Stock Code: 2023 中華民國104年年度報告 ANNUAL REPORT 2015 Information reporting website: http://sii.tse.com.tw Market Observation Post System: http://mops.twse.com.tw Website for enquiry of the Company’s annual report: same as above Published on MAY 15, 2016 1. Name, title, contact number and e-mail of the Company’s spokesman and deputy spokesman: Spokesman: Wu, Lin-Maw Title: President Contact No.: (07)611-7181 E-mail: [email protected] Deputy spokesman: Chen, Yung-Hsien Title: Vice President of Finance Contact No.: (07)611-7181 E-mail: [email protected] 2. Address and telephone number of head office and factories: Head Office address: No. 369, Yuliao Road, Yuliao Village, Ciaotou District, Kaohsiung City Tel: (07)611-7181 Factory address: No. 369, Yuliao Road, Yuliao Village, Ciaotou District, Kaohsiung City (Kaohsiung Plant) Tel: (07)611-7181 Factory address: No. 297, Yuliao Road, Yuliao Village, Ciaotou District, Kaohsiung City (Kaohsiung Plant) Tel: (07)611-7181 Factory address: No. 6, Gongye 6th Road, Pingtung City (Pingtung Plant) Tel: (08)755-0979 Factory address: No. 909, Fusing Road, Sanye Village, Lujhu District, Kaohsiung City (Lujhu Plant) Tel: (07)697-4428 Factory address: No. 600, Jhong’an Road, Yanchao District, Kaohsiung City (Yanchao Plant) Tel: (07)616-3001 3. Name, address, website and telephone number of stock registration agent: Name: Taipei Shareholder Service Division, Yieh Phui Enterprise Co., Ltd. Address: 15F., No.30, Beiping E. Rd., Zhongzheng Dist., Taipei City Company website: www.yiehphui.com.tw Tel: (02)2395-6780 4. Name, office, address, website and telephone number of the Certified Public Accountants for financial statements of the previous year: Name of Accountants: Cai, Shu-Man & Xie, Ren-Yao Name of Office: Crowe Horwath (TW) Certified Public Accountants Address: 12F, No. 21, Linsen 2nd Road, Kaohsiung City Website: www.crowehorwath.net/tw Tel: (07)331-2133 5. Name of the market where overseas marketable securities are listed for transaction & method(s) of inquiring about the information related to the aforesaid overseas marketable securities: Listing location: N/A Enquiry method: N/A 6. Company website: www.yiehphui.com.tw Table of Contents I. Report to Stockholders ............................................................................................... 1 II. Company Profile ........................................................................................................ 7 i. Date of Establishment ............................................................................................. 7 ii. Company History .................................................................................................... 7 III. Report on Corporate Governance ........................................................................ 11 i. Organization ............................................................................................................ 11 ii. Information about Director, Supervisor, President, Vice-President, Assistant Vice-President and Managers of Departments and Branches ...................................... 13 iii. Remuneration Paid to Director, Supervisor, President and Vice-President ......... 25 iv. Corporate Governance Practices ........................................................................... 36 v. Information on Accountant Fees ............................................................................ 71 vi. Information on Replacement of Certified Public Accountants ............................. 71 vii. Disclosure of Board Director, President, Manager in Charge of Finance and Accounting Who Has Served in the Certified Public Accountants’ Accounting Firm or Its Affiliates in the Past Year ............................................................................ 72 viii. Disclosure of Changes Concerning Stocks Rights Transfer and Pledge of Stocks Rights of Director, Supervisor, Managers and Stockholders with 10% Shareholding ................................................................................................................................ 72 ix. The Top 10 Stockholders in Shareholding Percentage, Including Information of Related Parties, Spouse, or Relative Within the Second Degree of Kinship ......... 75 x. The Direct or Indirect Controlled Subsidiaries’ Shareholdings by the Company, Its Director, Supervisor, or Managers ........................................................................ 81 IV. Capital Overview ...................................................................................................... 83 i. Capital & Shares ...................................................................................................... 83 (i) Source of Capital .............................................................................................. 83 (ii) Stockholders Structure ..................................................................................... 85 (iii) Share Distribution .......................................................................................... 85 (iv) List of Major Stockholders ............................................................................. 86 (v) Market Price per Share, Net Value, Equity, Dividends and Related Information in the Recent Two Years ................................................................................... 87 (vi) Dividend Policy and Its Implementation ........................................................ 88 (vii) The Impact of Stock Grant Approved by this General Stockholders’ Meeting on the Operational Performance and Earnings per Share of the Company ..... 89 (viii) Employee Bonus and Remuneration for Directors and Supervisors............ 89 (ix) Share Repurchase of the Company ................................................................ 90 ii. Issuance of Company’s Corporate Bonds ................................................................ 90 iii. Issuance of Company’s Preferred Stocks ................................................................ 90 iv. GDR of the Company .............................................................................................. 90 v. Issuance of Employee Stock Option Certificates by the Company .......................... 90 vi. Merger and Aqcuisition of Other Companies’ Shares and Issuing New Stocks ..... 90 vii. Funding Operation Project ..................................................................................... 90 V. Operational Highlights ................................................................................................ 91 i. Business Description ................................................................................................. 91 (i) Business Scope ................................................................................................. 91 (ii) Industry Overview ........................................................................................... 95 (iii) Research and Development Overview ........................................................... 96 (iv) Long and Short Term Plans for Business Development ................................. 100 ii. Markets and Sales Overview .................................................................................... 101 (i) Market Analysis ................................................................................................ 101 (ii) Major Purpose and Production Process of the Main Products ........................ 102 (iii) Supply of Main Raw Materials ...................................................................... 104 (iv) Information about Customers in The Past Two Fiscal Years Accounting for More Than 10% of Purchase and Sales .......................................................... 105 (v) Table of Production Amount and Value in the Past Two Fiscal Years ........... 107 (vi) Table of Sale Quantity and Amount in the Past Two Fiscal Years ................. 107 iii. Information about the Employees in the Past Two Fiscal Years Until the Publishing Date of the Annual Report ..................................................................................... 108 iv. Expenditure on Environmental Protection............................................................... 108 v. Labor-Capital Relations ............................................................................................ 109 vi. Major Contracts ....................................................................................................... 111 VI. Financial Status ........................................................................................................... 112 i. FiveYear Concise Balance Sheet and Consolidated Income Statement .................... 112 ii. Financial Analysis of The Last Five Years ............................................................... 118 iii. Supervisors’ Audit Report on the Financial Report for the Recent Fiscal Year ...... 123 iv. CPA-Audited Consolidated Financial Statements for the Recent Fiscal Year ......... 124 v. Parent Company Financial Statement for the Recent Fiscal Year ............................ 243 vi. Financial Turnover Difficulties faced by the Company and Its Affiliated Enterprises in the Recent Fiscal Year and as of the Annual Report Publishing Date .................. 338 VII. Review of Financial Conditions, Operating Results, and Risk Management 339 i. Financial Status .......................................................................................................... 339 ii. Financial Performance .............................................................................................