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GREATWALL — AGM Information 2021
Oct 6, 2021
51744_rns_2021-10-06_1ca6cbf5-b6f9-4089-8c43-4d74e0f33960.pdf
AGM Information
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Great Wall Enterprise Co., Ltd.
Minutesfor the 2020 GeneralShareholders Meeting
Time: Friday, 10 a.m. July 30, 2021.
Venue: 4F of Auditorium at the Company, No.3, Niaosong 2nd St., Yongkang Dist., Tainan City Chairperson: Chia-Yau Han, the chairman of the board of directors. Recorder: Chia-Lun Lu. The total shares issued: 827,339,086, Outstanding Shares: 781,976,653,
Total shares represented by shareholders present in person or by proxy: 487,136,861,
(402,125,247 shares exercised via electronic transmission),
Percentage of shares held: 62.29%.
Directors present: Chairman Chia-Yau Han, Director Chia-Yin Han, Chiao Thai Hsing Investment Company Limited, Representative: Director Tian-Xing Zhao, Independent Director Yu-Shan Ting ( Chairman of the Audit Committee) , Independent Director Chuang-Chen Tao, Independent Director Chien-Ming Wei.
Sit-in Members: Kun-Yen Chuang (President),Tan-Tan Chung (CPA), Zheng-Xian Lin (Attorney). The aggregate shareholding of the shareholders present in person or proxy constituted a quorum. The chairman called the meeting to order.
A. Chairman’s Address (omitted)
B. Report Items
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I. 2020 Business Operation
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II. Audit Committee's Review Report of 2020 Financial Statements
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III. 2020 Employees' and Directors' Remuneration
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IV. The Company's Endorsements and Guarantees
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V. 2020 Cash Dividends Distribution
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VI. Others
VII. Amendment of the Rules and Procedures of the Board of Directors
C. Ratifications
Report 1 proposed by the Board of Director
Subject: To ratify 2020 Financial Statements.
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Description: I. The Company's 2020 parent-only and consolidated financial statements have been audited by Ms. Mei-Fang Chen and Ms. Tan-Tan Chung of KPMG.
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II. The Business Report and the Financial Statements have been reviewed by the Audit Committee.
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III. The Business Report (page 10) and the Financial Statements (page 16)
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IV. Please ratify the proposal.
1
Resolution: Voting Result:
Shares represented at the time of voting: 487,136,861
| VotingResults* | VotingResults* | % of the total represented sharepresent |
|---|---|---|
| Votes in favor | 448,802,506votes (363,790,892votes) |
92.13% |
| Votes against | 82,554votes (82,554votes) |
0.01% |
| Votes invalid | 0votes (0votes) |
0.00% |
| Votes abstained / No votes |
38,251,801votes (38,251,801votes) |
7.85% |
*including votes casted electronically (numbers in brackets)
The proposal was approved after voting.
Report 2
proposed by the Board of Director
Subject: To ratify 2020 Profit Distribution.
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Description: I. To draft the Company's profit distribution in 2020 (please refer to page 36 of the Handbook)
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II. NT$2,233,815,532 from the 2020 distributable earnings is planned to be distributed as cash dividends, and the cash dividend per share is NT$2.7. NT$248,201,730 will be distributed as share dividends, with NT$0.3 of dividend per share. Cash dividen be rounded down to NT$1, and the aggregated amount of bonus less than NT$1 will be included as other revenue of the Company.
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III. After the report in the Shareholders' Meeting, the Board of Directors is authorized to set a separate ex-dividend date, distribution date, and other related matters.
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IV. The Board of Directors is authorized to handle and adjust the dividend ratio of the aforementioned profit distribution due to the changes in laws or regulations or adjustments by the competent authority, or when the Company buys back shares, which affects the number of shares outstanding and other factors require adjustment of the distribution ratio.
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V. Please ratify the proposal.
Resolution: Voting Result:
Shares represented at the time of voting: 487,136,861
| VotingResults* | VotingResults* | % of the total represented sharepresent |
|---|---|---|
| Votes in favor | 449,531,763votes (364,520,149votes) |
92.28% |
| Votes against | 241,627votes (241,627votes) |
0.04% |
| Votes invalid | 0votes (0votes) |
0.00% |
| Votes abstained / No votes |
37,363,471votes (37,363,471votes) |
7.67% |
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*including votes casted electronically (numbers in brackets)
The proposal was approved after voting.
D. Discussion
Report 1
proposed by the Board of Director
Subject: New share issuance by capital increase from profits. Please discuss the proposal. Description: I. The current capital of the Company is NT$8,273,390,860
- II. NT$248,201,730 from the distributable earnings is planned to be allocated to issue new shares for capital increase.
The issuance details are as follow:
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Number of shares: 24,820,173.
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Total amount: NT$248,201,730 was distributed for the capital increase. 30 shares will be allocated to every thousand shares based on the shareholding ratio as recorded on the register of shareholders on the record date. Shareholders can combine fractional shares. If the combination process doesn't complete within a period of time, shareholders can buy shares at their par value from the company representative.
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III. After the approval from the 2021 Shareholders' Meeting, the proposal will be submitted to the competent authority for approval. The Board of Directors will then set the ex-dividend date. The right and obligations of the new shares are the same as the original shares.
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IV. The Board of Directors is authorized to handle and adjust the dividend ratio of the aforementioned capital increase due to the changes in laws or regulations or adjustments by the competent authority, or when the Company buys back shares, which affects the number of shares outstanding and other factors require adjustment of the distribution ratio.
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V. The current capital of the Company is NT$8,521,592,590 after the new shares are issued.
VI. Please discuss the item.
Resolution: Voting Result:
Shares represented at the time of voting: 487,136,861
| VotingResults* | VotingResults* | % of the total represented sharepresent |
|---|---|---|
| Votes in favor | 448,881,967votes (363,870,353votes) |
92.14% |
| Votes against | 353,872votes (353,872votes) |
0.07% |
| Votes invalid | 0votes (0votes) |
0.00% |
| Votes abstained / No votes |
37,901,022votes (37,901,022votes) |
7.78% |
*including votes casted electronically (numbers in brackets)
The proposal was approved after voting.
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E. Special Motion: None.
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F. Adjournment.
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Chapter 1 Letter to Shareholders
Dear Shareholders,
First of all, I would like to thank you all for participating in our Shareholders' Meeting as the world is ravaged by COVID-19. I would also like to express my sincere gratitude to you who have been supported the Dachan Great Wall Group over the years.
In the past year, COVID-19 forced strict border control in most of the countries. Along with the Brexit, the trade war between China and the US, trade disputes in EU, trade protectionism, and African swine fever, Dachan encountered more violent fluctuations in business operation, raw material procurement, and currency swaps for risk hedging. Despite all the darkness over the past 12 months, the Company still created outstanding performance.
Adhering to business integrity, Dachan puts people's health in priority, providing healthy and trustworthy food products to customers. We also issue a Corporate Social Responsibility Report every year. We are dedicated to the adoption of traceable agricultural products (TAP) and implement the sales concept of "from farm to table". Dachan Quality Control Center even obtained the Food Safety Inspection Certification from the Ministry of Health and Welfare. By joining the Food Safety Alliance organized by the government, we hope that people can feel safe towards Dachan's food.
The Company's 2020 consolidated revenue was NT$81.7 billion, increased by NT$3.9 billion (5.0%) compared to the last year. 2020 profit attributed to the owner of the company amounted to NT$3.12 billion, an increase of NT$840 million (36.8%) compared to 2019.
Dachan's factories have obtained all domestic and global quality certifications, which include HACCP, ISO22000, and other food inspection certifications from the Ministry of Health and Welfare as well as the national laboratory. With the advanced facilities and well-established systems, Machouhou Food Processing Plant is about to operate. By collaborating with Showa Sangyo Co., Ltd., we conducted major investments in egg and flour businesses, such as Automatic Egg Washing & Sorting Plant and Liquid Egg Inventory Factory in Erlin Township, Changhua Country, hoping to enhance the quality and strengthen the relevant regulations on egg washing, sorting, and liquid egg production. We also improved the flour mixing technique and added on our edges to meet the highest standard of food safety. The Company builds the corporate image relentlessly so as to earn more trusts from our clients and customers.
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Business Operation Report I. 2020 Business and Financial Performance
(I) Business Performance
| Business Operation Report I. 2020 Business and Financial Performance (I) Business Performance |
Business Operation Report I. 2020 Business and Financial Performance (I) Business Performance |
Business Operation Report I. 2020 Business and Financial Performance (I) Business Performance |
Business Operation Report I. 2020 Business and Financial Performance (I) Business Performance |
|---|---|---|---|
| Unit: NT$1,000 | |||
| Items | 2020 | 2019 | Difference % |
| Business revenue | 81,650,892 | 77,769,986 | 4.99% |
| Operating profit | 4,211,948 | 3,721,214 | 13.19% |
| Profit(loss)before taxes | 4,983,488 | 3,852,569 | 29.35% |
| EPS | NT$3.99 | NT$2.93 | 36.18% |
(II) Implementation of Business Plan and Budget
The Company didn't disclose financial analysis, and there was no major discrepancy between the business implementation and internal plan.
(III) Financial Position and Profitability Analysis
(1) Financial Position
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(a) 2020 interest income amounted to NT$ 16,558 thousand. The interest mainly came from saving and commercial papers.
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(b) 2020 interest expense amounted to NT$ 279,627 thousand. The expense mainly came from long and short term borrowings.
(2) Profitability
| Items | 2020 | 2019 |
|---|---|---|
| Return on Assets(ROA) (%) | 8.68% | 7.35% |
| Return on Equity (ROE) (%) | 15.6% | 12.78% |
| Ratio of Income to Paid-in Capital(%) | 50.91% | 44.98% |
| Ratio of Net Profit Before Tax to Paid-in Capital(%) | 60.24% | 46.57% |
| Net Profit Margin(%) | 4.99% | 3.82% |
| EPS after taxes(NT$) | NT$3.99 | NT$2.93 |
(IV) Research and Development
Dachan has long been dedicated to the development of poultry, aquaculture, feed, oil, and eggs, acquiring a fundamental role in each market. The Company also pursues vertical integration to expand the market share and its scale. In recent year, Dachan heads toward food product image building, shaping its image as a safe, healthy, and delicious food provider as well as a reliable supplier of poultry, eggs, and houseold food. In addition, as people value more on green products and environmental sustainability, the Company invested in the development of agri-meat, and entered into new fields such as poultry wastes treatment and pet food production. Dachan hopes that through these efforts, we can recycle the resources, decrease the environmental burdens, and take real actions on sustainability.
In response to the Group business objectives, the research and development mainly focus on animal nutrition study. Other than that, animal health products, animal vaccines, pet food, waste treatment, waste reuse, and waste reduction have all been Dachan's emphasis.
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To ensure the technology is the latest and state-of-the-art, experimenting facilities have been implemented other than R&D resources and talents. The facilities include egg-based vaccine production farm, poultry experimental farm, pig experimental farm, and aquaculture experimental farm. Collaborations with domestic/international research institutes, such as National Taiwan University, National Cheng Kung University, National Chung Hsing University, National Pingtung University of Science and Technology, National Taiwan Ocean University, Tainan Livestock Research Institute, Danshui National Institute for Animal Health, and Schothorst Feed Research, have been carried out to acquire key technologies and applications.
II. 2021 Business Plan Overview
(I) Operating Strategy
Dachan has long committed to feed products for poultry and aquaculture, meat, and the establishment of the restaurant brand. Its market share in complete feed and automated slaughtered chickens have outperformed its competitors. Other than the sales growth, the Company strictly controls the feed quality and puts customers' health at its priority. The Company also works in the biotech field to develop animal nutrition products for different animals in different environmental conditions. In terms of egg products, Dachan follows egg washing and sorting policies enacted by the government. From the extensive monitoring of feed nutrition, regular inspections on layer, sampling egg quality check, to final product review, the Company offers high-quality egg products to end customers with professional cold chain logistics. The Company also established Food Development Center to advance its technology in production facilities and production procedures, as well as the sales, marketing, and production of agri-meat. Pet food is another key development for Dachan .
In terms of value-added food plants, the new modern food processing plant in Machouhou Industrial Park is about to be completed this year. It will provide the safest and high-quality food products for people in Taiwan with functional machines in quality control, frying, grilling, steaming, stewing, and automatic filling and packaging.
In the spirit of corporate social responsibility, Dachan continues to focus on core businesses in agriculture and poultry. The Company will pursue its pioneering vision with honesty and humility by paying major contributions in vertical integration, safe product quality, and customer satisfaction.
(II) Sales Volume Forecast and Its Basis
Based on the past performances and market change, the 2021 sales forecast is shown down below:
| Items | Volume (ton) |
|---|---|
| Feed | 3,600,000 |
| Meat (broiler + indigenous chickens ) | 400,000 |
| Bulk supplies | 514,000 |
(III) Important Sales Strategies
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In the oil business, Dachan Oil is well-known for its good quality and oil products for commercial use are commonly used in night markets and different food vendors. The domestic demand for soybean has been stable. Despite the African swine fever, Taiwan successfully prevents the outbreak of the disease, which leads to solid growth of the porker industry and strong demand for soybean. COVID-19 once disrupted global logistics, which caused a short supply of soybean. However, after the relentless efforts made by the Company, we provided sufficient soybean to produce soy flour and soybean oil. This led to a steady profit.
In the Taiwan market, the competition is fierce as the free trade agreement allows free imports of poultry products and the demand for animal protein came to a downturn. The Company consolidates the resources in R&D, production, and marketing to enhance product quality, generate product differentiation, and overcome the low-price pressure. As the biotech center has been studied on animal protein, it is expected that Dachan will provide high-quality products without antibiotics.
In the porker business, the Company has offered technical supports to porker farmers to improve livestock management, in order to respond to the substitution effect of the imported pork. Leveraging the biotech department’s products, the Company optimized the feeding efficiency and decreased the cost, ensuring the profit and labor cost on each porker is reasonable. A win-win situation for the Company and the farmers is what Dachan pursues.
In the indigenous chicken business, the Company consolidated the renowned food-processing technologies from broiler slaughtering plants and deli-meat processing plants, releasing products like sous vide chicken, chicken soup, and sugarcane chicken to satisfy Taiwanese’s preference of eating indigenous chickens and providing more convenient ways to eat chicken. By leveraging the IoT network and various channels, Dachan promoted and sold Dachan Indigenous Chicken products to the malls and supermarkets with vertical integration.
In recent years, the Company stepped into the markets of lunar new year dishes ordering and home meal replacements. The brand, Yummy Dots, was therefore established and had made outstanding performance. In terms of food processing, food safety inspection and production techniques are planned to be improved, fulfilling the goals of safety and good taste. Due to the changes in consumer behavior, in addition to the traditional marketing channels, Dachan also sell its products via e-commerce platforms, and some products are the top-selling items online.
(IV) Future Strategies
- As the domestic and global markets put more attention on clenbuterol, drug residue, and the pandemic, customers value more on food safety and health. Apart from the never-ending emphasis on food safety, the Company established Food Development Center to facilitate the update of machines and facilities, improvement of the production process, and production and sales of agri-meat.
For feed business, the Company will design a complete product structure to separate the operating risk. The Company will also adopt biotech products to enhance breeding efficiency; The Company will strengthen its role in the supply chain and stretch out to more industries. After long-term research and analysis, Dachan Feed didn't use any antibiotics in broiler feed, porkers, and chickens, fulfilling the goal of zero drug residue. This has pushed the Company and the whole industry to operate in a virtuous cycle, enhancing Dachan's competency in the feed business.
In the meat business, the Company adopts a vertical integration strategy in slaughtered meat. The brand, Dachan Chicken, handles each procedure from the breeding, contract farming, feed consulting, automated slaughter, final processing, and selling channels. This effectively reduces cost, guarantees quality, and ensure a stable chicken supply.
In terms of food processing, chicken processing can be divided into different types of products: room-temperature products, refrigerated products, and frozen products, which are sold to different channels nationwide.
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- Dachan not only continues to develop the animal businesses, it also combines existing R&D resources to develop biotechnology in replacing the usage of antibiotics. The Company also established aquaculture development plants and pilot plants for feed production and biotech research. Real-time ultrasound inspection technology was adopted to conduct carcass meat inspection in the pig farm. The study becomes the reference for breeding. Leveraging biotechnology, the Company maintains its advantage in technology by creating animal nutrition that balances and pre-digests protein to replace fishmeal, which is becoming more expensive. The high-quality protein has high peptide content, low anti-nutritional factors, and can be digested easily.
(V) External Competitive Environment, Regulations, and Overall Economy
Regional markets have been integrated as various trade agreements have been signed around the globe. Regional boundaries have been overcome as products, services, and information circulating seamlessly. Therefore, our rivals come from the globe. In addition to product competition in the market, the raw material must be sought from the world to reach low cost. In face of such fierce competition, Dachan leverages its edge in global procurement to reduce the material price, further enhancing the product quality and after-sales service.
As the consumers constantly worry about drug residue, avian flu, and food safety, the Company carries out vertical integration to separate the operating risk and maintain business profit. Dachan continues to promote traceable poultries, chickens, processing food, and eggs, taking pride in the spirit of "attentive journey, safe food." The outcomes have met the requirements set by the government and satisfied the needs of customers. We hope that with reliable products as our solid basis, Dachan can establish a positive image in food safety and gain more recognition from the customers.
We wish you good health, happiness, and success in the coming year.
Chairman: Han Chia-Yau
President: Chuang, Kun-Yen
Vice President: Liu, Chien-Chung
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Great Wall Enterprise Co., Ltd. Audit Committee Review Report
The Board of Directors has prepared the Company's 2020 Business Operation Report, Financial Statements and Proposal for Profit Distribution, among which the Financial Statements have been audited by KPMG, Taiwan, by whom an audit report has been issued accordingly. The Business Operation Report, Financial Statements and the proposed profit distribution have been reviewed by us, the Audit Committee of the Company. We have not found any inconsistencies with applicable laws in our review of the aforementioned documents. Therefore, we, the Audit Committee, hereby issue this report in compliance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.
Convener of the Audit Committee: Ting Yu-Shan
Date: March 31, 2021
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Independent Auditors ’ Report
To the Board of Directors of Great Wall Enterprise Co., Ltd.:
Opinion
We have audited the financial statements of Great Wall Enterprise Co., Ltd.(“the Company”), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its 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 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
- Revenue recognition
Regarding the significant accounting policies for revenue recognition, please refer to Note 4(n) and Note 6(v) “Revenue from contracts with customers” from the financial statements.
Description of key audit matter:
Due to the industry characteristics of the Company and following the rules set by competent authorities to announce operating income monthly, revenue recognition timing risk is increased.
How the matter was addressed in our audit:
Our principal audit procedures include:
- Understanding whether the accounting policies and methods for revenue recognition of the audited company are appropriate
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Testing the Company’s controls and transaction cycle from order to payment regarding revenue recognition
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Performing substantive procedure of revenue, and sampling payments or certified documents for sale transactions
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Selecting the appropriate sample size from the detail in the ending balance of the trade receivable and sending external confirmations to debtors
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Assessing whether revenues are recognized in the appropriate timing
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Assessing impairment of investments accounted for using equity method
Please refer to Note 4(m) Impairment of Non-financial Assets in the financial report for the accounting policy for assessing impairment of investments accounted for using equity method. For accounting assumptions, judgements and estimation uncertainty regarding assessing impairment of investment accounted for using equity method, please refer to Note 5 in the financial statement.
Description of key audit matter:
Constituent entities of subsidiaries using the equity method have continuously incurred net losses in recent years, hence the management believes that there are signs of impairment in related assets. The management adopts the value-in-use method to estimate the future discounted cash flow to evaluate the recoverable amount of the identifiable cash-generating unit to which the relevant assets belong, and considers whether to reverse or increase the previous year's set amount. The preparation of future discounted cash flow data involves significant management judgments, especially when estimating the gross profit margin and revenue growth rate and determining its appropriate discount rate. Therefore, factors such as the gross profit margin, revenue growth rate and discount rate are inherently uncertain and involve possible management bias.
How the matter was addressed in our audit:
Our principal audit procedures include:
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Assessing the significant cash-generating units recognized by the management of the Company as showing signs of impairment
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Comparing the main financial information used for its future discounted cash flows with relevant information in the financial budget approved by the management authority, including operating income, operating costs and operating expenses; and then comparing the financial budget prepared in the previous year with the current year’s performance in order to evaluate the accuracy of its forecasts while discussing with the management the reasons for the significant differences, and whether it has been taken into consideration in this year’s budget
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Comparing the key assumptions used in estimating future discounted cash flows including the estimated long-term income growth rate and profit margin of each cash-generating unit with comparable companies in the industry and external market data, and appointing internal evaluation experts to evaluate whether the discount rate used for future cash flows falls within the range adopted by the industry
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Performing sensitivity analysis on key assumptions (including income growth rate and discount rate) adopted for future discounted cash flows to evaluate the impact each cash-generating unit has on the net present value; and evaluating the impact of changes in key assumptions on the conclusions obtained and whether there is management bias.
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Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the 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 (the Audit Committee) are responsible for overseeing the Company’s financial reporting process.
Auditors ’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 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.
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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- Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.
The engagement partners on the audit resulting in this independent auditors’ report are Tan-Tan Chung and Mei-Fang Chen.
KPMG
Taipei, Taiwan (Republic of China) March 31, 2021
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(English Translation of Financial Statements and Report Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD.
Balance Sheets
December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
| Assets 1100 Cash and cash equivalents (Note 6(a)) 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 1150 Notes receivable, net (Notes 6(d) and 7) 1170 Trade receivable, net (Notes 6(d) and 7)) 1210 Other receivables due from related parties (Note 7) 130x Inventories (Note 6(e)) 1400 Current biological assets (Note 6(f)) 1410 Prepayments (Note 6(g)) 1476 Other current financial assets 1479 Other current assets, others 1517 Non-current financial assets at fair value through other comprehensive income (Notes 4 and 6(c)) 1550 Investments accounted for using equity method (Note 6(h)) 1600 Property, plant and equipment (Note 6(i)) 1755 Right-of-use assets (Notes 4 and 6(j)) 1760 Investment property, net (Note 6(k)) 1830 Non-current biological assets (Note 6(f)) 1840 Deferred income tax assets (Note 6(r)) 1975 Net defined benefit asset, non-current (Note 6(q)) 1990 Other non-current assets, others (Notes 4, 6(l) and 8) Total assets |
December 31, 2020 December 31, 2019 Amount % Amount % $ 290,515 1 251,020 1 20,454 - 439 - 861,623 3 870,680 3 2,441,080 8 1,917,060 7 612,228 2 206,100 1 1,698,474 6 2,139,985 9 934,797 3 802,308 3 110,565 - 86,911 - 23,865 - 50,309 - 78,745 - 53,227 - 7,072,346 23 6,378,039 24 2,277,088 8 1,946,129 7 11,898,268 40 9,600,405 36 7,415,968 25 7,350,717 27 213,834 1 259,080 1 385,466 1 478,554 2 187,167 1 200,431 1 53,379 - 46,271 - 105,259 - 100,642 - 307,066 1 549,008 2 22,843,495 77 20,531,237 76 $ 29,915,841 100 26,909,276 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(m)) 2110 Short-term notes and bills payable (Note 6(n)) 2120 Current financial liabilities at fair value through profit or loss (Note 6(l)) 2150 Notes payable (Note 7) 2170 Trade payable (Note 7) 2200 Other payables (Note 7) 2230 Current income tax liabilities 2280 Current lease liabilities (Note 6(o)) 2399 Other current liabilities, others (Note 7) Non-Current liabilities: 2570 Deferred income tax liabilities (Note 6(r)) 2580 Non-current lease liabilities (Note 6(o)) 2645 Guarantee deposits received 2670 Other non-current liabilities, others Total liabilities Equity attributable to owners of parent: 3110 Ordinary share 3200 Capital surplus 3300 Retained earnings (Note 6(s)) 3400 Other equity interest 3500 Treasury shares Total equity Total liabilities and equity |
December 31, 2020 | December 31, 2020 |
|---|---|---|---|
| Amount | % | ||
9,297,381 31 8,222,653 32 |
|||
69,203 - 53,287 - 170,194 1 214,969 1 75,790 - 69,042 - 122,195 - 122,195 - |
|||
437,382 1 459,493 1 |
|||
9,734,763 32 8,682,146 33 |
|||
8,273,391 28 8,273,391 31 3,179,626 11 3,011,373 11 7,562,982 25 6,259,370 23 1,384,211 5 902,128 3 (219,132) (1) (219,132) (1) 20,181,078 68 18,227,130 67 |
|||
$ 29,915,841 100 26,909,276 100 |
14
(English Translation of Financial Statements Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD.
Statements of Comprehensive Income
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)
| 4000 Operating revenue (Notes 6(v) and 7) 5000 Operating costs (Notes 6(e) and 7) 5900 Gross profit from operations 6000 Operating expenses: 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (Note 6(d)) Total operating expenses 6900 Net operating income 7000 Non-operating income and expenses: (Notes 6(w) and 7) 7100 Interest income 7020 Other gains and losses, net 7050 Finance costs 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method Total non-operating income and expenses 7900 Profit from continuing operations before tax 7950 Less: Income tax expenses (Note 6(m)) Profit 8300 Other comprehensive income (loss): 8310 Items that may not be subsequently reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Items that may not be subsequently reclassified to profit or loss 8360 Items that may be subsequently reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Items that may be subsequently reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Basic earnings per share Basic earnings per share (NT dollars) Diluted earnings per share (NT dollars) |
2020 | % 100 85 |
2019 | % 100 86 |
|---|---|---|---|---|
| Amount $ 27,173,338 23,121,741 |
Amount 27,785,090 23,991,737 |
|||
4,051,597 |
15 | 3,793,353 |
14 | |
1,507,123 478,122 91,346 24,290 |
6 2 - - |
1,508,256 416,853 94,237 24,840 |
5 2 - - |
|
2,100,881 |
8 | 2,044,186 |
7 | |
1,950,716 |
7 | 1,749,167 |
7 | |
9,076 419,117 (78,141) 1,272,239 |
- 2 - 5 |
7,448 228,005 (80,193) 777,315 |
- 1 - 3 |
|
1,622,291 |
7 | 932,575 |
4 | |
3,573,007 450,936 |
14 2 |
2,681,742 398,141 |
11 1 |
|
3,122,071 |
12 | 2,283,601 |
10 | |
2,160 384,312 473 |
- 1 - |
3,505 411,124 490 |
- 1 - |
|
| 385,999 | 1 | 414,139 | 1 | |
97,771 - |
- - |
(271,538) - |
(1) - |
|
| 97,771 | - | (271,538) | (1) | |
483,770 |
1 | 142,601 |
- |
|
$ 3,605,841 |
13 | 2,426,202 |
10 | |
$ |
3.99 | 2.93 | ||
| $ | 3.98 | 2.92 |
15
(English Translation of Financial Statements Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD.
Statements of Changes in Equity
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
| Balance on January 1, 2019 Profit for the year ended December 31, 2019 Other comprehensive income for the year ended December 31, 2019 Total comprehensive income for the year ended December 31, 2019 Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Stock dividends of ordinary share Disposal of company's share by subsidiaries recognized as treasury share transactions Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Adjustment of capital surplus for company's cash dividends received by subsidiaries Balance on December 31, 2019 Profit for the year ended December 31, 2020 Other comprehensive income for the year ended December 31, 2020 Total comprehensive income for the year ended December 31, 2020 Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Adjustment of capital surplus for company's cash dividends received by subsidiaries Balance on December 31, 2020 |
Share capital Ordinary shares Capital surplus |
Retained earnings |
|---|---|---|
| Legal reserve Special reserve Unappropriated retained earnings Total retained earnings |
16
(English Translation of Financial Statements and Report Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD.
Statements of Cash Flows
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
| Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit impairment loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries, associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Net (reproductive) death changes in biological assets Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Decrease in notes receivable (Increase) decrease in trade receivable Decrease (increase) in inventories Decrease in biological assets Increase in prepayments (Increase) decrease in other current assets Decrease (increase) in other financial assets Increase in deferred debits (Decrease) increase in notes payable Increase (decrease) in trade payable Increase in other payable (Decrease) increase in other current liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in other receivables due from related parties Decrease (increase) in other non-current assets Dividends received Net cash flows used in investing activities Cash flows used in financing activities: Increase in short-term loans (Decrease) increase in short-term notes and bills payable Increase in guarantee deposits received Payment of lease liabilities Increase in other non-current liabilities Cash dividends paid Net cash flows (used in) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
2020 $ 3,573,007 460,928 16,709 24,290 (66,660) 78,141 (9,076) (81,077) (1,272,239) (27,535) (2,327,245) |
2019 2,681,742 512,222 - 24,840 74,760 80,193 (7,448) (82,270) (777,315) (22,678) (2,722,299) |
|---|---|---|
(3,203,764) |
(2,919,995) |
|
9,057 (548,310) 441,511 2,208,020 (23,654) (25,518) 26,444 (2,254) (344,814) 789,065 93,588 (9,195) |
212,454 22,651 (394,256) 2,692,188 (62,487) 12,714 (3,039) (5,420) 365,398 (462,693) 102,151 52,650 |
|
2,613,940 |
2,532,311 |
|
(589,824) |
(387,684) |
|
2,983,183 9,076 (80,290) (404,630) |
2,294,058 7,448 (80,404) (338,683) |
|
2,507,339 |
1,882,419 |
|
2,190 (1,115,518) 506 65,000 (1,121,361) 761,349 (406,128) 225,233 422,449 |
- (659,490) - - (2,494,950) 115,887 70,600 (80,226) 318,110 |
|
(1,166,280) |
(2,730,069) |
|
522,240 (100,000) 6,748 (44,406) 134,000 (1,820,146) |
1,193,488 900,000 2,123 (47,237) 61,000 (1,181,913) |
|
(1,301,564) |
927,461 |
|
39,495 251,020 |
79,811 171,209 |
|
$ 290,515 |
251,020 |
17
Independent Auditors ’ Report
To the Board of Directors of Great Wall Enterprise Co., Ltd.:
Opinion
We have audited the consolidated financial statements of Great Wall Enterprise Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 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 with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee ( “ IFRIC ” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
Basis for Opinion
We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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, and we do not provide a separate opinion on these matters.
1. Revenue recognition
Regarding the significant accounting policies for revenue recognition, please refer to Note 4(p) and Note 6(aa) “Revenue from contracts with customers” from the financial statements.
Description of key audit matter:
Due to the industry characteristics of the Company and following the rules set by competent authorities to announce operating income monthly, revenue recognition timing risk is increased.
18
How the matter was addressed in our audit:
Our principal audit procedures include:
-
Understanding whether the accounting policies and methods for revenue recognition of the audited company are appropriate
-
Testing the Company’s controls and transaction cycle from order to payment regarding revenue recognition
-
Performing substantive procedure of revenue, and sampling payments or certified documents for sale transactions
-
Selecting the appropriate sample size from the detail in the ending balance of the trade receivable and sending external confirmations to debtors
-
Assessing whether revenues are recognized in the appropriate timing
-
Investment impairment using the equity method
Please refer to Note 4(o) Impairment of Non-financial Assets in the financial report for the accounting policy for assessing impairment of investments accounted for using equity method. For accounting assumptions, judgements and estimation uncertainty regarding assessing impairment of investment accounted for using equity method, please refer to Note 5 in the financial statement. For more information on asset impairment, please refer to Note 6(l) Property, plant, and equipment and Note 6(m) Right-of-use assets.
Description of key audit matter:
Constituent entities of subsidiaries using the equity method have continuously incurred net losses in recent years, hence the management believes that there are signs of impairment in related assets. The management adopts the value-in-use method to estimate the future discounted cash flow to evaluate the recoverable amount of the identifiable cash-generating unit to which the relevant assets belong, and considers whether to reverse or increase the previous year's set amount. The preparation of future discounted cash flow data involves significant management judgments, especially when estimating the gross profit margin and revenue growth rate and determining its appropriate discount rate. Therefore, factors such as the gross profit margin, revenue growth rate and discount rate are inherently uncertain and involve possible management bias.
How the matter was addressed in our audit:
Our principal audit procedures include:
-
Assessing the significant cash-generating units recognized by the management of the Group as showing signs of impairment
-
Comparing the main financial information used for its future discounted cash flows with relevant information in the financial budget approved by the management authority, including operating income, operating costs and operating expenses; and then comparing the financial budget prepared in the previous year with the current year’s performance in order to evaluate the accuracy of its forecasts while discussing with the management the reasons for the significant differences, and whether it has been taken into consideration in this year’s budget
-
Comparing the key assumptions used in estimating future discounted cash flows including the estimated long-term income growth rate and profit margin of each cash-generating unit with comparable companies in the industry and external market data, and appointing internal evaluation experts to evaluate whether the discount rate used for future cash flows falls within the range adopted by the industry
19
- Performing sensitivity analysis on key assumptions (including income growth rate and discount rate) adopted for future discounted cash flows to evaluate the impact each cash-generating unit has on the net present value; and evaluating the impact of changes in key assumptions on the conclusions obtained and whether there is management bias.
Other Matter
Great Wall Enterprise Co., Ltd. has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.
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 Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the 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 (the Audit Committee) are responsible for overseeing the Group’s financial reporting process.
Auditors ’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
-
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.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
20
-
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.
-
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
-
Obtain sufficient and 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.
The engagement partners on the audit resulting in this independent auditors’ report are Tan-Tan Chung and Mei-Fang Chen.
KPMG
Taipei, Taiwan (Republic of China) March 31, 2021
21
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
| Assets 1100 Cash and cash equivalents (Note 6(a)) 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 1150 Notes receivable, net (Note 6(d) and 7) 1170 Trade receivable, net (Note 6(d) and 7) 130x Inventories (Note 6(e)) 1400 Current biological assets (Note 6(f)) 1410 Prepayments (Note 6(g)) 1476 Other current financial assets (Note 6(h)) 1479 Other current assets, others Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(c)) 1550 Investments accounted for using equity method (Note 6(j)) 1600 Property, plant and equipment (Note 6(l)) 1755 Right-of-use assets (Note 6(m)) 1760 Investment property, net (Note 6(o)) 1805 Goodwill 1830 Non-current biological assets (Note 6(f)) 1840 Deferred income tax assets (Note 6(w)) 1990 Other non-current assets, others (Note 6(o) and 8) |
December 31, 2020 Amount % $ 4,488,486 9 21,880 - 1,107,562 2 5,225,980 10 8,148,332 17 1,720,785 3 918,389 2 802,247 2 1,083,677 2 |
December 31, 2019 Amount % 2,942,742 6 5,603 - 1,027,381 2 4,982,680 11 7,952,693 17 1,530,916 3 675,936 1 623,282 1 1,545,627 3 |
23,517,338 47 |
21,286,860 44 |
|
2,648,091 5 1,745,344 3 19,119,064 37 2,153,458 4 740,322 1 160,023 - 263,166 1 196,094 - 1,150,136 2 |
2,264,662 5 1,717,796 4 17,357,465 37 2,160,042 5 790,685 2 162,079 - 200,431 - 174,197 - 1,186,520 3 |
|
28,175,698 53 |
26,013,877 56 |
$ 51,693,036 100 47,300,737 100
| Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(p)) 2110 Short-term notes and bills payable (Note 6(q)) 2120 Current financial liabilities at fair value through profit or loss (Note 6(b)) 2150 Notes payable (Note 7) 2170 Trade payable (Note 7) 2200 Other payables (Note 7 and 6(s)) 2230 Current income tax liabilities 2280 Current lease liabilities (Note 6(t)) 2320 Long-term liabilities, current portion (Note 6(m)) 2399 Other current liabilities, others (Note 7) Non-Current liabilities: 2540 Long-term borrowings (Note 6(r)) 2551 Non-current provisions for employee benefits (Note 6(v)) 2570 Deferred income tax liabilities (Note 6(w)) 2580 Non-current lease liabilities (Note 6(t)) 2645 Guarantee deposits received 2670 Other non-current liabilities, others Total liabilities Equity attributable to owners of parent: 3110 Ordinary share 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares Total equity attributable to owners of parent: 36XX Non-controlling interests (Note 6(i) and (11)) Total equity Total liabilities and equity |
December 31, 2020 | December 31, 2020 | December 31, 2020 |
|---|---|---|---|
Amount |
% |
Amount |
|
21,147,353 41 20,172,456 43 |
|||
1,255,263 2 1,510,446 3 7,134 - 7,480 - 111,723 - 71,405 - 1,050,393 2 974,240 2 83,332 - 80,762 - 151,086 - 159,429 - |
|||
2,658,931 4 2,803,762 5 |
|||
23,806,284 45 22,976,218 48 |
|||
8,273,391 17 8,273,391 18 3,179,626 6 3,011,373 6 7,562,982 14 6,259,370 13 1,384,211 3 902,128 2 (219,132) - (219,132) - 20,181,078 40 18,227,130 39 |
|||
7,705,674 15 6,097,389 13 27,886,752 55 24,324,519 52 |
|||
$ 51693036 100 47300737 100 |
Total assets
22
(English Translation of Consolidated Financial Statements Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)
| 4000 Operating revenue (Note 6(v) and 7) 5000 Operating costs (Note 6(e) and 7) 5900 Gross profit from operations 6000 Operating expenses: 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (Note 6(d)) Total operating expenses 6900 Net operating income (Note 6(ab) and 7) 7100 Interest income 7020 Other gains and losses, net 7050 Finance costs 7060 Share of profit (loss) of associates and joint ventures accounted for using equity method Total non-operating income and expenses 7900 Profit from continuing operations before tax 7950 Less: Income tax expenses (Note 6(w)) Profit 8300 Other comprehensive income (loss): 8310 Items that may not be subsequently reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Items that may not be subsequently reclassified to profit or loss 8360 Items that may be subsequently reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Items that may be subsequently reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Profit (loss), attributable to: Owners of parent Non-controlling interests Comprehensive income attributable to: Owners of parent Non-controlling interests Basic earnings per share (Note 6(z)) Basic earnings per share (NT dollars) Diluted earnings per share (NT dollars) |
2020 | % 100 85 |
2019 | % 100 85 |
|---|---|---|---|---|
| Amount $ 81,650,892 69,388,663 |
Amount 77,769,986 66,038,732 |
|||
12,262,229 |
15 | 11,731,254 |
15 | |
5,460,747 2,388,505 169,130 31,899 |
7 3 - - |
5,435,266 2,320,603 166,024 88,147 |
7 3 - - |
|
8,050,281 |
10 | 8,010,040 |
10 | |
4,211,948 |
5 | 3,721,214 |
5 | |
16,558 1,018,574 (279,627) 16,035 |
- 1 - - |
90,439 367,533 (407,490) 80,873 |
- - (1) - |
|
771,540 |
1 | 131,355 |
(1) | |
4,983,488 911,142 4,072,346 |
6 1 5 |
3,852,569 878,542 2,974,027 |
4 1 3 |
|
2,160 384,312 473 |
- - - |
3,505 411,124 490 |
- 1 - |
|
| 385,999 | - | 414,139 | 1 | |
243,593 - |
- - |
(505,792) - |
(1) - |
|
| 243,593 | - | (505,792) | (1) | |
629,592 |
- | (91,653) |
- |
|
$ 4,701,938 |
5 | 2,882,374 |
3 | |
$ 3,122,071 950,275 |
4 1 |
2,283,601 690,426 |
2 1 |
|
$ 4,072,346 |
5 | 2,974,027 |
3 | |
$ 3,605,841 1,096,097 |
4 1 |
2,426,202 456,172 |
3 1 |
|
$ 4,701,938 |
5 | 2,882,374 |
4 | |
$ |
3.99 | 2.93 | ||
| $ | 3.98 | 2.92 |
23
(English Translation of Consolidated Financial Statements Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
| Balance on January 1, 2019 Profit for the year ended December 31, 2019 Other comprehensive income for the year ended December 31, 2019 Total comprehensive income for the year ended December 31, 2019 Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Stock dividends of ordinary share Other changes in capital surplus: Disposal of company's share by subsidiaries recognized as treasury share transactions Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Changes in non-controlling interests Adjustment of capital surplus for company's cash dividends received by subsidiaries Balance on December 31, 2019 Profit for the year ended December 31, 2020 Other comprehensive income for the year ended December 31, 2020 Total comprehensive income for the year ended December 31, 2020 Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Other changes in capital surplus: Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Changes in non-controlling interests Adjustment of capital surplus for company's cash dividends received by subsidiaries Balance on December 31, 2020 |
Equityattributable to ow | ners ofparent Other equityinterest Unrealized gains Exchange differences on translation of foreign financial statements (losses) from financial assets measured at fair value through other comprehensive income Total other equityinterest Treasury shares Total equity attributable to owners of parent Non-controll inginterests Total equity |
|
|---|---|---|---|
| Share capital Ordinary shares Capital surplus |
Retained earnings | ||
| Legal reserve Special reserve Unappropriate d retained earnings Total retained earnings |
|||
| $ 7,879,420 2,595,445 2,053,459 42,994 3,444,626 5,541,079 (627,977) 1,390,519 762,542 (306,199) 16,472,287 5,750,346 22,222,633 |
|||
- - - - 2,283,601 2,283,601 - - - - 2,283,601 690,425 2,974,026 - - - - 3,015 3,015 (271,538) 411,124 139,586 - 142,601 (234,253) (91,652) |
|||
- - - - 2,286,616 2,286,616 (271,538) 411,124 139,586 - 2,426,202 456,172 2,882,374 |
|||
- - 201,184 - (201,184) - - - - - - - - - - - - (1,181,913) (1,181,913) - - - - (1,181,913) - (1,181,913) 393,971 - - - (393,971) (393,971) - - - - - - - - 363,674 - - - - - - - 87,067 450,741 - 450,741 - (10,749) - - - - - - - - (10,749) (20,651) (31,400) - (1,801) - - 7,559 7,559 - - - - 5,758 2,641 8,399 - - - - - - - - - - - (91,119) (91,119) - 64,804 - - - - - - - - 64,804 - 64,804 |
|||
8,273,391 3,011,373 2,254,643 42,994 3,961,733 6,259,370 (899,515) 1,801,643 902,128 (219,132) 18,227,130 6,097,389 24,324,519 - - - - 3,122,071 3,122,071 - - - - 3,122,071 950,275 4,072,346 - - - - 1,687 1,687 97,771 384,312 482,083 - 483,770 145,822 629,592 |
|||
- - - - 3,123,758 3,123,758 97,771 384,312 482,083 - 3,605,841 1,096,097 4,701,938 |
|||
- - 229,418 - (229,418) - - - - - - - - - - - - (1,820,146) (1,820,146) - - - - (1,820,146) - (1,820,146) - 37,539 - - - - - - - - 37,539 (37,539) - - 30,917 - - - - - - - - 30,917 - 30,917 - - - - - - - - - - - 549,727 549,727 - 99,797 - - - - - - - - 99,797 - 99,797 |
|||
$ 8,273,391 3,179,626 2,484,061 42,994 5,035,927 7,562,982 (801,744) 2,185,955 1,384,211 (219,132) 20,181,078 7,705,674 27,886,752 |
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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) GREAT WALL ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
| Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit impairment loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Loss on disposal of investments accounted for using equity method Impairment loss on property, plant and equipment Gain on reversal for allowance for inventory write-down Loss on disposal of inventory Changes in fair value of biological assets Net (reproductive) death changes in biological assets Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Decrease in financial assets or liabilities at fair value through profit or loss (Increase) decrease in notes receivable Decrease (increase) in trade receivable Decrease (increase) in inventories Decrease in biological assets Increase in prepayments Decrease in other current assets Increase in other financial assets Increase in notes payable (Decrease) increase in trade payable Increase in other payable Increase in other current liabilities Increase in provisions for employee benefits Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Acquisition of investment accounted for using equity method Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from disposal of investments accounted for using equity method Proceeds from capital reduction of financial assets at fair value through other comprehensive income Net cash flow from acquisition of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in other non-current assets Dividends received Net cash flows used in investing activities Cash flows used in financing activities: Increase in short-term loans Decrease in short-term loans Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Proceeds from long-term debt Repayments of long-term debt Increase in guarantee deposits received (Decrease) increase in other non-current liabilities Cash dividends paid (Net cash flow from company's cash dividends received by subsidiaries) Proceeds from disposal of company's share by subsidiaries recognized as treasury share transaction Repayments of lease liabilities Acquisition of ownership interests in subsidiaries Interest paid Change in non-controlling interests Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
2020 $ 4,983,488 1,846,637 44,790 31,899 (67,455) 279,627 (16,558) (96,564) (16,035) (27,561) 4,463 36,990 17,163 13,356 18,352 (2,344,996) |
2019 3,852,569 1,914,875 39,190 88,147 84,807 407,490 (90,439) (176,149) (80,873) (68,908) - 172,911 (59,758) 55,000 22,538 (2,859,872) |
|---|---|---|
(275,892) |
(551,041) |
|
5,164 (80,181) 131,780 20,582 2,090,503 (89,743) 461,950 (173,831) 15,010 (93,610) 205,525 113,710 1,341 |
15,228 284,341 (247,023) (182,119) 2,645,433 (180,665) 102,431 (74,616) 4,956 878 260,473 21,578 1,843 |
|
2,608,200 |
2,652,738 |
|
2,332,308 |
2,101,697 |
|
7,315,796 16,558 (863,455) |
5,954,266 90,427 (660,534) |
|
6,468,899 |
5,384,159 |
|
(66,469) 2,190 - 506 65,171 (3,419,927) 213,642 (14,892) 94,374 |
- 10,590 1,974 - - (5,133,378) 270,469 (110,041) 182,595 |
|
(3,125,405) |
(4,777,791) |
|
63,891,608 (63,159,031) 23,550,985 (23,689,000) 1,437,345 (1,883,451) 2,570 (8,344) (1,720,349) - (248,606) 30,917 (282,764) 348,999 |
64,844,481 (63,694,106) 21,551,978 (20,644,000) 1,658,570 (2,885,238) 1,378 7,817 (1,117,109) 450,741 (320,266) (31,400) (407,490) (91,119) |
|
(1,729,121) |
(675,763) |
|
(68,629) 1,545,744 2,942,742 |
32,316 (37,079) 2,979,821 |
|
$ 4,488,486 |
2,942,742 |
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| Great Wall Enterprise Co., Ltd. Profit Distribution 2020 Currency Unit: NT$ |
||
| Balance as of January 1, 2020 | 1,912,167,314 | |
| Add (Less): | ||
| Welfare project revaluation variable | 1,686,957 | |
| Income after taxes for the year | 3,122,071,254 | |
| Earnings available for distribution | 5,035,925,525 | |
| Less (Add): | ||
| Legal reserve | 312,375,821 | |
| Distribution items | ||
| Shareholder dividends - share (NT$0.3 per share). | 248,201,730 | |
| Shareholder dividends - cash (NT$2.7 per share). | 2,233,815,532 | |
| Undistributed earnings at the end of the period | 2,241,532,442 |
Note: (1) Dividend distribution for the year shall not exceed the amount available for distribution in the period.
(2) Dividends will be distributed preferentially based on the after-tax benefits in 2020.
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