2019 Annual Report
Total Page:16
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Stock Code:4953 Wistron Information Technology and Services Corp. 2019 Annual Report Taiwan Stock Exchange Market Observation Post System: http://emops.twse.com.tw Wistron ITS annual report is available at http://www.wistronits.com Publication Date May 14, 2020 1. Name, Title and Contact Information for Company’s Spokesperson Spokesperson:Phoebe Chang Title:Vice President Tel:(02)7745-8888 E-mail:[email protected] Acting Spokesperson:Maggie Lee Title:Manager Tel:(02)7745-8888 E-mail:[email protected] 2. Address and Telephone Number of Company’s Registered Office and Headquarters Address:32F., No. 93, Sec. 1, Xintai 5th Rd., Xizhi Dist., New Taipei City 22175, Taiwan, R.O.C. Tel:(02)7745-8888 3. The Address and Contact information of Stock Transfer Agent Name:KGI Securities Address:5F, No.2, Sec.1, Chongqing S. Road, Taipei Website:htto://www.kgi.com.tw Tel:(02)2389-2999 4. The Address and Contact information of Independent Auditors in 2019 Name:Chen, Ya-Ling and Huang, Ming-Hung at KPMG Address:68F, TAIPEI 101 TOWER, No.7, Sec.5, Xinyi Road, Taipei, 110, Taiwan, R.O.C. Website:www.kpmg.com.tw Tel:(02)8101-6666 5. For more information about Wistron GDRs: None 6. For more information about Wistron: http://www.wistronits.com INDEX 1. Letter to Shareholders ........................................................................................................ 1 2. Wistron Information Technology and Services Corp. Introduction ................................... 4 3. Corporate Governance Report 3.1 Organization ................................................................................................................... 7 3.2 Directors, Supervisors and Management Team .............................................................. 11 3.3 Status of Corporate Governance .................................................................................. 21 3.4 Information Regarding the Company’s Independent Auditors .................................... 55 3.5 Replacement of Independent Auditors ........................................................................... 56 3.6 Where the Company's chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated companies of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed ............ 56 3.7 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders .................................................................................................................. 56 3.8 Relationship among the Top Ten Shareholders ............................................................ 57 3.9 Ownership of Shares in Affiliated Companies ............................................................. 58 4. Company Shares and Fund Raising 4.1 Capital and Shares ........................................................................................................ 59 4.2 Issuance of Corporate Bonds ........................................................................................ 65 4.3 Issuance of Preferred Stock .......................................................................................... 65 4.4 Issuance of Global Depositary Receipts ....................................................................... 65 4.5 Employee Stock Options .............................................................................................. 65 4.6 Restricted Stock Awards to key employees .................................................................. 65 4.7 Issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies shall specify the following matters ............ 65 4.8 Implementation of the Company’s Fund Raising and Utilization ................................ 65 5. Operational Highlights 5.1 Business Activities ....................................................................................................... 66 5.2 Market, Production and Sales ....................................................................................... 76 5.3 Taiwan Employee Data during the Past Two Years ...................................................... 83 5.4 Environmental Protection Expenditure ........................................................................ 83 5.5 Labor Relations ............................................................................................................ 83 5.6 Important Contracts ...................................................................................................... 85 6. Financial Information 6.1 Most Recent 5-Year Concise Financial Information .................................................... 86 6.2 Most Recent 5-Year Financial Analysis ....................................................................... 90 6.3 Audit Committee’s Review Report .............................................................................. 93 6.4 Consolidated Financial Statements of the Latest Year ................................................. 93 6.5 Parent Company only Financial Statements of the Latest Year ..................................... 93 6.6 Any financial distress experienced by the Company or its affiliated companies and impacts on the Company’s financial postion, in the last year up till the publication date of this annual report ........................................................................... 93 7. Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status ......................................................................................... 94 7.2 Analysis of Financial Performance .............................................................................. 95 7.3 Cash flow ...................................................................................................................... 96 7.4 Major Capital Expenditures and Impact on Financial and Business ............................ 96 7.5 Investment Policies ...................................................................................................... 97 7.6 Risk Management ......................................................................................................... 98 7.7 Other Important Matters ............................................................................................... 101 8. Special Disclosure 8.1 Summary of Affiliated Companies ............................................................................... 102 8.2 Private Placement Securities in the Most Recent Years ............................................... 105 8.3 Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years .............................................................................................................................. 105 8.4 Other matters that require additional description ......................................................... 106 9. If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the Company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, such situations shall be listed one by one ........................................................................... 107 Appendix 1: Consolidated Financial Statements of the Latest Year ...................................... 108 Appendix 2: Parent Company Only Financial Statements of the Latest Year ........................ 179 1. Letter to Shareholders Dear Shareholders, First of all, we would like to thank you for your long-term support and encouragement for Wistron ITS. A. A review of 2019 The year 2019 has been a good year for Wistron ITS. We were able to quickly respond to all the challenges we faced in 2019 during the turbulent economy, and were able to achieve a new overall revenue record, reaching more than NT$5 billion overall. Compared to 2018, we showed a 60% growth. Compared to the compound annual growth rate of 4% of the global IT service market, Wistron ITS showed an impressive 35% annual revenue growth. The main reason for this increase in revenue lies in the emerging demand of new digital services, the need for digital transformation of current companies, as well as continuously increasing demand for product localization. The overall growth in China, Taiwan, Japan and US, if broken down by industries, shows that Wistron ITS still excels in the fields of IT high-tech, finance, telecommunication and manufacturing. B. 2019 Financial Performance Consolidated revenue reached NT$5,323 million in 2019, an increase of 35 percent over NT$3,953 million in 2018. Net income was NT$413 million, increased 63 percent from the 2018 level of NT$253 million. Basic earnings per share were NT$6.23 in 2019. Gross porfit was 24.5% compared with 23.5% in 2018, while operating profit was 8.2% compared with 5.2% a year earlier. Net profit was 7.8%, an increase of 1.4% points from 6.4% in 2018. C. R&D Status Aside from traditional mainstream technology demands from our clients, currently we are also involved in innovative technologies such as AI, big data, fintech, IoT and 5G applications, etc. - 1 - Following through the big data strategy, Wistron ITS continues to