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HOLY STONE — AGM Information 2021
Aug 6, 2021
52259_rns_2021-08-06_e094a10a-9cc2-49b2-a157-b2ada16a7953.pdf
AGM Information
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Holy Stone Enterprise Co., Ltd. （ ”Company” ）
Minutes of 2021 Annual General Shareholders’ Meeting
Notice to readers
This English-version Meeting Minutes (including attachments) is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.
Time: 09:00a.m., July 21[st] , 2021 (Wednesday)
Place: Conference Room at 7[th] floor, No. 17（Chu Pao Building）, Lane 91, Sec. 1, NeiHu Road, Taipei 114,
Taiwan
Shareholders Present: Shares represented by shareholders present are 106,119,079 shares （ including
35,821,268 shares casted electronically ） , accounted for 67.16% of total shares 157,990,779 issued.
Chairman: Jing-Rong Tang,
Recorder: Jui-Chiung Wang
Directors present: Jing-Rong Tang, Director; Chyang Lo, Representative of Lin Tan Investment Co., Ltd.; Yu-Min Wu, Representative of Lin Tan Investment Co., Ltd.; Shao-Kuo Huang, Director; Ken-Yi Cheng, Independent Director; Nai-Hua Wu, Independent Director; Tang-Ming Wu, Supervisor; Chung-Yi Yang, Supervisor
Attendance: Ming-Fang Hsu, CPA, KPMG
Fan-Chuan Shih, Attorney, STRing Law Firm
- I. The aggregate shareholding of the shareholders present in person or casted electronically
constituted a quorum. The Chairman called the meeting to order.
-
II. Chairman’s Address: (omitted)
-
III. Meeting Content:
A. Report Items
-
(1) Business Report of 2020 (see attachment 1)
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(2) Supervisors’ Audit Report on 2020 (see attachment 2)
-
(3) Report the Distribution of 2020 Employee Bonus and Directors and Supervisors Remuneration. On March 10[th] , 2021, the Board approved NT$197,148 thousand of employee bonus and NT$37,552 thousand of directors’ and supervisors’ compensation, both paid in cash.
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(4) Report 2020 Earnings Distribution and Cash Dividends
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（I）On March 10[th] , 2021, the Board has passed the resolution of dividends and bonus total NT$1,263,926,232 for cash distribution, NT$ 8.0 per share distributed from earnings. Cash dividends up to one NT dollar, if the distribution is under this amount, will be accounted as other revenue. -
（II）Cash dividend distribution record date will be decide by another Board meeting.
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（III）If there is a change in the number of ordinary shares outside of the Company, or when there is a change in shareholders' dividend rate that requires revision, Chairman of the Board should take full authority. -
(5) Report the Revision of Company’s Internal Regulation (1. Codes of Ethical Conduct for the Board, Directors and Executives 2. Ethical Corporate Management Best Practice Principles)
-
（I）To comply with laws and regulations; Audit Committee is set to replace supervisor’s duties, part of the words are revised to reflect the status of law. -
（II）Attached Articles Revision Chart. (Please refer to the Chinese Version)-
i. Codes of Ethical Conduct for the Board, Directors and Executives
（see attachment 3） -
ii. Ethical Corporate Management Best Practice Principles
（see attachment 4）
-
-
(6) Report on revision of Corporate Social Responsibility Policy
（see attachment 5）
B. Acknowledgement Items
Case 1
- (1) Subject
：Accept 2020 Business Report and Financial Statements
Description ：
-
（I）2020 Financial Statement of Company has been audited, and the audit report has been issued by Ming-Fang Hsu and Chin-Sun Wang, accountants at CPA firm of KPMG. -
（II）The 2020 Financial Statements and Business Report are reviewed by Supervisors and issued the report. -
（III）Attachments: -
i. Business Report
（see attachment 1）
ii. Auditors’ Report （ see attachment 6&7 ）
iii. Financial Statements （ see attachment 6&7 ）
iv. Supervisors’ Audit Report （ see attachment 2 ）
（ IV ） Please approve
Resolution ： Voting Results are shown below ：
Shares represented at the time of voting ： 106,119,079 （ including 35,821,268 shares
casted electronically ）
% of the total represented Voting Results* share present Votes in favor: 101,449,596 votes 95.59% （ including electronic votes 31,152,963 ）
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Votes against: 32,526 votes 0.03% （ including electronic votes 32,526 ） Votes invalid: 0 vote 0.00% （ electronic votes 0 ） Votes abstained : 4,636,957 votes 4.36% （ including electronic votes 4,635,779 ）
The resolution was passed by initial vote.
Case 2
-
(2) Subject
：Approve the earnings distribution of 2020 -
Description
： -
（I）To draft the distribution of earnings according to Articles of Company.（see attachment 8） -
（II）This distribution of earnings are reviewed by Supervisors and issued into report.（see attachment 2） -
（III）Please approve
Resolution ： Voting Results are shown below ：
Shares represented at the time of voting ： 106,119,079 （ including 35,821,268 shares casted electronically ）
% of the total represented Voting Results* share present Votes in favor: 101,554,750 votes 95.69% （ including electronic votes 31,258,117 ） Votes against: 33,540 votes 0.03% （ including electronic votes 33,540 ） Votes invalid: 0 vote 0.00% （ electronic votes 0 ） Votes abstained : 4,530,789 votes 4.26% （ including electronic votes 4,529,611 ）
The resolution was passed by initial vote.
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C. Discussion and Election Items
Case 1
-
（1）Subject: Approve the Revision of Articles of Association： -
（I）In response to the needs of company operations, Audit Committee is set to replace supervisor’s duties, part of the words are revised to reflect the status of law, revised company’s Articles of Association. -
（II）Attached Articles Revision Chart. (Please refer to the Chinese Version)（see attachment 9） -
（III）The original AGM was scheduled on June 7[th] , 2021. Due to “Measures for public companies to postpone shareholders' meetings for pandemic prevention” announced by FSC, the Company has postponed the AGM to July 21[st] , 2021, as well as the revision of Articles of Association this time. -
（IV）Please jointly decide the above-mentioned item.
Resolution ： Voting Results are shown below ：
Shares represented at the time of voting ： 106,119,079 （ including 35,821,268 shares casted electronically ）
% of the total represented Voting Results* share present Votes in favor: 101,467,542 votes 95.61% （ including electronic votes 31,170,909 ） Votes against: 32,530 votes 0.03% （ including electronic votes 32,530 ） Votes invalid: 0 vote 0.00% （ electronic votes 0 ） Votes abstained : 4,619,007 votes 4.35% （ including electronic votes 4,617,829 ）
The resolution was passed by initial vote.
Case 2
(2) Subject ： Report the Revision of Company’s Internal Regulation (1.Rules of Procedure for Annual General Meeting 2. Charter of Electing the Board and Directors 3. Guidelines for Handling Acquisition and Disposal of Assets 4. Guidelines for Lending of Capital 5. Guidelines for Endorsements and Guarantees)
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-
（I）To comply with laws and regulations; Audit Committee is set to replace supervisor’s duties, part of the words are revised to reflect the status of law, also revised company’s internal regulations. -
（II）Attached Articles Revision Chart. (Please refer to the Chinese Version) -
i. Rules of Procedure for Annual General Meeting
（see attachment 10） -
ii. Charter of Electing the Board and Directors
（see attachment 11） -
iii. Guidelines for Handling Acquisition and Disposal of Assets
（see attachment 12）iv. Guidelines for Lending of Capital（see attachment 13） -
v. Guidelines for Endorsements and Guarantees
（see attachment 14） -
（III）The original AGM was scheduled on June 7[th] , 2021. Due to “Measures for public companies to postpone shareholders' meetings for pandemic prevention” announced by FSC, the Company has postponed the AGM to July 21[st] , 2021, as well as the aforementioned internal regulations revision date. -
（IV）Please jointly decide the above-mentioned item.
Resolution ： Voting Results are shown below ：
Shares represented at the time of voting ： 106,119,079 （ including 35,821,268 shares casted electronically ）
% of the total represented Voting Results* share present Votes in favor: 101,303,527 votes 95.46% （ including electronic votes 31,006,894 ） Votes against: 192,612 votes 0.18% （ including electronic votes 192,612 ） Votes invalid: 0 vote 0.00% （ electronic votes 0 ） Votes abstained : 4,622,940 votes 4.35% （ including electronic vote 4,621,762 ）
The resolution was passed by initial vote.
Case 3
-
(3) Subject
：Revocation on "Rules Governing the Scope of Powers of Supervisors" Regulation -
（I）To comply with laws and regulations; Audit Committee is set to replace supervisor’s duties,
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revoked "Rules Governing the Scope of Powers of Supervisors" Regulation.
-
（II）Attached Rules Governing the Scope of Powers of Supervisors. (Please refer to the Chinese Version)（see attachment 15） -
（III）Please jointly decide the above-mentioned item.
Resolution ： Voting Results are shown below ：
Shares represented at the time of voting ： 106,119,079 （ including 35,821,268 shares casted electronically ）
% of the total represented Voting Results* share present Votes in favor: 101,273,874 votes 95.43% （ including electronic votes 30,977,241 ） Votes against: 213,882 votes 0.20% （ including electronic votes 213,882 ） Votes invalid: 0 vote 0.00% （ electronic votes 0 ） Votes abstained : 4,631,323 votes 4.36% （ including electronic vote 4,630,145 ）
The resolution was passed by initial vote.
Case 4
(4) Subject ： The 15th term Board of Directors Election
Description ：
-
（I）The company’s 14[th ] term of directors and supervisors will finish their term on June 7[th] , 2021, according to Art.13 of Articles of Association, the company will elect the 15[th] term of 9 directors (including 3 independent directors). -
（II）New elected directors would take office right after the election; three-year term from June 7[th] , 2021to June 6[th] , 2024. -
（III）According to Company Art.13 in Articles of Association, the election method of directors (including independent directors) will be based on their nomination. Shareholders shall pick candidates from the Director Nomination List. -
（IV）The Board meeting on March 10[th] , 2021 follows “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies” and Art.192-1 of
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the Company Act. The Company has reviewed and approved the Director Nomination List (including independent directors).
（ V ） Attached Directors (including independent directors) Candidate List （ see attachment 16 ）
（ VI ） The Company originally scheduled AGM on June 7[th] , 2021. Due to “Measures for public companies to postpone shareholders' meetings for pandemic prevention” announced by FSC, the Company postponed the AGM to July 21[st] , 2021. The term of office for the 15[th] term Board of Directors has amended from July 21[st] , 2021 to July 20[th] , 2024.
（ VII ） Please jointly elect the above-mentioned item.
Election Results : Board of Directors (including independent directors) Elected List
| Position | Account (Name) | Voting Rights |
|---|---|---|
| Director | Jing-Rong Tang | 103,797,069 |
| Director | Lin Tan Investment Co., Ltd.: Chyang Lo | 89,749,845 |
| Director | Lin Tan Investment Co., Ltd.: Chung-Yi Yang |
89,211,188 |
| Director | Shih-Yun Sheng | 88,726,677 |
| Director | Shao-Kuo Huang | 88,246,492 |
| Director | Tang-Ming Wu | 87,983,358 |
| Independent Director |
Ken-Yi Cheng | 87,236,604 |
| Independent Director |
Nai-Hua Wu | 86,995,870 |
| Independent Director |
Chu-Yang Chien | 86,800,857 |
Case 5
- (5) Subject
：Release on Prohibition on Directors from non-competition Restrictions
Description ：
（I）According to Company Act Art.209, “A director who does anything for himself or on behalf
of another person that is within the scope of the company's business, shall explain to the
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meeting of shareholders the essential contents of such an act and secure its approval”.
-
（II）To use the help of directors profession and related experiences to expand company’s business, and without prejudice to the interests of the company, according to the Company Act, request the shareholder meeting to approve the removal of Prohibition on Directors from non-competition Restrictions as soon as new directors took office. -
（III）Attached current term of Directors (including independent directors) candidates holding positions in other companies of important content for non-competition restrictions.（see attachment 17） -
（IV）Please jointly decide the above-mentioned item.
Resolution ： Voting Results are shown below ：
Shares represented at the time of voting ： 106,119,079 （ including 35,821,268 shares casted electronically ）
% of the total represented Voting Results* share present Votes in favor: 101,213,951 votes 95.37% （ including electronic votes 30,917,318 ） Votes against: 273,977 votes 0.25% （ including electronic votes 273,977 ） Votes invalid: 0 vote 0.00% （ electronic votes 0 ） Votes abstained : 4,631,151 votes 4.36% （ including electronic vote 4,629,973 ）
The resolution was passed by initial vote.
D. Special Motion:
E. Adjournment ( 09:32a.m)
Chairman: Jing-Rong Tang Recorder: Jui-Chiung Wang
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【 Attachment 1 】
Holy Stone Enterprise Co., Ltd.
Business Report
In 2020, global supply chain is facing severe impacts due to the pandemic. Holy Stone have its own manufacture plant in Taiwan, therefore the production of house brand product wouldn’t be affected. Quick respond to customer’s demand and actively adjust product mix helped create a higher efficiency of operating quality. Operating results for 2020 and 2021 annual operating plan will be shown in the content below:
1. 2020 Operating Results
-
(1) 2020 Operating Plan Implementation: Consolidated Revenue totaled NT$14.83 billion, gross profit NT$3.08 billion, gross margin reached 20.8%; Net income attribution to parent company totaled NT$1.31 billion, up 65.5% YoY; Basic earnings per share totaled NT$8.31. Except the financial performance, Holy Stone also participate in the government investment program, the “Action Plan for Accelerated Investment by Domestic Corporations”, reviewed and approved by the Ministry of Economic Affairs, estimated investment will be NT$2.5 billion on the expansion of new manufacture plant in Longtan, developing the layout in advance for mid and long term operations.
-
(2) Budget Execution: The Company not disclosed 2020 Financial Forecasting, therefore no budget execution plan have to be disclosed in this case.
-
(3) Analysis on Revenue/Expenditure and Profitability: The Financial Highlights can be reference to Financial Statement appendix.
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(4) Research and Development: By follow the industrial development and market demand, continue to work on MLCC material exploitation, to improve our powder production ability. We mainly focus on developing niche-based products for 5G communication, automobile and industrial use. Total expense for R&D in 2020 is NT$189 million.
2. 2021 Operating Plan Summary
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(1) Management Guidelines: Holy Stone stands for the management values of “Modesty, Innovation, and Shared Prosperity”. Hope to advocate “More-in-depth Manufacturing and Intensify in Distributions”.
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More in Depth Manufacturing: Holy Stone house-brand products will be following industrial trend, committed to develop new application field, continue to employ niche-based products to get more involved in new application market of 5G communication, automobile and industrial…etc.
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Intensify in Distributions: Holy Stone mainly distributes products in communication, automobiles, and consumer electronics. Benefited from stay-at-home economy, related demand showed significant improvement. In 2021, we will continue to pay close attention to market change to adjust product mix, provide our clients with best solutions, and strengthen the profitability of distributed product.
-
(2) Significant Production Policies: New Plant Construction is still in progress, expecting production will be happening in the year of 2021. Self-made products will be increased efficiently after the new plant start operating. To cope with the future 5G communication development, automotive and industrial demand, expand production for niche-based products will be important strategy for company’s mid and long-term developments.
3. Effects on External Competition, Legislation, and Overall Management Settings
- Market has been changed rapidly under the effect of Covid-19; “stay-at-home economy” has emerged due to the pandemic, Holy Stone cautiously set up internal regulations to prevent pandemic risk, making continuous improvements on production and sales, flexibly adjust products and services; despite the effect of pandemic, we are still the most trustful partner to our clients. Holy Stone strongly believes that; in order to become a sustainable developing corporation, besides pursuing the growth on profit, we must fulfill corporate social responsibility, through corporate social responsibility report, strengthen the communication with our staffs, shareholders and stakeholders, comply with regulations, and fulfill corporate governance; provide safe workplace, create and maintain the Health and Safety Management System, hoping to approach “Green Enterprise”.
Finally, Holy Stone truly appreciate all the colleagues for their dedication to the Company, as well as the long-term support and recognition from customers, suppliers, shareholders, and the general public.
Wish you the best of health!
Chairman: Jing-Rong Tang President: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
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【 Attachment 2 】
Holy Stone Enterprise Co., Ltd. Supervisors’ Report
The Board of Directors has prepared the Company's 2020 Business Report, Financial Statements, and proposal for allocation of profits. Both CPA Hsu, Ming Fang and Wang, Chin Sun with KPMG were retained to audit Holy Stone's Financial Statements and have issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the undersigned, the supervisors of Holy Stone Enterprise Company Limited, no discrepancy found. According to Article 219 of the Company Act, we hereby submit this report.
Holy Stone’s Annual Shareholders Meeting, 2021
Supervisor: Tang-Ming Wu
Chung-Yi Yang
March 10, 2021
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【 Attachment 3 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Codes of Ethical Conduct for the Board, Directors and Executives Revision Chart
(Please refer to the Chinese Version)
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【 Attachment 4 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Ethical Corporate Management Best Practice Principles Revision Chart
(Please refer to the Chinese Version)
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【 Attachment 5 】
Holy Stone CSR Policy
Corporate Social Responsibility is one of Holy Stone Group's operational strategies. To fulfill corporate social responsibility and realize sustainability is our ultimate goal. We combined RBA Code of Conduct into our operational strategies; together every person in Holy Stone will strive to achieve the goal of sustainable developed enterprise:
A. Follow the Laws and Respect Business Ethics:
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Honesty and Integrity: Promote integrity introspection, avoid violation of laws, engage in collusion, or seek illegal benefits.
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No Improper Advantage: Bribes are not to be given or accepted, nor use method which violate business ethics to gain profit or cause profit of interest.
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Information Transparency: Fully disclosure on corporate activities, corporate governance, organizational structure and financial condition with transparency and accuracy.
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Intellectual Property Rights: Comply intellectual property agreements with partners, protect intellectual properties, and no arbitrarily disclose to others.
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Fair Business Practices: Promote fair competition, treat customers with respect and equality, and comply contract agreements with customers. To gain benefits from monopoly and collusion is forbidden.
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Identity Protection: Stakeholders are encouraged to propose feedback and suggestion; their identities are not to be revealed or face retaliation, also other rights are protected.
B. Follow relevant law, engage in environmentally-friendly practices and create a green corporation:
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Green Product: Develop eco-friendly products to minimize impacts on the environment.
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Green Production: Continue to improve manufacturing process to reduce waste emissions. No conflict minerals can be used in production.
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Green Education: Promote environmental education to improve the quality of living.
C. All operation units regardless of geographic area must be in compliance with key international human rights standards and applicable labor-related laws:
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No Forced Labor: Prohibited to charge fees, deposit, detain identifications from workers. Involuntary or exploitative prison labor, debt bondage or indentured labor, slavery or trafficking of persons shall not be used.
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Prohibition of child labor: Child labor is forbidden. Child labor review mechanism is established, as well as the protection method when misuse.
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Wages and Working Hours: All working hours, wages, vacation and benefits comply with the regulations.
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Humane Management: We respect our workers, thus no inhumane treatment are used. Company also provides career planning from both the enterprise and individual.
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Non-Discrimination: Company shall not engage in discrimination based on age, gender, religion, race, political affiliation...etc. Every worker or applicant shall not face discrimination or harassment.
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Freedom of Association: Respect employees' rights to join association and do negotiations freely.
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D. Through occupational risk control, we provide our employees safety training and protective equipments, evaluate the risk of harm establishment at workplace, also maintain Health & Safety Management System; provide our employees a safe work environment.
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E. Caring for the minorities through encouraging employees to participate in community services.
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F. Fulfill corporate governance, actively create the value of the company, and increase stockholders equity; aiming continuous improvement and sustainable development!
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【 Attachment 6 】
Independent Auditors' Report
To the Board of Directors of Holy Stone Enterprise Co., Ltd.:
Opinion
We have audited the financial statements of Holy Stone Enterprise Co., Ltd.(“the Company”), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, based on our audits and the report of another auditor (please refer to Other Matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audit of the financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants Ruling No. 1090360805 issued by the Financial Supervisory Commission, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the report of another auditor, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Other Matter
We did not audit the financial statements of a subsidiary, which represented investment in another entity accounted for using the equity method of the Company. Those statements were audited by another auditor, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the subsidiary , is based solely on the report of another auditor. The investment in the sudsidiary accounted for using the equity method constituting 2.52% and 2.77% of total assets at December 31, 2020 and 2019, respectively, and the related share of profit (loss) of subsidiaries accounted for using the equity method constituting 1.16% and 0.41% of total profit before income tax for the years then ended, respectively.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. Revenue Recognition
Please refer to Note 4(m)“Revenue recognition”for accounting policy and Note 6(s) for the disclosure of revenue from contracts with customers.
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Description of key audit matter:
The Company engages primarily in the manufacturing and sales of MLCC, integrated circuits, modules, and other electronic components. The Operating Revenue is the main indicator for the investor to evaluate the financial and business performance of the Company. Therefore, it has been identified as a key audit matter.
How the matter was addressed in our audit:
Regarding the key audit matter mentioned above, our key audit procedures include understanding the design and implementation of internal control over revenue recognition and verifying the compliance of accounting policy; analyzing the changes in sales revenue from top ten clients and comparing them with those of the same period in the previous year to confirm whether or not there are significant exceptions or irregular transactions exist; examining the vouchers to determine the appropriate cut offs for revenue recognition within selected periods before and after the balance sheet date to evaluate whether the revenue was recorded in the appropriate period.
2. Impairment evaluation of accounts receivable
Please refer to Note 4(f)(i)(1) “Financial assets measured at amortized cost ” ; Note 5(a) Significant accounting assumptions and judgments, and major sources of estimation uncertainty, and Note 6(d) Notes and accounts receivable.
Description of key audit matter:
The Company measured its accounts receivable by the recoverable amounts. Impairment evaluation of accounts receivable is one of the key judgmental areas for our audit, particularly in respect of the great influence of given the challenging industry climate. Due to the provision of bad debt allowance that is subject to the management’s judgement, it is uncertain to have enough of information of recoverability before the issuance of the financial statements.
How the matter was addressed in our audit:
Our principal audit procedures included understanding the design and implementation of internal control ; assessing the rationality of the provision policy and verifying the compliance of provision policy for accounts receivable allowance; examining the aging analysis table and checking the amount of receivables received after the balance date, as well as discussing with the management to assess the whether or not the provision is reasonable; evaluating the adequacy of the Company’s disclosure for bad debt allowance.
3. Inventory valuation
Please refer to Note 4(g) “Inventories” ; Note 5(b) Significant accounting assumptions and judgments, and major sources of estimation uncertainty, and Note6 (f) Inventories.
Description of key audit matter:
Inventories are measured at the lower of cost and net realizable value in the financial statements. However, with the rapid development of the consumer market and the volatility of sales, that may result in the cost of inventory may exceed its net realizable value. Therefore, it has been identified as a key audit matter.
How the matter was addressed in our audit:
Regarding the key audit matter mentioned above, our audit procedures included evaluating the reasonableness of the Company’s inventory valuation policy and the management’s assumption used when measuring allowance for inventory valuation and obsolescence losses; performing a retrospective review of the Company’s historical ’ accuracy of judgments with reference to inventory valuation and comparing them with the current year s
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calculation to evaluate the appropriateness of estimation and assumption used for inventory valuation; assessing the adequacy of the Company’s disclosure for inventories.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
’ Those charged with governance (including the supervisors) are responsible for overseeing the Company s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
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and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’report are Hsu, Ming-Fang and Wang, Chin-Sun.
KPMG
Taipei, Taiwan (Republic of China) March 10, 2021
Notes to Readers
The accompanying parent company only financial statements are intended only to present the statement of financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.
The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and financial statements, the Chinese version shall prevail.
~ 18 ~
(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)
HOLY STONE ENTERPRISE CO., LTD.
Balance Sheets
December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)
| Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1150 Notes and accounts receivables, net (note 6(d)(r)) 1180 Accounts receivable-related parties, net (note 6(d)(s) and 7) 1200 Other receivables, net (note 6(e)) 130X Inventories (note 6(f)) 1410 Prepayments and other current assets Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1550 Investments accounted for using the equity method (note 6(g)) 1600 Property, plant and equipment (note 6(i) and 7) 1755 Right-of-use assets (note 6(j)) 1840 Deferred tax assets (note 6(p)) 1915 Prepayments for business facilities (note 7) 1990 Other non-current assets, others (note 8) Total non-current assets |
December 31, 2020 Amount % $ 3,412,615 25 199,779 1 2,120,533 16 495,098 4 92,758 1 1,990,735 15 25,284 - |
December 31, 2019 Amount % 3,461,176 28 137,242 1 1,805,869 15 436,313 4 134,912 1 2,241,596 18 10,847 - |
|---|---|---|
| 8,336,802 62 |
8,227,955 67 |
|
| 9,905 - - - 1,928,011 14 3,160,713 24 4,668 - 50,126 - 35,987 - 18,532 - |
9,990 - 7,854 - 1,074,307 9 2,695,848 22 2,519 - 58,093 - 261,742 2 11,502 - |
|
| 5,207,942 38 |
4,121,855 33 |
$ 13,544,744 100 12,349,810 100
Total assets
| Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(k)) 2130 Current contract liabilities (note 6(s)) 2170 Accounts payable 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 6(l)) 2230 Current tax liabilities 2280 Current lease liabilities (note 6(n)) Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (note 6(m)) 2570 Deferred tax liabilities (note 6(p)) 2580 Non-current lease liabilities (note 6(n)) 2640 Net defined benefit liability, non-current (note 6(o)) 2650 Credit balance of investments accounted for using the equity method (note 6(g)) 2670 Other non-current liabilities, others Total non-current liabilities Total liabilities Equity (note 6(o)(q)): 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Total retained earnings Other equity: 3410 Exchange differences on translation of foreign financial statements 3420 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total other equity Total equity Total liabilities and equity |
December 31, 2020 | December 31, 2020 | December 31, 2020 |
|---|---|---|---|
| Amount | % | Amount | |
3,770,551 27 2,914,585 24 |
|||
423,932 3 50,000 - 68,211 1 64,398 1 2,318 - 599 - 71,841 1 66,242 1 - - 256,937 2 6 - 6 - |
|||
| 566,308 5 438,182 4 |
|||
4,336,859 32 3,352,767 28 |
|||
1,579,908 12 1,579,908 13 |
|||
3,109,960 23 3,402,323 28 |
|||
1,638,205 12 1,638,205 12 128,821 1 132,916 1 2,873,375 21 2,372,512 19 |
|||
4,640,401 34 4,143,633 32 |
|||
(51,074) - (47,294) - (71,310) (1) (81,527) (1) |
|||
(122,384) (1) (128,821) (1) |
|||
9,207,885 68 8,997,043 72 |
|||
| $ 13,544,744 100 12,349,810 100 |
The accompanying notes are an integral part of the financial statements. President: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
Chairman: Jing-Rong Tang
~ 19 ~
(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
HOLY STONE ENTERPRISE CO., LTD.
Statements of Comprehensive Income
For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)
| 4000 Operating revenue (note 6(s) and 7) 5000 Operating costs (note 6(f)(o), 7 and 12) Gross profit 5910 Unrealized profit (loss) from sales Net gross profit Operating expenses (note 6(o)(t), 7 and 12): 6100 Selling and administrative expenses 6300 Research and development expenses 6450 Expected credit loss (gain) (note 6(d)) Total operating expenses Net operating income Non-operating income and expenses (note 7): 7020 Other gains and losses, net 7050 Finance costs 7070 Share of profit (loss) of subsidiaries accounted for using the equity method 7100 Interest income Total non-operating income and expenses 7900 Profit before tax 7950 Less: Income tax expenses(note 6(p)) Net profit 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss: 8311 Losses on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Total components of other comprehensive income (loss) that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Total components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income, net of tax 8500 Total comprehensive income Earnings per share (note 6(r)) 9750 Basic earnings per share (NT dollars) 9850 Diluted earnings per share (NT dollars) |
2020 | 2020 | % 100 79 |
% 100 79 |
2019 | % 100 78 22 - 22 6 2 - 8 14 - - (6) - (6) 8 2 6 - - - - - - - - - 6 5.02 4.96 |
|---|---|---|---|---|---|---|
| Amount $ 12,389,397 9,740,094 |
Amount 11,663,523 9,092,623 |
|||||
2,649,303 (20,655) |
21 - |
2,570,900 (173) |
||||
2,628,648 |
21 | 2,570,727 |
||||
| 734,439 188,907 - |
6 2 - |
658,162 194,355 (6,077) |
||||
| 923,346 | 8 | 846,440 |
||||
1,705,302 |
13 | 1,724,287 |
||||
16,811 (13,601) (78,445) 12,832 |
- - (1) - |
37,442 (12,923) (709,663) 16,428 |
||||
(62,403) |
(1) | (668,716) |
||||
1,642,899 330,554 |
12 3 |
1,055,571 262,771 |
||||
1,312,345 |
9 | 792,800 |
||||
(7,746) 8,646 (145) 1,571 |
- - - - |
(4,542) 4,074 - 1,946 |
||||
2,326 |
- | 1,478 |
||||
(3,780) - |
- - |
(1,925) - |
||||
| (3,780) | - | (1,925) | ||||
(1,454) |
- | (447) |
||||
$ 1,310,891 |
9 | 792,353 |
||||
$ |
8.31 | |||||
| $ | 8.20 |
See accompanying notes to parent company only financial statements. Chairman: Jing-Rong Tang President: Jing-Rong Tang Accountant Manager: Shu-Ying Chang
~ 20 ~
(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
HOLY STONE ENTERPRISE CO., LTD.
Statements of Changes in Equity
For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)
| Retained earnings | Other | equity | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Unrealized gains | |||||||||||
| (losses) on | financial | ||||||||||
| Exchange | assets measured at | ||||||||||
| differences on | fair value | through | |||||||||
| translation of | other | ||||||||||
| Ordinary | Unappropriated | foreign financial | comprehensive | ||||||||
| shares | Capital surplus | Legal reserve | Special reserve | retained earnings | statements | income | Total equity | ||||
| Balance at January 1, 2019 | $ | 1,579,908 | 3,403,321 | 1,360,044 | - | 3,438,564 | (45,369) | (87,547) | 9,648,921 | ||
| Net profit | - | - | - | - | 792,800 | - | - | 792,800 | |||
| Other comprehensive income | - | - | - | - | (4,542) | (1,925) | 6,020 | (447) | |||
| Total comprehensive income | - | - | - | - | 788,258 | (1,925) | 6,020 | 792,353 | |||
| Appropriation and distribution of retained earnings: | |||||||||||
| Legal reserve | - | - | 278,161 | - |
(278,161) | - | - | - | |||
| Special reserve | - | - | - | 132,916 | (132,916) | - | - | - | |||
| Cash dividends of ordinary shares | - | - | - | - | (1,421,917) | - | - | (1,421,917) | |||
| Changes in ownership interests in subsidiaries | - | (998) | - | - | (21,316) | - | - | (22,314) | |||
| Balance at December 31, 2019 | 1,579,908 | 3,402,323 | 1,638,205 | 132,916 | 2,372,512 | (47,294) | (81,527) | 8,997,043 | |||
| Net profit | - | - | - | - | 1,312,345 | - | - | 1,312,345 | |||
| Other comprehensive income | - | - | - | - | (7,891) | (3,780) | 10,217 | (1,454) | |||
| Total comprehensive income | - | - | - | - | 1,304,454 | (3,780) | 10,217 | 1,310,891 | |||
| Appropriation and distribution of retained earnings: | |||||||||||
| Cash dividends of ordinary shares | - | - | - | - | (789,954) | - | - | (789,954) | |||
| Reversal of special reserve | - | - | - | (4,095) | 4,095 | - | - | - | |||
| Other changes in capital surplus: | |||||||||||
| Cash dividends from capital surplus | - | (315,982) | - | - | - | - | - | (315,982) | |||
| Difference between consideration and carrying amount of subsidiaries | - | - | - | - | (17,729) | - | - | (17,729) | |||
| acquired or disposed | |||||||||||
| Changes in ownership interests in subsidiaries | - | 23,619 | - | - | (3) | - | - | 23,616 | |||
| Balance at December 31, 2020 | $ | 1,579,908 | 3,109,960 | 1,638,205 | 128,821 | 2,873,375 | (51,074) | (71,310) | 9,207,885 |
See accompanying notes to parent company only financial statements. President: Jing-Rong Tang
Chairman: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
~ 21 ~
(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) HOLY STONE ENTERPRISE CO., LTD.
Statements of Cash Flows
For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)
| Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Expected credit gain Net gain on financial assets at fair value through profit or loss Interest expense Interest Income Dividend Income Share of loss of subsidiaries, accounted for using the equity method Gain from disposal of property, plant and equipment Gain on disposal of investments Impairment loss on non-financial assets Unrealized profit from sales Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Current financial assets at fair value through profit or loss Notes and accounts receivable Accounts receivable-related parties Other receivables Inventories Prepayments and other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Accounts payable Accounts payable to related parties Other payables Net defined benefit liability Total changes in operating liabilities Net changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using the equity method Proceeds from disposal of investments accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in other non-current assets, others (Increase) decrease in prepayments for business facilities Dividends received Net cash flows used in investing activities Cash flows used in financing activities: Increase in short-term borrowing Proceeds from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Net cash flows used in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
2020 $ 1,642,899 |
2019 1,055,571 423,298 (6,077) (13,538) 12,923 (16,428) (155) 709,663 (2,252) - 1,377 173 1,108,984 57,691 293,829 323,336 (77,993) 196,248 10,492 803,603 12,420 (106,380) (27,926) (374,192) (1,662) (497,740) 305,863 1,414,847 2,470,418 16,484 155 (12,940) (793,755) 1,680,362 - - - - (729,527) 2,530 900 56,872 - (669,225) 288,732 50,000 - (3,217) (1,421,917) (1,086,402) (75,265) 3,536,441 3,461,176 |
|---|---|---|
462,578 - (22,264) 13,601 (12,832) (499) 78,445 (78) (84) - 20,655 |
||
539,522 |
||
(40,188) (314,664) (58,785) 42,223 250,861 (14,437) |
||
(134,990) |
||
(23,550) 218,329 2,918 16,013 (2,147) |
||
211,563 |
||
76,573 |
||
616,095 |
||
2,258,994 12,763 499 (13,510) (280,284) |
||
1,978,462 |
||
(20,000) 20,000 (1,191,485) 274 (670,468) 136 (7,030) (28,035) 17 |
||
| (1,896,591) | ||
604,799 723,932 (350,000) (3,227) (1,105,936) |
||
(130,432) |
||
(48,561) 3,461,176 |
||
$ 3,412,615 |
See accompanying notes to parent company only financial statements. President: Jing-Rong Tang
Chairman: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
~ 22 ~
【 Attachment 7 】
Independent Auditors' Report
To the Board of Directors of Holy Stone Enterprise Co., Ltd.:
Opinion
We have audited based on our audit and the reports of other auditors the consolidated financial statements of Holy Stone Enterprise Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, based on our audits and the report of another auditor (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee ( “ IFRIC ” ) or the former Standing Interpretations Committee ( “ SIC ” ) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
Basis for Opinion
We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants Ruling No. 1090360805 issued by the Financial Supervisory Commission, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor ’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the report of another auditor, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Other Matter
We did not audit the financial statements of a subsidiary of the Group. Those statements were audited by another auditor, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the subsidiary, is based solely on the report of another auditor. The financial statements of the subsidiary reflect total assets constituting 3.07% and 3.65% of consolidated total assets at December 31, 2020 and 2019, respectively, and total operating revenue constituting 7.37% and 5.96% of consolidated total operating revenue for the years then ended, respectively.
Holy Stone Enterprise Co., Ltd. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion with other matters paragraph and an unmodified opinion with emphasis paragraph and other matters paragraph, respectively.
~ 23 ~
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
- Revenue Recognition
Please refer to Note 4(n) “Revenue recognition”for accounting policy and Note 6(t) for the disclosure of revenue from contracts with customers.
Description of key audit matter:
The Group engages primarily in the manufacturing and sales of MLCC, integrated circuits, modules, and other electronic components. The Operating Revenue is the main indicator for the investor to evaluate the financial and business performance of the Group. Therefore, it has been identified as a key audit matter.
How the matter was addressed in our audit:
Regarding to the key audit matter mentioned above, our key audit procedures include understanding the design and implementation of internal control over revenue recognition and verifying the compliance of accounting policy; analyzing the changes in sales revenue from top ten clients and comparing them with those of the same period in the previous year to confirm whether or not there are significant exceptions or irregular transactions exist; examining the vouchers to determine the appropriate cut offs for revenue recognition within selected periods before and after the balance sheet date to evaluate whether the revenue was recorded in the appropriate period.
- Impairment evaluation of accounts receivable
Please refer to Note 4(g)(i)(1) “Financial assets measured at amortized cost”; Note 5(a) Significant accounting assumptions and judgments, and major sources of estimation uncertainty, and Note 6(d) Notes and accounts receivables.
Description of key audit matter:
The Group measured its accounts receivable by the recoverable amounts. Impairment evaluation of accounts receivable is one of the key judgmental areas for our audit, particularly in respect of the great influence of given the challenging industry climate. Due to the provision of bad debt allowance that is subject to the management’s judgement, it is uncertain to have enough of information of recoverability before the issuance of the financial statements.
How the matter was addressed in our audit:
Our principal audit procedures included understanding the design and implementation of internal control; assessing the rationality of the provision policy and verifying the compliance of provision policy for accounts receivable allowance; examining the aging analysis table and checking the amount of receivables received after the balance date, as well as discussing with the management to assess the whether or not the provision is reasonable; evaluating the adequacy of the Group’s disclosure for bad debt allowance.
3. Inventory valuation
Please refer to Note 4(h) “Inventories”; Note 5(b) Significant accounting assumptions and judgments, and major sources of estimation uncertainty, and Note 6(f) Inventories.
Description of key audit matter:
Inventories are measured at the lower of cost and net realizable value in the financial statements. However, with the rapid development of the consumer market and the volatility of sales, that may result in the cost of
~ 24 ~
inventory may exceed its net realizable value. Therefore, it has been identified as a key audit matter.
How the matter was addressed in our audit:
Regarding the key audit matter mentioned above, our audit procedures included evaluating the reasonableness of the Group’s inventory valuation policy and the management’s assumption used when measuring allowance for inventory valuation and obsolescence losses; performing a retrospective review of the Group’s historical accuracy of judgments with reference to inventory valuation and comparing them with the current year’s calculation to evaluate the appropriateness of estimation and assumption used for inventory valuation; assessing the adequacy of the Group’s disclosure for inventories.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
’ In preparing the consolidated financial statements, management is responsible for assessing the Group s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
’ Those charged with governance (including the supervisors) are responsible for overseeing the Group s financial reporting process.
Auditors ’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
~ 25 ~
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
-
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors ’ report are Hsu, Ming-Fang and Wang, Chin-Sun.
KPMG
Taipei, Taiwan (Republic of China) March 10, 2021
Notes to Readers
The accompanying parent company only financial statements are intended only to present the statement of financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.
The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and financial statements, the Chinese version shall prevail.
~ 26 ~
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
HOLY STONE ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)
| Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1150 Notes and accounts receivable, net (note 6(d)(t) and 7) 1200 Other receivables, net (note 6(e)) 1220 Current tax assets 130X Inventories (note 6(f)) 1410 Prepayments and other current assets Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1550 Investments accounted for using the equity method (note 6(g)) 1600 Property, plant and equipment (note 6(i) and 8) 1755 Right-of-use assets (note 6(j)) 1780 Intangible assets (note 6(k)) 1840 Deferred tax assets (note 6(q)) 1915 Prepayments for business facilities 1990 Other non-current assets, others (note 8) Total non-current assets Total assets |
December 31, 2020 Amount % $ 4,459,782 30 308,995 2 3,109,196 21 122,710 1 1,404 - 2,280,969 16 97,891 1 |
December 31, 2019 Amount % 4,576,086 32 151,879 1 2,703,312 19 157,908 1 6,865 - 2,450,602 18 90,065 1 10,136,717 72 40,590 - 77,004 1 319,979 2 3,174,582 23 42,184 - 16,275 - 59,009 - 253,790 2 24,762 - 4,008,175 28 14,144,892 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(l) and 8) 2130 Current contract liabilities (note 6(t)) 2170 Accounts payable 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 6(m)) 2230 Current tax liabilities 2280 Current lease liabilities (note 6(o)) 2322 Long-term borrowings, current portion (note 6(n) and 8) Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (note 6(n) and 8) 2570 Deferred tax liabilities (note 6(q)) 2580 Non-current lease liabilities (note 6(o)) 2640 Net defined benefit liability, non-current (note 6(p)) 2670 Other non-current liabilities, others Total non-current liabilities Total liabilities Equity attributable to owners of parent (note 6(r)): 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Total retained earnings Other equity: 3410 Exchange differences on translation of foreign financial statements 3420 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total other equity Total equity attributable to owners of parent 36XX Non-controlling interests Total equity Total liabilities and equity |
December 31, 2020 | December 31, 2020 | December 31, 2020 |
|---|---|---|---|---|---|
| Amount | % | Amount | |||
10,380,947 71 |
|||||
| 28,088 - 84,940 1 376,166 3 3,611,113 25 41,609 - 13,744 - 50,933 - 12,728 - 29,652 - |
4,474,563 31 4,266,900 29 |
||||
440,502 3 85,833 1 68,211 - 64,398 - 28,721 - 27,186 - 71,841 - 66,242 - 2,276 - 2,329 - |
|||||
611,551 3 245,988 1 |
|||||
5,086,114 34 4,512,888 30 |
|||||
1,579,908 11 1,579,908 11 |
|||||
4,248,973 29 |
|||||
3,109,960 21 3,402,323 24 |
|||||
1,638,205 11 1,638,205 12 128,821 1 132,916 1 2,873,375 20 2,372,512 17 |
|||||
4,640,401 32 4,143,633 30 |
|||||
(51,074) - (47,294) - (71,310) - (81,527) - |
|||||
(122,384) - (128,821) - |
|||||
9,207,885 64 8,997,043 65 |
|||||
335,921 2 634,961 5 |
|||||
9,543,806 66 9,632,004 70 |
|||||
| $ 14,629,920 100 |
$ 14,629,920 100 14,144,892 100 |
See accompanying notes to consolidated financial statements. President: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
Chairman: Jing-Rong Tang
~ 27 ~
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
HOLY STONE ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)
| 4000 Operating revenue (note 6(t) and 7) 5000 Operating costs (note 6(f)(o)(p) and 7) Gross profit Operating expenses: 6100 Selling and administrative expenses (note 6(k)(o)(p)(u)) 6300 Research and development expenses (note 6(k)(o)(p)(u)) 6450 Expected credit loss (gain) (note 6(d)) Total operating expenses Net operating income Non-operating income and expenses: 7020 Other gains and losses, net (note 6(k)(v)) 7050 Finance costs (note 6(o)) 7060 Share of profit (loss) of associates accounted for using the equity method 7100 Interest income Total non-operating income and expenses Profit before tax 7950 Less: Income tax expenses(note 6(q)) Net profit 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss: 8311 Losses on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of subsidiaries accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Total components of other comprehensive income (loss) that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statement 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Total components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income, net of tax 8500 Total comprehensive income Profit, attributable to: 8610 Owners of parent 8620 Non-controlling interests Net Profit Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests Total comprehensive income Earnings per share (NT dollars) (note 6(s)) 9750 Basic earnings per share 9850 Diluted earnings per share |
2020 | % 100 79 |
% 100 79 |
2019 | % 100 79 21 13 2 - 15 6 - - - - - 6 2 4 - - - - - - - - - 4 5 (1) 4 5 (1) 4 5.02 4.96 |
|---|---|---|---|---|---|
| Amount $ 14,830,428 11,748,577 |
Amount 14,601,179 11,550,634 |
||||
3,081,851 |
21 | 3,050,545 |
|||
1,263,694 309,703 (1,403) |
9 2 - |
1,825,972 363,790 (1,655) |
|||
1,571,994 |
11 | 2,188,107 |
|||
1,509,857 |
10 | 862,438 |
|||
59,015 (18,291) 24,187 16,823 |
- - - - |
60,790 (16,565) 20,539 20,868 |
|||
81,734 |
- | 85,632 |
|||
1,591,591 361,801 |
10 2 |
948,070 286,342 |
|||
1,229,790 |
8 | 661,728 |
|||
(7,746) 12,861 (145) 1,571 |
- - - - |
(4,542) 9,450 - 1,946 |
|||
6,541 |
- | 6,854 |
|||
(1,185) - |
- - |
(2,236) - |
|||
| (1,185) | - | (2,236) | |||
5,356 |
- | 4,618 |
|||
$ 1,235,146 |
8 | 666,346 |
|||
$ 1,312,345 (82,555) |
9 (1) |
792,800 (131,072) |
|||
$ 1,229,790 |
8 |
661,728 |
|||
$ 1,310,891 (75,745) |
9 (1) |
792,353 (126,007) |
|||
$ 1,235,146 |
8 |
666,346 |
|||
$ |
8.31 | ||||
| $ | 8.20 |
See accompanying notes to consolidated financial statements. President: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
Chairman: Jing-Rong Tang
~ 28 ~
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
HOLY STONE ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)
| Equityattributable to owners ofparent | Equityattributable to owners ofparent | Equityattributable to owners ofparent | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Retained earnings | Other equity | |||||||||||||
| Unrealized gains | ||||||||||||||
| (losses) on | ||||||||||||||
| financial assets | ||||||||||||||
| Exchange | measured at | fair | ||||||||||||
| differences on | value through | |||||||||||||
| translation of | other | Total equity | ||||||||||||
| Ordinary | Unappropriated | foreign financial | comprehensive | attributable to | Non-controlling | |||||||||
| shares | Capital surplus | Legal reserve | Special reserve | retained earnings | statements | income | owners ofparent | interests | Total equity | |||||
| Balance at January 1, 2019 | $ | 1,579,908 | 3,403,321 | 1,360,044 | - |
3,438,564 | (45,369) | (87,547) | 9,648,921 | 527,151 | 10,176,072 | |||
| Net profit | - | - | - | - | 792,800 | - |
- | 792,800 | (131,072) | 661,728 | ||||
| Other comprehensive income | - | - | - | - | (4,542) | (1,925) | 6,020 | (447) | 5,065 | 4,618 | ||||
| Total comprehensive income | - | - | - | - | 788,258 | (1,925) | 6,020 | 792,353 | (126,007) | 666,346 | ||||
| Appropriation and distribution of retained earnings: | ||||||||||||||
| Legal reserve | - | - | 278,161 | - |
(278,161) | - |
- | - | - | - | ||||
| Special reserve | - | - | - | 132,916 | (132,916) |
- |
- | - | - | - | ||||
| Cash dividends of ordinary shares | - | - | - | - | (1,421,917) | - |
- | (1,421,917) | - | (1,421,917) | ||||
| Changes in ownership interests in subsidiaries | - | (998) | - | - | (21,316) | - |
- | (22,314) | - | (22,314) | ||||
| Changes in non-controlling interests | - | - | - | - | - | - | - | - | 233,817 | 233,817 | ||||
| Balance at December 31, 2019 | 1,579,908 | 3,402,323 | 1,638,205 | 132,916 | 2,372,512 | (47,294) | (81,527) | 8,997,043 | 634,961 | 9,632,004 | ||||
| Net profit | - | - | - | - | 1,312,345 | - |
- | 1,312,345 | (82,555) | 1,229,790 | ||||
| Other comprehensive income | - | - | - | - | (7,891) | (3,780) | 10,217 | (1,454) | 6,810 | 5,356 | ||||
| Total comprehensive income | - | - | - | - | 1,304,454 | (3,780) | 10,217 | 1,310,891 | (75,745) | 1,235,146 | ||||
| Appropriation and distribution of retained earnings: | ||||||||||||||
| Cash dividends of ordinary shares | - | - | - | - | (789,954) | - |
- | (789,954) | - | (789,954) | ||||
| Reversal of special reserve | - | - | - | (4,095) | 4,095 |
- |
- | - | - | - | ||||
| Other changes in capital surplus: | ||||||||||||||
| Cash dividends from capital surplus | - | (315,982) | - | - | - | - | - | (315,982) | - | (315,982) | ||||
| Difference between consideration and carrying amount of subsidiaries | - | - | - | - | (17,729) | - |
- | (17,729) | - | (17,729) | ||||
| acquired or disposed | ||||||||||||||
| Changes in ownership interests in subsidiaries | - | 23,619 | - | - | (3) | - | - | 23,616 | (223,295) | (199,679) | ||||
| Balance at December 31, 2020 | $ | 1,579,908 | 3,109,960 | 1,638,205 | 128,821 | 2,873,375 | (51,074) | (71,310) | 9,207,885 | 335,921 | 9,543,806 |
See accompanying notes to consolidated financial statements. President: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
Chairman: Jing-Rong Tang
~ 29 ~
(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HOLY STONE ENTERPRISE CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)
| Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit gain Net gain on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates accounted for using the equity method Gain from disposal of property, plant and equipment Loss (gain) on disposal of investments Impairment loss on non-financial assets Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Current financial assets at fair value through profit or loss Notes and accounts receivable Other receivables Inventories Prepayments and other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Accounts payable Accounts payable to related parties Other payables Net defined benefit liability Total changes in operating liabilities Net changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from disposal of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets, others (Increase) decrease in prepayments for business facilities Dividends received Net cash flows used in investing activities Cash flows used in financing activities: Increase in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Decrease in other non-current liabilities, others Cash dividends paid Changes in non-controlling interests Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
2020 $ 1,591,591 |
2019 948,070 480,350 3,056 (1,655) (36,957) 16,565 (20,868) (619) (20,539) (2,332) 179 1,377 (2) 418,555 172,332 584,317 (75,314) 145,053 3,341 829,729 39,443 (122,520) 13,953 241,848 (1,662) 171,062 1,000,791 1,419,346 2,367,416 21,059 619 (16,494) (838,867) 1,533,733 45,523 - 26,655 - - (351) (777,546) 3,084 (1,270) (3,261) 53,969 20,542 (632,655) 428,948 50,000 (15,141) (20,368) (36) (1,421,917) 211,383 (767,131) 461 134,408 4,441,678 4,576,086 |
|---|---|---|
513,342 3,113 (1,403) (51,023) 18,291 (16,823) (2,014) (24,187) 29 (14,889) - (2) |
||
424,434 |
||
(107,439) (404,813) 35,089 169,633 (7,826) |
||
(315,356) |
||
(20,150) 278,901 (58) (752,103) (2,147) |
||
(495,557) |
||
(810,913) |
||
(386,479) |
||
1,205,112 16,932 2,014 (18,225) (304,611) |
||
901,222 |
||
4,551 (20,000) 48,006 (52,968) 274 - (675,964) 462 - (4,943) (12,728) 20,558 |
||
(692,752) |
||
664,662 723,932 (369,264) (18,629) (53) (1,105,936) (217,403) |
||
(322,691) |
||
(2,083) (116,304) 4,576,086 |
||
$ 4,459,782 |
See accompanying notes to consolidated financial statements. President: Jing-Rong Tang
Accountant Manager: Shu-Ying Chang
Chairman: Jing-Rong Tang
~ 30 ~
【 Attachment 8 】
Holy Stone Enterprise Co., Ltd.
Earnings Distribution Table
December 31, 2020
| Unit: NT$ | ||
|---|---|---|
| Item | Amount | Total Amount |
| Net Income of 2020 Add ：Losses on remeasurements of defined benefit plansShare of other comprehensive income of subsidiaries accounted for using equity method Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries 2020 Unappropriated retained earnings Less: Legal reserve (Note 2) Less: Special Reserve 2020 Unappropriated retained earnings Add ：Beginning Unappropriated retained earningsTotal Unappropriated retained earnings Less：Distribution Item Cash Dividends Ending Unappropriated retained earnings |
1,312,344,795（7,745,512）（144,575）（17,729,598）（3,515） |
1,293,158,774 1,586,652,276 |
| 1,286,721,595 0 （6,437,179） |
||
| 2,879,811,050 1,263,926,232 |
||
| 1,615,884,818 |
1. The outstanding shares are 157,990,779 shares which are based on February 28, 2021.
2. The Company's legal reserve has reached total paid-in capital; according to Art.237 of the Company Act and No.20 Regulation in Article of Association, the company can choose not to keep legal reserve in this case.
Chairman: Jing-Rong Tang President: Jing-Rong Tang Accountant Manager: Shu-Ying Chan
~ 23 ~
【 Attachment 9 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Article of Association Revision Chart
(Please refer to the Chinese Version)
~ 24 ~
【 Attachment 10 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Rules of Procedure for Annual General Meeting Revision Chart
(Please refer to the Chinese Version)
~ 25 ~
【 Attachment 11 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Charter of Electing the Board and Directors Revision Chart
(Please refer to the Chinese Version)
~ 26 ~
【 Attachment 12 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Guidelines for Handling Acquisition and Disposal of Assets Revision Chart
(Please refer to the Chinese Version)
~ 27 ~
【 Attachment 13 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Guidelines for Lending of Capital Revision Chart
(Please refer to the Chinese Version)
~ 28 ~
【 Attachment 14 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Guidelines for Endorsements and Guarantees Revision Chart
(Please refer to the Chinese Version)
~ 29 ~
【 Attachment 15 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Rules Governing the Scope of Powers of Supervisors
(Please refer to the Chinese Version)
~ 30 ~
【 Attachment 16 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Board of Director Nomination List (including independent directors)
as of 2021.04.09
| as of2021.04.09 | |||||||
|---|---|---|---|---|---|---|---|
| NO. | Candidate Title |
Name | Numbers of shares held |
Background | Main Experience | Current Position | Reasons for nominating independent directors for 3 consecutive terms |
| 1 | Director | Jing-Rong Tang |
3,680,348 | Bachelor, Electronic Engineering, Tatung University |
Manager, Panasonic Sales Taiwan Co., Ltd. |
1.Chairman and President, Holy Stone Enterprise Co., Ltd 2. Representative of institutional shareholder and President, eGalax_eMPIA Technology Inc 3. Chairman, Holy Stone Healthcare Co., Ltd |
Not applicable |
| 2 | Director | Lin Tan Investment Co., Ltd.: Chyang Lo |
7,206,735 | Master, Graduate Institute of Management Science, Tamkang University |
Project Leader Engineer, Chung-Shan Institute of Science and Technology |
Legal Representative Director, Holy Stone Enterprise Co., Ltd |
Not applicable |
| 3 | Director | Lin Tan Investment Co., Ltd.: Chung-Yi Yang |
7,206,735 | Bachelor, Business Administration, National Taichung Institute of Technology |
Chairman, Lin Tan Investment Co., Ltd. |
Supervisor, Holy Stone Enterprise Co., Ltd |
Not applicable |
~ 23 ~
| NO. | Candidate Title |
Name | Numbers of shares held |
Background | Main Experience | Current Position | Reasons for nominating independent directors for 3 consecutive terms |
|---|---|---|---|---|---|---|---|
| 4 | Director | Shih-Yun Sheng |
1,878,327 | 1. Bachelor, Department of Physics, Tamkang University 2. Doctoral in Management, Macau University of Science and Technology |
Chairman, Westech Electronics Inc. |
1. Executive Deputy General Manager & Director, Holy Stone Enterprise Co., Ltd 2.Representative of institutional shareholder & Chairman & President, Infortech (China) Co., Ltd. 3.Representative of institutional shareholder & Chairman, Holy Stone International Trading (Shanghai) |
Not applicable |
| 5 | Director | Shao-Kuo Huang |
1,063,952 | Bachelor, Business Management, Tatung University |
Chairman, Infortech Co., LTD. |
1.Director & Vice President, Holy Stone Enterprise Co., Ltd. 2.Representative of institutional shareholder , Infortech (China) Co., Ltd. |
Not applicable |
| 6 | Director | Tang-Ming Wu |
536,043 | Bachelor, Accounting, Fu Jen Catholic University |
Accountant, Deloitte Taiwan |
1.Director, Honesty CPA Firm 2.Supervisor, Holy stone Enterprise Co., Ltd. |
Not applicable |
| 7 | Independent Director |
Ken-Yi Cheng | 0 | Bachelor, Accounting Department, Feng Chia University |
1.Assistant Manager of Underwriting Department, Taiwan International Securities |
1.Director, Grand Fortune Securities Co., Ltd. 2.Independent Director, Holy stone Enterprise Co., Ltd 3.Legal Representative Director, Wintech Microelectronics Co.,Ltd. |
1.Own necessary experience for company’s operations: （1）Experience incompany operation for securities financial industry |
~ 24 ~
| NO. | Candidate Title |
Name | Numbers of shares held |
Background | Main Experience | Current Position | Reasons for nominating independent directors for 3 consecutive terms |
|---|---|---|---|---|---|---|---|
| Corporation 2.Vice President, Hyield Venture Capital Co. |
4.Director, Solytech Enterprise Co.,Ltd. 5.Director, Shieh Yih Machinery Industry Co.,Ltd. 6. Director, Leader Electronics Co. 7.Independent Director, Prolific Technology Inc. |
（2）Professionalexperience in securities, accounting, etc. Also familiar with securities-related laws and regulations （3）Served as a director,supervisor and independent director of many listed companies 2.While serving as independent director, he is able to uphold an independent and objective stance, provides profession and useful suggestions from many perspectives; enhance company's operating value and fulfill the responsibility of supervision. |
~ 25 ~
| NO. | Candidate Title |
Name | Numbers of shares held |
Background | Main Experience | Current Position | Reasons for nominating independent directors for 3 consecutive terms |
|---|---|---|---|---|---|---|---|
| 8 | Independent Director |
Nai-Hua Wu | 0 | 1. Bachelor, Chemical Engineering, National Cheng Kung University 2. Master of Management, ChengChi University |
1.Vice President, Upking International Co., Ltd. 2. Independent Director, Holy Stone Healthcare Co., Ltd. . |
1.Chairman and President, Instant-Dict Co., Ltd. 2.Independent Director, Holy stone Enterprise Co., Ltd 3.Independent Director, Apex Science & Engineering Corp. |
1.Own necessary experience for company’s operations: （1）Experience incompany operation for technology industry （2）Experienced inhaving the ability to do industry insight, innovate products and deploy sales channels （3）Served as anindependent director of many listed companies 2. While serving as independent director, he is able to uphold an independent and objective stance, provides profession and useful suggestions from many perspectives; enhance company's operating value and fulfill the |
~ 26 ~
| NO. | Candidate Title |
Name | Numbers of shares held |
Background | Main Experience | Current Position | Reasons for nominating independent directors for 3 consecutive terms |
|---|---|---|---|---|---|---|---|
| responsibility of supervision. |
|||||||
| 9 | Independent Director |
Chu-Yang Chien |
0 | Doctoral in Business Administration (Accounting), National Taiwan University |
1. Associate Professor and Head of the Accounting Department, Chung Yuan Christian University 2. Associate Professor of the Accounting Department, National Yunlin University of Science and Technology 3. Director, Holy Stone Enterprise Co., Ltd |
1. Remuneration Committee Member, Holy stone Enterprise Co., Ltd 2. Remuneration Committee Member, eGalax_eMPIA Technology Inc. |
None |
~ 27 ~
【 Attachment 17 】
Holy Stone Enterprise Co., Ltd. (“the Company”) Important content on the new directors and the competitive behavior of legal person they represent
| Position | Name | Position in other companies | Position in other companies |
|---|---|---|---|
| Company Name | Position | ||
| Director Candidate |
Jing-Rong Tang | eGalax_eMPIA Technology Inc. | Legal Representative Director |
| Independent Director Candidate |
Ken-Yi Cheng | WT Microelectronics Co., Ltd. | Legal Representative Director |
| Solytech Enterprise Co.,Ltd | Director | ||
| Shieh Yih Machinery Industry Co.,Ltd. | Director | ||
| Leader Electronics Co. | Director | ||
| Prolific Technology Inc. | Independent Director | ||
| Independent Director Candidate |
Nai-Hua Wu | Instant-Dict Co., Ltd. | Director |
| Apex Science & Engineering Corp. | Independent Director |
~ 23 ~