Annual Report Is Accessible at the Following Website
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Stock Code: 5371 This annual report is accessible at the following website http://mops.tse.com.tw Coretronic Corporation 2020 Annual Report Published May 12, 2021 1. Name, designation, contact number, and e-mail of spokesperson and acting spokesperson Spokesperson : Cindy Wen Special Assistant of Investor Relations Office Contact No. : (03)577-2000 E-mail : [email protected] Acting : Franck Ho CFO Spokesperson Contact No. : (03)577-2000 E-mail : [email protected] 2. Address and contact number of the headquarter, branches and plant sites Headquarter and : No. 11, Li Hsing Road, Hsinchu Science Park plant address TEL : (03)577-2000 Plant address : No. 2, Ke Bei 5th Road, Chunan Science Park, Miao-Li County TEL : (037)777-000 Branch and plant : No. 2-1, Nanke 6th Road, Tainan Science Park address TEL : (06)505-2551 Branch and plant No. 5, Wenhua Road, Fengshan Village, Hukou Township, : address Hsinchu County TEL : (03)598-6200 3. Name, address, website, and contact number of share service agency Name : Taishin International Bank Stock Affairs Department Address : B1, No. 96, Sec. 1, Jianguo N. Rd., Taipei City Website : www.taishinbank.com.tw TEL : (02)2504-8125 4. Auditors and the name, address, website and contact number of the accounting firm for the latest financial report Name of CPA : Hsin-Min Hsu, Hans Chen Name of accounting : Ernst & Young firm Address : E-3, No. 1, Li Hsing Road, Hsinchu Science Park Website : www.ey.com TEL : (03)688-5678 5. Name of overseas exchange where securities are listed, and method of inquiry: None 6. Company website : www.coretronic.com Table of Contents Page One. Letter to the Shareholders ----------------------------------------------------------------------------1 Two. Company overview --------------------------------------------------------------------------------- 11 Three. Corporate Governance Report ------------------------------------------------------------------- 16 I. Organization ------------------------------------------------------------------------------------- 16 II. Background information of directors, the President, vice presidents, assistant vice presidents, and heads of departments and branch offices ---------------------------------- 17 III. Remuneration paid to Directors, President and Vice Presidents in the last year (2020)23 IV. Corporate governance -------------------------------------------------------------------------- 26 V. Disclosure of auditors' remuneration --------------------------------------------------------- 69 VI. Change of CPA ---------------------------------------------------------------------------------- 70 VII. The company’s Chairman, President, or any managers involved in financial or accounting affairs being employed by the accounting firm or any of its affiliated company in the last year ----------------------------------------------------------------------- 71 VIII. Details of shares transferred or pledged by directors, managers and shareholders with more than 10% ownership interest in the last year, up till the publication date of annual report ------------------------------------------------------------------------------------- 72 XI. Relationships characterized as spouse or second-degree relatives or closer among top-ten shareholders ---------------------------------------------------------------------------- 73 X. Investments jointly held by the Company, the Company's directors, managers, and enterprises directly or indirectly controlled by the Company; disclose shareholding in aggregate of the above parties ----------------------------------------------------------------- 74 Four. Capital Overview ----------------------------------------------------------------------------------- 75 I. Source of capital -------------------------------------------------------------------------------- 75 II. Shareholder structure --------------------------------------------------------------------------- 76 III. Diversity of ownership ------------------------------------------------------------------------- 77 IV. Major shareholders: If the number of shareholders with more than 5% ownership interest is less than 10, disclose the names, the number of shares held and shareholding percentage of the top-10 shareholders --------------------------------------- 77 V. Information relating to market price, net worth, earnings, and dividends per share for the last 2 years ----------------------------------------------------------------------------------- 78 VI. Dividend policy and execution ---------------------------------------------------------------- 78 VII. Impacts of proposed stock dividends on the Company’s business performance and earnings per share ------------------------------------------------------------------------------- 79 VIII. Employee and director remuneration --------------------------------------------------------- 79 IX. Status of a company repurchasing its own shares in the last financial year till the publication date of the annual report --------------------------------------------------------- 80 X. Disclosure relating to corporate bonds ------------------------------------------------------- 80 XI. Preferred shares, global depository receipts, employee warrants, restricted employee shares, or merger/acquisition/divestment through exchange of shares------------------- 80 XII. Progress on planned uses of capital ----------------------------------------------------------- 80 Five. Overview of operation ------------------------------------------------------------------------------ 81 I. Business Activities ------------------------------------------------------------------------------ 81 II. Market and Production Overview ------------------------------------------------------------- 94 III. Employees -------------------------------------------------------------------------------------- 104 IV. Environmental protection expenditure ------------------------------------------------------ 105 V. Labor relations --------------------------------------------------------------------------------- 105 VI. Important contracts ---------------------------------------------------------------------------- 109 Six. Financial Summary ------------------------------------------------------------------------------- 112 I. Summary balance sheet and statement of comprehensive income for the last 5 years 112 II. Financial analysis for the last 5 years ------------------------------------------------------- 116 III. Audit Committee's report on the review of the latest financial report ------------------ 119 IV. Latest financial statements -------------------------------------------------------------------- 120 V. The latest audited standalone financial statements ---------------------------------------- 120 VI. Any financial distress experienced by the company or its affiliated enterprise and impacts on the company's financial structure in the last year up till the publication date of annual report --------------------------------------------------------------------------- 120 VII. Attainment of mandatory certification by personnel involved in financial information transparency ------------------------------------------------------------------------------------ 120 Seven. Review and Analysis of Financial Position and Financial Performance, and Risk Management Issues ------------------------------------------------------------------------------- 121 I. Financial position ------------------------------------------------------------------------------ 121 II. Financial performance ------------------------------------------------------------------------- 122 III. Cash flow --------------------------------------------------------------------------------------- 123 IV. Material capital expenditures in the last year and impacts on financial/business performance ------------------------------------------------------------------------------------ 123 V. Causes of profit or loss incurred on investments in the last year, and any improvements or investments planned for the next year ---------------------------------- 123 VI. Risk management ------------------------------------------------------------------------------ 123 VII. Other important disclosures ------------------------------------------------------------------ 127 Eight. Special Disclosure -------------------------------------------------------------------------------- 128 I. Information of affiliated companies --------------------------------------------------------- 128 II. Private placement of securities in the last year up till the publication date of annual report -------------------------------------------------------------------------------------------- 143 III. Holding or disposal of the Company's shares by subsidiaries in the last financial year, up till the publication date of annual report ------------------------------------------------ 143 IV. Other supplementary information ------------------------------------------------------------ 143 Nine. Occurrences Significant to Shareholders' Equity or Securities Price, as Defined in Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act, in the Last Year Up Till the Publication Date of Annual Report ----------------------------------------- 143 One. Letter to the Shareholders Dear Shareholders, I. Introduction For the fiscal year of 2020, Coretronic reported a consolidated sales revenue of NT$42,438 million, drop 12.9% YoY. Consolidated operating income totaled NT$692 million with a pre-tax income of NT$1,837 million. Net income