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EVERSPRING Annual Report 2020

Jul 19, 2021

52050_rns_2021-07-19_a1b07b7e-fd92-4767-88c8-d9d8d0b1fb6e.pdf

Annual Report

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==> picture [57 x 46] intentionally omitted <==

EVERSPRING INDUSTRY CO., LTD

2021 Annual Shareholders’ Meeting

Meeting Handbook

Meeting Time ： 9:00 A.M., Jun. 22, 2021

Venue ： 5rd Fl, No.50, Sec. 1, Zhonghua Rd., Tucheng City, Taipei County 236,

Taiwan (R.O.C.)

Note to Readers：

If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language version shall prevail.

  • 0 -

Table of Contents

I. Meeting Procedure 1
II. Meeting Agenda 2
1. Management Presentation 3
2. Proposals 4
3. Discussion 6
4. Questions and Motions 6
III. Appendices
1. Business Report for the year of 2020 7
2. Audit Committee’s Censorship Report for the year of 2020 9
3. Auditor’s report, Individual Financial Report, and Consolidated
Financial Report for the year of 2020 10
4. Amendment of Articles of Incorporation 32
4. Appendices
1. Articles of Incorporation (Before amendment) 34
2.Rules of Procedure for Shareholder Meetings 41
3. Current Shareholding of Directors and Supervisors 44
  • 1 -

EVERSPRING INDUSTRY CO., LTD Procedure for the 2021 Annual Meeting of Shareholders

  1. Call the Meeting to Order

  2. Chairperson Remarks

  3. Management Presentation (Company Reports)

  4. Proposals

  5. Discussion

  6. Questions and Motions

  7. Adjournment

1

EVERSPRING INDUSTRY CO., LTD Procedure for the 2021 Annual Meeting of Shareholders

Time: 9:00 A.M., Jun. 22 (Tue.), 2021

Place: 5rd Fl, No.50, Sec. 1, Zhonghua Rd., Tucheng City, Taipei

1. Call the Meeting to Order (Announce the number of attendees)

2. Chairperson Remarks

3. Management Presentation (Company Reports)

  • (1) The 2020 Business Report

  • (2) The 2020 Audit committee’s review Report

  • (3) Briefing on matters related to the merger of the company and Auspistek Corporation.

4. Proposals

  • (1) The 2020 Business Report, Individual Financial Report, and Consolidated Financial Statements.

  • (2) The 2020 Loss make-up proposal.

5. Discussion

  • (1) Amendment on the Articles of Incorporation

6. Questions and Motion

7. Adjournment

2

Management Presentation (Company Reports)

  1. 2020 Business Report of the Company.

Refer to Appendix 1 on page 7 to 8 of the handbook for the 2020 Business Report of the Company.

  1. Audit Committee’s Review Report on the 2020 Financial Statements of the Company.

Refer to Appendix 2 on page 9 of the handbook for the 2020 Audit Committee’s Review Report on the 2020 Financial Statements of the Company.

  1. Briefing on matters related to the merger of the company and Auspistek Corporation.

To simplify the procedure for group investment structure and incorporation of resources, the Company has merged with the its subsidiary Auspistek Corporation of which 100% of the shares are owned by the Company. The merger was accepted on the Board of Director’s meeting on November 11, 2020, and conducted following the regulation of Article 19 of Business Mergers and Acquisitions Act. The date of merger was December 1, 2002. After the merger, Everspring is the surviving company, and the Auspistek Corporation is the dissolved company. The merger case has been completed and gained the official approval of Department of Commerce, Ministry of Economic Affairs.

Proposals

Proposed by the Board

Proposal: Adoption of the 2020 Business Report, Individual Financial Report, and Consolidated Financial Statements

Explanation:

  1. 2020 Individual and Consolidated Financial Statements of Everspring Industry Co., Ltd. were audited by independent auditors, Xie Chung-Ming and Su Yu-Show of Deloitte & Touche Firm. Also, Business Report and Financial Statements have been approved by the Board and examined by the supervisors of Everspring Industry Co., Ltd.

  2. Refer to Appendix 1 on page 7 to 8 and appendix 3 on page 10 to 31 for the Business Report, Auditors’ Review Report, Individual Financial Report, and Consolidated Financial Report.

  3. The case is hereby submitted to the meeting for recognition.

Resolution:

4

2. Proposal: Adoption of 2020 Loss make-up Proposal

Proposed by the Board

Explanation: 1. The proposal 2020 loss make-up proposal was accepted on the 11[th] meeting of the 14[th] Board of Directors on March 24, 2021, and reviewed by the audit committee.

2. The table for 2020 loss make-up is as below:

EVERSPRING INDUSTRY CO., LTD

Table of 2020 Loss Make-up

Unit: NT dollars

Table of 2020 Loss Make-up
Unit: NT dollars
retained earnings at the beginning of the year (416,242,138)
Add: Remeasurement of defined benefit plan
recognized asretained earnings
(263,248)
Net profit of the year 195,268,041
Retained earnings-unappropriated at the end of the
year
(221,237,345)

President: Chang, Tse Ling Manager: Chang, Tse Ling Supervisor of Accounting: Li, Hsiu Ting

3. The case is hereby submitted to the meeting for recognition.

Resolution:

5

Discussion

1

Proposed by the Board

  • Proposal: Adoption of amendments to “Articles of Incorporation” of Everspring Co., Ltd.

Explanation:

  1. “Articles of Incorporation” of Everspring Co., Ltd. are amended following the revision of legal regulations and fulfilling the operational needs of the company.

  2. Refer to Appendix 4 on page 32 to 33 of the handbook for the cross-reference table of “Articles of Incorporation” of Everspring Co., Ltd.

  3. The case is hereby submitted to the meeting for recognition.

Resolution:

Questions and Motions

Adjournment

6

Appendix I

EVERSPRING INDUSTRY CO., LTD 2020 Business Report

Dear Shareholders,

We appreciate your support over the past year. Below are the briefing of the outcome of business over the past year and the operation plan for the year 2021.

2020 Financial and Operational Performance

The consolidated revenue of the Company and subsidiaries in 2020 was NT$531 million, with a decrease of $621 million compared with consolidated revenue in the previous year. The consolidate operating gross profit was NT$93 million, dropping by 20.1% from the previous year’s consolidated gross profit of NT$117 million. The net loss from consolidated operations was NT$122 million; the pre-tax net profit was NT$202 million; the after-tax net profit was NT$195 million, and the earnings per share were NT$0.91. The sales of security system products (e.g. anti-theft/ disaster prevention/ home automation/ video surveillance) contribute to the majority of the operating income. The Company would continue to integrate technologies of software and hardware platforms and apps around the globe. While exploring the smart security industry, the company also lays the foundation for the market of smart construction .

2021Plan for Business, Product Development, and Operation

In 2021, Everspring Industry Co., Ltd. continued to promote security systems and products; it has been exploring the market of smart security control in Central and South America, the Middle East, and Europe. Meanwhile, the projects of smart product design and collaborative projects with major European and American brands continues to grow.

The company has been working on product development, too. Smart security is a set of comprehensive solutions that can integrate services, with anti-theft alarming, disaster prevention, energy saving, environmental control, home health management, image monitoring, and other functions. A complete smart platform would include hardware, Apps, and cloud services. In addition to promoting our own brands, the company also focus on integrating its home-developed products with those from third-party manufacturers. For example, smart IP gateways, security alarms, various sensors, IP Cam, wireless remote controls, smart sockets, mobile device apps, and cloud services. These products can also be combined with the integrated system of anti-epidemic temperature monitoring products to achieve big data integration and analysis to improve protection efficiency and reduce the risk of infection.

7

In terms of operations, Everspring Industry Co., Ltd. has transferred its production bases in mainland China this year. It has successfully completed the transfer of shares of mainland subsidiaries. Also, the Company has re-examined and consolidated group assets to reduce operating costs and increase asset value. Despite the raging global pandemic, the company's operations have not been suspended, and it’s still accelerating with the development of new products to keep up with the trend and business opportunities on the market.

Vision and Prospect for the year of 2021

In 2021, Everspring Industry Co., Ltd. expects to boost its business in providing software and hardware platform service solutions with smart security to its target market. The company will offer ot the customer security platform integration, high value-added products and services, and more complete and humanized smart life services solution.

This year, Everspring would continue to improve its security and automation products series and system service solutions. The Company will also officially promote access control system with more advanced hardware with the hope to enhance the competitiveness of product value and creating greater benefits for the company. Here, I would like to thank all shareholders, customers, third-party vendors, and all colleagues for their continuous support, encouragement, and contribution to Everspring Industry Co., Ltd. .

Sincerely,

Chairperson Chang, Tse Ling

General Manager Chang, Tse Ling

Director of Accounting: Li, Hsiu Ting

8

Appendix II

Review Report of Audit Committee

The Board has compiled and submitted the 2020 Business report, Financial Statement, and Loss Make-up proposal. Account Xie Ming-Chung and Su Yu-show from Deloitte & Touche Accounting Firm were entrusted by the Board to review the financial statement and compile a review report.

The above-mentioned business report, financial statement, and loss make-up proposal have been review by the audit committee. The company abides by relevant provisions in Company Act and compiled the reports above in accordance with Article 14 of Securities and Exchange Act and Article 219 of Company Act.

For review on 2021 Shareholders’ meeting of EVERSPRING INDUSTRY CO., LTD Sincerely,

LEE, PI SHU, Convener for Audit committee of EVERSPRING INDUSTRY CO., LTD

March 24, .2021

Appendix III

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders EVERSPRINGINDUSTRY CO., LTD

Opinion

We have audited the accompanying parent company only financial statements of EVERYSPRING INDUSTRY CO., LTD (the “Company”), which comprise the parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and he 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 accompanying parent company only financial position of the Company as of December 31, 2020 and 2019, 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 auditing standards generally accepted in the Republic of China Our responsibilities under those standards are further described in the Auditors’ 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 Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that he audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasizing matters

As mentioned in notes 1 and 30 of the individual financial report, that EVERSPRING INDUSTRY CO., LTD. absorbed and merged its wholly-owned subsidiary AUSPISTEK CORPORATION. on December 1, 2020. The merger is under common control. The reorganization of the organization and the IFRS Q&A and related letter interpretations published by the Accounting Research and Development Foundation of the Republic of China. When preparing the comparative statement, it should be deemed to have been consolidated from the beginning and the financial statements for the comparative period shall be re-edited. The auditor did not revise the audit opinion for this reason.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the parent company only financial statements for the year ended

10

December 31, 2020. 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, and we do not provide as separate opinion on these matters.

Key audit maters for the Company’s parent company only financial statements for the year ended December 31, 2020 are stated as follows:

Recognition of sales revenue

Based on the audit standards, there is a significant audit risk in the recognition of revenue, and EVERSPRING INDUSTRY CO., LTD. continues to actively promote the sales of smart home security control systems, smart lighting fixtures and smart sensors. The authenticity of recognized operating revenue holds significant impact on the independent financial statements, because the sales revenue of smart home security control systems, smart lighting fixtures and smart sensors are listed as key audit items.

In response to the above important matters, the auditor performs the main inspection procedures as follows:

  1. To understand the effectiveness of the design and implementation of the internal control system related to income recognition.

  2. To obtain the sales revenue details of smart home security control systems, smart lighting fixtures and smart sensors in the year 2020, and check the original orders, shipping orders, invoices and other related documents of the related transactions, and compare them with the entered amount, to check and confirm the authenticity of income.

Other Items

Included in the above Financial Statements of in the year ended Dec.31,2019 of PHASE ELECTRONICS (UK) LTD. were reviewed by other auditors. Therefore, the auditor’s opinion on the above Financial Statements is related to these investee companies. The investment using the equity method and the investment gains and losses using the equity method are recognized based on the audit reports of other auditors. On Dec.31,2019, the amount of investment in PHASE ELECTRONICS (UK) LTD. using the equity method was NT$ 1,298,000, accounting for 0% of total assets and liabilities. In the year ended Dec.31,2019, the investment loss of these investee companies was NT$ 3,546,000, accounting for 2% of the pre-tax loss.

In addition, in the attached Financial Statements, the Financial Statements of the investee company Medigen Biotechnology Corporation the evaluated by the equity method in the year ended Dec.31,2020 and 2019 were reviewed by other auditors. Therefore, the auditor indicated to the above Financial Statements. The opinion of the investment of these investee companies using the equity method and their investment gains and losses are recognized based on the audit reports of other auditors. The amount of investment in these investee companies using the equity method on Dec.31,2020 and 2019 was NT$ 414,728,000 and NT$ 379,164,000, respectively, accounting for 17% of the total assets. The share of losses of related companies recognized by the equity method of other investee companies was NT$ 34,806,000 and NT$ 27,833,000, accounting for (17) % and 16% of the net profit (loss) before tax.

Responsibilities of Management and Governance Units for Parent company only Financial Statements

The management’s responsibility is to prepare Parent company only Financial Statements that

11

can be properly expressed in accordance with the Securities Issuer’s Financial Report Preparation Standards, and to maintain the necessary internal controls related to the preparation of Individual Financial Statements to ensure that the Individual Financial Statements are not materially caused by fraud or errors false expression.

When preparing Individual Financial Statements, the management’s responsibilities also include assessing the ability of EVERSPRING INDUSTRY CO., LTD. to continue operations, disclosure of related matters, and the adoption of the accounting basis for continuing operations, unless the management intends to liquidate EVERSPRING INDUSTRY CO., LTD. The company may cease operations, or there is no practical and feasible plan other than liquidation or suspension of operations.

The Governance Unit (including the Audit Committee) of EVERSPRING INDUSTRY CO.,LTD. is responsible for supervising the financial reporting process.

Auditors’ 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 auditors’ 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 the auditing standards generally acdept3ed in the Republic of China, will always detect a material misstat3ement 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 the auditing standards generally accepted in the Republic of China, we exercised professional judgment an maintain professional skepticism throughout the audit. We also:

  1. 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 obtained audit evident 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.

  2. 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 EVERYSPRING INDUSTRY CO., LTD’s internal control.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. 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 ton events or conditions that may cast significant doubt on the EVERYSPRING INDUSTRY CO., LTD.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the 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 EVERYSPRING INDUSTRY CO., LTD. to cease to continue as a going concern.

12

  1. 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.

  2. Obtain sufficient appropriate audit evidence regarding the fnancial information of the entities or business activities within the EVERSPRING INDUSTRY CO., LTD. To express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and peformance 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 charge 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 many reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the mattters communicated with those charged with governance, we determine those matters that were of most signifiance in the audit of the parent company only financial statement for the year ended December 31, 2020, and are therefore the key audit maters. We describe these mattes in our auditors’ 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 communicate in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ming-Chung Hsieh and Yu-shiou Su.

DELOITTE & TOUCHE TAIPEI, TAIWAN Republic of China Ming-Chung Hsieh FSAC Approval Number:No.

Financial-Supervisory-Securities-Auditing-

Yu-shiou Su FSAC Approval Number:No. Financial-Supervisory-Securities-Auditing-10 40024195

1000028068

March 24, 2021

13

EVERYSPRING INDUSTRY CO., LTD

PARENT COMPANY ONLY BALANCE SHEET

DECEMBER 31 2020 & 2019

Code


1100
1110

1120
1160
1170
1180
1200
1210
1220
130X
1479
11XX


1510
1517
1550
1600
1760
1840
1821
1915
1920
1975

1990
15XX

1XXX


CODE


2100
2130
2170
2180
2219
2220
2230
2320
2399
21XX


2540
2570
2645
2650
25XX

2XXX


3110
3200
3320
3350
3300
3410
3420
3400
3XXX

 ASSETS
Current Assets
Cash & Cash Equivalents（Note 6）
Financial Assets at fair（value through profit or loss (Note 7）
Financial assets at fair value through other comprehensive income-current（Note
8）
Notes receivable-net from related parties（Note 26）
Account receivable, net（Note 9）
Account receivable-net from related parties（Note 26）
other accounts receivable（Note 9）
other accounts receivable-from related parties（Note 26）
Income tax assets for the current period（Note 22）
Inventories（Note 10）
Other current assets-others（Note 14）
Total current assets
Non-current assets
Financial assets at fair value through profit & loss-noncurrent（Note 7）
Financial assets at fair value through other comprehensive income –noncurrent
(Note 8）
Investment accounted for using the equity method（Note 11）
Property, plant and equipment（Note 12）
Not investment property（Note 13）
Deferred Income tax assets（Note 22）
Other intangible assets
Prepaid equipment（Note 14）
Refundable deposits
Net defined benefit assets-noncurrent（Note18）
other non-current assets（Note 14）
Total non-current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Short-term loans（Note 15）
contract liabilities –current（Note 20）
accounts payable（Note 16）
Accounts payable-related parties（note 26）
other accounts payable（Notes 17）
other accounts payable –related parties（Note 26）
Current income tax liabilities（Note 22）
Long-term loans due within one year（Note 15）
other current liabilities
total current liabilities
Non-current Liabilities
Long term loans(Note 15)
Deferred income tax liabilities
(Note 22)
Guarantee deposits (Note 17)
Investment credits by using equity method (Note 11)
Total non-current liabilities
Total liabilities
Equity(Note 19)
Stock
Common stock
Capital reserve
Retained surplus
Special surplus reserve
Undistributed surplus
Total retained earnings
Other equity
Conversion difference in the conversion of financial statements of
foreign operating organizations
Unrealized gains and losses of financial assets measured at fair value
through other comprehensive gains and losses
Total other equity
Total equity
Total liabilities and equity		 December 31,2020 December 31,2020 Unit: In thousands of New Taiwan Dollars
December 31, 2019
（After re-edition）
％
Amount
％
7
$ 167,881
8
9
61,935
3
-
186
-
-
5
-
1
22,719
1
-
10,616
-
-
349
-
3
71,436
3
-
254
-
1
18,703
1
-

21,590

1
21

375,674

17
-
1,632
-
1
15,526
1
59
1,295,664
59
6
162,870
8
10
241,354
11
3
81,214
4
-
6,838
-
-
-
-
-
245
-
-
2,000
-
-

90

-
79

1,807,433

83
100
$ 2,183,107
100
1
$ 10,100
-
-
4,983
-
-
1,071
-
1
1,643
-
1
17,167
1
-
125
-
-
2,406
-
1
11,619
1
-

892

-
4

50,006

2
2
48,381
3
-
527
-
-
1,454
-
-

-

-
2

50,362

3
6

100,368

5
86

2,140,216

98
18

385,666

17
2
45,041
2
9
)
(
416,242
)
(
19
)
7
)
(
371,201
)
(
17
)

2 )
(
40,372 )
(
2 )
1
)
(
31,570
)
(
1
)
3
)
(
71,942
)
(
3
)
94

2,082,739

95
100
$ 2,183,107
100		 Unit: In thousands of New Taiwan Dollars
December 31, 2019
（After re-edition）
％
Amount
％
7
$ 167,881
8
9
61,935
3
-
186
-
-
5
-
1
22,719
1
-
10,616
-
-
349
-
3
71,436
3
-
254
-
1
18,703
1
-

21,590

1
21

375,674

17
-
1,632
-
1
15,526
1
59
1,295,664
59
6
162,870
8
10
241,354
11
3
81,214
4
-
6,838
-
-
-
-
-
245
-
-
2,000
-
-

90

-
79

1,807,433

83
100
$ 2,183,107
100
1
$ 10,100
-
-
4,983
-
-
1,071
-
1
1,643
-
1
17,167
1
-
125
-
-
2,406
-
1
11,619
1
-

892

-
4

50,006

2
2
48,381
3
-
527
-
-
1,454
-
-

-

-
2

50,362

3
6

100,368

5
86

2,140,216

98
18

385,666

17
2
45,041
2
9
)
(
416,242
)
(
19
)
7
)
(
371,201
)
(
17
)

2 )
(
40,372 )
(
2 )
1
)
(
31,570
)
(
1
)
3
)
(
71,942
)
(
3
)
94

2,082,739

95
100
$ 2,183,107
100		 Unit: In thousands of New Taiwan Dollars
December 31, 2019
（After re-edition）
％
Amount
％
7
$ 167,881
8
9
61,935
3
-
186
-
-
5
-
1
22,719
1
-
10,616
-
-
349
-
3
71,436
3
-
254
-
1
18,703
1
-

21,590

1
21

375,674

17
-
1,632
-
1
15,526
1
59
1,295,664
59
6
162,870
8
10
241,354
11
3
81,214
4
-
6,838
-
-
-
-
-
245
-
-
2,000
-
-

90

-
79

1,807,433

83
100
$ 2,183,107
100
1
$ 10,100
-
-
4,983
-
-
1,071
-
1
1,643
-
1
17,167
1
-
125
-
-
2,406
-
1
11,619
1
-

892

-
4

50,006

2
2
48,381
3
-
527
-
-
1,454
-
-

-

-
2

50,362

3
6

100,368

5
86

2,140,216

98
18

385,666

17
2
45,041
2
9
)
(
416,242
)
(
19
)
7
)
(
371,201
)
(
17
)

2 )
(
40,372 )
(
2 )
1
)
(
31,570
)
(
1
)
3
)
(
71,942
)
(
3
)
94

2,082,739

95
100
$ 2,183,107
100		 Unit: In thousands of New Taiwan Dollars
December 31, 2019
（After re-edition）
％
Amount
％
7
$ 167,881
8
9
61,935
3
-
186
-
-
5
-
1
22,719
1
-
10,616
-
-
349
-
3
71,436
3
-
254
-
1
18,703
1
-

21,590

1
21

375,674

17
-
1,632
-
1
15,526
1
59
1,295,664
59
6
162,870
8
10
241,354
11
3
81,214
4
-
6,838
-
-
-
-
-
245
-
-
2,000
-
-

90

-
79

1,807,433

83
100
$ 2,183,107
100
1
$ 10,100
-
-
4,983
-
-
1,071
-
1
1,643
-
1
17,167
1
-
125
-
-
2,406
-
1
11,619
1
-

892

-
4

50,006

2
2
48,381
3
-
527
-
-
1,454
-
-

-

-
2

50,362

3
6

100,368

5
86

2,140,216

98
18

385,666

17
2
45,041
2
9
)
(
416,242
)
(
19
)
7
)
(
371,201
)
(
17
)

2 )
(
40,372 )
(
2 )
1
)
(
31,570
)
(
1
)
3
)
(
71,942
)
(
3
)
94

2,082,739

95
100
$ 2,183,107
100		 Unit: In thousands of New Taiwan Dollars
December 31, 2019
（After re-edition）
％
Amount
％
7
$ 167,881
8
9
61,935
3
-
186
-
-
5
-
1
22,719
1
-
10,616
-
-
349
-
3
71,436
3
-
254
-
1
18,703
1
-

21,590

1
21

375,674

17
-
1,632
-
1
15,526
1
59
1,295,664
59
6
162,870
8
10
241,354
11
3
81,214
4
-
6,838
-
-
-
-
-
245
-
-
2,000
-
-

90

-
79

1,807,433

83
100
$ 2,183,107
100
1
$ 10,100
-
-
4,983
-
-
1,071
-
1
1,643
-
1
17,167
1
-
125
-
-
2,406
-
1
11,619
1
-

892

-
4

50,006

2
2
48,381
3
-
527
-
-
1,454
-
-

-

-
2

50,362

3
6

100,368

5
86

2,140,216

98
18

385,666

17
2
45,041
2
9
)
(
416,242
)
(
19
)
7
)
(
371,201
)
(
17
)

2 )
(
40,372 )
(
2 )
1
)
(
31,570
)
(
1
)
3
)
(
71,942
)
(
3
)
94

2,082,739

95
100
$ 2,183,107
100
Amount
$ 190,900
225,583
188
-
16,952
5,587
475
71,104
-
16,464
2,463
529,716
991
21,849
1,469,613
157,383
236,210
82,503
6,513
240
76
-
78
1,975,456
$ 2,505,172
$ 30,000
6,235
1,263
10,335
16,001
203
6,153
25,160
1,306
96,656
54,303
-
2,458
728
57,489
154,145
2,140,216
454,830
45,041
221,237
)
176,196
)

48,974 )
18,849
)
67,823
)
2,351,027
$ 2,505,172		 Amount
$ 167,881
61,935
186
5
22,719
10,616
349
71,436
254
18,703
21,590
375,674
1,632
15,526
1,295,664
162,870
241,354
81,214
6,838
-
245
2,000
90
1,807,433
$ 2,183,107
$ 10,100
4,983
1,071
1,643
17,167
125
2,406
11,619
892
50,006
48,381
527
1,454
-
50,362
100,368
2,140,216
385,666
45,041
416,242
)
371,201
)

40,372 )
31,570
)
71,942
)
2,082,739
$ 2,183,107		 ％














(
(
(
(
(











(
(
(
(
(













(
(
(
(
(











(
(
(
(
(

 8
3
-
-
1
-
-
3
-
1
1
17
-
1
59
8
11
4
-
-
-
-
-
83
100
-
-
-
-
1
-
-
1
-
2
3
-
-
-
3
5
98
17
2
19
)
17
)

2 )
1
)
3
)
95
100

The accompanying notes are an integral part of the parent company only financial statements. Please refer to auditors’ reported provided by Delotte & Touche on March 24, 2021, Taipei Taiwan, R.O.C

Chairman: Chang Tse Ling Manager : Chang Tse Ling Accounting Supervisor : Li Hsiu Ting

14

EVERSPRING INDUSTRY CO., LTD

PARENT COMPANY ONLY COMPREHENSIVE INCOME

JANUARY 1 ~ DECEMBER 31, 2020 AND 2019

Unit: In thousands of NTD except Earnings Per Share

Code
Operating income (Notes
20&26)
4100
Sales Revenue

4800
Other Operating Income

4000
Total Operating Income


Operating
Expenses(Notes10&26)
5110
Sale Expenses
5800
Other Operating Expenses
5000
Total Operating Expenses


5900
Operating Gross Profit

5910
Realized profit of associate
company

5950
Net operating Gross profit


Operating expenses(Note 21)
6100
Marketing Expenses
6200
Managing Expenses
6300
Research and Development
Expenses
6450
Expected credit impairment
6000
Total operating
expenses

6900
Net operating Losses


Non-operating income and
expenses
7100
Interest Income(Note
21&26）
7010
Other income Notes
21&26）
7020
Other profits and losses（Notes
21）
7070
Shares of Recognizing
subsidiaries income
through equity method		 Year 2020 Year 2020 ％
97
3

100

90
1

91

9

6
)
3

9
29
33
-

71

68
)
2
18
184
25		 Year 2019
(after re-edition）		 Year 2019
(after re-edition）		 Year 2019
(after re-edition）
Amount
$ 120,961

3,898

124,859

112,546

1,345

113,891

10,968

7,653
)
3,315

11,217
36,064

40,769

58

88,108


84,793
)
2,139
22,626

229,310

31,798
 ％





(



(





(





(


 94

6
100
79

-
79
21

1
22
13
27
29

-
69
(47
)
2
5
9
( 79 )

（ To be continued on the next page ）

15

（ Continued from the previous page ）

（Continued from the previous page）
Code
7050
Financial expenses（Note 21）

7000
Total non-operating
income and expenses
7900
Profits Before Tax (loss)
7950
Income tax expenses（Note 22

8200
Net Profit (loss) for the period

Other comprehensive gains and
losses of the year(net)
8310
Items not reclassified
8316
Unrealized gain on
investments in equity
instruments at fair value
through other
comprehensive
income
8311
Remeasurement of Defined Benefit
Obligation
8330
share of recognizing
other comprehensive
income of associate
company using equity
method
8360
Item that may be reclassified
subsequently to profit and loss
8361
Exchange differences
arising in translation of
foreign operations
8370
Share of other
comprehensive profits
and losses of affiliates
recognized using the
equity method
8300
Total other
comprehensive profit
and loss (net)
8500
Total comprehensive profit and loss
for the year
c
Surplus(loss) attributable to
shareholders of the company(Note
23)
9750
basis

9850
diluted
 Year 2020 ％
1
)
228

160

4

156

5
-

-


7 )
5

3

159


 Year 2019(after re-edition)
Amount
1,361
)
284,512

199,719

4,451

195,268

6,325
-

263 )

8,602 )
6,396

3,856

$ 199,124

$ 0.91
$ 0.91		 Amount
424
)
101,839
)

179,250 )
1,416

180,666
)
1,237
661

534 )

12,808 )
11,529

85

$ 180,581
)
$ 0.84
)
$ 0.84
)		 ％
(



(
(




 (





(


 (
(
(

(
(
(


(
(
(
(
(

(

(


(

-
63
)
110 )
1
111
)
1
-

-

8 )
7
-
111
)

The accompanying notes are an integral part of the consolidated financial statements (Please refer to the audit report of the Deloitte & Touche on Mar. 24,2021)

Chairman: Chang Tse Ling Manager : Chang Tse Ling Accounting Supervisor : Li Hsiu Ting

16

EVERYSPRING INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENS OF CHANGES IN EUQITY

JANUARY 1~DECEMBER 31 OF YEAR 2020 AND 2019

(IN THOUSANDS OF New Taiwan Dollars)

(IN THOUSANDS OF New Taiwan Dollars) (IN THOUSANDS OF New Taiwan Dollars)
Code
A1
BALANCE, JANUARY 1, 2019
Other capital reserve changes：
C7
Changes in related parties Recognition
of using equity method
D1
Net income in 2019
D3
Other comprehensive income(loss) in
2019, after income tax
D5
Total comprehensive income (loss) in 2019
Q1
Disposal of investments in equity
instruments at fair value through
other comprehensive income
Z1
Balance, December 31, 2019
C7
Changes in equities recognition of
associates in using equity method
D1
Net income in 2020
D3
Other comprehensive income(loss) in
2020, after income tax
D5
Total comprehensive income in 2020
Z1
Balance, December 31, 2020		 STOCK
Common stock
$ 2,140,216
-
-

-

-

-
2,140,216
-
-

-

-
$ 2,140,216		 Capital reserve


$ 397,345

(
11,679 )

-

-

-

-

385,666

69,164

-

-

-
$ 454,830		 RETAINED EARNINGS
legal capital reserve
special capital
reserve
Unappropriated
earnings
$ -
$ 45,041
( $ 243,515 )
-
-
-
-
-
(
180,666 )

-

-

127

-

-
(
180,539
)

-

-

7,812
-
45,041
(
416,242 )
-
-
-
-
-
195,268

-

-
(
263
)

-

-

195,005
$ -
$ 45,041
($ 221,237
)		 Other equityitems
Unrealized
Gain(Loss) on
Financial Assets at
fair value Through
Other
Comprehensive
Income
Foreign Currency
Translation Reserve
( $ 27,564 )
( $ 36,524 )
-
-
-
-
(
12,808
)

12,766
(
12,808
)

12,766

-
(
7,812
)
(
40,372 )
(
31,570 )
-
-
-
-
(
8,602
)

12,721
(
8,602
)

12,721
($ 48,974
)
($ 18,849
)		 Total equity
Foreign Currency
Translation Reserve
( $ 27,564 )
-
-
(
12,808
)
(
12,808
)

-
(
40,372 )
-
-
(
8,602
)
(
8,602
)
($ 48,974
)
legal capital reserve
$ -
-
-

-

-

-
-
-
-

-

-
$ -
special capital
reserve
$ 45,041
-
-

-

-

-
45,041
-
-

-

-
$ 45,041


















$ 2,274,999
(
11,679 )
(
180,666 )

85
(
180,581
)

-
2,082,739
69,164
195,268

3,856

199,124
$ 2,351,027

The accompanying notes are an integral part of the consolidated financial statements. 。

（ please refer to auditors’ report issued by Deloitte & Touche on March 24, 2021 ）

Chairman: Chang Tse Ling

General manager: Chang Tse Ling

Accounting supervisor: Li Hsiu Ting

17

EVERSPRING INDUSTRY CO., LTD & SUBSIDIARIES

Parent company only Statements of Cash Flows

From Jan.1 to Dec. 31 2019 & 2020

Code
Cash flows from operating activities

A10000Net profit (Loss)before tax for the
current period
A20010Income and expense items
A20100
Epreciation expense

A20200
Amortization expenses

A20300Expected credit impairment
A20400Loss (gain) on financial instruments at fair
value through profit or loss net
A20900
Financial costs

A21200
Interest income

A21300
Dividend income

A22400 Shares of recognizing associated company
income by using equity method
A22500Disposal of loss of property, plant and
equipment
A23100
Disposal of investment interests

A23200
Disposal of investment interests
using the equity method
A22800 Loss of disposal of intangible assets
A23700 Stock depreciation and stagnation loss（return
profit）
A23900 Realized sales profits between associate
companies
A30000 Changes of operating assets and liabilities
A31130
Bills receivable

A31140
Bill receivable-related parties

A31150
Accounts receivable

A31160Accounts receivable-related parties

A31180
Other accounts receivables

A31190Other receivables-related parties

A31200
Stock

A31240
Other current assets

A31990 Net defined benefit assets –non current
A32125
Contract liabilities

A32150
Account payables
A32160
Account payable-related party
A32180
other payables

A32190
Other payables-related parties
A32230
Other current liabilities
 Unit: In Thousands of NTD
Year 2020
Year 2019
(after re-edition)

$ 199,719
( $ 179,250 )

10,989
13,510

1,191
1,373
58
31
(
130,083 )
18,165

1,361
3,137
(
2,139 )
(
2,959 )
(
21 )
(
20 )
(
31,798 )
127,745
-
83
(
57,211 )
-
(
55,665 )
(
44,227 )
423
120
4,717
(
1,976 )
7,653
(
557 )

-
6

5
(
5 )

5,709
1,279

5,029
-
(
126 )
(
85 )

332
4,724
(
2,478 )
1,794

19,127
42,877
2,000
146

1,252
(
11,789 )
192
63
8,692
857
(
909 )
(
6,092 )
78
(
23 )

414

892		 Unit: In Thousands of NTD
Year 2020
Year 2019
(after re-edition)

$ 199,719
( $ 179,250 )

10,989
13,510

1,191
1,373
58
31
(
130,083 )
18,165

1,361
3,137
(
2,139 )
(
2,959 )
(
21 )
(
20 )
(
31,798 )
127,745
-
83
(
57,211 )
-
(
55,665 )
(
44,227 )
423
120
4,717
(
1,976 )
7,653
(
557 )

-
6

5
(
5 )

5,709
1,279

5,029
-
(
126 )
(
85 )

332
4,724
(
2,478 )
1,794

19,127
42,877
2,000
146

1,252
(
11,789 )
192
63
8,692
857
(
909 )
(
6,092 )
78
(
23 )

414

892
( $ 179,250 )
13,510
1,373
31
18,165
3,137
(
2,959 )
(
20 )
127,745
83
-
(
44,227 )
120
(
1,976 )
(
557 )
6
(
5 )
1,279
-
(
85 )
4,724
1,794
42,877
146
(
11,789 )
63
857
(
6,092 )
(
23 )

892

（ To be continued on the next page ）

18

（ Continued from the previous page ）

Code
A33000
Cash generated from operations

A33300
Interest paid

A33500
income tax paid

AAAANet cash inflow from operating activities


Cash Flows from Investing Activities
B00700
Financial assets measured at fair value
through profit and loss, capital reduction
and return of shares
B00030Financial assets measured at fair value
Through other comprehensive gains and losses
B00050
Disposal of financial assets measured at
amortized cost
B00100
financial assets measured at fair value
through profit and loss
B01800
Obtain long-term equity investment using the
equity method
B01900Disposal of long-term equity investments using the
equity method
B00200Disposal of financial assets measured
at fair value through profit or loss
B02700
Purchase property, plant & equipment

B03800Decrease of guarantee deposits (increase)
B04500
acquired intangible assets

B07500
Interests received
B07600
Dividends received
B07700
Receive dividends from subsidiaries, affiliates
and joint ventures
B09900
Increase in other current assets

BBBBNet cash inflow from investing activities


Cash flow from financing activities
C00100
Increase in short-term borrowing
C01300
Repay long-term loans

C01600
Long-term loans
C03100Guarantee Increase (decrease) in deposits
CCCCNet cash inflow from financing activities


EEEE
Increase in cash and cash equivalents

E00100Cash and cash equivalents at the beginning of the
year

E00200Balance of cash and cash equivalents at the end of
the year		 Year 2020
(
11,489 )

(
1,618 )

(
2,266
)

(
15,373
)

126
-
-
(
67,139 )
(
83,042 )
45,875
91,300
(
358 )

169

(
1,289 )

2,139
21
10,451
(
228
)

(
1,975
)

19,900
(
11,648 )
31,111

1,004


40,367

23,019

167,881

$ 190,900
 Year 2019
(after re-edition)
(
30,181 )
(
2,966 )

23
(
33,124
)
-
696
22,000
-
-
38,969
-
(
491 )
(
169 )
(
482 )
2,959
20
514

445

64,461
10,100
-
26,674
(
1,364
)

35,410
66,747

101,134
$ 167,881

The accompanying notes are an integral part of the consolidated financial statements (Please refer to the audit report of the Deloitte & Touche on Mar. 24,2021)

Chairman: Chang Tse Ling Manager: Chang Tse Ling Accounting Supervisor: Li Hsiu Ting

19

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders EVERSPRING INDUSTRY CO.,LTD

Opinion

We have audited the accompanying consolidated financial statements of EVERSPRING INDUSTRY CO.,LTD and its subsidiaries (the “company”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statement present fairly. In all material respects, the consolidated financial position of the Company as of December 31,2020 and 2019, 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 (IFRS), International Accounting Standards (IAS),IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits for the year of 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China for the year of 2019; and in accordance with the Official Letter No. Financial-Supervisory-Securities-Auditing-109036085 by the Financial Supervisory Commission on Feb.25,2020. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Focused Events

As described in Consolidated Financial Statements Notes 1 & 35, EVERSPRING INDUSTRY CO., LTD. absorbed and merged the subsidiary AUSPISTEK CORPORATION with 100% shares on December 1,2020. The merge was the reorganization under mutual control and was handled in accordance with the IFRS Q&A announced by the Accountant Research & Development Consortium Foundation and the related explanations. It should be deemed to have been consolidated from the beginning and re-edited individual financial statements for the comparison period. Since AUSPISTEK CORPORATION was originally included in the consolidated preparation subject, and the above matters have no impact on the consolidated financial statements. Therefore, the accountant did not revise the audit opinion for this reason.

Key Audit Matters

20

Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter for the Company’s consolidated financial statements for the year ended December 3 I, 2020 are stated as follows.

Income Recognition of sales revenue

Based on the audit regulations over income preset recognition, there are significant audit risks. EVERSPRING INDUSTRY CO., LTD and its subsidiaries are continuing actively to promote the sale of smart home safety control systems, Smart lighting fixtures and smart sensors, etc. The authenticity of the operating income recognition has a significant impact on the consolidated financial statements. Because the sales revenue of smart home security control systems, smart lighting fixtures and smart sensors are listed as key audit items.

In regard to the above important matters, the main audit procedures performed by the accountant are as follows:

  1. Understand the effectiveness of the design and implementation of the internal control system related to income recognition.

  2. Obtain the sales revenue details of smart home security control systems, smart lighting fixtures and smart power generators in the Republic of China in 2020, and check the original orders, shipping orders, invoices and other related documents of related transactions, and enter them into the account. Check the amount to confirm the authenticity of the income.

Other matters

In other matters included in the subsidiaries of PHASE ELECTRONICS(UK)LTD. financial statements, the Republic of China the year ended December 31 financial statements related to PHASE ELECTRONICS (UK) LTD. were reviewed by other accountants. Therefore, in the accountant’s opinion on PHASE ELECTRONICS (UK) LTD. financial statements, the amounts listed in the financial statements of PHASE ELECTRONICS (UK) LTD. are based on the audit reports of other accountants. For PHASE ELECTRONICS (UK) LTD., the total assets of February 31, 2010 were NT$ 6,156,000, which accounted for 0% of the consolidated total assets. The net operating income of the Republic of China was NT$ 2,405,000, accounting for the net consolidated operating income of 0%. In addition, the financial statements of Medigen Biotechnology Corporation were also included in the open financial statements. The financial statements of the investee company Medigen Biotechnology Corporation were checked by the equity method in the Republic of China in 2020 and 2019 by other accountants. Therefore, the accountant indicated his opinion that the investments of these investee companies using the equity method and their investment gains and losses are recognized based on the audit reports of other accountants. The amount of investment in these investee companies using the equity method as of December 31, 2020 and 2019 was NT$453,913,000 and NT$412,144,000, respectively, which accounted for 16% of the total consolidated assets. The share of profits and losses of affiliated companies recognized by the equity method of other investee companies were losses of NT$40,922,000 and NT$32,491,000 respectively, accounting for (20) % and 18% of the consolidated net profit (loss) before tax.

EVERSPRING INDUSTRY CO., LTD. has prepared individual financial statements for the year 2020 and 2019 of the Republic of China, and the audit report with unqualified opinions and other matters issued by the accountant is recorded for reference.

21

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 IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, 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 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 ceases operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company's financial reporting process.

Auditors' 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 auditors' 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 the auditing standards generally accepted in the Republic of China 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 auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  1. 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, fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. 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.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. 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 auditors' 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

22

auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

  1. 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.

  2. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company 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 describe these matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters.

We describe these matters in our auditors' 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.

The engagement partners on the audit resulting in this independent auditors’ report are Ming-Chung Hsieh and Yu-shiou Su.

DELOITTE & TOUCHE TAIPEI, TAIWAN

Republic of China Ming-Chung Hsieh Yu-shiou Su

FSAC Approval Number:No.

Financial-Supervisory-Securities-Auditing-

FSAC Approval Number:No. Financial-Supervisory-Securities-Auditing-10 40024195

1000028068

March 24, 2021

23

EVERSPRING INDUSTRY CO., LTD& SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2020 & 2019

Code


1100
1110
1120
1136
1150

1160
1172
1180
1200
1210
1220
130X
1460
1479
11XX


1510

1520

1550

1600

1755

1760
1821
1840
1920
1915
1975
1990
15XX

1XXX


CODE


2100
2130
2150
2170
2219
2220
2230
2280
2260
2320
2399
21XX


2540
2570

2550
2580
2645
25XX

2XXX



3110
3200
3320
3350
3300
3410

3420

3400
31XX

36XX


3XXX

 ASSETS
Current Assets
Cash& Cash equivalents(Note 6)
Financial Assets at fair value through profit or loss（Note 7）
Financial assets at fair value through other comprehensive income-current
(Note8)
Financial assets at amortized cost (Note9)
Hedging financial assets (Note10)
Note and accounts receivable net from related Parties (Note 31)
Accounts receivable (Note 10)
Accounts receivable-net from related Parties (Note 31)
Other accounts receivable (Note 10)
Other accounts receivable-from related Parties (Note 31)
Income tax assets for the current period (Note 27)
Inventories (Note 11&32)
Non-current assets for sale (Note 13)
Other current Assets-others (Note 19)
Total current Assets
Non-current assets
Financial assets at fair value through profit & loss-non-current (Note 7)
Financial assets at fair value through other comprehensive income-non-current (Note 8)
Investment accounted for using the equity method (Note 14)
Property, plant and equipment (Note 15 & 32)
Right-of-use assets (Note 16)
Net investment property (Note 17 & 32)
Other Intangible assets (Note 18)
Deferred Income tax assets (Note 27)
Refundable deposits
Prepaid equipment (Note 19)
Net defined benefit assets-non-current (Note 22)
Other non-current assets (Note 19)
Total non-current assets
Total Assets
LIABILITIES AND EQUITY
CURRENT LIABILITIES
shot-term loans (Note 20)
Contract liabilities current (Note 25)
Bills payable (Note 21)
Accounts payable (Note 21)
Other accounts payable (Note 22)
Other accounts payable to related parties (Note 31)
Current income tax liabilities (Note 27)
Lease liability current (Note16)
Liabilities directly related to non -current assets to be sold (Note 13)
Long-term loans due within one year (Note 20)
Other current liabilities (Note 22)
Total Current assets
Non-current Liabilities
Long term loans (Note 20)
Deferred income tax liabilities
(Note 27)
Accrued pension liabilities (Note 23)
Lease liabilities non-current (Note 16)
Guarantee deposits (Note 22)
Total non-current liabilities
Total liabilities
Equity Attributable to the Shareholders of the Company
Capital Stock
Common stock
Capital surplus
Retained Earnings
Special earnings surplus
Unappropriated earnings
Total retained earnings
Total Other Equity
Conversion difference in the conversion of financial statements of foreign operating organizations
Unrealized gains and losses of financial assets measured at fair value through other comprehensive
gains and losses
Total other equity
Total owner's equity of the company
Non-controlling interests
Total equity
Total liabilities and equity		 December 31,2020 December 31,2020 ％
13
13
-
1
-
-
2
-
-
-
-
18
11
1
59
-
2
16
9
-
9
2
3
-
-
-
-
41
100
5
3
-
-
2
-
-
-
3
1
-
14
5
-
-
-
1
6
20
73
15
2

8
)

6
)

2 )
-

2
)
80
-
80
100		 Unit: in thousands of NTD
December 31,2019
Amount
％
$ 349,641
13
115,126
4
186
-
3,000
-
5,412
-
-
-
71,019
3
3,805
-
3,160
-
10
-
254
-
546,343
21
-
-
43,903

2
1,141,859

43
1,632
-
48,770
2
412,144
16
546,261
21
42,096
2
276,275
10
85,006
3
81,214
3
6,949
-
-
-
469
-
232

-
1,501,048

57
$ 2,642,907
100
$ 176,050
7
55,804
2
1,487
-
34,876
2
80,581
3
5,279
-
4,238
-
4,325
-
-
-
21,619
1
4,954

-
389,213

15
148,381
6
527
-
-
-
15,429
-
6,398

-
170,735

6
559,948

21
2,140,216

81
385,666

15
45,041
2

416,242
)
(
16
)

371,201
)
(
14
)

40,372 )
(
2 )

31,570
)
(
1
)

71,942
)
(
3
)
2,082,739

79
220

-
2,082,959

79
$ 2,642,907
100		 Unit: in thousands of NTD
December 31,2019
Amount
％
$ 349,641
13
115,126
4
186
-
3,000
-
5,412
-
-
-
71,019
3
3,805
-
3,160
-
10
-
254
-
546,343
21
-
-
43,903

2
1,141,859

43
1,632
-
48,770
2
412,144
16
546,261
21
42,096
2
276,275
10
85,006
3
81,214
3
6,949
-
-
-
469
-
232

-
1,501,048

57
$ 2,642,907
100
$ 176,050
7
55,804
2
1,487
-
34,876
2
80,581
3
5,279
-
4,238
-
4,325
-
-
-
21,619
1
4,954

-
389,213

15
148,381
6
527
-
-
-
15,429
-
6,398

-
170,735

6
559,948

21
2,140,216

81
385,666

15
45,041
2

416,242
)
(
16
)

371,201
)
(
14
)

40,372 )
(
2 )

31,570
)
(
1
)

71,942
)
(
3
)
2,082,739

79
220

-
2,082,959

79
$ 2,642,907
100
Amount
$ 371,375
388,299
188
21,000
4,731
961
50,857
3,905
260
-
-
529,027
335,082
16,943

1,722,628

991
53,990
453,913
262,615
12,433
270,471
57,795
82,503
9,842
240
-
1,187

1,205,980

$ 2,928,608

$ 136,735
69,617
725
7,240
60,367
-
10,511
5,028
87,195
25,160
5,719

408,297

152,303
-
1,486
7,465
7,768

169,022

577,319

2,140,216

454,830

45,041

221,237
)


176,196
)


48,974 )


18,849
)


67,823
)

2,351,027

262

2,351,289

$ 2,928,608
 Amount
$ 349,641
115,126
186
3,000
5,412
-
71,019
3,805
3,160
10
254
546,343
-
43,903

1,141,859

1,632
48,770
412,144
546,261
42,096
276,275
85,006
81,214
6,949
-
469
232

1,501,048

$ 2,642,907

$ 176,050
55,804
1,487
34,876
80,581
5,279
4,238
4,325
-
21,619
4,954

389,213

148,381
527
-
15,429
6,398

170,735

559,948

2,140,216

385,666

45,041

416,242
)


371,201
)


40,372 )


31,570
)


71,942
)

2,082,739

220

2,082,959

$ 2,642,907














(
(
(
(
(











(
(
(

(













(
(
(
(
(











(
(
(
(
(

The accompanying notes are an integral part of the consolidated financial statements (Please refer to the audit report of the Deloitte & Touche on Mar. 24,2021)

Chairman: Chang Tse Ling Manager: Chang Tse Ling Accounting Supervisor: Li Hsiu Ting

EVERSPRING INDUSTRY CO., LTD & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FROM JANUARY1 TO DECEMBER 31 2019 & 2020

Unit: In Thousands of NTD

Code
Operating income (Note 25)
4110
Sales Revenue

4600
Labor Income
4800
Other Operating Income

4000
Total Operating
Income

Operating Expenses
5110
Sale Expenses
5600
Labor Expenses
5800
Other Operating Expenses
5000
Total Operating
Expenses

5900
Operating Gross Profit


Operating Expenses
6100
Marketing Expenses
6200
Managing Expenses
6300
Research and Development
Expenses
6450
Expected credit impairment
(returning benefit) loss
6000
Total Operating
Expenses

6900
Net Operating Loses


Non-operating income and
expenses
7100
Interest Income (Note 26)
7010
Other Income (Note 26)
7020
Other profits and loses
(Note 26)
7060
Share of Profits and Losses of
Affiliated Companies
Recognized Using
the Equity Method
7050
Financial Expenses (Note 26)		 Year 2020 Year 2020

(To be continued on the next page)

25

(Continued from the previous page)

Code
7000
Total Non-operating Income
and Expenses

7900
Profits Before Tax (loss)

7950
Income Tax Expenses(Note 27)

8200
Net Profit (loss) for the Period


Other comprehensive gains
and losses this year
(net)
8310
Items not reclassified
subsequently to profit or loss
8311
Remeasurement of Defined
Benefit Obligation
8316
Unrealized gain on investments
in equity instruments at fair value
through other comprehensive
income
8320
Share of other comprehensive
profits and losses of subsidiaries
and affiliates
8360
Item that may be reclassified
subsequently to profit and loss
8361
Exchange differences arising in
translation of foreign operations
8370
Share of other comprehensive
profits and losses of affiliates
recognized using the equity
method
8300
Total other comprehensive profit
and loss (net)

8500
Total comprehensive profit and
loss for the year

Net surplus (loss) attributable to
8610
Shareholders of the
company
8620
Non-controlling interests

8600
 Year 2020 Year 2020

(To be continued on the next page)

26

(Continued from the previous page)

Code
The total comprehensive profit
and loss is attributable to
8710
Shareholders of the
company
8720
Non-controlling interests
8700


Earnings (loss) per share (Note
28)
9710
Basic

9810
Diluted
 Year 2020 Year 2020 ％
38
-

38


 Year 2019 Year 2019
Amount
$ 199,124

42

$ 199,166

$ 0.91
$ 0.91		 Amount
( $ 180,581 )

56

($ 180,525
)
($ 0.84
)
($ 0.84
)		 ％






( 29 )

-
(29
)

The accompanying notes are an integral part of the consolidated financial statements (Please refer to the audit report of the Deloitte & Touche on Mar. 24,2021)

Chairman: Chang Tse Ling Manager: Chang Tse Ling Accounting Supervisor: Li Hsiu Ting

27

EVERSPRING INDUSTRY CO., LTD&SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

JANUARY 1~DECEMBER 31 OF YEAR 2020 AND 2019

(IN THOUSANDS OF New Taiwan Dollars)

EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENTCOMPANY

OTHERS

RETAINED EARNINGS

Code

A1
Balance, January 1, 2019


C7
Changes in related parties Recognition of
using equity method

D1
Net income in 2019

D3
other comprehensive income(loss) in 2019,
after income tax


D5
Total comprehensive income (loss) in 2019

Q1
disposal of investments in equity
instruments at fair value through other
comprehensive income


Z1
Balance, December 31, 2019

C7
Changes in equities recognition of
associates in using equity method

D1
Net income in 2020

D3
Other comprehensive income(loss) in 2020,
after income tax


D5
Total comprehensive income in 2020


Z1
Balance, December 31, 2020
 Common stock
$ 2,140,216
-
-

-


-


-

2,140,216
-
-

-


-

$ 2,140,216
 Capital reserve
$ 397,345
(
11,679 )

-

-


-


-


385,666

69,164

-

-


-

$ 454,830
 legal capital
reserve
$ -

-

-
-

-

-


-

-

-
-

-

$ -
 special capital
reserve
$ 45,041

-

-

-


-


-


45,041

-

-

-


-

$ 45,041
 Unappropriated
earnings
( $ 243,515 )

-
(
180,666 )

127

(
180,539
)

7,812

(
416,242 )

-

195,268
(
263
)

195,005

($ 221,237
)		 Foreign
Currency
Translation
Reserve
( $ 27,564 )

-

-
(
12,808
)
(
12,808
)

-

(
40,372 )

-

-
(
8,602
)
(
8,602
)
($ 48,974
)		 Unrealized
Gain(Loss) on
Financial Assets
at fair value
Through Other
Comprehensive
Income
( $ 36,524 )

-

-

12,766


12,766

(
7,812
)
(
31,570 )

-

-

12,721


12,721

($ 18,849
)		 Total
$ 2,274,999
(
11,679 )
(
180,666 )

85

(
180,581
)

-


2,082,739

69,164

195,268

3,856


199,124

$ 2,351,027
 Non-controlling
interests
$ 164

-

61
(
5
)

56


-


220

-

55
(
13
)

42

$ 262
 Total equity































(





(

 $ 2,275,163
(
11,679 )
(
180,605 )

80
(
180,525
)

-

2,082,959

69,164

195,323

3,843

199,166
$ 2,351,289

The accompanying notes are an integral part of the consolidated financial statements. 。

（ please refer to auditors’ report issued by Deloitte & Touche on March 24, 2021 ）

Chairman: Chang Tse Ling

General manager: Chang Tse Ling

Accounting supervisor: Li Hsiu Ting

28

EVERSPRING INDUSTRY CO., LTD & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FROM JANUARY1 TO DECEMBER 31 2019 & 2020

Unit: In Thousands of NTD

Code
Cash flows from operating activities
A10000Net profit (Loss)before tax for the
current period
A20010Income and expense items that do not affect
cash flows
A22900
Lease modification benefits
A20100
Depreciation expense
A20200
Amortization expenses
A29900Expected credit impairment(returning
benefit) loss
A20400Loss (gain) on financial instruments
at fair value through profit or loss net
A20900
Financial costs
A21200
Interest income
A21300
Dividend income
A22300Share of losses of affiliated companies
using the equity method
A22500Disposal of loss of property, plant and
equipment (profit)
A22800
Loss in disposing intangible assets
A23100
Disposal of investment interests
A23200Disposal of investment interests
using the equity method
A30000Net changeable number for operating in
Assets and liabilities
A31130
Bills receivable
A31140
Bill receivable-related parties
A31150
Accounts receivable
A31160
Accounts receivable-related parties
A31180
Other receivables
A31190
Other receivables-related
parties
A31200
Stock
A31240
Other current assets
A31990
Net defined benefit
Assets-non-current
A32125
Contract liabilities
A32130
Bills payable
A32150
Accounts payable
A32180
Other payables
A32190
Other payable-related parties		 Year 2020
$ 202,270
(
72 )
47,622
28,077
(
310 )
( 198,046 )
4,943
(
1,157 )
(
92 )
40,922
(
207 )
423
( 111,681 )
(
50,589 )
681
(
961 )
20,464
(
100 )
2,900
10
17,123
26,613
-
13,813
(
762 )
(
11,233 )
(
15,077 )
(
5,279 )		 Year 2019
( $ 177,285 )
-
54,130
28,876
1,042
30,302
5,651
(
1,925 )
(
99 )
32,491
1,106
120
-
(
43,952 )
4,275
-
(
4,762 )
55
1,452
(
10 )
20,486
432
(
153 )
(
9,358 )
(
1,391 )
6,628
(
20,193 )
(
79 )

(To be continued on the next page)

  • 29 -

(Continued from the previous page)

Code
A32240
Net defined benefit liabilities
A32230
Other current liabilities
A33000
Cash generated from operations
A33300
Interest paid
A33500
Income tax paid
AAAANet cash inflow from operating activities

Cash Flows from Investing Activities
B00010Financial assets at fair value through
other comprehensive gains and losses
B00300Financial assets measured at fair value
through profit and loss, capital reduction
and return of shares
B00030Financial assets measured at fair value
Through other comprehensive gains and losses
B00040
financial assets at amortized cost
B00050Disposal of financial assets measured at
amortized cost
B00100financial assets measured at fair value
through profit and loss
B00200Disposal of financial assets measured
at fair value through profit or loss
B01500Disposal of long-term equity investment
using equity method
B02700
Purchase property, plant & equipment
B02800
Disposal of property, plant & equipment
B03800
Decrease of guarantee deposits (increase)
B04500
Purchase intangible assets
B06800
Other non-current assets decrease
B07200
Prepaid equipment Decrease (increase)
B07500
Interests received
B07600
Dividends received
B09900
Increase in other current assets
BBBB
Net cash inflow from investing
activities

Cash flow from financing activities
C00100
Increase in short-term borrowing
C01600
Long-term loans
C01700
Long-term loan repayment
C03100Guarantee Increase (decrease) in deposits
C04020
Lease principal repayment

(To be continued on the next page)

  • 30 -

(Continued from the previous page)

Code
CCCC
Net cash inflow from financing
activities
DDDD impact of exchange rate changes on
cash and cash equivalents
EEEE
Net increase in cash and cash equivalents
E00100 Balance of cash and cash equivalents
at the beginning of the year
E00200 Balance of cash and cash equivalents
at the end of the year
Adjustment of Cash and Cash Equivalents at the End of

Code
E00210 Cash and cash equivalents
E00240 Cash and cash equivalents included
in the group of disposals pending
sale
E00200 Adjustment of year-end cash
and cash equivalents


The accompanying notes are an integral part of the consolidated financial statements (Please refer to the audit report of the Deloitte & Touche on Mar. 24,2021)

Chairman: Chang Tse Ling Manager: Chang Tse Ling Accounting Supervisor: Li Hsiu Ting

  • 31 -

Appendix IV EVERSPRING INDUSTRY CO., LTD

Cross-Reference Table of Articles of Incorporation before and after Amendments

Item Before Amendment After Amendments Reason for
revision
Article
2
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.		 The Company operates the following businesses
：
C805050
Industrial
Plastic
Products
Manufacturing
CB01020 Affairs Machine Manufacturing
CC01030 Electrical Appliances and Audiovisual
Electronic Products Manufacturing
CC01060 Wired Communication Equipment and
Apparatus Manufacturing
CC01070 Telecommunication Equipment and
apparatus Manufacturing
CC01080 Electronic Parts and Components
Manufacturing
CC01101 Controlled Telecommunications
Radio-Frequency Devices and Materials
Manufacturing
CC01110 Computer and Peripheral Equipment
Manufacturing
CE01010 Precision Instruments Manufacturing
CE01030 Optical Instrument Manufacturing
E599010 Piping Engineering
E601020 Electric Appliance Installment
E603040 Fire Safety Equipment Installation
Engineering
E603050
Automatic
Control
Equipment
Engineering
E603090 Lighting Equipment Construction
E605010 Computer Equipment Installation
E701040 Simple Telecommunications
Equipment Installation
F112040 Wholesale of Petroleum Products
F113030 Wholesale of Precision Instruments
F113050 Wholesale of Computers and Office
Machinery and Equipment
F113070 Wholesale of Telecommunication
Apparatus
F117010 Wholesale of Fire Safety Equipment
F118010 Wholesale of Computer Software
F119010 Wholesale of Electronic Materials
F213030 Retail Sale of Computers and Clerical
Machinery Equipment
F213040 Retail Sale of Precision Instruments
F213060 Retail Sale of Telecommunication
Apparatus
F213080 Retail Sale of Other Machinery and
Equipment
F217010 Retail sales of Fire Fighting Equipment
F218010 Retail Sales of Computer Software
F219010 Retail Sale of Electronic Materials
F401010 International Trade
F401021 Restrained Telecom Radio Frequency
Equipment and Materials Import
I103060 Management Consulting
I301010 Software Design Services
I301020 Data Processing Services
I301030 Digital Information Supply Services
I599990 Other Designing
The Company operates the following businesses
：
1. C805050
Industrial
Plastic
Products
Manufacturing
2. CB01020 Affairs Machine Manufacturing
3. CC01030 Electrical Appliances and Audiovisual
Electronic Products Manufacturing
4. CC01060 Wired Communication Equipment
and Apparatus Manufacturing
5. CC01070 Telecommunication Equipment and
apparatus Manufacturing
6. CC01080 Electronic Parts and Components
Manufacturing
7. CC01110 Computer and Peripheral Equipment
Manufacturing
8. CE01010 Precision Instruments Manufacturing
9. CE01030 Optical Instrument Manufacturing
10. E599010 Piping Engineering
11. E601020 Electric Appliance Installment
12. E603040 Fire Safety Equipment Installation
Engineering
13. E603050
Automatic
Control
Equipment
Engineering
14. E603090 Lighting Equipment Construction
15. E605010 Computer Equipment Installation
16. E701040
Simple
Telecommunications
Equipment Installation
17. F112040 Wholesale of Petroleum Products
18. F113030 Wholesale of Precision Instruments
19. F113050 Wholesale of Computers and Office
Machinery and Equipment
20. F113070
Wholesale
of
Telecommunication
Apparatus
21. F117010 Wholesale of Fire Safety Equipment
22. F118010 Wholesale of Computer Software
23. F119010 Wholesale of Electronic Materials
24. F213030 Retail Sale of Computers and Clerical
Machinery Equipment
25. F213040 Retail Sale of Precision Instruments
26. F213060 Retail Sale of Telecommunication
Apparatus
27. F213080 Retail Sale of Other Machinery and
Equipment
28. F217010 Retail sales of Fire Fighting Equipment
29. F218010 Retail Sales of Computer Software
30. F219010 Retail Sale of Electronic Materials
31. F401010 International Trade
32. I103060 Management Consulting
33. I301010 Software Design Services
34. I301020 Data Processing Services
35. I301030 Digital Information Supply Services
36. I599990 Other Designing
37. IF01010 Fire Safety Equipment Inspection and
Repair
38. JA02010 Electric Appliance and Electronic
Products Repair
39. JE01010 LeasingIndustry		 (1)The
businesses
F108031
Wholesale of
Drugs,
Medical
Goods,
F208031
Retail Sale of
Medical
Apparatus,
H701010
Housing and
Building
Development
and Rental
, H701020
Industrial
Factory
Building
Lease
Construction
and
Development
,
F701040
Special Area
Development
, H703100
Real Estate
Leasing,
H703090
Real estate
business
were added
for the
Company’s
operational
needs
(2)The code of
businesses
were revised
according to
the revised
codes of
Economics
Department:
CC01100
Restrained
Telecom
Radio
Frequency
Equipment
and Materials
Manufacturing
(The Old
  • 32 -
Item Before Amendment Before Amendment After Amendments Reason for
revision
39. IF01010 Fire Safety Equipment Inspection and
Repair
40. JA02010 Electric Appliance and Electronic
Products Repair
41. JE01010 Leasing Industry
42. ZZ99999 All business items that are not
prohibited or restricted by law, except those that
are subject to special approval.		 40.
41.
42.
43.
44.
45.
46.
47.
48.		 CC01100
Controlled
Telecommunications
Radio-Frequency
Devices
and
Materials
Manufacturing
F108031 Wholesale of Drugs, Medical Goods
F208031 Retail Sale of Medical Apparatus
H701010 Housing and Building Development
and Rental
H701020 Industrial Factory Building lease
Construction and Development
F701040 Special Area Development
H703100 Real estate Leasing
H703090 Real Estate Business
ZZ99999 All business items that are not
prohibited or restricted by law, except those that
are subject to special approval.		 “CC01101
Controlled
Telecommunic
ations
Radio-Frequen
cy Devices
and Materials
Manufacturing
)
(3) According
to the revised
codes of
Economics
Department:,
F401021
Restrained
Telecom
Radio
Frequency
Equipment
and Materials
Import was
deleted
(4)The
sequence of
business item
code was
adjusted
Item Before amendment After amendment Reasons for
revision
Article
6		 The company only issues registered stocks which
have been stamped or signed byat least three
directors
through legal authorization. The company
only issues stocks registered by depository
institutions and may be exempted from printing out
stock documents.		 The company only issues registered stocks which
have been stamped or signed bythe representative
director
through legal authorization. The company
only issues stocks registered by depository
institutions and may be exempted from printing out
stock documents.		 Amended
according to
Company
Act.
Article
18		 The company has set up 7 directors serving a term
of three years. The shareholders’ meeting nominate
and elect qualified persons, and the directors can be
elected. The proportion of shares in possession of
all directors is regulated by relevant provisions of
the institutions supervising distributions of stocks.
At least three independent directors should be
included in the above-mentioned directors, and the
number shall not be less than one fifth of all
directors.		 The company has set up 7 directors serving a term
of three years. The shareholders’ meeting elects the
directors from a designated nominees name list and
the directors can be elected. The proportion of
shares in possession of all directors is regulated by
relevant provisions of the institutions supervising
distributions of stocks. At least three independent
directors
should
be
included
in
the
above-mentioned directors, and the number shall
not be less than one fifth of all directors.		 The
amendment
was done for
fulfilling the
Company’s
needs.
Artic
le 35		 The articles were established on March 6 1980
Dates of 1st~ 29thamendments
(omitted)
The 30thamendment was done on June 2,2019		 The articles were established on March 6 1980
Dates of 1st~ 30hamendments
(omitted)
The 31stamendment was done on June 22,2020		 The date of
the latest
amendment
was added
  • 33 -

Appendix 1 EVERSPRING INDUSTRY CO., LTD Articles of Incorporation

Chapter 1 General Provisions

Article 1 The Company is organized following the provisions of Company Act and entitled VERSPRING INDUSTRY CO., LTD. Article 2 The Company operates the following businesses ： 1. C805050 Industrial Plastic Products Manufacturing 2. CB01020 Affairs Machine Manufacturing 3.CC01030 Electrical Appliances and Audiovisual Electronic Products Manufacturing 4. CC01060 Wired Communication Equipment and Apparatus Manufacturing 5. CC01070 Telecommunication Equipment and apparatus Manufacturing 6. CC01080 Electronic Parts and Components Manufacturing 7. CC01101 Controlled Telecommunications Radio-Frequency Devices and Materials Manufacturing 8. CC01110 Computer and Peripheral Equipment Manufacturing 9. CE01010 Precision Instruments Manufacturing 10.CE01030 Optical Instrument Manufacturing 11.E599010 Piping Engineering 12.E601020 Electric Appliance Installment 13.E603040 Fire Safety Equipment Installation Engineering 14.E603050 Automatic Control Equipment Engineering 15.E603090 Lighting Equipment Construction 16.E605010 Computer Equipment Installation 17.E701040 Simple Telecommunications Equipment Installation 18.F112040 Wholesale of Petroleum Products 19.F113030 Wholesale of Precision Instruments 20.F113050 Wholesale of Computers and Office Machinery and Equipment 21.F113070 Wholesale of Telecommunication Apparatus 22.F117010 Wholesale of Fire Safety Equipment 23.F118010 Wholesale of Computer Software 24.F119010 Wholesale of Electronic Materials 25.F213030 Retail Sale of Computers and Clerical Machinery Equipment 26.F213040 Retail Sale of Precision Instruments 27.F213060 Retail Sale of Telecommunication Apparatus 28.F213080 Retail Sale of Other Machinery and Equipment 29.F217010 Retail sales of Fire Fighting Equipment’s 30.F218010 Retail Sales of Computer Software 31.F219010 Retail Sale of Electronic Materials 32.F401010 International Trade 33.F401021 Restrained Telecom Radio Frequency Equipment’s and Materials Import 34.I103060 Management Consulting 35.I301010 Software Design Services 36.I301020 Data Processing Services 37.I301030 Digital Information Supply Services 38.I599990 Other Designing 39.IF01010 Fire Safety Equipment Inspection and Repair

  • 34 -

  • 40.JA02010 Electric Appliance and Electronic Products Repair 41.JE01010 Leasing Industry

  • 42.ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

  • Article 2-1 The Company is exempted from the limitation specified in Article13 of Company Act that its total amount of investments in other companies shall not exceed forty percent of the amount of its own paid-in capital.

  • Article 2-2 When it’s necessary on business, the Company can offer loans or endorsements following the provisions in Regulations Governing Loaning of Funds and Making of Endorsements / Guarantees of the Company.

  • Article 3 The Company established its headquarter in New Taipei City, and the domestic and overseas branches can be established following the resolution of the Board.

  • Article 4 The Corporation shall make public announcements in accordance with Article 28 of the Company Act.

Chapter 2 Shares

  • Article 5 The capital amount of the Company has been registered as NT$ 3.8billion, which was divided into 380 million shares of NT$10. The Board was authorized to issues the share in batches. An amount of NT$350 million dollars of the above-mentioned capital was saved as employee stock option, each share being priced at 10 dollars. They were issued in batches following resolution of the Board.

  • Article 6 The shares of the Company shall be in registered form, and before they are issued, shall be signed by or affixed with the seals of no less than three directors of the Company, and ne certified pursuant to the law. The Company is exempted from issuing printed share certificates, and shall register the stocks at a securities central depository company.

  • Article 7 Omitted.

  • Article 8 Omitted.

  • Article 9 The company’s stock handling operations are handled in accordance with the "Guidelines for the Handling of Shares of Companies Offering Public Shares", the "Company Law," and relevant laws and regulations issued by the authorities.

  • 35 -

Article 10 When the stock is reissued due to loss or other reasons, a handling fee may be charged. Article 11 The entries in the shareholders' roster referred to in the preceding Paragraph shall not be altered within 30 days prior to the convening date of a regular shareholders' meeting, or within 15 days prior to the convening date of a special shareholders' meeting, or within 5 days prior to the target date fixed by the issuing company for distribution of dividends, bonus or other benefits. Chapter 3 Shareholders’ Meeting Article 12 Shareholders meetings of the Company are of two kinds: (1) regular meeting and (2) special meeting. Regular meetings shall be convened at least once a year by the Board of Directors according to the law within six months after close of each fiscal year. Special meetings shall be convened whenever necessary according to the laws and regulations. The shareholders’ meetings could be convened electronically with consensus of stakeholders. Shareholders possessing less than 1000 registered sticks shall be noticed about the convention of the shareholders’ meeting through announcement. Article 13 In case a directors is on leave or absent from the shareholders’ meeting for any cause, a delegate shall be appointed with letter of authorization. When one individual serves as the delicate of two or more directors, the proxy shall not perform the voting right of over 3 percent of all issued shares; any voting exceed the proportion shall not be calculated. Article 14 The Chairperson shall serve as the chair of the shareholders’ meeting; when the chair is on leave or absent or cannot exercise his power an authority for any cause, the Chairperson shall appoint a director as the proxy. When no proxy has been designated, one representative shall be appointed among the directors. When a shareholders’ meeting is convened by authorities other than the Chairperson, the convener or one among the two or more conveners shall be appointed as the chair of the meeting. Article 15 Shareholders of the Company shall have one voting right each, but the shareholders under legal limitation or involved in matters specified in provisions in Article 179 of Company Act shall not be granted with the voting right. Article 16 Resolutions at a shareholders' meeting shall, unless otherwise provided for in this Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares. Shareholders of the company shall perform the voting rights electronically and follow relevant legal regulations to deal with the matters. Article 17 Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chairman of the meeting and shall be distributed to all shareholders of the company within twenty days after the close of the meeting. The preparation and distribution of the minutes of shareholders' meeting as required in the preceding Paragraph may be effected by means of electronic transmission.

  • 36 -

Chapter 4 Directors and Audit Committee

  • Article 18 The Company has seven directors with a three-year term; the directors shall be elected by the shareholders’ meeting from among the persons with disposing capacity. The proportion of shares possessed by all directors shall abide by rules of authorities regulating securities. The above-mentioned directors shall include at least three independent directors and the number of independent directors shall not be less than one fifth of all directors.

  • Article 18-1 At least half of the Company’s directors shall not be of the following relationships:

  • Spouses.

  • Relatives within second degree of kinship.

  • Article 18-2 The Company elects its directors with the nomination system. The nomination procedure is conducted according to provisions in Article 192-1 of Company Act. The Company shall follow provisions in Company Act and rules of authorities regulating securities to establish professional qualifications of independent directors, the limitations of holding shares and taking other positions concurrently, the recognition, nomination, and election of the independent directors, the power of the position, and other matters to abide by.

  • Article 18-3 The Company has established its audit committee according to provisions in Article 14 of Securities and Exchange Act. All members of the committee are independent directors. The Company follows regulations of authorities to establish the rights and duties of committee and its member.

  • Article 18-4 The Company shall establish functional committees; the Board shall specify the qualifications of members, power, and other matters according to relevant laws and regulations.

  • Article 19 When one-third of the directors’ positions are to be filled, the Board shall convene special shareholders’ meeting within sixty days, and the elected personnel shall serve the remaining term period.

  • Article 20 The term of office of a director shall not exceed three years; but he/she may be eligible for re-election.

  • Article 21 The Board is organized by the directors. The chairperson shall be elected on the Board of the meeting where two-thirds of directors are present with over half of the attendees. All procedure shall be conducted following the regulations, the articles, and resolutions of the Board and Shareholders’ meeting. The Company shall purchase insurance of liabilities to cover compensation on all business-related affairs for all of its directors.

  • Article 21-1 The company shall offer its chairperson and directors the remunerations equivalent to compensate for their participation and devotion in business of the Company whether there is a profit or loss in the period. The remuneration standards shall be established with reference of conventions among companies of the same industry. When the Company has earnings, remunerations shall be distributed according to Article 31 of the Articles.

  • Article 22 The Board’s duties are as below: 1. To review the guidelines for operation, and the mid-term and long-term development plans.

  • 37 -

  • To review and supervise the execution of the annual business plan.

  • To adopt the budget and review the financial plan.

  • To review the plans for capital increase and capital decrease.

  • To review the distribution of earnings and loss make-up plan.

  • To review important contracts with external entities.

  • To review the Articles of Incorporations and the amendments.

  • To review the Rules of Company Organization and amendments.

  • To review and resolve the establishment, reorganization, or disassembly of branches.

  • 10.To review major capital expense plans.

  • 11.To execute resolutions of shareholders’ meeting.

  • 12.To review the proposals of the general manager.

  • 13.To convene and report on the shareholders’ meeitng. 14.Other businesses to deal with according to the laws.

  • Article 23 Except when other regulations are specified in the Company Act, the Board’s meeting shall be convened by the chairperson. Notice shall be issued at least 7 days prior to the above-mentioned meeting through letter, fax, or email; when an emergency occurs, a special meeting can be convened anytime. When the chairperson is not able to exercise the power, the chairperson shall appoint one of the members as the proxy; when no proxy was appointed, the directors shall appoint one representative among the members. The director can appoint a delegate to attend the Board’s meeting; the letter of authorization shall specify the reasons for the meeting and range of authorized rights. Each director shall only appoint one director as delegate for each meeting.

  • Article 24 Procedures of the Board’s meeting shall recorded; the minutes with the signature and affixation of the chairperson shall be distributed to each director within 15 days after the meeting. The minutes, the attendees’ signature book, and the letters of authorization shall be preserved in the Company.

  • Article 25 Omitted.

    • Chapter 5 Managers and obligations

  • Article 26 The Company shall hire a general manager, an executive officer, an officer of financial affairs, and several vice general managers. The appointment and dismissal shall be accepted by the majority of the Board. The general manager shall proposed the appointment or dismissal of the vice general managers.

  • Article 27 The Company shall hire consultants, accountants, and other important staff with approval of the Board.

  • Article 28 The appointment and dismissal of other staff member shall be conducted according to authorized rules of the Company.

  • Chapter 6 Accounting

  • Article 29 After the close of each fiscal year, (1) a report on operations, (2) financial statements and (3) proposals concerning appropriation of net profits or making up losses shall be prepared by the Board of Directors, and shall be submitted to the regular meeting of shareholders for acceptance. The aforementioned documents shall be compiled according to rules of the competent authorities.

  • 38 -

  • Article 30 With approval of the shareholders’ meeting, the Company shall issue employee stock option certificate at price lower than the closing price of the common stock of the Company on the issuance day. The Company shall transfer the bought-back treasury stocks to employees with prices lower than the average purchase stock price with approval of the shareholders’ meeting.

  • Article 31 When the Company has earnings for the fiscal year (the earnings refer to the pre-tax profit with deduction of remunerations for employees, directors, and supervisors), 3.75% to 12% of the earnings shall be allocated for remunerations for employees, and no more than 3% shall be allocated as remunerations for directors and supervisors. When the Company has accumulated loss (including the amount for adjusting undistributed earnings), the amount for loss make-up shall be retained. The aforementioned remunerations for employees shall be distributed in stock shares or cash. The eligible receivers include employees of subsidiaries fulfilling criteria set up by the Board. The remunerations for directors and supervisors shall only be distributed in cash. The above two matters have been accepted on the Boards meeting with at least two-thirds of all directors present and accepted by over half of the attendees, and the plan has been reported on the shareholders’ meeting.

  • Article 31-1 When the annual final accounts of the Company include pre-tax net profit of the year, the amount shall firstly used for loss make-up plan (including the adjustment on undistributed surplus); ten percent of the amount shall be retained as legal surplus reserve. This does not apply when legal surplus reserve has been accumulated to the amount of the total capital income of the Company. The special surplus reserve shall be allocated or retained according to regulations of the competent authorities. The economic surplus along with the undistributed surplus from the beginning of the year (including the amount of adjusted undistributed surplus) shall be included in a surplus distribution plan prepared by the Board and proposed on the shareholding’s meeting for acceptance of dividends for shareholders.

  • The Company’s dividend policies shall be conducted considering the present and future development plan, the investment environment, the capital needs, the domestic and overseas competition, benefits for the shareholders, and other factors. The years’ surplus in combination with the undistributed surplus from the previous year shall be distributed as interests and dividends for shareholders. The surplus distribution plan shall be prepared by the Board and approved by the shareholders’ meeting.

Chapter 7 Additional Matters

  • Article 32 The Company’s rules of organizations and office affairs planning rules are established by the Board.

  • Article 33 Matters unspecified in these Articles shall be conducted in accordance with Company Act and other legal regulations.

  • Article 34 The Company shall conduct endorsement for other companies based on principles of fairness and reciprocity.

  • 39 -

Article 35 The Articles were established on March 6, 1970. The first amendment was adopted on September 17, 1981. The second amendment was adopted on July 15, 1982. The third amendment was adopted on October 12, 1983. The fourth amendment was adopted on December 26, 1984. The fifth amendment was adopted on March 9, 1989. The sixth amendment was adopted on December 9, 1989. The seventh amendment was adopted on May 15, 1990. The eighth amendment was adopted on July 10, 1990. The ninth amendment was adopted on March 31, 1992. The tenth amendment was adopted on September 30, 1992. The eleventh amendment was adopted on June 25, 1993. The twelfth amendment was adopted on June 23, 1996. The thirteenth amendment was adopted on May 8, 1997. The fourteenth amendment was adopted on May 8, 1998. The fifteenth amendment was adopted on June 9, 1999. The sixteenth amendment was adopted on May 9, 2000. The seventeenth amendment was adopted on June 14, 2001. The eighteenth amendment was adopted on May 8, 2002. The nineteenth amendment was adopted on June 30, 1993 The twentieth amendment was adopted on June 9, 1994. The twenty-first amendment was adopted on June 13, 1997. The twenty-second amendment was adopted on June 19, 1998. The twenty-third amendment was adopted on June 19, 1999. The twenty-fourth amendment was adopted on June 22, 2000. The twenty-fifth amendment was adopted on June 22, 2012. The twenty-sixth amendment was adopted on June 2, 2015. The twenty-seventh amendment was adopted on June 21, 2016. The twenty-eighth amendment was adopted on June 12, 2017. The twenty-ninth amendment was adopted on June 15, 2018. The thirtieth amendment was adopted on June 20, 2019.

  • 40 -

Appendix II

EVERSPRING INDUSTRY CO., LTD

Rules of Procedures for Shareholders Meetings

  1. The rules of procedures for this Company’s shareholders’ meetings, except as otherwise provided by law or regulation, shall be as provided in these Rules.

  2. This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

  3. Attendance at shareholders’ meetings shall be calculated based on numbers of shares.

  4. The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.

  5. If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. When the chairperson of the board is on leave or for any reason unable to exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of the vice chairperson, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting.

  1. The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-voting capacity. Staff who organize the shareholders’ meeting shall wear ID card or badge during the meeting.

  2. The Company, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.

  3. The recorded materials of the preceding paragraph shall be retained for at least one year.

  4. The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act.

  5. When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

  6. If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Votes shall be cast on each separate proposal in the agenda (including extraordinary motions and amendments to the original proposals set out in the agenda). The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that is not the board of

  7. 41 -

directors.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

  1. Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail. When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

  2. Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

  3. When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal.

  4. After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

  5. When the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed, call for a vote, and schedule sufficient time for voting.

  6. Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation. Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

  7. When a meeting is in progress, the chair may announce a break based on time considerations.

  8. Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

  9. When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

  10. The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors (or security personnel) help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor." At the place of a shareholders meeting, if a shareholder attempts to speak

  11. 42 -

through any device other than the public address equipment set up by this Company, the chair may prevent the shareholder from so doing. When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

  1. Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder. The meeting minutes may be produced and distributed in electronic form. This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

  2. These Rules shall take effect after having been submitted to and approved by a shareholders meeting. Subsequent amendments thereto shall be effected in the same manner.

  3. 43 -

Appendix III

EVERSPRING INDUSTRY CO., LTD Current shareholding of All Directors

  1. Numbers of shares possessed by the Company’s incumbent directors and legal shareholding proportion are as below:

  2. Total number of common shares issued by the Company 214,021,602

  3. Total number of shares lawfully possessed by all directors 12,000,000

  4. Numbers of shares possessed by each director as of to the last day of stock transfer for shareholders’ meeting in 2021(April 23, 2021) are summarized below.

below.
Title Name Possessed number of
shares as of the final day
for stock transfer
Shareholding
proportion
President Chang, Tse Ling 32,450,492 15.16%
Director Huang, Tzu Liang 16,464,637 7.69%
Director Kao, Yun Hwa 13,442,914 6.28%
Director Chen, I Fong 0 0.00%
Subtotal number of shares possessed by
non-independent directors		 62,358,043 29.13%
independent
 Chang, Chin Chen 0 0.00%
~~di~~
independent
 Hong, Pel Pel 291,095 0.14%
~~di~~
independent
 Lee, Pi Shu 0 0.00%
~~di~~
Subtotal number of shares possessed by
non-independent directors		 291,095 0.14%
Total number of shares possessed by all directors
(including independent director)		 62,649,138 29.27%

Note: As the Company has established Audit Committee, the legal supervisor share ownership ratio is not applicable.

  • 44 -

==> picture [58 x 45] intentionally omitted <==

EVERSPRING INDUSTRY CO., LTD

  • 45 -

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