Asustek Computer Inc. 2013 ANNUAL REPORT
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2357 ASUSTeK Computer Inc. 2013 ANNUAL REPORT yTaiwan Stock Exchange Market Observation Post SystemǺhttp://mops.twse.com.tw yASUS annual report is available at http://www.asus.com Printed on April 19, 2014 321 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 I. SPOKESPERSON & DEPUTY SPOKESPERSON Spokesperson: David Chang Title: Chairman Office - Chief Special Assistant Tel.: 886(2)2894-3447 EXT: 2330 E-mail: [email protected] Deputy Spokesperson: Nick Wu Title: Management Headquarters - Finance Division - Senior Director Tel.: 886(2) 2894-3447 EXT: 2343 E-mail: [email protected] II. HEADQUARTERS AND PLANTS Taipei Headquarters: 15, Li-Te Road, Beitou District, Taipei City Tel.: 886(2) 2894-3447 Address: 4F, 150, Li-Te Road, Beitou District, Taipei City III.SECURITIES DEALING INSTITUTE Name : KGI Securities Corporation, Registrar and Transfer Services Address : 5F, 2, Sec. 1, Chung-Chin S. Rd., Zhongzheng Dist., Taipei City Tel. : 886(2) 2389-2999 Website : http://www.kgiworld.com.tw IV. AUDITORS Name : CPA: CHOU TSENG HUI-CHIN & HSUEH MING-LING CPA Firm : PricewaterhouseCoopers, Taiwan Address : 27F., No.333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei City 110 Tel. : 886(2)2729-6666 E-mail : http://www.pwc.com/tw V. EXCHANGEABLE BOND EXCHANGE MARKETPLACE Marketable security: GDR Luxemburg Stock Exchange: http://www.bourse.lu VI. COMPANY WEBSITE http://www.asus.com ! 322 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ɡɡ CONTENTS ɡɡ Page I. Letter to shareholders ……………………………………………………………………… 1 II. Introduction of the company ……………………………………………………………… 3 1. Establishment date ………………………...……………………………………………….. 3 2. Development history ……………………………………………………………………… 3 III. Corporate governance report ……………………………………………………………... 19 1. Organization of company ………………………………………………………………… 19 2. Directors, Supervisors, President, Vice President, Assistant V.P., and department heads.... 21 3. Corporate governance …………………………………………………………………….. 30 4. CPAs fees …………...…..………………………………………………………………….. 51 5. CPA’s information …………………………………………………………………………. 52 6. The chairman, president, and financial or accounting manager of the company who had worked for the independent auditor or the related party in the most recent years ………… 52 7. Information on Net Change in Shareholding and Net Change in Shares Pledged by Directors, Supervisors, Department Heads, and Shareholders of 10% shareholding or more ……………………………………………………………………………………….. 52 8. The relation of the top ten shareholders as the definition of Finance Standard Article 6 …. 53 9. Investment from Directors, Supervisors, Managers, and directly or indirectly controlled businesses ………………………………………………………………………………… 55 IV. Stock subscription …………………………………………………………………………. 60 1. Capital and shares …………………………………………………………………………. 60 2. Corporate bonds …………………………………………………………………………… 67 3. Preferred stock ……………………………………………………………………………. 67 4. Issuance of global depository receipts …………………………………………………….. 67 5. Employees stock option certificates ………………………………………………………. 69 6. Limit on Employee New Bonus Share ……………………………………………... 70 7. Merger and acquisitions or stock shares transferred with new stock shares issued……….. 70 8. Fund implementation plan ………………………………………………………………… 70 V. Overview of business operation………………………………..…………………………… 71 1. Principal activities ………………………………………………………………………… 71 2. Market analysis and the condition of sale and production ………………………………… 75 3. Status of employees ……………………………………………………………………….. 81 4. Expenditure on environmental protection ………………………………………………… 81 5. Employee / employer relation …………………………………………………………….. 84 6. Important agreements ……………………………………………………………………… 89 323! WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 VI. Financial information ………………………………………………………………. 90 1. Five-year Financial Summary ……………………………………………..………………. 90 2. Five-year Financial analysis ……………..………………………………………………… 98 3. Supervisor’s report in the most recent years ………………………………………………. 106 4. Financial statements in the most recent years …………………………………………….. 107 5. Consolidated financial statements in the most recent years ………………………………. 107 6. Impact of financial difficulties of the Company and related party on the Company’s financial position ………………………………………………………………………….. 107 VII. Review of financial position, financial performance and risk management ……………. 108 1. Financial position ………………………………………………………………………….. 108 2. Financial performance ……………...………………………………………………………. 110 3. Analysis of cash flows ……………………………………………………………………... 113 4. Impact of major capital expenditure on finance and business …………………………….. 114 5. Policies, reasons for gain or loss and action plan in regard to investment plans in current year and the next year…………………………………………………………………….. 114 6. Risk management …………………………………………………………………………. 114 7. Other important matters …………………………………………………………………… 117 VIII Special disclosures …………………………………………………………………………. 118 1. Related party ……………………………………………………………………………… 118 2. Subscription of marketable securities privately in the most recent years …………………. 118 3. The stock shares of the company held or disposed by the subsidiaries in the most recent years ……………………………………………………………………………………… 118 4. Supplementary disclosures ……………………………………………………………….. 118 5. Occurrence of events defined in Securities Transaction Law Article 36.2.2 that has great impact on shareholder’s equity or security price in the most recent years and up to the date of the report printed …………………………………………………………………. 118 ! 324 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 I. Letter to Shareholders Dear Shareholders: Thank you for your long-term support and encouragement. In 2013, the PC industry faced one of the greatest challenges in demand with shipments falling by 10 percent, globally. This decline was caused by a number of factors, including a sluggish global economy, lacking demand, and increasing competition from the mobile computing sector with various mobile form-factors entering the market place. ASUS understands that in a dynamic global technology marketplace, consumers quickly adjust their personal definitions of product experience and value. With a focus on innovation, ASUS continues to invest in expanding our world-class research and development pipeline and strengthen our engineering capabilities. In the last several years, our product design and operation management teams lead a dedicated global workforce leveraging concepts such as Lean Six Sigma, Design Thinking, and aligning standards with ASUS’s brand spirit initiative, “In Search Of Incredible”. As a result, ASUS continues to push the boundaries of innovation while setting new benchmarks of quality and value in personal and business computing technologies. Despite wide fluctuations in demand for touch notebooks in 2013, ASUS successfully maintained a steady growth by adjusting our product portfolio to introduce high-quality innovations to the computer, tablet, and smartphone markets. Our innovations and efforts were recognized by prestigious international organizations and press. The operating result of 2013 and business outlook are as follow: Financial Performance The consolidated revenue of ASUSTeK Computer Group for 2013 was $NT463.3 billion, representing a 3 percent increase over the fiscal year. Net income attributable to shareholders of the parent company was NT$21.449 billion, representing a 5 percent decrease over the fiscal year. For 2013, our consolidated brand revenue (unaudited) was NT$421.4 billion, representing a 2 percent increase over the fiscal year. Brand operating profit (unaudited) was NT$19.676 billion, representing an 11 percent decrease over the fiscal year. Global Recognition and Awards Over the past 11 years, the Taiwan Global Brands survey (organized by the Bureau of Foreign Trade, MOEA) has consistently recognized ASUS as one of Taiwan’s top three international brands. In 2013, ASUS was named winner of the Taiwan Brand Value Award. The company set a new milestone through its “In Search Of Incredible” company-wide brand spirit initiative, with brand value rising to an all-time high of US$1.711 billion. Globally, ASUS was honored with a record-high 4,256 awards in 2013. These awards acknowledged a wide range of achievements related to innovation, brand image, customer satisfaction, customer experience, corporate social responsibility, and environmental sustainability. For corporate and brand image, ASUS received the 2013 Most Admired Taiwan Enterprise Award from Common Wealth magazine, in the Appliances and Information enterprise category. Business Next magazine presented ASUS with the 2013 Digital Service Enterprise Benchmarking Award, and the company also received the 2013 Businessmen’s Ideal Brand Award from Business Today magazine. Product Innovation ASUS has received the “Taiwan Excellence Award” for 11 consecutive years. In 2013, the company garnered an impressive 50 awards for products - six of which were named finalists for the Taiwan Excellence Gold Award. Early in 2014, ASUS won 11 prestigious awards at the global iF Product Design Awards ceremony in Germany, receiving honors in the computer, electronic communications, and multimedia categories. A total of 16 products were awarded with CES Innovations and Engineering Awards at the 2014 Consumer Electronics Show (CES) in the United States for our innovation and engineering excellence. 1 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Throughout 2013, ASUS continued to demonstrate innovation across multiple product lines. The ASUS Transformer Book T100 launched