit
before tax without the compensations to employees and directors of each respective ending period,
multiplied by the percentage of the compensation to employees and directors, which was approved
by the management. The estimations are recorded under operating expenses and cost. The
differences between the amounts estimated and recognized in the financial statements, if any, are
accounted for as changes in accounting estimates and recognized as profit or loss in the distribution
year. If the Board of Directors approve to distribute employee compensation in the form of stock, the
number of the shares of the employee compensation is based on the closing price of the day before
the Board of Directors’ meeting, the related information can be accessed through the Market
Observation Post System website. There is no differences between the amount approved in the
Board of Directors’ meeting and those recognized in the financial statements in 2019 and 2018.
There is no differences between the amount estimated and recognized in the financial statements in
2018. The related information can be accessed through the Market observation Post System website.
(w) Non-operating income and expenses
(i) Other income
The other income for the years ended December 31, 2019 and 2018, were as follows:
Interest income
Financial assets at amortized cost
Bank deposits
Others
Dividend revenue
Overdue payable reversed as other income
Sale of expensed assets
Other revenue
2019
2018
$
$
2,992
141,195
40,420
71,778
-
275,412
122,042
653,839
9,992
316,199
6,714
212,129
37,657
162,265
142,398
887,354
(ii) Other gains and losses
The other gains and losses for the years ended December 31, 2019 and 2018, were as follows:
Losses on disposal of investments
Gains (losses) on financial assets and liabilities at fair value
through profit or loss, net
Foreign currency exchange gains (losses), net
Others
$
$
2019
8,990
2018
-
55,140
(484,552)
(501)
(420,923)
97,682
(221,786)
(1,926)
(126,030)
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
55
(x)
Financial instruments
(i)
Credit risk
1)
The carrying amount of financial assets represents the maximum amount exposed to
credit risk.
The Company’ s customers are mainly from the high-tech industry. The Company does
not concentrate on a specific customer and the sales regions are widely spread, thus there
should be no concern on the significant concentrations of accounts receivable credit risk.
And in order to mitigate accounts receivable credit risk, the Company constantly assesses
the financial status of the customers.
2)
Receivables and debt securities
Information of exposure to credit risk of notes and accounts receivable, please refer to
note (6)(e).
Other financial assets at amortized cost includes other receivables, investments in
corporate bonds and time deposits. These financial assets are considered to have low
risk, and thus, the impairment provision recognized during the period was limited to 12
months expected losses (Regarding how the financial instruments are considered to have
low credit risk, please refer to note (4)(f)). Due to the counter parties and the performing
parties of the Company’ s time deposits are financial institutions with investment grade
and above, these time deposits are considered to have low credit risk.
(ii) Liquidity risk
The following are the contractual maturities of financial liabilities. In addition to lease
liabilities, excluding estimated interest payments.
Carrying
Amount
Contractual
cash flows Within 1 year
1 ~ 2 years Over 2 years
December 31, 2019
Non-derivative financial
liabilities
Unsecured borrowings
Notes and accounts payable
Other payables
Lease liabilities-current and
non-current
December 31, 2018
Non-derivative financial
liabilities
Unsecured borrowings
Notes and accounts payable
Other payables
$
65,013,800
149,064,159
5,814,027
(65,013,800)
(149,064,159)
(5,814,027)
(57,513,800)
(149,064,159)
(5,814,027)
(1,925,000)
(5,575,000)
-
-
-
-
1,398,432
$ 221,290,418
(1,444,217)
(221,336,203)
(402,010)
(212,793,996)
(306,979)
(2,231,979)
(735,228)
(6,310,228)
$
79,701,932
155,427,659
5,044,541
$ 240,174,132
(79,701,932)
(155,427,659)
(5,044,541)
(240,174,132)
(68,801,932)
(155,427,659)
(5,044,541)
(229,274,132)
(8,600,000)
(2,300,000)
-
-
-
-
(8,600,000)
(2,300,000)
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
56
The Company is not expecting that the cash flows included in the maturity analysis could
occur significantly earlier or at significantly different amounts.
(iii) Currency risk
1)
Exposure to foreign currency risk
The Company’s significant exposure to foreign currency risk was as follows:
December 31, 2019
Exchange
rate
Foreign
currency
TWD
December 31, 2018
Exchange
rate
Foreign
currency
TWD
$ 6,580,212
29.98
197,274,756
6,889,285
30.715
211,604,389
446,859
1.0028
448,110
423,027
0.946
400,184
6,021,076
29.98
180,511,858
6,819,596
30.715
209,463,891
Financial assets
Monetary items
USD to TWD
Non-monetary items
THB to TWD
Financial liabilities
Monetary items
USD to TWD
2)
Sensitivity analysis
The Company’ s exposure to foreign currency risk arises from the translation of the
foreign currency exchange gains and losses on cash and cash equivalents, accounts
receivable, other receivables, loans and borrowings, accounts payable, and other payables
that are denominated in foreign currency. Assuming all other variable factors remain
constant, a strengthening (weakening) 5% of appreciation (depreciation) of the each
major foreign currency against the Company’ s functional currency as of December 31,
2019 and 2018, would have increased (decreased) the net profit before tax as follows.
The analysis is performed on the same basis for both periods.
USD (against the TWD)
Strengthening 5%
Weakening 5%
3)
Exchange gains and losses of monetary items
December
31, 2019
December
31, 2018
$
838,145
107,025
(838,145)
(107,025)
As the Company deals with diverse foreign currencies, gains or losses on foreign
exchange were summarized as a single amount. For the years ended December 31, 2019
and 2018, the foreign exchange losses, including both realized and unrealized, amounted
to $484,552 and $221,786, respectively.
(iv)
Interest rate analysis
The interest risk exposure from financial assets and liabilities has been disclosed in the note of
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
57
liquidity risk management.
The following sensitivity analysis is based on the risk exposure to interest rate on the
derivative and non-derivative financial instruments on the reporting date. Regarding the assets
and liabilities with variable interest rates, the analysis is on the basis of the assumption that the
amount of assets and liabilities outstanding at the reporting date were outstanding throughout
the year. The rate of change is expressed as the interest rate increase or decrease by 0.25%,
when reporting to management internally, which also represents the assessment of the
Company’s management for the reasonably possible interval of interest rate change.
Assuming all other variable factors remaining constant, if the interest rate had increased or
decreased by 0.25%, the impact to the net profit before tax would be as follows for the years
ended December 31, 2019 and 2018, which would be mainly resulted from the bank savings
and borrowings with variable interest rates.
Interest increased by 0.25%
Interest decreased by 0.25%
(v)
Fair value information
2019
2018
$
(30,454)
(30,511)
30,454
30,511
1)
The categories and fair value of financial instruments
The Company’s financial assets at fair value through profit or loss and financial assets at
fair value through other comprehensive income were measured at fair value on a
recurring basis. The following table shows the carrying amounts and fair values of
financial assets and financial liabilities, including their levels in the fair value hierarchy.
It shall not include fair value information of the financial assets and financial liabilities
not measured at fair value if the carrying amount is a reasonable approximation of fair
value and investments in equity instruments which do not have any quoted price in an
active market in which the fair value cannot be reasonably measured.
December 31, 2019
Fair Value
Book value
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit
or loss–current and non-current
Non-derivative financial assets
mandatorily measured at fair value
through profit or loss
Financial assets at fair value through
other comprehensive income
$
220,985
-
149,888
71,097
220,985
Stocks listed on domestic markets
1,614,565
1,614,565
Stocks listed on foreign markets
Stocks unlisted on domestic markets
Stocks unlisted on foreign markets
Accounts receivable
Subtotal
448,110
914,507
42,211
27,170,468
30,189,861
448,110
-
-
-
-
-
-
-
-
-
914,507
42,211
1,614,565
448,110
914,507
42,211
27,170,468
-
27,170,468
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
Financial assets measured at amortized
cost
Cash and cash equivalents
Notes and accounts receivable, net
Notes and accounts receivable due from
related parties, net
Other receivables
Guarantee deposits
Subtotal
Total
Financial liabilities measured at
amortized cost
Short-term borrowings
Notes and accounts payable
Notes and accounts payable to related
parties
Other payables
Lease liabilities–current and non-current
Long-term borrowings current portion
Long-term borrowings
Deposits received
Total
13,459,969
149,797,263
1,052,131
3,110,607
126,605
167,546,575
$ 197,957,421
$ 39,363,800
74,138,921
74,925,238
5,814,027
1,398,432
18,150,000
7,500,000
220
$ 221,290,638
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
58
-
-
-
-
-
-
-
-
-
-
-
-
-
December 31, 2018
Fair Value
Book value
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit
or loss–current and non-current
Non-derivative financial assets
mandatorily measured at fair value
through profit or loss
Financial assets at fair value through
other comprehensive income
$
308,513
284,768
Stocks listed on domestic markets
2,383,976
2,383,976
Stocks listed on foreign markets
Stocks unlisted on domestic markets
Stocks unlisted on foreign markets
Accounts receivable
Subtotal
Financial assets measured at amortized
cost
Cash and cash equivalents
Corporate bonds－current
Notes and accounts receivable, net
Notes and accounts receivable due from
related parties, net
Other receivables
400,184
896,395
51,363
22,896,211
26,628,129
20,446,378
350,000
166,600,383
1,318,230
1,418,750
400,184
-
-
-
-
-
-
-
-
-
-
-
-
-
22,896,211
-
-
-
-
-
23,745
308,513
-
-
896,395
51,363
-
-
-
-
-
-
2,383,976
400,184
896,395
51,363
22,896,211
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
59
Guarantee deposits
Subtotal
Total
Financial liabilities measured at
amortized cost
Short-term borrowings
Notes and accounts payable
Notes and accounts payable to related
parties
Other payables
Long-term borrowings current portion
Long-term borrowings
Deposits received
Total
Book value
117,500
190,251,241
$ 217,187,883
$ 51,305,682
77,050,816
78,376,843
5,044,541
17,496,250
10,900,000
266
$ 240,174,398
December 31, 2018
Level 1
-
Fair Value
Level 2
-
Level 3
-
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2)
Fair value valuation technique of financial instruments not measured at fair value
The Company estimates financial instruments that not measured at fair value by methods
and assumption as follows:
a)
Financial assets measured at amortized cost and financial liabilities measured at
amortized cost
If there is quoted price generated by transactions, the recent transaction price and
quoted price data is used as the basis for fair value measurement. However, if no
quoted prices are available, the discounted cash flows are used to estimate fair
values.
3)
Fair value valuation technique of financial instruments measured at fair value
a)
Non-derivative financial instruments
Financial instruments trade in active markets is based on quoted market prices. The
quoted price of a financial instrument obtained from main exchanges and on-the-
run bonds from Taipei Exchange can be used as a base to determine the fair value
of the listed companies’ equity instrument and debt instrument of the quoted price
in an active market.
If a quoted price of a financial instrument can be obtained in time and often from
exchanges, brokers, underwriters, industrial union, pricing institute, or authorities
and such price can reflect those actual trading and frequently happen in the market,
then the financial instrument is considered to have a quoted price in an active
market. If a financial instrument is not in accord with the definition mentioned
above, then it is considered to be without a quoted price in an active market. In
general, market with low trading volume or high bid-ask spreads is an indication of
a non-active market.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
60
The fair value of the listed company is determined by reference to the market
quotation.
The measurements on fair value of the financial instruments without an active
market are determined using the valuation technique or the quoted market price of
its competitors. Fair value measured using the valuation technique can be
extrapolated from similar financial instruments, discounted cash flow method, or
other valuation techniques which include the model used in calculating the
observable market data at the balance sheet date.
The measurement of fair value of a non-active market financial instruments held by
the Company which do not have quoted market prices are based on the comparable
market approach, with the use of key assumptions of price-book ratio multiple or
earnings multiple of comparable listed companies as its basic measurement. These
assumptions have been adjusted for the effect of discount without the marketability
of the equity securities.
b)
Derivative financial instruments
Measurement of the fair value of derivative instruments is based on the valuation
techniques that are generally accepted by the market participants. For instance,
discount method or option pricing models. Fair value of forward currency exchange
is usually determined by using the forward currency rate.
4)
Transfer from one level to another
The Company held an investment in equity of Crystalvue Medical Corporation
(“Crystalvue”), with a fair value of $18,736 and $11,287, which were classified as fair
value through other comprehensive income as of December 31, 2019 and 2018,
respectively. The investment was categorized as level 3 as of December 31, 2018,
because the shares were not listed on the exchange market and was measured by
significant unobservable inputs. In December 2019, Crystalvue’s shares were listed in the
exchange market, wherein they are actively traded. Currently, the equity shares have a
quoted market price in an active market; therefore, the category was transferred from
level 3 to level 1 as of December 31, 2019.
There was no transfer from one level to another in 2018.
5) Changes in level 3
The change in level 3 at fair value in the years ended December 31, 2019 and 2018, were
as follow:
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
61
Financial assets at
fair value through
profit or loss
Financial assets
at fair value
through other
comprehensive
income
Total
Balance on January 1, 2019
$
23,745
947,758
971,503
Total gains and losses recognized:
In profit or loss
In other comprehensive income
Purchased
Disposal
Proceeds of capital reduction of investment
Transferred out form level 3
Balance on December 31, 2019
Balance on January 1, 2018
Total gains and losses recognized:
In other comprehensive income
Purchased
Proceeds of capital reduction of investment
Balance on December 31, 2018
$
$
$
(8,244)
-
-
-
-
-
-
-
-
-
55,596
71,097
23,745
23,745
18,468
19,396
(791)
(7,615)
(20,498)
956,718
1,335,885
-
(487,950)
107,877
(8,054)
2,291,697
(8,244)
18,468
74,992
(791)
(7,615)
(20,498)
1,027,815
1,335,885
-
(487,950)
131,622
(8,054)
2,315,442
For the years ended December 31, 2019 and 2018, total gains and losses that were
included in “other comprehensive income, before tax, of equity instruments at fair value
through other comprehensive income” were as follows:
Total gains and losses recognized:
In profit or loss before tax (as “other gains and losses,
net”)
In other comprehensive income (as “other
comprehensive income, before tax, equity
instruments at fair value through other
comprehensive income”)
$
$
2019
2018
(8,244)
-
17,677
(487,950)
6)
The quantified information for significant unobservable inputs (level 3) used in fair value
measurement
The Company’ s financial instruments that use level 3 input to measure fair values
include financial assets at fair value through other comprehensive income – equity
instruments, financial assets at fair value through profit or loss – equity securities
investment and available-for-sale financial assets – equity investment.
Most of fair value measurements of the Company which are categorized as equity
investment into level 3 have several significant unobservable inputs. Significant
unobservable inputs of equity investments without quoted price are independent of each
other.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
62
The quantified information for significant unobservable inputs was as follows:
Item
Financial assets at fair
value through other
comprehensive
income － equity
investment without an
active market
Valuation
technique
Comparable
market approach
(Price-Book ratio
multiples method
and Multiples of
earnings method)
Significant
unobservable inputs
Price-Book ratio
multiples (1.4~5.64,
1.33~5.86,
respectively, on
December 31, 2019 and
2018)
Multiples of earnings
(3.12~11.24,
2.32~2.95,
respectively, on
December 31, 2019 and
2018)
Lack-of-Marketability
discount rate
(35%~85%, and
40%~82%,
respectively, on
December 31, 2019 and
2018)
Inter-relationships
between significant
unobservable inputs
and fair value
The higher the
multiple is, the
higher the fair value
will be.
The higher the
multiple is, the
higher the fair value
will be.
The higher the Lack-
of-Marketability
discount rate is, the
lower the fair value
will be.
Inapplicable
Financial assets at fair
value through other
comprehensive
income
Financial assets at fair
value through profit
or loss－investment in
private placement
Net asset value
method
Net asset value
Net asset value
method
Net asset value
Inapplicable
7)
Sensitivity analysis for fair value of financial instruments using level 3 inputs
The Company’s fair value measurement on financial instruments is reasonable. However,
the measurement would be different if different valuation models or valuation parameters
are used. For financial instruments using level 3 inputs, if the valuation parameters
changed, the impact on other comprehensive income or loss are as follows:
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
63
Input
Price-Book ratio
multiples
December 31, 2019
Financial assets at
fair value through
other comprehensive
income
December 31, 2018
Financial assets at
fair value through
other comprehensive
income
Multiples of earnings
Lack-of-Marketability
discount rate
Price-Book ratio
multiples
Multiples of earnings
Lack-of-Marketability
discount rate
Move up
or down
Other comprehensive income
Unfavorable
change
Favorable
change
5%
5%
5%
5%
5%
5%
$
$
$
$
$
$
25,552
24,531
14,707
6,589
12,746
6,548
24,924
24,935
18,629
4,913
17,648
4,925
The favorable and unfavorable changes reflect the movement of the fair value, in which
the fair value is calculated by using the different unobservable inputs in the valuation
technique. The table above shows the effects of one unobservable input, without
considering the inter-relationships with another unobservable input for financial
instrument, if there are one or more unobservable inputs.
(y)
Financial risk management
(i) Overview
The Company is exposed to the following risks arising from financial instruments:
1) Credit risk
2)
Liquidity risk
3) Market risk
In this note expressed the information on risk exposure and objectives, policies and procedures
of risk measurement and management of the Company. For detailed information, please refer
to the related notes of each risk.
(ii)Structure of risk management
The Company’ s finance management department provides business services for the overall
internal department. It sets the objectives, policies and processes for managing the risk and the
methods used to measure the risk arising from both the domestic and international financial
market operations.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
64
The Company minimizes the risk exposure through derivative financial instruments. The
Board of Directors regulated the use of derivative financial instruments in accordance with the
Company’s policy about risks arising from financial instruments such as currency risk, interest
rate risk, credit risk, the use of derivative and non-derivative financial instruments and the
investments of excess liquidity. The internal auditors of the Company continue with the
review of the amount of the risk exposure in accordance with the Company’s policies and the
risk management policies and procedures. The Company has no transactions in financial
instruments (including derivative financial instruments) for the purpose of speculation.
(iii) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a
financial instrument fails to meet its contractual obligations, and arises principally from the
Company’s receivables from customers and investment securities.
1) Accounts receivable and other receivables
The Company has established a credit policy under which each new customer is analyzed
individually for creditworthiness before the Company’ s standard payment and delivery
terms and conditions are offered. The Company’s review includes external ratings, when
available, and in some cases bank references. Purchase limits are established for each
customer, and these limits are reviewed periodically.
2)
Investments
The credit risks exposure in the bank deposits, investments with fixed income and other
financial instruments are measured and monitored by the Company’s finance department.
Since the Company’ s transaction counterparties and the contractually obligated
counterparties are banks, financial institutes and corporate organizations with good
credits, there are no compliance issues, and therefore, no significant credit risk.
3) Guarantees
Pursuant to the Company’s policies, it is only permissible to provide financial guarantees
to subsidiaries and companies that the Company has business with. As of December 31,
2019 and 2018, the guarantees provide to the subsidiaries amounted to $255,662 and
$325,179, respectively.
(iv) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities which be settled by delivering cash or another financial
asset.
The Company manages and maintains sufficient cash and cash equivalents so as to cope with
its operations and mitigate the effects of fluctuations in cash flows. The Company’ s
management supervises the banking facilities and ensures in compliance with the terms of the
loan agreements. Please refer to notes (6)(l) and (6)(m) for unused credit lines of short-term
and long-term borrowings as of December 31, 2019 and 2018.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
65
(v) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices which will affect the Company’s income or the value of its holdings of
financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimizing the return.
1) Currency risk
The Company is exposed to currency risk on sales, purchases and borrowings that are
denominated in a currency other than the functional currency of the Company, primarily
USD.
As for other monetary assets and liabilities denominated in other foreign currencies,
when short-term imbalance takes place, the Company buys or sells foreign currencies at
spot rate to ensure that the net exposure is kept on an acceptable level.
2)
Interest rate risk
The Company borrows funds on fixed and variable interest rates, which has a risk
exposure to changes in fair value and cash flow. Therefore, the Company manages the
interest rates risk by maintaining an adequate combination of fixed and variable interest
rates.
3) Other price risk
The Company is exposed to equity price risk arising from investments in listed equity
securities.
(z) Capital management
The policy of capital management made by the Board of Directors is to maintain a strong capital
base so as to stabilize the confidence of the investors, creditors and the public market and to sustain
future development of the business. Capital consists of ordinary shares, capital surplus and retained
earnings. The Board of Directors monitors the return on capital as well as the level of dividends to
ordinary shareholders.
The Company monitors the capital structure by way of periodical review the debt ratio. As of
December 31, 2019 and 2018, the debt ratio was as follows:
Total liabilities
Total assets
Debt ratio
December 31,
2019
$ 231,810,855
December
31, 2018
250,089,167
$ 337,783,488
355,812,813
69%
70%
The Company could purchase its own shares in the public market in accordance with the
corresponding rules and regulations. The timing of the purchases depends on market prices.
As of December 31, 2019, there were no changes in the Company’ s approach of capital
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
66
management.
(aa)
Investing and financing activities not affecting current cash flow
The Company’s investing and financing activities which did not affect the current cash flow in the
year ended December 31, 2019 were acquisition of right-of-use assets by leasing, please refer to note
(6)(k).
There were no investing and financing activities which did not affect the current cash flow in the
year ended December 31, 2018.
Reconciliation of liabilities arising from financial activities were as follows:
Short-term borrowings
Long-term borrowings
Lease liabilities
Guarantee deposits
Total liabilities from financing
activities
Long-term borrowings
Short-term borrowings
Guarantee deposits
Total liabilities from financing
activities
January 1,
2019
51,305,682
28,396,250
821,816
266
80,524,014
$
$
January 1,
2018
41,386,000
27,133,200
266
68,519,466
$
$
Cash flow
(11,941,882)
(2,746,250)
(414,856)
(46)
(15,103,034)
Cash flow
9,919,682
1,263,050
-
11,182,732
Non-cash
changes
-
-
991,472
-
991,472
Non-cash
changes
-
-
-
-
December
31, 2019
39,363,800
25,650,000
1,398,432
220
66,412,452
December
31, 2018
51,305,682
28,396,250
266
79,702,198
(7) Related-party transactions:
(a) Name and relationship with related parties
The following are the subsidiaries and entities that have transactions with related party during the
periods covered in the parent-company-only financial statements.
Name of related party
Panpal Technology Corp. (“Panpal”)
Gempal Technology Corp. (“Gempal”)
Hong Ji Capital Co., Ltd. (“Hong Ji”)
Hong Jin Investment Co., Ltd. (“Hong Jin”)
Zhaopal Investment Co., Ltd. (“Zhaopal”)
Yongpal Investment Co., Ltd. (“Yongpal”)
Kaipal Investment Co., Ltd. (“Kaipal”)
Country of incorporation
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
67
Name of related party
Accesstek, Inc. (“ATK”)
Arcadyan
Country of incorporation
The Company’s subsidiary
The Company’s subsidiary
Rayonnant Technology Co., Ltd. (“Rayonnant Technology”)
The Company’s subsidiary
HengHao Technology Co., Ltd. (“HengHao”)
Ripal Optortronics Co., Ltd. (“Ripal”)
Auscom Engineering Inc. (“Auscom”)
Just International Ltd. (“Just”)
Compal International Holding Co., Ltd. (“CIH”)
Compal Electronics (Holding) Ltd. (“CEH”)
Bizcom Electronics, Inc. (“Bizcom”)
Flight Global Holding Inc. (“FGH”)
High Shine Industrial Corp. (“HSI”)
Compal Europe (Poland) Sp. z o.o. (“CEP”)
Big Chance International Co., Ltd. (“BCI”)
Compal Rayonnant Holdings Limited (“CRH”)
Core Profit Holdings Limited (“CORE”)
Compalead Electronics B.V. (“CPE”)
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
Compalead Eletronica do Brasil Industria e Comercio Ltda. (“CEB”)
The Company’s subsidiary
Compal Display Holding (HK) Limited (“CDH (HK)”)
Compal Electronics International Ltd. (“CII”)
Compal International Ltd. (“CPI”)
Compal Electronics (China) Co., Ltd. (“CPC”)
Compal Optoelectronics (Kunshan) Co., Ltd. (“CPO”)
Compal System Trading (Kunshan) Co., Ltd. (“CST”)
Smart International Trading Ltd. (“Smart”)
Amexcom Electronics Inc. (“AEI”)
Mexcom Electronics, LLC (“MEL”)
Mexcom Technologies, LLC (“MTL”)
CENA Electromex, S.A. de C.V. (“CMX”) (Note)
Compal International Holding (HK) Limited (“CIH (HK)”)
Jenpal International Ltd. (“Jenpal”)
Prospect Fortune Group Ltd. (“PFG”)
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
68
Compal Electronics Technology (Kunshan) Co., Ltd. (“CET”)
Name of related party
Compal Information (Kunshan) Co., Ltd. (“CIC”)
Compal Information Technology (Kunshan) Co., Ltd. (“CIT”)
Kunshan Botai Electronics Co., Ltd. (“BT”)
Country of incorporation
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
Compal Information Research and Development (Nanjing) Co., Ltd. (“CIN”)
The Company’s subsidiary
Compal Digital Technology (Kunshan) Co., Ltd. (“CDT”)
Compower Global Service Co., Ltd. (“CGS”)
Compal Investment (Jiansu) Co., Ltd. (“CIJ”)
Compal Display Electronics (Kunshan) Co., Ltd. (“CDE”)
Etrade Management Co., Ltd. (“Etrade”)
Webtek Technology Co., Ltd. (“Webtek”)
Forever Young Technology Inc. (“Forever”)
Unicom Global, Inc. (“UCGI”)
Palcom International Corporation (“Palcom”)
Compal Communication (Nanjing) Co., ltd. (“CCI Nanjing”)
Compal Digital Communication (Nanjing) Co., Ltd. (“CDCN”)
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
Compal Wireless Communication (Nanjing) Co., Ltd. (“CWCN”)
The Company’s subsidiary
Hanhelt Communication (Nanjing) Co., Ltd. (“Hanhelt”)
Giant Rank Trading Ltd. (“GIA”)
OptoRite Inc.
MSI-ATK Otpics Holding Corporation (“MSI-ATK”)
Maitek (BVI) Corporation (“Maitek”)
Arcadyan Technology N.A. Corp. (“Arcadyan USA”)
Arcadyan Germany Technology GmbH (“Arcadyan Germany”)
Arcadyan Technology Corporation Korea (“Arcadyan Korea”)
Arcadyan Holding (BVI) Corp. (“Arcadyan Holding”)
Arcadyan do Brasil Ltda. (“Arcadyan Brasil”)
Arcadyan Technology Limited (“Arcadyan UK”)
Arcadyan Technology Australia Pty Ltd. (“Arcadyan AU”)
Zhi-pal Technology Inc. (“Zhi-pal”)
Tatung Technology Inc. (“TTI”)
AcBel Telecom Inc. (“AcBel Telecom”)
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
69
CBN
Name of related party
Speedlink Tradings Limited (“Speedlink”)
Compal Broadband Networks Belgium BVBA (“CBNB”)
Compal Broadband Networks Netherlands B.V. (“CBNN”)
Sinoprime Global Inc. (“Sinoprime”)
Country of incorporation
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
Arcadyan Technology (Vietnam) Co., Ltd. (“Arcadyan Vietnam”)
The Company’s subsidiary
Arcadyan Technology (Shanghai) corp. (“SVA Arcadyan”)
Arch Holding (BVI) Corp. (“Arch Holding”)
Compal Networking (Kunshan) Co., Ltd. (“CNC”)
Leading Images Ltd. (“Leading Images”)
Astoria Networks GmbH (“Astoria GmbH”)
Quest International Group Co., Ltd. (“Quest”)
Exquisite Electronic Co., Ltd. (“Exquisite”)
Tatung Home Appliances (Wujiang) Co., Ltd. (“THAC”)
Tatung Technology of Japan Co., Ltd.
Intelligent Universal Enterprise Ltd. (“IUE”)
Goal Reach Enterprises Ltd. (“Goal”)
Compal (Vietnam) Co., Ltd. (“CVC”)
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
Compal Development &Management (Vietnam) Co., Ltd. (“CDM”)
The Company’s subsidiary
Allied Power Holding Corp. (“APH”)
Primetek Enterprises Limited (“PEL”)
The Company’s subsidiary
The Company’s subsidiary
Rayonnant Technology (HK) Co., Ltd. (“Rayonnant Technology (HK)”)
The Company’s subsidiary
Royonnant Technology (Taicang) Co., Ltd. (“Rayonnant Technology
The Company’s subsidiary
(Taicang)”)
HengHao Holdings A Co., Ltd. (“HHA”)
HengHao Holdings B Co., Ltd. (“HHB”)
HengHao Trading Co., Ltd.
HengHao Optoelectronics Technology (Kunshan) Co., Ltd.
LUCOM Display Technology (Kunshan) Limited (“Lucom”)
Center Mind International Co., Ltd. (“CMI”)
Prisco International Co., Ltd. (“PRI”)
Compal Electronic (Sichuan) Co., Ltd. (“CIS”)
Compal Electronic (Chongqing) Co., Ltd. (“CEQ”)
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
70
Compal Electronic (Chengdu) Co., Ltd. (“CEC”)
Name of related party
Compal Management (Chengdu) Co., Ltd. (“CMC”)
Compal Smart Device (Chongqing) Co., Ltd. (“CSD”)
Billion Sea Holdings Limited (“BSH”)
Mithera Capital Io LP (“Mithera”)
Fortune Way Technology Corp. (“FWT”)
General Life Biotechnology Co., Ltd. (“GLB”)
Mactech Co., Ltd. (“Mactech”)
Rapha Bio Ltd. (“Rapha”)
Compal Electronics India Private Limited (“CEIN”)
Shennona Corporation (“Shennona”)
Unicore BioMedical Co., Ltd. (“Unicore”)
Raycore Biotech Co., Ltd. (“Raycore”)
Hippo Screen Neurotech Co., Ltd. (“Hippo Screen”)
Shennona Co., Ltd. (“Shennona TW”)
Aco Smartcare Co., Ltd. (“Aco Smartcare”)
AcBel Polytech Inc. (AcBel) and its subsidiaries (“AcBel”)
Avalue
Crownpo Technology Inc (“Crownpo”)
Kinpo Group Management Consultant Company (“Kinpo Group Management”)
Allied Circuit
LIZ Electronics (Kunshan) Co., Ltd. (“LIZ”)
Compal Connector Manufacture Ltd. (“CCM”)
Country of incorporation
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The Company’s subsidiary
The same Chairman of the
Board with the Company
An associate
An associate
An associate
An associate
An associate
A joint venture company
Note: Since the disposal of CMX in August 2019, CMX is no longer a subsidiary of the Company.
(b) Transactions with key management personnel
Key management personnel remunerations comprised:
Short-term employee benefits
Post-employment benefits
Share-based payments
2019
482,308
6,130
-
488,438
$
$
2018
487,007
5,913
(91,809)
401,111
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
71
There are no termination benefits and other long-term benefits. Please refer to note (6)(s) for
explanations related to share-based payments.
(c)
Significant related-party transactions
(i)
Sale of goods to related parties
The amounts of significant sales transactions between the Company and related parties were as
follows:
Subsidiaries
Associates
2019
1,432,433
179
2018
2,649,187
246
1,432,612
2,649,433
$
$
Sales prices for related parties were similar to those of the third-party customers. The
collection period was 45~180 days for related parties.
(ii) Purchase of goods from related parties
The amounts of significant purchase transactions between the Company and related parties
were as follows:
Subsidiaries
CSD
Others
Associates
Other related parties
Joint venture
2019
2018
$
96,242,404
296,062,338
392,304,742
410
65,573
467
$ 392,371,192
-
287,509,094
287,509,094
40
9,194
370
287,518,698
Purchase prices and payment period from related parties were similar to those from third-party
suppliers. The payment period was 60~120 days for related parties.
(iii) Product warranty service expenses
The product warranty service expenses paid to subsidiaries for the years ended December 31,
2019 and 2018, amounted to $292,959 and $278,993, respectively. As of December 31, 2019
and 2018, the unpaid warranty service expenses were record as other payables.
(iv) Technical service expense
The Company engaged its subsidiaries to research and develop of notebooks, and the related
technical service expenses for the years ended December 31, 2019 and 2018, amounted to
$170,657 and $154,412, respectively. As of December 31, 2019 and 2018, the unpaid technical
service expenses were recorded as other payables.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
72
(v) Receivable due from relate parties
The receivables arising from the transactions mentioned above, the sale of machinery and
equipment to related parties, and the purchasing of machinery, equipment and others on behalf
of the related parties as of December 31, 2019 and 2018, were as follows:
Account
Notes and accounts receivable
Other receivables
Other receivables
Other receivables
Other receivables
Less: Credit balance of investments
accounted for using equity
method
Related party
categories
December
31, 2019
December
31, 2018
$
Subsidiaries
Subsidiaries - UCGI
Subsidiaries - Others
Other related parties
Joint venture
1,052,131
581,199
27,155
62
-
1,660,547
1,318,230
502,320
18,278
-
120
1,838,948
(459,296)
1,201,251
$
(376,263)
1,462,685
As of December 31, 2019 and 2018, the Company’s investment accounted for using the equity
method in subsidiaries was a credit balance, recorded as a deduction from other receivable
(other receivables) – related party. Please refer to note (6)(h).
(vi) Payable to related parties
The payables to related parties as of December 31, 2019 and 2018, were as follows:
Account
Notes and accounts payable
Related party
categories
Subsidiaries - CIT
December
31, 2019
31,847,665
$
December
31, 2018
161,883
Notes and accounts payable
Subsidiaries - Others
43,055,746
78,205,643
Notes and accounts payable
Associates
Notes and accounts payable
Other related parties
Notes and accounts payable
Other payables
Other payables
Other payables
Joint venture
Subsidiaries
Associates
Other related parties
259
21,568
-
11
9,146
160
339,318
199,328
-
-
745
274
$
75,264,556
78,577,190
(vii) Loan to related parties
The interest rate of unsecured loans to subsidiaries was 1.20%~3.50%, and the Company had
assessed that no bad debt expenses should be recognized. As of December 31, 2019 and 2018,
the loans due to related parties were recorded as other receivables.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
73
Account
Other receivables
Other receivables
Other receivables
Less: Credit balance of investments
accounted for using the equity
method
Related party
categories
December
31, 2019
Subsidiaries - CEB
$
1,499,000
December
31, 2018
-
Subsidiaries - HengHao
Subsidiaries - UCGI
200,000
220,000
199,618
220,000
(200,000)
(118,481)
$
1,719,000
301,137
As of December 31, 2019 and 2018, the Company’s investment accounted for using the equity
method in some subsidiaries was a credit balance, recorded as a deduction from other
receivables – related parties (classified as other receivables). Please refer to note (6)(h).
(viii) Guarantees
As of December 31, 2019 and 2018, the guarantees provided to subsidiaries were $255,662
and $325,179, respectively.
(8) Pledged assets: None.
(9) Commitments and contingencies:
The details of commitments and contingencies were as follows:
(a) On May 17, 2017, Qualcomm Inc. filed a lawsuit to the Southern District Court of California, USA
against the Group for not paying the royalties of the patent license agreement. The Group has filed
counterclaims against Qualcomm Inc. based on the antitrust law in the same court on July 19, 2017.
The lawsuits was settled on April 16, 2019. The Company had compromised and both parties had
agreed to drop the lawsuits.
(b)
In August 2019, Inventec Corporation filed a lawsuit to the Taiwan Taipei District Prosecutors
Office against the Company concerning its former employees who joined the Company. This is
deemed as an act of violation according to the Trade Secret Law and Copyright Law. The Company
engaged lawyers to defend its right on this matter. Currently, the case is still in progress; therefore,
the Company cannot make any reasonable estimation regarding the possible impact on its business
operation.
(c) The Company entered into various patent license agreements with third parties, and was required to
make royalty payments of a predetermined amount periodically.
(10) Losses due to major disasters: None
(11) Subsequent events: None
(12) Other:
The employee benefits, depreciation and amortization expenses by categorized function are summarized as
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
74
follows:
By function
By item
Employee benefits
Salary
Labor and health insurance
Pension
Remuneration of directors
Others
Depreciation
Amortization
Operating
costs
2019
Operating
expenses
677,649
51,188
17,972
-
136,787
93,277
5,980
8,450,610
571,822
330,664
48,630
402,952
598,554
319,247
Operating
costs
2018
Operating
expenses
322,825
27,602
12,469
-
48,089
15,342
40,050
8,227,841
517,757
308,470
59,182
385,959
150,985
249,740
Total
9,128,259
623,010
348,636
48,630
539,739
691,831
325,227
Total
8,550,666
545,359
320,939
59,182
434,048
166,327
289,790
For the years ended December 31, 2019 and 2018, the information on the number of employees and
employee benefit expense of the Company is as follows:
Number of employees (Average salaries)
Number of directors (non-employees)
Average benefit expense of employees
Average salary expense of employees
2019
2018
7,682
11
1,387
1,190
$
$
6,903
11
1,429
1,241
Percentage of change in average salary expense of employees
(4.11)
%
(13) Other disclosures:
(a)
Information on significant transactions
The following were the information on significant transactions required by the “ Regulations
Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year
ended December 31, 2019:
(i)
Loans to other parties: Please refer to Table 1
(ii) Guarantees and endorsements for other parties: Please refer to Table 2
(iii) Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and
joint ventures): Please refer to Table 3
(iv)
Individual securities acquired or disposed of with accumulated amount exceeding the lower of
NT$300 million or 20% of the capital stock: Please refer to Table 4
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or
20% of the capital stock: None
(vi) Disposals of individual real estate with amount exceeding the lower of NT$300 million or 20%
of the capital stock: None
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Consolidated Financial Statements
75
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of
NT$100 million or 20% of the capital stock: Please refer to Table 5
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20%
of the capital stock: Table 6
(ix) Trading in derivative instruments: None.
(b)
Information on investees: Please refer to Table 7
(c)
Information on investment in Mainland China: Please refer to Table 8
(14) Segment information:
Please refer to the consolidated financial report of 2019.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
76
Table 1 Loans to other parties:
(December 31, 2019)
Name of
lender
No.
0 The
Name of
borrower
CVC
Company
0 The
UCGI
Company
0 The
HengHao
Company
0 The
CEB
Company
1 CIH
CEP
2 CPI
CVC
3 CPC
CDE
3 CPC
CIC
Account
name
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
4 CIT
4 CIT
CCI
Nanjing
Other
receivables
Rayonnant
(Taicang)
Other
receivables
5 PFG
CEB
Other
receivables
6 CPO
HengHao
Kunshan
Other
receivables
6 CPO
CIT
7 CET
BT
8 Panpal
HengHao
9 Arcadyan Acradyan
Brasil
Other
receivables
Other
receivables
Other
receivables
Other
receivables
9 Arcadyan Arcadyan
UK
Other
receivables
9 Arcadyan Arcadyan
AU
Other
receivables
9 Arcadyan Arcadyan
Vietnam
Other
receivables
10 Zhi-pal
Acradyan
Brasil
Other
receivables
11 Arcadyan
Holding
CNC
Other
receivables
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Highest balance
of financing to
other parties
during the
period
316,000
Related
party
Y
Ending
balance
-
Actual
usage
amount
during the
period
-
Range of
interest rates
during the
period
3.20%
Purposes of
fund
financing
for the
borrower
Short-term
financing
Short-term
financing
500,000
250,000
220,000
1.20%
405,369
200,000
200,000
1.2%~2.82% Short-term
financing
1,580,000
1,499,000
1,499,000
3.50%
110,600
104,930
43,471
3.50%
316,000
-
-
3.20%
1,380,900
1,291,500
1,291,500
2.20%
430,500
430,500
-
2.20%
2,212,000
2,098,600
2,098,600
2.76%
69,045
64,575
64,575
4.35%
308,950
-
-
2.50%
644,420
602,700
602,700
4.35%
645,750
645,750
-
2.20%
274,800
258,300
64,575
2.20%
600,000
600,000
600,000
1.20%
246,160
60,040
39,026
1.00%
219,730
210,140
126,400
-
284,400
270,180
34,760
33,022
-
-
-
-
1.00%
1.00%
1.00%
1.00%
523,940
510,340
510,340
1.00%
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Transaction
for business
between two
parties
Transaction
for business
between two
parties
Transaction
for business
between two
parties
Short-term
financing
Short-term
financing
Transaction
amount for
business
between two
parties
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Reasons
for
short-
term
financing
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
financing
Operating
demand
Operating
demand
Operating
demand
Operating
demand
Operating
financing
4,503,000
1,501,000
600,400
-
-
-
-
-
Operating
financing
Operating
financing
Allowance
for
bad debt
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(In Thousands of New Taiwan Dollars)
Individual
funding loan
limits
21,194,526
Maximum
limit of fund
financing
42,389,053
Note
(Note 1)
21,194,526
42,389,053
(Note 1)
21,194,526
42,389,053
(Note 1)
21,194,526
42,389,053
(Note 1)
34,545,521
34,545,521
(Note 2)
890,733
890,733
(Note 3)
2,096,417
2,096,417
(Note 4)
2,096,417
2,096,417
(Note 4)
20,539,992
20,539,992
(Note 5)
20,539,992
20,539,992
(Note 5)
435,070
435,070
(Note 6)
2,777,160
2,777,160
(Note 7)
2,777,160
2,777,160
(Note 7)
4,625,117
4,625,117
(Note 8)
5,896,656
5,896,656
(Note 9)
2,180,945
4,361,890
(Note 10)
2,180,945
4,361,890
(Note 10)
1,200,800
4,361,890
(Note 10)
480,320
4,361,890
(Note 10)
41,642
166,568
(Note 11)
2,003,996
2,003,996
(Note 12)
Collateral
Item Value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note 1:
According to the Company’ s Procedures of Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of the Company. When a short-term financing facility
with the Company is necessary, the total amount for lending to any company shall not exceed 80% of the borrower’s net worth, nor shall it be more than 50% of the Company’s lendable amount limit, and
shall be combined with the company’s endorsements/guarantees for calculation. In addition, the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company is unrestricted by
Note 2:
Note 3:
the aforesaid restriction of 80%, but the maximum amount shall not exceed 50% of the Company’s lendable limit, and shall be combined with the company’s amount of loans to others when calculating.
According to CIH’s Procedures for Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of CIH. When a shortterm financing facility with CIH is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIH’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIH, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CPI’s Procedures for Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of CPI. When a shortterm financing facility with CPI is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPI’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPI, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
77
Table 1 Loans to other parties:
(December 31, 2019)
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
According to CPC’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPC. When a shortterm financing facility with CPC is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower ’s net worth, nor shall it exceed 50% of CPC’ s total amount of capital lent, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPC, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CIT ’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CIT. When a shortterm financing facility with CIT is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower ’s net worth, nor shall it exceed 50% of CIT ’ s total amount of capital lent, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIT, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to PFG’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of PFG. When a shortterm financing facility with PFG is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of PFG’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of PFG, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CPO’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPO. When a shortterm financing facility with CPO is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPO’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPO, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to CET’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CET. When a shortterm financing facility with CET is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CET’s total amount of lendable capital, and shall be combined with the
company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CET, and shall be combined with the company’ s endorsements/guarantees for the borrower when
calculating.
According to Panpal’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Panpal. When a shortterm financing facility with Panpal is
necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of Panpal’s total amount of lendable capital, and shall be combined with the
company ’ s endorsements/guarantees for calculation. In addition, when lending to the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company, or the ultimate parent
company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited by the two aforesaid restrictions of 80%, but the maximum amount shall not exceed the of
Panpal, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
According to Arcadyan’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Arcadyan. To borrowers having business relationship
with Arcadyan, the total amount for lending the borrower shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount for the current year, nor shall it exceed 20% of the
net worth of Arcadyan. Also, the amount shall be combined with the Arcadyan ’ s endorsements/guarantees for the borrower when calculating. When a short-term financing facility is necessary, the
borrower should be Arcadyan’s investee. The total amount for lending the borrower shall not exceed 80% of the net worth of the borrower, nor shall it exceed 20% of the net worth of Arcadyan, and shall
be combined with the Arcadyan’s endorsements/guarantees for the borrower when calculating.
The total amount of loans to others shall not exceed 40% of the net worth of Zhi-pal. To borrowers having business relationship with Zhi-pal, the total amount for lending the borrower shall not exceed 80%
of the transaction amount in the last fiscal year or the expecting amount for the current year, nor shall it exceed 20% of the net worth of Zhi-pal. When a short-term financing facility is necessary, the
borrower should be Zhi-pal’s investee, and the total amount for lending the borrower shall not exceed 10% of the net worth of the borrower.
According to Arcadyan Holding’s Procedures of Lending Funds to Other Parties, the total amount of loans to others shall not exceed the net worth of Arcadyan Holding. When a short-term financing
facility is necessary, the borrower should be Arcadyan Holding’s investee. The total amount for lending the borrower shall not exceed the net worth of Arcadyan Holding, and shall be combined with the
Arcadyan Holding’s endorsements/ guarantees for the borrower when calculating.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
78
Table 2 Guarantees and endorsements for other parties:
(December 31, 2019)
Counter-party of
guarantee and
endorsement
Name of
guarantor
No.
0 The Company CEB
Name
Relationship
with the
Company
(Note 3)
Limitation on
amount of
guarantees
and
endorsements
for a specific
enterprise
26,493,158
Highest
balance for
guarantees
and
endorsements
during the
period
63,200
Balance of
guarantees
and
endorsements
as of
reporting date
59,960
Property
pledged for
guarantees
and
endorsements
(Amount)
-
Actual usage
amount
during the
period
59,960
Ratio of
accumulated
amounts of
guarantees and
endorsements to
net worth of the
latest financial
statements
0.06%
Maximum
amount
for guarantees
and endorsements
(Note 1)and(Note 4)
52,986,316
(In Thousands of New Taiwan Dollars)
Parent
company
endorsements
/guarantees to
third parties
on behalf of
subsidiary
Y
Subsidiary
endorsements
/guarantees to
third parties
on behalf of
parent
company
-
Endorsements
/ guarantees
to third
parties on
behalf of
companies in
Mainland
China
-
0 The Company CEP
(Note 2)
26,493,158
260,766
195,702
195,702
1 Arcadyan
Arcadyan
Brasil
(Note 5)
1,453,963
246,160
-
-
-
-
0.18%
52,986,316
-
4,361,890
Y
Y
-
-
-
-
Note 1:
According to the Company’ s Procedures for Endorsement and Guarantee, the total amount of endorsements/ guarantees the Company or the Group is permitted to make shall not exceed 50% of the
Company’s net worth. Endorsements/ guarantees the Company and the Group are permitted to make for a single company shall not exceed 25% of the Company’s net worth. For entities having business
relationship with the Company, the amount of endorsements/ guarantees for a single company shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount of the current
year, and shall be combined with the amount lend to others when calculating. The amount of endorsements/ guarantees permitted to make between subsidiaries whose over 90% of its voting shares are
owned, directly or indirectly, by the Company shall be no more than 10% of the net worth of the Company. The amount of endorsements/ guarantees permitted to make between directly or indirectly wholly
owned subsidiaries is not limited by the aforementioned restriction, only the maximum amount shall be no more than 25% of the net worth of the Company.
Note 2: Subsidiary whose over 50% common stock is directly owned.
Note 3: Subsidiary whose over 50% common stock is indirectly owned.
Note 4:
According to Arcadyan's Procedures for Endorsement and Guarantee, the total amount shall not exceed 40% of the net worth for latest financial statements audited or reviewed by Certified Public
Accountants, and the amount for a single company shall not exceed 1/3 of the total amount.
Note 5: Subsidiary whose 100% common stock is directly owned by Arcadyan.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
79
Table 3 Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and joint ventures):
(December 31, 2019)
Name of
holder
Category and name of security
The Company Taiwan Star
Relationship with
security issuer
‑
Kinpo Electronics, Inc. (“Kinpo”)
The same chairman
of the Company
Cal-Comp Electronics (Thailand) Public
Co., Ltd.
The same chairman
of the Company
‑
‑
‑
‑
‑
‑
‑
‑
HWA VI Venture Capital Corp.
HWA Chi Venture Capital Corp.
mProbe Ltd.
Global BioPharma, Inc.
Chen Feng Optoelectronics
PrimeSensor Technology Inc.
IIH Biomedical Venture Fund
UBS Extendible Money Mkt Cert.
Others
Total
Account name
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-non current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss and other
comprehensive income
Panpal
Compal Electronics, Inc.
The parent company Financial assets at fair value
through other comprehensive
income-non-current
Kinpo
The same chairman
of the Company
CDIB Partners Investment Holding
Corp.
‑
AcBel
The same chairman
of the Company
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
‑
‑
Taiwan Biotech Co., Ltd.
Others
Total
Gempal
Compal Electronics, Inc.
Lian Hong Art. Co., Ltd.
(In Thousands of shares/ units)
Ending balance
Shares/Units
(thousands)
98,046
Carrying
value
680,442
Holding
percentage
(%)
3%
Fair value
Note
680,442
124,044
1,593,962
9%
1,593,962
239,631
448,110
5%
448,110
290
25,397
10%
25,397
842
23,933
11%
23,933
4,000
40,920
2%
40,920
2,000
34,260
3%
34,260
6,685
97,866
11%
97,866
861
7,266
3%
7,266
2,500
24,350
8%
24,350
-
149,888
-
149,888
113,984
___________
3,240,378
31,648
596,566
1%
596,566
23,172
297,766
2%
297,766
54,000
941,220
5%
941,220
5,677
137,092
1%
137,092
4,897
134,085
3%
134,085
103,583
___________
2,210,312
The parent company Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
‑
18,369
346,262
-
346,262
2,140
65,670
8%
65,670
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
80
Table 3 Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and joint ventures):
(December 31, 2019)
Name of
holder
Category and name of security
Gempal
Global BioPharma, Inc.
Relationship with
security issuer
‑
Others
Total
Hong Ji
SUYIN Optronics Co., Ltd.
(“SUYIN Optronics”)
Hong Jin
SUYIN Optronics
Arcadyan
GeoThings Inc.
AirHop Communication Inc.
Adant Technologies Inc.
IOT EYE, Inc.
TIEF FUND L.P.
Chimei Motor Electronics Co., LTD
Total
Mactech
Taichung International Golf
Country Club
HHB
HWALLAR OPTRONICS
(Fuzhou) CO., LTD.
Mithera
Beyond Limits, Inc.
CPC
CET
CEC
CEQ
Structured deposits–SPD Bank
Yield Plus Structured Deposit
Structured deposits–SPD Bank
Yield Plus Structured Deposit
Structured deposits–Bank of
Communications Yun Tong Cai Fu,
Structured Deposit
Structured deposits–Bank of
Communications Yun Tong Cai Fu,
Structured Deposit
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
(In Thousands of shares/ units)
Ending balance
Shares/Units
(thousands)
2,000
Carrying
value
34,265
Holding
percentage
(%)
3%
Fair value
Note
34,265
2,699
___________
448,896
380
182
1%
332
160
1%
182
160
200
1,152
349
60
-
-
-
-
9%
5%
5%
14%
-
-
-
-
(Note 1)
(Note 1)
(Note 1)
(Note 1)
44,262
7%
44,262
1,650
49,500
9%
49,500
___________
93,762
7,530
-
7,530
-
19%
-
(Note 1)
873
134,910
394,013
437,840
219,070
129,647
-
-
-
-
-
134,910
394,013
437,840
219,070
129,647
-
-
-
-
-
-
Account name
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-non-
current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss-current
Financial assets at fair value
through profit or loss-current
Note 1:The carrying value is the remaining amount after deducting accumulated impairment.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
81
Table 4 Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Beginning Balance
Purchases
Sales
Others
Ending Balance
(In Thousands of New Taiwan Dollars)
Name of
counter-party
-
Relationship
with the
company
-
Shares/ Units
(thousands)
4,593
Amount
284,768
Shares/ Units
(thousands)
-
Amount
-
Shares/ Units
(thousands)
4,593
Price
307,207
Cost
307,207
Gain (loss)
on disposal
-
Shares/ Units
(thousands)
-
Name of
company
The
Company
Category and name
of security
Chipbond
The
Company
Innolux Corporation
Panpal
Chipbond
BSH
HSI
HSI
IUE
IUE
CVC
Account
name
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through other
comprehensive
income-non-
current
Financial assets
at fair value
through profit
or loss-current
Investments
accounted for
using equity
method
Investments
accounted for
using equity
method
Investments
accounted for
using equity
method
-
-
Issued for cash
Issued for cash
Issued for cash
CPC
CIT
CIT
CEC
CEQ
CEQ
CPO
CPO
CPO
CIC
CIC
CET
CET
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Financial assets
at fair value
through profit
or loss-current
Shanghai Pudong
Development
Bank
Structured deposits-
Bank of
Communications Yun
Tong Cai Fu.
Structured Deposit
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Structured deposits-
Bank of
Communications Yun
Tong Cai Fu.
Structured Deposit
Structured deposits-
Bank of
Communications Yun
Tong Cai Fu.
Structured Deposit
Structured deposits-
Industrial Bank
Structured Deposits
Structured deposits-
Bank of
Communications Yun
Tong Cai Fu.
Structured Deposit
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Bank of
Communications
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Shanghai Pudong
Development
Bank
Bank of
Communications
Bank of
Communications
Industrial Bank
Co.,Ltd
Bank of
Communications
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Shanghai Pudong
Development
Bank
Structured deposits-
The RMB "Open on
schedule" Financial
Product
Financial assets
at fair value
through profit
or loss-current
Bank of China
Structured deposits–
SPD Bank Yield Plus
Structured Deposit
Financial assets
at fair value
through profit
or loss-current
Shanghai Pudong
Development
Bank
Structured deposits-
Win-win Interest
Rate Structure RMB
Structural Deposits
Financial assets
at fair value
through profit
or loss-current
China CITIC
Bank
Structured deposits-
Bank of
Communications Yun
Tong Cai Fu.
Structured Deposit
Structured deposits-
Agricultural Bank of
China "HuiLiFeng"
customization RMB
structured deposit
Financial assets
at fair value
through profit
or loss-current
Financial assets
at fair value
through profit
or loss-current
Bank of
Communications
Agricultural Bank
of China
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
109,227
1,061,690
5,251
325,560
-
-
-
-
109,227
763,181
763,181
-
5,251
344,843
344,843
-
-
-
37,000
1,109,260
30,000
455,400
37,000
1,109,260
30,000
480,087
37,000
1,109,260
-
-
-
-
-
-
-
-
-
-
-
-
-
179,963
-
-
576,466
260,029
259,705
448,948
480,285
-
179,699
-
225,651
676,881
-
-
-
-
-
-
-
-
-
-
-
-
-
1,203,551
894,833
894,833
1,825,461
501,107
259,502
-
-
447,417
1,073,801
447,417
1,118,542
447,417
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
989,834
979,843
910,892
894,833
910,892
894,833
2,196,103
2,174,447
633,487
626,384
526,798
519,004
451,877
447,416
482,449
478,736
456,614
447,417
1,265,163
1,252,768
450,405
447,417
1,360,587
1,342,250
1,129,780
1,118,542
-
-
-
9,991
(Note 2)
16,059
(Note 2)
16,059
(Note 2)
21,656
(Note 2)
7,103
(Note 2)
7,794
(Note 2)
4,461
(Note 2)
3,713
(Note 2)
9,197
(Note 2)
12,395
(Note 2)
2,988
(Note 2)
18,337
(Note 2)
11,238
(Note 2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shares/ Units
(thousands)
-
Amount
-
-
-
-
-
37,000
1,109,260
Amount
22,439
(Note 1)
(298,509)
(Note 1)
19,283
(Note 1)
-
(Note 3)
(202,793)
(Note 3)
67,000
1,361,867
(203,384)
(Note 3)
67,000
1,385,963
333
(Note 1)
16,059
(Note 1)
16,059
(Note 1)
13,246
(Note 1)
1,998
(Note 1)
7,591
(Note 1)
2,929
(Note 1)
2,164
(Note 1)
9,197
(Note 1)
11,663
(Note 1)
2,988
(Note 1)
16,394
(Note 1)
5,482
(Note 1)
-
-
-
-
-
-
-
-
-
-
-
-
-
394,013
-
-
219,070
129,647
-
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
82
Table 4 Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Name of
company
CET
Category and name
of security
Structured deposits-
The RMB "Open on
schedule" Financial
Product
Account
name
Financial assets
at fair value
through profit
or loss-current
Name of
counter-party
Bank of China
Relationship
with the
company
-
Beginning Balance
Purchases
Sales
Others
Ending Balance
Shares/ Units
(thousands)
-
Amount
451,154
Shares/ Units
(thousands)
-
Amount
223,708
Shares/ Units
(thousands)
-
Price
667,681
Cost
671,125
Gain (loss)
on disposal
6,556
(Note 2)
Shares/ Units
(thousands)
-
Amount
2,819
(Note 1)
Shares/ Units
(thousands)
-
Amount
-
(In Thousands of New Taiwan Dollars)
CET
CET
Structured deposits-
SPD Bank Yield Plus
Structured Deposit
Financial assets
at fair value
through profit
or loss-current
Shanghai Pudong
Development
Bank
Structured deposits-
Win-win Interest
Rate Structure RMB
Structural Deposits
Financial assets
at fair value
through profit
or loss-current
China CITIC
Bank
Arcadyan Arcadyan Holding
Issued for cash
Investments
accounted for
using equity
method
-
-
-
-
-
-
-
-
-
1,297,509
1,297,509
32,780
1,221,252
27,000
823,505
-
-
-
858,447
850,092
1,307,480
1,297,509
8,355
(Note 2)
9,971
(Note 2)
-
-
-
-
-
-
(1,222)
(Note 1)
9,971
(Note 1)
-
-
437,840
-
(87,955)
(Note 3)
59,780
1,956,802
Note 1:Others were valuation gains and losses and foreign exchange gains and losses.
Note 2:Including gains and losses on disposal and foreign exchange gains and losses.
Note 3:Including share of profit (loss) accounted for using equity method and exchange differences on translation of foreign financial statements.
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
83
Table 5 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Transaction details
Transactions with terms
different from others
Notes/Accounts receivable
(payable)
(In Thousands of New Taiwan Dollars)
Purchase/
(Sale)
Sale
Amount
(195,680)
Percentage
of total
purchases/
(sales)
-
Payment terms
120 days
Unit price
Similar to non-
related parties
Payment Terms
There is no significant
difference
Sale
(962,973)
(0.1)%
90 days
Purchase
189,074,111
21.6%
120 days
Purchase
102,586,790
11.7%
120 days
Purchase
4,571,105
0.5%
120 days
Sale
Purchase
-
24,316,409
0.0%
2.8%
120天
120 days
Similar to non-
related parties
Similar to non-
related parties
Similar to non-
related parties
Similar to non-
related parties
〃
Markup based on
BCI and its
subsidiaries's cost
Purchase
19,044,223
2.2% Net 60 days from purchase Markup based on
Etrade and its
subsidiaries's cost
Purchase
34,469,915
3.9% Net 60 days from purchase Markup based on
Webtek's cost
There is no significant
difference
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
〃
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
Sale
(105,081)
-
Net 60 days from delivery Similar to non-
related parties
There is no significant
difference
Company
Name
The
Company
Counter
party
UCGI
CBN
CIH and its
subsidiaries
Nature of
relationship
Subsidiaries wholly
owned by the
Company
The Company's
subsidiaries
Subsidiaries wholly
owned by the
Company
Just and its
subsidiaries
Subsidiaries wholly
owned by the
Company
HSI and its
subsidiaries
Subsidiaries wholly
owned by the
Company
聯恆
BCI and its
subsidiaries
本公司百分之百持
Subsidiaries wholly
owned by the
Company
Etrade and its
subsidiaries
Subsidiaries wholly
owned by the
Company
Webtek
Palcom
Forever
Subsidiaries wholly
owned by the
Company
Subsidiaries wholly
owned by the
Company
Subsidiaries wholly
owned by the
Company
Just and its
subsidiaries
Webtek
With the same
ultimate parent
company
Purchase
18,139,071
2.1% Net 60 days from purchase Markup based on
Forever's cost
Sale
(24,375,017)
(19.0)% Net 60 days from delivery According to markup
Parent company
Sale
(102,586,790)
(45.0)%
120 days
pricing
Similar to non-
related parties
With the same
ultimate parent
company
Parent company
With the same
ultimate parent
company
With the same
ultimate parent
company
Sale
(6,892,761)
(34.0)% Net 60 days from delivery Similar to non-
related parties
Sale
(189,320,860)
(77.7)%
120 days
Sale
(196,173)
-
120 days
Similar to non-
related parties
Similar to non-
related parties
Sale
(9,187,778)
(20.1)% Net 60 days from delivery According to markup
pricing
Parent company
Purchase
959,522
52.0% Net 90 days from purchase
-
Parent company
Sale
(24,324,646)
(84.1)%
120 days
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
Adjustments will be
made based on demand
for funding
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
Adjustments will be
made based on demand
for funding
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
There is no significant
difference, and
adjustments will be
made based on demand
for funding if necessary
Adjustments will be
made based on demand
for funding
There is no significant
difference
Compal Electronic,
Inc.
Forever
CIH and its
subsidiaries
Compal Electronic,
Inc.
CEB
Forever
CBN
BCI and its
subsidiaries
Compal Electronic,
Inc.
Compal Electronic,
Inc.
CEB
With the same
ultimate parent
company
Sale
(1,962,595)
(7.0)%
120 days
Markup based on
BCI and its
subsidiaries's cost
According to markup
pricing
Adjustments will be
made based on demand
for funding
There is no significant
difference
Percentage
of total
notes/accounts
receivable
(payable)
-
Ending
Balance
45,158
Note
330,670
0.2%
(51,022,067)
(34.2)%
(6,799,206)
(4.6)%
(2,369,841)
(1.6)%
-
(7,460,959)
(5.0)%
0.0% (Note 2)
(5,904,962)
(4.0)%
(556,913)
(0.4)%
22,720
(778,369)
-
6,799,206
-
51,022,056
51,912
-
(0.5)%
20.0%
37.8%
-
-
-
-
-
(331,111)
(64.0)%
7,460,959
78.4%
772,909
4.7%
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
84
Table 5 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
(For the year ended December 31, 2019)
Transaction details
Transactions with terms
different from others
Notes/Accounts receivable
(payable)
(In Thousands of New Taiwan Dollars)
Company
Name
Webtek
Counter
party
Compal Electronic,
Inc.
Nature of
relationship
Parent company
Purchase/
(Sale)
Sale
Amount
(34,469,915)
Percentage
of total
purchases/
(sales)
(100.0)% Net 60 days from delivery According to markup
Payment terms
Unit price
pricing
Purchase
10,091,875
29.0% Net 60 days from purchase According to markup
pricing
Purchase
24,375,017
71.0% Net 60 days from purchase According to markup
pricing
Percentage
of total
notes/accounts
receivable
(payable)
Note
Ending
Balance
556,913
100.0%
-
-
-
-
Payment Terms
Adjustments will be
made based on demand
for funding
Adjustments will be
made based on demand
for funding
Adjustments will be
made based on demand
for funding
Purchase
1,944,054
17.1%
120 days
Similar to non-
related parties
There is no significant
difference
(765,855)
(47.8)%
Purchase
202,987
1.8%
120 days
Similar to non-
related parties
There is no significant
difference
(51,677)
(3.2)%
Sale
(10,091,875)
(35.0)% Net 60 days from delivery According to markup
pricing
Parent company
Sale
(19,044,223)
(65.0)% Net 60 days from delivery According to markup
pricing
Parent company
Sale
(18,139,071)
(85.0)% Net 60 days from delivery According to markup
pricing
CIH and its
subsidiaries
JUST and its
subsidiaries
With the same
ultimate parent
company
With the same
ultimate parent
company
Purchase
9,187,778
43.0% Net 60 days from purchase Similar to non-
related parties
Purchase
6,892,761
32.0% Net 60 days from purchase Similar to non-
related parties
Adjustments will be
made based on demand
for funding
Adjustments will be
made based on demand
for funding
Adjustments will be
made based on demand
for funding
Adjustments will be
made based on demand
for funding
Adjustments will be
made based on demand
for funding
-
-
5,904,962
100.0%
778,369
100.0%
-
-
-
-
Parent company
Purchase
195,680
68.2%
120 days
Similar to non-
related parties
There is no significant
difference
(45,124)
(86.5)%
Parent company
Purchase
105,081
100.0% Net 60 days from purchase Similar to non-
related parties
There is no significant
difference
(22,720)
-
Parent company
Sale
(4,571,105)
(100.0)%
120 days
Similar to non-
related parties
Adjustments will be
made based on demand
for funding
Arcadyan's subsidiary
Sale
(1,465,691)
(5.0)% Net 120 days from delivery
Arcadyan's subsidiary
Sale
(2,992,401)
(11.0)% Net 60 days from the end of
the month of delivery
Arcadyan's subsidiary
Sale
(2,444,741)
(9.0)% Net 45 days from the end of
the month of delivery
Arcadyan's subsidiary Purchase
11,451,395
31.0% Net 45 days from the end of
the month of delivery
Arcadyan's subsidiary Purchase
1,026,793
(3.0)% Net 180 days from the end of
Sale
(11,451,395)
(100.0)% Net 45 days from the end of
the month of delivery
the month of delivery
Sale
(158,620)
(1.0)% Net 90 days from the end of
the month of delivery
Sale
(1,026,793)
(100.0)% Net 180 days from the end of
the month of delivery
Purchase
1,465,691
100.0% Net 120 days from delivery
Purchase
2,992,401
100.0% Net 60 days from the end of
the month of delivery
Purchase
2,444,741
100.0% Net 45 days from the end of
the month of delivery
-
-
-
According to markup
pricing
According to markup
pricing
According to markup
pricing
-
-
-
-
Sale
(378,225)
(100.0)% Net 60 days from the end of
the month of delivery
According to markup
pricing
Purchase
158,620
2.0% Net 90 days from the end of
the month of delivery
Purchase
378,225
8.0% Net 60 days from the end of
the month of delivery
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note 1: The remaining balance is the net value of commissioned processing and sales of raw material.
Note 2: The amount of other receivables (other payables) on December 31, 2019 is 362,695 thousand dollars.
Note 3: The amount of unearned sales revenue (prepayment for purchases) on December 31,2019 is 103,079 thousand dollars.
2,383,869
100.0%
392,466
6.0%
2,683,393
38.0%
634,154
9.0%
(3,117,484)
(44.0)% (Note 1)
(Note 2)
3,117,484
23,396
(Note 2)
(Note 1)
99.0% (Note 1)
1.0% (Note 1)
-
-
(392,466)
(100.0)%
(2,683,393)
(100.0)%
(634,154)
(100.0)%
(Note 3)
-
(Note 1)
(23,396)
(54.0)% (Note 1)
(Note 3)
-
(Note 1)
(Continued)
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
Etrade and its
subsidiaries
JUST and its
subsidiaries
BCI and its
subsidiaries
CIH and its
subsidiaries
CEB
Etrade and its
subsidiaries
Webtek
Compal Electronic,
Inc.
Forever
Compal Electronic,
Inc.
UCGI
Palcom
Compal Electronic,
Inc.
Compal Electronic,
Inc.
HSI and its
subsidiaries
Compal Electronic,
Inc.
Arcadyan
CNC
Acradyan
Vietnam
Acradyan
Germany
Acradyan
USA
Acradyan
AU
Acradyan
Germany
Acradyan
USA
Acradyan
AU
CNC
Acradyan
Vietnam
Arcadyan
THAC
Arcadyan
Arcadyan
Arcadyan
Arcadyan
THAC
TTI
CNC
TTI
THAC
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
With the same
ultimate parent
company
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
85
Table 6 Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
Overdue
Ending Balance
Turnover
rate
330,670
1.80
Amount
-
Action taken
-
(In Thousands of New Taiwan Dollars)
Amounts received in
subsequent period
238,935 (Note 1)
Allowance
for bad
debts
-
(December 31, 2019)
Name of Company
The Company
Counter-party
CBN
Just and its
subsidiaries
CIH and its
subsidiaries
BCI and its
subsidiaries
BCI and its
subsidiaries
Forever
Webtek
Etrade and its
subsidiaries
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Compal Electronic,
Inc.
CEB
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Compal Electronic,
Inc.
Nature of
relationship
The Company's
subsidiary
Parent company
6,799,206
28.09
Parent company
51,022,056
Parent company
With the same
ultimate parent
company
Parent company
Parent company
7,460,959
772,909
778,369
556,913
Parent company
5,904,962
3.78
5.92
2.94
1.68
9.04
3.42
HSI and its
subsidiaries
Compal Electronic,
Inc.
Parent company
2,383,869
3.80
Arcadyan
Arcadyan
Arcadyan
Arcadyan
Arcadyan Germany Arcadyan's subsidiary
Arcadyan's subsidiary
Arcadyan USA
Arcadyan AU
Arcadyan's subsidiary
Arcadyan Vietnam Arcadyan's subsidiary
Arcadyan
TTI
Arcadyan's subsidiary
CNC
Arcadyan
With the same
ultimate parent
company
Note 1:Balance as of March 13, 2020.
Note 2:Balance as of February 21, 2020.
Note 3:Other receivables due to processing and sales of raw material.
Note 4:Other receivables due to processing.
392,466
2,683,393
634,154
362,695
(Note 3)
55,769
(Note 3)
3,117,484
(Note 4)
2.45
2.15
3.59
2.11
18.18
3.51
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,224,612 (Note 1)
48,763,927 (Note 1)
7,282,087 (Note 1)
197,195 (Note 1)
-
-
(Note 1)
(Note 1)
5,843,969 (Note 1)
-
(Note 1)
75,366 (Note 2)
708,279 (Note 2)
509,314 (Note 2)
(Note 2)
-
18,864 (Note 2)
450,187
(Note 2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
86
Table 7 The following is the information on investees for the year ended December 31, 2019 (excluding information on investees in Mainland China):
(December 31, 2019)
(In Thousands of New Taiwan Dollars/ shares)
Investor
Company
Investee
Company
The Company Bizcom
Main Businesses
and Products
Milpitas, USA Warranty services and
Location
December 31,
2019
December 31,
2018
36,369
36,369
Shares
100
Percentage
of
Ownership
100%
Carrying
Value
446,195
Net income
(losses) of
investee
Share of
profits/losses of
investee
16,485
16,485
Note
Original Investment Amount
Ending Balance
Just
CIH
Panpal
Gempal
Kinpo Group management
consultant company (“Kinpo Group
management”)
Ripal
Unicore
marketing of LCD TVs and
notebook PCs
British Virgin
Islands
Investment
British Virgin
Islands
Investment
Taipei City
City
Taipei City
City
Taipei City
Tainan City
Taipei City
Investment
Investment
Consultation, training
services, etc.
Manufacturing of electric
appliance and audiovisual
electric products
Management&Consultant,
rental and leasing business and
wholesale and retail of medical
equipments
1,480,509
1,480,509
48,010
100%
7,954,899
209,804
209,804
1,787,680
1,787,680
53,001
100% 34,558,369
473,752
473,752
5,171,837
5,171,837
500,000
100%
5,304,500
251,199
213,221
900,036
900,036
90,000
100%
1,603,518
96,808
74,765
3,000
3,000
300
38%
4,628
237
90
(Note 1)
(Note 1)
60,000
60,000
6,000
100%
76,632
24,978
24,834
200,000
200,000
20,000
100%
145,664
(18,865)
(18,984)
Lead-Honor Optronics. Co., Ltd.
(“Lead-Honor”)
Taoyuan City Manufacturing of electric
appliance and audiovisual
electric products
42,000
42,000
2,772
42%
-
Investment
34
34
1
100%
3,533,243
-
-
-
-
CEH
Shennona Taiwan
British Virgin
Islands
Taipei City
Management&Consultant,
rental and leasing business,
wholesale and retail sale of
precision instruments and
International Trade
6,000
-
600
100%
4,292
(1,708)
(1,708)
Allied Circuit
Taoyuan City Production and sales of PCB
395,388
395,388
10,158
20%
318,932
222,022
45,327
Maxima Ventures I, Inc.
(“Maxima”)
Aco Smartcare
Lipo Holding Co., Ltd.(“Lipo”)
CPE
ATK
boards
Taipei City
Investment
1,260
1,260
126
23%
2,693
(201)
37
Hsinchu City Wholesale and retail sale of
computer software, software
design services, data
processing services, wholesale
and retail sale of electronic
materials, wholesale and retail
sale of precision instruments,
and biotechnology services
Cayman
Islands
The
Netherlands
Investment
Investment
90,000
-
100,000
52%
85,978
(10,302)
(4,022)
489,450
489,450
98
49%
508,166
(255,302)
(125,098)
197,463
197,463
6,427
100%
823,429
16,394
16,394
Hsinchu City Design, research &
202,908
202,908
899
28%
8,545
(6,575)
(1,826)
Crownpo Technology
Inc. (“Crownpo”)
Taipei City
development, and selling of
DVD, Combo, CD-RW Drives
Manufacturing, processing,
and selling resistor chips,
networking chips, diodes,
multilayer ceramic capacitors,
semiconductor devices, and
selling electronic products
149,547
149,547
3,739
33%
55,769
(49,191)
(16,347)
Hong Ji
Hong Jin
Mactech
Auscom
Arcadyan
FGH
Shennona
HSI
CEP
Investment
Taipei City
Taipei City
Investment
Taichung City Manufacturing of equipment
1,000,000
295,000
219,601
1,000,000
295,000
219,601
100,000
29,500
21,756
100%
100%
53%
1,078,453
342,169
237,496
61,267
29,774
25,927
61,267
29,774
12,703
and lighting, retailing of
equipment and international
trading
Austin, TX
USA
R&D of notebook PC related
products and components
Hsinchu City R&D, manufacturing and sales
of wireless network, integrated
household electronics, and
mobile office products
Investment
British Virgin
Islands
101,747
101,747
3,000
100%
126,700
3,919
3,919
1,325,132
1,325,132
41,305
20%
2,260,060
1,313,498
278,206
2,754,741
2,754,741
89,755
100%
4,462,874
131,815
131,815
Delaware,
USA
British Virgin
Islands
Poland
Medical care IOT business
32,665
29,558
2,600
100%
1,372
(7,150)
(7,150)
Investment
1,346,814
1,346,814
42,700
54%
541,383
(180,050)
(180,050)
Maintenance and warranty
services of notebook PCs
90,156
90,156
136
100%
17,372
2,224
2,224
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
87
Table 7 The following is the information on investees for the year ended December 31, 2019 (excluding information on investees in Mainland China):
(December 31, 2019)
Investor
Company
Investee
Company
Location
Main Businesses
and Products
Taipei City
The Company Zhaopal
Taipei City
Yongpal
Kaipal
Taipei City
Hippo Screen Neurotech Co., Ltd. Taipei City
Infinno Technology Corporation
(“Infinno”)
Hsinchu
County
HengHao
Taipei City
BCI
CBN
British Virgin
Islands
Hsinchu
County
Rayonnant
Taipei City
CRH
Acendant Private Equity
Investment Ltd. (“APE”)
Etrade
Webtek
Forever
UCGI
Palcom
Avalue Technology, Inc.
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
Taipei City
Taipei City
New Taipei
City
(In Thousands of New Taiwan Dollars/ shares)
Original Investment Amount
Ending Balance
December 31,
2019
-
-
-
42,000
December 31,
2018
1,358,000
1,188,500
510,500
-
Percentage
of
Ownership
-
-
-
70%
Shares
-
-
-
4,200
Carrying
Value
-
-
-
34,869
Net income
(losses) of
investee
Share of
profits/losses of
investee
Note
1
-
-
(10,187)
1
-
-
(7,131)
109,837
109,837
5,650
27%
17,199
(16,010)
(4,354)
5,529,757
5,329,757
20,015
100%
(485,074)
(569,058)
(569,058)
Investment
Investment
Investment
Management&Consultant,
Rental and Leasing Business,
wholesale and retail sale of
precision instruments and
International Trade
Manufacturing of electronic
components, wholesale and
retail sale of precision
instruments and electronic
materials
Manufacturing of PCs,
computer periphery devices,
and electronic components
Investment
2,636,051
2,636,051
90,820
100%
6,181,036
296,503
296,503
R&D and sales of cable
modem, digital setup box, and
other communication products
Manufacturing and sales of
PCs, computer periphery
devices, and electronic
components
Investment
Investment
Investment
Investment
Investment
Manufacturing and retail sale
of computers and electronic
components
Selling of mobile phones
Manufacturing, processing,
and import and export business
of industrial motherboards
284,827
284,827
29,060
43%
734,059
10,514
4,619
295,000
295,000
29,500
100%
62,310
24,012
22,907
377,328
377,328
12,500
100%
131,698
27,806
27,806
943,922
943,922
31,253
35%
1,061,446
205,756
71,442
1,532,029
1,532,029
46,900
65%
(606,199)
(354,085)
(311,924)
3,340
1,575
3,340
100
100%
527,529
(39,957)
(39,957)
1,575
50
100%
1,453,833
1,497
1,497
100,000
100,000
10,000
100%
(459,297)
(83,034)
(83,034)
100,000
559,189
100,000
559,189
10,000
15,024
100%
21%
105,623
646,573
(2,453)
453,494
(2,453)
99,281
CORE
GLB
British Virgin
Islands
Investment
New Taipei
City
Manufacturing and wholesale
of medical equipment
4,318,860
4,318,860
147,000
100%
7,668,192
232,282
232,282
246,860
246,860
15,000
50%
305,987
90,284
45,053
81,883,115
1,022,912
Panpal
Arcadyan
Hsinchu City
Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
279,202
180,968
8,192
4%
493,017
1,313,498
Allied Circuit
Taoyuan City Production and selling of PCB
148,263
148,263
2,927
6%
91,903
222,022
Gempal
Others
Arcadyan
Hsinchu City
boards
Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
306,655
203,500
9,279
4%
582,145
583,444
1,313,498
Allied Circuit
Taoyuan City Production and selling of PCB
53,645
53,645
3,220
6%
101,093
222,022
boards
Others
3,274
Investment
gain(losses)
recognized by
Panpal
Investment
gain(losses)
recognized by
Panpal
Investment
gain(losses)
recognized by
Gempal
Investment
gain(losses)
recognized by
Gempal
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
88
Table 7 The following is the information on investees for the year ended December 31, 2019 (excluding information on investees in Mainland China):
(December 31, 2019)
Investor
Company
Investee
Company
Hong Ji
Arcadyan
Location
Hsinchu City
Main Businesses
and Products
Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
(In Thousands of New Taiwan Dollars/ shares)
Original Investment Amount
Ending Balance
December 31,
2019
306,655
December 31,
2018
203,500
Shares
9,279
Percentage
of
Ownership
4%
Carrying
Value
583,444
Net income
(losses) of
investee
1,313,498
Share of
profits/losses of
investee
Investment
gain(losses)
recognized by
Hong Ji
Note
Allied Circuit
Taoyuan City Production and selling of PCB
12,274
12,274
1,041
2%
26,724
222,022
Hong Jin
Arcadyan
Hsinchu City
boards
Telecommunication equipment
and apparatus manufacturing,
electronic parts and
components manufacturing,
restrained telecom radio
frequency equipments and
materials import and
manufacturing
131,942
112,569
4,609
2%
274,806
1,313,498
Just
CDH (HK)
Hong Kong
Investment
1,867,679
1,867,679
62,298
100%
5,559,135
121,268
CII
CPI
CII
Smart
AEI
MEL
MTL
CMX
MEL
and MTL
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
277,165
277,165
9,245
100%
252,744
38,910
14,990
14,990
500
100%
887,886
12,474
30
30
1
100%
385
(6)
U.S.A
Sales and maintenance of LCD
TVs
29,980
29,980
1,000
100%
48,020
(256)
U.S.A
Investment
246,855
246,855
U.S.A
Investment
30
30
Mexico
Manufacturing, sales and
maintenance of LCD TVs
-
241,339
-
-
-
100%
204,349
(49,788)
100%
30
-
-
-
(12,236)
CIH
CIH (HK)
Hong Kong
Investment
2,242,579
2,242,579
74,803
100% 32,770,648
597,121
Jenpal
PFG
FWT
CCM
HSI
IUE
Goal
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
British Virgin
Islands
Investment
220,353
220,353
7,350
100%
105,192
2,742
30
30
1
100%
435,070
24,092
446,702
446,702
14,900
100%
447,152
152
152,898
152,898
5,100
51%
26,994
(57,524)
2,008,660
899,400
67,000
100%
1,361,867
(197,879)
380,746
380,746
12,700
100%
316,738
17,829
Investment
gain(losses)
recognized by
Hong Ji
Investment
gain(losses)
recognized by
Hong Jin
Investment
gain(losses)
recognized by
Just
Investment
gain(losses)
recognized by
Just
Investment
gain(losses)
recognized by
Just
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
CII
Investment
gain(losses)
recognized by
MEL and MTL
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
CIH
Investment
gain(losses)
recognized by
HSI
Investment
gain(losses)
recognized by
HSI
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
89
Table 7 The following is the information on investees for the year ended December 31, 2019 (excluding information on investees in Mainland China):
(December 31, 2019)
Investor
Company
IUE
CVC
Investee
Company
Location
Vietnam
Goal
CDM
Vietnam
Main Businesses
and Products
R&D, manufacturing, sales,
and maintenance of notebook
PCs, computer monitors, LCD
TVs and electronic
components
Construction of and investment
in infrastructure in Ba-Thien
industrial district of Vietnam
(In Thousands of New Taiwan Dollars/ shares)
Original Investment Amount
Ending Balance
December 31,
2019
2,008,660
December 31,
2018
899,400
Shares
67,000
Percentage
of
Ownership
100%
Carrying
Value
1,385,963
Net income
(losses) of
investee
(197,879)
Share of
profits/losses of
investee
Investment
gain(losses)
recognized by
IUE
Note
380,746
380,746
12,700
100%
373,914
17,829
BCI
CMI
British Virgin
Islands
Investment
2,422,984
2,422,984
80,820
100%
3,855,996
164,336
PRI
British Virgin
Islands
Investment
299,800
299,800
10,000
100%
2,325,040
132,167
CORE
BSH
British Virgin
Islands
Investment
4,407,060
4,407,060
147,000
100%
7,668,193
232,282
BSH
Mithera
Cayman
Islands
Investment
149,900
HSI
British Virgin
Islands
Investment
1,109,260
Forever
GIA
British Virgin
Islands
Selling of mobile phones
-
-
-
-
-
99%
146,594
(3,444)
37,000
46%
1,109,260
(180,050)
-
100%
-
-
Webtek
Etrade
British Virgin
Islands
Investment
749,500
749,500
25,000
35%
(205,213)
(354,085)
Unicore
Raycore
Taipei City
Animal medication retail and
wholesale
25,500
25,500
1,275
51%
17,675
(9,082)
Arcadyan
Arcadyan Holding
British Virgin
Islands
Investment
2,064,032
1,240,526
59,780
100%
1,956,802
(24,302)
Arcadyan USA
U.S.A
Sales of wireless network
products
23,055
23,055
1
100%
(250,530)
14,289
Arcadyan Germany
Germany
Technology support and sales
of wireless network products
1,125
1,125
0.5
100%
68,318
7,022
Arcadyan Korea
Korea
Sales of wireless network
products
2,879
2,879
20
100%
7,047
(310)
Zhi-Pal
Taipei City
Investment
48,000
48,000
34,980
100%
416,421
2,169
TTI
Taipei City
R&D and sales of household
digital products
308,726
308,726
25,028
61%
627,585
105,625
AcBel Telecom
Taipei City
Investment
23,000
23,000
4,494
51%
36,163
4,784
Arcadyan UK
UK
Technical support of wireless
network products
1,988
1,988
50
100%
3,170
452
Arcadyan AU
Australia
Sales of wireless network
products
1,161
1,161
50
100%
27,970
29,187
Investment
gain(losses)
recognized by
Goal
Investment
gain(losses)
recognized by
BCI
Investment
gain(losses)
recognized by
BCI
Investment
gain(losses)
recognized by
CORE
Investment
gain(losses)
recognized by
BSH
Investment
gain(losses)
recognized by
BSH
Investment
gain(losses)
recognized by
Forever
Investment
gain(losses)
recognized by
Webtek
Investment
gain(losses)
recognized by
Unicore
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
90
Table 7 The following is the information on investees for the year ended December 31, 2019 (excluding information on investees in Mainland China):
(December 31, 2019)
Investor
Company
Arcadyan
CBN
Investee
Company
Location
Hsinchu
County
Main Businesses
and Products
Sales of communication and
electronic components
Original Investment Amount
Ending Balance
December 31,
2019
December 31,
2018
11,925
11,925
Shares
533
Percentage
of
Ownership
1%
(In Thousands of New Taiwan Dollars/ shares)
Carrying
Value
Net income
(losses) of
investee
Share of
profits/losses of
investee
Note
13,581
10,514
Golden Smart Home
Technology Corp.
Taipei City
Selling of hardware and
software integration of high-
tech systems
15,692
15,692
1,229
11%
-
(36,152)
Arcadyan and
Zhi-pal
Arcadyan Brasil
Brazil
Sales of wireless network
products
81,593
81,593
968
100%
(7,767)
(22,421)
Arcadyan
Holding
Sinoprime
British Virgin
Islands
Investment
271,681
271,681
9,050
100%
188,856
(86,152)
Arch Holding
British Virgin
Islands
Investment
330,550
330,550
35
100%
871,120
57,002
TTI
Quest
Samoa
Investment
36,024
36,024
1,200
100%
77,839
10,673
TTJC
Japan
Sales of household digital
electronic products
4,130
1,341
0.3
100%
2,015
(1,550)
Quest
Exquisite
Samoa
Investment
35,123
35,123
1,170
100%
80,994
10,665
AcBel
Telecom
Leading Images
British Virgin
Islands
Investment
1,501
1,501
50
100%
13,985
4,623
Sinoprime
Arcadyan Vietnam
Vietnam
Manufacturing of wireless
network products
270,180
-
-
100%
184,443
(88,285)
Leading
Images
Astoria GmbH
Germany
Sales of wireless network
products
841
841
25
100%
13,599
4,637
Zhi-Pal
CBN
Rayonnant
APH
Hsinchu
County
Produces and sales of
communication and electronic
components
British Virgin
Islands
Investment
36,272
36,272
13,140
20%
334,669
10,514
257,454
257,454
8,651
41%
85,269
47,050
Forming Co., Ltd.
Taoyuan City R&D and manufacturing of
27,300
27,300
1,820
21%
-
-
CRH
APH
APH
PEL
electronic materials
British Virgin
Islands
Investment
British Virgin
Islands
Investment
374,750
374,750
12,500
59%
131,698
47,050
94,467
94,467
3,151
100%
36,058
(16,756)
Rayonnant(HK)
Hong Kong
Investment
539,640
539,640
18,000
100%
172,950
63,805
HHT
HHA
HHA
HHB
British Virgin
Islands
Investment
British Virgin
Islands
Investment
1,429,235
1,429,235
46,882
100%
(27,044)
(281,360)
1,405,523
1,405,523
46,882
100%
(9,895)
(281,375)
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Investment
gain(losses)
recognized by
Arcadyan
Holding
Investment
gain(losses)
recognized by
Arcadyan
Holding
Investment
gain(losses)
recognized by
TTI
Investment
gain(losses)
recognized by
TTI
Investment
gain(losses)
recognized by
Quest
Investment
gain(losses)
recognized by
AcBel Telecom
Investment
gain(losses)
recognized by
Sinoprime
Investment
gain(losses)
recognized by
Leading Images
Investment
gain(losses)
recognized by
Zhi-Pal
Investment
gain(losses)
recognized by
Rayonnant
Investment
gain(losses)
recognized by
Rayonnant
Investment
gain(losses)
recognized by
CRH
Investment
gain(losses)
recognized by
APH
Investment
gain(losses)
recognized by
APH
Investment
gain(losses)
recognized by
HHT
Investment
gain(losses)
recognized by
HHA
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
91
Table 7 The following is the information on investees for the year ended December 31, 2019 (excluding information on investees in Mainland China):
(December 31, 2019)
Investor
Company
Investee
Company
HHB
HengHao Trading Co., Ltd.
Location
British Virgin
Islands
Main Businesses
and Products
Marketing and international
trade
Original Investment Amount
Ending Balance
December 31,
2019
December 31,
2018
300
300
Shares
10
Percentage
of
Ownership
100%
(In Thousands of New Taiwan Dollars/ shares)
Carrying
Value
Net income
(losses) of
investee
Share of
profits/losses of
investee
Note
479
90
CBN
Speedlink
British Virgin
Islands
Import and export business
-
1,514
-
-
-
86
CBNB
Belgium
CBNN
The
Netherlands
The import and export
business of broad band
network products and related
components, as well as
technical support and advisory
services
The import and export
business of broad band
network products and related
components, as well as
technical support and advisory
services
6,842
6,842
20
100%
6,338
(279)
7,016
-
20
100%
6,724
-
FGH
Wah Yuen Technology Holding
Ltd. and its subsidiaries
Mauritius
Investment
2,690,870
2,690,870
95,862
37%
4,531,552
361,173
GLB
Rapha
New Taipei
City
Detectors and test strip
6,500
6,500
1,275
100%
298
(162)
Mactech
Taiwan Intelligent Robotics
Company, LTD.
Taipei City
City
Manufacturing of equipment
43,200
-
2,160
20%
39,468
(19,504)
Note 1: The carrying value had been deducted $559,812 and $321,435 of the Company’s stock held by Panpal and Gempal, respectively.
Note 2: CBN had received the capital returned from Speedlink in November 2019, however, the liquidation procedures of Speedlink has not been completed as of December 31, 2019.
(Note 2)
Investment
gain(losses)
recognized by
HHB
Investment
gain(losses)
recognized by
CBN
Investment
gain(losses)
recognized by
CBN
Investment
gain(losses)
recognized by
CBN
Investment
gain(losses)
recognized by
FGH
Investment
gain(losses)
recognized by
GLB
Investment
gain(losses)
recognized by
Mactech
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
92
Table 8 Information on investment in Mainland China:
(December 31, 2019)
(i) The names of investees in Mainland China, the main businesses and products, and other information:
Accumulated
outflow of
investment
from Taiwan
as of January
1, 2019
1,109,260
Total amount of
paid-in capital
1,109,260
Method of
investment
(Note 1)
599,600
(Note 2)
599,600
359,760
(Note 2)
359,760
258,200
(Note 2)
(Note 3)
67,890
(Note 2)
(Note 3)
29,980
(Note 2)
29,980
8,607
(Note 2)
(Note 3)
Investment flows
Outflow Inflow
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(In Thousands of New Taiwan Dollars/ shares)
Accumulated
outflow of
investment
from Taiwan
as of
December 31,
1,109,260
Net income
(losses) of the
investee
Percentage of
ownership
Investment
income
(losses)
(Note 4)
108,135
100%
108,135
Book value
2,104,710
Accumulated
remittance of
earnings in
current
period
-
599,600
(82,463)
100%
(82,463)
111,528
359,760
(86,495)
100%
(86,495)
4,633,042
-
-
50,016
100%
50,016
(194,926)
(5,369)
51%
(2,738)
(41,719)
29,980
(49,888)
100%
(49,888)
(241,226)
-
9,113
100%
9,113
(27,249)
-
-
-
-
-
-
959,360
(Note 1)
399,633
-
-
399,633
(265,239)
43%
(114,530)
372,172
-
599,600
(Note 1)
44,071
-
-
44,071
(134,637)
48%
(64,155)
362,578
-
Name of
investee
CPC
CDT
CET
CSD
Zheng Ying
Electronics
(Chongqing)
Co., Ltd.
BT
CGS
LIZ
Electronics (Kunshan)
Co., Ltd.
LIZ
Electronics (Nantong)
Co., Ltd.
Main businesses and
products
Manufacturing and
sales of monitors
Manufacturing and
sales of notebook PCs,
mobile phones, and
Digital products
Manufacturing of
notebook PCs
Manufacturing of
notebook PCs
Research &
development, and
manufacturing latest
electronic components,
precision cavity mold,
design and
manufacturing for
standard parts for
molds, and selling self
-produced products
Maintenance and
warranty service of
notebook PCs
Production and
processing
chipresistors, ceramic
capacitors, diodes, and
other latest electronic
components and
related precision
electronic equipment;
selling self-produced
products
Research &
development, and
manufacturing chip
components( chip
resistors, ceramic chip
diode； selling self-
produced products and
providing after-sales
service. Performing
wholesale and trading
business of electronic
components,
semiconductors,
special materials for
electronic components,
and spare parts
Research, manufacture
and sales of
communication
devices, mobile
phones, electronic
computer, smart watch,
and provide related
technology service
CIC
CPO
CIT
Manufacturing of
notebook PCs
Manufacturing and
sales of LCD TVs
Manufacturing of
notebook PCs
359,760
(Note 2)
359,760
362,758
(Note 1)
362,758
719,520
(Note 2)
719,520
-
-
-
-
-
-
359,760
238,365
100%
238,365
7,523,588
362,758
89,531
100%
89,531
2,777,145
719,520
601,984
100%
601,984
20,539,996
-
-
-
(Continued)
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
93
Table 8 Information on investment in Mainland China:
(December 31, 2019)
(i) The names of investees in Mainland China, the main businesses and products, and other information:
Investment flows
Outflow Inflow
Accumulated
outflow of
investment
from Taiwan
as of January
1, 2019
41,972
Total amount of
paid-in capital
41,972
Method of
investment
(Note 2)
59,960
(Note 2)
59,960
299,800
(Note 2)
152,898
467,688
(Note 2)
467,688
449,700
(Note 2)
(Note 3)
2,422,984
(Note 1)
2,422,984
2,398,400
(Note 2)
(Note 3)
-
-
-
-
-
-
-
23,984
(Note 2)
(Note 3)
-
299,800
(Note 1)
299,800
-
Name of
investee
CST
CIN
Sheng Bao Precision
Electronics (Taicang)
Co., Ltd.
CIJ
CDE
CIS
CEC
CMC
CEQ
Main businesses and
products
International trade and
distribution of
computers and
electronic components
Software and hardware
R&D of computers,
mobile phones and
electronic components
Research &
development, and
manufacturing latest
electronic components,
precision cavity mold,
design and
manufacturing for
standard parts for
molds, and selling self-
produced products
Investment and
consulting services
Manufacturing and
sales of LCD TVs
Outward investment
and consulting services
R&D and
manufacturing of
notebook PCs, tablet
PCs, digital products,
network switches,
wireless AP, and
automobile electronic
products
Corporate management
consulting, financial
and tax consulting,
investment consulting,
and investment
management
consulting services
R&D, manufacturing
and sales of notebook
PCs and related
components. Also
provides related
maintenance and
warranty services
Compal Precision
Module (Jiangsu) Co.,
Ltd.
Manufacturing and
selling of magnesium
alloy injection molding
12,291,800
(Note 2)
2,477,157
Changbao Electronic
Technology
(Chongqing) Co., Ltd.
Rayonnant (Taicang)
CCI Nanjing
CDCN
CWCN
Production and
marketing of
magnesium alloy
molding
Manufacturing and
sales of aluminum
alloy and magnesium
alloy products
Manufacturing and
processing of mobile
phones and tablet PCs
Manufacturing and
processing of mobile
phones and tablet PCs
Manufacturing and
processing of mobile
phones and tablet PCs
1,798,800
(Note 2)
343,451
539,640
(Note 2)
374,750
659,560
(Note 1)
659,560
173,884
(Note 1)
173,884
1,469,020
(Note 1)
569,620
-
-
-
-
-
-
(In Thousands of New Taiwan Dollars/ shares)
Accumulated
outflow of
investment
from Taiwan
as of
December 31,
41,972
Net income
(losses) of the
investee
Percentage of
ownership
Investment
income
(losses)
(Note 4)
(834)
100%
(834)
Book value
47,429
Accumulated
remittance of
earnings in
current
period
-
59,960
(2)
-
(2)
-
152,898
(52,865)
51%
(26,961)
31,056
467,688
(99,921)
100%
(99,921)
832,860
-
(104,887)
100%
(104,887)
799,252
2,422,984
164,336
100%
164,336
3,855,996
-
-
164,343
100%
164,343
3,825,842
20
100%
20
23,833
299,800
132,167
100%
132,167
2,325,040
2,477,157
669,692
37%
245,241
5,703,239
343,451
(273,107)
37%
(100,012)
884,827
374,750
6,381
100%
6,381
173,536
659,560
45,661
100%
45,661
(966,915)
173,884
1,484
100%
1,484
83,584
569,620
(167,898)
100%
(167,898)
261,396
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Continued)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
COMPAL ELECTRONICS, INC.
Notes to Parent-Company-Only Financial Statements
94
Table 8 Information on investment in Mainland China:
(December 31, 2019)
(i) The names of investees in Mainland China, the main businesses and products, and other information:
Name of
investee
Hanhelt
Arcadyan
SVA Arcadyan
CNC
THAC
HengHao
HengHao
Optoelectronic
Technology (Kunshan)
Co., Ltd.
(“HengHao Kunshan”)
Main businesses and
products
R&D and
manufacturing of
electronic
communication
equipment
R&D and sales of
wireless network
products
Manufacturing and
wireless network
products
Manufacturing of
household electronics
products
Production of touch
panels and related
components
Accumulated
outflow of
investment
from Taiwan
as of January
1, 2019
Investment flows
Outflow Inflow
59,960
-
Total amount of
paid-in capital
59,960
Method of
investment
(Note 1)
393,262
(Note 1)
373,749
(Note 1)
100,567
(Note 1、
10)
552,969
(Note 7)
330,550
(Note 8)
34,523
1,199,200
(Note 1)
1,193,294
-
-
-
-
(In Thousands of New Taiwan Dollars/ shares)
Net income
(losses) of the
investee
Percentage of
ownership
Investment
income
(losses)
(Note 4)
(31)
100%
(31)
Book value
2,998
Accumulated
remittance of
earnings in
current
period
-
Accumulated
outflow of
investment
from Taiwan
as of
December 31,
59,960
-
552,969
5,750
100%
5,750
127,495
330,550
57,002
100%
57,002
871,090
34,523
10,665
100%
10,665
80,484
1,193,294
(282,492)
100%
(282,492)
(159,874)
194,841
1,027
100%
1,027
132,650
-
-
-
-
-
-
-
-
-
-
-
Lucom Display
Technology (Kunshan)
Limited(“Lucom”)
Manufacturing of
notebook PCs and
related modules
449,700
(Note 2)
194,841
-
(Note 12)
(ii) Limitation on investment in Mainland China:
Names of
Company
The Company
Arcadyan
HengHao
Accumulated Investment in Mainland China
as of December 31, 2019
Investment Amounts Authorized by
Investment Commission of Ministry of
Economic Affairs
16,325,219
(US$544,537)
22,523,344 (US$751,279)
(In Thousands of USD)
Limitation on investment in Mainland China by
Investment Commission of Ministry of Economic
Affairs
(Note 6)
(Note 5)
918,042
1,405,223
(US$30,581)
(US$46,872)
918,042 (US$30,581)
1,405,223 (US$46,872)
6,542,836
(Note 13)
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Indirectly investment in Mainland China through companies registered in the third region.
Indirectly investment in Mainland China through an existing company registered in the third region.
Investees held by Kunshan Botai Electronics Co., Ltd. (“BT”), Compal Investment (Jiansu) Co., Ltd. (“CIJ”), Compal Electronic (Sichuan)
Co., Ltd. (“CIS”), and Compal Electronics (China) Co., Ltd. (“CPC”) through their own funds.
The investment income (loss) was determined based on the financial report audited by the CPAs.
Including the investment amount of sold or dissolved companies, including Beijing Compower Xuntong Electronic Technology Co., Ltd., VAP
Optoelectronics (NanJing) Corp., Flextronics Technology (Shanghai) Ltd., Lucom, LCFC (HeFei) Electronics Technology Co., Ltd. and the
increased investment amount form merging with Compal Communication Co., Ltd.
Note 6:
As the Company has obtained the certificate of being qualified for operating headquarters, issued by Industrial Development Bureau, MOEA,
the upper limit on investment in mainland China is not applicable.
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Arcadyan paid US$18,420 thousands and acquired 100% shares of SVA Arcadyan from Accton Asia through Arcadyan Holding in 2010.
Arcadyan paid US$8,561 thousands and acquired 100% shares of CNC from Just through Arcadyan Holding in 2007.
SVA Arcadyan decreased its capital amounting to US$15,000 thousands to offset accumulated losses in March 2009.
Arcadyan’s subsidiary, TTI, obtained the control over THAC with US$1,150 thousands on February 28, 2013 (the date of stock transferring).
The amounts in New Taiwan Dollars were translated at the exchange rates at the balance sheet date or the average exchange rate.
The Company had an accumulated investment amounting to US$7,350 thousands in the previous years. In the first half of 2014, HengHao
paid the Company and LG US$3,184 thousands and US$3,315 thousands, respectively, for organization restructure, to obtain 100%
ownership of Lucom.
Note 13:
The net equity of HengHao is negative at December 31, 2019.
(iii) Significant transactions:
For the year ended December 31, 2019, the significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of
consolidated financial statements, are disclosed in “Information on significant transactions”.