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MSI — AGM Information 2020
Jun 29, 2020
52042_rns_2020-06-29_9fa87227-4097-46aa-afca-b540cf18d5fd.pdf
AGM Information
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Micro-Star International Co., Ltd.
2020 Annual Shareholders' Meeting Minutes
(Translation)
This English-version handbook is a summary translation of the Chinese version and is
not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.
Time: 9:00 a.m. on Wednesday, June 10, 2020.
Place: Company’s conference room 3102 (1F., No. 488, Bannan Rd., Zhonghe Dist., New Taipei City 235, Taiwan R.O.C.)
Total shares represented by shareholders present in person or proxy: 740,347,044 shares were represented by shareholders in person and by proxy(including by exercising voting rights electronically 483,383,521 shares),which are mounted to 87.62% of the Company's 844,856,199 issued and outstanding shares.
Director present: Hsu,Hsiang ， Huang,Chin-Ching ， Yu, Hsien-Neng ， Lin,Wen-Tung ， ， ， ， Chiang,Sheng-Chang Kuo,Hsu-Kuang Liao,Chun-Keng Hung, Yu-Sheng
， ， Independent Director: Wang,Sung-Chou Liu ,Cheng-Yi Hsu,Kao-Shan
Attendance: Liang, Hua-Ling, CPA
Chairman: Hsu, Hsiang Recorder: Chen,Nuan-Yun
The aggregate shareholding of the shareholders present in person or by proxy constituted a quorum. The Chairman called the meeting to order.
Chairman’s Remarks (Omitted)
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I. Report Items:
-
1.Business Report of 2019.(see Attachment Ⅰ )
-
2.The Audit Committee's Review Report on the 2019 Financial Statements. (see Attachment Ⅱ )
-
3.Report of Employees’ Compensation and Directors’ Compensation for 2019.
-
(1)2019 Employees’ Compensation and Directors’ Compensation distribution plan is in accordance with Article 235-1 of the Company Act and Article 19-1 of the Articles of Incorporation.
-
(2) The company's 2019 profit before income tax and before allocation of Employees’ Compensation and Directors’ Compensation of which an approximate 7.25% is distributed to Employees’ Compensation, count NT $ 505,000,000 ; of which 0.71% is distributed to Directors’ Compensation, count NT$49,500,000. Both Employees’ Compensation and Directors’ Compensation are distributed in cash.
-
(3) The distribution above is resolved by the Company’s Remuneration Committee and the Board of Directors. The above figures are no difference from the amount recognized in 2019.
-
4.The 2019 Earnings Distribution of cash dividends.
-
(1)The Board of Directors is authorized to decide the distribution of partial or full dividends in cash, and report the decision to the shareholders meeting in accordance with Company Act in Paragraph 5 of Article 240 and Article 19 of the Articles of Incorporation.
-
(2)The distributable earnings of the year 2019 is NT$3,548,396,035 will be distributed as cash dividends NT$4.2 per share have been approved by the board of directors on April 30, 2020. With the approval of the cash dividend by the meeting of shareholders, the chairperson will be authorized to determine the base date and distribution date of dividends. Cash dividends will be distributed up to one dollar (rounded down values below NT$1). The odd amount will be combined to the Company’s non-operating income.
-
(3)The dividend rate changed after this date as the number of shares circulated on the market under the influence of the following factors: buying back of the company shares and transfer or revocation of treasury shares. The chairperson is fully authorized by the Board of Directors to handle the related adjustment to such distribution at his discretion.
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II. Adoption Items
1.
Proposed by the Board
Proposal:
Adoption of the 2019 Business Report and Financial Statements
Explanation:
-
(1)MSI Company’s Financial Statements, including the balance sheet, income statement, statement of changes in shareholders’ equity, and statement of cash flows, were audited by independent auditors, Liang, Hua-Ling and Lai, Chung-His of PricewaterhouseCoopers, Taiwan. Also Business Report and Financial Statements have been approved by the Board of Directors and examined by the Audit Committee.
-
(2)2019 Business Report, independent auditors’ audit report, and the above-mentioned Financial Statements. see Attachment Ⅲ.
Voting Results:
| Votes in favor |
Votes against | Votes invalid |
Votes abstained |
Votes in favor of the total represented share present |
|---|---|---|---|---|
| 655,269,236 | 54,202 | 0 | 85,023,606 | 88.50% |
(Including votes casted electronically)
It was resolved that the above proposal be approved as proposed.
2.
Proposed by the Board
Proposal:
Adoption of the Proposal for Distribution of 2019 Profits
Explanation:
- (1)The Board of Directors has adopted a Proposal for Distribution of 2019 Profits in accordance with Article 19 of the Articles of Incorporation. 2019 Earnings Distribution Table as below.
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Micro-Star International Co., Ltd. Earnings Distribution Table of 2019
- （ Unit: NT ＄）
| Items | Amount |
|---|---|
| Beginningretained earnings | 11,486,820,218 |
| +(-)2019 Other comprehensive net income(loss) | (8,063,302) |
| +2019 Net Profit after Tax | 5,587,209,519 |
| (-)10%Legal Reserve | (558,720,952) |
| (-)Special Reserve | (288,559,131) |
| (-)Cash Dividends to Share Holders(NT$4.2per share) | (3,548,396,035) |
| Unappropriated Retained Earnings | 12,670,290,317 |
Chairman ： Hsu, Hsiang CEO ： Chiang, Sheng-Chang Accounting Officer ： Lin, Hui-Chin Note:
-
1.Profit of 2019 is prioritized for profit distribution this year.
-
2.The distributable earnings of the year 2019 accordance with Company Act in Paragraph 5 of Article 240 and Article 19 of the Articles of Incorporation has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors and examined by the Audit Committee on April 30, 2020.
Voting Results:
| Votes in favor |
Votes against |
Votes invalid |
Votes abstained | Votes in favor of the total represented share present |
|---|---|---|---|---|
| 656,207,526 | 65,202 | 0 | 84,074,316 | 88.63% |
(Including votes casted electronically)
It was resolved that the above proposal be approved as proposed.
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Ⅲ .Discussion Items
1. Proposed by the Board
Proposal:
To discuss amendment to the ‟Articles of Incorporation”. Please proceed to discuss.
Explanation:
In accordance with the laws, the Company hereby proposes amendments to the some articles of the Company’s “Articles of Incorporation” . see Attachment Ⅳ .
Voting Results:
| Votes in favor | Votes against | Votes invalid | Votes abstained | Votes in favor of the total represented share present |
|---|---|---|---|---|
| 654,342,231 | 57,210 | 0 | 85,947,603 | 88.38% |
(Including votes casted electronically)
It was resolved that the above proposal be approved as proposed.
Ⅳ .Extempore motions ： None.
Ⅴ. Adjournment
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Attachment Ⅰ
Business Report
The global economy in 2019 has been affected by the US–China trade war, and unstable territorial politics. The uncertainty of supply–demand in the industrial chain surges and the operation faces more difficulties and challenges. We respond to the variables in the environment with flexible deployment, including expanding the production lines in Taiwan, and allying with US gaming platform design company BlueStacks to reach cloud game application. While pursuing the shipments of hardware, we enhance our ability to integrate software and hardware, and employ AI to add value to our products to reduce the impact from external variations. Besides the continuing provision of high-end gaming equipment and peripherals, we launch high-end image processing products to meet the demands from content creators. Products and OEM services in server, industrial computer, auto electronics businesses conjoin AIoT applications and offer different solutions in order to bring higher added value to the clients and create a win-win situation for shareholders, clients, employees and suppliers.
I. Operating Performance in 2019 1. Consolidated financial results
| Operating Performance in 2019 1. Consolidated financial results |
Operating Performance in 2019 1. Consolidated financial results |
Operating Performance in 2019 1. Consolidated financial results |
Operating Performance in 2019 1. Consolidated financial results |
Operating Performance in 2019 1. Consolidated financial results |
|---|---|---|---|---|
| Unit: NT$thousands | ||||
| Year Item |
2019 | 2018 | Growth amount | Growth rate |
| Sales revenue | 120,491,417 | 118,527,273 |
1,964,144 | 1.66% |
| Grossprofit | 15,862,156 | 16,129,686 |
(267,530) | (1.66%) |
| Profit after tax | 5,587,210 | 6,041,129 |
(453,919) | (7.51%) |
| Basic earnings per share(After-tax) (in NT dollars) |
6.61 | 7.15 |
(0.54) | (7.55%) |
| Diluted earnings per share (After-tax) (in NT dollars) |
6.56 | 7.08 |
(0.52) | (7.34%) |
2. Profitability analysis
| Item | Year | Financial Analysis for the Last Two-Years |
Financial Analysis for the Last Two-Years |
|---|---|---|---|
| 2019 | 2018 | ||
| Financial structure(%) |
Debt to asset ratio(%) | 48.61 | 45.72 |
| Long-term capital to property, plant and equipment(%) |
648.29 |
641.74 |
|
| Solvency(%) | Current ratio(%) | 188.25 | 199.30 |
| Quick ratio(%) | 103.70 | 104.68 |
|
| Interest earned ratio(times) (%) | 27,783.82 | 49,733.08 |
|
| Profitability (%) |
Return on assets(%) | 9.71 | 11.60 |
| Return on shareholders’equity (%) | 18.33 | 20.92 |
|
| Profit ratio(%) | 4.64 | 5.10 |
|
| Basic after-tax EPS(NT$) | 6.61 | 7.15 |
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Research and Development Status
-
MSI is the global benchmark brand in the field of gaming and digital content creation. Supported by advanced research and development, and motivated by client satisfaction, MSI commits itself to build fine digital products with excellent quality, design for humanity and style, and which keep creating user value.
In 2019 Computex, MSI GT76 Titan flagship laptop won the golden reward, the highest recognition. Four products, MSI Trident X Plus gaming desktop, MSI Optix MPG341CQR gaming monitor, MSI Prestige P100 Series creator desktop, and MS-9A95 AIoT cloud server and smart management solution for global customer service under the edge computing structure received the “Category Rewards”. We demonstrate a sound R&D technology in hardware, and show MSI’s ability of integrating software and hardware to the world. In 2019, nine products received Taiwan Excellence Awards. MSI promises that we will keep working in innovation, design and performance, and bring a higher product and service value to users.
II. Operating Plan for 2020
To adjust to the future environment, MSI’s adopted operation guidelines, estimated goals and important sales strategies for 2020 are as follows:
-
operation guideline
-
(1) Sales and marketing aspect: progressively explore new markets and new customers and establish a long‐term entrusted stable business relationship with customers with potentials and sound financial status to create mutual benefits.
-
(2) Product R&D aspect: Develop products which meet users’ needs.
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(3) Finance aspect: uphold the principle of steady and stable operation, and control various financial risks.
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(4) Manufacturing, quality and service aspect: continue implementing automated manufacturing to increase quality and efficiency. Improve repair and services to enhance customer satisfaction.
-
Sales forecast and the analysis
We cover a wide range of products. While we continuously devote our efforts in the market of high-end products and pursuit of stable growth of each product, we will seek to increase the shipment in new product development and marketing, including motherboards, display cards, laptops, PCs, gaming monitors, gaming peripherals, servers, industrial computers, and auto electronics. We anticipate room for growth in the market. The company’s objective is to increase the overall revenue, and will proactively broaden the market share of every product.
-
Important sales policies
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(1) Production policy aspect: Always paying attention to the global major political and economic situations to respond to the possible change in market demand and the suppliers’ productivity. To increase capacity utilization rate by adopting planned procurement of components. To adopt flexible production to reduce stock level yet fulfilling customer’s order demand. To observe the dynamic of supply chains and to ensure an effective production of employees, equipment, materials, and manufacturing methods.
-
(2) Sales policy aspect: to provide good quality products that suit customers’ need. To gain a mutual success in sales target with our customers.
~7~
Looking forward into 2020, the uncertainty of the global ICT industry and macroeconomic environment keeps growing. Various competitions and challenges come along one after another due to the impact on supply and demand brought by the Covid-19 pandemic. As the outside environment changes rapidly, we will coordinate the sales, marketing, R&D, and operational departments, and keep raising the operational performance. Our employees will work together to promote every business to maintain the continuous growth of performance.
I hereby on behalf of the MSI management team express our appreciation to all our shareholders, customers and suppliers. We also appreciate the hard efforts of all employees and directors made during the past year. We hope our shareholders will keep supporting and encouraging us. We will work harder to achieve a greater performance and sales results to share with you.
Sincerely yours,
Chairman: Hsu, Hsiang
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Attachment Ⅱ
Audit Committee's Review Report
The Board of Directors has prepared the Company's 2019 Business Report, Financial Statements, and proposal for allocation of earnings. The CPA firm of PWC was retained to audit MSI's Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and earnings allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of Micro-Star International Co., Ltd. According to relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.
Micro-Star International Co., Ltd.
Chairman of the Audit Committee: Mr. Wang, Sung-Chou
April 30, 2020
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Attachment Ⅲ
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE
To the Board of Directors and Shareholders of MICRO‐STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES
Opinion
We have audited the accompanying consolidated balance sheets of MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES (the “Group”) as of December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.
Basis for opinion
We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our ethical responsibilities in accordance with the Code. Based on our audits and the audit reports of other independent accountants, we believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters. Key audit matters for the Group’s consolidated financial statements of the year ended December 31, 2019 are stated as follows:
Occurrence of sales revenue from significant customers
Description
Please refer to Note 4(26) for accounting policies on revenue recognition. Other than international brands, the Group sells its products to customers in various countries. With the Group actively
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developing new products, sales revenue increases progressively every year, and the occurrence of sales revenue is critical to the financial statements. Thus, the occurrence of sales revenue from new significant customers, excluding international brands, was identified as a key audit matter. How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
-
A. Obtained an understanding of and assessed internal controls in relation to sales revenue from new significant customers, and validated the operating effectiveness of those above mentioned internal controls.
-
B. Obtained detailed listing of sales revenue from new significant customers in the current year, and validated supporting documents, including sales invoices, customer purchase orders and delivery documents.
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C. Inspected contents and relevant evidences in relation to sales returns and discounts occurring subsequent to the reporting period and assessed the reasonableness of respective sales revenue recognised.
Estimation of allowance for inventory valuation losses
Description
Please refer to Note 4(12), for accounting policies on inventory valuation, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on inventory valuation, and Note 6(5) for details of inventories. As of December 31, 2019, the balances of inventories and allowance for inventory valuation losses are NT$23,062,460 thousand and NT$534,260 thousand, respectively. The Group is primarily engaged in manufacturing and sales of motherboard, interface card, notebook computer and other electronic products. Due to the rapid technological innovations, shorter electronic product life cycles, and the fluctuation of market prices within the industry, there is a higher risk of inventory losses due from market value decline or obsolescence. The Group recognises inventories at the lower of cost and net realisable value. As the monetary values of inventories are material, and there are various types of inventories, the estimation and determination of the net realisable value of inventories as of the balance sheet date are subject to management’s judgement and contain a high level of uncertainty and have material effects on the financial statements, and therefore, it was identified as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
-
A. Assessed the reasonableness and the consistency of policies in relation to the provision of allowance for inventory valuation losses and procedures based on our understanding of the Group’s operations and industry.
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B. Validated the appropriateness of system logic of the report of individually identified obsolete inventory prepared by management and confirmed the consistency with Group’s policies.
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C. Validated the appropriateness of estimation basis for net realisable value of inventories and inspected respective supporting documents, including sales prices or purchase prices, reperformed the calculation of the report and assessed the reasonableness of management’s determination of net realisable value of inventories.
Other matter –Reference to audits of other independent accountants
We did not audit the financial statements of certain consolidated subsidiaries and investments accounted for under the equity method that are included in the consolidated financial statements. Those financial statements were audited by other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on reports of the other
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independent accountants. Total assets of the abovementioned entities (including investments accounted for under the equity method) amounted to NT$11,727,830 thousand and NT$9,411,349 thousand as of December 31, 2019 and 2018, constituting 19% and 17% of consolidated total assets, respectively. Sales revenue of the above mentioned entities amounted to NT$23,178,240 thousand and NT$22,331,098 thousand, for the years ended December 31, 2019 and 2018, constituting 19% and 19% of consolidated total sales revenue, respectively.
Other matter – Parent company only financial reports
We have audited and expressed an unmodified opinion with other matter section on the parent company only financial statements of MICRO-STAR INTERNATIONAL CO., LTD. as of and for the years ended December 31, 2019 and 2018.
Responsibilities of management and those charged with governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance, including supervisors, are responsible for overseeing the Group’s financial reporting process.
Independent accountant’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
-
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Liang, Hua-Ling
Lai, Chung-Hsi
For and on behalf of PricewaterhouseCoopers, Taiwan March 20, 2020
The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.
As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.
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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| Assets | Notes 6(1) 6(2) 6(4) 6(4) 6(5) 6(6) 6(3) 6(7) and 8 6(8) 6(10) 6(25) 6(11) and 8 |
December31,2019 AMOUNT % $ 10,834,884 18 152,805 - 47,114 - 17,205,783 29 227,116 - 16,417 - 22,527,840 37 1,675,701 3 1,200,000 2 53,887,660 89 151,975 - 4,893,433 8 474,897 1 300,559 1 471,523 1 168,661 - 6,461,048 11 $ 60,348,708 100 |
December31,2018 | December31,2018 |
|---|---|---|---|---|
| AMOUNT $ 10,834,884 152,805 47,114 17,205,783 227,116 16,417 22,527,840 1,675,701 1,200,000 53,887,660 151,975 4,893,433 474,897 300,559 471,523 168,661 6,461,048 $ 60,348,708 |
AMOUNT $ 8,815,680 98,400 35,183 16,040,189 159,681 44,944 22,052,862 1,381,022 728,936 49,356,897 - 4,738,544 - 341,241 438,204 299,287 5,817,276 $ 55,174,173 |
% | ||
| Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories, net 1410 Prepayments 1476 Other current financial assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets |
16 - - 29 - - 40 3 1 |
|||
| 89 | ||||
| - 9 - 1 1 - |
||||
| 11 | ||||
| 100 |
(Continued)
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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| Liabilities andEquity | December31,2019 December31,2018 Notes AMOUNT % AMOUNT % 6(12) $ 1,500,000 3 $ 3,000,000 6 6(2) 24,943 - 5,555 - - - 200 - 20,391,520 34 14,933,624 27 6(13) 3,844,835 6 3,418,250 6 402,714 1 1,017,290 2 6(16) 556,720 1 501,095 1 159,081 - - - 1,636,499 3 1,796,905 3 108,961 - 92,142 - 28,625,273 48 24,765,061 45 6(14) and 8 15,095 - 16,442 - 6(25) 27,214 - 2,297 - 247,767 1 - - 6(15) 221,974 - 217,609 - 198,920 - 226,903 1 710,970 1 463,251 1 29,336,243 49 25,228,312 46 6(17) 8,448,562 14 8,448,562 15 6(18) 803,918 1 1,226,049 2 6(19) 4,982,577 8 4,378,464 8 505,966 1 421,815 1 17,065,967 28 15,976,937 29 ( 794,525) ( 1) ( 505,966) ( 1) 31,012,465 51 29,945,861 54 31,012,465 51 29,945,861 54 $ 60,348,708 100 $ 55,174,173 100 |
|---|---|
| Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provision for liabilities - current 2280 Current lease liabilities 2365 Refund liabilities- current 2399 Other current liabilities, others 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Net defined benefit liability, non-current 2670 Other non-current liabilities, others 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 3XXX Total equity 3X2X Total liabilities and equity |
The accompanying notes are an integral part of these consolidated financial statements.
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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars, except earnings per share)
| Items | YearendedDecember31 2019 2018 Notes AMOUNT % AMOUNT % 6(20) $ 120,491,417 100 $ 118,527,273 100 6(5)(23) ( 104,629,261)( 87) ( 102,397,587) ( 86) 15,862,156 13 16,129,686 14 6(23) ( 5,508,321) ( 4 ) ( 5,166,468) ( 4) ( 1,070,509) ( 1 ) ( 921,767) ( 1) ( 3,315,224) ( 3 ) ( 3,347,836) ( 3) ( 15,696) - ( 1,665) - ( 9,909,750)( 8) ( 9,437,736)( 8) 5,952,406 5 6,691,950 6 6(21) 715,283 - 655,733 - 6(22) ( 125,710) - ( 182,141) - ( 23,546) - ( 14,408) - 566,027 - 459,184 - 6,518,433 5 7,151,134 6 6(25) ( 931,223)( 1) ( 1,110,005) ( 1) $ 5,587,210 4 $ 6,041,129 5 6(15) ($ 10,079) - ($ 21,430) - 6(25) 2,016 - 8,461 - ( 8,063) - ( 12,969) - ( 288,559) - ( 84,151) - ( 288,559) - ( 84,151) - ($ 296,622) - ($ 97,120) - $ 5,290,588 4 $ 5,944,009 5 $ 5,587,210 4 $ 6,041,129 5 $ 5,290,588 4 $ 5,944,009 5 6(26) $ 6.61 $ 7.15 $ 6.56 $ 7.08 |
|---|---|
| 4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit loss 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive loss that will not be reclassified to profit or loss 8311 Actuarial loss on defined benefit plan 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent Comprehensive income attributable to: 8710 Owners of the parent Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share |
The accompanying notes are an integral part of these consolidated financial statements.
~16~
MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| 2018 Balance at January 1, 2018 Profit for the year Other comprehensive loss for the year Total comprehensive income Appropriations of 2017 earnings : Legal reserve Special reserve Cash dividends Due to donated assets received Balance at December 31, 2018 2019 Balance at January 1, 2019 Profit for the year Other comprehensive loss for the year Total comprehensive income Appropriation of 2018 earnings Legal reserve Special reserve Cash dividends Cash distribution from capital surplus Due to donated assets received Balance at December 31, 2019 |
Notes | Equity | Equity | Equity | at | tributable to own | er | s ofthe parent | Totalequity | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share capital - commonstock |
Capital surplus | Retained earnings | Financial statements translation differences of foreignoperations |
|||||||||||||||||
| Additional paid-in capital |
Treasury stock transactions |
Donated assets received |
Employee stock warrants |
Legal reserve | Special reserve | Unappropriated retained earnings |
||||||||||||||
| 6(19) 6(19) 6(19) |
$8,448,562 - - - - - - - $8,448,562 $8,448,562 - - - - - - - - $8,448,562 |
$1,050,563 - - - - - - - $1,050,563 $1,050,563 - - - - - - ( 422,429 ) - $ 628,134 |
$130,592 - - - - - - - $130,592 $130,592 - - - - - - - - $130,592 |
$ - - - - - - - 434 $ 434 $ 434 - - - - - - - 298 $ 732 |
$ 44,460 - - - - - - - $ 44,460 $ 44,460 - - - - - - - - $ 44,460 |
$3,884,722 - - - 493,742 - - - $4,378,464 $4,378,464 - - - 604,113 - - - - $4,982,577 |
$389,482 - - - - 32,333 - - $421,815 $421,815 - - - - 84,151 - - - $505,966 |
$14,276,704 6,041,129 ( 12,969 ) 6,028,160 ( 493,742 ) ( 32,333 ) ( 3,801,852 ) - $15,976,937 $15,976,937 5,587,210 ( 8,063 ) 5,579,147 ( 604,113 ) ( 84,151 ) ( 3,801,853 ) - - $17,065,967 |
($ 421,815 ) - ( 84,151 ) ( 84,151 ) - - - - ($ 505,966 ) ($ 505,966 ) - ( 288,559 ) ( 288,559 ) - - - - - ($ 794,525 ) |
$27,803,270 6,041,129 ( 97,120 ) 5,944,009 - - ( 3,801,852 ) 434 $29,945,861 $29,945,861 5,587,210 ( 296,622 ) 5,290,588 - - ( 3,801,853 ) ( 422,429 ) 298 $31,012,465 |
The accompanying notes are an integral part of these consolidated financial statements.
~17~
MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation (including right-of-use assets and investment properties) Amortization (including long-term prepaid rents) Expected credit loss Net gains on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Gain on disposal of property, plant and equipment Loss on disposal of investments Gain on lease modification Loss on unrealized foreign currency exchange Changes in operating assets and liabilities Changes in operating assets Financial assets held for trading Notes receivable, net Accounts receivable Other receivables Inventories, net Prepayments Other current financial assets Other non-current assets Changes in operating liabilities Notes payable Accounts payable Other payables Provision for liabilities - current Current refund liabilities Other current liabilities, others Net defined benefit liability Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash flows from operating activities |
Years ended December 31 Notes 2019 2018 $ 6,518,433 $ 7,151,134 890,056 685,785 6(23) 224 9,188 15,696 1,665 ( 39,222 ) ( 70,334 ) 23,546 14,408 6(21) ( 82,368 ) ( 88,788 ) 6(22) ( 2,906 ) ( 46,913 ) - 2,849 ( 214 ) - 24,242 28,275 - ( 26,147 ) ( 11,931 ) ( 35,162 ) ( 1,179,668 ) 899,718 ( 70,951 ) 182,643 ( 474,978 ) ( 5,731,835 ) ( 294,679 ) ( 88,294 ) ( 471,064 ) ( 660,101 ) 97,176 3,808 ( 200 ) 200 5,457,896 ( 1,098,711 ) 427,104 ( 70,215 ) 55,625 46,351 ( 160,406 ) ( 36,726 ) 16,728 ( 12,732 ) ( 5,714 ) ( 6,578 ) 10,732,425 1,053,488 84,991 86,892 ( 23,559 ) ( 13,974 ) ( 1,520,287 ) ( 1,042,224 ) 9,273,570 84,182 |
|---|---|
(Continued)
~18~
MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investment properties Increase in refundable deposits Increase in other financial assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease (increase) in short-term borrowings Repayment of the principal portion of lease liabilities Payment of long-term borrowings (Decrease) increase in guarantee deposits received Cash dividends paid Cash distribution from capital surplus Due to donated assets received Net cash flows used in financing activities Effect of exchange rate Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year |
Years ended December 31 Notes 2019 2018 6(3) ($ 151,975 ) $ - 6(7) ( 982,667 ) ( 450,502 ) 57,700 50,311 6(10) ( 3,602 ) ( 2,409 ) ( 15,894 ) ( 3,620 ) ( 19,121 ) ( 46,369 ) ( 1,115,559 ) ( 452,589 ) ( 1,500,000 ) 3,000,000 ( 152,916 ) - ( 843 ) ( 898 ) ( 27,983 ) 33,807 6(19) ( 3,801,853 ) ( 3,801,852 ) 6(19) ( 422,429 ) - 298 434 ( 5,905,726 ) ( 768,509 ) ( 233,081 ) ( 75,468 ) 2,019,204 ( 1,212,384 ) 6(1) 8,815,680 10,028,064 6(1) $ 10,834,884 $ 8,815,680 |
|---|---|
The accompanying notes are an integral part of these consolidated financial statements.
~19~
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE
To the Board of Directors and Shareholders of MICRO‐STAR INTERNATIONAL CO., LTD.
Opinion
We have audited the accompanying parent company only balance sheets of MICRO-STAR INTERNATIONAL CO., LTD. (the “Company”) as at December 31, 2019 and 2018, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2019 and 2018, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.
Basis for opinion
We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our ethical responsibilities in accordance with the Code. Based on our audits and the audit reports of other independent accountants, we believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the year ended December 31, 2019. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.
~20~
Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2019 are stated as follows:
Occurrence of sales revenue from significant customers
Description
Please refer to Note 4(24) for accounting policies on revenue recognition. Other than international brands, the Company sells its products to customers in various countries. With the Company actively developing new products, sales revenue increases progressively every year, and the occurrence of sales revenue is critical to the financial statements. Thus, the occurrence of sales revenue from new significant customers, excluding international brands, was identified as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
-
A. Obtained an understanding of and assessed internal controls in relation to sales revenue from new significant customers, and validated the operating effectiveness of those abovementioned internal controls.
-
B. Obtained detailed listing of sales revenue from new significant customers in the current year, and validated supporting documents, including sales invoices, customer purchase orders and delivery documents.
-
C. Inspected contents and relevant evidences in relation to sales returns and discounts occurring subsequent to the reporting period and assessed the reasonableness of respective sales revenue recognized.
Estimation of allowance for inventory valuation losses
Description
Please refer to Note 4(10), for accounting policies on inventory valuation, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on inventory valuation, and Note 6(5) for details of inventories. As of December 31, 2019, the balances of inventories and allowance for inventory valuation losses are NT$23,137,902 thousand and NT$381,847 thousand, respectively.
The Company is primarily engaged in manufacturing and sales of motherboard, interface card, notebook computer and other electronic products. Due to the rapid technological innovations, shorter electronic product life cycles, and the fluctuation of market prices within the industry, there is a higher risk of inventory losses due from market value decline or obsolescence. The Company recognises
~21~
inventories at the lower of cost and net realisable value. As the monetary values of inventories are material, and there are various types of inventories, the estimation and determination of the net realisable value of inventories at the balance sheet date are subject to management’s judgement and contain a high level of uncertainty and have material effects of the financial statements, and therefore, it was identified as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
-
A. Assessed the reasonableness and the consistency of policies in relation to the provision of allowance for inventory valuation losses and procedures based on our understanding of the Company’s operations and industry.
-
B. Validated the appropriateness of system logic of the report of individually identified obsolete inventory prepared by management and confirmed the consistency with Company’ policies.
-
C. Validated the appropriateness of estimation basis for net realisable value of inventories and inspected respective supporting documents, including sale prices or purchase prices, reperformed the calculation of the report and assessed the reasonableness of management’s determination of net realizable value of inventories.
Other matter-Reference to audits of other independent accountants
We did not audit the financial statements of certain investments accounted for under the equity method that are included in the parent company only financial statements. Those financial statements were audited by other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on reports of the other independent accountants. Total assets of the abovementioned investees (including investments accounted for under the equity method) amounted to NT$1,097,458 thousand and NT$1,054,586 thousand as at December 31, 2019 and 2018, constituting 1.75% and 1.83% of total assets, respectively. Comprehensive income of the abovementioned investees amounted to NT$88,436 thousand and NT$28,776 thousand, for the years ended December 31, 2019 and 2018, constituting 1.67% and 0.48% of total comprehensive income, respectively.
~22~
Responsibilities of management and those charged with governance for the parent company only financial statements
Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance, including audit committee, are responsible for overseeing the Company’s financial reporting process.
Independent accountant's responsibilities for the audit of the parent company only
financial statements
Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.
As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
~23~
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
-
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
~24~
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Liang, Hua-Ling
[Lai, Chung-Hsi ]
For and on behalf of PricewaterhouseCoopers, Taiwan March 20, 2020
------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.
As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.
~25~
MICRO-STAR INTERNATIONAL CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| Assets | December31,2019 Notes AMOUNT % 6(1) $ 8,881,827 14 6(2) 56,641 - 6(4) 3,929 - 6(4) 10,846,273 18 7 6,632,030 11 157,760 - 6(5) 22,756,055 36 1,351,294 2 1,200,000 2 51,885,809 83 6(3) 151,975 - 6(6) 7,496,491 12 6(7) 2,567,030 4 6(8) 179,398 - 6(21) 407,702 1 18,890 - 10,821,486 17 $ 62,707,295 100 (Continued) |
December31,2018 | December31,2018 |
|---|---|---|---|
| AMOUNT $ 6,979,442 14,332 2,377 10,736,410 5,881,877 91,329 22,167,051 1,115,391 728,936 47,717,145 - 7,099,071 2,363,138 - 392,815 5,603 9,860,627 $ 57,577,772 |
% | ||
| Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 130X Inventories, net 1410 Prepayments 1476 Other current financial assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets |
12 - - 19 10 - 39 2 1 |
||
| 83 | |||
| - 12 4 - 1 - |
|||
| 17 | |||
| 100 | |||
~26~
MICRO-STAR INTERNATIONAL CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| Liabilities andEquity | December31,2019 December31,2018 Notes AMOUNT % AMOUNT % 6(9) $ 1,500,000 2 $ 3,000,000 5 6(2) 24,943 - 5,555 - - - 200 - 19,764,458 32 14,658,805 25 6(10) 3,049,919 5 2,754,512 5 7 4,272,610 7 3,671,761 6 6(21) 362,183 1 961,026 2 6(12) 579,337 1 514,601 1 71,892 - - - 1,555,509 2 1,702,658 3 65,353 - 27,539 - 31,246,204 50 27,296,657 47 6(21) 26,830 - 1,755 - 108,013 - - - 6(11) 221,974 1 217,609 1 91,809 - 115,890 - 448,626 1 335,254 1 31,694,830 51 27,631,911 48 6(13) 8,448,562 13 8,448,562 15 6(14) 803,918 1 1,226,049 2 6(15) 4,982,577 8 4,378,464 7 505,966 1 421,815 1 17,065,967 27 15,976,937 28 ( 794,525) ( 1) ( 505,966) ( 1) 31,012,465 49 29,945,861 52 $ 62,707,295 100 $ 57,577,772 100 |
|---|---|
| Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Current lease liabilities 2365 Refund liabilities-current 2399 Other current liabilities, others 21XX Total current Liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Net defined benefit liability, non-current 2670 Other non-current liabilities, others 25XX Total non-current liabilities 2XXX Total Liabilities Equity Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3XXX Total equity 3X2X Total liabilities and equity |
The accompanying notes are an integral part of these parent company only financial statements.
~27~
MICRO-STAR INTERNATIONAL CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)
| Items | YearendedDecember31 2019 2018 Notes AMOUNT % AMOUNT % 6(16) and 7 $ 118,740,373 100 $ 116,988,422 100 6(5)(20) and 7 ( 105,097,585)( 89) ( 102,756,311) ( 88) 13,642,788 11 14,232,111 12 6(20) and 7 ( 4,689,816) ( 4 ) ( 4,474,176) ( 4) ( 526,354) - ( 445,352) - ( 2,937,315) ( 2 ) ( 2,983,104) ( 3) 6(4) ( 4,095) - 10,637 - ( 8,157,580)( 6) ( 7,891,995)( 7) 5,485,208 5 6,340,116 5 6(17) 297,400 - 401,353 - 6(2)(18) ( 50,864) - ( 119,607) - ( 13,504) - ( 9,029) - 6(6) 685,979 1 416,401 1 919,011 1 689,118 1 6,404,219 6 7,029,234 6 6(21) ( 817,009)( 1) ( 988,105) ( 1) $ 5,587,210 5 $ 6,041,129 5 6(11) ($ 10,079) - ($ 21,430) - 6(21) 2,016 - 8,461 - ( 8,063) - ( 12,969) - ( 288,559) - ( 84,151) - ( 288,559) - ( 84,151) - ($ 296,622) - ($ 97,120) - $ 5,290,588 5 $ 5,944,009 5 6(22) $ 6.61 $ 7.15 $ 6.56 $ 7.08 |
|---|---|
| 4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit (loss) gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Other components of other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial losses on defined benefit plans 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Basic earnings per share 9750 Total basic earnings per share 9850 Total diluted earnings per share |
The accompanying notes are an integral part of these parent company only financial statements.
~28~
MICRO-STAR INTERNATIONAL CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars)
| 2018 Balance at January 1, 2018 Profit for the year Other comprehensive loss for the year Total comprehensive income Appropriations of 2017 earnings (Note) : Legal reserve Special reserve Cash dividends Due to donated assets received Balance at December 31, 2018 2019 Balance at January 1, 2019 Profit for the year Other comprehensive loss for the year Total comprehensive income Appropriations of 2018 earnings (Note) : Legal reserve Special reserve Cash dividends Cash dividends from capital surplus Due to donated assets received Balance at December 31, 2019 |
Notes 6(15) 6(15) 6(14) |
Share capital - commonstock |
CapitalSurplus | CapitalSurplus | RetainedEarnings | Financial statements translation differences of foreignoperations |
Totalequity | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Treasury stock transactions $ 130,592 - - - - - - - $ 130,592 $ 130,592 - - - - - - - - $ 130,592 |
Donated assets received $ - - - - - - - 434 $ 434 $ 434 - - - - - - - 298 $ 732 |
Employee stock warrants |
Legal reserve | Special reserve | Unappropriated retained earnings |
|||||||||||
| $8,448,562 - - - - - - - $8,448,562 $8,448,562 - - - - - - - - $8,448,562 |
$ 44,460 - - - - - - - $ 44,460 $ 44,460 - - - - - - - - $ 44,460 |
$3,884,722 - - - 493,742 - - - $4,378,464 $4,378,464 - - - 604,113 - - - - $4,982,577 |
$ 389,482 - - - - 32,333 - - $ 421,815 $ 421,815 - - - - 84,151 - - - $ 505,966 |
$14,276,704 6,041,129 ( 12,969 ) 6,028,160 ( 493,742 ) ( 32,333 ) ( 3,801,852 ) - $15,976,937 $15,976,937 5,587,210 ( 8,063 ) 5,579,147 ( 604,113 ) ( 84,151 ) ( 3,801,853 ) - - $17,065,967 |
($ 421,815 ) - ( 84,151 ) ( 84,151 ) - - - - ($ 505,966 ) ($ 505,966 ) - ( 288,559 ) ( 288,559 ) - - - - - ($ 794,525 ) |
$27,803,270 6,041,129 ( 97,120 ) 5,944,009 - - ( 3,801,852 ) 434 $29,945,861 $29,945,861 5,587,210 ( 296,622 ) 5,290,588 - - ( 3,801,853 ) ( 422,429 ) 298 $31,012,465 |
Note: The directors' and supervisors' remuneration were $49,500 and $49,500, and employees' bonuses were $515,000 and $505,000 in 2017 and 2018, respectively, which had been deducted from net income for the year.
The accompanying notes are an integral part of these parent company only financial statements.
~29~
MICRO-STAR INTERNATIONAL CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization Expected credit gain Net gains on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Share of profit of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Gain on lease modification Loss on unrealized foreign currency exchange Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable Accounts receivable due from related parties Other receivables Other receivables - related parties Inventories, net Prepayments Other current financial assets Changes in operating liabilities Notes payable Accounts payable Other payables Other payables - related parties Provisions for liabilities - current Current refund liabilities Other current liabilities, others Net defined benefit liability Cash inflow (outflow) generated from operations Interest received Interest paid Income tax paid Net cash flows from (used in) operating activities |
Years ended December 31 Notes 2019 2018 $ 6,404,219 $ 7,029,234 6(7)(8)(19) 157,384 74,533 6(19) 4 23 6(4) 4,095 ( 10,637 ) ( 22,921 ) ( 12,309 ) 13,504 9,029 6(17) ( 57,384 ) ( 69,958 ) ( 685,979 ) ( 416,401 ) 6(18) ( 11 ) ( 300 ) ( 163 ) - 24,242 28,275 ( 1,552 ) ( 2,356 ) ( 113,958 ) 831,502 ( 750,153 ) ( 416,752 ) ( 70,283 ) ( 14,636 ) - 6,488 ( 589,004 ) ( 5,750,389 ) ( 235,903 ) 30,163 ( 471,064 ) ( 660,101 ) ( 200 ) 200 5,105,653 ( 1,205,689 ) 295,762 83,943 600,849 265,934 64,736 59,857 ( 147,149 ) 6,045 37,814 ( 40,790 ) ( 5,714 ) ( 6,578 ) 9,556,824 ( 181,670 ) 61,236 68,609 ( 13,859 ) ( 8,637 ) ( 1,403,648 ) ( 866,252 ) 8,200,553 ( 987,950 ) |
|---|---|
(Continued)
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MICRO-STAR INTERNATIONAL CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(Expressed in thousands of New Taiwan dollars)
| CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Proceeds from capital reduction of investments accounted for using equity method Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings Repayment of the principal portion of lease liabilities (Decrease) increase in guarantee deposits received Cash dividends paid Cash distribution from capital reserve Due to donated assets received Net cash flows used in financing activities Effect of exchange rate Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year |
Years ended December 31 Notes 2019 2018 6(3) ($ 151,975 ) $ - 6(7) ( 298,543 ) ( 64,263 ) 13 300 ( 13,291 ) ( 1,740 ) 6(6) - 613,937 ( 463,796 ) 548,234 6(9) ( 1,500,000 ) 3,000,000 6(8) ( 62,065 ) - ( 24,081 ) 28,472 6(15) ( 3,801,853 ) ( 3,801,852 ) 6(14) ( 422,429 ) - 298 434 ( 5,810,130 ) ( 772,946 ) ( 24,242 ) ( 28,275 ) 1,902,385 ( 1,240,937 ) 6(1) 6,979,442 8,220,379 6(1) $ 8,881,827 $ 6,979,442 |
|---|---|
The accompanying notes are an integral part of these parent company only financial statements.
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Attachment Ⅳ
Micro-Star International Co., Ltd.
Comparison chart of the amended Articles of Incorporation
AFTER THE REVISION
BEFORE THE REVISION
Remarks
Article 8 Article 8 To comply with the The stock certificates of the Company shall be in registered The stock certificates of the Company shall be in registered amended form ,affixed with the signatures or personal seals of the form and issued after being signed and affixed with the seal Regulations. director representing the Company, being assigned serial specimen by three or more directors of the Company, being numbers and being authenticated in accordance with law. assigned serial numbers and being authenticated in accordance When rights issue, the share certificates of the rights issue may with law. be printed in combination form but shall be held in custody by When rights issue, the share certificates of the rights issue may centralized securities depository institutions. The shares of be printed in combination form but shall be held in custody by the rights issue may be made in non-printed form but shall be centralized securities depository institutions. The shares of registered in centralized securities depository institutions. the rights issue may be made in non-printed form but shall be registered in centralized securities depository institutions. Article 22 Article 22 To increase the date of These Articles of Incorporation were entered into on July 23, These Articles of Incorporation were entered into on July 23, the 1986. 1986. amendment. The first amendment was made on June 30, 1989; The first amendment was made on June 30, 1989; The second amendment was made on March 26, 1990; The second amendment was made on March 26, 1990; The third amendment was made on June 25, 1991; The third amendment was made on June 25, 1991; The fourth amendment was made on April 25, 1994; The fourth amendment was made on April 25, 1994; The fifth amendment was made on May 30, 1995; The fifth amendment was made on May 30, 1995; The sixth amendment was made on June 11, 1996; The sixth amendment was made on June 11, 1996; The seventh amendment was made on August 30, 1996; The seventh amendment was made on August 30, 1996; The eighth amendment was made on April 19, 1997; The eighth amendment was made on April 19, 1997; The ninth amendment was made on February 28, 1998; The ninth amendment was made on February 28, 1998; The tenth amendment was made on September 18, 1998; The tenth amendment was made on September 18, 1998; The eleventh amendment was made on May 20, 1999; The eleventh amendment was made on May 20, 1999; The twelfth amendment was made on May 4, 2000; The twelfth amendment was made on May 4, 2000; The thirteenth amendment was made on May 10, 2001; The thirteenth amendment was made on May 10, 2001; The fourteenth amendment was made on May 10, 2001; The fourteenth amendment was made on May 10, 2001; The fifteenth amendment was made on May 16, 2002; The fifteenth amendment was made on May 16, 2002; The sixteenth amendment was made on May 28, 2003; The sixteenth amendment was made on May 28, 2003; The seventeenth amendment was made on May 28, 2003; The seventeenth amendment was made on May 28, 2003; The eighteenth amendment was made on June 9, 2004; The eighteenth amendment was made on June 9, 2004; The nineteenth amendment was made on June 14, 2005; The nineteenth amendment was made on June 14, 2005; The twentieth amendment was made on June 14, 2006; The twentieth amendment was made on June 14, 2006; The twenty-first amendment was made on June 13, 2007; The twenty-first amendment was made on June 13, 2007; The twenty-second amendment was made on June 11, 2008; The twenty-second amendment was made on June 11, 2008; The twenty-third amendment was made on June 16, 2009; The twenty-third amendment was made on June 16, 2009; The twenty-forth amendment was made on June 10, 2010; The twenty-forth amendment was made on June 10, 2010; and The twenty-fifth amendment was made on June 9, 2011. and The twenty-fifth amendment was made on June 9, 2011. The twenty-sixth amendment was made on June 17, 2014. The twenty-sixth amendment was made on June 17, 2014. The twenty-seventh amendment was made on June 16, 2016. The twenty-seventh amendment was made on June 16, 2016. The twenty-eighth amendment was made on June 15, 2018. The twenty-eighth amendment was made on June 15, 2018. The twenty-nineth amendment was made on June 14, 2019. The twenty-nineth amendment was made on June 14, 2019.
Article 8
Article 22
These Articles of Incorporation were entered into on July 23, 1986.
The first amendment was made on June 30, 1989; The second amendment was made on March 26, 1990; The third amendment was made on June 25, 1991; The fourth amendment was made on April 25, 1994; The fifth amendment was made on May 30, 1995; The sixth amendment was made on June 11, 1996; The seventh amendment was made on August 30, 1996; The eighth amendment was made on April 19, 1997; The ninth amendment was made on February 28, 1998; The tenth amendment was made on September 18, 1998; The eleventh amendment was made on May 20, 1999; The twelfth amendment was made on May 4, 2000; The thirteenth amendment was made on May 10, 2001; The fourteenth amendment was made on May 10, 2001; The fifteenth amendment was made on May 16, 2002; The sixteenth amendment was made on May 28, 2003; The seventeenth amendment was made on May 28, 2003; The eighteenth amendment was made on June 9, 2004; The nineteenth amendment was made on June 14, 2005; The twentieth amendment was made on June 14, 2006; The twenty-first amendment was made on June 13, 2007; The twenty-second amendment was made on June 11, 2008; The twenty-third amendment was made on June 16, 2009; The twenty-forth amendment was made on June 10, 2010; and The twenty-fifth amendment was made on June 9, 2011. The twenty-sixth amendment was made on June 17, 2014. The twenty-seventh amendment was made on June 16, 2016. The twenty-eighth amendment was made on June 15, 2018. The twenty-nineth amendment was made on June 14, 2019. The thirtieth amendment was made on June 10, 2020.
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