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GS Interim / Quarterly Report 2021

Dec 9, 2021

52110_rns_2021-12-09_53232232-e52f-40ae-b8b9-f86c50b3ff6d.pdf

Interim / Quarterly Report

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G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS

WITH

REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE THREE MONTHS ENDED

MARCH 31, 2021 AND 2020

Notice to Readers

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

  • 1 -

INDEPENDENT AUDITOR’S REVIEW REPORT

To: G-Shank ENTERPRISE CO., LTD.

Forward

We have reviewed the accompanying consolidated balance sheets of G-Shank Enterprise Co., Ltd. and its subsidiaries as of March 31, 2021 and 2020 and the related consolidated statements of income retained earnings, cash flows, and notes (including the summary of major accounting policies) to the financial statements for the periods of January 1 ~ December 31, 2021 and 2020. These consolidated financial statements are the responsibility of the company’s management to be prepared in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and International Accounting Standards (IAS) No. 34 “Interim Financial Reporting” that was recognized and published by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our review.

Scope

Except for the “Foundation for a qualified conclusion” paragraph , we conducted our review in accordance with generally accepted auditing standards No. 65 “Financial Statements Review.” These standards require that we plan and perform inquiries (mainly question the personnel in charge of financial and accounting affairs), analysis procedures, and other review procedures. The scope of the review performed is clearly smaller than the scope of an audit performed. We may not be able to detect all the major matters that can be identified through an audit; therefore, an audit opinion cannot be issued.

Foundation for a qualified conclusion

As stated in Note IV.2 of the consolidated financial statements, the same period financial statements of the insignificant subsidiaries included in the aforementioned consolidated financial statements have not been reviewed by the independent auditors. The total assets were NT$3,418,099 thousand and NT$3,178,710 thousand, accounted for 40.18% and 42.03% of the total consolidated assets as of March 31, 2021 and 2020, respectively. The total liabilities were NT$520,356 thousand and NT$441,545 thousand, accounted for 16.96% and 17.29% of total consolidated liabilities, respectively. The total consolidated profits and losses were NT$55,914 thousand and NT$(55,731) thousand, accounted for 50.83% and 29.34% of the total consolidated profits and losses for the period of January 1 ~ March 31, 2021 and 2020, respectively. As stated in Note VI.9 of the consolidated financial statements, the investment book amount under the equity method on the

    • 2

consolidated balance sheet of G-Shank Enterprise Co., Ltd. and its subsidiaries were NT$148,829 thousand and NT$169,391 thousand, accounted for 1.75% and 2.24% of the total consolidated assets, respectively, as of March 31, 2021 and 2020, respectively. The amount of profit (loss) from the affiliated enterprise under the equity method was NT$99 thousand and NT$(3,165) thousand, accounted for 0.09% and 1.66% of the total consolidated profits and losses for the period of January 1 ~ March 31, 2021 and 2020, respectively, which were calculated according to the same period financial statements of the invested companies that have not been reviewed by the independent auditors. In addition, the relevant information of the aforementioned subsidiaries as disclosed in Note 13 to the consolidated financial statements and the invested companies under the equity method have not been reviewed by the independent auditors.

Qualified Conclusion

In our conclusion, except for the financial statements of the insignificant subsidiaries and the invested companies under the equity method as stated in the “Foundation for a qualified conclusion ” paragraph and the relevant information disclosed in Note 13 to the consolidated financial statements may have affected the consolidated financial statements if they have been reviewed by the independent auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of G-Shank Enterprise Co., Ltd. as of March 31, 2021 and 2020, and the results of its operations and its cash flows for the periods then ended in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and International Accounting Standards (IAS) No. 34 “Interim Financial Reporting” that was recognized and published by the Financial Supervisory Commission.

Diwan & Company

Financial Supervisory Commission Certificate No.: FSC.Shen-Tzi No. 1070312218 FSC.Shen-Tzi No. 0990071790

Chiung-hui Tseng

CPAs ：

Arnico Tseng

May 6, 2021

    • 3

Notice to Readers

The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other 」 urisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, the company cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

    • 4

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

March 31, 2021、December 31, 2020 &March 31, 2020

(March 31, 2021 & 2020 have been Reviewed 、 December 31, 2020 have been audited)

(Unit amount in NT$ Thousand)

ASSETS ASSETS Notes 03.31.21 03.31.21 12.31.20 12.31.20 03.31.20 03.31.20
Code Accounts Amount % Amount % Amount %
11xx
1100
1110
1136
1150
1170
1180
1200
1210
1220
130x
1470
1476
15xx
1517
1550
1600
1755
1780
1840
1915
1920
1990
1xxx		 Current assets
Cash and cash equivalents
Financial assets-current measured at amortized cost
Financial assets-current measured at amortized cost
Notes receivable- net
Accounts receivable- net
Accounts receivable- related parties
Other receivables
Other receivables- related parties
Current tax assets
Inventory
Prepayments and Other current assets
Other financial assets-current
Total current assets
Noncurrent Asset
Financial assets-noncurrent measured at fa
value through other comprehensive profit and loss
Investment under the equity method
Property, Plant and Equipment
Right-of-use asset
Intangible assets
Deferred tax assets
Prepayments for business facilities
Guarantee deposits paid
Other non-current assets, others
Tota noncurrent Asset
Total Assets		 IV & VI.1
VI.2
VI & VI.3
VI.4 & VI.5
VI.5
VII
VI.5
VII
VI & VI.30
VI.6
VI、VI.7 & VIII
VI.8 & VI.22
VI.9
VI.10、VII & VIII
VI.11、VI.15、VIII & IX
VI.12
VI & VI.30
VIII		 3,062,609
$ 1,286,730
22,672
38,332
1,176,622
-
45,804
-
48,014
874,532
107,181
57,332
6,719,828
231,524
148,829
1,188,683
152,007
3,094
19,750
18,903
4,730
19,748
1,787,268
8,507,096
$		 36
15
-
-
14
-
1
-
1
10
1
1
79
3
2
14
2
-
-
-
-
-
21
100		 3,134,587
$ 1,101,179
22,708
80,901
1,148,656
32
57,647
-
49,054
745,421
47,689
95,560
6,483,434
205,354
146,510
1,213,352
159,129
3,373
21,582
16,672
4,841
24,074
1,794,887
8,278,321
$		 38
13
-
1
13
-
1
-
1
9
1
1
78
2
2
15
2
-
-
-
-
1
22
100		 3,036,184
$ 557,660
243,522
74,096
963,187
176
43,637
104
21,576
769,244
52,256
70,825
5,832,467
119,803
169,391
1,197,077
143,266
3,405
39,490
25,668
5,002
26,688
1,729,790
7,562,257
$		 40
7
3
1
13
-
1
-
-
10
1
1
77
2
2
16
2
-
1
-
-
-
23
100

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

  • 5 -

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET(CONTINUING)

March 31, 2021 、 December 31, 2020 &March 31, 2020

(March 31, 2021 & 2020 have been Reviewed 、 December 31, 2020 have been audited)

(Unit amount in NT$ Thousand)

Liabilities and Equity Liabilities and Equity Notes 03.31.21 03.31.21 12.31.20 12.31.20 03.31.20 03.31.20
Code Accounts Amount % Amount % Amount %
21xx
2100
2130
2170
2180
2200
2220
2230
2280
2300
25xx
2540
2570
2580
2640
2645
2xxx
31xx
3100
3110
3200
3300
3310
3320
3350
3400
3410
3420
36xx
3xxx		 C+urrent liabilities
Short-term loans
Current contract liabilities
Accounts payable
Accounts payable-related parties
Other payables
Other payables-related parties
Current tax liabilities
Lease Payable-current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term loans
Deferred tax liabilities
Lease liabilities
Net defined benefit liability, non-current
Guarantee deposits received
Total non-current liabilities
Total liabilities
Equity attributable to owners of parent
Share capital
Ordinary shares
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Exchange differences on translation
of foreign financial statements
Unrealised gains (losses) from financial assets
measured at fair value through other
comprehensive income
Total equity attributable to owners
of parent
Non-controlling interests
Total Equity
Total liabilities and equity		 VI.13 & VI.32
VI.25
VII
VI.10 & VI.26
VII
IV & VI.30
VI.15 & VI.32
VI.14 & VI.32
IV & VI.30
VI.15 & VI32
IV & VI.16
VI.17 & VI.24
VI.18、VI.23 & VI.24
VI.19 & VI.21
VI.20
VI.21
VI.22
VI.9、VI.22、VI.23 & VI.29
VI8、VI.9、VI.22 & VI.29
VI.23		 1,272,207
$ 12,766
543,147
2,706
337,914
1,874
46,568
16,763
40,141		 15
-
6
-
4
-
1
-
1
27
1
7
1
-
-
9
36
22
5
9
3
19
(4)
3
57
7
64
100		 1,235,824
$ 12,415
383,577
546
451,513
2,377
51,336
16,645
24,605		 15
-
5
-
5
-
1
-
-
26
1
7
1
1
-
10
36
22
5
10
3
19
(4)
2
57
7
64
100		 1,062,000
$ 14,565
403,594
891
310,668
1,496
32,941
11,380
22,847		 14
-
6
-
5
-
-
-
-
25
-
7
1
1
-
9
34
24
6
10
4
20
(6)
1
59
7
66
100
2,274,086 2,178,838 1,860,382
52,708
585,030
78,940
73,291
4,711		 44,365
555,982
84,076
82,291
4,712		 24,034
511,259
72,497
80,704
4,210
794,680 771,426 692,704
3,068,766 2,950,264 2,553,086
1,849,683
433,908
798,682
284,690
1,639,821
(404,406)
206,082		 1,849,683
432,784
798,682
284,690
1,529,619
(357,177)
177,692		 1,849,683
426,826
768,091
284,690
1,478,529
(442,938)
91,719
4,808,460 4,715,973 4,456,600
629,870 612,084 552,571
5,438,330 5,328,057 5,009,171
8,507,096
$		 8,278,321
$		 7,562,257
$

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

  • 6 -

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES STATEMENT OF COMPREHENSIVE INCOME

January 31, 2021~March 31, 2021 & January 31, 2020~March 31, 2020

(Reviewed, Not Audited)

(Unit amount in NT$ Thousand, Except Earnings (Loss) Per Share)

Code Accounts Notes 01.01.2021~
03.31.2021		 01.01.2020~
03.31.20
金 額 % 金 額 %
4000
5000
5900
6000
6100
6200
6300
6450
6500
6900
7000
7100
7010
7020
7050
7060
7230
7900
7950
8200
8300
8310
8316
8320
8349
8360
8361
8370
8399
8500
8600
8610
8620
8700
8710
8720
9750
9850		 Sales revenue
六.25及七
Operating costs
六.6、六.16、六.26及七
Gross profit (loss) from operations
Operating expense
六.15、六.16、六.26及七
Selling expense
Administrative expenses
Research and development expenses
Expected credit loss (gains)
六.5
Total operating expense
Net other income (expenses)
六.10、六.27及七
Net operating income
non-operating income and expenses
Interest income
六.28
Other income
六.28
Other gains and losses
六.2、六.10及六.28
Finance costs
六.15及六.28
Share of profit (loss) of associates
六.9及六.28
Foreign exchange gains (loss)
六.28
Total non-operating income and expenses
Profit (loss) from continuing operations before tax
Tax expense (income)
四及六.30
Net profit (loss) from continuing operations tax
Other comprehensive income
六.8、六.9及六.29
Items that will not be reclassified subsequently to profit or loss：
Unrealized gains and losses on investments in
equity instruments designated as at fair value
through other comprehensive income
Share of the other comprehensive income of
associates
Income tax benefit relating to items that will not
be reclassified subsequently to profit or loss
Total items that will not be reclassified
subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss：
Exchange differences on translating foreign operations
Share of the other comprehensive income of
associates
Income tax expense relating to items that may be
reclassified subsequently to profit or loss
Total items that may be reclassified subsequently
to profit or loss
Other comprehensive income (loss) for the period, net of income tax
Total comprehensive income for the period
Net profit (loss) attributable to：
Owners of the Corporation
Non-controlling interests
Net income (loss)
Total comprehensive income attributable to：
Owners of the Corporation
Non-controlling interests
Total comprehensive income
Earnings (loss) per share (dollar)
六.31
Basic
Diluted		 1,374,749
$ (983,526)
391,223
(62,751)
(105,967)
(42,591)
847
(210,462)
335
181,096
26,188
3,331
(3,691)
(3,882)
99
2,181
24,226
205,322
(68,730)
136,592
26,170
2,220
-
28,390
(54,981)
-
-
(54,981)
(26,591)
110,001
$ 110,202
$ 26,390
136,592
$ 91,363
$ 18,638
110,001
$ 0.60
$ 0.58
$		 100
(72)
28
(4)
(8)
(3)
-
(15)
-
13
2
-
-
-
-
-
2
15
(5)
10
2
-
-
2
(4)
-
-
(4)
(2)
8
8
2
10
7
1
8		 1,035,851
$ (773,225)
262,626
(55,387)
(97,360)
(38,026)
(2,801)
(193,574)
401
69,453
21,939
4,828
(125,640)
(3,237)
(3,165)
22,680
(82,595)
(13,142)
(15,566)
(28,708)
(46,629)
(963)
-
(47,592)
(113,587)
(45)
-
(113,632)
(161,224)
(189,932)
$ (37,897)
$ 9,189
(28,708)
$ (183,131)
$ (6,801)
(189,932)
$ (0.20)
$ (0.20)
$		 100
(75)
25
(5)
(9)
(4)
-
(18)
-
7
2
-
(12)
-
-
2
(8)
(1)
(2)
(3)
(4)
-
-
(4)
(11)
-
-
(11)
(15)
(18)
(4)
1
(3)
(17)
(1)
(18)

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

  • 7 -

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

January 31, 2021~March 31, 2021 & January 31, 2020~March 31, 2020

(Reviewed, Not Audited)

(Unit amount in NT$ Thousand)

Accounts Equity Attributable to Owners of the Corporation to Owners of the Corporation to Owners of the Corporation Non-controlling
Interests		 Total Equity
Share Capital Capital Surplus Retained Earnings Other Equity Total
Ordinary Shares Legal Reserve Special Reserve Unappropriated
Earnings		 Exchange Differences on
Translating
Foreign Operations		 Unrealized Gains and
Losses on Financial
Assets at Fair Value
Through Other
Cpmprehensive Income
BALANCE AT JANUARY 1, 2020
Share-based payment expenses
Changes in associates ventures accounted
for using the equity method
Received donation from shareholders
Net loss for the three months ended March 31, 2020
Other comprehensive income for the three months ended March 31, 2020
Total comprehensive income for the three months ended March 31, 2020
The difference between the actual price of equity acquired from the
subsidiary and the book amount
Cash dividends paid by subsidiaries to non-controlling interests
BALANCE AT MARCH 31, 2020
BALANCE AT JANUARY 1, 2021
Share-based payment expenses
Received donation from shareholders
Net loss for the three months ended March 31, 2021
Other comprehensive income for the three months ended March 31, 2021
Total comprehensive income for the three months ended March 3
Cash dividends paid by subsidiaries to non-controlling interests
BALANCE AT MARCH 31, 2021		 1,849,683
$ -
-
-
-
-
-
-
-
1,849,683
$ 1,849,683
$ -
-
-
-
-
-
1,849,683
$		 421,121
$ 2,087
27
28
-
-
-
3,563
-
426,826
$ 432,784
$ 1,101
23
-
-
-
-
433,908
$		 768,091
$ -
-
-
-
-
-
-
-
768,091
$ 798,682
$ -
-
-
-
-
-
798,682
$		 284,690
$ -
-
-
-
-
-
-
-
284,690
$ 284,690
$ -
-
-
-
-
-
284,690
$		 1,516,426
$ -
-
-
(37,897)
-
(37,897)
-
-
1,478,529
$ 1,529,619
$ -
-
110,202
-
110,202
-
1,639,821
$		 (344,771)
$ -
-
-
-
(97,642)
(97,642)
(525)
-
(442,938)
$ (357,177)
$ -
-
-
(47,229)
(47,229)
-
(404,406)
$		 139,311
$ -
-
-
-
(47,592)
(47,592)
-
-
91,719
$ 177,692
$ -
-
-
28,390
28,390
-
206,082
$		 4,634,551
$ 2,087
27
28
(37,897)
(145,234)
(183,131)
3,038
-
4,456,600
$ 4,715,973
$ 1,101
23
110,202
(18,839)
91,363
-
4,808,460
$		 579,189
$ -
-
-
9,189
(15,990)
(6,801)
(13,952)
(5,865)
552,571
$ 612,084
$ -
-
26,390
(7,752)
18,638
(852)
629,870
$		 5,213,740
$ 2,087
27
28
(28,708)
(161,224)
(189,932)
(10,914)
(5,865)
5,009,171
$ 5,328,057
$ 1,101
23
136,592
(26,591)
110,001
(852)
5,438,330
$

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

  • 8 -

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

January 31, 2021~March 31, 2021 & January 31, 2020~March 31, 2020

(Reviewed, Not Audited)

(Unit amount in NT$ Thousand)

Accounts 01.01.2021~
03.31.2021		 01.01.2020~
03.31.2020
Cash flows from operating activities :
Profit(loss) before tax from continuing operations
Adjustments for
The profit or loss items which did not affect cash flows:
Depreciation
Amortization
Expected credit (gains) loss
Losses on financial assets and liabilities at fair value through profit or lo
Interest expenses
Interest income
Share-based payment expenses
Share of (profit) loss of associates ventures accounted for using the equity meth
Losses on disposal of property, plant and equipment
Unrealized foreign exchange (gains) loss
Changes in operating assets and liabilities:
Unrealised gains (losses) from financial assets measured at fair value through income
Notes receivables
Accounts receivable
Accounts receivable-related parties
Other receivables
Other receivables -related parties
Current inventories
Prepayments and Other current assets
Current contract
Accounts payable
Accounts payable-related parties
Other payables
Other payables-related parties
Other current liabilities
Net defined benefit liability- non-current
Cash (used in) generated from operating activities:
Interest received
Interest paid
Income tax paid
Net cash (used in) provided by operating activities		 205,322
$ 41,480
5,462
(847)

3,259
3,882
(26,188)
1,101

(99)
21
(14,648)
(192,603)
42,569
(30,516)
32
9,758
-
(129,111)
(59,492)
351
159,570
2,160
(112,319)
(503)
15,536
(9,000)
(84,823)
27,641
(2,639)
(41,578)
(101,399)		 (13,142)
$ 41,135
10,149
2,801
125,200
3,237
(21,939)
2,087
3,165
304
3,444
(142,115)
3,895
136,463
(109)
16,268
99
(22,339)
(19,691)
(307)
42,342
(147)
(101,231)
(664)
5,193
(14,000)
60,098
24,630
(2,322)
(24,679)
57,727

(Continuing)

  • 9 -

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS(CONTINUING)

January 31, 2021~March 31, 2021 & January 31, 2020~March 31, 2020

(Reviewed, Not Audited)

(Unit amount in NT$ Thousand)

Accounts 01.01.2021~
03.31.2021		 01.01.2020~
03.31.2020
Cash flows from investing activities :
Acquisition of financial assets measured at amortized cost
Proceeds from disposal of financial assets measured at amortized cost
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in refundable deposits
Acquisition of intangible assets
Decrease in other current financial assets
Increase in Other current assets
(Increase) Decrease in prepayments for business facilities
Net cash (used in) provided by investing activities
Cash flows from financing activities :
Increase in short-term loan
Increase in long-term loan
Cash payment for the principal portion of the lease liabilities
Cash dividends paid by subsidiaries to non-controlling interests
Acquisition of subsidiaries Equity
Other financing activities
Net cash provided by financing activities
Effect of changes in exchange rate on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period		 -
$ -
(23,424)
219
111
(343)
39,181
(671)
(2,231)
12,842
36,383
8,343
(5,114)
(852)
-
23
38,783
(22,204)
(71,978)
3,134,587
3,062,609
$		 (223,600)
$ 223,445
(26,050)
1,292
757
-
6,657
(5,945)
13,486
(9,958)
19,000
24,034
(3,810)
(5,865)
(7,749)
28
25,638
(70,557)
2,850
3,033,334
3,036,184
$

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

  • 10 -

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

January 1 ~ March 31, 2021 and 2020

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

I. Company history

G-SHANK ENTERPRISE CO., LTD. (hereinafter referred to as “the company”) was approved for incorporation on November 14, 1973. The company was registered and operated at No. 1, Jiuzhou Road, Jiudou Li, Hsinwu District, Taoyuan City for the production and sales of molds, stamping parts, fixtures and tools, automatic machines and electrical appliances, and mechanical components.

The company’s stock had been listed for trade on the “Taipei Exchange, TPEx” since February 1998, then have been listed for trade on the “Taiwan Stock Exchange Corporation, TWSE” since September 2001.

The company’s board of directors had resolved on October 22, 2007 for the merger of the company and the subsidiary “HON YEH INVESTMENT CO., LTD.” (Referred to as “HON YEH” hereinafter) with “HON YEH” discontinued and the company continues to operate. The name of the merged company is “G-SHANK ENTERPRISE CO., LTD.” still with the merger base date scheduled on December 1, 2007.

“HON YEH,” the discontinued company, was approved for incorporation on February 24, 1998 for the operation of a general investment business.

II. Financial report approval date and procedure

The consolidated financial reports of the company and the subsidiaries (hereinafter referred to as “the Group”) for the period of January 1 ~ March 31, 2021 and 2020 were submitted to the company’s board of directors on May 6, 2021 and then published lawfully.

III. Application of the newly issued and revised standards and interpretations

  1. Implemented the standards and interpretations recognized and issued with effect by the Financial Supervisory Commission (hereinafter referred to as the “FSC”)

The Group has subject to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations, and Notices (IFRS), Interpretation (IFRIC) and Interpretative Announcement (SIC) announced on the website of Securities and Futures Bureau, Financial Supervisory Commission for implementation in 2021 since January

  • 11 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

1, 2021. The new/amended/revised standards and interpretations that have been released by the International Accounting Standards Board (hereinafter referred to as IASB) and recognized and released by the FSC in 2021 are as follows:

New/amended/revised standards
and interpretations		 Main contents The IASB’s release is
effective in the years after the
IFRS 4 (amendments)
IFRS 9, IAS 39, IFRS 7, IFRS 4,
and IFRS 16 (amendments)		 Temporary exemption from the
extension of IFRS 9
Change in interest rate
indicators – Phase II		 ~~f ll~~
~~i~~
~~d~~
Effective from the releasing
date
January 1, 2021

The Group is subject to the aforementioned amendments to the standards that are recognized and issued with effect by the FSC since January 1, 2021, which does not have a significant impact on the Group’s consolidated financial statements.

  1. The standards and interpretations issued with effect by IASB and recognized and issued with effect by the FSC, but not yet implemented: None

  2. The new/amended/revised standards and explanations issued with effect by IASB but not yet recognized and issued with effect by the FSC: None

  3. The new/amended/revised standards and interpretations issued without effect by the IASB and not yet recognized and issued with effect by the FSC

New/amended/revised criteria and
interpretation
Main contents		 The IASB’s issuance is
effective for the years after
the followingdates
IFRS 3 (amendments)
IFRS 10 and IAS 28
(amendments)
IFRS 16 (amendments)		 Index to Conceptual Framework
Sale or investment of assets
between investors and their
affiliated enterprises or joint
ventures
COVID-19 pandemic related
rent reduction after June 30,
2021		 January 1, 2022
To be determined by IASB
April 1, 2021
  • 12 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

SUBSIDIARIES (Continuing) SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)
IFRS 17 Insurance contracts January 1, 2023
IFRS 17 (amendments) Amendments to IFRS17 January 1, 2023
IFRS (amendments) Annual improvement of IFRS in January 1, 2022
2018-2020
IAS 1 (amendments) Classification of liabilities as January 1, 2023
current or non-current and
postpone of the effective date
IAS 1 (amendments) Disclosure of accounting January 1, 2023
policies
IAS 8 (amendments) Definition of accounting January 1, 2023
estimates
IAS 16 (amendments) Property, plant and equipment: January 1, 2022
The price before reaching the
intended use
IAS 37 (amendments) Onerous contract - The cost of January 1, 2022
performing the contract

The Group’s management is currently assessing the potential impact of the aforementioned new/amended standards; therefore, it is temporarily unable to reasonably estimate its impact on the Group’s consolidated financial statements.

IV. Summary of major accounting policies

The major accounting policies adopted for the preparation of the consolidated financial statements are summarized as follows, unless otherwise provided, these accounting policies are uniformly applicable to all reporting periods:

1. Financial report preparation and measurement basis

(1) Statement of Compliance

These consolidated financial statements are prepared in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” (referred to as the “Regulations” hereinafter) and International Accounting Standards (IAS) No. 34 “Interim Financial Reporting” that was recognized and issued with effect by the Financial Supervisory Commission.

  • 13 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(2) Measurement basis

Except for the financial instruments measured at fair value, this consolidated financial report is prepared on the basis of historical cost. For assets, the historical cost refers to the cash, cash equivalents, or the fair value of other considerations paid to obtain assets. For liabilities, the historical cost refers to the amount received when assuming obligations or the amount expected to be paid for liquating liabilities.

(3) Functional and reporting currency

The functional currency of each business entity of the Group is the currency used in the main economic environment where it operates. This consolidated financial report is prepared in New Taiwan Dollar that is the functional currency of the company. All financial information prepared in New Taiwan Dollar is in the unit of “NT$ Thousand,” unless otherwise specified.

2. The preparation scope of consolidated financial report

The company controls the invested company when the company receives variable remuneration from the invested company or is entitled to receiving such variable remuneration; also, the company can influence such remuneration through its power over the invested company. The company controls the invested company only when meeting the following three control elements:

  • (1) The power over the invested company, that is, with the vested power to lead the relevant activities of the invested company;

  • (2) The risk exposure or rights to the variable remuneration resulted from the investment in the invested company; and

  • (3) Exercise the power over the invested company to affect the company’s remuneration.

If there are facts and circumstances indicating that one or more of the aforementioned three control factors has changed, the company will reevaluate whether the control over the invested company is intake.

  • 14 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

The subsidiaries included in the consolidated financial report and their changes are as follows:

Investing company
The company
The company
The company
The company
The company
The company
The company
The company
GRAND STAR
ENTERPRISES
L.L.C. (Note 3)
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.		 Subsidiary Location Business nature Shareholding ratio (%) Shareholding ratio (%)
03.31.2021 12.31.2020 03.31.2020
CHIN DE INVESTMENT CO.,
LTD.
GRAND STAR
ENTERPRISES L.L.C. (Note 3)
G-SHANK, INC.
SHANGHAI G-SHANK
PRECISION MACHINERY
CO., LTD.
G-SHANK PRECISION
MACHINERY (SUZHOU) CO.,
LTD. (Note 2)
G-SHANK ENTERPRISE (M)
SDN. BHD.
G-SHANK JAPAN CO., LTD.
GREAT-SHANK CO., LTD.
GLOBAL STAR
INTERNATIONAL CO., LTD.
HONG
JING(SHANGHAI)ELECTRON
ICS CO., LTD.
G-LONG PRECISION
MACHINERY (DONG GUAN)
CO., LTD.		 Taiwan
Anguilla
USA
China
Shanghai
(Note 1)
China
Suzhou
(Note 1)
Malaysia
Japan
Tokyo
Thailand
Cayman
Islands
China
Shanghai
(Note 1)
China
Dongguan
(Note 1)		 General investment
General investment
Sales of stamping
parts molds, and
fixtures, and holding
company
Precision progressive
die and hardware
products
Planer, milling
machine or die
machine, precision
progressives die, and
hardware products
Stamping parts molds
and fixtures
International trade
Precision progressive
die and hardware
products
General investment
Precision progressive
die and hardware
products
Precision progressive
die and hardware
products		 100.00
100.00
100.00
85.00
5.86
92.33
58.89
85.00
100.00
80.19
51.00		 100.00
100.00
100.00
85.00
5.86
92.33
58.89
85.00
100.00
80.19
51.00		 100.00
100.00
100.00
85.00
5.86
92.33
58.89
85.00
100.00
80.19
51.00
  • 15 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Investing company
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.
GLOBAL STAR
INTERNATIONAL
CO., LTD.
G-SHANK, INC.		 Subsidiary Location Business nature Shareholding ratio (%) Shareholding ratio (%) 03.31.2020
03.31.2021 12.31.2020
XIAMEN G-SHANK
PRECISION MACHINERY
CO., LTD.
G-SHANK PRECISION
MACHINERY (SUZHOU)
CO., LTD. (Note 2)
QINGDAO G-SHANK
PRECISION SDN.BHD.
SHANGHAI G-SHANK
PRECISION HARDWARE
CO., LTD
TIANJIN G-SHANK
PRECISION MACHINERY
CO., LTD.
SHENZHEN G-SHANK
PRECISION SDN.BHD.
SHENZHEN G-BAO
PRECISION SDN.BHD.
G-SHANK DE MEXICO, S.A.
DE C.V.		 China
Xiamen
(Note 1)
China
Suzhou
(Note 1)
China
Qingdao
(Note 1)
China
Shanghai
(Note1)
China
Tianjin
(Note 1)
China
Shenzhen
(Note 1)
China
Shenzhen
(Note 1)
Mexico		 Precision progressive
die and hardware
products
Planer, milling
machine or die
machine, precision
progressive die, and
hardware products
Precision progressive
die and hardware
products
Precision progressive
die and hardware
products
Precision progressive
die and hardware
products
Precision progressive
die and hardware
products
Precision progressive
die and hardware
products
Stamping parts molds
and fixtures		 79.60
94.14
92.83
85.00
88.20
93.85
91.43
100.00		 79.60
94.14
92.83
85.00
88.20
93.85
91.43
100.00		 79.60
94.14
92.83
85.00
88.20
93.85
91.43
100.00
  • 16 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)
Investing company
G-SHANK ENTERPRISE (M)
SDN. BHD.
SHANGHAI G-SHANK
PRECISION HARDWARE CO.,
LTD.
G-LONG PRECISION
MACHINERY (DONG GUAN)
CO., LTD.		 Subsidiary Location Business nature Shareholding ratio (%) Shareholding ratio (%)
03.31.2021 12.31.2020 03.31.2020
PT INDONESIA
G-SHANK PRECISION
HUBEI HANSTAR
ELECTRONICS
TECHNOLOGY CO.,
LTD.
DONGGUAN QIAOJU
TRADING CO., LTD.		 Indonesia
China
Hubei
(Note 1)
China
Dongguan
(Note 1)		 Stamping parts molds
and fixtures
Precision progressive
die and hardware
products, and
electroplating
processing
Plastic hardware
wholesale and
import/export
business		 94.00
100.00
100.00		 94.00
100.00
100.00		 94.00
100.00
100.00

  • Note 1: The aforementioned companies are established in China where the foreign exchange control is enforced; therefore, the transfer of funds is restricted by local law and regulations. As of March 31, 2021, December 31, 2020, and March 31, 2020, the cash, bank deposits, and financial assets-current measured at amortized cost and other financial assets-current of the companies that are subject to foreign exchange control regulation were NT$2,136,584 thousand, NT$2,060,183 thousand, and NT$1,831,567 thousand, respectively.

  • Note 2: The company signed an equity transfer agreement with the shareholders of G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD. on May 24, 2019. The company agreed to buy 5.86% shareholding for RMB 2,503,481 from G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD., resulting in a total shareholding of 100% thereafter. The aforementioned equity transfer procedure was completed on January 20, 2020.

  • Note 3: GRAND STAR ENTERPRISES L.L.C. was originally known as “US GRAND STAR ENTERPRISES L.L.C.” and it was officially relocated from the United States to Anguilla on December 7, 2020 that was approved by the Investment Commission, MOEA on January 11, 2021.

The subsidiaries of the company have been included in the consolidated financial reports

  • 17 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

lawfully. The 2021Q1 and 2020Q1 financial reports of SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. and GRAND STAR ENTERPRISES L.L.C. had been reviewed by the independent auditors, but not the other subsidiaries of the company. The total assets of such subsidiaries were NT$3,418,099 thousand and NT$3,178,710 thousand; the total liabilities were NT$520,356 thousand and NT$441,545 thousand on March 31, 2021 and 2020, respectively; also, the total consolidated profit and loss of 2021Q1 and 2020Q1 were NT$55,914 thousand and NT$(55,731) thousand, respectively.

As of March 31, 2021, the investment and shareholding ratios of the company and its subsidiaries are as follows:

  • 18 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

==> picture [790 x 414] intentionally omitted <==

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

G-SHANK ENTERPRISE CO., LTD.
GRAND STAR SHANGHAI G-SHANK G-SHANK, INC. G-SHANK GREAT-SHANK
ENTERPRISES L.L.C. PRECISION 100.00% ENTERPRISE (M) CO., LTD.
100.00% MACHINERY CO., LTD. SDN. BHD. 85.00%
85.00% 92.33%
CHIN DE INVESTMENT G-SHANK
CO., LTD. JAPAN CO.,
100.00% LTD.58.89%
GLOBAL STAR G-SHANK DE PT INDONESIA
INTERNATIONAL MEXICO, G-SHANK
CO., LTD. S.A. DE C.V. PRECISION
100.00% 100.00% 94.00%
5.86%
G-SHANK PRECISION
MACHINERY (SUZHOU)
CO., LTD.100.00%
94.14%
HONG G-LONG PRECISION XIAMEN G-SHANK SHANGHAI G-SHANK QINGDAO G-SHANK TIANJIN G-SHANK SHENZHEN SHENZHEN G-BAO
JING(SHANGHAI)ELE MACHINERY (DONG PRECISION PRECISION HARDWARE PRECISION PRECISION G-SHANK PRECISION SDN.BHD.
CTRONICS CO., LTD. GUAN) CO., LTD. MACHINERY CO., CO., LTD. SDN.BHD. MACHINERY CO., PRECISION 91.43%
80.19% 51.00% LTD. 79.60% 85.00% 92.83% LTD. 88.20% SDN.BHD.93.85%
DONGGUAN HUBEI HANSTAR ELECTRONICS
QIAOJU TRADING TECHNOLOGY CO.,
CO., LTD.100.00% LTD.100.00%
----- End of picture text -----

  • 19 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

3. Principles for the preparation of consolidated financial report

  • (1) The consolidated financial report is prepared in accordance with International Financial Reporting Standards No. 10 “Consolidated Financial Statements.” The assets and liabilities, equity, income, expenses and losses, and cash flows related to the transactions between business entities of the Group were written-off at the time of preparing the consolidated financial report; also, similar transactions and events under similar circumstances were handled in accordance with the uniform accounting policies. The consolidated financial report included income and expenses of the subsidiary incurred from the date the control was obtained to the date the control terminated. The comprehensive profit and loss are attributable to the shareholders’ equity and non-controlling interests of the company, even if it causes losses to the non-controlling interests eventually.

- (2) Transactions between shareholders of the company and non controlling interests

  • A. Without resulting in “loss of control”

  • It is handled as an equity transaction. The difference between the fair value of any consideration paid for the purchase of non-controlling interests and the net book value of the relevant assets acquired from the subsidiary is recognized as equity and is attributable to the shareholders of the company. The profit or loss from the disposal of non-controlling interests is also recognized in equity.

B. Resulting in “loss of control”

If a change in the ownership of the subsidiary’s equity results in the loss of control, the assets, liabilities, non-controlling interests, and all other equity constituents related to the former subsidiary are delisted on the date of loss of control; also, the difference among the said delisted amount and the fair value of the considerations collected, the share distribution for the equity transaction conducted with the former subsidiary, and the fair value of any retained investment are recognized in profit and loss. In addition, any remaining investment in the former subsidiary is measured at the fair value on the date of “loss of control,” and it is regarded as the fair value of the originally recognized financial asset, or as the cost of the original investment in an affiliated enterprise or a joint venture.

4. Employee benefits - retirement benefits

  • (1) All full-time employees of the company are entitled to the retirement plan. The entire employee pension fund is deposited in the pension fund account and managed by the Labor Retirement Reserve Committee. The aforementioned pension fund is deposited in the name of the Labor Retirement Reserve Committee that is completely separated from the company; therefore, it is not included in the aforementioned consolidated financial report. The

  • 20 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

retirement plan for employees of foreign subsidiaries is handled in accordance with local law and regulations.

  • (2) For a defined contribution plan, the company’s monthly employee pension contribution rate shall not be less than 6% of the employee’s monthly salary, and the contributed amount is recognized as the current expense. Foreign subsidiaries are to appropriate a certain percentage of the salary as pension according to the local law; also, it is recognized as a current expense.

  • (3) For a defined benefit plan, the actuarial pension amount should be appropriated on the annual reporting date according to the Projected Unit Credit Method. The re-measured amount is included in other comprehensive profits and losses when it occurs; also, it is immediately recognized in the retained earnings. The pension cost in the interim period is calculated according to the pension cost rate actuarially calculated at the end of the previous year for the period from the beginning to the end of the year; also, the major market fluctuations, major reductions, settlements, or other significant non-reoccurring events after the end of the year should be adjusted and disclosed accordingly.

5. Income tax

  • (1) Income tax expenses include current and deferred income taxes. Except for those related to business mergers, directly recognized in equity, or other comprehensive profit and loss, current income tax and deferred income tax expenses are recognized in profit and loss.

  • (2) Current income tax expenses refer to the estimated income tax payable or tax refund receivable calculated on the taxable income or loss of the current year at the tax rate that has been legislated or substantively legislated on the reporting date, including any adjustment made to the income tax payable or refundable of the previous year.

  • (3) Deferred income tax expenses are calculated and recognized on the temporary difference between the tax base of assets and liabilities and the book amounts reported.

  • (4) Deferred income tax assets and liabilities are measured at the tax rate applicable when the temporary difference is expected to reverse that has been legislated or substantively legislated on the reporting date. Deferred income tax assets and liabilities can only be applied to offset current income tax assets and liabilities lawfully; also, it is limited to the same taxpayer and the same levying tax authority; or it can be offset by different taxpayers when the intention is to have the net current income tax liabilities and assets offset, or the

  • 21 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

income tax liabilities and assets will be realized at the same time.

  • (5) The outstanding taxable losses, income tax credit, and deductible temporary differences are recognized as deferred income tax assets to the extent of the potential taxable income that occurred in the future. Also, the deferred income tax assets are evaluated on each reporting day and adjusted down to the extent of the relevant tax benefit unlikely to be realized.

  • (6) For the domestic subsidiaries of the Group, for the additionally levied business income tax on the unappropriated earnings of the year, the income tax expense of the unappropriated earnings is recognized according to the actual earnings distribution that is resolved in the shareholders meeting of the following year.

  • (7) The income tax expense of the interim reporting period is measured according to the best estimated annual effective tax rate by the management, that is, apply the estimated annual average effective tax rate to the net income before tax in the interim reporting period. For any change in the legislated tax rate that occurred in the interim reporting period, the relevant income tax effect is recognized in a lump sum during the said interim reporting period.

6. Other significant accounting policies

The other significant accounting policies adopted in preparing this consolidated financial report are the same as those in Note IV of the 2020 consolidated financial report. Please refer to the Group’s 2020 consolidated financial report for details.

V. Main causes of uncertainty to material accounting judgments, estimates and assumptions

The management must make judgments, estimations, and assumptions when preparing the Group’s consolidated financial report, which will affect the reported amount of income, expenses, assets, and liabilities. The uncertainties of these material assumptions and estimations may cause significant adjustments to the book amount of assets and liabilities in the future, that is, actual results may differ from estimates.

The significant judgments made by the management of the Group while preparing this consolidated financial report, as well as the main causes of uncertainty in assumptions and estimations about the future are the same as those in Note V of the 2020 consolidated financial report. Please refer to the Group’s 2020 consolidated financial report for details.

  • 22 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

VI. Description of important accounting items

1. Cash and cash equivalents

.Cash and cash equivalents
Cash and petty cash
Checking deposit and savings
deposit
Time deposits
Total		 03.31.2021
$5,451
1,176,354
1,880,804
$3,062,609		 12.31.2020
$5,058
973,561
2,155,968
$3,134,587		 03.31.2020
$5,696
937,624
2,092,864
$3,036,184
  • (1) The aforementioned time deposits can be converted into a fixed amount of cash at any time and with limited risk of value changes.

(2) The aforementioned bank deposits had not been provided as collateral or mortgaged.

  1. Financial assets-current measured at fair value through profit and loss
Financial assets measured at fair
value through profit and loss
mandatorily
Acquisition cost:
Funds
Stocks
Bonds
SWAP contracts
Subtotal		 03.31.2021
$157,877
-
1,165,483
-
1,323,360		 12.31.2020
$118,886
-
1,013,585
-
1,132,471		 03.31.2020
$88,050
10,443
590,151
-
688,644

(Continuing to next page)

  • 23 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

Evaluation adjustment:
Funds
Stocks
Bonds
SWAP contracts
Subtotal
Total		 03.31.2021
$221
-
(42,349)
5,498
(36,630)
$1,286,730		 12.31.2020
$530
-
(32,711)
889
(31,292)
$1,101,179		 03.31.2020
$899
(5,662)
(126,221)
-
(130,984)
$557,660
  • (1) The SWAP contracts and structured instruments signed with financial institutions in 2021Q1 and 2020Q1 were the financial hedging operations of the company mainly for hedging changes in claims/obligations exchange rate and interest rate, but it is not specified as a hedging tool. The company’s derivative instruments of the available-for-trade financial assets that are not subject to the hedging accounting are detailed as follows:
Financial instrument
03.31.2021
SWAP contract
SWAP contract
SWAP contract
Total
12.31.2020
SWAP contract
SWAP contract
Total
03.31.2020: None		 Nominal principal
(NT$Thousand)
USD 7,500
USD 4,970
USD 1,900
USD 14,370
USD 7,500
USD 3,000
USD 10,500		 Currency
USD:NTD
USD:NTD
USD:NTD
USD:NTD
USD:NTD		 Due date
06.10.2021
06.22.2021
06.25.2021
03.10.2021
03.22.2021

The net losses arising from foreign exchange transactions in 2021Q1 and 2020Q1 were NT$2,466 thousand and NT$0, respectively.

  • 24 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • (2) The Group’s valuation losses incurred from the financial assets measured at fair value through profit and loss in 2021Q1 and 2020Q1 were NT$3,259 thousand and NT$125,200 thousand, respectively, which were booked in the “Non-operating income and expenses - other profit and loss” account.

  • (3) The aforementioned financial assets measured at fair value through profit and loss had not been provided as collateral or mortgaged.

  • (4) Please refer to Note XII.2 (3) A and B of the consolidated financial report for the disclosure of the market risk and credit risk of the Group’s financial assets measured at fair value through profit and loss.

  • Financial assets-current measured at amortized cost

RMB time wealth
management instruments
Less: Allowance for loss
Net amount		 03.31.2021
$22,672
-
$22,672		 12.31.2020
$22,708
-
$22,708		 03.31.2020
$243,522
-
$243,522

  • (1) Financial assets measured at amortized cost refers to the business model of collecting contractual cash flow with the financial assets held, and the contractual cash flow is entirely applied to pay for the principal and the interest of the outstanding principal; therefore, it is classified to be measured at amortized cost.

  • (2) The aforementioned financial assets measured at amortized cost had not been provided as collateral or mortgaged.

  • (3) Please refer to Note XII.2 (3) B of the consolidated financial report for the disclosure of the credit risk of the Group’s financial asset measured at amortized cost.

4. Notes receivable - net

Notes receivable-net
Notes receivable
Less: Allowance for loss
Net amount		 03.31.2021
$38,332
-
$38,332		 12.31.2020
$80,901
-
$80,901		 03.31.2020
$74,096
-
$74,096
  • 25 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  1. Accounts receivable - net
Accounts receivable-net
Accounts receivable
Less: Allowance for loss
Net amount		 03.31.2021
$1,207,733
(31,111)
$1,176,622		 12.31.2020
$1,180,904
(32,248)
$1,148,656		 03.31.2020
$992,040
(28,853)
$963,187

  • (1) The allowance for loss of the Group’s notes receivable, accounts receivable, and other receivable is simply measured by the expected credit losses amount throughout the duration. The notes receivable and accounts receivable are classified according to the common risk characteristics of the customers’ ability to pay all due amounts in accordance with the contract terms, taking into account the reasonable and provable information related to past events, current conditions, and future economic conditions (obtainable without excessive cost or investment on the reporting date), and estimating the expected credit loss according to the estimated default rate and expected credit loss rate.

  • (2) The increase or decrease of allowance for loss of the Group’s notes receivable, accounts receivable, and other receivable is as follows:

Balance - beginning
Allowance account for the
impairment of notes
receivable, accounts
receivable, and other
receivables
Allowance reversal account for
the impairment of notes
receivable, accounts
receivable, and other
receivables
Exchange difference
Balance - ending		 01.01.2021-03.31.2021
$32,248
-
(847)
(290)
$31,111		 01.01.2020-03.31.2020
$26,500
2,801
-
(448)
$28,853

  • (3) Please refer to Note XII.2 (3) B of the consolidated financial report for the disclosure of the credit risk of the Group’s notes receivable, accounts receivable, and other receivables.

  • 26 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

6. Inventory

03.31.2021

6.Inventory 03.31.2021
Raw materials
Substances
Work-in-process
goods
Finished
goods
Merchandise
trade
Total
Raw materials
Substances
Work-in-process
goods
Finished
goods
Merchandise
trade
Total
Raw materials
Substances
Work-in-process
goods
Finished goods
Merchandise trade
Total		 Cost
$296,066
31,394
227,681
387,031
13,524
$955,696		 Allowance for loss of
inventoryin valuation
$17,735
97
35,248
27,261
823
$81,164
12.31.2020		 Book amount
$278,331
31,297
192,433
359,770
12,701
$874,532
Cost
$243,238
40,857
200,263
324,561
12,812
$821,731		 Allowance for loss of
inventoryin valuation
$18,784
64
29,747
23,135
4,580
$76,310
03.31.2020		 Book amount
$224,454
40,793
170,516
301,426
8,232
$745,421
Cost
$275,902
35,067
198,532
320,882
12,667
$843,050		 Allowance for loss of
inventoryin valuation
$21,408
52
26,230
25,276
840
$73,806		 Book amount
$254,494
35,015
172,302
295,606
11,827
$769,244
  • 27 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • (1) Cost of goods sold related to inventory is as follows:
Inventory booked in “cost of goods
sold”
Inventory cost debited to “net cash
value”
Recovery of the net cash value of
inventory
Inventory loss
Total operating cost		 01.01.2021-03.31.2021
$975,474
5,466
-
2,586
$983,526		 01.01.2020-03.31.2020
$773,498
-
(1,470)
1,197
$773,225
  • (2) Due to the recovery of raw material price or the use of raw material that was with allowance for inventory loss in valuation appropriated in 2020Q1, or the work-in-process goods completed and transferred to the finished goods and sold or the finished goods sold, so the reason for the net cash value of inventory lower than the cost had disappeared and the booked net cash value of inventory increased; resulting in the cost of goods sold decreased by NT$1,470 thousand.

(3) The aforementioned inventory had not been provided as collateral or mortgaged.

  1. Other financial assets-current
Other financial assets-current
Time deposit
Restricted assets – bank
deposit
Special account for
transferring overseas funds
back to Taiwan
Savings deposit
Time deposit
Total		 03.31.2021
$30,942
1,133
472
24,785
$57,332		 12.31.2020
$61,301
3,962
2,586
27,711
$95,560		 03.31.2020
$65,808
5,017
-
-
$70,825

Please refer to Note VIII of the consolidated financial report for the other financial assets-current provided as collateral or mortgaged.

  1. Financial assets-noncurrent measured at fair value through other comprehensive profit and loss

  2. 28 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Equity instrument
Unlisted stocks
Equity instrument
investment evaluation
adjustment
Total		 03.31.2021
$27,006
204,518
$231,524		 12.31.2020
$27,006
178,348
$205,354		 03.31.2020
$27,006
92,797
$119,803

  • (1) Equity instrument investment measured at fair value through other comprehensive profit and loss was not an available-for-trade investment; therefore, the Group chose to have it designated as measured at fair value through other comprehensive profit and loss.

  • (2) The Group had recognized dividend income for NT$0 from the investment in equity instrument measured at fair value through other comprehensive profit and loss in 2021Q1 and 2020Q1, respectively.

  • (3) The Group did not have cumulative profit or loss transferred within equity in 2021Q1 and 2020Q1.

  • (4) The aforementioned financial assets measured at fair value through other comprehensive profit and loss had not been provided as collateral or mortgaged.

  • (5) Please refer to Note XII.2 (3) A and B of the consolidated financial report for the disclosure of the market risk and credit risk of the Group’s financial asset measured at fair value through other comprehensive profit and loss.

9. Investment under the equity method

  • A. The Group’s invested companies under the equity method are individually insignificant affiliated companies with the book amount and equity holding ratio as follows:
Affiliated enterprises 03.31.2021
$148,829
-
-
$148,829		 Equity holding
ratio(%)		 12.31.2020 Equity holding
ratio(%)		 03.31.2020 Equity holding
ratio(%)
SUNFLEX TECHNOLOGY CO.,
LTD. (Note 3)
CHANG HONG SHEN
HARDWARE CO., LTD. (Note 2)
OASIS WORLD CO., LTD. (Note 1)
Total		 14.74
-
-		 $146,510
-
-		 14.74
-
-		 $166,147
2,922
322		 14.74
20.00
100.00
$146,510 $169,391
  • 29 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • Note 1: The company’s board of directors had resolved to have the subsidiary, OASIS WORLD CO., LTD., dissolved and liquidated on November 7, 2019 due to the needs of business operation and management. Therefore, the said subsidiary was not included in the consolidated financial report since the said date. The liquidation procedure was completed on May 22, 2020.

  • Note 2: The Group decided to terminate the investment in CHANG HONG SHEN HARDWARE CO., LTD. (referred to as “CHANG HONG SHEN HARDWARE” hereinafter) according to the evaluation result with an agreement reached with the operating shareholders of CHANG HONG SHEN HARDWARE in May 2020. The company had recognized an investment loss of RMB 183,680 (equivalent to NT$782 thousand) according to the book amount of RMB 683,680 at the end of April 2020, net of the equipment payable of RMB 350,000 to CHANG HONG SHEN HARDWARE , and the recovered investment of RMB 150,000, which was booked in the “loss from the disposal of investment” in 2020Q2.

  • Note 3: The Group is the largest single shareholder of SUNFLEX TECHNOLOGY CO., LTD. with 14.74% voting shares. The shareholding of other top-ten shareholders (not related parties) exceeds the Group, and the shareholders have not agreed to discuss or make decisions collectively; apparently, the Group has no actual ability to lead relevant decision-making. Therefore, it is concluded that the Group has no control over SUNFLEX TECHNOLOGY CO., LTD., but only significant influence.

  • B. The Group’s shareholding in each individual insignificant affiliated company is summarized as follows:

summarized as follows:
Net profit (loss) of the
continuing business unit –
current
Other comprehensive profit and
loss (after tax) - current
Total comprehensive profit and
loss - current		 01.01.2021-03.31.2021
$99
2,220
$2,319		 01.01.2020-03.31.2020
$(3,165)
(1,008)
$(4,173)

  • C. The increase or decrease of the Group’s investments under the equity method is as follows:

  • 30 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Balance - beginning
Profit (loss) amount - current
Changes
in
the
affiliated
enterprises under the equity
method
The exchange difference amount
from the conversion of the
financial
statements
of
foreign operating institutions
The unrealized valuation profit
(loss) amount of the financial
assets measured at fair value
through other comprehensive
profit and loss
Balance - ending		 01.01.2021-03.31.2021
$146,510
99
-
-
2,220
$148,829		 01.01.2020-03.31.2020
$173,537
(3,165)
27
(45)
(963)
$169,391

D. The aforementioned investments under the equity method had not been provided as collateral or mortgaged.

  • 31 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

10. Property, plant and equipment

  • (1) The change in the Group’s property, plant and equipment is as follows:
Land
01.01.2021-03.31.2021
Original cost:
Balance
–
beginning
$135,721
Addition
-
current
-
Disposition -
current
-
Reclassification
-
Exchange
difference
(932)
Balance
-
ending
134,789
Accumulated
depreciation:
Balance
-
beginning
-
Depreciation
–current
-
Disposition -
current
-
Reclassification
-
Exchange
difference
-
Balance
–
ending
-
Book amount
$134,789
- ending		 Land House &
building		 Machinery
equipment		 Transporta
tion
equipment		 Office
equipment		 Other
equipment		 Construction
in progress
and
equipment yet
to be tested		 Total
$1,023,778
1,410
-
5,061
(9,716)		 $2,199,454
14,632
(8,098)
17,950
(20,886)		 $96,652
1,882
(1,196)
-
(1,332)		 $82,518
1,559
(923)
501
(1,428)		 $224,324
2,680
(106)
(18,451)
(1,643)		 $5,260
688
-
(5,061)
(65)		 $3,767,707
22,851
(10,323)
-
(36,002)
Original cost:
Balance
–
beginning
Addition
-
current
Disposition -
current
Reclassification
Exchange
difference
Balance
-
ending
Accumulated
depreciation:
Balance
-
beginning
Depreciation
–current
Disposition -
current
Reclassification
Exchange
difference
Balance
–
ending
Book amount
- ending
134,789 1,020,533 2,203,052 96,006 82,227 206,804 822 3,744,233
-
-
-
-
-		 587,284
9,547
-
-
(5,199)		 1,677,535
21,156
(8,020)
3,388
(16,686)		 65,903
2,011
(1,137)
-
(796)		 67,577
944
(830)
-
(1,198)		 156,056
2,829
(96)
(3,388)
(1,330)		 -
-
-
-
-		 2,554,355
36,487
(10,083)
-
(25,209)
- 591,632 1,677,373 65,981 66,493 154,071 - 2,555,550
$134,789 $428,901 $525,679 $30,025 $15,734 $52,733 $822 $1,188,683
  • 32 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

01.01.2020-03.31.2020
Original cost:
Balance – beginning
Addition - current
Disposition - current
Reclassification
Exchange difference
Balance - ending
Accumulated
depreciation:
Balance
–
beginning
Depreciation
–
current
Disposition - current
Exchange difference
Balance–ending
Book amount - ending		 $138,206
-
-
-
(2,927)		 $1,015,145
-
-
4,863
(19,475)		 $2,144,727
25,262
(9,135)
1,138
(42,539)		 $94,403
-
-
-
(3,233)		 $85,382
314
(2,832)
-
(3,285)		 $207,608
2,738
(712)
671
(3,712)		 $5,829
2,964
-
(6,672)
(21)		 $3,691,300
31,278
(12,679)
-
(75,192)
135,279 1,000,533 2,119,453 91,170 79,579 206,593 2,100 3,634,707
-
-
-
-		 547,596
9,613
-
(10,317)		 1,634,855
22,057
(7,870)
(32,834)		 66,842
1,662
-
(1,883)		 66,809
1,174
(2,570)
(2,617)		 145,707
2,998
(643)
(2,949)		 -
-
-
-		 2,461,809
37,504
(11,083)
(50,600)
- 546,892 1,616,208 66,621 62,796 145,113 - 2,437,630
$135,279 $453,641 $503,245 $24,549 $16,783 $61,480 $2,100 $1,197,077

  • (2) The Group’s major building constituents mainly include the main plant buildings, workshops, and plant decoration, which are depreciated according to their service life of 20-50 years and 3-20 years, respectively.

  • (3) The Group did not acquire property, plant and equipment that caused the capitalization of the loan cost in 2021Q1 and 2020Q1.

  • (4) The Group did not have any impairment occurred to the property, plant and equipment in 2021Q1 and 2020Q1.

  • (5) The aforementioned property, plant and equipment had not been provided as collateral or mortgaged.

  • (6) The acquired property, plant and equipment listed in the consolidated cash flow statement:

  • 33 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

01.01.2021-03.31.2021 01.01.2020-03.31.2020

The current addition of property, plant
and equipment listed in Note VI.10 (1)
of the consolidated financial report
Add: Equipment payable–beginning
Less: Equipment payable–ending
Cash outflow for the acquisition of
property, plant and equipment
(7) The Group’s leased assets are as follows:
03.31.2021
House and building
$1,340
Less: Accumulated
depreciation
(941)
Leased assets - net
$399		 $22,851
4,556
(3,983)
$23,424
12.31.2020		 $31,278
3,258
(8,486)
$26,050
03.31.2020
$1,340
(932)		 $4,147
(2,715)
$408 $1,432

  • A. The company had part of the plant building leased to BAIYUE PRECISION CO., LTD. (hereinafter referred to as “BAIYUE”) for a period from October 1, 2019 to September 30, 2020. The lease contract was renewed on September 30, 2020 for a lease period from October 1, 2020 to September 30, 2021.

  • B. SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. of the Group had part of the plant building leased to CHANG HONG SHEN HARDWARE CO., LTD. (hereinafter referred to as “CHANG HONG SHEN HARDWARE”) for a period from March 1, 2019 to February 28, 2024. The said two parties agreed to have the lease contract terminated in May 2020.

  • C. The Group had part of the plant building leased to BAIYUE and CHANG HONG SHEN HARDWARE. The said plant building could not be sold independently; also, the said plant building owned by the Group was mainly for the purpose of product production, service providing, and management; therefore, the proprietary plant was not classified as an investment property.

  • Right-of-use assets

  • 34 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(1) The increase and decrease of the Group’s right-of-use assets are as follows:

Original cost:
Balance – beginning
Addition – current
Due/transfer
amount
-
current
Exchange difference
Balance–ending
Accumulated depreciation:
Balance–beginning
Depreciation–current
Due/transfer
amount
-
current
Exchange difference
Balance–ending
Book amount - ending
Original cost:
Balance – beginning
Addition - current
Due/transfer amount - current
Exchange difference
Balance–ending
Accumulated depreciation:
Balance–beginning
Depreciation–current
Due/transfer amount – current
Exchange difference
Balance - ending
Book amount - ending		 01.01.2021-03.31.2021 01.01.2021-03.31.2021
Land
House & building
$66,045
$125,053
-
-
-
-
(991)
(1,397)
65,054
123,656
4,036
27,933
475
4,518
-
-
117
(376)
4,628
32,075
$60,426
$91,581
01.01.2020-03.31.2020		 Total
$191,098
-
-
(2,388)
188,710
31,969
4,993
-
(259)
36,703
$152,007
Land
$66,166
-
-
(2,278)
63,888
1,926
477
-
(6)
2,397
$61,491		 House & building
$98,874
-
-
(1,471)
97,403
12,671
3,154
-
(197)
15,628
$81,775		 Total
$165,040
-
-
(3,749)
161,291
14,597
3,631
-
(203)
18,025
$143,266
  • 35 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • (2) The Group did not have the right-of-use assets sublet in 2021Q1 and 2020Q1.

  • (3) The Group did not have any impairment occurred to the right-of-use assets in 2021Q1 and 2020Q1.

  • (4) The aforementioned right-of-use assets had not been provided as collateral or mortgaged.

12. Intangible assets

  • (1) The increase or decrease of the Group’s intangible assets-computer software is as follows:
Original cost:
Balance – beginning
Addition - current
Decrease in the current
period – delisted on the due
date
Exchange difference
Balance–ending
Accumulated depreciation:
Balance–beginning
Amortization–current
Decrease in current period –
delisted on the due date
Exchange difference
Balance–ending
Book amount - ending		 01.01.2021-03.31.2021
$8,598
343
(240)
(2)
8,699
(5,225)
(621)
240
1
(5,605)
$3,094		 01.01.2020-03.31.2020
$7,200
-
-
(54)
7,146
(3,229)
(563)
-
51
(3,741)
$3,405

  • (2) The Group did not have any impairment occurred to the intangible assets in 2021Q1 and 2020Q1.

  • 36 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

13. Short-term loans

rt-term loans
Credit loans
Guaranteed
loans
Total		 03.31.2021
$1,272,207
-
$1,272,207		 12.31.2020
$1,222,202
13,622
$1,235,824		 03.31.2020
$1,062,000
-
$1,062,000
  • (1) The Group’s short-term loan interest rate is as follows:
Nature of loan
Credit loan
Guaranteed loan		 03.31.2021
0.700%-1%
-		 12.31.2020
0.700%-1.325%
3.990%-4.350%		 03.31.2020
0.803%-2.000%
-

  • (2) Please refer to Note VIII of the consolidated financial report for the Group’s short-term loans provided as collateral.

  • 37 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

14. Long-term loans

Long-term loans
Creditor
Nature of loan
03.31.2021
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
BBVA USA
Credit loan
Total
Less: Long-term loans due within
one year
Long-term loans due after one
year		 Nature of loan Contract period
01/03/2020~01/03/2025
02/05/2020~01/03/2025
02/07/2020~02/07/2025
03/05/2020~01/03/2025
04/01/2020~01/03/2025
05/05/2020~01/03/2025
06/05/2020~01/03/2025
07/03/2020~01/03/2025
07/20/2020~01/03/2025
08/05/2020~01/03/2025
08/07/2020~02/07/2025
09/04/2020~01/03/2025
10/05/2020~01/03/2025
11/05/2020~01/03/2025
12/15/2020~01/03/2025
01/05/2021~01/03/2025
01/20/2021~01/03/2025
02/05/2021~01/03/2025
03/05/2021~01/03/2025
05/04/2020~05/04/2022		 Amount Repayment
method
$3,242
1,598
16,461
1,904
1,789
1,753
2,023
1,719
867
1,873
2,276
1,938
1,895
2,151
2,017
2,175
1,591
2,086
2,490
860
52,708
-
$52,708		 (Note 1)
(Note 1)
(Note 2)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 2)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 3)

(Continuing to next page)

  • 38 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

ued from the last page)
Creditor
Nature of loan
12.31.2020
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
BBVA USA
Credit loan
Total
Less: Long-term loans due
within one year
Long-term loans due after one
year		 Contract period
01/03/2020~01/03/2025
02/05/2020~01/03/2025
02/07/2020~02/07/2025
03/05/2020~01/03/2025
04/01/2020~01/03/2025
05/05/2020~01/03/2025
06/05/2020~01/03/2025
07/03/2020~01/03/2025
07/20/2020~01/03/2025
08/05/2020~01/03/2025
08/07/2020~02/07/2025
09/04/2020~01/03/2025
10/05/2020~01/03/2025
11/05/2020~01/03/2025
12/15/2020~01/03/2025
05/04/2020~05/04/2022		 Amount
$3,242
1,598
16,461
1,904
1,789
1,753
2,023
1,719
867
1,873
2,276
1,938
1,895
2,151
2,017
859
44,365
-
$44,365		 Repayment
method
(Note 1)
(Note 1)
(Note 2)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 2)
(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 3)

(Continuing to next page)

  • 39 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

ued from the last page)
Creditor
Nature of loan
03.31.2020
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
Fubon Bank
Credit loan
CTBC
Credit loan
Total
Less: Long-term loans due
within one year
Long-term loans due after one
year		 Contract period
01/03/2020~01/03/2025
02/05/2020~01/03/2025
02/07/2020~02/07/2025
03/05/2020~01/03/2025
03/31/2020~03/31/2025		 Amount
$3,242
1,598
16,461
1,904
829
24,034
-
$24,034		 Repayment
method
(Note 1)
(Note 1)
(Note 2)
(Note 1)
(Note 4)

  • Note 1: The first repayment date to Fubon Bank is on January 15, 2023, followed by a monthly installment for a total of 24 payments with the principal paid equally and the interest paid monthly.

  • Note 2: The first repayment date to Fubon Bank is on February 15, 2023, followed by a monthly installment for a total of 24 payments with the principal paid equally and the interest paid monthly.

  • Note 3: The company is to pay back the loan amount to BBVA USA in a lump sum on the due date.

  • Note 4: The first repayment date to China Trust Commercial Bank is on October 15, 2021, followed by a monthly installment for a total of 42 payments with the principal paid equally and the interest paid monthly. The company had already paid off the loan in advance on October 26, 2020.

  • (1) The aforementioned long-term loan from Fubon Bank is a loan for the special investment projects in Taiwan of home-coming Taiwanese businessmen with an interest rate of 0.70% on March 31, 2021 and December 31, 2020, and an interest rate of 0.45%~0.70 on March 31, 2020.

  • (2) The aforementioned long-term loan from BBVA USA is the United States relief loan with an interest rate of 1.00% on March 31, 2021 and December 31, 2020, respectively.

  • (3) The Group did not provide collateral for the aforementioned long-term loans.

  • 40 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

15. Lease liabilities

Lease liabilities
Lease liabilities
House and building
Less: Lease liabilities due
within one year
Lease liabilities due after
one year		 Discount rate 03.31.2021 12.31.2020 03.31.2020
2.475%-4.750% $95,703
(16,763)		 $100,721
(16,645)		 $83,877
(11,380)
$78,940 $84,076 $72,497

  • (1) The Group’s subsidiaries, G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD., SHENZHEN G-SHANK PRECISION SDN.BHD., G-SHANK JAPAN CO., LTD., and SHENZHEN G-BAO PRECISION SDN.BHD. had leased factory and dormitory from the Group in September 2007, June 2016, April 2017, and August 2017 for a lease period of 40 years, 5, years 2 years, ad 3 years, respectively, which have been booked as right-of-use assets since January 1, 2019, with a monthly rent paid.

  • (2) Other rental information is listed as follows:

Short-term lease expense
Low-value asset lease expenses
Changes in lease expense
excluded from the measurement
of a lease liability
Total cash outflow of all leases
Lease liabilities interest		 01.01.2021-03.31.2021
$1,210
$-
$-
$6,324
$1,148		 01.01.2020-03.31.2020
$1,245
$-
$-
$5,055
$1,020

The Group chose to have the qualified short-term dormitories lease exempted from lease recognition, and no related right-of-use assets and lease liabilities of such lease are recognized.

16. Retirement benefits

(1) Defined benefits plan

  • A. The company has established an employee retirement plan according to the employees’ years of service and the expected wages before retirement. A certain percentage of the monthly wage is appropriated as pension in accordance with the “Labor Standards Act”

  • 41 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

that is deposited in the special account and managed by the Labor Retirement Reserve Committee. The aforementioned pension fund is completely separated from the company; therefore, it is not included in the consolidated financial report. As of March 31, 2021, December 31, 2020, and March 31, 2020, the company’s pension reserve deposit account with the Bank of Taiwan was with a balance of NT$162,057 thousand, NT$155,402 thousand, and NT$148,217 thousand, respectively.

  • B. Please refer to Note VI.16 (1) of the 2020 consolidated financial report for the company’s defined benefit plan on December 31, 2020.

  • C. Pension expenses recognized as profit or loss:

Operating cost
Marketing expense
Management expense
R&D expense
Total		 01.01.2021-03.31.2021
$572
159
348
91
$1,170		 01.01.2020-03.31.2020
$587
153
332
113
$1,185

(2) Defined contribution plan

  • A. The company has adopted a definite contribution plan since the implementation of the “Labor Pension Act” in July 2005. The employees can choose the relevant pension plan of the “Labor Standards Act” since then or apply the pension system of the “Labor Pension Act” and retain the seniority accumulated before the Act. For employees subject to the “Labor Pension Act,” the company shall appropriate an amount not less than 6% of the employee’s monthly salary and have it deposited in the employee’s personal account with the Bureau of Labor Insurance, Ministry of Labor. The company after paying the monthly pension for each employee is not liable for the statutory and constructive obligations of paying additional contributions.

  • B. The Group’s subsidiaries in Mainland China, Malaysia, Indonesia, the United States, Mexico, Thailand, and Japan shall appropriate an amount equivalent to a certain percentage of the salaries as pension in accordance with the local law and regulations, and pay the appropriated amount to the responsible government departments and then have it deposited in each employee’s personal account.

  • C. The pension expenses recognized according to the defined contribution plan of the Group is as follows:

  • 42 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Operating cost
Marketing expense
Management expense
R&D expense
Total		 01.01.2021-03.31.2021
$8,897
1,727
2,031
1,294
$13,949		 01.01.2020-03.31.2020
$7,141
1,362
1,645
978
$11,126

17. Capital stock

Capital stock
Balance amount
on 01.01.2020
Balance amount
on 03.31.2020
Balance amount
on 01.01.2021
Balance amount
on 03.31.2021		 Authorized capital
stock(1,000 shares)
350,000
350,000
350,000
350,000		 Common stock shares issued at NT$10par
Shares(1,000 shares)
184,968
184,968
184,968
184,968		 Capital stock
$1,849,683
$1,849,683
$1,849,683
$1,849,683

  • (1) As of March 31, 2021, December 31, 2020, and March 31, 2020, the company’s authorized capital stock included 20,000 thousand shares reserved for the issuance of an employee stock warrant.

  • (2) The related rights, priority, and restrictions of the common stock shares issued by the company are as follows:

  • A. Each shareholder is entitled to one vote per share.

  • B. The distribution of dividends and bonuses are based on the shareholding ratio of each shareholder.

  • C. The property net of the debt is distributed proportionally to the shareholding ratio of each shareholder.

  • (3) As of March 31, 2021, December 31, 2020 and March 31, 2020, a total of 4,916 thousand shares were subscribed, respectively, due to the company’s issuance of an employee stock warrant. Please refer to Note VI.24 of the consolidated financial report for the related

  • 43 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified) information on the issuance of an employee stock warrant.

18. Additional paid-in capital

Additional paid-in capital
Common stock premium
Treasury stock transaction
The difference between the actual
acquisition price of the subsidiary’s
equity and the book amount
Changes in the net equity value of
subsidiaries under the equity method
and affiliated enterprises
Employee stock options
Invalid employee stock options
Received donation from shareholders
Total		 03.31.2021
$258,152
63,306
3,563
31,847
39,143
36,240
1,657
$433,908		 12.31.2020
$258,152
63,306
3,563
31,847
38,042
36,240
1,634
$432,784		 03.31.2020
$258,152
63,306
3,563
31,715
32,216
36,240
1,634
$426,826

According to the Company Act, the company shall apply the additional paid-in capital to make up for losses only. However, if the company has no loss, the stock premium and all or part of the donation received may be used to distribute new shares or cash proportionally to the shareholders’ original shareholding ratio. In addition, the company may apply the additional paid-in capital to supplement the capital loss only when there is an insufficient reserve.

19. Legal reserve

According to the Company Act, the company after having all taxes paid and ready for earnings distribution shall first appropriate 10% legal reserve and continue to appropriate until the total legal reserve amount equals total capital. The legal reserve can be applied to make up for the company’s losses; also, if the company has no loss, the amount of the legal reserve exceeding 25% of the paid-in capital can be used to distribute new shares or cash proportionally to the shareholders’ original shareholding ratio.

20. Special reserve

According to the provision of Jin-Guan-Chen-Far-Tzi No. 1010012865 Order, the relevant regulations for the comprehensiveness and stability of the company’s financial structure are as follows:

  • (1) When adopting IFRS for the first time, for the unrealized revaluation increments and

  • 44 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

cumulative conversion adjustments (benefits) under the shareholders’ equity that is transferred to retained earnings due to the adoption of FIRS 1 “Exemption,” a special reserve for the same amount should be appropriated. However, when there are insufficient retained earnings for appropriation on the transfer date due to the first-time adoption of IFRS, it is acceptable to appropriate only the amount of retained earnings increased due to the first-time adoption of IFRS. When the company subsequently uses, disposes, or reclassifies the related assets, an amount proportionally to the originally appropriated special reserve can be reversed for earnings distribution.

  • (2) After starting to prepare financial reports according to the IFRS, when distributing the distributable earnings, a special reserve for an amount equivalent to the net amount debited to other shareholders’ equity of the year (such as the cumulative balance amount of the exchange differs from the conversion of financial statements of foreign operating institutions, the unrealized profit and loss of the financial assets measured at fair value through other comprehensive profit and loss, the profit and loss of hedging instruments, and revaluation increments) should be appropriated from the current profit and loss and the unappropriated earrings of the previous period. For the cumulative amount debited to other shareholders’ equity in the previous period, a special reserve for the same amount should be appropriated from the unappropriated earrings of the previous year, which may not be distributed. However, if the company has a special reserve appropriated in accordance with the aforementioned provision, an additional special reserve for an amount equivalent to the difference between the appropriated amount and the net amount debited to other equity should be appropriated. When the amount debited to other shareholders’ equity is reversed subsequently, the reversed amount can be applied for earnings distribution.

21. Earnings distribution and dividend policy

  • (1) According to the company’s Articles of Incorporation, the annual earnings, if any, should be applied to pay income tax and make up for the losses of the previous years; also, appropriate 10% legal reserve from the remaining balance, if any. In addition, appropriate or reverse a certain amount of special reserve according to the regulations of the competent authority. Then, for the balance amount, if any, and the unappropriated earnings of the previous year, except for the retained amount, the board of directors shall draft an earnings distribution plan for the resolutions of the shareholders meeting.

  • (2) The company’s dividend policy: the company’s current industrial development is growing and will be expanded to support the business development. The earnings distribution shall be handled in accordance with the company’s Articles of Incorporation. However, the shareholders’ dividends distributed in the current year shall include not more than 50% of the stock dividend and must be more than 50% of the cash.

  • 45 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • (3) The aforementioned earnings distribution proposal issued by the board of directors (to be resolved in the company’s general shareholders meeting on June 3, 2021) or resolved in the shareholders’ meeting is as follows:
2020 2019
Legal reserve $28,424 $30,591
Special reserve - -
Shareholder’s dividends
Cash $221,962 $240,459
Cash dividend per share NT$1.20 NT$1.30
Stock (NT$10 par) -share -share
Stock dividend per share -NT$ -NT$
er equity (net amount after tax)
The exchange difference from the conversion of the financial statements of foreign
operating institutions
01.01.2021-03.31.2021 01.01.2020-03.31.2020
Balance–beginning $(357,177) $(344,771)
Transactions of current period (47,229) (97,597)
Non-controlling interests obtained
in current period		 - (525)
Recognized
under
the		 equity
method in the current period - - (45)
affiliated enterprise
Reclassified to (profit) and loss in
- -
the current period
Balance - ending $(404,406) $(442,938)

22. Other equity (net amount after tax)

  • (1) The exchange difference from the conversion of the financial statements of foreign operating institutions

  • (2) Unrealized valuation benefits of financial assets measured at fair value through other comprehensive profit and loss:

comprehensive profit and loss:
Balance - beginning
Transactions of current period
Recognized
under
the
equity
method in the current period -
affiliated enterprise
Reclassified to retained earnings in
the current period		 01.01.2021-03.31.2021
$177,692
26,170
2,220
-		 01.01.2020-03.31.2020
$139,311
(46,629)
(963)
-
  • 46 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Balance - ending
Non-controlling interests
Balance - beginning
The amount attributable to
non-controlling interests:
Net income
Book amount of non-controlling
interests purchased
Exchange difference from the
conversion of the financial
statements of foreign operating
institutions
Cash dividends paid by subsidiaries
to non-controlling interests
Balance - ending		 $206,082
01.01.2021-03.31.2021
$612,084
26,390
-
(7,752)
(852)
$629,870		 $91,719
01.01.2020-03.31.2020
$579,189
9,189
(13,952)
(15,990)
(5,865)
$552,571

23. Non-controlling interests

(1) The Group had no subsidiaries with significant non-controlling interests in 2021Q1 and 2020Q1.

(2) Obtained non-controlling interests

A. The company purchased 5.86% shareholding for RMB 2,503,481 from the non-controlling interest of the subsidiary, G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD., on January 20, 2020, so the comprehensive shareholding ratio was increased from 94.14% to 100%. The shareholding change of the Group in G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD., has affected the equity attributable to the shareholders of the parent company as follows:

Book amount of non-controlling interests purchased
Considerations paid for non-controlling interests
Other equity-exchange differences from the conversion of the
financial statements of foreign operating institutions
The difference between the actual price of equity acquired
from the subsidiary and the book amount adjusted to the
additional paid-in capital		 Amount
$13,952
(10,914)

525


$3,563
  • 47 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • B. Acquisition of equity from the subsidiaries listed in the consolidated cash flow statement:

The consideration paid for non-controlling interests listed in Note VI.23(2)A to the consolidated financial report Less: Prepaid investment funds at the beginning of the period Cash outflow for acquiring equity from the subsidiary

01.01.2021-03.31.2021 01.01.2020-03.31.2021 $- $10,914

  • (3,165) $- $7,749

  • Share-based payment - employee rewards

The company was authorized by the Securities and Futures Bureau of the Financial Supervisory Commission to issue 500,000 units of employee stock warrants on January 13, 2015 and August 22, 2018, respectively. One stock warrant is entitled to subscribe to 10 common stock shares of the company. New shares will be issued for the stock option exercised by employees and the subscription price is the company’s common stock closing price on the issuance day. The stock warrant holders can exercise a certain percentage of the stock warrant after 2-year from the issuance date (according to the regulations, the exercisable subscription amount is 40% of the amount available for subscription in each stock warrant issued after 2-year from the issuance date, 60% after 3-year from the issuance date, 80% after 4-year from the issuance date, and 100% after 5 years from the issuance date). The duration of the stock warrant is for seven years. The unexercised stock options after 7 years shall be deemed as being waived, and the subscribers cannot claim their rights to subscribe.

As of March 31, 2021, the issuance of compensatory employee stock warrants is disclosed as follows:

follows:
Warrant issuance
date		 Total warrants
issued originally		 Total warrants
outstanding at
yearend		 Total warrants
available for
subscription at
yearend		 Subscription price
(NTD) (Note)
07.27.2015 300,000 300,000 3,000,000 $13.70
01.08.2016 200,000 179,000 1,790,000 15.60
09.12.2018 290,000 278,000 1,112,000 21.70
08.12.2019 210,000 200,000 - 21.80

Note: The company has the subscription price adjusted when there is a change in common stock share or cash dividend is distributed for common stock shares in accordance with the “Regulations Governing the Issuance of Employee Stock Warrant and Stock Subscription.”

  • 48 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

The stock subscription price per share after adjustment is disclosed as of March 31, 2021.

  • (1) The company adopts the Black-Scholes stock options model to assess the fair value of the employee stock warrant issued each year. The remuneration cost accrued in 2021Q1 and 2020Q1 was NT$1,101 thousand and NT$2,087 thousand, respectively. The input values of the stock option pricing model are as follows:

2018 Stock 2018 Stock 2014 Stock 2014 Stock option option plan option plan option plan plan Expected -% -% -% -% dividend ratio

Expected price 18.99%~20.95% 21.38%~22.07% 22.64%~25.43% 22.80%~27.68% fluctuation ratio Risk-free interest 0.554%~0.582% 0.700%~0.758% 0.663%~0.831% 0.976%~1.203% rate Expected 4.5~6 years 4.5~6 years 4.5~6 years 4.5~6 years duration

The assumption of the expected price fluctuation ratio is measured according to the impact of the annual dividend distribution in the past on stock price, and the expected stock price fluctuations in the future period. The stock option duration is the employee exercising stock option period that is deducted from the historical data and current expectation, which may not necessarily match the actual result or actual implementation.

  • (2) The quantity and weighted average price of the compensatory employee stock option plan issued by the company is disclosed as follows:

  • 49 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Employee stock operations 01.01.2021-03.31.2021
QTY(unit)
Weighted
average price
per share
(NTD)
957,000
$18.07
-
-
-
-
-
-
957,000
18.07
590,200
15.78
$-		 01.01.2020-03.31.2020 01.01.2020-03.31.2020
QTY(unit) QTY(unit) Weighted
average price
per share
(NTD)
Outstanding shares -
beginning
Granted in current period
Exercised in current period
Lost in current period
(expired)
Outstanding shares - ending
Exercisable employee stock
options - ending
Average fair value per share
of stock options granted to
employees in the current
period (NTD)		 957,000
-
-
-		 967,000
-
-
-		 $19.34
-
-
-
19.34
15.38
957,000 967,000
590,200 383,200
$- $-

The company’s employees did not execute stock options in 2021Q1 and 2020Q1.

  • 50 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

As of March 31, 2021, December 31, 2020 and March 31, 2020, the company’s outstanding compensatory employee stock option plan is as follows:

03.31.2021
2014 Stock option plan
2014 Stock option plan
2018 Stock option plan
2018 Stock option plan
12.31.2020
2014 Stock option plan
2014 Stock option plan
2018 Stock option plan
2018 Stock option plan
03.31.2020
2014 Stock option plan
2014 Stock option plan
2018 Stock option plan
2018 Stock option plan		 Price
range per
share
(NTD)		 Outstanding stock Outstanding stock options Exercisable
employee stock
options		 Exercisable
employee stock
options
Outstanding
QTY(Unit)		 Weighted
average
expected
remaining
duration		 Weighted
average
price per
share
(NTD)		 Exercisable
QTY (Unit)		 Weighted
average
price per
share
(NTD)
$13.70
15.60
21.70
21.80
$13.70
15.60
21.70
21.80
$14.60
16.70
23.20
23.25		 300,000
179,000
278,000
200,000
300,000
179,000
278,000
200,000
300,000
179,000
278,000
210,000		 0.06
0.21
2.54
3.45
0.12
0.31
2.79
3.70
0.42
0.77
3.45
4.46		 $13.70
15.60
21.70
21.80
$13.70
15.60
21.70
21.80
$14.60
16.70
23.20
23.25		 300,000
179,000
111,200
-
300,000
143,200
111,200
-
240,000
143,200
-
-		 $13.70
15.60
21.70
21.80
$13.70
15.60
21.70
21.80
$14.60
16.70
23.20
23.25
  • 51 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

25. Net operating income

Net operating income
Sales income
Parts income
Mold income
Fixture income
Merchandise income
Total
Less: Sales return
Sales discount
Net operating income
(1) Income classification:
A. Main merchandise / service
Parts income
Mold income
Fixture income
Merchandise income
Total
B.Main regional markets
Customer location
Taiwan
Asia (other than Taiwan)
Europe
America
Total
C.Income recognition time
Goods transferred at a certain time		 01.01.2021-03.31.2021
$1,285,506
53,553
20,726
21,417
1,381,202
(2,578)
(3,875)
$1,374,749
01.01.2021-03.31.2021
$1,280,401
52,228
20,725
21,395
$1,374,749
01.01.2021-03.31.2021
$205,271
977,103
89,606
102,769
$1,374,749
01.01.2021-03.31.2021
$1,374,749		 01.01.2020-03.31.2020
$930,119
61,540
25,055
23,362
1,040,076
(2,563)
(1,662)
$1,035,851
01.01.2020-03.31.2020
$925,921
61,540
25,037
23,353
$1,035,851
01.01.2020-03.31.2020
$151,970
771,450
57,315
55,116
$1,035,851
01.01.2020-03.31.2020
$1,035,851
  • 52 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(2) Contract liabilities:

Contract liabilities:
Contract liabilities 03.31.2021
$12,766		 12.31.2021 03.31.2020
$12,415 $14,565

The significant changes in the contract liability balance are as follows:

01.01.2021-03.31.2021 01.01.2020-03.31.2020

Contract liabilities balance – beginning transferred to income in $(2,536) $(2,293) the current period Increase in cash received in advance 2,887 1,856 in the current period

26. Operating costs and expenses

The Group’s employee welfare expenses, depreciation, and amortization expenses are summarized as follows:

Function
Nature		 01.01.2021-03.31.2021 01.01.2021-03.31.2021 01.01.2021-03.31.2021 01.01.2020-03.31.2020 01.01.2020-03.31.2020 01.01.2020-03.31.2020
Attributable
to operating
cost

Attributable
to operating
expense		 Total Attributable
to operating
cost

Attributable
to operating
expense		 Total
Employee welfare
expenses
Employee
expense(Note 1)		 $193,495 $104,281 $297,776 $166,810 $100,863 $267,673
Labor and health
insurance
expenses		 13,086 8,446 21,532 11,554 7,659 19,213
Pension expenses 9,469 5,650 15,119 7,728 4,583 12,311
Director
remuneration		 - 501 501 - 581 581
Other welfare
expenses		 6,439 2,946 9,385 4,565 2,545 7,110
Depreciation
expenses(Note 2)		 30,081 11,390 41,471 29,297 11,797 41,094
Amortization
expense		 3,337 2,125 5,462 7,741 2,408 10,149
  • 53 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • Note 1 ： (1) According to the company’s Articles of Incorporation, the company shall appropriate an amount equivalent to 1-10% of the company’s net income before tax before deducting remuneration to employees, directors, and supervisors as remuneration to employees and not more than 3% as remuneration to directors and supervisors. However, it is necessary to reserve a sufficient amount to make up for the losses, if any. The remuneration to employees in the preceding paragraph is paid in the form of stocks or cash, including the employees of the controlled companies who meet the conditions set by the board of directors. The remuneration to directors and supervisors must be paid in cash. The aforementioned matters shall be resolved by the board of directors for implementation and shall be reported to the shareholders meeting.

The amendments to the company’s Articles of Incorporation were resolved in the shareholders meeting on June 15, 2020 as follows:

The company shall appropriate an amount equivalent to 1-10% of the company’s net income before tax before deducting remuneration to employees and directors as remuneration to employees and not more than 3% as remuneration to directors. However, it is necessary to reserve a sufficient amount to make up for the losses, if any. The remuneration to employees in the preceding paragraph is paid in the form of stocks or cash, including the employees of the controlled companies who meet the conditions set by the board of directors. The remuneration to directors must be paid in cash.

  • (2) The estimated remuneration payable to employees of the company in 2021Q1 and 2020Q1 were NT$5,250 thousand, respectively, and the remuneration to directors and supervisors was NT$0, respectively. The estimated remuneration to employees was based on a certain percentage of the net income before tax (without considering the impact of employee remuneration) of 2021Q1 and 2020Q1. The estimated remuneration to employees is recognized as the current operating cost or operating expense. However, if there is a change in the distribution amount resolved by the board of directors, it will be treated according to the accounting estimates changes and adjusted to the profit and loss of the following year.

  • (3) The company’s board of directors had resolved on March 15, 2021 to distribute the 2020 remuneration to employees for NT$21,000 thousand in cash and remuneration to directors for NT$0 that were not different from the estimated remuneration to employees and directors in the company’s 2020 financial report. The company’s

  • 54 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified) 

  - board of directors had resolved on March 20, 2020 to distribute the 2019 remuneration to employees for NT$21,000 thousand in cash and remuneration to directors and supervisors for NT$0 that were reported in the regular shareholders meeting on June 13, 2020; also, it was not different from the estimated remuneration to employees, directors, and supervisors in the company’s 2019 financial report.

  • (4) Please refer to the Market Observation Post System for the information regarding the remuneration to employees and directors resolved by the company’s board of directors.

  • Note 2: The Group had appropriated the depreciation expenses in 2021Q1 and 2020Q1 for an amount of NT$41,480 thousand and NT$41,135 thousand, respectively. Also, the depreciation expenses of the property, plant and equipment - leased assets were NT$9 thousand and NT$41 thousand, respectively, and listed in the “Other income and expenses - net” account.

27. Other income and expenses - net

01.01.2021-03.31.2021 01.01.2020-03.31.2020

Other income and expenses-net 01.01.2021-03.31.2021 01.01.2020-03.31.2020
Property, plant and equipment –
lease assets
Rent income
Depreciation expense
Other income and expenses - net
Non-operating income and expense
(1)Interest income
Bank deposit interest
Financial assets measured at
amortized cost
Assets interest income
Other interest income
Total
(2)Other income
Other income - other		 $344
(9)
$335
01.01.2021-03.31.2021
$9,900

160
16,128
$26,188
01.01.2021-03.31.2021
3,331		 $442
(41)
$401
01.01.2020-03.31.2020
(1)
(2)
$13,140
1,772
7,027
$21,939
01.01.2020-03.31.2020
4,828

28. Non-operating income and expense

  • 55 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(3) Other profit and loss

(3) Other profit and loss
(4) Net loss of financial assets
measured at fair value
through profit and loss
Net loss from the disposal of
property, plant, and
equipment
Other expenses
Total
Financial cost
Bank loan interest
Lease liability interest
Total		 01.01.2021-03.31.2021
$(3,259)
(21)
(411)
$(3,691)
01.01.2021-03.31.2021
$(2,734)
(1,148)
$(3,882)		 01.01.2020-03.31.2020
$(125,200)
(304)
(136)
$(125,640)
01.01.2020-03.31.2020
$(2,217)
(1,020)
$(3,237)

(5) Profit (loss) amount from the affiliated enterprises under the equity method Please refer to Note VI.9 (1) C of the consolidated financial report for details.

(6) Exchange profit - net

xchange profit-net
Realized exchange profit
(loss) - net
Unrealized exchange profit
(loss)
Total		 01.01.2021-03.31.2021
$(12,467)
14,648
$2,181		 01.01.2020-03.31.2020
$26,124
(3,444)
$22,680
  1. Other comprehensive profit and loss

Reclassification Other comprehensive profit and loss and Other constituents Transactions adjustment comprehensive of current of current profit and Income tax Amount after period period loss expense tax 01.01.2021-03.31.2021 Items not reclassified to profit and loss: Unrealized appraisal benefits of equity $26,170 $- $26,170 $- $26,170

  • 56 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD.
SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD.
SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD.
SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD.
SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD.
SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 AND
(Unit amount in NT$ Thousand, unless otherwise specified)
instrument investment measured at fair
value through other comprehensive
profit and loss
Unrealized appraisal benefits of equity
instrument investment measured at fair
value through other comprehensive
profit and loss of affiliated enterprises
under the equity method
2,220
-
2,220
-
Total amount of items not reclassified
to profit and loss:
28,390
-
28,390
-
Items that may be reclassified to profit and
loss subsequently:
Exchange difference from the conversion
of the financial statements of foreign
operating institutions
(54,981)
-
(54,981)
-
Exchange difference from the conversion
of the financial statements of foreign
operating institutions of affiliated
enterprises under the equity method
-
-
-
-
Total amount of items that may be
reclassified to profit and loss subsequently:
(54,981)
-
(54,981)
-
Total
$(26,591)
$-
$(26,591)
$-
01.01.2020-03.31.2020
Items not reclassified to profit and loss:
Unrealized appraisal loss of equity
instrument investment measured at fair
value through other comprehensive
profit and loss
$(46,629)
$-
$(46,629)
$-
Unrealized appraisal loss of equity
instrument investment measured at fair
value through other comprehensive
profit and loss of affiliated enterprises
under the equity method
(963)
-
(963)
-
Total amount of items not reclassified
to profit and loss:
(47,592)
-
(47,592)
-
Item that may be reclassified to profit and		 2,220
28,390 - 28,390 - 28,390

(54,981)

-		 -
-		 (54,981)
-		 -
-		 (54,981)
-
(54,981) - (54,981) - (54,981)
$(26,591) $- $(26,591) $- $(26,591)
$(46,629)
(963)		 $-
-		 $(46,629)
(963)		 $-
-		 $(46,629)
(963)
(47,592) - (47,592) - (47,592)
  • 57 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

loss subsequently:

loss subsequently:
Exchange difference from the conversion
of the financial statements of foreign
operating institutions
Exchange difference from the conversion
of the financial statements of foreign
operating institutions of affiliated
enterprises under the equity method
Total amount of items that may be
reclassified to profit and loss subsequently:
Total
(113,587)

(45)		 -
-		 (113,587)
(45)		 -
-		 (113,587)
(45)
(113,632) - (113,632) - (113,632)
$(161,224) $- $(161,224) $- $(161,224)

30. Income tax

  • (1) The Group’s income tax return must be filed by each entity independently instead of filing collectively. The company’s business income tax return filed before 2018 (inclusive) and the subsidiary, CHIN DE INVESTMENT CO., LTD., filed before 2019 (inclusive) were reviewed and approved by the tax collection agency.

(2) The income tax expense constituents:

  • A. Income tax recognized in profit and loss
e income tax expense constituents:
Income tax recognized in profit and loss
Income tax expense - current
Income tax expenses of the current period
Deferred income tax expense (benefits)
Income tax expense		 01.01.2021-03.31.2021 01.01.2020-03.31.2020
$37,850
30,880		 $30,642
(15,076)
$68,730 $15,566
  • B. The Group had no income tax related to other comprehensive profit and loss constituents or direct debited or credited to equity in 2021Q1 and 2020Q1.

31. Earnings per share

(1) Basic earnings per share

The basic earnings per share are calculated by dividing the profit and loss attributable to the company’s common stock shareholders by the outstanding weighted average common stock shares in the current period as follows:

  • 58 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Net profit (loss) attributable to the company’s
common stock shareholders
Outstanding weighted average shares
Basic earnings per share (after tax) (NTD)		 01.01.2021-03.31.2021 01.01.2020-03.31.2020

$110,202		 $(37,897)
184,968,298 shares 184,968,298 shares
$0.60 $(0.20)

(2) Diluted earnings per share

The diluted earnings per share are calculated by having the dilutive potential common stock share effect adjusted to the profit and loss attributable to the common stock shareholders of the company divided by the dilutive potential common stock share effect adjusted to the outstanding weighted average shares of the period as follows:

Net profit (loss) attributable to the company’s
common stock shareholders
Add: Potential common stock share effect
Adjusted net profit (loss) attributable to the
company’s common stock shareholders
Weighted average shares
Add: Potential common stock share effect
Employee stock option hypothesis –
subscribing new shares
Employee remuneration hypothesis –
issuing new shares
Adjusted weighted average shares
Basic earnings per share (after tax) (NTD)		 01.01.2021-03.31.2021 01.01.2020-03.31.2020
$110,202
-		 $(37,897)
-
$110,202 $(37,897)
184,968,298 shares
3,019,086
715,259		 184,968,298 shares
(Note)
(Note)
188,702,643 shares 184,968,298 shares
$0.58 $(0.20)

Note: The Company had a net loss in 2020Q1; therefore, the potential common stock shares

were with anti-dilution effect and were not included in the calculation of diluted earnings per share.

  • 59 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

32. Reconciliation of liabilities from financing activities

Accountingitem
Balance -
beginning
01.01.2021-03.31.2021
Short-term loan
$1,235,824
Long-term loan
44,365
Lease liabilities
(including current
and noncurrent)
100,721
Total
$1,380,910
Accountingitem
Balance -
beginning
01.01.2020-03.31.2020
Short-term loan
$1,043,000
Long-term loan
-
Lease
liabilities
(including current
and noncurrent)
87,972
Total
$1,130,972		 Cash flow
$36,383
8,343
(5,114)
$39,612		 Changes in non-cash Changes in non-cash Changes in non-cash Balance -
ending
Transaction
of current
period
$-
-
-
$-		 Interest
expense
recognized
$-
-
1,148		 $1,272,207
52,708
95,703
$1,148 $1,420,618
Cash flow
$19,000
24,034
(3,810)
$39,224		 Balance -
ending
Transaction
of current
period
$-
-
-
$-		 Change in
exchange
rate
$-
-
(1,305)
$(1,305)		 Interest
expense
recognized
$-
-
1,020		 $1,062,000
24,034
83,877
Short-term loan
Long-term loan
Lease
liabilities
(including current
and noncurrent)
Total
$1,020 $1,169,911

VII. Related party transactions

The account balance amount, transactions, income, and expenses related to the transactions between entities within the Group were written-off at the time of preparing the consolidated financial report. Please refer to Note XIII.1 (10) of the consolidated financial report for the business relationships and important transactions between the company and the subsidiaries and among subsidiaries. The relationship and transactions between the Group and related parties are disclosed as follows:

  • 60 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  1. Name of related party and relationship

Name of related party Relationship with the Group KUAI LUNG PRECISION INDUSTRY CO., The chairman of KUAI LUNG is the general LTD. (KUAI LUNG) manager of G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD., the subsidiary of the company. SUNFLEX TECHNOLOGY CO., LTD. SUNFLEX is invested by the company under (SUNFLEX) equity method. SHANG HAI CHANG HONG SHEN SHANG HAI CHANG HONG SHEN HARDWARE HARDWARE CO., LTD. (SHANG HAI is invested by the company’s subsidiary under CHANG HONG SHEN HARDWARE) equity method (Note) WU HAN CHANG HONG SHEN WU HAN CHANG HONG SHEN HARDWARE is HARDWARE CO., LTD. (WU HAN CHANG transfer-invested by the invested company under HONG SHEN HARDWARE) equity method of the company’s subsidiary (Note)

Note: The Group had terminated the investment in SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. at the end of May 2020. Therefore, the related party transactions of SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. and WU HAN CHANG HONG SHEN HARDWARE CO., LTD. were disclosed only up to May 31, 2020. Please refer to Note VI.9 of the consolidated financial report for details.

  • 61 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

2. Major transactions with related parties

(1) Purchases

or transactions with related parties
Purchases
Relatedpartycategory/name 01.01.2021-03.31.2021 01.01.2020-03.31.2020
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
Affiliated enterprises
WU HAN CHANG HONG SHEN
HARDWARE
SUNFLEX
Subtotal
Total		 $- $63

-
2,279		 71
579
2,279 650
$2,279 $713

The aforementioned purchase is mostly for molds and parts with special specifications from one single supplier. Therefore, there is no other purchase price available for comparison. The payment term from such a single supplier is OA30-60 days; while other suppliers are with a payment term of OA90-120 days.

(2) Sales

Sales
Relatedpartycategory/name 01.01.2021-03.31.2021 01.01.2020-03.31.2020
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
Affiliated enterprises
SUNFLEX
Total		 $-
-		 $10
168
$- $178

The products sold in the preceding paragraph are mostly equipment, tools, and materials used for production with the price negotiated by both parties by adding a percentage to the cost or by the cost price at the time of trade depending on the type of product traded; also, taking into account the expenses and exchange rate risk. The specifications of products that are sold to related parties are exclusive; therefore, there is no other customer available for comparison. The payment term of sales to a related party is OA60-90 days; while the general customer is with a payment term of OA90-120 days.

  • 62 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(3) Rent income

The Group - SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. had part of the plant building leased to SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. with a lease income of NT$87 thousand generated in 2020Q1, and the rent was collected on a monthly basis. In addition, please refer to Note VI.10 (7) of the consolidated financial report for details.

(4) Processing expense

  • A. The Group - SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD., SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD., HONG JING(SHANGHAI)ELECTRONICS CO., LTD., and HUBEI HANSTAR ELECTRONICS TECHNOLOGY CO., LTD. had contracted the affiliated enterprise, SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD., for product processing with a processing expense of NT$147 thousand incurred in 2020Q1.

  • B. The company had contracted the affiliated enterprise, SUNFLEX TECHNOLOGY CO., LTD., for product proceeding with a processing expense of NT$2,385 thousand and NT$1,899 thousand incurred in 2021Q1 and 2020Q1, respectively.

(5) Claims/obligations arising from the aforementioned transactions
Relatedpartycategory/name
03.31.2021
12.31.2020
A.Accounts receivable– related
party
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
$-
$32
Affiliated enterprises
SUNFLEX
-
-
Total
$-
$32
B.Other receivable– related
party
Affiliated enterprises
SHANG
HAI
CHANG
HONG
SHEN
HARDWARE
$-
$-		 Claims/obligations arising from the aforementioned transactions
Relatedpartycategory/name
03.31.2021
12.31.2020
A.Accounts receivable– related
party
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
$-
$32
Affiliated enterprises
SUNFLEX
-
-
Total
$-
$32
B.Other receivable– related
party
Affiliated enterprises
SHANG
HAI
CHANG
HONG
SHEN
HARDWARE
$-
$-		 03.31.2020

Relatedpartycategory/name
A.Accounts receivable– related
party
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
Affiliated enterprises
SUNFLEX
Total
B.Other receivable– related
party
Affiliated enterprises
SHANG
HAI
CHANG
HONG
SHEN
HARDWARE
03.31.2021
$-
-
$-
$-
$-
176
$176
$104
  • 63 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Relatedpartycategory/name
C.Accounts payable– related
party
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
Affiliated enterprises
SHANG
HAI
CHANG
HONG
SHEN
HARDWARE
WU HAN CHANG HONG
SHEN HARDWARE
SUNFLEX
Subtotal
Total
D.Other payable–related party
Other related parties
KUAI LUNG PRECISION
INDUSTRY CO., LTD.
Affiliated enterprises
SUNFLEX
Total		 03.31.2021
$100
-
-
2,606
2,606
$2,706
$155
1,719
$1,874		 12.31.2020
$204
-
-
342
342
$546
$652
1,725
$2,377		 03.31.2020
$83
68
32
708
808
$891
$154
1,342
$1,496

The claims/obligations between the Group and the related party are without collateral or guarantee received or provided, and a conclusion is made after thorough evaluations that it is no need to appropriate allowance for loss for the Group’s claims against the related parties.

(6) Information on total remunerations of key management personnel

The total remunerations to the Group’s directors, general manager, vice general manager, and other managerial officers are summarized as follows:

Item
Short-term benefits
Retirement benefits
Share-based payment
Total		 01.01.2021-03.31.2021
$3,845
78
63
$3,986		 01.01.2020-03.31.2020
$4,343
87
129
$4,559
  • 64 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

The remuneration to key management personnel is determined by the Group’s Remuneration Committee with reference to the general standards of the industry and taking into account personal performance, the company operating performance, and related future risks.

VIII. Mortgaged assets

As of March 31, 2021, December 31, 2020, and March 31, 2020, the Group had assets provided as collateral to financial institutions for loans, applying for credit line, electricity deposits, materials, contracts, and issuing the letter of credit as follows:

Accountingitem 03.31.2021 12.31.2020 03.31.2020 Mortgage
agency
Bank of
China
Bangkok
Bank
Mizuho Bank
Bank of
China
Bank of
China
 Collateral for
loans
Other financial assets -
current
Bank deposits
Other noncurrent assets
- others
Bank deposits
Other
noncurrent
assets – others
Bank deposits
Property,
plant
and
equipment
House and building
Right-of-use assets
Land
Total		 $1,133

229

1,289

-
-		 $3,962
236
1,384
31,412
12,751		 $5,017
345
1,395
-
-		 Material deposit,
contract deposit,
and others
Electricity deposit
Tariff deposits
Short-term loan
Short-term loan
$2,651 $49,745 $6,757

IX. Significant contingent liabilities and unrecognized contractual commitments

The Group had the following significant contingent liabilities and unrecognized contractual commitments not yet included in the aforementioned consolidated financial report as of March 31, 2021:

  1. The company had had a guaranteed loan from financial institutions for the tariff guarantee amount of NT$500 thousand on March 31, 2021.

  2. 65 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  1. The Group’s G-SHANK ENTERPRISE (M) SDN. BHD. had a guaranteed loan of NT$27,864 thousand from financial institutions for the introduction of foreign labor and other matters on March 31, 2021.

  2. The Group had a contract signed for the lease of the right-of-use asset-land for an amount of RMB 30,636 thousand with a payable amount of RMB 20,636 thousand.

X. Significant disaster loss

None

XI. Material post events

None

XII. Others

1. Capital management

  • (1) The Group’s capital management is aimed to ensure the Group’s ongoing concern, to continue to provide remuneration to shareholders and benefits to stakeholders, and to maintain the best capital structure in order to reduce capital costs and to set the price of products or services according to the relative risk levels in order to provide shareholders with sufficient remuneration.

  • (2) The Group bases on the risk ratio to set the capital stock; also, manage and adjust the capital structure appropriately in accordance with the changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the dividends paid to shareholders, refund shareholders by de-capitalization, and issue new shares or sell assets to settle liabilities.

2. Financial risk management

  • (1) The Group’s main financial instruments include cash and cash equivalents, financial assets measured at fair value through profit and loss, financial assets measured at fair value through other comprehensive profit and loss, financial assets measured at amortized cost, other financial assets (time deposits), short-term loans, long-term loans, lease liabilities, receivables and payables arising from operating activities, etc., also, adjust operating fund needs through such financial instruments. Therefore, the Group’s operations are subject to various financial risks, including market risk (including exchange rate risk, interest rate risk, and other price risks), credit risk, and liquidity risk. The purpose of the Group’s overall financial risk management is to reduce the potential adverse effects of the Group’s exposure

  • 66 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified) to financial risks due to changes in the financial market.

  • (2) The Finance Department of the Group is responsible for identifying, evaluating, and hedging financial risks through close contact with the business units of the Group, planning and coordinating the access to domestic and international financial markets, and manages the Group’s operation related financial risks by analyzing the degree of risk exposure; also, the Group’s board of directors is responsible for supervision and management. In addition, the Group uses derivative financial instruments to hedge risk exposure at an appropriate time to reduce the impact of financial risks. The Group has the procedures for derivative financial instrument transactions stipulated that have been approved by the board of directors and the shareholders meeting. The said procedures include trade principles and policies, risk management measures, internal audit systems, regular evaluation methods, and handling of nonconformities, of which, the risk management includes credit, market prices, liquidity, cash flow, operations, law, etc.

  • (3) The main risks of the Group’s financial instruments are as follows:

  • A. Market risk

The main market risks of the Group are exchange rate risks arising from operating activities, such as sales or purchases denominated in non-functional currencies, and interest rate risks or price risks arising from financial instruments transactions.

(A) Exchange rate risk

  • a. The Group evaluates and analyzes the overall exchange rate risk. When the listed assets and liabilities and future business transactions are exposed to significant exchange rate risk, within the permitted range of the policy, manage risk through forwarding exchange contract. In addition, the Group’s net investment in foreign operating institutions is a strategic investment; therefore, no hedging is performed.

The Group’s financial assets and liabilities denominated in non-functional currencies with significant risk exposure of exchange rate fluctuations on the reporting date, and sensitivity analysis information are as follows (the functional currency of the company and some subsidiaries is “NTD,” and the functional currency of some subsidiaries is RMB, THB, USD, MYR, IDR, and JPY); sensitivity analysis is regarding the impact of the Group’s financial assets and liabilities denominated in non-functional currencies appreciated by 5% against a respective foreign currency that is the functional currency of each overseas subsidiary on the net income before tax or equity on the reporting date; also,

  • 67 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

when it depreciated by 5%, it will affect the net income before tax and equity reversely:

Foreign
currency
(Thousand)
03.31,2021
Financial assets
Monetary items
USD
$37,092
JPY
54,650
RMB
64,978
HKD
8,294
EUR
3,104
Non-monetary items
USD
$39,367
Derivative
financial
instrument
USD
$14,370

Financial liabilities
Monetary items
USD
$629
JPY
43,523
Non-monetary items: None
Derivative financial instrument:
12.31.2020
Financial assets
Monetary items
USD
$40,427		 Exchange
rate		 Book
amount		 Sensitive analysis Sensitive analysis Sensitive analysis
Change
ratio		 Increase/
decrease in
net income
before tax		 Decrease
in Equity
28.53
0.2578
4.342
3.671
33.48
28.53
28.53
28.53
0.2578
None
28.48		 $1,058,230
14,089
282,135
30,448
103,925
$1,123,134
$5,498
(Note)
$17,949
11,220
$1,151,351		 5%
5%
5%
5%
5%
5%
5%
5%
5%
5%		 $52,912
704
14,107
1,522
5,196
$56,157
$275
$897
561
$57,568		 $-
-
-
-
-
$-
$-
$-
-
$-

  • 68 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

SUBSIDIARIES (Continuing) SUBSIDIARIES (Continuing) SUBSIDIARIES (Continuing) SUBSIDIARIES (Continuing) SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)
JPY 42,458 0.2767 11,748 5% 587 -
RMB 63,038 4.38 276,106 5% 13,805 -
HKD 8,216 3.625 29,783 5% 1,489 -
EUR 2,495 35.06 87,487 5% 4,374 -
  • 69 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Foreign
currency
(Thousand)
Non-monetary items
USD
$34,441
Derivative financial instrument

USD
$31
Financial liabilities
Monetary items
USD
$464
JPY
21,839
HKD
725
Non-monetary items: None
Derivative instrument: None
03.31.2020
Financial assets
Monetary items
USD
$58,462
JPY
49,535
RMB
21,216
HKD
9,670
EUR
1,308
Non-monetary
items
USD
$15,347		 Exchange
rate		 Book
amount		 Sensitive analysis Sensitive analysis Sensitive analysis
Change
ratio		 Increase /
decrease in
net income
(loss)
before tax		 Decrease
in Equity
28.48
28.48
28.48
0.2767
3.625
30.23
0.2791
4.255
3.902
33.22
30.230		 $980,874
$889
(Note)
$13,220
6,043
2,629
$1,767,306
13,825
90,274
37,732
43,452
$463,930		 5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%		 $49,044
$44
$661
302
131
$88,365
691
4,514
1,887
2,173
$23,197		 $-
$-
$-
-
-
$-
-
-
-
-
$-

Derivative financial instrument: None

  • 70 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Financial liabilities
Monetary items
USD
JPY
HKD
EUR		 Foreign
currency
(Thousand)
$783
15,907
7,630
84		 Exchange
rate		 Book
amount		 Sensitive analysis Sensitive analysis Sensitive analysis
Change
ratio		 Increase /
decrease in
net income
(loss)
before tax		 Decrease
in Equity
30.23
0.2791
3.902
33.22		 $23,670
4,440
29,772
2,790		 5%
5%
5%
5%		 $1,184
222
1,489
140		 $-
-
-
-




Non-monetary items: None

Derivative financial instrument: None

Note: The aforementioned derivatives information refers to the book amount of the SWAP contracts that have not yet been settled on each reporting day. Please refer to Note VI.2 of the consolidated financial report for the operation position, nominal principal, and due date.

The exchange profit and loss (including realized and unrealized) of the Group’s monetary items converted to functional currencies, and the exchange rate for the conversion to the reporting currency of the consolidated financial report are as follows:

follows:
Functional
currency
NTD
USD
RMB
MYR
Others
Total		 01.01.2021-03.31.2021
Exchange profit
(loss)
Average
exchange
rate
$(2,212)
-
1,238
28.400
(196)
4.322
3,398
6.960
(47)
-
$2,181		 01.01.2020-03.31.2020
Exchange profit
(loss)
$(2,212)
1,238
(196)
3,398
(47)
$2,181		 Exchange profit
(loss)
$8,497
(749)
6,590
8,146
196
$22,680		 Average
exchange rate
-
30.253
4.300
7.203
-
  • 71 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • b. In addition, the SWAP contracts held by the Group are a financial hedging operation intended to hedge exchange rate risk arising from the change (mainly including sales and purchases denominated in non-functional currencies, such as USD) in the exchange rate of foreign claims. Regarding the aforementioned SWAP contracts, the profit and loss arising from changes in the exchange rate will generally offset the profit and loss of the hedged project, so there is no significant market risk. As for the aforementioned hedged project, the net position of foreign currency claims that are not effectively hedged is linked to the market risk of changes in exchange rates, of which, the depreciation or appreciation of USD, RMB, MYR, or JPY will result in the risk of exchange profit or loss.

(B) Interest rate risk

The Group’s interest rate risks include the fair value interest rate risk of the financial instruments with fixed interest rate and the cash flow interest rate risk of financial instruments with floating interest rate. The financial instruments with fixed interest rate refer to the company’s time deposits, some financial assets-current measured at fair value through profit and loss, financial assets measured at amortized cost, some other financial assets-current and some bank loans; the financial instruments with floating rate refer to savings deposits, some other financial assets-current, some other noncurrent assets-others, and some bank loans. The Group has interest rate risk evaluated and analyzed on a dynamic basis and controlled the interest rate risk exposure by maintaining an appropriate combination of fixed and floating interest rates. The Group expects no significant interest rate risk.

a. The Group’s financial assets and liabilities with fixed and floating interest rates

Fixed
interest
rate
Financial
assets
Financial
liabilities
Net amount
Floating interest
rate
Financial
assets		 03.31.2021
$3,082,337
(1,368,770)
$1,713,567
$1,016,403		 12.31.2020
$3,248,563
(1,337,404)
$1,911,159
$837,341		 03.31.2020
$2,866,124
(1,145,877)
$1,720,247
$805,141
  • 72 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Financial
liabilities
Net amount		 (51,848)
$964,555		 (43,506)
$793,835		 (24,034)
$781,107

b. Sensitivity Analysis

For the Group’s financial assets and liabilities with a floating interest rate, if the interest rate of market deposits or loans increased by 0.5% on the reporting date, assuming that it is held for an accounting quarter and all other factors are given, it would cause the Group’s net income (loss) before tax increased by NT$1,206 thousand and decreased by NT$976 thousand in 2021Q1 and 2020Q1, respectively.

(C) Other price risks

The Group’s beneficiary certificates and equity securities, such as financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive profit and loss, are with price risk resulted. The Group manages the price risk of beneficiary certificates and equity securities by holding investment portfolios with different risks.

Sensitivity Analysis

For the Group’s financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive profit and loss, the impact of the beneficiary certificates and equity securities with a 5% price increase on the net income before tax or equity on the reporting date is as follows; also, the beneficiary certificates and equity securities with a 5% price decrease will affect the net income before tax or equity reversely:

Increase in net income before
tax
Financial assets measured at
fair value through profit and
loss
Increase in equity
Financial assets measured at
fair value through other
comprehensive profit and
loss		 03.31.2021
$64,062
$11,576		 12.31.2020
$55,015
$10,268		 03.31.2020
$27,883
$5,990
  • 73 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

B. Credit risk

  • (A) The Group’s credit risk is mainly the potential impact of the counterparty or other parties’ failure in performing financial assets contracts, which includes the concentration of credit risks, constituents, contract amounts, and other receivables of the financial assets transactions of the Group. In order to reduce credit risk, the Group has dealt with all well-known domestic and foreign financial or securities institutions for bank deposits, financial assets measured at fair value through profit and loss, financial assets measured at amortized cost, some other financial assets, which are with low credit risk. For receivables, the Group continues to evaluate the financial status of the counterparties, historical experience, and other factors to adjust the trade amount and trade method of individual customers appropriately in order to improve the Group’s credit-granting quality.
(B) The Group evaluates and analyzes the overdue or impairment of financial assets on the overdue or impairment of financial assets on the overdue or impairment of financial assets on
the balance sheet date. The Group’s credit risk exposure amount is as follows:
03.31.2021 12.31.2020 03.31.2020
Credit risk exposure amount
Allowance for
losses-measured by the
expected credit losses
amount for 12-month $- $- $-
Allowance loss-measured
by the expected credit
loss amount throughout
the duration
Accounts receivable 31,111 32,248 28,853
Total $31,111 $32,248 $28,853

The aforementioned credit risk exposure amounts are all from the recovery of accounts receivable. The Group has continuously evaluated the losses that affect the estimated future cash flow of accounts receivable with appropriate allowance accounts appropriated. Therefore, the book amount of accounts receivable is with credit risk properly considered and reflected. In addition, the Group does not hold collateral for the impairment of financial assets that is with an allowance account appropriated.

  • (C) The expected credit loss of the Group’s notes and accounts receivable as of March 31, 2021, December 31, 2020 and March 31, 2020 is analyzed as follows:

  • 74 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

03.31.2021
Not overdue
30days overdue
31-90 days overdue
91-180 days overdue
181-365 days overdue
Over 366 days overdue
Total
12.31.2020
Not overdue
30days overdue
31-90 days overdue
91-180 days overdue
181-365 days overdue
Over 366 days overdue
Total
03.31.2020
Not overdue
30days overdue
31-90 days overdue
91-180 days overdue
181-365days overdue
Over 366 days overdue
Total		 Total book
amount of
notes and
accounts
receivable
$1,113,890
70,304
32,735
1,624
136
27,376
$1,246,065
$1,129,251
57,566
26,400
17,985
3,591
27,012
$1,261,805
$882,558
66,958
47,804
33,346
11,228
24,242
$1,066,136		 Reserve matrix
(loss rate)
0%-0.86%
0%-23.36%
0%-32.78%
0%-48.84%
0%-71.13%
100.00%
0%~0.9%
0%~23.54%
0%~32.95%
0%~49.03%
0%~65.94%
100.00%
0%-0.76%
0%-20.12%
0%-26.83%
0%-34.59%
5.71%-40.96%
100.00%		 Allowance for
loss (expected
credit loss
throughout the
duration)
$1,927
682
997
100
29
27,376
$31,111
$2,182
505
770
991
788
27,012
$32,248
$842
446
678
941
1,704
24,242
$28,853

(D) The concentration of credit risk of accounts receivable is analyzed as follows:

The accounts receivable ratio
of the top five customers		 03.31.2021
33.24%		 12.31.2020
32.37%		 03.31.2020
32.92%
  • 75 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • C. Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents to support all contractual obligations for business operations and to minimize the impact of cash flow fluctuations. Bank loans are an important source of liquidity to the Group. The management ensures the repeating bank loans through capital structure management, monitoring the use of bank credit line, and complying with loan contract terms to reduce liquidity risk. The Group’s stock investment under the financial assets measured at fair value through other comprehensive profit and loss is exposed to liquidity risk due to lack of an active market. In addition, the exchange rate of the Group’s SWAP contract has been determined; therefore, there is no significant cash flow risk.

(A) Bank loan amount

Bank loan amount
Short-term loan
Long-term loan
Long-term and short-term
loan amount
Total		 03.31.2021
$979,500
300,000
118,152
$1,397,652		 12.31.2020
$1,153,398
300,000
6,494
$1,459,892		 03.31.2020
$675,379
835,966
-
$1,511,345

(B) Maturity analysis of undiscounted financial liabilities

03.31.2021
Non-derivative
financial liabilities
Short-term loan
Accounts payable
Accounts payable –
related party
Other payables
Other
payables
–
related party
Lease liabilities
Long-term loan
Total		 Less than 1
year		 More than
1-2years		 More than
2-5years		 Over 5
years		 Total
$1,274,658
543,147
2,706
293,902
1,874
20,552
363		 $-
-
-
17,321
-
21,133
6,919		 $-
-
-
-
-
19,422
46,435		 $-
-
-
26,691
-
80,223
-		 $1,274,658
543,147
2,706
337,914
1,874
141,330
53,717
$2,137,202 $45,373 $65,857 $106,914 $2,355,346

Derivative financial liabilities: None

  • 76 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand,
Less than 1
year
12.31.2020
Non-derivative
financial liabilities
Short-term loan
$1,239,758
Accounts payable
383,577
Accounts payable –
related party
546
Other payables
409,547
Other
payables
–
related party
2,377
Lease liabilities
20,443
Long-term loans
305
Total
$2,056,553		 (Unit amount in NT$ Thousand,
Less than 1
year
12.31.2020
Non-derivative
financial liabilities
Short-term loan
$1,239,758
Accounts payable
383,577
Accounts payable –
related party
546
Other payables
409,547
Other
payables
–
related party
2,377
Lease liabilities
20,443
Long-term loans
305
Total
$2,056,553		 unless otherwise specified)

More than
1-2years
More than
2-5years
Over 5
years
$-
$-
$-
-
-
-
-
-
-
-
-
41,966
-
-
-
21,019
23,809
78,980
1,163
43,821
-
$22,182
$67,630
$120,946		 unless otherwise specified)

More than
1-2years
More than
2-5years
Over 5
years
$-
$-
$-
-
-
-
-
-
-
-
-
41,966
-
-
-
21,019
23,809
78,980
1,163
43,821
-
$22,182
$67,630
$120,946		 unless otherwise specified)

More than
1-2years
More than
2-5years
Over 5
years
$-
$-
$-
-
-
-
-
-
-
-
-
41,966
-
-
-
21,019
23,809
78,980
1,163
43,821
-
$22,182
$67,630
$120,946		 Total
$1,239,758
383,577
546
409,547
2,377
20,443
305		 $-
-
-
-
-
21,019
1,163		 $-
-
-
-
-
23,809
43,821		 $-
-
-
41,966
-
78,980
-		 $1,239,758
383,577
546
451,513
2,377
144,251
45,289
$2,056,553 $22,182 $67,630 $120,946 $2,267,311

Derivative financial liabilities: None

03.31.2020
Non-derivative
financial liabilities
Short-term loan
Accounts payable
Accounts payable –
related party
Other payables
Other
payables
–
related party
Lease liabilities
Long-term loan
Total		 $1,064,095
403,594
891
263,247
1,496
15,103
166		 $-
-
-
7,963
-
13,816
284		 $-
-
-
-
-
27,703
24,215
$51,918		 $-
-
-
39,458
-
68,151
-		 $1,064,095
403,594
891
310,668
1,496
124,773
24,665
$1,748,592 $22,063 $107,609 $1,930,182

Derivative financial liabilities: None

(4) Fair value of financial instruments

The book amount of the Group’s financial instruments is an amount reasonably close to the fair value.

  • 77 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • A. The methods adopted for the fair value of financial instruments and the assumptions adopted for the use of evaluation techniques

  • (A) The fair value of short-term financial instruments is estimated according to the book value on the balance sheet. Such financial instruments are with a short maturity date; also, the present value of future cash flows discounted at the market interest rate is close to the book amount; therefore, the book amount should be a reasonable basis for estimating the fair value. This method is applied to cash and cash equivalents, net notes receivable, net accounts receivable (including related parties), other receivables (including related parties), short-term loans, accounts payable (including related parties), and other payables (including related parties).

  • (B) The financial assets measured at fair value through profit and loss are with a market price available for reference; therefore, the said market price is the fair value.

  • (C) Financial assets measured at fair value through other comprehensive profit and loss are equity instrument investments without market price available for reference; therefore, the fair value is estimated according to the Market Approach. The company has the fair value estimated according to the prices derived from the market transactions of the same or comparable equity instruments and other relevant information.

  • (D) The fair value of other financial assets and other noncurrent assets-restricted assets is estimated according to the book amount, since the present value of future cash collected and discounted at the market interest rate is close to the book amount; therefore, the book amount should be a reasonable basis for estimating the fair value.

  • (E) The financial assets measured at amortized cost refer to the debt instrument investments that do not have market price available for reference, but with a fixed or decidable amount to be collected. The Group adopts the evaluation method of the cash flow model for estimation.

  • (F) The evaluation of derivative financial instruments is based on the evaluation models that are widely accepted in the market, such as, discount method and option pricing model.

  • (G) Lease liabilities are discounted at the Group’s increment loan interest rate on the unpaid lease expense on the lease starting day and then measured at amortized cost of the effective interest method subsequently. The book amount of the lease liabilities is an amount reasonably close to the fair value.

  • 78 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • (H) The Group’s long-term loans are based on floating interest rates with the fair value estimated according to the book amount on the balance sheet, which has been adjusted with reference to market conditions. Therefore, the company’s loan interest rate is close to the market interest rate.

B. Classification of fair value measurement

All assets and liabilities measured or disclosed at the fair value are classified to the respective fair value level according to the lowest level input value critical to the overall fair value measurement. The input values for each level are as follows:

Level 1: The market price (unadjusted) available for the same asset or liability on the measurement date;

  • Level 2: Direct or indirect observable input values of assets or liabilities, except for those quotations in Level 1;

Level 3: Unobservable input value of assets or liabilities;

The assets and liabilities that were originally measured at fair value on a repetitive basis and recognized on the balance sheet should be reassessed for classification at the end of each reporting period to determine whether there is a swift between the levels of the fair value hierarchy.

(A) The classification of financial instruments measured at fair value and recognized in the

balance sheet

The Group does not have assets and liabilities measured at fair value on a non-repetitive basis. The fair value level of assets and liabilities measured at fair value on a repetitive basis is as follows:

  • 79 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

onsolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD.
SUBSIDIARIES (Continuing)		 AND
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)
Lever 1
Level 2
Level 3
03.31.2021
Assets
Financial assets measured at
fair value through profit and
loss
Funds
$158,098
$-
$-
Bonds
1,123,134
-
-
SWAP contracts
-
5,498
-
Financial assets measured at
fair value through other
profit and loss
Unlisted stocks
-
-
231,524
Liabilities
:None
12.31.2020
Assets
Financial assets measured at
fair value through profit and
loss
Funds
$119,416
$-
$-
Bonds
980,874
-
-
SWAP contracts
-
889
-
Financial assets measured at
fair value through other
profit and loss
Unlisted stocks
-
-
205,354
Liabilities: None		 Total
$158,098
1,123,134
5,498
231,524
$119,416
980,874
889
205,354
  • 80 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

03.31.2020
Assets
Financial assets measured at
fair value through profit and
loss
Funds
Stocks
Bonds
Financial assets measured at
fair value through other
profit and loss
Unlisted stocks
Liabilities: None		 Level 1
$88,949
4,781
463,930
-		 Level 2
$-
-
-
-		 Level 3
$-
-
-
119,803		 Total
$88,949
4,781
463,930
119,803

  • (B) The Group did not have any significant shift between Level 1 and Level 2 of the fair value in 2021Q1 and 2020Q1.

  • (C) The adjustment of the fair value measurement in Level 3 is as follows:

Items
Balance–beginning
Total profit (loss)
Recognized
in
other
comprehensive
profit
and
loss
Balance - ending		 Financial assets measured at fair value through
other comprehensiveprofit and loss		 Financial assets measured at fair value through
other comprehensiveprofit and loss
Equityinstrument investment – Unlisted stocks
01.01.2021-03.31.2021
$205,354
26,170
$231,524		 01.01.2020-03.31.2020
$166,432
(46,629)
$119,803

The Group had recognized total current profit for an amount of NT$26,170 thousand and total current loss for an amount of NT$46,629 thousand in other comprehensive profit and loss due to change in Level 3 fair value in 2021Q1 and 2020Q1, respectively, and they were booked in the “other comprehensive profit and loss – unrealized appraisal profit (loss) of equity instrument investment

  • 81 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

measured at fair value through other comprehensive profit and loss.

  • (D) The evaluation techniques and assumptions adopted to measure the fair value of financial assets.

  • a. The fair value of financial assets with standard terms and conditions that are traded in an active market is determined by referring to market price.

  • b. The fair value of domestic unlisted equity instrument investment is evaluated with the Market Approach.

  • (E) Quantitative information on the fair value measurement of significant unobservable input values (Level 3):

Significant Relationship between Sensitivity analysis of the Evaluation unobservable input Quantitative the input value and relationship between the input technique value information fair value value and fair value

03.31.2021 Financial

assets

Financial assets measured at fair value through other comprehensive profit and loss

Stock Market Similar company’s 3.19 The higher the stock When the stock price-to-net Approach stock price-to-net price-to-net value value ratio of similar value ratio ratio of similar companies increases companies, the higher (decreases) by 5%, the equity the estimated fair of the Group will value increase/decrease by NT$11,613 thousand.

12.31.2020 Financial

assets

Financial assets measured at fair value through other comprehensive profit and loss

Stock Market Similar company’s 2.84 The higher the stock When the stock price-to-net Approach stock price-to-net price-to-net value ratio value ratio of similar companies value ratio of similar companies, increases (decreases) by 5%, the the higher the estimated equity of the Group will fair value increase/decrease by NT$10,268 thousand.

  • 82 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

03.31.2020 Financial assets

Financial assets measured at fair value through other comprehensive profit and loss

Stock Market Similar company’s 1.78 The higher the stock When the stock price-to-net Approach stock price-to-net value value ratio of similar price-to-net ratio of similar companies increases value ratio companies, the higher (decreases) by 5%, the equity the estimated fair of the Group will value increase/decrease by NT$6,057 thousand.

  • F. The evaluation process for the fair value measurement of significant unobservable input values (Level 3):

The Accounting Department of the Group is responsible for fair value verification, using independent sources of information to bring the evaluation results closer to the market, confirming that the data source is independent, reliable, consistent with other data resources, and representing executable prices. Also, analyze the value change in the assets and liability that must be re-measured or re-evaluated on the reporting date according to the Group’s accounting policies to ensure the reasonableness of the evaluation result.

  • 83 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

XIII. Supplementary disclosure matters

The transactions between the company and the following subsidiaries and among the subsidiaries were written-off at the time of preparing the consolidated financial report. The information disclosed below is for reference only.

  1. Information on major transactions

Supplementary information of the company and the subsidiaries in 2021Q1 is disclosed as follows:

  • (1) Loaning of funds:

Unit: NT$ Thousand/USD

N0 Lending
company		 Borrower Accounting
item		 Related
party		 Maximum
amount - current		 Balance – ending
(03.31.2020)
(Note 2)		 Actual amount
implemented
(Note 3)		 Interest
rate
range		 Nature of
loan
Transaction
amount		 Reason
for
short-term
loan		 Allowance
for bad
debt
appropriated		 Collateral
 Collateral
 Loaning of fund
limit to individual
(Note 1)		 Total loaning of
fund limit (Note 1)
Name Value
1 G-SHANK
ENTERPR
ISE CO.,
LTD.		 G-SHANK
JAPAN CO.,
LTD.		 Other
accounts
receivable –
related party		 Yes $51,354
(USD1,800,000)		 $51,354
(USD1,800,000)		 $19,971
(USD700,000)		 1% Short-term
loan		 $- Business
operation
of
affiliated
enterprise		 $- - $- $471,597 $1,886,389

Note 1: The total loaning of fund limit refers to an amount equivalent to 40% of the current net value of the lending company. The loaning of fund limit to individual refers to

an amount equivalent to 10% of the current net value of the lending company. The current net value is based on the latest financial statements audited by an independent auditor.

Note 2: It is the loaning of fund amount resolved by the company’s board of directors.

Note 3: It is the actual outstanding loan amount at yearend.

(2) Making of endorsements/guarantees: None

  • 84 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(3) Securities held at yearend (excluding the investment in the equity of the subsidiaries, affiliate enterprises, and joint venture):

Unit: NT$ Thousand/RMB/THB/USD

Holding
company		 Type of
securities		 Name of securities Relationship with the
securities issuer		 Accounting title Ending (03.31.2021) Ending (03.31.2021) Ending (03.31.2021) Ending (03.31.2021) Remarks
Shares / unit /
1,000 shares		 Book amount Shareholding
ratio (%)		 Fair value / net value
G-SHANK
ENTERPRISE
CO., LTD.		 Stocks REEL MASK INDUSTRY
CO., LTD.
None		 Financial
assets-noncurrent
measured at fair value through
other comprehensive profit and
loss


3,392,713		 $231,524 9.98 $231,524
Bonds Zurich insurance bonds
ZURNVX 4 3/4 12/29/49		 None Financial assets-current measured
at fair value throughprofit and loss
1,590,000		 45,945
(USD1,610,400)		 - 45,945
(USD1,610,400)
Bonds AXA bonds
AXASA 4.5 12/29/2049		 None Financial assets-current measured
at fair value throughprofit and loss
700,000		 20,187
(USD707,567)		 - 20,187
(USD707,567)
Bonds HSBC Holding bonds
HSBC 6 RERP(I)		 None Financial assets-current measured
at fair value throughprofit and loss
1,800,000		 56,136
(USD1,967,616)		 - 56,136
(USD1,967,616)
Bonds Macquarie Group Limited
bonds
MQGAU 6 1/8 PERP		 None Financial assets-current measured
at fair value through profit and loss		 1,400,000 42,992
(USD1,506,904)		 - 42,992
(USD1,506,904)
Bonds BNP Paribas bonds
BNP 5 1/8 PERP(I)		 None Financial assets-current measured
at fair value throughprofit and loss		 600,000 17,652
(USD618,702)		 - 17,652
(USD618,702)
Bonds UBS Group AG bonds
UBS 5 PERP(I)		 None Financial assets-current measured
at fair value throughprofit and loss		 4,170,000 119,498
(USD4,188,515)		 - 119,498
(USD4,188,515)

(Continuing to next page)

  • 85 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

Holding
company		 Type of
securities		 Name of securities Relationship with the
securities issuer		 Accounting title Ending (03.31.2021) Ending (03.31.2021) Remarks
Shares / unit /
1,000 shares		 Book amount Shareholding
ratio (%)		 Fair value / net value
G-SHANK
ENTERPRISE
CO., LTD.		 Bonds Societe Generale bonds
SOCGEN 6.75 PERP (I)		 None Financial assets-current measured
at fair value throughprofit and loss		 1,020,000 $32,281
(USD1,131,486)		 - $32,281
(USD1,131,486)
Bonds Societe Generale bonds
SOCGEN 7 3/8 PERP (I)		 None Financial assets-current measured
at fair value throughprofit and loss		 1,700,000 52,597
(USD1,843,582)		 - 52,597
(USD1,843,582)
Bonds BCS-Barclays Plc bonds
BACR 8 PERP		 None Financial assets-current measured
at fair value throughprofit and loss		 300,000 9,614
(USD336,984)		 - 9,614
(USD336,984)
Bonds DB-Deutsche Bank AG bonds
DB 6 1/4 05/29/49		 None Financial assets-current measured
at fair value throughprofit and loss		 3,800,000 103,665
(USD3,633,560)		 - 103,665
(USD3,633,560)
Bonds Credit Suisse bonds
CS 5.1 PERP (I)		 None Financial assets-current measured
at fair value throughprofit and loss		 800,000 21,865
(USD766,392)		 21,865
(USD766,392)
Bonds DB-Deutsche Bank AG bonds
DB 6 PERP		 None Financial assets-current measured
at fair value throughprofit and loss		 2,800,000 80,986
(USD2,838,612)		 - 80,986
(USD2,838,612)
Bonds Internationale Nederlanden
Group N.V. bonds
INTNED 4 7/8 PERP (I)		 None Financial assets-current measured
at fair value through profit and loss		 600,000 17,353
(USD608,220)		 - 17,353
(USD608,220)
Bonds Societe Generale bonds
SOCGEN 5 3/8 PERP		 None Financial assets-current measured
at fair value throughprofit and loss		 581,000 17,097
(USD599,267)		 - 17,097
(USD599,267)
Bonds Standard Chartered bonds
STANLN 4 3/4 PERP		 None Financial assets-current measured
at fair value throughprofit and loss		 1,900,000 54,010
(USD1,893,084)		 - 54,010
(USD1,893,084)
  • 86 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Holding
company		 Type of
securities		 Name of securities Relationship with the
securities issuer		 Accounting title Ending (03.31.2021) Ending (03.31.2021) Remarks
Shares / unit /
1,000 shares		 Book amount Shareholding
ratio (%)		 Fair value / net value
G-SHANK
ENTERPRISE
CO., LTD.		 Bonds HSBC Holding bonds
HSBC 4.7 PERP(I)		 None Financial assets-current measured
at fair value throughprofit and loss		 5,400,000 $151,693
(USD5,316,948)		 - $151,693
(USD5,316,948)
Bonds Societe Generale bonds
SOCGEN 6.75 PERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 1,500,000 47,467
(USD1,663,740)		 - 47,467
(USD1,663,740)
Bonds HSBC Holding bonds
HSBC 6 3/8 PERP		 None Financial assets-current measured
at fair value throughprofit and loss		 1,000,000 31,018
(USD1,087,200)		 - 31,018
(USD1,087,200)
Bonds HSBC Holding bonds
HSBC 6 RERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 300,000 9,360
(USD328,083)		 - 9,360
(USD328,083)
Bonds UBS Group AG bonds
UBS 5 PERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 300,000 8,599
(USD301,407)		 - 8,599
(USD301,407)
Bonds Internationale Nederlanden
Group N.V. bonds
INTNED 4 7/8 PERP(II)		 None Financial assets-current measured
at fair value through profit and loss		 1,348,000 38,974
(USD1,366,077)		 - 38,974
(USD1,366,077)
Bonds Societe Generale bonds
SOCGEN 7 3/8 PERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 400,000 12,373
(USD433,692)		 - 12,373
(USD433,692)
Bonds Credit Suisse bonds
CS 5.1 PERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 790,000 21,796
(USD763,962)		 - 21,796
(USD763,962)
Bonds BNP Paribas bonds
BNP 5 1/8 PERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 1,250,000 36,814
(USD1,290,363)		 - 36,814
(USD1,290,363)
  • 87 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Holding
company		 Type of
securities		 Name of securities Relationship with the
securities issuer		 Accounting title Ending (03.31.2021) Ending (03.31.2021) Ending (03.31.2021) Ending (03.31.2021) Remarks
Shares / unit /
1,000 shares		 Book amount Shareholding
ratio (%)		 Fair value / net value
G-SHANK
ENTERPRISE
CO., LTD.		 Bonds HSBC Holding bonds
HSBC 4.7 PERP(II)		 None Financial assets-current measured
at fair value throughprofit and loss		 1,100,000 $30,931
(USD1,084,149)		 - $30,931
(USD1,084,149)
Bonds BNP Paribas bonds
BNP 5 1/8 PERP(III)		 None Financial assets-current measured
at fair value throughprofit and loss		 200,000 5,859
(USD205,370)		 - 5,859
(USD205,370)
Bonds HSBC Holding bonds
HSBC 6 RERP(III)		 None Financial assets-current measured
at fair value throughprofit and loss		 700,000 21,761
(USD762,748)		 - 21,761
(USD762,748)
CHIN DE
INVESTMENT
CO., LTD.		 Funds First Bank Taiwan Monetary
Funds
None		 Financial assets-current measured
at fair value throughprofit and loss		 598,082 9,237 - 9,237
Bonds HSBC Holding bonds
HSBC 6 RERP		 None Financial assets-current measured
at fair value throughprofit and loss		 470,000 14,611
(USD512,131)		 - 14,611
(USD512,131)
GREAT-SHANK
CO., LTD.		 Funds BBL-AIBP2-21 None Financial assets-current measured
at fair value throughprofit and loss		 2,619,242 23,876
(THB26,208,396)		 - 23,876
(THB26,208,396)
Funds SCBSFF None Financial assets-current measured
at fair value throughprofit and loss		 1,693,671 32,057
(THB35,188,545)		 - 32,057
(THB35,188,545)
Funds SCB FIXEDA (RA) None Financial assets-current measured
at fair value throughprofit and loss		 2,633,611 25,132
(THB27,587,599)		 - 25,132
(THB27,587,599)
Funds SCBSF6MI5 None Financial assets-current measured
at fair value throughprofit and loss		 7,426,177 67,796
(THB74,419,209)		 - 67,796
(THB74,419,209)
  • 88 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Review only without following generally accepted auditing standards) (Review only without following generally accepted auditing standards) (Review only without following generally accepted auditing standards) (Review only without following generally accepted auditing standards) (Review only without following generally accepted auditing standards)
(Unit amount in NT$Thousand,unless otherwise specified)
XIAMEN
G-SHANK
PRECISION
MACHINERY
CO., LTD.		 Others RMB time wealth management
instruments
None		 Financial assets-current measured
at amortized cost		 - 22,672
(RMB5,221,507)		 - 22,672
(RMB5,221,507)

  • (4) Cumulative purchases or sales of the same security amounted to more than NT$300 million or 20% of the paid-in capital: None

  • (5) Acquired real estate for an amount of more than NT$300 million or 20% of the paid-in capital: None

  • (6) Disposed real estate for an amount more than NT$300 million or 20% of the paid-in capital: None

  • (7) The purchase or sale of goods with the related party for an amount more than NT$100 million or 20% of the paid-in capital: None

  • (8) Accounts receivable from related parties amounted to more than NT$100 million or 20% of the paid-in capital: None

  • (9) Engage in derivative instruments transactions: Please refer to Notes VI.2 and XII of the consolidated financial statements.

  • 89 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(10) Business relationship and important transactions and transaction amount between the parent company and subsidiaries and among subsidiaries:

No. (Note 1) Trading party Counterparty Relationship
with the trading
party (Note 2)		 Transactions Transactions Transactions Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
0 G-SHANK
ENTERPRISE
CO., LTD.		 SHANGHAI G-SHANK PRECISION
MACHINERY CO., LTD.		 1 Sales income
Other income
Accounts receivable – related party
Other receivables – related party
Other payable – related party		 $132
8,820
133
8,802
32		 Note 4
Note 7		 0.01%
0.64%
-
0.10%
-
0 G-SHANK
ENTERPRISE
CO., LTD.		 G-LONG PRECISION MACHINERY
(DONG GUAN) CO., LTD.		 1 Other income
Other receivables – related party		 475
474		 Note 7 0.03%
0.01%
0 G-SHANK
ENTERPRISE
CO., LTD.		 XIAMEN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 1 Other income
Other receivables – related party
Other payable – related party		 904
901
5		 Note 7 0.07%
0.01%
-
0 G-SHANK
ENTERPRISE
CO., LTD.		 G-SHANK PRECISION MACHINERY
(SUZHOU) CO., LTD.		 1 Cost of goods sold
Other income
Other receivables – related party
Other receivables – related party
Other payable – related party		 346
1,645
347
1,641
5		 Note 5
Note 7		 0.03%
0.12%
-
0.02%
-

(Continuing to next page)

  • 90 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

No. (Note 1) Trading party Counterparty Relationship
with the trading
party (Note 2)		 Transactions Transactions Transactions Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
0 G-SHANK
ENTERPRISE
CO., LTD.		 QINGDAO G-SHANK PRECISION
SDN.BHD.		 1 Sales income
Other income
Accounts receivable – related party
Other receivables – related party
Other payables – related party		 $405
1,672
1,044
1,667
11		 Note 4
Note 7		 0.03%
0.12%
0.01%
0.02%
-
0 G-SHANK
ENTERPRISE
CO., LTD.		 SHENZHEN G-SHANK PRECISION
SDN.BHD.		 1 Sales income
Other income
Accounts receivable – related party
Other receivables – related party		 4
670
4
675		 Note 4
Note 7		 -
0.05%
-
0.01%
0 G-SHANK
ENTERPRISE
CO., LTD.		 TIANJIN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 1 Sales income
Other income
Accounts receivable – related party
Other receivables – related party		 274
1,619
276
1,615		 Note 4
Note 7		 0.02%
0.12%
-
0.02%
0 G-SHANK
ENTERPRISE
CO., LTD.		 G-SHANK, INC. 1 Sales income
Accounts receivable - related party
Other receivables – related party		 1,049
917
112		 Note 4 0.08%
0.01%
-

(Continuing to next page)

  • 91 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

No. (Note 1) Trading party Counterparty Relationship
with the trading
party (Note 2)		 Transactions Transactions Transactions Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
0 G-SHANK
ENTERPRISE
CO., LTD.		 SHENZHEN
G-BAO
PRECISION
SDN.BHD.		 1 Sales income
Cost of goods sold
Other income
Accounts receivable – related party
Accounts payable – related party
Other receivables – related party
Other payable – related party		 $1,372
297
1,005
2,006
258
4,413
37		 Note 4
Note 5
Note 7		 0.10%
0.02%
0.07%
0.02%
-
0.05%
-
0 G-SHANK
ENTERPRISE
CO., LTD.		 GREAT-SHANK CO., LTD. 1 Sales income
Other income
Accounts receivable – related party
Other receivables – related party		 1,052
878
1,064
1,177		 Note 4
Note 7		 0.08%
0.06%
0.01%
0.01%
0 G-SHANK
ENTERPRISE
CO., LTD.		 G-SHANK ENTERPRISE (M) SDN.
BHD.		 1 Sales income
Other income
Accounts receivable – related party
Other receivables – relatedparty		 1,751
1,363
1,767
1,377		 Note 4
Note 7		 0.13%
0.10%
0.02%
0.02%
0 G-SHANK
ENTERPRISE
CO., LTD.		 PT
INDONESIA
G-SHANK
PRECISION		 1 Sales income
Accounts receivable – related party		 841
1,215		 Note 4 0.06%
0.01%

(Continuing to next page)

  • 92 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

No. (Note 1) Trading party Counterparty Relationship
with the trading
party (Note 2)		 Transactions Transactions Transactions Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
0 G-SHANK
ENTERPRISE
CO., LTD.		 G-SHANK JAPAN CO., LTD. 1 Sales income
Cost of goods sold
Other income
Operating expense
Accounts receivable – related party
Other receivables – related party
Otherpayables – relatedparty		 $165
291
58
631
51
19,997
2,903		 Note 4
Note 5
Note 8
Note 7		 0.01%
0.02%
-
0.05%
-
0.24%
0.03%
1 SHANGHAI
G-SHANK
PRECISION MACHINERY
CO., LTD.		 HONG
JING(SHANGHAI)ELECTRONICS
CO., LTD.		 3 Sales income
Cost of goods sold
Other profit and loss
Accounts receivable – related party
Other receivable – related party
Otherpayable – relatedparty		 1,041
37,806
3,890
798
3,340
31,163		 Note 6
Note 6
Note 7		 0.08%
2.75%
0.28%
0.01%
0.04%
0.37%
1 SHANGHAI
G-SHANK
PRECISION MACHINERY
CO., LTD.		 SHANGHAI G-SHANK PRECISION
HARDWARE CO., LTD.		 3 Sales income
Cost of goods sold
Other profit and loss
Accounts receivable – related party
Accounts payable – related party
Other receivables – related party
Otherpayables – relatedparty		 605
16,118
2,161
338
4
1,787
12,949		 Note 6
Note 6
Note 7		 0.04%
1.17%
0.16%
-
-
0.02%
0.15%

(Continuing to next page)

  • 93 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

tinued from the lastpage)
No. (Note 1) Trading party Counterparty Relationship with
the trading party
(Note 2)		 Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
1 SHANGHAI G-SHANK PRECISION
MACHINERY CO., LTD.		 GREAT-SHANK CO., LTD. 3 Sales income
Accounts receivable – related party		 $825
810		 Note 6 0.06%
0.01%
1 SHANGHAI G-SHANK
PRECISION MACHINERY CO.,
LTD.		 G-SHANK JAPAN CO., LTD. 3 Sales income
Cost of goods sold
Accounts receivable – related party
Accounts payable – related party
Other receivables – related party
Other payables – related party		 373
7,181
259
144
10
10,209		 Note 6
Note 6		 0.03%
0.52%
-
-
-
0.12%
1 SHANGHAI G-SHANK
PRECISION MACHINERY CO.,
LTD.		 PT INDONESIA G-SHANK
PRECISION		 3 Sales income
Accounts receivable – related party		 157
3,029		 Note 6 0.01%
0.04%
1 SHANGHAI G-SHANK
PRECISION MACHINERY CO.,
LTD.		 G-SHANK PRECISION
MACHINERY (SUZHOU) CO.,
LTD.		 3 Sales income
Cost of goods sold
Accounts receivable – related party
Other payables – related party		 9
1,488
10
1,354		 Note 6 -
0.11%
-
0.02%
1 SHANGHAI G-SHANK
PRECISION MACHINERY CO.,
LTD.		 G-SHANK ENTERPRISE (M) SDN.
BHD.		 3 Cost of goods sold
Accounts payable – related party		 153
70		 Note 6 0.01%
-

(Continuing to next page)

  • 94 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

No. (Note 1) Trading party Counterparty Relationship
with the
trading party
(Note 2)		 Transactions Transactions Transactions Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
1 SHANGHAI
G-SHANK
PRECISION
MACHINERY
CO., LTD.		 HUBEI
HANSTAR
ELECTRONICS
TECHNOLOGY CO., LTD.		 3 Sales income
Cost of goods sold
Accounts receivable – related party
Accounts payable – related party		 $430
2,668
163
1,305		 Note 6
Note 6		 0.03%
0.19%
-
0.02%
1 SHANGHAI
G-SHANK
PRECISION
MACHINERY
CO., LTD.		 G-LONG PRECISION MACHINERY
(DONG GUAN) CO., LTD.		 3 Sales income
Accounts receivable – related party		 9
10		 Note 6 -
-
2 SHENZHEN
G-SHANK
PRECISION SDN.BHD.		 G-LONG PRECISION MACHINERY
(DONG GUAN) CO., LTD.		 3 Cost of goods sold
Accounts payable – related party		 226
257		 Note 6 0.02%
-
2 SHENZHEN
G-SHANK
PRECISION SDN.BHD.		 SHENZHEN
G-BAO
PRECISION
SDN.BHD.		 3 Sales income
Cost of goods sold
Accounts receivable – related party
Accounts payable – related party		 2,073
242
3,937
275		 Note 6
Note 6		 0.15%
0.02%
0.05%
-
2 SHENZHEN
G-SHANK
PRECISION SDN.BHD.		 XIAMEN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 3 Sales income
Accounts receivable – related party		 767
871		 Note 6 0.06%
0.01%

(Continuing to next page)

  • 95 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

No.
(Note 1)		 Trading party Counterparty Relationship
with the
trading party
(Note 2)		 Transactions Transactions Transactions Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total
assets (Note 3)
2 SHENZHEN G-SHANK PRECISION
SDN.BHD.		 TIANJIN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 3 Sales income
Accounts receivable – relatedparty		 $136
79		 Note 6 0.01%
-
2 SHENZHEN G-SHANK PRECISION
SDN.BHD.		 G-SHANK PRECISION MACHINERY
(SUZHOU) CO., LTD.		 3 Sales income
Accounts receivable – relatedparty		 265
414		 Note 6 0.02%
-
3 G-SHANK PRECISION MACHINERY
(SUZHOU) CO., LTD.		 PT INDONESIA G-SHANK PRECISION 3 Sales income
Accounts receivable – related party		 1,507
2,134		 Note 6 0.11%
0.03%
3 G-SHANK PRECISION MACHINERY
(SUZHOU) CO., LTD.		 G-SHANK JAPAN CO., LTD. 3 Cost of goods sold
Accounts payable – related party		 34
62		 Note 6 -
-
3 G-SHANK PRECISION MACHINERY
(SUZHOU) CO., LTD.		 QINGDAO
G-SHANK
PRECISION
SDN.BHD.		 3 Cost of goods sold
Accounts payable – related party		 8
9		 Note 6 -
-
4 G-LONG PRECISION MACHINERY
(DONG GUAN) CO., LTD.		 TIANJIN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 3 Sales income
Accounts receivable – related party		 61
53		 Note 6 -
-
4 G-LONG PRECISION MACHINERY
(DONG GUAN) CO., LTD.		 SHENZHEN
G-BAO
PRECISION
SDN.BHD.		 3 Sales income
Accounts receivable – related party		 4
7		 Note 6 -
-
4 G-LONG PRECISION MACHINERY
(DONG GUAN) CO., LTD.		 DONGGUAN
QIAOJU
TRADING
CO., LTD.		 3 Sales income
Other profit and loss
Accounts receivable – related party
Other receivables – relatedparty		 4,335
39
4,922
25		 Note 6 0.32%
-
0.06%
-

(Continuing to next page)

  • 96 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Continued from the lastpage)
No. (Note 1) Trading party Counterparty Relationship
with the
trading party
(Note 2)		 Transactions
Item Amount Transaction
conditions		 Ratio to total consolidated
operating income or total assets
(Note 3)
5 G-SHANK ENTERPRISE (M) SDN. BHD. G-SHANK JAPAN CO., LTD. 3 Sales income
Cost of goods sold
Accounts receivable – related party
Accounts payable – related party
Other receivables – related party		 $2,058
1,031
2,103
98
973		 Note 6
Note 6		 0.15%
0.07%
0.02%
-
0.01%
5 G-SHANK ENTERPRISE (M) SDN. BHD. GREAT-SHANK CO., LTD. 3 Sales income
Accounts receivable – related party		 180
24		 Note 6 0.01%
-
6 HONG JING(SHANGHAI)ELECTRONICS CO.,
LTD.		 SHANGHAI
G-SHANK
PRECISION
HARDWARE CO., LTD.		 3 Sales income
Accounts receivable – related party		 22
1		 Note 6 -
-
7 G-SHANK JAPAN CO., LTD. SHENZHEN G-BAO PRECISION SDN.BHD. 3 Sales income
Cost of goods sold
Accounts receivable – related party
Accounts payable – related party		 79
31
26
30		 Note 6
Note 6		 0.01%
-
-
-
8 QINGDAO G-SHANK PRECISION SDN.BHD. TIANJIN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 3 Sales income
Cost of goods sold
Accounts receivable – related party
Accounts payable – related party		 249
13
101
15		 Note 6
Note 6		 0.02%
-
-
-
8 QINGDAO G-SHANK PRECISION SDN.BHD. XIAMEN
G-SHANK
PRECISION
MACHINERY CO., LTD.		 3 Sales income
Accounts receivable – related party		 9
10		 Note 6 -
-
  • 97 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • Note 1: Business transactions conducted between the parent company and subsidiaries should be noted in the “No.” column as follows: (1) Fill in “0” for the parent company;

  • (2) The subsidiaries are numbered sequentially starting from the Arabic number “1” by the company type.

  • Note 2: The “relationship with the trading companies” includes three types (The same transaction between parent company and subsidiary or between two subsidiaries needs not to be disclosed repeatedly, for example, if the parent company has already disclosed the transaction conducted with the subsidiary, the subsidiary does not need to have it disclosed again. If one of the two subsidiaries has already disclosed the transaction conducted, the other subsidiary does not need to have it disclosed again), which should be marked as follows:

  • (1) The parent company to the consolidated subsidiary;

  • (2) Consolidate subsidiary to parent company;

  • (3) Consolidated subsidiary to consolidated subsidiary;

  • Note 3: For the ratio of the transaction amount to the consolidated total operating income or total assets, if it is an asset or liability item, it is calculated for the ratio of the ending balance amount to the consolidated total assets; if it is a profit and loss item, it is calculated for the ratio of the interim cumulative amount to total consolidated operating income.

  • Note 4: The products sold are mostly equipment, tools, and materials used for production with the price negotiated by both parties by adding a percentage to the cost or by the cost price of trade depending on the type of product traded; also, taking into account the expenses and exchange rate risk. However, the specifications of products that are sold to related parties are exclusive; therefore, there is no other customer available for comparison. The payment term of sales to a related party is OA60-150 days.

  • Note 5: The purchase is mostly for molds and parts with special specifications from one single supplier. Therefore, there is no other purchase price available for comparison. The payment term for such single supplier is OA60-120 days.

  • 98 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Note 6: The collection (payment) term is OA90-150 days according to the contract signed.

Note 7: It is calculated and collected according to the contract signed.

Note 8: Interest collection and principal repayment are made according to the loan contract signed.

  • 99 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

2. Re-investment business-related information

Supplementary disclosure of information related to the company’s direct or indirect significant influence, control, or joint venture equity on the invested company not in Mainland China in 2021Q1:

Unit: NTD Thousand/USD/MYR

Investing
company		 Invested company Location Main business operation Original investment amount (Note 13) Original investment amount (Note 13) Shareholding– ending(03.31.2021) Shareholding– ending(03.31.2021) Shareholding– ending(03.31.2021) Current profit
(loss) of the
invested
company		 Investment
profit (loss)
recognized
in current
period
(Note 12)		 Remark
Current yearend Last yearend Shares Ratio
(%)		 Book amount
(Note 12)
G-SHANK
ENTERPRISE
CO., LTD.		 CHIN DE INVESTMENT CO., LTD. Note 1 General investment $50,000 $50,000 5,000,000 100.00 $54,453 $351 $351
GRAND STAR ENTERPRISES L.L.C. (Note 2) Note 2 General investment 588,055 588,055 - 100.00 1,622,814 50,630 50,737
G-SHANK, Inc. Note 3

 Stamping parts molds,
fixtures		 36,686 36,686 1,000 100.00 302,289 3,205 3,209
G-SHANK ENTERPRISE (M) SDN. BHD. Note 4

 Stamping parts molds,
fixtures		 85,112 85,112 6,924,750 92.33 348,825 18,374 16,979
GREAT-SHANK CO., LTD.
 Note 5


 Precision progressive
die and hardware
products		 69,509 69,509 7,968,750 85.00 200,166 8,487 7,230
G-SHANK JAPAN CO., LTD. Note 6 International trade 19,749 19,749 1,060 58.89 6,046 4,097 2,413
SUNFLEX TECHNOLOGY CO., LTD. Note 7

 Manufacturing and trading
of electronic components		 40,448 40,448 9,940,956 14.73 148,678 674 99

(Continuing to next page)

  • 100 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

Unit: NTD Thousand/USD/MYR

Investing company Invested company Location Main business operation Original investment amount (Note 13) Original investment amount (Note 13) Shareholding– ending(03.31.2021) Shareholding– ending(03.31.2021) Shareholding– ending(03.31.2021) Current profit
(loss) of the
invested
company		 Investment
profit (loss)
recognized
in current
period
(Note 12)		 Remarks
Current yearend Last yearend Shares Ratio
(%)		 Book amount
(Note 12)
CHIN DE
INVESTMENT CO.,
LTD.
SUNFLEX
TECHNOLOGY CO.,
LTD.		 Note 7 Manufacturing and trading
of electronic components		 217 217 10,000 0.01 151 674 -
G-SHANK
ENTERPRISE (M)
SDN. BHD.		 PT INDONESIA
G-SHANK
PRECISION		 Note 8 Stamping parts molds,
fixtures		 $49,154
(RM 7,144,500)		 $49,154
(RM 7,144,500)
18,800		 94.00 $156,111
(RM 22,690,579)		 $11,311
(RM 1,625,131)		 $-
G-SHANK, INC. G-SHANK DE
MEXICO,S.A. DE C.V.		 Note 9 Stamping parts molds,
fixtures		 4,537
(USD 159,025)		 4,537
(USD 159,025)
-		 100.00 17,948
(USD629,082)		 1,096
(USD 38,601)		 -
GRAND STAR
ENTERPRISES
L.L.C. (Note 2)		 GLOBAL STAR
INTERNATIONAL
CO., LTD.		 Note 10 General investment 545,437
(USD19,118,011)		 545,437
(USD19,118,011)		 19,118,011 100.00 1,612,774 50,572 -
  • 101 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Note 1: 20F-2, No. 83, Section 1, Chung Hsiao E. Road, Zhongzheng District, Taipei City Note 8: Jl. Industri Kawasan JABABEKA Tahap Il Block RR 5C-5D Cikarang-Bekasi 17530, Indonesia Note 2: 201 Rogers Office Building Edwin Wallace Rey Drive George Hill Anguilla Please refer to Note IV.2 (3) of the consolidated financial report for the relocation of the Note 9: NO.15, Gral, Pedro Hinojosa, cd industrial H.Matamoros, Tamps, Mexico. former US GRAND STAR ENTERPRISES L.L.C. Note 10: Suite 102, Cannon Place, P.O. Box 712, North Sound Rd., George Town, Grand Cayman, KYl-9006 Cayman Islands. Note 3: 1034 Old Port Isabel Rd., Suite 2 Brownsville, TX 78521, U.S.A. Note 4: Plot 94, Bayan Lepas Industrial Estate 11900 Bayan Lepas, Penang, Malaysia. Note 11: Suite 802, St James Court St Denis Street, Port Louis, Mauritius Note 5: 116 Moo 1 Hitech Industrial Estate T.Banlane , A.Bang Pa-In , Ayutthaya Thailand 13160 Note 12: It is calculated according to the financial statements of the invested companies of the same period that have not been reviewed by the independent auditors. Note 6: 1-17-14, Nishi-Shinbashi ,Excel Annex 8F, Nishi-Shinbashi, Minato-Ku,Tokyo, 105-0003 Note 13: The original investment amount at the end of the current period and the end of last year is Japan. calculated according to the exchange rate on March 31, 2021. Note 7: No. 522, Nanshang Road, Guishan District, Taoyuan City

  • 102 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

3. Investment in China

(1) The name, main business operation, paid-in capital, investment methods, remittance in and out of funds, shareholding ratio, investment profit and loss, investment book amount at yearend, remittance in of investment profit and loss, and investment limits of the invested company in China:

Unit: NTD Thousand/USD/RMB/HKD

Invested company
in China		 Main business
operation		 Paid-in capital Investment method Cumulative
investment
amount
remitted out of
Taiwan in
current period
- beginning		 Investment
amount remitted
in or out in current
period		 Investment
amount remitted
in or out in current
period		 Cumulative
investment
amount
remitted out of
Taiwan in
current period -
ending		 Current
profit
(loss) of
the
invested
company		 The
company’s
direct or
indirect
investment
shareholding
ratio (%)		 Investment
profit (loss)
recognized
in current
period
(Note 4)		 Book
amount of
investment
- ending		 Investment profit
remitted into
Taiwan as of
current period
Remitted Remitted
out in
SHANGHAI
G-SHANK
PRECISION
MACHINERY CO.,
LTD.		 Precision
progressive die
and hardware
products		 USD 10,000,000
(Note 1)		 Entrusted
investment (Note
2)		 USD1,700,000 $- $- USD1,700,000 $75,698 85.00 $64,340 $1,536,821 $1,249,415
(USD43,793,009)
HONG
JING(SHANGHAI)
ELECTRONICS
CO., LTD.		 Precision
progressive die
and hardware
products		 USD1,590,000 Investment through
the company set up
in the third region
(Note 3)		 USD1,275,000 - - USD1,275,000 7,882 80.19 6,320 83,088 37,992
(USD1,331,645)
  • 103 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$Thousand,unless otherwise specified)
G-LONG
PRECISION
MACHINERY
(DONG GUAN)
CO., LTD.		 Precision
progressive die
and hardware
products		 USD3,000,000 Investment through
the company set up
in the third region
(Note 4)		 USD1,530,000 - - USD1,530,000 7,530 51.00 3,840 122,189 19,462
(USD682,168)
XIAMEN
G-SHANK
PRECISION
MACHINERY CO.,
LTD.		 Precision
progressive die
and hardware
products		 USD2,500,000 Investment through
the company set up
in the third region
(Note 5)		 USD1,990,000 - - USD1,990,000 (2,020) 79.60 (1,608) 104,627 49,555
(USD1,736,960)

(Continuing to next page)

  • 104 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

Unit: NTD Thousand/USD/RMB/HKD

Invested
company in
China		 Main business
operation		 Paid-in capital Investment method Cumulative
investment
amount
remitted out
of Taiwan in
current period
-ending		 Investment
amount remitted in
or out in current
period		 Investment
amount remitted in
or out in current
period		 Cumulative
investment
amount
remitted out of
Taiwan in
current period
-ending		 Current
profit
(loss) of
the
invested
company		 The
company’s
direct or
indirect
investment
shareholding
ratio (%)		 Investment
profit (loss)
recognized
in current
period
(Note 4)		 Book
amount of
investment
- ending		 Investment profit
remitted into
Taiwan as of
current period
Remitted out Remitt
ed in
G-SHANK
PRECISION
MACHINERY
(SUZHOU) CO.,
LTD.		 Planer, milling
machine or die
machine,
precision
continuous die
and hardware
products		 USD1,400,000 Investment through
the company set up
in the third region
(Note 6)		 USD1,671,825 $- $- USD1,671,825 $5,656
100.00		 $5,656 $237,491 $65,496
(USD2,295,680)
QINGDAO
G-SHANK
PRECISION
SDN.BHD.		 Precision
progressive die
and hardware
products		 USD4,000,000 Investment through
the company set up
in the third region
(Note 7)		 USD3,342,000 - - USD3,342,000 1,645 92.83 1,527 278,811 266,734
(USD9,349,241)

(Continuing to next page)

  • 105 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)		 Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)
(Review only without following generally accepted auditing standards)
(Unit amount in NT$ Thousand, unless otherwise specified)
(Continued from the lastpage)
TIANJIN
G-SHANK
PRECISION
MACHINERY
CO., LTD.		 Precision
progressive die
and hardware
products		 USD2,500,000 Investment through
the company set up
in the third region
(Note 8)		 USD2,205,000 - - USD2,205,000 13,972 88.20 12,323 198,050 15,932
(USD558,426)
SHANGHAI
G-SHANK
PRECISION
HARDWARE CO.,
LTD.		 Precision
progressive die
and hardware
products		 USD300,000 Investment through
the company set up
in the third region
(Note 9)		 USD 255,000 - - USD 255,000 17,939 85.00 15,248 168,490 422,138
(USD14,796,288)
SHENZHEN
G-SHANK
PRECISION
SDN.BHD.		 Precision
progressive die
and hardware
products		 USD2,600,000 Investment through
the company set up
in the third region
(Note 10)		 USD2,440,000 - - USD2,440,000 709 93.85 665 107,073 7,439
(USD260,742)
SHENZHEN
G-BAO
PRECISION
SDN.BHD.		 Precision
progressive die
and hardware
products		 USD3,150,000 Investment through
the company set up
in the third region
(Note 11)		 USD2,880,000 $- $- USD2,880,000 $7,581 91.43 $6,931 $326,638 $140,848
(USD4,936,848)

(Continuing to next page)

  • 106 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Unit amount in NT$ Thousand,
from the last page)		 (Unit amount in NT$ Thousand,
from the last page)		 (Unit amount in NT$ Thousand,
from the last page)		 (Unit amount in NT$ Thousand,
from the last page)		 (Unit amount in NT$ Thousand,
from the last page)		 unless otherwise specified) unless otherwise specified) unless otherwise specified) unless otherwise specified) unless otherwise specified) unless otherwise specified) unless otherwise specified) unless otherwise specified)
Unit: NTD Thousand/USD/RMB/HKD
Invested
company in
China		 Main business
operation		 Paid-in capital Investment method Cumulative
investment
amount
remitted out of
Taiwan in
current period
-beginning		 Investment
amount remitted
in or out in current
period		 Cumulative
investment
amount
remitted out of
Taiwan in
current period
-ending		 Current
profit
(loss) of
the
invested
company		 The
company’s
direct or
indirect
investment
shareholding
ratio (%)		 Investment
profit (loss)
recognized
in current
period
(Note 4)		 Book
amount of
investment
- ending		 益Investment
profit remitted into
Taiwan as of
current period
Remitted
out		 Remitted
in
HUBEI
HANSTAR
ELECTRONICS
TECHNOLOGY
CO., LTD. (Note
5)		 Precision
progressive die
and hardware
products,
electroplating
processing		 RMB30,000,000 Transfer investment
ofSHANGHAI
G-SHANK
PRECISION
HARDWARE CO.,
LTD.		 - - - - 4,163 100.00 4,163 124,083 -
DONGGUAN
QIAOJU
TRADING CO.,
LTD. (Note 5)		 Plastic hardware
wholesale and
import/export
business		 HKD3,000,000 Transfer investment
of G-LONG
PRECISION
MACHINERY
(DONG GUAN)
CO., LTD.		 - - - - 2,082 100.00 2,082 37,435 -
  • 107 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Cumulative investment amount remitted out from
Taiwan to China atyearend(Note 1)		 Investment amount approved by the Investment
Commission, MOEA(Notes 1 and 2)		 The investment amount limit stipulated by the
Investment Commission, MOEA(Note 3)
$601,588
(USD21,086,140)		 $806,186
(USD28,257,472)		 $3,262,998

  • Note 1: It includes the net amount of USD1,797,315 derived from the approved investment of DONGUAN JUYUE MOLD CO., LTD. for USD2,730,000 and net of the liquidating investment fund remitted in for USD932,685.

  • Note 2: It includes the capital increase from earnings of SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in May 2001 and October 2004, and the capital increase from earnings of QINGDAO G-SHANK PRECISION SDN.BHD. in January 2019.

  • Note 3: According to the “Principles for the Review of Investment or Technical Cooperation in Mainland China” stipulated by the Investment Commission, MOEA the company’s investment in China is limited to 60% of the net worth or consolidated net worth, whichever is higher. However, the enterprises that are with the certification document to evidence its meeting the operation scope of the headquarters issued by the Industrial Development Bureau, MOEA is not subject to this limit. The company had applied to the Industrial Development Bureau, MOEA for approval as the corporate operation headquarters on April 18, 2019 that would be valid from April 16, 2019 to April 15, 2021 for the investment in China, which had not violated the investment limit of the Investment Commission, MOEA.

  • Note 4: The profit and loss amount from the subsidiary under the equity method in 2021Q1 was calculated according to the invested company’s financial statements not audited by the independent auditors, except for SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.

  • Note 5: It is an investment made through the invested company in China; therefore, it is unnecessary to report to the Investment Commission MOEA and is not included in the “Cumulative investment amount remitted out from Taiwan to China.”

  • 108 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries

(Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • Note 1: SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. had a paid-in capital of US$2,000 thousand originally. It had arranged a capital increase from earnings for an amount of US$2,500 thousand and US$5,500 thousand in May 2001 and October 2004, respectively. As of March 31, 2021, SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. had a paid-in capital of US$10,000 thousand.

  • Note 2: The company has signed a power of attorney with G-SHANK ENTERPRISE (M) SDN. BHD. (hereinafter referred to as the “trustee”), a business entity of the company in the third region, to indirectly establish SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in China with the related party, Yuhuang Lin. The main content of the power of attorney is as follows:

  • A. The company designated the trustee to invest US$1,700,000 (including bank transfer of US$1,250,000 and machinery and equipment for an amount of US$450,000) in SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in China.

  • B. The trustee is to apply to the competent authorities in China to invest and establish SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in the name of the trustee.

  • C. The trustee upon receiving income or benefits from SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. should have it transferred to the company entirely.

  • D. If SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. is to return the investment funds due to capital reduction, business termination, or other reasons, the trustee upon receiving such refund shall have it transferred to the company entirely.

  • E. The trustee shall notify the company when transferring investment funds, benefits, or income due to the reasons stated in the last two preceding paragraphs according to the instruction of the company.

  • F. The trustee’s rights and obligations in SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. are transferred to the company due to this entrusted investment relationship; therefore, the trustee does not guarantee the income and profit and loss.

  • G. The trustee shall exercise due diligence to manage investment, foreign exchange settlement, and benefit collection.

  • H. The matters not addressed in the power of attorney shall be handled in accordance with the law and regulations of the Republic of China, domestic and foreign banking practices, and other regulations.

  • 109 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • Note 3: HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90010260 (Investment Commission, MOEA had the (90) Shen-II-Tzi No. 90010260 amended by issuing the (95) Shen-II-Tzi No. 095004988 on 03.03.2006), and the company was approved by the Investment Commission, MOEA by issuing the Shen-II-Tzi No. 093031757 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES

  • L.L.C. in the third region and then it indirectly invested in HONG JING(SHANGHAI)ELECTRONICS CO., LTD. HONG JING(SHANGHAI)ELECTRONICS CO., LTD. had arranged a capital increase in cash on November 1, 2012; however, the company did not subscribe shares proportionally to the shareholding ratio; therefore, the company’s shareholding ratio was 80.19% thereafter.

  • Note 4: HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90010259 and Jin-Shen-II-Tzi No. 91015965, and the company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092042580 Letter and Jin-Shen-II-Tzi No. 093031432 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD.

  • Note 5: HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90022866, and the company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092042581 Letter and Jin-Shen-II-Tzi No. 093006075 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in XIAMEN G-SHANK PRECISION MACHINERY CO., LTD.

  • Note 6: HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90001835, Jin-Shen-II-Tzi No. 091031112, and Jin-Shen-II-Tzi No. 92008940 to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD. Subsequently, 5.86% (investment amount of US$82 thousand) and 2%

  • 110 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

  • (investment mount US$28 thousand) of the shareholding was transferred to non-related parties, Mr. Bershin Lo and Mr. Guodong Hsu, in March 2003, respectively. The company’s shareholding was reduced to 92.14 % thereafter that was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092010563 Letter. HON YEH INVESTMENT CO., LTD., a subsidiary of the company, had paid US$23 thousand to acquire the 2% (investment amount US$28 thousand) shareholding from Mr. Guodong Hsu on January 5, 2007 with the shareholding increased to 94.14% thereafter and it was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 09500329480 Letter. The company’s board of directors had resolved on June 13, 2019 to acquire the 5.86% (investment amount US$361 thousand) shareholding from the non-related party, Mr. Bershin Lo, and it was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 10800157300 Letter with the comprehensive shareholding increased to 100% thereafter.

  • Note 7: HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Shen-II-Tzi No. 90010261, Jin-Shen-II-Tzi No. 91039369, Jin-Shen-II-Tzi No. 092003008 Letter, and Jin-Shen-II-Tzi No. 094008181 to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in QINGDAO G-SHANK PRECISION SDN.BHD. Subsequently, 5% (investment amount of US$130 thousand), 2.23% (investment mount US$58 thousand), and 0.58% (investment amount US$15 thousand) of the shareholding was transferred to non-related parties, Mr. Shenwei Guo, Mr. Hongjun Li, and Mr. Bangyong Liu, in March 2003, respectively. The company’s shareholding was reduced to 92.19 % thereafter that was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092010560 Letter. QINGDAO G-SHANK PRECISION SDN.BHD. had arranged capital increase in cash on November 25, 2006; however, the company did not subscribe shares proportionally to the shareholding ratio; therefore, the company’s shareholding ratio was 92.83% thereafter. QINGDAO G-SHANK PRECISION SDN.BHD. had a paid-in capital of US$3,600 thousand and then arranged a capital increase from earnings for an amount of US$400 thousand in January 2019 and the paid-in capital of QINGDAO G-SHANK PRECISION SDN.BHD. was US$4,000 thousand thereafter.

  • Note 8: The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092044159, Jin-Shen-II-Tzi No. 093005557, and Jin-Shen-II-Tzi No. 093006249 Letter to invest in GLOBAL STAR

  • 111 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified) 

  - INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in TIANJIN G-SHANK PRECISION MACHINERY CO., LTD.

  • Note 9: The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 095026420 Letter to indirectly invest in SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. through G-SHANK ENTERPRISE (M) SDN. BHD. in the third region. Then it was approved for amendment by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 095032048 Letter to invest in SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. through GLOBAL STAR INTERNATIONAL CO., LTD. that was invested by GRAND STAR ENTERPRISES L.L.C. in the third region. The investment fund was transferred through GRAND STAR ENTERPRISES L.L.C. to GLOBAL STAR INTERNATIONAL CO., LTD. for an amount of US$255 thousand on November 18, 2006, and the said amount was then transferred to SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. on January 20, 2006.

  • Note 10: The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 09500121350, Jin-Shen-II-Tzi No. 09600108160, and Jin-Shen-II-Tzi No. 09600265810 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in SHENZHEN G-SHANK PRECISION SDN.BHD.

  • Note 11: The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 09600405610 and Jin-Shen-II-Tzi No. 09700084160 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in SHENZHEN G-BAO PRECISION SDN.BHD. SHENZHEN G-BAO PRECISION SDN.BHD. had arranged capital increase in cash on September 13, 2012; however, the company did not subscribe shares proportionally to the shareholding ratio; therefore, the company’s shareholding ratio was reduced to 91.43% thereafter.

  • (2) Significant transactions conducted with the invested companies in China in the current period:

  • A. The purchase amount and percentage and the related payable amount and percentage at yearend: Please refer to Notes VII and XIII.1 (10) of the consolidated financial report

  • 112 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified) for details.

  • B. The sales amount and percentage and the related receivable amount and percentage at yearend: Please refer to Note VII and XIII.1 (10) of the consolidated financial report for details.

  • C. The property transaction amount and the profit and loss resulted: None

  • D. The ending balance and purpose of notes endorsements/guarantees or collateral provided: None

  • E. Maximum balance amount, ending balance amount, interest rate range, and total interest of the current period of loans: Please refer to Note XIII.1 (1) of the consolidated financial report for details.

  • F. Other transactions that have a significant impact on the profit and loss or financial status: Please refer to Notes VII and XIII.1 (10) of the consolidated financial report for details.

  • 113 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

4. Major Shareholder information

The name, shareholding, and shareholding ratio for more than 5% of the company’s shareholders:

Shares
Major shareholders		 Shareholding (shares) Shareholding ratio (%)
JIHONG INVESTMENT CO., LTD.
CHEN-LIN INVESTMENT COMPANY		 16,089,465 shares
10,481,790 shares		 8.69
5.66

  • Note 1: The information of the major shareholders in this table is based on the shareholders who have received more than 5% common stock shareholding completed with dematerialized registration (including treasury stock) on the last business day of each quarter that is counted by Taiwan Depository & Clearing Corporation. The capital stock recorded in the company’s consolidated financial report and the company’s actual number of shares delivered with dematerialized registration may be different due to different calculation bases adopted.

  • Note 2: If the aforementioned information is regarding shareholders having their shares delivered to the trust, it is disclosed by the individual account of the principal who entrusts the trustee to open a trust account. As for the shareholder’s reporting 10% or more of insider’s shareholding in accordance with the Securities and Exchange Act, the shareholding includes the principal’s shareholding and the shares delivered to the trust that remains under the control of the principal. Please refer to the Market Observation Post System for the insider’s equity reporting information.

  • 114 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries

(Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

XIV. Department information

There are two reporting departments within the Group, including the stamping parts department and the general investment department. The stamping parts department is mainly for the manufacturing and production, processing, and trading of stamping components, while the general investment department is engaged in short-term investment and general investment activities. The reportable departmental profit and loss are measured by operating profit and loss before tax (excluding the total management and logistics costs to be amortized, non-operating income and benefits, non-operating expenses and losses, and income tax expenses) and it is the base for performance evaluation. This measurement amount is provided to the operating decision-maker to determine the allocation of resources to each department and to evaluate the performance of each department. The accounting policies of the operating department are the same as the summary of the significant accounting policies described in Note IV of the consolidated financial report.

Department information

Department information
01.01.2021-03.31.2021
Income
Income from external
customers
Inter-department income
Total income
Departmental profit and loss
Non-operating
income
and
expense
Net income before tax of the
continuing business unit
01.01.2020-03.31.2020
Income
Income from external
customers
Inter-department income
Total income		 Stamping
parts
department		 General
investment
department		 Adjustment
& write-off		 Consolidation
$1,374,749
-		 $-
-		 $-
-		 $1,374,749
-
$1,374,749 $- $- $1,374,749
$181,101 $437 $- $181,538
23,784
$1,035,851
-		 $-
-		 $-
-
$205,322
$1,035,851
-
$1,035,851 $- $- $1,035,851
  • 115 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in
Departmental profit and loss
Non-operating income and
expense
Net loss before tax of the
continuing business unit		 NT$Thousand, unless otherwise specified)
$(2,192)
$-		 unless otherwise specified)
$(2,192)
$-
$71,274 $(2,192) $- $69,082
(82,224)
$(13,142)
  • 116 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

03.31.2021
Assets
Department assets
Income tax assets – current
Deferred income tax assets
Investment –
non-investment department
Total assets
Liabilities
Department liabilities
Income tax liabilities –
current
Deferred income tax
liabilities
Defined benefit liabilities –
net
Total liabilities
12.31.2020
Assets
Department assets
Income tax assets – current
Deferred income tax assets
Investment –
non-investment department
Total assets
Liabilities
Department liabilities
Income tax liabilities -
current		 Stamping
parts
department		 General
investment
department		 Adjustment
& write-off		 Consolidation
$6,719,554
47,946
19,290
1,665,756		 $54,022
68
460
-		 $-
-
-
-		 $6,773,576
48,014
19,750
1,665,756
$8,452,546 $54,550 $- $8,507,096
$2,363,780
46,496
585,030
73,291		 $97
72
-
-		 $-
-
-
-		 $2,363,877
46,568
585,030
73,291
$3,068,597 $169 $- $3,068,766
$6,702,263
48,986
21,108
1,451,839		 $53,583
68
474
-		 $-
-
-
-		 $6,755,846
49,054
21,582
1,451,839
$8,224,196 $54,125 $- $8,278,321
$2,260,630
51,336		 $25
-		 $-
-		 $2,260,655
51,336
  • 117 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND

SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Deferred income tax
liabilities
Defined benefit liabilities –
net
Total liabilities		 555,982
82,291		 -
-		 -
-		 555,982
82,291
$2,950,239 $25 $- $2,950,264
  • 118 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

03.31.2020
Assets
Department assets
Income tax assets – current
Deferred income tax assets
Investment –
non-investment department
Total assets
Liabilities
Department liabilities
Income tax liabilities –
current
Deferred income tax
liabilities
Defined benefit liabilities –
net
Total liabilities		 Stamping
parts
department		 General
investment
department		 Adjustment
& write-off		 Consolidation
$6,365,352
21,576
39,341
1,081,124		 $54,715
-
149
-		 $-
-
-
-		 $6,420,067
21,576
39,490
1,081,124
$7,507,393 $54,864 $- $7,562,257
$1,928,157
32,851
511,259
80,704		 $25
90
-
-		 $-
-
-
-		 $1,928,182
32,941
511,259
80,704
$2,552,971 $115 $- $2,553,086
  • 119 -

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