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SYNCMOLD Annual Report 2021

Aug 16, 2021

51868_rns_2021-08-16_0c7f834d-d74d-4d84-abe4-6384531666e6.pdf

Annual Report

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Stock Code ： 1582

==> picture [72 x 75] intentionally omitted <==

Syncmold Enterprise Corp.

2020Annual Report

Notice to readers

This English-version annual report 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.

Annual Report Website

Market Observation Post System ： http://mops.twse.com.tw

Company Website ： http://www.syncmold.com.tw

Printing Date ： June 1, 2021

I. Contact Information of Spokesperson and Deputy Spokesperson ： Spokesperson Deputy Spokesperson Name ： Daphne, Chang Name ： Vick, Liu Title ： Deputy General Manager Title ： Assistant Manager Contact Number ： (02)6621 － 5888 Contact Number ： (02)6621 － 5888 E-mail ： E-mail ： [email protected] [email protected] II. Contact Information of the Head Office, Branch Offices and Factories ： Item Address Telephone Head Office 9F., No. 168, Jiankang Rd., Zhonghe Dist., New Taipei City － (02)6621 5888 Branch Office n/a n/a Factory No. 6, Ln. 403, Min’an Rd., Xinzhuang Dist., New Taipei City (02)2202 － 9108 Factory 3F., No.348, Shanying Rd., Gueishan Dist., Taoyuan City (03)263-0001 III. Contact Information of the Share Transfer Agency ：

Name ： CTBC Bank Co., Ltd Share Transfer Agency

Add ： 5F., No. 83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City

Tel ： (02)6636-5566

Website ： http ： //www.chinatrust.com.tw

IV. Contact Information of the Certified Public Accountants for the Latest Financial

Report ：

CPAFirm:Deloitte&Touche

Auditors ： Tung-Feng Lee and Chih-Yuan Chen.

Add ： 20F, No. 100, Songren Rd., Xinyi Dist., Taipei City

－ Tel ： (02)2725 9988

Website ： http://www.deloitte.com.tw

  • V. Overseas Trade Places for Listed Negotiable Securities ： n/a.

  • VI. Company Website ： www.syncmold.com.tw

Syncmold Enterprise Corp

Table of Contents

Table of Contents
I.、LETTER TO SHAREHOLDERS 1
1.1 2020 OPERATINGRESULTS
1.2 2021 ANNUAL SUMMARY OF THE BUSINESS PLAN
II.、COMPANYPROFILE 5
2.1DATEOFINCORPORATION 5
2.2COMPANY HISTORY 5
III.、CORPORATE GOVERNANCE REPORT 8
3.1 ORGANIZATION 8
3.2 DIRECTORSANDMANAGEMENTTEAM 10
3.3 CORPORATEGOVERNANCE 24
3.4 AUDITFEES 66
3.5 INFORMATIONFORCHANGEOFCPA 66
3.6 THECHAIRMAN, PRESIDENT, ANDMANAGERSRESPONSIBLEFORFINANCEOR
ACCOUNTINGWHOHADHELDA POSITIONINTHECPA OFFICEORITSAFFILIATES67
3.7 CHANGESINTHESHARESHELDANDPLEDGEDBYDIRECTORS, SUPERVISORS,
MANAGERS, ANDMAJORSHAREHOLDERSHOLDINGOVER10% OFOUTSTANDING
SHARESINTHEMOSTRECENTYEARANDUPTOTHEPUBLICATIONOFTHEANNUAL
REPORT 67
3.8 TOP-10 SHAREHOLDERSBEINGTHERELATEDPARYTASDEFINEDINSTATEMENTOF
FINANCEACCOUNTINGSTANDARDS 68
3.9 THESHARESOFTHEINVESTEDCOMPANYHELDBYTHECOMPANY, THECOMPANY’S
DIRECTORS, MANAGERS, ANDCOMPANIESCONTROLLEDDIRECTLYORINDIRECTLY,
ANDTHEAGGREGATEDOVERALLSHAREHOLDINGRATIO 69
IV、CAPITAL OVERVIEW 71
4.1 CAPITALANDSHARES 71
4.2 CORPORATEBOND 76
4.3 PREFERREDSTOCK 76
4.4 ISSUANCEOFGLOBALDEPOSITAOYRECEIPTS 76
4.5 EMPLOYEESTOCKOPTION 77
4.6 NEWSHARESISSUEDFORMERGERORACQUISITIONS 77
4.7 FINANCINGPLANSANDIMPLEMENTATION 77
V、OPERATION HIGHLIGHTS 78
5.1 BUSINESSACTIVITIES 78
5.2 OVERVIEWOFMARKET,PRODUCTION,ANDSALESMARKETANALYSIS 85
5.3 INFORMATIONABOUTOFEMPLOYEE 95
5.4 EXPENDITURESONENVIRONMENTPROTECTION 95
5.5 EMPLOYEE/EMPLOYERRELATION 95
5.6 IMPORTANTCONTRACTSANDAGREEMENTS 96
VI、FINANCIAL INFORMATION 97
6.1 FIVE-YEARFINANCIALSUMMARY 97
6.2 FINANCIALRATIOANALYSISFORRECENTFIVEYEARS 101
6.3 THEAUDITCOMMITTEE’SREVIEWREPORT 105
6.4 FINANCIALREPORT(CONSOLIDATED) 106
6.5 FINANCIALREPORT(STAND-ALONE) 106
6.6 IMPACTOFTHEFINANCIALDISTRESSOCCURREDTOTHECOMPANYANDAFFILIATES
INRECENTYEARSUNTILTHEANNUALREPORTBEINGPUBLISHED 106
VII、REVIEW OF FINANCIAL CONDITIONS, OPERATING PERFORMANCE, AND
RISK MANAGEMENT 107
7.1 REVIEWANDANALYSISOFFINANCIALCONDITIONS 107
7.2 REVIEWANDANALYSISOFFINANCIALPERFORMANCES 109
7.3 REVIEWANDANALYSISOFCASHFLOW 110
7.4 MAJORCAPITALEXPENDITURESINRECENTYEARSANDIMPACTSONFINANCIAL
ANDOPERATIONALSITUATIONS 110
7.5 INVESTMENTPOLICIESINRECENTYEARS 110
7.6 SOURCESOFRISKSANDEVALUATIONS 111
7.7 OTHERS 114
VIII、SPECIAL DISCLOSURE 115
8.1 AFFILIATEDCOMPANIES 115
8.2 PRIVATEPLACEMENTSECURITIESINTHELATESTYEAR 122
8.3 THECOMPANY'SSHARESHELDORDISPOSEDBYSUBSIDIARIESINRECENTYEARS
UNTILTHEANNUALREPORTBEINGPUBLISHED 122
8.4 OTHERSUPPLEMENTARYINFORMATION 122

IX、PURSUANT TO THE ARTICLE 36-3-2 OF SECURITY EXCHANGE ACT, EVENT HAVING MATERIALI MPACT ON SHAREHOLDERS' EQUITY OR SHARE PRICE IN THE LATEST YEAR UNTIL THE ANNUAL REPORT BEING PUBLISHED 122

I. Letter to Shareholders

Dear Shareholders and Ladies and Gentlemen,

Thank you for attending the Company’s 2021 General Shareholders' Meeting.

In the midst of the US-China trade war of 2020, COVID-19 broke out and the impacts on the global economy and trade continued to spread and the extent of influence became more extensive as well. Faced with the critical moment of fierce impacts brought about by the trade war and the pandemic, the Company proactively diversified its overseas production sites and sought the possibility of developing new services externally in order to reduce the negative impacts brought about by the drastic changes in the external environment.

As far as the extension of the operational momentum is concerned, being the world’s largest monitor bearing and socket supplier, with the surge in demand as a result of the pandemic for working from home, video conferencing, education, and stay-at-home economy, monitors, among other primary products, of the Company saw an increase in demand for a replenishment of inventory among customers, which accordingly boosted the growth in the revenue and profitability of the Company.

2020 Business Overview:

Challenged by the rapid changes in economy and COVID-19 sweeping through the world, the Company benefited from the demand for remote commerce, video conferencing, and education around the world in 2020 and hence the operations continued to be heated. Despite the impacts from fluctuating exchange rates, an annual growth of 12.5% was accomplished in the overall revenue.

Looking into 2021, in the aftermath of the pandemic, people’s life has been changed, business opportunities brought about by remote commerce and the stay-at-home economy are emerging as part of the global industry. The demand for related products, such as computers, tablets, and displays, among other 3C supplies, continue to surge and according to the latest survey of TrendForce, up to 18.4 million e-sports LCD monitors were shipped in 2020, a growth of 105%. The shipment size is expected to reach 25 million units in 2021. Given the above two major trends, the Company continues to be optimistic about the steady growths in monitors and AIOs around the world. Plus the contribution to the revenue from re-invested businesses GATETECH TECHNOLOGY INC. and LEOHAB ENTERPRISE CO., LTD., the Company remains confident about an operational accomplishment that remains or event exceeds prior ones to create even greater value for the shareholders.

I.1 2020 Operating Results:

1.1.1. Accomplishments in Implementation of Operation Plan

The Company rendered a consolidated operating income of 2020 worth NTD 9,663,341 thousand, a growth of 12.6% from the consolidated operating income in 2019, which was NTD 8,582,344 thousand. The sales gross profit of 2020 was 26.29 ％, comparable to that of 2019, which was 26.39%. The Company’s earnings per share of 2019 came to NTD 7.81.

1.1.2. Implementation on Budget Plan ：

  • 1 -

Unit ： NT$ in thousands

Un it：NT$ in thou
Item 2020actual 2020 forecast Achieving rate
(%)
Operatingincome 9,663,341 9,885,082 97.76
Operatingcosts 7,122,648 7,373,486 96.60
Net operatingmargin 2,540,693 2,511,596 101.16
Operatingexpenses 1,009,001 1,071,974 94.13
Non-operating incomes and
expenses		 （34,171） 57,145 （59.80）
Profit before income tax 1,497,521 1,496,767 100.05

1.1.3 .Financial and Profitability Analysis ：

(1) Financial Analysis

(1)Financial Analysis
Item
Interest incomes
Interest expenses
(2)Profitability		 2020 2019 Amount
change		 Percentage
change
35,901 26,755 9,146 34.18
27,342 20,568 6,774 32.93
Item 2020 2019
Return on Assets（%） 9.11 10.28
Return on equity（%） 16.30 16.72
Operating Profit to Paid-in Capital（%） 123.80 103.29
Net Income before Tax to Paid-in Capital（%） 121.04 116.79
Net Profit Margin（%） 10.09 10.98
Earnings per share（NT$） 7.81 7.61

1.1.4. Research & Development ：

The Company continued to increase its expenditure on research and development and constantly expanded its development of new technologies in 2020, with more than 80 invention and utility model patents acquired. Most of them had to do with the sockets of LCD monitors, which clearly shows the leading position of the Company in monitor bearings and sockets. The Company’s research and development are focused primarily on LCD monitor sockets, e-sports monitor sockets, AIO sockets, and TV sockets.

Besides continuing with the research and development of monitors, AIO, and TV sockets, the Company is devoted also to the R&D of other products and introduction of new technologies, such as the introduction of webcam life modules to meet the demand brought about by working-from-home business opportunities. In the future, the synergistic effects of merging with and acquiring GATETECH TECHNOLOGY INC. and LEOHAB ENTERPRISE CO., LTD. will help promote the magnesium alloy die

  • 2 -

casting technology and the ability to manufacture and assemble small precision bearings and stamping mechanisms and opportunities to apply them, respectively, to products such as wearable devices, auto and notebook computer bearings, and fitness devices,

among others.

  • 1.2 2021 Annual summary of the business plan

  • 1.2.1. Operating strategy:

  • (1) Maximize the utilization of automated production equipment for enhanced production efficiency and quality of products.

  • (2) Increase the R&D manpower throughout the Group for expanding the growth momentum in the future.

  • (3) Set up production sites in different areas to reinforce the flexibility in the utilization of resources throughout the Group.

  • (4) Expedite the integration of resources throughout the Group in order to secure business for new applicable fields.

(5) Reinforce inventory management to enhance the capital turnover efficiency.

1.2.2. Expected sales quantity ：

The Company didn’t prepare 2021 financial forecasts for the public, so there was no expected sale volume and its reference.

1.2.3.Important production and marketing policy ：

In the aftermath of the pandemic, economic activities are gradually resumed in countries around the world. With demand in respective industries stabilizing, the Company will continue to focus on purchase order-based production, along with an adequate safety inventory size that helps satisfy customers’ demand, and to seek optimal economic performance answering to changes in the external environment with a robust attitude.

1.2.4. Future corporate development strategy ：

As far as sockets are concerned, the Company remains optimistic about the growing stream of sockets for e-sports monitors and will maximize the research and development of patent rights over sockets of monitors of various types of high-end e- sports models to integrate applications such as audiovisual effects in the socket and to increase the market share with unique products. An increase in the shipment of e-sports models will contribute to the growth in the revenue momentum in the future.

As far as diversification of products is concerned, the Company has invested in GATETECH TECHNOLOGY INC., which deals with aluminum alloy and magnesium alloy die casting, and LEOHAB ENTERPRISE CO., LTD., which deals with precision metal stamping, through mergers and acquisitions, for the past few years to fulfill the purpose of maximizing the Company’s portfolios and extending the scope of application of products so that the Group can more quickly and thoroughly reach its parts and components out to various types of 3C products, fitness devices, and electric vehicles to bring about growths in the revenue and profitability.

1.2.5. Influences on outside competition, regulatory and macro economy ：

As a leading supplier of monitor sockets, the Company is capable of patented development of rotating sockets, possesses the technicality, productivity, and ability to deliver the products; all are superior to its counterparts. Over the past few years,

  • 3 -

automated production lines have been proactively upgraded, too. Therefore, despite the excessive competition from counterparts, there are no major impacts yet.

The Company and its subsidiaries follow applicable regulatory requirements in respective operations. The regulatory setting does not pose significant impacts on the Company. For the operational environment as a whole, as far as the demand in the LCD monitor industry is concerned, given the diversification in the development of e- sports monitor models over the past few years and the selling prices getting more and more approachable, the growth momentum will continue in the coming years. As far as the LCD TV industry is concerned, on the other hand, brand owners have introduced OLED TVs and Mini LED back light TVs one after another. Reforms of the TV panel technology will inevitably bring about new growth niche for the LCD TV industry. We are thankful for the support and trust that each of you as shareholders has towards the Company. We will work for the maximum rewards for you while adhering to the management beliefs in order to thank you for your long-term support.

Chairman CEO

  • 4 -

II. Introduction of the Company

  • 2.1 Date of Incorporation

July 7th, 1979

Contact Information of Head Office, Branch Office, and Factory

  1. Head Office Address ： 9F., No. 168, Jian kang Rd., Zhon ghe Dist., New Taipei City Tel ：（ 02 ） 6621-5888 。

  2. Branch Office ： n/a

  3. Factory Address ： No. 6, Ln. 403, Min’an Rd., Xin zhuang Dist., New Taipei City Tel ：（ 02 ） 2202-9108

2.2 Company History

Year Item
July 1979 Syncmold Co., Ltd. was established with a capital of NT$ 500,000 and engaged
inplastic mold manufacture.
August 1980 Capital increased by Cash of NT$ 1.5 million，Paid-in capital after the capital
increase was NT$2 million.
June 1987 Expansion led to the acquisition of a newplant in Xin Zhuangcity,Taiwan.
November 1988 Synsmold increased capital with cash to NT$ 10,000,000 paid-up capital after
capital increase as 12,000,000 and adopted the name: Syncmold Enterprise Corp.
August 1997 Capital increased by Cash of NT$ 13 million，Paid-in capital after the capital
increase was NT$25million.
December 2004 Capital increased by Cash of NT$ 125 million. Paid-in capital after the capital
increase was NT$150 million. Grated ISO9001:2000 Certification.
February2005 Grated ISO 14001 Certification.
May 2005 Reinvested Fuzhou Fulfil Tech Co., Ltd for the manufacture and sales of monitor
hingeproducts.
June 2005 Capital increased by retained earnings of NT$ 30 million and capital increased by
Cash with NT$ 70 million. Paid-in capital after the capital increase was NT$ 250
million.
November 2005 Financial SupervisoryCommission approved the request for apublic offering.
December 2005 Syncmold stocks formallytraded over the counter.
December 2005 Reinvested Wuhan Fulfil Electronic Hardware Co., Ltd 100% ownership from
thirdplace companyfor the manufacture and sales of molds and hingeproducts.
December 2005 Reinvested Fujian Khuan Hua Precise Mold Co., Ltd (51.4% ownership) for the
manufacture and sales of molds.
April 2006 Reinvested Fuqing Foqun Co., Ltd 100% ownership for the manufacture and sales
of castproducts.
April 2006 Wuhan Fulfil Electronic Hardware Co., Ltd, the subsidiary of Synsmold, adopted
the name: Wuhan Foqun Electronic Hardware Co.,Ltd.
May2006 Fujian Khuan Hua Precise Mold Co.,Ltd became whollyowned subsidiaryof
  • 5 -
Syncmold. After the 48.6% reinvestment.
May 2006 Reinvested Highgrade Tech Co, Ltd (51.4% ownership) for the design and sales
of TV wall mount andprojector ceilingmountproducts.
2006 June Reinvested Tianjin Foqun Electronic Hardware Tech. Co., Ltd 100% ownership
for the manufacture and sales of molds and hingeproducts.
2006 October Capital increased by retained earnings of NT$ 58.1 million. Paid-in capital after
the capital increase was NT$308.1 million.
November 2006 IPO on OTC was approved.
January 2007 Syncmold officially listed on OTC. Capital increased by cash of 41.9 million.
Paid-in capital after the capital increase was NT$350 million.
May 2007 Obtained 100% of the shares of Full Big Limited through subsidiary situated in
another country, engages in investments in subsidiaries in China and international
trade.
September 2007 Capital increased by retained earnings of NT$ 65 million. Paid-in capital after the
capital increase was NT$415 million.
December 2007 Obtained 100% of the shares of Forever Business Development Limited, engages
in investments in subsidiaries in China and international trade.
April 2008 Boards approved the merge with Shenzhen Fulfil Tech. Co.,Ltd.
June 2008 Reinvested Shenzhen Fulfil Tech. Co., Ltd for the manufacture and sales of hinge
products.
September 2008 Capital increased by retained earnings of NT$ 30.75million and employee stock
option certificates to common share of 4.815 million. Paid-in capital after the
increase was NT$455.65 million.
December 2008 Merged with Fulfil Tech. Co., Ltd with new issuance of NT$ 901.12 million. The
capital was NT$1,351.685 million.
August 2009 Employee stock option certificates to common share of NT$ 2.07 million. Paid-
in capital after the increase was NT$1,353.755 million.
December 2009 Syncmold officiallylisted on TSE.
April 2010 Employee stock option certificates to common share of NT$ 4.7 million. Paid-in
capital after the increase was NT$1,358.455 million.
September 2010 Employee stock option certificates to common share of NTD 1.953 million. Paid-
in capital after the increase was NT$1,360.4075 million.
July 2011 Corporate bond to common share of 5.976 million，Paid-in capital after the
increase was NT$1,366.38355 million.
October 2012 Bond option certificates to common share of NTD 11.774million. Paid-in capital
after the increase was NT$1,378.15765 million.
November 2012 Invested 100% equity of Chongqing Fulfil Tech Co., Ltd. through a third location
subsidiary,engagingin the sales and manufacture of base and hingeproducts.
February 2013 Corporate bond to common share of NT$ 44.354 million. Paid-in capital after the
increase was NT$1,422.5117 million.
April 2013 Corporate bond to common share of NT$ 46.220 million. Paid-in capital after the
increase was NT$1,468.73206 million.
  • 6 -
August 2013 Corporate bond to common share of NT$ 17.188 million. Paid-in capital after the
increase was NT$1,485.92078 million.
December 2013 Corporate bond to common share of NT$ 12.642million. Paid-in capital after the
increase was NT$1,498.56339million.
June 2016 Syncmold Enterprise Co., Ltd. was founded, engaging in the sales of electronic
components.
May 2017 Corporate bond to common share of NT$ 35.25 million. Paid-in capital after the
increase was NT$1,533.81309million.
June 2017 Corporate bond to common share of NT$ 51.428 million. Paid-in capital after the
increase was NT$1,585.24088 million.
September 2017 Corporate bond to common share of NT$ 30.130 million. Paid-in capital after the
increase was NT$1,615.37043 million.
December 2017 Corporate bond to common share of NT$ 20.362 million. Paid-in capital after the
increase was NT$1,635.73231 million.
April 2018 Corporate bond to common share of NT$ 13.923 million. Paid-in capital after the
increase was NT$1,648.65561 million.
September 2018 Capital reduction by cash of NT$ 412.414 million. Paid-in capital after the
reduction was NT$1,237.24171 million.
November 2019 Invested in the equity of Gatetech Technology Inc. 72.81%, this company engages
in manufacturingand sellingaluminum-magnesium alloydie casting products.
December 2019 Investing in establishing the subsidiary in Vietnam of 100% equity, this company
engages in manufacturingand sellingLCD monitor stand,hingeproducts.
February, 2020 Invested in and set up the subsidiary in Malaysia holding 100% shares, whose
scope of operation includes trading of electronic parts, imports and exports,
customer support,and service center.
February, 2020 Invested in and set up the subsidiary in Singapore holding 100% shares, whose
scope of operation includes trading of electronic parts, imports and exports, and
design of electronicparts andproducts.
May 2020 Invested in and set up the subsidiary in Thailand holding 100% shares, whose
scope of operation includes processing and manufacturing, trading, and related
imports and exports of electronicparts.
December 2020 Invested in LEOHAB ENTERPRISE CO., LTD. holding 70% shares, whose
scope of operation includes plastic injection molding and metal stamping and
forming.
  • 7 -

III. Corporate Governance Report

3.1 Organization

3.1.1 Organization Chart

==> picture [734 x 353] intentionally omitted <==

  • 8 -

3.1.2 Major Corporate Functions

Department Functions
General Manager 1.Responsible for all shareholders according to the resolution of the board of directors.
2. Ensure the company's operations and future development direction.
3.Approval of major decisions of the company and the signing of important contracts.
4.Determination of the company's overall business objectives and implementationplans.
Internal Auditing 1.Inspection and evaluation of the soundness, rationality, and effectiveness of the company's
internal control system.
2.Investigation and evaluation of the efficiency of each department in the company in
implementingthe company'splans orpolicies and its assigned functions.
Information and
Supply Chain
Management		 1.Planning and integration of group ERP system management.
2.Coordination of the Group's computer hardware and software and planning of network
security and system integration.
3.Groupsupplychain management, process improvement,and cost control.
Investment and
Corporate
Information		 1.Responsible for external communications with institutions and the press on behalf
of the Group.
2. Planning for external investment assessment, execution of plan and management of follow-
up.
Business 1.Determination of sales budget and execution.
2.Product quotation, order receipt, and collection of payment.
3.Maintenance of existing customer service, development of new customers and new
orders.。
Factory Affairs 1.Responsible for production scheduling, manufacturing process, and quality confirmation.
2.Maintenance of manufacturing equipment maintenance.
3.Maintenance measures for personal safety and quality of the work environment,
and maintain 5S cleanness.
4.Warehouse layout and shelf planning, entry and exit of material and inventory
management,maintenance of warehouse security,etc.
Research and
Development		 1.Research and development of patents and technologies for hinge products.
2.Development of hinges and bases for various monitors, TVs, and 3C products.
3.Trial of various 3Cproduct base samples and verification of customer recognition.
General
Administration		 1.Responsible for the production and analysis of group accounting, taxation, customs, and
financial statements.
2.Responsible for the management of the Group’s funds and budget, analysis of cost and
evaluation of business performance.
3.Recruitment, attendance management, employee education and training, performance
appraisal planning and execution.
4.Procurement for general affairs and asset management.
5.Shareholder's affair and related matters.
Audit Committee 1. Preparation or revision of the internal control system as required by Article 14-1 of the
Securities and Exchange Act.
2. Evaluation of the effectiveness of the internal control system.
3. Revision or amendment of the procedures for acquiring or disposing of assets, trading
derivatives, lending funds to others, providing endorsements or guarantees to others,
among other major financial operations as required by Article 36-1 of the Securities and
Exchange Act.
4. Matters involving the interests of the Board directors.
5. Trading of major assets or derivatives.
6. Major lending of assets, endorsements, or guarantees.
7. Raising, issuance, or private placement of equity securities.
8. Delegation, dismissal of CPAs or their compensation.
9. Appointment or dismissal of the head of finance, accounting, or internal audit.
10. Annual Financial Statement and Semi-Annual Financial Statement.
11. Other important matters as specified bythe Companyor the competent authority.
Remuneration
Committee		 1. The remuneration committee has more than 1/2 (inclusive) seats held by independent
directors.
2. The relevant remunerations of directors, supervisors and managers will be reviewed by the
Compensation Committee and implemented after approval by the board of directors.
3. Formulate and regularly review the long-term performance goals and salary policies and
systems of directors, supervisors and managers.
4. The Remuneration Committee convenes a regular meeting at least once every six months.
For the meeting of the committee and the attendance rate of each member, please refer to the
company's annual reports.
  • 9 -

3.2 Information about directors, supervisors, president, vice president, assistant managers, and supervisors of the branches and offices

3.2.1 Directors and Supervisors

3.2.1.1 Information on Directors and Supervisors

3.2.1 Directors and Supervisors
3.2.1.1 Information on Directors and		 3.2.1 Directors and Supervisors
3.2.1.1 Information on Directors and		 3.2.1 Directors and Supervisors
3.2.1.1 Information on Directors and		 3.2.1 Directors and Supervisors
3.2.1.1 Information on Directors and		 3.2.1 Directors and Supervisors
3.2.1.1 Information on Directors and		 Supervisors Supervisors Supervisors Supervisors Supervisors Supervisors Supervisors Supervisors Supervisors Supervisors
April 26,2021
Title Nationality
or Place of
Registration
Name		 Gender
First
Elected
Date		 Elected
Date		 Term
Shares held
when
elected		 Current
shareholding		 Shares
currently
held
by their
spouses and
minor
children		 Shares Held
in the name
of others		 Main
working
(education)
experience		 Concurrent
positions in the
Company and
other companies		 Other heads, directors,
or
supervisors as spouse or
kin
within the second
degree
Shares % Shares % Shares % Shares % Title Name Relation
Chairman Republic of
China		 Chiu-
Lang,
Chen		 Male 1979.07.07 2020.06.18
3
year		 5,508,211 4.45% 5,708,211 4.61% 93,022 0.08% 2,300,000 1.86% Yang-Tze
High School		 Chairman and president
of Syncmold
Chairman of:
-Enterprise(SAMOA)
Corp
-Full Big Limited
-Forever Business
Development Ltd.
-Grand Advance Inc.
-Fullking Development
Ltd.
-Canford International
Ltd.
-Full Glary Holding
Ltd.
-Full Celebration Ltd.
-Syncmold Enterprise
(USA) Corp.,
GatetechTechnology
Inc., GATECH
HOLDING LTD.,
GATECH
INTERNATIONAL
LTD.
Director of Leohab
Enterprise Co.,LTD.		 Director
Chien-
Yuan,
Chen.
Son
Director Republic of
China		 Fortune
Investment
NA		 2020.06.18 2020.06.18
3
year		 5,200,139 4.20% 5,200,139 4.20%
—		 — — — — — —
—
—
  • 10 -
Co.,Ltd.
Republic of
China		 Chien-
Yuan,
Chen.		 Male 2020.06.18 2020.06.18
3
year		 2,551,717 2.06% 2,529,717 2.04%
—		 — — — Bachelor of
Commerce,
CQU, A.U.S
Master of
Human
Resource
Management,
GU,A.U.S		 Chairman of Fortune
Investment Co., Ltd.
Chairman
Chiu-
Lang,
Chen		 Father
Director Republic of
China		 Shu-Yen,
Chuang		 Female 2017.06.13 2020.06.18
3
year		 1,918,684 1.55% 1,918,684 1.55%
—		 — — — Kuo-Kou
High School		 Chairman of Tai
Hsin Investment Co.,
Ltd., and Chia Hsuan
Investment L Co.,
Ltd.
GatetechTechnology
Inc.		 —
—
—
Independent
Director
Republic of
China		 Yung-Lu,
Tsai		 Male 2005.05.24 2020.06.18
3
year		 — — — — — — — — MBA.,
University of
Missouri, U.S.
B.B.A.,
Transportation
and Logistics
Management,
Chiao Tung
University

—		 —
—
—
Independent
Director
Republic of
China		 Shih-
Kuang,
Tsai		 Male 2020.06.18 2020.06.18
3
year		 — — — — — — — — Accounting
Institute ,
National
Taiwan
University		 CPA of T.K. Tsai &
Co., CPAs、
Independent director
of Yung Shin Global
Holding Co., Ltd.、
Independent director
of Yung
Shin Pharmaceutical
Industrial Co., Ltd.、
Director of Tatung
System Technology
Inc.、Supervisor of
Zhi-Hang
Technology Co.,
Ltd.、Independent
director of AIC Inc.		 —
—
—
Independent
Republic of
China		 Da-Ho, Male 2020.06.18 2020.06.18
3		 — — — — — — — — Law, National Independent director
of Taipei Star		 —
—
—
  • 11 -
Director Yen year Taiwan
University
Master of
Laws, SMU,
U.S.		 Bank、Independent
director of AAEON
Technology Inc.
Independent
Director
Republic of
China		 Hui-Chin,
Chiu		 Male 2020.06.18 2020.06.18
3
year		 — — — — — — — — Master of
Industrial
Engineering
and
Management,
National
Taipei
University of
Technology
EMBA,
National
Taiwan
University		 — —
—
—

(1-1)Major shareholders of institutional shareholders

(1-1)Major shareholders of institutional shareholders
April 26,2021
Name of institutional shareholder Major shareholders of institutional shareholders
Fu Yan Investment Corporation Chen, Chien-Yuan (49.9%)
Chen,Chien-Hung (49.9%)
  • 12 -

3.2.1.2 Professional qualifications and independence analysis of directors and supervisors

Criteria
Name		 Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work
Experience		 Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work
Experience		 Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work
Experience		 Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Independence Criteria(Note) Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

An Instructor or Higher Position in a
Department of Commerce, Law,
Finance, Accounting, or Other Academic
Department Related to the Business
Needs of the Company in a Public or
Private Junior College, College or
University		 A Judge, Public Prosecutor, Attorney,
Certified Public Accountant, or Other
Professional or Technical Specialist Who
has Passed a National Examination and
been Awarded a Certificate in a Profession
Necessary for the Business of the
Company		 Have Work Experience in
the Areas of Commerce,
Law, Finance, or
Accounting, or Otherwise
Necessary for the Business
of the Company		 1 2 3 4 5 6 7 8 9 10 11 12
Chiu-Lang,Chen ─ ─ ─ ─ ─ ─ ─ ─ ─ ─
Fortune
Investment
Chien- Yuan,
Chen.		 ─ ─ ─ ─ ─ ─ ─ ─ ─ ─
Shu-Yen,Chuang ─ ─ ─ ─ ─
Yung-Lu,Tsai ─ ─ ─
Shih- Kuang,
Tsai		 ─ 3
Da-Ho,Yen ─ 2
Hui-Chin,Chiu ─ ─ ─

  • Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office. 1. Not an employee of the Company or any of its affiliates.

  • Not a director or supervisor of the Company or any of its affiliates. Not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares.

  • Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.

  • Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs.

  • Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the Company or who holds shares ranking in the top five holdings.

  • Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business relationship with the Company.

  • 13 -

  • Not a professional individual who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof. These restrictions do not apply to any member of the remuneration committee who exercises powers pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the TPEx“.

  • Not having a marital relationship or a relative within the second degree of kinship to any other director of the Company.

  • Not being a person of any conditions defined in Article 30 of the Company Law.

  • Not a governmental, juridical person or it's representative as defined in Article 27 of the Company Law.

  • 14 -

3.2.2 President 、 V.P. 、 A.V.P. 、 Management Team

April 26, 2021

3.2.2 Presid ent、V.P. 、A.V. P.、M anageme nt Team nt Team April 26,2021
Title Nationality
or Place of
Registration
Name		 Gender Elected
Date		 Current
shareholding		 Shares
currently
held
by their
spouses and
minor
children		 Shares Held
in the name
of others		 Main working
(education)
experience		 Concurrent positions
in the
Company and other
companies		 Spouse or relatives
within two degrees
who are managers		 Management
obtains
employee
stock option
certificate
Shares % Shares % Shares % Title Name Relation
Chairman
and
President		 Republic of
China		 Posen,
Chiu		 Male 2020.6.29 1,018,081 0.82% 93,022 0.08% 2,300,000 1.86% Yang-Tze High School



















 Chairman and president of
Syncmold
Chairman of:
-Enterprise(SAMOA) Corp
-Full Big Limited
-Forever Business
Development Ltd.
-Grand Advance Inc.
-Fullking Development Ltd.
-Canford International Ltd.
-Full Glary Holding Ltd.
-Full Celebration Ltd.
-Syncmold Enterprise
(USA) Corp.,Gatetech
Technology Inc.,GATECH
HOLDING LTD.,
GATECH
INTERNATIONAL LTD.
Director of Leohab
Enterprise Co.,LTD.		 — — — —
President
Component
Assembly
BG		 Republic of
China		 Tim,
Weng		 Male 2008.12.16 2,747,581 2.22% — — — — Mechanical
Engineering, Lee-
Ming Institute of
Technology
Sales Manager,
Kernan Technology
Co., Ltd.
Sales Manager,
CherngJyieh Corp.



 Director of
GatetechTehnology Inc.
Chairman of Leohab
Enterprise Co., LTD.		 — — —
V.P. Republic of
China		 Connie,
Hsu
Female		 2006.6.1 2,888 0.00% — — — — Accounting,
National Taiwan
University
E.M.B.A., National
Taiwan University		 — — — —
  • 15 -
V.P., Fubon
Securities Co.Ltd.
CPA
V.P. Republic of
China		 Gray,
Yan		 Male 2008.12.16
9,000		 0.01% — — — — Master, Mechanical
Engineering,
National Cheng-
Kung University
(NCKU)
Researcher, BenQ
Corporation
Manager, SHL
Technology Co.,
Ltd.		 — — — —
V.P. Republic of
China		 Alex,
Cheng		 Male 2015.7.1 15,926 0.01% — — — — Lunghwa University
of Science and
Technology (LHU)
Factory Chief, Heng
Rise Co., Ltd.

 President, Fu Zhon
Fulfil Tech Co., Ltd.		 — — —
V.P. Republic of
China		 Daphne,
Chang
Female		 2013.4.22 3,000 0.00% — — — — M.B.A., National
Taiwan University
Manager, Winbond
Electronics Corp.
Research Assistant
Manager, China
Development
Financial Holding
Corp.
Supervisor, Cathay
Life Insurance Co.,
Ltd.

 Core Bio
Technologies Co., Ltd.		 — — —
V.P.
(Note 1)		 Republic of
China		 Peter,
Huang		 Male 2020.11.1 — — — — — — Department of
Mechanical
Engineering, NTUT
Manager, LITE-ON
Technology Co.,
Ltd.
Director, Wistron
Co.,Ltd.		 — — — —
  • 16 -
A.V.P. Republic of
China		 Y.Y.,
Hsieh		 Male 2011.5.16 — — — — — — Mechanical
Engineering, Chung
Yuan Christian
University
Manager, Attotek
Technology Co.,
Ltd.		 — — — —
A.V.P. Republic of
China		 Phillip,
Cheng		 Male 2015.7.1 — — — — — — Accounting,
TungHai University
Senior Manager,
Fubon Securities
Co.Ltd.		 — — — —
A.V.P. Republic of
China		 Randy,
Lin		 Male 2015.2.24 1,500 0.00% — — — — LiRen Private High
School
Manager, United Fu
Shen
ChenTechnology
Corp.		 — — — —
A.V.P. Republic of
China		 Monty,
Chen		 Male 2019.1.1 — — 2,250 0.00%
—		 — Mechanical
Engineering, China
University of
Science and
Technology		 — — — — —
A.V.P. Republic of
China		 Toni,
Kao		 Male 2019.1.1 — — — — — — Sports and Leisure,
National Dong Hwa
University (NDHU)
Sales manager,
Universal Weight
Electronic Co., Ltd.		 — — — — —
  • 17 -
Title Nationa
lity
or Place
of
Registra
tion
Name		 Gend
er		 Elected
Date		 Current
shareholding		 Current
shareholding		 Shares
currently held
by their
spouses and
minor
children		 Shares
currently held
by their
spouses and
minor
children		 Shares held
in the name
of others		 Shares held
in the name
of others		 Shares held
in the name
of others		 Concurrent positions in the
Company and other companies		 Spouse or relatives
within two degrees
who are managers		 Spouse or relatives
within two degrees
who are managers		 Spouse or relatives
within two degrees
who are managers		 Managem
ent
obtains
employee
stock
option
certificate
Shares % Shares % Shares % Title Name Relatio
n
Corporate
governance
supervisor
&
Executive
Assistant of
Chairman		 Republic
of
China
YI-
CHUN,
HUAN
G
Male		 2019.5.9 — — — — — — Accounting, Tamkang
University
Financial Officer, Unity Opto
Technology co., Ltd.
Financial Officer, Casing
Macron Technology Co., Ltd.		 Legal representative
ssupervisor of TIGA GAMING
INC.
Legal representative director of
High Grade Tech Co., Ltd.		 — — —
A.V.P. Republic
of
China
Scott,
Lu		 Male 2020.1.1 — — — — — — Department of Industrial
Management, National
Taiwan University of Science
and Technology
Manager of Good Way
TechnologyCo. Ltd.		 — — — —
A.V.P.
(Note 2)		 Republic
of
China
Alvin,
Chen		 Male 2021.1.1 — — — — — — Geological Sciences, PhD,
National Taiwan University
Examiner, Intellectual
PropertyOffice		 — — — —
Chief Audit
Executive
Republic
of
China
Carrie,
Wang		 Female 2017.12.29
—		 — — — — — Accounting and Information,
Chang Jung Christian
University (CJCU)
Auditor, UHY L&C
Company, CPAs
Internal Auditor, Yem Chio
Co.Ltd.
CPA (Accountant of higher
examination)
CIA (Certified Internal
Auditor)		 — — — —

Note 1: V.P Peter, Huang was inaugurated on November 1, 2020. Note 2: A.V.P Alvin, Chen was inaugurated on January 1, 2021.

  • 18 -

3.2.3. Remuneration paid to Directors and management team

3.2.3.1 Remunerations of Directors for 2020

unit ： NT$ in thousands

unit：NT$ in unit：NT$ in thousands
Title Name Remunerations of Directors (Note 1) Ratio of Total
Remuneration
(A+B+C+D) to net
income %		 Relevant Remuneration Received by Directors who are Also Ratio of Total
Compensation
(A+B+C+D+E+F+G
) to net income %
 Compensatio
n Paid
to Directors
from an
Invested
Company
Other than
the
Company’s
subsidiary

Employees (Note 1)
Basic
Compensation
(A)		 Severance Pay
(B)		 Directors
Compensation
(C)		 Allowances (D) Salary, bonuses
and allowance (E)
Severance Pay
(F)		 Employee Compensation
(G)
A B A B A B A B A B A B A B A B A
 B
Cash Stock Cash Stock
Chairman Chiu-Lang,Chen - - - - 6,800 6,800 260 306 0.72% 0.72% 3,530
11,300		 - - 4,400
-		 4,400
-		 1.52% 2.32% N/A
Director Tim, Weng
Director Chien- Yuan, Chen.
Director Chen-Tung,Chen
Director Shu-Yen,Chuang
Independent
Director		 Yung-Lu, Tsai - - - - 8,200 8,200 480 480 0.89% 0.89% - - - - - - - - 0.89% 0.89% N/A
Independent
Director		 Shih- Kuang, Tsai
Independent
Director		 Da-Ho, Yen
Independent
Director		 Hui-Chin, Chiu
Independent
Director		 Wen-Hung, Kao
1.Described Independent Director remuneration policies, system, standard and structure, and its linkage of remuneration amount in accordance with responsibilities, risk, engaged time and other factors:
According to Articles of Corporation, distribution of employee remuneration and profit before remuneration of Director or Supervisor shall be deducted at Pre-Tax Income of the fiscal year, and the Company shall retain the
amount of accumulated losses, if there is still a balance, shall allocate the remuneration of Director or Supervisor which is not higher than 2%. The Company established “Remuneration Management Measures for Director,
Supervisor, Functional Committee Member and Managers”, the structure of Director remuneration includes remuneration, remuneration of earrings distribution and executive business fee, in addition to execution cost,
remuneration amount shall refer to Director’s attendance condition of Board of Directors, engaged time in daily affairs and operation management of the Company, providing proposal direction times for operation management
and contribution value, and compare with comprehensive consideration of domestic, overseas industrial standards and other factors, the Company shall provide the proposals approved by Remuneration Committee, and report
to Board of Directors for approval and execution.
2. In addition to above table, director remuneration for their services in the most recentyear: NT$ 130,000.

Note 1: The tenure of Directors Wen, Zu-Jin and Chen, Zhen-Dong, and Independent Director Kao, Wen-Hung expired on June 18, 2020.

Note 2: The tenure of Director Chen, Chien-Yuan and Independent Directors Yen, Da-Ho, Tsai, Shih-Kuang, and Chiu, Hui-Chin began on June 18, 2020. Note 3: Column A represents the Company; Column B represents all companies in the consolidated financial statement.

  • 19 -

Range of Remuneration

Range of Remuneration Range of Remuneration Range of Remuneration Range of Remuneration
Range of Director Remuneration
Names of Directors
First four categories of remuneration (A+B+C+D) First seven categories of remuneration (A+B+C+D+E+F+G)
Syncmold Consolidated subsidiaries(H) Syncmold Consolidated subsidiaries(I)
Under NT$1,000,000 Fortune Investment Co.,Ltd Fortune Investment Co.,Ltd Fortune Investment Co.,Ltd Fortune Investment Co.,Ltd
NT$1,000,001 – NT$2,000,000 Chen-Tung, Chen
Shu-Yen, Chuang
Wen-Hung, Kao
Hui-Chin, Chiu
Da-Ho, Yen
Shih- Kuang,Tsai		 Chen-Tung, Chen
Shu-Yen, Chuang
Wen-Hung, Kao
Hui-Chin, Chiu
Da-Ho, Yen
Shih- Kuang,Tsai		 Chen-Tung, Chen
Shu-Yen, Chuang
Wen-Hung, Kao
Hui-Chin, Chiu
Da-Ho, Yen
Shih- Kuang,Tsai		 Chen-Tung, Chen
Shu-Yen, Chuang
Wen-Hung, Kao
Hui-Chin, Chiu
Da-Ho, Yen
Shih- Kuang,Tsai
NT$2,000,001 – NT$3,500,000 Chiu-Lang, Chen
Tim, Weng
Yung-Lu,Tsai		 Chiu-Lang, Chen
Tim, Weng
Yung-Lu,Tsai		 Yung-Lu, Tsai Yung-Lu, Tsai
NT$3,500,001 – NT$5,000,000
NT$5,000,001 – NT$10,000,000 0 0 Chiu-Lang, Chen
Tim,Weng		 Chiu-Lang, Chen
Tim,Weng
NT$10,000,001 – NT$15,000,000 0 0 0 0
NT$15,000,001 – NT$30,000,000 0 0 0 0
NT$30,000,001 – NT$50,000,000 0 0 0 0
NT$50,000,001 – NT$100,000,000 0 0 0 0
Over NT$100,000,000 0 0 0 0
Total 10 10 10 10
  • 20 -

3.2.3.2 Remunerations of Supervisor for 2020

Unit ： NT$ in thousands

Unit：N Unit：N T$ in thousands
Title Name SupervisorRemuneration(Note) Ratio of Total
Compensation
(A+B+C+D+E+F+G) to
net income %		 Compensation
Paid to Directors
from an Invested
Company Other
than the
Company’s
subsidiary
Base Compensation (A) Bonus to Supervisors (B)
Allowances (C)
Syncmold Consolidated
subsidiaries
Syncmold		 Consolidated
subsidiaries
Syncmold		 Consolidated
subsidiaries
Syncmold		 Consolidated
subsidiaries
Supervisor Jui-Tai, Wu ─ ─ 3,000 3,000 60 73 0.31% 0.32% N/A
Supervisor Tung-Ping,
Cheng
Supervisor Chin-Chang,
Pao

Range of remuneration

Range of remuneration Range of remuneration
Range of Supervisor Remuneration
Name of supervisors
First three categories of remuneration(A+B+C)
Syncmold Consolidated subsidiaries(D)
Under NT$1,000,000 0 0
NT$1,000,001 – NT$2,000,000 Jui-Tai,Wu Tung-Ping ,Cheng Chin-Chang ,Pao Jui-Tai,Wu Tung-Ping ,Cheng Chin-Chang ,Pao
NT$2,000,001 – NT$3,500,000 0 0
NT$3,500,001 – NT$5,000,000 0 0
NT$5,000,001 – NT$10,000,000 0 0
NT$10,000,001 – NT$15,000,000 0 0
NT$15,000,001 – NT$30,000,000 0 0
NT$30,000,001 – NT$50,000,000 0 0
Total 3 3
  • 21 -

3.2.3.3 Remunerations of President and V.P. for 2020

Unit ： NT$ in thousands

Unit：NT$ in thousands
Title Name Salary (A) Severance
Pay (B)		 Bonuses and
Allowance etc. (C)
Employee Compensation
(D)		 Ratio of total
(A+B+C+D)		 compensation
to net income		 Compensation Paid to the President and Vice Presidents
from an Invested Company Other than the Company’s
subsidiary
A B A B A B A B A
 B
Cash Stock Cash Stock
Chairman and
President		 Chen, Chiu-
Lang		 7,300 7,300 - - - 23,000 13,000
-		 13,000
-		 2.10% 4.44% N/A
President Posen, Chiu
President
Component
AssemblyBG		 Tim, Weng
V.P. Connie, Hsu
V.P. Gray, Yan
V.P. Alex, Cheng
V.P. Daphne, Chang
V.P. Peter,Huang

Note 1: For 2020, the pension set aside for the President and the Vice President(s) was NTD 279 thousand.

Note 2: President Chiu, Po-Sen resigned on June 19, 2020.

Note 3: Chairman: Chen, Chiu-Lang started to also serve as the President on June 29, 2020.

Note 4: Column A represents the Company; Column B represents all companies in the consolidated financial statement.

Range of remuneration

Range of remuneration

Range of V.P. Remuneration		 Name of President and V.P.
Syncmold Consolidated subsidiaries(E)
Under NT$1,000,000 Posen,Chiu Posen,Chiu
NT$1,000,001 – NT$2,000,000 0 0
NT$2,000,001 – NT$3,500,000 Chiu-Lang, Chen Tim, Weng Alex, Cheng Connie, Hsu Gray, Yan Daphne, Chang Peter,
Huang
Peter, Huang
NT$3,500,001 – NT$5,000,000 0 Connie,Hsu Gray ,Yan Daphne,Chang
NT$5,000,001 – NT$10,000,000 0 Chiu-Lang, ChenTim ,Weng、Alex ,Cheng
NT$10,000,001 – NT$15,000,000 0 0
NT$15,000,001 – NT$30,000,000 0 0
NT$30,000,001 – NT$50,000,000 0 0
Under NT$1,000,000 0 0
NT$1,000,001 – NT$2,000,000 0 0
Total 5 5
  • 22 -

3.2.3.4 Remunerations of Managers and Range of Remuneration for 2020

Unit ： NT% in thousands

Unit：NT% in thousands
Title Name Stock Cash Total Total remuneration to net
income after tax（％）
Managers President Chiu-Lang,Chen - 21,000 21,000 2.15%
President Component
Assembly BG
Tim, Weng
V.P. Connie, Hsu
V.P. Gray, Yan
V.P. Alex, Cheng
V.P. Daphne, Chang
V.P. Peter, Huang
A.V.P. Y.Y.,Hsieh
A.V.P. Daphne,Chang
A.V.P.(Note 1) Cindy,Chang
A.V.P. Randy,Lin
A.V.P. Phillip,Cheng
corporate governance
supervisor
Patrick, huang
Manager Carrie,Wang
  1. Comparison of Remuneration for Directors, Supervisors, President and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, President and Vice Presidents ：
Title Ratio of 2020 total remuneration to net
income for Directors, Supervisors, President
and Vice Presidents(%)		 Ratio of 2020 total remuneration to net
income for Directors, Supervisors, President
and Vice Presidents(%)
Ratio of 2019 total remuneration
to net income for Directors, Supervisors,
President and Vice Presidents(%)
Ratio of 2019 total remuneration
to net income for Directors, Supervisors,
President and Vice Presidents(%)
Syncmold Consolidated subsidiaries Syncmold Consolidated subsidiaries
Directors 2.45％ 3.21％ 2.37％ 3.12％
Supervisor 0.31％ 0.32％ 0.44％ 0.45％
President & V.P. 2.08％ 4.44％ 1.48％ 3.55％

The issuance of salaries, bonuses and employee bonuses to the directors, supervisors, managers, shall be handled in accordance with the relevant regulations of the Articles of Incorporation and the organization and regulations of the Remuneration Committee.

In accordance with the provisions of the company's articles of incorporation, the directors' remuneration shall be based on the profit before income tax of the current year after deducting the employee's remuneration and the benefits of the director's compensation and retaining the accumulated loss amount. If there is still a balance, the employee's remuneration shall not be less than 3%, while the director's compensation shall not be more than 2% in reference of the company's operating results, its contribution to the company's performance to provide reasonable compensation. The president and VP's policy of remuneration shall be handled in accordance with the relevant regulations of the company's remuneration committee depending on the position and responsibility of the company and its contribution to the company's operational objectives, taking into account the characteristics of the industry and the nature of the company's business. Relevant performance appraisal and reasonableness of remuneration are reviewed by the Remuneration Committee and the Board of Directors. The remuneration system is reviewed at any time depending on the actual operating conditions and relevant laws and regulations, so as to balance the company's sustainable operation with risk control.

The company has established a remuneration committee in December 2011, and the relevant remuneration of directors, supervisors and managers will be reviewed by the Remuneration Committee and executed after the Board of Directors approves it.

  • 23 -

3.3 Corporate Governance

3.3.1 Information on implementation of Board of Directors ：

Eight meetings （ A ） were held by the Board of Directors in the most recent year

(2020) with their attendance shown as follow ：

Attendance in Attendance rate in
Title Name person (Ｂ) By proxy person (%)【Ｂ/Ａ】 Remarks
Chairman Chen, Chiu-
Lang		 8 0 100
Directors Weng, Zu-
Jin		 2 0 100 Retired on June 18, 2020
Directors Chen, Zhen-
Dong		 2 0 100 Retired on June 18, 2020
Directors Chuang,
Shu-Yen		 8 0 100
Directors Chen,
Chien-Yuan		 6 0 100 Inaugurated on June 18,
2020
Independent
Director
Tsai, Yung-
Lu		 8 0 100
Independent
Director
Kao, Wen-
Hung		 2 0 100 Retired on June 18, 2020
Independent
Director
Yen, Da-Ho		 6 0 100 Inaugurated on June 18,
2020
Independent
Director
Tsai, Shih-
Kuang		 6 0 100 Inaugurated on June 18,
2020
Independent
Director
Chiu, Hui-
Chin		 6 0 100 Inaugurated on June 18,
2020

Other noteworthy matters ：

  1. State the Board Meeting’s date, session, proposal contents, all Independent directors’ opinions

and the company’s actions in response to the opinions if any of the following occurred ： (1) Matters specified in Article 14.3 of Taiwan’s Securities and Exchange Act:

§14-3 of the Objection or
Board of Contents of the proposal and subsequent Securities and reservation of
directors management Exchange Act independent
Items directors
2020 1. Revision of the Articles of Incorporation None
First,
3/13/2020		 2. Establishment of the Audit Committee Organic
Rules		 None
3. Revision of the Guidelines for Electing Board
Directors and Supervisors		 None
4. Revision of the Rules of Procedure for
Shareholders’ Meetings		 None
5. Revision of the Procedures for the Acquisition
or Disposal of Assets		 None
6. Revision of the Operating Procedure for
Lendingto Others		 None
7. Revision of the Operating Procedure for
Endorsements/Guarantees		 None
8. Ratification of Derivatives None
9. Discussion of Lendingof Funds None
10. Limits of borrowings from Bank SinoPac and
ratification of endorsements/guarantees to None
subsidiaries
  • 24 -
11. Revision of thewritten internal control system
None
Opinions from independent directors: None.
How the Companyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.
2020
Second
5/7/2020		 1. Support Letter to the subsidiary GATETECH
TECHNOLOGY INC.		 None
2. Line of credit from E.SUN Bank None
3. Ratification of Derivatives None
4. Discussion of Lendingof Funds None
5. Limits of borrowings from Taipei Fubon
Commercial Bank Co., Ltd. and ratification of
endorsements/guarantees to subsidiaries		 None
Opinions from independent directors: None.
How the Companyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.
2020
Third
6/18/2020		 1. Election of Chairman of the Company None
Opinions from independent directors: None.
HowtheCompanyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.
2020
Fourth
6/29/2020		 1. Discussion of Lendingof Funds None
2. Ratification of Derivatives None
3. Revision of the written internal control system None
4. Line of credit from E.SUN Bank and
ratification
of
endorsements/guarantees
to
subsidiaries		 None
5. Revision of the Operating Procedure for
Handling Major Internal Information to Prevent
against Insider Trading		 None
6. Revision of the Ethical Code of Conduct for
Directors, Supervisors,and Managers		 None
7. Revision of the Corporate Social Responsibility
Best Practice Principles		 None
8. Revision of the Corporate Governance Best-
Practice Principles		 None
9. Revision of the Ethical Corporate Management
Best-Practice Principles		 None
10. Revision of the Board of Directors Meeting
Regulations		 None
11. Revision of the Organic Rules of the
Compensation and RemunerationCommittee		 None
Opinions from independent directors: None.
How the Companyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.
2020
Fifth
8/6/2020		 1. Discussion of Lendingof Funds None
2. Ratification of line of credit from Chinatrust
Commercial Bank		 None
3. Revision of thewritten internal control system None
4. Ratification of line of credit from Taishin
International Bank		 None
Opinions from independent directors: None.
HowtheCompanyhandles opinions of all independent directors: None.
Decision made: The proposals were approved a
meeting.		 s is by all directors attending the
2020 1. Discussion of Lendingof Funds None
  • 25 -
Sixth 2. Ratification of Derivatives None
10/29/2020 3. Discussion of the prohibited lending of funds None
and
endorsements/guarantees		 involving
subsidiaries
Opinions from independent directors: None.
How the Companyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.
2020
Seventh		 1. Endorsements/Guarantees to the
LEOHAB ENTERPRISE CO.,LTD.		 subsidiary
 None
12/2/2020 2. Endorsements/Guarantees to the
GATETECH TECHNOLOGY INC.		 subsidiary None
3. Discussion of Lendingof Funds None
4. Ratification of Derivatives None
5. Ratification of line of credit from
Commercial Bank		 Chinatrust None
Opinions from independent directors: None.
How the Companyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.
1. Line of credit from E.SUN Bank None
2. Ratification of line of credit from HSBC Bank
(Taiwan)Limited		 None
2020
Eighth
12/28/2020		 3. Ratification of Derivatives
4. Independence assessment and delegation of
CPAs
Opinions from independent directors: None.
None
None
How the Companyhandles opinions of all independent directors: None.
Decision made: The proposals were approved as is by all directors attending the
meeting.

(2) Opinions or records of independent director on other matters ： None.

  1. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified:
Date Name of Contents of the Cause of recusal and voting
director proposal
6/29/2020 Chen, Delegation of For this proposal, except for Chairman
Chiu-Lang President Chen, Chiu-Lang, who was the candidate for
President and excused himself due to
conflict of interest and hence did not take
part in the discussion and voting, all the
other attending directors approved it.
Independent directors were consulted and
they also approved the proposal. It was
approved unanimously.
12/2/2020 Chen, Managers serving For this proposal, except for Chairman
Chiu-Lang also managers of Chen, Chiu-Lang, who excused himself due
other for-profit to conflict of interest and hence did not take
businesses and part in the discussion and voting, all the
lifting of the non- other attending directors approved it.
competition Independent directors were consulted and
pledge obligations they also approved the proposal. It was
approved unanimously.
12/2/2020 Chen, Second For this proposal, except for Chairman
Chiu-Lang distribution of the Chen, Chiu-Lang, who excused himself due
remuneration to to conflict of interest and hence did not take
managers and part in the discussion andvoting,all the
  • 26 -
employees for other attending directors approved it.
2019 Independent directors were consulted and
they also approved the proposal. It was
approved unanimously.
12/2/2020 Chen, Three-festival gift For this proposal, except for Chairman
Chiu-Lang money for Chen, Chiu-Lang, who excused himself due
managers for to conflict of interest and hence did not take
2020 part in the discussion and voting, all the
other attending directors approved it.
Independent directors were consulted and
they also approved the proposal. It was
approved unanimously.

  1. Goal and assessment on strengthen the function of the board in most recent year ： (1) In order to establish a good corporate governance system and implement corporate culture and corporate social responsibility for integrity management, the company has established “Code of Corporate Governance” with reference to the relevant regulations by the Taiwan Stock Exchange Co., Ltd. and the Securities and Futures Trading Centre of the Republic of China. The Code of Corporate Integrity and the Code of Corporate Social Responsibility, which was approved by the Board of Directors on December 30, 2013, and a dedicated unit promotes the development and supervision of integrity management policies and prevention programs. The unit submits a report on the implementation of the Code of Corporate Social Responsibility and the implementation report of the Code of Corporate Integrity to the Board of Directors. The corporate governance team is responsible to report to the board of directors on the December 28, 2020 with the implementation of the 2020 Code of Corporate Social Responsibility and the Code of Corporate Integrity.

  2. (2) In accordance with the developing trend of international corporate governance, the Company set up “the standard procedure of handling requests from directors” on May 9, 2019 to improve the level of corporate governance.

  3. (3) The Company passed the “Regulations on the self evaluation or peer evaluation” on May 9, 2019 and completed the 2020 annual evaluation of the Board, Board members, and functional Committee based on the participation, profession, and continuous study of the directors and operation of the Remuneration Committee on Dec 28, 2020. According to the Board’s 2020 performance evaluation result, the overall operation of the Board is good.

3.3.2 Operational status of the Audit Committee and participation of supervisors in the operations of the Board of Directors:

The Committee met 5 times in total in 2020 (A). Its operational status is described as follows:

as follows:
Title Name Attendance in Person（Ｂ） Attendance Rate (%)（Ｂ/Ａ） Remarks
Convener Tsai,Yung-Lu 5 100
Member Yen,Da-Ho 5 100
Member Tsai,Shi-Kuang 5 100
Member Chiu,Hui-Qin 5 100
The Company’s Audit Committee consists of all independent directors and it meets at least once per quarter.
Matters within the scope of review by the Audit Committee primarily include:
12. Preparation or revision of the internal control system as required by Article 14-1 of the Securities and
Exchange Act.
13. Evaluation of the effectiveness of the internal control system.

  • 27 -

  • Revision or amendment of the procedures for acquiring or disposing of assets, trading derivatives, lending funds to others, providing endorsements or guarantees to others, among other major financial operations as required by Article 36-1 of the Securities and Exchange Act.

  • Matters involving the interests of the Board directors.

  • Trading of major assets or derivatives.

  • Major lending of assets, endorsements, or guarantees.

  • Raising, issuance, or private placement of equity securities.

  • Delegation, dismissal of CPAs or their compensation.

  • Appointment or dismissal of the head of finance, accounting, or internal audit.

  • Annual Financial Statement and Semi-Annual Financial Statement.

  • Other important matters as specified by the Company or the competent authority.

  • Other noteworthy matters ：

  • When the operation of the Audit Committee is found with one of the following conditions, the date, session No., details of proposals, decisions made by the Audit Committee, and how the Company addressed opinions from the Audit Committee in the Board of Directors’ meeting shall be stated:

(1) Matters listed in Article 14-5 of the Securities and Exchange Act ：

Date Term Contents of the proposal Decision of the Audit
Committee		 How the Company
addressed opinions
from the Audit
Committee
10/20/2020 Third Strategic equity investment It was approved by
the Audit Committee
unanimously		 It was approved by all
attending Board
directors
10/20/2020 Third Financial Statement for the third
quarter of 2020		 It was approved by
the Audit Committee
unanimously		 It was approved by all
attending Board
directors
12/2/2020 Fourth Lifting of the non-competition pledge
obligations
for
the
Company’s
managers serving as managers of other
for-profit businesses		 It was approved by
the Audit Committee
unanimously		 It was approved by all
attending Board
directors
12/28/2020 Fifth Independence
assessment
and
delegation of CPAs		 It was approved by
the Audit Committee
unanimously		 It was approved by all
attending Board
directors

  • (2) Besides those mentioned in the foregoing, other resolutions with approval by two-thirds and more of all directors despite the failure to be approved by the Audit Committee: None.

  • II. For the recusal upon conflicts of interest among independent directors, the name of the independent director, details of the proposal, reason for the recusal, and participation in the voting process or not shall be described: None.

  • III. Communication among the independent directors, the head of internal audit, and the CPAs (important matters communicated, method, and results of the communication over the financial standing and business operation of the Company, etc.):

The communication among the independent directors, the head of internal audit, and the CPAs of 2020 is already disclosed on the website of the Company. For related information, refer to the website

below. (Http://www.syncmold.com.tw/syncmold2018/images_syncmold/directorate/2020 communications

between independent directors and internal audit.pdf)

  • 28 -

3.3.3 The difference between the corporate governance implementation and the Corporate Governance Best Practice Principles for TWSE/GTSM-Listed Companies and reasons:

Companies and reasons:
Evaluation Item Implementation Status Deviating from the “Corporate
Social Responsibility Best-
Practice Principles for
TWSE/GTSM Listed
Companies” and the root cause
Yes No Description
1. Does the company establish and disclose the Corporate
Governance Best-Practice Principles based on “Corporate
Governance Best-Practice Principles for TWSE/TPEx
Listed Companies”?		 V The Company has based on the “Corporate
Governance Best-Practice Principles for
TWSE/GTSM Listed Companies” to set up and
disclose the Company’s corporate governance
best-practiceprinciples forguidelines on the MOPS.		 In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
2. Equity structure and shareholder rights
(1) Has the Company set internal operating procedures to
deal with shareholder proposals, doubts, disputes and
litigation matters, and does it implement these in
accordance with its procedures
(2) Does the Company have a list of those who ultimately
control the major shareholders of the Company?
(3) How does the Company establish its risk management
mechanism and firewalls involving related
enterprises?		 V
V
V		 (1) The Company has a spokesperson, stock affairs
supervisor, and associated person assigned to
effectively handle shareholder’s suggestions or
disputes. Legal issues, if any, will be handled with the
assistance of the legal affair personnel.
(2) Regularly disclose the pledge, increase or decrease of
shareholding, or the occurrence of other events that
may cause significant changes in the shares of the
shareholders with over 10% shareholding; also,
maintain a good relationship with the major
shareholder at any time for control.
(3) The management responsibilities of the Company and
the affiliated enterprises are clearly defined; also,
business transactions are conducted in compliance
with the Company’s internal control system and the
relevant requirements. For strengthening the control
mechanism, the procedures for monitoring
subsidiaries are regulated with proper risk control.		 In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
  • 29 -
Evaluation Item Implementation Status Deviating from the “Corporate
Social Responsibility Best-
Practice Principles for
TWSE/GTSM Listed
Companies” and the root cause
Yes No Description
(4) Has the Company set internal standards to prohibit the
use of undisclosed insider information to trade
securities on the market?
V		 (4) Syncmold worked out the “Management measures for
handling internal significant information and
preventing insider trading” to prohibit the use of
undisclosed insider information to trade securities on
the market and propagandize regularly to insiders and
employees.
3、Composition and Responsibilities of the Board of
Directors
(1) Does the Board of Directors have diversified policies
regulated and implemented substantively according
to the composition of the members?		 V (1) The Company has established a "Code of Practice for
Corporate Governance". The Company's "Code of
Practice for Corporate Governance" Article 20 on the
diversity of board members is listed as follows：
The composition of the board of directors should
be considered in a diversified manner, and
appropriate diversification policies should be
formulated for its own operation, operational type
and development needs, including but not limited to
the following two standards：
1.Basic requirements and values: gender, age,
nationality and culture, etc.

In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
  • 30 -
V 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:		 2. Professional knowledge and skills: professional
background (such as law, accounting, industry,
finance, marketing or technology), professional
skills and industry experience, etc.
Board members should generally have the
knowledge, skills and literacy necessary to perform
their duties. In order to achieve the ideal goal of
corporate governance, the overall ability of the board
of directors should be as follows：
1. Operation judgement 2. Accounting and financial
knowledge 3. Business management 4. Crisis
dealing 5. Industry knowledge 6. International
market view 7. Leadership 8. Decision-making
Implementation on diversity of the board of directors:
Core Item
Directors		 Gender 1 2 3 4 5 6 7 8
Chiu-Lang, Chen Male V V V V V V V V
Shu-Yen, Chuang Female V V V V V V
Fortune Investment
Co.,Ltd.		 Male V V V V V V V V
Yung-Lu, Tsai Male V V V V V V V
Tsai, Shih-Kuang Male V V V V V V V V
Yen, Da-Ho Male V V V V V V
Chiu, Hui-Chin Male V V V V V V V V
Diversity of the board of directors is on our
website and MOPS.
(2) Does the Company, in addition to setting the
Remuneration Committee and Audit
Committee lawfully, have another functional
committee set up voluntarily?		 (2)The Company has set up Compensation and
Remuneration
Committee
and
the
Audit
Committee now.

(2) Assessment of the necessity for
additional functional committees
with reference to the business
operation status and scale in the
future.
  • 31 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviating from the “Corporate
Social Responsibility Best-
Practice Principles for
TWSE/GTSM Listed
Companies” and the root cause
Yes No Description
(3) Does the Company have the performance
evaluation rules and methods for the Board of
Directors regulated and have the performance
evaluation performed regularly every year and
report the result to the Board for reference on
directors’
individual
remuneration
and
reappointed nomination?





V		 V (3) To implement corporate governance, to improve
the functions of the board of directors and to enhance
the operation efficiency of the board of directors, the
board of directors’ meeting of the Company has
approved the “Regulations for Board of Directors
Performance Evaluation” on May 9, 2019, and has
specified that the internal board of directors
performance evaluation, self-evaluation of individual
board member, peer evaluation and each functional
committee shall be conducted at least once annually.
The Company shall take into consideration its
condition and needs when establishing the criteria for
evaluating the performance of the board of directors,
which should cover, at a minimum,
the following five aspects:
1. Participation in the operation of the company.
2. Improvement of the quality of the board of
directors' decision making.
3. Composition and structure of the board of
directors.
4. Election and continuing education of the directors.
5. Internal control.
The criteria for evaluating the performance of the
board members (on themselves or peers), should
cover, at a minimum, the following six aspects:
1. Alignment of the goals and missions of the
company.
In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.

  • 32 -

  • Awareness of the duties of a director;

  • Participation in the operation of the company.

  • Management of the internal relationship and communication.

  • The director's professionalism and continuing education.

  • Internal control.

The criteria for evaluating the performance of functional committees should cover, at a minimum, the following five aspects:

  1. Participation in the operation of the company.

  2. Awareness of the duties of the functional committee.

  3. Improvement of quality of decisions made by the functional committee.

  4. Composition of the functional committee and election of its members.

  5. Internal control.

The Company has completed relevant evaluation on the board of director’s operation for the period from January 1, 2020 to December 31, 2020, including the self-evaluation questionnaire survey of 7 directors (including 4 independent directors) and the internal self-evaluation questionnaire survey of the board of directors.

The statistical method for the performance evaluation is divided into two types: the board member selfevaluation and questionnaire and the internal selfevaluation questionnaire for board of directors. In the questionnaire, a higher score in an item means that the achievement rate for the item is higher. For an achievement rate above 90%, it is evaluated to be “Outstanding”; when the achievement rate is above 80%, it is evaluated to be “Successful”; for the rest of

  • 33 -
(4) Does the Company have the independence of the
public accountant evaluated regularly?		 the rates, they are evaluated to be “Improvement
Needed.” After the completion of the aforementioned
evaluation score statistics, the 2020 board of
director’s performance evaluation achievement rate of
the Company was 90% and the evaluation result was
“Outstanding.” In addition, the evaluation result was
reported in the board of directors’ meeting dated
December 28, 2020.
The Company has passed the “directors, supervisors,
functional committees, and managers’ remuneration
management regulation” on Dec 27, 2019. According
to the regulation, the Board has the right to determine
the directors and supervisors’ remuneration based on
two dimensions in the assessment of evaluation on the
Board’s performance, “participation of the Company’s
operation”, and “contribution value”.
(4) The Company evaluates the independence of
public accountant according to the regulations of
“Corporate Governance Best-Practice Principles for
TWSE/TPEx Listed Companies” and “The Norm of
Professional Ethics for Certified Public Accountant
No. 10”. Major evaluation items are as follow:
1. Company shares, bond, or other instruments
held by a shareholder in one’s own name and by a
spouse, underage child, or in others’ name.
2. No capital loan in one’s own name and a spouse
or in others’ name.
3. No business relation with the Company’s
directors, supervisors, and managers that interfere
with the independence on one’s own name and a
spouse.

















In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.

  • 34 -

  • Not served as the Company’s directors, supervisors, managers, or a position that has significant effect on audit cases in one’s own name within two years, and promise not served in the positions mentioned previously.

  • None of one’s family member served as the Company’s directors, supervisors, managers, or a position that has significant effect on audit during the auditing period.

  • Not a direct relative, affinity, second-degree relative of the Company’s directors, supervisors, managers during the auditing period.

Independent auditors (CPA), Tung-Feng Lee and Chih-Yuan Chen, of Deloitte Taiwan met all the evaluation and were appointed by the board of directors on December 28, 2020.

4 、 Does the company set up a corporate governance unit or appoint personnel responsible for corporate governance matters (including but not limited to providing information for directors and supervisors to perform their functions, handling work related to meetings of the board of directors and the shareholders' meetings, filing company registration and changes to company registration, and producing minutes of board meetings and shareholders’ meetings)?

V

In compliance with the Corporate According to the resolution of the board of directors’ Governance Best Practice Principles meeting dated May 9, 2019, the Company established for TWSE/TPEx Listed Companies. the corporate governance team, and the Special Assistant of the Chairman’s Office, Yi-Chun Huang, was appointed to act as the corporate governance supervisor to protect the rights and interests of shareholders and to strengthen the functions of the board of directors.

Special Assistant, Yi-Chun Huang, is already equipped with management work experience in financial and stock affairs for more than ten years, and his main responsibilities are to provide information and documents necessary for the directors and supervisors to perform duties, to assist the directors and supervisors in legal compliance and to handle matters related to the board of directors’ meetings and shareholders’

  • 35 -
meetings according to the laws.
2020 duty execution status is as follows:
1. Assist independent directors and general directors to
perform job duties, provide necessary documents and
arrange the training for the directors.
2. Provide assistance to legal compliance of the board
of directors’ meeting and the shareholders’ meeting
procedure and resolution.
3. Prepare the board of directors’ meeting agenda for
informing the directors seven days prior to the
convention of the meeting, convene meeting and
provide meeting documents and data. In case where a
proposal requires any director’s recusal of conflict of
interest, provide a notice in advance, and complete the
meeting minutes for the board of directors’ meeting
within twenty days after the meeting.
4. Handle the shareholders’ meeting date preliminary
registration,
prepare
meeting
notice,
meeting
handbook and meeting minutes within the statutory
deadlines and handle the registration alternation
matters for the amendment of the articles of
incorporation or the election of directors.














5、Does the company establish a communication
channel and build a designated section on its
website for stakeholders (including but no
limited to shareholders, employees, customers,
and suppliers), as well as handle all the issues
they care for in terms of corporate social
responsibilities?		 V The company maintains good relationships with
investors, employees, customers, suppliers and other
stakeholders, and has a stakeholder area on the
company's website to deliver immediate and
appropriate responses to issues raised by stakeholders
and important corporate social responsibility issues in
response to their concerns. (http：

In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
  • 36 -
//www.syncmold.com.tw/syncmold-
2018/item_interested_person_2018.html)
6、Does the company appoint a professional
shareholder service agency to deal with
shareholder affairs?		 V The Company commissioned a professional stock
affairs service agent, CTBC Bank Stock Agent, to
handle the Company’s stock service matters, and with
the “Guidelines for Handling of Stock Affairs”
stipulated to regulate the relevant operations.		 In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
7、Information disclosure
(1) Does the Company have a website setup and the
financial business and corporate governance
information disclosed?		 V (1) The Company’s website (www.syncmold.com.tw)
has the shareholder’s section setup to disclose
financial information and corporate governance;
also, to establish a communication channel for
communicating to investors.
In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
(2) Does the Company have adopted other information
disclosure methods (such as, establishing an
English website, designating responsible person
for collecting and disclosing information of the
Company, substantiating the spokesman system,
placing the juristic person seminar program on
the Company’s website, etc.)?
V		 (2) In addition to setting up a website in both Chinese
and English, the company has a spokesperson
responsible for external communication. And a
designated person is responsible for collecting
company information to provide spokespersons
and relevant business departments with answers
to interested parties and authorities. Via MOPS,
earnings call, the company's website and
newspapers and magazines, etc., the company
exposes financial information to the investing
public.
In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
  • 37 -
(3) Does the Company file and disclose the annual
financial reports within two months after the end
of its accounting year, and disclose and file the
financial reports of the first, second, and third
quarters and monthly operation status in advance
before the deadline?		 V (3) The Company did not file and disclose the 2020
financial reports within two months after the end
of its accounting year.		 It will be adjusted in accordance
with the authority’s regulations
in the future.
8、Are there any other important
information(including but not limited to the
interests of employees, employee care, investor
relations, supplier relations, the rights of
stakeholders, the continuing education of
directors and supervisors, the implementation of
risk management policies and risk measurement
standards, the execution of customer policy, the
purchase of liability insurance for the Company’s
directors and supervisors) that are helpful in
understanding the corporate governance
operation of the Company?
V		 (1) Employee rights and employee care: The
company has set up special processing channel
for various stakeholders. For example, the
management department specializes in handling
employee rights, and employee welfare
committee is set up to care for the needs of
employees. Holiday bonuses, travel, birthday
allowance and labor festivals subsidies are
provided each year. The system operates
smoothly.。
(2) Investor Relations: Establish a communication
channel for the spokesperson and agency
spokesperson system to respond to shareholders’
questions.
(3) Supplier Relationship: The company has always
maintained a good relationship with its suppliers.
In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
  • 38 -
Evaluation Item Implementation Status Deviating from the “Corporate
Social Responsibility Best-Practice
Principles for TWSE/GTSM Listed
Companies” and the root cause
Yes No Description
(4) Rights of interested parties: The company
respects and safeguards the legitimate rights and
interests of stakeholders, and maintains good
communication channels with customers,
employees, suppliers, etc. The business dealings
with related companies under the principle of
fairness and reasonableness. Written
specifications are set for the financial operations
and the transfer of interests and unconventional
transactions are prohibited. In accordance with
the provisions of the competent authority, the
company handles relevant information
announcements in a timely manner to provide
various company information.
(5) Directors and Supervisor's training situation: The
directors and Supervisors of the Company have
professional capabilities in business, financial
accounting and business management. Also, the
Corporate Governance Act and related
information are regularly updated and provided
to the Directors and Supervisors for reference,
and the Company will take the initiative to
inform the Director and Supervisor if they have
  • 39 -

obtained relevant corporate governance courses. The training situation has been exposed to the MOPS for reference by shareholders and investors. (6) Implementation of risk management policies and risk measurement standards: The company has established various internal regulations and internal control systems in accordance with the law to conduct various risk management and evaluation. Internal auditing unit regularly and irregularly checks the implementation level of the internal control system. (7) Implementation of customer policy: The Company maintains a good relationship with its customers and provides customer service in accordance with various internal management methods, and “customer satisfaction” is an important part of the quality policy. (8) The acquisition of liability insurance for directors :The Company has acquired liability insurance for directors and supervisors.

  • 40 -

  • 9、Please explain the improved status and the priority matters and measures on the unimproved items based on the latest Corporate Governance Evaluation Result by the Taiwan Stock Exchange Corporate Governance Center: The Company performed the self-assessment of corporate governance through the Corporate Governance Evaluation System established by the

  • corporate governance center of the Taiwan Stock Exchange. The result of the seventh intake of the corporate governance review of 2020 was 6%-20%. According to the findings of the 2020 corporate governance review, matters where improvement has been made by the Company include:

  • The rationale for continued nomination of independent directors who have served three terms in office to continue serving as independent director has been disclosed truthfully in the Market Observation Post System.

  • For recent shareholders’ meetings of the Company, more than one-third of the directors (including the two independent directors) attended the general shareholders’ meeting.

  • The Company has voluntarily set up more seats for independent directors than regulatory requirements.

  • For 2020, there were a total of three independent directors and all of them did not serve a term longer than 9 years.

  • The Company has set up a compliant Audit Committee.

  • The Company filed important English news concurrently in 2020.

Prioritized items for the Company in the future include:

  1. Is the Company’s general shareholders’ meeting held before the end of May?

  2. Set an extra-statutory Functional Committee.

  3. It is specified in the Board of Directors Performance Evaluation Guidelines that an external assessment shall be performed at least once every three years.

  4. The Company releases the Annual Financial Statement within two months after the end of a fiscal year.

  5. The Corporate Social Responsibility Report or other reports disclosing non-financial information of the Company are certified by a third party.

  6. 41 -

3.3.4 Remuneration Committee

3.3.4.1 Remuneration Committee members

Identity Terms
Name		 Over five years of experience and the following
professionalqualifications		 Over five years of experience and the following
professionalqualifications		 Over five years of experience and the following
professionalqualifications		 Independence criteria Independence criteria Independence criteria Independence criteria Independence criteria Independence criteria Independence criteria Independence criteria Serving as a
Remunerati
on
Committee
member of
another
public
company		 Remarks
University
teaching in
areas of
commerce,
law, finance,
accounting or
related
corporate
business		 Working as a
judge, attorney,
lawyer,
accountant or
other positions
that require
professional
certification		 Work
experience
in commerce,
law,
finance,
accounting
or
related
corporate
experiences
1		 2 3 4 5 6 7 8
Independent
Director		 Da-Ho ,Yen
─		 ─ 2
Independent
Director		 Yung-
Lu,Tsai		 ─ ─ ─
Independent
Director		 Shih-
Kuang,Tsai
─		 2

Note: A “  “ is marked in the space beneath the respective column when a director or supervisor has met that condition during the two-year prior to election and

during his or her period of service; the conditions are as follows:

  • （ 1 ） Not employed by the Company or an affiliated business.

  • （ 2 ） Not a director or supervisor of the Company or its affiliated company. This restriction does not apply to independent directors of subsidiaries in which the company or its parent company directly or indirectly holds over 50% of the shareholder voting rights.

  • （ 3 ） company shares or being a top-10 natural person shareholder in one’s own name, held by a spouse or underage child, or held by nominee agreement.

  • （ 4 ） Neither a spouse, second-degree relative, nor a fifth degree direct relative of the persons listed under the previous three items.

  • （ 5 ） Neither a director, supervisor or employee of an institutional shareholder directly owning more than 5% of the company’s outstanding shares, nor one of the company’s top-five institutional shareholder.

  • （ 6 ） Neither a director, supervisor, manager or shareholder holding more than a 5% stake in certain companies or institutions that have a financial or business relationship with the Company.

  • （ 7 ） Not a professional who provides commercial, legal, financial, and accounting services or consulting to the Company or its affiliated companies, proprietor, partner, owner of a company or an institution, partner, director (executive), supervisor (executive), manager, and their spouses.38

  • （ 8 ） Standing does not match any of the scenarios described in Article 30 of the Company Law.

3.4.2 The responsibility of Remuneration Committee ：

  • A. Establish and regularly review the policies, systems, standards and structures of directors and managers for performance evaluation and compensation.

  • B. Regularly evaluate and determine the salary remuneration of directors and managers.

  • C. When the salary remuneration committee performs the functions, it shall be based on the following principles, but the supervisor remuneration proposal shall be submitted to the board of directors for discussion, and the supervisor salary remuneration shall be prescribed by the company's articles of incorporation or the resolution of the shareholders' meeting authorizing the board of directors to:

  • a. Managerial performance evaluation and compensation and remuneration shall take reference of the general criteria for the payment in the industry and take into consideration the legitimate correlation with personal performance, operational

  • 42 -

performance of the Company, and risks in the future.

  • b. Directors and managers should not be led to engage in aggressive risk appetite for the pursuit of salary remuneration.

  • c. The ratio of dividends paid to the short-term performance of directors and timing of changes in salary compensation to senior managers should be determined by considering the industry characteristics and the nature of the company's business.

  • D. The salary remuneration referred to in the preceding paragraph includes cash remuneration, stock options, dividend share, retirement benefits or resignation benefits, various allowances and other measures with substantial rewards shall be in accordance with the guidelines for the record of the annual report of the public company. The directors and managers are paid the same. When the board of directors advising remuneration committee, it should consider the amount of salary remuneration, the payment method and the company's future risks.

  • E. The remuneration of the directors and managers of the subsidiaries shall be submitted to the board of directors of the company for discussion. After being advised by the remuneration committee, they are subject to the approval of the board of directors

  • 3.4.3 Operation of remuneration committee

  • A. There are three members in Remuneration Committee of the Company. B. Current term of office: June 18, 2020 through June 17, 2023; the most recent year The Board held 4 meetings (A) with the attendance record and qualification

of Committee members as follows ：

Title Name Actual
attendance(B)		 Actual attendance rate
(%) (B/A)		 Remarks
Convener Da-Ho, Yen 2 100 Inaugurated
on June 18,
2020
Member Yung-Lu, Tsai 4 100
Member Shih-Kuang, Tsai 2 100 Inaugurated
on June 18,
2020
Member Wen-Hung, Kao 2 100 Retired on
June 18,
2020
Member Ming- Ju, Ren 2 100 Retired on
June 18,
2020
Other noteworthy matters：
1. If the board of directors does not adopt or amend the recommendations from the remuneration
committee, it shall state the date and time of the board meeting, the content of the proposal,
the results of the resolutions and the company's treatment of the opinions of the
compensation committee. (If the salary paid by the board of directors is better than the salary
compensation committee's recommendations, the rates and reasons should be stated)：
None.
2. In the event that any member of the Remuneration Committee has expressed dissent or
reservation over the Committee’s decisions, and that the dissent or reservation has been
recorded or delivered in writing, the decision shall indicate the date of the Committee’s
meeting, term, contents of the proposal, opinions of all the members, and how the opinions
of a member is handled: None.
3. The results of the recent annual Compensation Committee discussion and resolution are as
follows:
  • 43 -
C. Dates,motions and resolutions of remuneration committee in 2020 C. Dates,motions and resolutions of remuneration committee in 2020 C. Dates,motions and resolutions of remuneration committee in 2020
Date Proposal Compensation
Committee
resolution		 The opinions of
the Compensation
Committee
March 5,
2020		 1. Review of the distribution of the
remuneration to directors and
supervisors and that to employees
for 2019 of the Company as
advised bythe management.		 All the attending
members passed
the resolution		 All the attending
directors passed
the resolution
April 29,
2020		 1. Review of the distribution of the
remuneration to directors abd
supervisors for 2019 of the
Company.
2. Review of the distribution of
remuneration to managers and
employees for 2019 of the
Company.		 All the attending
members passed
the resolution		 All the attending
directors passed
the resolution
July 29,
2020		 1. Review of the compensation for
Chairman Mr. Chen, Chiu-Lang to
also serve as the President as
delegated by the Company’s Board
of Directors on June 29,2020.		 All the attending
members passed
the resolution		 All the attending
directors passed
the resolution
November
23, 2020		 1. Review of the distribution of
remuneration to managers and
employees for 2019 of the
Company.
2. Review of the distribution of three-
festival gift money to managers for
2020 of the Company.
3. Review of the promotion and salary
raise for managers and for 2021 of
theCompany.		 All the attending
members passed
the resolution		 All the attending
directors passed
the resolution
  • 44 -

3.3.5 Performance of Corporate Social Responsibility

Item Implementation Status Deviations from
“CorporateSocialResponsibilityBest
-
PracticePrinciplesforTWSE/GTSML
istedCompanies”and Reasons
Yes No Summary
1. Has the Company set up major principles on the risk
assessment on environment, society, and corporate
governance issues related to the company
operations, and set up related policy or strategy of
risk management?
2. Does the Company have a specific (or part-time) unit
set up to promote corporate social responsibility,
have the management authorized by the Board of
Directors to handle matters and report the
processing results to the Board of Directors?		 V

V		 The Company has set up risk assessment on major
issues based on the major principles of corporate social
responsibility and set up related policy or strategy of
risk management as follow:
Major
Principles
Risk
Assessment
Item
Related Policy or Strategy of Risk
Management
Environme
nt
Environmental
protection
The Company has done its responsible
in environment and actively promote the
activity and measures on environmental
education and environmental production
and energy saving, such as bring one’s
own cups and utensils, double-printed
on paper or reuse single-printed paper to
reduce the energy consumption and
energy saving. Specific and quantify
data and goal are set up for performance
management.
Society
Labor Relations
Employees are the most important
partners and assets of a corporate. The
Company is dedicated to building a
good labor relation and provides a
stable working environment, multiple
education training system, and diverse
employee benefits, so that every
employee can enjoy one’s job and take
care of their family while developing
their career.
Corporate
Governanc
e
Regulation
Compliance
The Company ensures all personnel and
operation have followed the relative
regulations through governance
organization and implement internal
control system.
The Company has set up a Corporate Governance
Team on the Board meeting on May 9, 2019 and
assigned Huang Yi-Chung, the special assistant of the
Chairman’s room, as the governance manager. The
team is also responsible for corporate social

In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.



In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.
  • 45 -
Item Implementation Status Implementation Status Deviations from
“CorporateSocialResponsibilityBest
-
PracticePrinciplesforTWSE/GTSML
istedCompanies”and Reasons
Yes No Summary
responsibility and takes charge of proposing and
executing project on the policy, system, or
management direction of the corporate social
responsibility. An annual performance target and
specific execution project and a regular meeting will
be set up to review the executing performance on the
compliance status of the corporate social responsibility
and project execution. It will report the execution
status to the Board annually, and the 2020 execution
status was reported on Dec 28, 2020.



3. Development of sustainable environment
(1) Does the Company have an appropriate
environmental management system established in
accordance with its industrial character?
(2) Is the Company committed to enhance the
utilization efficiency of resources and use
renewable materials that are with low impact on
the environment?		 V
V		 (1) Environmental and safety and health
management systems have been established and
ISO14001, OHSAS 18001 and other
certifications have been obtained.
(2) The company promotes the recycling of paper
and promotes the recycling and reuse of waste
resources and carries out paperless operations.
The company's production process does not have
a procedure for harmful substances, and the
wastes of the production are receipted and
recycled by professional manufacturers.		 In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.

In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.
  • 46 -
(3) Does the Company evaluate the existing and future
potential risk and opportunity of climate change to
the corporate, and adopt relative corresponding
measures?		 V (3) Substantial Risk of Corporate Caused by
Climate Change:
Climate change will cause extreme weather,
including increased frequency of typhoons
(hurricanes), increase of annual average
temperature, concentrated and short-time of
rains and uneven rainfalls, such that the power
consumption for air conditioning and office
lighting demand of the Company is increased,
leading to increase of power consumption cost.
Opportunity to Corporate Due to Climate
Change:
In response to the low carbon economic demands
of the governments, customers and international
investment institutions, the Company seeks to
contribute efforts to the greenhouse climate
change and considers the sources of various
aspects along with the implementation of green
research, green factory, enhanced energy saving,
water saving, reduction of production energy
and environmental information disclosure etc.,
in light of continuously seeking the reduction of
impacts of the Group on the environment.
In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.
(4) Has the Company count the greenhouse gas
emissions, water usage, and total weight of waste
over the last two years, and formulate policy on
energy saving, greenhouse gas reducing, water
saving, or waste management?		 (4) According to the self-accounting result, the
emissions for Scope II in 2019 and 2018 were
approximately below the carbon dioxide
equivalent of 192,476 and 200,727 kg. The
Company will continue to contribute efforts in
the reduction of greenhouse gas emission.
The domestic greenhouse gas emission of the		 In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.
  • 47 -
Company refers to the indirect emission type,
and the emission source mainly comes from the
power consumption demanded by the air
conditioning and office lighting. Accordingly,
energy saving method is adopted for the
establishment of relevant policies in order to
achieve the goal of reduction of greenhouse gas
emission.
4. Social issues
(1) Does the Company have the relevant management
policies and procedures stipulated in accordance
with the relevant laws and regulations and
international conventions on human rights?
(2) Does the Company set up and implement
reasonable employee benefits (including
remuneration, vacation, and other benefits), and
reflect the operation performance or result on the
employee remuneration?		 V
V		 (1)The Company respects and follows the internationally
known human rights such as “Universal Declaration
of Human Rights” and “Guiding Principles on
Business and human rights” by the United Nations
and precludes any behavior that infringes or violates
human rights.All management regulations are in
compliance with and comply with relevant
government regulations and are committed to
complying with international social
responsibility regulations to ensure employee
rights and interests.
(2)The Company has set up Committee of Employees'
Welfare on 2004 to establish all benefit measures.
The implementation is disclosed on the Company’s
website and page 95 of the annual report.
Remuneration Committee was also set up to evaluate
operation cost, profitability, consumer price index,
fairness of the internal and external salary, and
performance management, and use them and social
responsibility as reference to allocate and adjust
remuneration of all employees.
In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.

In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.
  • 48 -
(3) Does the Company provide employee with a safe
and healthy working environment, and provide
safety and health education to employees
regularly?		 V (3) The working environment complies with the
relevant regulations of the government
occupational safety and health and provides
various safety and health education and training
sessions according to the relevant regulations on
occupational safety and health.
(4) The company prepares annual employee
education, training programs and special lectures
every year, covering functional training, logical
and innovative thinking and physical and mental
development, to enhance the professional
competence of employees, innovative thinking
and balance physical and mental development.		 In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.


In compliance with the Corporate
Governance Best Practice
Principles for TWSE/TPEx Listed
Companies.
(4) Does the Company have an effective career
capacity development training program established
for the employees?
V
(5) Does the Company have the relevant consumer
protection policies and complaint procedures
established in the sense of R&D, procurement,
production, operations, and service processes?
(6)Does the Company have a supplier management policy,
and request its supplier to follow the related regulation
on environmental protection, occupational safety, or
labor human rights and its implementation?		 V (5) The company and its subsidiaries have
established customer complaint procedures with
a satisfaction-oriented quality system and set up
stakeholder areas on the company's website to
provide employees, customers, suppliers,
government agencies, shareholders, investors an
effective complaint channel for various
stakeholders
(http://www.syncmold.com.tw/syncmold-
2018/item_interested_person_2018.html).
(6)The Company has set up “Supplier Management
Regulation” and ask the new suppliers to sign
“environmental management substance guarantee”,
and “supplier honest credit contract”, while
providing “Content of harmful substances test report
SGS”, “Product raw material chart” and other
information to ensure its product is complied with		 In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
In compliance with the Corporate
Governance Best Practice Principles
for TWSE/TPEx Listed Companies.
  • 49 -

V ROHS regulation before it can be listed as the qualified suppliers. Quality assurance department will conduct an annual evaluation plan on the qualified suppliers and perform audit in these suppliers to ensure the stable quality on the raw material. If the supplier does not pass the evaluation assessment and not improve after discussion and counseling, it will be disqualified.

  1. Does the Company follow the international regulation when preparing the corporate social responsibility report or other report that disclose company V information other than financial data? Does the report obtain a third party verification or assurance?

The Company’s CRS report of 2019 was prepared in In compliance with the Corporate accordance with the “core” item in the Standards of Global Governance Best Practice Principles Reporting Initiative (GRI) and the “Taiwan Stock Exchange for TWSE/TPEx Listed Companies. Corporation Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports” Meanwhile, it is disclosed on the Company’s and the Market 。 Observation Post System in September 2020

  1. If the Company has the “Corporate Social Responsibility Best-Practice Principles” stipulated in accordance with the “Corporate Social Responsibility Best-Practice Principles for TWSE/GTSM Listed Companies,” please state its deviation :

The relevant regulations on corporate social responsibility are set in the company's personnel, environmental protection, safety and health standards, in line with the requirements of the law.

  1. Other noteworthy information regarding to SCR：

  2. 1.Everionmental, health and safety ：

(1) The company has established an environmental, health and safety management system and obtained ISO14001, ISO9001 and other certifications. In 2020 and 2019, we continued to carry out internal education training on ISO9001 and ISO14001, enhance our colleagues' awareness of relevant laws and regulations, implement various systems formulated by the company, achieve product quality assurance, and achieve the goal of saving energy, protecting the environment, and protecting the global environment.

(2) The Company was certified by IECQ QC 080000 (Hazardous Substance Process Management) for the first time in 2020. Both the use and production process of hazardous substances with special restrictions are thoroughly checked and evaluated as a commitment to protect all workers along the production line and product users and to reduce the impacts that products have on the environment and accordingly ensure environmental sustainability.

  • 50 -

  • (3) The company is committed to improving the efficiency of the use of various resources, promoting the recycling of paper and other waste resources, and the implementation of paperless operations. The company's production procedures do not produce hazardous substances. The production wastes such are recycled by professional manufacturers. 。

  • (4) The office glass window has been fully applied with heat-insulating film. The heat-insulating film reduces the indoor temperature, the electricity consumption of AC in summer, and achieve energy-saving effects. As of August 2017, all the office windows applied heat-insulating film reducing the indoor temperature and electricity consumption.

  • (5) In 2020, the office building was monitoring by energy-saving manufacturers using data and cloud services, it showed a 30% reduction of electricity consumption.

  • Following internationally recognized basic human rights, fulfill corporate social responsibility, and protect the basic human rights of all colleagues, customers and stakeholders. According to the company's characteristics and operational development strategy, the company will conduct risk assessments on human rights issues from time to time. Relevant risk issues are as follows: ：

(1)Reasonable working hours ：

In order to ensure that employees are not at risk of working long hours, the company specifies working hours and overtime hours and regularly care and manage employee attendance.

  • 51 -

(2) Diversity and equal opportunities ：

  • (a) Ensure that employment policies are not treated differently, implement fairness in employment, compensation and benefits, training, assessment and promotion opportunities, and provide appropriate grievance mechanisms to avoid jeopardizing employee rights

  • (b)The company complies with relevant labor regulations and protects the legitimate rights and interests of employees. The Company has established "Working Rules" in accordance with the " Labor Standards Act " and clearly stipulates the rights and obligations of both employers and employees. Establish a "Labor Safety and Health Work Code" under the "Labor Safety and Health Work Rules" to prevent occupational disasters and safeguard workers' safety and health. According to Article 7 of the "Taipei County Sexual Harassment Prevention and Autonomous Regulations", the "Sexual Harassment Prevention and Control Management Measures" is formulated to prevent sexual harassment in employment and to maintain gender equality and personal dignity. The company also handles various safety and health education and training in accordance with relevant regulations of the government's occupational safety and health education.

  • (c)The company attaches great importance to employee career development and regularly examines the gaps between employees' ability and organizational needs to plan training plans for staff capacity enhancement or talent development. The company prepares annual employee education and training programs and special lectures, covering functional training, logical innovative thinking and physical and mental development, to enhance the professional competence of employees, innovative thinking and balance physical and mental development.

  • (3) Health and safe workplace ：

  • (a) Regular environmental safety checks to avoid potential health and safety risks from work.

  • (b) The company is committed to providing a safe and healthy working environment for employees. In terms of security and access control management, each office has an access control system at the entrance and exit and cooperates with the security personnel to carry out the relevant control operations. In the fire safety of the building, fire safety inspections and fire drills are regularly conducted every year. In terms of water safety of the building, regular inspections were carried out to clean the reservoir and the quality of drinking water for sampling inspection and announcement. Another implementation of the smoke-free workplace decree to plan outdoor smoking areas, the working environment is in line with government occupational safety and health related regulations.

  • (c) The company sets up employee welfare committees, organizes various activities and provides various welfare measures to encourage staff morale and strengthen labor-management cooperation. The company regularly handles employee health checks. In July 2018, the employee conducts health checks. In addition to the basic inspection items that should be given according to law, the company increases the budget for health check items.

  • (d) In 2017, the company established the “Measures for Employee Child Care Subsidy”. In 2020, the number of qualified employees has reached 25 with the total of 33 children, totaling NT$ 198,000 to reduce burden of employee.

  • 52 -

  • (e) To establish a workplace environment of good occupation and healthy balance, in addition to monthly provision of fixed health newsletters by E-mail, the Company advertises the knowledge of various medical treatment and health care, and weekly invites the doctor and nurse to provide free consultation service of medical treatment for the personnel to expect that the personnel can take good care of their health besides hard work.

(4) Freedom of association ：

Colleague has freedom of association, establishes associations and actively promotes societies.

(5) Labor negotiation ：

The company has established a systematic staff communication mechanism to maintain communication with employees through regular interviews and a staff complaints pipeline to handle employee complaints or labor dispute mediation. The company also has an electronic bulletin board, so employees can instantly receive the company's important information.

(6) Privacy protection ：

In order to fully protect the privacy rights of customers and all stakeholders, we will establish a sound information security management mechanism and follow strict management and control practices and protective measures.

3. Social welfare ：

  1. Made donations to Chungho Station of Hua-Shan Foundation for New Year’meals and delivery service; assisting with supplies gathering and volunteering service.

  2. Made donations as scholarship to assist students with good grades but from a low-income family to finish school.

  3. Made donations to Taiwan Read Foundation and set up a book stack in the Tong-shi Elementary School in Yunlin.

  4. For other information, please refer to the Annual Corporate Social Responsibility Report on the Company’s

website：(http://www.syncmold.com.tw/syncmold-2018/item_csr_report_2018.html)

  • 53 -

3.3.6 Implementation of corporate ethical management and measures taken:

Item Implementation Status Discretions with Ethical Corporate
Management Best Practice
Principles for TWSE/GTSM Listed
Companies and the Reasons
Yes No Summary
1. Formation of ethical management policies and
methods
(1) Does the Company have the ethical
management policy and method declared
explicitly in the Articles of Incorporation and
external documents; also, the commitment of
the board of directors and the management to
actively implement the operating policies?		 V (1) The Board has passed the “Integrity Operation
Regulation” and “Ethical Behavior Principle”
and appointed Mr. Huang Yi-Chung, the
governance manager, in charge to plan and
execute integrity operation policy and
prevention. In order to ensure the
implementation, the performance will be
reported to the Board, and the 2020 execution
performance was reported on Dec 28, 2020.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
(2) Does the Company set up a disintegrated
behavior risk assessment to analyze and
evaluate any highly disintegrated behavior in
its operation scope regularly while at least
cover the prevent measures under Article 7
(2) in Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed
Companies?		 V (2) The company has an "integrity operation
procedure", which clearly stipulates that all
employees shall not directly or indirectly
provide or accept any unreasonable gifts,
hospitality or other improper benefits and
avoid employees sacrificing the company's
rights and interests for personal gain. An
effective accounting system and internal
control system have been established and
reviewed Quarterly to ensure that the design
and implementation of the system continues to
be effective.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
  • 54 -
(3) Does the Company have the prevention
program for any fraud stipulated; also, have
the respective operating procedures,
guidelines for conduct, disciplinary actions,
and complaints system declared explicitly;
also have it implemented substantively?		 V (3) The Company has established an "integrity
operation procedure", including procedures for
how to prevent untrustworthy behavior and
accept improper interests. Through the
education and training, we will promote the
integrity management policy and combine this
policy with the employee performance
appraisal and human resources policy to
establish a clear and effective reward and
punishment system.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
2. Substantiation of ethical management
(1) Does the company have the integrity of the trade
counterparty assessed and with the code of
integrity expressed in the contract signed?
(2) Does the Company have a specific unit setup
under the board of directors to advocate the code
of integrity and to report on its implementation
to the Board on a regular basis?		 V
V		 (1) The company uses customer credit assessment
and supplier evaluation to avoid untrustworthy
business activities. The relevant integrity
behavior clauses are combined with the parties
to ensure that their business operations are fair
and transparent, and will not require or
accepting bribes.
(2) The corporate governance team is responsible
for the revision, implementation,
interpretation, consulting services, notification
content, recording and construction, of the
“integrity operation procedures”. The division
requires to supervise and execute the “integrity
operation procedures” and report to the board
of directors once a year.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
(3) Does the Company have developed policies to
prevent conflicts of interest, provided adequate
channel for communication, and substantiated
the policies?		 V (3) The company has established the regulation of
the board of directors according to law. If the
directors have interests in the resolutions listed
by the board, the legal persons of their own or		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
  • 55 -
their representatives, which are harmful to the
interests of the company, are avoided during
discussion and voting.
(4) Does the Company have established effective
accounting systems and internal control systems
to make related audit plan to verify and prevent
disintegrated behavior based on the assessment
from internal audit department or by the
commission CPAs?		 V (4) In order to implement the integrity
management, the company has established an
effective accounting system. The internal
auditors regularly check the accounting system
and the internal control system and make an
audit report to the board of directors.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
(5) Does the Company have organized ethical
management internal and external education and
training programs on a regular basis?		 V (5) The company will regularly organize
internal and external education training on
integrity management. The higher
management will convey the importance of
integrity to its employees from time to time. In
2020, the company held internal and external
education training on integrity management
with a total of 127 people and 564 hours
(including integrity management regulations,
corporate governance practices, accounting
systems and internal control).		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
3.The operation of the Company’s Report System
(1) Does the Company have a specific report and
reward system stipulated, a convenient report
channel established, and a responsible staff
designated to handle the individual being
reported?		 V (1) In order to establish the internal and external
reporting pipelines and handling systems of
the company, the company established
regulation on "treatment for illegal and
unethical or dishonesty" for the
implementation of Code of Ethics and the
Code of Business Conduct for the directors,
supervisor and managers and ensure the legal
rights of prosecutors.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
  • 56 -
(2) Does the Company have the standard
investigating procedures and related
confidentiality mechanism established for the
incidents being reported?		 V (2) The company's Company has set up reporting
procedures on “reporting illegal, unethical, or
disintegrated behavior case” reporting
procedures have a confidentiality mechanism
for information of the parties.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
(3) Does the Company have taken proper measures to
protect the whistleblowers from suffering any
consequence of reporting an incident?		 V (3) The company's Company has set up reporting
procedures on “reporting illegal, unethical, or
disintegrated behavior case” reporting
procedures have a confidentiality mechanism
that prohibits retaliation against informants.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
4. Strengthening information disclosure
(1) Does the Company have the content of ethical
management and its implementation disclosed
on the website and MOPS?		 V The company publishes the work plan, operation
and execution of integrity management on the
website(http://www.syncmold.com.tw/syncmold-
2018/item_integrity_management_2018.html), and
announces the integrity of business practices,
corporate culture and business policies in the
MOPS.		 In compliance with Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM Listed Companies
5. If the Company has the “Ethical Management Best-Practice Principles” stipulated in accordance with the “Ethical Management Best-Practice Principles
for TWSE/GTSM Listed Companies,” please state its deviating from the “Ethical Management Best-Practice Principles for TWSE/GTSM Listed
Companies” in operation:：
The company has “Code of corporate integrity” which in compliance with the “Corporate Ethical Management Best-Practice Principles for
TWSE/GTSM Listed Companies.”
6. Other important information helpful in understanding the ethical management operation: (Such as, the Company has its Ethical Management
Best-Practice Principles reviewed and amended, etc.)
The company is engaged in commercial activities based on the principles of fairness, honesty, trustworthiness and transparency. In order to implement
the policy of honesty and integrity, and actively prevent unscrupulous behaviors, the company has established a “Code of Corporate Integrity” to
specifically regulate the matters that employees should pay attention to when conducting business. The company abides by the Company Act, the
Securities and Exchange Act, the commercial accounting law and other relevant regulations and the relevant regulations on public company, as the
basis for the implementation of integrity management.
The companyhas created a "comment box" on the company's internal website as a complaint mechanismpipeline and reporting procedure and has a
  • 57 -

dedicated person to handle it. In addition, the comment box is set up on the company's website in the stakeholder area to provide an effective complaint channel for all stakeholders (http ： //www.syncmold.com.tw/syncmold-2018/item_interested_person_2018.html).

3.3.7 Query on corporate governance related policies

The company has announced the following policies on the company's website: articles of incorporation, acquisition or disposal of asset, endorsement guarantee operations, fund loans, internal major information management, code of corporate governance, code of integrity practice, code of corporate social responsibility, code of ethic for directors, supervisor and management, treatment of illegal and unethical or dishonest conduct.

3.3.8Other important information helpful in understanding the corporate governance operation

  • (1) The Company has formulated “Internal Major Information Management Practice” and regularly reminds directors, supervisors, managers and all colleagues to avoid violations on insider trading.

  • (2) The company announces the code of corporate governance, code of integrity practice, and the code of corporate social responsibility to its internal staff, such as directors, supervisors and managers.

  • 58 -

  • 3.3.9 Implementation status of the internal control system:

  • 3.3.9.1 The Company’s 2020 Internal Control Declaration:

Syncmold Enterprise Corp.

Internal Control System Declaration

Date: March 16, 2021

For the Company's internal control system of 2020, it is hereby declared as follows according to self-assessment findings:

  • I. The Company knows that establishing, enforcing, and maintaining an internal control system is the responsibility of the Company's Board of Directors and managers and has such a system in place already. The purpose of the system is to reasonably ensure the achievement of various objectives, including operational efficiency and effectiveness (including profitability, business performance and the security of assets), the reliability, timeliness and transparency of information disclosed, and compliance with relevant guidelines as well as relevant laws and regulations.

  • II. The internal control system has its inherited restrictions that cannot be overcome with improved design. An effective internal control system can also only reasonably ensure the fulfillment of the three goals stated above and its effectiveness may change as the environment or situation changes. There is a self-surveillance mechanism, however, built inside the internal control system of the Company that helps the Company take a corrective action against deficiencies confirmed.

  • III. The Company determines the effectiveness of the design and implementation of its internal control system in accordance with the items in "Governing Regulations for Public Company's Establishment of Internal Control System" (hereinafter called "Governing Regulations") that are related to the effectiveness of internal control systems. The items adopted in the Governing Regulations for determining the internal control system are the five constitutional elements of the internal control system divided according to the management and control process: 1. control environment, 2. risk assessment, 3. control process, 4. information and communication, and 5. supervision. Each element further encompasses several items. Please refer to "Governing Regulations" for details.

  • IV. The Company has already adopted the aforesaid items for assessing the effectiveness of its internal control system in terms of system design and implementation.

  • V. Pursuant to the results of the above-mentioned evaluations, the Company is of the view that the design and implementation of its internal control system as of December 31,

  • 59 -

2020 (including its supervision and management of subsidiaries), including its awareness of the extent by which the operating effects and efficiency goals are fulfilled, reliability of reports, and compliance with relevant laws and regulations, are such that it is effective and capable of reasonably ensuring that the aforementioned goals can be achieved.

  • VI. This declaration constitutes a major part of the Company's Annual Report and the Company's Prospectus that are made available to the public. If the aforesaid published contents are found to be false, or fraudulent in any way, the Company and its management shall be legally liable in accordance with Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

  • VII. This declaration was approved at the meeting of the Company's Board of Directors on March 16, 2021 without dissenting opinions expressed by any of the 7 directors attending the meeting. All agreed on the contents of this Declaration. Please take note of it.

  • 60 -

  • 3.3.9.2 If the accountant is appointed to examine the internal control system, the independent auditor’s report should be disclosed ： None.

  • 3.3.10 The fiscal year 2020, up to publication of annual report and internal personnel was punished in accordance with regulations, or the Company's punishment for internal personnel violated internal control system and regulations, its punishment results which probably caused important affection for shareholders’ equity or securities shall be specified the content of punishment, main deficiencies and improvement: None

  • 3.3.11 Important resolutions made by the Shareholders’ Meeting and Board of Directors by the

end of 2020 and the printing date of the annual report ：

(1) Resolutions and Implementation of 2020 Shareholders’ Meetings

Meeting
Date		 Summary Resolutions Implementation
June 18,
2020		 1. Ratification of 2019 statements and reports Voted and
approved
2. Ratification of Distribution of 2019
Earnings
It was decided that cash dividends worth
NTD 556,758,769; that is, NTD 4.5 per
share,would be distributed.		 Voted and
approved		 July 21, 2020 was set to be the ex-dividend
base date and cash dividends worth NTD
556,758,769 were completely distributed
on August 13, 2020.
3. Discussion of the revision of the Articles
of Incorporation		 Voted and
approved		 They are already announced on the
Company’s website and the post-revised
version has been followed.
4. Discussion of the revision of the
Procedures for the Acquisition or Disposal of
Assets		 Voted and
approved		 They are already announced on the
Company’s website and the post-revised
version has been followed.
5. Discussion of the revision of the Operating
Procedure for Lending to Others		 Voted and
approved		 They are already announced on the
Company’s website and the post-revised
version has been followed.
6. Discussion of the revision of the Operating
Procedure for Endorsements/Guarantees		 Voted and
approved		 They are already announced on the
Company’s website and the post-revised
version has been followed.
7. Revision of the Guidelines for Electing
Board Directors and Supervisors		 Voted and
approved		 They are already announced on the
Company’s website and the post-revised
version has been followed.

(2) Resolutions and Implementation of Board Meetings

MeetingDate Summary Resolutions
March
13,
2020		 1. Revision of the Articles of Incorporation Approved by all attending
directors without objection.
2. 2019 statements and reports Approved by all attending
directors without objection.
3. Distribution of 2019 earnings Approved by all attending
directors without objection.
4. Distribution of the remuneration to employees and that to directors
and supervisors for 2019		 Approved by all attending
directors without objection.
5. Establishment of the Audit Committee Organic Rules Approved by all attending
directors without objection.
6. Revision of the Guidelines for Electing Board Directors and
Supervisors		 Approved by all attending
directors without objection.
5. Revision of the Procedures for the Acquisition or Disposal of Assets Approved by all attending
directors without objection.
  • 61 -
6. Revision of the Operating Procedure for Lending to Others Approved by all attending
directors without objection.
7. Revision of the Operating Procedure for Endorsements/Guarantees Approved by all attending
directors without objection.
8. 2019 Internal Control System Declaration Approved by all attending
directors without objection.
9. Discussion of Lending of Funds Approved by all attending
directors without objection.
10. Ratification of Derivatives Approved by all attending
directors without objection.
11. Limits of borrowings from Bank SinoPac and ratification of
endorsements/guarantees to subsidiaries		 Approved by all attending
directors without objection.
12. Re-election of board directors Approved by all attending
directors without objection.
13. Intended 2020 General Shareholders' Meeting Approved by all attending
directors without objection.
14. Related matters of accepting proposals from shareholders prior to
the 2020 General Shareholders' Meeting		 Approved by all attending
directors without objection.
MeetingDate Summary Resolutions
15. Revision of the written internal control system Approved by all attending
directors without objection.
May 7, 2020 1. Review of the distribution of the remuneration to directors and
supervisors for 2019 of the Company.		 Approved by all attending
directors without objection.
2. Review of the distribution of remuneration to managers and
employees for 2019 of the Company.		 Approved by all attending
directors without objection.
3. Ratification of line of credit from Yuanta Bank Approved by all attending
directors without objection.
4. Limits of borrowings from Taipei Fubon Commercial Bank Co., Ltd.
and ratification of endorsements/guarantees to subsidiaries		 Approved by all attending
directors without objection.
5. Discussion of Lending of Funds Approved by all attending
directors without objection.
6. Ratification of Derivatives Approved by all attending
directors without objection.
7. Line of credit from E.SUN Bank Approved by all attending
directors without objection.
June 18, 2020 1. Election of Chairman of the Company Approved by all attending
directors without objection.
June 29, 2020 1. Revision of the Organic Rules of the Compensation and
Remuneration Committee		 Approved by all attending
directors without objection.
2. Hiring of Compensation and Remuneration Committee members Approved by all attending
directors without objection.
4. Limits of borrowings from E.SUN Bank and ratification of
endorsements/guarantees to subsidiaries		 Approved by all attending
directors without objection.
5. Revision of the Operating Procedure for Handling Major Internal
Information to Prevent against Insider Trading		 Approved by all attending
directors without objection.
6. Revision of the Ethical Code of Conduct for Directors, Supervisors,
and Managers		 Approved by all attending
directors without objection.
7. Revision of the Corporate Social Responsibility Best Practice
Principles		 Approved by all attending
directors without objection.
  • 62 -
8. Revision of the Corporate Governance Best-Practice Principles Approved by all attending
directors without objection.
9. Revision of the Ethical Corporate Management Best-Practice
Principles		 Approved by all attending
directors without objection.
19. Revision of the Board of Directors Meeting Regulations Approved by all attending
directors without objection.
11. Ratification of Derivatives Approved by all attending
directors without objection.
12. Discussion of Lending of Funds Approved by all attending
directors without objection.
13. Revision of the written internal control system Approved by all attending
directors without objection.
August
6,
2020		 1. Ratification of line of credit from Chinatrust Commercial Bank Approved by all attending
directors without objection.
2. Ratification of line of credit from Taishin International Bank Approved by all attending
directors without objection.
3. Discussion of Lending of Funds Approved by all attending
directors without objection.
4. Revision of the written internal control system Approved by all attending
directors without objection.
October
29,
2020		 1. Strategic equity investment Approved by all attending
directors without objection.
2. Discussion of Lending of Funds Approved by all attending
directors without objection.
3. Ratification of Derivatives Approved by all attending
directors without objection.
4. Discussion of the prohibited lending of funds and
endorsements/guarantees involvingsubsidiaries		 Approved by all attending
directors without objection.
December 2,
2020		 1. Endorsements/Guarantees to the subsidiary GATETECH
TECHNOLOGY INC.		 Approved by all attending
directors without objection.
2. Endorsements/Guarantees to the subsidiary LEOHAB ENTERPRISE
CO.,LTD.		 Approved by all attending
directors without objection.
3. Second distribution of remuneration to managers and employees for
2019 of the Company		 Approved by all attending
directors without objection.
4. Distribution of three-festival gift money to managers for 2020 of the
Company		 Approved by all attending
directors without objection.
5. Promotion and salary raise for managers for 2021 of the Company Approved by all attending
directors without objection.
11. Discussion of Lending of Funds Approved by all attending
directors without objection.
12. Ratification of line of credit from Chinatrust Commercial Bank Approved by all attending
directors without objection.
13. Ratification of Derivatives Approved by all attending
directors without objection.
14. Revision of the written internal control system Approved by all attending
directors without objection.
December 28,
2020		 1. 2021 Business Budget Approved by all attending
directors without objection.
2. 2021 Internal Audit Plan Approved by all attending
directors without objection.
  • 63 -
3. Line of credit from E.SUN Bank Approved by all attending
directors without objection.
4. Ratification of line of credit from HSBC Bank (Taiwan) Limited Approved by all attending
directors without objection.
13. Ratification of Derivatives Approved by all attending
directors without objection.
6. Independence assessment and delegation of CPAs Approved by all attending
directors without objection.
March
16,
2021		 1. 2020 statements and reports Approved by all attending
directors without objection.
2. Distribution of 2020 earnings Approved by all attending
directors without objection.
3. Distribution of the remuneration to directors and supervisors and that
to employees for 2020 of theCompany		 Approved by all attending
directors without objection.
4. 2020 Internal Control System Declaration Approved by all attending
directors without objection.
5.
Lifting of the non-competition pledge obligations upon the
newlyelected directors		 Approved by all attending
directors without objection.
6. Independence assessment and delegation of CPAs Approved by all attending
directors without objection.
7. Discussion of Lending of Funds Approved by all attending
directors without objection.
8. Ratification of Derivatives Approved by all attending
directors without objection.
9. Limits of borrowings from Taipei Fubon Commercial Bank Co., Ltd.
and ratification of endorsements/guarantees to subsidiaries		 Approved by all attending
directors without objection.
10. Ratification of limits of borrowings from Bank SinoPac Approved by all attending
directors without objection.
11. Intended 2021 General Shareholders' Meeting Approved by all attending
directors without objection.
12. Related matters of accepting proposals from shareholders prior to
the 2021 General Shareholders' Meeting		 Approved by all attending
directors without objection.
2021.05.05 1. Location authorization of 2021 regular shareholder meeting Approved by all attending
directors without objection.
2. Audit for 2020 remuneration distribution of Directors and Supervisors Approved by all attending
directors without objection.
3. Audit for 2020 remuneration distribution of managers and employees Approved by all attending
directors without objection.
4. Reconfirmation on derivation products Approved by all attending
directors without objection.
5. Discussion on loaning funds Approved by all attending
directors without objection.
6. Credit line of E.Sun Commercial Bank Ltd. Approved by all attending
directors without objection.
7. Loan amount of Taipei CTCB & recognition of endorsement
guarantee		 Approved by all attending
directors without objection.
8. Recognition for credit line of Yuanta Commercial Bank Company
Ltd.		 Approved by all attending
directors without objection.
9. The company guarantees the third unsecured conversion of CB. Approved by all attending
directors without objection.

  • 64 -

  • Syncmold Enterprise Vietnam Co., Ltd. investment plan revision

Approved by all attending directors without objection.

  • 3.3.12 The contents of the board resolutions regarding which independent directors have voiced opposing or qualified opinions on the record or in writing in the most recent year or up to the publication of the annual report: None

  • 3.3.13The resignation or dismissal of the Company’s Chairman, President, Accounting Officer, Finance Office, Internal Audit Director, Corporate Governance Supervisor and RD Supervisor in the most recent year or up to the publication of the annual report:

Position Name Date of
inauguration		 Date of dismissal Reason for
resignation or
**dismissal **
President Chiu, Po-Sen December 13,
2008		 June 19, 2020 Resigned

  • Note: The parties relating thereto include the chairman, president, accounting officer, finance officer, internal audit officer and R&D officer

  • 65 -

3.4 Audit Fees

Range of Audit Fee

CPA Firm Name of CPAs Name of CPAs Audit Period Audit Period Remark
Deloitte & Touche Tung-Feng
Lee		 Chih-Yuan
Chen		 2020
Fee Fees Items
Range		 Audit fee
(Note)		 Non-audit fee Total
1 Under NT$2,000,000 ˅
2 NT$2,000,001～$4,000,000
3 NT$4,000,001～$6,000,000
4 NT$6,000,001～$8,000,000 ˅ ˅
5 NT$8,000,001～$10,000,000
6 Over NT$100,000,000

Note ： The audit fee includes Syncmold and its consolidated subsidiary.

3.4.1Non-audit fee account for more than a quarter of audit fee ： None

Unit ： NT$ in thousands

Unit：N T$ in thousands
Accounting
Firm		 Name of
CPA		 Audit
Fee		 Non-audit Fees Audit Period Remark
Syste
m
Design
Comp
any
Regist
ration		 Huma
n
Resour
ce		 Others Subtot
al		 Audit Period
Deloitte &
Touche		 Tung-
Feng Lee		 7,837 - - - 90 90 The year of 2020 1.The audit fee includes
Syncmold, its consolidated
subsidiary and the check list
of non-supervisor, full-time
employee
2.Other contents include the
review of annual report and
the direct deduction of
business tax.
Chih-
Yuan
Chen

3.4.2If a new CPA Firm is commissioned to serve for an audit fee less than the year before, please disclose the audit fee amount before and after the CPA replacement arranged and the reason for doing so: None

3.4.3If the audit fee of current year is more than 15% less than the year before, please disclose the audit fee amount and ratio reduced and the root cause of the fee reduction: None.

3.5 Information For Change Of CPA: None.

  • 66 -

  • 3.6 The Chairman, President, And Managers Responsible For Finance Or Accounting Who Had Held A Position In The CPA Office Or Its Affiliates ： None

  • 3.7 Changes In The Shares Held And Pledged By Directors, Supervisors, Managers, And Major Shareholders Holding Over 10% Of Outstanding Shares In The Most Recent Year And Up To The Publication Of The Annual Report ：

  • 3.7.1 Changes in holdings of directors, supervisors, managers and shareholders with holding exceeding 10% ：

Unit ： Share

Unit：Share Unit：Share
Title Name 2020 As of April 26,2021
Increase (decrease)
of
shareholding		 Increase
(decrease) of
shares
pledged		 Increase
(decrease) of
shareholding		 Increase
(decrease) of
shares
pledged
Chairman Chiu-Lang,Chen 200,000 0 200,000 0
Director(Note 1) Fortune Investment Co.,
Ltd.		 0 0 0 0
Director(Note 3) Tim,Weng 0 0 0 0
Director(Note 3) Chen-Tung, Chen 8,000
(26,000)		 0 0 0
Director Shu-Yen,Chuang 0 0 0 0
Independent Director Yung-Lu,Tsai 0 0 0 0
Independent Director
(Note 1)		 Shih-Kuang, Tsai 0 0 0 0
Independent Director
(Note 1)		 Da-Ho, Yen 0 0 0 0
Independent Director
(Note 1)		 Hui-Chin, Chiu 0 0 0 0
Independent Director
(Note 3)		 Wen-Hung, Kao 0 0 0 0
Supervisor(Note 3) Tung-Ping,Cheng 0 0 0 0
Supervisor(Note 3) Chin-Chang,Pao 0 0 0 0
Supervisor(Note 3) Jui-Tai,Wu 0 0 0 0
President(Note 4) Posen, Chiu 0 0 0 0
V.P. Connie,Hsu 0 0 0 0
V.P. Gray,Yan 0 0 0 0
V.P. Alex,Cheng 0 0 0 0
V.P. Daphne,Chang 0 0 0 0
V.P.(Note 2) Peter,Huang 0 0 0 0
A.V.P. Y.Y.,Hsieh 0 0 0 0
A.V.P. Randy,Lin 0 0 0 0
A.V.P. Phillip,Cheng 0 0 0 0
A.V.P. Monty,Chen 0 0 0 0
A.V.P. Toni,Kao 0 0 0 0
Corporate governance
supervisor		 Yi-Chun, Huang 0 0 0 0
A.V.P. Scott,Lu 0 0 0 0
Manager Carrie,Wang 0 0 0 0

Note 1 ： Director Fortune Investment Co., Ltd. and Independent Director Shih-Kuang, Tsai, Da-Ho, Yen , Hui-Chin, Chiu was inaugurated on June 18, 2020。

Note 2 ： V.P Peter, Huang was inaugurated on November 1, 2020。

Note 3 ： Director Tim Weng, Chen-Tung, Chen , Independent Director Wen-Hung, Kao and Supervisor Chin-Chang, Pao , Jui-Tai, Wu was resigned on June 18, 2020。

Note 2 ： President Posen, Chiu was resigned on June 19, 2020。

3.7.2 Equity transfer information ： None

3.7.3 Equity pledge information ： None

  • 67 -

3.8 Top-10 shareholders being the related party as defined in statement of finance accounting:

Information on relationships among the top ten shareholders

April 26,2021 April 26,2021 April 26,2021
NAME CURRENT
SHAREHOLDING		 SPOUSE’S/MINOR’S
SHAREHOLDING		 SHAREHOLDING
BY NOMINEE
ARRANGEMENT		 NAME AND RELATIONSHIP BETWEEN
THECOMPANY’S TOP TEN SHAREHOLDERS,
ORSPOUSES OR RELATIVES WITHIN
TWODEGREES		 REMARK
Shares (%) Shares (%) Shares (%) Name Relations
Chiu-Lang,Chen 5,708,211 4.61% 93,022 0.08% 2,300,000 1.86% Jianhong, Chen first-degree relatives
Jianyuan, Chen first-degree relatives
Fortune Investment Co., Ltd.
(Representative:Jian-yuan, Chen)		 5,200,139
2,529,717		 4.20%
2.04%		 -
-		 -
-		 -
-		 -
-		 Chiu-Lang ,Chen first-degree relatives
Jian-hong, Chen second-degree relatives
Jian-yuan, Chen 2,529,717 2.04% - - - - Chiu-Lang ,Chen first-degree relatives
Jianhong, Chen second-degree relatives
Jian-hong, Chen 2,939,750 2.38% - - - - Chiu-Lang ,Chen first-degree relatives
Jianyuan, Chen second-degree relatives
Tim, Weng 2,747,581 2.22% - - - - - -
Guan-zhen Investment Co., Ltd.
(Representative:Jian-hong, Chen)		 2,970,647
2,939,750		 2.40%
2.38%		 -
-		 -
-		 -
-		 -
-		 Chiu-Lang ,Chen first-degree relatives
Jianyuan, Chen second-degree relatives
Hongbo Investment Co., Ltd.
(Representative: Chiu-Lang ,Chen)		 2,300,000
5,708,211		 1.86%
4.61%		 -
-		 -
-		 -
-		 -
-		 Jian-hong, Chen first-degree relatives
Jian-yuan, Chen first-degree relatives
Zong-Ying, Dong 2,237,000 1.81% - - - - - -
Standard Chartered Bank
entrusted with the GMO Emerging
Markets Fund		 1,894,250 1.53% - - - - - -
Shu-Yen, Chuang 1,918,684 1.55% - - - - - -

  • 68 -

  • 3.9 The Shares Of The Invested Company Held By The Company, The Company’S Directors, Supervisors, Managers, And Companies Controlled Directly Or Indirectly, And The Aggregated Overall Shareholding Ratio:

As of April 26, 2021

AffiliatedCompanies (Note) Ownership
bytheCompany		 Ownership
bytheCompany		 Ownership byDirectors, Supervisors,Managers
andEntitiesDirectly or IndirectlyControlled by
theCompany		 Ownership byDirectors, Supervisors,Managers
andEntitiesDirectly or IndirectlyControlled by
theCompany		 Total Ownership Total Ownership
Shares ％ Shares % Shares %
Syncmold Enterprise (Samoa)
Corp.		 3,545,584 100% - - 3,545,584 100%
Grand Advance Inc. -
100%		 -
-		 -
100%
Syncmold Enterprise (USA)
Corp.		 -
100%		 -
-		 -
100%
Syncmold Enterprise Vietnam
Co., Ltd.		 -
100%		 -
-		 -
100%
Syncmold Enterprise
(MALAYSIA) Sdn., Bhd.		 -
100%		 -
-		 -
100%
Syncmold Enterprise
(SINGAPORE) Pte., Ltd.		 -
100%		 -
-		 -
100%
Syncmold Enterprise
(THAILAND) Co., Ltd.		 -
100%		 -
-		 -
100%
High Grade Tech Co., Ltd. 2,280,000 38% - - 2,280,000 38%
CANFORD
INTERNATIONAL LIMITED		 -
100%		 -
-		 -
100%
Fullking Development Limited -
100%		 -
-		 -
100%
FULL GLARY HOLDING
LIMITED		 -
100%		 -
-		 -
100%
Full Big Limited -
100%		 -
-		 -
100%
Forever Business Development
Limited		 -
100%		 -
-		 -
100%
Full Celebration Limited -
100%		 -
-		 -
100%
Fuzhou Fulfil Tech Co., Ltd. -
100%		 -
-		 -
100%
Fujian Khuan Hua Precise
Mold., Ltd.		 -
100%		 -
-		 -
100%
Fuqing Foqun Electronic
Hardware Tech Co.,Ltd.		 -
100%		 -
-		 -
100%
Dongguan Khuan Huang
Precise Mold Plastic Co., Ltd.		 -
100%		 -
-		 -
100%
Suzhou Fulfil Electronics Co.,
Ltd.		 -
100%		 -
-		 -
100%
Zhongshan Fulfil Tech Co., Ltd. -
100%		 -
-		 -
100%
Kunshan Fulfil Tech Co., Ltd. -
100%		 -
-		 -
100%
Chongqing Fulfil Tech Co., Ltd. -
100%		 -
-		 -
100%
CoreBio Technologies Co., Ltd. 5,200,000 38.29% -
-		 5,200,000 38.29%
Gatetech Technology Co., Ltd. 42,207,440 73.43% -
-		 42,207,440 73.43%
Gatech Holding Ltd. - 73.43% -
-		 - 73.43%
  • 69 -
Gatech International Ltd. - 73.43% -
-		 - 73.43%
Gatech (Suzhou) Inc. - 73.43% -
-		 - 73.43%
Leohab Enterprise Co., Ltd. 16,619,800 70.00% - - 16,619,800 70.00%
Sweet International Group Ltd. - 70.00% - - - 70.00%
Lucky King Holdings Ltd. - 70.00% - - - 70.00%
Commuwell Enterprise
(Thailand)Co.,Ltd.		 - 70.00% - - - 70.00%
Suzhou Leoho Electronics Co.,
Ltd.		 - 70.00% - - - 70.00%
  • 70 -

IV 、 CAPITAL OVERVIEW

4.1 Capital And Shares

4.1.1 Source of capital

4.1.1.1 Type of capital

April 26, 2021；Unit：Share April 26, 2021；Unit：Share April 26, 2021；Unit：Share April 26, 2021；Unit：Share
Type Authorized Capital Note
Outstanding Shares
(note)		 Non-issued
Shares		 Total
Registered
Common Shares		 123,724,171 76,275,829 200,000,000 1. Listed company stock
2. Retained warrants for
subscription of 3,000,000 share

4.1.1.2 Formation of capital

April 26, 2021 ； Unit ： 1000 Share; NT$ in thousands

April 26, 2 April 26, 2 021；Unit：1000 Share; NT$ in thousands 021；Unit：1000 Share; NT$ in thousands 021；Unit：1000 Share; NT$ in thousands
Year /
Month		 Issued
price
(NT$)		 Authorized capital Paid-in Capital Remarks


Shares		 Amount Shares Amount Source of capital
(NT$1,000)		 Capital
Increase
d
by
Assets
Other
than
Cash
Approval date and
document No.
2004.12 10 15,000 150,000 15,000 150,000 Capital increase 125,000 by
cash		 — December 13, 2004
Tai.Chai.Chen.I.Tzi
No. 09333164610
2005.07 10 40,000 400,000 25,000 250,000 Capital increase 70,000 by
cash
Capital increase 30,000 by
earning		 — July 7, 2005
Tai.Chai.Chen.I.Tzi
No. 09432406570
2006.10 10 40,000 400,000 30,810 308,100 Capital increase 58,100 by
earning		 — November 17, 2006
Tai.Chai.Chen.I.Tzi
No. 09533140020
2007.03 10 40,000 400,000 35,000 350,000 Capital increase 41,900 by
cash		 — March 2, 2007
Tai.Chai.Chen.I.Tzi
No. 09631749920
2007.09 10 50,000 500,000 41,500 415,000 Capital increase 65,000 by
earning		 — September 19, 2007
Tai.Chai.Chen.I.Tzi
No. 09632780680
2008.09 10 160,000 1,600,000 45,057 450,565 Capital increase 35,565 by
earnings and employee stock
option
—		 September 19, 2007
Tai.Chai.Chen.I.Tzi
No. 09733104880
2008.12 10 160,000 1,600,000 135,169 1,351,685 Merged with Fulfil Tech.
Co., Ltd with new
issuance of NT$ 901.12
million.		 — February 23, 2009
MOEA.So.Sun.Tzi
No. 09801032360
2009.09 10 160,000 1,600,000 135,376 1,353,755 Capital increase 2,070 by
employee stock option		 — September 14, 2009
MOEA.So.Sun.Tzi
No. 09801210290
2010.04 10 160,000 1,600,000 135,845 1,358,455 Capital increase 4,700 by
employee stock option		 — April 21, 2010
MOEA.So.Sun.Tzi
No. 09901078050
  • 71 -
2010.09 10 160,000 1,600,000 136,040 1,360,408
Capital increase 1,953 by
employee stock option		 — September 16, 2010
MOEA.So.Sun.Tzi
No. 09901208440
2011.07 10 160,000 1,600,000 136,638 1,366,384
Conversion of convertible
bond of 598,000 shares		 — July 22, 2011
MOEA.So.Sun.Tzi
No. 10001166200
2012.10 10 160,000 1,600,000 137,816 1,378,158
Conversion of convertible
bond of 1,177,000 shares		 — October31, 2012
MOEA.So.Sun.Tzi
No. 10101225400
2013.02 10 160,000 1,600,000 142,251 1,422,512
Conversion of convertible
bond of 4,435,000 shares		 — February 1, 2013
MOEA.So.Sun.Tzi
No. 10201022320
2013.04 10 160,000 1,600,000 146,873 1,468,732
Conversion of convertible
bond of 4,622,000 shares		 — April24, 2013
MOEA.So.Sun.Tzi
No. 10201075050
2013.08 10 160,000 1,600,000 148,592 1,485,901
Conversion of convertible
bond of 1,719,000 shares		 — August 5, 2013
MOEA.So.Sun.Tzi
No. 10201154290
2013.12 10 160,000 1,600,000 149,856 1,498,563
Conversion of convertible
bond of 1,264,000 shares		 — December 6,
2013MOEA.So.Sun.
Tzi No.
10201241380
2017.05 10 160,000 1,600,000 153,381 1,533,813
Conversion of convertible
bond of 3,525,000 shares		 — May 8, 2017
MOEA.So.Sun.Tzi
No. 10601054200
2017.06 10 160,000 1,600,000 158,524 1,585,241
Conversion of convertible
bond of 5,143,000 shares		 — June 1,2017
,MOEA.So.Sun.Tzi
No. 10601066760
2017.09 10 200,000 2,000,000 161,537 1,615,370
Conversion of convertible
bond of 3,013,000 shares		 — September 6, 2017
MOEA.So.Sun.Tzi
No. 10601123350
2017.12 10 200,000 2,000,000 163,573 1,635,732
Conversion of convertible
bond of 2,036,000 shares		 — December 8, 2017
MOEA.So.Sun.Tzi
No. 10601161370
2018.04 10 200,000 2,000,000 164,966 1,649,656
Conversion of convertible
bond of 1,392,000 shares		 — April 18, 2018
MOEA.So.Sun.Tzi
No. 10701039580
2018.09 10 200,000 2,000,000 123,724 1,237,242 Capital reduction by cash — September 12, 2018
MOEA.So.Sun.Tzi
No. 10701117370

4.1.2 Shareholder Structure

April 26, 2021 ； Unit ： People ； Share ；﹪

April 26, 20 21；Unit：People ；Share；﹪
Shareholder
Structure
Quantity

Governm
ents		 Financial
Institutions

 Other
Institutions		 Individuals Foreign
Institutions &
Individuals		 Total
Members 0
4		 191
22,427
138
18,734
Total Share
Held		 0 1,423,000
13,710,409 86,881,092
21,709,670
123,724,171
Shareholdin
gs(%)		 0%
1.15%
11.08%
70.22%
17.55%
100.00%
  • 72 -

4.1.3 Distribution of common shares ：

April 26, 2021 ； Unit ： Share ；﹪

April 26, 2021；U nit：Share；﹪
Shares No. of Shareholders Total Share Held Shareholdings
(%)
1-999 10,836 1,586,389 1.28
1,000-5,000 9,387 19,321,223 15.62
5,001-10,000 1,313 10,144,204 8.20
10,001-15,000 433 5,513,052 4.46
15,001-20,000 232 4,251,539 3.44
20,001-30,000 186 4,688,807 3.79
30,001-40,000 79 2,866,632 2.32
40,001-50,000 59 2,729,787 2.21
50,001-100,000 113 8,034,369 6.49
100,001-200,000 63 8,780,780 7.10
200,001-400,000 26 7,910,208 6.39
400,001-600,000 11 5,348,272 4.32
600,001-800,000 2 1,354,750 1.09
800,001-1,000,000 4 3,491,000 2.82
1,000,001 股以上 16 37,703,159 30.47
Total 22,760 123,724,171 100.00

4.1.4 List of Major Shareholders

April 26, 2021 ； Unit ： Share ；﹪

April 26, 2021； Unit：Share；﹪
Name of Major Shareholders Share Held Shareholdings(%)
Chiu-Lang,Chen 5,708,211 4.61
Fortune Investment Co., Ltd. 5,200,139 4.20
Guan-zhen Investment Co., Ltd. 2,970,647 2.40
Jian-yuan,Chen 2,939,750 2.38
Tim, Weng 2,747,581 2.22
Jian-hong, Chen 2,529,717 2.04
Hong-bo Investment Co., Ltd. 2,300,000 1.86
Zong-Ying, Dong 2,237,000 1.81
Shu-Yen, Chuang 1,918,684 1.55
Standard Chartered Bankentrusted with the
GMO EmergingMarkets Fund		 1,894,250 1.53
  • 73 -

4.1.5 Information on Market Price, Book Value, Earnings Per Share and Dividend

unit ： NT$ ； Thousands shares ；﹪

Item Year Year Year
2019		 2020 As of March 31,
2021
Market Price
Per Share
Highest		 91.70 93.50 88.50

Lowest		 64.40 60.50 79.10
Average 79.86 82.61 84.25
Book Value
Per Share		 Before distribution 44.38 47.68 48.44
After distribution 39.88 42.68 —
Earnings per
share		 Weighted average shares 123,724 123,724 123,724
Earnings
per share		 Before
distribution		 7.61 7.81 1.02
After
distribution		 — — —
Dividends
per share		 Cash dividend(note 1) 4.50 5.00 —
Stock
dividends		 Before
distribution		 — — —

After
distribution		 — — —
Accumulated
unappropriated
dividends		 — — —
Investment
return
analyses		 P/E ratio 10.49 10.58 —
Price-dividend ratio 17.75 16.52 —
Cash dividendyield 5.63% 6.05% —

Note 1 ： 2020 earnings distribution has not yet been approved by shareholders’ meeting

Note 2：Formulas for the table ：

(1) P/E ratio ＝ Average annual closing price ／ Earnings per share 。

(2) Price-dividend ratio ＝ Average annual closing price ／ Cash dividend per share

＝ (3) Cash dividend yield Cash dividend per share ／ Average annual closing price

4.1.6 Dividend Policy and Execution Status

(1) Dividend Policy

The company is in the growing phrase. The dividend policy will consider future capital need, long-term financial planning and shareholder interests, etc. Each year, the board of directors proposes a distribution proposal to the shareholders meeting. Cash dividend will be 5% to 100% of the total dividend. The actual amount of cash dividend will be approved in shareholders meeting.

In accordance with the provisions of the company's articles of incorporation, the company should deduct the benefits before the employee's remuneration and the director's compensation from profit before income tax. After retaining the amount of accumulated losses, if there is still a balance, the employee's remuneration shall be no less than 3% and the director's remuneration shall not exceed 2%.

Employees' compensation, director's compensation distribution ratio and the employee's compensation in the form of stocks or cash shall be reported by the board of directors to shareholders meeting at a resolution of more than two-thirds

  • 74 -

of the directors' attendance and a majority of the directors' consent.

Employee compensation, either paid in stocks or cash, includes employees of subordinate companies that meet certain conditions.

Annual earnings concluded by the Company, if any, shall be first set aside for paying taxes and making up historical accumulated losses, followed by 10% as the legal reserve, and a provision or reversal of special reserve as required by law or the competent authority. Subsequently, if there are still earnings, the balance will be combined with prior accumulated earnings yet to be distributed. The Board of Directors will prepare the distribution proposal and introduce it during the shareholders’ meeting for a decision before they are distributed. Dividends distributed are about 0% to 90% of after-tax earnings. Cash dividends, in particular, account for around 5% to 100% of all dividends. The actual amount to be distributed shall be that approved through a shareholders’ meeting.

The bonus for shareholders intended to be distributed for 2020 totaled NTD 618,620,855; that is, cash dividends worth NTD 5 per share would be issued.

  • (2) Annual proposal for issuance of bonus shares ： non-applicable.

  • 4.1.7 Impact of annual proposal for issuance of bonus shares on company performance and earnings per share ： non-applicable.

  • 4.1.8 Employee Compensation and Remuneration to Directors and Supervisors ：

  • (1) The percentage and range of employee compensation and remuneration to directors and supervisors on the articles of incorporation ： Please referred to the above explanation of 6.(1).

  • (2) The estimated basis for compensation for employees, directors and supervisors for the current period, calculation basis on the number of shares for employee’s compensation and accounting treatment if the actual distribution amount differs from the estimated number ：

    • a.The estimated remuneration to employees and that to directors and supervisors for 2020 were NTD 80,000 thousand and NTD 18,000 thousand, accounting for 8.21% and 1.85% of after-tax net profit.

    • b.The calculated basis of stocks for employee compensation ： Non-applicable

    • c. If the actual distribution amount is different from the estimated number, it is regarded as an estimated change and is included in the current profit and loss.

  • 75 -

  • (3) Status of compensation approval by Board of Directors

  • a.If the actual amount of cash or stock compensation for employee, directors and supervisors is different with the annual expense recorded, the company should disclose, explain and deal with the situation.

Unit ： NT$ in thousands

U nit：NT$ in thousands
Item 2020
recorded
amount		 Estimated
amount
(note)		 difference reason Status
Employee
Compensation		 80,847 80,000 (847) Due to
accounting
practice.		 If the actual
distribution
amount is different
from the estimated
number, it is
regarded as 2021
annual expense.
Remuneration to
Directors and
Supervisors		 17,747 18,000 253

note ： Approved by 2021 board of directors.

  • b. The percentage of amount of employee compensation by stock dividend to individual financial statements net income on the current year and to overall employee compensation ： No employee stock dividends during the year

  • c. Considered the employee compensation, remuneration to directors and supervisors, the earnings per share is calculated as NT$ 7.81 per share.

  • (4) The actual compensation for employee, directors and supervisors in the previous year. If the actual amount is different with the amount recorded, the company

should disclose, explain and deal with the situation. ：

unit ： NT$ in thousands

unit： NT$ in thousands
Item 2019 recorded
amount		 Actual
amount		 Difference Reason Status
Employee
Compensation		 79,339 79,000 (339) Due to
accountin
g practice.		 The difference is
regarded as 2020
annual expense.
Remuneration
to Directors and
Supervisors		 17,416 18,000 584

4.1.9 Situations of the Company’s buy back stocks ： None

  • 4.2 Corporate Bond (including overseas corporate bond) ： None

  • 4.3 Preferred Stock ： None

  • 4.4 Issuance Of Global Depositary Receipts ： None

  • 76 -

4.5 Employee Stock Option ：

  • 4.5.1 Status of issuance of restricted employee warrant certificate

  • (1)Employee stock warrant certificate which has not expired：NA

  • (2) The name, acquisition and subscription of the managers and top ten employees who have obtained the employee stock option certificate and the number of the

warrants as of the printing date of annual report ： None 

  - (3) The issuance of private employee stock option in the last three years and the

     - date of publication of the prospectus ： None.

  • 4.5.2 Status of Restricted Employee Stock

    • (1) The impact of restricted employee stock options which are not fully vested on shareholders equity as of the annual report printed date ： None

    • (2) The name and the status of managers and top ten employees of restricted employee stock accumulated as of the printing date of annual report ： None 。

  • 4.6 New Shares Issued For Merger Or Acquisitions ：

  • 4.6.1 In the most recent year and as printing date of the annual report, the company has completed the merger or acquisition with newly issued stock ： None

  • 4.6.2 In the most recent year and as printing date of the annual report, the board of directors has approved the merger or acquisition with newly issued stock ： None

  • 4.7 Financing Plans And Implementation ： None

  • 77 -

V 、 OPERATION HIGHLIGHTS

5.1 Business Activities

  • 5.1.1 Business Scoop

  • (1) Major business operation of the Company

CB01010 Machinery and Equipment Manufacturing

CQ01010 Die Manufacturing

F113010 Wholesale of Machinery

F213080 Retail Sale of Other Machinery and Equipment

CC01110 Computers and Computing Peripheral Equipments Manufacturing CC01080 Electronic Parts and Components Manufacturing

CC01060 Wired Communication Equipment and Apparatus Manufacturing F119010 Wholesale of Electronic Materials

F401010 International Trade

F108031 Wholesale of Drugs, Medical Goods

CF01011 Medical Materials and Equipment Manufacturing CC01070 Telecommunication Equipment and Apparatus Manufacturing CC01101 Restrained Telecom Radio Frequency Equipments and Materials Manufacturing

ZZZ99999 In addition to the licensing business, the company can operate business in areas not prohibited or restricted by business laws

  • (2) Major products and business ratio of the Company

unit ： NT$ in thousands ； %

un it：NT$ in tho usands；%
Percentage Percentage

of		 of
2020
Major Product 2019 total Net total Net
Net Sales
Purchases		 Net Sales Purchases
（%） （%）
Stand Products 8,058,052 93.89
9,222,383		 95.43
Molds 524,292 6.11
440,958		 4.57
Total Net Sales 8,582,344 100.00
9,663,341		 100.00

(3) The Company’s currently offered products and services

The company's main services are the design, manufacturing, and plastic injection of molding mold, modeling / mechanism design, model making, mold manufacturing, plastic injection of LCD monitor hinge base, LCD TV hinge base, AIO computer hinge base and AL and MG alloy die caster and precision stamping products. In terms of hinge products, we provide one-stop shop with full services from the ID review, mechanism design, material selection, sample design / production, exterior design, trial production, mass production. For the plastic mold products, we provides complete services such as design of product appearance and mechanism design, as well as vertical integrated services from molding, sample preparation and injection of plastic products.

Products / Services Description
Design and
manufacture of LCD
monitor base, LCD
TV base, AIO
computer base		 LCD monitor hinge base, LCD TV hinge base, AIO computer
hinge base, multi-axis (steering) or other special function base
and hinge products designed to meet customer needs. We can
accommodate with our clients to mass produce, improve yield
and incorporate automation in the manufacturing process in
various locations.
Mold molding/ Weprovide clients with consistent developmentprocess from
  • 78 -
mechanism design product design, mechanism design and mold making to plastic
injection of finished product for mass-production. We also advise
our clients on product design improvement and how to reduce
mold cost andproduction cost.
Mold making To reduce mold development risks, we offer small quantities
production for new development products which can be used for
marketing purpose.
Mold manufacturing Based on the 2D and 3D image files provided by clients, we
manufacture precision molds with automation equipment such as
CNC and electric discharge machining through professional
design software designprograms.
Aluminum and
Magnesium die
casting manufacturing		 professional manufacturer for Aluminum and Magnesium alloy
die caster. The main products are Automotive parts, Bicycle
components, Optical components, Air Valve components, DIY
tools.
Manufacturing of
metal stamping parts		 Precision stamping products primarily include 360-degree
rotational bearings, keypad frames, cooling products, power
supplyenclosures,etc.

(4) Plan for developing new products or services

Current product items of the Company include mold making of LCD monitor stand, LCD TV stand, AIO computer stand, LCD monitor cover and other products, and mass production service of injection products. In the aspect of stand products, the Company engaged in developing compound process parts for simplifying product assembling; meanwhile, the Company successfully introduced automatization production equipment in 2019, raised production efficiency and product quality, developed components of automatization equipment through construction experience of automatization production equipment, and utilized the method of renting automatization equipment to increase business development opportunities. Furthermore, The Company proactively researches and manufactures small precision bearings and will apply them to folding mobile phones and notebook computers, among other 3C products, as 360-degree bearings. In business expansion, the Company has cut into the supply chains of monitor bearings of fitness equipment and 5G outdoor router mechanisms.

5.1.2 Industry Outlook

  • (1) Industry status and development

The company main products are LCD monitor stands, hubs and plastic injection molds, plastic injection molding products. The LCD display stand product revenue accounts for about 90% of the company's combined revenue. The applications include LCD monitor stand, LCD TV stand and AIO computer stand. There is a trend for product with high structural strength, thin volume and metal appearance or special treatment appearance. Plastic injection molds and plastic molding products accounted for about 10% of the company's combined revenue. The applications include LCD monitor shells, LCD TV shells, etc., which mainly supply the demand of the Group's internal stand products and the needs of customers' plastic shells. The company has established production sites in Huadong Region, Fujian, Guangdong, Chongqing in mainland China and Southeast Asia to serve customers nearby. The following remarks are on the status and development of the industry of stand products, plastic injection molds and plastic molding products respectively:

A. Stand Products

  • 79 -

The stand products produced by the company are essential components for LCD monitors, LCD TVs, AIO computers, etc. The rotating function for the display is convenient for use and saves space. It is mainly used in Dell, HP, Asus, Acer, AOC., SONY, NEC and other international brand, home appliance brand manufacturers’ LCD products. The LCD display industry status is as followed ：

With the advance of technology, the traditional cathode-ray tube (CRT) has been completely replaced by flat-panel displays. In flat-panel displays, the most advantageous is price advantage of LCD displays which has also been accepted by the market. With the expansion of TFT-LCD panel capacity and the improvement of technology and yield, the panel price has dropped sharply, which has led to the mainstream application of display. At present, professional display OEMs leaders are TPV, Foxconn, Qisda, Wistron, L&T, Samsung, which account for more than 70% of the world's total shipments. With the competitive advantage of OEMs in this mature industry, the remaining manufacturers will not be able to shake the leading position of the manufacturers in the display industry.

B. Plastic Molding

Mold is an indispensable tool for the mass production of products in the industry from metal, plastic, rubber, glass and other materials. To form a certain shape of the finished product through high temperature, high pressure or high impact process, everything rely on the mold to complete. According to the Ministry of Economic Affairs sorting system, metal molds are divided into five items: die-casting molds, forging dies, stamping dies, plastic molding dies and other molds. The company is a manufacturer of plastic molding dies.

Taiwan's mold industry started later than Europe, the United States and Japan. The application of molds was mainly for electronic communication products. In 1998, the output value reached NT$ 60.4 billion, the highest output value recorded. After that, due to the impact of the Asian financial turmoil, the orders for molds in Southeast Asia decreased. Also, the production costs of domestic land and manpower increased gradually, which led to the transfer of downstream industries to China or Southeast Asian countries, and the output value began to decline year by year. In recent years, the global economy has gradually stabilized under the government's loose monetary policy. The company's plastic molding molds and plastic injection products are mainly for the supply of the Group's needs and client’s demand of shall for their information products.

  • (2) The supply chain in upstream, midstream and downstream

A. Stand Products

The stand and hinge products produced by the company are mainly used to support LCD monitors, LCD TVs and AIO computers. Meanwhile, the company provides the main components of steering rotation and lifting. The upstream provides the raw material for manufacturing the stand and the hinge, including steel plate material, plastic material, iron (stainless steel) pipe, spring wire and die casting aluminum alloy, zinc alloy, etc. While, the downstream is to assemble all the key components, such as manufactures of monitors for video display and other related functions, or computers and televisions system assembly

manufacturers. The relationship is depicted as below ：

Upstream Steel Plate ： Ma Steel 、 Baosteel 、 China Steel 、 Vsc Steel 。

  • 80 -

Zinc / aluminum alloy ： SHUANG TONG 、 HUA LONG 、 Sigma 。 Plastic material ： Chimei 、 LG 、 Samsung 。 Midstream Stand, hinge manufacturing ： Syncmold 、 Shin Zu Shing 、 Jarllytec 。 TV/Monitor/AIO assembly manafucturers ： TPV 、 Foxconn 、 Downstream Wistron 、 Qisda 、 L&T 。 B.Molds

The molds designed by the company are mainly for the information products, home appliances and other related components. It is located at midstream at the mold industry supply chain. The relationship is depicted as

below ：

Mold industry relationship chart in Taiwan

==> picture [388 x 404] intentionally omitted <==

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

Tool steel ： FKL Taiwan Steel and Tien Wen Trading 。
Upstream Tungsten carbide ： CB-CERATIZIT 、 Porite Taiwan and Titanco 。
Parts ： Futaba Taiwan 、 New Stone 、 Sen Yun 、 Chuen Jaang 。
Heat treatment ： Kaori 、 Xing Guang 、 HISEN ENTERPRISES 、
Shin Kwang and NIHON PARKERIZING 。
Surface treatment ： Princo 、 HUI TAI 。
Peripheral
CAD/CAM/CAE system ： Darcam 、 SolidWizard 、 Parametric 、
ugintech 、 Cimatron 、 Getranic 。
Manufacturer - Moldex3D 。
Plastic molds ： Syncmold 、 Nan Jomg 、 Ho Hsing 、 KAI MING and
Midstream
Depo 。
Main ： directly sold to domestic clients
Channel
subordinate ： directly sold to international clients
Electronic Communications ： TPV 、 Acer 、 Foxconn 、 Wistron 、
Qisda 、 Asus 。
Downstream Photoelectric ： Innolux 、 AUO 、 HannStar 。
Transportation ：Yulon、Ford、China Motor、Kymco、Merida。
Machinery Industry ： Victor Taichung 、 Yipc 、 Chin Fong 、
Tongtai 。
----- End of picture text -----

source ： Metal Industries Research & Development Centre IT IS publication and synthesized by the company

  • 81 -

(3) Developing trends in the products

A. Stand products

To sum up above description, in addition to product itself efficiency, the market demand of LCD monitor, LCD TV and AIO computer, dimension, weight, appearance and specific application functions and others were important factors of affecting the market. Hence how to be more efficient and better quality, meanwhile provide aesthetic shape design, variation research and development of stand and hinge products, all are the essential subjects and consecutive development direction encountered by the Company.

LCD monitor bases and pivotal products account for around 90% of the operating income of the Company, in which e-sports monitors account for around 19.4%. TrendForce data show that e-sports LCD monitors of 2019 primarily targeted curved gaming products. In 2020, the product line went diversified. Flat IPS products were expanded to accordingly drive growths in the sales of gaming products. In 2020, up to 18.4 million units were shipped, a growth of up to 105% from 2019. Meanwhile, with the increase in the supply of gaming panels, selling prices of e-sports monitors were becoming more approachable in favor of the popularity of products. Plus the stay-at-home economy and the demand brought about by remote commerce, the growing momentum will continue in the few years ahead. The shipment is estimated to reach 25 million units in 2021. In addition, some brands will further introduce high-end Mini LED models. The development of high-end products and market acceptance will be one of the highlights to be expected in the future, too.

As far as LCD TV sockets are concerned, the income accounts for around 12.7% of the Company’s operating income. TrendForce data show that, thanks to the stay-at-home economy in the midst of the pandemic, as the market demand gradually recovered for the second half of 2020, the overall TV shipment bottomed out and peaked in October. At the end of the year, however, because of the shortage in the supply of electronic IC products from the upstream contractors, the shipment schedule was affected for brands in the fourth quarter, resulting in only 217 million units being shipped for TV brands in 2020, an annual decrease of 0.3%. In 2021, the Tokyo Olympics and the European Cup that were scheduled for 2020 and were postponed because of the pandemic are likely to be resumed despite the changeable and unpredictable pandemic, which is likely to push the demand for TVs to another peak. In addition, as prices of panels constantly climbed each month for the second half of 2020, profitability of mainstream 32 to 55” units gradually dropped. In order to make up for the profits lost of low-price products, some brand owners started to turn the demand for panels towards even larger sizes. The shipment of 65” and above grew up to 23.4%. Under the premise that prices of panels do not drop significantly in 2021, brands need to expedite their deployment for ultra-large products. It is expected that there will still be 30% of growth in the shipment of TVs of 65” and above in 2021. Therefore, TrendForce estimates that the global shipment of TVs in 2021 is likely to reach 223 million units, an annual growth of 2.8%.

AIO computer-related sockets are one of the major sources of the Company's revenue. Their income accounts for 9% of the operating income. As more and more emphasis has been placed on light and compact styles over the past few years, American brand owners started to research and develop AIO computers where the motherboard is installed in the socket. The socket is the computer and it goes with the selected monitor. The combination not only appears to be simple but also saves the room needed. In addition, the distant business opportunities triggered by the pandemic have driven manufacturers to

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introduce the terminal equipment for video conferencing that combines the personal computer and monitor, which also adds new growth momentum to AIO computers. The future is promising.

B. Mold Products

However, Taiwan has difficulties in retaining land, increasing labor costs, and technical difficulties such as competition between the mainland and Southeast Asian countries. Since low-priced and simple plastic molds have lost competitive advantages in China, it is inevitable to develop high-precision, highvalue-added molds. In the future, the mold industry will face the technical challenges for light, thin, precision and composite molding, molding integration and environmental protection and energy saving. Mold design/manufacturing technology will play a very important role. Under this trend, the development of human resources and technology is vital, which not only promotes another wave of industry transformation, but also makes the future development of the mold industry clear and visible.

(4) Compition on Prosucts

A. Stand Products

TPV, Foxconn, Wistron, Qisda, Pegatron, Quanta, L&T Displayand other system assemblers and international brands such as Dell, Hewlett-Packard, Asus, Acer, AOC, Sony, NEC and Funai are all major clients of the company. The above-mentioned system assemblers are the world's leading LCD monitors and LCD TV manufacturers. The company is a leader in high-end LCD monitor stand, LCD TV stand and hinge industries. We have accumulated years of research and development capabilities and manufacturing integration capabilities. Except for Korean brands, major display system assemblers are our clients. The company is superior to its peers in terms of R&D capability, service quality and delivery capability. Therefore, the company is able to maintain its leading position in the industry.

B. Molds

According to the research report of the Metal Industry Research and Development Center, Taiwanese mold industry operation status is dominated by small and medium-sized enterprises, 80% of the total industry have capital below NT$ 10 million. The scale of the company's molds is relatively high among the peers. With good customer relationship with long-term cooperation and with the demand for stand products, and the service and technical experience from design to mold manufacturing to trial production, our molding products are still competitive in the display industry.

5.1.3 Status on Skill and Development

(1) Business-related Technology

A. Stand Products

Due to the wide range of applications of the stand components, the company’s products are an indispensable part no matter the variation of display. In terms of product technology, the company has superior patented and development experience in the high-end stand products with rotating functions which is more competitive than peers, such as four-link lifting structure, vertical lifting, forward tilting, and clockwise (counterclockwise) steering, meanwhile conforming the variation and market trend of dimension and appearance for LCD monitor industry in recent years. The research and development of the Company turned to the stand with features of light, thin and high supporting

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strength, and the Company considered buyer’s demand of aesthetic shape and space saving to make products have more advantages of market competitiveness. B. Molds

Mold is one of the traditional industries. The key to competition lies in quality, cost, delivery and production efficiency. The company has accumulated many years of experience in mold development and manufacturing, design talents and market pulsation combined with customer needs and have long-term cooperation experience with customers. The design of the mechanism has a decisive influence on the quality of the mold. With the professional design talents with many years of expertise, the company conducts analysis of the mold flow before the mold is opened. This helps to reduce the number and time of mold modification and complete the mold manufacturing in advance. This is company's competitive niche.

(2) Status on R&D

The Company primarily produces LCD monitor sockets, LCD TV sockets, and AIO computer sockets as well as plastic injection molding dies for the enclosures of various types of information products. Video conferencing and working from home have become a new routine in the midst of the pandemic. As such, positive growths in LCD monitors, LCD TVs, and AIO computers remain and there is still quite huge demand. The Company will continue to invest comparable resources to the research and development department in order to develop related patents and technologies.

A.R&D Expenses for the most recent year and as of March 31, 2020

2020 2020 March 31,2021 March 31,2021
Amount % of Sales Amount % of Sales
175,753 1.82％ 47,551 2.07%

The Company's research and development expenses for 2020 increased by 15% compared with the previous year. It is mainly used for research and development of LCD monitor stand, LCD TV stand, AIO computer stand, hinge products and research and development of automatization production and inspection.

In the year of 2021, it is estimated that the investment in research and development will account for 1.8 to 2.0% of revenue.

B. Results of R&D

The company’s results of R&D in 2020 and 2019 are as followed ：

Mainly LCD monitor and LCD TV support frame, expandable bracket structure, display lifting device and constant force spring module, hinge and display support device, liftable support device, linkage support device, adjustable loading mechanism, rotatable support frame, strain relief kit, liftable support device, thin carrier plate, support frame, cable management, sucked supporting device, quick releasing hinge model and pivoting device, etc.

5.1.4 Long-Term and Short-term Business Development Plan

  • (1) Short-term development plan

A. Production policy and R&D

  • (A) Invest in appearance treatment equipment to increase value added of the products.

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     - (B) Develop thin, small, strong structure and special appearance stand to meet the needs for gaming market.

 - (C) Expand automatic product market, create new energy of revenues

 - (D) Increase the number of parts produce in house to enhance the competitiveness.

 - (E) Establish safety stock system, decrease the risk of raw materials supply, and more efficient stock cost.

 - B. Operation and management strategy

 - (A) Integration of group resources, increase the scope of product application, gradually raise operation scale of the group

 - (B)Implement a lean management system, to maximize the group’s logistic, talents and information.

    • C. Financial strategy

      • (A) Provide immediate and accurate management information as a reference for decision making

      • (B) Properly use financial instruments to reduce exchange rate risks and minimize the impact of exchange rate fluctuation.

    • D. Marketing strategy

      • (A) Provide clients with in house design to incorporate our design concepts into new products.

      • (B) Cultivate sales talent for international business with the aim to win new orders.

  • (2) Long-term development plan

    • A. Production policy and R&D

      • (A) Develop micro-hinge components. 360-Degree rotating pivots and advanced die casting in response to future trends.

      • (B) Develop small, thin and lightweight stand products and promote to clients.

      • (C)Produce self-made components in a composite process to reduce the number of parts and improve quality and efficiency.

    • B. Operation and management strategy

      • (A) Cultivate potential management trainee and build group’s talent pool.

      • (B) Using information management system to identify misconducts, improve and to track the progress.

    • C. Financial strategy

      • (A) Under the principle of stable financial leverage and financial risk to use funds acquire moderate returns.

      • (B) Using cost analysis and manage information effectively to support the company’s decision making.

      • (C) Integrate horizontal and vertical resources, expand the group’s scale through strategical investment or merger and acquisition.

      • (E) Utilize global layout, actively add overseas production bases, diversify supply risk.

    • D. Marketing strategy

      • (A) Based on our research and development advantages, we will improve customer dependency and to maintain long-term relationships

      • (B) Develop high-end or special applications to increase revenue and profitability.

  • 5.2 Overview of Market,Production and Sales Market Analysis

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5.2.1Market analysis

(1) Sales and markets of main products and services

The company’s sales are mostly international order. The status of sales for most

recent two years ：

unit ： NT$ in thousands ； %

un un it：NT$ in thousands；% it：NT$ in thousands；%
Year
Region
2020		 2019
Amount % Amount %
International Sales 9,327,293
96.52
8,560,428
99.74
Domestic Sales 336,048
3.48
21,916
0.26
Net operatingrevenue 9,663,341
100.00
8,582,344
100.00

(2) Market Share

A. Stand product

The stand products of the company include LCD monitor stand, LCD TV Stand and AIO computer stand. Based on the professional statistical institution, it is estimated that the market share of each product of the company is as follows. The company's clients are the world's major LCD display system assembly companies such as TPV, L&T Display, Foxconn, Wistron, Qisda, Pegatron and other LCD TV brand manufacturers such as Sony, Funai, etc. The market demand for this product still has a stable quantity, and it is developing toward a light, thin, large size trend. With the competitive advantage of the company, it is expected to have room for market share of high-end stand and hinge products with steering functions to be increased.

Statistics of professional institutions show that the shipment of LCD monitors around the world was about 137,900 thousand units in 2020. The Company accounted for a market share of around 28.7％, in which e-sports accounted for about 4.2%. The shipment of LCD TVs around the world was about 216,900 thousand units in 2020. The Company accounted for a market share of around 3.5%. The shipment AIO computers around the world was about 12,300 thousand units in 2020. The Company accounted for a market share of around 23.6%. It is expected in the several years ahead, the shipment of LCD monitors around the world will be around 140 million units. The stay-at-home drives the demand on the market as a whole to grow against all odds in the midst of the pandemic. Given the stressed supply of panels, however, the extent of increase in the overall shipment is limited despite the increased demand. In addition, applicable sizes of monitors will be obviously enlarged. At the end of 2020, LCD monitors of 23” and above already accounted for more than 70%. Plus the preference of consumers over lighter and smaller volumes and the demand for dazzling appearances, it is obvious that the demand for high-end monitor sockets is gradually climbing. LCD TVs and LCD monitors share similar developmental trends. Being larger, lighter, and thinner is the basic requirement for LCD TV sockets. Plus appearance treatment and special composition or unique style, LCD TV sockets have come to integrate with the living space. Mechanical design, appearance treatment, and industrial design are all required in order to meet the demand of international brand owners.

B. Molds

At present, most of the domestic manufacturers of plastic injection molds have a small scale of operation. Since establishment, the company view us as professional mold factory has been committed to the development of mold technology and production efficiency. We spared no effort to cultivate many long-term cooperative customers by developing new technology and new

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applications. Our product quality and technology have been affirmed by our clients

According to the research and development department of Taiwan Die & Mold Industry Association, the total output value of domestic molds in 2020 is about NT$ 40.1 billion and the output value of plastic molds is about NT$ 10.29 billion. The revenue of plastic molds of our company in 2020 is about NT$ 540 million. It is estimated that the company's share of the output value of plastic molds is low and still has room for growth.

  • (3) Future Market Demand and Growth

A. Stand products

The stand and hinge products produced by the company are mainly used in LCD monitors, LCD TVs and AIO computers. The future development of LCD monitors, LCD TVs and AIO computers is as follows:

Statistics of professional institutions show that the shipment of LCD monitors around the world was about 137,900 thousand units in 2020 and is expected to reach 140,900 thousand units in 2021; that of TVs was 216,900 thousand units in 2020 and expected to reach 223,000 thousand units in 2021. Impacted by the pandemic, however, subsequent shipments of monitors and TVs are pending observation. The shipment of AIO computers around the world was 12,300 thousand units in 2020 and is expected to reach 12,400 thousand units in 2021. The demand on the market in 2020 was comparable to that in 2021. Based on the above statistics, it is estimated that the shipments of LCD monitors, LCD TVs, and AIO computers around the world in the future will be about 140 million units, 223 million units, and 12.4 million sets. The demand on the market will appear to be steady. Therefore, without new applications, despite the unlikely significant growth for the display industry, it will not shrink much, either; the demand will remain steady.

Estimated Global LCD Monitor Shipment (in million unit)

==> picture [375 x 163] intentionally omitted <==

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

150.0 137.9 140.9 136.4 133.8 10.0%
125.4 123.7 126.6 128.3
130.0 8.0%
7.5%
110.0
6.0%
90.0
4.0%
70.0
2.3% 2.2% 2.0%
50.0 1.3%
0.0% 0.0%
30.0
-1.4%
10.0 -1.9%-2.0%
-3.2%
-10.0 -4.0%
2016 2017 2018 2019 2020(E) 2021(F) 2022(F) 2023(F)
----- End of picture text -----

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Estimated Global LCD TV Shipment (in thousands)

==> picture [379 x 162] intentionally omitted <==

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

224,000 5.0%
222,000 220,000 4.0% 2.8%220,000 219,000 4.0%3.0%
218,000 2.0%
1.6%
216,000 1.0%
214,000 0.0%
-0.5% -0.4% -0.5%
212,000 -1.0%
-1.3%
210,000 -2.0%
208,000 -3.0%
206,000 -3.9% -4.0%
204,000 -5.0%
2016 2017 2018 2019 2020(E) 2021(F) 2022(F) 2023(F)
----- End of picture text -----

Estimated Global AIO Computer Shipment (in million)

==> picture [389 x 173] intentionally omitted <==

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

20.0 3.0%
18.0 1.5% 1.7% 2.0%
16.0 0.8% 1.0%
14.0 0.0% 0.0%
-1.0%
12.0
-2.0%
10.0 -2.5%
-3.2% -3.0%
8.0
-4.0%
6.0 -4.8% -5.0%
4.0 -6.0%
2.0 -6.7% -7.0%
- -8.0%
2016 2017 2018 2019 2020(E) 2021(F) 2022(F) 2023(F)
數列1 數列2
----- End of picture text -----

source ： Wits View

B. Molds

According to the research data by the Taiwan Die & Mold Industry Association, the supply and demand side of Taiwanese mold industry has shown a trend of recovery since 2002. The output value from 2003 to 2008 was between NT$ 50 billion and gradually recovered after the financial crisis. Taiwan’s 2020 mold industry output value decreased by 4.75% compared with 2019, showing that the mold industry has obvious characteristics of the economic cyclical. To achieve fast delivery, the company sets up its mold production sites in areas close to its clients in order to meet the needs of clients and of the Group's needs of mold and plastic injection products It is expected that the mold industry will still have stable demand as continuous improvement of electronics, home appliances and 3C products.

  • 88 -

unit ： NT$ in hundred

unit：NT$ in hundred unit：NT$ in hundred
million
Item
(Year)		 Output
Value
A
Export
Value
B		 Import
Value
C		 Domestic
Demand
D=A-B+C		 Demand
Growth
E		 Export
Ration
F=B/A		 Ratio of
Dependence
on Import
G=C/D		 Self-
Sufficiency
Rate
H=1-G
2001 394.1 184.8 49.3 258.6 -25.50% 46.89% 19.06% 80.94%
2002 425.6 183.1 37.1 279.6 8.12% 43.02% 13.27% 86.73%
2003 501.0 192.4 35.4 344.0 23.03% 38.40% 10.29% 89.71%
2004 567.7 200.6 58.8 425.9 23.81% 35.34% 13.81% 86.19%
2005 550.0 202.1 40.8 388.7 -8.73% 36.75% 10.50% 89.50%
2006 550.4 191.5 44.3 403.2 3.73% 34.79% 10.99% 89.01%
2007 566.6 185.9 60.9 441.6 9.52% 32.81% 13.79% 86.21%
2008 495.6 191.2 55.7 360.1 -18.46% 38.58% 15.47% 84.53%
2009 386.2 125.7 24.0 184.5 -48.7% 32.55% 13.0% 87%
2010 458.4 143.8 29.9 344.5 86.7% 31.37% 8.68% 91.32%
2011 469.3 149.1 28.1 348.3 1.10% 31.78% 8.1% 91.9%
2012 468.2 155.6 32.4 345.0 -0.95% 33.23% 9.39% 90.61%
2013 456.4 146.7 26.4 336.1 -2.6％ 32.14％ 7.85％ 92.15％
2014 470.3 168.5 29.2 331.0 -1.5％ 35.83％ 8.82％ 91.18％
2015 487.1 156.1 28.2 359.2 8.5% 32.05% 7.85% 92.15%
2016 449.1 150.0 25.9 325.0 -9.5% 33.4% 7.97% 92.03%
2017 437.9 149.9 25.7 313.7 -3.4% 34.2% 8.19% 91.81%
2018 455.0 145.4 30.8 340.4 8.5% 32.0% 9.04% 90.96%
2019 421.0 129.8 26.8 318.0 -6.6% 30.8% 8.42% 91.58%
2020 401.0 95.9 25.8 330.9 -4.75% 23.92% 7.80% 92.20%

source ： Taiwan Die & Mold Industry Association and synthesized by the company

The company's plastic injection molds are mainly used for the shells of LCD monitors and LCD TV. According to a professional statistical agency, in the next few years, the global LCD monitors and LCD TV shipments will be around 140 million units and 220 million units respectively. Moreover, the LCD monitors and the TV shells are still mainly made of plastic. Since the development of new products requires the cooperation from the molds, the demand for plastic injection molds can maintain stable growth.

(4) Competitive Niche

A. Solid Technical Experience and Development Integration

The company is the earliest professional manufacturer of LCD monitor stand and hinge products. We have the most patents and technologies, specializing in the development of stands and hinge products with high structural strength and multi-axis steering. The world's major LCD monitors and LCD TVs brands are clients of the company. The company is the leading manufacturer of LCD display stand.

In terms of plastic injection molds, the company's molds are mainly used in LCD monitors or LCD TV shells and some of the molds supplied group’s need for stand products.

Through the combination of plastic molds, plastic injection molding, stand and hinge products, the company can complete the process from drawing design to proofing, certification to mass production in the shortest time. To showcase the new product to the public in a timely manner, we can complete the prompt delivery of the entire stand.

B. Provide Services Near the Clients

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The Company currently actively makes the global deployment for production bases to decrease product supply chain risk, and provide overall services for the customers around the world.

C. Timely Delivery in Line with Client Policy

In terms of the stand products, closely cooperating with the system assembly manufacturer, the company can complete the shipment within five days after the client’s orders, which meets the customer's zero inventory policy and timely on-line assembly needs.

  • (5) Advantages, Disadvantages and Countermeasures of Developing Prospects

A. Advantages

  • (A) R&D with resources, patents, inventions and leading technology

In terms of stand products, the company has the industry's largest patent base for display stands and hinges. International brands and system assemblers collaborate to develop new design structures, also, the company design potential products for clients to reduce client design costs. In terms of mold products, the company focuses on the development of materialsaving. In addition to meeting customer needs, it can also supply demand within the group to reduce production costs.

(B) Expand the scope of products to create growth energy of revenues

The Company integrated the group’s resources, increased the scope of product sale to expand the Company’s scale and diversify operation risk through the policies of strategical investment, merger and acquisition. This was exactly the strategy followed by the Company in 2019 and in 2020, respectively, with its investments in GATETECH TECHNOLOGY INC. and LEOHAB ENTERPRISE CO., LTD.

  • (C) Stable orders from international brands

Owning the patented technology of the stands, the company can provide prompt service for the development, testing and mass production of the entire products. This saves the research and development costs for the customer. At present, most of the major customers are international brand manufacturers or system assembly manufacturers which have long-term cooperation with the company. This advantage is an important factor for the company to grow steadily.

  • (D) Raise automatization ratio, research and development

The Company voluntarily researched and developed automatization equipment, introduced production lines to strengthen production efficiency and product quality of the Company, and pushed the research results of automatization equipment in the scope of other intelligential manufacturing, expanded new business scopes.

B. Disadvantages and Countermeasures

  • (A) Higher costs due to fluctuations in raw material prices

The LCD display stand, hinge and molds are mainly made from special steel, galvanized steel, plastic pellet, spring, aluminum alloy, zinc alloy, iron (stainless steel) tube, etc. In recent years, the price of raw materials has increased significantly, resulting in increased material costs for the company.

Countermeasures ：

The company absorbs the cost at the initial price increase of the raw material or reduces the material cost by purchasing in large quantities. When the raw materials rise to a long-term trend and exceed the company's affordable range, the company negotiates a reasonable increase to reflect the

  • 90 -

cost of the raw materials. For parts or appearances that require a large amount of demand or high added value, the company is committed to providing customers with a more complete service.

  • (B) Higher labor cost and insufficient manpower

Since the implementation of the Labor Contract Law in mainland China, the basic salary of labor has been raised year by year, resulting in a significant increase in labor costs. Due to the shortage of labor, there have been frequent shortages of manpower and affected the production.

Countermeasures ：

The company take labor cost in to consideration into quote. The company also committed to simplify product design and production process, expand automatic production equipment to reduce the dependence on labor and reduce the impact of rising labor costs.

  • (C) Price competition by peers and intense market competition

Due to the intense competition in the market, it will adversely affect the business expansion and profitability.

Countermeasures ：

The scale of operation and efficiency of the peers are not as good as the company. The company has a large purchasing advantages and self-made parts to reduce costs. The company will continue to target high-value-added services and lock in high-end product markets to reduce the impact of peerto-peer price competition.

  • 5.2.2 Function and Production Process of Products

  • (1) Important function of the products

A. Stand products

The company's stand and hinge products are mainly used in LCD monitor, LCD TV and AIO computer as an important component to support the display and assist its rotation (steering). In addition to the basic structural strength to support and connect the LCD display, it is also design for multi-steering functions such as front tilting, left and right rotation, up and down lifting, and clockwise (counterclockwise) rotation according to different requirements of high-value-added products.

B. Molds

The company produces plastic injection molds for the outer shell or components of LCD monitors, LCD TVs and other products.

  • 91 -

  • (2)Production Process

  • A. Stand products

==> picture [263 x 267] intentionally omitted <==

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

Processing and inspection of stampings, die
castings, plastic parts, springs and washers
Incoming inspection and production
management
Production line assembly and adjustment
Quality inspection
Warehousing and delivery operation
----- End of picture text -----

  • 92 -

==> picture [514 x 633] intentionally omitted <==

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

B. Molds
PROGRAMING PREPARING DRAWING DRAWING
SCHEDULE
DESIGN STEEL DESIGN CHECK
SURFACE DATUM AXIS ＆ SHAPING
DOWEL PIN. GRINDING
ERILLING DATUMFEATUR
E
PRESSURE
CASTING SUBCONTRACTO SURFACE FINISH
OF BERYLLUM R (POLISHING) MILLING PLANT
COPPER
WIRE CUTING ASSEMBLE CNC MILLING
SCULPTURING TRIAL SHOT EDM
ETCHING CHECK MODIFY
LATHING
(TEXTURE) TRIAL SHOT
MOLD CHECK PROCESS
SANDBLAST
AND ACCEPT CHECKED
PLATING PILOT RUN BENCH WORK
----- End of picture text -----

  • 93 -

(3) Supply of Main Raw Materials

(A) Stand products

The main raw materials of the company's stand and hinge products are steel plates, aluminum alloys, zinc alloys, plastic pellets, washers, springs, shafts, screws, etc. Those are bulk commodities with prices available in the open market. There is no special or monopoly situation. Therefore, the company does not have a long-term supply contract with the supplier. Each of the main raw materials maintains at least two suppliers, which can effectively control the quality and price level of raw materials, also, other related risks such as excessive concentration of purchases can be effectively reduced.

(B) Molds

The main raw materials of the company's plastic injection molds are special steels and other components. Due to their wide variety of specifications, hardness, material properties and requirements from clients, the company has not signed a long-term supply contract with the supplier. The main raw materials are maintained at least two suppliers and the supply of goods can be fully obtained Therefore, there is still no over-concentration of supply, and the price and quality can be reasonably stable.

  • (4) List of Major Supplier and Clients

  • (A) The name, purchase amount, and ratio of the suppliers accounted for over 10% of the total purchase in one of the last two years, and the reason for the changes

in purchase ： The suppliers of the company are extremely diversified and there are suppliers with more than 10% of total purchase.

  • (B) The name, sale amount, and ratio of the customers accounted for over 10% of the total sale in one of the last two years, and the reason for the changes in sales ：

unit ： NT$ in thousands ； %

Year
Rank		 2019 2019 2020 2020 2020 2020 2021Q1 2021Q1 2021Q1
Name Amount Ratio to
Annual
Net
Sales
(%)
Relatio
nship
with the
issuer
Name		 Amount Ratio to
Annual
Net
Sales
(%)		 Relatio
nship
with the
issuer
Name		 Amount Ratio to
Annual
Net
Sales
(%)		 Relation
ship
with the
issuer
1 Company
A
2,315,820
26.98		 None Company
A		 2,497,956
25.85		 None Company
B		 370,101
16.13		 None
2 Company
B
1,299,662
15.14		 None Company
B		 1,393,966
14.43		 None Company
A		 330,055
14.39		 None
3 Company
C
1,135,567
13.23		 None Company
C		 1,055,015
10.92		 None Company
C		 246,884
10.76		 None
Other 3,831,295
44.65
-		 Other 4,716,404
48.80
-		 Other 1,346,951
58.72
-
Net Sales 8,582,344 100.00
Net Sales 9,663,341 100.00
Net Sales 2,293,991
100.00

There are no major changes in the major clients ranking.

  • 94 -

(5) Production, Volume, and Value of the last two years

Unit ： thousand units / NT$ in thousands

Year
Output
Main Products
2020
2020
2020		 2019 2019 2019
Production
capacity
Production
Quantity
(1000 PCS)
Production
Value		 Production
capacity
Production
Quantity
(1000 PCS)		 Production
Value
Stand Products(1000 PCS) － 52,877 7,031,553 － 52,732 6,557,291

Note：Some of the stand components and mold products produced by the company are self-use and can be sold externally, so the production capacity cannot be accurately counted.

(6) Sales Volume and Value of the last two years

unit ： 1000unit / NT$ in thousands

Shipment Year
&
Sales
Main Products		 2020 2020 2020 2020 2019 2019 2019 2019
Domestic Sales Export Sales Domestic Sales Export Sales
Volume Value Volume Value Volume Value Volume
Value
Stand Products (1000
PCS)		 162 47,338 52,019
8,346,069
93		 35,898 43,866
7,966,501

5.3 Information About Of Employee

Unit ： People ； %

Item Year 2019 2020 As of March
31,2021
No. of
Employee		 Direct Staff 0 5 7
Indirect Staff 111 143 146
R&D Staff 93 109 108
Total 204 257 261
Average age 39.11 39.34 39.75
Average seniority 6.1 5.6 5.7
Academy
Ratio
(%)		 Master and above 10.78% 10.51% 11.11%
College 80.88% 77.43% 75.86%
Senior High School and Below 8.34% 12.06% 13.03%

5.4 Expenditures On Environment Protection

The amount of penalty/fine (including compensation) imposed due to environmental pollution in the most recent year and up to the publication of the annual report, countermeasures and potential expenditures: None

5.5Employee/Employer Relation

  • 5.5.1The company's various employee welfare measures, training, retirement system and its implementation status, as well as the agreement between labor and

  • management and the maintenance measures of various employee rights ：

  • (1) Welfare measures for employees

  • 95 -

The company has always adhered to the business philosophy of steady and sustainable development and pay great attention to employee welfare. Established the Staff Welfare Committee in 2004 and provided monthly benefits. The Welfare Committee arranged activities to promote various welfare measures for

employees. The welfare offerings by the Welfare Committee are as follows: ：

(a)The company provides and pays for group insurance for all employees providing employee accidents and medical insurance.

(b) Emergency relief funds for employees faced accidents

(c) Employee wedding, birthday gift and funeral condolence payments etc.

(d) Hold various outdoor activities (travel, dinner party)

(e) Regular health check and medical consultation

(f) Holiday bonus or gifts

(g)Formulated the “Measures for Employee Child Care Subsidy” to provide employee childcare subsidies every year to reduce the burden for employees in 2017.

(h) Face masks and protective overalls, among other disease prevention resources, were provided to each employee free of charge to prevent against COVID-19.

(2) Career Development and Training for Employees

In order to improve the quality and work skills of employees, enhance work efficiency and quality, the company has implemented pre-employment guidance education for new employees. Internal education training is irregularly scheduled for all employees. Also, employees are selected to implement external education and training according to their specialties. By doing so, we hope to cultivate outstanding professional talents, improve operational performance and effectively developing human resources.

  • (3) Retirement System:

The Company has established an employee retirement measure in accordance with the Labor Standards Law. According to the provisions, the pension payment is calculated based on the employee's service years and the average salary of the six months prior to retirement. The company provides monthly retirement reserve according to regulations and is administered by the Labor Retirement Reserve Supervision Committee and deposited in the Central Trust Office in the name of the committee. Since the implementation of the "Labor Pensions Measure" on July 1, 2005, a 6% pension has been paid for employees who choose to apply the measure.

  • (4) Agreement between labor and management and various employee rights

The company has always adhered to the harmony of labor-management. All operations are in accordance with the norms of the Labor Standards Law. Regular labor-management meetings are held. The internal communication channels are

smooth. So far, there have been no major labor disputes. 。

  • 5.5.2 Loss suffered from labor disputes in the latest year and up to the printing date of this Annual Report: ：

  • (1) Loss suffered by the company in recent years due to labor disputes ：

The company has not caused losses due to labor disputes since establishment.

  • (2) Estimated amount and countermeasures that may occur in the future

Under the current system and regular labor-management meetings in accordance with the law to enhance the exchange of views between employers and employees, the possibility of losses due to labor disputes in the future is extremely low.

  • 5.6 Important Contracts and Agreements: None.

  • 96 -

VI 、 Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheet and comprehensive Income Statement

(1) Condensed Consolidated Balance Sheet - IFRS

unit ： NT$ in thousands

Year
Item		 Year
Item		 Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial data up
to March 31, 2021
（Note 2）
2016 2017 2018 2019 2020
Current asset 7,782,701 7,314,607 7,167,417 7,651,497 8,808,968 8,603,835
Investments using equity
method		 95,063 102,665 123,713 168,252 164,556 166,399
Property, plant, and
equipment		 611,792 557,808 543,858 1,225,581 1,686,017 1,885,616
Intangible assets 25,283 21,489 22,308 26,637 34,250 33,973
Other assets 529,933 587,947 537,206 953,543 1,077,120 1,292,428
Total assets 9,058,687 8,584,516 8,394,502 10,025,510 11,770,911 11,982,251
Current
liability		 Before
distribution		 2,493,540 2,452,088 2,598,926 3,786,437 4,929,446 4,921,066
After
distribution		 3,373,540 3,276,916 3,403,133 4,343,196 (Note 1) (Note 1)
Noncurrent liabilities 984,486 161,828 239,978 519,442 599,630 728,853
Total
liabilities		 Before
distribution		 3,478,026 2,613,916 2,838,904 4,305,879 5,529,076 5,649,919
After
distribution		 4,358,026 3,438,744 3,643,111 4,862,638 (Note 1) (Note 1)
Shareholder’s equity
attributable to parent
company		 5,580,661 5,970,600 5,555,598 5,490,374 5,898,697 5,993,202
Capital stock 1,498,564 1,635,733 1,237,242 1,237,242 1,237,242 1,237,242
Certificate of
Entitlement to New
Shares form Convertible
Bond(Subscribed Stock)		 35,250 13,923 － － － －
Additional paid-in
capital		 2,094,403 2,591,280 2,591,280 2,591,280 2,592,857 2,592,857
Retained
earnings		 Before
distribution		 2,116,980 2,106,313 2,158,582 2,295,872 2,704,213 2,830,854
After
distribution		 1,236,980 1,281,485 1,354,375 1,739,113 (Note 1) (Note 1)
Other equity (164,536) (376,649) (431,506) (634,020) (635,615) (667,751)
Treasury stock － － － － － －
Non-controlling equity － － － 229,257 343,138 339,130
Total
equity		 Before
distribution		 5,580,661 5,970,600 5,555,598 5,719,631 6,241,835 6,332,332
After
distribution		 4,700,661 5,145,772 4,751,391 5,162,872 (Note 1) (Note 1)

Note 1 ： The proposal for the distribution of the 2020 earnings is yet to be resolved in the shareholders’ meeting.

Note 2 ： The 2021Q1 financial data were reviewed by the CPA.

  • 97 -

(2) Condensed Balance Sheet (parent-company only) - IFRS

unit ： NT$ in thousands

Year
Item		 Year
Item		 Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years
2016 2017 2018 2019 2020
Current assets 1,628,556 2,418,339 1,724,346 1,574,884 1,728,616
Investments
using
equitymethod
5,915,794		 4,752,813 5,245,364 6,145,911 6,885,352
Property, plant, and
equipment		 114,952 109,205 112,477 118,158 152,098
Intangible assets 18,751 16,041 13,191 17,159 15,593
Other assets 435,306 438,288 429,953 412,084 440,867
Total assets 8,113,359 7,734,686 7,525,331 8,268,196 9,222,526
Current
liabilities		 Before
distribution
1,551,908		 1,603,994 1,729,426 2,486,460 3,056,845
After
distribution
2,431,908		 2,428,822 2,533,633 3,043,219 (Note 1)
Noncurrent liabilities 980,790 160,092 240,307 291,362 266,984
Total
liabilities		 Before
distribution
2,532,698		 1,764,086 1,969,733 2,777,822 3,323,829
After
distribution
3,412,698		 2,588,914 2,773,940 3,334,581 (Note 1)
Shareholder’s
equity
attributable to parent
company
5,580,661		 5,970,600 5,555,598 5,490,374 5,898,697
Capital stock 1,498,564 1,635,733 1,237,242 1,237,242 1,237,242
Certificate
of
Entitlement to New
Shares
form
Convertible
Bond
(Subscribed Stock)



35,250		 13,923 － － －
Additional
paid-in
capital
2,094,403		 2,591,280 2,591,280 2,591,280 2,592,857
Retained
earnings		 Before
distribution
2,116,980		 2,106,313 2,158,582 2,295,872 2,704,213
After
distribution
1,236,980		 1,281,485 1,354,375 1,739,113 (Note 1)
Other equity (164,536) (376,649) (431,506) (634,020) (635,615)
Treasury stock － － － － －
Non-controlling equity
－		 － － － －
Total
equity		 Before
distribution
5,580,661		 5,970,600 5,555,598 5,490,374 5,898,697
After
distribution
4,700,661		 5,145,772 4,751,391 4,933,615 (Note 1)

Note 1 ： The proposal for the distribution of the 2020 earnings is yet to be resolved in the shareholders’ meeting.

  • 98 -

(3) Condensed Consolidated Income Statement - IFRS

unit ： NT$ in thousands

Year
Item		 Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial Data within the last 5 years Financial data
up to March
31, 2021
（Note 1）
2016 2017 2018 2019 2020
Operating income 9,138,485
8,870,758
8,808,885		 8,582,344
9,663,341
2,293,991
Gross profit 2,166,883
2,053,546
2,034,141		 2,265,039 2,540,693
466,675
Operating profit 1,182,074
1,234,450
1,147,221		 1,277,995
1,531,692
166,331
Non-Operating
income and expense		 182,365
(12,906)
218,327
166,995
(34,171)
35,290
Net income before tax 1,364,439 1,221,544
1,365,548		 1,444,990
1,497,521
201,621
Net income of
continuingoperations		 909,263
869,440
889,961
942,595
974,682
125,033
Discontinuing operation loss － － － － － －
Net income 909,263
869,440
889,961
942,595
974,682
125,033
Other comprehensive
profit and loss (net)		 (449,348)
(212,220)
(54,642)		 (203,522)
48
(34,536)
Total current
comprehensiveprofit		 459,915
657,220
835,319
739,073
974,730
90,497
Net income
attributable to parent
company’s
shareholders		 909,263
869,440
889,961
941,542
965,738
126,115
Net income
attributable to
non-controllingequity		 － － － 1,053
8,944
(1,082)
Total comprehensive
profit and loss
attributable to parent
company’s
shareholders		 459,915
657,220
835,319
738,983
963,505
94,505
Total comprehensive
profit and loss
attributable to
non-controllingequity		 － － － 90
11,225
(4,008)
Earnings per share 6.06
5.42
5.88
7.61
7.81
1.02

Note 1 ： The 2021Q1 financial data were reviewed by the CPA.

  • 99 -

(4) Condensed Income Statement (parent-company only) - IFRS

unit ： NT$ in thousands

unit：NT$ in thousands unit：NT$ in thousands unit：NT$ in thousands unit：NT$ in thousands unit：NT$ in thousands
Year
Item		 Financial Data within the last 5 years
2016 2017 2018 2019 2020
Operating income 3,070,409 3,554,107
3,338,567
3,706,674
3,931,114
Gross profit 529,754
545,264
475,750
550,327
517,748
Operating profit 213,170
208,375
82,774
117,630
100,739
Non-Operating
income and expense		 819,181
774,618
981,723
995,052
1,029,646
Net income before tax 1,032,351
983,056
1,064,497
1,112,682
1,130,385
Net income of
continuingoperations		 909,263
869,440
889,961
941,542
965,738
Discontinuing operation loss － － － － －
Net income 909,263
869,440
889,961
941,542
965,738
Other comprehensive
profit and loss (net)		 (449,348)
(212,220)
(54,642)
(202,559)
(2,233)
Total current
comprehensiveprofit		 459,915
657,220
835,319
738,983
963,505
Net income
attributable to parent
company’s
shareholders		 909,263
869,440
889,961
941,542
965,738
Net income
attributable to
non-controllingequity		 － － － － －
Total comprehensive
profit and loss
attributable to parent
company’s
shareholders		 459,915
657,220
835,319
738,983
963,505
Total comprehensive
profit and loss
attributable to
non-controllingequity		 － － － － －
Earnings per share 6.06
5.42
5.88
7.61
7.81

6.1.2 The name and opinion of the independent auditor within the last 5 year

Year Name of CPA Firm Name of CPAs Auditor’s opinions
2016 Deloitte & Touche Tung-Feng Lee and
Jing-RenChang		 unqualified opinion
2017 Deloitte & Touche Tung-Feng Lee and
Chih-Yuan Chen		 unqualified opinion
2018 Deloitte & Touche Tung-Feng Lee and
Chih-Yuan Chen		 unqualified opinion
2019 Deloitte & Touche Tung-Feng Lee and
Chih-YuanChen		 unqualified opinion
2020 Deloitte & Touche Tung-Feng Lee and
Chih-Yuan Chen		 unqualified opinion
  • 100 -

6.2Financial Ratio Analysis for Recent Five Years 6.2.1 Consolidated Financial Analysis within the last few years - IFRS

Analysis Year
item		 Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial data
up to March 31,
2021（Note
2）
2016 2017 2018 2019 2020
Financial
structure
Debt to assets ratio（％）		 40.03 38.39 30.45 33.82 42.95 41.24

Long term funds to property, plant,
and equipment ratio（％）
944.48		 1,073.10 1,099.38 1,065.64 509.07 516.11
Solvency Current ratio (％) 306.80 312.67 298.30 275.78 202.08 209.47

Quick ratio (％)		 276.55 282.32 269.84 246.47 177.59 184.64
Interest coverage ratio (times) 71.70 110.34 330.61 1,668.34 71.25 31.35
Operatin
g ability		 Receivables turnover (times) 2.21 2.44 2.76 2.72 2.46 2.20
Accounts receivable
collecting days		 165.15 149.59 132.24 134.19 148.37 165.90
Inventory turnover (times) 11.15 10.76 11.02 11.25 8.47 5.99
Payables turnover (times) 3.56 3.65 3.59 3.74 3.38 2.98
Average sales day for inventory 32.74 33.92 33.12 32.44 43.09 60.93
Property, plant, and property
turnover (times)		 13.23 14.94 15.90 16.20 7.00 5.62
Total asset turnover (times) 1.01 1.01 1.03 1.05 0.86 0.70
Profitabil
ity		 Return on Assets（％） 8.34 9.99 9.89 10.49 10.38 5.64
Return on equity（％） 14.16 16.26 15.05 15.44 16.72 9.43
Ratio of net income before
tax to paid-in capital（％）		 82.45 91.05 74.68 110.37 116.79 73.11
Profit margin（％） 8.35 9.95 9.80 10.10 10.98 7.89
Earnings per share（NT$）（Note
3）
5.28		 6.06 5.42 5.88 7.61 1.07
Cash
flow
(note 4)		 Cash flow ratio（％） 43.04 62.10 42.17 16.95 29.75 13.71
Cash Flow Adequacy Ratio（％） 86.21 128.32 122.33 119.97 116.61 123.00
Cash Flow Re-investment Ratio
（％）		 6.33 13.18 2.47 - 4.96 7.34
Leverage
Operating leverage		 1.12 1.10 1.09 1.10 1.20 1.33

Financial leverage		 1.02 1.01 1.00 1.00 1.02 1.03

  • 101 -

  • Reasons for variations in the financial ratios from consolidated financial statements within the last two years ： (variations less than 20% can be exempted for analysis)

  • Interest protection multiples decreased mainly because of the increase of NTD 6,774 thousand from 2019 in the interest expenditure of 2020; the interest protection multiples hence dropped compared to those in 2019.

  • The ratio of long-term capital to property, plant, and equipment and the property, plant, and equipment turnover ratio dropped mainly because of the increase of NTD 460,436 thousand in the net fixed assets of 2020; the ratio of long-term capital to property, plant, and equipment hence dropped.

  • The cash flow ratio and the cash re-investment ratio dropped mainly because of the decrease of NTD 569,343 thousand in accounts receivable of 2020, which led to a decrease of NTD 563,357 thousand in net cash in-flows of operating activities in 2020 from 2019; the cash flow ratio and the cash re-investment ratio hence dropped.

  • 102 -

6.2.2 Financial Analysis within the last few years – IFRS (parent-company only)

Analysis Item Year Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1) Financial analysis within the last 5 years (Note 1)
2016 2017 2018 2019 2020
Financial
Structure		 Debt to assets ratio（％） 31.22 22.81 26.17 33.60 36.04
Long term funds to
property, plant, and
equipment ratio（％）		 5,707.99 5,613.93 5,152.97 4,893.22 4,053.76
Solvency Current ratio (％) 104.94 150.77 99.71 63.34 56.55
Quick ratio (％) 103.94 149.61 97.88 62.13 55.93
Interest
coverage
ratio
(times)
85.01		 265.83 1,300.75 894.00 116.74
Operating ability Receivables
turnover
（times）		 3.70 3.47 3.21 3.42 3.73
Accounts receivable
collectingdays		 98.59 105.14 113.75 106.06 97.93
Inventoryturnover (times) 146.94 172.92 117.38 113.14 161.94

Payables turnover (times)		 3.69 2.76 2.77 2.97 2.80

Average sales day for
inventory
2.48		 2.11 3.11 3.22 2.25
Property,
plant,
and
property
turnover(times)
26.71		 32.55 29.68 31.37 25.85
Total
asset
turnover
(times)
0.38		 0.46 0.44 0.45 0.43
Profitability Return on Assets（％） 11.69 11.01 11.67 11.94 11.14
Return on equity（％） 16.26 15.05 15.44 17.05 16.96
Ratio of net income before
tax to paid-in capital (%)
68.89		 60.10 86.04 89.93 91.36
Profit margin (%) 29.61 24.46 26.66 25.40 24.57
Earnings
per
share
（NT$）（Note 3）		 6.06 5.42 5.88 7.61 7.81
Cash flow
(Note 4)		 Cash flow ratio（％） 23.09 2.09 - 5.62 5.87
Cash
Flow
Adequacy
Ratio（％）
8.67		 7.75 2.17 13.44 13.57
Cash Flow Re-investment
Ratio（％）		 - - - - -
Leverage Operatingleverage 1.07 1.09 1.21 1.20 1.33
Financial leverage 1.06 1.02 1.01 1.01 1.11
Reasons for variations in the financial ratios from consolidated financial statements within the last two
years：(variations less than 20% can be exempted for analysis)
1. The inventory turnover increased and the mean sales days dropped mainly because of the increase of
NTD 224,440 thousand in the sales income of 2020, which led to an increase of NTD 257,019 thousand
from 2019.
2. Interest protection multiples decreased mainly because of the increase of NTD 8,521 thousand from 2019
in the interest expenditure of 2020; the interest protection multiples hence dropped from 2019.
  • 103 -

Note 1 ： The financial analysis data of the past five years has been prepared in accordance with Taiwan’s financial accounting standards. Therefore, please refer to the financial analysis - Taiwanese financial accounting standards information

Note 2 ： The 2019Q1 financial data were reviewed by the CPA.

Note 3 ： Retrospective adjustment for earnings per share.

Note 4 ： Not calculated as either net operating cash flow, net operating cash flow within recent five years or (net operating cash flow – cash dividend) is negative.

Note 5 ： Formulas

1.Capital Structure Analysis

  • (1) Debt Ratio = Total Liabilities / Total Assets 。

  • (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment

2.Liquidity Analysis

(1)Current Ratio = Current Assets / Current Liabilities

(2)Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities

  • (3) Interest coverage ratio = Earnings before Interest and Taxes / Interest Expenses

  • 3.Operating Performance Analysis

  • (1)Account receivable (including account receivable and notes receivable from operation) turnover = Net sales / the Average of account receivable (including account receivable and notes receivable from operation) balance

  • (2)Days Sales Outstanding = 365 / Average Collection Turnover

  • (3)Average Inventory Turnover = Cost of Sales / Average Inventory

(4)Account payable (including account payable and notes payable from operation) turnover = Cost of goods sold / the average of account payable (including account payable and notes payable from operation) balance

  • (5) Average Inventory Turnover Days = 365 / Average Inventory Turnover

  • (6)Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment

(7)Total Assets Turnover = Net Sales / Average Total Assets。

  1. Profitability Analysis

(1)Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate))

  • / Average Total Assets

(2) Return on Equity = (Net Income * (1 - Effective Tax Rate)) / Average Total Equity

  • (3)Net Margin = Net Income / Net Sales。

  • (4)Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding

  • Cash Flow Analysis

  • (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities

  • (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend

  • (3)Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)

  • Leverage Analysis

  • (1)Operating Leverage = (Net Sales - Variable Cost) / Income from Operations

  • (2) Financial Leverage = Income from Operations / (Income from Operations – Interest Expenses)

  • 104 -

  • 6.3 The Audit Committee’s Review Report

Audit Committee’s Review Report

The Board of Directors prepared and submitted the 2020 Business Report, Financial Statements, Consolidated Financial Statement, and Proposal on Distribution of Earnings. The Financial Statements, in particular, were completely audited by CPA Li, Dong-Feng and CPA Chen, Chih-Yuan of Deloitte Taiwan and this Audit Report was issued.

The above-mentioned Business Report, Financial Statement, Consolidated Financial Statement, and Proposal on Distribution of Earnings have been reviewed by the Audit Committee and no discrepancy has been found. Therefore, according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, the report is prepared as above.

Your review and approval are cordially requested.

To

Syncmold Enterprise Corp. 2021 General Shareholders' Meeting

Convener of Audit Committee: Tsai, Yong-Lu March. 16[th] , 2020

  • 105 -

  • 6.4 Financial Report (Consolidated): Please refer to page 123 to page 201.

  • 6.5 Financial Report (Stand-Alone): Please refer to page 202 to page 279.

  • 6.6 Impact Of The Financial Distress Occurred To The Company And Affiliates Inrecent Years Until The Annual Report Being Published：None.

  • 106 -

VII 、 Review of Financial Conditions, Operating Performance, and Risk Management

7.1Review and Analysis of Financial Conditions

The main reasons and impact for significant changes in assets, liabilities and shareholders' equity in the last two years (the amount of change is more than 10%, and the amount is up to 1% of the total assets of the year), and if the impact is significant to the future, it should be explained

unit ： NT$ in thousands

unit ：NT$ in thousands ：NT$ in thousands
Year
Item
2019		 2020 Differences
amount ％
Cash and cash equivalents 2,889,307 2,420,807 (468,500) (16.21)
Current Financial Assets at Fair Value through Profit or
Loss
91,989		 375,949 283,960 308.69
Notes receivable 401,766 605,827 431,933 248.39
Accounts receivables (Net) 3,088,959 392,958 (8,808) (2.19)
Inventory (Net) 747,098 3,616,529 527,570 17.08
Current assets 7,651,497 967,154 220,056 29.45
Other Current assets 258,484 429.744 171,260 66.26
Investment under equity method 168,252 8,808,968 1,157,471 15.13
Property, plant,
and equipment		 1,225,581 164,556 (3,696) (2.20)
Goodwill 324,597 1,686,017 460,436 37.57
Prepayments for equipment 22,455 324,597 - -
Total assets 10,025,510 66,967 44,512 198.23
Current liabilities 3,786,437 11,770,911 1,745,401 17.41
Noncurrent
liabilities		 519,442 4,929,446 1,143,009 30.19
Total liabilities 4,305,879 599,630 80,188 15.44
Capital stock 1,237,242 5,529,076 1,223,197 28.41
Additional paid-in
capital		 2,591,280 1,237,242 - -
Retained
earnings		 2,295,872 2,592,857 1,577 0.06
Other equity (634,020) 2,704,213 408,341 17.79
Equity attributable to owners 5,490,374 (635,615) (1,595) (0.25)
NON-CONTROLLING INTERESTS 229,257 5,898,697 408,323 149.67
Total equity 5,719,631 343,138 113,881 49.67
Analysis and description will be given only if the increase/decrease in ratio reaches 10% and amount reaches one percent of total asset in the
current year：
1.
Cash and cash equivalents decreased and financial assets at fair value through gains or losses - current increased mainly because of
the non-derivative financial assets worth NTD 200,000 thousand acquired in cash in 2020.
2.
Net accounts receivable increased primarily because of the acquisition of LEOHAB ENTERPRISE CO., LTD. in 2020, which
contributed to an increase of NTD 227,330 thousand, the accounts receivable from LEOHAB ENTERPRISE CO., LTD. in
consolidated assets.
3.
Net inventories increased primarily because of the increase in market demand at the end of 2020, which contributed to an increase
of NTD 197,642 thousand in inventories.
4.
Property, plant, and equipment increased primarily because of the acquisition of LEOHAB ENTERPRISE CO., LTD. in 2020,
which contributed to an increase of NTD 309,009 thousand, the fixed assets from LEOHAB ENTERPRISE CO., LTD. in
consolidated assets.
5.
Current liabilities increased primarily because of the demand for capital brought about by the investment in LEOHAB
ENTERPRISE CO., LTD. and the construction of facilities in Vietnam, which contributed to an increase of NTD 487,818 thousand
in short-term borrowings. In addition, current liabilities of LEOHAB ENTERPRISE CO., LTD. worth NTD 343,799 thousand
were added to the consolidated liabilities.

  • 107 -

  • Non-controlling interests increased because of non-controlling shares generated from the acquisition of 70% of the shares of LEOHAB ENTERPRISE CO., LTD. in 2020.

  • 108 -

  • 7.2Review and Analysis of Financial Performances

  • 7.2.1 The main reasons for the significant changes in the operating revenue, operating net profit and pre-tax net profit and the expected sales volume and its basis in the last two years, the possible impact on the company's future financial business and the corresponding plan:

Comparison Analysis of Operating Results

unit ： NT$ in thousands

unit：NT$ in thousands
Year
Item
2019		 2020 Amount
change		 Percentage
change（％）
Operating income 8,582,344 9,663,341 1,080,997 12.60
Operating cost 6,317,305 7,122,648 805,343 12.75
Gross profit 2,265,039 2,540,693 275,654 12.17
Operating expense 987,044 1,009,001 21,957 2.22
Operating profit 1,277,995 1,531,692 253,697 19.85
Non-operating income
and expense		 166,995 (34,171) (201,166) (120.46)
Net income before tax 1,444,990 1,497,521 52,531 3.64
Income tax expense 502,395 522,839 20,444 4.07
Net income 942,595 974,682 32,087 3.40
other comprehensive profit
and loss
(203,522)		 48 203,570 100.02
total comprehensive net
income		 739,073 974,730 235,657 31.89
Analysis and description will be given only if the increase/decrease in ratio reaches 20%:
1. Non-operating income and expenditure decreased because of the foreign exchange losses worth
NTD 153,494 thousand in 2020.
2. Other combined gains and losses increased because of the reduced difference from the
conversion of financial statements from overseas operating entities affected by changes in
exchange rate.

  1. Non-operating income and expenditure decreased because of the foreign exchange losses worth NTD 153,494 thousand in 2020.

  2. Other combined gains and losses increased because of the reduced difference from the conversion of financial statements from overseas operating entities affected by changes in exchange rate.

7.2.2Forecasted sales in the coming year and its basis and main factors affecting expected sales volume to continuously grow or decline

The Company did not prepare the 2021 Financial Forecast. It is our belief that the lives of people will still be under the impacts of the pandemic in 2021. Demand for remote commerce and stay-at-home economy remains. Meanwhile, brand owners will begin to replenish their inventories upon gradual recovery from the pandemic. The future is promising yet caution is required. The Company expects that the revenue of 2021 will remain the same as that of 2020 or show a slight growth.

  • 109 -

7.3Review and Analysis of Cash Flow

Analysis of recent annual cash flow changes, improvement of liquidity and cash analysis in the coming year:

  • 7.3.1 Analysis of changes in cash flow in recent year (2020) - consolidated financial statements
Cash balance
– beginning		 Annual net cash
flow from
operating
activities		 Annual net
cash flow
from other
activities		 Impacts by
exchange rate		 Cash
balance		 Contingency plans for
insufficient cash		 Contingency plans for
insufficient cash
Investment
Plan		 Financial
Plan
2,889,307 562,766 (1,146,363) 115,097 2,420,807 - 651,539

  • (1) Net cash in-flows of operating activities included mainly the net operating profit, depreciated non-cash activity expenditure, and cash in-flows from accounts receivable of the Company.

  • (2) Net cash out-flows of investing activities are mainly the results of cash outflows associated with the acquisition of financial assets and right-of-use assets.

  • (3) Net cash out-flows of fund-raising activities are mainly the results of paying off corporate bonds and issuance of cash dividends.

7.3.2 Analysis of Cash Liquidity for the coming year (2021)

Cash balance
in the
beginning of
the year		 Net cash flow
from operating
activities
throughout the
year		 Annual net
cash flow		 Cash balance
at the end of
the year		 Remedial measures for
insufficient cash		 Remedial measures for
insufficient cash
Investment
Plan		 Financial
Plan
2,420,807 16,254 (174,571) 2,262,490 - -

Improvement plan for insufficient liquidity: The company responds to the funding situation by borrowing or other financing methods.

  • 7.4Major Capital Expenditures In Recent Years And Impacts On Financial And Operational Situations

On the basis of the consolidated statement, the 70% shares obtained by the Company and its subsidiaries of LEOHAB ENTERPRISE CO., LTD. was worth about NTD 230 million in 2020, accounting for 0.54% of net sales value and without major impacts on the Company’s finance.

  • 7.5 Investment Policies in Recent Years

  • 7.5.1 The most recent annual investment policy

Using the company’s research and development advantages on the basis of existing technologies and related industries, the investment policy focuses on areas that can increase revenues, enter new product domain or develop vertical integration.

  • 7.5.2The main reason for its profit or loss, the improvement plan

The Company recognized investment income from each of its subsidiaries overseas in 2020, which was worth NTD 924,709 thousand mainly because of the overall profitable sales of the subsidiary in Mainland China that was re-invested in despite the rampage of the pandemic globally due to contribution from remote commerce, improved production efficiency, and the centralized procurement strategy that helps minimize fluctuations of raw materials and supplies in addition to reinforced control over operating expenditure.

7.5.3The investment plan for the next year

  • 110 -

In the past, the Company focused on China for re-investments as the latter was the Company’s primary production center. Impacted by the China-US trade war, however, protectionism is taking prominence around the world in trade. It is no longer applicable to export to areas around the world from China, the only production base. For enhanced supply chain risk management, the Company invested in the subsidiary in Vietnam of 2019. In 2020, overseas production sites in Thailand and offices in Malaysia and Singapore were added while at the same time expansion of production in Taiwan continued. The demand for diversified management was evaluated to cope with changes in the global situation. Related re-investment decisions are based on applicable operating requirements of the Company and are made through the Board of Directors or by the Chairman.

7.6 Sources of Risks and Evaluations

  • 7.6.1 The impact of interest rates, exchange rate changes, and inflation associated with the company's profit and future corresponding measures

  • (1) The impact of changes in interest rates associated with the company's profit in the most recent fiscal year and till printing date of annual report and the future corresponding measures

A. Impact ：

Unit ： NT$ in thousands ； %

Item / Year 2020 2021 Q1
Interest
Expense(A)		 27,342 8,181
Income before
tax(B)		 1,497,521 201,621
(A)/ (B) 1.83% 4.06%

The company’s interest expenses mostly due to short-term bank loans. When comparing the loan conditions and interest rates of the banks in the market, banks with the best terms and interest rates are the priority lenders. The interest expenses of 2020 and 2021Q1 account for 1.82% and 4.06%. The change has no significant impact on the company’s profit.

B. Future corresponding measures ：

Taking overall funds and operation condition into consideration, the company will conduct short-term loans with banks adopting floating interest rate if there is need.

  • (2) The impact of exchange rate changes on the company's profit and loss in the most recent year and the end of the annual report and future countermeasures

A. Impact ：

Unit ： NT$ in thousands ； %

Unit ：NT$in thousan ds；%
Item/year 2020 2021Q1
Exchange gains and losses
(A)		 (153,494) 2,433
Operatingincome(B) 9,663,341 2,293,991
Income before tax(C) 1,497,521 201,621
(A)/ (B) (1.59%) 0.11%
(A)/(C) (10.25%) 1.21%
  • 111 -

The company’s product sold domestically and internationally. As a result, we retained revenue with foreign currency for the purchasing payment to achieve currency hedging and reduce exchange rate risks.

The ratio of exchange gains or losses in operating revenue for 2020 for this Company is (1.59%), the ratio of exchange gains or losses in income before tax is (10.25%);1Q21 exchange gain to operating revenue is 0.11%，to income before tax is 1.21%，For 2020, the exchange rate of the USD to RMB has depreciation significantly, thus we have a higher exchange losse. However, 1Q21 faced a increased of USD to RMB the ratio of exchange gain to operating revenue.The Company will continue to monitor the long-term and short-term trends of the exchange rate and enhance risk management regarding exchange rates to lower the effect of exchange rate fluctuation on profit.

B. Future corresponding measures ：

In order to effectively reduce the impact of exchange rate changes on revenue and profit, the company adopted the following measures: a. actively collect exchange rate information to fully grasp exchange rate changes; b. consider the impact of exchange rate changes in quotation; c. retain foreign currency position appropriately from sales revenue in supporting foreign currency purchase expenditure; d. moderately pre-sale forwards on foreign exchange rate as hedging purpose within foreign currency sales revenue e. negotiate with suppliers to use foreign currency as source of payment. The above-mentioned measures are expected to lower impact on exchange rate volatility.

  • (3) The impact of inflation on the company's profit and loss in the most recent year

and the printing date of the annual report and the future countermeasures ：

The company always pays close attention to market prices fluctuations and maintains a good interaction with suppliers and customers. Although the raw material prices have risen due to inflation, the company reflected part of the cost in the new model price and absorbed some ourselves, also, we required suppliers to reduce the price increase. Thus, inflation does not have a significant impact on the company.

7.6.2 The main reasons for the high-risk, high-leverage investment, funds loan to others, endorsement guarantee and derivative commodity trading, profit or loss and

future response measures ：

The Company's fund loan to others and endorsement guarantees are handled in accordance with the Company's “Funding to Others Practice” and “Endorsement Guarantee Practice” which only for subsidiaries of 50% or more shareholding. The endorsement is performed in accordance with the contract signed by the credit bank and the guarantor's responsibility.

Transaction of derivative products are based on Securities and Futures Bureau "public company acquisition or disposition of assets handling guidelines" and Company's internal regulations with the aim to avoid market risks. Depending on the company's operating conditions and changes in market trends, the holdings and related hedging strategies are regularly evaluated and maneuvered.

7.6.3Future R&D plan and estimated R&D expenses in the future ：

  • 112 -

In 2020, the Company invested NTD 175,753 thousand as its research and development expenditure, which accounts for around 1.82% of the revenue. Besides R&D and improvement of LCD monitors and LCD TV screen sockets, quite some efforts are devoted also to the improvement of the automation production technology and patents of multiple products were obtained in 2020, demonstrating benefits of the R&D unit. It is expected that around NTD 206,460 thousand will be invested in as R&D expenditure in 2021 to help continue with the development of new products and technologies and to enhance the competitive advantages of the Company.

7.6.4 The impact of important domestic and international policies and regulatory

changes associated with the company's business and the corresponding measures ：

The company pays close attention to the changes of important laws and policies both at home and abroad and promptly proposes countermeasures. We did not affect by important policies and laws changes which had a significant impact on our business.

7.6.5The impact of technological changes associated with the company's business and

the corresponding measures ：

The company always pays attention to the evolution of relevant technology in the industry, evaluates, researches and develops to meet the market trend. There have been no major technological changes in the most recent year, which have had a significant impact on the operations of the company.

7.6.6 The impact of corporate image change associated with corporate crisis

management and corresponding measures ：

The company has a dedicated spokesperson who is responsible for maintaining the relationship with the public and investors and establishing the company's image. Therefore, the company has not had any significant impact on the company due to changes in corporate image.

7.6.7Expected benefits, potential risks and corresponding measure for M&A ：

The Company obtained the equity of 70.00% from Leohab Enterprise Inc. with cash 0.23 billion at the end of the fiscal year 2020, expected that future reinvestment industry will make the group expand new application scope, increase the application scope of the products, drive future revenue growth energy. The strategical investment of the Company was cautiously evaluated, important capital expenditure was also reported to Board of Directors for deliberation, and has been considered investment risk and countermeasures.

7.6.8Expected benefits, potential risks and corresponding measure for plant

expansion ：

In order to expand the production base in Southeast Asia, the company's board of directors passed a resolution on May 5, 2021

to increase the capital of the Vietnamese subsidiary by another US$15 million and has been considered investment returns and possible risk.

7.6.9 Potential risks and countermeasures associated with concentrated procurement

and sales ：

(1) risks of concentrated procurement

Non-applicable as the company does have concentrated procurement.

  • 113 -

  • (2) risks of concentrated sales

Non-applicable as the company does have concentrated procurement.

  • 7.6.10Potential impact, risks, and corresponding measure on sales with significant number of shares from directors, supervisors and major shareholders with over 10% of shares ： n/a

  • 7.6.11 Potential impact, risks and corresponding measure on change of management right ： The company does not encounter change of management right.

  • 7.6.12 Disclosure of information of directors, supervisors, managers, major shareholders holding over 10% of outstanding shares and affiliates regarding on litigation or non-

  • litigation which will impact shareholder equity or stock price ： None.

  • (1) Ongoing Litigation or non-litigation which will impact shareholder equity or stock price in the most recent two years and till the printing date of annual report ： None.

  • (2) Ongoing Litigation or non-litigation of directors, supervisors, managers, major shareholders holding over 10% of outstanding shares and affiliates which will impact shareholder equity or stock price in the most recent two years and till the printing date of annual report ： None.

  • (3) The circumstances of the Article 157 of Securities Exchange Act and the current situation of the company treatment related to directors, supervisors, managers, major shareholders holding over 10% of outstanding shares in the last two years and the end of the annual report ： None.

  • 7.6.13Other potential risks and corresponding measure ：

  • Information safety risk: in view of the graduated development of information

  • system and network application, to ensure the safety of the Company’s software, hardware equipment and the network, information safety policy of the Company was approved by Board of Directors in 2019. As a basis for all personnel of the Company comply with information safety, avoiding improper use or intentional destruction of information system from internal, external person, or when the information system was improperly used, intentionally destructed, other urgent accidents, the Company can rapidly dispose, and recover normal operation in the shortest time, decrease possible economic loss and operation breakdown caused by the accidents.

  • Countermeasures: the Company authorized Department of Information & Supply Chain Management to plan annual inspection and evaluation for the safety and efficiency of overall network construction, and established off-site backup system for important information of various departments, meanwhile strengthened various simulation tests, emergency management and other drills for the engine room to ensure normal operation and information safety of information system, decrease breakdown risk caused by disasters without warning, human negligence and malware attack.

In 2020 and before the printing date of the annual report, the company did not find any major cyber-attack or incidents that will adversely affect business and operation. The company has not been involved in any legal cases or regulatory investigations related to this.

7.7Others ： None.

  • 114 -

VIII 、 SPECIAL DISCLOSURE

  • 8.1 Affiliated Companies

  • 8.1.1 Affiliates Consolidated Financial Statement

    • (1) Organization Chart (December 31, 2020)

==> picture [458 x 541] intentionally omitted <==

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

Canford Suzhou Fulfil
International Electronics Co., Ltd
Limited 100% 100%
Grand Advance Inc. Fullking Zhongshan Fulfil
100% Development Tech Co., Ltd. 100%
Limited 100%
Full Glary Holding Kunshan Fulfil Tech
Limited 100% Co., Ltd. 100%
Fuzhou Fulfil Tech.
Co., Ltd. 100%
Fujian Khuan Hua
Precise Mold., Ltd.
100%
Fuqing Foqun
Electronic Hardware
Syncmold Enterprise Tech Co., Ltd. 100%
(Samoa) Corp. 100%
Full Big Limited
100%
Syncmold Enterprise
(USA) Corp. 100%
Forever Business Dongguan Khuan
Development Huang Precise Mold
Syncmold Enterprise Syncmold Enterprise Limited 100% Plastic Co., 100%
Corporation Vietnam Co., Ltd.
100%
Full Celebration Chongqing Fulfil
Limited 100% Tech Co., Ltd. 100%
Syncmold Enterprise
(Thailand) Co., Ltd.
100%
Syncmold Enterprise
(Singapore) Pte., Ltd.
100%
Syncmold Enterprise
(Malaysia) Sdn., Ltd.
100%
Gatetech Technology Gatech Holding Ltd. Gatech Gatetech (Suzhou)
International Ltd.
Inc. 73.43% 100% 100% Inc. 100%
Suzhou Leoho
Electronics Co., Ltd.
Sweet International 100%
Leohab Enterprise Lucky King
Group Ltd.
Co., Ltd. 70% 100% Holdings Ltd. 100% Commuwell
Enterprise (Thailand)
Co., Ltd. 100%
----- End of picture text -----

  • 115 -

(2) Information on subsidiaries (December 31, 2020)

Unit ： NT$ in thousands

Unit：NT$ in thousands
Name of subsidiaries Established
Date		 Address Paid-In
Capital		 Main Operating or Production item
Syncmold Enterprise (USA) Corp. 2016/06/27 691 S MILPITAS BLVD, STE 212, MILPITAS,
CA 95035		 30 Electronic parts trading, import and export trade and
investment business
Syncmold Enterprise (Samoa) Corp. 2005/01/10 Level 2,lotemau Centre Building,Vaea Street,Apia,
Samoa		 106,297 Reinvestment in Chinese subsidiaries and international trade
business
Fujian Khuan Hua Precise Mold., Ltd. 2003/07/15 Hongzhi Road, Hongkuan Industrial Village,
Yangxia Town, Fuqing City, Fujian Province,
P.R.Chin		 106,640 Processing, manufacturing, trading of various metal molds and
plastic molds and related import and export business
Fuzhou Fulfil Tech Co., Ltd. 2002/05/29 FuYu N. Road, Gaolun Villane, Hong Lu Town, Fu
QingCity,Fujan Province,P.R.Chin		 41,647 Electronic parts manufacturing, trading and related import and
export business
Fuqing Foqun Electronic Hardware
Tech Co.,Ltd.		 2006/04/25 No. 396 Shangting Village, Yangxia Street, Fuqing
City,Fuzhou City,Fujian Province		 56,833 Electronic parts manufacturing, trading and related import and
export business
Full Big Limited 2006/01/03 Level 2,lotemau Centre Building,Vaea Street,Apia,
Samoa		 15,131 Reinvestment in Chinese subsidiaries and international trade
business
Forever Business Development Limited 2007/04/03 Portcullis Trust Net Chambers, P.O. Box 1225,
Apia. Samoa		 119,920 Reinvestment in Chinese subsidiaries and international trade
business
Dongguan Khuan Huang Precise Mold
Plastic Co., Ltd.		 2008/01/04 Area 3, Jinhe Management Zone, Zhangmutou
Town, Dongguan City, Guangdong Province,
P.R.China		 120,503 Processing and manufacturing of various types of plastic
molds and plastic injection parts and related import and export
business
Grand Advance Inc. 2002/01/10 Level 2,lotemau Centre Building,Vaea Street,Apia,
Samoa		 202,230 Electronic parts trading, import and export business and
investment business
Fullking Development Limited 2008/06/20 Room 706, Haleson Building, 1 Jubilee St., Central,
HongKong		 149,900 Electronic parts trading, import and export business and
investment business
Zhongshan Fulfil Tech Co., Ltd. 2008/11/14 No.18, Shabian Road, Huoju Development, Zone
Zhongshan City,GuangDong,P.R.Chin		 146,661 Electronic parts manufacturing, trading and related import and
export business
CANFORD INTERNATIONAL
LIMITED		 2002/01/10 Level 2,lotemau Centre Building,Vaea Street,Apia,
Samoa		 14,990 Import and export trade and investment business
Suzhou Fulfil Electronics Co., Ltd. 2002/03/01 NO.1201. FuYuan Road, XiangChengEconomic
Developing
District,SuZhou City,JiangSu Province,P.R.China		 17,785 Electronic parts manufacturing, trading and related import and
export business
FULL GLARY HOLDING LIMITED 2009/09/09 Room 706, Haleson Building, 1 Jubilee St., Central,
HongKong		 242,838 Electronic parts trading, import and export business and
investment business
Kunshan Fulfil Tech Co., Ltd. 2010/03/04 #257 FUIL Road, Zhang Pu Town, KunShan City,
JiangSu Province,P.R.Chin		 225,210 Processing, manufacturing, trading of precision hardware and
accessories and related import and export business
Full Celebration Limited 2012/04/03 Le Sanalele Complex, Grand Floor,Vaea Street,
Saleufi,P.O. Box 1868,Apia. Samoa		 149,900 Reinvestment in Chinese subsidiaries and international trade
business
Chongqing Fulfil Tech Co., Ltd. 2012/06/11 No. 1/2 Cooperative, Shihe Village, Qinggang Sub-
district, Bishan District, Chongqing Province,
P.R.Chin		 133,885 Processing and manufacturing of various electronic plastic
hardware and other related import and export business
  • 116 -
Gatetech Technology Inc. 1988/05/20 No. 1-1, Datong 1st Rd., Guanyin Dist., Taoyuan
City328,Taiwan(R.O.C.)		 574,803 Processing and manufacturing service for aluminum alloy and
magnesium alloydie casting
Gatetech Holdings Ltd. 2002/01/22 Le sanalele Complex, Gold-In Chambers, Vaea
Street,Apia,Samoa.		 603,509 General trade and investment
Gatetech International Ltd. 2002/01/22 Le sanalele Complex, Gold-In Chambers, Vaea
Street,Apia,Samoa.		 607,648 Import and export trade and investment business
Gatetech (Suzhou) Inc. 2002/06/27 No. 130 yanshan west road, chengxiang town,
taicangcity		 728,514 Processing, manufacturing, trading of aluminum alloy and
magnesium alloydie castingand export business
Leohab Enterprise Co., Ltd 1980/06/12 No.14, Gongyequ 24th Rd., Nantun Dist., Taichung
City408,Taiwan		 237,424 Precision hardware components manufacturing
Sweet International Group Ltd. 2002/01/02 Intershore Chambers, P.O. Box 4342, Road Town,
Tortola,British Virgin Islands.		 280,368 General investment business
Lucky King Holdings Ltd. 2002/01/25 3rd Floor, Ebene Esplanade, 24 Cybercity Ebebe
Mauritius.		 280,368 General investment business
Suzhou Leoho Electronics Co., Ltd. 2002/02/05 No. 2500, Zhongshan North Road, Songling Town,
Wujiang Economic Development Zone, Suzhou
City,Jiangsu Province		 201,755 Precision hardware components manufacturing
Commuwell Enterprise (Thailand)
Co.,Ltd.		 2002/01/22 78/19M005.TAKAM,BANGPAGONG,CHACHOE
NGSAO,24130,THAILAND		 129,006 Plastic injection and hardware parts manufacturing

  • 117 -

  • (3) Presumed to be the same shareholder information for those with control and affiliation ： None

  • (4) Description of business relations ：

  • A. The overall industry coverage by affiliates ：

  • (A) Reinvestment and international trade business 。

  • (B) Electronic parts manufacturing, trading and related import and export business

  • (C) Processing and manufacturing of various types of plastic molds and plastic injection parts and related import and export business

  • B. Relationship between affiliates and division of cooperation ：

  • (A) The company manufactures and sells high-precision molds, and also undertakes orders from the America and Europe, and transfer the orders to mainland subsidiaries for manufacture and deliver directly to the customers, and Taiwan's parent company Syncmold Enterprise Corporation integrates purchases of raw material and collect fees for processing for subsidiaries Forever Business Development Limited, Fujian Khuan Hua Precise Mold., Ltd. and Zhongshan Fulfil Tech Co., Ltd..

  • (B) The Company engages in import and export in the United States through Syncmold Enterprise (USA) Corp..

  • (C) The Company invests in Full Celebration Limited (and indirectly invests in Chongqing Fulfil Tech Co., Ltd.) and Fuzhou Fulfil Tech Co., Ltd. through Syncmold Enterprise (Samoa) Corp., some export orders of Chongqing Fulfil Tech Co., Ltd. and Fuzhou Fulfil Tech Co., Ltd. are undertaken by this Company.

  • (D) The Company invests in CANFORD INTERNATIONAL LIMITED (and indirectly invests in Suzhou Fulfil Electronics Co., Ltd.) and Fullking Development Limited (and indirectly invests in Zhongshan Fulfil Tech Co., Ltd.) through Grand Advance Inc., some export orders of Suzhou Fulfil Electronics Co., Ltd. and Zhongshan Fulfil Tech Co., Ltd. are undertaken by this Company.

  • 118 -

(5) Information on Affiliates’ Director, Supervisor and President (December 31, 2020)

Unit ： NT$ in thousands ； Share ；％

Unit：NT$ in thousands ；Share；％ ；Share；％
Company Name Title Name or Representative Shareholding
Share
Original
Investment
Amount		 %
Syncmold Enterprise (USA)
Corp.		 Director Syncmold Enterprise Corporation(Representative: Zi
Xiang,Liao)		 32 100%
Syncmold Enterprise Vietnam
Co.,Ltd.		 Director Syncmold Enterprise Corporation(Representative: Wen
Hua,Yang)		 302,444 100%
Syncmold Enterprise
(MALAYSIA)Sdn.,Bhd.		 Director Syncmold Enterprise Corporation(Representative: Zi
Xiang,Liao,Wen Hua,Yang)		 3,639 100%
Syncmold Enterprise
(SINGAPORE)Pte.,Ltd.		 Director Syncmold Enterprise Corporation(Representative: Zi
Xiang,Liao)		 1,100 100%
Syncmold Enterprise
(THAILAND)Co.,Ltd.		 Director Syncmold Enterprise Corporation(Representative: Zi
Xiang,Liao)		 19,920 100%
Syncmold Enterprise (Samoa)
Corp.		 Director Syncmold Enterprise Corporation(Representative: Chiu-
Lang,Chen)		 3,545,584
Share
110,598		 100%
Fujian Khuan Hua Precise
Mold., Ltd.		 Director Syncmold Enterprise (Samoa) Corp. (Representative:
Wen Hua,Yang)
108,311
 100%
Supervisor Syncmold Enterprise (Samoa) Corp. (Representative: Zi
Xiang,Liao)
President Wen Hua, Yang - -
Fuzhou Fulfil Tech Co., Ltd. Director Syncmold Enterprise (Samoa) Corp. (Representative:
Wen Hua,Yang)
42,300
 100%
Supervisor Syncmold Enterprise (Samoa) Corp. (Representative: Zi
Xiang,Liao)
President Alex,Cheng
Fuqing Foqun Electronic
Hardware Tech Co., Ltd.		 Director Syncmold Enterprise (Samoa) Corp. (Representative:
Wen Hua,Yang)
57,723
 100%
Supervisor Syncmold Enterprise (Samoa) Corp. (Representative: Zi
Xiang,Liao)
President Fang Sheng,Liu - -
Full Big Limited Director Syncmold Enterprise (Samoa) Corp. (Representative:
Chiu-Lang,Chen)
16,643		 100%
Forever Business Development
Limited		 Director Syncmold Enterprise (Samoa) Corp. (Representative:
Chiu-Lang,Chen)
125,957		 100%
Dongguan Khuan Huang
Precise Mold Plastic Co., Ltd.		 Director Forever Business Development Limited (Representative:
Zi Xiang,Liao)
122,391
 100%
Supervisor Forever Business Development Limited(Representative:
Wen Hua,Yang)
Grand Advance Inc. Director Syncmold Enterprise Corporation (Representative: Chiu-
Lang,Chen)		 506,240 100%
FullkingDevelopment Limited Director Grand Advance Inc.(Representative: Chiu-Lang,Chen) 160,175 100%
Zhongshan Fulfil Tech Co.,
Ltd.		 Director Fullking Development Limited (Representative: Chiu-
Lang,Chen)		 148,959 100%
CANFORD
INTERNATIONAL LIMITED		 Director Grand Advance Inc. (Representative: Chiu-Lang,Chen) 119,342 100%
Suzhou Fulfil Electronics Co.,
Ltd.		 Director CANFORD INTERNATIONAL LIMITED
(Representative: Zi Xiang,Liao)		 18,064 100%
Supervisor CANFORD INTERNATIONAL LIMITED
(Representative: Wen Hua,Yang)
President Zi Xiang,Liao - -
FULL GLARY HOLDING Director Grand Advance Inc.(Representative: Chiu-Lang,Chen) 259,720 100%

119

LIMITED
Kunshan Fulfil Tech Co., Ltd. Director FULL GLARY HOLDING LIMITED (Representative:
Zi Xiang,Liao)		 228,740 100%
Supervisor FULL GLARY HOLDING LIMITED (Representative:
Wen Hua,Yang)
Full Celebration Limited Director Syncmold Enterprise (Samoa) Corp. (Representative:
Chiu-Lang,Chen)		 147,710 100%
Chongqing Fulfil Tech Co.,
Ltd.		 Director Full Celebration Limited (Representative: Wen Hua,
Yang)		 135,983 100%
Supervisor Full Celebration Limited(Representative: Zi Xiang,Liao)
President Wen Hua,Yang - -
Gatetech Technology Inc. Director Syncmold Enterprise Corp. (Representative: Chiu-
Lang,Chen)		 553,815 73.43%
Supervisor Dong-Ping,Jheng ,Sheng-Le,Lin
Gatetech Holdings Ltd. Director Syncmold Enterprise Corp. (Representative: Chiu-
Lang,Chen)		 647,041 73.43%
Gatetech International Ltd. Director Syncmold Enterprise Corp. (Representative: Chiu-
Lang,Chen)		 657,284 73.43%
Gatetech (Suzhou) Inc. Director Zi Xiang,Liao 692,064 73.43%
Supervisor Wen Hua,Yang
Leohab Enterprise Co., Ltd Director Syncmold Enterprise Corp.(Representative: Tim,Weng) 232,677 70.00%
Supervisor Full Celebration Limited (Representative: Geng-Bin,
Liao,Rui-Tai,Wu)
President Yu-Kai,Lin
Sweet International GroupLtd. Director Zi Xiang,Liao 280,368 70.00%
LuckyKingHoldings Ltd. Director Zi Xiang,Liao 280,368 70.00%
Suzhou Leoho Electronics Co.,
Ltd.		 Director Zi Xiang,Liao 201,755 70.00%
Supervisor Wen Hua,Yang
Commuwell Enterprise
(Thailand)Co.,Ltd.		 Director Zi Xiang,Liao,Wen Hua,Yang 113,236 70.00%
Supervisor Meng-Wei,Lin

120

(6) Operating Overview of Affiliates

Unit ： NT$ in thousands

Company Name Paid-In
Capital		 Total Asset Total
Liability		 Equity Operating
Revenue		 Operating
Profit		 Net
Income
(After-tax)		 Earnings per
share (NT$)
(After-tax)
Syncmold Enterprise (USA) Corp. 28
15,479
18,002
(2,522)
17,581
(237)
(218)
-
Syncmold Enterprise (Samoa) Corp. 100,978
2,540,251
-
2,540,251
-
5,816
276,919
2.74
Fujian Khuan Hua Precise Mold.,
Ltd.		 108,311
561,816
247,591
314,225
503,448
19,656
(854)
-
Fuzhou Fulfil Tech Co., Ltd. 42,300
1,456,810
378,307
1,078,503
1,662,090
297,062
221,651
-
Fuqing Foqun Electronic Hardware
Tech Co.,Ltd.		 57,723
474,313
229,659
244,654
673,424
33,514
27,308
-
Full Big Limited 14,374
235,578
-
235,578
-
-
2,886
-
Forever Business Development
Limited		 113,920 338,583
-
338,583
-
1,539
51,037
-
Dongguan Khuan Huang Precise
Mold Plastic Co.,Ltd.		 122,391
462,797
210,527
252,270
581,506
59,988
46,472
-
Grand Advance Inc. 192,111 3,051,009
25,684
3,025,325
-
(59,436)
649,350
-
Fullking Development Limited 142,400 1,047,544
65,504
982,040
-
5,741
317,168
-
Zhongshan Fulfil Tech Co., Ltd. 148,959 1,838,463
791,922
1,046,542
2,345,061
460,232
315,671
-
CANFORD INTERNATIONAL
LIMITED		 14,240 1,415,691
-
1,415,691
-
-
338,527
-
Suzhou Fulfil Electronics Co., Ltd. 18,064 2,470,625
1,054,951
1,415,674
3,770,047
513,896
341,807
-
FULL GLARY HOLDING
LIMITED		 230,688 312,018
-
312,018
-
(25)
54,807
-
Kunshan Fulfil Tech Co., Ltd. 228,740 548,609
236,592
312,017
588,610
72,326
54,834
-
Full Celebration Limited 142,400 248,069
-
248,069
-
-
(24,570)
-
Chongqing Fulfil Tech Co., Ltd. 135,983 442,965
194,907
248,058
518,469
(15,668)
(23,822)
-
Gatetech Technology Inc. 574,804 1,128,983
550,231
578,752
362,959
32,260
25,545
0.44
Gatetech Holdings Ltd. 573,313 626,918
-
626,918
-
-
17,027
-
Gatetech International Ltd. 577,246 626,894
-
626,894
-
-
17,028
-
Gatetech (Suzhou) Inc. 692,064 732,438
106,836
625,602
392,467
7,675
8,909
-
Syncmold Enterprise Vietnam Co.,
Ltd.		 284,800
262,460
20,019
242,441
3,399
(13,885)
(15,941)
-
Syncmold Enterprise (MALAYSIA)
Sdn.,Bhd.
3,395
1,904
22
1,882
-
(1,512)
(1,501)
-

121

Syncmold Enterprise
(SINGAPORE)Pte.,Ltd.		 1,078
1,342
749
593
1,283
(463)
(477)
-
Syncmold Enterprise (THAILAND)
Co.,Ltd.		 20,050 35,493
20,251
15,242
-
(4,669)
(4,757)
-
Leohab Enterprise Co., Ltd 237,424 774,243
517,440
256,803
264,987
391
25,577
1.08
Sweet International Group Ltd. 280,368 505,170
-
505,170
-
-
4,199
-
Lucky King Holdings Ltd. 280,368
505,170
-
505,170
-
-
4,199
-
Suzhou Leoho Electronics Co., Ltd. 201,755 405,990
77,498
328,492
322,137
47,004
21,766
-
Commuwell Enterprise (Thailand)
Co.,Ltd.		 129,006 252,675
67,182
185,493
232,358
22,736
17,274
-

Note 1 ： Converting the foreign currency of each subsidiary into Taiwan dollar at the exchange rate of December 31, 2020.

  • 2.Financial Statement of Affiliates ： Please refer to consolidated financial statement.

  • Statement of Affiliates ： None.

  • 8.2Private Placement Securities In The Latest Year ： None.

  • 8.3 The Company's Shares Held Or Disposed By Subsidiaries In Recent Years Untilthe Annual Report Being Published ： None.

  • 8.4 Other Supplementary Information ： None.

IX 、 PURSUANT TO THE ARTICLE 36-3-2 OF SECURITY

EXCHANGE ACT, EVENT HAVING MATERIALI MPACT ON SHAREHOLDERS' EQUITY OR SHARE PRICE IN THE LATEST YEAR UNTIL THE ANNUAL REPORT BEING PUBLISHED ： None.

122

Syncmold Enterprise Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

123

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies that are required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2020 are all the same as those included in the consolidated financial statements of parent and subsidiary companies prepared in conformity with the International Financial Reporting Standards No. 10, “Consolidated Financial Statements”. In addition, relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Consequently, Syncmold Enterprise Corporation and its subsidiaries did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

SYNCMOLD ENTERPRISE CORPORATION

March 16, 2021

124

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Syncmold Enterprise Corporation

Opinion

We have audited the accompanying consolidated financial statements of Syncmold Enterprise Corporation (the “Corporation”) and its subsidiaries (collectively referred to as 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 the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and the report of other auditors (refer to the 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 International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the report of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

125

Key audit matter of the Group’s consolidated financial statements for the year ended December 31, 2020 is stated as follows:

Occurrence of Sales Revenue

The sales revenue of the Group is mainly generated from the sales of monitor hinge products. Most of the sales were highly concentrated on major customers, which revenue accounted for 51.20% of total sales revenue in 2020. Due to the high frequency and significant amounts of transactions with major customers, the occurrence of sales revenue was deemed as a key audit matter for the year ended December 31, 2020. Refer to Note 4 to the consolidated financial statements for the related revenue recognition policies.

In response to this key audit matter, our main audit procedures performed in the assessment of the recognition of sales revenue of the Group were as follows:

  1. We understood and assessed the operating effectiveness of design and implementation of the relevant internal controls.

  2. We performed detailed verification tests on the selected samples of sales revenue, and checked transaction vouchers and future sales returns and discounts of major customers to confirm the occurrence of sales revenue.

Other Matter

We did not audit the financial statements of certain subsidiaries of the Group as of and for the year ended December 31, 2020 which were included in the accompanying consolidated financial statements, but such financial statements were audited by other auditors whose reports have been furnished to us. Our opinion, insofar as it relates to the amounts included in the Group’s consolidated financial statements for such subsidiaries, is based solely on the reports of other auditors. The total assets of such subsidiaries amounted to NT$742,781 thousand, which represented 6.31% of the Group’s consolidated total assets. The operating revenue of such subsidiaries amounted to NT$51,837 thousand, which represented 0.54% of the Group’s consolidated total operating revenue. We did not audit the financial statements of associates accounted for using the equity method, these were instead audited by other auditors. Our opinion, insofar as it relates to the amounts included for associates accounted for using the equity method, is based solely on the report of other auditors. As of December 31, 2020 and 2019, the amounts of investments accounted for using the equity method were NT$164,556 thousand and NT$168,252 thousand, respectively, which accounted for 1.40% and 1.68% of the Group’s consolidated total assets, respectively. For the years ended December 31, 2020 and 2019, share of other comprehensive income of associates accounted for using the equity method amounted to NT$7,704 thousand and NT$3,939 thousand, respectively, which accounted for 0.79% and 0.53% of the Group’s consolidated total comprehensive income, respectively.

We have also audited the parent company only financial statements of Syncmold Enterprise Corporation as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion with other matter paragraph.

126

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the 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 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 the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

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

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

127

  1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  2. Obtain sufficient and appropriate audit evidence regarding the financial information of 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 for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tung-Feng Lee and Chih-Yuan Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

March 16, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with 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 consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and consolidated financial statements shall prevail.

128

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)

Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Financial assets at amortized cost - current (Notes 4, 8 and 30)
Notes receivable
Trade receivables, net (Notes 4 and 9)
Inventories (Notes 4 and 10)
Other current assets (Notes 4, 23 and 29)

Total current assets

NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Investments accounted for using the equity method (Notes 4 and 12)
Property, plant and equipment (Notes 4, 13, 29 and 30)
Right-of-use assets (Notes 4, 14 and 29)
Goodwill (Notes 4 and 15)
Intangible assets (Notes 4 and 16)
Deferred tax assets (Notes 4 and 23)
Prepayments for land, property and equipment
Refundable deposits
Net defined benefit assets (Notes 4 and 20)
Other non-current assets (Notes 4 and 16)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term borrowings (Notes 4, 17 and 30)

Short-term bills payable (Notes 4 and 17)
Notes payable and trade payables
Other payables (Note 19)
Current tax liabilities (Notes 4 and 23)
Lease liabilities - current (Notes 4, 14 and 29)
Current portion of long-term borrowing and bonds payable (Notes 17, 18 and 30)
Other current liabilities

Total current liabilities

NON-CURRENT LIABILITIES
Long-term borrowing (Notes 4 and 17)
Deferred tax liabilities (Notes 4 and 23)
Lease liabilities - non-current (Notes 4, 14 and 29)
Net defined benefit liabilities (Notes 4 and 20)
Guarantee deposits received
Other non-current liabilities (Note 20)

Total non-current liabilities

Total liabilities

EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION
Ordinary shares

Capital surplus

Retained earnings
Legal reserve
Special reserve
Unappropriated earnings

Total retained earnings

Other equity
Exchange differences on translating the financial statements of foreign operations
Unrealized gain (loss) of financial assets at fair value through other comprehensive income

Total other equity

Total equity attributable to owners of the Corporation
NON-CONTROLLING INTERESTS

Total equity

TOTAL
 2020
Amount
%
$ 2,420,807
21
375,949
3
605,827
5
392,958
3
3,616,529
31
967,154
8

429,744

4


8,808,968
75

70,286
1
164,556
1
1,686,017
14
495,502
4
324,597
3
34,250
-
79,720
1
66,967
1
37,202
-
2,567
-

279

-


2,961,943
25

$ 11,770,911
100

$ 1,867,695
16
29,981
-
2,183,688
19
498,717
4
181,357
2
133,785
1
16,909
-

17,314

-


4,929,446
42

56,227
1
331,939
3
170,268
1
20,763
-
1,308
-

19,125

-


599,630

5


5,529,076
47


1,237,242
10


2,592,857
22

904,665
8
634,020
5

1,165,528
10


2,704,213
23

(639,134)
(5)

3,519

-


(635,615)

(5)

5,898,697
50

343,138

3


6,241,835
53

$ 11,770,911
100
 2019







































































Amount
%
$ 2,889,307
29

91,989
1

173,894
2

401,766
4

3,088,959
31

747,098
7

258,484

2

7,651,497
76

60,882
1

168,252
2

1,225,581
12

436,868
5

324,597
3

26,637
-

70,538
1

22,455
-

31,272
-

2,269
-

4,662

-

2,374,013
24
$ 10,025,510
100
$ 1,006,982
10

-
-

1,959,612
20

417,290
4

113,470
1

123,884
1

150,000
2

15,199

-

3,786,437
38

-
-

276,152
3

232,119
2

10,956
-

215
-

-

-

519,442

5

4,305,879
43

1,237,242
12

2,591,280
26

810,515
8

431,506
4

1,053,851
11

2,295,872
23

(633,784)
(6)

(236)

-

(634,020)

(6)

5,490,374
55

229,257

2

5,719,631
57
$ 10,025,510
100

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

(With Deloitte & Touche auditors’ report dated March 16, 2021)

129

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Note 4)

OPERATING COSTS (Notes 4, 10 and 22)

GROSS PROFIT

OPERATING EXPENSES (Notes 22 and 29)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit loss (reversed) on trade receivables

Total operating expenses

PROFIT FROM OPERATIONS

NON-OPERATING INCOME AND EXPENSES
Other income (Notes 4, 14 and 22)
Other gains and losses (Notes 14 and 22)
Interest income
Gain from bargain purchase - acquisition of
subsidiaries (Notes 4 and 25)
Net foreign exchange (loss) gain (Notes 22 and 33)
Net gain on financial assets at fair value through
profit or loss (Notes 4 and 7)
Share of profit of subsidiaries and associates
(Notes 4 and 12)
Interest expenses (Note 29)
Impairment loss on goodwill (Notes 4 and 15)

Total non-operating income and expenses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 23)

NET PROFIT FOR THE YEAR
 2020
Amount
%
$ 9,663,341
100

7,122,648
74


2,540,693
26

254,095
2
584,491
6
175,753
2

(5,338)

-


1,009,001
10


1,531,692
16

42,663
-
(9,764)
-
35,901
-
19,323
-
(153,494) (2)
54,357
1
4,185
-
(27,342)
-

-

-


(34,171)
(1)

1,497,521
15

522,839

5


974,682
10
 2019






























Amount
%
$ 8,582,344
100

6,317,305
74

2,265,039
26

289,010
3

526,348
6

170,127
2

1,559

-

987,044
11

1,277,995
15

44,191
1

(8,720)
-

26,755
-

63,669
1

59,115
1

40,794
-

3,939
-

(20,568)
-

(42,180)
(1)

166,995

2

1,444,990
17

502,395

6

942,595
11
(Continued)
  • 130 -

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of defined benefit plans

Share of other comprehensive income of
subsidiaries accounted for using the equity
method
Income tax relating to 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 the financial
statements of foreign operations

Other comprehensive income (loss) for the year
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

NET PROFIT ATTRIBUTABLE TO:
Owners of the Corporation

Non-controlling interests


TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the Corporation

Non-controlling interests


EARNINGS PER SHARE (Note 24)

Basic

Diluted
 2020
Amount
%
$ (572)
-
3,519
-
(57)
-

(2,842)

-


48

-

$ 974,730
10

$ 965,738
10

8,944

-

$ 974,682
10

$ 963,505
10

11,225

-

$ 974,730
10


$ 7.81

$ 7.73
 2019


























Amount
%
$ (380)
-

(2,577)
-

11
-

(200,576)
(2)

(203,522)
(2)
$ 739,073

9
$ 941,542
11

1,053

-
$ 942,595
11
$ 738,983
9

90

-
$ 739,073

9
$ 7.61
$ 7.55

$		 $
$ $
$ $
$ $
$ $


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

(With Deloitte & Touche auditors’ report dated March 16, 2021)

(Concluded)

  • 131 -

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019

Appropriation of 2018 earnings
Legal reserve
Special reserve
Cash dividends distributed by the Corporation


Net profit for the year ended December 31, 2019
Other comprehensive loss for the year ended December 31,
2019, net of income tax

Total comprehensive income (loss) for the year ended
December 31, 2019

Actual acquisition of interests in subsidiaries

BALANCE AT DECEMBER 31, 2019

Appropriation of 2019 earnings
Legal reserve
Special reserve
Cash dividends distributed by the Corporation


Unclaimed dividends

Net profit for the year ended December 31, 2020
Other comprehensive income (loss) for the year ended
December 31, 2020, net of income tax

Total comprehensive income (loss) for the year ended
December 31, 2020

Actual acquisition of interests in subsidiaries

BALANCE AT DECEMBER 31, 2020
 Equity Attributable Equity Attributable Equity Attributable to Owners of th e corporation (Notes 4, 21and 26 ) e corporation (Notes 4, 21and 26 ) e corporation (Notes 4, 21and 26 ) Total
$ (431,506 )

-

-

-


-


-

(202,514)


(202,514)


-


(634,020)


-

-

-


-


-


-

(1,595)


(1,595)


-

$ (635,615)
 Non-controlling
Interests
Aggregate
Amount
(Notes 4, 21
and 26 )
$ 5,555,598 $ -

-
-

-
-

(804,207)

-


(804,207)

-


941,542
1,053

(202,559)

(963)


738,983

90


-

229,167


5,490,374

229,257


-
-

-
-

(556,759)

-


(556,759)

-


56

-


965,738
8,944

(2,233)

2,281


963,505

11,225


1,521

102,656

$ 5,898,697
$ 343,138
 Total Equity
$ 5,555,598

-

-

(804,207)

(804,207)

942,595

(203,522)

739,073

229,167

5,719,631

-

-

(556,759)

(556,759)

56

974,682

48

974,730

104,177
$ 6,241,835













Ordinary
Shares
$ 1,237,242
-
-

-


-

-

-


-


-


1,237,242

-
-

-


-


-

-

-


-


-

$ 1,237,242
 Capital Surplus Total

$ 2,591,280

-

-

-


-


-

-


-


-


2,591,280


-

-

-


-


56


-

-


-


1,521

$ 2,592,857
 Retained Earnings

Total
$ 2,158,582

-

-

(804,207)


(804,207)


941,542

(45)


941,497


-


2,295,872


-

-

(556,759)


(556,759)


-


965,738

(638)


965,100


-

$ 2,704,213
 Other Equity



















The Difference
Between the
Consideration
Paid and the
Carrying
Amount of the
Subsidiaries
Issuance of
Net Assets
Ordinary
Shares
During Actual
Acquisition
$ 1,184,809 $ 410,949

-
-

-
-

-

-


-

-


-
-

-

-


-

-


-

-


1,184,809

410,949


-
-

-
-

-

-


-

-


-

-


-
-

-

-


-

-


-

1,521

$ 1,184,809
$ 412,470
 Change in
Percentage of
Ownership
Interest in
Subsidiaries

$ 143,150

-

-

-


-


-

-


-


-


143,150


-

-

-


-


-


-

-


-


-

$ 143,150
 Consolidation
Excess
$ 852,372

-

-

-


-


-

-


-


-


852,372


-

-

-


-


-


-

-


-


-

$ 852,372
 Other
$ -

-

-

-


-


-

-


-


-


-


-

-

-


-


56


-

-


-


-

$ 56






















Exchange
Differences on
Translating


the Financial
Statements of
Foreign
Operation
$ (431,506 )

-

-

-


-


-

(202,278)


(202,278)


-


(633,784)


-

-

-


-


-


-

(5,350)


(5,350)


-

$ (639,134)
 Unrealized
Gain (Loss) of
Financial
Assets at Fair
Value
Through
Other
Comprehen-
sive Income
$ -

-

-

-


-


-

(236)


(236)


-


(236)


-

-

-


-


-


-

3,755


3,755


-

$ 3,519
Legal Reserve
$ 721,519

88,996

-

-


88,996


-

-


-


-


810,515


94,150

-

-


94,150


-


-

-


-


-

$ 904,665
 Special
Reserve

$ 376,649

-

54,857

-


54,857


-

-


-


-


431,506


-

202,514

-


202,514


-


-

-


-


-

$ 634,020
 Unappropri-
ated Earnings
$ 1,060,414

(88,996 )

(54,857 )

(804,207)


(948,060)


941,542

(45)


941,497


-


1,053,851


(94,150 )

(202,514 )

(556,759)


(853,423)


-


965,738

(638)


965,100


-

$ 1,165,528

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

(With Deloitte & Touche auditors’ report dated March 16, 2021)

  • 132 -

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Expected credit loss (reversed) on trade receivables
Net gain on financial assets at fair value through profit or loss
Share of profit of associates
Interest expenses
Interest income
Dividend income
Loss on disposal of property, plant and equipment
Impairment loss on property, plant and equipment
(Reversal of) write-downs of inventories
Net loss on unrealized foreign currency exchange
Impairment loss on goodwill
Gain from bargain purchase
Gain on lease modification
Changes in operating assets and liabilities
Notes receivable
Trade receivables
Inventories
Other current assets
Other non-current assets
Notes payable and trade payables
Other payables
Other current liabilities
Net defined benefit assets and liabilities

Cash generated from operations
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at amortized cost
Purchase of financial assets at fair value through profit or loss

Proceeds from sale of financial assets at fair value through profit or
loss
Acquisition of associates
Payment for property, plant and equipment
Proceeds from disposal of property, plant and equipment
(Increase) decrease in refundable deposits
Payments for intangible assets
Net cash outflow on business combinations		 2020
$ 1,497,521

301,651
14,034
(5,338)
(54,357)
(4,185)
27,342
(35,901)
(6,229)
1,038
2,528
(44,940)
19,139
-
(19,323)
(1,476)
(11,192)
(478,209)
(165,173)
(177,692)
(76,142)
340,145
(60,884)
1,405

(2,086)

1,061,676
(26,622)

(472,288)


562,766

(431,933)
(2,427,595)
2,189,260
-
(141,301)
19,210
(7,493)
(17,385)
(107,113)		 2019
$ 1,444,990
240,560
14,435

1,559

(40,794)

(3,939)
20,568

(26,755)

-
6,870
-

37,854
23,718
42,180

(63,669)

-

29,998

91,134

(117,947)

(25,007)

712
36,272

(55,284)
(1,999)

(280)
1,655,176

(20,430)

(508,623)

1,126,123

(173,801)
(1,021,306)
1,153,032
(52,000)

(92,991)
11,387

4,835

(18,681)

(246,525)
(Continued)
  • 133 -

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Payments for right-of-use assets

Interest received
Dividends received

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Proceeds from short-term bills payable
Repayments of bond payables
Repayments of long-term borrowings
Refunds of guarantee deposits received
Repayment of the principal portion of lease liabilities
Cash dividends
Changes in non-controlling interests

Net cash used in financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES

NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
 2020
$ (100,651)
35,901

17,629


(971,471)

651,539
29,981
(150,000)
(1,130)
1,093
(145,801)
(556,759)

(3,815)


(174,892)


115,097

(468,500)

2,889,307

$ 2,420,807
 2019
$ -
26,755

11,400

(397,895)
447,468
-

-

-
(152)

(128,057)

(804,207)

-

(484,948)

(35,284)

207,996

2,681,311
$ 2,889,307

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 16, 2021) (Concluded)

  • 134 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

Syncmold Enterprise Corporation (the “Corporation”) was incorporated in the Republic of China (ROC) in July 1979 and is mainly engaged in the processing, manufacturing, trading, technology licensing and related import and export business of various metal molds, plastic molds and electronic parts.

The Corporation’s shares were approved for listing on the emerging stock board of the Taipei Exchange (TPEx) in December 2005, and after obtaining approval from the Financial Supervisory Commission, Executive Yuan in November 2006, the Corporation’s shares were listed on the over-the-counter (OTC) market on January 11, 2007. In November 2009, the Corporation obtained approval to transfer listing of its shares to the Taiwan Stock Exchange (TWSE) and were officially listed and started trading its shares on December 17, 2009.

The consolidated financial statements are presented in the Corporation’s functional currency, the New Taiwan dollar.

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Corporation’s board of directors on March 16, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

  • a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group’s accounting policies:

There was no significant impact from the application of the aforementioned amended standards and interpretations in 2020.

  • b. The IFRSs endorsed by the FSC for application starting from 2021
New IFRSs
Amendments to IFRS 4 “Extension of the Temporary Exemption from
Applying IFRS 9”

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
“Interest Rate Benchmark Reform - Phase 2”

Amendment to IFRS 16 “Covid-19 - Related Rent Concessions”
 Effective Date
Announced by IASB
Effective immediately upon
promulgation by the IASB
January 1, 2021
June 1, 2020
  • 135 -

As of the date the consolidated financial statements were authorized for issue, the Group continues assessing other possible impacts that the application of the aforementioned amendments and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers will have on the Group’s financial position and financial performance and will disclose these other impacts when the assessment is completed.

  • c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
“Annual Improvements to IFRS Standards 2018-2020”

Amendments to IFRS 3 “Reference to the Conceptual Framework”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 16 “Property, Plant and Equipment - Proceeds
before Intended Use”

Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a
Contract”
 Effective Date
Announced by IASB (Note 1)
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

  • Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

  • Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

  • Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

  • Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

  • Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

  • Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

  • 136 -

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS as endorsed and issued into effect by the FSC.

  • b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

  • 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

  • 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

  • 3) Level 3 inputs are unobservable inputs for an asset or liability.

  • c. Classification of current and non-current assets and liabilities

Current assets include:

  • 1) Assets held primarily for the purpose of trading;

  • 2) Assets expected to be realized within 12 months after the reporting period; and

  • 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

  • 1) Liabilities held primarily for the purpose of trading;

  • 2) Liabilities due to be settled within 12 months after the reporting period; and

  • 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

  • 137 -

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group (i.e. its subsidiaries).

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

See Note 11 and Tables 7 and 8 for detailed information on subsidiaries (including percentages of ownership and main businesses).

e. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interests in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after re-assessment, the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held interests in the acquiree, the excess is recognized immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured at fair value. Other types of non-controlling interests are measured at fair value.

Where the consideration the Group transfers in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and considered as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with the corresponding adjustments being made against goodwill or gains on bargain purchases. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period about facts and circumstances that existed as of the acquisition date. The measurement period does not exceed 1 year from the acquisition date.

f. Foreign currencies

In preparing the financial statements of each individual entity in the Group, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange difference on monetary items arising from settlement or translation are recognized in profit of loss in the period in which they arise.

  • 138 -

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting the consolidated financial statements, the functional currencies of the Group and the group entities in the Group (including subsidiaries in other countries that use currencies which are different from the currency of the Group) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

  • g. Inventories

Inventories consist of raw materials, supplies, work in progress and finished goods and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

  • h. Investments in associates

An associate is an entity over which the Group has significant influence and that is not a subsidiary.

The Group uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of the equity of associates.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

Profits and losses resulting from upstream transactions and downstream transactions are recognized only in the Group’s consolidated financial statements only to the extent of interests in the associates that are not related to the Group.

  • i. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

  • 139 -

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

  • j. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods.

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation which is disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

  • k. Intangible assets

  • 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

  • 2) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

  • 3) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

  • 140 -

  • l. Impairment of property, plant and equipment, right-of-use asset and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

  • m. Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

  • 1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

  • a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost.

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 28.

  • 141 -

  • ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

  • i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

  • ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost (including cash, notes receivable, trade receivables, other receivables, other receivables from related parties and refundable deposits) are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

  • i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

  • ii) Financial assets that are not credit-impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

  • b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Group always recognizes lifetime expected credit losses (i.e. ECLs) for trade receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

  • 142 -

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

Equity instruments issued by the Group are classified as equity in accordance with the substance of the contractual arrangements and the definitions of an equity instrument.

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Group’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Group’s own equity instruments.

3) Financial liabilities

  • a) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

  • b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

4) Ordinary corporate bonds

The Group issued corporate bonds payable at initial recognition measured at fair value minus transaction costs, the difference between redemption values is recognized as the premium and discount of bonds payable, and as the addition and deduction of bonds payable; the effective interest method is subsequently adopted to recognize net profit/loss for the year based on the amortized costs during the bond circulation period as the adjustment of financial costs.

n. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

  • 143 -

1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of electronic components and molding products. Sales of electronic components and molding products are recognized as revenue when the goods are delivered via the modes of transportation as stated in the agreements with customers, e.g. FOB shipping or FOB destination modes because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently. Goods are sold at fixed prices as stated in the agreements with customers.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2) Revenue from the rendering of services

Service income is recognized when services are provided.

3) Licensing revenue

Royalty revenue is recognized when the technique remains functional without updates and technical supports. When the customer uses the intellectual property for mass production, the price is decided based on production, sales or other methods, and revenue is recognized according to royalty arrangements.

o. Leasing

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease.

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

  • 144 -

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments that depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

p. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

  • q. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized as a reduction of the related costs on a systematic basis over the periods in which the Group recognizes as expenses the related costs that the grants intend to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they are received.

r. Employee benefits

  • 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period it occurs and is reflected immediately in retained earnings and will not be reclassified to profit or loss.

  • 145 -

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

  • s. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Law, an additional tax on unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

  • 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carry forwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

  • 3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

  • 146 -

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. CASH AND CASH EQUIVALENTS

Cash on hand

Checking accounts and demand deposits
Cash equivalents
Time deposits (with original maturities of less than 3 months)

 December 31 December 31


2020
$ 2,058
2,188,915

229,834

$ 2,420,807
 2019
$ 2,509

2,427,533

459,265
$ 2,889,307

The market rate intervals of cash in the bank at the end of the reporting period were as follows:

Bank balance
 December 31
2020
2019
0.001%-0.38%
0.001%-2.5%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current
Financial assets mandatorily classified as at FVTPL
Derivative financial assets
Foreign exchange forward contract (a)

Non-derivative financial assets
Domestic listed shares
Hybrid financial assets
Structured deposits(b)

 December 31 December 31


2020
$ 22,322

200,701

152,926

$ 375,949
 2019
$ -
$ 39,800

52,189
$ 91,989
(Continued)
  • 147 -
Financial assets at FVTPL-non-current
Financial assets mandatorily classified as at FVTPL
Non-derivative financial assets
Domestic emerging market shares

Overseas unlisted shares
Private funds

 **December 31 ** **December 31 **


2020
$ 15,619

51,579
3,088

$ 70,286
 2019
$ 10,271
50,611

-
$ 60,882
(Concluded)
  • a. At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

December 31, 2020

Notional Amount
Currency Maturity Date (In Thousands)
Sell
US$/RMB		 2021.01 US$1,000/RMB6,528
Sell US$/RMB 2021.02 US$1,000/RMB6,973
Sell US$/RMB 2021.02 US$1,000/RMB6,854
Sell US$/RMB 2021.02 US$1,000/RMB6,890
Sell US$/RMB 2021.02 US$1,000/RMB6,891
Sell US$/RMB 2021.03 US$1,000/RMB6,987
Sell US$/RMB 2021.03 US$2,000/RMB13,882
Sell US$/RMB 2021.03 US$2,000/RMB13,842
Sell US$/RMB 2021.03 US$2,000/RMB13,682
Sell US$/RMB 2021.04 US$1,000/RMB6,760
Sell US$/RMB 2021.05 US$1,000/RMB6,832
Sell US$/RMB 2021.06 US$1,000/RMB6,670
Sell US$/RMB 2021.06 US$1,000/RMB6,612
Sell US$/RMB 2021.06 US$1,000/RMB6,597

The Group entered into foreign exchange forward contracts to manage exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities.

  • b. The Group successively entered into a one to 1-6 months structured time deposit contracts with bank in 2020 and 2019. The structured time deposit contract includes an embedded derivative instrument which is not closely related to the host contract. The entire contract is assessed and mandatorily classified as at FVTPL since it contained a host that is an asset within the scope of IFRS 9.

  • 148 -

8. FINANCIAL ASSETS AT AMORTIZED COST

Current
Time deposits with original maturities of more than 3 months

Time deposits pledged as collateral with original maturities of more
than 3 months
Reserve account

 December 31 December 31


2020
$ 601,313

3,964
550

$ 605,827
 2019
$ 173,894
-

-
$ 173,894

The interest rates for time deposits with original maturities of more than 3 months were 2.015% -3.8% and 3.5% -4.15% per annum as of December 31, 2020 and 2019, respectively.

The interest rate for time deposits pledged as collateral with original maturities of more than 3 months was 0.35% -0.75% per annum as of December 31, 2020.

See Note 30 for detailed information on financial assets at amortized cost pledged as collateral.

9. TRADE RECEIVABLES, NET

At amortized cost
Gross carrying amount

Less: Allowance for impairment loss

 December 31 December 31


2020
$ 3,627,405

(10,876)

$ 3,616,529
 2019
$ 3,103,403

(14,444)
$ 3,088,959

The average credit period of sales of goods was 130-160 days. No interest was charged on trade receivables.

The Group uses other publicly available financial information or its own trading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management annually.

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

  • 149 -

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2020

Not Past Due
Less than 30
Days
31 to 90 Days
91 to 180
Days
Over 180
Days
Expected credit loss rate
-
5.51%
14.83%
42.93%
100%

Gross carrying amount
$ 3,542,654 $ 41,942 $ 38,235 $ 2,944 $ 1,630
Loss allowance (Lifetime
ECLs)

-

(2,313)

(5,669)

(1,264)

(1,630)

Amortized cost
$ 3,542,654
$ 39,629
$ 32,566
$ 1,680
$ -
December 31, 2019
Not Past Due
Less than 30
Days
31 to 90 Days
91 to 180
Days
Over 180
Days
Expected credit loss rate
-
4.71%
16.99%
46.79%
99.75%

Gross carrying amount
$ 3,003,292 $ 73,753 $ 17,597 $ 1,434 $ 7,327
Loss allowance (Lifetime
ECLs)

-

(3,475)

(2,989)

(671)

(7,309)

Amortized cost
$ 3,003,292
$ 70,278
$ 14,608
$ 763
$ 18
The movements of the loss allowance of trade receivables were as follows:
2020
Balance at January 1
$ 14,444
Add: Acquisitions through business combinations
1,466
Add: Net remeasurement of loss allowance (reversal of loss
allowance)
(5,338)
Foreign exchange gains and losses

304
Balance at December 31
$ 10,876







$		 Total
$ 3,627,405

(10,876)
$ 3,616,529
Total
-
$ 3,103,403

(14,444)
$ 3,088,959
2019
13,253
17
1,559
(385)
14,444
$

10. INVENTORIES

Finished goods

Work in progress
Raw materials

 **December 31 ** **December 31 **


2020
$ 327,374

234,759
405,021

$ 967,154
 2019
$ 301,455
197,681

247,962
$ 747,098

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020 and 2019 was $7,122,599 thousand and $6,317,305 thousand, respectively. The cost of goods sold included inventory write-downs reversed (recognized) of $44,940 thousand and $(37,854) thousand. The reversals of previous write-downs resulted from selling of slow moving inventories.

  • 150 -

11. SUBSIDIARIES

Subsidiaries Included in the Consolidated Financial Statements

Investor
Investee
Nature of Activities
Syncmold Enterprise
Corp.
Syncmold Enterprise (Samoa)
Corp.
The trading and commercial related
practices of all metal molds and
plastic molds as well as the
reinvestment of subsidiaries in
mainland China.
Grand Advance Inc.
The trading, imports, exports and
investments of electronic parts.
Syncmold Enterprise (USA) Corp. The trading, imports and exports of
electronic parts.
Gatech Technology Inc.
Precision molding and magnesium
alloy die caster manufacturing and
transaction business
Syncmold Enterprise Vietnam
Co., Ltd.
Electronic parts processing
manufacturing, trading and related
import and export business.
Syncmold Enterprise (Malaysia)
Sdn., Bhd.
The trading, imports and exports of
electronic parts.
Syncmold Enterprise (Singapore)
Pte., Ltd.
The trading, imports and exports of
electronic parts.
Syncmold Enterprise (Thailand)
Co., Ltd.
Electronic parts processing
manufacturing, trading and related
import and export business.
Leohab Enterprise Co., Ltd.
Precision hardware components
manufacturing
Grand Advance Inc.
Canford International Limited
Import and export trade and
investment.
Fullking Development Limited
Import and export trade and
investment.
Full Glary Holding Limited
Import and export trade and
investment.
Syncmold Enterprise
(Samoa) Corp.
Full Big Limited
Reinvesting subsidiaries of mainland
China and international business.
Forever Business Development
Limited
Reinvesting subsidiaries of mainland
China and international business.
Full Celebration Limited
Reinvesting subsidiaries of mainland
China and international business.
Fuzhou Fulfil Tech Co., Ltd.
Electronic parts processing
manufacturing, trading and related
import and export business.
Fujian Khuan Hua Precise Mold.,
Ltd.
Processing, manufacturing, trading
and related import and export
business of various metal molds,
plastic molds and plastic injection
molds.
Fuqing Foqun Electronic
Hardware Tech Co., Ltd.
Electronic parts processing
manufacturing, trading and related
import and export business.
Gatech Technology
Inc.
Gatech Holding Ltd.
General investment business
Leohab Enterprise Co.,
Ltd.
Sweet International Group Ltd.
General investment business
Forever Business
Development
Limited
Dongguan Khuan Huang Precise
Mold Plastic Co., Ltd.
Processing, manufacturing, trading
and related import and export
business of various metal molds,
plastic molds and plastic injection
molds.		 Proportion of Ownership
(%)
December 31
2020
2019
100
100
100
100
100
100
73.43
(Note 2)
72.81
(Note 2)
100
(Note 3)
-
100
(Note 4)
-
100
(Note 5)
-
100
(Note 6)
-
70
(Note 1)
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(Note 1)
-
100
100
(Continued)
  • 151 -
Investor
Investee
Nature of Activities
Canford International
Limited
Suzhou Fulfil Electronics Co.,
Ltd.
Electronic parts processing
manufacturing, trading and related
import and export business.
Fullking Development
Limited
Zhongshan Fulfil Tech Co., Ltd.
Electronic parts processing
manufacturing, trading and related
import and export business.
Full Glary Holding
Limited
Kunshan Fulfil Tech Co., Ltd.
Manufacturing and assembling of
laptop components such as
precision bearing, hardware and
related accessories.
Full Celebration
Limited
Chongqing Fulfil Tech Co., Ltd.
The processing, manufacturing,
related imports and exports of all
electronic, plastic and electronic
parts.
Gatech Holding Ltd.
Gatech International Ltd.
General investment business
Gatech International
Ltd.
Gatech (Suzhou) Inc,
Aluminum and magnesium alloy
manufacturing and trading
Sweet International
Group Ltd.
Lucky King Holdings Ltd.
General investment business
Lucky King Holdings
Ltd.
Suzou Leoho Electronics Co., Ltd. Precision hardware components
manufacturing
Commuwell Enterprise (Thailand)
Co., Ltd.
Plastic shot and hardware components
manufacturing		 Proportion of Ownership
(%)
December 31
2020
2019
100
100
100
100
100
100
100
100
100
100
100
100
100
(Note 1)
-
100
(Note 1)
-
100
(Note 1)
-
(Concluded)

  • Note 1: On November 30, 2020, the Corporation completed the acquisition of Leohab Enterprise Co., Ltd. for a cash consideration of $232,677 thousand after the acquisition, the Corporations percentage of ownership in Leohab Enterprise Co., Ltd. was 70% See Note 25 for detailed information on the acquisition of Leohab Enterprise Co., Ltd.

  • Note 2: On November 29, 2019, the Corporation completed the acquisition of Gatech Technology Inc. for a cash consideration of $550,000 thousand; after the acquisition, the Corporation’s percentage of ownership in Gatech Technology Inc. was 72.81%. On April 21, 2020 and July 27, 2020, the Corporation acquired additional 0.17% and 0.45% ownerships in Gatech Technology Inc. for a cash consideration of $1,345 thousand and $2,470 thousand, respectively, which increased the Corporation’s percentage of ownership to 73.43%. Refer to Notes 25 and 26 for detailed information on the acquisition of Gatech Technology Inc. and non-controlling interests.

  • Note 3: The establishment of Syncmold Enterprise Vietnam Co., Ltd. was approved on December 24, 2019. As of March 19, 2020, the Corporation had invested $302,344 thousand in exchange for 100% shareholding interest.

  • Note 4: The establishment of Syncmold Enterprise (Malaysia) Sdn., Bhd. was approved on February 10, 2020. As of June 10, 2020, the Corporation had invested $3,639 thousand in exchange for 100% shareholding interest.

  • Note 5: The establishment of Syncmold Enterprise (Singapore) Pte., Ltd. was approved on February 27, 2020.As of June 29, 2020, the Corporation had invested $1,100 thousand in exchange for 100% shareholding interest.

  • Note 6: The establishment of Syncmold Enterprise (Thailand) Co., Ltd. was approved on May 14, 2020. As of May 27, 2020, the Corporation had invested $19,920 thousand in exchange for 100% shareholding interest.

  • 152 -

Information on the subsidiaries included in the consolidated financial statements for the years ended December 31, 2020 and 2019 in the table above was based on the financial statements of the subsidiaries audited by the auditors for the same periods.

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Associates that are not individually material
Unlisted company
High Grade Tech Co., Ltd.

Corebio technologies Co., Ltd.

 December 31 December 31


2020
$ 128,639

35,917

$ 164,556
 2019
$ 121,500

46,752
$ 168,252

Aggregate information of associates that are not individually material

The Group’s share of:
Net profit of the year
Other comprehensive income		 December 31
2020
$ 4,185
$ 3,519		 2019
$ 3,939
$ -

In January 2019, the Corporation subscribed for shares of Corebio Technologies Co., Ltd. for a cash consideration of $25,000 thousand; after the subscription, the Corporation’s percentage of ownership in Corebio Technologies Co., Ltd. was 23.83% and the Corporation was able to exercise significant influence over Corebio Technologies Co., Ltd., and as of December 31, 2019, the Corporation subscribed for additional new shares at a cash consideration of $27,000 thousand, which increased the Corporation’s percentage of ownership to 38.29%.

The shares of profit or loss of associates accounted for using the equity method in 2020 and 2019 were calculated based on the associates’ financial statements which have been audited for the same periods.

13. PROPERTY, PLANT AND EQUIPMENT



Cost


Balance at January 1, 2020
Additions

Disposals

Acquisitions through
business combinations

Transfer from prepayments
for equipments

Reclassifications

Effect of foreign currency
exchange differences


Balance at December 31,
2020
 Freehold Land
$ 484,451

-
-
218,709
-
-

2

$ 703,102
 Buildings
$ 641,034


29,310

(36,684 )

237,954
-

2,141

9,530

$ 883,285
 Equipment
Transportation
Equipment
$ 1,119,133
$ 32,396


88,129
3,681

(65,199 )
(1,212 )

301,736
4,832
35,998
-
(1,984 )
-

17,296

1,372

$ 1,497,074
$ 41,069
 Office
Equipment
$ 41,780


8,522

(6,201 )

6,769
-

(2,113 )

1,561

$ 50,318
 Other
Equipment
Total
$ 84,415
$ 2,403,209
13,662
141,301

(2,205 )
(111,501 )
162,098
932,098
1,592
37,590

148
(2,160 )

1,733

31,494
$ 261,443
$ 3,436,351
(Continued)
  • 153 -


Accumulated depreciation
and impairment


Balance at January 1, 2020
Disposals

Depreciation expenses

Impairment losses
recognized

Acquisitions through
business combinations

Reclassified as held for sale
Effect of foreign currency
exchange differences


Balance at December 31,
2020


Carrying amounts at
December 31, 2020


Cost


Balance at January 1, 2019
Additions

Disposals

Acquisitions through
business combinations

Reclassified as held for sale
Effect of foreign currency
exchange differences


Balance at December 31,
2019


Accumulated depreciation
and impairment


Balance at January 1, 2019
Disposals

Depreciation expenses

Acquisitions through
business combinations

Reclassified as held for sale
Effect of foreign currency
exchange differences


Balance at December 31,
2019


Carrying amounts at
December 31, 2019
 Freehold Land
$ -
-
-
-
-
-

-

$ -

$
$ 65,187

-
-
419,264
-

-

$ 484,451

$ -
-
-
-
-

-

$ -

$ 484,451
 Buildings
$ 320,970

(36,409 )

45,002
-

111,373

1,494

1,613

$ 434,043

$ 439,242

$ 330,490


6,028

(37,294 )

353,919

(2,112 )

(9,997)

$ 641,034

$ 188,292

(35,051 )

13,827

159,201

-

(5,299)

$ 320,970

$ 320,064
 Equipment
Transportation
Equipment
$ 747,814 $ 19,070

(45,966 )
(1,090 )

80,623
3,097
2,528
-

261,440
3,599

2,425
-

7,832

280

$ 1,056,696
$ 24,956

$ 440,378
$ 16,113

$ 650,462
$ 24,862


74,784
2,970

(109,417 )
(3,243 )

514,778
8,750

8,431
-

(19,905)

(943)

$ 1,119,133
$ 32,396

$ 360,290 $ 15,581

(95,551 )
(2,921 )

60,789
2,390

432,134
4,587

3,089
-

(12,937)

(567)

$ 747,814
$ 19,070

$ 371,319
$ 13,326
 Office
Equipment
$ 29,435

(5,771 )

4,480
-

5,015

(1,469 )

427

$ 32,117

$ 18,201

$ 42,371


4,781

(5,308 )

1,769

(237 )

(1,596)

$ 41,780

$ 28,714

(3,949 )

4,766

1,022

(18 )

(1,100)

$ 29,435

$ 12,345
 Other
Equipment
Total
$ 60,339 $ 1,177,628

(2,017 )
(91,253 )

7,481
140,683
-
2,528

126,209
507,636

-
2,450

510

10,662
$ 192,522
$ 1,750,334
$ 68,921
$ 1,686,017
$ 58,119
$ 1,171,491

4,428
92,991

(9,051 )
(164,313 )

26,911
1,325,391

(1,107 )
4,975

5,115

(27,326)
$ 84,415
$ 2,403,209
$ 34,756 $ 627,633

(8,584 )
(146,056 )

13,884
95,656

22,745
619,689

(1,207 )
1,864

(1,255)

(21,158)
$ 60,339
$ 1,177,628
$ 24,076
$ 1,225,581
(Concluded)

The Group expects that future cash inflows of some machinery and equipment will decrease, resulting in recoverable amount lower than the carrying amount and, therefore, recognized an impairment loss of $2,528 thousand in 2020. The impairment loss was recorded under other gains and losses in the consolidated statements of comprehensive income.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings Main buildings 5-60 years Electromechanical power equipment 4-5 years Equipment 1-23 years Transportation equipment 5-10 years Office equipment 3-10 years Other equipment 1-20 years

  • 154 -

14. LEASE ARRANGEMENTS

  • a. Right-of-use assets
Carrying amounts
Lands

Buildings
Transportation equipment



Additions to right-of-use assets

Acquisition through business combinations

Depreciation charge for right-of-use assets
Lands

Buildings
Transportation equipment


Income from the subleasing of right-of-use assets (presented in
other income)

Lease liabilities
Carrying amounts
Current

Non-current

Range of discount rate for lease liabilities was as follows:
Buildings
Transportation equipment		 **December 31 ** **December 31 **
2020
$ 174,905

318,942

1,655

$ 495,502

**For the Year Ended **		 2019
$ 53,158
383,134

576
$ 436,868
**December 31 **





2020
2019
$ 238,238
$ 142,982
$ 27,123
$ 45,918
$ 3,025
$ 268
157,493
144,387
450

249
$ 160,968
$ 144,904
$ (9,806)
$ (17,485)
December 31

2020
2019
$ 133,785
$ 123,884
$ 170,268
$ 232,119
**December 31 **
2020
2019
0.94%-4.90%
0.94%-4.90%
0.94%-1.69%
0.94%

b. Lease liabilities

Range of discount rate for lease liabilities was as follows:

  • 155 -

c. Subleases

Sublease of right-of-use assets

The Group subleases its right-of-use assets for buildings under operating leases with lease terms of 5 years and with the priority to extend the lease. The lease contracts contain market review clauses in the event that the lessees exercise their options to extend.

The maturity analysis of lease payments receivable under operating subleases was as follows:

Year 1
d. Other lease information

Expenses relating to short-term leases

Total cash outflow for leases
 December 31
2020
$ -
For the Year Ended		 2019
$ 8,386
December 31

2020
$ 22,469

$ (282,344)
 2019
$ 14,696
$ (158,201)

The Group leases certain buildings and transportation equipment which qualify as short-term leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

15. GOODWILL



Cost

Balance at January 1

Balance at December 31

Balance at January 1

Impairment losses recognized

Balance at December 31

Carrying amounts atDecember 31
 **For the Year Ended ** **For the Year Ended ** **December 31 **







2020
$ 366,777

$ 366,777

$ (42,180)

-

$ (42,180)

$ 324,597
 2019
$ 366,777
$ 366,777
$ -

(42,180)
$ (42,180)
$ 324,597

The Group acquired FulFil Tech Co., Ltd. on June 27, 2007 and recognized goodwill of $366,777 thousand relating to molding department and electronic components department. The goodwill is mainly arising from the expected benefit from sales growth of electronic components and molding products, and the potential of developing new electronic models.

As of December 31, 2019, the operations of some plastic molding departments ceased due to the expected increase in bargaining pressure, raw materials, and labor cost of molded plastic products, as well as intra-group rearrangements and adjustments. Since the estimated recoverable amount of plastic molding department was lower than its carrying amount, an impairment loss on goodwill of $42,180 thousand was recognized in 2019.

  • 156 -

The recoverable amount of plastic molding department was determined based on a value in use calculation that used the cash flow projections in the financial budgets approved by management covering a 5-year period; the discount rate was 13.20% and 12.96% in 2020 and 2019, respectively. Other key assumptions included budgeted revenue and budgeted gross margin. Such assumptions were based on the past performance of the cash-generating unit and management’s expectations of future market development.

16. INTANGIBLE ASSETS

Trademarks
Cost
Computer
Software Cost Patents Cost
Cost
Balance at January 1, 2020
$ -
$ 48,046
$ -

Additions
-
17,385
-
Acquisitions through business
combinations
181
2,289
5,887
Disposals
-
(9,446)
-
Reclassifications
-
(505)
505
Effect of foreign currency exchange
differences

-

44

-

Balance at December 31, 2020
$ 181
$ 72,346
$ 6,392

Accumulated amortization
and impairment
Balance at January 1, 2020
$ -
$ 21,409
$ -

Acquisitions through business
combinations
113
14,655
3,606
Amortization expenses
2
13,991
41
Disposals
-
(9,446)
-
Effect of foreign currency exchange
differences

-

192

106

Balance at December 31, 2020
$ 115
$ 40,801
$ 3,753

Carrying amount at December 31,
2020
$ 66
$ 31,545
$ 2,639



Cost
Balance at January 1, 2019
$ -
$ 46,394
$ -

Additions
-
18,681
-
Disposals
-
570
-
Acquisitions through business
combinations
-
(16,901)
-

Effect of foreign currency exchange
differences

-

(698)

-

Balance at December 31, 2019
$ -
$ 48,046
$ -
 Total
$ 48,046
17,385
22,890
(9,446)
-

44
$ 78,919
$ 21,409
18,374
14,034
(9,446)

298
$ 44,669
$ 34,250
$ 46,394
18,681
570
(16,901)

(698)
$ 48,046
(Continued)
  • 157 -
Trademarks
Cost
Computer
Software Cost Patents Cost
Accumulated amortization
and impairment
Balance at January 1, 2019
$ -
$ 24,086
$ -

Acquisitions through business
combinations
-
(16,090)
-

Amortization expenses
-
112
-
Disposals
-
14,435
-
Effect of foreign currency exchange
differences

-

(323)

-

Balance at December 31, 2019
$ -
$ 21,409
$ -

Carrying amount at December 31,
2019
$ -
$ 26,637
$ -
 Total
$ 24,086
(16,090)
112
14,435

(323)
$ 21,409
$ 26,637
(Concluded)

The above items of intangible assets are amortized on a straight-line basis their estimated useful lives as follows:

Trademarks 7-10 years Computer software 1-5 years Patents 1-19 years

17. BORROWINGS

a. Short-term borrowings

Secured borrowings
Mortgage loans

Bank loans
Unsecured borrowings
Line of credit borrowings

 **December 31 ** **December 31 **


2020
$ 484,000

8,895

1,374,800

$ 1,867,695
 2019
$ 280,000
-

726,982
$ 1,006,982

The weighted average effective interest rates on bank loans were ranging from 0.67%-3.75% and 0.88%-2.80% per annum as of December 31, 2020 and 2019, respectively.

  • 158 -

b. Short-term bills payable

Commercial paper
Less: Unamortized discounts on bills payable		 December 31


2020
$ 30,000


(19)

$ 29,981
 2019
$ -

-
$ -

Outstanding short-term bills payable were as follows:

December 31, 2020

Carrying Carrying
Nominal Discount Carrying Interest Amount of
Issuer Amount
Amount
Amount
Rate		 Collateral
Collateral
Commercial papers
Mega Bills Finance $ 30,000 $ 19 $ 29,981 1.05% None
 $ -
Co., Ltd.
  • c. Long-term borrowings
Secured borrowings
Mortgage loans
Unsecured borrowings
Line of credit borrowings
Less: Current portions		 December 31



2020
$ 59,500


13,636

73,136
(16,909)

$ 56,227
 2019
$ -

-
-

-
$ -

The Group’s property, plant and equipment and financial assets at amortized cost were provided as collateral for long-term borrowings (refer to Note 30). The effective interest rate on long-term borrowings was 1.70%-1.995% on December 31, 2020.

18. BONDS PAYABLE

Secured domestic bonds

Less: Current portions

 **December 31 ** **December 31 **


2020
$ -

-

$ -
 2019
$ 150,000
(150,000)
$ -
  • 159 -

Due to funding needs, the Group issued a guaranteed ordinary corporate bond of $150,000 thousand in December 2016 based on its book value, with a coupon rate of 1.59%, annual interest payments and a bond repayment due in December 2018. The Group issued a guaranteed ordinary corporate bond of $150,000 thousand in December 2018 based on its book value, with a coupon rate of 1.45%, annual interest payments and a bond repayment due in December 2020, as well as an advanced repayment of bond in March 2020.

19. OTHER PAYABLES

Current
Payables for salaries or bonuses

Others

 December 31 December 31


2020
$ 280,535

218,182

$ 498,717
 2019
$ 242,155

175,135
$ 417,290

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Group of the Group adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The subsidiaries operate a defined contribution retirement benefit plan for all qualifying employees of its subsidiaries in China. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. Where employees leave the plan prior to full vesting of the contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions.

b. Defined benefit plans

The defined benefit plans adopted by the Group of the Group in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Group contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Group has no right to influence the investment policy and strategy.

  • 160 -

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit liabilities (assets)		 December 31


2020
$ 60,291

(42,095)

$ 18,196
 2019
$ 42,157
(33,470)
$ 8,687

The net defined benefit liabilities (assets) were $20,763 thousand and $(2,567) thousand recognized in the consolidated balance sheets for the year ended December 31, 2020.

Movements in net defined benefit assets were as follows:

Present Value
of the Defined
Benefit Fair Value of Net Defined
Obligation the Plan Assets
Benefit Assets
Balance at January 1, 2019 $ 21,666 $ (23,968) $ (2,302)
Acquisition through business combinations
21,241		 (10,352)
10,889
Service cost
Current service cost 111 - 111
Net interest expense (income)
462
(361)
101
Recognized in profit or loss
573
(361)
212
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (1,218) (1,218)
Actuarial (gain) loss
Changes in demographic assumptions 52 - 52
Changes in financial assumptions 985 - 985
Experience adjustments
561
-
561
Recognized in other comprehensive income
1,598
(1,218)
380
Contributions from the employer
-
(492)
(492)
Benefits paid
(2,921)
2,921
-
Balance at December 31, 2019
42,157		 (33,470)
8,687
Acquisition through business combinations
15,996
(4,973)
11,023
Service cost
Current service cost 62 - 62
Net interest expense (income)
336
(244)
92
Recognized in profit or loss
398
(244)
154
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (1,168) (1,168)
Actuarial (gain) loss
Changes in demographic assumptions 4 - 4
Changes in financial assumptions 1,283 - 1,283
Experience adjustments
453
-
453
Recognized in other comprehensive income
1,740
(1,168)
572
Contributions from the employer
-
(2,240)
(2,240)
Balance at December 31, 2020 $ 60,291 $ (42,095) $ 18,196
  • 161 -

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

  • 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

  • 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

  • 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate
Expected rate(s) of salary increase
Mortality rate

Turnover rate		 December 31
2020
2019
0.300%-0.800%
0.625%-1.000%
1.000%-2.000%
1.000%-1.500%
According to the fifth
experience life table
of the insurance
industry in Taiwan
According to the fifth
experience life table
of the insurance
industry in Taiwan
0%-8%
0%-10%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate(s)
25% increase
25% decrease
Expected rate(s) of salary increase
25% increase
25% decrease		 December 31



2020
$ (1,206)

$ 1,253

$ 1,239

$ (1,198)
 2019
$ (952)
$ 991
$ 986
$ (952)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year
Average duration of the defined benefit obligation
 December 31
2020
2019
$ 659
$ 493
7.6 - 13.3 years
8.3-14.1 years

  • 162 -

  • c. Commuwell Enterprise (Thailand) Co., Ltd. calculates the pension of Thai employees on the basis of seniority, in accordance with section 118/1 of the Labour Protection Act (No. 6).

21. EQUITY

  • a. Share capital

Ordinary shares

Number of shares authorized (in thousands)

Shares authorized

Number of shares issued and fully paid (in thousands)

Shares issued
 **December 31 ** **December 31 **



2020

200,000

$ 2,000,000


123,724

$ 1,237,242
 2019

200,000
$ 2,000,000

123,724
$ 1,237,242

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per shares and right to dividends.

The authorized shares include 3,000 thousand shares allocated for the exercise of employee stock options.

  • b. Capital surplus

Capital surplus may be used to offset a deficit; in addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Group’s capital surplus and to once a year).

Capital surplus arises from the effect of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions, or from changes in capital surplus of subsidiaries accounted for using the equity method and unclaimed dividends may be only use to offset a deficit.

The capital surplus generated from the stock option of the convertible bonds could not be used for other purposes.

  • c. Retained earnings and dividends policy

Under the dividends policy as set forth in the amended Articles, where the Corporation made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to employees’ compensation and remuneration of directors and supervisors in Note 22-d.

  • 163 -

As the Corporation is currently in the growth stage, the Corporation considers its industry development and long-term interests of shareholders as well as its programs to maintain operating efficiency and meet its financial goals when determining the distribution of bonuses in shares or cash. The board of directors shall propose allocation ratios every year and propose such allocation ratio at the shareholder’s meeting. For the distribution of bonuses to shareholders, cash dividends are preferred. Distribution of earnings may also be made in the form of stock dividends; provided that the ratio of cash dividends distributed is 5% to 100% of the total dividends distributed.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Corporation.

The appropriations of earnings for 2019 and 2018 which were approved in the shareholders’ meetings on June 18, 2020 and June 20, 2019, respectively, were as follows:

Legal reserve

Special reserve
Cash dividends		 Appropriation of Earnings
For the Year Ended
December 31
2019
2018
$ 94,150
$ 88,996
202,514
54,857
556,759
804,207		 Dividends Per Share (NT$)
For the Year Ended
December 31
2019
2018
$4.50
$6.50

The appropriation of earnings for 2020 had been proposed by the Corporation’s board of directors on March 16, 2021. The appropriation and dividends per share were as follows:

Appropriation Appropriation Dividends Per
of Earnings Share (NT$)
Legal reserve $
96,150
Special reserve 1,595
Cash dividends 618,621 $5.00

The appropriation of earnings for 2020 is subject to the resolution of the shareholders in the shareholders’ meeting to be held on June 24, 2021.

d. Special reserve

Balance at January 1

Appropriated special reserve
Exchange differences on translating the financial statements of
foreign operations

Balance at December 31
 **December 31 ** **December 31 **


2020
$ 431,506

202,514

$ 634,020
 2019
$ 376,649

54,857
$ 431,506
  • 164 -

On the initial application of the IFRSs, the net increase arising from the retained earnings was not enough for the special reserve appropriation; thus, the Corporation appropriated a special reserve at the amount of $230,916 thousand. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and is thereafter, distributed.

e. Non-controlling interests


Balance at January 1

Share in profit for the year
Other comprehensive income (loss) during the year
Exchange differences on translating the financial statements of
foreign entities
Remeasurement of defined benefit plans
Non-controlling interests arising from acquisition of subsidiaries
(Note 25)
Changes in ownership interests in subsidiaries (Note 26)

Balance at December 31
 For the Year Ended December 31, For the Year Ended December 31, For the Year Ended December 31,


2020
$ 229,257

8,944
2,508
(227)
107,998
(5,342)

$ 343,138
 2019
$ -
1,053
(875)
(88)
229,257

-
$ 229,257

22. NET PROFIT

Net profit comprises:

a. Other income


Dividends

Rental income
Subsidy income
Others

 For the Year Ended December 31, For the Year Ended December 31, For the Year Ended December 31,


2020
$ 6,229

9,896
24,033
2,505

$ 42,663
 2019
$ -
17,485
22,250

4,456
$ 44,191

b. Other gains and losses


Loss on disposal of losses plant and equipment

Others

 For the Year Ended December 31, For the Year Ended December 31, For the Year Ended December 31,


2020
$ (1,038)

(8,726)

$ (9,764)
 2019
$ (6,870)

(1,850)
$ (8,720)
  • 165 -

c. Depreciation, amortization and employee benefits expense:

Employee benefits expense
Defined contribution plan
Defined benefit plan
Other employee benefits
Depreciation
Amortization		 2020 Total
$ 44,279

154
1,865,989

$ 1,910,422

$ 301,651

$ 14,034
 2019




Operating
Costs
$ 31,836
286
1,398,941

$ 1,431,063

$ 191,195

$ 396
 Operating
Expenses
$ 12,443

(132)

467,048

$ 479,359

$ 110,456

$ 13,638




Operating
Costs
$ 54,134

9
1,126,802

$ 1,180,945

$ 149,803

$ 1,401
 Operating
Expenses
$ 15,794

(13)

405,235

$ 421,016

$ 90,757

$ 13,034
 Total
$ 69,928

(4)
1,532,037
$ 1,601,961
$ 240,560
$ 14,435

d. Employees’ compensation and remuneration of directors and supervisors

According to the Corporation’s Articles of Incorporation, the Corporation accrued employees’ compensation and remuneration of directors and supervisors at rates of no less than 3% and no higher than 2%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. The employees’ compensation and the remuneration of directors and supervisors for the years ended December 31, 2020 and 2019, which were approved by the Corporation’s board of directors on March 16, 2021 and March 13, 2020, respectively, are as follows:

Accrual rate


Employees’ compensation
Remuneration of directors and supervisors
Amount

Employees’ compensation
Remuneration of directors and supervisors		 For the Year Ended December 31
2020
2019
6.58%
6.56%
1.44%
1.44%
For the Year Ended December 31
2020
2019
Cash
Cash
$ 80,847
$ 79,339
17,747
17,416		 For the Year Ended December 31
2020
2019
6.58%
6.56%
1.44%
1.44%
For the Year Ended December 31
2020
2019
Cash
Cash
$ 80,847
$ 79,339
17,747
17,416
2019
Cash
$ 79,339
17,416

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

The Corporation held board of directors’ meetings on March 13, 2020 and March 14, 2019 and the meeting resulted in the actual amounts of the employees’ compensation and remuneration of directors and supervisors paid for 2019 and 2018 to differ from the amounts recognized in the consolidated financial statements. The differences were adjusted to profit and loss for the years ended December 31, 2020 and December 31, 2019.

  • 166 -
Amounts approved in the board
of directors’ meeting

Amounts recognized in the
annual consolidated financial
statements
 **For the Year Ended December 31 ** **For the Year Ended December 31 **
2019
Employees’
Compensation
Remuneration
of Directors
and
Supervisors
$ 79,000
$ 18,000
$ 79,339
$ 17,416		 2018
Employees’
Compensation
Remuneration
of Directors
and
Supervisors
$ 76,000
$ 17,000
$ 75,903
$ 16,662

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Corporation’s board of directors in 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

23. INCOME TAXES

  • a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:


Current tax
In respect of the current period

Income tax on unappropriated earnings
Adjustments for prior periods


Deferred tax
In respect of the current period
Adjustments to deferred tax attributable to changes in tax rates
and laws


Income tax expense recognized in profit or loss
 **For the Year Ended ** **For the Year Ended ** **December 31 **





2020
$ 520,072

4,404
4,522

528,998

(6,702)
543

(6,159)

$ 522,839
 2019
$ 458,147
-

7,937

466,084
36,311

-

36,311
$ 502,395

A reconciliation of accounting profit and income tax expense is as follows:


Profit before tax

Income tax expense calculated at the statutory rate

Permanent differences
Unrecognized deductible temporary differences
Unrecognized loss carry-forwards
Income tax on unappropriated earnings
Adjustments for prior years’ tax

Income tax expense recognized in profit or loss
 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31



2020
$ 1,497,521

$ 572,440

(60,355)
(6,205)
7,490
4,404

5,065

$ 522,839
 2019
$ 1,444,990
$ 549,073

(60,289)

5,021

653

-

7,937
$ 502,395
  • 167 -

b. Current tax assets and liabilities

Current tax assets
Tax refund receivable (included other current assets)

Current tax liabilities
Income tax payable
 December 31 December 31

2020
$ 8,474

$ 181,357
 2019
$ 3,309
$ 113,470

c. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2020

Deferred Tax Assets
Temporary differences
Allowance loss for exceeding limits

Allowance for inventory valuation and
obsolescence losses
Others
Loss carryforwards


Deferred Tax Liabilities
Temporary differences
Gain on investments accounted for
using the equity method

Unrealized exchange gains
Land value income tax
Others

 Opening
Balance
Acquisitions
through
Business
Combinations
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income
$ 3,678
$ 15
$ (1,267 )
$ -

18,680
7,992
(4,379 )
-
4,761
6,402
2,219
-

43,419

6,073

(7,992)

-

$ 70,538
$ 20,482
$ (11,419)
$ -

Opening
Balance
Acquisitions
through
Business
Combinations
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income
$ 267,035
$ 39,341
$ (22,248 )
$ -

6,425
1,461
(387 )
-
-
22,171
-
-

2,692

10,345

5,057

57

$ 276,152
$ 73,318
$ (17,578)
$ 57
 Exchange
Differences
Closing Balance
$ (32 )
$ 2,394
45
22,338
93
13,475

13

41,513
$ 119
$ 79,720
Exchange
Differences
Closing Balance
$ -
$ 284,128
(13 )
7,486
-
22,171

3

18,154
$ (10)
$ 331,939

For the year ended December 31, 2019

Deferred Tax Assets
Temporary differences
Allowance loss for exceeding limits

Allowance for inventory valuation and
obsolescence losses
Impairment loss recognized on
financial assets measured at cost
Others
Loss carryforwards


Deferred Tax Liabilities
Temporary differences
Investments accounted for using the
equity method

Unrealized exchange gains
Others

 Opening
Balance
Acquisitions
through
Business
Combinations
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income
$ 3,501
$ -
$ 323
$ -

11,097
-
8,367
-
5,021
-
(5,021 )
-
6,506
-
(1,573 )
-

831

44,483

(1,862)

-

$ 26,956
$ 44,483
$ 234
$ -

Opening
Balance
Acquisitions
through
Business
Combinations
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income
$ 234,334
$ -
$ 32,701
$ -

4,636
-
1,797
-

664

-

2,047

(11)

$ 239,634
$ -
$ 36,545
$ (11)
 Exchange
Differences
Closing Balance
$ (146 )
$ 3,678
(784 )
18,680
-
-
(172 )
4,761

(33)

43,419
$ (1,135)
$ 70,538
Exchange
Differences
Closing Balance
$ -
$ 267,035
(8 )
6,425

(8)

2,692
$ (16)
$ 276,152

  • 168 -

  • d. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Deductible temporary differences

Loss carryforwards

 **December 31 ** **December 31 **


2020
$ 246,192

136,996

$ 383,188
 2019
$ 172,802

215,933
$ 388,735

The unrecognized deductible temporary differences are goodwill amortization, excess loss allowance, impairment loss on financial assets measured at cost, and loss on investments accounted for using the equity method.

  • e. Information about unused loss carryforwards

Loss carryforwards as of December 31, 2020 comprised:

Unused Amount Unused Amount Expiry Year
$ 6,288 2022
40,892 2023
44,201 2024
21,082 2025
11,149 2026
13,384 2029
$ 136,996

f. Income tax assessments

The income tax returns of Leohab Enterprise Co., Ltd. through 2017 have been assessed by the tax authorities.

The income tax returns of the Corporation and Gatech Technology Inc. through 2018 have been assessed by the tax authorities.

24. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share are as follows:

Net Profit for the Year


Earnings used in the computation of diluted earnings per share
 **For the Year Ended ** **For the Year Ended ** December 31
2020
$ 965,738
 2019
$ 941,542
  • 169 -

Shares

The weighted average number of ordinary shares outstanding (in thousands of shares) is as follows:


Weighted average number of ordinary shares used in the
computation of basic earnings per share
Effect of potentially dilutive ordinary shares
Employees’ compensation
Weighted average number of ordinary shares used in the
computation of diluted earnings per share		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2020
123,724

1,133
124,857		 2019
123,724

1,061
124,785

If the Group offered to settle the compensation or bonuses paid to employees in cash or shares, the Group assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

25. BUSINESS COMBINATIONS

2020

  • a. Subsidiaries acquired
Proportion of
Voting Equity
Interests Consideration
Subsidiary Principal Activity Date of Acquisition
Acquired (%)
Transferred
Leohab Enterprise Precision hardware
November 30, 2020		 70
 $ 232,677
Co., Ltd. and component
subsidiaries manufacturing and
plastic ejection

Leohab Enterprise Co., Ltd. and subsidiaries was acquired in order to further enhance the Group’s supply chain integration.

  • b. Consideration transferred

Cash

Leohab Enterprise Co., Ltd. and Subsidiaries $ 232,677

  • 170 -

  • c. Assets acquired and liabilities assumed at the date of acquisition

Leohab
Enterprise Co.,
Ltd. and
Subsidiaries
Current assets
Cash and cash equivalents $ 125,564
Trade and other receivables 227,318
Inventories 49,510
Other current assets 7,798
Non-current assets
Property, plant and equipment 424,462
Right-of-use assets 27,123
Intangible assets 4,516
Deferred tax assets 20,482
Other non-current assets 752
Current liabilities
Short-term borrowings (209,174)
Trade and notes payables (72,002)
Other payables (63,057)
Current tax liabilities (14,644)
Lease liabilities (695)
Current Portions of long-term borrowings (710)
Other current liabilities (1,362)
Non-current liabilities
Long-term borrowings (73,556)
Deferred tax liabilities (62,188)
Net defined benefit liabilities (11,023)
Other non-current liabilities
(19,116)
$ 359,998
  • d. Gain from bargain purchase recognized on acquisitions
Leohab
Enterprise Co.,
Ltd. and
Subsidiaries
Consideration transferred $ 232,677
Plus: Non-controlling interests (30% in Leohab Enterprise Co., Ltd.) 107,998
Less: Fair value of identifiable net assets acquired (359,998)
Gain from bargain purchase recognized on acquisitions $ 19,323

The gain from bargain purchase recognized in the acquisitions of Leohab Enterprise Co., Ltd. and subsidiaries is generated from the differences between consideration transferred and the acquisition of fair value of identifiable net assets acquired, which was recognized as net profit/loss for the year.

  • 171 -

  • e. Net cash outflow on the acquisition of subsidiaries

Leohab
Enterprise Co.,
Ltd. and
Subsidiaries
Consideration paid in cash $ 232,677
Less: Cash and cash equivalent balances acquired (125,564)
$ 107,113
  • f. Impact of acquisitions on the results of the Group

The financial results of the acquirees since the acquisition dates, which are included in the consolidated statements of comprehensive income, are as follows:

Leohab
Enterprise Co.,
Ltd. and
Subsidiaries
Revenue $ 51,837
Profit $ 3,689

Had these business combinations been in effect at the beginning of the financial year, the Group’s revenue would have been $10,239,213 thousand, and the profit would have been $996,570 thousand for the year ended December 31, 2020. This pro-forma information is for illustrative purposes only and is not necessarily an indication of the revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2020, nor is it intended to be a projection of future results.

2019

  • a. Subsidiaries acquired
Proportion of
Voting Equity
Interests Consideration
Subsidiary Principal Activity Date of Acquisition
Acquired (%)
Transferred
Gatech
 Metal casting and November 29, 2019 72.81
 $ 550,000
Technology Inc. selling of
and subsidiaries aluminum alloy
and magnesium
alloy

Gatech Technology Inc. and subsidiaries was acquired in order to further enhance the Group’s supply chain integration.

  • 172 -

b. Consideration transferred

Cash

Gatech Technology Inc. and Subsidiaries $ 550,000

c. Assets acquired and liabilities assumed at the date of acquisition

Gatech
Technology Inc.
and
Subsidiaries
Current assets
Cash and cash equivalents $ 303,475
Trade and other receivables 224,959
Inventories 110,504
Other current assets 18,959
Non-current assets
Property, plant and equipment 705,702
Right-of-use assets 45,198
Intangible assets 458
Prepayments for equipment 1,907
Deferred tax assets 44,483
Other non-current assets 6,374
Current liabilities
Short-term borrowings (330,000)
Trade and notes payables (81,592)
Other payables (44,545)
Other current liabilities (2,877)
Non-current liabilities
Bonds payable (150,000)
Net defined benefit liabilities
(10,889)
$ 842,836
  • d. Gain from bargain purchase recognized on acquisitions
Gatech
Technology Inc.
and
Subsidiaries
Consideration transferred $ 550,000
Plus: Non-controlling interests (27.19% in Gatech Technology Inc.) 229,167
Less: Fair value of identifiable net assets acquired (842,836)
Gain from bargain purchase recognized on acquisitions $
63,669

The gain from bargain purchase recognized in the acquisitions of Gatech Technology Inc. and subsidiaries is generated from the differences between consideration transferred and the acquisition of fair value of identifiable net assets acquired, which was recognized as net profit/loss for the year.

  • 173 -

  • e. Net cash outflow on the acquisition of subsidiaries

Gatech
Technology Inc.
and
Subsidiaries
Consideration paid in cash $ 550,000
Less: Cash and cash equivalent balances acquired (303,475)
$ 246,525
  • f. Impact of acquisitions on the results of the Group

The financial results of the acquirees since the acquisition dates, which are included in the consolidated statements of comprehensive income, are as follows:

Gatech
Technology Inc.
and
Subsidiaries
Revenue $ 78,740
Profit $ 3,872

Had these business combinations been in effect at the beginning of the financial year, the Group’s revenue would have been $9,203,029 thousand, and the profit would have been $953,982 thousand for the year ended December 31, 2019. This pro-forma information is for illustrative purposes only and is not necessarily an indication of the revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2019, nor is it intended to be a projection of future results.

26. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On April 21, 2020 and July 27, 2020, the Corporation subscribed for additional new shares of Gatech Technology Inc. at 0.17% and 0.45% from its existing ownership percentage for a cash consideration of $1,345 thousand and $2,470 thousand, respectively, and increased the Corporation’s percentage of ownership from 72.81% to 73.43%.

  • 174 -

The above transactions were accounted for as equity transactions, since the Corporation did not cease to have control over these subsidiaries.

Gatech Gatech
Technology Inc.
Consideration paid $ (3,815)
The proportionate share of carrying amount of the net assets of the subsidiary
transferred to non-controlling interests 5,342
Exchange differences on translating the financial statements of foreign operations (6)
Difference recognized from equity transactions $ 1,521
Adjustment of difference recognized from equity transactions
Capital surplus-difference between actual acquisition of subsidiary’s equity prices and
carrying amount $ 1,521

27. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stockholders through the optimization of the debt and equity balance.

The strategy for managing the capital structure of the Group is based on the scale of the business, the future growth of the industry and the blueprints of the products’ development. The Group calculates trading fund and cash based on its production capacity in order to have a long-term and completed plan. The Group takes into account product competition to estimate the products’ contribution, operating profit margin and cash flow. It also considers the business cycle and the product’s’ life cycle and risks when deciding the appropriate capital structure.

Key management personnel of the Group review the capital structure on a regular basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Generally, the Group uses a cautious risk management strategy.

28. FINANCIAL INSTRUMENTS

  • a. Fair value of financial instruments measured at fair value on a recurring basis

  • 1) Fair value hierarchy

December 31, 2020
Financial assets at FVTPL
Foreign exchange
forward contracts

Listed shares
Structured deposits
Emerging market shares
Overseas unlisted shares
Private funds

 Level 1
$ -

200,701
152,926

6,708

-

-

$ 360,335
 Level 2
$ 22,322


-

-

-

-

-

$ 22,322
 Level 3
$ -


-

-

8,911

51,579

3,088

$ 63,578
 Total
$ 22,322

200,701

152,926

15,619

51,579

3,088
$ 446,235
  • 175 -

December 31, 2019

Financial assets at FVTPL
Listed shares

Emerging market shares
Structured deposits
Overseas unlisted shares
 Level 1
$ 39,800

3,473
52,189

-

$ 95,462
 Level 2
$ -

-

-

-

$ -
Level 3
$ -

6,798

-

50,611

$ 57,409
 Total
$ 39,800

10,271

52,189

50,611
$ 152,871

There were no transfers between Levels 1 and 2 in the current and prior periods.

  • 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2020

Balance at January 1, 2020
Recognized in profit or loss (included in net gain on fair value changes of
financial assets at fair value through profit or loss)
Purchases
Refund of capital reduction
Balance at December 31, 2020
For the year ended December 31, 2019
Balance at January 1, 2019
Recognized in profit or loss (included in net gain on fair value changes of
financial assets at fair value through profit or loss)
Purchases
Transfers out of Level 3
Balance at December 31, 2019		 Financial Assets
at FVTPL
Equity
Instruments
$ 57,409
5,588
5,018

(4,437)
$ 63,578
Financial Assets
at FVTPL
Equity
Instruments
$ 54,099
3,301
3,482

(3,473)
$ 57,409
  • 3) Valuation techniques and inputs applied for level 2 fair value measurement

Financial Instrument Valuation Technique and Inputs Foreign exchange forward Discounted cash flows Future cash flows are estimated based contracts on observable forward exchange rates at the end of the year and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

  • 176 -

  • 4) Valuation techniques and inputs applied for Level 3 fair value measurement

Fair values of emerging market shares are measured using the market approach, while the fair values of overseas unlisted shares and private funds are measured using the asset approach.

  • b. Categories of financial instruments
Financial assets
Mandatorily classified as at FVTPL

Financial assets at amortized cost (1)
Financial liabilities
Financial liabilities at amortized cost (2)		 December 31
2020
2019
$ 446,235
$ 152,871
7,124,038
6,621,835
4,373,990
3,291,944

  • 1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, financial assets at amortized costs, notes receivable, trade receivables, other receivables, and refundable deposits.

  • 2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, notes payable and trade payables, other payables, bonds payable, long-term borrowings, and guarantee deposits received.

  • c. Financial risk management objectives and policies

The Group’s major financial instruments include cash and cash equivalents, financial assets mandatorily classified as at FVTPL, financial assets at amortized costs, equity investment, trade receivables, trade payables, accounts payable, bonds payable, short-term borrowings and lease liabilities. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). There is no change in the method of the measurement of market risk.

There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

Several subsidiaries of the Group have foreign currency sales and purchases, which exposes the Group to foreign currency risk. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 31.

  • 177 -

Sensitivity analysis

The Group is mainly exposed to the USD and RMB.

The following table details the Group’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (functional currency) against the relevant foreign currencies. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 1%. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign exchange forward contracts designated as cash flow hedges, and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. A negative number below indicates a decrease in pre-tax profit associated with the New Taiwan dollar strengthening 1% against the relevant currency. For a 1% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit, and the balances below would be positive.

USD impact
USD:NTD

USD:RMB

USD:VND

RMB impact
RMB:NTD

RMB:USD
 2020
$ 6,816

$ (24,354)

$ (1,335)


$ (2,477)

$ (445)
 2019
$ 3,367
$ (30,719)
$ -
$ (1,953)
$ (950)

This was mainly attributable to the exposure on outstanding receivables in USD and RMB which were not hedged at the end of the reporting period.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign currency risk because the exposure at the end of the reporting period did not reflect the exposure during the period.

b) Interest rate risk

The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk
Financial assets

Financial liabilities
Cash flow interest rate risk
Financial assets		 December 31
2020
2019
$ 988,587
$ 685,348
2,274,865
1,512,984
2,185,789
2,424,021
  • 178 -

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’s exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2020 and 2019 would have decreased/increased by $21,858 thousand and $24,240 thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on its variable-rate deposits.

c) Other price risk

The Group was exposed to equity price risk through its investments in domestic listed shares, domestic emerging market shares, mutual funds and overseas unlisted shares. In addition, the Group has appointed a special team to monitor the price risk and will consider hedging the risk exposure should the need arise.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 1% higher/lower, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $2,679 thousand and $1,007 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Group, could be equal to the total of the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to reduce credit risk, the management team of the Group designated a special team to decide the credit ratings of counterparties and other monitoring procedures to make sure there are appropriate actions taken to collect the overdue receivables. Additionally, on each balance sheet date, the Group reviews the recoverable amounts to ensure appropriate allowances have been made for doubtful accounts. Therefore, the Group considers its credit risk to be significantly reduced.

The Group continuously assesses the financial conditions of customers with outstanding receivables.

As the counterparties of the Group are financial institutions and companies with good credit ratings, the Group has limited credit risk.

  • 179 -

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2020 and 2019, the Group had available unutilized short-term bank loan facilities set out in below.

Financing facilities

Unsecured bank overdraft facilities, reviewed annually and
payable on demand:
Amount used

Amount unused


Secured bank overdraft facilities, review annually and
payable on demand:
Amount used

Amount unused

 December 31 December 31





2020
$ 1,388,436


1,930,200

$ 3,318,636

$ 552,395


169,493

$ 721,888
 2019
$ 1,006,982

1,443,018
$ 2,450,000
$ -

-
$ -

29. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

  • a. Related party name and category
Related Party Name

High Grade Tech Co., Ltd.

Chen Chien Hung

Chen Chien Yuan

Kuan Chen Investment Co., Inc.
 Related Party Category

Associate
Related party in substance (first-degree relative of the
Corporation’s director)
The legal representative of the Corporation’s director (Note)
Related party in substance (director is the first-degree relative
of the Corporation’s director)

Note: Since June 2020, related party in substance has been changed to the legal representative of the Corporation’s director.

  • 180 -

b. Operating expense

Related Party Category / Name Associate

For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2020
$ 7
 2019
$ -
  • c. Property, plant and equipment
Related Party Category/Name

Related party in substance

Lease agreements

Related Party Category
Lease assets acquired
Related party in substance
The legal representative of the Corporation’s director
Line Item
Lease liabilities
Related party in substance
The legal representative of the Corporation’s director

Related Party Category
Interest expense
Related party in substance
The legal representative of the Corporation’s director
Lease expense
Related party in substance
The legal representative of the Corporation’s director		 December 31
2020
2019


$ 550
$ -
For the Year Ended December 31


2020
$ 2,879


1,574

$ 4,453

December		 2019
$ -

-
$ -
31
2020
2019
$ 1,685
$ 374

921

-
$ 2,606
$ 374
**For the Year Ended December 31 **





2020
$ 19


6

$ 25

$ 458


297

$ 755
 2019
$ 13

-
$ 13
$ 946

-
$ 946
  • d. Lease agreements

The rental amounts agreed in lease contracts between the Group and other related parties are determined based on market prices and general payment terms.

  • 181 -

e. Prepayments

Line Item
Related Party Category/Name
Prepaid expense (including
other current assets)
Related party in substance
Compensation of key management personnel

Short-term employee benefits
Post-employment benefits		 December 31
2020
2019
$ -
$ 76
For the Year Ended December 31
2020
$ 59,549

279
$ 59,828		 2019
$ 48,408

253
$ 48,661

f. Compensation of key management personnel

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for short-term borrowings and current portion of bonds payable:

Financial assets at amortized cost - current

Investments accounted for using the equity method
Property, plant and equipment

 **December 31 ** **December 31 **


2020
$ 4,514

-
706,058

$ 710,572
 2019
$ -
317,694

529,385
$ 847,079

31. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

A fire broke out in the premises of Suzhou Fuhongqi Electronics Co., Ltd. on January 20, 2021, which caused damage to some of the plant, machinery, equipment and inventories. The Corporation has property and public liability insurance for the plant, machinery, equipment and inventory, but the cause of the accident is still under investigation. As of March 16, 2021, the Corporation had negotiated with insurance companies to settle the claim and assessed the damage.

32. OTHER ITEMS

Except for the extension of Lunar New Year holiday in accordance with the epidemic prevention regulations of mainland China, the Group’s operations have not been affected by the COVID-19 pandemic.

  • 182 -

33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant financial assets and liabilities of entities in the Group denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between the foreign currencies and respective functional currencies were as follows:

December 31, 2020

Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD $
45,597		 28.480 (USD:NTD) $ 1,298,603
USD 89,596 6.5423 (USD:RMB)
2,551,694
USD 4,686 25,689 (USD:VND)
133,457
RMB 64,678 4.3770 (RMB:NTD)
283,096
RMB 10,167 0.1537 (RMB:USD)
44,501
THB 5,874 0.9556 (THB:NTD)
5,613
Non-monetary items
Financial assets at FVTPL - non-current
USD 1,342 28.480 (USD:NTD)
51,579
Financial liabilities
Monetary items
USD 69,530 28.480 (USD:NTD)
1,980,214
USD 4,083 6.5423 (USD:RMB)
116,284
RMB 8,095 6.5423 (RMB:NTD)
35,432
December 31, 2019
Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD $
41,587		 29.980 (USD:NTD) $ 1,246,778
USD 106,932 6.9762 (USD:RMB)
3,205,821
RMB 45,357 4.305 (RMB:NTD)
195,262
RMB 22,072 4.143 (RMB:USD)
95,020
Non-monetary items
Financial assets at FVTPL - non-current
USD 1,500 29.980 (USD:NTD)
50,611
Financial liabilities
Monetary items
USD 52,819 29.980 (USD:NTD)
1,583,514
USD 4,468 6.9762 (USD:RMB)
133,951
  • 183 -

The Group is mainly exposed to the USD and RMB. The following information was aggregated by the functional currencies of the group entities in the Group, and the exchange rates between respective functional currencies and the presentation currency were disclosed. The significant foreign exchange gains (losses) were as follows:

For the Year Ended December 31

Foreign
Currency
NTD
USD
RMB
VND
THB
SGD		 2020
Exchange Rate
Net Foreign
Exchange Gains
(Losses)
1 (NTD:NTD) $ 27,444
28.480 (USD:NTD)
(9,026)
4.3770 (RMB:NTD) (169,930)
0.00111 (VND:NTD)
(1,967)
0.9556 (THB:NTD)
(1)
21.56 (SGD:NTD)
(14)
$ (153,494)		 2019
Exchange Rate
Net Foreign
Exchange Gains
(Losses)
1 (NTD:NTD) $ 8,740
29.980 (USD:NTD)
733
4.305 (RMB:NTD)
49,642
- (VND:NTD)
-
- (THB:NTD)
-
- (SGD:NTD)
-
$ 59,115

34. SEPARATELY DISCLOSED ITEMS

  • a. Information about significant transactions and investees:

  • 1) Financing provided to others (Table 1)

  • 2) Endorsements/guarantees provided (Table 2)

  • 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (Table 3)

  • 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (Table 4)

  • 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)

  • 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)

  • 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 5)

  • 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 6)

  • 9) Trading in derivative instruments (None)

  • 10) Intercompany relationships and significant intercompany transactions (Table 9)

  • 11) Information on investees (Table 7)

  • 184 -

  • b. Information on investments in mainland China

  • 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 8)

  • 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Tables 1, 2, 5, 6 and 9):

    • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

    • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

    • c) The amount of property transactions and the amount of the resultant gains or losses.

    • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

    • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

    • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.

  • c. Information of major shareholders with ownership of 5% or greater showing the name of shareholders, the number of shares owned and percentage of ownership of each shareholder (None)

35. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group’s reportable segments under IFRS 8 “Operating Segments” were electronic equipment and molding.

No operating segments were closed during the year.

  • 185 -

a. Segment revenue and results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segments:

Equipment - electronic parts

- plastic molding

Revenue from continuing
operations

Interest income
Gain from bargain purchase -
acquisitions of subsidiaries
Other income
Other gains and losses
Net foreign exchange (loss)
gain
Net gain on financial assets at
fair value through profit or
loss
Share of profit of associates
Interest expenses
Impairment loss on goodwill
General and administrative
expenses
Income before tax		 Income
2020
2019
$ 9,222,383 $ 8,058,052

440,958

524,292

$ 9,663,341
$ 8,582,344

 Loss Loss


2020
$ 9,222,383

440,958

$ 9,663,341


2020
$ 1,985,317

130,866

2,116,183
35,901
19,323
42,663
(9,764)
(153,494)
54,357
4,185
(27,342)
-

(584,491)

$ 1,497,521
 2019
$ 1,723,443

80,900

1,804,343

26,755

63,669

44,191

(8,720)

59,115

40,794

3,939

(20,568)

(42,180)

(526,348)
$ 1,444,990

The above segment revenue and results were generated from the transactions with external customers. There were no inter-segment transactions in 2020 and 2019.

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs and directors’ salaries, interest income, gain from bargain purchase - acquisitions of subsidiaries, other gains and losses, net foreign exchange gain, net gain on financial assets at fair value through profit or loss, share of profit of associates, interest expense, goodwill impairment loss and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

b. Segment total assets

The Group has no key operational personnel to monitor segment performance, and thus, the amount of segment assets is zero.

c. Other segment information

Plastic molding department

Electronic parts department

 **Depreciation and Amortization ** **Depreciation and Amortization ** **Depreciation and Amortization **


2020
$ 54,331

261,354

$ 315,685
 2019
$ 56,768

198,227
$ 254,995
  • 186 -

d. Revenue from major products and services

The following is an analysis of the Group’s revenue from continuing operations from its major products and services.


Display hinges

Molding equipment

 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2020
$ 9,222,383


440,958

$ 9,663,341
 2019
$ 8,058,052

524,292
$ 8,582,344

e. Geographical information

The Group operates in three principal geographical areas - Samoa, USA, China and Taiwan.

The Group’s revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are detailed below.


China

Taiwan
Other

 **For the Year Ended December 31 ** **For the Year Ended December 31 ** **For the Year Ended December 31 **


2020
$ 5,676,649

3,943,924

42,768

$ 9,663,341
 2019
$ 5,154,081
3,386,230

42,033
$ 8,582,344

f. Information about major customers

Revenue in 2020 and 2019 were $9,663,341 thousand and $8,582,344 thousand, respectively and each single customer contributing 10% or more to the Group’s revenue was as follows:

Client Code
A

B
C		 For the Year Ended December 31 For the Year Ended December 31
2020
Sales
% of
Revenue
$ 2,497,956
25.85

1,393,966
14.43
1,055,015
10.92		 2019
Sales
% of
Revenue
$ 2,315,820
26.98
1,299,662
15.14
1,135,567
13.23
  • 187 -

TABLE 1

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest
Balance for
the Period		 Ending
Balance		 Actual
Amount
Borrowed		 Interest Rate
(%)		 Nature of
Financing		 Business
Transaction
Amount		 Reasons for
Short-term
Financing		 Allowance for
Impairment
Loss		 Collateral Collateral Financing Limit
for Each Borrower
Aggregate
Financing Limit
Item Value
0 Syncmold Enterprise
Corporation		 Syncmold Enterprise
(Samoa) Corp.
Grand Advance Inc.
Syncmold Enterprise
Vietnam Co., Ltd.
Gatech Technology
Inc.
Leohab Enterprise
Co., Ltd.
Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes
Yes
Yes
Yes		 $ 100,000
100,000
250,000
200,000
300,000		 $ 100,000
100,000
250,000
200,000
300,000		 $ -
-
-
-
-		 -
-
-
-
-		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing		 $ -
-
-
-
-		 Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital		 $ -
-
-
-
-		 -
-
-
-
-		 -
-
-
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
1 Syncmold Enterprise
(Samoa) Corp.		 Fujian Khuan Hua
Precise Mold.,
Ltd.
Forever Business
Development
Limited
Dongguan Khuan
Huang Precise
Mold Plastic Co.,
Ltd.
Syncmold Enterprise
Corporation		 Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties		 Yes
Yes
Yes
Yes		 56,960
85,440
85,440
213,600		 56,960
85,440
85,440
213,600		 -
-
-
42,720		 -
-
-
0.00		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing		 -
-
-
-		 Operating
capital
Operating
capital
Operating
capital
Operating
capital		 -
-
-
-		 -
-
-
-		 -
-
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)

(Continued)

  • 188 -
No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest
Balance for
the Period		 Ending
Balance		 Actual
Amount
Borrowed		 Interest Rate
(%)		 Nature of
Financing		 Business
Transaction
Amount		 Reasons for
Short-term
Financing		 Allowance for
Impairment
Loss		 Collateral Collateral Financing Limit
for Each Borrower
Aggregate
Financing Limit
Item Value
2 Grand Advance Inc. Kunshan Fulfil Tech
Co., Ltd.
Syncmold Enterprise
(Samoa) Corp.
Full Big Limited
Zhongshan Fulfil
Tech Co., Ltd.
Chongqing Fulfil
Tech Co., Ltd.
Fuzhou Fulfil Tech
Co., Ltd.
Suzhou Fulfil
Electronics Co.,
Ltd.
Syncmold Enterprise
(USA) Corp.
Fullking
Development
Limited
Syncmold Enterprise
Corporation		 Other receivables
from related parties

Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties		 Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes		 $ 85,440
85,440
85,440
199,360
199,360
199,360
199,360
25,632
128,160
412,960		 $ 85,440
85,440
85,440
85,440
85,440
85,440
85,440
25,632
128,160
412,960		 $ -
-
-
-
-
-
-
11,392
42,720
284,800		 -
-
-
-
-
-
-
0.00
0.00
0.00		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing		 $ -
-
-
-
-
-
-
-
-
-		 Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital		 $ -
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
3 Fuzhou Fulfil Tech Co., Ltd Fujian Khuan Hua
Precise Mold.,
Ltd.
Fuqing Foqun
Electronic
Hardware Tech
Co., Ltd.
Suzhou Fulfil
Electronics Co.,
Ltd.		 Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes
Yes		 69,837
69,837
69,837		 69,837
69,837
69,837		 -
-
-		 -
-
-		 Short-term
financing
Short-term
financing
Short-term
financing		 -
-
-		 Operating
capital
Operating
capital
Operating
capital		 -
-
-		 -
-
-		 -
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
(Continued)
  • 189 -
No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest
Balance for
the Period		 Ending
Balance		 Actual
Amount
Borrowed		 Interest Rate
(%)		 Nature of
Financing		 Business
Transaction
Amount		 Reasons for
Short-term
Financing		 Allowance for
Impairment
Loss		 Collateral Collateral Financing Limit
for Each Borrower
Aggregate
Financing Limit
Item Value
4 Full Big Limited Grand Advance Inc.
Fullking
Development
Limited		 Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes		 $ 17,088
39,872		 $ -
22,784		 $ 22,784 -
0.00		 Short-term
financing
Short-term
financing		 $ -
-		 Operating
capital
Operating
capital		 $ -
-		 -
-		 -
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
5 Suzhou Fulfil Electronics
Co., Ltd.		 Kunshan Fulfil Tech
Co., Ltd.		 Other receivables
from related parties		 Yes 39,283 39,283 - - Short-term
financing		 - Operating
capital		 - - - $1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
6 Zhongshan Fulfil Tech Co.,
Ltd.		 Dongguan Khuan
Huang Precise
Mold Plastic Co.,
Ltd.
Chongqing Fulfil
Tech Co., Ltd.
Suzhou Fulfil
Electronics Co.,
Ltd.		 Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes
Yes		 34,918
34,918
34,918		 34,918
34,918
34,918		 -
-
-		 -
-
-		 Short-term
financing
Short-term
financing
Short-term
financing		 -
-
-		 Operating
capital
Operating
capital
Operating
capital		 -
-
-		 -
-
-		 -
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)

Note 1: The authorized amount of loans was approved by the board of directors.

Note 2: The highest balance, ending balance, and the actual amount borrowed were calculated based on the exchange rate at the end of 2020.

Note 3: All the transaction in the table above have been eliminated during the preparation of the consolidated financial statements.

  • 190 -

TABLE 2

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Endorser/Guarantor Endorsee/Guarantee Endorsee/Guarantee Limit on
Endorsement/
Guarantee Given on
Behalf of Each Party		 Maximum
Amount
Endorsed/
Guaranteed
During the
Period		 Outstanding
Endorsement/
Guarantee at the
End of the Period		 Actual
Borrowing
Amount		 Amount
Endorsed/
Guaranteed by
Collateral		 Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity in Latest
Financial
Statements
(%)
Aggregate
Endorsement/
Guarantee Limit		 Endorsement/
Guarantee Given
by Parent on
Behalf of
Subsidiaries
Endorsement/
Guarantee Given
by Subsidiaries
on Behalf of
Parent		 Endorsement/
Guarantee Given
on Behalf of
Companies in
Mainland China
Name Relationship
0 Syncmold Enterprise Corporation Syncmold Enterprise
(Samoa) Corp.
Full Big Limited
Forever Business
Development Limited
Fullking Development
Limited
Full Celebration Limited		 Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary		 $1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(Net worth of the
corporation 30%)		 $ 56,960
(US$ 2,000
thousand)
626,560
(US$ 22,000
thousand)
626,560
(US$ 22,000
thousand)
626,560
(US$ 22,000
thousand)
-		 $ 56,960
(US$ 2,000
thousand)
(Notes 1 and 5)
-
626,560
(US$ 22,000
thousand)
(Notes 2, 3
and 5)
284,800
(US$ 10,000
thousand)
(Notes 3 and 5)
-		 $ -
-
570
-
-		 $ -
-
-
-
-		 0.97
-
10.62
4.83
-		 $2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(Net worth of the
corporation 50%)		 Y
Y
Y
Y
Y		 -
-
-
-
-		 -
-
-
-
-
1 Leohab Enterprise Co., Ltd. Commuwell Enterprise
(Thailand) Co., Ltd.		 Subsidiary $128,399
(50% of the net worth
of Leohab
Enterprise Co.,
Ltd.)		 102,249
(THB 107,000
thousand)		 64,025
(THB
67,000
thousand)
(Notes 4 and 5)		 3,822 - 1.09 $256,797
(100% of the net
worth of Leohab
Enterprise Co.,
Ltd.)		 N - -

Note 1: The co-financing amount of endorsement and guarantees by Syncmold Enterprise (Samoa) Corp. to bank A is $56,960 thousand.

Note 2: The co-financing amount of endorsement and guarantees by Forever Business Development Limited to bank D is $341,760 thousand.

Note 3: The co-financing amount of endorsement and guarantees by Forever Business Development Limited and Fullking Development Limited to bank E is $284,800 thousand.

Note 4: The co-financing amount of endorsement and guarantees by Commuwell Enterprise (Thailand) Corporation Limited to bank A is $64,025 thousand.

Note 5: The Corporation co-financed most of the endorsement and guarantee amounts, and the Corporation’s total balance for endorsements and guarantees is $683,520 thousand. The Corporation and its subsidiaries’ total amount for endorsements and guarantees is $747,545 thousand.

  • 191 -

TABLE 3

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name Type and Name of Marketable Securities Relationship with the
Holding Company		 Financial Statement Account December 31, 2020 December 31, 2020 Note
Number of
Shares		 Carrying
Amount		 Percentage of
Ownership (%)		 Fair Value
Syncmold Enterprise Corporation
Dongguan Khuan Huang Precise
Mold Plastic Co.,
Kunshan Fulfil Tech Co., Ltd.
Gatech (Suzhou) Inc.		 Stock
Gigastone Corporation
Tiga Gaming Inc.
Foxfortune Technology Limited
Hercules BioVenture, L.P.
Largan Precision Co., Ltd.
Winmate Inc.
Advanced Wireless Semiconductor Company
Auras Technology Co., Ltd.
Private funds
China Development of Healthcare Venture of
Limited Partnership
Structured deposit
Peoples’ profit 140 and 146 from E.SUN Bank
Monthly profit 20120390 from Fubon Bank
Monthly profit 20120398 from Fubon Bank		 -
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at FVTPL - non-current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - current		 847,011
1,332,132
1,000,000
184,210
9,000
1,038,000
379,198
200,000
5,017,715
-
-
-		 $ 6,708
8,911
39,425
12,154
28,755
77,954
51,192
42,800
3,088
65,508
43,648
43,770		 1.66
5.06
5.80
2.63
0.01
1.44
0.25
0.23
0.96
-
-
-		 $ 6,708
8,911
39,425
12,154
28,755
77,954
51,192
42,800
3,088
65,508
43,648
43,770		 (Notes 2 and 6)
(Notes 3 and 6)
(Notes 4 and 6)
(Notes 4 and 6)
(Notes 2 and 6)
(Notes 2 and 6)
(Notes 2 and 6)
(Notes 2 and 6)
(Notes 4 and 6)
(Notes 5 and 6)
(Notes 5 and 6)
(Notes 5 and 6)

Note 1: The negotiable securities in the table above are the shares, bonds and mutual funds recognized under IFRS 9 - “Financial Instruments”.

Note 2: The shares are calculated at the strike price as of December 31, 2020.

Note 3: The shares are measured using the market approach.

Note 4: The shares are measured using the asset approach.

Note 5: The structured commodity is calculated at its contract worth as of December 31, 2020.

Note 6: No guarantees, pledged collateral or other restricted situations.

Note 7: Refer to Tables 7 and 8 for information on investments in subsidiaries and associates.

  • 192 -

TABLE 4

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Type and Name of
Marketable Securities		 Financial Statement
Account		 Counterparty Relationship Beginning Balance Beginning Balance Acquisition Acquisition Disposal Disposal Ending Balance
Number of
Shares		 Amount Number of
Shares		 Amount Number of
Shares		 Amount Carrying
Amount		 Gain on
Disposal		 Shares Amount
Syncmold Enterprise
Corporation		 Stock
Syncmold Enterprise
Vietnam Co., Ltd.		 Investments accounted
for using the equity
method
Syncmold Enterprise
Vietnam Co., Ltd.
Subsidiary		 - $ - - $ 302,444 - $ - $ - $ -
(Note)		 - $ 242,441
(Note)

Note: The amount in the end of period includes the adjustments using the equity method, which are original investment for $302,444 thousand, and adjustment to investment losses recognized by ownership percentage of $(15,941) thousand and other comprehensive income of $(44,062) thousand.

  • 193 -

TABLE 5

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer Related Party Relationship Transaction Details Transaction Details Abnormal Transaction Abnormal Transaction Notes/Accounts
Receivable (Payable)		 Notes/Accounts
Receivable (Payable)		 Note
Purchase/
Sale		 Amount % of
Total		 Payment Terms Unit Price Payment Terms Ending Balance
% of
Total
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Fuqing Foqun Electronic Hardware
Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Dongguan Khuan Huang Precise
Mold Plastic Co., Ltd.		 Zhongshan Fufil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Fuqing Foqun Electronic Hardware Tech Co.,
Ltd.
Dongguan Khuan Huang Precise Mold Plastic
Co., Ltd.
Fuqing Foqun Electronic Hardware Tech Co.,
Ltd.
Dongguan Khuan Huang Precise Mold Plastic
Co., Ltd.
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Syncmold Enterprise Corporation
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.		 Subsidiary
Subsidiary
Subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Parent company
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Parent company
Parent company
Indirect subsidiary
Indirect subsidiary		 Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Sales
Sales
Sales
Sales
Sales
Sales
Sales
Sales		 $ 1,505,534
1,365,186
340,741
587,473
213,733
157,004
360,996
307,287
(1,505,534)
(587,473)
(360,996)
(213,733)
(1,365,186)
(340,741)
(157,004)
(307,287)		 44
40
10
20
7
5
29
18
64
100
54
32
36
21
27
53		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1		 $ -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 $ (518,441)
(560,484)
(79,865)
(138,333)
(53,508)
(42,885)
(68,497)
(64,510)
518,441
138,333
68,497
53,508
560,484
79,865
42,885
64,510		 53
45
6
17
6
5
15
11
53
100
44
34
32
17
34
51

Note 1: Payment terms are the same as the payment terms of non-related parties.

Note 2: All the transactions in the table above have been eliminated during the preparation of the consolidated financial statements.

  • 194 -

TABLE 6

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Related Party Relationship Ending Balance
(Note 1)
Turnover
Rate		 Overdue Amount
Received in
Subsequent
Period		 Allowance for
Impairment
Loss
Amount Actions Taken
Grand Advance Inc.
Zhongshan Fufil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Suzhou Leoho Electronics Co., Ltd.		 Syncmold Enterprise Corporation
Syncmold Enterprise Corporation
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Leohab Enterprise Co., Ltd.		 Parent company
Parent company
Parent company
Indirect subsidiary
Indirect subsidiary		 $ 284,800
(Note 1)
518,441
560,484
138,333
166,545		 -
-
-
-
-		 $ -
-
-
-
-		 -
-
-
-
-		 $ 284,800
258,320
287,414
132,077
23,667		 $ -
-
-
-
-

Note 1: Financing.

Note 2: All the transactions in the table above have been eliminated during the preparation of the consolidated financial statements.

  • 195 -

TABLE 7

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company Investee Company Location Main Businesses and Products Original Investment
Amount		 Original Investment
Amount		 As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 Net Income
(Loss) of the
Investee		 Share of
Profit (Loss)		 Note
December 31,
2020
December 31,
2019
Number of
Shares		 % Carrying
Amount
Syncmold Enterprise Corporation
Grand Advance Inc.
Syncmold Enterprise (Samoa) Corp.
Gatech Technology Inc.
Gatech Holdings Ltd.
Leohab Enterprise Co., Ltd.
Sweet International Group Ltd.
Lucky King Holdings Ltd.		 Syncmold Enterprise (Samoa)
Corp.
Grand Advance Inc.
Syncmold Enterprise (USA) Corp.
High Grade Tech Co., Ltd.
Corebio Technologies Co., Ltd.
Leohab Enterprise Co., Ltd.
Gatech Technology Inc.
Syncmold Enterprise Vietnam
Co., Ltd.
Syncmold Enterprise (Malaysia)
Sdn., Ltd.
Syncmold Enterprise (Singapore)
Pte., Ltd.
Syncmold Enterprise (Thailand)
Co., Ltd.
Canford International Limited
Fullking Development Limited
Full Glary Holding Limited
Full Big Limited
Forever Business Development
Limited
Full Celebration Limited
Gatech Holding Ltd.
Gatech International
Sweet International Group Ltd.
Lucky King Holdings Ltd.
Commuwell Enterprise (Thailand)
Co., Ltd.		 Samoa
Samoa
USA
Taiwan
Taiwan
Taiwan
Taiwan
Vietnam
Malaysia
Singapore
Thailand
Samoa
Hong Kong
Hong Kong
Samoa
Samoa
Samoa
Samoa
Samoa
British Virgin
Islands
Merisis
Thailand		 Trading and related import and export businesses of
metal molds and plastic molds as well as the
reinvestment of subsidiaries in mainland China
Trading, import and export and investment in electronic
parts
Trading, import and export in electronic parts
The design and sale of television hangers and related
import and export businesses
Medical technology and precision instrument wholesale
and retail
Precision hardware components manufacturing
Precise molding and magnesium alloy die caster
manufacturing and transaction business
Trading, import and export and investment in electronic
parts
Trading, import and export in electronic parts,
customer support and service center
Trading, import and export in electronic parts,
electronic components and parts design
Trading, import and export and investment in electronic
parts
Import and export trade and investment business
Import and export trade and investment business
Import and export trade and investment business
Reinvestment in subsidiaries in mainland China and
international trade
Reinvestment in subsidiaries in mainland China and
international trade
Reinvestment in subsidiaries in mainland China and
international trade
General investment business
General investment business
General investment business
General investment business
Plastic shot and hardware components manufacturing		 $ 110,598

506,240
32
36,075

52,000
232,677
553,815

302,444
3,639
1,100

19,920
119,342
160,175
259,720
16,643
125,957
147,710
647,041
657,284
280,368
280,368
113,236		 $ 110,598

506,240

32

36,075

52,000

-

550,000

-

-

-

-

119,342

160,175

259,720

16,643

125,957

147,710

647,041

657,284

280,368

280,368

113,236
3,546

-

-

2,280

5,200

16,620

42,207

-

-

-

-

-

-

-

-

-

-

20,130

20,268

-

-

-		 100.00
100.00
100.00
38.00
38.29
70.00
73.43
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 $ 2,537,652
3,023,481
(2,522)
128,639
35,917
253,967
645,537
242,441
1,882
593
15,243
1,415,412
982,035
310,456
235,578
335,845
248,069
626,918
626,894
505,170
505,170
177,504		 $ 276,919

649,350

(218)

39,527

(28,296)

3,689

25,545

(15,941)

(1,501)

(477)

(4,757)

338,527

317,168

54,807

2,886

51,037

(24,570)

17,027

17,028

4,199

4,199

4,092		 $ 274,294

647,505

(218)

15,020

(10,835)

2,464

19,155

(15,941)

(1,501)

(477)

(4,757)

338,527

317,163

53,198

2,886

48,271

(24,570)

17,027

17,028

4,199

4,199

4,092		 (Note 1)
(Note 1)

(Note 1)
(Note 1)

(Note 1)
(Note 1)




(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)

(Note 1)
(Note 1)
(Note 1)

(Continued)

  • 196 -

Note 1: Calculated based on the audited financial statements of the investee company and the Corporation’s shareholding ratio.

Note 2: Refer to Table 8 for related information on investees from mainland China.

Note 3: The profit and loss of investments between reinvested companies, investments accounted for using the equity method, and the equity of investee companies were all eliminated during the preparation of the consolidated financial statements, except for High Grade Tech Co., Ltd. and Corebio Technology Co., Ltd.

(Concluded)

  • 197 -

TABLE 8

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Main Businesses and Products Paid-in Capital Method of Investment
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31,
2020		 Remittance of Funds Remittance of Funds Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31,
2020		 Net Income (Loss)
of the Investee
% Ownership of
Direct or
Indirect
Investment		 Investment
Gain (Loss)		 Carrying Amount
as of
December 31,
2020		 Accumulated
Repatriation of
Investment
Income as of
December 31,
2020
Outward Inward
Fuzhou Fulfil Tech Co., Ltd.
Fujian Khuan Hua Precise Mold.,
Ltd.
Fuqing Foqun Electronic Hardware
Tech Co., Ltd.
Dongguan Khuan Huang Precise
Mold Plastic Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Chongqing Fulfil Tech Co., Ltd.
Gatech (Suzhou) Inc.
Suzhou Leoho Electronics Co., Ltd.		 Electronic parts processing
manufacturing. Trading and
related import and export
business
Processing, manufacturing, trading
and related import and export
business of various metal molds,
plastic molds and plastic
injection molds
Electronic parts processing
manufacturing. Trading and
related import and export
business
Processing, manufacturing, trading
and related import and export
business of various metal molds,
plastic molds and plastic
injection molds
Electronic parts processing
manufacturing. Trading and
related import and export
business
Electronic parts processing
manufacturing. Trading and
related import and export
business
Manufacturing and assembling of
laptops uses precise bearing,
hardware and related accessories
The processing, manufacturing,
related imports and exports of all
electronic, plastic and hardware
parts
Aluminum and magnesium alloy
die caster
Precision hardware components
manufacturing		 $ 42,300
108,311
57,723
122,391
18,064
148,959

228,740
135,983
692,064
201,755		 Invested through
Syncmold Enterprise
(Samoa) Corp.
Invested through
Syncmold Enterprise
(Samoa) Corp.
Invested through
Syncmold Enterprise
(Samoa) Corp.
Invested through Forever
Business Development
Limited
Invested through Canford
International Limited
Invested through Fullking
Development Limited
Invested through Full
Glary Holding Limited
Invested through Full
Celebration Limited
Invested through Gatech
International
Invested through Lucky
King Holdings Ltd.		 $ 59,324
(US$ 2,083
thousand)
38,619
(US$ 1,356
thousand)
-
-
-

-
170,880
(US$ 6,000
thousand)
-
692,064
(US$ 24,300
thousand)
127,533
(US$ 4,478
thousand)		 $ -
-
-
-
-
-
-
-
-
-		 $ -
-
-
-
-
-
-
-
-
-		 $ 59,324
(US$ 2,083
thousand)
38,619
(US$ 1,356
thousand)
-
-
-
-
170,880
(US$ 6,000
thousand)
-
692,064
(US$ 24,300
thousand)
127,533
(US$ 4,478
thousand)		 $ 221,651
(854)
27,308
46,472
341,807
315,671
54,834
(23,822)
8,909
110		 100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
73.43
70.00		 $ 223,215
3,471
27,308
48,011
341,807
321,412
54,809
(23,822)
12,521
77		 $ 1,078,503
310,018
244,654
252,270
1,415,674
1,046,542
312,017
248,058
625,602
327,666		 $ 1,929,919
(US$ 67,764
thousand)
-
22,841
(US$ 802
thousand)
-
1,214,102
(US$ 42,630
thousand)
1,192,059
(US$ 41,856
thousand)
-
516,172
(US$ 18,124
thousand)
-
-

(Continued)

  • 198 -

(Concluded)

Accumulated Outward Remittance for
Investment in Mainland China as of
December 31, 2020		 Investment Amount Authorized by the
Investment Commission, MOEA		 Upper Limit on the Amount of
Investment Stipulated by the
Investment Commission, MOEA
$1,300,824
(US$45,675 thousand)		 $2,205,577
(US$77,443 thousand)		 $3,745,101

Note 1: Calculated based on the audited financial statements of the investee company and the Corporation’s shareholding ratio.

Note 2: The profit and loss of investments between reinvested companies, investments accounted for using the equity method, and the equity of investee companies were all eliminated during the preparation of the consolidated financial statements

  • 199 -

TABLE 9

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.
(Note 1)		 Investee Company Counterparty Relationship
(Note 2)		 Transaction Details Payment Terms % of Total
Sales or Asset
(Note 3)
Financial Statement Account Price
0 Syncmold Enterprise Corporation Gatech (Suzhou) Inc.
Fujian Khuan Hua Precise Mold., Ltd.		 1
1		 Other receivables from related parties
Other receivables from related parties		 $ 14,518
12,582		 Based on the contract between both parties
Based on the contract between both parties		 -
-
1 Zhongshan Fufil Tech Co., Ltd. Syncmold Enterprise Corporation
Syncmold Enterprise Corporation		 2
2		 Sales
Trade receivables from related parties		 1,505,534
518,441		 No significant difference with non-related parties
No significant difference with non-related parties		 15
4
2 Dongguan Kwan Huang Precision Mold
Plastic Co., Ltd.		 Zhongshan Fufil Tech Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.		 3
3
3
3
3		 Sales
Trade receivables from related parties
Sales
Sales
Trade receivables from related parties		 307,287
64,510
80,401
157,004
42,885		 No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties		 3
1
1
2
-
3 Fuzhou Fulfil Tech Co., Ltd. Syncmold Enterprise Corporation
Syncmold Enterprise Corporation		 2
2		 Accounts receivable from related parties
Sales		 79,865
340,741		 No significant difference with non-related parties
No significant difference with non-related parties		 1
4
4 Fuqing Foqun Electronic Hardware Tech
Co., Ltd.		 Fuzhou Fulfil Tech Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.		 3
3
3
3
3
3		 Sales
Trade receivables from related parties
Sales
Trade receivables from related parties
Sales
Trade receivables from related parties		 360,996
68,497
213,733
53,508
98,747
34,448		 No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties		 4
1
2
-
1
1
5 Grand Advance Inc. Syncmold Enterprise Corporation
Fullking Development Limited		 2
3		 Other receivables from related parties
Other receivables from related parties		 284,800
42,720		 Based on the contract between both parties
Based on the contract between both parties		 2
-
6 Suzhou Fulfil Electronics Co., Ltd. Syncmold Enterprise Corporation
Syncmold Enterprise Corporation		 2
2		 Trade receivables from related parties
Sales		 560,484
1,365,186		 No significant difference with non-related parties
No significant difference with non-related parties		 5
14
7 Full Big Limited Fullking Development Limited 3 Other receivables from related parties 22,784 Based on the contract between both parties -
8 Forever Business Development Limited Dongguan Khuan Huang Precise Mold Plastic
Co., Ltd.		 3 Other receivables from related parties 17,158 No significant difference with non-related parties -
9 Kunshan Fulfil Tech Co., Ltd. Suzhou Fulfil Electronics Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.		 3
3		 Trade receivables from related parties
Sales		 138,333
587,473		 No significant difference with non-related parties
No significant difference with non-related parties		 1
6

(Continued)

  • 200 -
No.
(Note 1)		 Investee Company Counterparty Relationship
(Note 2)		 Transaction Details Payment Terms % of Total
Sales or Asset
(Note 3)
Financial Statement Account Price
10 Chongqing Fulfil Tech Co., Ltd. Suzhou Fulfil Electronics Co., Ltd.
Syncmold Enterprise Corporation
Syncmold Enterprise Corporation		 3
2
2		 Trade receivables from related parties
Sales
Trade receivables from related parties		 $ 29,397
60,036
134,057		 No significant difference with non-related parties
No significant difference with non-related parties
No significant difference with non-related parties		 -
-
1
11 Syncmold Enterprise (Samoa) Corp. Fujian Khuan Hua Precise Mold., Ltd.
Syncmold Enterprise Corporation		 3
3		 Other receivables from related parties
Other receivables from related parties		 43,851
42,720		 Based on the contract between both parties
Based on the contract between both parties		 -
-
12 Fujian Khuan Hua Precise Mold Ltd. Suzhou Fulfil Electronics Co., Ltd. 3 Trade receivables from related parties 22,134 No significant difference with non-related parties -
13 Suzhou Leoho Electronics Co., Ltd. Leoho Electronics Co., Ltd. 3 Trade receivables from related parties 166,545 Based on the contract between both parties 1

Note 1: 0 represents the parent company and the subsidiaries are numbered from 1.

  • Note 2: 1 represents transactions from the parent company to the subsidiaries, 2 represents transactions from the subsidiaries to the parent company, and 3 represents transactions between the subsidiaries.

  • Note 3: The monetary amount of the transaction is calculated based on percentage of total sales or assets. If the account is an asset or a liability, the ratio is calculated using the ending balance. If the account is in the income statement, the ratio is calculated using cumulative amount during that period.

Note 4: The disclosure standard of the table above was 10% of the specified account and reached to $10,000 thousand.

Note 5: All the transactions in the table above have been eliminated during the preparation of the consolidated financial statements.

(Concluded)

  • 201 -

Syncmold Enterprise Corporation

Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

202

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Syncmold Enterprise Corporation

Opinion

We have audited the accompanying financial statements of Syncmold Enterprise Corporation (the “Corporation”), 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 the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, based on our audits and the report of other auditors (refer to the other matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation 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 audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 for the year ended December 31, 2020. 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.

203

Key audit matter of the Corporation’s financial statements for the year ended December 31, 2020 is stated as follows:

Occurrence of Sales Revenue

The sales revenue of the Corporation is mainly generated from the sales of monitor hinge products. Most of the sales were highly concentrated on major customers, which revenue accounted for 63.54% of total sales revenue in 2020. Due to the high frequency and significant amounts of transactions with major customers, the occurrence of sales revenue was deemed as a key audit matter for the year ended December 31, 2020. Refer to Note 4 to the financial statements for the related revenue recognition policies.

In response to this key audit matter, our main audit procedures performed in the assessment of the recognition of sales revenue of the Corporation were as follows:

  1. We understood the design and implementation of internal controls and assessed the operating effectiveness of relevant controls.

  2. We performed detailed verification tests on the selected samples of sales revenue, and checked transaction vouchers and future sales returns and discounts of major customers to confirm the occurrence of sales revenue.

Other Matter

We did not audit the financial statements of associates accounted for using the equity method, these were instead audited by other auditors. Our opinion, insofar as it relates to the amounts included for associates accounted for using the equity method, is based solely on the report of other auditors. As of December 31, 2020 and 2019, the amounts of investments accounted for using the equity method were NT$418,523 thousand and NT$168,252 thousand, respectively, which accounted for 4.54% and 2.03% of the Corporation’s total assets, respectively. For the years ended December 31, 2020 and 2019, share of profit of associates accounted for using the equity method amounted to NT$9,671 thousand and NT$3,939 thousand, respectively, which accounted for 1.00% and 0.53% of the Corporation’s total comprehensive income, respectively.

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 the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of 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 Corporation’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 Corporation or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including supervisors, are responsible for overseeing the Corporation’s financial reporting process.

204

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

  1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control.

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

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’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 Corporation to cease to continue as a going concern.

  5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Corporation to express an opinion on the 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.

205

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 for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tung-Feng Lee and Chih-Yuan Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

March 16, 2021

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with 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 financial statements are those generally applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

206

SYNCMOLD ENTERPRISE CORPORATION

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash (Notes 4 and 6)

Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Notes receivable
Trade receivables, net (Notes 4 and 8)
Trade receivables from related parties (Notes 4 and 25)
Other receivables from related parties (Notes 4 and 25)
Current tax assets (Notes 4 and 20)
Inventories (Notes 4 and 9)
Other current assets (Note 4)

Total current assets

NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Investments accounted for using the equity method (Notes 4, 10 and 22)
Property, plant and equipment (Notes 4, 11 and 25)
Right-of-use assets (Notes 4, 12 and 25)
Goodwill (Notes 4 and 13)
Intangible assets (Notes 4 and 14)
Deferred tax assets (Notes 4 and 20)
Prepayments for land, property and equipment
Net defined benefit assets (Notes 4 and 17)
Refundable deposits

Total non-current assets

TOTAL

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Short-term borrowings (Notes 4 and 15)

Notes payable and trade payables

Trade payables from related parties (Note 25)

Other payables (Note 16)

Other payables from related parties (Note 25)

Current tax liabilities (Notes 4 and 20)

Lease liabilities - current (Notes 4 and 12)

Other current liabilities


Total current liabilities


NON-CURRENT LIABILITIES

Deferred tax liabilities (Notes 4 and 20)

Lease liabilities - non-current (Notes 4, 12 and 25)

Other non-current liabilities (Notes 4 and 10)


Total non-current liabilities


Total liabilities


EQUITY

Ordinary shares

Capital surplus

Retained earnings

Legal reserve

Special reserve

Unappropriated earnings

Total retained earnings

Other equity

Exchange differences on translating the financial statements of foreign operations

Unrealized gain (loss) of financial assets at fair value through other comprehensive income

Total other equity


Total equity


TOTAL
 2020
Amount
%
$ 438,447
5
220,572
3
-
-
766,631
8
245,735
3
22,565
-
8,474
-
15,838
-

10,354

-


1,728,616
19

70,286
1
6,885,352
75
152,098
2
23,591
-
324,597
3
15,593
-
505
-
17,160
-
2,567
-

2,161

-


7,493,910
81

$ 9,222,526
100

$ 1,214,800
13

6,029
-

1,226,682
13

167,585
2

327,520
4

98,120
1

13,175
-

2,934

-



3,056,845
33



254,065
3

10,397
-

2,522

-



266,984

3



3,323,829
36



1,237,242
14


2,592,857
28


904,665
10

634,020
7

1,165,528
12


2,704,213
29


(639,134) (7)

3,519

-


(635,615)
(7)



5,898,697
64


$ 9,222,526
100
 2019

























































































Amount
%
$ 308,208
4

39,800
1

5,216
-

886,530
11

204,542
2

66,954
1

3,309
-

25,730
-
34,595

-
1,574,884
19

60,882
1

6,145,911
74

118,158
2

21,366
-

324,597
4

17,159
-

760
-

494
-

2,269
-
1,716

-
6,693,312
81
$ 8,268,196
100
$ 726,982
9

7,611
-

1,183,282
14

193,747
3

344,770
4

18,796
-

8,180
-
3,092

-
2,486,460
30

275,737
4

13,188
-
2,437

-
291,362

4
2,777,822
34
1,237,242
15
2,591,280
31

810,515
10

431,506
5
1,053,851
13
2,295,872
28

(633,784) (8)
(236)

-
(634,020)
(8)
5,490,374
66
$ 8,268,196
100

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

(With Deloitte & Touche auditors’ report dated March 16, 2021)

207

SYNCMOLD ENTERPRISE CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 25)
Sales revenue

Other operating revenue

Total operating revenue
OPERATING COSTS (Notes 4, 9, 19 and 25)

GROSS PROFIT

OPERATING EXPENSES (Notes 19 and 25)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit loss on trade receivables (Notes 4
and 8)

Total operating expenses

PROFIT FROM OPERATIONS

NON-OPERATING INCOME AND EXPENSES
Interest income (Note 25)
Gain from bargain purchase - acquisition of
subsidiaries (Notes 4, 10 and 22)
Other income (Notes 19 and 25)
Net gain on financial assets at fair value through
profit or loss (Notes 4 and 7)
Impairment loss on goodwill (Notes 4 and 13)
Interest expenses (Note 25)
Net foreign exchange gain (Notes 4 and 19)
Share of profit of subsidiaries and associates
(Notes 4 and 10)

Total non-operating income and expenses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 20)

NET PROFIT FOR THE YEAR
 2020
Amount
%
$ 3,597,648
92

333,466

8

3,931,114
100

3,413,366
87


517,748
13

62,610
1
184,044
5
169,754
4

601

-


417,009
10


100,739

3

993
-
19,323
-
21,224
1
40,215
1
-
-
(9,767)
-
32,949
1

924,709
23


1,029,646
26

1,130,385
29

164,647

4


965,738
25
 2019
































Amount
%
$ 3,393,441
92

313,233

8

3,706,674
100

3,156,347
85

550,327
15

97,531
3

166,155
4

168,952
5

59

-

432,697
12

117,630

3

1,013
-

63,669
2

1,653
-

30,744
1

(42,180) (1)

(1,246)
-

7,972
-

933,427
25

995,052
27

1,112,682
30

171,140

5

941,542
25
(Continued)
  • 208 -

SYNCMOLD ENTERPRISE CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of defined benefit plans

Share of other comprehensive income of
subsidiaries accounted for using the equity
method
Income tax relating to 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 the financial
statements of foreign operations

Other comprehensive loss for the year

TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

EARNINGS PER SHARE (Note 21)

Basic

Diluted
 2020
Amount
%
$ 283
-
2,891
-
(57)
-

(5,350)

-


(2,233)

-

$ 963,505
25


$ 7.81

$ 7.73
 2019














Amount
%
$ (56)
-

(236)
-

11
-

(202,278)
(5)

(202,559)
(5)
$ 738,983
20
$ 7.61
$ 7.55
$ $


The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 16, 2021)

(Concluded)

  • 209 -

SYNCMOLD ENTERPRISE CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019

Appropriation of 2018 earnings
Legal reserve
Special reserve
Cash dividends distributed by the Corporation

Net profit for the year ended December 31,
2019
Other comprehensive loss for the year ended
December 31, 2019, net of income tax

Total comprehensive income (loss) for the year
ended December 31, 2019

BALANCE AT DECEMBER 31, 2019

Appropriation of 2019 earnings
Legal reserve
Special reserve
Cash dividends distributed by the Corporation

Unclaimed dividends

Actual acquisition of interests in subsidiaries

Net profit for the year ended December 31,
2020
Other comprehensive income (loss) for the year
ended December 31, 2020, net of income tax
Total comprehensive income (loss) for the year
ended December 31, 2020

BALANCE AT DECEMBER 31, 2020
 Ordinary
Shares
(Note 18)
$ 1,237,242

-
-

-


-

-

-


-


1,237,242

-
-

-


-


-


-

-

-


-

$ 1,237,242
Issuance of
Ordinary
Shares
$ 1,184,809

-
-

-


-

-

-


-


1,184,809

-
-

-


-


-


-

-

-


-

$ 1,184,809
 CapitalSurplus(Notes 4 and 18) CapitalSurplus(Notes 4 and 18) Total

$ 2,591,280

-
-

-


-

-

-


-


2,591,280

-
-

-


-


56


1,521

-

-


-

$ 2,592,857
 Retained Earnings (Note 18) Total
$ 2,158,582

-

-

(804,207)


(804,207)

941,542

(45)


941,497


2,295,872


-

-

(556,759)


(556,759)


-


-

965,738

(638)


965,100

$ 2,704,213
 Other Equity Total
$ (431,506 )

-

-

-


-


-

(202,514)


(202,514)


(634,020)


-

-

-


-


-


-


-

(1,595)


(1,595)

$ (635,615)
 Total Equity
$ 5,555,598
-
-

(804,207)

(804,207)
941,542

(202,559)

738,983

5,490,374
-
-

(556,759)

(556,759)

56

1,521
965,738

(2,233)

963,505
$ 5,898,697
The Difference

Between the
Consideration
Paid and the
Carrying
Amount of the
Subsidiaries
Net Assets
Change in
Percentage of
Ownership
During Actual
Acquisition
Interest in
Subsidiaries
Consolidation
Excess
$ 410,949 $ 143,150
$ 852,372
-
-
-
-
-
-

-

-

-


-

-

-

-
-
-

-

-

-


-

-

-


410,949

143,150

852,372

-
-
-
-
-
-

-

-

-


-

-

-


-

-

-


1,521

-

-

-
-
-

-

-

-


-

-

-

$ 412,470
$ 143,150
$ 852,372
 Other
$ -


-

-

-


-


-

-


-


-


-

-

-


-


56


-


-

-


-

$ 56
Exchange
Differences on
Translating the
Financial
Statements of
Foreign
Operation
Unrealized
Gain (Loss) of
Financial
Assets at Fair
Value Through
Other
(Notes 4
and 18)
Comprehensive
Income
$ (431,506 ) $ -

-
-

-
-

-

-


-

-


-
-

(202,278)

(236)


(202,278)

(236)


(633,784)

(236)


-
-

-
-

-

-


-

-


-

-


-

-


-
-

(5,350)

3,755


(5,350)

3,755

$ (639,134)
$ 3,519
Legal Reserve Special Reserve
Unappropriated
Earnings
$ 721,519 $ 376,649 $ 1,060,414

88,996
-
(88,996 )
-
54,857
(54,857 )

-

-

(804,207)


88,996

54,857

(948,060)

-
-
941,542

-

-

(45)


-

-

941,497


810,515

431,506

1,053,851

94,150
-
(94,150 )
-
202,514
(202,514 )

-

-

(556,759)


94,150

202,514

(853,423)


-

-

-


-

-

-

-
-
965,738

-

-

(638)


-

-

965,100

$ 904,665
$ 634,020
$ 1,165,528

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

(With Deloitte & Touche auditors’ report dated March 16, 2021)

  • 210 -

SYNCMOLD ENTERPRISE CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Expected credit loss recognized on trade receivables
Net gain on financial assets at fair value through profit or loss
Share of profit of subsidiaries and associates
Interest expenses
Interest income
Dividend income
Loss on disposal of property, plant and equipment
Impairment loss on goodwill
Reversal of write-downs of inventories
Net gain on unrealized foreign currency exchange
Gain from bargain purchase
Gain on lease modification
Changes in operating assets and liabilities
Notes receivable
Trade receivables
Trade receivables from related parties
Other receivables from related parties
Inventories
Other current assets
Net defined benefit assets
Notes payable and trade payables
Trade payables from related parties
Other payables
Other current liabilities

Cash generated from operations
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit or loss
Proceeds of financial assets at fair value through profit or loss
Acquisition of associates
Net cash outflow on acquisition of subsidiaries
Payment for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease (increase) in finance receivables from related parties
Purchase of intangible assets		 2020
$ 1,130,385

22,317
11,288
601
(40,215)
(924,709)
9,767
(993)
(6,229)
2
-
-
(23,249)
(19,323)
(3)
5,216
119,298
(48,753)
(5,611)
9,892
24,241
(15)
(1,567)
64,994
(26,481)

(158)

300,695
(9,392)

(111,962)


179,341

(217,884)
67,923
-
(563,595)
(43,312)
256
(445)
50,000
(9,722)		 2019
$ 1,112,682
11,678
11,445
59

(30,744)

(933,427)
1,246

(1,013)

-
-
42,180
(1,900)

(16,368)

(63,669)

-
3,630
(57,237)

1,731

1,684
3,617
(27,118)

(23)

(555)
227,947

491

(2,140)
284,196

(1,293)

(153,835)

129,068

(449,385)
625,462
(52,000)

(550,000)

(13,243)
-

(1,145)
(50,000)

(15,413)
(Continued)
  • 211 -

SYNCMOLD ENTERPRISE CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Increase in prepayments for land, property and equipment

Interest received
Dividends received

Net cash generated from (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Repayment of the principal portion of lease liabilities
Increase in finance payables from related parties
Refund of guarantee deposits received
Dividends paid

Net cash used in financing activities

NET INCREASE (DECREASE) IN CASH
CASH AT THE BEGINNING OF THE YEAR

CASH AT THE END OF THE YEAR
 2020
$ (17,160)
993

773,562


40,616

487,818
(12,727)
(8,050)
-

(556,759)


(89,718)

130,239

308,208

$ 438,447
 2019
$ (494)
1,013

496,428

(8,777)
496,982

(4,114)

94,307
(120)

(804,207)

(217,152)
(96,861)

405,069
$ 308,208

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

(With Deloitte & Touche auditors’ report dated March 16, 2021)

(Concluded)

  • 212 -

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

SYNCMOLD ENTERPRISE CORPORATION

1. GENERAL INFORMATION

Syncmold Enterprise Corporation (the “Corporation”) was incorporated in the Republic of China (ROC) in July 1979 and is mainly engaged in the processing, manufacturing, trading, technology licensing and related import and export business of various metal molds, plastic molds and electronic parts.

The Corporation’s shares were approved for listing on the emerging stock board of the Taipei Exchange (TPEx) in December 2005, and after obtaining approval from the Financial Supervisory Commission, Executive Yuan in November 2006, the Corporation’s shares were listed on the over-the-counter (OTC) market on January 11, 2007. In November 2009, the Corporation obtained approval to transfer listing of its shares to the Taiwan Stock Exchange (TWSE) and were officially listed and started trading its shares on December 17, 2009.

The financial statements are presented in the Corporation’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Corporation’s board of directors on March 16, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

  • a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Corporation’s accounting policies:

  • b. The IFRSs endorsed by the FSC for application starting from 2021
New IFRSs
Amendments to IFRS 4 “Extension of the Temporary Exemption from
Applying IFRS 9”

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
“Interest Rate Benchmark Reform - Phase 2”

Amendment to IFRS 16 “Covid-19 - Related Rent Concessions”
 Effective Date Announced
by the IASB
Effective immediately upon
promulgation by the IASB
January 1, 2021
June 1, 2020

As of the date the financial statements were authorized for issue, the Corporation continues assessing other possible impacts that the application of the aforementioned amendments and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers will have on the Corporation’s financial position and financial performance and will disclose these other impacts when the assessment is completed.

  • 213 -

  • c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs
“Annual Improvements to IFRS Standards 2018-2020”

Amendments to IFRS 3 “Reference to the Conceptual Framework”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 16 “Property, Plant and Equipment - Proceeds
before Intended Use”

Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a
Contract”
 Effective Date
Announced by IASB (Note 1)
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

  • Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

  • Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

  • Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

  • Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

  • Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

  • Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

As of the date the financial statements were authorized for issue, the Corporation is continuously assessing the possible impact that the application of other standards and interpretations will have on the Corporation’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Regulations”).

  • b. Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit assets which are measured at the present value of defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

  • 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

  • 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

  • 3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing these parent company only financial statements, the Corporation used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same as the amounts attributable to the owners of the Corporation in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and associates and the share of other comprehensive income of subsidiaries and associates.

  • c. Classification of current and non-current assets and liabilities

Current assets include:

  • 1) Assets held primarily for the purpose of trading;

  • 2) Assets expected to be realized within 12 months after the reporting period; and

  • 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

  • 1) Liabilities held primarily for the purpose of trading;

  • 2) Liabilities due to be settled within 12 months after the reporting period; and

  • 3) Liabilities for which the Corporation does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

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d. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interests in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after re-assessment, the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held interests in the acquiree, the excess is recognized immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured at fair value. Other types of non-controlling interests are measured at fair value.

Where the consideration the Corporation transfers in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and considered as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with the corresponding adjustments being made against goodwill or gains on bargain purchases. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period about facts and circumstances that existed as of the acquisition date. The measurement period does not exceed 1 year from the acquisition date.

e. Foreign currencies

In preparing the Corporation’s financial statements, transactions in currencies other than the Corporation’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting the financial statements, the functional currencies of the Corporation (including subsidiaries in other countries that use currencies which are different from the currency of the Corporation) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

  • 216 -

f. Inventories

Inventories consist of raw materials, finished goods and products and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

  • g. Investments in subsidiaries

The Corporation uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Corporation.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of the profit or loss and other comprehensive income of the subsidiary. The Corporation also recognizes the changes in the Corporation’s share of equity of subsidiaries.

When the Corporation’s share of losses of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Corporation’s net investment in the subsidiary), the Corporation continues recognizing its share of further losses.

The Corporation assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

Profits or losses resulting from downstream transactions are eliminated in full only in the parent company only financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized only in the parent company only financial statements only to the extent of interests in the subsidiaries that are not related to the Corporation.

  • h. Investments in associates

An associate is an entity over which the Corporation has significant influence and that is not a subsidiary.

The Corporation uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of the profit or loss and other comprehensive income of the associates. The Corporation also recognizes the changes in the Corporation’s share of the equity of associates.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

Profits and losses resulting from upstream transactions and downstream transactions are recognized only in the parent company only financial statements only to the extent of interests in the associates that are not related to the Corporation.

  • 217 -

i. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

  • j. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Corporation’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods.

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation which is disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

  • k. Intangible assets

  • 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

  • 2) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

  • 218 -

3) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

  • l. Impairment of property, plant and equipment, right-of-use asset, intangible assets other than goodwill

At the end of each reporting period, the Corporation reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Corporation estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

  • m. Financial instruments

Financial assets and financial liabilities are recognized when the Corporation becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

  • 1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

  • a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost.

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

  • 219 -

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 24.

  • ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

  • i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

  • ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost (including cash, notes receivable, trade receivables, other receivables, other receivables from related parties and refundable deposits) are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

  • i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

  • ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

  • b) Impairment of financial assets

The Corporation recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Corporation always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Corporation recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Corporation measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

  • 220 -

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Corporation recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

  • c) Derecognition of financial assets

The Corporation derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

Equity instruments issued by the Corporation are classified as equity in accordance with the substance of the contractual arrangements and the definitions of an equity instrument.

Equity instruments issued by the Corporation are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Corporation’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Corporation’s own equity instruments.

3) Financial liabilities

a) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

  • b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

  • 221 -

n. Revenue recognition

The Corporation identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

  • 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of electronic components and molding products. Sales of electronic components and molding products are recognized as revenue when the goods are delivered via the modes of transportation as stated in the agreements with customers, e.g. FOB shipping or FOB destination modes because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently. Goods are sold at fixed prices as stated in the agreements with customers.

The Corporation does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2) Revenue from the rendering of services

Service income is recognized when services are provided.

3) Licensing revenue

Royalty revenue is recognized when the technique remains functional without updates and technical supports. When the customer uses the intellectual property for mass production, the price is decided based on production, sales or other methods, and revenue is recognized according to royalty arrangements.

o. Leasing

At the inception of a contract, the Corporation assesses whether the contract is, or contains, a lease.

  • 1) The Corporation as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

2) The Corporation as lessee

The Corporation recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

  • 222 -

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments that depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Corporation uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Corporation remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

p. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

  • q. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Corporation’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

  • 223 -

r. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Law, an additional tax on unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Corporation is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Corporation expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

  • 3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

  • 224 -

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Corporation’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Corporation considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. CASH

Cash on hand

Checking accounts and demand deposits

 December 31 December 31


2020
$ 921

437,526

$ 438,447
 2019
$ 836

307,372
$ 308,208

The market rate intervals of cash in bank at the end of the reporting period were as follows:

Bank balance December 31
2020
2019
0.001%-2%
0.001%-0.35%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current
Financial assets mandatorily classified as at FVTPL
Derivative financial assets
Foreign exchange forward contracts

Non-derivative financial assets
Domestic listed shares


Financial assets at FVTPL-non-current
Financial assets mandatorily classified as at FVTPL
Non-derivative financial assets
Domestic emerging market shares

Overseas unlisted shares
Private funds

 **December 31 ** **December 31 **





2020
$ 19,871

200,701

$ 220,572

$ 15,619

51,579
3,088

$ 70,286
 2019
$ -
39,800
$ 39,800
$ 10,271
50,611

-
$ 60,882
  • 225 -

At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

December 31, 2020

Notional Amount
Currency Maturity Date (In Thousands)
Sell
US$/RMB		 2021.02 US$1,000/RMB6,973
Sell US$/RMB 2021.02 US$1,000/RMB6,854
Sell US$/RMB 2021.02 US$1,000/RMB6,890
Sell US$/RMB 2021.02 US$1,000/RMB6,891
Sell US$/RMB 2021.03 US$1,000/RMB6,987
Sell US$/RMB 2021.03 US$2,000/RMB13,882
Sell US$/RMB 2021.03 US$2,000/RMB13,842
Sell US$/RMB 2021.03 US$2,000/RMB13,682
Sell US$/RMB 2021.04 US$1,000/RMB6,760
Sell US$/RMB 2021.05 US$1,000/RMB6,832
Sell US$/RMB 2021.06 US$1,000/RMB6,670
Sell US$/RMB 2021.06 US$1,000/RMB6,612
Sell US$/RMB 2021.06 US$1,000/RMB6,597

The Corporation entered into foreign exchange forward contracts to manage exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities

8. TRADE RECEIVABLES, NET

At amortized cost
Gross carrying amount

Less: Allowance for impairment loss

 December 31 December 31


2020
$ 767,341

(710)

$ 766,631
 2019
$ 886,639

(109)
$ 886,530

The average credit period of sales of goods was 90-120 days. No interest was charged on trade receivables. Credit rating information is obtained from independent rating agencies where available or, if not available, the Corporation uses other publicly available financial information or its own trading records to rate its major customers. The Corporation’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management annually.

The Corporation measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Corporation’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Corporation’s different customer base.

  • 226 -

The Corporation writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Corporation continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Corporation’s provision matrix.

December 31, 2020
Expected credit loss rate

Gross carrying amount

Loss allowance
(Lifetime ECL)


Amortized cost

December 31, 2019
Expected credit loss rate

Gross carrying amount

Loss allowance
(Lifetime ECL)


Amortized cost
 Not Past
Due
Less than 30
Days
-
-
$ 763,791 $ -

-

-

$ 763,791
$ -

Not Past
Due
Less than 30
Days
-
-
$ 886,394 $ -

-

-

$ 886,394
$ -
 31 to 90
Days
20.00%
$ 3,550

(710)

$ 2,840

31 to 90
Days
-
$ -

-

$ -
 91 to 180
Days
-
$ -

-

$ -

91 to 180
Days
44.49%
$ 245

(109)

$ 136
 Over 180
Days
-
$ -

-

$ -

Over 180
Days
-
$ -

-

$ -
 Total
$ 767,341

(710)
$ 766,631
Total
$ 886,639

(109)
$ 886,530

The movements of the loss allowance of trade receivables were as follows:


Balance at January 1
Add: Net remeasurement of loss allowance
Balance at December 31		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2020
$ 109


601

$ 710
 2019
$ 50

59
$ 109

9. INVENTORIES

Products
Raw materials
Finished goods		 December 31


2020
$ 11,010

4,742

86

$ 15,838
 2019
$ 24,897
833

-
$ 25,730
  • 227 -

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020 and 2019 was $3,413,317 thousand and $3,156,347 thousand, respectively. The cost of goods sold in 2019 included reversal of inventory write-down of $1,900 thousand and inventory write-down of $1,638 thousand. The reversals of previous write-downs resulted from selling of slow moving inventories.

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries

Investments in associates

 **December 31 ** **December 31 **


2020
$ 6,720,796


164,556

$ 6,885,352
 2019
$ 5,977,659

168,252
$ 6,145,911

a. Investments in subsidiaries

Grand Advance Inc.

Syncmold Enterprise (Samoa) Corp.
Syncmold Enterprise (USA) Corp.
Gatech Technology Inc.
Syncmold Enterprise Vietnam Co., Ltd.
Syncmold Enterprise (Malaysia) Sdn., Bhd
Syncmold Enterprise (Singapore) Pte., Ltd.
Syncmold Enterprise (Thailand) Co., Ltd.
Leohab Enterprise Co., Ltd.

Add: Credit balance of investments reclassified to non-current
liabilities


Name of Subsidiaries
Grand Advance Inc.
Syncmold Enterprise (Samoa) Corp.
Syncmold Enterprise (USA) Corp.
Gatech Technology Inc.
Syncmold Enterprise Vietnam Co., Ltd.
Syncmold Enterprise (Malaysia) Sdn., Bhd
Syncmold Enterprise (Singapore) Pte., Ltd.
Syncmold Enterprise (Thailand) Co., Ltd.
Leohab Enterprise Co., Ltd.		 **December 31 **



2020
2019
$ 3,023,481
$ 2,749,104
2,537,652
2,614,645
(2,522)
(2,437)
645,537
613,910
242,441
-
1,882
-
593
-
15,243
-

253,967

-
6,718,274
5,975,222

2,522

2,437
$ 6,720,796
$ 5,977,659
Proportion of Ownership and
Voting Rights
December 31
2020
2019
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
73.43%
72.81%
100.00%
-
100.00%
-
100.00%
-
100.00%
-
70.00%
-

On November 30, 2020, the Corporation completed the acquisition of Leohab Enterprise Co., Ltd. for a cash consideration of $232,677 thousand; after the acquisition, the Corporation’s percentage of ownership in Leohab Enterprise Co., Ltd. was 70% and the Corporation had substantial control over Leohab Enterprise Co., Ltd. and listed it as a subsidiary. The acquisition was measured at fair value and the Corporation recognized a gain from bargain purchase of $19,323 thousand.

  • 228 -

On November 29, 2019, the Corporation completed the acquisition of Gatech Technology Inc. for a cash consideration of $550,000 thousand; after the acquisition, the Corporation’s percentage of ownership in Gatech Technology Inc. was 72.81% and the Corporation had substantial control over Gatech Technology Inc. and listed it as a subsidiary. On April 21, 2020 and July 27, 2020, the Corporation acquired additional 0.17% and 0.45% ownerships in Gatech Technology Inc. for a cash consideration of $1,345 thousand and $2,470 thousand, respectively, which increased the Corporation’s percentage of ownership to 73.43%.

The establishment of Syncmold Enterprise Vietnam Co., Ltd. was approved on December 24, 2019. As of March 19, 2020, the Corporation had invested $302,344 thousand in exchange for 100% shareholding interest.

The establishment of Syncmold Enterprise (Malaysia) Sdn. Bhd. was approved on February 10, 2020. As of June 10, 2020, the Corporation had invested $3,639 thousand in exchange for 100% shareholding interest.

The establishment of Syncmold Enterprise (Singapore) Pte. Ltd. was approved on February 27, 2020.As of June 29, 2020, the Corporation had invested $1,100 thousand in exchange for 100% shareholding interest.

The establishment of Syncmold Enterprise (Thailand) Co., Ltd. was approved on May 14, 2020. As of May 27, 2020, the Corporation had invested $19,920 thousand in exchange for 100% shareholding interest.

The Corporation continued to support Syncmold Enterprise (USA) Corp. and recognized investment loss based on the proportion of the Corporation’s ownership. The credit balances of long-term equity investment transferred to other liabilities were $2,522 thousand and $2,437 thousand on December 31, 2020 and 2019, respectively.

See Note 25 of financial statements for more information about the acquisition of Gatech Technology Inc. and Leohab Enterprise Co., Ltd. by the Corporation.

For details of the investments in subsidiaries indirectly held by the Corporation, refer to Note 28.

The share of profit or loss of subsidiaries accounted for using the equity method in 2020 and 2019 was calculated based on the subsidiaries’ financial statements which have been audited for the same periods.

  • b. Investments in associates
Associates that are not individually material
Unlisted companies
High Grade Tech Co., Ltd.

Corebio Technologies Co., Ltd.

 **December 31 ** **December 31 **


2020
$ 128,639

35,917

$ 164,556
 2019
$ 121,500

46,752
$ 168,252
  • 229 -

Aggregate information of associates that are not individually material:

The Corporation’s share of:
Net profit of the year
Other comprehensive income		 December 31

2020
$ 4,185

$ 3,519
 2019
$ 3,939
$ -

In January 2019, the Corporation subscribed for shares of Corebio Technologies Co., Ltd. for a cash consideration of $25,000 thousand; after the subscription, the Corporation’s percentage of ownership in Corebio Technologies Co., Ltd. was 23.83% and the Corporation was able to exercise significant influence over Corebio Technologies Co., Ltd., and as of December 31, 2019, the Corporation subscribed for additional new shares at a cash consideration of $27,000 thousand, which increased the Corporation’s percentage of ownership to 38.29%.

The share of profit or loss and other comprehensive income of associates accounted for using the equity method in 2020 and 2019 was calculated based on the associates’ financial statements which have been audited for the same periods.

11. PROPERTY, PLANT AND EQUIPMENT


Cost

Balance at January 1, 2020
Additions
Transfer from prepayments
for equipment
Disposals

Balance at December 31,
2020


Accumulated depreciation
and impairment


Balance at January 1, 2020
Depreciation expenses

Disposals


Balance at December 31,
2020


Carrying amounts at
December 31, 2020


Cost

Balance at January 1, 2019
Additions
Disposals

Balance at December 31,
2019
 Freehold
Land
$ 65,187

-
-

-

$ 65,187

$ -

-

-

$ -

$ 65,187

$ 65,187

-

-

$ 65,187
 Buildings
$ 67,264

16,057
-

(16,936)

$ 66,385

$ 32,722

3,077

(16,936)

$ 18,863

$ 47,522

$ 67,264

-

-

$ 67,264
 Equipment
$ 18,483

22,384
494

(1,250)

$ 40,111

$ 2,788

4,994

(992)

$ 6,790

$ 33,321

$ 10,792

12,017

(4,326)

$ 18,483
 Transpor-
tation
Equipment
$ 875

550
-

-

$ 1,425

$ 640

172

-

$ 812

$ 613

$ 875

-

-

$ 875
 Office
Equipment
Total
$ 5,015
$ 156,824
4,321
43,312
-
494

(1,356)

(19,542)
$ 7,980
$ 181,088
$ 2,516
$ 38,666
1,365
9,608

(1,356)

(19,284)
$ 2,525
$ 28,990
$ 5,455
$ 152,098
$ 5,013
$ 149,131
1,226
13,243

(1,224)

(5,550)
$ 5,015
$ 156,824
(Continued)
  • 230 -

Accumulated depreciation
and impairment


Balance at January 1, 2019
Disposals

Depreciation expenses


Balance at December 31,
2019


Carrying amounts at
December 31, 2019
 Freehold
Land
$ -

-

-

$ -

$ 65,187
 Buildings
$ 30,976

-

1,746

$ 32,722

$ 34,542
 Equipment
$ 2,505

(4,326)

4,609

$ 2,788

$ 15,695
 Transpor-
tation
Equipment
$ 515


-

125

$ 640

$ 235
 Office
Equipment
Total
$ 2,658
$ 36,654
(1,224)
(5,550)

1,082

7,562
$ 2,516
$ 38,666
$ 2,499
$ 118,158
(Concluded)

No impairment assessment was performed for the years ended December 31, 2020 and 2019 as there was no indication of impairment.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings Main buildings 45 years Electromechanical devices 4-5 years Equipment 3-10 years Transportation equipment 5-10 years Office equipment 3-8 years

12. LEASE ARRANGEMENTS

  • a. Right-of-use assets
Carrying amounts
Buildings
Transportation equipment

Additions to right-of-use assets
Depreciation charge for right-of-use assets
Buildings
Transportation equipment		 **December ** **31 **
2020
2019
$ 22,307
$ 20,790

1,284

576
$ 23,591
$ 21,366
For the Year Ended December 31



2020
$ 15,463

$ 12,285


424

$ 12,709
 2019
$ 21,351
$ 3,867

249
$ 4,116
  • 231 -

b. Lease liabilities

c. Carrying amounts
Current
Non-current
Range of discount rate for lease liabilities was as follows:
Buildings
Transportation equipment
Other lease information

Expenses relating to short-term leases
Total cash outflow for leases		 December 31
2020
$ 13,175
$ 10,397
December		 2019
$ 8,180
$ 13,188
31
2020
2019
0.94%
0.94%
0.94%
0.94%
**For the Year Ended December 31 **
2020
$ 367
$ (13,336)		 2019
$ 1,544
$ (5,686)

The Corporation leases certain buildings and transportation equipment which qualify as short-term leases. The Corporation has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

13. GOODWILL



Cost

Balance at January 1

Balance at December 31

Balance at January 1

Impairment losses recognized

Balance at December 31

Carrying amounts atDecember 31
 For the Year Ended For the Year Ended December 31







2020
$ 366,777

$ 366,777

$ (42,180)

-

$ (42,180)

$ 324,597
 2019
$ 366,777
$ 366,777
$ -

(42,180)
$ (42,180)
$ 324,597

The Corporation acquired FulFil Tech Co., Ltd. on June 27, 2007 and recognized goodwill of $366,777 thousand relating to molding department and electronic components department. The goodwill is mainly arising from the expected benefit from sales growth of electronic components and molding products, and the potential of developing new electronic models

  • 232 -

As of December 31, 2019, the operations of some plastic molding departments ceased due to the expected increase in bargaining pressure, raw materials, and labor cost of molded plastic products, as well as intra-group rearrangements and adjustments. Since the estimated recoverable amount of plastic molding department was lower than its carrying amount, an impairment loss on goodwill of $42,180 thousand was recognized in 2019.

The recoverable amount of plastic molding department was determined based on a value in use calculation that used the cash flow projections in the financial budgets approved by management covering a 5-year period; the discount rate was 13.20% and 12.96% in 2020 and 2019, respectively. Other key assumptions included budgeted revenue and budgeted gross margin. Such assumptions were based on the past performance of the cash-generating unit and management’s expectations of future market development.

14. INTANGIBLE ASSETS

Computer
Software Cost
Cost
Balance at January 1, 2020 $ 30,610
Additions 9,722
Disposals
(7,441)
Balance at December 31, 2020 $ 32,891
Accumulated amortization and impairment
Balance at January 1, 2020 $ (13,451)
Amortization expenses (11,288)
Disposals
7,441
Balance at December 31, 2020 $ (17,298)
Carrying amount at December 31, 2020 $ 15,593
Cost
Balance at January 1, 2019 $ 30,531
Additions 15,413
Disposals (15,334)
Balance at December 31, 2019 $ 30,610
Accumulated amortization and impairment
Balance at January 1, 2019 $ (17,340)
Amortization expenses (11,445)
Disposals
15,334
Balance at December 31, 2019 $ (13,451)
Carrying amount at December 31, 2019 $ 17,159

Computer software costs are amortized on a straight-line basis over one to five years.

  • 233 -

15. BORROWINGS

Short-term borrowings
Unsecured borrowings - line of credit borrowings
 December 31 December 31
2020
$ 1,214,800
 2019
$ 726,982

The weighted average effective interest rates on bank loans were 0.67%-0.77% and 0.88%-2.80% per annum as of December 31, 2020 and 2019, respectively.

16. OTHER PAYABLES

Payables for salaries or bonuses

Payables for procurement
Others

 December 31 December 31


2020
$ 111,758

3,314
52,513

$ 167,585
 2019
$ 120,212
6,569

66,966
$ 193,747

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Corporation adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plans adopted by the Corporation in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Corporation contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Corporation assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Corporation is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Corporation has no right to influence the investment policy and strategy.

  • 234 -

The amounts included in the balance sheets in respect of the Corporation’s defined benefit plans were as follows:

Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit assets		 December 31


2020
$ 23,501

(26,068)

$ (2,567)
 2019
$ 22,787
(25,056)
$ (2,269)

Movements in net defined benefit assets were as follows:

Present Value
of the Defined
Benefit Fair Value of Net Defined
Obligation the Plan Assets
Benefit Assets
Balance at January 1, 2019 $ 21,666 $ (23,968) $ (2,302)
Service cost
Current service cost - - -
Net interest expense (income)
217
(240)
(23)
Recognized in profit or loss
217
(240)
(23)
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (848) (848)
Actuarial (gain) loss
Changes in demographic assumptions 52 - 52
Changes in financial assumptions 691 - 691
Experience adjustments
161
-
161
Recognized in other comprehensive income
904
(848)
56
Balance at December 31, 2019
22,787		 (25,056)
(2,269)
Service cost
Current service cost - - -
Net interest expense (income)
142
(157)
(15)
Recognized in profit or loss
142
(157)
(15)
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (855) (855)
Actuarial (gain) loss
Changes in demographic assumptions 4 - 4
Changes in financial assumptions 441 - 441
Experience adjustments
127
-
127
Recognized in other comprehensive income
572
(855)
(283)
Balance at December 31, 2020 $ 23,501 $ (26,068) $ (2,567)

Through the defined benefit plans under the Labor Standards Law, the Corporation is exposed to the following risks:

  • 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

  • 235 -

  • 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

  • 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate
Expected rate(s) of salary increase
Mortality rate

Turnover rate		 December 31
2020
2019
0.375%
0.625%
1.500%
1.500%
According to the fifth
experience life table
of the insurance
industry in Taiwan
According to the fifth
experience life table
of the insurance
industry in Taiwan
0%-7.5%
0%-10%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate(s)
25% increase
25% decrease
Expected rate(s) of salary increase
25% increase
25% decrease		 December 31



2020
$ (441)

$ 458

$ 445

$ (430)
 2019
$ (465)
$ 484
$ 471
$ (455)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year
Average duration of the defined benefit obligation		 December 31
2020
$ -

7.6 years		 2019
$ -
8.3 years
  • 236 -

18. EQUITY

  • a. Share capital

Ordinary shares

Number of shares authorized (in thousands)

Shares authorized

Number of shares issued and fully paid (in thousands)

Shares issued
 **December 31 ** **December 31 **



2020

200,000

$ 2,000,000


123,724

$ 1,237,242
 2019

200,000
$ 2,000,000

123,724
$ 1,237,242

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and right to dividends.

The authorized shares include 3,000 thousand shares allocated for the exercise of employee stock options.

  • b. Capital surplus

Capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and to once a year).

Capital surplus arises from the effect of changes in ownership interests in subsidiaries resulting from equity transactions may be used to offset deficits.

Capital surplus generates from the convertible corporate bond due to the exercise of share options could not be used in any other purpose.

  • c. Retained earnings and dividends policy

Under the dividends policy as set forth in the amended Articles, where the Corporation made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to employees’ compensation and remuneration of directors and supervisors in Note 19-c.

As the Corporation is currently in the growth stage, the Corporation considers its industry development and long-term interests of shareholders as well as its programs to maintain operating efficiency and meet its financial goals when determining the distribution of bonuses in shares or cash. The board of directors shall propose allocation ratios every year and propose such allocation ratio at the shareholder’s meeting. For the distribution of bonuses to shareholders, cash dividends are preferred. Distribution of earnings may also be made in the form of stock dividends; provided that the ratio of cash dividends distributed is 5% to 100% of the total dividends distributed.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

  • 237 -

Items referred to under Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Corporation.

The appropriations of earnings for 2019 and 2018 which were approved in the shareholders’ meetings on June 18, 2020 and June 20, 2019, respectively, were as follows:

Legal reserve

Special reserve
Cash dividends		 Appropriation of Earnings
For the Year Ended
December 31
2019
2018
$ 94,150
$ 88,996
202,514
54,857
556,759
804,207		 Dividends Per Share (NT$)
For the Year Ended
December 31
2019
2018
$4.50
$6.50

The appropriation of earnings for 2019 had been proposed by the Corporation’s board of directors on March 16, 2021. The appropriation and dividends per share were as follows:

Appropriation Appropriation Dividends Per
of Earnings Share (NT$)
Legal reserve $
96,510
Special reserve 1,595
Cash dividends 618,621 $5.00

The appropriation of earnings for 2020 is subject to the resolution of the shareholders in the shareholders’ meeting to be held on June 24, 2021.

d. Special reserve

Beginning at January 1

Appropriated special reserves
Exchange differences on translating the financial statements of
foreign operations

Balance at December 31
 **December 31 ** **December 31 **


2020
$ 431,506

202,514

$ 634,020
 2019
$ 376,649

54,857
$ 431,506

On the initial application of the IFRSs, the net increase arising from the retained earnings was not enough for the special reserve appropriation; thus, the Corporation appropriated a special reserve at the amount of $230,916 thousand. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and is thereafter, distributed.

  • 238 -

19. NET PROFIT

Net profit comprises:

a. Other income

Consulting income
Dividends
Others		 For the Year Ended December 31
2020
2019
$ 14,518
$ -
6,229
-

477

1,653
$ 21,224
$ 1,653		 For the Year Ended December 31
2020
2019
$ 14,518
$ -
6,229
-

477

1,653
$ 21,224
$ 1,653
2019
$ -
-

1,653
$ 1,653

b. Depreciation, amortization and employee benefits expense

Employee benefits
expense
Salaries expenses

Labor insurance
expenses
Pension expenses
Defined
contribution plan
Defined benefit plan
Director’s
remuneration
Other employee
benefits
Depreciation
Amortization		 2020 Total
$ 234,449

18,098
9,230

(15)

15,287

9,974
$ 287,023
$ 22,317
$ 11,288		 2019





Operating
Costs
$ 4,741
509
309

-
-

329

$ 5,888

$ 5,708

$ -
 Operating
Expenses
$ 229,708

17,589
8,921
(15)

15,287

9,645

$ 281,135

$ 16,609

$ 11,288






Operating
Costs
$ -

-
-

-

-

-

$ -

$ 123

$ -
 Operating
Expenses
$ 206,383

15,458
7,576
(23)

13,956

8,005

$ 251,355

$ 11,555

$ 11,445
 Total
$ 206,383

15,458
7,576

(23)

13,956

8,005
$ 251,355
$ 11,678
$ 11,445

As of December 31, 2020 and 2019, the Corporation had 268 and 208 employees, respectively, which included 6 directors and 4 directors not concurrently serving as employees, respectively. The average employee benefits expenses were $1,092 thousand and $1,164 thousand, respectively. The average employees’ salaries were $895 thousand and $1,049 thousand, respectively. The average adjustment of employee salary was (15%) which the calculation standard was the same as employee benefits expense.

The remuneration of directors and supervisors shall be allocated in accordance with the Articles of Incorporation and shall be paid by remuneration committee upon the resolution of the board of directors and reported in the shareholders' meeting. The remuneration is based on the content of work, education, expertise and other standards, and the Corporation's operating conditions. Employees’ performance and other factors such as salary increases or bonuses, and remuneration of managers are determined by compensation committee subject to the approval from the board of directors.

  • 239 -

  • c. Employees’ compensation and remuneration of directors and supervisors

According to the Articles of Incorporation of the Corporation, the Corporation accrues employees’ compensation and remuneration of directors and supervisors at rates of no less than 3% and no higher than 2%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. The employees’ compensation and the remuneration of directors and supervisors for the years ended December 31, 2020 and 2019, which were approved by the Corporation’s board of directors on March 16, 2021 and March 13, 2020, respectively, are as follows:

Accrual rate


Employees’ compensation
Remuneration of directors and supervisors
Amount

Employees’ compensation
Remuneration of directors and supervisors		 **For the Year Ended December 31 ** **For the Year Ended December 31 **
2020
2019
6.58%
6.56%
1.44%
1.44%
For the Year Ended December 31
2020
Cash
$ 80,847
17,747		 2019
Cash
$ 79,339
17,416

If there is a change in the amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

The Corporation held board of directors’ meetings on March 13, 2020 and March 14, 2019 and the meeting resulted in the actual amounts of the employees’ compensation and remuneration of directors and supervisors paid for 2019 and 2018 to differ from the amounts recognized in the financial statements. The differences were adjusted to profit and loss for the years ended December 31, 2020 and 2019.

Amounts approved in the
board of directors’
meeting
Amounts recognized in the
annual financial
statements		 For the Year Ended December 31 For the Year Ended December 31
2020
Employees’
Compensation
Remuneration
of Directors and
Supervisors
$ 79,000
$ 18,000
$ 79,339
$ 17,416		 2019
Employees’
Compensation
Remuneration
of Directors and
Supervisors
$ 76,000
$ 17,000
$ 75,903
$ 16,662

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Corporation’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

  • 240 -

20. INCOME TAXES

  • a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:


Current tax
In respect of the current period

Income tax on unappropriated earnings
Adjustments for prior periods


Deferred tax
In respect of the current period
Adjustments to deferred tax attributable to changes in tax rates
and laws

Income tax expense recognized in profit or loss
 **For the Year Ended ** **For the Year Ended ** **December 31 **




2020
$ 180,475

4,404
1,242

186,121

(22,017)
543

$ 164,647
 2019
$ 117,571
-

10,520

128,091
43,049

-
$ 171,140

A reconciliation of accounting profit and income tax expense is as follows:


Profit before tax

Income tax expense calculated at the statutory rate

Nondeductible expenses in determining taxable income
Unrecognized deductible temporary differences
Income tax on unappropriated earnings
Adjustments for prior years’ tax

Income tax expense recognized in profit or loss
 **For the Year Ended December 31 ** **For the Year Ended December 31 ** **For the Year Ended December 31 **



2020
$ 1,130,385

$ 226,077

(67,619)
-
4,404

1,785

$ 164,647
 2019
$ 1,112,682
$ 222,537

(66,938)

5,021
-

10,520
$ 171,140

b. Current tax assets and liabilities

Current tax assets
Tax refund receivable
Current tax liabilities
Income tax payable		 December 31
2020
$ 8,474
$ 98,120		 2019
$ 3,309
$ 18,796
  • 241 -

c. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2020

Deferred Tax Assets
Opening
Balance
Recognized in
Profit or Loss
Recognized in
Other
Comprehen-
sive Income
Temporary differences
Allowance for exceeding
limit
$ 159
$ 288
$ -

Allowance for inventory
valuation and
obsolescence losses
58
-
-
Others

543

(543)

-

$ 760
$ (255)
$ -

Deferred Tax Liabilities
Opening
Balance
Recognized in
Profit or Loss
Recognized in
Other
Comprehen-
sive Income
Temporary differences
Gain on investments
accounted for using the
equity method
$ 267,035
$ (26,714) $ -

Defined benefit obligations
454
3
57
Unrealized exchange gains
6,206
(73)
-
Financial assets at FVTPL
2,042

5,055

-

$ 275,737
$ (21,729)
$ 57

For the year ended December 31, 2019
Deferred Tax Assets
Opening
Balance
Recognized in
Profit or Loss
Recognized in
Other
Comprehen-
sive Income
Temporary differences
Allowance for exceeding
limit
$ 201
$ (42) $ -

Allowance for inventory
valuation and
obsolescence losses
439
(381)
-
Impairment loss recognized
on financial assets
measured at cost
5,021
(5,021)
-
Others

543

-

-

$ 6,204
$ (5,444)
$ -
 Closing
Balance
$ 447
58

-
$ 505
Closing
Balance
$ 240,321
514
6,133

7,097
$ 254,065
Closing
Balance
$ 159
58
-

543
$ 760

Deferred Tax Assets
Temporary differences
Allowance for exceeding
limit

Allowance for inventory
valuation and
obsolescence losses
Impairment loss recognized
on financial assets
measured at cost
Others
  • 242 -
Deferred Tax Liabilities
Temporary differences
Gain on investments
accounted for using the
equity method

Defined benefit obligations
Unrealized exchange gains
Financial assets at FVTPL
 Opening
Balance
Recognized in
Profit or Loss
Recognized in
Other
Comprehen-
sive Income
$ 234,334
$ 32,701 $ -

460
5
(11)
3,349
2,857
-

-

2,042

-

$ 238,143
$ 37,605
$ (11)
 Closing
Balance
$ 267,035

454
6,206

2,042
$ 275,737

d. Deductible temporary differences for which no deferred tax assets have been recognized in the balance sheets

Deductible temporary differences
 December 31 December 31
2020
$ 148,350
 2019
$ 172,802

The unrecognized deductible temporary differences are goodwill amortization and excess loss allowance.

21. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share are as follows:

Net Profit for the Year


Earnings used in the computation of diluted earnings per share
 **For the Year Ended ** **For the Year Ended ** December 31
2020
$ 965,738
 2019
$ 941,542

Shares

The weighted average number of ordinary shares outstanding (in thousands of shares) is as follows:


Weighted average number of ordinary shares used in the
computation of basic earnings per share
Effect of potentially dilutive ordinary shares
Employees’ compensation
Weighted average number of ordinary shares used in the
computation of diluted earnings per share		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2020
123,724

1,133
124,857		 2019
123,724

1,061
124,785
  • 243 -

If the Corporation offered to settle the compensation or bonuses paid to employees in cash or shares, the Corporation assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

22. BUSINESS COMBINATIONS

Refer to Note 25 to the consolidated financial statements for detailed information relating to business combinations.

23. CAPITAL MANAGEMENT

The Corporation manages its capital to ensure that entities in the Corporation will be able to continue as going concerns while maximizing the return to stockholders through the optimization of the debt and equity balance.

The strategy for managing the capital structure of the Corporation is based on the scale of the business, the future growth of the industry and the blueprints of the products’ development. The Corporation calculates trading fund and cash based on its production capacity in order to have a long-term and completed plan. The Corporation takes into account product competition to estimate the products’ contribution, operating profit margin and cash flow. It also considers the business cycle and the product’s’ life cycle and risks when deciding the appropriate capital structure.

Key management personnel of the Corporation review the capital structure on a regular basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Generally, the Corporation uses a cautious risk management strategy.

24. FINANCIAL INSTRUMENTS

  • a. Fair value of financial instruments measured at fair value on a recurring basis

  • 1) Fair value hierarchy

December 31, 2020

Financial assets at FVTPL
Listed shares

Emerging market shares
Overseas unlisted shares
Forward foreign
exchange
Private funds

 Level 1
$ 200,701


6,708

-
-

-

$ 207,409
 Level 2
$ -

-
-
19,871

-

$ 19,871
 Level 3
$ -

8,911
51,579
-

3,088

$ 63,578
 Total
$ 200,701
15,619
51,579
19,871

3,088
$ 290,858
  • 244 -

December 31, 2019

Financial assets at FVTPL
Listed shares

Emerging market shares
Overseas unlisted shares
 Level 1
$ 39,800


3,473

-

$ 43,273
 Level 2
$ -

-

-

$ -
 Level 3
$ -

6,798

50,611

$ 57,409
 Total
$ 39,800
10,271

50,611
$ 100,682

There were no transfers between Levels 1 and 2 in the current and prior periods.

  • 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2020

Balance at January 1, 2020
Recognized in profit or loss (included in net gain on fair value changes of
financial assets at fair value through profit or loss)
Purchases
Refund of capital reduction
Balance at December 31, 2020
For the year ended December 31, 2019
Balance at January 1, 2019
Recognized in profit or loss (included in net gain on fair value changes of
financial assets at fair value through profit or loss)
Purchases
Transfers out of Level 3
Balance at December 31, 2019		 Financial Assets
at FVTPL
Equity
Instruments
$ 57,409
5,589
5,017

(4,437)
$ 63,578
Financial Assets
at FVTPL
Equity
Instruments
$ 54,099
3,301
3,482

(3,473)
$ 57,409
  • 3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instrument Valuation Technique and Inputs Foreign exchange forward Discounted cash flow Future cash flows are estimated based contracts on observable forward exchange rates at the end of the year and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

  • 245 -

  • 4) Valuation techniques and inputs applied for Level 3 fair value measurement

Fair values of emerging market shares are measured using the market approach, while the fair values of overseas unlisted shares are measured using the asset approach.

  • b. Categories of financial instruments
Financial assets
Mandatorily classified as at FVTPL

Financial assets at amortized cost (1)
Financial liabilities
Financial liabilities at amortized cost (2)		 December 31
2020
2019
$ 290,858
$ 100,682
1,476,437
1,473,166
2,830,858
2,336,180

  • 1) The balances include financial assets at amortized cost, which comprise cash, financial assets at amortized cost, notes receivable, trade receivables, other receivables and refundable deposits.

  • 2) The balances include financial liabilities at amortized cost, which comprise short-term loans, notes payable and trade payables, other payables, and guarantee deposits received.

  • c. Financial risk management objectives and policies

The Corporation’s major financial instruments include cash, financial assets mandatorily classified as at FVTPL, financial assets at amortized cost, equity investments, trade receivables, trade payables, short-term borrowings and lease liabilities. The Corporation’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Corporation through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Corporation’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

There has been no change to the Corporation’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

The Corporation has foreign currency sales and purchases, which exposes the Corporation to foreign currency risk. The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 27.

Sensitivity analysis

The Corporation is mainly exposed to the USD and the RMB.

  • 246 -

The following table details the Corporation’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (i.e. the functional currency) against the relevant foreign currencies. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 1%. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign exchange forward contracts designated as cash flow hedges, and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. A negative number below indicates a decrease in pre-tax profit associated with the New Taiwan dollar strengthening 1% against the relevant currency. For a 1% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit, and the balances below would be positive.

Equity
 USD Impact
For the Year Ended
December 31
2020
2019
$ 7,029
$ 3,992
 RMB Impact
For the Year Ended
December 31
2020
2019
$ (2,430)
$ (1,953)

This was mainly attributable to the exposure on outstanding receivables and payables in USD and RMB which were not hedged at the end of the reporting period.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign currency risk because the exposure at the end of the reporting period did not reflect the exposure during the period.

b) Interest rate risk

The Corporation is exposed to interest rate risk because the Corporation borrows funds at both fixed and floating interest rates.

The carrying amounts of the Corporation’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk
Financial liabilities

Cash flow interest rate risk
Financial assets
Sensitivity analysis		 December 31
2020
2019
$ 1,238,372
$ 748,350
434,400
303,860

The sensitivity analysis below was determined based on the Corporation’s exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

  • 247 -

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Corporation’s pre-tax profit for the years ended December 31, 2020 and 2019 would have decreased/increased by $4,344 thousand and $3,039 thousand, respectively, which was mainly attributable to the Corporation’s exposure to interest rates on its variable-rate deposits.

c) Other price risk

The Corporation was exposed to equity price risk through its investments in domestic listed shares, domestic emerging market shares, and overseas unlisted shares. In addition, the Corporation has appointed a special team to monitor the price risk and will consider hedging the risk exposure should the need arise.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 1% higher/lower, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $2,679 thousand and $1,007 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Corporation. As at the end of the reporting period, the Corporation’s maximum exposure to credit risk, which would cause a financial loss to the Corporation due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Corporation, could be equal to the total of carrying amount of the respective recognized financial assets as stated in the balance sheets; and

In order to reduce credit risk, the management team of the Corporation designated a special team to decide the credit ratings of counterparties and other monitoring procedures to make sure there are appropriate actions taken to collect the overdue receivables. Additionally, on each balance sheet date, the Corporation reviews the recoverable amounts to ensure appropriate allowances have been made for doubtful accounts. Therefore, the Corporation considers its credit risk to be significantly reduced.

The Corporation continuously assesses the financial conditions of customers with outstanding receivables.

As the counterparties of the Corporation are financial institutions and companies with good credit ratings, the Corporation has limited credit risk.

3) Liquidity risk

The Corporation manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Corporation’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

  • 248 -

The Corporation relies on bank borrowings as a significant source of liquidity. As of December 31, 2020 and 2019, the Corporation had available unutilized short-term bank loan facilities set out below.

Financing facilities

Unsecured bank overdraft facilities, reviewed annually and
payable on demand:
Amount used

Amount unused

 **December 31 ** **December 31 **


2020
$ 1,214,800


2,185,200

$ 3,400,000
 2019
$ 726,982

1,273,018
$ 2,000,000

25. TRANSACTIONS WITH RELATED PARTIES

Besides information disclosed elsewhere in the other notes, details of transactions between the Corporation and other related parties are disclosed below.

  • a. Related party name and category
Related Party Name
Syncmold Enterprise (Samoa) Corp.
Grand Advance Inc.
Syncmold Enterprise (USA) Corp.
Syncmold Enterprise Vietnam Co., Ltd.
Syncmold Enterprise (Singapore) Pte. Ltd.
Leohab Enterprise Co., Ltd.
Gatech Technology Inc.
Gatech (Suzhou) Inc.
Fuzhou Fulfil Tech Co., Ltd.
Fujian Khuan Hua Precise Mold., Ltd.
Chongqing Fulfil Tech Co., Ltd.
Dongguan Khuan Huang Precise Mold Plastic Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Zhongshan Fulfil Tech Co., Ltd
High Grade Tech Co., Ltd.
Chen Chien Yuan
Chen Chien Hung
Kuan Chen Investment Co., Ltd.		 Related Party Category
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Associate
The legal representative of the
Corporation’s director (Note)
Related party in substance (first-degree
relative of the Corporation’s director)
Related party in substance (director is the
first-degree relative of the Corporation’s
director)

Note: Before June 2020, Chen Chien Yuan was a related party in substance.

  • 249 -

b. Sales of goods


Line Item
Related Party Category/Name
Sales
Subsidiaries

Indirect subsidiaries


Other operating revenue Indirect subsidiaries
- royalty
Fuzhou Fulfil Tech Co., Ltd.
Zhongshan Fulfil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Chongqing Fulfil Tech Co., Ltd.


Other operating revenue
- service revenue
Indirect subsidiaries

 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31







2020
$ 17,091


11,307


28,398

66,178
93,004

149,848

23,270


332,300


1,108

$ 361,806
 2019
$ 27,821

-

27,821
70,461
71,850
135,150

34,029

311,490

1,711
$ 341,022

The transaction prices and terms of collection between the Corporation and its related parties are the same as the non-related parties, except for subsidiaries that purchase raw materials on behalf of the Corporation, whose service income is decided with reference to market prices, and royalty income which is based on that stated in the agreements.

  • c. Purchases of goods
Related Party Category/Name

Indirect subsidiaries

Zhongshan Fulfil Tech Co., Ltd

Suzhou Fulfil Electronics Co., Ltd.

Fuzhou Fulfil Tech Co., Ltd.

Others


 December 31 December 31







2020
$ 1,505,534

1,365,186
340,741

165,084

$ 3,376,545
 2019
$ 1,466,013
1,070,426
338,556

237,296
$ 3,112,291

Prices of transactions between the Corporation and related parties were made with reference to market prices, and payment terms are the same as that with non-related parties.

  • d. Operating expenses

Related Party Category

Subsidiaries

Indirect subsidiaries

Associate


 **For the Year Ended December 31 ** **For the Year Ended December 31 ** **For the Year Ended December 31 **





2020
$ 1,321

367

7

$ 1,695
 2019
$ -
-

-
$ -

  • 250 -

  • e. Property, plant and equipment

Related Party Category

Related party in substance

For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31

2020
$ 550
 2019
$ -
  • f. Leases agreements

Related Party Category
Lease assets acquired
Related party in substance

The legal representative of the Corporation’s director


Line Item
Lease liabilities
Related party in substance

The legal representative of the Corporation’s director



Related Party Category
Interest expense
Related party in substance

The legal representative of the Corporation’s director

 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2020
2019
$ 2,879
$ -

1,574

-
$ 4,453
$ -
December 31
2020
2019
$ 1,685
$ 374

921

-
$ 2,606
$ 374
**For the Year Ended December 31 **


2020
$ 19


6

$ 25
 2019
$ 13

-
$ 13

The rental amounts agreed in lease contracts between the Corporation and other related parties are determined based on market prices and general payment terms.

g. Receivables from related parties (excluding loans to related parties)

Line Item
Related Party Category/Name
Trade receivables
Subsidiaries

Indirect subsidiaries
Zhongshan Fulfil Tech Co., Ltd
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Others


 **December 31 ** **December 31 **



2020
$ 6,610

95,985

95,183
35,140

12,817


245,735
 2019
$ -
69,949
74,423
33,521

26,649

204,542
(Continued)
  • 251 -
Line Item
Related Party Category/Name
Other receivables
Indirect subsidiaries
Fujian Khuan Hua Precise Mold.,
Ltd.

Gatech (Suzhou) Inc.
Others





 **December 31 ** **December 31 **



2020
$ 12,581

9,984

-


22,565

$ 268,300
 2019
$ 14,938
-

2,013

16,951
$ 221,493
(Concluded)

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2020 and 2019, no allowance loss was recognized for trade receivables from related parties.

Other receivables between the Corporation and its related parties are mainly from the purchase of raw materials. The Corporation recognizes the transactions that have not been paid to the suppliers as other payables.

  • h. Payables to related parties (excluding loans from related parties)
Line Item
Related Party Category/Name
Trade payables
Indirect subsidiaries
Zhongshan Fulfil Tech Co., Ltd

Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Chongqing Fulfil Tech Co., Ltd.
Others



 **December 31 ** **December 31 **



2020
$ 518,441


560,484
79,865
59,883

8,009

$ 1,226,682
 2019
$ 562,084
409,564
126,092
81,906

3,636
$ 1,183,282

The outstanding trade payables from related parties are unsecured and would be repaid in cash.

  • i. Loans to related parties
Related Party Category/Name
Subsidiary
Gatech Technology Inc.

Interest revenue

Related Party Category

Other receivables

Subsidiary
 December 31 December 31
2020
2019
$ -
$ 50,003
For the Year Ended December 31


2020
$ 363
 2019
$ 3

The Corporation provided Gatech Technology Inc. with unsecured short-term loans at rate of 1.25%, which was comparable to market interest rates.

  • 252 -

  • j. Loans from related parties

Related Party Category/Name
Other payables
Subsidiaries
Grand Advance Inc.

Syncmold Enterprise (Samoa) Corp.

 December 31 December 31


2020
$ 284,800


42,720

$ 327,520
 2019
$ 344,770

-
$ 344,770

The interest rate of short-term borrowings from related parties was 0% in 2020 and 2019.

  • k. Endorsements and guarantees
Related Party Category/Name
Subsidiaries
Amount endorsed

Amount utilized
 December 31 December 31

2020
$ 683,520

$ 570
 2019
$ 1,079,680
$ -

l. Non-operating income

Line Item
Related Party Category/Name
Non-operating income
Indirect subsidiaries
Service revenue
Gatech (Suzhou) Inc.
 **December 31 ** **December 31 **
2020
$ 14,518
 2019
$ -

The Corporation provided management consultancy services to its subsidiaries in 2020. The conditions of transaction price payment was based on to the market price agreed. Service revenue was agreed according to the content of the contract. The rest are comparable to non-related parties.

  • m. Compensation of key management personnel

Short-term employee benefits

Post-employment benefits

 **For the Year Ended December 31 ** **For the Year Ended December 31 ** **For the Year Ended December 31 **


2020
$ 36,503


279

$ 36,782
 2019
$ 28,818

253
$ 29,071

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

  • 253 -

26. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

A fire broke out in the premises of Suzhou Fuhongqi Electronics Co., Ltd. on January 20, 2021, which caused damage to some of the plant, machinery, equipment and inventories. The Corporation has property and public liability insurance for the plant, machinery, equipment and inventories, but the cause of the accident is still under investigation. As of March 16, 2021, the Corporation had negotiated with insurance companies to settle the claim and assessed the damage.

27. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Corporation’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2020

Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD
 $
38,749		 28.480 (USD:NTD) $ 1,103,572
RMB
 63,623 4.377 (RMB:NTD)
278,478
Non-monetary items
Subsidiaries accounted for using the equity
method
USD
 195,264 28.480 (USD:NTD)
5,561,133
Financial assets at FVTPL - non-current
USD
 1,342 28.480 (USD:NTD)
51,579

Financial liabilities

Monetary items
USD
 63,431 29.980 (USD:NTD)
1,806,515
RMB
 8,095 4.377 (RMB:NTD)
35,432
  • 254 -

December 31, 2019

Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD
 $
39,493		 29.980 (USD:NTD) $ 1,184,000
RMB
 45,357 4.305 (RMB:NTD)
195,262
Non-monetary items
Subsidiaries accounted for using the equity
method
USD
 178,911 29.980 (USD:NTD)
5,363,749
Financial assets at FVTPL - non-current
USD
 1,500 29.980 (USD:NTD)
50,611

Financial liabilities

Monetary items
USD
 52,808 29.980 (USD:NTD)
1,583,184

The significant foreign exchange gains (losses) were as follows:

Foreign
Currency
USD
RMB
Other		 For the Year Ended December 31 For the Year Ended December 31
2020
Exchange Rate
Net Foreign
Exchange Gains
(Losses)
28.480 (USD:NTD)
$ 24,262
4.365 (RMB:NTD)
8,703

(16)
$ 32,949		 2019
Exchange Rate
Net Foreign
Exchange Gains
(Losses)
29.980 (USD:NTD)
$ 11,858
4.305 (RMB:NTD)
(3,884)

(2)
$ 7,972

28. SEPARATELY DISCLOSED ITEMS

  • a. Information about significant transactions and investees:

  • 1) Financing provided to others (Table 1)

  • 2) Endorsements/guarantees provided (Table 2)

  • 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (Table 3)

  • 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (Table 4)

  • 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)

  • 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)

  • 255 -

  • 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 5)

  • 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 6)

  • 9) Trading in derivative instruments (Note 7)

  • 10) Information on investees (Table 7)

  • b. Information on investments in mainland China

  • 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 8)

  • 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Tables 1, 2, 5 and 6):

    • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

    • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

    • c) The amount of property transactions and the amount of the resultant gains or losses.

    • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

    • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

    • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.

  • c. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (None)

  • 256 -

TABLE 1

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest
Balance for
the Period		 Ending
Balance		 Actual
Amount
Borrowed		 Interest Rate
(%)		 Nature of
Financing		 Business
Transaction
Amount		 Reasons for
Short-term
Financing		 Allowance for
Impairment
Loss		 Collateral Collateral Financing Limit
for Each Borrower
Aggregate
Financing Limit
Item Value
0 Syncmold Enterprise
Corporation		 Syncmold Enterprise
(Samoa) Corp.
Grand Advance Inc.
Syncmold Enterprise
Vietnam Co., Ltd.
Gatech Technology
Inc.
Leohab Enterprise
Co., Ltd.
Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes
Yes
Yes
Yes		 $ 100,000
100,000
250,000
200,000
300,000		 $ 100,000
100,000
250,000
200,000
300,000		 $ -
-
-
-
-		 -
-
-
-
-		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing		 $ -
-
-
-
-		 Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital		 $ -
-
-
-
-		 -
-
-
-
-		 -
-
-
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
$2,359,479
(40% of the net
worth of the
Corporation)
1 Syncmold Enterprise
(Samoa) Corp.		 Fujian Khuan Hua
Precise Mold.,
Ltd.
Forever Business
Development
Limited
Dongguan Khuan
Huang Precise
Mold Plastic Co.,
Ltd.
Syncmold Enterprise
Corporation		 Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties		 Yes
Yes
Yes
Yes		 56,960
85,440
85,440
213,600		 56,960
85,440
85,440
213,600		 -
-
-
42,720		 -
-
-
0.00		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing		 -
-
-
-		 Operating
capital
Operating
capital
Operating
capital
Operating
capital		 -
-
-
-		 -
-
-
-		 -
-
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)

(Continued)

  • 257 -
No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest
Balance for
the Period		 Ending
Balance		 Actual
Amount
Borrowed		 Interest Rate
(%)		 Nature of
Financing		 Business
Transaction
Amount		 Reasons for
Short-term
Financing		 Allowance for
Impairment
Loss		 Collateral Collateral Financing Limit
for Each Borrower
Aggregate
Financing Limit
Item Value
2 Grand Advance Inc. Kunshan Fulfil Tech
Co., Ltd.
Syncmold Enterprise
(Samoa) Corp.
Full Big Limited
Zhongshan Fulfil
Tech Co., Ltd.
Chongqing Fulfil
Tech Co., Ltd.
Fuzhou Fulfil Tech
Co., Ltd.
Suzhou Fulfil
Electronics Co.,
Ltd.
Syncmold Enterprise
(USA) Corp.
Fullking
Development
Limited
Syncmold Enterprise
Corporation		 Other receivables
from related parties

Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties
Other receivables
from related parties

Other receivables
from related parties		 Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes		 $ 85,440
85,440
85,440
199,360
199,360
199,360
199,360
25,632
128,160
412,960		 $ 85,440
85,440
85,440
85,440
85,440
85,440
85,440
25,632
128,160
412,960		 $ -
-
-
-
-
-
-
11,392
42,720
284,800		 -
-
-
-
-
-
-
0.00
0.00
0.00		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing		 $ -
-
-
-
-
-
-
-
-
-		 Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital
Operating
capital		 $ -
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
3 Fuzhou Fulfil Tech Co., Ltd Fujian Khuan Hua
Precise Mold.,
Ltd.
Fuqing Foqun
Electronic
Hardware Tech
Co., Ltd.
Suzhou Fulfil
Electronics Co.,
Ltd.		 Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes
Yes		 69,837
69,837
69,837		 69,837
69,837
69,837		 -
-
-		 -
-
-		 Short-term
financing
Short-term
financing
Short-term
financing		 -
-
-		 Operating
capital
Operating
capital
Operating
capital		 -
-
-		 -
-
-		 -
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
(Continued)
  • 258 -

(Concluded)

No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest
Balance for
the Period		 Ending
Balance		 Actual
Amount
Borrowed		 Interest Rate
(%)		 Nature of
Financing		 Business
Transaction
Amount		 Reasons for
Short-term
Financing		 Allowance for
Impairment
Loss		 Collateral Collateral Financing Limit
for Each Borrower
Aggregate
Financing Limit
Item Value
4 Full Big Limited Grand Advance Inc.
Fullking
Development
Limited		 Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes		 $ 17,088
39,872		 $ -
22,784		 $ 22,784 -
0.00		 Short-term
financing
Short-term
financing		 $ -
-		 Operating
capital
Operating
capital		 $ -
-		 -
-		 -
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
5 Suzhou Fulfil Electronics
Co., Ltd.		 Kunshan Fulfil Tech
Co., Ltd.		 Other receivables
from related parties		 Yes 39,283 39,283 - - Short-term
financing		 - Operating
capital		 - - - $1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
6 Zhongshan Fulfil Tech Co.,
Ltd.		 Dongguan Khuan
Huang Precise
Mold Plastic Co.,
Ltd.
Chongqing Fulfil
Tech Co., Ltd.
Suzhou Fulfil
Electronics Co.,
Ltd.		 Other receivables
from related parties
Other receivables
from related parties
Other receivables
from related parties		 Yes
Yes
Yes		 34,918
34,918
34,918		 34,918
34,918
34,918		 -
-
-		 -
-
-		 Short-term
financing
Short-term
financing
Short-term
financing		 -
-
-		 Operating
capital
Operating
capital
Operating
capital		 -
-
-		 -
-
-		 -
-
-		 $1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)
$1,179,739
(20% of the net
worth of the
Corporation)		 $2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)
$2,949,349
(50% of the net
worth of the
Corporation)

Note 1: The authorized amount of loans was approved by the board of directors.

Note 2: The highest balance, ending balance, and the actual amount borrowed were calculated based on the exchange rate at the end of 2020.

Note 3: All the transaction in the table above have been eliminated during the preparation of the consolidated financial statements.

  • 259 -

TABLE 2

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Endorser/Guarantor Endorsee/Guarantee Endorsee/Guarantee Limit on
Endorsement/
Guarantee Given on
Behalf of Each Party		 Maximum
Amount
Endorsed/
Guaranteed
During the
Period		 Outstanding
Endorsement/
Guarantee at the
End of the Period		 Actual
Borrowing
Amount		 Amount
Endorsed/
Guaranteed by
Collateral		 Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity in Latest
Financial
Statements
(%)
Aggregate
Endorsement/
Guarantee Limit		 Endorsement/
Guarantee Given
by Parent on
Behalf of
Subsidiaries
Endorsement/
Guarantee Given
by Subsidiaries
on Behalf of
Parent		 Endorsement/
Guarantee Given
on Behalf of
Companies in
Mainland China
Name Relationship
0 Syncmold Enterprise Corporation Syncmold Enterprise
(Samoa) Corp.
Full Big Limited
Forever Business
Development Limited
Fullking Development
Limited
Full Celebration Limited		 Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary		 $1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(30% of the net worth
of the Corporation)
$1,769,609
(Net worth of the
corporation 30%)		 $ 56,960
(US$ 2,000
thousand)
626,560
(US$ 22,000
thousand)
626,560
(US$ 22,000
thousand)
626,560
(US$ 22,000
thousand)
-		 $ 56,960
(US$ 2,000
thousand)
(Notes 1 and 5)
-
626,560
(US$ 22,000
thousand)
(Notes 2, 3
and 5)
284,800
(US$ 10,000
thousand)
(Notes 3 and 5)
-		 $ -
-
570
-
-		 $ -
-
-
-
-		 0.97
-
10.62
4.83
-		 $2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(50% of the net worth
of the Corporation)
$2,949,349
(Net worth of the
corporation 50%)		 Y
Y
Y
Y
Y		 -
-
-
-
-		 -
-
-
-
-
1 Leohab Enterprise Co., Ltd. Commuwell Enterprise
(Thailand) Co., Ltd.		 Subsidiary $128,399
(50% of the net worth
of Leohab
Enterprise Co.,
Ltd.)		 102,249
(THB 107,000
thousand)		 64,025
(THB
67,000
thousand)
(Notes 4 and 5)		 3,822 - 1.09 $256,797
(100% of the net
worth of Leohab
Enterprise Co.,
Ltd.)		 N - -

Note 1: The co-financing amount of endorsement and guarantees by Syncmold Enterprise (Samoa) Corp. to bank A is $56,960 thousand.

Note 2: The co-financing amount of endorsement and guarantees by Forever Business Development Limited to bank D is $341,760 thousand.

Note 3: The co-financing amount of endorsement and guarantees by Forever Business Development Limited and Fullking Development Limited to bank E is $284,800 thousand.

Note 4: The co-financing amount of endorsement and guarantees by Commuwell Enterprise (Thailand) Corporation Limited to bank A is $64,025 thousand.

Note 5: The Corporation co-financed most of the endorsement and guarantee amounts, and the Corporation’s total balance for endorsements and guarantees is $683,520 thousand. The Corporation and its subsidiaries’ total amount for endorsements and guarantees is $747,545 thousand.

  • 260 -

TABLE 3

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name Type and Name of Marketable Securities Relationship with the
Holding Company		 Financial Statement Account December 31, 2020 December 31, 2020 Note
Number of
Shares		 Carrying
Amount		 Percentage of
Ownership (%)		 Fair Value
Syncmold Enterprise Corporation
Dongguan Khuan Huang Precise
Mold Plastic Co.,
Kunshan Fulfil Tech Co., Ltd.
Gatech (Suzhou) Inc.		 Stock
Gigastone Corporation
Tiga Gaming Inc.
Foxfortune Technology Limited
Hercules BioVenture, L.P.
Largan Precision Co., Ltd.
Winmate Inc.
Advanced Wireless Semiconductor Company
Auras Technology Co., Ltd.
Private funds
China Development of Healthcare Venture of
Limited Partnership
Structured deposit
Peoples’ profit 140 and 146 from E.SUN Bank
Monthly profit 20120390 from Fubon Bank
Monthly profit 20120398 from Fubon Bank		 -
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at FVTPL - non-current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - non-current
Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTPL - current		 847,011
1,332,132
1,000,000
184,210
9,000
1,038,000
379,198
200,000
5,017,715
-
-
-		 $ 6,708
8,911
39,425
12,154
28,755
77,954
51,192
42,800
3,088
65,508
43,648
43,770		 1.66
5.06
5.80
2.63
0.01
1.44
0.25
0.23
0.96
-
-
-		 $ 6,708
8,911
39,425
12,154
28,755
77,954
51,192
42,800
3,088
65,508
43,648
43,770		 (Notes 2 and 6)
(Notes 3 and 6)
(Notes 4 and 6)
(Notes 4 and 6)
(Notes 2 and 6)
(Notes 2 and 6)
(Notes 2 and 6)
(Notes 2 and 6)
(Notes 4 and 6)
(Notes 5 and 6)
(Notes 5 and 6)
(Notes 5 and 6)

Note 1: The negotiable securities in the table above are the shares, bonds and mutual funds recognized under IFRS 9 - “Financial Instruments”.

Note 2: The shares are calculated at the strike price as of December 31, 2020.

Note 3: The shares are measured using the market approach.

Note 4: The shares are measured using the asset approach.

Note 5: The structured commodity is calculated at its contract worth as of December 31, 2020.

Note 6: No guarantees, pledged collateral or other restricted situations.

Note 7: Refer to Tables 7 and 8 for information on investments in subsidiaries and associates.

  • 261 -

TABLE 4

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Type and Name of
Marketable Securities		 Financial Statement
Account		 Counterparty Relationship Beginning Balance Beginning Balance Acquisition Acquisition Disposal Disposal Ending Balance
Number of
Shares		 Amount Number of
Shares		 Amount Number of
Shares		 Amount Carrying
Amount		 Gain on
Disposal		 Shares Amount
Syncmold Enterprise
Corporation		 Stock
Syncmold Enterprise
Vietnam Co., Ltd.		 Investments accounted
for using the equity
method
Syncmold Enterprise
Vietnam Co., Ltd.
Subsidiary		 - $ - - $ 302,444 - $ - $ - $ -
(Note)		 - $ 242,441
(Note)

Note: The amount in the end of period includes the adjustments using the equity method, which are original investment for $302,444 thousand, and adjustment to investment losses recognized by ownership percentage of $(15,941) thousand and other comprehensive income of $(44,062) thousand.

  • 262 -

TABLE 5

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer Related Party Relationship Transaction Details Transaction Details Abnormal Transaction Abnormal Transaction Notes/Accounts
Receivable (Payable)		 Notes/Accounts
Receivable (Payable)		 Note
Purchase/
Sale		 Amount % of
Total		 Payment Terms Unit Price Payment Terms Ending Balance
% of
Total
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Fuqing Foqun Electronic Hardware
Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Dongguan Khuan Huang Precise
Mold Plastic Co., Ltd.		 Zhongshan Fufil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Fuqing Foqun Electronic Hardware Tech Co.,
Ltd.
Dongguan Khuan Huang Precise Mold Plastic
Co., Ltd.
Fuqing Foqun Electronic Hardware Tech Co.,
Ltd.
Dongguan Khuan Huang Precise Mold Plastic
Co., Ltd.
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Fuzhou Fulfil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Syncmold Enterprise Corporation
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.		 Subsidiary
Subsidiary
Subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Parent company
Indirect subsidiary
Indirect subsidiary
Indirect subsidiary
Parent company
Parent company
Indirect subsidiary
Indirect subsidiary		 Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Sales
Sales
Sales
Sales
Sales
Sales
Sales
Sales		 $ 1,505,534
1,365,186
340,741
587,473
213,733
157,004
360,996
307,287
(1,505,534)
(587,473)
(360,996)
(213,733)
(1,365,186)
(340,741)
(157,004)
(307,287)		 44
40
10
20
7
5
29
18
64
100
54
32
36
21
27
53		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1		 $ -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 $ (518,441)
(560,484)
(79,865)
(138,333)
(53,508)
(42,885)
(68,497)
(64,510)
518,441
138,333
68,497
53,508
560,484
79,865
42,885
64,510		 53
45
6
17
6
5
15
11
53
100
44
34
32
17
34
51

Note 1: Payment terms are the same as the payment terms of non-related parties.

Note 2: All the transactions in the table above have been eliminated during the preparation of the consolidated financial statements.

  • 263 -

TABLE 6

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Related Party Relationship Ending Balance
(Note 1)
Turnover
Rate		 Overdue Amount
Received in
Subsequent
Period		 Allowance for
Impairment
Loss
Amount Actions Taken
Grand Advance Inc.
Zhongshan Fufil Tech Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Suzhou Leoho Electronics Co., Ltd.		 Syncmold Enterprise Corporation
Syncmold Enterprise Corporation
Syncmold Enterprise Corporation
Suzhou Fulfil Electronics Co., Ltd.
Leohab Enterprise Co., Ltd.		 Parent company
Parent company
Parent company
Indirect subsidiary
Indirect subsidiary		 $ 284,800
(Note 1)
518,441
560,484
138,333
166,545		 -
-
-
-
-		 $ -
-
-
-
-		 -
-
-
-
-		 $ 284,800
258,320
287,414
132,077
23,667		 $ -
-
-
-
-

Note 1: Financing.

Note 2: All the transactions in the table above have been eliminated during the preparation of the consolidated financial statements.

  • 264 -

TABLE 7

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company Investee Company Location Main Businesses and Products Original Investment
Amount		 Original Investment
Amount		 As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 Net Income
(Loss) of the
Investee		 Share of
Profit (Loss)		 Note
December 31,
2020
December 31,
2019
Number of
Shares		 % Carrying
Amount
Syncmold Enterprise Corporation
Grand Advance Inc.
Syncmold Enterprise (Samoa) Corp.
Gatech Technology Inc.
Gatech Holdings Ltd.
Leohab Enterprise Co., Ltd.
Sweet International Group Ltd.
Lucky King Holdings Ltd.		 Syncmold Enterprise (Samoa)
Corp.
Grand Advance Inc.
Syncmold Enterprise (USA) Corp.
High Grade Tech Co., Ltd.
Corebio Technologies Co., Ltd.
Leohab Enterprise Co., Ltd.
Gatech Technology Inc.
Syncmold Enterprise Vietnam
Co., Ltd.
Syncmold Enterprise (Malaysia)
Sdn., Ltd.
Syncmold Enterprise (Singapore)
Pte., Ltd.
Syncmold Enterprise (Thailand)
Co., Ltd.
Canford International Limited
Fullking Development Limited
Full Glary Holding Limited
Full Big Limited
Forever Business Development
Limited
Full Celebration Limited
Gatech Holding Ltd.
Gatech International
Sweet International Group Ltd.
Lucky King Holdings Ltd.
Commuwell Enterprise (Thailand)
Co., Ltd.		 Samoa
Samoa
USA
Taiwan
Taiwan
Taiwan
Taiwan
Vietnam
Malaysia
Singapore
Thailand
Samoa
Hong Kong
Hong Kong
Samoa
Samoa
Samoa
Samoa
Samoa
British Virgin
Islands
Merisis
Thailand		 Trading and related import and export businesses of
metal molds and plastic molds as well as the
reinvestment of subsidiaries in mainland China
Trading, import and export and investment in electronic
parts
Trading, import and export in electronic parts
The design and sale of television hangers and related
import and export businesses
Medical technology and precision instrument wholesale
and retail
Precision hardware components manufacturing
Precise molding and magnesium alloy die caster
manufacturing and transaction business
Trading, import and export and investment in electronic
parts
Trading, import and export in electronic parts,
customer support and service center
Trading, import and export in electronic parts,
electronic components and parts design
Trading, import and export and investment in electronic
parts
Import and export trade and investment business
Import and export trade and investment business
Import and export trade and investment business
Reinvestment in subsidiaries in mainland China and
international trade
Reinvestment in subsidiaries in mainland China and
international trade
Reinvestment in subsidiaries in mainland China and
international trade
General investment business
General investment business
General investment business
General investment business
Plastic shot and hardware components manufacturing		 $ 110,598

506,240
32
36,075

52,000
232,677
553,815

302,444
3,639
1,100

19,920
119,342
160,175
259,720
16,643
125,957
147,710
647,041
657,284
280,368
280,368
113,236		 $ 110,598

506,240

32

36,075

52,000

-

550,000

-

-

-

-

119,342

160,175

259,720

16,643

125,957

147,710

647,041

657,284

280,368

280,368

113,236
3,546

-

-

2,280

5,200

16,620

42,207

-

-

-

-

-

-

-

-

-

-

20,130

20,268

-

-

-		 100.00
100.00
100.00
38.00
38.29
70.00
73.43
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 $ 2,537,652
3,023,481
(2,522)
128,639
35,917
253,967
645,537
242,441
1,882
593
15,243
1,415,412
982,035
310,456
235,578
335,845
248,069
626,918
626,894
505,170
505,170
177,504		 $ 276,919

649,350

(218)

39,527

(28,296)

3,689

25,545

(15,941)

(1,501)

(477)

(4,757)

338,527

317,168

54,807

2,886

51,037

(24,570)

17,027

17,028

4,199

4,199

4,092		 $ 274,294

647,505

(218)

15,020

(10,835)

2,464

19,155

(15,941)

(1,501)

(477)

(4,757)

338,527

317,163

53,198

2,886

48,271

(24,570)

17,027

17,028

4,199

4,199

4,092		 (Note 1)
(Note 1)

(Note 1)
(Note 1)

(Note 1)
(Note 1)




(Note 1)
(Note 1)
(Note 1)
(Note 1)
(Note 1)

(Note 1)
(Note 1)
(Note 1)

(Continued)

  • 265 -

Note 1: Calculated based on the audited financial statements of the investee company and the Corporation’s shareholding ratio.

Note 2: Refer to Table 8 for related information on investees from mainland China.

Note 3: The profit and loss of investments between reinvested companies, investments accounted for using the equity method, and the equity of investee companies were all eliminated during the preparation of the consolidated financial statements, except for High Grade Tech Co., Ltd. and Corebio Technology Co., Ltd.

(Concluded)

  • 266 -

TABLE 8

SYNCMOLD ENTERPRISE CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Main Businesses and Products Paid-in Capital Method of Investment
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31,
2020		 Remittance of Funds Remittance of Funds Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31,
2020		 Net Income (Loss)
of the Investee
% Ownership of
Direct or
Indirect
Investment		 Investment
Gain (Loss)		 Carrying Amount
as of
December 31,
2020		 Accumulated
Repatriation of
Investment
Income as of
December 31,
2020
Outward Inward
Fuzhou Fulfil Tech Co., Ltd.
Fujian Khuan Hua Precise Mold.,
Ltd.
Fuqing Foqun Electronic Hardware
Tech Co., Ltd.
Dongguan Khuan Huang Precise
Mold Plastic Co., Ltd.
Suzhou Fulfil Electronics Co., Ltd.
Zhongshan Fufil Tech Co., Ltd.
Kunshan Fulfil Tech Co., Ltd.
Chongqing Fulfil Tech Co., Ltd.
Gatech(Suzhou) Inc.
Suzhou Leoho Electronics Co., Ltd.		 Electronic parts processing
manufacturing. Trading and
related import and export
business
Processing, manufacturing, trading
and related import and export
business of various metal molds,
plastic molds and plastic
injection molds
Electronic parts processing
manufacturing. Trading and
related import and export
business
Processing, manufacturing, trading
and related import and export
business of various metal molds,
plastic molds and plastic
injection molds
Electronic parts processing
manufacturing. Trading and
related import and export
business
Electronic parts processing
manufacturing. Trading and
related import and export
business
Manufacturing and assembling of
laptops uses precise bearing,
hardware and related accessories
The processing, manufacturing,
related imports and exports of all
electronic, plastic and hardware
parts
Aluminum and magnesium alloy
die caster
Precision hardware components
manufacturing		 $ 42,300
108,311
57,723
122,391
18,064
148,959

228,740
135,983
692,064
201,755		 Invested through
Syncmold Enterprise
(Samoa) Corp.
Invested through
Syncmold Enterprise
(Samoa) Corp.
Invested through
Syncmold Enterprise
(Samoa) Corp.
Invested through Forever
Business Development
Limited
Invested through Canford
International Limited
Invested through Fullking
Development Limited
Invested through Full
Glary Holding Limited
Invested through Full
Celebration Limited
Invested through Gatech
International
Invested through Lucky
King Holdings Ltd.		 $ 59,324
(US$ 2,083
thousand)
38,619
(US$ 1,356
thousand)
-
-
-

-
170,880
(US$ 6,000
thousand)
-
692,064
(US$ 24,300
thousand)
127,533
(US$ 4,478
thousand)		 $ -
-
-
-
-
-
-
-
-
-		 $ -
-
-
-
-
-
-
-
-
-		 $ 59,324
(US$ 2,083
thousand)
38,619
(US$ 1,356
thousand)
-
-
-
-
170,880
(US$ 6,000
thousand)
-
692,064
(US$ 24,300
thousand)
127,533
(US$ 4,478
thousand)		 $ 221,651
(854)
27,308
46,472
341,807
315,671
54,834
(23,822)
8,909
110		 100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
73.43
70.00		 $ 223,215
3,471
27,308
48,011
341,807
321,412
54,809
(23,822)
12,521
77		 $ 1,078,503
310,018
244,654
252,270
1,415,674
1,046,542
312,017
248,058
625,602
327,666		 $ 1,929,919
(US$ 67,764
thousand)
-
22,841
(US$ 802
thousand)
-
1,214,102
(US$ 42,630
thousand)
1,192,059
(US$ 41,856
thousand)
-
516,172
(US$ 18,124
thousand)
-
-

(Continued)

  • 267 -

(Concluded)

Accumulated Outward Remittance for
Investment in Mainland China as of
December 31, 2020		 Investment Amount Authorized by the
Investment Commission, MOEA		 Upper Limit on the Amount of
Investment Stipulated by the
Investment Commission, MOEA
$1,300,824
(US$45,675 thousand)		 $2,205,577
(US$77,443 thousand)		 $3,745,101

Note 1: Calculated based on the audited financial statements of the investee company and the Corporation’s shareholding ratio.

Note 2: The profit and loss of investments between reinvested companies, investments accounted for using the equity method, and the equity of investee companies were all eliminated during the preparation of the consolidated financial statements

  • 268 -

SYNCMOLD ENTERPRISE CORPORATION

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item
Major Accounting Items in Assets, Liabilities and Equity
Statement of cash
Statement of financial assets at FVTPL - current
Statement of trade receivables
Statement of inventories
Statement of financial assets at FVTPL - non-current
Statement of changes in investments accounted for using the equity method
Statement of changes in property, plant and equipment
Statement of changes in accumulated depreciation and accumulated impairment of
property, plant and equipment
Statement of changes in intangible assets
Statement of deferred income tax assets
Statement of other payables
Statement of deferred income tax liabilities
Statement of short-term borrowings
Major Accounting Items in Profit or Loss
Statement of net operating revenue
Statement of operating cost
Statement of operating expenses
Statement of labor, depreciation and amortization by function		 **Statement Index **
1
2
3
4
5
6
Note 11
Note 11
Note 14
Note 20
Note 16
Note 20
7
8
9
10
Note 19
  • 269 -

STATEMENT 1

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF CASH DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item
Petty cash

Cash in banks
Checking accounts
Demand deposits
Trust deposits


Foreign currency demand deposits (Note)

 Amount
$ 921
3,126
71,423

247

74,796

362,730
$ 438,447

Note: The amount of US$11,642 thousand was calculated based on the exchange rate of US$1=NT$28.48. The amount of RMB6,693 thousand was calculated based on the exchange rate of RMB1=NT$4.377. The amount of EUR3 thousand was calculated based on the exchange rate of EUR1=NT$35.02 and the amount of SGD97 was calculated based on the exchange rate of SGD1=NT$21.56 and the amount of JPY2,422 thousand was calculated based on the exchange rate of JPY1=NT$0.2763 and the amount of THB640 thousand was calculated based on the exchange rate of THB1=NT$0.9556.

  • 270 -

STATEMENT 2

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Total Face
Gains (Losses) on
Financial Assets at
Item
Value/Shares
Acquisition Cost
FVTPL - Current
Stock
Largan Precision Co., Ltd.
9,000
$ 43,380
$ (14,625 )
Winmate Inc.
1,038,000
68,430
9,524
Advance Wireless Semiconductor Company
379,198
40,993
10,199
Auras Technology Co., Ltd.
200,000

46,930

(4,130)

199,733

968
Foreign exchange forward contract
Sell
1,000,000
-
1,894
Sell
1,000,000
-
1,895
Sell
2,000,000
-
3,389
Sell
2,000,000
-
3,240
Sell
2,000,000
-
2,527
Sell
1,000,000
-
1,375
Sell
1,000,000
-
1,535
Sell
1,000,000
-
1,535
Sell
1,000,000
-
852
Sell
1,000,000
-
1,124
Sell
1,000,000
-
367
Sell
1,000,000
-
102
Sell
1,000,000

-

36

-

19,871
$ 199,733
$ 20,839		 Fair Value Amount
Note
$ 28,755
-
77,954
-
51,192
-
42,800
-
200,701
1,894
-
1,895
-
3,389
-
3,240
-
2,527
-
1,375
-
1,535
-
1,535
-
852
-
1,124
-
367
-
102
-
36
-
19,871
$ 220,572
Unit Price
3,195

75
135
214


-
-
-
-
-
-
-
-
-
-
-
-
-
  • 271 -

STATEMENT 3

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF TRADE RECEIVABLES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Client Name
A

B
Others (Note)

Less: Allowance for impairment loss

 Amount
$ 573,123
99,112

95,106
767,341

710
$ 766,631

Note: The amount from each individual client included in others does not exceed 5% of the account balance.

  • 272 -

STATEMENT 4

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF INVENTORIES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item
Product
Finished goods
Raw material
Less: Allowance for inventory valuation losses		 Amount



Cost
Net Realized
Value
$ 11,220
$ 12,104
101
250

4,811

4,715
16,132
$ 17,069

294
$ 15,838
  • 273 -

STATEMENT 5

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - NON-CURRENT DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item
Domestic emerging market shares
Gigastone Corporation
Tiga Gaming Inc.

Overseas unlisted shares
Hercules BioVenture, L.P.
Foxfortune Technology Limited

Private fund
China Development of Healthcare Venture of
Limited Partnership		 Balance, January 1, 2020
Shares
Amount
847,011
$ 3,473
1,332,132

6,798

10,271
342,105
16,999
1,000,000

33,612

50,611
-

-

$ 60,882		 Acquisition
Shares
Amount
-
$ -
-

-

-
-
-
-

-

-
5,017,715

5,017
$ 5,017		 Decrease
Gain (Losses)
on Financial
Assets at
FVTPL -
Shares
Amount
Non-current
-
$ -
$ 3,235
-

-

2,113


-

5,348
157,895
4,437
(408)
-

-

5,813


4,437

5,405
-

-

(1,929)

$ 4,437
$ 8,824		 Balance, December 31, 2020

Shares
Amount
Collateral
Note
847,011
$ 6,708
None
-
1,332,132

8,911
None
-

15,619

184,210
12,154
None
-
1,000,000

39,425
None
-

51,579
5,017,715

3,088
None
-
$ 70,286
Shares
847,011

1,332,132


342,105
1,000,000


-

 Shares
-

-


-
-


5,017,715

 Shares
-

-


157,895
-


-
Shares
847,011

1,332,132



184,210
1,000,000


5,017,715
  • 274 -

STATEMENT 6

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Unlisted companies
Grand Advance Inc.
Syncmold Enterprise (Samoa) Corp.
Syncmold Enterprise (USA) Corp.
Gatech Technology Inc.
Syncmold Enterprise Vietnam Co., Ltd.
Syncmold Enterprise (Malaysia) Sdn.,
Bhd.
Syncmold Enterprise (Singapore) Pte.,
Ltd.
Syncmold Enterprise (Thailand) Co.,
Ltd.
Leohab Enterprise Co., Ltd.
High Grade Tech Co., Ltd.
Corebio Technologies Co., Ltd.
Add: Credit balance of investments
reclassified to non-current liabilities		 Balance as of January 1, 2020
Shares (In
Thousands)
Shareholding
Ratio %
Amount
-
100.00
$ 2,749,104

3,546
100.00
2,614,645
-
100.00
(2,437)
41,849
72.81
613,910

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,280
38.00
121,500
5,200
38.29

46,752

6,143,474


2,437
$ 6,145,911		 Adjustments of the Year Cash
Dividends
$ (397,336)
(358,597)
-

-
-
-
-
-
-
(11,400)

-
$ (767,333)		 Balance of December 31, 2020
Shares (In
Thousands)
Shareholding
Ratio %
Amount
Note

-
100.00
$ 3,023,481
Notes 1 and 2

3,546
100.00
2,537,652
Notes 1 and 2
-
100.00
(2,522) Notes 1 and 2
42,207
73.43
645,537
Notes 1, 2
and 3
-
100.00
242,441
Notes 1, 2
and 4
-
100.00
1,882
Notes 1, 2
and 5
-
100.00
593
Notes 1, 2
and 6
-
100.00
15,243
Notes 1, 2
and 7
16,620
70.00
253,967
Notes 1, 2
and 8

2,280
38.00
128,639
Notes 1 and 2
5,200
38.29

35,917
Notes 1 and 2
6,882,830

2,522
$ 6,885,352



Increase in
Investments
$ -

-

-
3,815
302,444
3,639
1,100
19,920
252,000
-

-

$ 582,918
 Share of Profit
Exchange
Differences on
Translating the
Financial
Adjustment
Differences
between
Acquisition of
Share of Other
Comprehensiv
e Income of
Subsidiaries
or Loss of
Statements of
Subsidiaries Accounted for
Decrease in
Investments
Subsidiaries
and Associates
Foreign
Operations
and Book
Value
Using the
Equity Method
$ -
$ 647,505
$ 24,208
$ -
$ -

-
274,294
7,310
-
-
-
(218)
133
-
-
-
19,155
7,764
1,521
(628)
-
(15,941)
(44,062)
-
-
-
(1,501)
(256)
-
-
-
(477)
(30)
-
-
-
(4,757)
80
-
-
-
2,464
(497)
-
-
-
15,020
-
-
3,519

-

(10,835)

-

-

-

$ -
$ 924,709
$ (5,350)
$ 1,521
$ 2,891
Shares (In
Thousands)
Shareholding
Ratio %
-
100.00

3,546
100.00

-
100.00
41,849
72.81

-
-
-
-
-
-
-
-
-
-
2,280
38.00
5,200
38.29



 Shares (In
Thousands)
Shareholding
Ratio %

-
100.00


3,546
100.00

-
100.00
42,207
73.43
-
100.00
-
100.00
-
100.00
-
100.00
16,620
70.00

2,280
38.00
5,200
38.29

Note 1: Calculated based on the audited financial statements of the investee companies and the shareholding ratio.

Note 2: No pledges or guaranteed investments accounted for using the equity method as at the end of 2020.

Note 3: On April 21, 2020 and July 27, 2020, the Corporation acquired additional 0.17% and 0.45% ownerships for $1,345 thousand and $2,470 thousand, respectively, which increased the Corporation’s percentage of ownership to 73.43%.

Note 4: The establishment of Syncmold Enterprise Vietnam Co., Ltd. was approved on December 24, 2019. As of March 19, 2020, the Corporation had invested $302,344 thousand in exchange for 100% shareholding interest.

Note 5: The establishment of Syncmold Enterprise (Malaysia) Sdn. Bhd. was approved on February 10, 2020. As of June 10, 2020, the Corporation had invested $3,639 thousand in exchange for 100% shareholding interest.

Note 6: The establishment of Syncmold Enterprise (Singapore) Pte. Ltd. was approved on February 27, 2020.As of June 29, 2020, the Corporation had invested $1,100 thousand in exchange for 100% shareholding interest.

Note 7: The establishment of Syncmold Enterprise (Thailand) Co., Ltd. was approved on May 14, 2020. As of May 27, 2020, the Corporation had invested $19,920 thousand in exchange for 100% shareholding interest.

Note 8: The Corporation subscribed for shares of Leohab Enterprise Co., Ltd. for a cash consideration of $232,677 thousand; the Corporation’s percentage of ownership in Leohab Enterprise Co., Ltd. was 70%. The acquisition was measured at fair value and recognized a gain from bargain purchase of $19,323 thousand.

  • 275 -

STATEMENT 7

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF SHORT-TERM BORROWINGS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Credit Type
Contract Date
Annual Rate
(%)
Ending Balance
Bank loan
Chinatrust Commercial
Bank Co., Ltd.
2020/11/04-
2021/02/26
0.75-0.77
$ 500,000

Yuanta Commercial
Bank Co., Ltd.
2020/11/27-
2021/02/23
0.76
230,000
Taishin International
Bank
2020/10/14-
2021/02/26
0.67-0.76
484,800
Taipei Fubon Bank
-
-
-
E.SUN Commercial
Bank, Ltd.
-
-
-
Bank SinoPac
Company Limited
-
-
-
HSBC Bank Limited

-

$ 1,214,800
 Credit Line
Security
Guarantees
$ 500,000
None
500,000
None
500,000
None
500,000
None
600,000
None
500,000
None

300,000
None
$ 3,400,000
  • 276 -

STATEMENT 8

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF NET OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item
Quantity
Average Price
Sales revenue
Display hinges
19,920,419
$ 180

Others
-

Other operating revenue

 Amount
$ 3,583,550

14,098
3,597,648

333,466
$ 3,931,114
  • 277 -

STATEMENT 9

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item
Raw material, beginning of year

Add: Raw material purchased
Less: Raw material, end of the year
Transferred to operating expense

Raw materials used
Direct labor
Manufacturing expense

Manufacturing cost
Add: Work in process, beginning of year
Less: Work in process, end of year

Cost of finished goods
Add: Finished goods, beginning of year
Less: Finished goods, end of year

Cost of finished goods sold

Add: Product, beginning of year
Purchase of products
Less: Product, end of year
Transferred to operating expense

Cost of products

Cost of goods sold
Other operating cost

 Amount
$ 956
17,636
4,811

387
13,394
1,644

12,963
28,001
-

-
28,001
182

101

28,082
24,886
3,371,652
11,220

83

3,385,235
3,413,317

49
$ 3,413,366
  • 278 -

STATEMENT 10

SYNCMOLD ENTERPRISE CORPORATION

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item
Salary (Note 2)
Others (Note 1)
 Selling
Expenses
General and
Administrative
Research and
Development
Expense
Expected
Credit Loss
Reversed on
Trade
Receivables
$ 27,036
$ 129,553
$ 97,312
$ -


35,574

54,491

72,442

601

$ 62,610
$ 184,044
$ 169,754
$ 601
 Total
$ 253,901
163,108
$ 417,009

Note 1: The amount of each item in others does not exceed 5% of the account balance.

Note 2: Included salary, pension and remuneration of directors.

  • 279 -

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