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FITH Annual Report 2020

Jul 23, 2021

52375_rns_2021-07-23_3d2cabe1-8eab-4a38-82d0-09307bfd66d5.pdf

Annual Report

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Stock code: 3712

FIT Holding Co., Ltd.

2020 Annual Report

Printed on May 15, 2021

Annual report inquiry URL: Market Observation Post System http://mops.twse.com.tw The company’s URL http://www.fit-holding.com

  • I. Company spokesperson and acting spokesperson Spokesperson: Jenny Hung Job Title: Manager Acting spokesperson: Kufn Lin Job Title: Chief Financial Officer Telephone: (02)2269-9866 E-mail: [email protected]

  • II. Company address and telephone FIT Holding Co., Ltd.

Address: No.49, Sec.4, Zhongyang Rd., Tucheng Dist., New Taipei City Telephone: (02)2269-9866

Foxlink Image Technology Co., Ltd. Address: No.49, Sec.4, Zhongyang Rd., Tucheng Dist., New Taipei City Telephone: (02)2269-9888

Glory Science Co., Ltd. Address: No. 22 Houke South Road, Houli District, Taichung Telephone: (04)2558-7889

Power Quotient International Co., Ltd. Address: No.49, Sec.4, Zhongyang Rd., Tucheng Dist., New Taipei City Telephone: (02)2269-9889

Shih Fong Power Co., Ltd. Address: No.49, Sec.4, Zhongyang Rd., Tucheng Dist., New Taipei City Telephone: (02)2269-9888

III. Stock Transfer Agency

Name: Grand Fortune Securities Co.,Ltd

Address: 6F, No.6, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei Website: www.gfortune.com.tw Telephone: (02)2371-1658

  • IV. Name, firm name, address, website and telephone number of the CPAs for the

most recent financial report Accountant names: Yi-Chang Liang, Se-Kai Lin Firm Name: PricewaterhouseCoopers Address: 27F, No. 333, Section 1, Jilong Road, Taipei Website: www.pwc.tw Telephone: (02)2729-6666

  • V. Name of the trading place where overseas securities are listed for trading, and

inquiry method of the information of overseas securities: The company has no overseas securities listed for trading as of the date of publication.

  • VI. Company website: www.fit-holding.com

Table of Contents

One. Report to Shareholders ..................................................................... 1 One. Report to Shareholders ..................................................................... 1
Two. Company Profile ................................................................................ 6
I. Date of Establishment ....................................................................................... 6
II. Company History .............................................................................................. 6
Three. Corporate Governance Report .......................................................... 7
I. Organizational System ...................................................................................... 7
II. Information of Directors, Supervisors, President, Vice Presidents, Senior
Managers and Heads of Various Departments and Branches .......................... 8
III. Remuneration paid to Directors, Supervisors, President and Vice
Presidents in the Last Year ............................................................................. 16
IV. Corporate Governance Status ........................................................................ 22
V. Independent Auditor Fee Information .............................................................. 52
VI. Change of Independent Auditor ...................................................................... 53
VII. Whether the chairman, president, or manager in charge of financial or
accounting affairs of the company has worked in the firm of the
independent auditor or its affiliated enterprises in the past year ..................... 53
VIII. Equity transfer and equity pledge by directors, supervisors, managers,
and shareholders with a shareholding ratio of more than 10% ....................... 54
IX. Information on the relationship among the top ten shareholders in terms
of shareholding ratio who are related persons, spouses or second-tier
relatives .......................................................................................................... 55
X. The number of shares held by the company, its directors, supervisors,
managers, and the company’s indirectly controlled enterprises in the
same reinvested enterprise, and the consolidated shareholding ratio ............ 56
Four. Fund Raising Status ........................................................................ 58
I. Capital and Shares ......................................................................................... 58
II. Handling of corporate bonds ........................................................................... 62
III. Handling of preferred shares .......................................................................... 62
IV. Handling of overseas depositary receipts ....................................................... 62
V. Handling of employee stock option certificates ............................................... 62
VI. Handling of M&A or receiving shares of other companies for issuing new
shares ............................................................................................................. 63
VII. Implementation status of fund utilization plan ................................................. 63
Five. Operation Overview ........................................................................... 64
I. Business Content ............................................................................................ 64
II. Overview of Market, Production and Sales ..................................................... 78
III.
Number of employees and the average length of service, average age
and distribution of education level of the employees in the last two years
and as of the publication date of the annual report ......................................... 90
IV.
Environmental Protection Expenditure Information ......................................... 90
V. Labor-management Relationship .................................................................... 91
VI.
Important Contracts ........................................................................................ 92
Six. Financial Overview .......................................................................... 96
I. Condensed Balance Sheet and Comprehensive Income Statement for
the Last Five Years ......................................................................................... 96
II. Financial Analysis for the Last Five Years .................................................... 103
III.
Audit Committee’s Review Report of the Latest Annual Financial Report ..... 108
IV.
Latest Annual Financial Report .....................................................................110
V. Latest Individual Financial Report Audited and Certified by the
Independent Auditor ...................................................................................... 211
VI.
If the company and its affiliated companies had any financial difficulties in
the most recent year and as of the publication date of the annual report, .... 268
Seven. Review and Analysis of Financial Status and Performance and Risk
Issues ........................................................................................... 268
I. Review and analysis of financial status ........................................................ 268
II. Review and Analysis of Financial Performance ............................................ 269
III.
Review and Analysis of Cash Flow ............................................................... 269
IV.
Impact of Major Capital Expenditures on Financial Operations in the Last
Year .............................................................................................................. 270
V. Reinvestment policy in the most recent year, main reason for its profit or
loss, improvement plan and investment plan for the next year ..................... 270
VI.
Risks ............................................................................................................. 271
VII. Oher Important Matters ................................................................................. 276
Eight. Special Records ............................................................................ 279
I. Information of Affiliated Enterprises .............................................................. 279
II. Handling of private placement securities in the last year and as of the
date of publication of the annual report ......................................................... 292
III.
Status of holding or disposal of the company’s shares by subsidiaries in
the last year and as of the date of publication of the annual report............... 292
IV.
Other necessary supplementary explanations .............................................. 292
V. In the most recent year and as of the date of publication of the annual
report, if there is any matter that has a significant impact on shareholders’
rights and interests or the price of securities as specified in subparagraph
2, paragraph 3, Article 36 of the Securities and Exchange Act ..................... 292

I. Report to Shareholders

The company’s consolidated operating income in 2020 was NT$7,053,361 thousand, a decline of 20.21% from the consolidated operating income of NT$8,840,159 thousand in 2019. The 2020 after-tax net profit attributable to the parent company was NT$83,599 thousand, an increase of 144.22% from the after-tax net loss attributable to the parent company of NT$189,059 thousand in 2019. In addition to the decrease in the loss of the subsidiary Glory Science Co., Ltd. under the efforts of the team compared with the previous year, the subsidiary Shinfox Energy Co., Ltd. recognized technical service and engineering income as the Group’s profit, and brought a great deal of help to the Group. The other subsidiaries Foxlink Image Technology Co., Ltd. and Power Quotient International Co., Ltd. maintained their revenues and profits at the previous year’s level. The company was able to grow and profit in the severe global outbreak of COVID-19 in 2020. As the epidemic slows down this year, the company’s good operating performance this year can be expected. I would like to thank all employees and shareholders for your contribution and support in the past year.

The important strategic growth of the Group in the next phase will still focus on the areas of “clean energy” and “energy saving and carbon reduction.” The company is striving for a layout in the green energy and carbon reduction industry. At present, the Group comprises Shih Fong Power Co., Ltd. in charge of hydropower, Shinfox Energy in charge of land wind power and solar power plant turnkey projects and maintenance, and Foxwell Energy Corporation Ltd. in charge of offshore wind power and solar power plant investment, development and operation; Shinfox Natural Gas Co., Ltd. has obtained the import permit of liquefied natural gas (LNG) to improve air pollution and serve as a cleaner alternative fuel, and it is estimated that the supply operations of the first batch of imported natural gas will be completed by the end of August 2021; Foxwell Power Co.,Ltd offers green power trading and integrates energy-saving services and power services such as energy storage system to form a comprehensive energy service platform through e-commerce. FIT Holding Group is looking forward to creating a sustainable living environment, building competitiveness for new energy and energy saving industries, and contributing to the wellbeing of the earth.

The company will thrive on a stable basis and create greater profits for shareholders. Therefore, we need to be prepared to face challenges and solve problems, so as to ensure the growth of the company’s revenue and profit. Lastly, I hope that all shareholders can continue to support and encourage the company, and I wish all shareholders the best of everything.

Chairman T.C. Gou

1

I. 2020 Business Results

(I) Business Plan Implementation Results

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
Item 2020 2019 Growth rate
Operating income 7,053,361 8,840,159 (20.21%)
Operating cost 6,168,735 8,226,631 (25.02%)
Operating margin 884,626 613,528 44.19%
Operating expenses 1,105,280 1,146,824 (3.62%)
Operating loss (220,654) (533,296) 58.62%
Non-operating income
and expenditure		 512,107 305,166 67.81%
Net profit (loss) before
tax		 291,453 (228,130) 227.76%
Net profit (loss) for the
period		 179,775 (197,033) 191.24%
Net profit (loss)
attributable to the
parentcompany		 83,599 (189,059) 144.22%

==> picture [68 x 31] intentionally omitted <==

(II) Budget Implementation Status

The company did not prepare the 2020 financial forecast, so this is not applicable.

(III) Profitability Analysis

Profitability Analysis Profitability Analysis
Year 2020 2019
Return on assets (%) 1.20 (0.65)
Return on shareholders’equity (%) 2.39 (2.79)
Percentage of paid-in
capital (%)		 Business
interest		 (8.96) (21.66)
Net profit
before tax		 11.84 (9.26)
Net profit rate (%) 2.55 (2.23)
Basic earnings pershare (NT$) (note) 0.34 (0.77)

Note: The ratios above are based on the figures in the consolidated financial statements, and the earnings per share are calculated based on the number of shares after retrospective adjustment.

(IV) R&D Status

3C Components:

  1. Patent application.

  2. Mold technology and forming technology.

  3. Improved automation capabilities.

  4. Process efficiency and yield.

  5. R&D of new materials.

2

  1. Development and application of new technologies and new products.

  2. Application and cooperative development of other optical products.

3C Retail and Peripheral Products:

  1. In response to the needs of the fast charging market, a series of fast charging products have been launched, including fast chargers with output requirements of GaN 65W, 36W and 24W. In the future, fast charging products for 50W and 100W will be developed to meet simultaneous charging requirements for multiple devices.

  2. A 10000mAh PD 18W portable power bank is launched, and a 20000mAh PD 45W high-output power bank is planned to be developed in the future, which can provide mobile charging requirements for tablets/small laptops.

  3. The SSD external mobile hard drive is launched to provide light, stable and high-performance data transmission.

  4. Power assisted bicycles are planned to be launched in response to the world trend of green energy and carbon reduction.

  5. Forehead temperature gun products are introduced in line with new life measures for epidemic prevention.

Energy Service Management:

  1. Developing renewable energy and clean energy markets.

  2. The project contracting business of power plants and improvement of the operation efficiency of power plant maintenance.

System and Peripheral Products:

  1. Participating in the development process of customers’ new products to providing customers with various solutions and technical support.

  2. Actively striving to cultivate R&D talents across the strait, including talents of software, firmware, optics and institutions, strengthening on-the-job training, and enriching the capability of the R&D team.

  3. To meet environmental protection needs, comprehensively promote the control of prohibited substances, promote lead-free products, and develop materials and products that meet environmental protection requirements.

  4. Continuing to develop related products such as digital imaging and automatic paper feeder modules and actively investing in mold development to increase the company’s core mold technology and enhance mold competitiveness to strengthen one-stop service to customers.

  5. Establishing a complete testing center to provide rapid testing and verification services during the R&D phase and improve product design quality.

II. Summary of 2021 Business Plan

(I) Business Policy

1. Business purpose:

After the establishment of the company, Glory Science Co., Ltd., Power Quotient International Co., Ltd. and Foxlink Image Technology Co., Ltd. will further strengthen each other’s advantages in their respective professional fields, and then join Shih Fong Power Co., Ltd. and Shinfox Energy Co., Ltd. to expand their energy service territories. Under the complementary resource sharing and full cooperation of marketing, procurement and R&D, each

3

company’s resources are integrated to give full play to the advantage of integrated marketing. After the vertical integration between upstream and downstream products, the scale of operations will be expanded to increase economic benefits and improve overall operating performance and competitiveness, thereby increasing the future room for growth between each other. At the same time, commanding heights and new opportunities for the future development and sustainable operation of the optoelectronic, communication and digital imaging businesses can be obtained to provide customers with quality, efficient and comprehensive services so as to create the company’s best operating performance and seek the maximum profit for shareholders.

The company assists in the integration of resources within the Group so that each business entity can focus on its business while taking into account the flexibility and efficiency of its independent operation and development and improving the efficiency of the corporate division of labor.

  • (II) Expected sales volume and its basis

The Group’s products are mainly consumer electronics. As the industry growth trend of mobile phone lens modules and optical connectors remains unchanged, and the system and peripheral product businesses are actively expanding customer bases and developing new products, the sales volume of each product is expected to reach a trend of stable growth. In terms of energy services, as it is mainly energy-saving services, equipment maintenance services and solar engineering design and development, the sales volume cannot be calculated.

(III) Important production and marketing policies

The Group will enhance its internal management capabilities to reduce various production costs, continue to expand production capacity, actively cultivate talents, strengthen employee training, make good use of group resources, as well as provide customers with the best service and technical resources and establish a good cooperative relationship with customers, in order to achieve a win-win goal.

III. Future Company Development Strategy

The subsidiaries of the Group have strengthened each other’s advantages in their respective professional fields. Under the complementary resource sharing and full cooperation of marketing, procurement and R&D, the resources of each company are integrated to give full play to the advantage of integrated marketing. After the vertical integration between upstream and downstream products, the scale of operations will be expanded to increase economic benefits and improve overall operating performance and competitiveness, thereby increasing the room for future growth between each other. At the same time, commanding heights and new opportunities for the future development and sustainable operation of the optoelectronic, communication and digital imaging businesses can be obtained to provide customers with quality, efficient and comprehensive services.

4

IV. Impact of External Competition Environment, Legal Environment and Overall Business Environment

Faced with the rapidly changing industry and operating environment, the Group will further implement business management, improve operating efficiency, and respond to the company’s operations with a more positive attitude and service. In addition to continuing to control fixed marketing costs, the Group will also use its relevant resources to develop and produce products to strengthen its cost competitiveness and timeliness. In the meantime, the company will integrate the technical guidance of the Group to develop forward-looking products, strengthen product differentiation and enhance competitiveness. Green energy is supported by current policies and regulations and will bring a greater vision to the FIT Holding Group.

5

II. Company Profile

  • I. Date of Establishment: October 1, 2018

II. Company History:

  • 2018 • The company was jointly established by Glory Science Co., Ltd., Power Quotient International Co., Ltd. and Foxlink Image Technology Co., Ltd. on October 1, 2018, and is listed on the Taiwan Stock Exchange. After the share swap, Foxlink Image Technology Co., Ltd., Glory Science Co., Ltd. and Power Quotient International Co., Ltd. became wholly-owned subsidiaries of the company, and terminated their trading on the centralized (OTC) market on the same day.

  • 2019 • In compliance with the establishment of the Audit Committee, the directors were re-elected in advance, and 9 seats of directors were elected, including 3 seats of independent directors.

  • Established the Audit Committee to replace supervisors.

  • Invested in hydropower related businesses and obtained 100% equity of Shih Fong Power .

  • Subsidiary Foxwell Energy Corporation Ltd. swapped shares with Hsingwei Co., Ltd. and became a 100% subsidiary of Hsingwei Co., Ltd. Power Quotient International Co., Ltd. holds 76.56% of the shares of Shinfox Energy Co., Ltd.

  • 2020 • Subsidiary Shih Fong Power handled capital increase, and the Group holds 80% of its equity.

  • Subsidiary Shinfox Energy Co., Ltd. handles capital increase, and the Group holds 58.74% of its equity.

  • The subsidiary Shinfox Energy Co., Ltd. was publicly issued on September 30, 2020; it was registered on the Taipei Exchange on December 7, 2020.

6

III. Corporate Governance Report

I. Organizational System

  • (1) Organizational Structure

==> picture [471 x 345] intentionally omitted <==

----- Start of picture text -----

Shareholders’
meeting Audit
Committee
Compensation
Committee
Board of
Directors
Audit Office
Chairman of Chairman’s
the board office
President
Subsidiaries Central
Resource Unit
Power Quotient Foxlink Image Glory Science Shih Fong Finance and Administration Investment
International Co., Technology Co., Ltd. Power Accounting Division Strategy Division
Ltd. Co., Ltd. Division
----- End of picture text -----

(II) The business of each main department

Department Business
Audit Office • Audit of the operation of the company’s internal control cycle system.
• Checking and evaluation of the integrity and effectiveness of the company’s
internal control system.
Finance and
Accounting
Division		 • Planning of the company’s overall finance and tax.
• Capital scheduling and risk management.
• Planning and drafting of the company’s financial and accounting systems
and operating procedures.
Administration
Division		 • Planning and execution of human resources, administrative management,
human development, personnel management, salary and benefits.
• Establishment and implementation of a customized talent cultivation system.
•Maintenance and planning of general affairs.
Investment
Strategy Division		 • Strategic planning and investment management for reinvestment within the
Group.
•Handling of relevant legal documents and litigation cases within the Group.
Subsidiaries • Developing customers and maintaining customer relationships.
• Preparing and implementing sales plans.
• Product development and manufacturing.
• Responsible for improving and enhancing manufacturing technology and
efficiencymanagement.

7

II. Information of Directors, Supervisors, President, Vice Presidents, Senior Managers and Heads of Various

Departments and Branches

(I) Directors and Supervisors

Information of Directors and Supervisors (I)

Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I) Information of Directors and Supervisors (I)
April 24,2021 Unit: share
Job Title Nationality or place of registration Name Gender Date of
election
(taking
office)		 Term of office Date of first appointment Shareholding at the
time of appointment		 Current shareholding Shareholding of
spouse and minor
children s		 Shareholdings
in the names of
other people
Major work experience (education
background)
 Positions at the company and
other companies concurrently
held at the moment		 Other managers,
directors or
supervisors with a
spouse or
second-tier relative
relationship		 Remarks
Number of
shares		 Shareholding
ratio		 Number of
shares		 Shareholding
ratio		 Number of shares Shareholding
ratio		 Number of shares Shareholding
ratio		 Job title Name Relationship
Chairman of
the board		 Republic
of China		 Foxlink
International
Investment Ltd.		 - June 21,
2019		 3
years		 June 19,
2018		 58,303,464 23.68% 58,303,464 23.68% 0 0% 0 0% None None None None None None
Republic
of China		 T.C. Gou
(note 1)		 Male June 21,
2019		 3
years		 June 19,
2018		 0 0% 0 0% 0 0% 0 0% Department of Law, Chung Hsing
University
President of Hon Hai Precision Industry
Co., Ltd.		 note 3 None None None note 4
Director Republic
of China		 Foxlink
International
Investment Ltd.		 - June 21,
2019		 3
years		 June 19,
2018		 58,303,464 23.68% 58,303,464 23.68% 0 0.00% 0 0.00% None None None None None None
Republic
of China		 Kufn Lin
(note 1)		 Male June 21,
2019		 3
years		 June 19,
2018		 6,310 0% 6,310 0% 0 0.00% 0 0.00% Department of Accounting, Fu Jen
Catholic University
Special Assistant to the Chairman’s
Office of Cheng Uei Precision Industry
Co., Ltd.		 note 3 None None None None
Director Republic
of China		 Foxlink
International
Investment Ltd.		 - June 21,
2019		 3
years		 June 19,
2018		 58,303,464 23.68% 58,303,464 23.68% 0 0% 0 0% None None None None None None
Republic
of China		 Jeffery Cheng
(note 1)		 Male June 21,
2019		 3
years		 June 21,
2019		 0 0% 0 0% 0 0% 0 0% Department of Foreign Languages,
National Taiwan University (Evening
Class)
Vice President of Cheng Uei Precision
IndustryCo., Ltd.		 note 3 None None None None
Director Republic
of China		 Fu Uei
International
Investment Ltd.		 - June 21,
2019		 3
years		 June 19,
2018		 14,690,257 5.97% 14,690,257 5.97% 0 0.00% 0 0.00% None None None None None None

8

Job Title Nationality or place of registration Name Gender Date of
election
(taking
office)		 Term of office Date of first appointment Shareholding at the
time of appointment		 Shareholding at the
time of appointment		 Current shareholding Current shareholding Shareholding of
spouse and minor
children s		 Shareholding of
spouse and minor
children s		 Shareholdings
in the names of
other people		 Shareholdings
in the names of
other people
Major work experience (education
background)
 Positions at the company and
other companies concurrently
held at the moment		 Other managers,
directors or
supervisors with a
spouse or
second-tier relative
relationship		 Other managers,
directors or
supervisors with a
spouse or
second-tier relative
relationship		 Other managers,
directors or
supervisors with a
spouse or
second-tier relative
relationship		 Remarks
Number of
shares		 Shareholding
ratio		 Number of
shares		 Shareholding
ratio		 Number of shares Shareholding
ratio		 Number of shares Shareholding
ratio		 Job title Name Relationship
Singapore Hwee Kian Lim
(note 2)		 Female Decembe
r 16,
2019		 3
years		 December
16, 2019		 281,851 0.11% 281,851 0.11% 0 0.00% 0 0.00% Department of Mechanical Engineering,
Nanyang Technological University
President of Foxlink Image Technology
Co., Ltd.		 note 3 None None None None
Director Republic
of China		 Fu Uei
International
Investment Ltd.		 - June 21,
2019		 3
years		 June 19,
2018		 14,690,257 5.97% 14,690,257 5.97% 0 0.00% 0 0.00% None None None None None None
Republic
of China		 Semi Wang
(note 2)		 Male June 29,
2020		 3
years		 June 29,
2020		 0 0% 0 0% 0 0.00% 0 0.00% MBA, University of Leicester, UK
President
and
Vice
Chairman
of
NexPower Optoelectronics Co., Ltd.
note 3		 None None None None
Director Republic
of China		 Fu Uei
International
Investment Ltd.		 - June 21,
2019		 3
years		 June 19,
2018		 14,690,257 5.97% 14,690,257 5.97% 0 0.00% 0 0.00% None None None None None None
Republic
of China		 Wilson Hu
(note 2)		 Male June 21,
2019		 3
years		 June 21,
2019		 0 0% 0 0% 0 0.00% 0 0.00% EMBA in Information Management,
National Taiwan University
President and Director of Hsingwei Co.,
Ltd.
Chairman of Foxwell Energy
Corporation Ltd.		 note 3 None None None None
Independent
Director
Republic
of China		 Ralph Chen Male June 21,
2019		 3
years		 June 21,
2019		 0 0% 0 0% 0 0.00% 0 0.00% Department of Accounting, Tunghai
University
CPA of Shangjin Certified Public
Accountants		 note 3 None None None None
Independent
Director
Republic
of China		 Chen-Rong
Chian		 Male June 21,
2019		 3
years		 June 21,
2019		 0 0% 0 0% 0 0.00% 0 0.00% PhD in Business Administration,
University of Maryland, USA
Chairman of the Taiwan Pollution
Control Equipment Industry Association,
“Domestic Environmental Protection
Equipment Quality Certification Review
Committee” of the Industrial Bureau of
theMinistry of EconomicAffairs
note 3		 None None None None
Independent
Director
Republic
of China		 Wei-Lin Wang Male June 21,
2019		 3
years		 June 21,
2019		 0 0% 0 0% 0 0.00% 0 0.00% PhD in Law, Washington University, St.
Louis, USA
Full-time Professor and Dean of the
Department of Finance and Law,
School of Law, Ming Chuan University		 note 3 None None None None

Note 1: Legal representative of Foxlink International Investment Ltd.

Note 2: Legal representative of Fu Uei International Investment Ltd.

9

Note 3:

Note 3: Note 3:
Directors:
Positions at the company and other companies concurrently held at the moment
T.C. Gou
Chairman of Cheng Uei Precision Industry Co., Ltd., Foxlink Image Technology Co., Ltd., Microlink Communications Inc., DU Precision Industry, Studio A Inc., Power Quotient
International Co., Ltd., Hsin Hung International Investment t, Foxlink International Investment, Central Motion Picture, Central Motion Picture Corporation, CMPC Cultural &
Creative, CMPC Bade, CMPC Cultural City, CMPC International, Deepwaters Digital Support, Shinfox Energy Co., Ltd., Shinfox Natural Gas, Shih Fong Power , Central Motion
Picture USA Corporation and Luminys Systems Corp.
Kufn Lin
Director of Foxlink Image Technology Co., Ltd., Well Shin Technology Co., Ltd., Microlink Communications Inc., Darts Technologies, Studio A Inc., Foxwell Energy, Chuangshiji,
Power Quotient International Co., Ltd., Power Sufficient International, Trinity Investment Corporation, Central Motion Picture, CMPC Cultural & Creative, CMPC International,
Deepwaters Digital Support, An Attitude Film, Xinhong International Investment, Foxlink International Investment, Foxlink International Investment, Taifu International Investment,
Fulian International Investment, Zhi De Investment, Taiwan Star Telecom Corporation Limited, Shinfox Energy Co., Ltd., Shinfox Natural Gas, Straight A, Jing Jing Technology,
Glory Science Co., Ltd., Wellgen Medical, Shih Fong Power, Foxwell Energy, Fu Uei Power, Studio A Macau, Fushineng Electronics (Kunshan), Foxlink Automotive Technology
(Kunshan), Power Quotient Technology (Yancheng), Ashop Co., Ltd., Sharetronic Data Technology Co., Ltd., and Fu Gang Electronic (Nan Chang)
Chairman of VA Product, CMPC Management Consulting, Dachuan HsuanHsiu, Shengji Music, Fresh Air, Fu Uei International Investment, Chengfa Investment, Chichun
International Investment, Fujshishiang (Kunshan), Glorytek (Suzhou) Co., Ltd., Glorytek (Yancheng) Co., Ltd., Glory Optics (Yancheng) Co., Ltd., Yancheng Yaowei, Dong Guan
Fu Zhang Precision Industry, Wei Hai Fu Kang Electric, Dong Guan HanYang Computer and Shanghai Fugang Electric
Director of Studio A Hong Kong, CU International, CULINK International, New Start Industries, Benefit Right, Foxlink Technology, Glory Tek (BVI), Glory Optics (BVI), Glory Tek
(Samoa), Power Channel Limited, Foxlink Technical India Private Electric, Foxlink India Electric Private Limited, Sinobest Brothers, Foxlink Myanmar Company, Glorytek Science
India Private Limited, Hong Kong Hualinde, Value Success Ltd., Capital Guardian Ltd. and Accu Image Technology Limited.
Special Assistant to the Chairman’s Office of Cheng Uei Precision Industry Co., Ltd.
President of Culink Tianjin and Foxlink Energy (Tianjin)
Vice Chairman of Fugang Electronic (Dongguan)
Supervisor of CYNC Design Co., Ltd.
Supervisor of Fugang Electric (Xuzhou) and Fuzhan Electronics (Shanghai) Co., Ltd.
Legal representative of Fugang Electric (Yancheng), Fuqiang Electric (Yancheng), Fugang Electric (Kunshan), Dongguan Fuqiang Electronics, Fugang Electric (Maanshan),
Fuqiang Electric (Ma’anshan), Dongguan Fu Uei Electronics, Kunshan Fugang Electric , Kunshan Fugang Investment, Suzhou Keyu Rui Automobile Technology and Power
Channel
Jeffery Cheng
Chairman of Jing Jing Technology, Jingsheng Technology and Ashop Co., Ltd.
Director of VA Product International, Power Quotient International Co., Ltd., Power Sufficient International, Kunshan Fugang Electric Trading, Jingshi Hong Kong, Jingshi Macau,
Shanghai Fugang Electronic Trading, Kunshan Fu Shi You Trading, Sinocity Industries Limited, Shanghai Benchmarking Information and DG Lifestyle Store Limited
President of Jingshi Technology, Shanghai Fugang Electric Trading and Kunshan Fu Shi You Trading
Hwee Kian Lim
President of Foxlink Image Technology Co., Ltd.
Director of Dongguan Fu Uei , Dong Guan Fu Zhang Precision Industry and Wei Hai Fu Kang Electric
Semi Wang
Chairman of Minghsing Creative Management Consulting Company and Chairman of Minghsiang Culture Company, Independent Director of KYEC, Independent Director and
Remuneration Committee Convener of Creative Sensor Inc., Supervisor of Guoguang Electric Power Company, Director of Taiwan Electrical and Electronic Manufacturers’
Association and Vice President of Zero Energy Building Technology Alliance
Wilson Hu
President and Director of Shinfox Energy Co., Ltd.
Chairman of Foxwell Energy, Fu Uei Power and Junzhe Company
Director of Shinfox Natural Gas and Shih Fong Power
Legal representative of Kunshan Jiuwei Info Tech
Ralph Chen
Certified Public Accountant of Shangjin Certified Public Accountants, Independent Director of Ruibao Gene Co., Ltd., Independent Director and Remuneration Committee Member
of Triocean Filament Yarns, and Independent Director and Remuneration Committee Member of TungThih Electronic Co., Ltd.
Chen-Rong
Chian
Chairman and President of Taiwan-Asahi Environmental Technology Co., Ltd., Chairman and President of Diamond Technical & Trading Corp., Independent Director and
Remuneration Committee Convener of Shampo Co., Ltd., Independent Director and Remuneration Committee Member of Alpha Networks Inc. and Independent Director and
Remuneration Committee Member of Sheng Nan Electronics Co., Ltd.
Wei-Lin Wang
Director of the Institute of Technology Law of the Institute for Information Industry, Independent Director and Remuneration Committee Member of Ant Precision Industry Co., Ltd.
and Remuneration Committee Member of Win Foundry Co., Ltd.
Note 4: The Chairman of the company concurrently serves as the President mainly to improve the efficiency of operation and management and the execution of decision-making; in addition, the
Chairman closely communicates with the directors on the company’s current operating conditions and the planning guidelines to implement corporate governance. In the future, the company		 Directors: Positions at the company and other companies concurrently held at the moment
T.C. Gou Chairman of Cheng Uei Precision Industry Co., Ltd., Foxlink Image Technology Co., Ltd., Microlink Communications Inc., DU Precision Industry, Studio A Inc., Power Quotient
International Co., Ltd., Hsin Hung International Investment t, Foxlink International Investment, Central Motion Picture, Central Motion Picture Corporation, CMPC Cultural &
Creative, CMPC Bade, CMPC Cultural City, CMPC International, Deepwaters Digital Support, Shinfox Energy Co., Ltd., Shinfox Natural Gas, Shih Fong Power , Central Motion
Picture USA Corporation and Luminys Systems Corp.
Kufn Lin Director of Foxlink Image Technology Co., Ltd., Well Shin Technology Co., Ltd., Microlink Communications Inc., Darts Technologies, Studio A Inc., Foxwell Energy, Chuangshiji,
Power Quotient International Co., Ltd., Power Sufficient International, Trinity Investment Corporation, Central Motion Picture, CMPC Cultural & Creative, CMPC International,
Deepwaters Digital Support, An Attitude Film, Xinhong International Investment, Foxlink International Investment, Foxlink International Investment, Taifu International Investment,
Fulian International Investment, Zhi De Investment, Taiwan Star Telecom Corporation Limited, Shinfox Energy Co., Ltd., Shinfox Natural Gas, Straight A, Jing Jing Technology,
Glory Science Co., Ltd., Wellgen Medical, Shih Fong Power, Foxwell Energy, Fu Uei Power, Studio A Macau, Fushineng Electronics (Kunshan), Foxlink Automotive Technology
(Kunshan), Power Quotient Technology (Yancheng), Ashop Co., Ltd., Sharetronic Data Technology Co., Ltd., and Fu Gang Electronic (Nan Chang)
Chairman of VA Product, CMPC Management Consulting, Dachuan HsuanHsiu, Shengji Music, Fresh Air, Fu Uei International Investment, Chengfa Investment, Chichun
International Investment, Fujshishiang (Kunshan), Glorytek (Suzhou) Co., Ltd., Glorytek (Yancheng) Co., Ltd., Glory Optics (Yancheng) Co., Ltd., Yancheng Yaowei, Dong Guan
Fu Zhang Precision Industry, Wei Hai Fu Kang Electric, Dong Guan HanYang Computer and Shanghai Fugang Electric
Director of Studio A Hong Kong, CU International, CULINK International, New Start Industries, Benefit Right, Foxlink Technology, Glory Tek (BVI), Glory Optics (BVI), Glory Tek
(Samoa), Power Channel Limited, Foxlink Technical India Private Electric, Foxlink India Electric Private Limited, Sinobest Brothers, Foxlink Myanmar Company, Glorytek Science
India Private Limited, Hong Kong Hualinde, Value Success Ltd., Capital Guardian Ltd. and Accu Image Technology Limited.
Special Assistant to the Chairman’s Office of Cheng Uei Precision Industry Co., Ltd.
President of Culink Tianjin and Foxlink Energy (Tianjin)
Vice Chairman of Fugang Electronic (Dongguan)
Supervisor of CYNC Design Co., Ltd.
Supervisor of Fugang Electric (Xuzhou) and Fuzhan Electronics (Shanghai) Co., Ltd.
Legal representative of Fugang Electric (Yancheng), Fuqiang Electric (Yancheng), Fugang Electric (Kunshan), Dongguan Fuqiang Electronics, Fugang Electric (Maanshan),
Fuqiang Electric (Ma’anshan), Dongguan Fu Uei Electronics, Kunshan Fugang Electric , Kunshan Fugang Investment, Suzhou Keyu Rui Automobile Technology and Power
Channel
Jeffery Cheng Chairman of Jing Jing Technology, Jingsheng Technology and Ashop Co., Ltd.
Director of VA Product International, Power Quotient International Co., Ltd., Power Sufficient International, Kunshan Fugang Electric Trading, Jingshi Hong Kong, Jingshi Macau,
Shanghai Fugang Electronic Trading, Kunshan Fu Shi You Trading, Sinocity Industries Limited, Shanghai Benchmarking Information and DG Lifestyle Store Limited
President of Jingshi Technology, Shanghai Fugang Electric Trading and Kunshan Fu Shi You Trading
Hwee Kian Lim President of Foxlink Image Technology Co., Ltd.
Director of Dongguan Fu Uei , Dong Guan Fu Zhang Precision Industry and Wei Hai Fu Kang Electric
Semi Wang Chairman of Minghsing Creative Management Consulting Company and Chairman of Minghsiang Culture Company, Independent Director of KYEC, Independent Director and
Remuneration Committee Convener of Creative Sensor Inc., Supervisor of Guoguang Electric Power Company, Director of Taiwan Electrical and Electronic Manufacturers’
Association and Vice President of Zero Energy Building Technology Alliance
Wilson Hu President and Director of Shinfox Energy Co., Ltd.
Chairman of Foxwell Energy, Fu Uei Power and Junzhe Company
Director of Shinfox Natural Gas and Shih Fong Power
Legal representative of Kunshan Jiuwei Info Tech
Ralph Chen Certified Public Accountant of Shangjin Certified Public Accountants, Independent Director of Ruibao Gene Co., Ltd., Independent Director and Remuneration Committee Member
of Triocean Filament Yarns, and Independent Director and Remuneration Committee Member of TungThih Electronic Co., Ltd.
Chen-Rong
Chian		 Chairman and President of Taiwan-Asahi Environmental Technology Co., Ltd., Chairman and President of Diamond Technical & Trading Corp., Independent Director and
Remuneration Committee Convener of Shampo Co., Ltd., Independent Director and Remuneration Committee Member of Alpha Networks Inc. and Independent Director and
Remuneration Committee Member of Sheng Nan Electronics Co., Ltd.
Wei-Lin Wang Director of the Institute of Technology Law of the Institute for Information Industry, Independent Director and Remuneration Committee Member of Ant Precision Industry Co., Ltd.
and Remuneration Committee Member of Win Foundry Co., Ltd.

10

plans to increase the number of independent directors to enhance the functions of the board of directors and strengthen the supervision function.

11

Major Shareholders of Corporate Shareholders

April 24, 2021

Major Shareholders of Corporate Shareholders
April 24, 2021
Corporate shareholder’s name Major shareholders of corporate shareholders
Foxlink International Investment Ltd. ChengUei Precision IndustryCo.,Ltd.(100%)
Zhi De Investment Co.,Ltd. Fu Uei International Investment Ltd.(100%)
Fu Uei International Investment Ltd. ChengUei Precision IndustryCo., Ltd.(100%)

Major Shareholders of Major Shareholders That Are Corporates

Major Shareholders of Major Shareholders That Are Corporates Major Shareholders of Major Shareholders That Are Corporates
April 24,2021
Name of the corporate Major shareholders of the corporate
Cheng Uei Precision Industry Co., Ltd.




 Hsin Hung International Investment Co., Ltd. (19.62%), Central Motion Picture Corporation(6.36%), Foxlink Image
Technology Co., Ltd. (5.37%), Special Investment Account of Citibank as Custody for the Central Bank of Norway (1.62%),
Cooperative Bank of Taiwan ( 1.41%), T.C. Gou(1.17%), Special Investment Account of Chase Manhattan Bank as Custodian
for Vanguard Group Emerging Market Fund (1.13%), Special Investment Account of Chase Manhattan Bank as Custodian for
Advanced Starlight Advanced Aggregate International Stock Index(1.01%),Mei-YingSulian(0.69%),Yu-Fa Chiu(0.68%)

12

Information of Directors and Supervisors (II)

Conditions
Name		 Has more than five years of work
experience and the following professional
qualifications or not		 Has more than five years of work
experience and the following professional
qualifications or not		 Has more than five years of work
experience and the following professional
qualifications or not		 Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Meeting the independence requirements or not (note 4) Number of independent director
position concurrently held at other
public offering companies
Lecturer or
above in
public or
private
colleges or
universities
in legal
affairs,
finance,
accounting
or relevant
disciplines
required for
the
company’s
business.		 Judge,
prosecutor,
lawyer,
accountant or
other type of
professional and
technical
personnel who
has passed the
national
examination and
obtained the
certificate
required for the
company’s
business.		 Work
experience
in legal
affairs,
finance,
accounting
or other
disciplines
required for
the
company’s
business.		 1 2 3 4 5 6 7 8 9 10 11 12
T.C. Gou (note
1)		 None
Kufn Lin (note
1)		 None
Jeffery Cheng
(note 1)		 None
Hwee Kian Lim
(note 2)		 None
Semi Wang
(note 2)		 None
Wilson Hu
(note 2)		 None
Ralph Chen 3
Chen-Rong
Chian		 3
Wei-Lin Wang 1
  • Note 1: Legal representative of Foxlink International Investment Ltd.

Note 2: Legal representative of Fu Uei International Investment Ltd.

Note 3: If the director or supervisor meets the following conditions in the two years before their election and during the term of office, please mark ““ in the space below each condition code.

  • (1) The director is not an employee of the company or its affiliated enterprises.

  • (2) The director is not a director or supervisor of the company or its affiliated enterprises (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

  • (3) The director or supervisor, or his/her spouse or minor children or in another person’s name, does not hold more than 1% of the total issued shares of the company or is not a top ten individual shareholder.

  • (4) The director or supervisor is not a manager in (1) or the spouse, second-tier relative or third-tier relative of the persons listed in (2) or (3).

  • (5) The director or supervisor is not a director, supervisor or employee of a corporate shareholder who directly holds more than 5% of the total issued shares of the company, or a top five shareholder, or which appoints its representative as the company’s director or supervisor in accordance with paragraph 1 or 2 of Article 27 of the Company Act (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations ).

  • (6) The director or supervisor is not a director, supervisor or employee of another company that has a seat on the board of directors, or more than half of its shares with voting rights are controlled by the same owner of this company (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations ).

  • (7) The director or supervisor is not a director, supervisor or employee of another company or institution who is the same person or spouse as the Chairman, President or an equivalent position of the company (except

13

for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

  • (8) The director or supervisor is not a director, supervisor or manager of another company or institution which has financial or business dealings with the company or is a shareholder holding more than 5% of the shares of the company (not applicable if the company or institution holds more than 20% but no more than 50% of the total issued shares of the company, with concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations ).

  • (9) The director or supervisor is not a professional, sole proprietor, partner, business owner or partner, or a director, supervisor, manager or the spouse of the above of a company or institution which provides audit services to the company or its affiliated enterprises, or the cumulative remuneration amount of which in the past two years exceeds NT$500,000 for business, legal affairs, finance or accounting related services. However, this does not apply to the members of the Compensation Committee, public takeover review committee or special merger and acquisition committee who perform their functions in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions Act.

  • (10) The director or supervisor has no spouse or second-tier relative relationship with other directors.

  • (11) There are no such circumstances as in Article 30 of the Company Act.

  • (12) The director or supervisor is not a government agency, legal person, or representative as stipulated in Article 27 of the Company Act.

14

(II) Information of President, Vice Presidents, Senior Managers and Heads of Various Departments and Branches

April 24, 2021 Unit: share

Job Title Nationality Name Gender Date of election
(taking office)		 Shareholding Shareholding Shareholdings of
spouse and minor
children		 Shareholdings of
spouse and minor
children		 Shareholdings in
the names of other
people		 Shareholdings in
the names of other
people		 Major work
experience
(education
background)		 Concurrent positions at other companies Managers with a
spouse or second-tier
relative relationship		 Managers with a
spouse or second-tier
relative relationship		 Managers with a
spouse or second-tier
relative relationship		 Remarks
Number
of shares		 Shareholding
ratio		 Number
of shares		 Shareholding
ratio		 Number
of shares		 Shareholding
ratio		 Job
title		 Name Relationship
President Republic of
China
T.C.
Gou		 Male June 21, 2019 0 0% 0 0% 0 0% University graduate
President of Hon
Hai Precision
Industry Co., Ltd.		 Chairman of Cheng Uei Precision Industry Co., Ltd., Foxlink Image Technology Co.,
Ltd., Microlink Communications Inc., DU Precision Industry, Well Shin Technology
Co., Ltd., Studio A Inc., Power Quotient International Co., Ltd., Hsin Hung
International Investment t, Foxlink International Investment, Central Motion Picture,
Central Motion Picture Corporation, CMPC Cultural & Creative, CMPC Bade, CMPC
Cultural City, CMPC International, Deepwaters Digital Support, Shinfox Energy Co.,
Ltd., Shinfox Natural Gas, Shih Fong Power , Central Motion Picture USA
CorporationandLuminys Systems Corp.		 None None None None
Head of Finance and Accounting Republic
of China		 Kufn
Lin		 Male June 21, 2019 6,310 0% 0 0% 0 0% University graduate
Cheng Uei Precision
Industry Co., Ltd.
Special Assistant,
Chairman’s Office
Director of Foxlink Image Technology Co., Ltd., Well Shin Technology Co., Ltd.,
Microlink Communications Inc., Darts Technologies, Studio A Inc., Foxwell Energy,
Chuangshiji, Power Quotient International Co., Ltd., Power Sufficient International,
Trinity Investment Corporation, Central Motion Picture, CMPC Cultural & Creative,
CMPC International, Deepwaters Digital Support, An Attitude Film, Xinhong
International Investment, Foxlink International Investment, FoxlinkInternational
Investment, Taifu International Investment, Fulian International Investment, Zhi De
Investment, Taiwan Star Telecom Corporation Limited, Shinfox Energy Co., Ltd.,
Shinfox Natural Gas, Straight A, Jing Jing Technology, Glory Science Co., Ltd.,
Wellgen Medical, Shih Fong Power , Foxwell Energy, Fu UeiPower, Studio A
Macau,
Fushineng
Electronics
(Kunshan),
Foxlink
Automotive
Technology
(Kunshan), Power Quotient Technology (Yancheng), Ashop Co., Ltd.,Sharetronic
Data Technology Co., Ltd., and Fu Gang Electronic (Nan Chang)
Chairman of VA Product, CMPC Management Consulting, Dachuan HsuanHsiu,
Shengji Music, Fresh Air, Fu Uei International Investment, Chengfa Investment,
Chichun International Investment, Fujshishiang (Kunshan),Glorytek (Suzhou) Co.,
Ltd., Glorytek (Yancheng) Co., Ltd., Glory Optics (Yancheng) Co., Ltd., Yancheng
Yaowei, Dong Guan Fu Zhang Precision Industry, Wei Hai Fu Kang Electric,Dong
Guan HanYang Computer and Shanghai Fugang Electric
Director of Studio A Hong Kong, CU International, CULINK International, New Start
Industries, Benefit Right, Foxlink Technology, Glory Tek (BVI), Glory Optics (BVI),
Glory Tek (Samoa), Power Channel Limited, Foxlink Technical India Private, Foxlink
India Electric Private Limited, Sinobest Brothers, Foxlink Myanmar Company,
Glorytek Science India Private Limited, Hong Kong Hualinde, Value Success Ltd.,
Capital Guardian Ltd. and Accu Image Technology Limited.
Special Assistant to the Chairman’s Office of Cheng Uei Precision Industry Co., Ltd.
President of Culink Tianjin and Foxlink Energy (Tianjin)
Vice Chairman of Fugang Electronic (Dongguan)
Supervisor of CYNC Design Co., Ltd.
Supervisor of Fugang Electric (Xuzhou) and Fuzhan Electronics (Shanghai) Co., Ltd.
Legal representative of Fugang Electric (Yancheng), Fuqiang Electric (Yancheng),
Fugang Electric (Kunshan), Dongguan Fuqiang, Fugang Electric (Maanshan),
Fuqiang Electric (Ma’anshan), Dongguan Fu Uei Electronics, Kunshan Fugang
Electronics, Kunshan Fugang Investment, Suzhou Keyu Rui Automobile Technology
and Power Channel



















None		 None None None
  • Note: The Chairman of the company concurrently serves as the President mainly to improve the efficiency of operation and management and the execution of decision-making; in addition, the Chairman closely communicates with the directors on the company’s current operating conditions and the planning guidelines to implement corporate governance. In the future, the company plans to increase the number of independent directors to enhance the functions of the board of directors and strengthen the supervision function.

15

III. Remuneration paid to Directors, Supervisors, President and Vice Presidents in the Last Year

1. Remuneration paid to Directors, Supervisors, President and Vice Presidents in 2020 (1) Remuneration of General and Independent Directors

Unit: 1000 shares, NT$ thousand

Unit: Unit: Unit: Unit: 1000 shares, 1000 shares, NT$thou
Job
title		 Name Remuneration of directors Ratio of the total
of A, B, C and D to
net income after
tax (%)
 Remuneration received for c oncurrent employee positions Ratio of the total
of A, B, C, D, E, F
and G to net
income after tax
(%)
Remuneratio
n received
from a
non-subsidia
ry reinvested
enterprise or
parent
company
Remuneration (A) Retirement
pension (B)		 Directors’
remuneration (C)		 Business execution
fee (D)
Salary, bonus and
special fee (E)		 Retirement
pension (F)		 Employee’s remuneration (G)
All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies
 in the financial
report of the
company
Cash
amount		 Monetary
amount of
shares
Cash
amount		 Monetary
amount of
shares
Director Foxlink
International
Investment Ltd.		 1,300
 1,300 0 0 1,200 3,800 370 370 3.43% 6.54% 0 7,879 0 108 0 0 5,300 0 3.43% 22.44% 17,419
Corporate
representative:
T.C. Gou
Corporate
representative:
Kufn Lin
Corporate
representative:
Jeffery Cheng
Director Fu Uei
International
Investment Ltd.
Corporate
representative:
Hwee Kian Lim
Corporate
representative:
Julius Chu
(resigned)
Corporate
representative:
Semi Wang
(new)
Corporate
representative:
Wilson Hu

16

Ralph Chen Chen-Rong Chian Wei-Lin Wang 1. The remuneration policy, system, standard and structure for independent directors, and the correlation between the amount of remuneration and factors such as responsibilities, risks and time invested: When the independent directors of the company perform their duties, the company pays a fixed amount of remuneration regardless of its profit or loss, with reference to the level of the industry. In addition, in accordance with the evaluation results of the “Measures for the Performance Evaluation of the Board of Directors” and the “Compensation Committee Organizational Rules,” the independent director’s individual responsibility and time invested are taken into account. The individual performance achievement rate and contribution are also referred to in order to give appropriate remuneration. The proposal shall be approved by the Compensation Committee and then submitted to the board meeting for resolution. 2. Except as disclosed in the table above, the remuneration received by the company’s directors for providing services (such as serving as non-employee consultants) for all companies in the financial report in the last year: None.

Note: 1. All the 2020 retirement pension amount is the amount allocated under the old and new pension systems.

  1. The proposed amount is calculated according to the proportion of the actual amount allocated last year according to the amount of remuneration to be distributed approved by the board meeting in 2020. 3. Julius Chu, the former representative of Fu Uei International Investment Ltd., resigned and was re-placed by Semi Wang on June 29, 2020.

17

Remuneration Tier Table

Remuneration Tier Table
Tiers of Remuneration Paid to Each Director of the
Company		 Director’s name
The total amount of the first four remuneration amounts
(A+B+C+D)		 The total amount of the first seven remuneration amounts
(A+B+C+D+E+F+G)
All companies in the financial report of the
company		 All companies in the financial report of the
company
Less than NT$1,000,000 General directors:
Foxlink International Investment
Ltd., Fu Uei International
Investment Ltd., T.C. Gou,
Jeffery Cheng, Kufn Lin, Hwee
Kian Lim, Julius Chu, Semi
Wang, Wilson Hu
Independent directors:
Ralph Chen, Chen-RongChian,
Wei-Lin Wang		 General directors:
Foxlink International Investment
Ltd., Fu Uei International
Investment Ltd., T.C. Gou,
Jeffery Cheng, Kufn Lin, Hwee
Kian Lim, Julius Chu, Semi
Wang
Independent directors:
Ralph Chen, Chen-RongChian,
Wei-Lin Wang

General directors:
Foxlink International
Investment Ltd., Fu Uei
International Investment Ltd.,
T.C. Gou , Jeffery Cheng,Kufn
Lin, Hwee Kian Lim, Julius
Chu, Semi Wang, Wilson Hu
Independent directors:
Ralph Chen, Chen-Rong
Chian, Wei-Lin Wang
General directors:
Foxlink International
Investment Ltd., Fu Uei
International Investment Ltd.,
T.C. Gou , Jeffery Cheng,Kufn
LIN ,Hwee Kian Lim, Julius
Chu, Semi Wang
Independent directors:
Ralph Chen, Chen-Rong
Chian, Wei-Lin Wang
NT$1,000,000(inclusive)～NT$2,000,000(exclusive) - General director: Wilson Hu - -
NT$2,000,000(inclusive)～NT$3,500,000(exclusive) - - - -
NT$3,500,000(inclusive)～NT$5,000,000(exclusive) - - - -
NT$5,000,000 (inclusive)～NT$10,000,000 (exclusive) - - - General director:
Hwee Kian Lim ,Wilson Hu
NT$10,000,000(inclusive)～NT$15,000,000(exclusive) - - - -
NT$15,000,000(inclusive)～NT$30,000,000(exclusive) - - - -
NT$30,000,000(inclusive)～NT$50,000,000(exclusive) - - - -
NT$50,000,000 (inclusive)～NT$100,000,000
(exclusive)		 - - - -
More than NT$100,000,000 - - - -
Total 12 12 12 12

18

(2) Remuneration of President and Vice Presidents

December 31, 2020 Unit: 1,000 shares, NT$ thousand

Job title Name Salary (A) Salary (A) Retirement
pension (B)		 Retirement
pension (B)		 Bonus and
special
subsidies (C)		 Bonus and
special
subsidies (C)		 Employee remuneration (D) Employee remuneration (D) Employee remuneration (D) Employee remuneration (D) Ratio of the total of A, B,
C and D to net income
after tax (%)		 Ratio of the total of A, B,
C and D to net income
after tax (%)		 Remuneration received
from a non-subsidiary
reinvested enterprise or
parent company
All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All companies in the financial
report of the
company		 All
companies		 in the financial
report of the
company		 All companies in the
financial
report of the
company
Cash
amount
 Monetary
amount of
shares		 Cash
amount		 Monetary
amount of
shares
President T.C. Gou 0 0 0 0 0 0 0 0 0 0 0％ 0％ 9,028

Remuneration Tier Table

Remuneration Tier Table
Tiers of Remuneration of President and Vice Presidents
of the Company		 Name of President and Vice Presidents
All companies in the financial report of the company
Less than NT$1,000,000 T.C. Gou T.C. Gou
NT$1,000,000(inclusive)～NT$2,000,000(exclusive) - -
NT$2,000,000(inclusive)～NT$3,500,000(exclusive) - -
NT$3,500,000(inclusive)～NT$5,000,000(exclusive) - -
NT$5,000,000(inclusive)～NT$10,000,000(exclusive) - -
NT$10,000,000(inclusive)～NT$15,000,000(exclusive) - -
NT$15,000,000(inclusive)～NT$30,000,000(exclusive) - -
NT$30,000,000(inclusive)～NT$50,000,000(exclusive) - -
NT$50,000,000 (inclusive)～NT$100,000,000
(exclusive)		 - -
More than NT$100,000,000 - -
Total 1 1

19

Managers Receiving Employees’ Remuneration:

December 31,2020 Unit: NT$thousand
Job title
Name
Monetary
amount of
shares
Cash amount
Total
Percentage of
net profit after
tax (%)
President
T.C. Gou
0
0
0
0%
Head of
Finance and
Accounting
Kufn Lin		 December 31,2020 Unit: NT$thousand
Job title
Name
Monetary
amount of
shares
Cash amount
Total
Percentage of
net profit after
tax (%)
President
T.C. Gou
0
0
0
0%
Head of
Finance and
Accounting
Kufn Lin		 December 31,2020 Unit: NT$thousand
Job title
Name
Monetary
amount of
shares
Cash amount
Total
Percentage of
net profit after
tax (%)
President
T.C. Gou
0
0
0
0%
Head of
Finance and
Accounting
Kufn Lin		 December 31,2020 Unit: NT$thousand
Job title
Name
Monetary
amount of
shares
Cash amount
Total
Percentage of
net profit after
tax (%)
President
T.C. Gou
0
0
0
0%
Head of
Finance and
Accounting
Kufn Lin		 December 31,2020 Unit: NT$thousand
Job title
Name
Monetary
amount of
shares
Cash amount
Total
Percentage of
net profit after
tax (%)
President
T.C. Gou
0
0
0
0%
Head of
Finance and
Accounting
Kufn Lin		 December 31,2020 Unit: NT$thousand
Job title
Name
Monetary
amount of
shares
Cash amount
Total
Percentage of
net profit after
tax (%)
President
T.C. Gou
0
0
0
0%
Head of
Finance and
Accounting
Kufn Lin
Job title Name Monetary
amount of
shares		 Cash amount Total Percentage of
net profit after
tax (%)
Manager President T.C. Gou 0 0 0 0%
Head of
Finance and
Accounting		 Kufn Lin

  1. An analysis of the proportion of the total remuneration paid to the Directors, Supervisors, President and Vice Presidents of the company and all the companies in the consolidated statements to the net profit after tax in the last two years, and an explanation of the policy, standard and combination of the remuneration, the procedures for setting the remuneration, and the relevance to the business performance and future risks:

  2. (1) The proportion of the total remuneration paid to the company’s Directors, President and Vice Presidents to the net profit after tax in the last two years:

Item
Job title		 Total remuneration as a percentage of the net
profit after tax		 Total remuneration as a percentage of the net
profit after tax		 Total remuneration as a percentage of the net
profit after tax		 Total remuneration as a percentage of the net
profit after tax		 Percentage of
increase or decrease		 Percentage of
increase or decrease
2020 2019
All
companies		 in the
financial
report of the
company		 All
companies		 in the
financial
report of the
company		 All
companies		 in the
financial
report of the
company
Director 3.43% 6.54% -0.32% -1.36% 3.75% 7.9%
President and Vice
Presidents

  • (2) The policy, standard and combination of the remuneration, the procedures for setting the remuneration, and the relevance to the business performance and future risks:

  • A. The remuneration of the Directors of the company shall be paid in accordance with the provisions of the company’s Articles of Association.

  • B. The remuneration of the President and Vice Presidents of the company is divided into salary, bonus and employees’ remuneration. The salary and bonus are handled in accordance with the relevant provisions of the company’s personnel regulations; the total amount of employees’ remuneration is decided by the board meeting according to the profit status of the distribution year and the Articles of Association and reported to the shareholders’ meeting.

  • C. The company has set up the “Measures for the Performance Evaluation of the Board of Directors” and the ““Measures for the Performance Evaluation” for managers and employees. The performance evaluation of the board of directors includes the measurement items such as the degree of participation in the operation of the company, the manager evaluation items include

20

financial indicators and other performance indicators, and the employees’ remuneration of directors and managers is based on the results of performance evaluation.

21

IV. Corporate Governance Status:

(I) Operation of the board of directors:

In the last year (2020), the board of directors held 6 meetings (A) and the voting and non-voting attendance of directors is as follows:

Job title Name Number of
actual
(voting and
non-voting)
attendance
(B)		 Number
of
attenda
nce by
proxy		 Actual (voting
and
non-voting)
attendance
rate		 Remarks
Chairman of
the board		 T.C. Gou (note
1)		 6 6 100
Director Kufn Lin (note
1)		 6 6 100
Director Jeffery Cheng
(note 1)		 6 6 100
Director Hwee Kian Lim
(note 2)		 6 5 83.3
Director Julius Chu
(note 2)		 3 3 100 Resignation on
June 29, 2020.
Director Semi Wang
(note 2)		 3 3 100 Taking office on
June 29, 2020.
Director Wilson Hu
(note 2)		 6 6 100
Independent
Director		 Ralph Chen 6 6 100
Independent
Director		 Chen-Rong
Chian		 6 6 100
Independent
Director		 Wei-Lin Wang 6 6 100
Other items to be recorded:
I.
In case of any of the following circumstances in the operation of the board of
directors, state the date of the board meeting, the number of the meeting session,
the contents of the proposal, all the opinions of the independent directors and the
company’s handling of such opinions of the independent directors:
(I) Items in Article 14-3 of the Securities and Exchange Act: Please refer to page
51 for all resolutions of the board meetings in 2020. Independent directors
have approved all the resolutions on matters listed in Article 14-3 of the
Securities and Exchange Act.
(II) In addition to the matters above, other resolutions of the board meeting with
objections or reservation of independent directors and records or written
statements: None.
II.
For the implementation of avoidance of motions by directors due to a conflict of
interest involved, state the name of the director, the content of the motion, the
reason for withdrawal from the meeting for interest avoidance and the voting
results:
1. On March 31, 2020, the board meeting made a resolution to amend the
company’s “Measures for the Remuneration of Directors and Managers.”

22

III.
IV.		 Independent Directors Ralph Chen, Chen-Rong Chian and Wei-Lin Wang had
their personal interests in the case, and avoided the discussion and voting in
accordance with the law. The remaining eight directors approved the case
without objection.
2. On September 30, 2020, the board meeting made a resolution on the
remuneration of the directors of the subsidiary Foxlink Image Technology Co.,
Ltd. for 2019. Directors T.C. Gou, Hwee Kian Lim and Hwee Kian Lim avoided
the discussion and voting in accordance with the law, and the remaining eight
directors approved the case without objection.
3. On September 30, 2020, the board meeting made a resolution on the
employees’ remuneration of the managers of the subsidiary Foxlink Image
Technology Co., Ltd. for 2019. Director Hwee Kian Lim avoided the discussion
and voting in accordance with the law, and the remaining eight directors
approved the case without objection.
A listed or OTC company shall disclose information such as the evaluation cycle,
period, scope, method and content of the board of directors’ self (or peer)
evaluation:		 Independent Directors Ralph Chen, Chen-Rong Chian and Wei-Lin Wang had
their personal interests in the case, and avoided the discussion and voting in
accordance with the law. The remaining eight directors approved the case
without objection.
2. On September 30, 2020, the board meeting made a resolution on the
remuneration of the directors of the subsidiary Foxlink Image Technology Co.,
Ltd. for 2019. Directors T.C. Gou, Hwee Kian Lim and Hwee Kian Lim avoided
the discussion and voting in accordance with the law, and the remaining eight
directors approved the case without objection.
3. On September 30, 2020, the board meeting made a resolution on the
employees’ remuneration of the managers of the subsidiary Foxlink Image
Technology Co., Ltd. for 2019. Director Hwee Kian Lim avoided the discussion
and voting in accordance with the law, and the remaining eight directors
approved the case without objection.
A listed or OTC company shall disclose information such as the evaluation cycle,
period, scope, method and content of the board of directors’ self (or peer)
evaluation:		 Independent Directors Ralph Chen, Chen-Rong Chian and Wei-Lin Wang had
their personal interests in the case, and avoided the discussion and voting in
accordance with the law. The remaining eight directors approved the case
without objection.
2. On September 30, 2020, the board meeting made a resolution on the
remuneration of the directors of the subsidiary Foxlink Image Technology Co.,
Ltd. for 2019. Directors T.C. Gou, Hwee Kian Lim and Hwee Kian Lim avoided
the discussion and voting in accordance with the law, and the remaining eight
directors approved the case without objection.
3. On September 30, 2020, the board meeting made a resolution on the
employees’ remuneration of the managers of the subsidiary Foxlink Image
Technology Co., Ltd. for 2019. Director Hwee Kian Lim avoided the discussion
and voting in accordance with the law, and the remaining eight directors
approved the case without objection.
A listed or OTC company shall disclose information such as the evaluation cycle,
period, scope, method and content of the board of directors’ self (or peer)
evaluation:		 Independent Directors Ralph Chen, Chen-Rong Chian and Wei-Lin Wang had
their personal interests in the case, and avoided the discussion and voting in
accordance with the law. The remaining eight directors approved the case
without objection.
2. On September 30, 2020, the board meeting made a resolution on the
remuneration of the directors of the subsidiary Foxlink Image Technology Co.,
Ltd. for 2019. Directors T.C. Gou, Hwee Kian Lim and Hwee Kian Lim avoided
the discussion and voting in accordance with the law, and the remaining eight
directors approved the case without objection.
3. On September 30, 2020, the board meeting made a resolution on the
employees’ remuneration of the managers of the subsidiary Foxlink Image
Technology Co., Ltd. for 2019. Director Hwee Kian Lim avoided the discussion
and voting in accordance with the law, and the remaining eight directors
approved the case without objection.
A listed or OTC company shall disclose information such as the evaluation cycle,
period, scope, method and content of the board of directors’ self (or peer)
evaluation:		 Independent Directors Ralph Chen, Chen-Rong Chian and Wei-Lin Wang had
their personal interests in the case, and avoided the discussion and voting in
accordance with the law. The remaining eight directors approved the case
without objection.
2. On September 30, 2020, the board meeting made a resolution on the
remuneration of the directors of the subsidiary Foxlink Image Technology Co.,
Ltd. for 2019. Directors T.C. Gou, Hwee Kian Lim and Hwee Kian Lim avoided
the discussion and voting in accordance with the law, and the remaining eight
directors approved the case without objection.
3. On September 30, 2020, the board meeting made a resolution on the
employees’ remuneration of the managers of the subsidiary Foxlink Image
Technology Co., Ltd. for 2019. Director Hwee Kian Lim avoided the discussion
and voting in accordance with the law, and the remaining eight directors
approved the case without objection.
A listed or OTC company shall disclose information such as the evaluation cycle,
period, scope, method and content of the board of directors’ self (or peer)
evaluation:
Evaluation
cycle		 Evaluation
period		 Evaluation
scope		 Evaluation
method		 Evaluation content
Carried
out
once a year.		 January 1,
2020 to
December
31, 2020		 Board of
Directors		 Internal
Self-evalua
tion of the
Board
of
Directors		 1.Degree of participation in
the company’s operation
2. Improvement in the
decision-making quality o
the board.
3.Composition and structur
of the board of directors.
4. Election and continuing
study of directors.
5. Internal control.
Objectives of strengthening the functions of the board of directors in the current
year and the latest year (such as setting up an audit committee, improving
information transparency, etc.) and evaluation of the implementation status: The
company has set up a compensation committee and an audit committee to assist
the board ofdirectorstorespectively perform theirsupervisory duties.

Note 1: Legal representative of Foxlink International Investment Ltd. Note 2: Legal representative of Fu Uei International Investment Ltd.

23

(II) Information on the Operation of the Audit Committee

In the last year (2020), the Audit Committee held 6 meetings (A) and the voting and non-voting attendance of independent directors is as follows:

Job title Name Number of
actual
attendance
(B)		 Number of
attendance
by proxy		 Actual
attendance
rate (%)
(B/A)(note)		 Remarks
Convener Ralph Chen 6 0 100 -
Members Chen-Rong
Chian		 6 0 100 -
Members Wei-Lin Wang 6 0 100 -
Other items to be recorded:
I.
In case of any of the following circumstances in the operation of the Audit
Committee, state the date of the board meeting, the number of the meeting
session, the contents of the proposal, the resolution of the Audit Committee
members and the company’s handling of the opinion of the Audit Committee:
(I) Items in Article 14-5 of the Securities and Exchange Act: Approved by the
Audit Committee and submitted to the board of directors.
1.
Approved in the board meeting of the 5th session of the 2nd term on
March 31, 2020
(1) 2019 financial report
(2) Endorsement and guarantee for subsidiaries Glory Science Co., Ltd.
and Power Quotient International Co., Ltd.
(3) 2019 “Internal Control System Effectiveness Assessment” and
“Internal Control System Statement.”
2.
Approved in the board meeting of the 6th session of the 2nd term on May
5, 2020.
(1) Endorsement and guarantee quota for the subsidiary Glory Science
Co., Ltd.
3.
Approved in the board meeting of the 7th session of the 2nd term on June
24, 2020:
(1) The company’s intended loan extension to Glorytek (Yancheng) Co.,
Ltd. and Glory Optics (Yancheng) Co., Ltd.
(2) Endorsement and guarantee for the subsidiary Power Quotient
International Co., Ltd.
(3) Cancellation of the quota restriction on the endorsement and
guarantee for the subsidiary Glory Science Co., Ltd.
4.
Approved in the board meeting of the 8th session of the 2nd term on
August 13, 2020:
(1) The company’s consolidated financial report for the second quarter
of 2020.
(2) Intended endorsement and guarantee for subsidiaries Glory Science
Co., Ltd. and Power Quotient International Co., Ltd.
5.
Approved in the board meeting of the 8th session of the 2nd term on
September 30, 2020:
(1) Disposal of the equities of Changyuan Wind Power Ltd. and Beiyuan
Wind Power Ltd. by the subsidiary Foxwell Energy Corporation Ltd.
6.
Approved in the board meeting of the 10th session of the 2nd term on
November 11, 2020:
(1)Revision of the company’s “Internal Control System.”

24

(2) Endorsement and guarantee for subsidiaries Glory Science Co., Ltd.
and Power Quotient International Co., Ltd.
(3) The company’s intended disposal of the equity of Shih Fong Power
Co., Ltd.
(II) Except for the matters previously mentioned, the other matters that have not
been approved by the Audit Committee but approved by more than two-thirds
of all directors: None.
II. For the implementation of avoidance of motions by independent directors due to a
conflict of interest involved, the name of the independent director, the content of
the motion, the reason for withdrawal from the meeting for interest avoidance and
the voting results shall be stated: None.
III. Communication between independent directors and the internal audit director and
the accountant (including major matters, methods and results of communication on
the company’s finance and business conditions).
1. The company’s internal audit supervisor regularly communicates with
independent directors on the results of audit reports and regularly sends audit
reports to independent directors for review, and reports on the implementation
of internal audits in each Audit Committee meeting. If there is any special
situation, he will immediately report to the independent directors. There was
no such special situation in 2020. The independent directors of the company
and the internal audit supervisor have been in good communication.
2. After being reviewed or checked by the independent auditor, the company’s
financial statements are sent to the Audit Committee for discussion and then
submitted to the board of directors for reporting or resolution after approval.
When reviewing the financial report quarterly, the independent auditor issues
a written communication letter to the independent directors, explaining the
content and results of the review and the important accounting estimates and
adjustment entries. In addition, the independent auditor attended the Audit
Committee meeting on March 26, 2021, and reported to the independent
directors on the results of the financial report audit, the impact of KY incidents
on the audit, the audit arrangements under the epidemic, the audit findings,
and the update of relevant laws and regulations. After discussion and
communication, the independent directors have no opinion on the
independent auditor’s report. The independent directors of the company and
the independent auditor have been in good communication.
IV. Annual Work Focus and Operation Status of the Audit Committee:
(I) The Audit Committee of the company convened 6 meetings in 2020, and all
members attended each meeting. Its main work priorities and responsibilities
are as follows:
1.
Establish or amend the internal control system in accordance with the
provisions of Article 14-1 of the Securities and Exchange Act.
2.
Evaluate the effectiveness of the internal control system.
3.
Formulate or amend the procedures of major financial activities such as
acquisition or disposal of assets, engagement in derivative transactions,
extending loans to others, and endorsements or guarantees to others.
4.
Matters involving the interests of the directors themselves.
5.
Significant asset or derivative transactions.
6.
Significant loan extensions, endorsements or guarantees.
7.
Raising, issuing or private placement of equity securities.
8.
Appointment, dismissal or remuneration of the independent auditor.
9.
Appointment and dismissal of financial,accountingor internal audit

25

supervisors.
10. Annual financial report and quarterly financial report.
11. Implementation status of internal audit operations.
12. Other major matters stipulated by the company or the competent
authority.
(II) Operation of the Audit Committee in 2020:
Meeting
date
Proposal contents, resolution status and follow-up processing
March 31,
2020
I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Items regarding communication with the independent auditor.
3.
Discussion on the company’s 2019 financial report.
4.
Discussion on the company’s 2019 allocation of earnings or
loss compensation.
5.
Discussion on the endorsement and guarantee for
subsidiaries Glory Science Co., Ltd. and Power Quotient
International Co., Ltd.
6.
Discussion on the independence and competency
assessment report on the independent auditor.
7.
Discussion on the 2019 “Internal Control System
Effectiveness Assessment” and “Internal Control System
Statement.”
II.
Results of the resolution of the Audit Committee: After discussion
and communication, all members of the Audit Committee agreed
to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
May 5,
2020
I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Report on the company’s consolidated financial report for the
first quarter of 2020.
3.
Discussion on the company’s abandonment of subscription
to the shares from the cash capital increase of the subsidiary
Shih Fong Power Co., Ltd.
4.
Discussion on the endorsement and guarantee for the
subsidiary Glory Science Co., Ltd.
II.
Results of the resolution of the Audit Committee: All members of
the Audit Committee agreed to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
June 23,
2020
I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
The company’s financial report for May 2020.
3.
Report on the bid winning of TaiPower’s “Wind Farm
Property Procurement and Installation for Offshore Wind
Power Phase II Project” by the subsidiary, Foxwell Energy
Corporation Ltd.
4.
Report on loan extension to and overrun of subsidiaries and		 supervisors.
10. Annual financial report and quarterly financial report.
11. Implementation status of internal audit operations.
12. Other major matters stipulated by the company or the competent
authority.
(II) Operation of the Audit Committee in 2020:
Meeting
date
Proposal contents, resolution status and follow-up processing
March 31,
2020
I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Items regarding communication with the independent auditor.
3.
Discussion on the company’s 2019 financial report.
4.
Discussion on the company’s 2019 allocation of earnings or
loss compensation.
5.
Discussion on the endorsement and guarantee for
subsidiaries Glory Science Co., Ltd. and Power Quotient
International Co., Ltd.
6.
Discussion on the independence and competency
assessment report on the independent auditor.
7.
Discussion on the 2019 “Internal Control System
Effectiveness Assessment” and “Internal Control System
Statement.”
II.
Results of the resolution of the Audit Committee: After discussion
and communication, all members of the Audit Committee agreed
to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
May 5,
2020
I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Report on the company’s consolidated financial report for the
first quarter of 2020.
3.
Discussion on the company’s abandonment of subscription
to the shares from the cash capital increase of the subsidiary
Shih Fong Power Co., Ltd.
4.
Discussion on the endorsement and guarantee for the
subsidiary Glory Science Co., Ltd.
II.
Results of the resolution of the Audit Committee: All members of
the Audit Committee agreed to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
June 23,
2020
I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
The company’s financial report for May 2020.
3.
Report on the bid winning of TaiPower’s “Wind Farm
Property Procurement and Installation for Offshore Wind
Power Phase II Project” by the subsidiary, Foxwell Energy
Corporation Ltd.
4.
Report on loan extension to and overrun of subsidiaries and
Meeting
date		 Proposal contents, resolution status and follow-up processing
March 31,
2020		 I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Items regarding communication with the independent auditor.
3.
Discussion on the company’s 2019 financial report.
4.
Discussion on the company’s 2019 allocation of earnings or
loss compensation.
5.
Discussion on the endorsement and guarantee for
subsidiaries Glory Science Co., Ltd. and Power Quotient
International Co., Ltd.
6.
Discussion on the independence and competency
assessment report on the independent auditor.
7.
Discussion on the 2019 “Internal Control System
Effectiveness Assessment” and “Internal Control System
Statement.”
II.
Results of the resolution of the Audit Committee: After discussion
and communication, all members of the Audit Committee agreed
to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
May 5,
2020		 I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Report on the company’s consolidated financial report for the
first quarter of 2020.
3.
Discussion on the company’s abandonment of subscription
to the shares from the cash capital increase of the subsidiary
Shih Fong Power Co., Ltd.
4.
Discussion on the endorsement and guarantee for the
subsidiary Glory Science Co., Ltd.
II.
Results of the resolution of the Audit Committee: All members of
the Audit Committee agreed to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
June 23,
2020		 I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
The company’s financial report for May 2020.
3.
Report on the bid winning of TaiPower’s “Wind Farm
Property Procurement and Installation for Offshore Wind
Power Phase II Project” by the subsidiary, Foxwell Energy
Corporation Ltd.
4.
Report on loan extension to and overrun of subsidiaries and

26

improvement plan.
5.
Discussion on the endorsement and guarantee for the
subsidiary Foxlink Image Technology Co., Ltd.
6.
Discussion on the adjustment to the loan extension quota for
the subsidiary Foxlink Image Technology Co., Ltd.
7.
Discussion on the company’s abandonment of subscription
to the shares from the 2020 cash capital increase of the
subsidiary Shinfox Energy Co., Ltd. (formerly Hsingwei Co.,
Ltd., Shinfox Energy Co., Ltd. hereinafter), which is indirectly
held by the company, due to its future plan of listing on the
TWSE (TPEx), and the plan to have all shareholders of the
company participate in the subscription.
8.
In order to motivate and enhance the loyalty of employees,
the company plans to implement the first buyback of its
shares and transfer them to employees.
9.
Discussion on the company’s intended loan extension to
Glorytek (Yancheng) Co., Ltd. and Glory Optics (Yancheng)
Co., Ltd.
10. Discussion on the endorsement and guarantee for the
subsidiary Power Quotient International Co., Ltd.
11. Discussion on the cancellation of the quota restriction on the
endorsement and guarantee for the subsidiary Glory Science
Co., Ltd.
II.
Results of the resolution of the Audit Committee: With the
exception of case 8, which is suspended, all members of the
Audit Committee agreed to approve the rest.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
August 13,
2020		 I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Report on the budget of each subsidiary of FIT Holding in the
second half of the year
3.
Discussion on the loan extension to the subsidiary Foxlink
Image Technology Co., Ltd.
4.
Report on the contract signing by the subsidiary Foxwell
Energy Corporation Ltd. with TaiPower on the “Wind Farm
Property Procurement and Installation for Offshore Wind
Power Phase II Project.”
5.
Report on the civil engineering project of the first power plant
and the second power plant of the hydropower development
plan of the subsidiary Shih Fong Power Co., Ltd.
6.
Discussion on the company’s consolidated financial report
for the second quarter of 2020.
7.
Discussion on the intended endorsement and guarantee for
subsidiaries Glory Science Co., Ltd. and Power Quotient
International Co., Ltd.
II.
Results of the resolution of the Audit Committee: All members of
the Audit Committee agreed to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors

27

present
September
30, 2020		 I.
Proposal contents:
1.
Discussion on the endorsement and guarantee for the
subsidiary Shinfox Energy Co., Ltd.
2.
Discussion on the disposal of the equities of Changyuan
Wind Power Ltd. and Beiyuan Wind Power Ltd. by the
subsidiary Foxwell Energy Corporation Ltd.
II.
Results of the resolution of the Audit Committee: All members of
the Audit Committee agreed to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present
November
11, 2020		 I.
Proposal contents:
1.
Report on the status of internal audit operation.
2.
Discussion on the loan extension to the subsidiary Foxlink
Image Technology Co., Ltd.
3.
Discussion on the endorsement and guarantee for the
subsidiary Foxlink Image Technology Co., Ltd.
4.
Report on the TPEx listing of the subsidiary Shinfox Energy
Co., Ltd.
5.
Discussion on the company’s consolidated financial report
for the third quarter of 2020.
6.
Discussion on the company’s 2021 internal audit plan.
7.
Discussion on the revision of company’s “Internal Control
System.”
8.
Discussion on the endorsement and guarantee for
subsidiaries Glory Science Co., Ltd. and Power Quotient
International Co., Ltd.
9.
Discussion on the company’s planned disposal of the equity
of Shih Fong Power Co., Ltd.
10. Discussion on the reduction of the company’s shareholding
ratio of Jiangsu Foxlink New Energy Technology Co., Ltd. by
more than 10%.
II.
Results of the resolution of the Audit Committee: All members of
the Audit Committee agreed to approve.
III. The company’s handling of the opinions of the Audit Committee:
Submitted to the board meeting and approved by all the directors
present

28

(III) The operation of corporate governance and the difference from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons.

Evaluation items Operation status Operation status Operation status Difference from the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons
Yes No Summary description
I.
Has the company been in compliance with the
“Corporate Governance Best Practice Principles
for TWSE/TPEx Listed Companies” and disclosed
the company’s own corporate governance best
practice principles?		 ˇ The company has established its “Corporate Governance
Best Practice Principles,” and disclosed them on the
company’s website for inquiry.		 No difference.
II.
Equity structure and shareholders’ equity of the
company
(I)
Has the company established internal
operating procedures to deal with
shareholders’ suggestions, doubts, disputes
and lawsuits, and implemented them in
accordance with the procedures?
(II) Does the company have a list of major
shareholders and ultimate controllers of major
shareholders who actually control the
company?
(III) Has the company established and
implemented risk control and firewall
mechanisms with affiliated enterprises?
(IV) Does the company have internal regulations
that prohibit insiders of the company from
buying and selling securities using non-public
information?		 ˇ
ˇ
ˇ
ˇ		 (I)
The company has a spokesperson, an acting
spokesperson and a stock affairs unit to handle
shareholder related issues. Legal issues will be
transferred to the company’s Legal Department or
legal counsel for handling.
(II)
The company regularly keeps track of the list of
major shareholders of the company based on the
register of shareholders provided by the stock
affairs agency on the book-closing date, and
regularly discloses the pledge and increase or
decrease of shareholdings of shareholders holding
more than 10% of the company’s shares.
(III)
The company has established affiliated enterprise
trading procedures and risk control management
measures to control various operating procedures
and various risk issues, in order to jointly eliminate
exceptional trading.
(IV)
The company has set up the “Measures for the
Processing of Major Internal Information,” which is
publicized to insiders at least once a year.		 No difference.
III. Composition and Responsibilities of the Board of
Directors
(I)
Has the board of directors formulated and
strictly implemented diversification policies on
the composition of its members?		 ˇ (I)
The company, based on the Sample Template of
“Procedures for Election of Directors” issued by
theTWSE, integrates the concept of diversity into
themeasuresfordirectors electionand takesinto		 There is no difference except
for the second item, which is
still under planning.

29

Evaluation items Operation status Operation status Operation status Difference from the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons
Yes No Summary description
(II) In addition to setting up the Compensation
Committee and the Audit Committee according
to law, has the company voluntarily set up
other functional committees?
(III) Has the company established performance
evaluation measures and methods for the
board of directors, conducted performance
evaluation annually and regularly, reported
performance evaluation results to the board of
directors, and applied them to the reference of
salary and remuneration of individual directors
and nomination and renewal?		 ˇ ˇ consideration the overall configuration of the board
of directors. The specific objective is that the board
of directors is composed of directors of different
genders, ages, nationalities, professional
knowledge and backgrounds. At present, the
company’s board of directors has 9 seats of
directors (including 3 seats of independent
directors), including one female director. The
company’s board members have diversified
backgrounds, with their professional knowledge
and skills covering the fields of business
management, law, finance and accounting,
machinery, aviation and electro machines, and the
diversification objective for the board members is
fully met. In addition to their professional
knowledge and skills, the directors may contribute
to supervision and decision-making through the
operation of functional committees in corporate
governance, environmental sustainability and legal
compliance.
(II)
The company has established a Compensation
Committee in accordance with the law, and the
Audit Committee was established in 2019. The rest
of the corporate governance operations are
conducted by each department according to its
responsibilities. In the future, other functional
committees will be set up in accordance with the
company’s corporate governance requirements.
(III)
The company has set up the “Measures for the
Performance Evaluation of the Board of Directors,”
and the scope of evaluation includes the
performance evaluation of the overall board of
directors, individual directors and functional
committees; the methods of performance
evaluation include internal self-evaluation of the
board of directors, self-evaluation of directors,
appointment of external professional bodies,
experts orotherappropriatemethods; the

30

Evaluation items Operation status Operation status Operation status Difference from the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons
Yes No Summary description
(IV) Does the company regularly evaluate the
independence of the independent auditor?		 ˇ measurement items of the performance evaluation
of the board of directors of the company cover the
following five aspects:
1.
Degree of participation in the company’s
operations.
2.
Improvement in the decision-making quality of
the board.
3.
Composition and structure of the board of
directors.
4.
Election and continuing study of directors.
5.
Internal control.
(IV)
The board of directors of the company regularly
evaluates the independence and competency of the
independent auditor every year, and the accounting
unit of the company conducts the evaluation with
reference to the proforma independence
assessment items of the Certified Public
Accountant Act and the Bulletin of Professional
Standards No. 10. On March 26, 2021, the board
meeting passed a resolution to assess the
independence and competency of the independent
auditor.
Our independent auditor provides to the company
its “Declaration of Transcendent Independence”
every year. In addition, relevant regulations shall be
complied with for the rotation of the independent
auditors ofthe company.
IV. For a listed or OTC company, is it equipped with a
competent and appropriate number of corporate
governance personnel, and has it designated a
corporate governance director to be responsible
for corporate governance related matters
(including but not limited to providing information
required by directors and supervisors to carry out
business, assisting directors and supervisors in
complying with laws and regulations, managing
related matters of the board meeting and
shareholders’ meetinginaccordancewith laws,
ˇ		 On March 26, 2021, the board meeting of the company
approved the establishment of the position of Corporate
Governance Director, which is concurrently taken by the
Chief Financial Officer. He has more than three years of
experience in the financial and stock affairs of public
companies. He will complete professional training in
accordance with the laws and regulations before the
expiration of his term of office in 2022. The main
responsibilities of the Corporate Governance Director are
to supervise the stock affairs unit in the handling of the
convening ofboardmeetings and shareholders’ meetings		 No difference.

31

Evaluation items Operation status Operation status Operation status Difference from the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons
Yes No Summary description
taking minutes of the board meeting and
shareholders’ meeting, etc.)?		 and the arrangement of the agenda, prepare the minutes
and disclose the information, provide the information
needed by the directors to carry out the business, assist
the directors in legal compliance, and assist the directors
intaking office andfurtherstudy.
V.
Has the company established a communication
channel with stakeholders (including but not
limited to shareholders, employees, customers
and suppliers), set up a stakeholder area on the
company’s website, and properly responded to
major corporate social responsibility issues of
concernto stakeholders?		 ˇ The company has a spokesman and acting spokesmen
who act as the communication channel with interested
parties. There is a special contact area on the company’s
website for the exchange of views at any time.		 No difference.
VI. Has the company appointed a professional
agency to handle the affairs of the shareholders’
meeting?		 ˇ The company has appointed a professional stock affairs
agency, the stock Affairs Agency Department of Fubang
Securities Co., Ltd., to handle the stock affairs of the
company.		 No difference.
VII. Information Disclosure
(I)
Has the company set up a website to disclose
financial and corporate governance
information?
(II) Does the company adopt other ways of
information disclosure (such as setting up an
English website, appointing a dedicated person
to be responsible for the collection and
disclosure of the company’s information,
implementing the spokesperson system, and
placing on the company’s website the process
of the seminar for institutional investors)?
(III) Does the company announce and declare the
annual financial report within two months after
the end of the fiscal year, and announce and
declare the first, second and third quarter
financial report and the operation of each
month ahead of the required time limit?
ˇ
ˇ		 ˇ (I)
The company has set up a website to disclose
various financial information and corporate
governance related information.
(II)
The company has designated personnel to collect
and disclose the company’s information and strictly
implements the spokesperson system.
(III)
As the company has a large number of
subsidiaries, it is unable to announce and declare
the annual financial report within two months after
the end of the accounting year; however, the
financial reports for the first, second and third
quarters and the operation of each month are all
announced and declared before the specified
deadlines.		 There is no difference
between the first and
second items, and the third
item is completed before the
specified deadline.
VIII. Does the company have other important ˇ (I)
Employee rights and interests: The company has		 No difference.

32

Evaluation items Operation status Operation status Operation status Difference from the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons
Yes No Summary description
information to help understand the operation of
corporate governance (including but not limited to
employee rights and interests, employee care,
investor relations, supplier relations, rights of
interested parties, the status of directors’ and
supervisors’ further education, the implementation
of risk management policies and risk
measurement standards, the implementation of
customer policies, the company’s purchase of
liability insurance policy for directors and
supervisors, etc.)?		 formulated a number of employee welfare policies
and management procedures, which comply with
local laws and regulations on labor relations, labor
conditions and social responsibility and protect a
number of employee rights and interests.
(II)
Employee care: In order to expand the scope of
employees’ leisure activities, the company
subsidizes employees’ club activities and signs
contracts with a number of leisure sports centers
for employees to keep fit. In addition, the company
regularly carries out staff health examinations and
provides medical consultations to maintain the
physical and mental health of employees, and
continuously improves the working environment of
employees to meet the needs of international
norms. Therefore, all employees are able to
complete the work agreed with the company
according to their wishes, without physical or
psychological coercion, and without discrimination
on the basis of race, gender, age, religion or
political orientation.
(III)
Investor relations: A stock affairs department and a
spokesperson system are set up to handle stock
affairs, shareholder suggestions and disputes.
(IV)
Supplier relations: The company has signed
purchase contracts with suppliers and has always
been able to maintain a good relationship with
them.
(V)
Rights of interested parties: The company has a
spokesperson system in place. Interested parties
can communicate with the company through the
company’s website, telephone and fax. At the same
time, the company’s supervisors and audit
department personnel can directly contact and talk
with interested parties if they think it necessary.
(VI)
Directors’ further study: All directors of the
company have industrial and professional
backgrounds and practical management
No difference.

33

Evaluation items Operation status Operation status Operation status Difference from the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons
Yes No Summary description
experience, and the company arranges directors to
attend seminars on corporate governance from
time to time. Please refer to page 276 of the annual
report for details of directors’ and supervisors’
further studies.
(VII)
Implementation of risk management policies and
risk measurement standards: The company
focuses on its core business, complies with
relevant laws and regulations to implement and
promote various policies, and establishes various
standard operation standards to reduce and avoid
any possible risks. For details of the
implementation of the company’s risk management
policies and risk measurement standards, please
refer to page 271 of the annual report.
(VIII) Implementation of customer policies: The company
has operating bases at home and abroad and has
business service offices to serve as channels to
answer customer queries or provide services. The
company can maintain good relations with
customers and create profits for the company.
(IX)
Purchase of liability insurance for directors and
supervisors: The company has purchased liability
insurancefordirectors and supervisors.		 No difference.
IX.
Please explain the improvement of the corporate governance evaluation results according to the findings issued by the Corporate Governance Center of
the Taiwan Stock Exchange for the latest year, and put forward the priorities and measures for those that have not been improved: The company has set
up anaudit committee onJune21,2019 and a corporate governance supervisoron March 26,2021to strengthencorporate governancerelatedmatters.

34

(IV) Composition and operation status of the Compensation Committee:

1. Information of Compensation Committee members

Identity type
(note 1)
Conditions
Name		 Has more than five years of work
experience and the following professional
qualifications or not		 Has more than five years of work
experience and the following professional
qualifications or not		 Has more than five years of work
experience and the following professional
qualifications or not		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Compliance with the independence criteria
(note 2)		 Number of compensation committee member
position concurrently held at other public offering
companies		 Remarks
A lecturer or
above of a
public or
private
college or
university in
a relevant
department
of
commerce,
legal affairs,
finance,
accounting
or
disciplines
required for
the
company’s
business.		 Judge,
prosecutor,
lawyer,
accountant or
other type of
professional and
technical
personnel who
has passed the
national
examination and
obtained the
certificate
required for the
company’s
business.		 Work
experience
in
commerce,
legal
affairs,
finance,
accounting
or
disciplines
required for
the
company’s
business.		 1 2 3 4 5 6 7 8 9 10
Independent
Director
Wei-Lin
Wang		 2 None
Independent
Director
Chen-Ron
g Chian		 3 None
Independent
Director
Ralph
Chen		 2 None

  • Note 1: Please fill in the identity as a director, independent director or other.

  • Note 2: For members who meet the following conditions two years before and during their term of office, please type ““ in the space below each condition code.

  • (1) The director is not an employee of the company or its affiliated enterprises.

  • (2) Not a director or supervisor of the company or its affiliated enterprises. (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations) .

  • (3) The director or supervisor, or his/her spouse or minor children or in another person’s name, does not hold more than 1% of the total issued shares of the company or is not a top ten individual shareholder.

  • (4) The director or supervisor is not a manager in (1) or the spouse, second-tier relative or third-tier relative of the persons listed in (2) or (3).

  • (5) Not a director, supervisor or employee of a corporate shareholder which directly holds more than 5% of the total issued shares of the company, or a top five shareholder, or which appoints its representative as the company’s director or supervisor in accordance with paragraph 1 or 2 of Article 27 of the Company Act (except for concurrent independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

  • (6) Not a director, supervisor or employee of another company which has a seat on the board of directors, or more than half of its shares with voting rights are controlled by the same owner of this company (except for concurrent independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

35

  • (7) Not a director, supervisor or employee of another company or institution who is the same person or spouse as the Chairman, President or an equivalent position of the Company (except for concurrent independent directors of the Company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

  • (8) Not a director, supervisor or manager of another company or institution which has financial or business dealings with the Company, or is a shareholder holding more than 5% of the shares of the Company (not applicable if the company or institution holds more than 20% but no more than 50% of the total issued shares of the Company, with concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

  • (9) Not a professional, sole proprietor, partner, business owner or partner, or a director, supervisor, manager or the spouse of the above of a company or institution which provides audit services to the company or its affiliated enterprises, or the cumulative remuneration amount of which in the past two years exceeds NT$500,000 for business, legal affairs, finance or accounting related services. However, this does not apply to the members of the Compensation Committee, public takeover review committee or special merger and acquisition committee who perform their functions in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions Act.

  • (10) There are no such circumstances as in Article 30 of the Company Act.

  • Information on the Operation of the Compensation Committee

    • (1) There are three members on the Compensation Committee of the company.

    • (2) Term of office of current members: from August 14, 2019 to June 20, 2022. In the last year, the Compensation Committee held 2 meetings (A), and the member qualification and attendance are as follows:

Job title Name Number of
actual
attendance
(B)		 Number of
attendance
by proxy		 Actual
attendance rate
(%)
(B/A)
(note)		 Remarks
Convener Wei-Lin
Wang		 2 0 100 -
Members Chen-Rong
Chian		 2 0 100 -
Members Ralph
Chen		 2 0 100 -
Other items to be recorded:
I.
Scope of responsibilities of the Compensation Committee:
(I) Members of the Committee shall faithfully fulfill the following responsibilities with the
attention of good managers, be responsible to the board of directors, and submit their
suggestions to the board of directors for discussion:
1.
Formulate and regularly review the policies, systems, standards and structures for
the performance evaluation and compensation of directors, supervisors and
managers.
2.
Regularly evaluate and determine the remuneration of directors, supervisors and
managers.
(II) The Committee shall fulfill the responsibilities above in accordance with the following
principles:
1.
For theperformance evaluation and remuneration of directors,supervisors and

36

II.
III.
IV.		 managers, references shall be made to the general level of payment in the same
industry. The reasonable association with personal performance, company
performance and future risks shall be taken into consideration.
2.
Directors and managers shall not be guided to engage in behaviors beyond the
company’s risk appetite in pursuit of compensation.
3.
The proportion of short-term performance bonuses paid to directors and senior
managers and the payment time of partial variable salaries shall be determined by
considering the industry characteristics and the nature of the company’s business.
(III) The salary and remuneration referred to in the preceding two paragraphs include cash
remuneration, stock options, stock dividends, retirement benefits or severance
payment, various allowances and other measures with substantial incentives.
If the board meeting does not adopt or amends the recommendation of the Compensation
Committee, state the date, period, content of the proposal, resolution results of the board
meeting, and the Company’s handling of the opinions of the Compensation Committee (if
the compensation adopted by the board meeting is better than the proposal of the
Compensation Committee, state the difference and reason): None.
In case of any objection or reservation of any member to the resolution of the Compensation
Committee with a record or written statement in place, please state the date, period,
proposal content, opinions of all members and the handling of the opinions of the members:
None.
The date, the number of the meeting session, the contents of the proposal and the
resolution of the Compensation Committee meetings in the latest year, and the company’s
handling of the opinions of the Compensation Committee:
Compensation
Committee
Proposal Contents
Resolution
on the
proposal
contents
The company's
handling of the opinions
of the Compensation
Committee
2nd session of
the 2nd term
March 31,
2020
1. Amendment to the “Measures
for Remuneration of Directors
and Managers.”
2. Allocation of remuneration of
employees, directors and
supervisors of the company
and its major subsidiaries for
2019
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.
3rd session of
the 2nd term
September 30,
2020
1. Remuneration distribution to
directors and supervisors of the
subsidiary Foxlink Image
Technology Co., Ltd.
2. Remuneration distribution to
managers and employees of
the subsidiary Foxlink Image
Technology Co., Ltd.
3. Proposal to review the relevant
measures for the remuneration
of the company’s directors and
managers.
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.		 managers, references shall be made to the general level of payment in the same
industry. The reasonable association with personal performance, company
performance and future risks shall be taken into consideration.
2.
Directors and managers shall not be guided to engage in behaviors beyond the
company’s risk appetite in pursuit of compensation.
3.
The proportion of short-term performance bonuses paid to directors and senior
managers and the payment time of partial variable salaries shall be determined by
considering the industry characteristics and the nature of the company’s business.
(III) The salary and remuneration referred to in the preceding two paragraphs include cash
remuneration, stock options, stock dividends, retirement benefits or severance
payment, various allowances and other measures with substantial incentives.
If the board meeting does not adopt or amends the recommendation of the Compensation
Committee, state the date, period, content of the proposal, resolution results of the board
meeting, and the Company’s handling of the opinions of the Compensation Committee (if
the compensation adopted by the board meeting is better than the proposal of the
Compensation Committee, state the difference and reason): None.
In case of any objection or reservation of any member to the resolution of the Compensation
Committee with a record or written statement in place, please state the date, period,
proposal content, opinions of all members and the handling of the opinions of the members:
None.
The date, the number of the meeting session, the contents of the proposal and the
resolution of the Compensation Committee meetings in the latest year, and the company’s
handling of the opinions of the Compensation Committee:
Compensation
Committee
Proposal Contents
Resolution
on the
proposal
contents
The company's
handling of the opinions
of the Compensation
Committee
2nd session of
the 2nd term
March 31,
2020
1. Amendment to the “Measures
for Remuneration of Directors
and Managers.”
2. Allocation of remuneration of
employees, directors and
supervisors of the company
and its major subsidiaries for
2019
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.
3rd session of
the 2nd term
September 30,
2020
1. Remuneration distribution to
directors and supervisors of the
subsidiary Foxlink Image
Technology Co., Ltd.
2. Remuneration distribution to
managers and employees of
the subsidiary Foxlink Image
Technology Co., Ltd.
3. Proposal to review the relevant
measures for the remuneration
of the company’s directors and
managers.
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.		 managers, references shall be made to the general level of payment in the same
industry. The reasonable association with personal performance, company
performance and future risks shall be taken into consideration.
2.
Directors and managers shall not be guided to engage in behaviors beyond the
company’s risk appetite in pursuit of compensation.
3.
The proportion of short-term performance bonuses paid to directors and senior
managers and the payment time of partial variable salaries shall be determined by
considering the industry characteristics and the nature of the company’s business.
(III) The salary and remuneration referred to in the preceding two paragraphs include cash
remuneration, stock options, stock dividends, retirement benefits or severance
payment, various allowances and other measures with substantial incentives.
If the board meeting does not adopt or amends the recommendation of the Compensation
Committee, state the date, period, content of the proposal, resolution results of the board
meeting, and the Company’s handling of the opinions of the Compensation Committee (if
the compensation adopted by the board meeting is better than the proposal of the
Compensation Committee, state the difference and reason): None.
In case of any objection or reservation of any member to the resolution of the Compensation
Committee with a record or written statement in place, please state the date, period,
proposal content, opinions of all members and the handling of the opinions of the members:
None.
The date, the number of the meeting session, the contents of the proposal and the
resolution of the Compensation Committee meetings in the latest year, and the company’s
handling of the opinions of the Compensation Committee:
Compensation
Committee
Proposal Contents
Resolution
on the
proposal
contents
The company's
handling of the opinions
of the Compensation
Committee
2nd session of
the 2nd term
March 31,
2020
1. Amendment to the “Measures
for Remuneration of Directors
and Managers.”
2. Allocation of remuneration of
employees, directors and
supervisors of the company
and its major subsidiaries for
2019
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.
3rd session of
the 2nd term
September 30,
2020
1. Remuneration distribution to
directors and supervisors of the
subsidiary Foxlink Image
Technology Co., Ltd.
2. Remuneration distribution to
managers and employees of
the subsidiary Foxlink Image
Technology Co., Ltd.
3. Proposal to review the relevant
measures for the remuneration
of the company’s directors and
managers.
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.		 managers, references shall be made to the general level of payment in the same
industry. The reasonable association with personal performance, company
performance and future risks shall be taken into consideration.
2.
Directors and managers shall not be guided to engage in behaviors beyond the
company’s risk appetite in pursuit of compensation.
3.
The proportion of short-term performance bonuses paid to directors and senior
managers and the payment time of partial variable salaries shall be determined by
considering the industry characteristics and the nature of the company’s business.
(III) The salary and remuneration referred to in the preceding two paragraphs include cash
remuneration, stock options, stock dividends, retirement benefits or severance
payment, various allowances and other measures with substantial incentives.
If the board meeting does not adopt or amends the recommendation of the Compensation
Committee, state the date, period, content of the proposal, resolution results of the board
meeting, and the Company’s handling of the opinions of the Compensation Committee (if
the compensation adopted by the board meeting is better than the proposal of the
Compensation Committee, state the difference and reason): None.
In case of any objection or reservation of any member to the resolution of the Compensation
Committee with a record or written statement in place, please state the date, period,
proposal content, opinions of all members and the handling of the opinions of the members:
None.
The date, the number of the meeting session, the contents of the proposal and the
resolution of the Compensation Committee meetings in the latest year, and the company’s
handling of the opinions of the Compensation Committee:
Compensation
Committee
Proposal Contents
Resolution
on the
proposal
contents
The company's
handling of the opinions
of the Compensation
Committee
2nd session of
the 2nd term
March 31,
2020
1. Amendment to the “Measures
for Remuneration of Directors
and Managers.”
2. Allocation of remuneration of
employees, directors and
supervisors of the company
and its major subsidiaries for
2019
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.
3rd session of
the 2nd term
September 30,
2020
1. Remuneration distribution to
directors and supervisors of the
subsidiary Foxlink Image
Technology Co., Ltd.
2. Remuneration distribution to
managers and employees of
the subsidiary Foxlink Image
Technology Co., Ltd.
3. Proposal to review the relevant
measures for the remuneration
of the company’s directors and
managers.
Approved by
all the
members
present
according to
the proposal
contents.
Submitted to the board
meeting and approved
by all the directors
present.
Compensation
Committee		 Proposal Contents Resolution
on the
proposal
contents		 The company's
handling of the opinions
of the Compensation
Committee
2nd session of
the 2nd term
March 31,
2020		 1. Amendment to the “Measures
for Remuneration of Directors
and Managers.”
2. Allocation of remuneration of
employees, directors and
supervisors of the company
and its major subsidiaries for
2019		 Approved by
all the
members
present
according to
the proposal
contents.		 Submitted to the board
meeting and approved
by all the directors
present.
3rd session of
the 2nd term
September 30,
2020		 1. Remuneration distribution to
directors and supervisors of the
subsidiary Foxlink Image
Technology Co., Ltd.
2. Remuneration distribution to
managers and employees of
the subsidiary Foxlink Image
Technology Co., Ltd.
3. Proposal to review the relevant
measures for the remuneration
of the company’s directors and
managers.		 Approved by
all the
members
present
according to
the proposal
contents.		 Submitted to the board
meeting and approved
by all the directors
present.

37

(V) Performance of social responsibility and differences from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and the reasons:

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
I. Does the company conduct risk assessments
on environmental, social and corporate
governance issues related to the company’s
operation in accordance with the principle of
materiality and formulate relevant risk
management policies or strategies?		 ˇ The company complies with relevant laws and
regulations on environmental, social and corporate
governance related issues in its implementation of
corresponding measures and regularly reviews
them.		 No difference.
II.
Has the company set up a full-time (part-time)
unit to promote corporate social responsibility,
which is managed by the senior management
under the board of directors’ authorization, and
reports to the board of directors of the handling
status?		 ˇ The “Corporate Social Responsibility Manual” of the
company clearly sets up the responsibility units to
promote corporate social responsibility.		 No difference.
III. Environmental Issues
(I)
Has the company established an appropriate
environmental management system
according to its industrial characteristics?
(II)
Is the company committed to improving
resource utilization efficiency and using
recycled materials with low impact on the
environment?
(III)
Does the company assess the potential risks		 ˇ
ˇ
ˇ		 (I)
The company has obtained the relevant
system certification and strictly implemented
it in daily work and life to fulfill the corporate
responsibility of an earth citizen.
(II)
The company strictly implements the
environmental protection policy and declares
the treatment according to the Regulations
on the Control of Industrial Waste by the
Environmental Protection Agency. The waste
is classified according to its nature, and the
resources are recycled and reused. At the
same time, the company promotes the
Smoke Prevention Act and implements the
policy of non-smoking in public places.
(III)
In response to global warming and to		 No difference.

38

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
and opportunities of climate change for the
enterprise now and in the future and take
measures to deal with climate-related issues?
(IV)
Does the company prepare statistics of
greenhouse gas emissions, water
consumption and the total weight of waste in
the past two years, and formulate policies for
energy conservation and carbon reduction,
greenhouse gas reduction, water
consumption reduction or other waste
management?		 ˇ effectively mitigate the impact of climate
change, the company actively promotes the
energy-saving strategy and responds to the
reduction of the use of disposable tableware.
(IV)
The company implements energy saving and
carbon reduction measures, including
improvement of lighting equipment, use of
electronic forms and documents, energy
saving and resource and energy recycling,
and will continue to promote the energy
saving policy.
IV. Social Issues
(I)
Has the company formulated relevant
management policies and procedures in
accordance with relevant laws and
regulations and International Human Rights
Conventions?
(II)
Has the company established and
implemented reasonable employee welfare
measures (including compensation, vacation
and other benefits) and properly reflected the
operating performance or results in employee
compensation?
ˇ
ˇ
(I)
The company formulates relevant rules and
measures according to the Labor Standards
Act and related labor laws and regulations for
the management and employees to follow to
protect the legitimate rights and interests of
employees.
(II) The company provides a wealth of employee
welfare measures based on the corporate
culture to meet the needs of employees. It
handles various activities and subsidies
through the Employee Welfare Committee. In
addition, “increasing profits and revenue”and
“reducing operating expenses” are the
company’s overall goals to ensure that the
operating performance of each department is
achieved, and the establishment of real-time
performance tracking, improvement and
management mechanisms in order to reflect

No difference.

39

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
(III)
Does the company provide a safe and
healthy working environment for its
employees and conduct regular safety and
health education for them?		 ˇ operating performance results in employee
compensation.
In addition, the Articles of Association of the
company also stipulate the following:
Article 26: If the company makes a profit
during the year (the so-called profit refers to
the profit before tax minus the distribution of
employees’ and directors’ remuneration), no
less than 6% of it shall be allocated as
employees’ remuneration and no more than
3 % as the directors’remuneration. However,
when the company still has a cumulative
loss, it shall reserve the compensation
amount in advance.
The employee remuneration mentioned in
the preceding paragraph can be paid in
stocks or cash. The payment objects include
employees of controlling or affiliated
companies who meet certain conditions. The
board of directors is authorized to make a
resolution on the conditions and distribution
methods. Directors’ remuneration can only
be paid in cash.
(III) The company provides employees with a
safe and healthy working environment and
regularly conducts safety and health training
for employees. The content is as follows:
1. Access control security: The company has
monitors or access control equipment for
all external and internal access control to
strictlycontrol the access status, and has
No difference.

40

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
a police team to patrol day and night; the
company has also established the
“Factory Access Management Measures”
and “Building Access Control Management
Measures..”., etc. which clearly regulate
the movement of personnel, vehicles, and
articles entering and exiting the factory to
maintain the safety of employees.
2. Occupational safety and disaster
prevention measures and response:(1)
New employees must undergo labor safety
and health training to increase their
occupational safety awareness. According
to the annual training plan, 10 new
employee safety and health training
sessions have been completed, with a
total of 40 person-times. (2) The company
has in place the “Occupational Health and
Safety Management Procedures,”
“Emergency Response Procedures,”
“Accident Handling and Investigation
Management Measures..”. etc. which
clearly regulate the timely handling and
investigation of accidents occurred and
existing, in order to minimize the degree of
damage and prevent similar accidents
from recurring after investigation and
review of the causes and prevention
methods. (3) Due to the company’s good
occupational safety and health control,
there were no occupational injury cases

41

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
this year.
3. Equipment maintenance: (1) In
accordance with the provisions of the Fire
Services Act, inspections of fire safety
equipment and refuge facilities are carried
out monthly, and 12 safety inspections and
maintenance operations have been
completed this year. (2) In accordance
with the Occupational Safety and Health
Management Measures, regular
maintenance and inspection of various
equipment in the working environment
have been completed, and environmental
testing has been completed twice this
year; the results of the environmental
testing are in compliance with the
requirements of the regulations. (3) An
annual inspection on electrical equipment
and circuit inspections has been
completed, and the results are all in
compliance with relevant national safety
regulations. The electrical equipment has
fusible insurance and leakage protection,
the insulation performance is good, and
there are reliable grounding or
zero-connection protection measures.
4. Health and hygiene: (1) New recruits are
required to undergo a physical
examination before taking up their jobs,
while the company assists incumbents in
arranging health examinations every two

42

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
years, and the frequency is superior to that
in the regulations. The labor physics and
health examination results are analyzed
and evaluated by professionals. (2) The
company regularly organizes health and
hygiene lectures to improve the
employees’relevant health knowledge and
health care. (3) The company implements
plans and activities to prevent human
hazards and labor overload, protect
maternal health, and prevent illegal
infringements. (4) The company has a
mother-friendly working environment and
has a nursing room available. (5) To
prevent workplace violence and sexual
harassment, the company has formulated
the “Sexual Harassment Prevention and
Management Measures,” which provides
and establishes complaint channels and
punishment measures. (6) The company
appoints medical (nursing) personnel to
provide on-site services for labor health
services. (7) The company regularly
conducts environmental disinfection in the
factory. Professionals maintain the
environmental cleaning, and deep
cleaning is regularly arranged to ensure a
healthy working environment. 6
environmental disinfection and cleaning
sessions have been completed this year.
5. Insurance: The company provides

43

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
(IV)
Has the company established an effective
career development training program for its
employees?
(V)
Does the company follow relevant laws and
regulations and international standards for
customer health and safety, customer
privacy, marketing and labeling of products
and services, and formulate relevant policies
and grievance procedures to protect the
rights and interests of consumers?
(VI)
Does the company have a supplier
management policy that requires suppliers to
follow relevant specifications and their
implementation in environmental protection,
occupational safety and health or labor
human rights issues?		 ˇ
ˇ
ˇ		 employee group insurance, which covers
term life insurance, critical illness
insurance, accident insurance, accidental
medical insurance as well as
hospitalization, cancer medical insurance
and preferential family insurance.
(IV)
The company organizes training for
employees from time to time every year.
(V)
The marketing and labeling of the company’s
products and services are handled in
accordance with relevant laws and
international standards. The company also
has dedicated personnel and an e-mail box
to deal with issues related to company
complaints and deal with consumer
complaints immediately.
(VI)
The company attaches great importance to
environmental and social protection, so
before dealing with suppliers, it will consider
whether the suppliers have followed relevant
regulations in the past on environmental
protection, occupational safety and health, or
labor human rights.
V.
Does the company prepare the corporate social
responsibility report and other reports that
disclose the company’s non-financial
information in accordance with the international
reporting standards or guidelines? Is the
aforesaid report confirmed or guaranteed by a
third-party verification unit?		 ˇ The company currently has not met the criteria of
relevant laws and regulations to prepare the
corporate social responsibility report, so the report
is not yet prepared.		 In the future, the company
will make an assessment
based on actual needs.

44

Evaluation items Operation status Operation status Operation status Differences from the
Corporate Social
Responsibility Best Practice
Principles for TWSE/TPEx
Listed Companies and the
reasons.
Yes No Summary description
VI. If the company has its own corporate social responsibility best practice principles in accordance with the “Corporate Social Responsibility
Best Practice Principles for TWSE/GTSM Listed Companies,” please state the implementation status and the differences: No difference.
In accordance with the requirements of relevant regulations and standards, the company has formulated the “Corporate Social Responsibility
Handbook”and formulated appropriate management plans to ensure that the goals are achieved.
VII. Any other important information that may help to understand the operation of corporate social responsibility:
The company and the companies of the group make donations to related charity organizations in Taiwan and mainland China everyyear, and
hold living material raising activities and second-hand book raising activities, donate second-hand clothes, second-hand shoes and daily
necessities to children in remote areas, and care for disadvantaged groups at the end of the year and donate money to help them tide over
the cold winter. The company also organizes visits to social welfare organizations and volunteer activities from time to time and holds
employee blood donation activities to make a contribution to society.

45

(VI) Performance of ethical corporate management and differences from the Ethical Corporate Management Best Practice

Principles for TWSE/GTSM Listed Companies and the reasons:

Evaluation items Operation status Operation status Operation status Differences from the
Ethical Corporate
Management Best
Practice Principles for
TWSE/GTSM Listed
Companies and the
reasons
Yes No Summary description
I.
Establishment of ethical corporate management
policy and plans
(I)
Does the company have an ethical corporate
management policy approved by the board of
directors, and clearly state the ethical corporate
management policy and practice in the internal
regulations and external documents, as well as the
commitment of the board of directors and senior
management to actively implement the corporate
management policy?
(II)
Has the company established an evaluation
mechanism for the risk of unethical behavior,
regularly analyzed and evaluated the business
activities with high unethical behavior risk within the
business scope, and formulated a plan to prevent
unethical behavior accordingly, whichat least covers
the preventive measures for the behaviors in
paragraph 2, Article 7 of the “Ethical Corporate
Management Best Practice Principles for
TWSE/GTSM Listed Companies”?
(III)
Does the company stipulate the operating
procedures, behavior guidelines, and disciplinary
and grievance systems in its unethical behavior
prevention plan and implement them, and regularly
review and revise the plan?
ˇ
ˇ
ˇ		 (I)
The company has established the “Ethical
Corporate Management Best Practice
Principles”; the audit unit is responsible for
formulating and supervising the ethical
corporate management policy and prevention
plan and regularly reports to the board
meeting.
(II)
In order to ensure the implementation of
ethical corporate management, all employees
of the companies of the group have signed the
“Integrity Commitment Letter” to prevent
through the inspection mechanism of the
internal audit unit the occurrence of unethical
business activities and bribery giving and
taking, and regular reviews are conducted.
(III)
During the regular inspection, the internal audit
unit also includes in its inspection whether
there is any unethical behavior internally.
Employees with unethical behaviors will be
punished in accordance with the “Employee
Reward and Punishment Measures” based on
the circumstances and impact.
No difference.
II. Implementation of ethical corporate management
(I)
Does the companyassess its counterparties’ ethical		 ˇ (I)
The companyand its suppliers have signed		 The company is in
compliance with the

46

Evaluation items Operation status Operation status Operation status Differences from the
Ethical Corporate
Management Best
Practice Principles for
TWSE/GTSM Listed
Companies and the
reasons
Yes No Summary description
corporate management records and specify the
ethical corporate management terms in the
contracts it enters into with them?
(II)
Has the company set up a dedicated unit under the
board of directors to promote ethical corporate
management, and regularly (at least once a year)
report to the board of directors its ethical corporate
management policy and plan to prevent unethical
behavior as well as its supervision of the
implementation?
(III)
Does the company have a conflict of interest
prevention policy to provide appropriate channels for
explanation and implement it?
(IV)
Has the company established an effective
accounting system and internal control system for
the implementation of ethical corporate
management, and has the internal audit unit,
according to the assessment results of the risk of
unethical behavior, drawn up relevant audit plans to
check the status of unethical behavior prevention
ˇ
ˇ		 ˇ the “Manufacturer’s Integrity Commitment.”
When signing the contract, the rights and
obligations of both parties are specified in
detail, and all suppliers are required to abide
by them.
(II) The company’s audit unit is responsible for the
formulation and supervision of the
implementation of ethical corporate
management policies and prevention plans.
As of the announcement date of the annual
report, the company has not yet reported the
implementation status to the board meeting
but will in the future arrange to regularly report
the company’s ethical corporate management
implementation status to the board meeting.
(III)
The company’s employees have signed the
“Employee Integrity Commitment Letter,” and
complaint channels are available. For any
violations and petitions, employees can report
to their direct supervisors, Human Resources
or the audit unit.
(IV)
The company has established an effective
accounting system and internal control
system, and formulates an internal audit plan
every year. According to the audit plan, the
internal audit unit implements various audit
operations; in case of special circumstances,
special inspections will be arranged
second item, and there
is no difference from
the rest.

47

Evaluation items Operation status Operation status Operation status Differences from the
Ethical Corporate
Management Best
Practice Principles for
TWSE/GTSM Listed
Companies and the
reasons
Yes No Summary description
accordingly, or entrusted an independent auditor to
carry out the audit?
(V)
Does the company regularly conduct internal and
external ethical corporate management?		 separately.
(V)
The company occasionally promotes its ethical
corporate management philosophy at internal
meetings.
III. Operation of the company’s accusation system
(I)
Does the company have a specific accusation and
reward system, establish a convenient accusation
channel, and assign appropriate personnel to the
accused person?
(II)
Has the company established the standard
operating procedures for the investigation of
accused matters, follow-up measures after
investigation and the relevant confidentiality
mechanism?
(III)
Does the company take measures to protect the
accuser from improper treatment due to the
accusation?		 ˇ
ˇ
ˇ		 (I)
The company has a dedicated line and
mailbox for appeals and has dedicated
personnel to handle related affairs.
(II)
The company has established operating
procedures and related confidentiality
mechanisms for accepting accusation matters.
(III)
The company protects the identity of the
accuser and avoids improper handling and
threats to him/her due to the accusation.		 No difference.
IV. Enhancement of information disclosure
Does the company disclose the content and promotion
effect of its ethical corporate management best
practice principles on its website and MOPS?
ˇ		 The company has set up a website and will gradually
enrich the effectiveness of ethical corporate
management related promotion in the future.		 No difference.
V. If the company has its own ethical corporate management best practice principles in accordance with the Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies, please state the differences between its operation and the principles.
VI. Other important information helpful to understand the company’s ethical corporate management operation: (such as the company’s review and
amendment of the ethical corporate management best practice principles)
The company has formulated relevant prevention plans to prevent unethical behaviors from occurring. The prevention plans formulated shall
comply with the relevant laws and regulations of where the company and the group companies and organizations operate.

48

  • (VII) Disclose the inquiry method if the company has formulated the code of corporate governance and relevant rules and regulations: Please visit the Market Observation Post System or the company’s official website.

  • (VIII) Other important information which may improve the understanding of the operation of the company’s corporate governance: None.

  • (IX) Status of internal control system implementation:

  • Internal Control System Statement

FIT Holding Co., Ltd. Internal Control System Statement

Date: March 26, 2021

Based on the results of the self-assessment of the company’s internal control system in 2020, the company hereby states the following:

  • I. The company acknowledges that it is the responsibility of the board of directors and the managers of the company to establish, implement and maintain the internal control system, which has already been established by the company. Its purpose is to provide reasonable assurance in achieving the objectives of operation effectiveness and efficiency (including profitability, performance and asset safety), in order to assure reliability, timeliness and transparency of reports, and compliance with relevant norms and regulations.

  • II. The internal control system has its inherent limitations. No matter how well designed, an effective internal control system can only provide reasonable assurance for the achievement of the above three objectives. Moreover, due to the change of environment and situation, the effectiveness of the internal control system may change accordingly. However, the company’s internal control system has a self-monitoring mechanism. Once a shortcoming is identified, the company will immediately take corrective action.

  • III. The company judges the effectiveness of the design and implementation of the internal control system in accordance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as the Regulations). The judgment items of the internal control system adopted in the “Regulations” are the process of management control, and the internal control system is divided into the following five components: 1. control environment, 2. risk assessment, 3. control operation, 4. information and communication, and 5. supervision operation. Each component includes several items. Please refer to the “Regulations” for these items.

  • IV. The company has adopted the aforesaid internal control system judgment items to assess the effectiveness of the design and implementation of the internal control system.

  • V. Based on the assessment results, it is believed that the company’s internal control system (including the supervision and management of subsidiaries) as of December 31, 2020, including the understanding of the operational effectiveness and the extent to which the efficiency objectives have been achieved, the reliability, timeliness and transparency of the report, and the design and implementation of the internal control

49

system on the compliance with relevant norms, laws and regulations are effective and can reasonably assure the achievement of the objectives above.

  • VI. This Statement will be the company’s annual report and prospectus’ main content and will be made public. If the above-mentioned contents are false or concealing, the legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act shall be involved.

  • VII. This Statement has been approved by the board meeting of the company on March 26, 2021. Of the nine directors present, there was no objection, and the rest agreed with the contents of this Statement.

FIT Holding Co., Ltd.

Chairman: T.C. Gou Signature and seal

President: T.C. Gou Signature and seal

50

  1. If an independent auditor is entrusted with auditing the internal control system, the independent auditor’s report shall be disclosed: None.

  2. (X) During the most recent year and up to the date of printing of the annual report, the punishment of the company and its insiders in accordance with the law, the company’s punishment on its insiders for violating the provisions of the internal control system, and the major deficiencies and improvement: None.

  3. (XI) Important resolutions of shareholders’ meetings and board meetings in the most recent year and as of the date of printing of the annual report:

  4. Important resolutions of board meetings

Date Important resolutions
June 24,
2020		 1. Approved the company’s abandonment of subscription to the shares from the 2020
cash capital increase of the subsidiary Shinfox Energy Co., Ltd. (formerly Hsingwei
Co., Ltd., Shinfox Energy Co., Ltd. hereinafter), which is indirectly held by the
company, due to its future plan of listing on the TWSE (TPEx), and the plan to have
all shareholders of the company participate in the subscription.
2. Approved the company’s intended loan extension to Glorytek (Yancheng) Co., Ltd.
and Glory Optics (Yancheng) Co., Ltd.
3. Approved the endorsement and guarantee for the subsidiary Power Quotient
International Co., Ltd.
4. Approved the cancellation of the quota restriction on the endorsement and guarantee
forthe subsidiary Glory Science Co.,Ltd.
August 13,
2020		 1. Approved the company’s consolidated financial report for the second quarter of 2020.
2. Approved the intended endorsement and guarantee for subsidiaries Glory Science
Co., Ltd. and Power Quotient International Co., Ltd.
3. Approved the contract signingwith financial institutionsforcreditlines.
September
30, 2020		 1. Approved the remuneration distribution to directors and supervisors of the subsidiary
Foxlink Image Technology Co., Ltd.
2. Approved the remuneration distribution to managers and employees of the subsidiary
Foxlink Image Technology Co., Ltd.
3. Approved the disposal of the equities of Changyuan Wind Power Ltd. and Beiyuan
WindPower Ltd.by the subsidiaryFoxwell Energy Corporation Ltd.
November
11, 2020		 1. Approved the company’s 2021 internal audit plan.
2. Approved the company’s “Internal Control System.”
3. Approved the endorsement and guarantee for subsidiaries Glory Science Co., Ltd.
and Power Quotient International Co., Ltd.
4. Approved the company’s intended disposal of the equity of Shih Fong Power Co., Ltd.
5. Approved the reduction of the company’s shareholding ratio of Jiangsu Foxlink New
EnergyTechnology Co.,Ltd.bymore than 10%.
January
21,2021		 1. Approved the company’s intended loan extension to the subsidiary Foxwell Energy
Corporation Ltd.
March 26,
2021		 1. Approved the company’s 2021 business plan.
2. Approved the company’s 2020 financial statements and business report.
3. Approved the company’s 2020 earnings distribution plan.
4. Approved the company’s cash distribution from capital reserve.
5. Approved the company’s and its important subsidiaries’ allocation of remuneration of
employees, directors and supervisors.
6. Approved the company’s subscription to the new shares from cash capital increase by
the subsidiary Power Quotient International Co., Ltd.
7. Approved the setup of the corporate governance director position.
8. Approved the performance evaluation results of the company’s board of directors.
9. Approved the independence and competency assessment report on the independent
auditor.
10. Approved the 2020 “Internal Control System Effectiveness Assessment” and “Internal
Control System Statement.”
11. Approved the company’s “Measures for Director Election.”
12. Approved the company’s “Measures for the Performance Evaluation of the Board of
Directors.”

51

Date Important resolutions
13. Approved the contract signing with financial institutions for credit lines.
14. Approved the discussion on the convening of the company’s 2021 general
shareholders’ meeting andits proposals
May 14,
2021		 1. The Company's intended endorsement and guarantee for subsidiaries Glory Science
Co., Ltd. and Power Quotient International Co., Ltd.
2. Formulation of the company's “Corporate Governance Best Practice Principles”.
3. Revision of the company's “Rules of Procedure of the Board Meeting”.
  1. Review of important resolutions of the shareholders’ meeting and their implementation:
Meeting
date		 Important resolutions Implementation status
June 24,
2020		 (1) Approved the company’s financial statements for 2019.
(2) Approved the company’s earnings distribution and loss
compensation for 2019.
(3) Approved the company’s “Procedures of Loan
extension to Others.”
(4) Approved the company’s “Procedure of Endorsement
and Guarantee.”		 The “Procedures of Loan
extension to Others” and the
“Procedure of Endorsement
and Guarantee” have been
announced on the company’s
website and the revised
procedures shall prevail.

  • (XII) In the most recent year and as of the date of printing the annual report, if the directors or supervisors have different opinions on the important resolutions passed by the board of directors’ meeting with recorded or written statements in place, the main contents are: None.

  • (XII) Summary of resignations and dismissals of relevant persons of the company (including Chairman, President, accounting director, financial director, internal audit director, corporate governance director and R&D director, etc.) in the most recent year and as of the date of printing of the annual report: None.

V. Independent Auditor Fee Information

Tiers of public accountant fees

Name of accounting firm
PwC Taiwan		 Name of
independent
auditor		 Name of
independent
auditor		 Audit period Remarks
Yi-Chang
Liang		 Se-Kai
Lin		 January 1 2020 ~
December 31,
2020		 -

Unit: NT$ thousand

Fee item
Amount tier		 Fee item
Amount tier		 Audit fee Non-audit
fee		 Total
1 Below NT$2000
2 NT$2,000(inclusive)~ NT$4,000
3 NT$4,000(inclusive)~ NT$6,000
4 NT$6,000(inclusive)~ NT$8,000
5 NT$8,000(inclusive)~ NT$10,000
6 Above NT$10,000(inclusive)
  • (1) If the non-audit fee is paid to the independent auditor, the firm to which the independent auditor belongs and its affiliated enterprises account for more than a quarter of the audit

52

fee, disclose the audit and non-audit fees and the non-audit service content: None.

Public accountant fee information

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
Name of
accounting
firm		 Name of
independent
auditor		 Audit fee Non-audit fee Audit period Remarks
System
design		 Business
registration		 Human
resources		 Others Subtotal
PwC
Taiwan		 Yi-Chang
Liang
Se-Kai Lin		 2,100 - - - 300 300 January 1,
2020 ~
December
31, 2020

  • Note: Other non-audit fees include financial report translation and consultation service fees.

  • (II) If the accounting firm is changed and the audit fee paid in the year of change is less than that in the year before the change, disclose the amount reduced, percentage and reason: None.

  • (III) If the audit fee is reduced by more than 15% compared with the previous year, disclose the amount reduced, percentage and reason: None.

  • VI. Change of Independent Auditor: None.

  • VII. Whether the chairman, president, or manager in charge of financial or

  • accounting affairs of the company has worked in the firm of the independent auditor or its affiliated enterprises in the past year: None.

53

VIII. Equity transfer and equity pledge by directors, supervisors, managers, and shareholders with a shareholding ratio of more than 10%:

  • (I) Changes in shareholdings of directors, supervisors, managers and major shareholders

Unit: share

Unit: share Unit: share
Job title Name 2020 2021 as of April 24
Increase
(decrease) of
shares held		 Increase
(decrease) of
pledged
shares
Increase
(decrease) of
shares held		 Increase
(decrease) of
pledged
shares
Director and
major
shareholder		 Foxlink
International
Investment
Ltd.		 0 0 0 0
Chairman and
President		 Corporate
representative:
T.C.Gou
0		 0 0 0
Director and
finance and
accounting
supervisor		 Corporate
representative
Kufn Lin		 0 0 0 0
Director Corporate
representative:
Jeffery Cheng
0		 0 0 0
Director and
major
shareholder		 Fu Uei
International
Investment
Ltd.		 0 0 0 0
Director Corporate
representative:
Hwee Kian
Lim
0		 0 0 0
Director Corporate
representative:
Semi Wang
0		 0 0 0
Director Corporate
representative:
Wilson Hu
0		 0 0 0
Independent
Director		 Ralph Chen 0 0 0 0
Independent
Director		 Chen-Rong
Chian		 0 0 0 0
Independent
Director		 Wei-Lin Wang 0 0 0 0

(II) The counterparty of share transfer or share pledge is a related party: No such situation.

54

IX. Information on the relationship among the top ten shareholders in terms of

shareholding ratio who are related persons, spouses or second-tier relatives:

Name The shareholder’s
own shareholding		 The shareholder’s
own shareholding		 Shareholdings
of spouse and
minor children		 Shareholdings
of spouse and
minor children		 Shareholdings
in the names
of others		 Shareholdings
in the names
of others		 Names and relationships
of the top ten
shareholders who are
related persons, spouses
orsecond-tier relatives		 Names and relationships
of the top ten
shareholders who are
related persons, spouses
orsecond-tier relatives		 Remarks
Number
of shares		 Sharehol
ding ratio		 Number
of shares		 Sharehol
ding ratio		 Number
of shares		 Sharehol
ding ratio		 Name Relationship
Foxlink
International
Investment Ltd.
Representative:
T.C. Gou		 58,303,464 23.68% 0 0% 0 0% Hsin Hung
International
Investment
Co., Ltd.
Fulian
International
Investment
Co., Ltd.
Taifu
International
Investment		 Concurrently
serving as
the
Chairman.
The
Chairman is
the spouse.
The
Chairman is
a
second-tier
relative.
0 0% 0 0% 0 0%
Zhi De
Investment Co.,
Ltd.
Representative:
Vivien Liu		 21,055,687 8.55% 0 0% 0 0% Taiwan
Foxlink
Investment
Co., Ltd.		 Concurrently
serving as
the
Chairman.
0 0% 0 0% 0 0%
Fu Uei
International
Investment Ltd.
Representative:
Kufn Lin		 14,690,257 5.97% 0 0% 0 0% Cheng-Fa
Investment
Co., Ltd.		 Concurrently
serving as
the
Chairman.
6,310 0% 0 0% 0 0%
Fulian
International
Investment Co.,
Ltd.
Representative:
Yu-Chen Luo		 4,197,772 1.71% 0 0% 0 0% Foxlink
International
Investment
Ltd.
Hsin
Hung
International
Investment
Co., Ltd.
Taifu
International
Investmen		 The
Chairman is
the spouse.
The
Chairman is
the spouse
The
Chairman is
a
second-tier
relative.
0 0% 0 0% 0 0%
Hsin Hung
International
Investment Co.,
Ltd.
Representative:
T.C. Gou		 3,738,329 1.52% 0 0% 0 0% Foxlink
International
Investment
Ltd.
Fulian
International
Investment
Co., Ltd.
Taifu
International		 Concurrently
serving as
the
Chairman.
The
Chairman is
the spouse.
The
Chairman is
0 0% 0 0% 0 0%

55

Name The shareholder’s
own shareholding		 The shareholder’s
own shareholding		 Shareholdings
of spouse and
minor children		 Shareholdings
of spouse and
minor children		 Shareholdings
in the names
of others		 Shareholdings
in the names
of others		 Names and relationships
of the top ten
shareholders who are
related persons, spouses
or second-tier relatives		 Names and relationships
of the top ten
shareholders who are
related persons, spouses
or second-tier relatives		 Remarks
Number
of shares		 Sharehol
ding ratio		 Number
of shares		 Sharehol
ding ratio		 Number
of shares		 Sharehol
ding ratio		 Name Relationship
Investmen a second-tier
relative.
Taiwan Foxlink
Investment Co.,
Ltd.
Representative:
Vivien Liu		 2,771,276 1.13% 0 0% 0 0% Zhi De
Investment
Co., Ltd.		 Concurrently
serving as
the
Chairman.
5,248 0% 0 0% 0 0%
Yi-Ching
Chuang		 2,527,000 1.03% 0 0% 0 0% - -
Cheng-Fa
Investment Co.,
Ltd.
Representative:
Kufn Lin		 1,766,000 0.72 % 0 0% 0 0% Fu Uei
International
Investment
Ltd.		 Concurrently
serving as
the
Chairman.
6,310 0% 0 0% 0 0%
Taifu
International
Investment
Representative:
Freddy Kuo		 1,749,836 0.71 % 0 0% 0 0% Foxlink
International
Investment
Ltd.
Fulian
International
Investment
Co., Ltd.
Hsin Hung
International
Investment
Co.,Ltd.		 The
Chairman is
a second-tier
relative.
0 0% 0 0% 0 0%
Hong-Yang
Venture Capital
Co., Ltd.
Representative:
De-Tsai Huang		 1,638,842 0.67% 0 0% 0 0% - -
0 0% 0 0% 0 0%

X. The number of shares held by the company, its directors, supervisors,

managers, and the company’s indirectly controlled enterprises in the same reinvested enterprise, and the consolidated shareholding ratio:

56

April 30,2021 Unit: shares;%
Investment of the
company
Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company
Total number of
investment
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
95,970,371
100%
0
0%
95,970,371
100%

164,993,974
100%
0
0%
164,993,974
100%
324,690,529
100%
0
0%
324,690,529
100%
37,500,000 16.30%
79,800,000 34.70% 117,300,000
51%		 April 30,2021 Unit: shares;%
Investment of the
company
Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company
Total number of
investment
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
95,970,371
100%
0
0%
95,970,371
100%

164,993,974
100%
0
0%
164,993,974
100%
324,690,529
100%
0
0%
324,690,529
100%
37,500,000 16.30%
79,800,000 34.70% 117,300,000
51%		 April 30,2021 Unit: shares;%
Investment of the
company
Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company
Total number of
investment
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
95,970,371
100%
0
0%
95,970,371
100%

164,993,974
100%
0
0%
164,993,974
100%
324,690,529
100%
0
0%
324,690,529
100%
37,500,000 16.30%
79,800,000 34.70% 117,300,000
51%		 April 30,2021 Unit: shares;%
Investment of the
company
Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company
Total number of
investment
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
95,970,371
100%
0
0%
95,970,371
100%

164,993,974
100%
0
0%
164,993,974
100%
324,690,529
100%
0
0%
324,690,529
100%
37,500,000 16.30%
79,800,000 34.70% 117,300,000
51%		 April 30,2021 Unit: shares;%
Investment of the
company
Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company
Total number of
investment
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
95,970,371
100%
0
0%
95,970,371
100%

164,993,974
100%
0
0%
164,993,974
100%
324,690,529
100%
0
0%
324,690,529
100%
37,500,000 16.30%
79,800,000 34.70% 117,300,000
51%		 April 30,2021 Unit: shares;%
Investment of the
company
Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company
Total number of
investment
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
Number of
shares
Sharehol
ding ratio
95,970,371
100%
0
0%
95,970,371
100%

164,993,974
100%
0
0%
164,993,974
100%
324,690,529
100%
0
0%
324,690,529
100%
37,500,000 16.30%
79,800,000 34.70% 117,300,000
51%
Reinvested enterprises Investment of the
company		 Investment by
directors, supervisors,
managers and
enterprises directly or
indirectly controlled by
the company		 Total number of
investment
Number of
shares		 Sharehol
ding ratio		 Number of
shares		 Sharehol
ding ratio		 Number of
shares		 Sharehol
ding ratio
Glory Science Co., Ltd. 95,970,371
100%		 0
0%		 95,970,371
100%
Foxlink Image Technology
Co., Ltd.
164,993,974
100%		 0
0%		 164,993,974
100%
Power Quotient
International Co., Ltd.		 324,690,529
100%		 0
0%		 324,690,529
100%
Shih Fong Power Co.,
Ltd.		 37,500,000 16.30% 79,800,000 34.70% 117,300,000
51%

57

IV. Fund Raising Status

I. Capital and Shares

  • (I) Source of capital

  • Source of capital

1.
Source of capital		 1.
Source of capital		 1.
Source of capital		 1.
Source of capital		 1.
Source of capital		 1.
Source of capital		 1.
Source of capital		 1.
Source of capital		 1.
Source of capital
April 30,2021 Unit: 1000 shares;NT$thousand
Month/
year		 Issue
price
(NT$)		 Approved share
capital		 Paid-in capital Remarks
Number
of
shares		 Amount Number
of
shares
Amount		 Source of capital Share capital
paid with
assets other
thancash		 Reference number
of approval
October
2018		 10 300,000 3,000,000 246,242 2,462,421 Initial investment
NT$2,462,421
thousand		 None October 1, 2018
ref.
Jing-Shou-Shang
No. 10701125670

2. Types of shares issued

April 24,2021 Unit: share April 24,2021 Unit: share April 24,2021 Unit: share April 24,2021 Unit: share April 24,2021 Unit: share
Share
type		 Approved share capital Remarks
Outstanding shares
(note)		 Unissued
shares		 Reserved
shares for the
issuance of
employee
stock options
Total
Ordinary
shares		 246,242,146 23,757,854 30,000,000 300,000,000

Note: Listed shares.

  1. Information related to the blanket declaration system: Not applicable.

  2. (II) Shareholder structure

) Shareholder structure ) Shareholder structure ) Shareholder structure ) Shareholder structure ) Shareholder structure ) Shareholder structure ) Shareholder structure
April 24,2021 Unit: shares1000
Shareholder
structure
Quantity
Government
agencies
Financial
institutions		 Other legal
persons		 Foreign
institutions
and
foreigners		 Individuals Total
Total number
0
1
54
55
32,723
32,833
Number of
shares held		 0
86		 114,538,789 3,803,837 127,899,434 246,242,146
Shareholding
ratio
0.00%		 0.00% 46.52% 1.54% 51.94% 100.00%

58

(III) The situation of diversification of equity

  1. Diversified holdings of ordinary shares
1.
Diversified holdings of ordinary shares		 1.
Diversified holdings of ordinary shares		 1.
Diversified holdings of ordinary shares		 1.
Diversified holdings of ordinary shares
April 24,2021 Unit: share
Shareholding level Number of
shareholders		 Number of shares
held
Shareholding
ratio
1 to 999 14,432
3,926,155
1.59%
1,000 to 5,000 14,098
29,233,974
11.87%
5,001 to 10,000 2,216
16,916,307
6.87%
10,001 to 15,000 687
8,714,143
3.54%
15,001 to 20,000 459
8,365,981
3.40%
20,001 to 30,000 354
9,020,310
3.66%
30,001 to 40,000 137
4,892,597
1.99%
40,001 to 50,000 108
4,946,621
2.01%
50,001 to 100,000 194
13,746,755
5.58%
100,001 to 200,000 80
11,263,870
4.57%
200,001 to 400,000 40
10,556,512
4.29%
400,001 to 600,000 12
5,758,458
2.34%
600,001 to 800,000 2
1,370,000
0.56%
800,001 to 1,000,000 1
924,000
0.38%
1,000,001 or more 13
116,606,463
47.35%
Total 32,833 246,242,146 100.00%

  1. Diversified holdings of preferred shares: The company has not issued preferred shares.

  2. (IV) List of major shareholders

April 24, 2021 Unit: share
List of major shareholders
Shares
Name of major shareholder		 Number of shares held Shareholding ratio
Foxlink International Investment Ltd. 58,303,464
23.68%
Zhi De Investment Co., Ltd. 21,055,687
8.55%
Fu Uei International Investment Ltd. 14,690,257
5.97%
Fulian International Investment Co., Ltd. 4,197,772
1.71%
Hsin Hung International Investment Co.,
Ltd.		 3,738,329 1.52%
Taiwan Foxlink Investment Co., Ltd. 2,771,276
1.13%
Yi-Ching Chuang 2,527,000
1.03%
Cheng-Fa Investment Co., Ltd. 1,766,000
0.72%
Taifu International Investment 1,749,836
0.71%
Hong-YangVenture CapitalCo.,Ltd. 1,638,842
0.67%

59

  • (V) Stock market prices, net values, earnings, dividends and related information for the last two years
o years
Item Year
2019		 2020 2021 as of
March 31, 2021
Market price
per share
(NT$)		 Highest 27.7 51.7 32.9
Lowest 18.3 9.09 24.7
Average 21.66 27.71 29.04
Net value
per share
(NT$)		 Before distribution 27.88 33.21 36.02
After distribution 27.88 33.21 36.02
Earnings
per share		 Weighted average number of
shares (thousand shares)		 246,242 246,242 246,242
Earnings per
share
(NT$)		 Before
retrospective
adjustment		 (0.77) 0.34 0.39
After
retrospective
adjustment		 (0.77) 0.34 0.39
Dividend
per share
(NT$)		 Cashdividend 0 1 -
Free share
allotment		 Share allotment
fromearnings		 None None -
Share allotment
from capital
reserve		 None None -
Accumulated unpaid dividends None None -
Return on
investment
analysis		 P/E ratio (28.13) 81.50 -
Price-dividend ratio Not
applicable		 27.71 -
Cash dividend yield Not
applicable		 3.61% -

  • (VI) Company dividend policy and implementation status

  • Dividend policy: The company’s dividend policy is to distribute the company’s distributable earnings up to 90% to shareholders in the form of dividends. According to the future capital expenditure budget and capital demand situation, the cash dividend of the company’s dividends will not be less than 20%.

  • Dividend distribution proposal at the shareholders’ meeting: The company will allocate NT$73,872,644 as shareholders’ cash dividend from the distributable earnings of 2020, at NT$0.3 per share, and a capital reserve of NT$172,369,503 in excess of the par value of shares issued will be distributed in cash at NT$0.7 per share. The board meeting has approved this proposal, and the chairman is authorized to set the ex-dividend date, payment date and other related matters.

60

  • (7) Impact of the free share allotment proposed by the shareholders’ meeting on the company’s operating performance and earnings per share
Year
Item		 Year
Item		 Year
Item		 2021
Paid-incapitalat the beginning ofthe period 2,462,421
Dividend distribution
this year		 Cash dividend per share NT$1 per
share
Number of allotment shares per share due to
transferofearnings to capital increase		 None
Number of allotment shares per share due to
transferofcapital reserve to capital increase		 None
Changes in
business
performance		 Businessinterest The
company
did not
prepare
2021
financial
forecasts,
so it is not
applicable.
Increase (decrease) ratio of operating profit
overthe same periodlast year
Net profit aftertax
Rate of increase (decrease) in net profit after
taxoverthe same periodlast year
Earnings per share (NT$) (before
retrospective adjustment)
Increase (decrease) ratio of earnings per
share overthe same periodlast year
Annual average return on investment (the
reciprocalofthe annualaverageP/E ratio)
Proforma earnings
per share and P/E
ratio		 If the earnings
transferred to capital
increase are all
distributed in cash
dividend		 Proforma earnings per
share (NT$)
Proforma annual
average return on
investment
If no capital reserve
is transferred to
capital increase		 Proforma earnings per
share (NT$)
Proforma annual
average return on
investment
If no capital reserve
is processed and
the earnings
transferred to capital
increase are to be
distributed in cash
dividend		 Proforma earnings per
share (NT$)
Proforma annual
average return on
investment

Note: The 2020 earnings distribution plan was approved by the board meeting.

(VIII) Remuneration of employees, directors and supervisors

  1. The amount or range of the remuneration of employees, directors and supervisors as stated in the company’s articles of association:

  2. If the company makes a profit during the year (the so-called profit refers to the profit before tax minus the distribution of remuneration of employees, directors and

61

supervisors), no less than 6% of it shall be allocated as employees’ remuneration and no more than 3 % as the directors’ remuneration. However, when the company still has a cumulative loss, it shall reserve the compensation amount in advance. The employee remuneration mentioned in the preceding paragraph can be paid in stocks or cash. The payment objects include employees of controlling or affiliated companies who meet certain conditions. The board of directors is authorized to make a resolution on the conditions and distribution methods. Directors’ remuneration can only be paid in cash.

  1. The basis for the estimated amount of remuneration for employees, directors and supervisors in the current period, the calculation basis for the number of shares of employees’ remuneration distributed in stock, and the accounting treatment if the actual distribution amount is different from the estimated amount:

  2. The basis for the estimated amount of remuneration for employees, directors and supervisors is that If the company makes a profit during the year (the so-called profit refers to the profit before tax minus the distribution of remuneration of employees, directors and supervisors), no less than 6% of it shall be allocated as employees’ remuneration and no more than 3 % as the directors’ remuneration. However, when the company still has a cumulative loss, it shall reserve the compensation amount in advance. If the shareholders’ meeting decides to pay shares as employee dividends, the number of stock dividends is determined by dividing the amount of the resolved remuneration by the fair value of the stock. The fair value of the stock is calculated based on the closing price on the day before the resolution of the shareholders’ meeting of the following year while taking into consideration the effect of ex-stock or ex-cash dividend. However, if there is a discrepancy between the actual distribution amount by the resolution of the shareholders’ meeting and the estimated amount, it will be listed as the income in the following year.

  3. Remuneration distribution approved by the board meeting:

  4. (1) Cash distribution of NT$5,600,000 for employees’ remuneration and NT$1,200,000 for directors’ and supervisors’ remuneration.

  5. (2) The amount of employees’ remuneration distributed in stock and its proportion of the total net profit after tax and total employees’ remuneration in the individual financial report for the current period: Not applicable.

  6. The actual distribution of the remuneration of employees, directors and supervisors in the previous year (including the number of shares distributed, amount and stock price); if there are differences between the recognized remuneration of employees, directors and supervisors, state the differences, reasons and handling: Not applicable.

(IX) The company’s buyback of its shares: None.

  • II. Handling of corporate bonds: None.

  • III. Handling of preferred shares: None.

  • IV. Handling of overseas depositary receipts: None.

  • V. Handling of employee stock option certificates

  • (I) Processing of the company’s unexpired employee stock options and its impact on shareholders’ equity: None.

  • (II) As of the publication date of the annual report, the names, acquisition and subscription status of the managers who obtained employee stock option certificates and the top ten employees who obtained employee stock options certificates that can be converted into the largest number of shares: None.

62

  • (III) Handling of new shares with restricted employee rights: None.

  • (IV) As of the publication date of the annual report, the names, acquisition and subscription status of the managers who obtained new shares with restricted employee rights, and the top ten employees who obtained employee stock options certificates that can be converted into the largest number of shares: None.

  • VI. Handling of M&A or receiving shares of other companies for issuing new shares:

  • None.

  • VII. Implementation status of fund utilization plan: None.

63

V. Operation Overview

I. Business Content

(I) Business Scope

  1. The main content of the company’s business The main business of the Group is the production, manufacturing and trading of optical instrument components, computer peripheral components, 3C products, image scanners and multi-function printers, power plant investment and development, and clean energy services.

  2. Business Proportions

The business proportions of the various products of the company in 2020 are as follows:

follows:
Product Business turnover (NT$ thousand) Proportion
System and peripheral
products		 4,428,378 62.78%
3C retail and peripheral
products		 1,618,361 22.94%
3C components 484,943
6.88%
Others 521,496
7.40%
Total 7,053,361
100.00%
Note: The business turnover above is the revenue as in the consolidated financial report.
The company’s current products (services)
Main product categories Important application or function
3C Components:
Optical and optical
communication
components		 Mainly used in smartphones, tablet computers,
wearable 3D game consoles, and connectors
for NB and optical fiber network products.
3C retail and peripheral
products:
Apple products and
mobile peripheral
products		 iPhone, iPad, iMac, MacBook, iPod, iStorage,
iReader; transmission line, wireless/wired
charger, mobile power, hub, fingerprint disc,
storage device, protective case, wireless car
charger, forehead temperature gun, smart
home IoT, etc.
System and peripheral
products		 Various wired and wireless cloud image
scanners, image recognition devices and
automaticpaper feed scanningmodules
Other:
Power plant investment
and energy services
Others		 Power plant investment and development and
clean energy services
Mainly income from mold components and
processing.

  1. The company’s current products (services)

  2. New products planned to be developed:

  3. 3C Components:

  4. (1) Various application lenses for mobile phone products

  5. (2) Lenses for portable devices

  6. (3) Biometric and AI sensor lenses

64

3C retail and peripheral products:

  • (1) Fingerprint flash drives and external hard drives

  • (2) Wireless chargers/power banks

  • (3) iPhone/Android smartphones/PC three-interface OTG UFD/card readers

  • (4) Mobile peripheral products

  • (5) Smart home vehicles

  • (6) High-wattage fast chargers and transmission lines

  • (7) High output power banks

  • (8) Electric bicycles

  • (9) Forehead temperature guns

System and peripheral products:

  • (1) High-end 100/55 PPM A3 size double-sided automatic document feeder modules

  • (2) High-end 120/80/60 PPM A4 size double-sided automatic document feeder modules

  • (3) Intermediate 60/40/35 PPM A4 size dual-head scanners

  • (4) Intermediate 50/40/30/25 PPM automatic paper feed + flatbed scanners

  • (5) AOI industrial automatic optical inspection equipment

Energy Service Management: 

  - (1) Expand the development of other electric energy fields

  - (2) Enter the renewable energy market

  - (3) Power plant engineering contracting business

  - (4) Overcome the technical challenges of intermittent power supply from renewable energy sources

  • (II) Industry overview

  • Industry Status and Development

    • 3C Components:

    • (1) Optical Components

Optical lenses can be divided into glass lenses and plastic lenses due to different materials. The first optical lenses developed are made of glass. The advantages are good weather resistance, high hardness and good light transmittance, so they are suitable for high-end large-aperture optics. Due to the high technical threshold of molding and spherical glass, the high cost of equipment investment, and the low yield rate, only Japanese optical manufacturers can put them into mass production for the production of lenses. In comparison, plastic lenses have poor weather resistance, hardness and light transmittance compared with glass lenses. Still, due to the advantages of lightweight, easy mass production and low cost, they are conducive to the development of 3C consumer electronics products that are light, thin and short, so their demand has far exceeded that of glass lenses.

With the technological breakthrough of aspherical plastic lenses and the rise of camera phones, camera phones have become the fastest-growing product in the plastic lens industry and developed from the initial models equipped with a 300,000-pixel VGA lens to gradually 1.3 million and 2 million pixels. In addition, due to the launch of 3G mobile service communications, the market penetration rate of camera phones exceeded 70% in 2007. By the end of 2007, the world’s top five mobile phone brands launched mobile phones with built-in 5 million pixel lenses. With the continuous improvement of pixel numbers, the penetration rate of

65

camera phones in 2008 exceeded 80%. After Apple’s iPhone 4 led the mobile phone into the 5 million pixel generation in 2010, in 2011, mobile phone brands including HTC, Samsung Electronics, LG Electronics and Sharp successively launched mobile phones equipped with 8 million pixel lenses. In 2013, smartphones with 13 million pixel lenses were launched. At present, mobile phone lens modules are developing towards enhanced photosensitive performance, such as photosensitive design and new functions such as OIS based on MEMS technology, autofocus, optical zoom, etc., in order to take into account the quality of photographs and the lightness of the mobile phone. In 2020, mobile phone lenses will develop towards a higher level of 48 million pixels or more. In order to make the camera more powerful, a dual-lens design is developed. Due to the security needs of mobile phones, 3D time-of-flight (ToF) lenses are also being developed.

Taiwan’s lens industry tends to focus on 3C products. For glass lenses, Taiwanese manufacturers are still important suppliers of Japanese products (such as digital cameras) of Japanese manufacturers. In terms of plastic lenses, VGA lenses are used in notebook computers and low-end mobile phones, and with technological breakthroughs in high-end and high-pixel lenses, they are also used in high-end smartphones and tablets.

(2) Optical Communication Components

The function of the optical fiber connector is to provide a port to the standard fiber optic terminal for active insertion and removal operations; in high-end products, an aspheric optical lens needs to be built in the precision optical fiber connector to guide the light through the lens to improve the light source to the fiber, and the efficiency of light energy usage from the fiber to the photodetector.

The company has developed its own precision optical connector molding technology, which can control the diameter deviation of the optical fiber plug-in port to within 3 micro-meters. The surface shape of the built-in aspheric optical lens can meet the precision demand of high-speed optical communication. The company has become one of the few manufacturers in the world that can mass-produce it commercially.

With the rapid economic development, the demand for communication capacity and bandwidth continues to increase. The development of fiber to the home (FTTH) and fiber to the building is becoming faster. Indoor optical cables, optical communication connectors and optical transceiver modules are required for the integrated wiring system of smart buildings and the internal and external connections of communication equipment; therefore, the demand for indoor optical cables and active and passive components of optical communication is becoming more urgent.

At present, the so-called “cloud” refers to the “network” in general, and “cloud computing” represents the use of the network to enable computers to cooperate with each other or to make services more far-reaching, and emphasizes the use of the network to obtain remote computing resources when local resources are limited. “Cloud service” is to use these services, and users can even rely on a mobile phone to do many tasks that could only be done on a personal computer in the past. “Cloud technology” focuses on the use of virtualization and automation technologies to create and popularize various computing resources in computers. This can be regarded as an extension of traditional data centers and can be applied to

66

the internal system of the entire company without external resources from a third party. Therefore, it is an inevitable trend of future development to integrate the resources of many computers and make them work together to complete larger tasks. However, to transmit such a huge amount of data, it is necessary to replace copper wires with optical fibers. Therefore, the company’s optical connectors will definitely develop steadily under this trend.

The major brands in the global optical communications industry include Finisar, Broadcom, HW, JDSU, Source Photonics, Opnext and Sumitomo. Due to cost considerations, these brands are clearly developing in the Asia-Pacific region, thus creating a growth opportunity for the company and downstream companies in optical communication connectors.

3C Retail and Peripheral Products:

  • (1) Apple products

The business is mainly from Apple distributors in physical retail, and the main business is to sell Apple consoles and peripheral products. In the current environment, everyone has a handheld device. Consumers use handheld devices to search, compare prices or make purchases, making the link between physical channels and online stores gradually disappear. As consumers communicate through mobile devices, electronic media and social platforms, the integration of online and offline has also become an important trend in all-around retail.

(2) Power Bank

As the output of mobile devices and their functional requirements continue to grow, continuous technological innovation and improvement have been promoted, factors including the innovation of mobile device functions, the rapid development of mobile communication technology (5G) and wireless services, and the ever-rising safety standards cannot be ignored in the development of power banks. In the future, after the introduction of mobile communication technology (5G), the market demand for mobile phones is expected to have a breakthrough growth. At the same time, due to faster network bearing support, the public will be more dependent on mobile phones, and the user demand for mobile power will greatly increase. Therefore, the characteristics of fast charging technology, large capacity, convenient use and stable charging quality will become a major niche in the breakthrough growth of the market.

(3) Wireless Charging Technology

With the increasing popularity of mobile phones equipped with wireless fast charging, wireless charging has become an important criterion for measuring the grade of mobile phones. The iPhone and Android series of mobile phones began to fully support wireless charging in 2017, and has driven the shipment of wireless charging related accessories. According to research, it is estimated that the sales volume will reach 8 billion by 2022, which shows that wireless power transmission has entered a stage of rapid development. This means that the consumer demand for wireless chargers and wireless charging mobile power supplies is expected to show rapid growth.

(4) Type-C Cable

Type-C interface does not just mean a share in the smartphone market,

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but also a channel across many smart hardware platforms, including smartphones, PCs/tablets, TVs, wearables, cars, homes, etc. USB Type-C is also the technology with the most definite technical route in the next few years (obvious technological advantages and strong support of the entire industry chain), the most significant linkage effect (fast charging, intelligent digital audio, high-definition video and high-speed data), and the largest scale (rigid output volume with a potential NT$100 billion market).

Power Plant Investment and Energy Services:

The Government’s promotion of “Non-nuclear Homeland” (the formulation of non-extended service of nuclear power plants No. 1, 2, and 3 and suspension of nuclear power plant No. 4) and the liberalization of the electricity industry will have a major impact on the future energy ratio and power supply system structure. They will help the development of green energy and energy-saving industries.

In order to enhance Taiwan’s energy independence and the emerging green energy industry, and gradually achieve the goal of becoming a non-nuclear homeland, the Ministry of Economic Affairs has approved the “Green Energy Technology Industry Innovation Program,” one of the “5+2” innovative industries, on October 27, 2016. Based on the domestic green demand, large-scale domestic and foreign investments are introduced to increase high-quality jobs and drive the country’s green energy technology and industry to leap forward. With the three visions of “green energy promotion,” “industrial development” and “technological innovation,” and through policy-oriented measures in the aspects of comprehensive promotion of energy conservation, energy innovation, energy storage, smart system integration and electricity industry reform, the target volume of solar photovoltaics will advance to 8.7 GW in 2020, and 3 million low-voltage households will install smart meters in 2024, in order to comply with the 20% goal of renewable energy power generation volume in 2025.

The solar photovoltaic device capacity is 20GW and the wind power generation is 4.2GW for the implementation of energy transition.

The Legislative Yuan has passed the amendment to the “Renewable Energy Development Act.” This amendment allows green electricity companies to “two-way conversion” between bulk purchases (sold to TaiPower) and direct supply and re-supply (sold to customers) freely. Large electricity consumers of more than 800 kWh are required to use a certain percentage of green electricity (about 10%). They should jointly participate in the installation of renewable energy-related equipment and purchase renewable energy certificates to optimize the environment of renewable energy development of the country and activate the trading market.

System and Peripheral Products: Commercial Scanner

1End Market

The terminal application market for high-speed scanners is firms and government departments with moderate and heavy needs for digitizing daily documents, such as hospitals, banks, law firms, post offices, government administrative units, etc. In recent years, in addition to the continuous increase in the demand for the digitization of documents by various firms, due to the rapid development of online e-commerce, especially the rapid

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change in the retail market generated by cross-border e-commerce, the express delivery business volume has increased year after year. The digitization of express delivery documents is also one of the key factors leading to the continuous growth in demand for commercial scanners in recent years.

  • 2Brand Competition

This market has long been dominated by American and Japanese brands, including Fujitsu, Canon, Kodak, HP, Epson, Brother, etc.; the market share of regional brands such as Avision, Visioneer, Neat and Xerox cannot significantly increase but has a downward trend. Therefore, the market has a trend of growth of the largest, and the competition between Epson and Brother in the launch speed and price of new products is becoming fiercer. Although Fujitsu and Canon have a certain degree of brand loyalty in the market, their launch of new products is slow and it is difficult for them to expand the market. After Kodak went bankrupt and reorganized, it tried to reinvigorate itself with the Kodak Alaris brand and a complete product line.

  • 3Future Development

As the terminal demand (digitization of documents) continues to be strong, new retail industries (such as e-commerce, TV shopping, etc.) are impacting the demand for digitization of documents due to changes in the retail market. The market for low and medium-end high-speed scanners is expected to grow steadily; coupled with the maturity and widespread use of cloud-based digital file storage, management and sharing technologies, the demand for portable or miniaturized document scanners is also increasing gradually. When the price of low-end products falls to a sweet spot, it is expected that the household demand will significantly increase the overall industry demand. The market for high-end high-speed scanners is relatively stable. Although the volume is limited, the technical threshold is high and the gross profit is relatively attractive. As a result, major manufacturers are also making a lot of investment in R&D to develop a new generation of high-end scanners.

  1. Correlation among the Industry’s Upstream, Midstream and Downstream 3C Components:

  2. (1) Optical Components (Plastic Lens Set)

As far as the company’s customers are concerned, the company’s main product lens sets are supplied to assembly OEMs or distributors of mobile phones, tablets, NBs and wearable devices. It is the production and manufacturing of plastic lens sets of optical components and belongs to the midstream optical component industry. The upstream part is the optical plastic industry that supplies optical material plastic pellets. The midstream part also assists the company in completing lens group industry related automation equipment such as mold manufacturing, coating material, coating equipment, molding equipment and inspection equipment. The downstream of the company’s lens set is the module industry or system industry, which assemble modules to complete related products such as mobile phones and tablets. The correlation among the industry’s upstream, midstream, and downstream and their contents are shown as follows:

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==> picture [407 x 259] intentionally omitted <==

----- Start of picture text -----

Plastic pellets
(upstream optical
plastic industry)
Lens group
(midstream optical
component industry)
Forming equipment Module assembly
Inspection equipment (downstream module and
system industries)
Mold manufacturing
Mobile phones, tablets
Coating material
and NB
Coating equipment
(terminal brand
----- End of picture text -----

(2) Optical Communication Components (Optical Connector)

Plastic optical connectors, the main product, have gradually replaced the traditional transceiver connectors using high-price glass lenses and metal shells. They are supplied to major domestic and foreign suppliers of optical transceiver modules and are an indispensable key component in the popularization of optical communications.

The production of optical connectors belongs to the midstream optical communication component industry. The upstream is the optical plastic industry that provides optical materials and plastic pellets. The midstream still assists the company in completing optical connector related mold manufacturing, molding equipment and inspection equipment. The downstream of the company’s optical connectors are the module industry or system industry for assembling modules and completing related products. The correlation among the industry’s upstream, midstream, and downstream and their contents are shown as follows:

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==> picture [410 x 284] intentionally omitted <==

----- Start of picture text -----

Plastic pellets
(upstream optical
plastic industry)
Forming equipment Optical Connector
Inspection equipment (midstream optical Mold manufacturing
communication
Module assembly
(downstream module
and system industries)
Optical signal transmission
system, optical signal
exchange system
(Terminal Optical
Communication Industry)
----- End of picture text -----

3C Retail and Peripheral Products:

Apple products

Mainly Apple’s distributors; the following is the diagrams of the correlation among the industry’s upstream, midstream and downstream:

==> picture [435 x 240] intentionally omitted <==

----- Start of picture text -----

Upstream Midstream Downstream
Apple Dealer End user
Energy Service Management:
Upstream Midstream Downstream
Main equipment supplier
Research
Power plant
Project planning and design consulting and Renewable
engineering
energy
services
Engineering construction plant
----- End of picture text -----

Energy Service Management:

System and Peripheral Products:

Mainly the production of optoelectronic and digital imaging related products. Its upstream materials cover a wide range of suppliers, such as those of optical

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materials, electronic materials, IC, plastic materials, metal materials, packaging materials and software; the downstream manufacturers include major international brands and distributors, distributors, PC manufacturers and other customers. The company is located in the midstream responsible for integrating the upstream materials, and conducts the design, producing, testing and packaging, and finally provides the finished products to downstream customers. The correlation among the industry’s upstream, midstream and downstream is shown in the figure below:

==> picture [366 x 238] intentionally omitted <==

----- Start of picture text -----

Upstream Midstream Downstream
• IC industry: • Manufacturers of • International brand
• Software ••• IC design DRAM, IC PC Driver •photoelectric and digital imaging equipment Foxlink Image ••• Major PC brandsDistributorsDealer
• Optical industry Technology Co.,
• Lens Ltd.
• CCD, CIS
• Electronic materials
• PCB
• SMD RCL
• Plastic industry
• Plastic parts of
casing
• Metal industry
• Screw, Gear,
Sheet metal parts
----- End of picture text -----

3. Various Development Trends and Competitive Situation of Products 3C Components:

  • (1) Optical Components

Optical lens materials can be divided into two types: glass and plastic. The company’s main products are plastic optical lenses, which can be applied to all kinds of optical lenses. As 3C products are developing towards lightness, thinness and compactness, optical lenses used in 3C products are also moving towards lightness, thinness, compactness and high resolution. Therefore, the production technology and quality requirements for optical lenses have become increasingly stringent.

Although the optical lens has a trend development toward high pixels, all grades of products have their market applications and needs; for example, VGA lenses and up to 1.3 million-pixel lenses are widely used on plug-in PC cams and notebook computers due to transmission capacity issues; 8 million and 16 million pixel lenses are used on cheap mobile phone models; 8 million pixel lenses are used on tablets and high-end smartphones; 16 million pixel lenses are used on high-end smartphones; 48 million and 64 million lenses have been applied on various flagship models.

The main manufacturers of professional optical components in Taiwan are Largan, Genius Electronic Optical, Newmax Technology, Asia Optical, Kinko Optical, Ability Opto-Electronics Technology and our company. The international optoelectronic manufacturers are mainly distributed in China, Japan, the United States and Germany. The elements of competition

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among manufacturers are cost, yield, design capability, and mass production capability. Therefore, the improvement of quality and technology is the goal of the company and its peers.

(2) Optical Communication Components

At present, the world’s major optical transceiver module suppliers include Finisar, JDSU, Source Photonics, Opnext, FOIT, Sumitomo, Bookham, and manufacturers in Taiwan, South Korea, and mainland China.

The main customers of the optical communication industry are private telecommunications companies engaged in the construction of communication infrastructure and supply of services. Limited by the restrictions of optical communication standards and regulations and the investment threshold of infrastructure-intensive capital, large-scale system companies have most of the market share, and the midstream and downstream companies compete with each other to be included in the supply chain of large-scale system companies. However, because optical communications are an infrastructure industry, the volatility is small, and with the increasing demand for network communications in emerging countries, it is showing steady growth.

In recent years, in order to promote the popularization of optical communications, major European, American and Japanese manufacturers have gone to the Asia-Pacific region to purchase or produce due to cost considerations. This has increased the business opportunities of OEM or ODM for Asia-Pacific manufacturers. It has also become a development niche for Taiwanese manufacturers and an opportunity for the company’s growth.

3C Retail and Peripheral Products:

  • The 3C retail market is highly competitive, and its development and competition are as follows:

  • (1) A more complete shopping experience: Due to the maturity of 3C products and the rapid development of technology, the demand for the Internet of Things has exceeded the demand for pure hardware. Introducing smart home appliances, using AR VR and other functional products to provide customers with more systematic home management services is a top priority.

  • (2) A more comfortable shopping environment: 3C products are changing on a daily basis. Store display and movement planning, but more professional explanations by service personnel and customer experience in actual operation are necessary conditions for the current retail environment.

  • (3) Social media management: In recent years, online marketing has played a very important role in the retail industry. Building a brand’s community and maintaining a healthy interaction with fans has greatly contributed to the management of the brand image.

  • (4) Maintenance of loyal members: Due to intensified market competition, consolidating existing members and providing members with considerate and differentiated services will help members purchase in a long-term loyalty manner.

Energy Service Management:

In response to the international trend of developing green energy to mitigate climate change, transforming a green economy, enhancing independent energy, and building a good living environment in Taiwan, the

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Ministry of Economic Affairs actively promotes green energy in the country and has achieved fruitful results. Six principles (national energy independence, acceptability of electricity price impact, technical feasibility, cost-benefit orientation, phased and balanced development, and promotion of industrial development) have been planned for the promotion goals, focusing on the promotion of renewable energy with mature technology and low power generation costs, and investment in related research and development for more forward-looking and uncommercialized technologies. A rolling review of renewable energy promotion goals and their proportions are also conducted. In Taiwan, wind power generation (including land-based and offshore wind power generation), solar photovoltaic, biomass power generation and geothermal power generation are currently the main promotion projects.

The Electricity Act is being amended to open up to and encourage the power generation industry to develop renewable energy. Although market opportunities will increase, the number of competitors will also increase. The company will invest in related businesses with an excellent management team and quality and technology to enhance the company’s interests. System and Peripheral Products:

  • (1) Commercial Document Scanner

Starting this year, the trend of commercial document scanning has become more and more polarized. First, the scanning efficiency requirements are getting higher and higher; regardless of the cost involved, the smart recognition and automatic image adjustment functions of the scanner must be improved, and any risk of manuscript damage caused by high-speed scanning must be avoided to meet high-end commercial models with high data storage requirements. On the other hand, the market for mid-to-low-end scanners continues to grow steadily. In addition to prices that continue to challenge lows, the functions inherited from high-end commercial models are expected.

ODM scanner suppliers have experienced the rise and fall of more than a decade. Now, only a handful of manufacturers in the world can develop similar products. However, due to the limited market, there is only one Taiwanese supplier in the world for the key scanner-dedicated control IC. To provide customers with clear market segmentation, the company has developed two generations of dedicated ICs in succession. Recently, we have developed the 2.5 generation of dedicated ICs to provide a perfect solution for the mid-to-low-end and portable markets with smaller and more power-saving functions. We have developed an embedded perfect image adjustment and paper protection mechanism with the world’s exclusive and patented advanced technology for software and firmware. For the medium and low-end commercial markets, we are undoubtedly the market technology leader.

  • (2) Embedded Smart Image Recognition/Correction

As the direction of commercial scanners is becoming more high-speed, the requirements for embedded intelligent image recognition and correction are becoming more demanding. Especially for commercial models with a USB3.0 interface, the hardware scanning speed is far higher than that of the connected computer. Therefore, if the embedded image processing function inside the scanner cannot be used for processing in real-time while scanning, even after the document is scanned at high speed, the user still has to wait for the processing result of the computer, and the significance

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and efficiency of high-speed scanning will be greatly reduced.

(3) Paper Feeding Module of Business Machines

In the development of new products of various brands, in order to enhance the added value of products, the proportion of business machines with additional paper feeding modules is increasing, and the requirements for double-sided scanning and speed are becoming clearer.

After years of intensive work in paper feeding technology, the company has obtained many patent protections at home and abroad. The company’s paper-feeding style automatic paper feed module is a technological leader in the ODM industry. There has been actual development and shipment performance ranging from A4 low-end modules to A3 high-end double-sided modules. Our accumulated technical experience has been recognized and supported by Japanese and American customers. Therefore, our customer loyalty is very firm. Low-end paper-feeding modules generally have low entry barriers and high price sensitivity, so price competition is high. The geographical location of production also has a decisive factor in their packaging and transportation costs. In contrast, the entry barriers for mid-to-high-end modules are high. Generally speaking, apart from the customer’s own development team, there are relatively few significant competitors.

(III) Technology and R&D Overview

The company’s R&D expenses and technologies or products successfully developed in the last year and as of the date of publication of the annual report are as follows:

Unit: NT$ thousand

Unit: NT$thousand
Segment 2020 2021 (as of March 31, 2021)
Expenses 383,683 108,200
New
products or
new
technologies
successfully
developed

3C Components:
1. Three 8 million pixel lenses
2. One 12 million pixel lens
3. One 13 million pixel lens
4. Two 16 million pixel lenses
5. Two 20 million pixel lenses
6. Two 48 million pixel lenses
7. One 64 million pixel lens
8. One AR lens
9. Four 3D application lenses
10.Two fingerprint recognition
lenses
11. Two NB lenses
12.Three TOF and face ID
lenses
System and Peripheral Products:
1. A3
high-end,
100PPM,
double-sided automatic paper
feed document module
2.Intermediate A4, 35/40/65/70
PPM, double-sided auto-feed
document scanner
3. Single-sided
600dpi,

3C Components:
1.Six high, middle and low level
NB lenses
2. Two 13 million pixel lenses
3. One 64 million pixel lens
4.One mobile phone macro lens
5. One TOF and face ID lens
6. One AR lens
7. One 3D application lens
8. One surveillance lens




System and Peripheral Products:
1. A4
mid-range,
30PPM,
double-sided
auto-feed
document scanner
2.A4
portable,
25PPM,
double-sided automatic feed
document scanner

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single-sheet 4-second portable A4 auto-feed document scanner

(IV) Long-term and Short-term Business Development Plans

In response to the future industrial development and the overall economic environment, the company has formulated long-term and short-term plans for the company’s future business direction and competitiveness enhancement. The following is a summary of the company’s short-term and long-term plans:

  1. Short-term Development Plan

  2. (1) Improve the achievement rate, profitability, product differentiation, technical capabilities, product quality and management capability.

  3. (2) Reduce costs, expenses, product delivery time, inventory and product development time.

  4. (3) Give full play to the advantage of vertical integration and strengthen the integration of group resources.

  5. (4) Continue the channel deep-growing plan, provide better services to meet consumer needs, strengthen online marketing, develop diversified sales models, and expand various sales through flexible marketing activities, such as corporate training and corporate direct sales, to develop various sales channels.

  6. (5) Comply with the Government’s promotion of renewable energy policy, continue to invest in the development and construction of clean energy, such as solar, wind, geothermal, and water power, and continue to find good cases for factory building; gradually accumulate engineering experience and actual performance, build or strengthen the teams with factory construction technology and maintenance competence in photovoltaic, wind power and hydropower, move from the power generation industry to the market of free electricity sales, and add value to business opportunities from renewable energy through the sales of electricity from green energy and the accompanying renewable energy certificates.

  7. Long-term Development Plan

  8. (1) Continue to promote core products and capabilities, and with optical support, increase market size and create high-value output benefits.

  9. (2) Expand market operations, diversified products and services.

  10. (3) Understand the market trend, and make good use of the Group’s technical resources.

  11. (4) Continuously cultivate and develop talents.

  12. (5) Combine physical stores, online shopping and logistics resources; start from customer needs, use digital tools to improve the quality of customers’ shopping experience and provide more software related value-added services.

  13. (6) In addition to the continuous investment in the development of domestic renewable energy and clean energy, the company actively integrates various renewable energy industry chains, including development, construction, maintenance operation and free buying and selling of electric energy. On December 3, 2019, the company obtained a license for the electricity sales business and invested in the natural gas market; it is now the second company in Taiwan that obtained a natural gas import business license. It is the only private natural gas import company in Taiwan. The

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company will continue to carry out market development plans for “clean energy” business opportunities to replace heavy oil or coal as fuel. To sum up, the company adopts the five major directions of “light, wind, water, gas, and big platform” in its operation strategy and cultivates professionals in each strategic field. At the same time, the company also participates in international bidding projects, assesses the potential for overseas investment, and uses the experience of domestic power plants to deploy in Southeast Asia and establish a foothold in the Asian market. Continue to develop the ESG business, create an ecological chain of resource recycling, and sustain the development in Taiwan.

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II. Overview of Market, Production and Sales

  • (I) Market Analysis

  • Sales areas of main products

Unit: NT$ thousand

Year
Area		 2020 2020 2019 2019
Amount Proportion Amount Proportion
Hong Kong 1,680,824
23.83%
2,295,848
25.97%
China 1,627,720
23.08%
1,586,224
17.94%
United States 1,109,838
15.73%
1,191,740
13.48%
Taiwan 692,078
9.81%
614,177
6.95%
Others 1,942,901
27.55%
3,152,170
35.66%
Total 7,053,361
100%		 8,840,159
100%

Note: The amounts above are the revenues in the consolidated financial report.

  1. Market share and future supply and demand status and growth

  2. 3C Components:

  3. (1) Optical Components

    • 1Lens Supply Status

The main lens manufacturers include Japanese, Taiwanese, South Korean and mainland Chinese companies. The market shares are as follows:

  • a. Japanese lens factories have a market share of about 10%, and the important manufacturers include Kantatsu and Fujinon.

  • b. Taiwanese lens factories have a market share of about 35~40%, and the important manufacturers include Largan, Genius Electronic Optical, Newmax Technology, Ability Opto-Electronics Technology and our company

  • c. South Korean lens factories have a market share of about 25~30%, and the important manufacturers include Diostech, Kolen and Sekonix.

  • d. The mainland Chinese lens factories have a market share of about 25%, and the important manufacturers include Sunny, AAC and O-film.

  • e. Lens factories in other regions have a market share of about 5%.

  • Japanese manufacturers, the main lens manufacturers, have a conservative market share in recent days and are not actively expanding their factories. Taiwanese manufacturers, such as Largan, Genius Electronic Optical and Ability Opto-Electronics Technology, due to mobile phones’ multi-lenses and the addition of AR, MR and TOF to special application products, have a positive attitude towards expansion.

  • 2Lens Demand Status

The Group is a professional manufacturer of lenses, and mobile phones are the main source of demand for the lens industry. The main terminal applications of lenses include smartphones, NBs and tablets. Among them, smartphones account for the highest proportion of shipments. The 2021 estimated shipment volume by each research unit compiled by the company is as follows:

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Product
name		 Estimated
shipment
volume
(production
volume)		 Annual
growth
rate		 Explanation
Smartphones 1.36 billion
units		 9% Looking forward to 2021, the global
smartphone industry is expected to
recover due to the increasingly stable
lifestyle.
Through
periodic
replacement
demand
and
the
support of emerging markets, it is
estimated
that
the
total
annual
production will grow to 1.36 billion
units, an annual growth of 9%. From
the perspective of brand rankings,
Huawei’s
annual
production
performance was affected by the US
ban and its split with Honor, and its
ranking dropped to the seventh.
NB 217 million
units		 8.6% According to the Display Research
Office of TrendForce, thanks to the
effects of the housing economy due
to the epidemic, the global notebook
shipment in 2020 not only exceeded
200 million units for the first time, but
the annual growth rate also hit a new
high of 22.5%. However, compared
with the booming demand for laptops
after the resumption of OEM work in
the second quarter of last year, now
the epidemic has become severe
again worldwide, and countries have
implemented border controls and
closed cities. Therefore, it is difficult
to determine the market trend in the
second half of 2021 at this stage. It is
currently estimated that the 2021
global notebook shipment will have a
chance to reach 217 million units, an
annual growth of 8.6%. It is worth
mentioning
that
Chromebooks’
contribution to the notebook market
cannot be underestimated due to the
continuous increase in demand for
distance
learning.
Chromebooks
accounted for 14.8% of the global
notebook shipment in 2020, and it is
expected that the proportion of total
shipment will rise to 18.5% in 2021.

3Supply and Demand Status and Growth of Special Applications a. From 2018, 3D sensing applications are expected to be fully introduced

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to Apple mobile phone, tablet and NB product lines; in addition, the gradual follow-up of Android OS and mainland Chinese brand mobile phones and the stimulation of AR/VR/MR somatosensory applications will drive multiple growths of the consumer electronics application market to reach US$11.3 billion in output value in 2022, thus playing the role of the largest application market.

  • b. Industrial and commercial applications will drive the second wave of growth of 3D sensing. With the industry 4.0 trend, 3D sensing is driven by robotic arm visual picking, guidance, reverse engineering, optical inspection, unmanned vehicles, etc., and the application penetration rate is increasing day by day. The push of the smart retail facial-recognition mobile payment will also enable industrial and commercial applications to play a role in the second wave of market growth to reach US$3.8 billion in output value in 2022, thus stably ranking the second largest application market.

  • c. It is predicted that the global market size will be US$18 billion in 2022, a growth of 5.7 times from US$3.14 billion in 2017. Consumer electronics applications will account for 63%, followed by industrial and commercial applications which will account for approximately 21%; the proportion of other applications will be relatively low.

  • d. From 2020 to 2022, 3D image sensing technology will be fully expanded to IoT applications, and markets including consumer electronics, industrial and commercial, automotive, medical and aerospace are expected to take off simultaneously. It is expected that the growth rate of the annual output value from 2018 to 2021 will reach a high level between 48% and 63%, and the global market scale is expected to reach US$17.9 billion in 2022; the development prospects are highly promising.

(2) Future Supply Status and Growth of Optical Communication Components Since the market for the optical communications industry is still in the hands of major international manufacturers, after mergers and acquisitions, bankruptcies and the addition of new competitors in the past few years, the optical communications industry is still under constant restructuring. Large manufacturers have rapidly expanded their technological capabilities and markets by means of mergers and acquisitions and have gained a leading position. Recently, under the influence of the economic crisis, large manufacturers in Europe, the United States and Japan, after considering the cost factor, have made their purchases or production in the Asia Pacific region, thus increasing the business opportunities of OEM or ODM in the Asia Pacific region. Due to the production termination, transfer or outsourcing of some of their product lines, the Asia Pacific market has benefited, and a development niche is offered to Taiwanese manufacturers. The company has also benefited from this development trend. The molding technology of the optical connector produced by the company has been able to control the diameter of the fiber plug-in port within 3 micrometers, and the surface shape of the built-in aspheric optical lens has already met the high-precision requirement of high-speed optical communication, thus successfully making the company one of the three main suppliers. Under the situation of only a small number of suppliers available, the company’s optical connector business will develop steadily.

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3C Retail and Peripheral Products:

The main revenue of this product is the contribution of the reinvested Apple-related products in the Hong Kong sales channel. Because this channel covers physical channels and the trade business, it is not easy to estimate an accurate market share. In addition, as other products are diversified, they also face the difficulty of an accurate estimate of the market share. However, looking forward to the future, the company still aims to increase its market share and profitability of various products.

Apple’s product supply is still smooth, but when new products are on the market, there will be occasional interruptions in supply. Except that the smartphone market is slightly saturated, other wearable Apple Watches and AirPods are still in the high growth stage.

Energy Service Management:

  • (1) The sources of solar market development are mainly the installation of rooftop solar photovoltaic systems such as the roofs of factories (enterprises) in various industrial zones across the country and government public bidding proposals. The construction of 23MW was completed at the end of 2020, and the large-scale development of ground-based land, including the land of the salt industry, is gradually promoted.

  • (2) Continue to develop land-based wind power plants and actively participate in the third-stage development of offshore wind power blocks, in expectation of bringing in the company’s off-site wind power construction project income and long-term maintenance income.

  • (3) Expand the Development of Small Hydropower Generation

  • Hydropower is a clean, self-produced energy source. In line with government policies and the conclusions of the National Energy Conference, environment-friendly small hydropower projects are worthy of active development and promotion in order to make full use of water resources. According to the 2008 National Small Hydropower Assessment Report of the Water Resources Administration, 79 sites were assessed to have small hydraulic potential, of which 47 belonged to rivers and 32 belonged to irrigation channels. In addition, the Taiwan Joint Irrigation Association investigated 27 potential sites for micro-hydro power generation in the initial stage.

System and Peripheral Products:

  • (1) Commercial Scanner

  • 1End Market

High-speed scanners have entered a product stabilization period. As related technologies have reached a mature stage and market demand has stabilized and flattened, the company will continue to move toward image big data and impact processing capabilities.

2Brand Competition

In the low-end market, the three major brands of Epson, Fujitsu and Brother are rushing to capture the high-end market. In addition, the portable automatic document feed scanner market has grown steadily. Brands such as Epson and Brother have actively entered the market. In recent years, they have launched new models to capture the market. 3Future Development

Artificial intelligence technology has begun to sprout among high-speed scanners, especially in applications related to document

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classification and automation, providing users with a more convenient mode of use. For the new generation of scanners, it has become an R&D focus that various companies are competing to invest in.

  • (2) Multifunction Printer Market

  • 1Desktop Multifunctional Business Machines:

Miniaturization and low price have become the trend of business machines in recent years, especially for the home market. At the same time, various companies have begun to provide lower-cost solutions for single-sheet printing, especially the original design models with continuous ink supply or even continuous carbon (powder) supply have become the mainstream of the market. As far as brand manufacturers are concerned, not only can they continue to actively oppress compatible consumables (ink and toner) on the market, but at the same time, they can also keep the profits of consumables to themselves as much as possible.

2Large Multifunctional Copiers:

HP and Epson have developed inkjet copiers that have the characteristics of low cost, low energy consumption, and low pollution but also have a printing speed that is superior to traditional copiers. Therefore, they have created considerable pressure for traditional Japanese copier companies and may produce a crowding effect among brands.

3Evolution of New Technology:

In addition to the industrial revolution that artificial intelligence technology may bring, related office automation technology may have the opportunity to enter the new industrial automation field, bringing further industrial cooperation and business opportunities to Industry 4.0.

  1. Competitive Niche

  2. 3C Components:

  3. (1) The unit focuses on the R&D and manufacturing of high-precision optical plastic components and lenses; we combine ultra-precision mold machining technology, high-precision mold manufacturing technology and automated manufacturing process, and have the ability to master and penetrate the upstream, midstream, and downstream of the industrial supply chain to provide full service to International customers.

  4. (2) The management, R&D, and manufacturing teams combine the operation experience of industry-academia and multinational enterprises, share the same overall goals, and continuously challenge and make breakthroughs in optical technology and manufacturing processes to give full play to the company’s overall capabilities.

  5. (3) Deeply culture optical communication components, and undertake OEM orders from major international customers with the integration of optical, mechanical and electrical technology and experience.

  6. 3C Retail and Peripheral Products:

  7. (1) Apple’s product channels have strong service capabilities and can reduce operating risks through diversified operating methods.

  8. (2) Leverage the Group’s leading MFI technology to accelerate the development of Apple-related peripheral products.

  9. (3) Leverage the Group’s supply chain resources to continuously improve the production capacity and product quality.

82

  • (4) Leverage the Group’s Apple product stores in mainland China, Hong Kong and Taiwan to develop product channels.

Energy Service Management:

The management team responsible for energy service management has rich experience in constructing and maintaining power plants. In addition to focusing on the investment, development and operation of renewable energy power plants, it is responsible for the full range of services, including power plant turnkey engineering and maintenance, from site survey, evaluation, planning, design, certificate application, installation and construction, technician certification, engineering control, city power parallel metering to warranty, maintenance and management after completion (one-stop integrated service).

System and Peripheral Products:

  • (1) Continuous evolution of scanning control chips

In addition to the low cost, low power consumption, and high flexibility features of the new generation of scanning chips that the company has developed and introduced into mass production, the company will effectively produce more intelligent scanners with AI chips that have gradually matured in the market.

  • (2) Advantages of miniaturized and intelligent product design

Under the long-term technology accumulation of commercial and portable scanner products, the company’s incorporation of derivative design of related technologies into home-type business machines has become a special niche for the next generation of products and has also won praise and cooperation opportunities of many customers. The accumulation of related patents has also constructed a profit base higher than that of the company’s peers.

  • (3) Long-term stable quality has won the trust of international manufacturers

The quality persistence and requirement for customers over the years have become the company’s strongest competitive advantage. At the same time, the company has built an excellent bond and cooperated with brand customers in terms of supply chain management and flexibility under the highly changing market, thus being able to maintain a long-term stable relationship with them.

  • (4) Continue to combine AI artificial intelligence and big data with the good image processing capability of Foxlink Image Technology, integrate the AOI concept, optimize the design through potential industries and customers, and think about how to stand out from existing competitors and upgrade AOI technology to obtain patents and stabilize production.

  • Favorable and Unfavorable Factors of Development Prospects and Countermeasures

  • 3C Components:

  • (1) Favorable Factors

    • 1Main Business Contents and Development Prospects

    • a. In order to enhance the camera function, consumer electronic products and smartphones have launched multi-lens products and special wearable

    • lenses which are under development for automobiles and security surveillance; this will help expand the demand for optical components.

    • b. The wide use of multimedia products, the increasing popularity of optical fiber networks, and consumers’ demand for transmission quality and

83

“cloud services” have greatly increased the demand for optical communication components.

  • 2Position in the Industry

  • a. The R&D team is strong and complete, and the processing quality is affirmed by customers.

  • b. The company is one of the few manufacturers that can provide high-pixel lenses.

  • 3Supply Status of Main Raw Materials

The company has long-term cooperation with raw material suppliers; the supply relation is stable and normal, and the prices are stable.

  • 4Sales Status of Main Products

  • a. The company’s product quality and delivery time can meet the requirements of international manufacturers.

  • b. It takes a long time for the certification of optical communication components, and it is not easy for competitors to enter.

  • (2) Unfavorable Factors

  • 1Main Business Contents and Development Prospects

As the market is vast, there are many competitors.

  • 2Position in the Industry

The business scale is still small and the market share is still low.

  • 3Supply Status of Main Raw Materials

Plasticized raw materials are formulated, and the prices are not easy to fall.

  • 4Sales Status of Main Products

Compete with industry leaders.

  • (3) Countermeasures

  • 1Main Business Contents and Development Prospects

  • a. On the product side, continue to expand product specifications, with 16 million pixels to 64 million pixels as the main products for shipment, and develop higher pixel products and products that meet market applications.

  • b. For marketing, actively develop new products and new customers.

  • 2 Position in the Industry

Timely expand production capacity, increase yield, and enhance product competitiveness.

  • 3Supply Status of Main Raw Materials

Start from product design to provide multiple utilities with one mold and reduce material consumption and costs.

  • 4Sales Status of Main Products

Automate production, improve product yield, and provide customers with better services.

3C Retail and Peripheral Products:

  • (1) Favorable Factors

1In recent years, as the gaps among the technical and production capabilities of various manufacturers have been greatly narrowed, the mastery of marketing channels has become the main reason for the rapid market occupation of commodities. The Apple product channel operated by the company’s subsidiary in Hong Kong has reached a certain scale. It is attractive to accessory suppliers to accelerate their introduction of peripheral accessories, enrich the types of accessories, and form a virtuous circle of the channel’s growth performance.

84

  • 2The Apple product channel operated by the company’s subsidiary in Hong Kong focuses on serving consumers in innovative ways.

  • In this era of meager profit, we win with our high-quality and diverse

  • services.

  • (2) Unfavorable Factors and Countermeasures

  • 1High rent in Hong Kong

Countermeasure: For stores whose revenue and profit are

disproportionate to their rents, shut them down and look for new stores in areas where the profit can support the rent.

  • 2Wide fluctuation of exchange rate: Recent international exchange rates fluctuate widely and affect the control of costs.

Countermeasure: Closely observe price fluctuations in the foreign exchange market, and use various hedging methods to minimize potential risks.

Energy Service Management:

  • (1) Favorable Factor:

The Government is promoting the “Non-nuclear Homeland,” and the renewable energy goals will continue to expand under the green energy policy; these will help the development of the subsidiary’s renewable energy business.

Corporate social responsibility: As of 2020, the estimated benefits of energy power plants (including power generation and construction) are: green energy power generation: 400 million kWh; carbon emission reduction: 213,045 metric tons; 17.75 million trees were planted.

  • (2) Unfavorable Factor and Countermeasure

A large amount of capital is required for capital expenditure, and the cost of capital is high. Countermeasures: Use the advantages of the Group to borrow funds with lower capital costs.

System and Peripheral Products:

  • (1) Favorable Factor:

  • 1The lightweight and miniaturization trend of the scanner market has driven the growth of relevant markets in recent years, and the company’s design advantages can be brought into play under this development trend.

  • 2As the design of the printing engine is gradually changed to the original factory’s continuous ink (carbon) supply, growth in the new generation of multifunctional business machines due to replacement and update is expected.

  • 3The changes in new industries and new technologies have increased the actual demand for commercial scanning; for example, the development of cross-border e-commerce and the rapid improvement of the C to C business model (such as the business opportunities of Taobao in the 1111 Singles Day in recent years) substantially improved the year-on-year growth of the express delivery business, and the demand for the scanning of express delivery related documents continues to increase as a result. Another example is the advancement and wide application of battery technology and cloud file management, increasing the demand for portable wireless cloud scanners to provide more effective and convenient solutions for mobile business people’s file digitization, thus boosting related market demand.

  • 4Artificial Intelligence Technology

The rapid progress of artificial intelligence technology has removed the

85

difficult bottleneck for the sound and image recognition technology in the past and has given more opportunities to the development prospects of digital imaging. Therefore, cross-industry (such as between the medical equipment and the industrial automatic testing industry) entrance opportunities have also increased. 

  - (2) Unfavorable Factors:

     - 1The growth of the scanner market has slowed down, which in turn reduces the willingness and scale of customers to invest in new development projects, and extends the life cycle of products; This will cause considerable pressure on the investment of customers who rely on new development projects.

     - 2In a saturated and highly competitive market environment, customers’ emphasis on cost control will pose considerable challenges to the maintenance of related gross profit.

     - 3Due to the impact of COVID-19 since 2020, the raw material supply chain has been rushing for orders, which has severely affected the production ecology of major manufacturing plants. It has greatly impacted maintaining the stable production of existing models and the trial production of new projects as scheduled.

  - (3) Countermeasures:

     - 1Develop high-end industrial grade scanners for the new generation.

     - 2Continue to develop high-end commercial and industrial scanners, and use the design sharing concept to reduce customers’ development and mold costs, so as to enhance customers’ willingness and ability to introduce new products.

     - 3The company’s layout includes production bases of Taiwan but outside mainland China to avoid the direct impact of the Sino-US trade war.

     - 4Draft the AOI development schedule and the actual machine plan in conjunction with the development of AI and big data and through the existing image development plan; confirm the potential market in a limited time, and seize development opportunities as soon as possible together with state agencies and the parent company.

     - Accelerate product development for other industrial applications in order to increase the momentum of long-term business growth.

     - The shortage of raw materials in 2020 will continue into 2021 and will become more serious. Through the procurement strategy, the company will pay attention to market trends and deploy in advance together with customers to reduce the market impact due to huge fluctuations in the raw materials market.

  • (II) Important Applications and Production Process of Main Products

  • Important Applications of Main Products

Main Products Important Applications
Optical Components Used for photography, with applications on smartphones, tablet
computers, game consoles, notebook computers, desktop
computers, digital cameras, camera phones, wearable products,
security sensing applications, projectors and rear projection TVs.
Optical
Communication
Components		 Ports that allow active insertion and removal of standard optical
fiber terminals to guide light so as to improve the efficiency of light
energy application from the light source to the optical fiber and
from the optical fiber to thephotodetector.

86

Apple products Consumer communication products and entertainment or data
processing equipment used by individuals or businesses.
Memory Products Used in personal computers, printers and other information
products and as data access or transmission equipment.
Mobile
peripheral
products
Supporting various consumer entertainment products,
communication products and data processing equipment, and
used for car startup and outdoor camping power.
Power
plant
investment
and
energy services

Power plant investment and development and clean energy
services.
Scanners Optical image input can scan flat text, picture data and negatives,
and store them in computers for editing, modification, and output
via the desktop typesetting system.
Automatic Paper
Feeder		 Automatic paper feed module placed on scanners, multifunction
printers orphotocopiers.

2. Production Process

  • A.Optical Components
Raw
material		 Raw
material		 Raw
material		 Forming Forming Forming Cutting Cutting Cutting Testing Testing Coating Testing
Lens Testing Finished
assembling product

B.Optical Communication Components

Raw
material
Forming
Cutting
Testing		 Finished
product

C. Scanners

87

==> picture [397 x 289] intentionally omitted <==

----- Start of picture text -----

Pre-processing
Online Base Optical machine
processing assembling assembling
Optical Function test Assembling
machining
Testing
Packaging and
storing
----- End of picture text -----

  • (III) Supply Status of Main Raw Materials

The company and various suppliers have established a stable supply cooperation relationship. For the purchase of major components, the company tries to diversify the source of purchase as much as possible to ensure the smoothness of purchase. Most of the raw material suppliers are original factories and well-known domestic and foreign manufacturers. They have a good quality reputation in the industry and have been with the company for many years with a stable cooperative relationship. At present, the supply of major raw materials is sufficient, and the company’s raw material sources are not in short supply.

  • (IV) Names of customers who have accounted for more than 10% of the total purchases (sales) in any of the last two years, their purchases (sales) amount and proportion, and the reasons for the increase or decrease

1. Information of Major Suppliers in the Last Two Years

2019 2019 2019 2019 2020 2020 2020 2020 2021 as of the end of the 1st quarter 2021 as of the end of the 1st quarter 2021 as of the end of the 1st quarter 2021 as of the end of the 1st quarter
Item Name Amount Percentage of Annual
Net Purchase (%)		 Relationship with the
Issuer		 Name Amount Percentage of Annual
Net Purchase (%)		 Relationship with the
Issuer		 Name Amount Percentage of Net Purchase
in the Current Year as of the
Previous Quarter (%)		 Relationship with the Issuer
1 Company
e		 1,706,065 31% None Company
e		 1,223,811
32%		 None Company
e
327,211


33%		 None
Others 3,718,606 69%
Others 2,603,721
68%
Others 658,921
67%
Purchase
Net
amount		 5,424,671 100%
Purchase
Net
amount		 3,827,532
100%
Purchase
Net
amount
986,132
100%

88

2. Information of Major Sales Customers in the Last Two Years

Unit: NT$ thousand

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
2019 2020 2021 as of the end of the 1st quarter
Item Name Amount Percentage of Annual
Net Sales (%)		 Relationship with the
Issuer		 Name Amount Percentage of Annual
Net Sales (%)		 Relationship with the
Issuer		 Name Amount Percentage of Net
Sales (%) in the
Current Year as of the
End of the Previous
Quarter		 Relationship with the
Issuer
1 Customer
C		 1,840,660
21%		 None Customer
C
1,401,613
20%		 None Customer
C
392,628
17%		 None
2 Customer
B		 851,647
10%		 None Customer
F
732,348
10%		 None Customer
G
387,624
17%		 Related
Party
3 Customer
A		 659,475
7%		 None Customer
A
661,212
9%		 None Custmer
F		 277,571
11%		 None
Others 5,488,377
62%
Others 4,258,188
61%		 Others 1,197,178
55%
Net sales
amount		 8,840,159 100% Net sales
amount		 7,053,361 100% Sales
Net
amount		 2,255,001
100%

Reason for increase or decrease: Customer F’s acceptance of customer orders increased from the previous period.

(V) Production Value of the Last Two Years

) Production Value of the Last Two Years ) Production Value of the Last Two Years ) Production Value of the Last Two Years ) Production Value of the Last Two Years ) Production Value of the Last Two Years ) Production Value of the Last Two Years ) Production Value of the Last Two Years
Unit: 1000 units/NT$thousand
Year
Production Value
Major Product		 2019 2020
Production
Capacity		 Production
Volume		 Output
Value		 Production
Capacity		 Production
Volume		 Output
Value
Optical and optical
communication
components		 180,000
51,892		 347,066
180,000
69,348
260,479
System and peripheral
products		 9,000
8,841		 3,866,54
1
2,600
2,490
2,859,507
Others 600 598 140,583 275 263 93,355
Total 189,600
61,331		 4,354,19
0
182,875
72,101
3,213,341

89

(VI) Sales Volume Value of the Last Two Years

Unit: 1000 units/NT$ thousand

Unit: 1000 units/NT$thousand Unit: 1000 units/NT$thousand Unit: 1000 units/NT$thousand Unit: 1000 units/NT$thousand
Year
Value of Sales
Volume
Major Product		 2019 2020
Domestic sales Export Domestic sales Export
Amount Value Amount Value Amount Value Amount Value
Optical and optical
communication
components		 2,069
34,305
52,106
790,105
1,530		 88,798
73,393
396,145
System and peripheral
products		 0
0
9,955		 5,108,513
0		 0
3,014		 4,428,378
Others 887 533,380
43,786		 2,373,856
212		 598,768
4,904		 1,541,272
Total 2,956 567,685 105,847 8,272,474
1,742		 687,566
81,311		 6,365,795

III. Number of employees and the average length of service, average age and distribution of education level of the employees in the last two years and as of the publication date of the annual report

Year 2019 2020 The current year as
of April 30,2021
Number of
employees		 Clerical staff 1,197
1,279		 1,209
Operators 2,238
2,177		 1,880
Total 3,435
3,456		 3,080
Average age 27.63 28.60 29.30
Average years of
service		 3.06 3.33 3.35
Distribution of
education level		 PhD 0.03% 0.03% 0.06%
Master’s
degree		 3.70% 3.91% 4.27%
Junior college 22.01% 21.04% 25.77%
High school 11.00% 19.99% 10.42%
Below high
school		 63.26% 55.03% 59.48%

IV. Environmental Protection Expenditure Information

  • (I) Taking environmental protection as the starting point, the company selects the wash-free process with the least pollution in the production process, and at the same time, considers recyclable materials in material selection. Strictly follow the requirements of international environmental protection organizations and various environmental protection measures; the company has dedicated personnel for labor safety, hygiene and factory affairs who are responsible for the implementation of various environmental protection.

  • (II) The company has not been punished for environmental pollution in the most recent

90

year and as of the publication date of the annual report.

  • (III) Implementation measures in response to the EU directives on the restriction of hazardous substances: In response to the rising awareness of environmental protection, the EU passed the Restriction on the Use of Hazardous Substances (RoHS) in 2003. The requirements of the directives fully promote the control of prohibited substances, and at the same time, make every effort to develop materials that meet environmental protection requirements.

V. Labor-management Relationship

  • (I) Various employee welfare measures, advanced studies, training, retirement systems and their implementation status, as well as the agreements between labor and management and various employee rights protection measures:

  • The company has an employee welfare committee to facilitate the promotion of various welfare measures. The company has always treated its employees with integrity, and the labor-management relationship has always been harmonious. A complete system for employee training, communication, incentives and welfare has already been established.

  • Welfare Measures Provided by the Company

    • (1) Generous Welfare Items:

      • The company provides gift money or gifts for employee birthdays and the three major festivals, labor retirement pension allocation, employee travel subsidy, parking space, meal subsidy and various club activities.

    • (2) Perfect Insurance and Protection: In accordance with government regulations, the company has purchased labor insurance for employees and national health insurance and complete group hospitalization medical insurance, life insurance, and accident insurance for employees and their family members.

    • (3) Subsidies for Wedding, Funeral and Emergencies: There are various employee subsidies for events such as weddings, funerals and emergencies, including marriage, childbirth, condolences for major injuries and illnesses, and bereavement of employees and relatives.

  • Further Studies and Training The company attaches great importance to employee training and

encourages colleagues to take the initiative to learn, and plans training courses for employees in general knowledge, professional technology and management for different job grades, in the hope that through training, the company can create excellence and improve technical standards, and promote the common growth of employees and the company, in order to create the company’s best operating performance.

  1. Employee Retirement System: The company has established employee retirement measures covering all officially recruited employees.

    • (1) Allocation of Retirement Reserves on a Monthly Basis: For those to whom the pension provisions of the Labor Standards Act apply, the company allocates retirement reserves on a monthly basis in accordance with the requirement of the Act.

    • (2) Individual Labor Pension Account: For those to whom the retirement pension system of the Labor Pension Act applies, the company reserves 6% of the monthly wage in compliance with

91

the Labor Pension Act according to the monthly wage allocation tier table approved by the Executive Yuan. It deposits it in a special labor pension account established for the employees at the Labor Insurance Bureau.

  • (II) The company has no labor dispute agreement in the last year and as of the printing date of the annual report.

VI. Important Contracts

Contract
nature		 Counterparty Contract start and end
dates		 Main content Restrictions
The company shall bear
Development November 22, 2010 ~
the responsibility of

Company A		 Development contract
contract termination date confidentiality of
technical information.
The company shall bear
Development February 26, 2020~
the responsibility of

Company A		 Development contract
contract February 26, 2021 confidentiality of
technical information.
OEM November 1, 2013 ~ The company’s OEM
Company B OEM production
contract termination date manufacturing
Manufacture 1. Confidentiality clause
December 9, 2019 ~
and sales Company B OEM production 2. Intellectual property
termination date
contract right guarantee clause
The company shall bear
Development May 18, 2017 ~
the responsibility of

Company C		 Development contract
contract termination date confidentiality of
technical information.
OEM December 10, 2013 ~ The company’s OEM
Company D OEM production
contract termination date manufacturing
The company shall bear
Development January 1, 2018 ~
the responsibility of

Company E		 Development contract
contract termination date confidentiality of
technical information.
The company shall bear
Development April 22, 2020~March 31,
the responsibility of

Company E		 Development contract
contract 2021 confidentiality of
technical information.
Manufacture 1. Confidentiality clause
and sales Company E Starting April 22, 2020 OEM production 2. Intellectual property
contract right guarantee clause
Manufacture 1. Confidentiality clause
Starting December 2,
and sales Company E OEM production 2. Intellectual property
2020
contract right guarantee clause
The company shall bear
Development the responsibility of

Company E		 Starting April 22, 2020 Development contract
contract confidentiality of
technical information.
The company shall bear
Development the responsibility of

Company E		 Starting April 22, 2020 Development contract
contract confidentiality of
technical information.
OEM January 20, 2017 ~ The company’s OEM
Company F OEM production
contract termination date manufacturing
The company shall bear
Development November 6, 2019~June
the responsibility of

Company G		 Development contract
contract 5, 2020 confidentiality of
technical information.
Sales November 20,
Company H Indirect product sales None
contract 2019~November 19,2022

92

Contract
nature		 Counterparty Contract start and end
dates		 Main content Restrictions
Investment The investment amount is
Company I Starting October 9, 2020 None
contract NT$690 million.
The company shall be
Purchase Power generation
Company J Starting March 15, 2019
responsible for
contract equipment procurement
confidentiality.
Changbin water surface
Contract of November 19,2019~July
Company K
solar power plant		 None
undertaking 8, 2025
construction project
Offshore wind power
Contract of June 15, 2020~December
Company L
construction, a contract		 None
undertaking 31, 2027
value of NT$62.8 billion.
Project management
Service August 19,
Company M
service of documents		 None
contract 2020~December 31, 2025
submitted for review
Contract of October 23, 2020~May 5, Civil engineering
Company N None
undertaking 2029 undertaking contract
Contract of October 23, Civil engineering
Company N None
undertaking 2020~September6,2029 undertaking contract
Investment
Company O Starting October 30, 2020 Investment contract None
contract
Right
November 11,

pledging		 Company P Right pledge setting None
2020~December 31, 2025
contract
Wind turbine
Contract of Starting November 11,
Company P transportation and None
undertaking 2020
installation
Contract of November 26, Turnkey project
Company Q None
undertaking 2020~December31,2026 undertaking contract
Service
Company Q Starting January 1, 2022 System maintenance None
contract
Contract of Starting November 30, Project undertaking
Company R None
undertaking 2020 contract
Contract of Starting December 10,
Company S Equipment installation None
undertaking 2020
Service December 31,
Company T System maintenance None
contract 2020~December31,2039
Electrical and mechanical
Contract of Starting December 28,
Company U engineering project None
undertaking 2020
undertaking contract
Purchase
Company V Starting October 15, 2020 Equipment purchase None
contract
Purchase Starting December 25,
Company W Equipment purchase None
contract 2020
Credit March 1, 2017~February The credit amount is
Jih Sun Bank None
contract 29,2020 NT$300 million.
Credit November 29, The credit amount is
Jih Sun Bank None
contract 2018~November 29,2021 NT$300 million.
Credit January 19, The credit amount is
Export-Import Bank None
contract 2019~January19,2020 NT$500 million.
Credit November 12, The credit amount is
Yuanta Bank None
contract 2019~November 12,2021 NT$300 million.
Credit December 25, The credit amount is
Export-Import Bank None
contract 2019~December 25,2020 NT$500 million.
Credit December 4, The credit amount is
Yuanta Bank None
contract 2019~December3,2021 NT$300 million.
Credit May 31, 2019~May 31, The credit amount is NT$1
Bank SinoPac
None
contract 2020 billion.
Credit KGI Bank June14,2019~June14, The credit amount is None

93

Contract
nature		 Counterparty Contract start and end
dates		 Main content Restrictions
contract 2021 NT$400 million.
Credit The credit amount is
E.Sun Bank July 2, 2019~July 2, 2020 None
contract NT$400 million.
September 11,
Credit The credit amount is
Mega Bank 2019~September 11, None
contract NT$300 million.
2020
Credit Taiwan Cooperative
September, 18,		 The credit amount is
None
contract Bank 2019~Setember 12,2021 NT$500 million.
Credit February 3, The credit amount is
Bank of Taiwan None
contract 2020~February 3,2022 NT$300 million.
Credit March 31, 2020~March The credit amount is
Cathay Bank None
contract 31,2021 NT$300 million.
Credit July 20, 2020~July 20, The credit amount is
E.Sun Bank None
contract 2020 NT$400 million.
Credit July 21, 2020~July 21, The credit amount is
KGI Bank None
contract 2021 NT$400 million.
Credit August 7, 2020~August 6, The credit amount is
Mega Bank None
contract 2021 NT$300 million.
Credit Taiwan Cooperative
August 27, 2020~August		 The credit amount is
None
contract Bank 27,2022 NT$500 million.
Credit September 23, 2020~July The credit amount is
Jih Sun Bank None
contract 9,2022 NT$400 million.
October, 29,
Credit The credit amount is
Entie Bank 2020~September 30, None
contract NT$300 million.
2022
Credit April 2, 2019~January, 24,
The credit amount is
Jih Sun Bank None
contract 2021 NT$300 million.
Credit May 20, 2019~May 20, The credit amount is
Yuanta Bank None
contract 2021 NT$300 million.
Credit December 4, The credit amount is
Yuanta Bank None
contract 2019~December3,2021 NT$300 million.
Credit August 31, 2020~August The credit amount is NT$1
Bank SinoPac
None
contract 30,2021 billion.
September 23,
Credit The credit amount is
Yuanta Bank 2020~September 22, None
contract NT$300 million.
2022
Credit May 22, 2019~May 31, The credit amount is
Bank SinoPac None
contract 2020 NT$1.2 billion.
Credit November 6, 2019~May The credit amount is
E.Sun Bank None
contract 5,2020 NT$621 million.
Credit December 18, 2019~May The credit amount is
Mega Bank None
contract 3,2020 NT$550 million.
Credit April 22, 2019~April 19, The credit amount is
Bank SinoPac None
contract 2024 NT$530 million.
Credit International Bills July 29, 2019~July 28, The credit amount is
None
contract Finance 2020 NT$500 million.
Transfer of creditor’s rights
Financial
Bank SinoPac Starting March 11, 2020
with a contract amount of
None
contract
NT$530 million.
Credit June 16, 2020~June 30, The credit amount is
Bank SinoPac None
contract 2021 NT$530 million.
Credit June 16, 2020~June 30, The credit amount is
Bank SinoPac None
contract 2021 NT$1.2 billion.
Cheng Uei
Credit July 30, 2020~September The credit amount is NT$4

Precision Industry
None
contract 30, 2020 billion.
Co., Ltd.
Credit International Bills September 25, The credit amount is
None
contract Finance 2020~September 24, NT$500 million.

94

Contract
nature		 Counterparty Contract start and end
dates		 Main content Restrictions
2021
Credit September 30, The credit amount is
Bank SinoPac None
contract 2020~December31,2020 NT$1.35 billion.
Cheng Uei
Credit October 1, 2020~March The credit amount is NT$4

Precision Industry
None
contract 31, 2021 billion.
Co., Ltd.
Credit November 13, The credit amount is
Bank SinoPac None
contract 2020~December30,2020 NT$1.935 billion.
Credit Chinatrust November 30, The credit amount is
None
contract Commercial Bank 2020~December30,2020 NT$11.4 billion.
Credit December 4, The credit amount is
Yuanta Bank None
contract 2019~December3,2021 NT$300 million.
Credit July 15, 2020~June 30, The credit amount is
Bank SinoPac None
contract 2021 NT$300 million.

95

VI. Financial Overview

  • I. Condensed Balance Sheet and Comprehensive Income Statement for the Last Five Years

  • (I) 1. Condensed Consolidated Balance Sheet - Adopting the International Financial Reporting Standards

Unit: N0T$ thousand

Year
Item		 Year
Item
Financial Information for the Last Five Years (note 1)
Financial Information for the Last Five Years (note 1)
Financial Information for the Last Five Years (note 1)
Financial Information for the Last Five Years (note 1)
Financial Information for the Last Five Years (note 1)		 Financial
Information
for the
current year
as of
March 31,
2021
(note 2)
2016 2017 2018 2019 2020
Current assets 1,788,751 1,851,765 6,902,925 6,740,195 13,443,029 12,261,402
Property, plant and
equipment		 1,599,352 1,444,461 3,510,082
5,279,784
3,411,488
3,331,558
Intangible assets 906 0 1,056,706 1,027,695 985,094
983,019
Other assets 135,736
438,150		 4,270,314
5,160,244
4,967,398
5,113,659
Totalassets 3,524,745 3,734,376 15,740,027 18,207,918 22,807,009 21,689,638
Current
liabilities		 Before
distribution		 997,945 1,105,602 5,169,736
5,813,251		 10,542,565
9,632,830
After
distribution		 1,190,409 1,298,066 5,362,200
6,428,856		 10,788,807
9,632,830
Non-currentliabilities 123,578 183,735 3,315,824
5,530,512
4,087,189		 3,188345
Total
liabilities		 Before
distribution		 1,121,523 1,289,337 8,485,560 11,343,763 14,629,754
12,821,175
After
distribution		 1,313,987 1,481,801 8,678,024 11,959,368 14,875,996
12,821,175
Equity attributable to
owners of the parent
company		 2,403,222 2,445,039 7,171,853
6,704,305
7,058,599
7,025,893
Share capital 962,320
962,320		 2,462,421
2,462,421
2,462,421
2,462,421
Additionalpaid-incapital
861,858		 861,858 5,019,688 4,237,390 4,198,013 4,103,320
Retained
earnings		 Before
distribution		 628,603
681,177
(165,483)
(273,604)
98,209
120,959
After
distribution		 436,139
488,713
(357,947)
(889,209)
24,336
120,959
Other rights (49,559) (60,316) (144,773) 278,098 299,956 339,193
Non-controlling interests
0
0
159,810
159,850
1,118,656
1,842,570
Total
equity		 Before
distribution		 2,403,222 2,445,039 7,254,467
6,864,155
8,177,255
8,868,463
After
distribution		 2,210,758 2,252,575 7,062,003
6,248,550
7,931,013
8,868,463

Note 1: On October 1, 2018, the company was formed as a new holding company jointly by Power Quotient International Co., Ltd., Foxlink Image Technology Co., Ltd. and Glory Science Co., Ltd. The method of financial report disclosure in 2018 was based on the IFRS Questions and Answers issued by the Accounting Research and Development Foundation of the Republic of China on October 26, 2018. Because Glory Science Co., Ltd. swapped every one of its ordinary shares for one ordinary share of

96

the company, this transaction is regarded as a restructuring of the organization under joint control. It is essentially a continuation of Glory Science Co., Ltd. Therefore, the financial report before the establishment of the company was based on the book value of the financial report of Glory Science Co., Ltd. for recognition of the relevant assets and liabilities, and Glory Science Co., Ltd. is regarded as a subsidiary after the merger and the financial report for the comparative period is prepared accordingly.

In order to promote the effective integration of group resources, the subsidiary Power Quotient International Co., Ltd. swapped the shares of its 89.29% subsidiary Foxwell Energy Corporation Ltd. on December 27, 2019 through the resolution of the shareholders’ meeting to become a 100% subsidiary of Hsingwei Co., Ltd. After the share swap, Power Quotient International Co., Ltd. holds 76.56% of the shares of Hsingwei Co., Ltd., and this is considered a restructuring of the organization under joint control. When preparing comparative consolidated financial statements, it should be regarded as a merger from the beginning, and the 2018 consolidated financial statements were re-compiled accordingly.

The financial information of each year above has been audited and certified by the independent auditor.

  • Note 2: The independent auditor has reviewed the financial information for the current year ending March 31, 2021.

97

2. Condensed Consolidated Comprehensive Income Statement - Adopting the International Financial Reporting Standards

Unit: NT$ thousand

Year
Item		 Financial Information for the Last Five Years (note 1) Financial Information for the Last Five Years (note 1) Financial Information for the Last Five Years (note 1) Financial Information for the Last Five Years (note 1) Financial Information for the Last Five Years (note 1) Financial
Information for
the current year
as of March 31,
2021 (note 2)
2016 2017 2018 2019 2020
Operatingincome 1,990,262 1,720,918 3,365,313 8,840,159 7,053,361
2,251,001
Operatingmargin 748,470 564,637
326,017
613,528		 884,626 593,870
Operating profit and
loss		 416,769
270,295
(152,780)
(533,296)
(220,654)
281,643
Non-operating income
and expenditure		 (24,153)
47,635
14,269
305,166
512,107
(3,662)
Net profit before tax 392,616
317,930
(138,511)
(228,130)
291,453
277,981
Current net profit of
continuing business
units		 253,868
245,312
(171,064)
(197,033)
179,775
201,844
Interests in discontinued
units
0
0
0
0
0
0
Net profit (loss) for the
period		 253,868
245,312
(171,064)
(197,033)
179,775
201,844
Other comprehensive
income of the current
period
(net after tax)		 (78,732)
(11,031)
(86,426)
413,575
25,590
45,137
Total comprehensive
income for the current
period		 175,136
234,281
(257,490)
216,542
205,365
246,981
Net profit attributable to
owners of the parent
company		 253,868
245,312
(166,692)
(189,059)
83,599
96,623
Net profit attributable to
the equity of previous
holders under joint
control		 0
0
(3,256)
(17,953)
0
0
Net profit attributable to
non-controlling interests		 0
0
(1,116)
9,979
96,176
105,221
Total comprehensive
income attributable to
owners of the parent
company		 175,136
234,281
(248,458)
234,752
111,706
135,860
Total comprehensive
income attributable to
the equity of previous
holders under joint
control		 0
0
(6,512)
(18,250)
0
0
Total comprehensive
income attributable to
non-controllinginterests		 0
0
(2,520)
40
93,659
111,121
Earningsper share 2.66
2.55
(1.24)		 (0.77) 0.34
0.39

Note 1: On October 1, 2018, the company was formed as a new holding company jointly by Power Quotient International Co., Ltd., Foxlink Image Technology Co., Ltd. and Glory Science Co., Ltd. The method of

98

financial report disclosure in 2018 was based on the IFRS Questions and Answers issued by the Accounting Research and Development Foundation of the Republic of China on October 26, 2018. Because Glory Science Co., Ltd. swapped every one of its ordinary shares for one ordinary share of the company, this transaction is regarded as a restructuring of the organization under joint control. It is essentially a continuation of Glory Science Co., Ltd. Therefore, the financial report before the establishment of the company was based on the book value of the financial report of Glory Science Co., Ltd. for recognition of the relevant assets and liabilities, and Glory Science Co., Ltd. is regarded as a subsidiary after the merger and the financial report for the comparative period is prepared accordingly. In order to promote the effective integration of group resources, the subsidiary Power Quotient International Co., Ltd. swapped the shares of its 89.29% subsidiary Foxwell Energy Corporation Ltd. on December 27, 2019 through the resolution of the shareholders’ meeting to become a 100% subsidiary of Hsingwei Co., Ltd. After the share swap, Power Quotient International Co., Ltd. holds 76.56% of the shares of Hsingwei Co., Ltd., and this is considered a restructuring of the organization under joint control. When preparing comparative consolidated financial statements, it should be regarded as a merger from the beginning, and the 2018 consolidated financial statements were re-compiled accordingly.

The financial information of each year above has been audited and certified by the independent auditor.

  • Note 2: The independent auditor has reviewed the financial information for the current year ending March 31, 2021.

99

(II)1. Condensed Individual Balance Sheet - Adopting the International Financial Reporting Standards

Unit: NT$ thousand

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
Year
Item
Financial Information for the Last Five Years














2016 2017 2018 2019 2020
Current assets 0 0 4
665		 352,603
Property, plant and equipment 0 0 0
0
0
Intangible assets 0 0 0
0
0
Other assets 2,403,222
2,445,039
7,098,760
7,623,551
7,876,626
Totalassets 2,403,222
2,445,039		 7,098,764
7,624,216		 8,229,229
Current
liabilities		 Before distribution
0		 0 4,107
619,911
770,630
After distribution 0 0 4,107
619,911
1,016,872
Non-currentliabilities 0 0 0 300,000 400,000
Total
liabilities		 Before distribution
0		 0 4,107
919,911
1,170,630
After distribution 0 0 196,571
1,535,516
1,416,872
Equity attributable to owners of
the parent company		 2,403,222
2,445,039
7,094,657
6,704,305
7,058,599
Share capital 962,320 962,320 2,462,421
2,462,421
2,462,421
Additional paid-in capital 861,858
861,858
5,019,688
4,237,390
4,198,013
Retained
earnings		 Before distribution
628,603
681,177
(165,483)
(273,604)
98,209
Afterdistribution 436,139 488,713 (165,483) (273,604) 24,336
Other rights (49,559)
(60,316)
(144,773)
278,098
299,956
Equity of previous holders under
joint control
0
0
(77,196)
0
0
Treasury stock 0
0
0
0
0
Non-controllinginterests 0 0 0 0
0
Total equity Before distribution
2,403,222
2,445,039		 7,094,657
6,704,305		 7,058,599
After distribution 2,210,758
2,252,575
6,902,193
6,088,700
6,812,357

Note 1: The company was established on October 1, 2018. Before that date, its individual financial report was based on the book value of the financial report of Glory Science Co., Ltd. for recognition of the relevant assets and liabilities, and Glory Science Co., Ltd. is regarded as a subsidiary after the merger and the financial report for the comparative period is prepared accordingly. In order to promote the effective integration of group resources, the subsidiary Power Quotient International Co., Ltd. swapped the shares of its 89.29% subsidiary Foxwell Energy Corporation Ltd. on December 27, 2019 through the resolution of the shareholders’ meeting to become a 100% subsidiary of Hsingwei Co., Ltd. After the share swap, Power Quotient International Co., Ltd. holds 76.56% of the shares of Hsingwei Co., Ltd., and this is considered a restructuring of the organization under joint control. When preparing comparative consolidated financial statements, it should be regarded as a merger from the beginning, and the 2018 consolidated financial statements were re-compiled accordingly.

Note 2: The financial information of each year above has been audited and certified by the independent auditor.

100

2. Condensed Individual Comprehensive Income Statement - Adopting the International Financial Reporting Standards

Unit: NT$ thousand

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
Year
Item
Financial Information for the Last Five Years
2016 2017 2018 2019 2020
Operating income 253,868
245,312
0
0
102,367
Operating margin 253,868
245,312
(165,845)
(281,228)
102,367
Operating profit andloss 253,868 245,312
(169,948)		 (294,358) 77,450
Non-operating income and
expenditure		 0
0
0
87,346
6,149
Net profit before tax 253,868
245,312
(169,948)
(207,012)
83,599
Current net profit of continuing
business units
253,868
245,312
(169,948)
(207,012)
83,599
Interests (loss) of discontinued
units
0
0
0
0
0
Net profit (loss) for the period 253,868
245,312
(169,948)
(207,012)
83,599
Other comprehensive income
of the current period
(net aftertax)		 (78,732)
(11,031)
(85,022)
423,514
28,107
Total comprehensive income
forthe current period		 175,136
234,281
(254,970)
216,502
111,706
Net profit attributable to
owners of the parent company
253,868
245,312
(166,692)
(189,059)
83,599
Net profit attributable to the
equity of previous holders
under joint control		 0
0
(3,256)
(17,953)
0
Total comprehensive income
attributable to owners of the
parent company		 175,136
234,281
(248,458)
234,752
111,706
Total comprehensive income
attributable to the equity of
previous holders under joint
control		 0
0
(6,512)
(18,250)
0
Earningsper share 2.66
2.55
(1.24)		 (0.77) 0.34

Note 1: The company was established on October 1, 2018. Before that date, its individual financial report was based on the book value of the financial report of Glory Science Co., Ltd. for recognition of the relevant assets and liabilities, and Glory Science Co., Ltd. is regarded as a subsidiary after the merger and the financial report for the comparative period is prepared accordingly. In order to promote the effective integration of group resources, the subsidiary Power Quotient International Co., Ltd. swapped the shares of its 89.29% subsidiary Foxwell Energy Corporation Ltd. on December 27, 2019 through the resolution of the shareholders’ meeting to become a 100% subsidiary of Hsingwei Co., Ltd. After the share swap, Power Quotient International Co., Ltd. holds 76.56% of the shares of Hsingwei Co., Ltd., and this is considered a restructuring of the organization under joint control. When preparing comparative consolidated financial statements, it should be regarded as a merger from the beginning, and the 2018 consolidated financial statements were re-compiled accordingly.

Note 2: The financial information of each year above has been audited and certified by the independent auditor.

101

(III) Names of Accountants in the Last Five Years and Their Review Opinions

Year Accounting firm Name of
independent auditor		 Audit opinion
2016 PwC Taiwan Yu-Juan Wang,
Hsiao-Tsi Chou		 Unqualified opinion
2017 PwC Taiwan Yu-Juan Wang,
Hsiao-Tsi Chou		 Unqualified opinion
2018 PwC Taiwan Se-Kai Lin,
Yi-Chang Liang		 Unqualified opinion
subsequent to revision
2019 PwC Taiwan Se-Kai Lin,
Yi-Chang Liang		 Unqualified opinion
subsequent to revision
2020 PwC Taiwan Yi-Chang Liang,
Se-Kai Lin		 Unqualified opinion

Note: The data of Glory Science Co., Ltd. is used for disclosure from 2016 to 2017.

102

II. Financial Analysis for the Last Five Years

(I) Consolidated Financial Analysis - Adopting the International Financial Reporting Standards

Standards Standards
Year
Analysis item		 Financial analysis for the last five years The current year
as of March 31,
2021
(note 2)
2016 2017 2018 2019 2020
Financial
structure
(%)		 Debt to assets ratio 31.82
34.53
53.91
62.30
64.15
59.11
Ratio of long-term
capital to property,
plant and equipment
157.99		 181.99 266.79 209.72 343.52 347.47
Solvency
(%)		 Current ratio 179.24 167.49 133.53 115.95 127.51
127.29

Quick ratio		 161.75 145.03 102.02
85.45		 115.48
116.33
Times interest
earned		 35.13 40.35 -5.02
-2.02		 3.71 8.62
Management capacity Turnover rate of
receivables (times)		 3.35 3.32 3.54 6.31 5.48 6.45
Average cash
collection days		 109 110 103.24 57.82 66.61 56.59
Inventory turnover
rate (times)		 7.28 5.36 3.83 6.36 5.86 7.90
Turnover rate of
payables (times)		 11.18 11.29 4.30 5.92 5.02 6.45
Average sales days 50
68
95.39
57.35
62.29
56.59
Turnover rate of
property, plant and
equipment (times)		 1.28 1.13 1.36 2.01 1.62 2.67
Turnover rate of
total assets (times)		 0.56 0.47 0.35 0.52 0.34 0.40
Profitability Return on assets
(%)		 7.44 6.94 -1.46
-0.65		 1.20 4.11
Return on equity
(%)		 10.55 10.12 -3.53
-2.79		 2.39 9.47
Ratio of net profit
before tax to paid-in
capital (%)		 40.80 33.04 -5.62
-9.26		 11.84 45.16
Net profit rate (%) 12.76
14.25
-5.08
-2.23
2.55
8.97
Earnings per share
(NT$)		 2.66 2.55 -1.24
-0.77		 0.34 0.39
Cash flow
(%)		 Cash flow ratio 51.43 67.11 3.07
5.27		 11.97 -0.39
Cash flow adequacy
ratio
118.70		 128.87 56.91
33.65		 53.83 41.52
Cash reinvestment
ratio		 7.55 11.61 -0.26
-1.93		 7.85 -0.43
Leverage Operatingleverage 2.08 2.65 -2.43
-1.45		 -4.29 2.00

Financial leverage		 1.03 1.03 0.87
0.88		 0.67 1.15

103

Reasons for changes in various financial ratios in the last two years:

  1. The ratio of long-term capital to property, plant and equipment increased by 64% mainly due to the disposal of the subsidiaries Zhangyuan, Beiyuan and Hsingwei Power in 2020, as well as the exclusion of Jiangsu Foxlink New Energy Technology Co., Ltd. from the consolidated report due to a decrease in its investment ratio as it reduced its capital, thus resulting in a substantial decrease in property, plant and equipment.

  2. The quick ratio increased by 35%, mainly due to the substantial increase in current assets in 2020. 3. The times interest earned increased by 284%, mainly due to the loss-to-profit turnaround in 2020. 4. The turnover rate of total assets decreased by 34%, mainly due to the decrease in net sales in 2020.

  3. The return on assets increased by 255% and the return on equity increased by 186%, mainly due to the loss-to-profit turnaround in 2020.

  4. The ratio of pre-tax net profit to paid-in capital increased by 228%, mainly due to the loss-to-profit turnaround in 2020.

  5. The net profit ratio increased by 214% and the earnings per share increased by 144%, mainly due to the loss-to-profit turnaround in 2020.

  6. The cash flow ratio increased by 127%, the net cash flow adequacy ratio increased by 55%, and the cash reinvestment ratio increased by 507%, mainly due to the increase in cash for operating activities resulting from the increase in profit in 2020 and non-distribution of cash dividends.

  7. The operating leverage decreased by 197% and financial leverage decreased by 23%, mainly due to the substantial increase in operating profit in 2020.

  8. Note 1: On October 1, 2018, the company was formed as a new holding company jointly by Power Quotient International Co., Ltd., Foxlink Image Technology Co., Ltd. and Glory Science Co., Ltd. The method of financial report disclosure in 2018 was based on the IFRS Questions and Answers issued by the Accounting Research and Development Foundation of the Republic of China on October 26, 2018. Because Glory Science Co., Ltd. swapped every one of its ordinary shares for one ordinary share of the company, this transaction is regarded as a restructuring of the organization under joint control. It is essentially a continuation of Glory Science Co., Ltd. Therefore, the financial report before the establishment of the company was based on the book value of the financial report of Glory Science Co., Ltd. for recognition of the relevant assets and liabilities, and Glory Science Co., Ltd. is regarded as a subsidiary after the merger and the financial report for the comparative period is prepared accordingly. In order to promote the effective integration of group resources, the subsidiary Power Quotient International Co., Ltd. swapped the shares of its 89.29% subsidiary Foxwell Energy Corporation Ltd. on December 27, 2019 through the resolution of the shareholders’ meeting to become a 100% subsidiary of Hsingwei Co., Ltd. After the share swap, Power Quotient International Co., Ltd. holds 76.56% of the shares of Hsingwei Co., Ltd., and this is considered a restructuring of the organization under joint control. When preparing comparative consolidated financial statements, it should be regarded as a merger from the beginning, and the 2018 consolidated financial statements were re-compiled accordingly. The financial information of each year above has been audited and certified by the independent auditor.

  9. Note 2: The independent auditor has reviewed the financial information for the current year ending March 31, 2021.

104

(II) Individual Financial Analysis - Adopting the International Financial Reporting Standards

Analysisitem Year
 2016 2017 2018 2019 2020
Financial
structure
(%)		 Debt to assets ratio - - 0.06
12.07
14.23
Ratio of long-term
capital to property,
plant and
equipment		 - - - - -
Solvency
(%)		 Current ratio - - 0.10
0.11
45.76
Quick ratio - - 0.10
0.11
45.74
Times interest
earned		 - - - -39.6 9.84
Management
capacity		 Turnover rate of
receivables (times)		 - - - - -
Average cash
collection days		 - - - - -
Inventory turnover
rate (times)		 - - - - -

Turnover rate of
payables (times)		 - - - - -
Average sales days - - - - -
Turnover rate of
property, plant and
equipment (times)		 - - - - -
Turnover rate of
total assets (times)		 0.11 0.10 - - 0.01
Profitability Return on assets
(%)		 10.55 10.12 -3.56 -2.74 1.17
Return on equity
(%)		 10.55 10.12 -3.56 -3.00 1.21
Ratio of net profit
before tax to paid-in
capital (%)		 26.38 25.49 -6.90 -8.41 3.39
Net profit rate (%) 100
100
-		 - 81.67
Earnings per share
(NT$)		 2.66 2.55
-1.24
-0.77		 0.34
Cash flow
(%)		 Cash flow ratio - - 0.10 74.41 41.40
Cash flow adequacy
ratio
-		 - - 33.53 49.21
Cash reinvestment
ratio		 - - - -2.20 4.28
Leverage Operating leverage 1.00
1.00
1.00
1.00		 1.00
Financial leverage 1.00
1.00
1.00
0.98		 1.14

105

Reasons for changes in various financial ratios in the last two years:

  1. The current ratio increased by 42553% and the quick ratio by 42542%, mainly due to the substantial increase in current assets in 2020.

  2. The substantial increase in times interest earned was mainly due to the substantial increase in net profit before tax and interest expenses in 2020.

  3. The return on assets increased by 143% and the return on equity increased by 140%, mainly due to the loss-to-profit turnaround in 2020.

  4. The ratio of pre-tax net profit to paid-in capital increased by 140%, mainly due to the loss-to-profit turnaround in 2020.

  5. Earnings per share increased by 144%, mainly due to the loss-to-profit turnaround in 2020.

  6. The cash flow ratio decreased by 44%, mainly due to the decrease in net cash flow from operating activities and the increase in current liabilities.

  7. The cash flow allowable ratio increased by 47% and the cash reinvestment ratio increased by 294%,

  8. mainly due to the non-distribution of cash dividends in 2020.

  9. Note 1: The company was established on October 1, 2018. Before that date, its individual financial report was based on the book value of the financial report of Glory Science Co., Ltd. for recognition of the relevant assets and liabilities, and Glory Science Co., Ltd. is regarded as a subsidiary after the merger and the financial report for the comparative period is prepared accordingly. In order to promote the effective integration of group resources, the subsidiary Power Quotient International Co., Ltd. swapped the shares of its 89.29% subsidiary Foxwell Energy Corporation Ltd. on December 27, 2019 through the resolution of the shareholders’ meeting to become a 100% subsidiary of Hsingwei Co., Ltd. After the share swap, Power Quotient International Co., Ltd. holds 76.56% of the shares of Hsingwei Co., Ltd., and this is considered a restructuring of the organization under joint control. When preparing comparative consolidated financial statements, it should be regarded as a merger from the beginning, and the 2018 consolidated financial statements were re-compiled accordingly.

  10. Note 2: The financial information of each year above has been audited and certified by the independent auditor.

106

Calculation formula of financial analysis:

  1. Financial structure

  2. (1) Liabilities to assets ratio = total liabilities/total assets

  3. (2) Ratio of long-term capital to property, plant and equipment = (total equity + non-current liabilities)/net property, plant and equipment

2. Solvency

  • (1) Current ratio = current assets/current liabilities

  • (2) Quick ratio = (current assets-inventory-prepaid expenses)/current liabilities

  • (3) Times interest earned = net profit before income tax and interest expense/Interest expense in the current period

3. Management capacity

  • (1) Turnover rate of receivables (times) (including accounts receivable and notes receivable due to business) turnover rate = net sales/balance of average receivables for each period (including accounts receivable and notes receivable due to business)

  • (2) Average cash collection days = 365/turnover rate of receivables

  • (3) Inventory turnover rate = cost of goods sold/average inventory value

  • (4) Turnover rate of payables (including accounts payable and bills payable due to business) = cost of goods sold/balance of payables for each period (including accounts payable and notes payable due to business)

  • (5) Average sales days = 365/inventory turnover rate

  • (6) Turnover rate of property, plant and equipment = net sales/average net property, plant and equipment

  • (7) Turnover rate of total assets = net sales/total average assets

4. Profitability

  • (1) Return on assets = [after-tax profit and loss + interest expense × (1-tax rate)]/average total assets

  • (2) Return on equity = after-tax profit and loss/average total equity

  • (3) Net profit rate = after-tax profit and loss/net sales

  • (4) Earnings per share = (profit and loss attributable to owners of the parent company - preferred stock dividends)/weighted average number of shares issued

5. Cash flow

  • (1) Cash flow ratio = net cash flow from operating activities/current liabilities

  • (2) Net cash flow allowable ratio = net cash flow from operating activities in the last five years/(capital expenditure + inventory increase + cash dividends) in the last five years

  • (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends)/(gross property, plant and equipment + long-term investment + other non-current assets + working capital)

6. Leverage

  • (1) Operating leverage = (net operating income - variable operating costs and expenses)/operating profit

  • (2) Financial leverage = operating profit/(operating profit - interest expense)

107

III. Audit Committee’s Review Report of the Latest Annual Financial Report

Audit Committee’s Review Report

The company’s board of directors submitted the proposed business report, financial statements, and earnings distribution plan for 2020. The financial statements were audited by PwC Taiwan and an independent auditor’s report was issued accordingly. The proposal of the above-mentioned business report, financial statements and earnings distribution plan has been audited by the Audit Committee and did not find any discrepancy. A report is prepared in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act; please verify.

FIT Holding Co., Ltd.

Convener of Audit Committee: Ralph Chen

March 26, 2021

108

IV. Latest Annual Financial Report:

See pages 110 to 210.

  • V. Latest Individual Financial Report Audited and Certified by the

Independent Auditor:

Please refer to pages 211 to 267.

109

FIT HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2020 AND 2019

110

FIT HOLDING CO., LTD.

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2020, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the company that is required to be included in the consolidated financial statements of affiliates, is the same as the company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard No. 10. Also, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

FIT HOLDING CO., LTD.

March 26, 2021

111

INDEPENDENT AUDITORS’ REPORT

PWCR 20005325

To the Board of Directors and Shareholders of FIT Holding Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of FIT Holding Co., Ltd. and subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 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, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China; and in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” , "Rule No. Financial-Supervisory-Securities-Auditing1090360805 issued by the Financial Supervisory Commission on February 25, 2020” and generally accepted auditing standards in the Republic of China for our audit of the consolidated financial statements as of and for the year ended December 31, 2019. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants in 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 and the report of other auditors are sufficient and appropriate to provide a basis for our opinion.

112

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters. Key audit matters for the Group’s consolidated financial statements of the year ended December 31, 2020 are stated as follows:

Assessment of allowance for inventory valuation losses

Description

Please refer to Note 4(14) for accounting policies on inventories, Note 5(2) for the uncertainty of accounting estimates and assumptions applied to inventory valuation, and Note 6(6) for details of inventories.

The Company’s subsidiaries are primarily engaged in the manufacturing and sale of optical instruments, peripheral equipment components, 3C products, image scanners and multifunction printers. As the electronic products’ life cycles are relatively short and the market is highly competitive, there is a higher risk of incurring inventory valuation losses or obsolescence due to an economic slowdown or an excess of supply over demand. Those subsidiaries’ inventories are measured at the lower of cost and net realisable value, and individually assessed for those inventories over a certain age in order to identify obsolete or slow-moving inventories.

Those subsidiaries’ amounts of inventory were material, and the net realisable value involves subjective judgement resulting in an uncertainty when assessing the obsolete or slow-moving inventories. The assessment of allowance for inventory valuation losses was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  • A. Assessed the reasonableness of policies and procedures on allowance for inventory valuation losses.

  • B. Verified whether the systematic logic used in the Group’s inventory aging report is appropriate and in line with its policies.

  • C. Tested inventory valuation basis adequacy and recalculated the selected samples’ information in order to verify that the inventory was measured at the lower of cost and net realisable value.

113

Valuation of goodwill impairment

Description

Please refer to Note 4(20) for accounting policies on impairment loss on non-financial assets, Note 5(2) for the uncertainty of accounting estimates and assumptions applied to goodwill impairment valuation, and Note 6(12) for details of intangible assets.

The amount of goodwill was generated from the acquisition of subsidiaries, Power Quotient International Co., Ltd. and Foxlink Image Technology Co., Ltd.. The Company valued the impairment of goodwill through the discounted cash flow method which measures the cash generating unit’s recoverable amount. As the assumptions of expected future cash flows involved subjective judgement and a high degree of uncertainty which would cause a material impact on the valuation result, the valuation of goodwill impairment was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  • A. Obtained the external appraisal report on impairment valuation and examined the external appraiser’s qualification and assessed the independence, competence and objectiveness.

  • B. Assessed that the valuation model used in the appraisal report was widely used and appropriate.

  • C. Assessed the reasonableness of significant assumptions (including expected growth rate and discount rate) applied in the appraisal report.

Valuation of property, plant and equipment impairment

Description

Please refer to Note 4(20) for accounting policies on impairment loss on non-financial assets, Note 5(2) for the uncertainty of accounting estimates and assumptions applied to property, plant and equipment impairment valuation, and Note 6(8) for details of property, plant and equipment.

As the 3C components’ life cycles are relatively short and the market is highly competitive, there is a high risk of property and equipment incurring an impairment loss. The Company’s subsidiaries valued the impairment of the cash generating unit’s property, plant and equipment which had an indication of impairment. We mainly relied on the external appraisal report. As the external appraisal report on impairment valuation involved subjective judgement and a high degree of uncertainty which would

114

cause a material impact on the valuation result, the valuation of property, plant and equipment impairment was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  • A. Examined the external appraiser’s qualification and assessed the independence, competence and objectiveness.

  • B. Verified whether the list of properties for the external appraiser is correct.

  • C. Assessed that the valuation method used in the appraisal report was appropriate.

  • D. Tested the external appraisal report’s valuation basis adequacy.

Other matter-Parent company only financial reports

We have audited and expressed an unqualified opinion and an unqualified opinion with an other matters section on the parent company only financial statements of FIT Holding Co., Ltd. as at and for the years ended December 31, 2020 and 2019, respectively.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the Group’s

115

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 generally accepted auditing standards 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 the generally accepted auditing standards 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, 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 Group’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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our 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 auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

  5. Evaluate the overall presentation, structure and content of the consolidated financial statements,

116

including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  1. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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.

Liang Yi Chang

Lin, Se-Kai

For and on behalf of PricewaterhouseCoopers, Taiwan March 26, 2021

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of[China, and their applications in practice. ]

117

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets Notes
6(1)
6(2)
6(4) and 8
6(5)
6(5)
7
6(6)
6(3)
6(4) and 8
6(7)
6(8) and 8
6(9)
6(11)
6(12)
6(28)
6(13) and 8		 December 31, 2020
AMOUNT
%
$
5,148,889
23
-
-
5,574,504
24
104,591
-
4,846
-
895,437
4
394,721
2
8,061
-
867,146
4
401,542
2
43,292
-
13,443,029
59
2,345,419
10
19,091
-
1,017,177
4
3,411,488
15
574,928
3
391,072
2
985,094
4
339,752
1
162,580
1
117,379
1
9,363,980
41
$
22,807,009
100		 December 31, 2019 December 31, 2019
AMOUNT
$
5,148,889
-
5,574,504
104,591
4,846
895,437
394,721
8,061
867,146
401,542
43,292
13,443,029
2,345,419
19,091
1,017,177
3,411,488
574,928
391,072
985,094
339,752
162,580
117,379
9,363,980
$
22,807,009		 AMOUNT
$
1,820,304
129,150
1,487,355
169,992
8,636
1,098,557
46,297
6,923
1,239,969
532,840
200,172
6,740,195
2,229,668
20,318
806,459
5,279,784
650,279
393,708
1,027,695
335,184
589,831
134,797
11,467,723
$
18,207,918		 %
Current assets
1100
Cash and cash equivalents
1110
Financial assets at fair value through
profit or loss - current
1136
Current financial assets at amortised
cost
1140
Current contract assets
1150
Notes receivable, net
1170
Accounts receivable, net
1180
Accounts receivable - related parties
1200
Other receivables
130X
Inventories
1410
Prepayments
1470
Other current assets
11XX
Current Assets
Non-current assets
1517
Non-current financial assets at fair
value through other comprehensive
income
1535
Non-current financial assets at
amortised cost
1550
Investments accounted for under
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1840
Deferred income tax assets
1915
Prepayments for business facilities
1990
Other non-current assets, others
15XX
Non-current assets
1XXX
Total assets		 10
1
8
1
-
6
-
-
7
3
1
37
12
-
4
29
4
2
6
2
3
1
63
100

(Continued)

118

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity Notes
6(14)
6(15)
6(22)
7
6(16)
7
6(28)
7
6(17)
6(18)
6(28)
7
6(19)
6(20)
6(21)
9
11		 December 31, 2020
December 31, 2019
AMOUNT
%
AMOUNT
%
$
3,129,800
14
$
1,996,744
11
307,237
1
314,958
2
640,316
3
279,542
2
155
-
3,273
-
982,146
4
1,331,548
7
22,070
-
118,207
1
618,327
3
1,101,980
6
4,037,439
18
33,375
-
29,029
-
31,587
-
70,164
-
79,622
-
705,882
3
522,415
3
10,542,565
46
5,813,251
32
3,542,047
16
4,208,453
23
252,107
1
170,688
1
266,888
1
267,194
1
26,147
-
884,177
5
4,087,189
18
5,530,512
30
14,629,754
64
11,343,763
62
2,462,421
11
2,462,421
14
4,198,013
19
4,237,390
23
8,361
-
8,361
-
89,848
- (
281,965) (
2 )
299,956
1
278,098
2
7,058,599
31
6,704,305
37
1,118,656
5
159,850
1
8,177,255
36
6,864,155
38
$
22,807,009
100
$
18,207,918
100
AMOUNT
$
3,129,800
307,237
640,316
155
982,146
22,070
618,327
4,037,439
29,029
70,164
705,882
10,542,565
3,542,047
252,107
266,888
26,147
4,087,189
14,629,754
2,462,421
4,198,013
8,361
89,848
299,956
7,058,599
1,118,656
8,177,255
$
22,807,009
Current liabilities
2100
Short-term borrowings
2110
Short-term notes and bills payable
2130
Current contract liabilities
2150
Notes payable
2170
Accounts payable
2180
Accounts payable to related parties
2200
Other payables
2220
Other payables to related parties
2230
Current income tax liabilities
2280
Current lease liabilities
2300
Other current liabilities
21XX
Current Liabilities
Non-current liabilities
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Non-current lease liabilities
2600
Other non-current liabilities
25XX
Non-current liabilities
2XXX
Total Liabilities
Equity
Share capital
3110
Share capital - common stock
Capital surplus
3200
Capital surplus
Retained earnings
3320
Special reserve
3350
Unappropriated retained earnings
(accumulated deficit)
Other equity interest
3400
Other equity interest
31XX
Equity attributable to owners of
the parent
36XX
Non-controlling interest
3XXX
Total equity
Significant contingent liabilities
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

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

119

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(22) and 7
$
7,053,361
100
$
8,840,159
100
6(6)(27) and 7
(
6,168,735 ) (
87) (
8,226,631 ) (
93 )
884,626
13
613,528
7
6(27)
(
222,319 ) (
3) (
296,276 ) (
3 )
(
498,526 ) (
7) (
511,367 ) (
6 )
(
383,683 ) (
6) (
338,228 ) (
4 )
12(2)
(
752 )
-
(
953 )
-
(
1,105,280 ) (
16) (
1,146,824 ) (
13 )
(
220,654 ) (
3) (
533,296 ) (
6 )
6(23)
30,038
-
51,989
1
6(24)
200,938
3
224,636
2
6(25)
316,501
5
49,694
1
6(26) and 7
(
107,403 ) (
2) (
75,620 ) (
1 )
6(7)
72,033
1
54,467
1
512,107
7
305,166
4
291,453
4
(
228,130 ) (
2 )
6(28)
(
111,678 ) (
1)
31,097
-
$
179,775
3
( $
197,033 ) (
2 )
4000
Sales revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Expect credit loss
6000
Total operating expenses
6900
Operating loss
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of profit of associates and joint
ventures accounted for using equity
method
7000
Total non-operating income and
expenses
7900
Profit (loss) before income tax
7950
Income tax (expense) benefit
8200
Profit (loss) for the year

(Continued)

120

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
$
7,786
-
$
1,208
-
6(3)
41,754
-
560,816
6
20
-
(
27 )
-
6(28)
(
1,557 )
-
(
241 )
-
48,003
-
561,756
6
(
27,551 )
-
(
180,447 ) (
2 )
480
-
(
1,786 )
-
6(28)
4,658
-
34,052
-
(
22,413 )
-
(
148,181 ) (
2 )
$
25,590
-
$
413,575
4
$
205,365
3
$
216,542
2
$
83,599
1
( $
189,059 ) (
2 )
-
-
(
17,953 )
-
96,176
2
9,979
-
$
179,775
3
( $
197,033 ) (
2 )
$
111,706
2
$
234,752
2
-
-
(
18,250 )
-
93,659
1
40
-
$
205,365
3
$
216,542
2
6(29)
$
0.34 ( $
0.77 )
-(
0.07 )
$
0.34 ( $
0.84 )
$
0.34 ( $
0.77 )
-(
0.07 )
$
0.34 ( $
0.84 )
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311
Other comprehensive income, before tax,
actuarial gains on defined benefit plans
8316
Unrealised gains from investments in
equity instruments measured at fair value
through other comprehensive income
8320
Share of other comprehensive income of
associates and joint ventures accounted
for using equity method, components of
other comprehensive income that will not
be reclassified to profit or loss
8349
Income tax related to components of
other comprehensive income that will not
be reclassified to profit or loss
8310
Components of other comprehensive
income that will not be reclassified to
profit or loss
Components of other comprehensive
income that will be reclassified to profit
or loss
8361
Financial statements translation
differences of foreign operations
8370
Share of other comprehensive income of
associates and joint ventures accounted
for using equity method, components of
other comprehensive income that will be
reclassified to profit or loss
8399
Income tax relating to the components of
other comprehensive income
8360
Components of other comprehensive
loss that will be reclassified to profit or
loss
8300
Other comprehensive income for the year
8500
Total comprehensive income for the year
Profit (loss), attributable to:
8610
Owners of the parent
8615
Former owner of business combination
under common control
8620
Non-controlling interest
Total
Comprehensive income attributable to:
8710
Owners of the parent
8715
Former owner of business combination
under common control
8720
Non-controlling interest
Total
Earinings (loss) per share
9710
Basic earnings (loss) per share from
continuing operations
9720
Basic earnings (loss) per share from
equity attributable to former owner of
business combination under common
control
9750
Basic earnings (loss) per share
9810
Diluted earnings (loss) per share from
continuing operations
9820
Diluted earnings (loss) per share from
equity attributable to former owner of
business combination under common
control
9850
Diluted earnings (loss) per share

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

121

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Year 2019
Balance at January 1, 2019
Profit (loss)
Other comprehensive income (loss)
Total comprehensive income (loss)
Adjustments to share of changes in equity of
associates and joint ventures accounted for using the
equity method
Capital surplus used to cover accumulated deficits
Cash dividends paid by additional paid-in capital
Changes in ownership interests in subsidiaries
Adjustments to reorganisation
Balance at December 31, 2019
Year 2020
Balance at January 1, 2020
Profit
Other comprehensive income (loss)
Total comprehensive income
Adjustments to share of changes in equity of
associates and joint ventures accounted for using the
equity method
Capital surplus used to cover accumulated deficits
Changes in non-controlling interest
Compensation costs
Balance at December 31, 2020		 Notes Equity attributable to owners ofthe parent Equity attributable to owners ofthe parent Equity attributable to owners ofthe parent Equity attributable to owners ofthe parent Equity
attributable to
former owner of
business
combination
under common
control
Non-controlling
interest		 Totalequity
Share capital -
commonstock		 Capital surplus,
additional paid-
incapital		 Retained earnings Otherequityinterest Total
Special reserve Unappropriated
retained
earnings
(accumulated
deficit)		 Financial
statements
translation
differences of
foreign
operations		 Unrealised
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
6(21)
6(20)
6(21)		 $ 2,462,421
-
-
-
-
-
-
-
-
$ 2,462,421
$ 2,462,421
-
-
-
-
-
-
-
$ 2,462,421		 $ 5,019,688
-
-
-
-
(
166,692 )
(
615,606 )
-
-
$ 4,237,390
$ 4,237,390
-
-
-
59,741
(
281,965 )
182,847
-
$ 4,198,013		 $
8,361
-
-
-
-
-
-
-
-
$
8,361
$
8,361
-
-
-
-
-
-
-
$
8,361		 ( $ 173,844 )
(
189,059 )
940
(
188,119 )
(
129 )
166,692
-
-
(
86,565 )
( $ 281,965 )
( $ 281,965 )
83,599
6,249
89,848
-
281,965
-
-
$
89,848		 ( $
81,588 )
-
(
137,945 )
(
137,945 )
-
-
-
-
-
( $ 219,533 )
( $ 219,533 )
-
(
19,896 )
(
19,896 )
-
-
-
-
( $ 239,429 )		 ( $
63,185 )
-
560,816
560,816
-
-
-
-
-
$ 497,631
$ 497,631
-
41,754
41,754
-
-
-
-
$ 539,385		 $ 7,171,853
(
189,059 )
423,811
234,752
(
129 )
-
(
615,606 )
-
(
86,565 )
$ 6,704,305
$ 6,704,305
83,599
28,107
111,706
59,741
-
182,847
-
$ 7,058,599		 ( $
77,196 )
(
17,953 )
(
297 )
(
18,250 )
-
-
-
8,881
86,565
$
-
$
-
-
-
-
-
-
-
-
$
-		 $ 159,810
9,979
(
9,939 )
40
-
-
-
-
-
$ 159,850
$ 159,850
96,176
(
2,517 )
93,659
-
-
864,920
227
$ 1,118,656		 $ 7,254,467
(
197,033 )
413,575
216,542
(
129 )
-
(
615,606 )
8,881
-
$ 6,864,155
$ 6,864,155
179,775
25,590
205,365
59,741
-
1,047,767
227
$ 8,177,255

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

122

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit (loss) before tax
Adjustments
Adjustments to reconcile profit (loss)
Expected credit loss

Depreciation (including investment property and right-of-use
assets)

Amortisation

Loss on disposal of property, plant and equipment

Financial assets at fair value through profit or loss

Share of profit of associates and joint ventures accounted for
using the equity method
Gain on disposal of investments

Interest expense

Interest income

Dividend income

Compensation cost
Loss on lease modification

Deferred government grants revenue recognised

Gain recognized in bargain purchase transaction

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss - current
Current contract assets
Notes receivable, net
Accounts receivable
Other receivables
Accounts receivable - related parties
Inventories
Prepayments
Other current assets
Other non-current assets
Changes in operating liabilities
Financial liabilities at fair value through profit or loss
Contract liabilities - current
Notes payable
Accounts payable
Accounts payable to related parties
Other payables
Increase in other payables to related parties
Other current liabilities
Cash inflow generated from operations
Interest received
Interest paid
Dividend received
Income tax paid
Net cash flows from operating activities		 Year ended December 31
Notes
2020
2019
$
291,453
( $
228,130 )
12(2)
752
953
6(27)
469,758
725,389
6(27)
15,823
19,025
6(25)
1,555
7,258
6(2)(25)
(
1,387 ) (
4,843 )
(
72,033 ) (
54,467 )
6(25)
(
266,613 ) (
11,395 )
6(26)
107,403
75,620
6(23)
(
30,038 ) (
51,989 )
6(24)
(
72,193 ) (
44,690 )
227
-
6(25)
-
(
2,141 )
6(25)
(
11,233 ) (
32,358 )
6(24)
-
(
92,235 )
129,202
(
129,720 )
65,401
(
145,958 )
3,790
(
5,300 )
176,357
321,832
(
4,900 )
344,677
(
348,424 ) (
9,871 )
284,696
105,350
114,769
(
245,642 )
83,757
(
95,186 )
4,612
(
13,887 )
-
401
360,774
97,700
(
3,118 ) (
460 )
(
321,197 )
93,500
(
96,137 )
31,605
246,787
(
218,678 )
4,104
-
50,730
11,778
1,184,677
448,138
32,365
40,851
(
107,214 ) (
74,825 )
168,111
44,690
(
15,995 ) (
152,235 )
1,261,944
306,619

(Continued)

123

FIT HOLDING CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in financial assets at amortised cost
Proceeds from disposal of investments accounted for using the
equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of right-of-use assets
Acquisition of intangible assets
Increase in prepayments for business facilities
Increase in refundable deposits
Cash received due to disposal of subsidiaries
Proceeds from capital reduction of investments accounted for
using equity method
Acquisition of investments accounted for using the equity method
Acquisition of subsidiary (excluding cash)
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Increase in short-term borrowings
Increase (decrease) in short-term notes payable
Increase in long-term borrowings
Decrease in long-term borrowings
Repayment of lease liabilities
Increase in other payables to related parties
Increase (decrease) in other non-current liabilities
Cash dividends paid

Changes in non-controlling interest
Net cash flows from financing activities
Changes in foreign currency exchange
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 Year ended December 31
Notes
2020
2019
( $
4,085,922 ) ( $
905,124 )
73,620
71,106
(
894,071 ) (
1,284,800 )
3,089
2,829
-
(
18,465 )
(
3,431 ) (
4,287 )
-
(
365,675 )
4,830
(
7,033 )
441,275
-
342,528
-
(
210,000 )
-
-
(
279,811 )
(
4,328,082 ) (
2,791,260 )
(
22,861,084 ) (
9,400,639 )
23,994,140
10,297,383
(
7,721 ) (
39,976 )
6,369,016
5,791,574
(
5,915,480 ) (
4,170,858 )
(
75,122 ) (
105,446 )
4,000,000
-
6,702
(
5,684 )
6(20)
-
(
615,605 )
1,047,767
-
6,558,218
1,750,749
(
163,495 ) (
193,306 )
3,328,585
(
927,198 )
1,820,304
2,747,502
$
5,148,889
$
1,820,304

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

124

FIT HOLDING CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

  1. History and Organisation

A. FIT Holding Co., Ltd. (the “Company”) and its subsidiaries (collectively referred herein as the “Group”) were incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) on October 1, 2018. The Group is primarily engaged in production, manufacturing and trading of optical instrument components, computer peripheral components, 3C products, image scanners and multifunction printers, investment and development of power plant and cleaning energy services.

B. The Company’s subsidiaries, Glory Science Co., Ltd. (Glory Science), Power Quotient International Co., Ltd. (PQI) and Foxlink Image Technology Co., Ltd. (Foxlink Image) entered into a joint share swap agreement as approved by each of their Board of Directors in May 2018. The Company acquired 100% shares of Glory Science, PQI and Foxlink Image through share swap by exchanging 1 common share of PQI with 0.194 common share of the Company, 1 common share of Foxlink Image with 0.529 common share of the Company and 1 common share of Glory Science with 1 common share of the Company. The agreement was approved by the shareholders of Glory Science, PQI and Foxlink Image in June 2018, respectively. The transactions of joint shares swap were completed on October 1, 2018. The Company’s shares were listed on the Taiwan Stock Exchange (TSE) and approved by the regulatory authority on the same date.

  • C. Cheng Uei Precision Industry Co., Ltd. became the ultimate parent company of the Company after acquiring over half of the seats in the Company’s Board of Directors due to the abovementioned shares swap.

  • The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation These consolidated financial statements were authorised for issuance by the Board of Directors on March 26, 2021.

  • Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:


follows:
New Standards,Interpretations andAmendments Effective date by
International Accounting
StandardsBoard
Amendments to IAS 1 and IAS 8,‘Disclosure initiative-definition of
material’
Amendments to IFRS 3,‘Definition of a business’
Amendments to IFRS 9, IAS 39 and IFRS7 ,‘Interest rate benchmark
reform’
Amendment to IFRS 16,‘Covid-19-related rent concessions’
Note：Earlier application from January 1, 2020 is allowed by FSC.		 January 1, 2020
January 1, 2020
January 1, 2020
January 1, 2020 (Note)

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

125

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:


follows:
New Standards,Interpretations andAmendments Effective date by
International Accounting
StandardsBoard
Amendments to IFRS 4,‘Extension of the temporary exemption from
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,‘
Interest Rate Benchmark Reform—Phase 2’		 January 1, 2021
January 1, 2021

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards,Interpretations and Amendments International
Accounting
Standards Board
Amendments to IFRS 3,‘Reference to the conceptual framework’
Amendments to IFRS 10 and IAS 28,‘Sale or contribution of assets between an investor
and its associate or joint venture’
IFRS 17,‘Insurance contracts’
Amendments to IFRS 17, 'Insurance contracts'
Amendments to IAS 1,‘Classification of liabilities as current or non-current’
Amendments to IAS 1,‘Disclosure of accounting policies’
Amendments to IAS 8,‘Definition of accounting estimates’
Amendments to IAS 16,‘Property, plant and equipment:proceeds before intended use’
Amendments to IAS 37,‘Onerous contracts—cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018–2020		 January 1, 2022
To be determined by
International
Accounting Standards
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC

126

Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

  • (2) Basis of preparation

  • A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

    • (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

    • (b) Financial assets at fair value through other comprehensive income.

    • (c) Defined benefit assets and liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

  • B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

  • (3) Basis of consolidation

  • A. Basis for preparation of consolidated financial statements:

    • (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

    • (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

    • (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

    • (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

    • (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

  • B. Subsidiaries included in the consolidated financial statements:

127

Name of
investor		 Name of
subsidiary		 Main business
December 31, December 31,
activities
2020
2019

Manufacture and sale of
optical lens components
and other products
100
100
Manufacture and sale of
image scanners and
multifunction printers
100
100
Manufacture of electronic
telecommunication
components
100
100
Energy service
management
41.3
100
General investments
holding
100
100
Sales agent
100
100
General investments
holding
100
100
Manufacture and sale of the
components of
communication and
consumer electronics
99
99
Production and processing
and sale of optical lens
components and other
products
100
100
Production and processing
and sale of optical lens
components and other
products
35
35
Production and processing
and sale of optical lens
components and other
products
100
100
Production and processing
and sale of optical lens
components and other
products
100
100
Ownership(%)		 Description
Note 4
Note 2
The Company
The Company
The Company
The Company
Glory Science
GLORY TEK
GLORY TEK
GLORY TEK
GLORY TEK
(SAMOA)
GLORY TEK
(SAMOA)
GLORY
OPTICS
Glorytek
Yancheng		 Glory Science Co.,
Ltd. (Glory Science)
Foxlink Image
Technology Co.,
Ltd. (Foxlink
Image)
Power Quotient
International Co.,
Ltd. (PQI)
Shih Fong Power
Co., Ltd. (Shih
Fong)
GLORY TEK (BVI)
CO.,LTD.(GLORY
TEK)
GLORY OPTICS
(BVI) CO.,
LTD.(GLORY
OPTICS)
GLORY TEK
(SAMOA) CO.,
LTD.(GLORY TEK
(SAMOA))
GLORYTEK
SCIENCE INDIA
PRIVATE
LIMITED
(GLORYTEK
SCIENCE INDIA)
Glorytek (Suzhou)
Co., Ltd. (Glorytek
Suzhou)
Glory Optics
(Yancheng) Co.,
Ltd. (GOYC)
Glorytek
(Yancheng) Co.,
Ltd. (Glorytek
Yancheng)
Yancheng Yaowei
Technology Co.,
Ltd. (YYWT)

128

Ownership(%)

Ownership(%)
Name of
investor		 Name of
subsidiary		 Main business
December 31, December 31,
activities
2020
2019

Production and processing
and sale of optical lens
components and other
products
65
65
Manufacture and sale of
image scanners and
multifunction printers
100
100
Energy service
management
34.7
-
Mould development and
moulding tool manufacture
100
100
Manufacture and sale of
image scanners and
multifunction printers
100
100
Manufacture and sale of
parts and moulds of
photocopiers and scanners
100
100
Manufacture of image
scanners and multifunction
printers and investment of
real estate
100
100
Sale of electronic
telecommunication
components
100
100
Sale of electronic
telecommunication
components
100
100
Specialized investments
holding
100
100
Specialized investments
holding
100
100		 Description
Glorytek Suzhou
Foxlink Image
Foxlink Image
AITL
AITL
AITL
AITL
PQI
PQI
PQI
PQI		 Glory Optics
(Yancheng) Co.,
Ltd. (GOYC)
ACCU-IMAGE
TECHNOLOGY
LIMITED (AITL)
Shih Fong Power
Co., Ltd. (Shih
Fong)
Dong Guan Fu
Zhang Precision
Industry Co., Ltd.
(DGFZ)
Dongguan Fu Wei
Electronics Co.,
Ltd. (Dongguan Fu
Wei)
Wei Hai Fu Kang
Electric Co., Ltd.
(WHFK)
Dong Guan
HanYang Computer
Co., Ltd. (DGHY)
Power Quotient
International (H.K.)
Co., Ltd. (PQI H.K.)
PQI Japan Co., Ltd.
(PQI JAPAN)
Syscom
Development Co.,
Ltd. (SYSCOM)
PQI Mobility Inc.
(PQI MOBILITY)		 Notes 1
and 2
Note 4
Note 5
Note 5
Note 5

129

Name of
investor		 Name of
subsidiary		 Main business
December 31, December 31,
activities
2020
2019

Ownership(%)
Specialized investments
holding
100
100
Sale of medical instruments
100
100
Mechanical installation and
piping engineering
58.74
76.56
Energy service
management
100
100
Wind energy and wholesale
of machinery
-
100
Wind energy and wholesale
of machinery
-
100
Energy service
management
80
100
Supply chain finance
energy service management
100
100
Energy service
management
99
100
Energy service
management
-
40
Energy service
management
-
-
Sale of electronic
telecommunication
components
100
100		 Description
PQI
PQI
PQI
Shinfox
Foxwell Energy
Foxwell Energy
Shinfox
Shinfox
Shinfox
Shinfox
Shinfox
SYSCOM		 Apix Limited
(APIX)
Power Sufficient
International Co.,
Ltd. (PSI)
Shinfox Energy Co.
Ltd. (Shinfox)
Foxwell Energy
Corporation Ltd.
(Foxwell Energy)
Beiyuan Wind
Power Co., Ltd.
(Beiyuan)
Changyuan Wind
Power Co., Ltd.
(Changyuan)
Shinfox Natural Gas
Co., Ltd. (Shinfox
Natural Gas)
Kunshan Jiuwei
Info Tech Co., Ltd.
(Kunshan Jiuwei)
Foxwell Power Co.,
Ltd. (Foxwell
Power)
Shinfox Energy
International Inc.
(SHINFOX
ENERGY)
Shinfox Power Co.,
Ltd. (Shinfox
Power)
PQI Corporation
(PQI USA)		 Notes 6
and 9
Note 6
Note 3
Note 3
Note 7
Note 10

130

Name of
investor		 Name of
subsidiary		 Main business
December 31, December 31,
activities
2020
2019

Ownership(%)
Manufacture of electronic
telecommunication
components
99
99
Sales of electronic
equipment
100
100
Specialised investments
holding
100
100
Sales of electronic
equipment
100
100
Manufacture and sales of
electronic
telecommunication
components
100
100
Manufacture of electronic
telecommunication
components
-
100
Manufacture of electronic
telecommunication
components
100
-		 Description
SYSCOM
APIX
APIX
Sinocity
PQI MOBILITY
PQI
YANCHENG
PQI
YANCHENG		 FOXLINK
POWERBANK
INTERNATIONAL
TECHNOLOGY
PRIVATE
LIMITED
(FOXLINK
POWERBANK)
Sinocity Industries
Limited (Sinocity)
Perennial Ace
Limited (Perennial)
DG LIFESTYLE
STORE LIMITED
(DG)
Power Quotient
Technology
(YANCHENG) Co.,
Ltd. (PQI
YANCHENG)
Jiangsu Foxlink
New Energy
Technology
Co.,Ltd. (Jiangsu
Foxlink)
PQI (Xuzhou) New
Energy Co.,Ltd.
(PQI Xuzhou)		 Note 8
Note 11

  • Note 1: Glorytek Suzhou invested RMB 58,500 thousand in GOYC for the year ended December 31, 2019.

  • Note 2: GLORY TEK (SAMOA) and Glorytek Suzhou jointly held 100% equity interest of GOYC.

  • Note 3: Foxwell Energy invested $60,000 in Changyuan and Beiyuan for the year ended December 31, 2019, respectively. In November 2020, the Group lost its control over the subsidiaries, Changyuan and Beiyuan, as a result of the 100% stock disposal for the amount of $559,337. The Group recognised profit of $239,850 under ‘other gains and losses’ in the statement of comprehensive income. For information on cash flows of the subsidiaries, please refer to Note 6 (33).

  • Note 4: On June 14, 2019, the Company acquired 100% of the share capital of Shih Fong for $280,000 and obtained control over Shih Fong. Shih Fong increased its capital for the year ended December 31, 2020. The Group’s subsidiary, Foxlink Image, acquired 34.7% of the share capital of Shih Fong for $957,600. The Company jointly held 76% of the share capital of Shih Fong with Foxlink Image and maintained the control over Shih Fong.

  • Note 5: To simplify the Group’s structure, the shareholders at their meeting on December 16, 2019

131

resolved to merge the subsidiaries of the Group, AITL, GITL, GSTL and GOI, with AITL being the surviving company.

  • Note 6: Shinfox conducted a share swap by issuing new shares with Foxwell Energy on December 27, 2019. Shinfox became a subsidiary of PQI with 76.56% of shares held. Shinfox increased its capital for the year ended December 31, 2020. The Group’s subsidiary, PQI, did not acquire shares proportionally to its interest and sold 1.9% of shares. As a result, PQI decreased its share interest to 58.74% and maintained control over Shinfox. Please refer to Note 6(30) for more details.

  • Note 7: SHINFOX ENERGY has completed the cancellation of registration during the year ended December 31, 2020.

  • Note 8: Jiangsu Foxlink New Energy Technology Co., Ltd. increased its capital in April 2020. The Group did not acquire shares proportionally to its interest and lost its control. This investment is recognised in investments accounted for using the equity method. Subsequently, the Group reduced its capital in September 2020, decreased its share interest to 12.9% and lost its significant influence based on its assessment. It was recognised in financial assets at fair value through other comprehensive income.

  • Note 9: Shinfox Energy Co., Ltd. was formerly named as Shinfox Co., Ltd..

  • Note 10: Shinfox Power Co., Ltd. was established by Shinfox Energy Co., Ltd. in 2020, and the Group lost its control over it as a result of the 100% stock disposal for the amount of $45,000 in November 2020. The Group recognised profit of $52 under ‘other gains and losses’ in the statement of comprehensive income. For information on cash flows of the subsidiary, please refer to Note 6 (33).

Note 11: PQI Xuzhou completed registration of incorporation in 2020.

  • C. Subsidiaries not included in the consolidated financial statements
Name of
investor		 Name of
subsidiary		 Main business
activities
December31,2020
December31,2019
Manufacture and sale
of Magnesium
products
-
50
Ownership(%)		 Note
Foxlink Image KLEINE
DEVELOPMENTS
LIMITED		 Note

Note: On December 28, 2015, the Board of Directors has resolved the liquidation of the company, KLEINE and the registration has been completed in May 2020.

  • D. Adjustments for subsidiaries with different balance sheet dates None.

  • E. Significant restrictions None.

  • F. Subsidiaries that have non-controlling interests that are material to the Group None.

  • (4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars (NTD), which is the Company’s functional and the Group’s presentation currency.

A. Foreign currency transactions and balances

  • (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

  • (b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-

132 

     - translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

  - (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  - (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

  • B. Translation of foreign operations

    • The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • (c) All resulting exchange differences are recognised in other comprehensive income.

  • (5) Classification of current and non-current items

  • A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

    • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

    • (b) Assets held mainly for trading purposes;

    • (c) Assets that are expected to be realised within twelve months from the balance sheet date;

    • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

  • B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

    • (a) Liabilities that are expected to be settled within the normal operating cycle;

    • (b) Liabilities arising mainly from trading activities;

    • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

    • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

  • C. As the operating cycle of the Group’s construction contracts are usually more than one year, the construction-related assets and liabilities are classified by operating cycle.

  • (6) Cash equivalents

  • Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

  • (7) Financial assets at fair value through profit or loss

  • A. Financial assets at fair value through profit or loss are financial assets that are not measured at

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amortised cost or fair value through other comprehensive income.

  • B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

  • C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

  • D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

  • (8) Financial assets at fair value through other comprehensive income

  • A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

    • (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

    • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

  • B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

  • C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

    • (a) The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

    • (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.

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(9) Financial assets at amortised cost

  • A. Financial assets at amortised cost are those that meet all of the following criteria:

  • (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

  • B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

  • C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

  • D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

  • (10) Accounts and notes receivable

  • A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

  • B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

  • (11) Impairment of financial assets

  • For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

  • (12) Derecognition of financial assets

  • The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

  • (13) Leasing arrangements (lessor) lease receivables/ operating leases

  • A. Based on the terms of a lease contract, a lease is classified as a finance lease if the lessee assumes substantially all the risks and rewards incidental to ownership of the leased asset.

  • (a) At commencement of the lease term, the lessor should record a finance lease in the balance sheet as ‘lease receivables’ at an amount equal to the net investment in the lease (including initial direct costs). The difference between gross lease receivable and the present value of the receivable is recognised as ‘unearned finance income of finance lease’.

  • (b) The lessor should allocate finance income over the lease term based on a systematic and rational basis reflecting a constant periodic rate of return on the lessor’s net investment in the finance lease.

  • (c) Lease payments (excluding costs for services) during the lease term are applied against the gross investment in the lease to reduce both the principal and the unearned finance income.

  • B. Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

  • (14) Inventories

  • Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the

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ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

  • (15) Investments accounted for using equity method / associates

  • A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

  • B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

  • C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognises change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

  • D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

  • F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

  • G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

  • H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

  • (16) Property, plant and equipment

  • A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

  • B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,

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as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

  • C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

  • D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:


are as follows:
Buildings and structures 3 ~ 45 years
Machinery and equipment 2 ~ 20 years
Transportation equipment 5 years
Office equipment 2 ~ 8 years
Leasehold improvements 3 ~ 5 years
Molding equipment 1 ~ 2 year(s)
Other equipment 3 ~ 15 years

(17) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

  • A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

  • B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

  • (a) Fixed payments, less any lease incentives receivable;

  • (b) Variable lease payments that depend on an index or a rate;

  • (c) Amounts expected to be payable by the lessee under residual value guarantees;

  • (d) The exercise price of a purchase option, if the lessee is reasonably certain to exercise that option; and

  • (e) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

  • C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

  • (b) Any lease payments made at or before the commencement date;

  • (c) Any initial direct costs incurred by the lessee; and

  • (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying

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asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 5 ~ 50 years.

(19) Intangible assets

  • A. Computer software

    • Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 1 to 3 year(s).

  • B. Goodwill

    • Goodwill arises in a business combination accounted for by applying the acquisition method.

  • C. Trademark right (indefinite useful life)

    • Trademark right is stated at cost and regarded as having an indefinite useful life as it was assessed to generate continuous net cash inflow in the foreseeable future. Trademark right is not amortised, but is tested annually for impairment.

  • (20) Impairment of non-financial assets

  • A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

  • B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

  • C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination.

  • (21) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(22) Notes and accounts payable

  • A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

  • B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(23) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(24) Non-hedging derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

(25) Employee benefits

  • A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

  • B. Pensions

  • (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments. 

  - (b) Defined benefit plans

     - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

     - ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii. Past service costs are recognised immediately in profit or loss.

  • C. Employees’ compensation and directors’ and supervisors’ remuneration

    • Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

  • (26) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date.

(27) Income tax

  • A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or

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loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

  • B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

  • C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

  • D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

  • E. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

  • (28) Share capital

  • A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

  • B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(29) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved at the Board of Directors’ meeting. Cash dividends are recorded as liabilities; stock dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

  • (30) Revenue recognition

  • A. Sales revenue

    • (a) The Group manufactures and sells optical instrument components, image scanners and electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the price to sell the products, and there is no unfulfilled obligation that could affect the

140

wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • (b) The Group’s obligation to provide a refund for faulty products under the standard warranty terms is recognised as a provision.

  • (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

  • B. Service revenue

The Group provides services such as products research, development and mold repair, energysaving equipment maintenance and solar construction design and development. If the outcome of services provided can be estimated reliably or the milestone of the research and development project is reached, revenue should be recognised by reference to the stage of project or the point in time of billing.

  • C. Construction contract revenue

    • (a) The Group’s construction contracts revenue mainly arises from the construction contracts and belongs to performance obligation satisfied over time. If the outcome of a construction contract can be estimated reliably and it is probable that this contract would make a profit, contract revenue should be recognised by reference to the stage of completion of the contract activity, using the percentage-of-completion method of accounting, over the contract term. Contract costs are expensed as incurred. The stage of completion of a contract is measured by the completion ratio for work performed to date. An expected loss where total contract costs will exceed total contract revenue on a construction contract should be recognised as an expense as soon as such loss is probable.

    • (b) Contract revenue should include the revenue arising from variations from the original contract work, claims and incentive payments that are agreed by the customer and can be measured reliably.

    • (c) The excess of the cumulative costs incurred plus recognised profits (less recognised losses) over the progress billings on each construction contract is presented as an asset within ‘contract assets’. While, the excess of the progress billings over the cumulative costs incurred plus recognised profits (less recognised losses) on each construction contract is presented as a liability within ‘contract liabilities’.

  • (31) Government grants

  • Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as non-current liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

  • (32) Business combinations

  • A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the

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acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. 

  - B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

  • (33) Reorganisation under common control

    • A, The Group applies the related interpretations issued in R.O.C. for the intra-group reorganisation since there is no definite rules for business combinations of entities under common control in IFRS 3, ‘Business combinations’ as explained in the IFRS Q&A ‘explanations to IFRS 3 Business Combinations under Common Control’ issued by Accounting Research and Development Foundation on October 26, 2018. The aforementioned transaction is stated at book value method and the comparative financial statements of prior years were restated based on the assumption that the business combination occurred at the beginning of the year.

    • B. As described in Note 1, the share swap transactions between the Company and Glory Science were considered as a reorganisation under common control and the Company is substantially a continuation of Glory Science. The Group recognised the associated assets and liabilities in its consolidated financial statements before the incorporation date based on their carrying amounts in the consolidated financial statements of Glory Science. The comparative financial statements were restated based on the assumption that Glory Science was considered as a consolidated subsidiary at the beginning.

  • C. The Group acquired share interest of Shinfox, a subsidiary of the ultimate parent company through share swap for the year ended December 31, 2019. As the acquisition was the Group’s internal reorganisation, in accordance with Accounting Research and Development Foundation Interpretation 101-301, it was considered that the Company invested in Shinfox at the beginning. When restating the consolidated financial statements of prior years, Shinfox’s equity owned by the Company, are classified as “Equity attributable to former owner of business combination under common control” and profit or loss recognised by the Group are classified as “Net profit (loss) of equity attributable to former owner of business combination under common control”.

  • (34) Operating segments

    • Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments.

  • Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

  • (1) Critical judgements in applying the Group’s accounting policies None.

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(2) Critical accounting estimates and assumptions

A. Impairment assessment of goodwill

The impairment assessment of goodwill relies on the Group’s subjective judgement, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units. Please refer to Note 6(12) for the information of goodwill impairment.

  • B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2020, the carrying amount of inventories was $867,146.

  • C. Impairment assessment of tangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.

6. Details of Significant Accounts

(1) Cash and cash equivalents


tails of Significant Accounts
Cash and cash equivalents
Cash on hand
Checking accounts and demand deposits
Cash equivalents
Time deposits		 December31,2020
10,055
$ 2,355,349
2,783,485
5,148,889		 December31,2019
11,765
$ 1,372,580
435,959
1,820,304

  • A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

  • B. The Group has no cash and cash equivalents pledged to others.

(2) Financial assets/liabilities at fair value through profit or loss

Current items:
Financial assets mandatorily measured at fair
value through profit or loss
Non-capital guaranteed floating profit
financial instruments		 December31,2020
-
$		 December31,2019
129,150
$

Amounts recognised in profit or loss in relation to financial assets/liabilities at fair value through profit or loss are listed below:

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December 31, 2020

December 31, 2019

(3) Financial assets at fair value through other comprehensive income
Current items:
Financial assets/liabilities mandatorily
measured at fair value through profit or loss
Non-capital guaranteed floating profit
1,387
$ 4,442
$ financial instruments
Forward foreign exchange contracts
-
401
$ 1,387
$ 4,843
Items
December31,2020
December31,2019
Equity instruments
Listed stocks
1,263,416
$ 1,263,416
$ Unlisted stocks
1,350,028
1,276,031
2,613,444
2,539,447
Valuation adjustment
268,025)
(
309,779)
(
$ 2,345,419
$ 2,229,668		 4,442
$ 401
$ 4,843

  • A. The Group has elected to classify equity investments that are considered to be strategic investments and steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $2,345,419 and $2,229,668 as at December 31, 2020 and 2019, respectively.

  • B. Amounts recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income		 YearendedDecember31,2020 YearendedDecember31,2020
2020
41,754
$		 2019
560,816
$
  • C. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

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(4) Financial assets at amortised cost

Financial assets at amortised cost
Items
Current items:
Restricted bank deposits
Pledged time deposits
Time deposits maturing in excess of three months
Repatriated offshore funds

Non-current items:
Restricted bank deposits
Pledged time deposits
 December31,2020
4,359,551
$ 1,200,000
14,953
-
$ 5,574,504

14,591
$ 4,500
$ 19,091
 December 31, 2019
7,711
$ 241,250
341,488
896,906
$ 1,487,355
2,376
$ 17,942
$ 20,318

A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:


below:
Interest income YearendedDecember31,2020
2020
17,611
$		 2019
18,248
$

B. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

(5) Notes and accounts receivable

B. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provide
in Note 8.
Notes and accounts receivable
Interest income
17,611
$ 18,248
$		 B. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provide
in Note 8.
Notes and accounts receivable
Interest income
17,611
$ 18,248
$		 B. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provide
in Note 8.
Notes and accounts receivable
Interest income
17,611
$ 18,248
$
A. The ageing analysis of accounts receivable that were past due but not impaired is as follows:
December 31,2020
December 31,2019
Notes receivable
4,846
$ 8,636
$ Accounts receivable
927,259
$ 1,192,077
$ Less: Allowance for uncollectible accounts
31,822)
(
93,520)
(
895,437
$ 1,098,557
$ Accounts
Notes
Accounts
Notes
receivable
receivable
receivable
receivable
Not past due
862,431
$ 4,846
$ 1,039,337
$ 8,636
$ Up to 30 days
53,405
-
82,536
-
31 to 90 days
348
-
929
-
91 to 180 days
160
-
1,131
-
Over 180 days
10,915
-
68,144
-
927,259
$ 4,846
$ 1,192,077
$ 8,636
$ December31,2020
December31,2019
Accounts
receivable
1,039,337
$ 82,536
929
1,131
68,144
1,192,077
$		 Notes
receivable
8,636
$ -
-
-
-
8,636
$

The above ageing analysis was based on past due date.

B. As of December 31, 2020 and 2019, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2019, the balance of receivables from contracts

145

with customers amounted to $1,420,777.

  • C. The Group has no accounts receivable and notes receivable pledged to others.

  • D. Information relating to credit risk of accounts receivable is provided in Note 12(2).

  • E. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable was $4,846 and $8,636; $895,437 and $1,098,557, respectively.

(6) Inventories


respectively.
Inventories
December 31,2020
Allowance for
Cost valuation loss Bookvalue
Raw materials $ 516,001 ($ 32,427)
 $ 483,574
Work in progress 20,427 ( 1,844)
 18,583
Finished goods 303,583 ( 41,286)
 262,297
Merchandise 106,823 ( 4,131) 102,692
$ 946,834 ($ 79,688) $ 867,146
December31,2019
Allowance for
Cost valuation loss Bookvalue
Raw materials $ 560,869 ($ 29,428)
 $ 531,441
Work in progress 20,390 ( 3,698)
 16,692
Finished goods 551,674 ( 30,850)
 520,824
Merchandise 175,536 ( 4,524) 171,012
$ 1,308,469 ($ 68,500) $ 1,239,969
The cost of inventories recognised as expense for the year:
Year ended December31,
2020 2019
Cost of goods sold $ 5,752,458 $ 7,587,740
Unamortised manufacturing expenses 205,085 364,193
Loss on (gain on reversal of) decline in market value 12,027 ( 23,044)
Loss on scrapping inventory 615 5,212
Loss on physical inventory 2,678 5,106
Revenue from sale of scraps ( 1,250) ( 1,715)
$ 5,971,613 $ 7,937,492

The Group reversed a previous inventory write-down because obsolete and slow-moving inventories and inventories with decline in market value were partially sold by the Group during the year ended December 31, 2019.

146

(7) Investments accounted for using the equity method

Investments accounted for using the equity method
Investee companies
Power Channel Limited
Foxwell Energy Co., Ltd.
Castles Technology Co., Ltd.
Studio A Technology Limited
Tegna Electronics Private Limited
Kleine Developments Ltd.		 December31,2020
Carryingamount
507,611
$ 209,077
181,429
93,174
25,886
-
1,017,177
$		 December31,2019
Carryingamount
383,154
$ -
205,914
185,049
25,308
7,034
806,459
$

  • A. The Group’s investments accounted for using the equity method for the years ended December 31, 2020 and 2019 were recognised based on the financial statements audited and attested by independent auditors.

  • B. Associates

The basic information of the associates that are material to the Group is as follows:

Company name
Power Channel
Studio A Technology		 Principal place
of business
China (Note 1)
Hong Kong		 December 31,
December 31,
2020
2019
35.75%
35.75%
24.50%
24.50%
Shareholdingratio		 Nature of
relationship
Note 2
Note 2		 Methods of
measurement
December 31,
2020
35.75%
24.50%
Equity method
Equity method

Note 1: Registered location is Hong Kong.

Note 2: Holds 20% or more of the voting power.

  • C. The summarised financial information of the associates that are material to the Group is as follows:

Balance sheet


is as follows:
Balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Share in associate's net assets
Goodwill
Carrying amount of the associate		 PowerChannel Limited
December31,2020
-
$ 1,066,779
-
-
1,066,779
$ 381,373
126,238
507,611
$		 December31,2019
-
$ 719,728
-
-
719,728
$
257,303
125,851
383,154
$

147

Statement of comprehensive income
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Share in associate's net assets
Goodwill
Carrying amount of the associate
Revenue
Profit for the period from
continuing operations
Loss for the period from
discontinued operations
Other comprehensive income,
net of tax
Total comprehensive income
Dividends received from associates
Revenue
Profit for the period from
continuing operations
Loss for the period from
discontinued operations
Other comprehensive income,
net of tax
Total comprehensive income
Dividends received from associates		 December31,2020
December31,2019
533,234
$ 842,834
$ 57,018
80,347
205,265)
(
150,021)
(
4,687)
(
17,857)
(
380,300
$ 755,303
$ 93,174
$ 185,049
$ -
-
93,174
$ 185,049
$ Studio A Technology
2020
2019
-
$ -
$ 113,196
$ 98,766
$ -
-
-
-
113,196
$ 98,766
$ -
$ -
$ PowerChannel Limited
YearendedDecember31,
2020
2019
1,666,133
$ 2,497,078
$ 58,309
$ 53,487
$ -
-
-
-
-
-
58,309
$ 53,487
$ -
$ -
$ YearendedDecember31,
PowerChannel Limited
2020
1,666,133
$ 58,309
$ -
-
-
58,309
$ -
$

D. The carrying amount of the Group’s interests in all individually immaterial associates (Note) and the Group’s share of the operating results are summarised below:

As of December 31, 2020 and 2019, the carrying amount of the Group’s individually immaterial associates amounted to $416,392 and $238,256, respectively.

148

Year ended December Year ended December 31,
2020 2019
Profit for the year from continuing $ 191,740 $ 2,398
operations
Other comprehensive loss, net of tax ( 136) ( 10,965)
Total comprehensive income (loss) $ 191,604 ($ 8,567)

  • Note: Castles Technology Co., Ltd., Kleine Developments Limited (registration has been cancelled in May 2020) and Tegna Eletronics Private Limited.

  • E. Wellgen Medical Co., Ltd. increased its capital by issuing new shares in February 2019. The Group did not acquire shares proportionally to its interest. As a result, the Group decreased its share interest to 17% and lost its significant influence. It was subsequently recognised in financial assets at fair value through other comprehensive income.

  • F. As described in Note 4(3), Jiangsu Foxlink New Energy Technology Co., Ltd. was initially a subsidiary of the Group. The Group did not participate in the capital increase proportionally to its interest in April 2020 and lost its control. This investment is recognised in investments accounted for using the equity method. Subsequently, the Group reduced its capital in September 2020, decreased its share interest to 12.9% and lost its significant influence based on its assessment. It was recognised in financial assets at fair value through other comprehensive income. Gains on disposal of investments of $9,579 was recognised due to the aforementioned transaction.

149

(8) Property, plant and equipment

Buildings
and Office Leasehold Other Unfinished
structures Machinery equipment improvements equipment construction Total
At January 1, 2020
Cost $ 1,405,027
 $ 3,474,924
 $ 134,741
 $ 320,543
 $ 1,289,259
 $ 2,271,006
 8,895,500
Accumulated depreciation ( 98,134) ( 1,932,257)
 ( 96,981) ( 279,614) ( 1,208,730)
 - ( 3,615,716)
$ 1,306,893 $ 1,542,667 $ 37,760 $ 40,929 $ 80,529 $ 2,271,006 $ 5,279,784
2020
Opening net book amount $ 1,306,893
 $ 1,542,667
 $ 37,760
 $ 40,929
 $ 80,529
 $ 2,271,006
 $ 5,279,784
as at January 1
Additions 66,680 83,279 14,969 7,484 8,606 673,809 854,827
Disposals - 45 ( 1,612) ( 2,369) ( 541)
 ( 167)
 ( 4,644)
Disposal of subsidiaries ( 923,712) ( 1,479,389)
 ( 24,135) - ( 1,763) ( 324,623) ( 2,753,622)
Reclassifications 655,878 1,550,602 - - - ( 1,806,348) 400,132
Depreciation charge ( 13,330) ( 277,968) ( 8,465) ( 21,737) ( 54,405) - ( 375,905)
Net exchange differences 6,872 9,365 ( 235)
 187 592 ( 5,865) 10,916
Closing net book amount
as at December 31 $ 1,099,281 $ 1,428,601 $ 18,282 $ 24,494 $ 33,018 $ 807,812 $ 3,411,488
At December 31, 2020
Cost $ 1,211,713
 $ 3,483,028
 $ 110,792
 $ 322,775
 $ 1,290,326
 $ 807,812
 $ 7,226,446
Accumulated depreciation ( 112,432)
 ( 2,054,427)
 ( 92,510)
 ( 298,281) ( 1,257,308)
 - ( 3,814,958)
$ 1,099,281 $ 1,428,601 $ 18,282 $ 24,494 $ 33,018 $ 807,812 $ 3,411,488
Buildings
and Office Leasehold Other Unfinished
structures Machinery equipment improvements equipment construction Total
At January 1, 2019
Cost $ 475,136
 $ 2,586,898
 $ 111,627
 $ 260,160
 $ 1,020,208
 $ 1,439,771
 $ 5,893,800
Accumulated depreciation ( 88,241) ( 1,305,276)
 ( 83,559) ( 193,855) ( 712,787) - ( 2,383,718)
$ 386,895 $ 1,281,622 $ 28,068 $ 66,305 $ 307,421 $ 1,439,771 $ 3,510,082
2019
Opening net book amount $ 386,895
 $ 1,281,622
 $ 28,068
 $ 66,305
 $ 307,421
 $ 1,439,771
 $ 3,510,082
as at January 1
Additions - 280,526 17,039 14,417 175,404 816,453 1,303,839
Acquired from business combinations - - - - - 691,860 691,860
Disposals - ( 85)
 ( 2,887) ( 4,902) ( 2,108) - ( 9,982)
Reclassifications 933,245 191,710 9,754 ( 533)
 - ( 614,991) 519,185
Depreciation charge ( 12,279) ( 303,140) ( 14,798) ( 32,732) ( 240,856) - ( 603,805)
Net exchange differences ( 968)
 92,034 584 ( 1,626) ( 159,332) ( 62,087) ( 131,395)
Closing net book amount
as at December 31 $ 1,306,893 $ 1,542,667 $ 37,760 $ 40,929 $ 80,529 $ 2,271,006 $ 5,279,784
At December 31, 2019
Cost $ 1,405,027
 $ 3,474,924
 $ 134,741
 $ 320,543
 $ 1,289,259
 $ 2,271,006
 $ 8,895,500
Accumulated depreciation ( 98,134)
 ( 1,932,257)
 ( 96,981)
 ( 279,614) ( 1,208,730)
 - ( 3,615,716)
$ 1,306,893 $ 1,542,667 $ 37,760 $ 40,929 $ 80,529 $ 2,271,006 $ 5,279,784

Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

150

(9) Leasing arrangements - lessee

  • A. The Group leases various assets including land, buildings, machinery and equipment and business vehicles. Rental contracts are typically made for periods of 2 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

  • B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land
Buildings
Transportation equipment (Business vehicles)
Office equipment (Photocopiers)
Land
Buildings
Transportation equipment (Business vehicles)
Office equipment (Photocopiers)		 December31,2020
December31,2019
Carrying
Carrying
amount
amount
295,676
$ 362,183
$ 276,054
285,843
3,046
2,236
152
17
574,928
$ 650,279
$ Year ended December31,		 December31,2019
Carrying
amount
362,183
$ 285,843
2,236
17
650,279
$
2020
Depreciation
charge
11,427
$ 78,219
1,506
65
91,217
$		 2019
Depreciation
charge
11,954
$ 105,386
1,567
41
118,948
$
  • C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $72,453 and $92,679, respectively.

D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss
Interest expense on lease liabilities

Expense on short-term lease contracts
Expense on leases of low-value assets
Expense on variable lease payments		 YearendedDecember31, YearendedDecember31,
2020
$ 4,594
25,250
584
6,200		 2019
$ 4,853
20,594
397
5,294
  • E. For the years ended December 31, 2020 and 2019, the Group’s total cash outflows for leases were $111,750 and $131,731, respectively.

F. Variable lease payments

(a) Some of the Group’s lease contracts contain variable lease payment terms that are linked to sales generated from electricity sold. For aforementioned contracts, up to 36.96% of lease payments are on the basis of variable payment terms and are accrued based on the sales amount. Variable payment terms are used for a variety of reasons and various lease payments that depend on sales are recognised in profit or loss in the period in which the event or condition that triggers those payments occurs.

151

  • (b) A 1% increase in the aggregate sales amount with such variable lease contracts would increase total lease payments by approximately $62.

  • (10) Leasing arrangements - lessor

  • A. The Group leases various assets including land and buildings. Rental contracts are typically made for periods of 1 and 6 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

  • B. For the years ended December 31, 2020 and 2019, the Group recognised rent income in the amounts of $13,805 and $12,777, respectively, based on the operating lease agreement, which does not include variable lease payments.

  • C. The maturity analysis of the lease payments under the operating leases is as follows:

Investment property
2020
2021
2022
2023
After 2024
At January 1, 2020
Cost

Accumulated depreciation
2020
Opening net book amount

as at January 1
Depreciation charge
Closing net book amount
as at December 31
At December 31, 2020
Cost
Accumulated depreciation		 December31,2020
December31,2019
$ -
$ 13,724
13,724
13,642
11,335
11,335
6,720
6,720
5,040
5,040
36,819
$ 50,461
$ Buildings and
Land
structures
Total
$ 344,587
52,416
$ 397,003
$ -
3,295)
(
3,295)
(
344,587
$ 49,121
$ 393,708
$ $ 344,587
$ 49,121
$ 393,708
-
2,636)
(
2,636)
(
344,587
$ 46,485
$ 391,072
$ 344,587
52,416
397,003
-
5,931)
(
5,931)
(
344,587
$ 46,485
$ 391,072
$		 December31,2019 December31,2019
$ 13,724
13,642
11,335
6,720
5,040
$ 50,461

(11) Investment property

152

At January 1, 2019
Cost

Accumulated depreciation
2019
Opening net book amount

as at January 1
Depreciation charge
Closing net book amount
as at December 31
At December 31, 2019
Cost
Accumulated depreciation		 Buildings and
Land
structures
Total
$ 344,587
52,416
$ 397,003
$ -
659)
(
659)
(
344,587
$ 51,757
$ 396,344
$ $ 344,587
$ 51,757
$ 396,344
-
2,636)
(
2,636)
(
344,587
$ 49,121
$ 393,708
$ 344,587
52,416
397,003
-
3,295)
(
3,295)
(
344,587
$ 49,121
$ 393,708
$
  • A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

investment property are shown below:
Rental income from investment property
Direct operating expenses arising from
the investment property that generated
rental income during the year		 YearendedDecember31,
2020
13,805
$ 2,636
$		 2019
12,777
$
2,636
$

  • B. The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was $392,673 and $397,003, respectively, which was valued by external independent appraisers. Valuations were made using the comparison, income and cost approach.

  • C. The Group has no investment property pledged to others.

153

(12) Intangible assets

Intangible assets
Goodwill Trademarks Others Total
At January 1, 2020
Cost $ 919,223
 $ 49,566 $ 143,336
 $ 1,112,125
Accumulated amortisation
and impairment - - ( 84,430) ( 84,430)
$ 919,223 $ 49,566 $ 58,906 $ 1,027,695
2020
Opening net book amount $ 919,223
 $ 49,566 $ 58,906
 $ 1,027,695
as at January 1
Additions - - 3,431 3,431
Amortisation charge - - ( 15,823)
 ( 15,823)
Net exchange differences ( 27,116) ( 2,480) ( 613)
 ( 30,209)
Closing net book amount
as at December 31 $ 892,107 $ 47,086 $ 45,901 $ 985,094
At December 31, 2020
Cost $ 892,107
 $ 47,086 $ 85,250
 $ 1,024,443
Accumulated amortisation
and impairment - - ( 39,349) ( 39,349)
$ 892,107 $ 47,086 $ 45,901 $ 985,094
Goodwill Trademarks Others Total
At January 1, 2019
Cost $ 931,993
 $ 50,781 $ 142,149
 $ 1,124,923
Accumulated amortisation
and impairment - - ( 68,217) ( 68,217)
$ 931,993 $ 50,781 $ 73,932 $ 1,056,706
2019
Opening net book amount $ 931,993
 $ 50,781 $ 73,932
 $ 1,056,706
as at January 1
Additions - - 4,287 4,287
Disposals - - ( 105)
 ( 105)
Amortisation charge - - ( 19,025)
 ( 19,025)
Net exchange differences ( 12,770) ( 1,215) ( 183)
 ( 14,168)
Closing net book amount
as at December 31 $ 919,223 $ 49,566 $ 58,906 $ 1,027,695
At December 31, 2019
Cost $ 919,223
 $ 49,566 $ 143,336
 $ 1,112,125
Accumulated amortisation
and impairment - - ( 84,430)
 ( 84,430)
$ 919,223 $ 49,566 $ 58,906 $ 1,027,695

154

  • A. Goodwill and trademark right (indefinite useful life) are allocated as follows to the Group’s cashgenerating units identified according to operating segment:

generating units identified according
to operating segment:
System and peripheral products
3C retail and peripheral products		 Goodwill
Trademarks
611,760
$ -
$ 280,347
47,086
892,107
$ 47,086
$ December31,2020		 December31,2019
Goodwill
611,760
$ 280,347
892,107
$		 Goodwill
611,760
$ 307,463
919,223
$		 Trademarks
-
$ 49,566
49,566
$
  • B. The recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill and trademark right (indefinite useful life) were not impaired. The recoverable amount of goodwill and trademark right (indefinite useful life) has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections and discount rate (11.61%~16.48%) based on financial budgets covering a five-year period.

(13) Other non-current assets, others

(13) Other non-current assets, others
December31,2020 December31,2019
Guarantee deposits paid (Note) $ 29,575 $ 48,220
Net defined benefit asset 74,891 67,562
Other non-current assets 12,913 19,015
$ 117,379 $ 134,797
Note: Please refer to Note 8.
(14) Short-term borrowings
Type of borrowings December31,2020 Interest rate range Collateral
Bank borrowings
Unsecured borrowings $ 3,099,800
 0.5134%～1.29% None
Secured borrowings 30,000 1.01% Please refer to note
8
$ 3,129,800
Type ofborrowings December31, 2020 Interestraterange Collateral
Bank borrowings
Unsecured borrowings $ 1,996,744 0.81%~1.80% None
(15) Short-term notes and bills payable
December31,2020 December31,2019
Commercial papers $ 307,400 $ 315,300
Discount amortisation ( 163)
 ( 342)
$ 307,237 $ 314,958
Annual interest rate range 1.338%～1.568% 1.058%-1.758%

155

(16) Other payables

Other payables
Payable on salary and bonus
Payable on employees’compensation and
directors’and supervisors’remuneration
Payable on equipment
Others		 December31,2020
273,584
$ 109,338
8,486
226,919
618,327
$		 December31,2019
257,226
$ 74,991
47,730
722,033
1,101,980
$

156

- (17) Long term borrowings

Long-term borrowings
Borrowing period Interest Unused December 31,
Type of borrowings and repayment term rate range credit line 2020
Long-term bank borrowings
Bank unsecured borrowings
FIT Holding Borrowing period is from
October 2020 to August 2022;
pay entire amount of principal
when due, interest is repayable
monthly. 1.1%~1.22% $ -
 $ 400,000
Foxlink Image Borrowing period is from
February 2020 to August
2023; pay entire amount of
principal when due, interest is
repayable monthly. 0.94%~1.1% 544,800 2,440,000
PQI Borrowing period is from
December 2019 to December
2022; pay principal based on
each bank's regulations,
interest is repayable monthly.
1.23%～1.35% 4,200 365,800
Glory Science Borrowing period is from
April 2019 to July 2024; pay
principal and interest based on
each bank's regulations. 1.04%～1.5% - 387,000
Shinfox Borrowing period is from
February 2019 to February
2023; pay entire amount in
installments 1.71%~1.76% - 18,870
Foxwell Energy Borrowing period is from
January 2019 to September
2023; pay entire amount in
installments 1.49% 292,775 38,451
Bank secured borrowings
Glory Science Borrowing period is from
December 2019 to December
2024; pay principal in
installments quarterly, interest
is calculated monthly.
1.26% - 80,000
Foxwell Energy Borrowing period is from May
2018 to December 2034; pay
entire amount in installments
1.53%~1.80% 294,832 314,397
4,044,518
Less: Current portion (shown as other current liabilities) ( 502,471)
$ 3,542,047

157

Borrowing period Interest Unused December 31,
Type of borrowings and repayment term rate range credit line 2019
Long-term bank borrowings
Bank unsecured borrowings
FIT Holding Borrowing period is from
October 2019 to August 2022;
pay entire amount of principal
when due, interest is repayable
monthly. 1.12% $ -
 $ 300,000
Foxlink Image Borrowing period is from April
2019 to December 2022; pay
entire amount of principal when
due, interest is repayable
monthly. 1.12%~1.23% - 2,300,000
PQI Borrowing period is from April
2015 to December 2021; pay
principal based on each bank's
regulations, interest is repayable
monthly. 1.48%～1.6% 16,683 387,027
Glory Science Borrowing period is from
December 2018 to July 2024;pay
entire amount of principal when
due, interest is repayable
monthly. 1.14%～1.26% - 462,000
Shinfox Principal is repayable in
installments from January 2015 to
February 2023. 1.97%~2.01% 55,817 33,378
Foxwell Energy Principal is repayable in
installments from January 2019 to
September 2033. 1.75% 306,709 41,487
Changyuan Principal is repayable in
installments from May 2019 to
October 2035. 1.59%~2.02% 253,042 276,958
Bank secured borrowings
Shinfox Borrowing period is from
December 2019 to December
2024; pay entire amount of
principal when due, interest is
repayable monthly. 1.26% - 100,000
Foxwell Energy Principal is repayable in
installments from May 2018 to
December 2034. 1.75%~1.8% 337,392 340,891
Principal is repayable in
Beiyuan installments from November
2019 to June 2036. 1.75%~2.22% 284,749 336,251
4,577,992
Less: Current portion (shown as other current liabilities) ( 369,539)
$ 4,208,453

158

As of December 31, 2020, the borrowings that have been used amounted to as follows:

Company Bank SinoPac
Yuanta Bank
Taishin Bank
Jih Sun Bank
E.SUN Bank
Cathay United Bank
Hua Nan Bank
Jih Sun Bank
KGI Bank
Taiwan Cooperative Bank
Eximbank
Mega Bank
Bank of Taiwan
EnTie Bank
Yuanta Bank
Hua Nan Bank
Mega Bank
Bank SinoPac
First Bank
KGI Bank
Hua Nan Bank
Jih Sun Bank
Taishin Bank
Bank SinoPac
Chang Hwa Bank
Taipei Fubon Bank
Eximbank
Mega Bank
SCSB
Chang Hwa Bank
Taishin Bank
Mega Bank
Bank SinoPac
Bank		 Credit line
1,000,000
$ 300,000
250,000
100,000
400,000
USD 10,000,000
200,000
400,000
400,000
500,000
500,000
300,000
300,000
300,000
300,000
100,000
100,000
300,000
90,000
200,000
95,000
50,000
250,000
200,000
200,000
250,000
192,000
100,000
16,528
2,342
132,530
240,907
1,917,017		 Amount of
borrowings used
FIT Holding
FIT Holding
FIT Holding
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
Foxlink Image
PQI
PQI
PQI
PQI
PQI
Glory Science
Glory Science
Glory Science
Glory Science
Glory Science
Glory Science
Glory Science
Glory Science
Glory Science
Shinfox
Shinfox
Foxwell Energy
Foxwell Energy
Foxwell Energy		 507,800
$ 300,000
250,000
100,000
200,000
280,000
200,000
300,000
250,000
310,000
500,000
300,000
300,000
300,000
300,000
65,800
50,000
196,000
1,000
75,000
95,000
25,000
200,000
200,000
185,000
250,000
192,000
80,000
16,528
2,342
46,217
240,907
65,724

159

(18) Pensions

  • A. (a) The Group has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Group contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Group would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Group will make contributions for the deficit by next March.

  • (b) The amounts recognised in the balance sheet are as follows:

December 31,2020 December 31,2019
Present value of defined benefit obligations ($ 39,445)
 ($ 36,237)
Fair value of plan assets 114,336 103,799
Net defined benefit asset $ 74,891 $ 67,562
December 31,2020 December 31,2019
Present value of defined benefit obligations $ - ($ 8,815)
Fair value of plan assets - 6,912
Net defined benefit liability $ - ($ 1,903)

160

(c) Movements in net defined benefit assets (liabilities) are as follows:

Present value of Net defined
defined benefit Fair value of benefit asse
obligations plan assets (liability)
2020
At January 1 ($ 45,054)
 $ 110,713
 $ 65,659
Current service cost ( 40)
 - ( 40)
Interest (expense) income ( 402)
 1,042 640
Past service cost 704 - 704
( 44,792) 111,755 66,963
Remeasurements:
Return on plan assets - 3,547 3,547
(excluding amounts included in
interest income or expense)
Change in financial assumptions ( 854)
 - ( 854)
Experience adjustments 5,093 - 5,093
4,239 3,547 7,786
Pension fund contribution - 142 142
Paid pension 1,106 ( 1,106) -
At December 31 ($ 39,447) $ 114,338 $ 74,891
Present value of Net defined
defined benefit Fair value of benefit asse
obligations plan assets (liability)
2019
At January 1 ($ 45,863)
 $ 108,474
 $ 62,611
Current service cost ( 41)
 - ( 41)
Interest (expense) income ( 561)
 1,334 773
Past service cost 966 - 966
( 45,499) 109,808 64,309
Remeasurements:
Return on plan assets - 3,590 3,590
(excluding amounts included in
interest income or expense)
Change in financial assumptions ( 2,079)
 - ( 2,079)
Experience adjustments ( 303) - ( 303)
( 2,382) 3,590 1,208
Pension fund contribution - 142 142
Paid pension 2,827 ( 2,827) -
At December 31 ($ 45,054) $ 110,713 $ 65,659

161

  • (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate
Future salary increases		 YearendedDecember31
2020
2019
0.04%~0.8%
0.08%~1.125%
1%~5%
2%~5%

Assumptions regarding future mortality experience are set based on the 2nd Taiwan Annuity Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2020
Effect on present value of
defined benefit obligation
December 31, 2019
Effect on present value of
defined benefit obligation		 Increase
Decrease
0.25%
0.25%
1,399)
($ 1,465
$ 1,007)
($ 1,090
$ Discountrate		 Increase
Decrease
1%
2%
1,381
$ 1,269)
($ 1,663
$ 1,519)
($ Future salaryincreases
Increase
0.25%
1,399)
($ 1,007)
($		 Increase
1%
1,381
$ 1,663
$

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

162 

  - (f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 amount to $2,203.

  - (g) As of December 31, 2020, the weighted average duration of the retirement plan is 12~20.5 years.

  • B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6%~8% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

    • (b) The Company’s foreign subsidiaries have established a defined contribution pension plan in accordance with the local regulations. Other than the monthly contributions, the Group has no further obligations.

    • (c) The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2020 and 2019, were $24,436 and $71,726, respectively.

  • (19) Share capital

As described in Note 1, the Company acquired 100% of the shares of Glory Science, PQI and Foxlink Image through share swap by exchanging 1 common share of Glory Science into 1 common share of the Company, 1 common share of PQI converted to 0.194 common share of the Company and 1 common share of Foxlink Image converted to 0.529 common share of the Company. As of December 31, 2020, the Company’s authorised capital was $3,000,000, consisting of 300,000 thousand shares of ordinary stock (including 30,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,462,421 with a par value of $10 (in dollars) per share. Ordinary shares outstanding as at December 31,2020 amounted to 246,242 thousand shares.

(20) Capital surplus

  • A. In accordance with IFRS Q&A issued by Accounting Research and Development Foundation (ARDF) on October 26, 2018 and ARDF Interpretation 100-390, as described in Note 4, the share swap transactions between the Company and Glory Science were considered as a reorganisation under common control on October 1, 2018.

  • B. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

  • C. The shareholders resolved the Company to distribute cash by capital surplus of $615,606 (NT$2.5 (in dollars) per share) on June 21, 2019.

163

(21) Accumulated deficits to be covered

  • A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. The remaining earnings shall be proposed by the Board of Directors and resolved by the shareholders as dividends to shareholders.

  • According to the Company’s dividend policy, no more than 90% of the distributable retained earnings shall be distributed as shareholders’ bonus and cash dividend distributed in any calendar year shall be at least 20% of the total distributable earnings in that year based on future capital expenditures budget and capital requirements.

  • B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

  • C. Special reserve

  • (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

  • (b) As described in Note 4(2), the Company is substantially a continuation of Glory Science. Therefore, the amount previously set aside by the Company as special reserve in accordance with Order No. Financial-Supervisory-Securities-Corporate-1010012865, dated April 6, 2012, shall be the same as the amount reclassified from accumulated translation adjustment under shareholders’ equity to retained earnings for the exemptions elected by the Group. The special reserve increased as a result of retained earnings arising from the adoption of IFRS amounted to $8,361 thousand.

  • D. The shareholders resolved the Company to cover deficits by capital surplus of $281,965 on June 24, 2020 and $166,692 on June 21, 2019.

(22) Operating revenue

  • A. Disaggregation of revenue from contracts with customers

The Group derives revenue in the following major product lines and geographical regions: Revenue from external customer contracts

164

2020
System and peripheral products
3C retail and peripheral products
3C components
Others
2020
System and peripheral products
3C retail and peripheral products
3C components
Others
2019
System and peripheral products
3C retail and peripheral products
3C components
Others
2019
System and peripheral products
3C retail and peripheral products
3C components
Others		 China
1,325,258
$ 14,109
263,241
25,112
1,627,720
$ Europe
624,147
$ -
1,042
-
625,189
$ China
887,015
$ 38,651
660,558
-
1,586,224
$ Europe
916,257
$ -
240
-
916,497
$		 Taiwan
4,511
$ 95,680
88,799
496,584
685,574
$ Others
1,200,489
$ 12,238
111,490
-
1,324,217
$ Taiwan
3,563
$ 156,563
34,305
419,746
614,177
$ Others
2,095,422
$ 66,905
73,346
-
2,235,673
$		 HongKong
177,141
$ 1,484,488
19,195
-
1,680,824
$ HongKong
29,451
$ 2,218,127
48,270
-
2,295,848
$		 US
1,096,832
$ 11,829
1,176
-
1,109,837
$
Total
4,428,378
$ 1,618,344
484,943
521,696
7,053,361
$
US
1,176,805
$ 7,244
7,691
-
1,191,740
$
Total
5,108,513
$ 2,487,490
824,410
419,746
8,840,159
$

165

  • B. Contract assets and contract liabilities

  • (a) The Group has recognised the following revenue-related contract assets and contract liabilities:

Contract assets:
Contract assets–construction contracts
Contract liabilities:
Contract liabilities–advance sales receipts
Contract liabilities–construction contracts		 December31,2020 December31,2019
104,591
$ 374,231
266,085
640,316
$		 169,992
$ 276,945
2,597
279,542
$
  • (b) The aforementioned revenue-related contract assets and contract liabilities as at December 31, 2020 and 2019 are as follows:
31, 2020 and 2019 are as follows:
Total costs incurred and revenue recognised
Contractor's request for progress payment amounts
Contract assets- current
Contract liabilities- current		 Year ended
December31,2020		 Year ended
December31,2019
786,579
$
616,587)
(

169,992
$ 169,929
$
2,597)
(

167,332
$
977,551
$ 1,139,045)
(
161,494)
($ 104,591
$ 266,085)
(
161,494)
($
  • (c) Revenue recognised that was included in the contract liability balance at the beginning of the period
the period
Interest income
Revenue recognised that was included
in the contract liability balance at the
beginning of the period
Unearned revenue
Interest income from bank deposits
Interest income from financial assets
measured at amortised cost		 2020
2019
130,226
$ 35,658
$ Year ended December31
YearendedDecember31
2020
12,427
$ 17,611
30,038
$		 2019
33,741
$ 18,248
51,989
$

(23) Interest income

166

(24) Other income

Other income
Year ended December 31
2020 2019
Rent income $ 31,812 $ 27,523
Dividend income 72,193 44,690
Gain recognised in bargain
purchase transaction - 92,235
Compensation income 50,000 -
Others 46,933 60,188
$ 200,938 $ 224,636
Other gains and losses
Year ended December 31
2020 2019
Foreign exchange gains (losses) $ 39,536 ($ 2,538)
Gains on disposals of investments 266,613 11,395
Government grants revenue 11,233 32,358
Financial assets at fair value through 1,387 4,843
profit or loss
(Losses) gains arising from lease - 2,141
modifications
Depreciation charge on investment property ( 2,636) ( 2,636)
Losses on disposals of property, plant and ( 1,555) ( 7,258)
equipment
Others 1,923 11,389
$ 316,501 $ 49,694

(25) Other gains and losses

(26) Finance costs

Finance costs
Interest expense
Bank loans
Lease liabilities		 Year ended December31
2020
102,809
$ 4,594
107,403
$		 2019
70,767
$ 4,853
75,620
$

167

(27) Expenses by nature

Expenses by nature
Nature
Employee benefit expense
Wages and salaries
Labour and health insurance fees
Pension costs
Other personnel expenses
Depreciation charge
Amortisation charge
Nature
Employee benefit expense
Wages and salaries
Labour and health insurance fees
Pension costs
Other personnel expenses
Depreciation charge
Amortisation charge		 Year ended December31,2020
Classified as
Classified as
operating
operatingcosts
expenses
Total
739,772
$ 523,803
$ 1,263,575
$ 26,711
27,910
54,621
8,713
14,419
23,132
37,986
24,104
62,090
813,182
$ 590,236
$ 1,403,418
$ 277,290
$ 189,832
$ 467,122
$ 1,780
$ 14,043
$ 15,823
$ Year ended December31,2019		 Total
1,263,575
$ 54,621
23,132
62,090
1,403,418
$
467,122
$
15,823
$
Classified as
operatingcosts
963,293
$ 48,286
55,011
48,103
1,114,693
$ 536,060
$ 2,404
$		 Classified as
operating
expenses
538,028
$ 33,499
15,017
27,028
613,572
$ 186,693
$ 16,621
$		 Total
1,501,321
$ 81,785
70,028
75,131
1,728,265
$
722,753
$
19,025
$

  • A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 6% for employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration.

  • B. For the year ended December 31, 2020, employees’ compensation was accrued at $5,600; while directors’ and supervisors’ remuneration was accrued at $1,200. The aforementioned amounts were recognised in salary expenses.

  • C. The employees’ compensation and directors’ remuneration were estimated and accrued based on distributable profit of current year as of the end of reporting period and the percentage prescribed by the Company’s Articles of Incorporation. The employees’ compensation and directors’ remuneration resolved by the Board of Directors on March 26, 2020 were $5,600 and $1,200, respectively, and will be distributed in the form of cash.

  • D. Information about employees’ compensation and directors’ remuneration of the Company as

168

resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(28) Income tax

  • A. Income tax expense (benefit)

  • (a) Components of income tax expense (benefit):

Current tax:
Current tax on profits for the year
Prior year income tax (over)
underestimation
Total current tax
Deferred tax:
Origination and reversal of temporary
differences
Total deferred tax
Income tax expense (benefit)		 2020
2019
34,765
$ 132,459
$ (3,039)
13,753
31,726
146,212
79,952
177,309)
(
79,952
177,309)
(
111,678
$ 31,097)
($ Year ended December31
  • (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:
is as follows:
Year ended December 31
2020 2019
Currency translation differences $ 4,658
 $ 34,052
for the year
Remeasurement of defined benefit
obligations ( 1,557) ( 241)
$ 3,101 $ 33,811

169

B. Reconciliation between income tax expense (benefit) and accounting profit

Year ended December Year ended December 31
2020 2019
Tax calculated based on profit (loss) $ 21,831 ($ 240,064)
before tax and statutory tax rate
Temporary difference not recognised 115,515 164,053
as deferred tax assets
Expenses disallowed by tax ( 39,646) 70,771
regulation
Prior year income tax underestimation ( 3,039) 13,753
Separate taxation - 79,219
Effect from changes in tax regulation 17,017 -
Impact of change in the tax rate on
temporary differences between
current year and the year realised - ( 118,829)
Income tax expense (benefit) $ 111,678 ($ 31,097)

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

are as follows:
Recognised
in other
Recognised in
comprehensive
At January1
profit or loss
income
AtDecember31
Temporary differences:
－Deferred tax assets:
Loss carryforward
67,740
$ 9,738
$ -
$ 77,478
$ Depreciation difference between tax and
36,541
14,605
-
51,146
financial basis
Warranty cost of after-sale service
21,164
1,036
-
22,200
Currency translation differences
104,353
-
4,658
109,011
Unrealized loss on market price decline and
12,940
1,296
-
14,236
obsolete and slow-moving inventory
Losses on doubtful debts
16,935
(1,506)
-
15,429
Unrealised gain on inter-affiliate accounts
40,107
12,779)
(
-
27,328
Others
35,404
12,077)
(
403)
(
22,924
335,184
$ 313
$ 4,255
$ 339,752
$ －Deferred tax liabilities:
Unrealised exchange gain
34,986)
($ 79,931)
($ -
$ 114,917)
($ Others
135,702)
(
334)
(
1,154)
(
137,190)
(
170,688)
($ 80,265)
($ 1,154)
($ 252,107)
($ 164,496
$ 79,952)
($ 3,101
$ 87,645
$ 2020		 2020
Recognised
in other
comprehensive
income
AtDecember31
-
$ 77,478
$ -
51,146
-
22,200
4,658
109,011
-
14,236
-
15,429
-
27,328
403)
(
22,924
4,255
$ 339,752
$ -
$ 114,917)
($ 1,154)
(
137,190)
(
1,154)
($ 252,107)
($ 3,101
$ 87,645
$		 AtDecember31
77,478
$ 51,146
22,200
109,011
14,236
15,429
27,328
22,924
339,752
$

170

Recognised
in other
Recognised in
comprehensive
At January1
profit or loss
income
AtDecember31
Temporary differences:
－Deferred tax assets:
Loss carryforward
70,307
$ 2,567)
($ -
$ 67,740
$ Depreciation difference between tax and
64,985
(28,444)
-
36,541
financial basis
Warranty cost of after-sale service
18,120
3,044
-
21,164
Currency translation differences
-
70,301
34,052
104,353
Unrealized loss on market price decline and
17,469
(4,529)
-
12,940
obsolete and slow-moving inventory
Losses on doubtful debts
16,577
358
-
16,935
Unrealised gain on inter-affiliate accounts
9,605
30,502
-
40,107
Others
17,769
17,793
158)
(
35,404
214,832
$ 86,458
$ 33,894
$ 335,184
$ －Deferred tax liabilities:
Unrealised exchange gain
171,040)
($ 136,054
$ -
$ 34,986)
($ Others
90,416)
(
45,203)
(
83)
(
135,702)
(
261,456)
($ 90,851
$ 83)
($ 170,688)
($ 46,624)
($ 177,309
$ 33,811
$ 164,496
$ 2019		 2019 2019
Recognised
in other
comprehensive
income
AtDecember31
-
$ 67,740
$ -
36,541
-
21,164
34,052
104,353
-
12,940
-
16,935
-
40,107
158)
(
35,404
33,894
$ 335,184
$ -
$ 34,986)
($ 83)
(
135,702)
(
83)
($ 170,688)
($ 33,811
$ 164,496
$		 AtDecember31
67,740
$ 36,541
21,164
104,353
12,940
16,935
40,107
35,404
335,184
$
  • D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets of the Company’s domestic subsidiaries are as follows:

==> picture [451 x 15] intentionally omitted <==

----- Start of picture text -----

December 31, 2020
----- End of picture text -----

Year incurred
2011~2020		 Amount filed/
assessed
2,960,873
$		 Unused amount
2,553,425
$		 Unrecognised
deferred taxassets
2,234,905
$		 Expiry year
2021~2030

E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority. The Company’s domestic subsidiaries’ income tax returns through 2017 and 2018 have been assessed and approved by the Tax Authority.

171

(29) Earnings (loss) per share

Earnings (loss) per share
Amount
after tax
Basic earnings per share
Profit attributable to the parent
83,599
$ Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
83,599
$ Assumed conversion of all dilutive
potential ordinary shares
Employees’compensation
-
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares
83,599
$ Amount
after tax
Basic and diluted loss per share
Loss attributable to the parent
189,059)
($ Equity attributable to former
owner of business combination
under common control
17,953)
(
207,012)
($		 Weighted average number of
ordinary shares outstanding
Earnings per share
(share in thousands)
(in dollars)
246,242
0.34
$ 246,242
173
246,415
0.34
$ Weighted average number of
ordinary shares outstanding
Loss per share
(share in thousands)
(in dollars)
0.77)
($ 0.07)
(
246,242
0.84)
($ Year ended December31,2019
Year ended December31,2020
Amount
after tax
83,599
$ 83,599
$ -
83,599
$

(30) Transactions with non-controlling interest

A. Disposal of equity interest in a subsidiary (that did not result in a loss of control)

In November 2020, the Group disposed of 1.9% of shares of its subsidiary - Shinfox Energy Co., Ltd. for a total cash consideration of $81,497. The carrying amount of non-controlling interest in Shinfox Energy Co., Ltd. was $499,185 at the disposal date. This transaction resulted in an increase in the non-controlling interest by $24,097 and an increase in the equity attributable to owners of the parent by $57,400.

  • B. The Group did not participate in the capital increase raised by the subsidiaries and second-tier subsidiary proportionally to its interest to the subsidiary.

The subsidiary, Shih Fong Power Co., Ltd. and the second-tier subsidiaries, Shinfox Energy Co., Ltd., Shinfox Natural Gas Co., Ltd. and Foxwell Power Co., Ltd. increase its capital by issuing

172

new shares in 2020. The Group did not acquire shares proportionally to its interest. As a result, the Group decreased its share interest by 34%, 16%, 20% and 1%, respectively. The transaction decreased non-controlling interest by $125,447 and increased the equity attributable to owners of parent by $125,447.

  • C. The Group did not conduct any transaction with non-controlling interest for the year ended December 31, 2019.

(31) Business combinations

On June 14, 2019, the Company acquired a 100% equity interest in Shih Fong for a cash consideration of $280,000 and had control over the company. Shih Fong is primarily engaged in the development of hydropower plants.

A. The following table summarises the consideration paid for Shih Fong and the fair values of the assets acquired and liabilities assumed at the acquisition date:

assets acquired and liabilities assumed at the acquisition date:
June 14,2019
Purchase consideration
Cash paid $ 280,000
Fair value of the identifiable assets acquired and liabilities assumed
Cash 189
Prepayments 3,744
Property, plant and equipment 691,860
Other non-current assets 13,442
Notes payable 169,252
Other payables 167,748
Total identifiable net assets 372,235
Gain recognised in bargain purchase transaction ($ 92,235)
  • B. Had Shih Fong Power Co., Ltd. been consolidated from January 1, 2019, the consolidated statement of comprehensive income would show operating revenue of $8,840,159 and loss before income tax of ($197,641).

(32) Group restructuring under common control

To integrate Group resources and enhance the efficiency of entities division of labour, Foxwell Energy, an 89.29% owned subsidiary of the Company’s subsidiary, PQI, became one of the wholly owned subsidiaries of Shinfox Energy (formerly named Shinfox Co., Ltd.) by converting stocks into shares as approved by the shareholders on November 25, 2019. The effective date for this conversion was set on December 27, 2019. The conversion ratio is 1 share of Foxwell Energy’s common stock converted to 1 share of Shinfox Energy. Shinfox Energy increase its capital by issuing new shares in the amount of 60,000,000 shares which would be granted to PQI. PQI held a 76.56% equity interest in Shinfox Energy after the conversion. This conversion was deemed a group restructuring since the ultimate parent company of PQI is the same with Shinfox Energy, and thus the subsidiary is considered as consolidated at the beginning of the merger. The difference between the acquisition

173

cost and net equity would be adjusted in retained earnings for the year ended December 31, 2019 in the amount of $86,565

(33) Supplemental cash flow information

The Group sold 100% of its shares in the subsidiaries – Changyuan, Beiyuan and Shinfox Power on November 30, 2020 and therefore lost control over the subsidiaries (please refer to Note 4(3)B). The details of the consideration received from the transaction (including cash and cash equivalents) and assets and liabilities relating to the subsidiary are as follows:

ets and liabilities relating to the subsidiary are as follows:
Carrying amount of the assets and liabilities of the
subsidiaries
Cash
Other current assets
Property, plant and equipment
Deferred tax assets
Other non-current assets
Other current liabilities
Other non-current liabilities
Carrying amount of subsidiaries disposed
Gain on disposal of subsidiaries
Total consolidation received from disposal of subsidiaries
Cash and cash equivalents from disposal of subsidiaries
Net cash charged due to disposal of subsidiaries		 December 31,2020
Changyuan Beiyuan
Shinfox
Power
3,287
$ 6,400
$ 21,108
$ 37,784
38,351
114
729,847
740,911
24,039
34
28
-
5,786
2,864
2,057
128,466)
(
130,331)
(
2,370)
(
454,612)
(
532,396)
(
-
193,660
125,827
44,948
125,490
114,360
52
319,150
240,187
45,000
3,287)
(
6,400)
(
21,108)
(
315,863
$ 233,787
$ 23,892
$

(34) Changes in liabilities from financing activities

January 1, 2020
Changes in cash flow from financing activities
Changes in other non-cash items
Impact of changes in foreign exchange rate
December 31, 2020
January 1, 2019
Changes in cash flow from financing activities
Changes in other non-cash items
Impact of changes in foreign exchange rate
December 31, 2019		 Short-term
borrowings
1,996,744
$ 1,133,056
-
-
3,129,800
$ Short-term
borrowings
1,100,000
$ 896,744
-
-
1,996,744
$		 Long-term
Short-term
borrowings
notes and
(including
bills
current
payable
portion)
314,958
$ 4,577,992
$ 7,721)
(
453,536
-
987,010)
(
-
-
307,237
$ 4,044,518
$ Long-term
Short-term
borrowings
notes and
(including
bills
current
payable
portion)
354,934
$ 2,957,276
$ 39,976)
(
1,620,716
-
-
-
-
314,958
$ 4,577,992
$		 Liabilities
Other
from
payables to
financing
related
Lease
activities-
parties
liability
gross
$ - $ 346,816
$ 7,236,510
4,000,000 (
75,122) 5,503,749
-
69,763 (
917,247)
-
(
4,405)
(
4,405)
4,000,000
$ 337,052
$ 11,818,607
$ Liabilities
Other
from
payables to
financing
related
Lease
activities-
parties
liability
gross
$ - $ 431,044
$ 4,843,254
- (
105,446) 2,372,038
-
22,868
22,868
-
(
1,650)
(
1,650)
-
$ 346,816
$ 7,236,510
$		 Liabilities
from
financing
activities-
gross
7,236,510
$

174

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Cheng Uei Precision Industry Co., Ltd. (Cheng Uei) Ultimate parent Fugang Electronic (Dongguan) Co., Ltd. (FGEDG) Other related party Fugang Electronic (Xuzhou) Co., Ltd. (FG XuZhou) Other related party Kunshan Fugang Electric Trading Co., Ltd. (KFET) Other related party VA Product Inc. (VA) Other related party CU International Ltd. (CU) Other related party Studio A Technology Limited (Studio A Hong Kong) Other related party Studio A Inc. (Studio A) Other related party Straight A Inc. (Straight A) Other related party Sharetronic Data Technology Co., Ltd. (Sharetronic) Other related party Dongguan Fuqiang Electronics Co., Ltd. (DGFQ) Other related party Foxwell Energy Co., Ltd. (Foxwell Energy) Other related party Changyuan Wind Power Co., Ltd. (Zhangyuan) Other related party (Note) Beiyuan Wind Power Co., Ltd. (Beiyuan) Other related party (Note) Shinfox Power Co., Ltd. (Shinfox Power) Other related party (Note) Central Motion Picture Corporation (Central Motion Picture) Other related party

Note: Changyuan, Beiyuan and Foxwell Energy became other related party due to disposal of shares on November 31, 2020.

(2) Significant related party transactions

  • A. Operating revenue
November 31, 2020.
nificant related party transactions
Operating revenue
Sales of goods:
Cheng Uei
Other related parties
Sales of services:
Central Motion Picture
Changyuan
Beiyuan
Other related parties		 YearendedDecember31
2020
121,022
$ 67,696
188,718
$ 64,848
$ 33,688
33,688
28
132,252
$		 2019
31,946
$ 67,235
99,181
$
-
$ -
-
51
51
$

  • (a) Goods sold to the abovementioned related parties are based on mutual agreement and are not sold to the third parties. The collection terms are 90 to 120 days after monthly billings.

  • (b) The Group’s sales of services to the abovementioned related parties refer to construction revenue, service revenue and electricity sales revenue charged from the contracted

175

construction agreements, contracted agreements for development, design, manufacture and supervision of construction and the operation and maintenance contract for wind turbine generator system (WTGS) entered with other related parties, and the transaction price and credit terms are the same with the market situation or the general customers.

B. Purchases

credit terms are the same with
Purchases		 the market situation or the general customers. the market situation or the general customers.
Purchases of goods:
Cheng Uei
Studio A
Others		 YearendedDecember31
2020
38,077
$ 16,007
432
54,516
$		 2019
79,084
$ 56,039
-
135,123
$

The prices and terms are determined in accordance with mutual agreement, and the payment term is 90 to 120 days after monthly billings.

C. Receivables from related parties

is 90 to 120 days after monthly billings.
Receivables from related parties
Accounts receivable:
Shinfox Power
Beiyuan
Cheng Uei
Other related parties		 December31,2020
284,899
$ 35,308
22,195
52,319
394,721
$		 December31,2019
-
$ -
8,665
37,632
46,297
$

176

D. Payables to related parties

Payables to related parties
Accounts payable:
Cheng Uei
Other related parties
Other payables:
Cheng Uei
Other related parties		 December31,2020
21,333
$ 737
22,070
$ 14,734
$ 22,705
37,439
$		 December31,2019
115,181
$ 3,026
118,207
$
13,335
$ 20,040
33,375
$

  • (a) Payables to related parties mainly arose from purchases, and the payment terms are 90 to 120 days after monthly billings.

  • (b) Other payables to related parties mainly arose from management, legal and system maintenance fees payable.

  • E. Related Party Transactions

Disposal of financial assets:

maintenance fees payable.
Related Party Transactions
Disposal of financial assets:
Accounts
No. of shares
Other related parties
Foxwell Energy
Investments
accounted for
using the
equity method
- subsidiaries
23,000
Investments
accounted for
using the
equity method
- subsidiaries
16,000
Investments
accounted for
using the
equity method
- subsidiaries
4,500		 Objects Year ended December31,2020
Proceeds
319,150
$ 240,187
45,000
604,337
$		 Gain/(loss)
125,490
$ 114,360
52
239,902
$
Changyuan
Beiyuan
Shinfox
Power

The Group sold 100% of its shares in Changyuan Wind Power Ltd., Beiyuan Wind Power Ltd. and Shinfox Power Co., Ltd. to Foxwell Energy Co., Ltd. on November 30, 2020 and therefore lost control over the subsidiaries, of which the consideration of Changyuan Wind Power Ltd. and Beiyuan Wind Power Ltd. was reasonable after consulting with an external appraiser. The details of the consideration received from the transactions and assets and liabilities relating to the

177

subsidiaries are provided in Note 6(33).

  • －

  • F. Lease transactions lessee

  • (a)The Group leases buildings from the ultimate parent company and other related parties. Rental contracts are typically made for periods from 2013 to 2028 years. Rents are paid monthly.

  • (b)Acquisition of use-of-right assets

(c)
Lease liability
i. Outstanding balance
Ultimate parent
Cheng Uei
Other related parties
CU
Others		 Year ended December31,2020
Year ended December31,2019
37,249
$ 11,102
$ December31,2020
December31,2019
129,961
$ 118,204
$ 40,625
61,149
-
1,780
170,586
$ 181,133
$		 Year ended December31,2019 Year ended December31,2019
$ 11,102
December31,2019
118,204
$ 61,149
1,780
181,133
$

ii. Interest expenses

ii. Interest expenses
Rental revenue
Cheng Uei
Other related parties
Other related parties		 Year ended December31
2020
2019
1,665
$ 1,247
$ 591
909
2,256
$ 2,156
$ 2020
2019
18,007
15,657
$ Year ended December31		 2019
1,247
$ 909
2,156
$
2020
18,007
$

  • G. Rental revenue

  • H. Loans from related parties:

Loans from related parties (shown as other payable to related parties):

  • (a) Outstanding balance:
Outstanding balance:
Interest expense
Cheng Uei
Cheng Uei		 December31,2020
December31,2019
4,000,000
$ -
$ Year ended December31		 December31,2019
-
$
2020
22,126
$		 2019
-
$
  • (b) Interest expense

The loans are settled at maturity. Interest rate for the year ended December 31, 2020 was 1.5%

178

per annum.

I. Loans to others and guarantee/endorsement: Please refer to Notes 13(1)A and 13(1) B. (3) Key management compensation

Salaries and other short-term
employee benefits
Post-employment benefits		 Year ended December31 Year ended December31
2020
11,671
$ 216
11,887
$		 2019
17,221
$ 1,244
18,465
$

179

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Pledged asset
Time deposits (shown as
financial assets at
amortised cost- current)
Time deposits (shown as
financial assets at
amortised cost- current)
Guarantee deposits paid
(shown as other non-
current assets)
Guarantee deposits paid
(shown as other current
assets)
Time deposits (shown as
financial assets at
amortised cost-non-
current)
Restricted bank deposits
(shown as financial assets
at amortised cost-
current)
Time deposits (shown as
financial assets at
amortised cost-non-
current)
Restricted bank deposits
(shown as financial assets
at amortised cost- non-
current)
Property, plant and
equipment		 December31,2020
December31,2019
-
$ 896,906
$ 159,551
241,250
2,284
2,694
3,107
-
-
13,442
5,400,000
7,711
4,500
4,500
14,591
2,376
951,953
591,778
6,535,986
$ 1,760,657
$ Bookvalue		 Purpose
December31,2020
-
$ 159,551
2,284
3,107
-
5,400,000
4,500
14,591
951,953
6,535,986
$
Repatriation of capital
from Taiwan’s offshore
companies
Guarantee for fast
Customs Clearance and
issuance of material
purchasing guarantee
and security deposit
Guarantee for
construction
performance and bank
deposits
Guarantee for
construction
performance
Guarantee for soil and
water conservation
Impound and guarantee
for construction
performance and
guarantee for notes
Guarantee for lease
performance
Impound, guarantee for
construction
performance and notes
Short-term and long-
term borrowings

180

9. Significant Contingent Liabilities and Unrecognised Contract Commitments (1) Contingencies

Central Motion Picture Corporation (the “Central Motion Picture”), a financial asset at fair value through other comprehensive income of the Group, amounting to $257,656, was determined to be an affiliate organisation of the Kuomintang by the Ill-gotten Party Assets Settlement Committee (the “Ill-gotten Party”) in its written disposition, Dang-Chan-Chu-Zi No. 107007, issued on October 9, 2018. Under paragraph 1, Articles 5 and 9 of the Act Governing the Settlement of Ill-gotten Properties by Political Parties and Their Affiliate Organisations (the “Act”), properties were held by the Central Motion Picture when the Act was released on August 10, 2016 are considered as unjustly received properties. The presumed ill-gotten party assets as prescribed in the preceding paragraph 1 of Article 5 are prohibited from being transferred or disposed since from the date of promulgation of this Act. However, this limit is not applicable if it is necessary to perform its legal duties or other justifiable reasons. The properties held by the Central Motion Picture are considered as unjustly received properties; however, their existing rights in leases, superficies, mortgage, or pawnage are not affected if Ill-gotten Party considers such assets as unjustly received assets and then orders the bona fide third party to transfer such assets to the State, local self-governing bodies, or original owners. Under Article 16, the Central Motion Picture may file an administrative litigation (an action for revocation) in the Taipei High Administrative Court within two months after the aforementioned written disposition was served. In addition, the Central Motion Picture may file for a suspension of execution under Paragraph 2, Article 116 of the Administrative Litigation Act. On December 12, 2018, Central Motion Picture Corporation submitted cause of action to the Taipei High Administrative Court, which ruled to approve the suspension of execution in January 2020. However, Ill-gotten Party subsequently filed an appeal against the ruling, and it was dismissed by the High Administrative Court in February 2020. Meanwhile, Central Motion Picture filed a revocation action with the Taipei High Court, and it was pending approval as of January 14, 2020. As of the financial reporting date, the possible result of this litigation cannot be determined.

(2) Commitments

  • A. Information on endorsement/guarantee of the Company is provided in Note 13(2).

  • B. As of December 31, 2020 and 2019, the letters of guarantee to be issued by the bank, which are required for contracting the Phase II of Taipower’s Offshore Wind Power Project, the “Wind Farm Property Procurement and Installation Project” and Solar System Integration Project, amounted to $5,682,681 and $284,991, respectively.

  • C. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

  • (a) As of December 31, 2020 and 2019, equipment purchases agreements contracted but not recognised and paid amounted to $26,618 and $167,552, respectively.

  • (b) The Company entered into a construction cooperation contract with non-related parties with a total consideration of $15,154. As of December 31, 2020, the consideration of $1,687 was settled.

181

  • D. On August 13, 2020, the Group entered into an equipment procurement contract and an operation and maintenance contract with Taiwan Power Company for the Phase II of Taipower’s Offshore Wind Power Project, the “Wind Farm Property Procurement and Installation Project” amounting to $56,588,000 and $6,300,000, respectively. The terms of the equipment procurement contract specifies that the Company shall complete the foundation construction for WTGS and offshore substation as of September 30, 2024, shall complete all WTGS which shall be under the security constrained dispatch process as of December 31, 2025, shall complete the whole construction as of December 31, 2025 and shall provide 2 years warranties from the date of completion and acceptance of the whole construction. In addition, the equipment shall provide guaranteed generating capacity. The performance term of this project is divided into stages progress and the final completion deadline. The default penalty shall be computed until the termination date of the contract according to each stage of the project. The operation and maintenance contract specifies the terms such as the guaranteed annual availability and default penalty of all WTGS as well as the relevant rights and obligations of both parties. The contract period is 5 years from the time when all WTGS are under the security constrained dispatch process.

  • E. The Group entered the operation and maintenance contract with Changyuan Wind Power Ltd., Beiyuan Wind Power Ltd. and Shinfox Power Co., Ltd. for WTGS and solar energy equipment. The contract specifies the terms such as the bonus and penalty of operation and maintenance as well as the relevant rights and obligations of both parties. The contract period is 20 years from the parallel connection date. Please refer to Note 7 for the payment charged.

10. Significant Disaster Loss

None.

11. Significant Subsequent Events

  • A. The appropriation of 2020 earnings had been approved by the Board of Directors on March 26, 2021. Details are summarized below:
Legal reserve
Cash dividends		 2020 2020
Amount
8,985
$ 73,873		 Dividends per share
(in dollars)
0.30
$
  • B. The cash payment from capital surplus amounting to $172,369 (NTD 0.7 per share) had been approved by the Board of Directors on March 26, 2021.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a

182

going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(2) Financial instruments

A. Financial instruments by category

ares or sell assets to reduce debt.
nancial instruments
Financial instruments by category
Financial assets
Financial assets at fair value
through profit or loss
Financial assets mandatorily measured
at fair value through profit or loss
Financial assets at fair value through
other comprehensive income
Designation of equity instrument
Financial assets at amortised cost
Cash and cash equivalents
Financial assets at amortised cost
Notes receivable
Accounts receivable
(including related parties)
Other receivables
Guarantee deposits paid		 December31,2020
-
$ 2,345,419
$ 5,148,889
$ 5,593,595
4,846
1,290,158
8,061
32,682
12,078,231
$		 December31,2019
129,150
$
2,229,668
$
1,820,304
$ 1,507,673
8,636
1,144,854
6,923
48,220
4,536,610
$

183

Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable (including related parties)
Other payables
(including related parties)
Long-term borrowings
(including current portion)
Lease liability		 December31,2020
3,129,800
$ 307,237
155
1,004,216
4,655,766
4,044,518
13,141,692
$ 337,052
$		 December31,2019
1,996,744
$ 314,958
3,273
1,449,755
1,135,355
4,577,992
9,478,077
$
346,816
$

  • B. Financial risk management policies

  • (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk.

  • (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

  • C. Significant financial risks and degrees of financial risks

  • (a) Market risk

Exchange rate risk

  • i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

  • ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The group entities are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD and RMB expenditures.

  • iii. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations

184

is as follows:

(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
RMB:NTD
JPY:NTD
HKD:NTD
EUR:NTD
HKD:RMB
USD:RMB
Financial liabilities
Monetary items
USD:NTD
RMB:NTD
JPY:NTD
USD:RMB
USD:HKD
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
RMB:NTD
HKD:RMB
USD:RMB
Financial liabilities
Monetary items
USD:NTD
RMB:NTD
EUR:NTD
USD:RMB
USD:HKD		 December31,2020 December31,2020
Foreign currency amount
Book value
(Inthousands)
Exchangerate
(NTD)
57,883
$ 28.4800
1,648,508
$ 293,127
4.3770
1,283,017
468,634
0.2760
129,343
3,440
3.6730
12,635
164
35.0200
5,743
4,890
0.8390
17,961
13,805
6.5070
393,166
27,203
$ 28.4800
774,741
$ 62,317
4.3770
272,762
23,942
0.2760
6,608
2,405
6.5070
68,494
4,434
7.7540
126,280
December31,2019
Foreign currency amount
(Inthousands)
66,945
$ 37,526
519
6,111
17,780
35,978
$ 40,404
6,213
5,377
2,234		 Book value
Exchangerate
(NTD)
29.98
2,007,011
$ 4.305
161,549
33.59
17,433
0.894
5,463
6.964
533,044
29.98
1,078,620
$ 4.305
173,939
33.59
208,695
6.964
161,202
7.789
66,975

D. The total exchange gain (loss), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019, amounted to $39,536 and ($2,538), respectively.

185

E. Analysis of foreign currency market risk arising from significant foreign exchange variation:

Year ended December 31, 2020

Year ended December31,2020
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
RMB:NTD
JPY:NTD
HKD:NTD
EUR:NTD
HKD:RMB
USD:RMB
Financial liabilities
Monetary items
USD:NTD
RMB:NTD
JPY:NTD
USD:RMB
USD:HKD		 Sensitivityanalysis
Degree of
variation
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%		 Effect on profit or loss
Effect on other
before tax
comprehensive income
16,485
$ -
$ 12,830
-
1,295
-
126
-
57
-
180
-
3,932
-
7,747
$ -
$ 2,728
-
66
-
685
-
1,263
-





186

(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD
RMB:NTD
EUR:NTD
HKD:RMB
USD:RMB
Financial liabilities
Monetary items
USD:NTD
RMB:NTD
EUR:NTD
USD:RMB
USD:HKD		 YearendedDecember31,2020
Sensitivity analysis
Degree of
variation
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%		 Effect on profit or loss
Effect on other
before tax
comprehensiveincome
20,070
$ -
$ 1,615
-
174
-
55
-
5,330
-
10,786
$ -
$ 1,739
-
2,087
-
1,612
-
670
-

Price risk

There is no significant effect.

Cash flow and fair value interest rate risk

  • i. The Group’s main interest rate risk arises from short-term borrowings and long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the years ended December 31, 2020 and 2019, the Group’s borrowings were denominated in the NTD and USD.

  • ii. If the borrowing interest rate had increased/decreased by 0.1% with all other variables held constant, profit, net of tax for the years ended December 31, 2020 and 2019 would have increased/decreased by $7,482 and $6,521, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

  • (b) Credit risk

  • i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

  • ii. The Group manages their credit risk taking into consideration the entire group’s concern. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the

187

credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

  • iii. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • iv. If the credit rating grade of an investment target degrades two scales, there has been a significant increase in credit risk on that instrument since initial recognition.

  • iii. The default occurs when the contract payments are past due over 120 days.

  • vi. The Group classifies customer’s accounts receivable and contract assets in accordance with default situation. The Group applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.

  • viii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2020 and 2019, the provision matrix is as follows:

December 31, 2020
Not past due
Up to 30 days past due
31~90 days past due
91~180 days past due
Over 180 days past due		 Expectedlossrate
0.03%
0.03%~5%
20%
100%
100%		 Totalbookvalue
862,431
$ 53,405
-
508
10,915
927,259
$		 Loss allowance
259
$ 20,140
508
10,915
31,822
$
December 31, 2020
Not past due
Up to 30 days past due
31~90 days past due
91~180 days past due
Over 180 days past due		 Expectedlossrate
0.03%
0.03%~5%
20%
100%
100%		 Totalbookvalue
1,039,337
$ 82,536
929
1,131
68,144
1,192,077
$		 Loss allowance
312
$ 23,747
186
1,131
68,144
93,520
$
  • viii. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable snd contract assets are as follows:

188

2020
Accounts receivable
At January 1 $ 93,520
Provision for impairment 752
Write-offs ( 62,493)
Effect of foreign exchange 43
At December 31 $ 31,822
2019
Accounts receivable
At January 1 $ 93,132
Provision for impairment 953
Effect of foreign exchange ( 565)
At December 31 $ 93,520

(c) Liquidity risk

The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Non-derivative financial liabilities

December 31, 2020
Short-term borrowings
Short-term notes and bills
payable
Notes payable
Accounts payable
Other payables
Lease liability
Long-term borrowings
(including current portion)		 Less than 1year
3,141,899
$ 307,237
155
1,004,216
4,655,766
73,877
541,696		 Between 2
and5 years
-
$ -
-
-
-
142,639
3,368,598		 Over5 years
-
$ -
-
-
-
160,940
199,466

Non-derivative financial liabilities

189

December 31, 2019
Less than 1 year
Short-term borrowings
2,013,226
$ Short-term notes and bills
payable
314,958
Notes payable
3,273
Accounts payable
1,449,755
Other payables
1,135,355
Lease liability
66,141
Long-term borrowings
(including current portion)
430,949		 Between 2
and5 years
-
$ -
-
-
-
129,412
3,652,393		 Over5 years
-
$ -
-
-
-
140,823
714,184

(3) Fair value information

  • A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

  • Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in unlisted stocks is included in Level 1.

  • B. Fair value information of investment property at cost is provided in Note 6(11).

  • C. The carrying amounts of the Company’s financial instruments not measured at fair value, including cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable and other payables are approximate to their fair values.

  • D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2020 and 2019 are as follows:

December 31, 2020 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income $ 1,295,391 $ - $ 1,050,028 $ 2,345,419 Equity securities

190

December 31, 2019
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Non-capital guaranteed floating profit
financial instruments
Financial assets at fair value through other
comprehensive income
Equity securities		 Level 1
-
$ -
1,259,637
1,259,637
$		 Level 2
129,150
$ -
-
129,150
$		 Level3
-
$ -
970,031
970,031
$		 Total
129,150
$ -
2,229,668
2,358,818
$

  • E. The methods and assumptions the Group used to measure fair value are as follows:

  • (a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares Market quoted price Closing price

  • (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.

  • (c) When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

  • (d) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.

  • (e) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. Price information and parameters used in valuation was carefully assessed and was adjusted according to current market conditions.

  • (f) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

191

  • F. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

  • G. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

At January 1
Transfer in
Loss recognised in other comprehensive income
At December 31		 2020
2019
970,031
$ 998,656
$ 73,997
18,375
6,000
47,000)
(
1,050,028
$ 970,031
$

  • H. For the years ended December 31, 2020 and 2019, there were transfers into from Level 3, please refer to Note 6(7).

  • I. Treasury segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

  • J. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Fair value at
Significant
December
Valuation
unobservable
31,2020
technique
input
Unlisted shares
$ 1,050,028 Market
comparable
companies
Discount for lack
of marketability
Fair value at
Significant
December
Valuation
unobservable
31,2019
technique
input
Unlisted shares
$ 970,031 Market
comparable
companies
Discount for lack
of marketability
Non-derivative equity instrument:
Non-derivative equity instrument:		 Range
Relationship
(weighted
of inputs to
average)
fairvalue
20%
The higher the
discount for lack of
marketability, the
lower the fair value
Range
Relationship
(weighted
of inputs to
average)
fair value
20%~30%
The higher the
discount for lack of
marketability, the
lower the fair value		 Relationship
of inputs to
fairvalue

192

13. Supplementary Disclosures

(1) Significant transactions information

  • A. Loans to others: Please refer to table 1.

  • B. Provision of endorsements and guarantees to others: Please refer to table 2.

  • C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

  • D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.

  • E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

  • F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

  • G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

  • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.

  • I. trading in derivative instruments undertaken during the reporting periods: None.

  • J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

  • (2) Information on investees

  • Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 8.

(3) Information on investments in Mainland China

  • A. Basic information: Please refer to table 9.

  • B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

    • (a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: Please refer to Note 13(1) G.

    • (b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Please refer to Note 13(1) G.

    • (c) The amount of property transactions and the amount of the resulting gains or losses:None.

    • (d) Balance and purpose of provision of endorsements/guarantees or collaterals at December 31, 2020: Please refer to 13(1) B.

    • (e) Maximum balance, ending balance, interest rate range and interest for financing during the year ended and at December 31, 2014: Please refer to Note 13(1) A.

    • (f) Other significant transactions that affected the gains and losses or financial status for the period, i.e. rendering/receiving of service: None.

  • (4) Major shareholders information

  • Please refer to table 10.

193

14. Segment Information

(1) General information

The Group has classified the reportable operating segments based on product types. The Company’s operations and segmentation are both developed according to the product types. The current main product types are: 3C component, systems and peripheral products, 3C product retail and others.

(2) Measurement of segment information

The Board of Directors assesses the performance of the operating segments based on the operating income (loss).

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Year ended December 31, 2020

Systems and

Revenue from external customer
Inter-segment revenue
Segment Revenue
Segment income (loss)
Year ended December 31, 2019
Revenue from external customer
Inter-segment revenue
Segment Revenue
Segment income (loss)		 peripheral
3C product
products
retail
3C component
Adjustment
department
department
department
Others
and elimination
Total
4,428,378
$ 1,618,544
$ 484,943
$ 528,000
$ 6,504)
($ 7,053,361
$ -
183)
(
-
-
183
-
4,428,378
$ 1,618,361
$ 484,943
$ 528,000
$ 6,321)
($ 7,053,361
$ 294,923
$ 7,115)
($ 489,218)
($ 85,444
$ 104,688)
($ 220,654)
($ Systems and
peripheral
3C product
products
retail
3C component
Adjustment
department
department
department
Others
and elimination
Total
5,159,283
$ 2,487,490
$ 824,410
$ 419,746
$ 50,770)
($ 8,840,159
$ -
898
-
-
898)
(
-
5,159,283
$ 2,488,388
$ 824,410
$ 419,746
$ 51,668)
($ 8,840,159
$ 318,928
$ 16,418)
($ 789,341)
($ 289,690)
($ 243,225
$ 533,296)
($		 Total

194

(4) Reconciliation for segment income (loss)

The external revenue and segment profit (loss) reported to the chief operating decision-maker are measured in a manner consistent with revenue and profit (loss) before tax in the financial statements. 。 Therefore, no reconciliation was needed.

A reconciliation of reportable segment income or loss to the income/(loss) before tax from continuing operations for the years ended December 31, 2020 and 2019 is provided as follows:

Year ended December31 Year ended December31 Year ended December31
2020 2019
Reportable segments income/(loss) ($ 220,654)
 ($ 533,296)
Unrealised financial instrument gains
Non-operating income and expenses, net 512,107 305,166
Income (loss) before tax from continuing operations $ 291,453 ($ 228,130)

(5) Geographical information

Geographical information for the years ended December 31, 2020 and 2019 is as follows:

Hong Kong
China
USA
Taiwan
Others		 Year ended December31 Year ended December31
Non-current assets
584,684
$ 1,562,178
-
3,232,030
146,270
5,525,162
$ 2020		 2019
Revenue
1,680,824
$ 1,627,720
1,109,838
692,078
1,942,901
7,053,361
$		 Revenue
2,295,848
$ 1,586,224
1,191,740
614,177
3,152,170
8,840,159
$		 Non-current assets
654,629
$ 2,961,964
-
4,246,106
78,598
7,941,297
$

(6) Major customer information

Major customer information of the Group for the years ended December 31, 2020 and 2019 is as follows:

ollows:
D Company
H Company		 Year ended December 31
Segment
Systems and peripheral
products department
Systems and peripheral
products department
2020		 2019
Revenue
1,401,613
$ 732,348
$		 Revenue
Segment
1,840,660
$ Systems and peripheral
products department
483,805
$ Systems and peripheral
products department

195

Loans to others

Year ended December 31, 2020

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

FIT HOLDING CO., LTD.

No.
(Note 1)
Creditor
Borrower
General ledger
account
Is a
related
party
Maximum
outstanding
balance during
the year ended
December 31,
2020
Balance at
December 31,
2020
Interest
rate
Nature of loan
(Note 2)
Amount of
transactions
with the
borrower
Reason for short-term
financing
Allowance
for doubtful
accounts
Actual amount
drawn down		 Collateral Limit on loans
granted to a
single party
(Note 3)		 Ceiling on total
loansgranted		 Footnote
Item
Value
0
FIT Holding Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
289,014
$ 288,882
$ 218,850
$ 0.98%-1.2%
2
-
$ Operations
-
$ 0
FIT Holding Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Other receivables
Y
131,370
131,310
131,310
0.98%-1.2%
2
-
Operations
-
1
Foxlink Image Technology Co., Ltd.
Glory Science Co., Ltd.
Other receivables
Y
300,000
300,000
143,000
0.85%-1.2%
2
-
Operations
-
1
Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Other receivables
Y
648,000
600,000
425,000
0.89%-1.23%
2
-
Operations
-
2
Glory Science Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
399,970
253,866
253,866
1.5%
2
-
Operations
-
3
GLORY OPTICS(BVI) CO., LTD.
Glorytek (Yancheng) Co., Ltd.
Other receivables
Y
93,060
-
-
-
2
-
Operations
-
3
GLORY OPTICS(BVI) CO., LTD.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
75,068
-
-
-
2
-
Operations
-
4
Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
28,026
28,013
28,013
3%
2
-
Operations
-
4
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Other receivables
Y
220,910
218,850
175,080
5%
2
-
Operations
-
5
Power Quotient Technology (YANCHENG)
Co., Ltd.
Jiangsu Foxlink New Energy Technology
Co.,Ltd.
Other receivables
Y
457,600
-
-
-
2
-
Group capital movement
-
6
Foxwell Energy Corporation Ltd.
Beiyuan Wind Power Co., Ltd.
Other receivables
Y
50,000
-
-
Over one
month, 1.75%
2
-
Group capital movement
-
6
Foxwell Energy Corporation Ltd.
Changyuan Wind Power Co., Ltd.
Other receivables
Y
50,000
-
-
Over one
month, 1.75%
2
-
Group capital movement
-
7
Shinfox Co., Ltd.
Foxwell Energy Corporation Ltd.
Other receivables
Y
50,000
50,000
-
1.6%
2
-
Group capital movement
-
7
Shinfox Co., Ltd.
Foxwell Power Co., Ltd.
Other receivables
Y
50,000
50,000
-
1.6%
2
-
Group capital movement
-
7
Shinfox Co., Ltd.
SHINFOX NATURAL GAS CO., LTD.
Other receivables
Y
60,000
60,000
-
1.5%-1.6%
2
-
Group capital movement
-		 -
-
$ -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 2,117,579
$ 2,117,579
1,174,532
1,174,532
309,072
-
-
477,261
477,261
695,052
-
-
501,621
501,621
501,621		 2,823,439
$ 2,823,439
1,174,532
1,174,532
309,072
-
-
477,261
477,261
695,052
-
-
501,621
501,621
501,621

Note 1: The numbers filled in for the loans to others provided by the Company or subsidiaries are as follows:

  • ‘ ’

  • (1) The Company is 0 .

  • (2) The subsidiaries are numbered in order starting from ‘1’.�

  • Note 2: Fill in the nature of the loan as follows:

  • (1) Fill in 1 for business transaction.

  • (2) Fill in 2 for short-term financing

  • Note 3: The Company's and its subsidiaries' limits on loans to singal party and total loans are calculated based on the Company's and its subsidiaries' "Procedures for Provision of Loans".

(a) Total limit on loans granted to the companies having business relationship with the Company is 40% of the Company's net assets, limit on loans granted to a single party is 150% of the amount of business transactions between the creditor and borrower in the current year; the amount of business transactions means the higher between sales and purchases.

  • (b) Limit on total loans to parties with short-term financing is 40% of the Company's net assets; but limit on loans to a single party is 30% of the Company's net assets.

  • (c) Ceiling on total loans granted between foreign companies whose voting shares are 100% held by the Company directly or indirectly, or on loans granted to the Company by such foreign companies is 100% of their net asset value.

  • The total amount of loans granted to a single company should not exceed 100% of the net assets. Financing period shall not be more than 3 years.

(d) Among the Company and the parent company or subsidiaries, or loans between the Company's subsidiaires, excluding the loans to others qualifying the abovementioned condition, (c), the authorised limit on the Company's or the Company's subsidiaries' loans to a singal party shall be lower than 10% of the company's net assets based on the company's lastest financial statements.

  • (e) Limit on total loans and individual limit on lonas to others of the Company's subsidiaries are both under 40% of the Company's net assets.

196

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

FIT HOLDING CO., LTD.

Provision of endorsements and guarantees to others Year ended December 31, 2020

Number
(Note 1)
Endorser/
guarantor		 Partybeingendorsed/guaranteed Limit on
endorsements/
guarantees
provided for a
single party
(Note 3)		 Maximum
outstanding
endorsement/
guarantee amount as
of December 31,
2020		 Outstanding
endorsement/
guarantee
amount at
December 31,
2020		 Actual amount
drawn down		 Amount of
endorsements/
guarantees
secured with
collateral		 Ratio of accumulated
endorsement/
guarantee amount to
net asset value of the
endorser/ guarantor
company		 Ceiling on total
amount of
endorsements/
guarantees
provided		 Provision of
endorsements/
guarantees by
parent company
to subsidiary		 Provision of
endorsements/
guarantees by
subsidiary to
parent
company		 Provision of
endorsements/
guarantees to the
party in Mainland
China		 Footnote
Companyname
Relationship
with the
endorser/
guarantor
(Note2)
0
FIT Holding Co., Ltd.
0
FIT Holding Co., Ltd.
0
FIT Holding Co., Ltd.
1
Glory Science Co., Ltd.
1
Glory Science Co., Ltd.
2
Foxwell Energy Corporation Ltd.
3
Foxlink Image Technology Co., Ltd.
3
Foxlink Image Technology Co., Ltd.
4
Shinfox Co., Ltd.		 Power Quotient International Co., Ltd.
2
Glory Science Co., Ltd.
2
Foxwell Energy Corporation Ltd.
2
Glory Optics (Yancheng) Co., Ltd.
2
Glorytek (Yancheng) Co., Ltd.
2
Beiyuan Wind Power Co., Ltd.
2
Glory Science Co., Ltd.
4
Power Quotient International Co., Ltd.
4
Foxwell Energy Corporation Ltd.
2		 10,587,898
$ 10,587,898
9,882,038
1,159,023
1,159,023
1,238,685
4,110,865
4,110,865
1,881,077		 720,000
$ 1,260,000
531,698
185,070
185,070
600,000
600,000
300,000
800,000		 720,000
$ 1,121,310
522,778
-
-
-
600,000
300,000
800,000		 400,000
$ 625,000
522,778
-
-
-
200,000
300,000
790,000		 -
-
-
-
-
-
-
-
-		 10.20
15.89
7.41
-
-
-
8.50
4.25
11.33		 10,587,898
$ 10,587,898
10,587,898
1,159,023
1,159,023
1,238,685
4,404,498
4,404,498
1,881,077		 Y
Y
Y
Y
Y
Y
N
N
Y		 N
N
N
N
N
N
N
N
N		 N
N
N
Y
Y
N
N
N
N

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

  • (1) The Company is '0'.

  • (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

  • (1) Having business relationship.�

  • (2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

  • (3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

  • (4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.�

  • (5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.�

  • (6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.�

  • (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.�

Note 3: Total limit or limit on loans to a singal party of the Company's and subsidiaires is calculated in accordance with the Company's "Procedures for Provision of Endorsements and Guarantees".

  • (1) Limit on total endorsements is 150% of the Company's net asset.

  • (2) Limit on endorsements to a single party is 140% of the Company's net asset.

  • (3) Limit on total endorsements granted by the Company and its subsidiaries is 150% of the Company's net asset.

  • (4) Total limit on the Company's and its subsidiaries endorsement/guarantee to a singal party is 140% of the Company's net assets and to the subisidiaries that the Company owned more than 90% (included) voting shares is 150% of the Company's net assets.

  • (5) For business transaction with the Company, the guarantee amount should not exceed 150% of the amount of business transaction, which is the higher between sales and purchases.

  • (6) The companies whose voting rights are 90% owned directly and indirectly by the Company can provide endorsement/guarnatee each other with a limat of 10% of the Company's net assets, but not available for the companies whose voting rights are 100% owned directly and indirectly by the Company.

  • (7) The Company's subsidiary who prepared to provide endorsement/guarnatee to others due to business transaction shall implement in accordance with the Company's procedures, and the calculation of the Company's net assets shall use the subsidiary's net assets.

197

FIT HOLDING CO., LTD.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

Year ended December 31, 2020

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Securitiesheld by Marketable securities Relationship with the
securitiesissuer		 General
ledgeraccount		 As of December31,2020 As of December31,2020 Footnote
Number of shares
(inthousands)		 Bookvalue Ownership (%) Fairvalue
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient Technology (YANCHENG)
Co., Ltd.		 TAIWAN STAR TELECOM
CORPORATION LIMITED
Central Motion Picture Corporation
Cheng Uei Precision Industry Co., Ltd.
Wellgen Medical Co., Ltd.
SAINT SONG CORP.
OURS TECHNOLOGY INC.
INNOPLUS CO., LTD.
TAIWAN STAR TELECOM
CORPORATION LIMITED
STACK DEVICES CORPORATION
Jiangsu Foxlink New Energy Technology
Co.,Ltd.		 Not applicable
Investee of the Company's
parent company which is
accounted for using equity
method
The Company's parent
company
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable		 Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current		 50,000
4,294
27,503
1,500
127
13
160
50,000
70
-		 350,000
$ 257,656
1,295,391
18,375
-
-
-
350,000
-
73,997		 0.91
4.00
5.37
15.80
1.05
0.21
12.00
0.91
0.11
12.90		 350,000
$ 257,656
1,295,391
18,375
-
-
-
350,000
-
73,997		 Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral

198

Securitiesheld by Marketable securities Relationship with the
securitiesissuer		 General
ledgeraccount		 As of December31,2020 As of December31,2020 Footnote
Number of shares
(inthousands)		 Bookvalue Ownership (%) Fairvalue
Shinfox Co., Ltd.
Shinfox Co., Ltd.
Foxwell Energy Corporation Ltd.		 Corvus Energy Ltd.
SEC INTERNATIONAL INC.
Full Entertainment Marketing Co., Ltd.		 Not applicable
Not applicable
Not applicable		 Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current		 22
54
300		 -
-
-		 0.12
9.00
1.50		 -
-
-		 Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral

199

FIT HOLDING CO., LTD.

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2020

Table 4
Investor		 Marketable
securities		 General
ledger
account		 Counterparty Relationship with
the counterparty		 Balance as at January1,2020 Balance as at January1,2020 Addition Addition Disposal Disposal Expressed in thousands of NTD
(Except as otherwise indicated)
Balance as at December 31,2020		 Expressed in thousands of NTD
(Except as otherwise indicated)
Balance as at December 31,2020
No. of shares
(in thousands)		 Amount No. of shares
(in thousands)		 Amount No. of shares
(in thousands)		 Selling price Book value Gain (loss) on
disposal		 No. of shares
(in thousands)		 Amount
Foxlink Image
Technology Co.,
Ltd.
Foxwell Energy
Corporation Ltd.
Foxwell Energy
Corporation Ltd.		 Shih Fong Power
Co., Ltd.
Changyuan Wind
Power Co., Ltd.
Beiyuan Wind
Power Co., Ltd.		 Investment
accounted for
using equity
method
Investment
accounted for
using equity
method
Investment
accounted for
using equity
method		 Capital increase
by cash
Foxwell Energy
Co., Ltd.
Foxwell Energy
Co., Ltd.		 Affiliate
Other related
party
Other related
party		 -
23,000
16,000		 $ -
197,206
129,109		 79,800,000
-
-		 $ 957,600
-
-		 -
23,000
16,000		 $ -
319,150
240,187		 $ -
193,660
125,827		 $ -
125,490
114,360		 79,800,000
-
-		 $ 957,600
-
-

200

Table 5

FIT HOLDING CO., LTD.

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller Counterparty Relationship
with the
counterparty		 Transaction Differences in transaction terms
compared to third party
transactions		 Differences in transaction terms
compared to third party
transactions		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Footnote
Purchases
(sales)		 Amount Percentage of
total purchases
(sales)		 Credit term Unit price Credit term Balance Percentage of total
notes/accounts
receivable (payable)
ACCU-IMAGE
TECHNOLOGY LIMITED
Foxlink Image Technology Co.,
Ltd.
Wei Hai Fu Kang Electric Co.,
Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dongguan Fu Wei Electronics
Co., Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dong Guan Fu Zhang Precision
Industry Co., Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dongguan Fu Wei Electronics
Co., Ltd.
Foxlink Image Technology Co.,
Ltd.
Glory Science Co., Ltd.		 Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
ACCU-IMAGE
TECHNOLOGY LIMITED
Wei Hai Fu Kang Electric Co., Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
Dongguan Fu Wei Electronics Co., Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dong Guan Fu Zhang Precision Industry
Co., Ltd.
Foxlink Image Technology Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Glorytek (Yancheng) Co., Ltd.		 Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate		 Processing
income
Processing
income
Sales
Purchases
Processing
income
Processing
costs
Processing
income
Processing
costs
Processing
income
Processing
costs
Purchases		 586,226)
($ 586,226
190,473)
(
190,473
428,381)
(
428,381
114,510)
(
114,510
175,080)
(
175,080
117,220		 -100%
75%
-98%
33%
-67%
72%
-79%
19%
-27%
22%
18%		 Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
90 days after monthly
billings
90 days after monthly
billings
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement		 Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement		 None
None
None
None
None
None
None
None
None
None
None		 12,541
$ 12,541)
(
46,781
46,781)
(
262,549
262,549)
(
117,061
117,061)
(
178,981
178,981)
(
11,254)
(		 22%
-4%
96%
-100%
56%
-69%
53%
-31%
38%
-60%
-14%

201

Table 6

FIT HOLDING CO., LTD.

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Overdue receivables

Overdue receivables
Creditor Counterparty Relationship
withthe counterparty		 Balance as at
December31,2020		 Turnover rate Amount Actiontaken Amount collected
subsequent to
the balance
sheet date		 Allowance for
doubtfulaccounts
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dong Guan Fu Zhang Precision Industry Co., Ltd.
Dong Guan Fu Zhang Precision Industry Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Glory Science Co., Ltd.
Glory Science Co., Ltd.
Glory Science Co., Ltd.
Yancheng Yaowei Technology Co., Ltd.
Glorytek (Suzhou) Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.		 ACCU-IMAGE TECHNOLOGY LIMITED
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Glory Science Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Suzhou) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.		 Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate		 262,549
$ 178,981
117,061
103,223
425,000
143,000
328,575
507,221
121,199
138,336
177,144
131,310
219,054		 1.37
1.96
0.84
0.33
Note 1
Note 1
0.07
Note 1
Note 1
0.06
Note 1
Note 1
Note 1		 -
$ -
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-
-		 $ -
43,770
30,055
11,238
-
-
-
-
-
-
-
-
-		 -
$ -
-
-
-
-
-
-
-
-
-
-
-

Note 1: It was recognised in other receivables, therefore it was not applicable.

202

FIT HOLDING CO., LTD. Significant inter-company transactions during the reporting period Year ended December 31, 2020

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number
(Note 1)		 Companyname Counterparty Relationship General ledgeraccount Amount Transactionterms Percentage of consolidated
total operating
revenues or total assets
(Note 3)
1
1
2
2
3
4
5
5
5
5
6
6		 FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
Wei Hai Fu Kang Electric Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dong Guan Fu Zhang Precision Industry
Co., Ltd.
Dong Guan Fu Zhang Precision Industry
Co., Ltd.		 Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Power Quotient International Co., Ltd.
Glory Science Co., Ltd.
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
ACCU-IMAGE TECHNOLOGY LIMITED
ACCU-IMAGE TECHNOLOGY LIMITED
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
ACCU-IMAGE TECHNOLOGY LIMITED		 1
1
3
3
3
3
3
3
3
3
3
3		 Other receivables
Other receivables
Other receivables
Other receivables
Processing income
Sales revenue
Processing income
Accounts receivable
Processing income
Accounts receivable
Processing income
Accounts receivable		 131,310
$ 219,054
425,000
143,000
586,226
190,473
428,381
262,549
175,080
178,981
114,510
117,061		 Based on the Company's
policies
Based on the Company's
policies
Based on the Company's
policies
Based on the Company's
policies
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement		 1%
1%
2%
1%
8%
3%
6%
1%
2%
1%
2%
1%

203

Transaction

Number
(Note 1)		 Companyname Counterparty Relationship General ledgeraccount Amount Transactionterms Percentage of consolidated
total operating
revenues or total assets
(Note 3)
7
7
7
8
9		 Glory Science Co., Ltd.
Glory Science Co., Ltd.
Glory Science Co., Ltd.
Glorytek (Suzhou) Co., Ltd.
Yancheng Yaowei Technology Co., Ltd.		 Glory Optics (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Suzhou) Co., Ltd.		 3
3
3
3
3		 Other receivables
Accounts receivable
Other receivables
Other receivables
Accounts receivable		 507,221
328,575
121,199
175,080
138,336		 Collected depending on the
capital requirement after
offsetting receivables and
payables
Based on the Company's
policies
Based on the Company's
policies
Collected depending on the
capital requirement after
offsetting receivables and
payables
Based on the Company's
policies		 2%
1%
1%
1%
1%

  • Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:�

  • (1) Parent company is '0'.

  • (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to.�

(1) Parent company to subsidiary.

  • (2)Subsidiary to parent company.�

  • (3)Subsidiary to subsidiary.�

Note 3: Percentage of total consolidated revenues or total assets is calculated using the total consolidated assets at the end of the year when the subject of transaction is an asset/liability, � and is calculated by total consolidated revenues during the year when the subject of transaction is a revenue/expense.

  • Note 4: The inter-company transactions not exceeding $0.1 billion are not disclosed. In addition, counterparty related parties' transactions are not disclosed.

204

Table 8

FIT HOLDING CO., LTD.

Information on investees

Year ended December 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2020 as at December 31,2020 Net profit (loss) of
the investee for the
year ended December
31, 2020
(Note 1)		 Investment income
(loss) recognized by
the Company for the
year ended December
31, 2020
(Note 1)		 Footnote
Balance as at
December 31,
2020		 Balance as at
December 31,2019		 Number of shares Ownership
(%)		 Book value
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
Foxlink Image Technology Co.,
Ltd.
Foxlink Image Technology Co.,
Ltd.
Foxlink Image Technology Co.,
Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
Glory Science Co., Ltd.
GLORY TEK (BVI) CO., LTD.		 Glory Science Co., Ltd.
Foxlink Image Technology Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Shih Fong Power Co., Ltd.
Foxwell Energy Co., Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
KLEINE DEVELOPMENTS
LIMITED
Shih Fong Power Co., Ltd.
POWER CHANNEL LIMITED
GLORY TEK (BVI) CO., LTD.
GLORY TEK (SAMOA) CO.,
LTD.		 Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
British Virgin
Islands
British Virgin
Islands
Taiwan
Hong Kong
British Virgin
Islands
Samoa		 Manufacture and
sales of optical
instruments
Manufacture of
image
scanners and
multifunction
printers
Manufacture and
sales of
telecommunication
electronic
components
Hydroelectricity
generation
Energy service
management
Manufacture of
image
scanners and
multifunction
printers
Manufacture and
sales of magnesium
products
Hydroelectricity
generation
Holding and
reinvesting
businesses
General investments
business
General investments
business		 2,214,868
$ 3,011,140
2,172,180
760,000
210,000
1,030,318
-
957,600
139,552
1,379,545
780,074		 2,214,868
$ 3,011,140
2,172,180
760,000
-
1,030,318
642,224
-
139,552
1,379,545
780,074		 95,970,371
164,993,974
324,690,529
95,000,000
21,000,000
13,241,034
-
79,800,000
3,575
40,699,819
25,050,628		 100.00
100.00
100.00
41.30
14.00
100.00
0.00
34.70
35.75
100.00
100.00		 772,681
$ 3,682,263
2,211,702
1,000,903
209,077
1,383,042
-
957,197
507,611
583,887
692,930		 482,494)
($ 382,773
212,885
2,634)
(
6,592)
(
150,150
3
2,634)
(
122,016
336,236)
(
197,992)
(		 482,494)
($ 376,562
211,174
1,952)
(
923)
(
-
-
403)
(
-
-
-		 Subidiary
(Note 1)
Subidiary
(Note 1)
Subidiary
(Note 1)
Subidiary
(Note 1)
Subidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Investee
(Note 3)
Investee
(Note 1)
Investee
(Note 1)
Second-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)

205

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2020 as at December 31,2020 Net profit (loss) of
the investee for the
year ended December
31, 2020
(Note 1)		 Investment income
(loss) recognized by
the Company for the
year ended December
31, 2020
(Note 1)		 Footnote
Balance as at
December 31,
2020		 Balance as at
December 31,2019		 Number of shares Ownership
(%)		 Book value
GLORY TEK (BVI) CO., LTD.
GLORY TEK (BVI) CO., LTD.
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Sufficient International
Co., Ltd.
Shinfox Co., Ltd.
Shinfox Co., Ltd.		 GLORY OPTICS (BVI) CO.,
LTD.
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
TEGNA ELECTRONICS
PRIVATE LIMITED
Power Quotient International
(H.K.) Co., Ltd.
PQI JAPAN CO., LTD
SYSCOM DEVELOPMENT
CO., LTD.
Apix LIMITED
PQI Mobility Inc.
Castles Technology Co., Ltd.
Power Sufficient International
Co., Ltd.
Shinfox Co., Ltd.
Castles Technology Co., Ltd.
Foxwell Energy Corporation Ltd.
SHINFOX ENERGY
INTERNATIONAL INC.		 British Virgin
Islands
India
India
Hong Kong
Japan
British Virgin
Islands
British Virgin
Islands
Samoa
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Republic of
Seychelles		 Trading
Trading and
manufacturing
Trading and
manufacturing
Sales of electronic
telecommunication
components
Sales of electronic
telecommunication
components
General investments
holding
Specialised
investments holding
Specialised
investments holding
Trading and
manufacturing of
magnetic card and
reader for barcode
Sales of medical
instruments
Energy service
management
Trading and
manufacturing of
magnetic card and
reader for barcode
Energy service
management
Energy service
management		 494,837
99,927
13,174
389,705
23,129
309,378
2,946,803
284,800
43,061
10,000
561,482
6,670
672,000
-		 494,849
99,927
13,174
389,705
23,129
309,378
2,946,803
284,800
48,831
10,000
553,110
6,670
672,000
35,976		 16,000,000
21,773,105
3,001,000
106,100,000
24,300
10,862,980
12,501
10,000,000
10,847,003
1,000,000
58,743,000
331,000
67,200,000
-		 100.00
99.27
10.00
100.00
100.00
100.00
100.00
100.00
12.11
100.00
58.74
0.37
100.00
-		 58,973)
(
85,423
12,971
4,712)
(
156,089)
(
407,489)
(
1,109,517
695,052
176,017
8,935
740,111
5,412
848,087
-		 139,482)
(
1,252
6,130
38)
(
115)
(
2,210
62,793
12,589)
(
198,122
731
244,389
198,122
185,566
-		 -
-
-
-
-
-
-
-
-
-
-
-
-
-		 Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Investee
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Investee
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Investee
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 2)

206

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2020 as at December 31,2020 Net profit (loss) of
the investee for the
year ended December
31, 2020
(Note 1)		 Investment income
(loss) recognized by
the Company for the
year ended December
31, 2020
(Note 1)		 Footnote
Balance as at
December 31,
2020		 Balance as at
December 31,2019		 Number of shares Ownership
(%)		 Book value
Shinfox Co., Ltd.
Shinfox Co., Ltd.
Shinfox Co., Ltd.
Foxwell Energy Corporation Ltd.
Foxwell Energy Corporation Ltd.
SYSCOM DEVELOPMENT
CO., LTD
SYSCOM DEVELOPMENT
CO., LTD
Apix LIMITED
Apix LIMITED
Sinocity Industries Co., Ltd.
Perennial Ace Limited
Foxlink Powerbank International
Technology Private Limited		 SHINFOX NATURAL GAS
CO.,LTD.
Foxwell Power Co., Ltd.
Shinfox Power Co., Ltd.
Beiyuan Wind Power Co., Ltd.
Changyuan Wind Power Co., Ltd.
PQI CORPORATION
Foxlink Powerbank International
Technology Private Limited
Sinocity Industries Co., Ltd.
Perennial Ace Limited
DG LIFESTYLE STORE
LIMITED
Studio A Technology Limited
TEGNA ELECTRONICS
PRIVATE LIMITED		 Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
USA
India
Hong Kong
British Virgin
Islands
Macau
Hong Kong
India		 Energy service
management
Energy service
management
Energy service
management
Wind energy
Wind energy
Sales of electronic
telecommunication
components
Sales of electronic
telecommunication
components
Sales of electronic
telecommunication
components
Specialised
investments holding
Trading and
manufacturing
Trading and
manufacturing
Trading and
manufacturing		 120,000
99,000
-
-
-
199,360
95,778
2,479,275
606,624
357
4,998
11,649		 15,000
10,000
-
160,000
230,000
199,360
95,778
2,479,275
606,624
357
4,998
11,649		 12,000
9,900
-
-
-
7,000,000
21,790,000
6,000,000
No shares issued
100,000
1,225,000
3,001,000		 80.00
99.00
-
-
-
100.00
99.27
100.00
100.00
100.00
24.50
10.00		 103,015
99,460
-
-
-
492,603)
(
85,081
889,537
219,848
635
93,174
12,915		 12,762)
(
1,425
52)
(
3,280)
(
3,547)
(
303
1,921
48,507
14,286
130,136)
(
58,309
6,130		 -
-
-
-
-
-
-
-
-
-
-
-		 Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Notes 1 and 4)
Fourth-tier
subsidiary
(Notes 1 and 4)
Fourth-tier
subsidiary
(Notes 1 and 4)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Fourth-tier
subsidiary
(Note 1)
Investee
(Note 1)
Investee
(Note 1)

Note 1: It was recognised based on the company's financial statements reviewed by the independent auditors. Note 2: It was retired in the first quarter of 2020. Note 3: It was retired in the second quarter of 2020.

Note 4: It was sold in the fourth quarter of 2020.

207

FIT HOLDING CO., LTD.

Information on investments in Mainland China

Year ended December 31, 2020

Table 9
Investee in
Mainland China		 Main business
activities		 Paid-in
capital		 Investment
method		 Accumulated
amount of
remittance from
Taiwan to		 Amount remitted from Amount remitted from Accumulated
amount of
remittance from
Taiwan to
Mainland China as		 Net income of
investee for the
year ended
December 31,		 Ownership held
by the Company
(direct or
indirect)
Investment income
(loss) recognized by
the Company for the
year ended
December 31,2020		 Book value of
investments in
Mainland China as
of December 31,
Expressed in thousands of NTD
(Except as otherwise indicated)
Accumulated
amount of
investment income
remitted back to
Taiwan as of
Footnote
Remitted to
Mainland
China		 Remitted back
to Taiwan
Dong Guan Han Yang
Computer Limited
Sharetronic Data
Technology Co., Ltd.
Dong Guan Fu Zhang
Precision Industry Co.,
Ltd.
Wei Hai Fu Kang
Electric Co., Ltd.
Dongguan Fu Wei
Electronics Co., Ltd.
Glorytek (Suzhou) Co.,
Ltd.
Glorytek (Yancheng)
Co., Ltd.
Yancheng Yao Wei
Technology Co., Ltd
Glory Optics
(Yancheng) Co., Ltd.
Power Quotient
Technology
(YANCHENG) Co.,
Jiangsu Foxlink New
Energy Technology
Co.,Ltd.
PQI (Xuzhou) New
Energy Co., Ltd.
Kunshan Jiuwei Info
Tech Co., Ltd.		 Manufacture of image
scanners and multifunction
printers and investment in property
Manufacutre and sales of mobile phone, LCD TV
Connector and electronic components
Mould development and
moulding tool manufacture
Manufacture and sale of parts
and moulds of photocopiers
and scanners
Manufacture and sales of image
scanners, multifunction and
printers and its accessories
Trading and manufacturing
Trading and manufacturing
Trading and manufacturing
Trading and manufacturing
Manufacture and sales of electronic components
Manufacture and sales of electronic components
Manufacture and sale of electronic telecommunication
components
Supply chain finance energy
service management		 174,828
$ 678,078
231,037
227,840
170,880
398,720
256,320
43,770
944,412
569,600
678,435
43,770
1,424		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2
Note 3
Note 1
Note 2
Note 2
Note 3		 174,828
$ 122,179
169,897
142,400
151,181
398,720
256,320
-
329,444
Note 4
Note 5
Note 5
1,424		 -
$ -
-
-
-
-
-
-
-
-
-
-
-		 -
$ -
-
-
-
-
-
-
-
-
-
-
-		 174,828
$ 122,179
169,897
142,400
151,181
398,720
256,320
-
329,444
-
-
-
1,424		 18,503
$ 408,080
2,813)
(
15,610)
(
73,942
127,156)
(
129,381)
(
3,574)
(
203,066)
(
12,589)
(
-
12
3,466		 100
18,503
$ 7.13
40,468
100
2,813)
(
100
15,610)
(
100
73,942
100
127,156)
(
100
129,381)
(
100
3,574)
(
100
203,066)
(
100
12,589)
(
Note 7
-
100
12
100
3,466		 247,575
$ -
$ Note 6
381,392
-
Note 6
261,020
-
Note 6
250,436
-
Note 6
513,673
-
Note 6
477,261
-
Note 6
304,355)
(
-
Note 6
143,422
-
Note 6
631,079
-
Note 6
695,052
-
Note 6
-
-
-
43,782
-
Note 6
13,714
-
Note 6
  • Note 1: Through investing in an existing company in the third area, which then invested in the investee in Mainland China. Note 2: As the investment is invested through an existing company in Mainland China, which then invested in the investee. Note 3: An investee established in the third area and an reinvestee in Mainland China invested by an investee in Mainland China. Note 4: The capital of an indirect investment of PQI, Power Quotient Technology (YANCHENG) Co., Ltd., was remitted by the financing from the investee in the third party. Note 5: The capital of an indirect investment of PQI, Jiangsu Foxlink New Energy Technology Co.,Ltd. and PQI (Xuzhou) New Energy Co., Ltd. , was remitted by a capital from Power Quotient Technology (YANCHENG) Co., Ltd. Note 6: It was recognised based on the investee's financial statements reviewed by the independent auditors. Note 7: Jiangsu Foxlink New Energy Technology Co., Ltd. was initially a subsidiary of the Group. However, the Group did not participate in the capital increase of Jiangsu Foxlink New Energy Technology Co., Ltd. in April 2020, thus, the Group lost its control over the company, and this investment was recognised in investments accounted for using equity method. Subsequently, the company proceeded to reduce its capital by returning cash, and the shareholding ratio decreased to 12.9%. The Group lost its control over the company, therefore, this investment was classified in financial assets at fair value through other comprehensive income.

208

Companyname Accumulated amount of remittance from
Taiwan to Mainland China as of
December31,2020		 Investment amount approved by the Investment
Commission of the Ministry of Economic Affairs
(MOEA)		 Ceiling on investments in Mainland China
imposed by theInvestment Commissionof MOEA
Foxlink Image Technology Co., Ltd.
Glory Science Co., Ltd.
Power Quotient International Co., Ltd.		 771,956
$ 984,484
1,424		 923,199
$ 1,194,736
622,146		 1,761,799
$ 463,992
1,704,187

209

Table 10

FIT HOLDING CO., LTD. Major shareholders information December 31, 2020

Name of majorshareholders Shares Shares
Numberofsharesheld Ownership (%)
Foxlink International Investment Ltd.
Zhi De Investment Co., Ltd.
Fu Uei International Investment Ltd. (FUII)		 58,303,464
21,055,687
14,690,257		 23.67%
8.55%
5.96%

210

FIT HOLDING CO., LTD.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

211

INDEPENDENT AUDITORS’ REPORT

Opinion

We have audited the accompanying parent company only balance sheets of FIT Holding Co., Ltd. (the “Company”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at 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 audit of the parent company only financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China; and in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, “Rule No. Financial-Supervisory-Securities-Auditing1090360805 issued by the Financial Supervisory Commission on February 25, 2020” and generally accepted auditing standards in the Republic of China for our audit of the parent company only financial statements as of and for the year ended December 31, 2019. 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 Accountants 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.

212

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 2020 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

The balance of investments accounted for under the equity method recognised from the Company’s subsidiaries, Glory Science Co., Ltd. (Glory Science), Power Quotient International Co., Ltd. (PQI), Foxlink Image Technology Co., Ltd. (Foxlink Image) and Shih Fong Power Co., Ltd. (Shih Fong) and investee accounted for using equity method, Foxwell Energy Co., Ltd. (Foxwell Energy), amounted to NT$7,876,626 thousand, constituting 96% of the Company’s total assets as at December 31, 2020, and the investment profit (shown as operating revenue) amounted to NT$102,367 thousand. Please refer to Note 4(7) for accounting policies on investments accounted for under the equity method and Note 6(1) for details of investments accounted for under the equity method. As the amounts are material to the parent company only financial statements of the Company, the investments accounted for under equity method - assessment of allowance for inventory valuation losses, investments accounted for under equity method - valuation of goodwill impairment and investments accounted for under equity method - valuation of property, plant and equipment impairment were identified as key audit matters.

Key audit matters for the Company’s 2020 parent company only financial statements are stated as follows:

Investments accounted for under equity method - Assessment of allowance for inventory valuation losses

Description

Please refer to Note 4(14) in the consolidated financial statements for accounting policies on inventories, Note 5(2) in the consolidated financial statements for the uncertainty of accounting estimates and assumptions applied to inventory valuation, and Note 6(6) in the consolidated financial statements for details of inventories.

213

The Company’s subsidiaries are primarily engaged in the manufacturing and sale of optical instruments, peripheral equipment components, 3C products, image scanners and multifunction printers. As the electronic products’ life cycles are relatively short and the market is highly competitive, there is a higher risk of incurring inventory valuation losses or obsolescence due to en economic slowdown or an excess of supply over demand. Those subsidiaries’ inventories are measured at the lower of cost and net realisable value, and individually assessed for those inventories over a certain age in order to identify obsolete or slow-moving inventories.

Those subsidiaries’ amounts of inventory were material, and the net realisable value involves subjective judgement resulting in an uncertainty when assessing the obsolete or slow-moving inventories. The assessment of allowance for inventory valuation losses was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Assessed the reasonableness of policies and procedures on allowance for inventory valuation losses.

  2. Verified whether the systematic logic used in the inventory aging report is appropriate and in line with its policies.

  3. Tested inventory valuation basis adequacy and recalculated the selected samples’ information in order to verify that the inventory was measured at the lower of cost and net realisable value.

Investments accounted for under equity method - Valuation of goodwill impairment

Description

Please refer to Note 4(20) in the consolidated financial statements for accounting policies on impairment loss on non-financial assets, Note 5(2) in the consolidated financial statements for the uncertainty of accounting estimates and assumptions applied to goodwill impairment valuation, and Note 6(12) in the consolidated financial statements for details of intangible assets.

214

The amount of goodwill was generated from the acquisition of subsidiaries, Power Quotient International Co., Ltd. and Foxlink Image Technology Co., Ltd.. The Company valued the impairment of goodwill through the discounted cash flow method which measures the cash generating unit’s recoverable amount. As the assumptions of expected future cash flows involved subjective judgement and a high degree of uncertainty which would cause a material impact on the valuation result, the valuation of goodwill impairment was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Obtained the external appraisal report on impairment valuation and examined the external appraiser’s qualification and assessed the independence, competence and objectiveness.

  2. Assessed that the valuation model used in the appraisal report was widely used and appropriate.

  3. Assessed the reasonableness of significant assumptions (including expected growth rate and discount rate) applied in the appraisal report.

Investments accounted for under equity method - Valuation of property, plant and equipment impairment

Description

Please refer to Note 4(20) in the consolidated financial statements for accounting policies on impairment loss on non-financial assets, Note 5(2) in the consolidated financial statements for the uncertainty of accounting estimates and assumptions applied to property, plant and equipment impairment valuation, and Note 6(8) in the consolidated financial statements for details of property, plant and equipment.

As the 3C components’ life cycles are relatively short and the market is highly competitive, there is a high risk of plant and equipment incurring an impairment loss. The Company’s subsidiaries valued the impairment of the cash generating unit’s property, plant and equipment which had an indication of impairment. We mainly relied on the external appraisal report. As the external appraisal report on impairment valuation involved subjective judgement, various assumptions and a high degree of uncertainty which would cause a material impact on the valuation result, the valuation of property, plant and equipment impairment was identified as a key audit matter.

215

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Examined the external appraiser’s qualification and assessed the independence, competence and objectiveness.

  2. Verified whether the list of properties for the external appraiser is correct.

  3. Assessed that the valuation method used in the appraisal report was appropriate.

  4. Tested the external appraisal report’s valuation basis adequacy.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s 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 generally accepted auditing standards 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

216

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 generally accepted auditing standards 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  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 parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

  5. 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.

  6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope

217

and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period 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.

Liang Yi Chang Lin, Se-Kai For and on behalf of PricewaterhouseCoopers, Taiwan March 26, 2021

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic[of China, and their applications in practice.]

218

FIT HOLDING CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets December 31, 2020
Notes
AMOUNT
%
$
2,150
-
7
350,364
4
89
-
352,603
4
6(1)
7,876,626
96
7,876,626
96
$
8,229,229
100
(Continued)		 December 31, 2019 December 31, 2019
AMOUNT
$
665
-
-
665
7,623,551
7,623,551
$
7,624,216		 %
Current assets
1100
Cash and cash equivalents
1210
Other receivables - related parties
1410
Prepayments
11XX
Current Assets
Non-current assets
1550
Investments accounted for under
equity method
15XX
Non-current assets
1XXX
Total assets		 -
-
-
-
100
100
100

219

FIT HOLDING CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity Notes
6(3)
6(4)
6(5)
6(6)
6(7)
9
11		 December 31, 2020
December 31, 2019
AMOUNT
%
AMOUNT
%
$
757,800
9
$
615,000
8
12,800
-
4,893
-
30
-
18
-
770,630
9
619,911
8
400,000
5
300,000
4
400,000
5
300,000
4
1,170,630
14
919,911
12
2,462,421
30
2,462,421
32
4,198,013
51
4,237,390
56
8,361
-
8,361
-
89,848
1 (
281,965) (
4 )
299,956
4
278,098
4
7,058,599
86
6,704,305
88
$
8,229,229
100
$
7,624,216
100
AMOUNT
$
757,800
12,800
30
770,630
400,000
400,000
1,170,630
2,462,421
4,198,013
8,361
89,848
299,956
7,058,599
$
8,229,229
Current liabilities
2100
Short-term borrowings
2200
Other payables
2300
Other current liabilities
21XX
Current Liabilities
Non-current liabilities
2540
Long-term borrowings
25XX
Non-current liabilities
2XXX
Total Liabilities
Equity
Share capital
3110
Share capital - common stock
Capital surplus
3200
Capital surplus
Retained earnings
3320
Special reserve
3350
Unappropriated retained earnings
(accumulated deficit)
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

220

FIT HOLDING CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except earnings (loss) per share)

Items YearendedDecember 31
2020
2019
Notes
AMOUNT
%
AMOUNT
6(1)
$
102,367
100
$
-
6(1)
-
- (
281,228 )
102,367
100 (
281,228 )
6(9)
(
24,917 ) (
24) (
13,130 )
(
24,917 ) (
24) (
13,130 )
77,450
76 (
294,358 )
7
1,536
1
1
6(8)
2,015
2
92,458
12,054
12 (
14 )
(
9,456 ) (
9) (
5,099 )
83,599
82 (
207,012 )
6(10)
-
-
-
$
83,599
82 ( $
207,012 )		 YearendedDecember 31 YearendedDecember 31 %
-
-
-
-
-
-
-
-
-
-
-
-
-
2020 2019
4000
Sales revenue
5000
Operating costs
5900
Net operating margin
Operating expenses
6200
General and administrative expenses
6000
Total operating expenses
6900
Operating profit (loss)
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7900
Profit (loss) before income tax
7950
Income tax expense
8200
Profit (loss) for the year

(Continued)

221

FIT HOLDING CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except earnings (loss) per share)

Items Notes Year ended December 31 Year ended December 31 Year ended December 31 %
-
-
-
-
-
-
-
-
-
-
-
-
0.77)
0.07)
0.84)
0.77)
0.07)
0.84)
2020 2019
%
AMOUNT
47
$ 561,756
47

561,756




20)(
138,242)

20)(
138,242)
27
$ 423,514
109
$ 216,502



-
($ 189,059)
-
(
17,953)
-
($ 207,012)




$ 234,752
-
(
18,250)
-
$ 216,502




0.34 ( $ - (
0.34( $ 0.34 ( $ - (
0.34 ( $		 2019
AMOUNT
$ 48,003

48,003



19,896 )(

19,896 )(
$ 28,107
$ 111,706


$ 83,599

-
$ 83,599


$ 111,706

-
$ 111,706


$
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8330
Share of other comprehensive
income of associates and joint
ventures accounted for using equity
method, components of other
comprehensive income that will not
be reclassified to profit or loss
8310
Components of other
comprehensive income that will
not be reclassified to profit or loss
Components of other comprehensive
income that will be reclassified to
profit or loss
8380
Share of other comprehensive
income of associates and joint
ventures accounted for using equity
method, components of other
comprehensive income that will be
reclassified to profit or loss
8360
Components of other
comprehensive income that will be
reclassified to profit or loss
8300
Other comprehensive income for the
year
8500
Total comprehensive income for the
year
Profit (loss), attributable to:
Owners of the parent
Former owner of business combination
under common control
Total
Comprehensive income (loss),
attributable to:
Owners of the parent
Former owner of business combination
under common control
Total
Earnings (loss) per share
9710
Basic earnings (loss) per share from
continuing operations
9720
Basic earnings (loss) per share from
equity attributable to former owner
of business combination under
common control
9750
Basic earnings (loss) per share
9810
Diluted earnings (loss) per share
from continuing operations
9820
Diluted earnings (loss) per share
from equity attributable to former
owner of business combination
under common control
9850
Diluted earnings (loss) per share		 (
(
$
$
$

The accompanying notes are an integral part of these parent company only financial statements.

222

FIT HOLDING CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Year 2019
Balance at January 1, 2019
Loss
Other comprehensive income (loss)
Total comprehensive income
Capital surplus used to cover accumulated deficits
Cash dividends paid from additional paid-in capital
Adjustments to share of changes in equity of associates and joint
ventures accounted for using the equity method
Changes in ownership interests in subsidiaries
Adjustments to reorganisation
Balance at December 31, 2019
Year 2020
Balance at January 1, 2020
Profit
Other comprehensive income (loss)
Total comprehensive income
Capital surplus used to cover accumulated deficits
Adjustments to share of changes in equity of associates and joint
ventures accounted for using the equity method
Changes in investees' capital increase not recognized by
shareholding percentage
Capital surplus, difference between consideration and carrying
amount of subsidiaries acquired or disposed
Balance at December 31, 2020		 Notes Share capital -
commonstock		 Capital surplus,
additional paid-
incapital		 Retained earnings Retained earnings Retained earnings Otherequityinterest Otherequityinterest Equity
attributable to
former owner of
business
combination
under common
control		 Totalequity
Legal reserve Special reserve Unappropriated
retained
earnings
(accumulated
deficit)		 Financial
statements
translation
differences of
foreign
operations		 Unrealised
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
6(7)
6(6)
6(7)		 $ 2,462,421
-
-
-
-
-
-
-
-
$ 2,462,421
$ 2,462,421
-
-
-
-
-
-
-
$ 2,462,421		 $ 5,019,688
-
-
-
(
166,692 )
(
615,606 )
-
-
-
$ 4,237,390
$ 4,237,390
-
-
-
(
281,965 )
59,741
125,447
57,400
$ 4,198,013		 $
-
-
-
-
-
-
-
-
-
$
-
$
-
-
-
-
-
-
-
-
$
-		 $
8,361
-
-
-
-
-
-
-
-
$
8,361
$
8,361
-
-
-
-
-
-
-
$
8,361		 ( $ 173,844 )
(
189,059 )
940
(
188,119 )
166,692
-
(
129 )
-
(
86,565 )
( $ 281,965 )
( $ 281,965 )
83,599
6,249
89,848
281,965
-
-
-
$
89,848		 ( $
81,588 )
-
(
137,945 )
(
137,945 )
-
-
-
-
-
( $ 219,533 )
( $ 219,533 )
-
(
19,896 )
(
19,896 )
-
-
-
-
( $ 239,429 )		 ( $
63,185 )
-
560,816
560,816
-
-
-
-
-
$ 497,631
$ 497,631
-
41,754
41,754
-
-
-
-
$ 539,385		 ( $
77,196 )
(
17,953 )
(
297 )
(
18,250 )
-
-
-
8,881
86,565
$
-
$
-
-
-
-
-
-
-
-
$
-		 $ 7,094,657
(
207,012 )
423,514
216,502
-
(
615,606 )
(
129 )
8,881
-
$ 6,704,305
$ 6,704,305
83,599
28,107
111,706
-
59,741
125,447
57,400
$ 7,058,599

The accompanying notes are an integral part of these parent company only financial statements.

223

FIT HOLDING CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit (loss) before tax
Adjustments
Adjustments to reconcile profit (loss)
Share of profit (loss) of associates accounted for
using the equity method
Interest expense
Interest income
Gain on disposal of investments
Changes in operating assets and liabilities
Changes in operating liabilities
Other payables
Prepayments
Other current liabilities
Cash outflow generated from operations
Dividend received
Interest paid
Interest received
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other receivables from related parties
Acquisition of investments accounted for under the
equity method
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Increase in long-term borrowings
Decrease in long-term borrowings
Cash dividends paid
Net cash flows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 Year ended December 31
Notes
2020
2019
$
83,599
($
207,012 )
6(1)
(
102,367 )
281,228
9,456
-
(
1,536 ) (
1 )
6(10)
-
(
92,235 )
8,281
786
(
89 )
-
11
17
(
2,645 ) (
17,217 )
329,988
478,483
(
9,830 )
-
1,536
1
319,049
461,267
(
350,364 )
-
(
210,000 ) (
760,000 )
(
560,364 ) (
760,000 )
142,800
615,000
1,300,000
1,066,000
(
1,200,000 ) (
766,000 )
-
(
615,606 )
242,800
299,394
1,485
661
665
4
$
2,150
$
665

The accompanying notes are an integral part of these parent company only financial statements.

224

FIT HOLDING CO., LTD.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organisation

FIT Holding Co., Ltd. (the “Company”) is a holding company established by Glory Science Co., Ltd. (Glory Science), Power Quotient International Co., Ltd. (PQI) and Foxlink Image Technology Co., Ltd. (Foxlink Image) through a share swap in accordance with the regulations on October 1, 2018. The Company’s shares were listed on the Taiwan Stock Exchange (TSE) and approved by the regulatory authority on the same date. The Company acquired 100% shares of Glory Science, PQI and Foxlink Image through share swap by exchanging 1 common share of PQI with 0.194 common share of the Company, 1 common share of Foxlink Image with 0.529 common share of the Company and 1 common share of Glory Science with 1 common share of the Company. The Company is primarily engaged in establishing the management mechanism for the Group, supervising the subsidiaries’ operation, and integrating the resources and platforms to improve the Group’s overall operational efficiency. Cheng Uei Precision Industry Co., Ltd. became the ultimate parent company of the Company after acquiring over half of the seats in the Company’s Board of Directors due to the abovementioned share swaps.

  1. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These parent company only financial statements were authorised for issuance by the Board of Directors on March 26, 2021.

3. Application of New Standards, Amendments and Interpretations

  • (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

2020 are as follows:
New Standards,Interpretations and Amendments Effective date by
International Accounting
Standards Board
Amendments to IAS 1 and IAS 8,‘Disclosure initiative-definition of
material’
Amendments to IFRS 3,‘Definition of a business’
Amendments to IFRS 9, IAS 39 and IFRS7 ,‘Interest rate benchmark
reform’
Amendment to IFRS 16,‘Covid-19-related rent concessions’
Note：Earlier application from January 1, 2020 is allowed by FSC.		 January 1, 2020
January 1, 2020
January 1, 2020
January 1, 2020 (Note)

The above standards and interpretations have no significant impact to the Company’s

225

financial condition and financial performance based on the Compnay’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

2021 are as follows:
New Standards,Interpretations and Amendments Effective date by
International Accounting
Standards Board
Amendments to IFRS 4,‘Extension of the temporary exemption from
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,‘Interest
Rate Benchmark Reform—Phase 2’		 January 1, 2021
January 1, 2021

The above standards and interpretations have no significant impact to the Compnay’s

financial condition and financial performance based on the Company’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

in the IFRSs as endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments Effective date by
International Accounting
Standards Board
Amendments to IFRS 3,‘Reference to the conceptual framework’
Amendments to IFRS 10 and IAS 28,‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17,‘Insurance contracts’
Amendments to IFRS 17, 'Insurance contracts'
Amendments to IAS 1,‘Classification of liabilities as current or non-
current’
Amendments to IAS 1,‘Disclosure of accounting policies’
Amendments to IAS 8,‘Definition of accounting estimates’
Amendments to IAS 16,‘Property, plant and equipment:proceeds before
intended use’
Amendments to IAS 37,‘Onerous contracts—cost of fulfilling a contract
Annual improvements to IFRS Standards 2018–2020		 January 1, 2022
To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022

The above standards and interpretations have no significant impact to the Company’s

financial condition and financial performance based on the Company’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in

accordance with the Regulations Governing the Preparation of Financial Reports by

226

Securities Issuers,

  • (2) Basis of preparation

  • A. The parent company only financial statements have been prepared under the historical cost convention

  • B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

  • (3) Foreign currency translation

  • Items included in the financial statements of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in NTD, which is the Company’s functional and presentation currency. A. Foreign currency transactions and balances

    • (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

    • (b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

    • (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

    • (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

227

  • B. Translation of foreign operations

The operating results and financial position of all the company entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: 

  - (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  - (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  - (c) All resulting exchange differences are recognised in other comprehensive income.

  • (4) Classification of current and non-current items

  • A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

    • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

    • (b) Assets held mainly for trading purposes;

    • (c) Assets that are expected to be realised within twelve months from the balance sheet date;

    • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

  • B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

    • (a) Liabilities that are expected to be settled within the normal operating cycle;

    • (b) Liabilities arising mainly from trading activities;

    • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

    • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

  • Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Impairment of financial assets

For debt instruments measured at financial assets at amortised cost, at each reporting

228

date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(7) Investments accounted for using equity method / subsidiaries and associates

  • A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

  • B. Unrealised profit (loss) from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted to be consistent with the Company’s accounting policies.

  • C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

  • D. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

  • E. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

  • F. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

  • G. Unrealised gains on transactions between the Company and its associates are

229

eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

  • H. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

  • I. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

  • J. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

  • K. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

  • L. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall be equal to the amount attributable to owners of the parent in the parent company only financial statements. Owners’ equity in the parent company only financial statements shall be equal to equity attributable to owners of the parent in the parent company only financial statements.

230

  • (8) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

  • (9) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

  • (10) Employee benefits

  • A. Short-term employee benefits

    • Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

  • B. Pensions

Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

  • C. Employees’ compensation and directors’ remuneration

    • Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

  • (11) Income tax

  • A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised

231

  • in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

  • B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

  • C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

  • D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

  • E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(12) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved at the meeting of Board of Directors. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and

232

are reclassified to ordinary shares on the effective date of new shares issuance.

  • (13) Reorganisation under common control

    • A, The Group applies the related interpretations issued in R.O.C. for the intra-group reorganisation since there are no definite rules for business combinations of entities under common control in IFRS 3, ‘Business combinations’ as explained in the IFRS Q&A ‘explanations to IFRS 3 Business Combinations under Common Control’ issued by Accounting Research and Development Foundation on October 26, 2018. The aforementioned transaction is stated at book value method and the comparative financial statements of prior years were restated based on the assumption that the business combination occurred at the beginning of the year.

    • B. As described in Note 1, the share swap transactions between the Company and Glory Science were considered as reorganisation under common control and the Company is substantially a continuation of Glory Science. The Company recognised the associated assets and liabilities for its parent company only financial statements before the incorporation date based on the carrying amount of the parent company only financial statements of Glory Science. The comparative financial statements were restated based on the assumption that Glory Science was considered as consolidated subsidiary accounted for using equity method at the beginning.

    • C. The Company acquired share interest of Shinfox Energy Co., Ltd., a subsidiary of the ultimate parent company through share swap for the year ended December 31, 2019. As the acquisition was a Group internal reorganisation, in accordance with Accounting Research and Development Foundation Interpretation 101-301, it was deemed that the Company invested in Shinfox at the beginning. When restating the consolidated financial statements of prior years, Shinfox’s equity owned by the Company, are classified as “Equity attributable to former owner of business combination under common control” and profit or loss recognised by the Company are classified as “Net profit (loss) of equity attributable to former owner of business combination under common control”.

  • Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

  • (1) Critical judgements in applying the Company’s accounting policies None.

233

(2) Critical accounting estimates and assumptions

Impairment assessment of investments accounted for using equity method

The Company assesses the impairment of an investment accounted for using equity method as soon as there is any indication that it might have been impaired and its carrying amount cannot be recovered. The Company assesses the recoverable amounts of an investment accounted for under the equity method based on the present value of the Company’s share of expected future cash flows of the investee, and analyses the reasonableness of related assumptions.

6. Details of Significant Accounts

(1) Investments accounted for using the equity method

Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Shih Fong Power Co., Ltd.
Glory Science Co., Ltd.
Foxwell Energy Co., Ltd.		 December31,2020
December 31, 2019
3,682,263
$ 3,608,129
$ 2,211,702
1,938,232
1,000,903
822,469
772,681
1,254,721
209,077
-
7,876,626
$ 7,623,551
$

  • A. On June 14, 2019, the Company acquired 100% of the share capital of Shih Fong Power Co., Ltd. (Shih Fong) for $280,000 and obtained the control over Shih Fong.

  • B. The investment profit (loss) of $102,367 and ($281,228) recognised for the investments accounted for using equity method for the years ended December 31, 2020 and 2019, respectively, was based on each investee’s audited financial statements for the corresponding period.

  • C. To integrate Group resources and enhance the efficiency of entities division of labour, Foxwell Energy Corporation Ltd. (Foxwell Energy), an 89.29% owned subsidiary of the Company’s subsidiary, PQI, became one of the wholly owned subsidiaries of Shinfox Energy (formerly named Shinfox Co., Ltd.) by converting stocks into shares as approved by the shareholders on November 25, 2019. The effective date for this conversion was set on December 27, 2019. The conversion ratio is 1 share of Foxwell Energy’s common stock converted to 1 share of Shinfox Energy. Shinfox Energy increase its capital by issuing new shares in the amount of 60,000,000 shares which would be granted to PQI. PQI held a 76.56% equity interest in Shinfox Energy after conversion. This conversion was deemed a group restructuring since the ultimate parent company of PQI is the same with Shinfox Energy, and thus the subsidiary is considered as consolidated at the beginning of merger. The difference between the acquisition cost and net equity would be adjusted in retained earnings for the year ended December 31, 2019 in the amount of $86,565.

  • D. Details of the Company’s subsidiaries are provided in Note 4(3) of the Company’s

234

2020 consolidated financial statements.

(2) Pensions

The Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2020 and 2019, were $181 and $144, respectively.

(3) Short-term borrowings

Short-term borrowings
Type of borrowings December31,2020 Interest rate range Collateral
Bank borrowings
Unsecured borrowings 757,800
$		 1.05% None
Type of borrowings December31,2019 Interest rate range Collateral
Bank borrowings
Unsecured borrowings 615,000
$		 0.81%~0.91% None
Long-term borrowings
Undrawn
Borrowing period Interest Borrowing
Type of borrowings and repayment term rate range facilities December31,2020
Long-term bank borrowings
Unsecured borrowings Borrowing period is 1.10% - $ 300,000
from October 2020
to August 2022;
principal is repayable
in full amount at the
maturity date;
interest is repayable
monthly.
Unsecured borrowings Borrowing period is 1.22% - 100,000
from October 2020
to July 2022;
principal is repayable
in full amount at the
maturity date;
interest is repayable
monthly.
  • (4) Long term borrowings

$ 400,000

235

Type of borrowings Undrawn
Borrowing period
Interest Borrowing
and repayment term
rate range
facilities
December31,2019
Borrowing period is
from October 2019 to
April 2021; principal
is repayable in full
amount at the
maturity date;
interest is repayable
monthly.
1.12%
-
300,000
$
Long-term bank borrowings
Unsecured borrowings

(5) Share capital

As described in Note 1, the Company acquired 100% of the shares of Glory Science, PQI and Foxlink Image through share swap by exchanging 1 common share of Glory Science into 1 common share of the Company, 1 common share of PQI converted to 0.194 common share of the Company and 1 common share of Foxlink Image converted to 0.529 common share of the Company. As of December 31, 2020, the Company’s authorised capital was $3,000,000, consisting of 300,000 thousand shares of ordinary stock (including 30,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,462,421 with a par value of $10 (in dollars) per share. Ordinary shares outstanding at December 31,2020 amounted to 246,242 thousand shares.

(6) Capital surplus

  • A. In accordance with IFRS Q&A issued by the Accounting Research and Development Foundation (ARDF) on October 26, 2018 and ARDF Interpretation 100-390, as described in Note 4, the share swap transactions between the Company and Glory Science were considered as a reorganisation under common control on October 1, 2018.

  • B. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

  • C. The shareholders resolved that the Company distribute cash by using capital surplus of $615,606 (NT$2.5 (in dollars) per share) on June 21, 2019.

236

  • (7) Retained earnings (accumulated deficits to be covered)

  • A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. The remaining earnings shall be proposed by the Board of Directors and resolved by the shareholders as dividends to shareholders. According to the Company’s dividend policy, no more than 90% of the distributable retained earnings shall be distributed as shareholders’ bonus and cash dividend distributed in any calendar year shall be at least 20% of the total distributable earnings in that year based on future capital expenditures budget and capital requirements.

  • B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

  • C. Special reserve

  • (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

  • (b) As described in Note 4(2), the Company is substantially a continuation of Glory Science. Therefore, the amount previously set aside by the Company as special reserve in accordance with Order No. Financial-Supervisory-SecuritiesCorporate-1010012865, dated April 6, 2012, shall be the same as the amount reclassified from accumulated translation adjustment under shareholders’ equity to retained earnings for the exemptions elected by the Group. The increase in special reserve as a result of retained earnings arising from the adoption of IFRS amounted to $8,361 thousand.

  • D. The shareholders resolved that the Company cover accumulated deficits by using capital surplus of $281,965 on June 24, 2020 and $166,692 on June 21, 2019.

237

(8) Other income

ther income
Revenue from directors’and supervisors’
remuneration of the subsidiaries
Gain recognised in bargain
purchase transaction
Others		 Year ended December31
2020
2,015
$ -
-
2,015
$		 2019
-
$ 92,235
223
92,458
$

(9) Expenses by nature

xpenses by nature
Employee benefit expense
Wages and salaries
Directors’remuneration
Labour and health insurance fees
Pension costs
Other personnel expenses		 Year ended December31
2020
16,723
$ 2,870
382
181
222
20,378
$		 2019
6,285
$ -
333
144
198
6,960
$

  • A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 6% for employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration.

  • B. For the year ended December 31, 2020, employees’ compensation was accrued at $5,600; while directors’ and supervisors’ remuneration was accrued at $1,200. The aforementioned amounts were recognised in salary expenses.

  • C. For the years ended December 31, 2020 and 2019, the Company had loss before tax, and thus did not accrue employees’ compensation and directors’ remuneration. Information about employees’ compensation and directors’ remuneration of the

  • Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

  • (10) Income tax

  • A. The Company had no income tax expense for the years ended December 31, 2020 and 2019.

  • B. Reconciliation between income tax expense and accounting profit

238

Year ended December31 Year ended December31 Year ended December31
2020 2019
Tax calculated based on loss $ 16,720
 ($ 37,812)
before tax and statutory tax rate
Tax exempt income by tax regulation ( 16,384)
 34,208
Taxable loss not recognised as deferred
tax assets ( 336) 3,604
Income tax expense $ - $ -
  • C. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets of the Company’s domestic subsidiaries are as follows:
December 31,2020
Year incurred
2018		 Amount filed/
Unrecognised
assessed
Unused amount
deferred tax assets
4,103
$ 2,210
$ 2,210
$ December31,2019		 Expiry year
2028
Year incurred
2018
2019		 Amount filed/
Unrecognised
assessed
Unused amount
deferred tax assets
4,103
$ 4,103
$ 4,103
$ 18,020
18,020
18,020		 Expiry year
2028
2029
  • D. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

239

(11) Earnings (loss) per share

Earnings (loss) per share
Year ended December31,2020
Weighted average number of
Amount ordinary shares outstanding Earnings per share
after tax (share in thousands) (in dollars)
Basic earnings per share
Profit attributable to the parent $ 83,599 $ 246,242 $ 0.34
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 83,599
 246,242
Assumed conversion of all dilutive
potential ordinary shares
Employees’compensation - 173
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares $ 83,599 $ 246,415 $ 0.34
Year ended December31,2019
Weighted average number of
Amount ordinary shares outstanding Loss per share
after tax (share in thousands) (in dollars)
Basic and diluted loss per share
Loss attributable to the parent ($ 189,059)
 ($ 0.77)
Equity attributable to former
owner of business combination
under common control ( 17,953) ( 0.07)
($ 207,012) 246,242 ($ 0.84)

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties

Cheng Uei Precision Industry Co., Ltd. (Cheng Uei) Foxlink International Investment (FII) Fu Uei International Investment Ltd. (FUII) Foxlink Image Technology Co., Ltd. (Foxlink Image) Power Quotient International Co., Ltd. (PQI) Glory Science Co., Ltd. (Glory Science) Shih Fong Power Co., Ltd. (Shih Fong) Foxwell Energy Co., Ltd. (Foxwell Energy)

Shinfox Energy Co. Ltd. (Shinfox)

Foxwell Energy Corporation Ltd. (Foxwell Energy) Glory Optics (Yancheng) Co., Ltd. (GOYC) Glorytek (Yancheng) Co., Ltd. (Glorytek Yancheng)

Relationship with the Company

Ultimate parent Subsidiary of the ultimate parent Subsidiary of the ultimate parent Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Investee that the Company accounted for using equity method

The Company is its ultimate parent The Company is its ultimate parent The Company is its ultimate parent The Company is its ultimate parent

240

Loans from related parties

Loans to related parties:

A. Outstanding balance:

Loans from related parties
Loans to related parties:
A. Outstanding balance:
B. Interest income
GOYC
Glorytek Yancheng
GOYC
Glorytek Yancheng		 December31,2020
219,054
$ 131,310
350,364
$ Year ended
December 31, 2020
841
$ 694
1,535
$		 December31,2019
-
$ -
-
$ Year ended
December 31, 2019
-
$ -
-
$

The loans to subsidiaries are repayable based on the agreement and carry interest at 1.12% per annum.

(2) Key management compensation

None.

8. Pledged Assets

None.

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

Central Motion Picture Corporation (the “Central Motion Picture”), a financial asset at fair value through other comprehensive income that the Group obtained through investments accounted for using equity method, amounting to $257,656, was determined to be an affiliate organisation of the Kuomintang by the Ill-gotten Party Assets Settlement Committee (the “Ill-gotten Party”) in its written disposition, DangChan-Chu-Zi No. 107007, issued on October 9, 2018. Under paragraph 1, Articles 5 and 9 of the Act Governing the Settlement of Ill-gotten Properties by Political Parties and Their Affiliate Organisations (the “Act”), properties that were held by the Central Motion Picture when the Act was released on August 10, 2016 are considered as unjustly received properties. The presumed ill-gotten party assets as prescribed in the preceding paragraph 1 of Article 5 are prohibited from being transferred or disposed starting from the date of promulgation of this Act. However, this restriction is not applicable if it is necessary to perform its legal duties or other justifiable reasons. The properties held by the Central Motion Picture are considered as unjustly received properties; however, their existing rights in leases, superficies, mortgage, or pawnage are not affected if Ill-gotten Party considers such assets as unjustly received assets and then orders the bona fide third party to transfer such assets to the State, local selfgoverning bodies, or original owners. Under Article 16, the Central Motion Picture

241

may file an administrative litigation (an action for revocation) in the Taipei High Administrative Court within two months after the aforementioned written disposition was served. In addition, the Central Motion Picture may file for a suspension of execution under Paragraph 2, Article 116 of the Administrative Litigation Act. On December 12, 2018, the Central Motion Picture Corporation submitted a cause of action to the Taipei High Administrative Court, which ruled to approve the suspension of execution in January 2020. However, the Ill-gotten Party subsequently filed an appeal against the ruling, and it was dismissed by the High Administrative Court in February 2020. Meanwhile, the Central Motion Picture filed a revocation action with the Taipei High Court, and it was pending approval as of January 14, 2020. As of the financial reporting date, the possible outcome of this litigation cannot be determined.

  • (2) Commitments

    • A, Information on endorsements/guarantees of the Company is provided in Note 13(1)B.

    • B. As of December 31, 2020 and 2019, the subsidiaries of the Company issued promissory notes amounting to $5,682,681 and $284,991, respectively, for undertaking the Offshore Wind Farm Property Procurement and Installation Project of Taipower and the Solar Photovoltaic System Construction Project.

    • C. The subsidiaries of the Company entered into agreements of equipment procurement and operation maintenance with Taipower for Phase II of the Offshore Wind Power Project, the “Wind Farm Property Procurement and Installation Project” with a total consideration of $56,588,000 and $6,300,000, respectively. The equipment procurement agreement stipulated that the Company shall complete the substructure installation of all wind turbines and marine substations before September 30, 2024, dispatch all units safely before September 30, 2025 and complete all construction before December 31, 2025. The Company will provide a 2-year warranty from the date of construction acceptance and guarantee a certain power supply from equipment. There is a staged progress and a final deadline for the performance of the project, and the penalty for overdue contract is calculated on the basis of each phase of the construction until the date of termination or cancellation of the agreement. The operation maintenance agreement regulated the terms of the guaranteed annual availability rate penalty for all wind power equipment and the period of the agreement was five years after all units have been safely dispatched.

  • Significant Disaster Loss

None.

  1. Significant Events after the Balance Sheet Date

  2. A. The appropriation of 2020 earnings had been approved by the Board of Directors on March 26, 2021. Details are summarized below:

242

Legal reserve
Cash dividends		 2020 2020
Amount
8,985
$ 73,873		 Dividends per share
(in dollars)
0.30
$
  • B. The cash payment from capital surplus of $172,369 (NTD $0.7 per share) had been approved by the Board of Directors on March 26, 2021.

12. Others

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or use the working capital effectively to reduce debt.

(2) Financial instruments

A. Financial instruments by category

nancial instruments
Financial instruments by category
Financial assets
Financial assets at amortised cost
Cash and cash equivalents
Financial liabilities
Financial liabilities at amortised
cost
Short-term borrowings
Other accounts payable
Long-term borrowings		 December31,2020
2,150
$ December31,2020
757,800
$ 12,800
400,000
1,170,600
$		 December31,2019
665
$
December31,2019
615,000
$ 4,893
300,000
919,893
$

B. Financial risk management policies

The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk.

The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial position and financial performance.

243

  • C. Significant financial risks and degrees of financial risks

  • (a) Market risk

Exchange rate risk

  • i. The Company’s foreign exchange rate risk mainly arises from recognised assets and liabilities

  • ii. The Company’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2020 Foreign currency amount Book value (In thousands) Exchange rate (NTD) (Foreign currency: functional currency) Financial assets Monetary items RMB:NTD $ 80,326 $ 4.3770 $ 351,587

  • iii. The total exchange gain (loss), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to $12,054 and ($14), respectively.

  • iv. Analysis of foreign currency market risk arising from significant foreign exchange variation:

(Foreign currency:
functional currency)
Financial assets
Monetary items
RMB:NTD		 Degree of
Effect on profit
Effect on other
variation
or loss before tax
comprehensive income
1%
3,516
$ -
Year ended December 31,2020
Sensitivityanalysis
Degree of
variation
1%

Interest rate risk

The Company is not exposed to market risk arising from material change in interest rates as it did not invest in interest rate products and its borrowings were at fixed rate.

(b) Credit risk

Credit risk refers to the risk of financial loss to the Company arising from default by the counterparties of financial instruments on the contract

244

obligations. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with a good credit rating are accepted.

  • (c) Liquidity risk

  • i. Cash flow forecasting is performed in the Company. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs so that the Company does not breach agreement related to liabilities.

  • ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

Non-derivative financial liabilities
Non-derivative financial
December 31, 2020
Short-term borrowings
Other payables
Long-term borrowings
December 31, 2019
Short-term borrowings
Other payables
Long-term borrowings		 liabilities
Less than
1year
758,403
$ 12,800
4,520
775,723
$ Less than
1year
615,484
$ 4,893
3,362
623,739
$		 Between 2
and5 years
-
$ -
402,589
402,589
$ Between 2
and5 years
-
$ -
300,995
300,995
$		 Over5 years
-
$ -
-
-
$
Over5 years
-
$ -
-
-
$

(3) Fair value information

The Company did not trade any financial instruments measured at fair value.

13. Supplementary Disclosures

(1) Significant transactions information

  • A. Loans to others: Please refer to table 1.

  • B. Provision of endorsements and guarantees to others: Please refer to table 2.

  • C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

  • D. Acquisition or sale of the same security with the accumulated cost exceeding $300

245

million or 20% of the Company’s paid-in capital: Please refer to table 4.

  • E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

  • F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

  • G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

  • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.

  • I. trading in derivative instruments undertaken during the reporting periods: None.

  • J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

  • (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 8.

(3) Information on investments in Mainland China

  • A. Basic information: Please refer to table 9.

  • B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

    • (a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: Please refer to Note 13(1) G.

    • (b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Please refer to Note 13(1) G.

    • (c) The amount of property transactions and the amount of the resulting gains or losses:None.

    • (d) Balance and purpose of provision of endorsements/guarantees or collaterals at December 31, 2020: Please refer to 13(1) B.

    • (e) Maximum balance, ending balance, interest rate range and interest for financing during the year ended and as at December 31, 2020: Please refer to Note 13(1) A.

    • (f) Other significant transactions that affected the gains and losses or financial status for the period, i.e. rendering/receiving of service: None.

  • (4) Major shareholders information

Please refer to table 10.

14. Segment Information

None.

246

Loans to others

Year ended December 31, 2020

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

FIT HOLDING CO., LTD.

No.
(Note 1)
Creditor
Borrower
General ledger
account
Is a
related
party
Maximum
outstanding
balance during
the year ended
December 31,
2020
Balance at
December 31,
2020
Interest
rate
Nature of loan
(Note 2)
Amount of
transactions
with the
borrower
Reason for short-term
financing
Allowance
for doubtful
accounts
Actual amount
drawn down		 Collateral Limit on loans
granted to a
single party
(Note 3)		 Ceiling on total
loansgranted		 Footnote
Item
Value
0
FIT Holding Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
289,014
$ 288,882
$ 218,850
$ 0.98%-1.2%
2
-
$ Operations
-
$ 0
FIT Holding Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Other receivables
Y
131,370
131,310
131,310
0.98%-1.2%
2
-
Operations
-
1
Foxlink Image Technology Co., Ltd.
Glory Science Co., Ltd.
Other receivables
Y
300,000
300,000
143,000
0.85%-1.2%
2
-
Operations
-
1
Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Other receivables
Y
648,000
600,000
425,000
0.89%-1.23%
2
-
Operations
-
2
Glory Science Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
399,970
253,866
253,866
1.5%
2
-
Operations
-
3
GLORY OPTICS(BVI) CO., LTD.
Glorytek (Yancheng) Co., Ltd.
Other receivables
Y
93,060
-
-
-
2
-
Operations
-
3
GLORY OPTICS(BVI) CO., LTD.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
75,068
-
-
-
2
-
Operations
-
4
Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Other receivables
Y
28,026
28,013
28,013
3%
2
-
Operations
-
4
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Other receivables
Y
220,910
218,850
175,080
5%
2
-
Operations
-
5
Power Quotient Technology (YANCHENG)
Co., Ltd.
Jiangsu Foxlink New Energy Technology
Co.,Ltd.
Other receivables
Y
457,600
-
-
-
2
-
Group capital movement
-
6
Foxwell Energy Corporation Ltd.
Beiyuan Wind Power Co., Ltd.
Other receivables
Y
50,000
-
-
Over one
month, 1.75%
2
-
Group capital movement
-
6
Foxwell Energy Corporation Ltd.
Changyuan Wind Power Co., Ltd.
Other receivables
Y
50,000
-
-
Over one
month, 1.75%
2
-
Group capital movement
-
7
Shinfox Co., Ltd.
Foxwell Energy Corporation Ltd.
Other receivables
Y
50,000
50,000
-
1.6%
2
-
Group capital movement
-
7
Shinfox Co., Ltd.
Foxwell Power Co., Ltd.
Other receivables
Y
50,000
50,000
-
1.6%
2
-
Group capital movement
-
7
Shinfox Co., Ltd.
SHINFOX NATURAL GAS CO., LTD.
Other receivables
Y
60,000
60,000
-
1.5%-1.6%
2
-
Group capital movement
-		 -
-
$ -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 2,117,579
$ 2,117,579
1,174,532
1,174,532
309,072
-
-
477,261
477,261
695,052
-
-
501,621
501,621
501,621		 2,823,439
$ 2,823,439
1,174,532
1,174,532
309,072
-
-
477,261
477,261
695,052
-
-
501,621
501,621
501,621

Note 1: The numbers filled in for the loans to others provided by the Company or subsidiaries are as follows:

  • ‘ ’

  • (1) The Company is 0 .

  • (2) The subsidiaries are numbered in order starting from ‘1’.�

  • Note 2: Fill in the nature of the loan as follows:

  • (1) Fill in 1 for business transaction.

  • (2) Fill in 2 for short-term financing

  • Note 3: The Company's and its subsidiaries' limits on loans to singal party and total loans are calculated based on the Company's and its subsidiaries' "Procedures for Provision of Loans".

(a) Total limit on loans granted to the companies having business relationship with the Company is 40% of the Company's net assets, limit on loans granted to a single party is 150% of the amount of business transactions between the creditor and borrower in the current year; the amount of business transactions means the higher between sales and purchases.

  • (b) Limit on total loans to parties with short-term financing is 40% of the Company's net assets; but limit on loans to a single party is 30% of the Company's net assets.

  • (c) Ceiling on total loans granted between foreign companies whose voting shares are 100% held by the Company directly or indirectly, or on loans granted to the Company by such foreign companies is 100% of their net asset value.

  • The total amount of loans granted to a single company should not exceed 100% of the net assets. Financing period shall not be more than 3 years.

(d) Among the Company and the parent company or subsidiaries, or loans between the Company's subsidiaires, excluding the loans to others qualifying the abovementioned condition, (c), the authorised limit on the Company's or the Company's subsidiaries' loans to a singal party shall be lower than 10% of the company's net assets based on the company's lastest financial statements.

  • (e) Limit on total loans and individual limit on lonas to others of the Company's subsidiaries are both under 40% of the Company's net assets.

247

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

FIT HOLDING CO., LTD.

Provision of endorsements and guarantees to others Year ended December 31, 2020

Number
(Note 1)
Endorser/
guarantor		 Partybeingendorsed/guaranteed Limit on
endorsements/
guarantees
provided for a
single party
(Note 3)		 Maximum
outstanding
endorsement/
guarantee amount as
of December 31,
2020		 Outstanding
endorsement/
guarantee
amount at
December 31,
2020		 Actual amount
drawn down		 Amount of
endorsements/
guarantees
secured with
collateral		 Ratio of accumulated
endorsement/
guarantee amount to
net asset value of the
endorser/ guarantor
company		 Ceiling on total
amount of
endorsements/
guarantees
provided		 Provision of
endorsements/
guarantees by
parent company
to subsidiary		 Provision of
endorsements/
guarantees by
subsidiary to
parent
company		 Provision of
endorsements/
guarantees to the
party in Mainland
China		 Footnote
Companyname
Relationship
with the
endorser/
guarantor
(Note2)
0
FIT Holding Co., Ltd.
0
FIT Holding Co., Ltd.
0
FIT Holding Co., Ltd.
1
Glory Science Co., Ltd.
1
Glory Science Co., Ltd.
2
Foxwell Energy Corporation Ltd.
3
Foxlink Image Technology Co., Ltd.
3
Foxlink Image Technology Co., Ltd.
4
Shinfox Co., Ltd.		 Power Quotient International Co., Ltd.
2
Glory Science Co., Ltd.
2
Foxwell Energy Corporation Ltd.
2
Glory Optics (Yancheng) Co., Ltd.
2
Glorytek (Yancheng) Co., Ltd.
2
Beiyuan Wind Power Co., Ltd.
2
Glory Science Co., Ltd.
4
Power Quotient International Co., Ltd.
4
Foxwell Energy Corporation Ltd.
2		 10,587,898
$ 10,587,898
9,882,038
1,159,023
1,159,023
1,238,685
4,110,865
4,110,865
1,881,077		 720,000
$ 1,260,000
531,698
185,070
185,070
600,000
600,000
300,000
800,000		 720,000
$ 1,121,310
522,778
-
-
-
600,000
300,000
800,000		 400,000
$ 625,000
522,778
-
-
-
200,000
300,000
790,000		 -
-
-
-
-
-
-
-
-		 10.20
15.89
7.41
-
-
-
8.50
4.25
11.33		 10,587,898
$ 10,587,898
10,587,898
1,159,023
1,159,023
1,238,685
4,404,498
4,404,498
1,881,077		 Y
Y
Y
Y
Y
Y
N
N
Y		 N
N
N
N
N
N
N
N
N		 N
N
N
Y
Y
N
N
N
N

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

  • (1) The Company is '0'.

  • (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

  • (1) Having business relationship.�

  • (2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

  • (3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

  • (4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.�

  • (5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.�

  • (6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.�

  • (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.�

Note 3: Total limit or limit on loans to a singal party of the Company's and subsidiaires is calculated in accordance with the Company's "Procedures for Provision of Endorsements and Guarantees".

  • (1) Limit on total endorsements is 150% of the Company's net asset.

  • (2) Limit on endorsements to a single party is 140% of the Company's net asset.

  • (3) Limit on total endorsements granted by the Company and its subsidiaries is 150% of the Company's net asset.

  • (4) Total limit on the Company's and its subsidiaries endorsement/guarantee to a singal party is 140% of the Company's net assets and to the subisidiaries that the Company owned more than 90% (included) voting shares is 150% of the Company's net assets.

  • (5) For business transaction with the Company, the guarantee amount should not exceed 150% of the amount of business transaction, which is the higher between sales and purchases.

  • (6) The companies whose voting rights are 90% owned directly and indirectly by the Company can provide endorsement/guarnatee each other with a limat of 10% of the Company's net assets, but not available for the companies whose voting rights are 100% owned directly and indirectly by the Company.

  • (7) The Company's subsidiary who prepared to provide endorsement/guarnatee to others due to business transaction shall implement in accordance with the Company's procedures, and the calculation of the Company's net assets shall use the subsidiary's net assets.

248

FIT HOLDING CO., LTD.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

Year ended December 31, 2020

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Securitiesheld by Marketable securities Relationship with the
securitiesissuer		 General
ledgeraccount		 As of December31,2020 As of December31,2020 Footnote
Number of shares
(inthousands)		 Bookvalue Ownership (%) Fairvalue
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient International Co., Ltd.
Power Quotient Technology (YANCHENG)
Co., Ltd.		 TAIWAN STAR TELECOM
CORPORATION LIMITED
Central Motion Picture Corporation
Cheng Uei Precision Industry Co., Ltd.
Wellgen Medical Co., Ltd.
SAINT SONG CORP.
OURS TECHNOLOGY INC.
INNOPLUS CO., LTD.
TAIWAN STAR TELECOM
CORPORATION LIMITED
STACK DEVICES CORPORATION
Jiangsu Foxlink New Energy Technology
Co.,Ltd.		 Not applicable
Investee of the Company's
parent company which is
accounted for using equity
method
The Company's parent
company
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable		 Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current		 50,000
4,294
27,503
1,500
127
13
160
50,000
70
-		 350,000
$ 257,656
1,295,391
18,375
-
-
-
350,000
-
73,997		 0.91
4.00
5.37
15.80
1.05
0.21
12.00
0.91
0.11
12.90		 350,000
$ 257,656
1,295,391
18,375
-
-
-
350,000
-
73,997		 Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral

249

Securitiesheld by Marketable securities Relationship with the
securitiesissuer		 General
ledgeraccount		 As of December31,2020 As of December31,2020 Footnote
Number of shares
(inthousands)		 Bookvalue Ownership (%) Fairvalue
Shinfox Co., Ltd.
Shinfox Co., Ltd.
Foxwell Energy Corporation Ltd.		 Corvus Energy Ltd.
SEC INTERNATIONAL INC.
Full Entertainment Marketing Co., Ltd.		 Not applicable
Not applicable
Not applicable		 Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current
Financial assets at fair value
through other comprehensive
income-non-current		 22
54
300		 -
-
-		 0.12
9.00
1.50		 -
-
-		 Not pledged as
collateral
Not pledged as
collateral
Not pledged as
collateral

250

FIT HOLDING CO., LTD.

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2020

Table 4
Investor		 Marketable
securities		 General
ledger
account		 Counterparty Relationship with
the counterparty		 Balance as at January1,2020 Balance as at January1,2020 Addition Addition Disposal Disposal Expressed in thousands of NTD
(Except as otherwise indicated)
Balance as at December 31,2020		 Expressed in thousands of NTD
(Except as otherwise indicated)
Balance as at December 31,2020
No. of shares
(in thousands)		 Amount No. of shares
(in thousands)		 Amount No. of shares
(in thousands)		 Selling price Book value Gain (loss) on
disposal		 No. of shares
(in thousands)		 Amount
Foxlink Image
Technology Co.,
Ltd.
Foxwell Energy
Corporation Ltd.
Foxwell Energy
Corporation Ltd.		 Shih Fong Power
Co., Ltd.
Changyuan Wind
Power Co., Ltd.
Beiyuan Wind
Power Co., Ltd.		 Investment
accounted for
using equity
method
Investment
accounted for
using equity
method
Investment
accounted for
using equity
method		 Capital increase
by cash
Foxwell Energy
Co., Ltd.
Foxwell Energy
Co., Ltd.		 Affiliate
Other related
party
Other related
party		 -
23,000
16,000		 $ -
197,206
129,109		 79,800,000
-
-		 $ 957,600
-
-		 -
23,000
16,000		 $ -
319,150
240,187		 $ -
193,660
125,827		 $ -
125,490
114,360		 79,800,000
-
-		 $ 957,600
-
-

251

Table 5

FIT HOLDING CO., LTD.

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller Counterparty Relationship
with the
counterparty		 Transaction Differences in transaction terms
compared to third party
transactions		 Differences in transaction terms
compared to third party
transactions		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Footnote
Purchases
(sales)		 Amount Percentage of
total purchases
(sales)		 Credit term Unit price Credit term Balance Percentage of total
notes/accounts
receivable (payable)
ACCU-IMAGE
TECHNOLOGY LIMITED
Foxlink Image Technology Co.,
Ltd.
Wei Hai Fu Kang Electric Co.,
Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dongguan Fu Wei Electronics
Co., Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dong Guan Fu Zhang Precision
Industry Co., Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dongguan Fu Wei Electronics
Co., Ltd.
Foxlink Image Technology Co.,
Ltd.
Glory Science Co., Ltd.		 Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
ACCU-IMAGE
TECHNOLOGY LIMITED
Wei Hai Fu Kang Electric Co., Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
Dongguan Fu Wei Electronics Co., Ltd.
ACCU-IMAGE
TECHNOLOGY LIMITED
Dong Guan Fu Zhang Precision Industry
Co., Ltd.
Foxlink Image Technology Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Glorytek (Yancheng) Co., Ltd.		 Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate		 Processing
income
Processing
income
Sales
Purchases
Processing
income
Processing
costs
Processing
income
Processing
costs
Processing
income
Processing
costs
Purchases		 586,226)
($ 586,226
190,473)
(
190,473
428,381)
(
428,381
114,510)
(
114,510
175,080)
(
175,080
117,220		 -100%
75%
-98%
33%
-67%
72%
-79%
19%
-27%
22%
18%		 Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
90 days after monthly
billings
90 days after monthly
billings
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement
Flexible collection,
depending on the capital
requirement		 Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement
Mutual
agreement		 None
None
None
None
None
None
None
None
None
None
None		 12,541
$ 12,541)
(
46,781
46,781)
(
262,549
262,549)
(
117,061
117,061)
(
178,981
178,981)
(
11,254)
(		 22%
-4%
96%
-100%
56%
-69%
53%
-31%
38%
-60%
-14%

252

Table 6

FIT HOLDING CO., LTD.

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Overdue receivables

Overdue receivables
Creditor Counterparty Relationship
withthe counterparty		 Balance as at
December31,2020		 Turnover rate Amount Actiontaken Amount collected
subsequent to
the balance
sheet date		 Allowance for
doubtfulaccounts
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dong Guan Fu Zhang Precision Industry Co., Ltd.
Dong Guan Fu Zhang Precision Industry Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
Glory Science Co., Ltd.
Glory Science Co., Ltd.
Glory Science Co., Ltd.
Yancheng Yaowei Technology Co., Ltd.
Glorytek (Suzhou) Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.		 ACCU-IMAGE TECHNOLOGY LIMITED
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
Foxlink Image Technology Co., Ltd.
Power Quotient International Co., Ltd.
Glory Science Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Suzhou) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.		 Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate		 262,549
$ 178,981
117,061
103,223
425,000
143,000
328,575
507,221
121,199
138,336
177,144
131,310
219,054		 1.37
1.96
0.84
0.33
Note 1
Note 1
0.07
Note 1
Note 1
0.06
Note 1
Note 1
Note 1		 -
$ -
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-
-		 $ -
43,770
30,055
11,238
-
-
-
-
-
-
-
-
-		 -
$ -
-
-
-
-
-
-
-
-
-
-
-

Note 1: It was recognised in other receivables, therefore it was not applicable.

253

FIT HOLDING CO., LTD. Significant inter-company transactions during the reporting period Year ended December 31, 2020

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number
(Note 1)		 Companyname Counterparty Relationship General ledgeraccount Amount Transactionterms Percentage of consolidated
total operating
revenues or total assets
(Note 3)
1
1
2
2
3
4
5
5
5
5
6
6		 FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
Wei Hai Fu Kang Electric Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dongguan Fu Wei Electronics Co., Ltd.
Dong Guan Fu Zhang Precision Industry
Co., Ltd.
Dong Guan Fu Zhang Precision Industry
Co., Ltd.		 Glorytek (Yancheng) Co., Ltd.
Glory Optics (Yancheng) Co., Ltd.
Power Quotient International Co., Ltd.
Glory Science Co., Ltd.
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
ACCU-IMAGE TECHNOLOGY LIMITED
ACCU-IMAGE TECHNOLOGY LIMITED
Foxlink Image Technology Co., Ltd.
Foxlink Image Technology Co., Ltd.
ACCU-IMAGE TECHNOLOGY LIMITED
ACCU-IMAGE TECHNOLOGY LIMITED		 1
1
3
3
3
3
3
3
3
3
3
3		 Other receivables
Other receivables
Other receivables
Other receivables
Processing income
Sales revenue
Processing income
Accounts receivable
Processing income
Accounts receivable
Processing income
Accounts receivable		 131,310
$ 219,054
425,000
143,000
586,226
190,473
428,381
262,549
175,080
178,981
114,510
117,061		 Based on the Company's
policies
Based on the Company's
policies
Based on the Company's
policies
Based on the Company's
policies
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement
Flexible collection, depending
on the capital requirement		 1%
1%
2%
1%
8%
3%
6%
1%
2%
1%
2%
1%

254

Transaction

Number
(Note 1)		 Companyname Counterparty Relationship General ledgeraccount Amount Transactionterms Percentage of consolidated
total operating
revenues or total assets
(Note 3)
7
7
7
8
9		 Glory Science Co., Ltd.
Glory Science Co., Ltd.
Glory Science Co., Ltd.
Glorytek (Suzhou) Co., Ltd.
Yancheng Yaowei Technology Co., Ltd.		 Glory Optics (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Yancheng) Co., Ltd.
Glorytek (Suzhou) Co., Ltd.		 3
3
3
3
3		 Other receivables
Accounts receivable
Other receivables
Other receivables
Accounts receivable		 507,221
328,575
121,199
175,080
138,336		 Collected depending on the
capital requirement after
offsetting receivables and
payables
Based on the Company's
policies
Based on the Company's
policies
Collected depending on the
capital requirement after
offsetting receivables and
payables
Based on the Company's
policies		 2%
1%
1%
1%
1%

  • Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:�

  • (1) Parent company is '0'.

  • (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to.�

(1) Parent company to subsidiary.

  • (2)Subsidiary to parent company.�

  • (3)Subsidiary to subsidiary.�

Note 3: Percentage of total consolidated revenues or total assets is calculated using the total consolidated assets at the end of the year when the subject of transaction is an asset/liability, � and is calculated by total consolidated revenues during the year when the subject of transaction is a revenue/expense.

  • Note 4: The inter-company transactions not exceeding $0.1 billion are not disclosed. In addition, counterparty related parties' transactions are not disclosed.

255

Table 8

FIT HOLDING CO., LTD.

Information on investees

Year ended December 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2020 as at December 31,2020 Net profit (loss) of
the investee for the
year ended December
31, 2020
(Note 1)		 Investment income
(loss) recognized by
the Company for the
year ended December
31, 2020
(Note 1)		 Footnote
Balance as at
December 31,
2020		 Balance as at
December 31,2019		 Number of shares Ownership
(%)		 Book value
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
FIT Holding Co., Ltd.
Foxlink Image Technology Co.,
Ltd.
Foxlink Image Technology Co.,
Ltd.
Foxlink Image Technology Co.,
Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
Glory Science Co., Ltd.
GLORY TEK (BVI) CO., LTD.		 Glory Science Co., Ltd.
Foxlink Image Technology Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Shih Fong Power Co., Ltd.
Foxwell Energy Co., Ltd.
ACCU-IMAGE TECHNOLOGY
LIMITED
KLEINE DEVELOPMENTS
LIMITED
Shih Fong Power Co., Ltd.
POWER CHANNEL LIMITED
GLORY TEK (BVI) CO., LTD.
GLORY TEK (SAMOA) CO.,
LTD.		 Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
British Virgin
Islands
British Virgin
Islands
Taiwan
Hong Kong
British Virgin
Islands
Samoa		 Manufacture and
sales of optical
instruments
Manufacture of
image
scanners and
multifunction
printers
Manufacture and
sales of
telecommunication
electronic
components
Hydroelectricity
generation
Energy service
management
Manufacture of
image
scanners and
multifunction
printers
Manufacture and
sales of magnesium
products
Hydroelectricity
generation
Holding and
reinvesting
businesses
General investments
business
General investments
business		 2,214,868
$ 3,011,140
2,172,180
760,000
210,000
1,030,318
-
957,600
139,552
1,379,545
780,074		 2,214,868
$ 3,011,140
2,172,180
760,000
-
1,030,318
642,224
-
139,552
1,379,545
780,074		 95,970,371
164,993,974
324,690,529
95,000,000
21,000,000
13,241,034
-
79,800,000
3,575
40,699,819
25,050,628		 100.00
100.00
100.00
41.30
14.00
100.00
0.00
34.70
35.75
100.00
100.00		 772,681
$ 3,682,263
2,211,702
1,000,903
209,077
1,383,042
-
957,197
507,611
583,887
692,930		 482,494)
($ 382,773
212,885
2,634)
(
6,592)
(
150,150
3
2,634)
(
122,016
336,236)
(
197,992)
(		 482,494)
($ 376,562
211,174
1,952)
(
923)
(
-
-
403)
(
-
-
-		 Subidiary
(Note 1)
Subidiary
(Note 1)
Subidiary
(Note 1)
Subidiary
(Note 1)
Subidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Investee
(Note 3)
Investee
(Note 1)
Investee
(Note 1)
Second-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)

256

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2020 as at December 31,2020 Net profit (loss) of
the investee for the
year ended December
31, 2020
(Note 1)		 Investment income
(loss) recognized by
the Company for the
year ended December
31, 2020
(Note 1)		 Footnote
Balance as at
December 31,
2020		 Balance as at
December 31,2019		 Number of shares Ownership
(%)		 Book value
GLORY TEK (BVI) CO., LTD.
GLORY TEK (BVI) CO., LTD.
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Quotient International Co.,
Ltd.
Power Sufficient International
Co., Ltd.
Shinfox Co., Ltd.
Shinfox Co., Ltd.		 GLORY OPTICS (BVI) CO.,
LTD.
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
TEGNA ELECTRONICS
PRIVATE LIMITED
Power Quotient International
(H.K.) Co., Ltd.
PQI JAPAN CO., LTD
SYSCOM DEVELOPMENT
CO., LTD.
Apix LIMITED
PQI Mobility Inc.
Castles Technology Co., Ltd.
Power Sufficient International
Co., Ltd.
Shinfox Co., Ltd.
Castles Technology Co., Ltd.
Foxwell Energy Corporation Ltd.
SHINFOX ENERGY
INTERNATIONAL INC.		 British Virgin
Islands
India
India
Hong Kong
Japan
British Virgin
Islands
British Virgin
Islands
Samoa
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Republic of
Seychelles		 Trading
Trading and
manufacturing
Trading and
manufacturing
Sales of electronic
telecommunication
components
Sales of electronic
telecommunication
components
General investments
holding
Specialised
investments holding
Specialised
investments holding
Trading and
manufacturing of
magnetic card and
reader for barcode
Sales of medical
instruments
Energy service
management
Trading and
manufacturing of
magnetic card and
reader for barcode
Energy service
management
Energy service
management		 494,837
99,927
13,174
389,705
23,129
309,378
2,946,803
284,800
43,061
10,000
561,482
6,670
672,000
-		 494,849
99,927
13,174
389,705
23,129
309,378
2,946,803
284,800
48,831
10,000
553,110
6,670
672,000
35,976		 16,000,000
21,773,105
3,001,000
106,100,000
24,300
10,862,980
12,501
10,000,000
10,847,003
1,000,000
58,743,000
331,000
67,200,000
-		 100.00
99.27
10.00
100.00
100.00
100.00
100.00
100.00
12.11
100.00
58.74
0.37
100.00
-		 58,973)
(
85,423
12,971
4,712)
(
156,089)
(
407,489)
(
1,109,517
695,052
176,017
8,935
740,111
5,412
848,087
-		 139,482)
(
1,252
6,130
38)
(
115)
(
2,210
62,793
12,589)
(
198,122
731
244,389
198,122
185,566
-		 -
-
-
-
-
-
-
-
-
-
-
-
-
-		 Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Investee
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Investee
(Note 1)
Second-tier
subsidiary
(Note 1)
Second-tier
subsidiary
(Note 1)
Investee
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 2)

257

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2020 as at December 31,2020 Net profit (loss) of
the investee for the
year ended December
31, 2020
(Note 1)		 Investment income
(loss) recognized by
the Company for the
year ended December
31, 2020
(Note 1)		 Footnote
Balance as at
December 31,
2020		 Balance as at
December 31,2019		 Number of shares Ownership
(%)		 Book value
Shinfox Co., Ltd.
Shinfox Co., Ltd.
Shinfox Co., Ltd.
Foxwell Energy Corporation Ltd.
Foxwell Energy Corporation Ltd.
SYSCOM DEVELOPMENT
CO., LTD
SYSCOM DEVELOPMENT
CO., LTD
Apix LIMITED
Apix LIMITED
Sinocity Industries Co., Ltd.
Perennial Ace Limited
Foxlink Powerbank International
Technology Private Limited		 SHINFOX NATURAL GAS
CO.,LTD.
Foxwell Power Co., Ltd.
Shinfox Power Co., Ltd.
Beiyuan Wind Power Co., Ltd.
Changyuan Wind Power Co., Ltd.
PQI CORPORATION
Foxlink Powerbank International
Technology Private Limited
Sinocity Industries Co., Ltd.
Perennial Ace Limited
DG LIFESTYLE STORE
LIMITED
Studio A Technology Limited
TEGNA ELECTRONICS
PRIVATE LIMITED		 Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
USA
India
Hong Kong
British Virgin
Islands
Macau
Hong Kong
India		 Energy service
management
Energy service
management
Energy service
management
Wind energy
Wind energy
Sales of electronic
telecommunication
components
Sales of electronic
telecommunication
components
Sales of electronic
telecommunication
components
Specialised
investments holding
Trading and
manufacturing
Trading and
manufacturing
Trading and
manufacturing		 120,000
99,000
-
-
-
199,360
95,778
2,479,275
606,624
357
4,998
11,649		 15,000
10,000
-
160,000
230,000
199,360
95,778
2,479,275
606,624
357
4,998
11,649		 12,000
9,900
-
-
-
7,000,000
21,790,000
6,000,000
No shares issued
100,000
1,225,000
3,001,000		 80.00
99.00
-
-
-
100.00
99.27
100.00
100.00
100.00
24.50
10.00		 103,015
99,460
-
-
-
492,603)
(
85,081
889,537
219,848
635
93,174
12,915		 12,762)
(
1,425
52)
(
3,280)
(
3,547)
(
303
1,921
48,507
14,286
130,136)
(
58,309
6,130		 -
-
-
-
-
-
-
-
-
-
-
-		 Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Notes 1 and 4)
Fourth-tier
subsidiary
(Notes 1 and 4)
Fourth-tier
subsidiary
(Notes 1 and 4)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Third-tier
subsidiary
(Note 1)
Fourth-tier
subsidiary
(Note 1)
Investee
(Note 1)
Investee
(Note 1)

Note 1: It was recognised based on the company's financial statements reviewed by the independent auditors. Note 2: It was retired in the first quarter of 2020. Note 3: It was retired in the second quarter of 2020.

Note 4: It was sold in the fourth quarter of 2020.

258

FIT HOLDING CO., LTD.

Information on investments in Mainland China

Year ended December 31, 2020

Table 9
Investee in
Mainland China		 Main business
activities		 Paid-in
capital		 Investment
method		 Accumulated
amount of
remittance from
Taiwan to		 Amount remitted from Amount remitted from Accumulated
amount of
remittance from
Taiwan to
Mainland China as		 Net income of
investee for the
year ended
December 31,		 Ownership held
by the Company
(direct or
indirect)
Investment income
(loss) recognized by
the Company for the
year ended
December 31,2020		 Book value of
investments in
Mainland China as
of December 31,
Expressed in thousands of NTD
(Except as otherwise indicated)
Accumulated
amount of
investment income
remitted back to
Taiwan as of
Footnote
Remitted to
Mainland
China		 Remitted back
to Taiwan
Dong Guan Han Yang
Computer Limited
Sharetronic Data
Technology Co., Ltd.
Dong Guan Fu Zhang
Precision Industry Co.,
Ltd.
Wei Hai Fu Kang
Electric Co., Ltd.
Dongguan Fu Wei
Electronics Co., Ltd.
Glorytek (Suzhou) Co.,
Ltd.
Glorytek (Yancheng)
Co., Ltd.
Yancheng Yao Wei
Technology Co., Ltd
Glory Optics
(Yancheng) Co., Ltd.
Power Quotient
Technology
(YANCHENG) Co.,
Jiangsu Foxlink New
Energy Technology
Co.,Ltd.
PQI (Xuzhou) New
Energy Co., Ltd.
Kunshan Jiuwei Info
Tech Co., Ltd.		 Manufacture of image
scanners and multifunction
printers and investment in property
Manufacutre and sales of mobile phone, LCD TV
Connector and electronic components
Mould development and
moulding tool manufacture
Manufacture and sale of parts
and moulds of photocopiers
and scanners
Manufacture and sales of image
scanners, multifunction and
printers and its accessories
Trading and manufacturing
Trading and manufacturing
Trading and manufacturing
Trading and manufacturing
Manufacture and sales of electronic components
Manufacture and sales of electronic components
Manufacture and sale of electronic telecommunication
components
Supply chain finance energy
service management		 174,828
$ 678,078
231,037
227,840
170,880
398,720
256,320
43,770
944,412
569,600
678,435
43,770
1,424		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2
Note 3
Note 1
Note 2
Note 2
Note 3		 174,828
$ 122,179
169,897
142,400
151,181
398,720
256,320
-
329,444
Note 4
Note 5
Note 5
1,424		 -
$ -
-
-
-
-
-
-
-
-
-
-
-		 -
$ -
-
-
-
-
-
-
-
-
-
-
-		 174,828
$ 122,179
169,897
142,400
151,181
398,720
256,320
-
329,444
-
-
-
1,424		 18,503
$ 408,080
2,813)
(
15,610)
(
73,942
127,156)
(
129,381)
(
3,574)
(
203,066)
(
12,589)
(
-
12
3,466		 100
18,503
$ 7.13
40,468
100
2,813)
(
100
15,610)
(
100
73,942
100
127,156)
(
100
129,381)
(
100
3,574)
(
100
203,066)
(
100
12,589)
(
Note 7
-
100
12
100
3,466		 247,575
$ -
$ Note 6
381,392
-
Note 6
261,020
-
Note 6
250,436
-
Note 6
513,673
-
Note 6
477,261
-
Note 6
304,355)
(
-
Note 6
143,422
-
Note 6
631,079
-
Note 6
695,052
-
Note 6
-
-
-
43,782
-
Note 6
13,714
-
Note 6
  • Note 1: Through investing in an existing company in the third area, which then invested in the investee in Mainland China. Note 2: As the investment is invested through an existing company in Mainland China, which then invested in the investee. Note 3: An investee established in the third area and an reinvestee in Mainland China invested by an investee in Mainland China. Note 4: The capital of an indirect investment of PQI, Power Quotient Technology (YANCHENG) Co., Ltd., was remitted by the financing from the investee in the third party. Note 5: The capital of an indirect investment of PQI, Jiangsu Foxlink New Energy Technology Co.,Ltd. and PQI (Xuzhou) New Energy Co., Ltd. , was remitted by a capital from Power Quotient Technology (YANCHENG) Co., Ltd. Note 6: It was recognised based on the investee's financial statements reviewed by the independent auditors. Note 7: Jiangsu Foxlink New Energy Technology Co., Ltd. was initially a subsidiary of the Group. However, the Group did not participate in the capital increase of Jiangsu Foxlink New Energy Technology Co., Ltd. in April 2020, thus, the Group lost its control over the company, and this investment was recognised in investments accounted for using equity method. Subsequently, the company proceeded to reduce its capital by returning cash, and the shareholding ratio decreased to 12.9%. The Group lost its control over the company, therefore, this investment was classified in financial assets at fair value through other comprehensive income.

259

Companyname Accumulated amount of remittance from
Taiwan to Mainland China as of
December31,2020		 Investment amount approved by the Investment
Commission of the Ministry of Economic Affairs
(MOEA)		 Ceiling on investments in Mainland China
imposed by theInvestment Commissionof MOEA
Foxlink Image Technology Co., Ltd.
Glory Science Co., Ltd.
Power Quotient International Co., Ltd.		 771,956
$ 984,484
1,424		 923,199
$ 1,194,736
622,146		 1,761,799
$ 463,992
1,704,187

260

Table 10

FIT HOLDING CO., LTD. Major shareholders information December 31, 2020

Name of majorshareholders Shares Shares
Numberofsharesheld Ownership (%)
Foxlink International Investment Ltd.
Zhi De Investment Co., Ltd.
Fu Uei International Investment Ltd. (FUII)		 58,303,464
21,055,687
14,690,257		 23.67%
8.55%
5.96%

261

FIT HOLDING CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

STATEMENT 1

Name BeginningBalance BeginningBalance Addition Addition Decrease Decrease EndingBalance Market Value or Net Assets
Value		 Market Value or Net Assets
Value		 Collateral
Shares Amount Shares Amount Shares Amount Shares Percentage of
Ownership		 Amount Unit Price Total Amount
Foxlink Image Technology
Co., Ltd.
Power Quotient International
Co., Ltd.
Glory Science Co., Ltd.
Shih Fong Power Co., Ltd.
Foxwell Energy Co., Ltd.		 164,993,974
324,690,529
95,970,371
95,000,000		 3,608,129
$ 1,938,232
1,254,721
822,469
-		 -
-
-
21,000,000		 74,134
$ 273,470
-
178,434
209,077		 -
-
-
-		 -
$ -
482,040)
(
-
-		 164,993,974
324,690,529
95,970,371
95,000,000
21,000,000		 100%
100%
100%
41.3%
14%		 3,682,263
$ 2,211,702
772,681
1,000,903
209,077		 17.80
$ 7.08
8.05
10.66
9.96		 2,936,331
$ 2,298,988
772,681
1,012,582
209,077		 None
None
None
None
None
7,623,551
$		 735,115
$		 482,040)
($		 7,876,626
$		 7,229,659
$

Note 1: Changes in current year included acquisition of investments accounted for using equity method and share of profit or loss or other comprehensive income in investees accounted for using the equity method.

Note 2: Net assets value was calculated based on the Company’s shareholding ratio in each investee according to their financial statements.

262

FIT HOLDING CO., LTD. STATEMENT OF SHORT-TERM BORROWINGS YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

STATEMENT 2

STATEMENT 2
Nature Description EndingBalance Contract Period Range of Interest
Rate		 Credit Line Collateral Note
Unsecured borrowings
Unsecured borrowings		 Bank SinoPac
Taishin Bank		 507,800
$ 250,000
757,800
$		 2020/12/30~2021/1/29
2020/12/25~2021/1/25		 1.05%
1.05%		 165,000
$ 250,000		 None
None

263

FIT HOLDING CO., LTD. STATEMENT OF LONG-TERM BORROWINGS YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

STATEMENT 3
Creditor		 Description Amount Contract Period Interest Rate Collateral
Yuanta Bank
Jih Sun Bank		 Borrowing period is
from October 2020 to
August 2022;
principal is repayable
in full amount at the
maturity date; interest
is repayable monthly.
Borrowing period is
from October 2020 to
June 2022; principal
is repayable in full
amount at the
maturity date; interest
is repayable monthly.		 300,000
$ 100,000
400,000
$		 2020/10/23~2021/8/25
2020/10/8~2022/6/18		 1.10%
1.22%		 None
None

264

FIT HOLDING CO., LTD.

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION

YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

STATEMENT 4

STATEMENT 4
Nature
Function		 Year ended December 31,2020 Year ended December 31,2019
Classified as
Operating Costs		 Classified as
Operating
Expenses		 Total Classified as
Operating Costs		 Classified as
Operating
Expenses		 Total
Employee Benefit Expense
Wages and salaries $ - $ 16,723 $ 16,723 $ - $ 6,285 $ 6,285
Labour and health insurance fees - 382 382 - 333 333
Pension costs - 181 181 - 144 144
Directors'remuneration - 2,870 2,870 - - -
Other personnel expenses - 222 222 - 198 198

Note:

  1. As at December 31, 2020 and 2019, the Company had 22 and 11 employees,including 9 and 5 non-employee directors, respectively.

  2. A company whose stock is listed for trading on the stock exchange or over-the-counter securities exchange shall additionally disclose the following information ：

  3. (1) Average employee salaries in current year was $1,286 (Total employee salaries in current year/(Number of employees in current year–Number of non-employee directors in current year)).

  4. (2) Average employee salaries in previous year was $1,048 (Total employee salaries in previous year/(Number of employees in previous year–Number of non-employee directors in previous year)).

  6. (3) Adjustments of average employee salaries was 23% ((Average employee salaries in current year Average employee salaries in previous year) / Average employee salaries in previous year).

  7. (4) There was no supervisors’ remuneration in current and previous years. (The Company has no supervisors’ remuneration as it has set up an audit committee)

265

FIT HOLDING CO., LTD.

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION (Cont.)

YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

STATEMENT 4

  • (5) The Company’s remuneration policy (including directors, supervisors, managers, and employees) is as follows:

  • A. Relevance between the policy, standard and portfolio and established procedures of the remuneration that the Company paid to directors and independent directors and operational performance and future risk;

    • (a) Directors’ remuneration of the Company was paid in accordance with the standards of attendance allowance and travel fee payments approved by the Board of Directors as well as the general pay levels.

    • (b) In accordance with Article 26 of the Company’s Articles of Incorporation: a ratio of distributable profit of the current year’s profit before tax that excludes employees’ compensation and directors’ remuneration, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration, which will be resolved by the Board of Directors. The ratio shall not be lower than 6% for employees’ compensation and shall not be higher than 3% for directors’ remuneration.

  • B. Relevance between the policy, standard and portfolio and established procedures of the remuneration that the Company paid to managers and operational performance and future risk;

    • (a) Managers’ remuneration of the Company was determined in accordance with requirements stated in the performance evaluation regulations of the Company, depending on personal performance and contribution to the Company’s overall operation and by reference to the general pay levels of the industry and was conducted after being reviewed by the remuneration committee and reported to the Board of Directors for approval.

    • (b) In accordance with Article 26 of the Company’s Articles of Incorporation: a ratio of distributable profit of the current year’s profit before tax that excludes employees’ compensation and directors’ remuneration, after covering accumulated losses, shall be distributed as employees' compensation and directors’ remuneration, which will be resolved by the Board of Directors. The ratio shall not be lower than 6% for employees’ compensation and shall not be higher than 3% for directors’ remuneration.

266

FIT HOLDING CO., LTD.

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION (Cont.)

YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

STATEMENT 4

  • C. Relevance between the policy, standard and portfolio and established procedures of the remuneration that the Company paid to employees and operational performance and future risk;

  • (a) Employees’ remuneration included monthly salary (including meal allowances), annual salary adjustment for personal performance, performance bonus, holiday bonus and earnings bonus. Salary payment of the Company’s employees was determined in accordance with the general pay levels of the industry, operation of the Company, employees’ educational background, experience, ability and contribution and was adjusted depending on the market salary dynamics, changes in the overall economic and industrial climate and the government regulations.

  • (b) In accordance with Article 26 of the Company’s Articles of Incorporation: a ratio of distributable profit of the current year’s profit before tax that excludes employees’ compensation and directors’ remuneration, after covering accumulated losses, shall be distributed as employees' compensation and directors’ remuneration, which will be resolved by the Board of Directors. The ratio shall not be lower than 6% for employees’ compensation and shall not be higher than 3% for directors’ remuneration.

267

  • VI. If the company and its affiliated companies had any financial difficulties in the most recent year and as of the publication date of the annual report, state the impact on the company’s financial status: None.

VII. Review and Analysis of Financial Status and Performance and Risk Issues

  • I. Review and analysis of financial status
Review and analysis of financial status Review and analysis of financial status Review and analysis of financial status Review and analysis of financial status Review and analysis of financial status
Year
Item
2020		 2019 Difference
Amount %
Current assets 13,443,029
6,740,195
6,702,834
99.45%
Property, plant and equipment 3,411,488 5,279,784 (1,868,296) (35.39%)
Intangible assets 985,094
1,027,695
(42,601)
(4.15%)
Other assets 4,967,398
5,160,244
(192,846)
(3.74%)
Totalassets 22,807,009 18,207,918 4,599,091
25.26%
Current liabilities 10,542,565
5,813,251
4,729,314
81.35%
Non-current liabilities 4,087,189
5,530,512		 (1,443,323)
(26.10%)
Total liabilities 14,629,754
11,343,763		 3,285,991
28.97%
Equity attributable to owners of the
parent company
7,058,599
6,704,305
354,294
5.28%
Share capital 2,462,421
2,462,421
0
0.00%
Additional paid-in capital 4,198,013
4,237,390
(39,377)
(0.93%)
Retained earnings 98,209 (273,604) 371,813 135.89%
Other rights 299,956
278,098
21,858
7.86%
Non-controlling interests 1,118,656
159,850
958,806
599.82%
Totalequity 8,177,255 6,864,155 1,313,100 19.13%
Reasons for the increase or decrease in the amount in the last two years:
1. Increase in current assets: Mainly due to the increase in performance bond for the
projects in 2020.
2. Decrease in property, plant and equipment: Mainly due to the disposal of the subsidiaries
Zhangyuan, Beiyuan and Hsingwei Power in 2020, as well as the exclusion of Jiangsu
Foxlink New Energy Technology Co., Ltd. from the consolidated report due to a decrease
in its investment ratio as it reduced its capital, thus resulting in a substantial decrease in
property, plant and equipment.
3. Increase in total assets: Mainly due to the increase in performance bonds for the projects
in 2020.
4. Increase in current liabilities: Mainly due to the substantial increase in payments due to
related parties.
5. Increase in total liabilities: Mainly due to the substantial increase in payments due to
related parties.
6. Decrease in non-current liabilities: Mainly due to the decrease in long-term borrowings in
2020.
7. Increase in retained earnings: Mainly due to the increase in net profit in 2020.
8. Increase in non-controlling interests: Mainly due to the decrease in the company’s
shareholding of the subsidiaries Shifeng and Shinfox due to non-participation in their
capital increase in cash in 2020.

268

II. Review and Analysis of Financial Performance

Unit: NT$ thousand

Unit: NT$tho
Year
Item		 2020 2019 Increase
(decrease)
amount		 Change ratio
%
Operating income 7,053,361
8,840,159
(1,786,798)
(20.21%)
Operating cost 6,168,735
8,226,631
(2,057,896)
(25.02%)
Operatingmargin 884,626 613,528 271,098 44.19%
Operating expenses 1,105,280
1,146,824
(41,544)
(3.62%)
Business interest (220,654)
(533,296)
312,642
58.62%
Non-operating income
and expenditure		 512,107
305,166
206,941
67.81%
Net profit before tax 291,453 (228,130) 519,583 227.76%
Income tax expense 111,678
(31,097)
142,775
459.13%
Net profit for the period 179,775
(197,033)
376,808
191.24%
Reasons for the increase or decrease in the amount in the last two years:
1. Operating income/operating cost and gross operating profit: Mainly due to the decline in
customer orders in 2020 compared with the same period last year. The decline in the
revenue of 3C components, which had a poor profit accounted for a relatively high
proportion, resulting in an increase in gross operating profit compared with the same period
last year.
2. Increase in operating profit: This is mainly due to the increase in gross operating profit and
the decrease in operating expenses during the current period.
3. Net profit before tax, income tax expenses and net profit for the period: Mainly due to the
increase in net operating profit in 2020 and the increase in non-operating income and
expenses compared with the same period last year, which led to the increase in net profit
before tax,income tax expenses and netprofit for theperiod.

III. Review and Analysis of Cash Flow

Unit: NT$ thousand

Beginning
cash
balance		 Annual net
cash flow
from
operating
activities		 Annual cash
outflow from
investment
and financing
activities		 Exchange
rate impact		 Cash
surplus
(shortage)
amount		 Remedies for cash
shortage		 Remedies for cash
shortage
Investment
plan		 Financial
plan
1,820,304 1,261,944 2,230,136 (163,495) 5,148,889 - -
1. Analysis of cash flow changes in recent years:
(1)
Business activities: NT$1,261,944 thousand
(2)
Investment activities: NT$(4,328,082) thousand
(3)
Fund-raising activities: NT$6,558,218 thousand
2. Remedial measures for cash shortage and liquidity analysis: None
3. Analysis of cash liquidity in the next year: The cash balance is about NT$5.149 billion, and there is
no worryfor the cash flow in the nextyear.

269

IV. Impact of Major Capital Expenditures on Financial Operations in the Last Year

Unit: NT$ thousand

Year Capital expenditure
items		 Sources of
funds		 Total funds Impact on financial operations
2020 Acquisition of property,
plant and equipment		 Own funds
and bank
financing		 894,071



 Build
additional
factories
and
purchase production equipment to
expand the scale of production and
sales to meet market and customer
needs.

V. Reinvestment policy in the most recent year, main reason for its profit or loss, improvement plan and investment plan for the next year

  • (I) Reinvestment Analysis Table

December 31, 2020

December 31,2020
Description
Item		 Investment
amount
(note)		 Policy Main reason for profit
or loss
Improvement plan
Glory Science Co., Ltd. NT$2,214,868
thousand		 Restructuring
of
organization
under joint
control		 Loss of NT$482,494
thousand		 Measures such as staff
streamlining and short-term
OEMs to avoid further
expansion of losses; in
addition, recruiting technical
teams to strengthen product
development capabilities,
and continuing to follow up
with existing and new
customers.
Power Quotient
International Co., Ltd.		 NT$2,172,180
thousand		 Restructuring
of
organization
under joint
control		 Profit of NT$212,885
thousand		 -
Foxlink Image
Technology Co., Ltd.		 NT$3,011,140
thousand		 Restructuring
of
organization
under joint
control		 Profit of NT$382,773
thousand		 -
Shih Fong Power Co.,
Ltd.		 NT$760,000
thousand		 Invest in
other
companies		 Loss of NT$2,634
thousand		 The power plant is still in
the construction stage and
no revenue has been
generated yet.

Note: The investment amount exceeds 5% of the paid-in capital.

  • (II) The company’s investment plan for the next year will focus on increasing profits in response to market demand.

270

VI. Risks

  • (1) Impact of interest rate and exchange rate changes, and inflation on the company’s profit and loss and future countermeasures:

  • Interest rate: The interest income was NT$30,038 thousand in 2020, and the interest expense was NT$107,403 thousand. In the future, the company will regularly assess the interest rates of deposits and borrowings offered by banks, and at the same time obtain the average market interest rate and maintain a good relationship with banks to obtain a more favorable deposit and borrowing rates, in order to maintain the flexibility of financial operations.

  • Exchange rate: The consolidated revenue of the subsidiary Power Quotient mainly comes from the sales of Apple products by its subsidiaries; as its sales are mainly quoted in Hong Kong dollars, while its purchases are quoted in US dollars, the gross profit margin will be affected by exchange rate fluctuations. The consolidated revenue of the subsidiary GLORYTEK mainly comes from mainland China. The operating income of the subsidiary Foxlink Image Technology is mostly denominated and recorded in US dollars. The purchase of raw materials and machinery and equipment is also mostly denominated and recorded in US dollars, so there is a certain hedging effect on the risk of exchange rate changes. Most of the exchange gains and losses come from foreign currencies and unrealized conversion gains or losses incurred after reevaluation of liabilities and assets based on the spot exchange rate at the end of the period. In response to exchange rate fluctuations, the Finance Department has established hedging strategies and methods, and timely adopts the following foreign exchange hedging measures: (1) consider the possible future changes in the exchange rate when quoting the business, so as to protect the company’s profits; (2) constantly collect information about exchange rate changes to fully grasp exchange rate trends; (3) use appropriate hedging tools, such as pre-sale or pre-purchase of forward foreign exchange contracts, to avoid exchange risks; (4) set up foreign currency accounts and use the accounts to manage foreign currency deposits and withdrawals required for business to reduce the exchange rate risk from the conversion of New Taiwan dollars; pay attention to the foreign currency revenue and expenditure at all times, try to keep the foreign currency revenue and expenditure in balance, and if necessary, engage in derivative financial product trading for the purpose of risk avoidance in accordance with the company’s “Management Measures for Acquisition or Disposal of Assets,” so as to avoid exchange losses.

  • Inflation: The extent of inflation changes did not significantly affect the company’s operations and did not significantly impact the company.

  • (II) Policies for engaging in high-risk or high-leverage investments, loans to others, endorsement guarantees, and derivatives trading, main reasons for profit or loss, and future countermeasures:

  • The company has established the “Procedures of Acquisition and Disposal of Assets,” “Procedures of Loan Extension and Endorsement Guarantee,” and the established policies and corresponding measures are followed for any engagement in the extension of loans to others, endorsement guarantees or derivative trading. The company has never engaged in any high-risk or high-leverage investment. Only the subsidiary Power Quotient engaged in the trading of derivative financial products with other subsidiaries for assistance to the company, but limited to avoiding current or future potential exchange rate and interest rate risks. Hence, the proportion of the overall profit and loss generated from derivative trading to the profit and loss generated from operations is

271

quite limited and within the control of the company.

(III) Future R&D plans and estimated R&D expenses:

  1. The Group’s future R&D plans:

    • (1) On the lenses of 3C components, the trend of plastic lenses is “smaller sizes and higher pixels” and applications in various products. This trend is also the direction of the company’s R&D plan for lenses. The company adheres to the belief of independent R&D, and the main sources of technology are the company’s long-term R&D personnel cultivation, project research plans for self-development, and maintenance of close technical cooperation with customers. In recent years, the company has actively recruited R&D talents for the development of a full range of products.

    • (2) The main sources of technology for systems and peripheral products are the rich experience of the R&D personnel in the industry and by the company’s long-term cultivation through project research plans for self-development. The key technologies currently mastered include automatic paper feeding technology, integrated circuit design for special applications, precision optical mechanism design, high-speed transmission design, analog/digital circuit design, image processing and optical design... etc. In recent years, the company has started investing in AI technology. In addition to static image detection/recognition/adjustment in the OA field, dynamic image recognition is introduced, such as license plate recognition in parking lots and crowd/gender recognition in different areas. In addition, using this technology, it is actively entering the field of automatic optical inspection equipment. The materials currently analyzed include the positive and negative electrodes of lithium batteries, copper foil, PCB, contact lenses and textiles.

  2. The combined R&D expenses of the company and its subsidiaries in 2020 were NT$383,683 thousand, which accounted for approximately 5.44% of the consolidated operating income for the year. As of March 31 in 2021, the actual consolidated R&D expenses were NT$108,200 thousand, which is approximately 4.81% of the operating income. It is estimated that the total R&D expenditure invested in this year will be 4 to 8% of the operating income.

  3. (IV) Impact of important domestic or foreign policies and legal changes on the company’s financial operations and corresponding measures:

The company’s daily operations are handled in accordance with the laws and regulations of the competent authority. In recent years, the company’s finance and business have not been affected by the important domestic or foreign policy or legal changes. The company’s management will review important domestic and foreign policies and legal changes at any time, put forward countermeasures in due course, and set up a legal unit to pay attention to important domestic and foreign policy and legal changes at any time in order to propose impact assessments and response plans. At the same time, the company also commissions external legal consultants to provide inquiry services and deal with the company’s legal issues. Up to the moment, important policy and legal changes have not significantly impacted the company.

  • (V) Impact of technological and industrial changes on the company’s financial operations and countermeasures:

  • Regarding technological and industrial changes, the company regularly invites relevant departments to hold meetings to discuss ways to respond; so far, technological and industrial changes have not significantly impacted the company’s

272

financial operations.

  1. Information security risk assessment:

The company has formulated an information security policy to strengthen information security management, in order to ensure the confidentiality, integrity and availability of its information assets, provide an information environment for the continuous operation of the company’s business, and avoid internal and external deliberate or accidental threats: the company also formulated information security risk assessment procedures and conducted regular annual assessments.

  • (1) Scope of information security policy

  • A. Personnel management and information security training

  • B. Network and computer system security management

  • C. Security management of system access control, development and maintenance

  • D. Information asset security management

  • E. Physical and environmental safety management

  • F. Planning and management of business continuity plan

  • (2) Information security policy rights and responsibilities

  • A. The company has established a cross-departmental information security management team. The information unit is responsible for the team’s work and coordinating the promotion of information security management related matters.

  • B. Supervisors at all levels of the company shall actively participate in and support the information security management system and implement the policy through relevant standards and procedures established.

  • C. All personnel of the company, outsourced service vendors and visitors shall abide by this policy.

  • D. When all personnel of the company and outsourced service providers detect information security incidents, they shall notify the information security team’s contact person and inform the person in charge of the information security team. At the same time, the information security contact person shall report the information security incident or the detected weakness through the notification mechanism, and record it accordingly.

  • E. Any act that endangers information security will be investigated for civil, criminal and administrative responsibilities according to the severity of the circumstances, or will be dealt with in accordance with the relevant regulations of the company.

The information security team’s operations are all implemented in accordance with the company’s procedures to ensure data integrity and security, and the information security risk assessment results are good. Therefore, the company’s information security has no major defect in the last year and as of the printing date of the annual report, and there are no major operational risks.

  • (VI) Impact of corporate image changes on corporate crisis management and countermeasures:

The company has always been committed to its core businesses to establish a positive social image of the company and fulfill its social responsibilities, so no incidents that damage the corporate image have occurred.

  • (VII) Expected benefits, possible risks and countermeasures concerning mergers and acquisitions:

  • In the most recent year and as of the publication date of the annual report, the company did not have any merger or acquisition.

273

  • (VIII) Expected benefits, possible risks and countermeasures concerning plant expansion: In order to meet the needs of future business growth, the company is building production bases and purchasing production equipment to increase revenue and profit.

  • (IX) Risks from the concentration of purchase or sales and countermeasures: Sales: As the company’s products are diversified and the sales targets are mainly international brand manufacturers, the risk profile is relatively low. Purchase: The company’s purchases are not overly concentrated. The main reason is that the company has at least two or more raw material suppliers, and negotiates with the suppliers based on the purchased quantity. Therefore, there should be no risk of purchase concentration. In addition, the company reduces the cost of incoming materials through group resources and the advantages of the group’s bulk purchases, has established stable supply partnerships with various suppliers, and adopts decentralized procurement sources for the purchase of major components to ensure smoothness of incoming materials. In addition to maintaining good transactions with existing customers and suppliers, the company’s subsidiaries will strive to develop new sources of customers and suppliers to diversify business risks and enhance long-term competitiveness.

  • (X) Impact, risks and countermeasures of volume transfers or replacement of equity by directors, supervisors or major shareholders holding more than 10% of the company’s shares: The company did not have such a situation in the last year and as of the date of publication of the annual report.

  • (XI) Impact, risks and countermeasures concerning the change in management rights of the company:

The company did not have such a situation in the last year and as of the date of publication of the annual report.

(XII) Litigation or non-litigation events:

  1. Major litigation, non-litigation or administrative litigation events that the company is undergoing at the moment:

  2. Power Quotient International Co., Ltd., a wholly-owned subsidiary of the company, received a notice from the US subsidiary on December 16, 2011, that it had an accounts receivable dispute with customers in Central and South America. After an investigation by Power Quotient International, it was found that a specific employee of the US subsidiary went to the freight contracting company to tamper with the relevant delivery documents and had the goods transported to areas other than the places designated by the customers who placed the orders. The estimated amount affected was US$19,447 thousand (approximately NT$577,633 thousand). According to the lawyer’s opinion, the above-mentioned incidents belong to claims against the specific employee. Based on the principle of prudence and conservatism, the US subsidiary provided all the claims above as bad debt losses. However, the actual losses are still subject to the results of judicial investigation and recovery. In this case, the judicial authorities of Taiwan and the United States have been invited to investigate and search for evidence for the criminal responsibility of the relevant personnel; the company has appointed lawyers to file civil lawsuits in Taiwan and the United States respectively, and deposited NT$2,500 thousand at the Taiwan New Taipei District Court as the guarantee for provisional seizure. Based on the lawyer’s opinion, the possibility of the recovery of the creditor’s rights cannot yet be confirmed. In addition, the US subsidiary filed a claim against Private Label PC, Inc. (PLPC), and PLPC also filed a counterclaim against Power Quotient

274

International, the company’s US subsidiary and Hong Kong subsidiary and claimed US$3,224 thousand. The US subsidiary reached a settlement agreement with some of the defendants in advance, and in March and June 2015, the US subsidiary received US$950 thousand and US$400 thousand in settlement payments. On October 7, 2015, PLPC withdrew the claim against the Hong Kong subsidiary. A settlement agreement was reached for the litigation above with PLPC on July 25, 2016. Power Quotient International did not need to pay any settlement amount, and because both parties had a confidentiality clause, the settlement amount was exempt from disclosure. Both parties withdrew the lawsuit on August 12. On November 30, 2016, the US subsidiary won the first case against the two defendants in a civil lawsuit, and the civil disputes with the other parties were closed by settlement. On March 22, 2017, one of the defendants in the case was sentenced to criminal non-prosecution in Taiwan.

  1. If there are major litigation, non-litigation or administrative disputes that the company’s directors, supervisors, president, substantive persons in charge, major shareholders with more than 10% shareholding or subsidiary companies have been sentenced or are currently undergoing. The results may have a significant impact on shareholders’ equity or the price of securities. The relevant information should be disclosed: None.

  2. (XIII) Other important risks and countermeasures

The company and its subsidiaries have no other important risks as of the date of publication of the annual report, except for the above-mentioned risk assessment and descriptions.

275

VII. Oher Important Matters:

(1) Directors’ advanced study status:

Job title Name Training date Training date Organizer Course title Training
hours
Director Kufn Lin September
21, 2020		 September
21, 2020		 Accounting
Research and
Development
Foundation of the
Republic of China
Impact of New IFRS17
“Insurance Contract” on
Insurance Companies,
Investors and
Policyholders and
Countermeasures		 3
Director Kufn Lin October
23, 2020		 October
23, 2020		 Accounting
Research and
Development
Foundation of the
Republic of China
Case Study of
Investigation of “Fund
Flow” in Financial Report
Frauds and Discussion of
Related Legal Liabilities		 3
Director Kufn Lin November
3, 2020		 November
3, 2020		 Accounting
Research and
Development
Foundation of the
Republic of China
Legal Compliance Audit
Practices of
“Shareholders’ Meetings”
of Enterprises		 3
Director Kufn Lin November
24, 2020		 November
24, 2020		 Accounting
Research and
Development
Foundation of the
Republic ofChina		 Analysis of False Financial
Reports and How to Find
Key Information in
Financial Reports
3
Director Hwee Kian
Lim		 June 12,
2020		 June 12,
2020		 CIO Taiwan The 7th Manufacturing
CIOForum		 6
Director Semi
Wang		 November
25, 2020		 November
25, 2020		 Securities and
Futures Institute		 2020 Seminar on
Understanding Futures
Derivative Hedging
Transactions and
Operational Perfection for
Sustainable Management
Practices of Enterprise for
Listed and OTC
Companies		 3
Director Wilson Hu August 7,
2020		 August 7,
2020		 Taiwan Corporate
Governance
Association
Information Disclosure
and Transparency		 3
Director Wilson Hu November
6, 2020		 November
6, 2020		 Taiwan Corporate
Governance
Association
Corporate Governance
Blueprint and Corporate
Social Responsibility
Vision		 3
Director Wilson Hu November
10, 2020		 November
10, 2020		 Securities and
Futures Institute		 Advanced Seminar for
Practices of Executives
(Corporate Governance
and Securities
Regulations)		 3
Independent
Director		 Ralph
Chen		 September
16, 2020		 September
16, 2020		 National
Federation of
CPA Associations
Analysis of the Latest
Securities Management
CompanyRegulations and
3

276

Job title Name Training date Training date Organizer Course title Training
hours
of the R.O.C. Practices
Independent
Director		 Ralph
Chen		 October
14, 2020		 October
14, 2020		 Taiwan Corporate
Governance
Association
(Audit Committee Series
Course) Establishment
and Operation of the Audit
Committee		 3
Independent
Director		 Ralph
Chen		 October
22, 2020		 October
22, 2020		 Securities and
Futures Institute		 2020 Annual Prevention of
Insider Trading and
Insider Equity Trading
Publicity Seminar
3
Independent
Director		 Ralph
Chen		 October
27, 2020		 October
27, 2020		 Taiwan Corporate
Governance
Association
ESG Development Trend
and Socially Responsible
Investment (SRI)		 3
Independent
Director		 Chen-Rong
Chian
August 29,
2020		 August 29,
2020		 Chinese
Middle-way
Leadership
Culture
Association		 Lectures and
Comprehensive Seminars
on Deepening Corporate
Governance and
Corporate Social
Responsibility Culture,
Corporate Excellence
Management, Effective
Integration of Middle-way
Culture and Corporate
Management		 3
Independent
Director		 Chen-Rong
Chian
November
10, 2020		 November
10, 2020		 Taiwan Corporate
Governance
Association
Key 5G Technologies and
Application Opportunities		 3
Independent
Director		 Chen-Rong
Chian
December
15, 2020		 December
15, 2020		 Taiwan Corporate
Governance
Association
How to Use Influential
Investment to Enhance
Corporate Value		 3
Independent
Director		 Wei-Lin
Wang		 June 23,
2020		 June 23,
2020		 Taiwan
Construction
Research
Institute		 Engineering Related Legal
Affairs Series - Evidence
Rules in Litigation Law
and Engineering Appraisal
Practices

6
Independent
Director		 Wei-Lin
Wang		 November
19, 2020		 November
19, 2020		 Internal Audit
Association of the
Republic of China

Recent Business Secret
and Non-Competition
Cases and Development
Practices		 6

277

(II) Training participation by personnel related to financial information transparency:

Year Organizer Course title Course
hours		 Number of compa
participants
ny
2020 Accounting Research
and Development
Foundation of the
Republic of China		 Impact of New IFRS17 “Insurance
Contract” on Insurance Companies,
Investors and Policyholders and
Countermeasures		 3 1
2020 Accounting Research
and Development
Foundation of the
Republic of China		 Case Study of Investigation of “Fund
Flow” in Financial Report Frauds and
Discussion of Related Legal Liabilities		 3 1
2020 Accounting Research
and Development
Foundation of the
Republic of China		 Legal Compliance Audit Practices of
“Shareholders’ Meetings” of Enterprises		 3 1
2020 Accounting Research
and Development
Foundation of the
Republic of China		 Analysis of False Financial Reports and
How to Find Key Information in Financial
Reports
3		 1
2020 Internal Audit
Association of the
Republic of China		 Analysis of Policies for Enterprises to
Improve Their Ability of Financial Report
Self-Preparation and Study of Key
Internal Audit and Internal Control
Practices		 6 1
2020 Internal Audit
Association of the
Republic of China		 Subsidiary Audit Practice 6 1
2020 Internal Audit
Association of the
Republic of China		 Essentials of Internal Audit on Legal
Compliance		 6 1
2020 Internal Audit
Association of the
Republic of China		 Analysis of Internal Auditors on Issues
Concerning Legal Compliance and
Fraud Prevention of “Information
Security”and“Personal Privacy”		 6 1

278

VIII. Special Records

  • I. Information of Affiliated Enterprises

  • (I) Consolidated business report of affiliated enterprises

    1. Organization Chart of Affiliated Enterprises (December 31, 2020)

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FIT Holding Co., Ltd.
Power Quotient International Glory Science Co., Ltd., Foxlink Image Technology Co., Ltd. Shih Fong Power Co., Ltd.
Shareholding of FIT Holding: 41.3%
Co., Ltd. Shareholding ratio: 100% Shareholding ratio: 100% Shareholding of Foxlink Image
Technology: 34.7%
Shareholding ratio: 100%
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Glory Science Co., Ltd., GLORY TEK (BVI) CO.,LTD Shareholding ratio: 100% GLORY OPTICS (BVI) CO.,LTD. GLORY TEK (SAMOA) CO.,LTD. GLORYTEK SCIENCE INDIA Shareholding ratio: 100% Shareholding ratio: 100% PRIVATE LIMITED Shareholding ratio: 99.27% Glorytek (Yancheng) Co., Ltd. Glorytek (Suzhou) Co., Ltd. Shareholding ratio: 100% Shareholding ratio: 100%

Yancheng Yaowei Technology Co., Glory Optics (Yancheng) Co., Ltd. Co., Ltd. Ltd. Shareholding ratio: Shareholding ratio: 100% Glorytek (Suzhou) Co., Ltd. 65% GLORY TEK(SAMOA)35%

280

Power Quotient International Co., Ltd.

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----- Start of picture text -----

Power Quotient PQI MOBILITY SYSCOM PQI JAPAN APIX LIMITED Power Sufficient Shinfox Energy
International INC. DEVELOPMEN CO.,LTD. Shareholding International Co., Co., Ltd.
(H.K.) Co., Ltd. shareholding T CO.,LTD Shareholding ratio: 100% Ltd. Shareholding Shareholding
Shareholding ratio: 100% Shareholding ratio: 100% ratio: 100% ratio: 58.74%
ratio: 100% ratio: 100%
Power Quotient FOXLINK PQI Sinocity PERENNIAL ACE Foxwell Energy Shinfox Natural
Technology POWERBANK CORPORATION Industries Limited LIMITED. Corporation Ltd. Gas Co., Ltd.
INTERNATIONAL
(Yancheng) Co., Ltd. Shareholding (Hong Kong) Shareholding Shareholding Shareholding
TECHNOLOGY
Shareholding ratio: PRIVATE LIMITED ratio: 100% Shareholding ratio: 100% ratio: 100% ratio: 100%
100% ratio: 100%
Shareholding ratio:
99.27%
Power Quotient DG Lifestyle Store Foxwell Power
Xuzhou New Energy Limited (Macau) Co., Ltd.
Co., Ltd. Shareholding ratio: Shareholding
Shareholding ratio: 100% ratio: 99%
100%
Kunshan Jiuwei
Info Tech Co., Ltd.
Shareholding
ratio: 100%
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281

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Foxlink Image Technology Co., Ltd.
ACCU-IMAGE
Shih Fong Power Co., Ltd.
TECHNOLOGY LTD.
Shareholding ratio: Shareholding ratio:
100% 34.7%
Wei Hai Fu Kang Electric Dong Guan HanYang Dongguan Fu Wei Dong Guan Fu Zhang
Co., Ltd. Computer Co., Ltd. Electronics Co., Ltd. Precision Industry Co.,
Shareholding ratio: 100% Shareholding ratio: 100% Shareholding ratio: 100% Ltd.
Shareholding ratio: 100%
----- End of picture text -----

282

2. Basic information of affiliated enterprises

December 31, 2020 Unit: NT$ Thousand

Company name Date of
establishment
Address		 Paid-in capital Main businesses
Glory Science Co., Ltd. June 29,
2000		 No. 22, Houke South Road, Houli District,
Taichung City
959,704		 Production, processing and sales of
optical lens components.
Power Quotient International
Co., Ltd.
December
31, 1997		 8th Floor, No. 49, Section 4, Zhongyang
Road, Tucheng District, New Taipei City		 3,246,905
1. Manufacturing,
processing,
assembling
and
trading
of
various
computer
electronic
equipment and accessories.
2. Import and export of the products
mentioned above.
Foxlink Image Technology
Co., Ltd.
March 25,
1997		 No. 49, Section 4, Zhongyang Road,
Tucheng District, New Taipei City		 1,649,940 R&D and sales of image scanners
and multi-function printers.
Shih Fong Power Co., Ltd. January 18,
1995		 No. 49, Section 4, Zhongyang Road,
Tucheng District, New Taipei City		 2,300,000 Hydroelectric
power
generation
business.
GLORY TEK (BVI) CO.,LTD November 3,
2003		 Vistra Corporate Services Centre,
Wickhams Cay II, RoadTown, Tortola,
VG1110, British Virgin Islands		 1,262,422 Holding and reinvestment business.
GLORY OPTICS (BVI)
CO.,LTD.		 December
24, 2003		 Vistra Corporate Services Centre,
Wickhams Cay II, Road Town, Tortola,
VG1110, British Virgin Islands		 494,837 Trading business.
GLORY TEK (SAMOA)
CO.,LTD.		 October 31,
2003		 Vistra Corporate Services Centre,Ground
Floor NPF Building,Beach
Road,Apia,Samoa		 780,074 Holding and reinvestment business.
Glorytek (Yancheng) Co.,
Ltd. Co., Ltd.
November
11, 2011		 No. 1 Standard Factory Building in
Yancheng Comprehensive Bonded Zone,
Jiangsu Province
271,521		 Production, processing and sales of
optical lens components.
Glorytek (Suzhou) Co., Ltd. January 9,
2004		 Building 2, No. 2, Zhengwei Road, Jinxi
Town, Kunshan City, Jiangsu Province		 443,174 Production, processing and sales of
optical lens components.
Yancheng Yaowei
Technology Co., Ltd.		 November 5,
2015		 No. 50, Jiuhuashan Road, Yancheng
Technology Development Zone, Jiangsu
Province		 49,931 Production, processing and sales of
optical lens components.
Glory
Optics
(Yancheng)
Co., Ltd.
May 23, 2017
Room 919, No. 18, Hope Avenue South
Road, Yancheng Technology
Development Zone,Jiangsu Province		 976,388 Production, processing and sales of
optical lens components.

~283~

283

Company name Date of
establishment
Address		 Paid-in capital Main businesses
GLORYTEK SCIENCE
INDIA PRIVATE LIMITED		 August 14,
2017		 C-3 in Unit No.532,Logix
Technova,Tower B Plot
No.A-4,Sector-132 Noida Gautam
Buddha Nagar-201301		 100,194
Manufacturing
and
sales
of
communication
and
consumer
electronics components.
Power Quotient International
(H.K.) Co., Ltd.
September
29, 1999		 Unit 2018, Shatin Galleria, 18-24 Shan
Mei Street, Fotan, New Territories, Hong
Kong.		 466,755 Electronic components trading.
PQI MOBILITY INC. December
14, 2012		 Portcullis TrustNet Chambers, P.O Box
1225 Apia,Samoa		 290,604 Holding and reinvestment business.
SYSCOM DEVELOPMENT
CO.,LTD		 November 9,
2000		 OFFICE OF INSINGER CORPORAE
SERVICES LIMITED,ROAD
TOWN,TORTOLA,BRITISH VIRGIN
ISLAND.		 365,596 Holding and reinvestment business.
PQI JAPAN CO.,LTD. April 9, 2002 5-1208 BIWAJIMA-TYO, NISHI-KU,
NAGOYA CITY 451-0053, JAPAN		 23,129 Electronic components trading.
APIX LIMITED December
13, 2012		 Portcullis TrustNet Chambers,P.O Box
3444 Road Town,Tortola,British Virgin
Islands		 3,000,909 Holding and reinvestment business.
Power Sufficient
International Co., Ltd.		 November
21, 2014		 8th Floor, No. 49, Section 4, Zhongyang
Road, Tucheng District, New Taipei City		 10,000 Medical equipment trading.
Shinfox Energy Co., Ltd. April 27, 2007 No. 49, Section 4, Zhongyang Road,
Tucheng District, New Taipei City		 1,000,000
Machinery
installation,
energy
technology service, and machinery
manufacturing
for
power
generation,
transmission
and
distribution.
Power Quotient Technology
(Yancheng) Co., Ltd.		 April 12, 2001
Room 815, Commercial Building,
Comprehensive Bonded Zone, No. 18,
Hope Avenue South Road, Yancheng
Economic and Technological
Development Zone, Jiangsu Province,
China		 724,461 Manufacturing
and
trading
of
electronic components.
Power Quotient Xuzhou
New Energy Co., Ltd.		 June 18,
2020		 North side of Shenda Road, Xuzhou
Economic and Technological
Development Zone		 43,770 Battery manufacturing and trading.
FOXLINK POWERBANK January16, C-2 in Unit No.532,Logix Technova, 95,778 Manufacturing
and
sales
of

284

Company name Date of
establishment
Address		 Paid-in capital Main businesses
INTERNATIONAL
TECHNOLOGY PRIVATE
LIMITED		 2018 Tower B Plot No. A-4, Sector -132 Noida
Gautam Buddha Nagar UP 201301 IN		 communication
and
consumer
electronics components.
PQI CORPORATION November
26, 2002		 3230 Fallow Field Drive, Diamond Bar,
CA 91765		 233,335 Electronic components trading.
Sinocity Industries Limited
(Hong Kong)		 December
10, 1991		 Room 3906, Cable Building, 9 Hoi Shing
Road, Tsuen Wan, New Territories, Hong
Kong
2,479,268		 Electronic product trading.
DG Lifestyle Store Limited
(Macau)		 September
13, 2007		 Shop 2109&2111, 3rd Floor, Shoppes at
Venetian, Coloane Road, Macau		 357 Electronic product trading.
PERENNIAL ACE LIMITED. January 17,
2012		 Vistra Corporate Services Centre,
Wickhams Cay II, RoadTown, Tortola,
VG1110, British Virgin Islands		 606,624 Holding and reinvestment business.
Foxwell Energy Corporation
Ltd.
February 8,
2013		 6th Floor, No. 49, Section 4, Zhongyang
Road, Tucheng District, New Taipei City		 672,000 Energy service management
Shinfox Natural Gas Co.,
Ltd.		 April 11, 2014 6th Floor, No. 49, Section 4, Zhongyang
Road, Tucheng District, New Taipei City		 150,000 Petroleum product wholesale and
retail and natural gas import.
Foxwell Power Co., Ltd. June 28,
2019		 6th Floor, No. 49, Section 4, Zhongyang
Road, Tucheng District, New Taipei City		 100,000
Electricity sales, energy-saving
service, energy technology
service, self-use power
generation equipment for
renewable energy.
Kunshan Jiuwei Info Tech
Co., Ltd.		 June 1, 2017 Room 9606, Room 3, No. 28, Jinchang
Road, Jinxi Town, Kunshan City, Jiangsu
Province		 1,536
Software development and
sales; technology development,
technical service, business
management consulting and
contract energy management.
ACCU-IMAGE
TECHNOLOGY LIMITED		 July 18, 2000
Vistra Corporate Services Centre,
Wickhams Cay II, RoadTown, Tortola,
VG1110, British Virgin Islands		 377,105 Manufacturing of image scanners
and multi-function printers.
Dongguan Fu Wei
Electronics Co., Ltd.		 January 10,
2014		 Yinhe Industrial Zone, Qingxi Town,
Dongguan		 170,880 Manufacturing of image scanners
and multi-function printers.
Wei Hai Fu Kang Electric
Co.,Ltd.		 July 12, 2011 No. 373, Shuangdao Road, Shuangdao
Bay,Weihai High District		 227,840 Manufacturing and sales of parts
and molds ofphotocopiers and

285

Company name Date of
establishment
Address		 Paid-in capital Main businesses
scanners.
Dong Guan Fu Zhang
Precision Industry Co., Ltd.		 June 1, 2011 Yinhe Industrial Zone, Qingxi Town,
Dongguan		 231,037 Mold development and plastic parts
business.
Dong Guan HanYang
Computer Co.,Ltd.		 November
24,2000		 Yinhe Industrial Zone, Qingxi Town,
Dongguan		 174,828 Manufacturing of image scanners
and multi-functionprinters.

  1. Information of the same shareholders of entities which are presumed to have control and subordination relationship: None.

  2. Industries covered by the businesses of all affiliated enterprises: manufacturing, investment, trading, retail, and energy services.

  3. Information on directors, supervisors and presidents of affiliated enterprises:

5. Information on directors, supervisors and presidents of affiliated enterprises: 5. Information on directors, supervisors and presidents of affiliated enterprises: 5. Information on directors, supervisors and presidents of affiliated enterprises:
December 31,2020 Unit: Share
Company name Job title Name or representative Shareholding
Number of shares Shareholding
ratio
Glory Science Co., Ltd. Chairman of the board
Director
Director
Supervisor		 T.C. Gou (note 1)
Kufn Lin (note 1)
Julius Chu (note 1)
Chen-Phan Pu(note 1)		 95,970,371
95,970,371
95,970,371
95,970,371		 100%
100%
100%
100%
Power Quotient International Co.,
Ltd.		 Chairman of the board
Director
Director
Supervisor		 T.C. Gou (note 1)
Kufn Lin (note 1)
Jeffery Cheng (note 1)
Chen-Phan Pu(note 1)		 324,690,529
324,690,529
324,690,529
324,690,529		 100%
100%
100%
100%
Foxlink Image Technology Co., Ltd. Chairman of the board
Director
Director
Supervisor		 T.C. Gou (note 1)
Kufn Lin (note 1)
Hwee Kian Lim (note 1)
Chen-Phan Pu(note 1)		 164,993,974
164,993,974
164,993,974
164,993,974		 100%
100%
100%
100%
Shih Fong Power Co., Ltd.
Shih Fong Power Co., Ltd.		 Chairman of the board
Director
Director
Director
Director		 T.C. Gou (note 1)
Wilson Hu (note 1)
Kufn Lin (note 1)
Jin-Jun Li (note 1)
Shao-Bo Peng (note 2)		 95,000,000
95,000,000
95,000,000
95,000,000
46,000,000		 41.30%
41.30%
41.30%
41.30%
20.00%

286

Company name Job title Name or representative Shareholding Shareholding
Number of shares Shareholding
ratio
Supervisor Chen-Phan Pu(note 3) 79,800,000 34.70%
GloryScience(BVI)Co.,Ltd. Director Kufn Lin - -
GloryOptics(BVI)Co.,Ltd. Director Kufn Lin - -
GloryScience(Samoa)Co.,Ltd Director Kufn Lin - -
Glorytek (Yancheng) Co., Ltd. Co.,
Ltd.		 Legal representative Kufn Lin - -
Glorytek(Suzhou)Co.,Ltd. Legal representative Kufn Lin - -
Yancheng Yaowei Technology Co.,
Ltd.		 Legal representative Kufn Lin - -
GloryOptics(Yancheng)Co.,Ltd. Legal representative Kufn Lin - -
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED		 Director Kufn Lin
Mr. Pragati Jain		 -
-		 -
-
Power Quotient International (H.K.)
Co.,Ltd.		 Director Vivien Liu (note 4) 106,100,000 100%
PQI MOBILITY INC. Director Vivien Liu(note 4) 10,000,000 100%
SYSCOM DEVELOPMENT
CO.,LTD		 Director Vivien Liu (note 4) 10,862,980 100%
PQI JAPAN CO.,LTD. Director Vivien Liu(note 4) 24,300 100%
APIX LIMITED Director Vivien Liu(note 4) 12,501 100%
Power Sufficient International Co.,
Ltd.
Power Sufficient International Co.,
Ltd.		 Chairman of the board
Director
Director
Supervisor		 Vivien Liu (note 4)
Kufn Lin (note 4)
Jeffery Cheng (note 4)
Chen-Phan Pu (note 4)		 1,000,000
1,000,000
1,000,000
1,000,000		 100%
100%
100%
100%
Shinfox Energy Co., Ltd. Chairman of the board
Director
Director
Director		 T.C. Gou (note 4)
Wilson Hu (note 4)
Kufn Lin (note 4)
Tsi-Jun Tu		 58,743,000
58,743,000
58,743,000
-		 58.74%
58.74%
58.74%
-

287

Company name Job title Name or representative Shareholding Shareholding
Number of shares Shareholding
ratio
Independent Director
Independent Director
Independent Director		 Shu-Fen Wang
Chong-Hsiung Wen
Wen-Shuai Liu		 -
-
-		 -
-
-
Power Quotient Technology
(Yancheng)Co.,Ltd.		 Director Vivien Liu (note 5) (Capital contribution USD20,000 thousand,
unissued shares)
100%
Power Quotient Xuzhou New
EnergyCo.,Ltd.		 Director Chi-Hong Yeh (note 6) (Capital contribution CNY10,000 thousand,
unissued shares)
100%
FOXLINK POWERBANK
INTERNATIONAL TECHNOLOGY
PRIVATE LIMITED		 Director
Director		 Vivien Liu (note 7)
Jia-Hsiung Ni		 217,900,000
-		 99.27%
-
PQI CORPORATION Director Vivien Liu(note 7) 7,000,000 100%
Sinocity Industries Limited (Hong
Kong)		 Director
Director		 Vivien Liu (note 8)
JefferyCheng		 6,000,000
-		 100%
-
DG Lifestyle Store Limited(Macau) Director JefferyCheng (note 9) 100,000 100%
PERENNIAL ACE LIMITED. Director Vivien Liu (note 8) (Capital contribution USD21,300 thousand,
unissued shares)
100%
Foxwell Energy Corporation Ltd. Chairman of the board
Director
Director
Supervisor		 Wilson Hu (note 10)
Vivien Liu (note 10)
Kufn Lin (note 10)
Chen-Phan Pu(note 10)		 67,200,000
67,200,000
67,200,000
67,200,000		 100%
100%
100%
100%
Shinfox Natural Gas Co., Ltd. Chairman of the board
Director
Director
Supervisor		 T.C. Gou (note 10)
Wilson Hu (note 10)
Kufn Lin (note 10)
Chen-Phan Pu(note 10)		 12,000,000
12,000,000
12,000,000
12,000,000		 80%
80%
80%
80%
Foxwell Power Co., Ltd. Chairman of the board
Chairman of the board
Director
Supervisor		 Wilson Hu (note 10)
Kufn Lin (note 10)
Hsia-Peng Hao (note 10)
Chen-Phan Pu		 9,900,000
9,900,000
9,900,000
-		 99%
99%
99%
99%

288

Company name Job title Name or representative Shareholding Shareholding
Number of shares Shareholding
ratio
Kunshan Jiuwei Info Tech Co.,Ltd. Legal representative Wilson Hu - -
ACCU-IMAGE TECHNOLOGY
LIMITED		 DIRECTOR Kufn Lin (note 3) 13,241,034 100%
Dongguan Fu Wei Electronics Co.,
Ltd.		 Legal representative Kufn Lin (note 11) USD6,000,000 100%
Wei Hai Fu KangElectric Co.,Ltd. Legal representative Kufn Lin(note 11) USD8,000,000 100%
Dong Guan Fu Zhang Precision
IndustryCo.,Ltd.		 Legal representative Kufn Lin (note 11) USD8,112,257 100%
Dong Guan HanYang Computer
Co.,Ltd.		 Legal representative Kufn Lin (note 11) HKD47,598,184 100%

Note 1: Representative of FIT Holding Co., Ltd. Note 2: Representative of the National Development Fund Management Committee of the Executive Yuan Note 3: Representative of Foxlink Image Technology Co., Ltd.

Note 4: Representative of Power Quotient International Co., Ltd. Note 5: Representative of PQI Mobility Inc. Note 6: Representative of Power Quotient Technology (Yancheng) Co., Ltd. Note 7: Representative of Syscom Development Co., Ltd. Note 8: Representative of Apix Limited Note 9: Representative of Sinocity Industries Limited (Hong Kong) Note 10: Representative of Shinfox Energy Co., Ltd. Note 11: Representative of Accu-Image Technology Limited

289

6. Operation overview of affiliated enterprises

  • (I) Financial status and operating results of affiliated enterprises in 2020:
Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07		 Unit: NT$thousand
Company name
Capital
Total assets
Total
liabilities
Net worth
Operating
income
Business
interest
Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd.
959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.
3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.
1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd.
2,300,0002,457,995
6,481 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd.
1,262,422
719,464
-
719,464
-
-
(336,236)
(8.26)
Glory Optics (BVI) Co., Ltd.
494,837
(58,973)
-
(58,973)
-
(10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.
780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.
271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd.
443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.
976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED
100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.
466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC.
290,604
744,520
49,468
695,052
-
-
(12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD
365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD.
23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED
3,000,909
1,293,028
183,511
1,109,517
-
-
62,793
0.02
Power Sufficient International
Co.,Ltd.
10,000
8,935
-
8,935
-
0
731.053
0.07
Company name Capital Total assets Total
liabilities		 Net worth Operating
income		 Business
interest		 Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Glory Science Co., Ltd. 959,704
2,616,686
1,844,004
772,682
287,487
(212,534)
(482,494)
(5.03)
Power Quotient International
Co., Ltd.		 3,246,905
3,431,984
1,132,996
2,298,988
132,114
(37,137)
212,885
0.07
Foxlink Image Technology
Co., Ltd.		 1,649,940
7,675,920
4,739,588
2,936,332
3,811,950
217,565
382,773
2.32
Shih Fong Power Co., Ltd. 2,300,000 2,457,995
6,481		 2,451,514
-
(3,399)
(2,634)
(0.01)
Glory Science (BVI) Co., Ltd. 1,262,422
719,464
-		 719,464
-		 - (336,236)
(8.26)
Glory Optics (BVI) Co., Ltd. 494,837
(58,973)
-		 (58,973)
-		 (10,770)
(139,482)
(8.72)
Glory Science (Samoa) Co.,
Ltd.		 780,074
692,930
-
692,930
-
-
(197,992)
(7.90)
Glorytek (Yancheng) Co., Ltd.
Co., Ltd.		 271,521
516,158
820,513
(304,355)
167,753
(139,721)
(129,381)
Not applicable
Glorytek (Suzhou) Co., Ltd. 443,174
631,663
154,401
477,262
29,568
(472)
(127,156)
Not applicable
Yancheng Yaowei Technology
Co., Ltd.
49,931
143,448
26
143,422
11,134
(4,601)
(3,574)
Not applicable
Glory Optics (Yancheng) Co.,
Ltd.		 976,388
1,549,945
918,866
631,079
206,478
(198,324)
(203,066)
Not applicable
GLORYTEK SCIENCE INDIA
PRIVATE LIMITED		 100,194
86,276
215
86,061
-
(138)
1,252
0.06
Power Quotient International
(H.K.) Co., Ltd.		 466,755
684
5,396
(4,712)
-
(61)
(38)
(0.00)
PQI MOBILITY INC. 290,604
744,520
49,468
695,052
-		 - (12,589)
(0.04)
SYSCOM DEVELOPMENT
CO.,LTD		 365,596
88,356
495,220
(406,864)
-
(312)
2,210
Not applicable
PQI JAPAN CO.,LTD. 23,129
3,374
159,463
(156,089)
(37)
(61)
(115)
0
APIX LIMITED 3,000,909
1,293,028
183,511
1,109,517
-		 - 62,793
0.02
Power Sufficient International
Co.,Ltd.		 10,000
8,935
-
8,935
-		 0
731.053
0.07

290

Company name Capital Total assets Total
liabilities		 Net worth Operating
income		 Business
interest		 Current profit
and loss
(after tax)
Earnings per
share
(NT$) (after tax)
Shinfox Energy Co., Ltd. 1,000,000
1,675,087
421,036
1,254,051
268,271
55,157
244,389
0.24
Power Quotient Technology
(Yancheng) Co., Ltd.		 724,461
744,520
49,469
695,051
-
(1,304)
(12,589)
Not applicable
Power Quotient Xuzhou New
Energy Co., Ltd.		 43,770
43,787
4
43,783
-		 (4)
(12)
Not applicable
FOXLINK POWERBANK
INTERNATIONAL
TECHNOLOGY PRIVATE
LIMITED		 95,778
85,276
195
85,081
-		 (116)
1,921
Not applicable
PQI CORPORATION 233,335
2,421
495,024
(492,603)
-		 (196)
303
Not applicable
Sinocity Industries Limited
(Hong Kong)		 2,479,268
1,052,444
162,907
889,537
1,476,096
53,133
48,507
Not applicable
DG Lifestyle Store Limited
(Macau)		 357
62,054
61,419
635
85,801
(11,759)
(130,136)
(1.3)
PERENNIAL ACE LTD. 606,624
219,848
-		 219,848
-		 - 14,286
Not applicable
Foxwell Energy Corporation
Ltd.		 672,000
6,342,290
5,457,515
884,775
147,195
26,674
185,566
0.28
Shinfox Natural Gas Co., Ltd. 150,000
131,192
2,423
128,769
-		 (12,755)
(12,762)
-0.11
Foxwell Power Co., Ltd. 100,000
119,193
18,728
100,465
95,227
1,534
1,425
0.01
Kunshan Jiuwei Info Tech
Co., Ltd.		 1,536
21,062
7,348
13,714
25,112
3,562
3,466
Not applicable
Fuchiang Technology Co.,
Ltd.		 377,105
1,869,964
486,923
1,383,041
1,182,617
11,783
150,150
Not applicable
Dongguan Fu Wei Electronics
Co., Ltd.		 170,880
609,256
95,583
513,673
638,289
70,419
73,942
Not applicable
Wei Hai Fu Kang Electric Co.,
Ltd.		 227,840
294,965
44,529
250,436
195,042
(10,158)
(16,021)
Not applicable
Dong Guan Fu Zhang
Precision Industry Co., Ltd.		 231,037
340,950
79,930
261,020
186,253
1,305
(2,813)
Not applicable
Dong Guan HanYang
Computer Co.,Ltd.		 174,828
249,167
1,592
247,575
44,562
18,503
18,503
Not applicable

(II) Consolidated financial statements of affiliated enterprises

291

For the consolidated financial statements of the parent and subsidiary companies, please refer to pages 110 to 210 of this handbook.

(III) Relationship report: Not applicable.

  • II. Handling of private placement securities in the last year and as of the date of publication of the annual report: None.

  • III. Status of holding or disposal of the company’s shares by subsidiaries in the last year and as of the date of publication of the annual report: None.

  • IV. Other necessary supplementary explanations: None.

  • V. In the most recent year and as of the date of publication of the annual report, if there is any matter that has a significant impact on shareholders’ rights and interests or the price of securities as specified in subparagraph 2, paragraph 3, Article 36 of the Securities and Exchange Act: None.

292

FIT Holding Co., Ltd.

Chairman: T.C. Gou

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