Sunonwealth Electric Machine Industry Co., Ltd. 20192019 Annualannual Reportreport
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Stock Code:2421 Sunonwealth Electric Machine Industry Co., Ltd. 20192019 AnnualAnnual ReportReport Printed on April 21, 2020 Company Website : http://www.sunon.com Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw I. Name, job title, contact phone number and email of the Company's spokesperson and acting spokesperson Spokesperson: William Li Title: Vice President Tel: (07)8135888 Email: [email protected] Acting Spokesperson: Ling-Wen Huang Title: Special Assistant, Secretariat of the Board Tel: (07)8135888 Email: [email protected] II. Addresses and telephone numbers of the head office, branch offices, and factories. Head Office: No. 30, Ln. 296, Xinya Rd., Qianzhen Dist., Kaohsiung City 806, Taiwan(R.O.C.) Tel: (07)8135888 Taipei Office: 4F., No. 356, Sec. 1, Neihu Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) Tel: (02)27992383 Kunshan Plant: NO.168 Nanbang Road Kunshan , Jiangsu ,China Tel: +86-512-57700108 Foshan Plant: NO.5 Xianan 2Road Pingzhou, Nanhai District Foshan City, Guangdong Tel: +86-757-88390388 Beihai Plant: Zone B6,Beihai Integrated Free Trade Zone Beihai Avenue West Beihai City Guangxi China Tel: +86-779-6666888 III. Name, address, website, and telephone number of stock transfer agent Grand Fortune Securities Co., Ltd. Stock Transfer Agent Address: 6F., No. 6, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.) Tel: (02) 2371-1658 (Stock Transfer Department mainline) Website: www.gfortune.com.tw IV. Names of certified accountants, address, website, and telephone number of the accounting firm auditing the Company's latest financial report in the most recent year CPAs: Ching-Lin Li, Shu-Man Tsai Name of firm: Crowe (TW) CPAs Address: 27F.-1, No. 6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 802, Taiwan Tel: (07)3312133 Website: www.crowe.tw V. Overseas securities listing exchange and information:None VI. Company website http://www.sunon.com Table of Contents A. Letter to Shareholders -------------------------------------------------------------------------------------- 1 B. Company Profile -------------------------------------------------------------------------------------------- 4 I. Date of establishment ----------------------------------------------------------------------------------- 4 II. Company history ---------------------------------------------------------------------------------------- 4 C. Corporate Governance Report ---------------------------------------------------------------------------- 10 I. Organization system ------------------------------------------------------------------------------------ 10 II. Profile of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Department Directors ----------------------------------------------------------------------------------- 13 III. Remunerations to Directors, Supervisors, President, and Vice Presidents in recent years ---- 21 IV. Implementation of corporate governance ------------------------------------------------------------ 30 V. Information on fees to CPA ---------------------------------------------------------------------------- 57 VI. Information on Replacement of CPAs ---------------------------------------------------------------- 58 VII. The Chairman, President and Financial or Accounting Managerial Officer of the Company who had worked for the Independent CPA or the affiliate in the past year ---------------------- 58 VIII. Share transfer by Directors, Supervisors, Managerial Officers, and shareholders holding more than 10% interests and changes to share pledging by them --------------------------------- 59 IX. Information on the relationship between any of the top ten shareholders (related party, spouse, or kinship within the second degree) -------------------------------------------------------- 61 X. The shareholding of the Company, Director, Supervisor, Managerial Officers and an enterprise that is directly or indirectly controlled by the Company in the invested company and the calculation of the consolidated shareholding percentage --------------------------------- 63 D. Funding Status ------------------------------------------------------------------------------------------------ 64 I. Source of Capital Shares ------------------------------------------------------------------------------- 64 II. Shareholders --------------------------------------------------------------------------------------------- 66 III. Shareholding distribution status ----------------------------------------------------------------------- 67 IV. List of major shareholders ------------------------------------------------------------------------------ 67 V. Market price per share, net worth, earnings, dividends, and the related information for the last two years --------------------------------------------------------------------------------------------- 68 VI. Dividend policy and implementation status --------------------------------------------------------- 70 VII. The effects of the stock dividends proposed by the shareholders' meeting on the Company's business performances and earnings per share ------------------------------------------------------ 70 VIII. Remuneration of employees, directors and supervisors -------------------------------------------- 70 IX. Buyback of treasury stock ------------------------------------------------------------------------------ 71 X. Corporate bond issuance status ------------------------------------------------------------------------ 71 XI. Issuance of preferred stocks ---------------------------------------------------------------------------- 71 XII. Issuance of global depositary receipts (GDR) ------------------------------------------------------- 71 XIII. Exercise of employee stock option plan (ESOP) ---------------------------------------------------- 71 XIV. Restricted stock awards --------------------------------------------------------------------------------- 71 XV. Mergers, acquisitions or issuance of new shares for acquisition of shares of other companies ------------------------------------------------------------------------------------------------ 71 XVI. Implementation of capital allocation plan ------------------------------------------------------------ 71 E. Business Overview ------------------------------------------------------------------------------------------- 72 I. Business activities ------------------------------------------------------------------------------------- 72 II. Market, production and sales ------------------------------------------------------------------------- 78 III. Employee information ---------------------------------------------------------------------------------- 85 IV. Environmental protection expenditure information ------------------------------------------------ 85 V. Employees-employer relations ------------------------------------------------------------------------ 86 VI. Important contracts ------------------------------------------------------------------------------------- 86 F. Financial Overview ------------------------------------------------------------------------------------------- 87 I. Condensed balance sheet and statement of income for the last five years ----------------------- 87 II. Financial analysis for the last five year --------------------------------------------------------------- 94 III. Audit Committee's review report for the financial statements of the most recent year -------- 98 IV. Financial statements of the most recent year -------------------------------------------------------- 99 V. Parent company only financial statements of the most recent year audited by the CPA ------- 193 VI. Financial turnover status encountered by the Company and affiliates that have material impact on the financial status of the Company ------------------------------------------------------ 282 G. Review, Analysis, and Risks of Financial Conditions and Performance -------------------------- 283 I. Financial conditions ------------------------------------------------------------------------------------- 283 II. Financial performance ---------------------------------------------------------------------------------- 284 III. Cash flow ------------------------------------------------------------------------------------------------- 285 IV. The effects that significant capital expenditures have on financial operations in the recent year -------------------------------------------------------------------------------------------------------- 286 V. Investment policy in the past year, profit/loss analysis, improvement plan, and investment plan for the coming year -------------------------------------------------------------------------------- 286 VI. Risk management and evaluation --------------------------------------------------------------------- 288 VII. Other important matters ------------------------------------------------------------------------------- 295 H. Special Disclosures ------------------------------------------------------------------------------------------- 296 I. Profiles of affiliates and subsidiaries ----------------------------------------------------------------- 296 II. Progress of private placement of securities ---------------------------------------------------------- 301 III. Holding or disposal of stocks of the Company by subsidiaries ----------------------------------- 301 IV. Other supplemental information ----------------------------------------------------------------------- 301 Corporate events with material impact on shareholders'