Annual Report Can Be Found at the Following Webpage (Website
Total Page:16
File Type:pdf, Size:1020Kb
Stock Code: 2031 The information in the Annual Report can be found at the following webpage (Website: http://newmops.twse.com.tw) HSIN KUANG STEEL CO., LTD 2016 Annual Report Date of Publication: April 30, 2017 1. Date of establishment January 1, 1967 2. Addresses of headquarters and factories: Headquarters: 25F, No. 97, Section 4, Chongxin Road, Sanchong District, New Taipei City :(02)2978-8888 Guanyin Plant: No. 120, Gongye 8th Road, Guanyin District, Taoyuan City :(03)483-8895 Changbin Plant: No. 1, East 9th Road, Changhua Coastal Industrial Park, Xianxi Township, Changhua County :(04)758-3113 Kaohsiung First Plant: No. 25, Bengong West Road, Benzhou Industrial Park, Gangshan District, Kaohsiung City :(07)623-2325 Kaohsiung Second Plant: No. 50, Bengong West Road, Benzhou Industrial Park, Gangshan District, Kaohsiung City :(07)623-2325 3. Stock Transfer Handling Agency Name: President Securities Corp. Department of Stock Affairs Address: B1, No. 8, Dongxing Road, Taipei City Website:http://www.pscnet.com.tw Telephone:(02)2746-3797 4. Name of the CPA Certifying the Financial Statements in the Most Recent Year Name of CPA firm: Deloitte & Touche Certifying CPA: CPAs Chao-Ling Chen and Chiang-Pao Liu Address of CPA firm: 12F, No. 156, Section 3, Minsheng East Road, Taipei City Website: http://www.deloitte.com.tw Address and telephone number of CPA firm:(02)2545-9988 5. Name of exchange house where overseas eligible securities are traded and method of inquiry on mentioned securities: N/A 6. Spokesperson Name: Chao-Lang Hsu Title: Vice General Manager of Administration Department Telephone: (02) 2978-8888 ext. 236 Email:[email protected] 7. Acting Spokesperson: Name: Teng-Kui Kao Title: Assistant Vice General Manager of 1st Operations Department, ext. 202 Telephone:(02)2978-8888 8. Company Website: http://www.hkssteel.com.tw 9. Investor relations processing unit E-mail: [email protected] 10. Market Observation Post System: http://newmops.twse.com.tw Table of Contents Item Page No. I. Letter to Shareholders ................................................................................................ 1 II. Company Profile ........................................................................................................ 3 1. Company introduction ......................................................................................... 3 2. Company history .................................................................................................. 3 III. Corporate Governance Report ............................................................................... 5 1. Company organization ......................................................................................... 5 2. Operations of the Board of Directors ................................................................... 26 3. Operations of the Audit Committee ..................................................................... 27 4. Supervisors' participation in Board meetings ...................................................... 27 5. Corporate governance for TWSE/GTSM listed companies................................. 28 6. Composition, duties, and operations of the Remuneration Committee ............... 33 7. Performance of corporate social responsibility ................................................... 35 8. Ethical corporate management and measures adopted ........................................ 45 9. Corporate governance principles, related guidelines, and the means of 51 accessing this information ................................................................................... 10. Other important information of the Company's corporate governance practices . 51 11. Implementation of internal control system ........................................................... 52 12. Penalty on the Company and its personnel or punishment imposed by the Company on personnel in violation of internal control system regulations, major deficiencies and improvement in the past year and up to the date of 53 report ................................................................................................................... 13. Important resolutions made during shareholders and Board of Directors' 53 meetings in recent years and up to the publication date of this annual report ..... 14. Dissenting or qualified opinion of directors or supervisors against an important resolution passed by the Board of Directors that is on record or stated in a written statement in the past year and up to the date of report: ........................... 54 15. Resignation or dismissal of individuals related to the financial report ................ 55 16. Information on CPA professional fees ................................................................. 55 17. The Chairman, General Manager and financial or accounting manager of the Company who had worked for the independent auditor or the affiliate in the 55 most recent year ................................................................................................... IV. Funding Status ......................................................................................................... 56 1. Company capital and shares ................................................................................ 56 2. Issuance of corporate bonds ................................................................................. 65 3. Issuance of preferred stocks (with subscription rights) ....................................... 66 Item Page No. 4. Status of issuance for global depositary receipts ................................................. 66 5. Issuance of employee stock options .................................................................... 67 6. Names of managerial officers receiving ESO and names of top ten employees receiving ESO whose eligible subscription amount exceeds NT$30 million, their exercise and subscription ............................................................................. 67 7. Restricted stock awards ....................................................................................... 68 8. Mergers, acquisitions or issuance of new shares for acquisition of shares of 69 other companies ................................................................................................... 9. Status of the capital utilization plan implementation ........................................... 69 V. Operational Highlights .............................................................................................. 70 1. Business activities................................................................................................ 70 2. Market, production and sales ............................................................................... 70 3. Employees ........................................................................................................... 84 4. Spending on environmental protections .............................................................. 84 5. Employees-employer relations ............................................................................ 85 6. Important contracts .............................................................................................. 87 VI. Financial Conditions ................................................................................................ 88 1. Condensed balance sheet and condensed consolidated income statement for the 88 last 5 years ........................................................................................................... 2. Financial analysis for the 5 most recent years ..................................................... 93 3. Supervisors' Audit Report for the most recent year ............................................. 96 4. Financial difficulties and corporate events encountered by the Company and affiliates in the past, if any ................................................................................... 97 5. Financial Statements and Independent Auditors' Report in the most recent year 97 6. The latest accountant audited consolidated financial statements for parent and 97 subsidiary companies ........................................................................................... VII. Review of Financial Conditions, Financial Performance and Risk 98 Management ................................................................................................................... 1. Review and analysis of financial conditions and performance ............................ 98 2. Cash flow review and analysis ............................................................................ 101 3. Effect of major capital spending on financial position and business operation ... 102 4. The main reason for profit or loss from the reinvestment policies in the most 102 recent year and improvement plan ....................................................................... 5. Risk analysis and assessment of the most recent year up to the publication date 102 of this report......................................................................................................... 6. Other important issues ......................................................................................... 107 Item Page No. VIII. Special Notes .......................................................................................................... 108 1. Profiles on affiliates and subsidiaries .................................................................. 108 2. Progress of private placement of