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T3EX — AGM Information 2020
Jul 23, 2020
52176_rns_2020-07-23_dc3444b4-b412-4881-a2ea-33a5b553102d.pdf
AGM Information
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Stock Code: 2636
T3EX Global Holdings Corp. 2020 Annual Meeting of Shareholders
(Translation)
Meeting Agenda Handbook
MEETING TIME: 05, 27, 2020
PLACE: Cathay Financial Conference Hall, G Room
| Table of Contents | ||
| I. Meeting Procedure…………................................................................................... | P2 | |
| II. Meeting Agenda | P3 | |
| 1. Report Items…………………………….……....................................................... | P4 |
|
| 2. Proposed Resolutions…………….…………..…………....................................... | P6 |
|
| 3. Discussion Items……………...…………….......................................................... | P7 | |
| 4. Meeting Adjourned…………………………………….………………………… | P8 | |
| III. Attachments…………………………………….……………………………….. | P9 | |
| 1. 2019 Business Reports……………………….………………………………… | P9 | |
| 2. Audit Committee’s Review Report……………………………………………… | P12 | |
| 3. Financial Statement………………………………………………………………. | P13 |
|
| IV. Appendices………………………………………………………………………. | P28 | |
| 1. Articles of Incorporation………………………………………………………... | P28 | |
| 2. Shareholdings of Directors…………………………………………………….. | P35 | |
| 3. Directors’ Compensation and Employees’ Profit Sharing……………………….. | P36 | |
| 4. The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate…………………………………………………………. |
P36 |
1
T3EX Global Holdings Corp.
Time: 9:30 a.m., May 27, 2020
Place: Cathay Financial Conference Hall, G Room
( No.9, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan)
I. Procedure for the 2020 Annual Meeting of Shareholders:
1. Call the Meeting to Order
2. Chairman’s Address
3. Report Items
4. Proposed Resolutions
5. Discussion Items
6. Meeting Adjourned
2
II. Agenda of Annual Meeting of Shareholders:
1. Report Items
-
（1）2019 Business Report -
（2）Audit Committee review report on the 2019 financial statements -
（3）2019 distribution report of compensation of directors and employee bouns. -
（4）The status of 2019 endorsement and guarantee -
（5）Amendment to the “7th Regulations of Company’s Share Buyback Transfer” -
（6）Other report items
2. Proposed Resolutions
-
（1）Adoption of the 2019 business report and financial statements -
（2）Adoption of the proposal for distribution of 2019 profits
3. Discussion Items
-
（1）Amendment to the Company’s Articles of Incorporation -
（2）Amendment to the Rules of Procedure for Shareholder Meetings -
（3）Amendment to the Operational Procedures for Loaning of Company Funds
4. Meeting Adjourned
3
1. Report Items
Report No.1
2019 Business Reports.
Explanation:
Please refer to page 9-11 (Attachment 1) for details.
Report No.2
Audit Committee’s review report on the 2019 financial statements.
Explanation:
Please refer to page 12 (Attachment 2) for details.
Report No.3
2019 distribution report of compensation of directors and employee bonus.
Explanation:
” i.In accordance with the “Company’s Articles of Incorporation .
ii.The Company’s 2019 profit before distribution was
NT$262,236,516which distributed 0.5% (NT$1,320,000) employee bonus and distributed 2.8% (NT$7,350,000)
compensation of directors with cash.
Report No.4
The status of 2019 endorsement and guarantee
Explanation:
i.In accordance with the “Company’s the Operational Procedures for Endorsements and Guarantees”.
ii.The Company has endorsed the bank contract for the future operating capital of Shanghai YaoHwa International Forwarder Co., Ltd. The end of year balance was NT$12,987 thousands and the actual usage amount was NT$0.
iii.The Company has endorsed the bank contract for the future operating capital of T.H.I. Group (Shanghai) Ltd. The end of year balance was NT$94,474 thousands and the actual usage amount was NT$0.
- iv.The Company has endorsed the bank contract for the future operating capital of T-SC Factoring Co., Ltd. The end of year balance was NT$289,920 thousands and the actual usage
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amount was NT$0.
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v.The Company has endorsed the bank contract for the future operating capital of T-Cube Global Logistics Co., Ltd. The end of year balance was NT$81,679 thousands and the actual usage amount was NT$29,852 thousands.
-
vi.The Company has endorsed the bank contract for the future operating capital of TEC Logistics Co., Ltd. The end of year balance was NT$104,965 thousands and the actual usage amount was NT$ 0.
-
vii.The Company has endorsed the bank contract for the future operating capital of THI Group Limited (H.K.). The end of year balance was NT$29,990 thousands and the actual usage amount was NT$ 0.
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viii.Shanghai YaoHwa International Forwarder Co., Ltd. endorsed the business contract for the business need of T.H.I. Group (Shanghai) Ltd. The end of year balance is NT$3,009 thousands and the actual usage amount was NT$3,009thousands.
Report No.5
Amendment to the “7[th] Regulations of Company’s Share Buyback Transfer”
Explanation:
-
i.In accordance with the amendment of Article 28-2 of Securities and Exchange Act, which extended the transfer period of share buyback from three years to five years.
-
ii.The Company has amended the Article 3, Article 10, and Article 13 of “7[th] Regulations of Company’s Share Buyback Transfer”, which has extended the transfer period of share buyback from three years to five years.
Report No.6
Other report items
Explanation:
The status of proposal from shareholders: The Company didn’t receive any proposal during the period of proposal from March 20, 2020 to March 30, 2020.
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2. Proposed Resolutions
-
(1) Proposal: (Proposed by the Board) Adoption of the 2019 business report and financial statements. Explanation:
-
i.The Company’s 2019 financial statements, including the balance sheet, income statement, statement of changes in shareholders’ equity, and statement of cash flows, were audited by independent auditors, CHI-LUNG YU and MEI-PIN WU of KPMG Firm. Also the business report and financial statements have been approved by the audit committee and board of directors on March 6, 2020.
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ii.The 2019 business report, independent auditors’ audit report, and the above-mentioned financial statements were attached in the Meeting Agenda, please refer to page 13~27 (Attachment 3). Resolution:
-
(2) Proposal: (Proposed by the Board) Adoption of the proposal for distribution of 2019 profits. Explanation:
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i.The board has adopted a proposal for distribution of 2019 profits. Please refer to the below of 2019 PROFIT DISTRIBUTION TABLE.
T3EX Global Holdings Corp. PROFIT DISTRIBUTION TABLE Year 2019
| Year 2019 | ||
|---|---|---|
（Unit: NTD＄） |
||
| BeginningRetained Earnings | 85,568,422 | |
| Less: Remeasurement of defined benefit obligation in 2019 | (6,815,723) | |
| Less: Cancellation of the buyback shares | (10,819,069) | (17,634,792) |
| Adjusted BeginningRetained Earnings | 67,933,630 | |
| Add: Netprofit after tax | 249,046,803 | |
| Less: 10% legal reserve | (23,141,201) | |
| Less: set aside the special reserve | (60,623,579) | 165,282,023 |
| Distributable Net Profit | 233,215,653 | |
| Distributable items: | ||
| Shareholders Bonus- Stock Dividends | 0 |
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Shareholders Bonus- Cash Dividends(NT$1.3per share) Unappropriated retained earnings
(150,535,323) (150,535,323)
82,680,330
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ii.After the proposal is approved by the Shareholders’ Meeting, the Chairman is authorized to determine the distribution record date, the dividend distribution date and other related detail.
-
iii.In the event that, before the distribution record date, the proposed profit distribution is affected by an amendment to relevant laws or regulations, a request by the competent authorities, or a buyback of shares or issuance of new shares for transferring treasury shares to employees or for equity conversion in connection with domestic convertible corporate bonds or other convertible securities or employee stock options, it is proposed that the Chairman be authorized to adjust the cash to be distributed to each share based on the number of actual shares outstanding on the record date for distribution.
Resolution:
3. Discussion Items
- (1) Proposal: (Proposed by the Board)
Amendment to the Company ’ s Articles of Incorporation.
Explanation:
i.In accordance with the amendment of Article 162 of Company Act, the Company amended the Company’s Articles of Incorporation.
ii.Please proceed to discuss.
Resolution:
- (2) Proposal: (Proposed by the Board) Amendment to the Rules of Procedure for Shareholder Meetings
Explanation:
-
i.In accordance with the amendment of Company Act and the actual needs, the Company amended the Rules of Procedure for Shareholder Meetings.
-
i.Please proceed to discuss.
Resolution:
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- (3) Proposal: (Proposed by the Board)
Amendment to the Operational Procedures for Loaning of Company Funds
Explanation:
- i.In accordance with the Company’s actual needs, the company
hereby proposes to amend the Operational Procedures for Loaning of Company Funds
ii.Please proceed to discuss. Resolution:
4. Meeting Adjourned
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Attachment 1: 2019 Business Report
Now, I hereby thanks to every shareholders on behalf of T3EX group for your cares and supports. T3EX Group has been keeping work hard to be the provider of total solution of logistics supply chain management.
2019 Performance Review:
| Expressed in thousands of New Taiwan Dollars |
2019 | 2018 | YoY |
|---|---|---|---|
| Revenue | 11,258,071 | 11,536,269 | -2.41% |
| Gross Profit | 2,014,229 | 1,963,236 | 2.60% |
| OperatingExpense | 1,717,569 | 1,587,038 | 8.22% |
| OperatingProfit | 296,660 | 376,198 | -21.14% |
| Profit after tax | 241,363 | 366,598 | -34.16% |
| EPS(Dollars) | 2.15 | 3.07 | -29.97% |
| Gross Margin | 17.89% | 17.02% | 0.87% |
| Income Tax Rate | 22.35% | 9.93% | 12.41% |
In 2019, both freight and cargo volume of international air freight and ocean freight were declined by the effect of US and China trade war, especially in China region. According to the statistics of IHS Markit, the global information provider, the volume of export by ocean freight from China to USA of 2019 decreased 10% compared to 2018; According to the statistics of IATA, the International Air Transport Association, the volume of air cargo in Asia region of 2019 fell 6% compared to 2018. T3EX Group’s revenue in China region is approximately 70%, but through the adjustment of operating strategy as below that have been taking effective, the Company’s revenue in 2019 merely declined 2.4% compared to 2018, the gross profit increased 2.6% year over year, the operating expense grew 8%.
To mitigate the impact of China-US trade war, the Company has been doing below strategies:
1. The adjustment of customer structure, the Company has eliminated lower profit customers to keep more resources and time for the high quality customers in order to provide them more value-added services.
2. T3EX Group has been rooting in Southeast Asia for many years. Since a lot of industries have been moving out from China to Southeast Asia, this region has huge potential to grow. The Company has been speeding up to build business teams in Southeast Asia as well as develop business, the revenue of East Asia in 2019 enjoyed a 81% year over year growth, and the sales percentage of 2019 was 11%, compared to 11% of 2018.
3. The Company has developed non-US route business such as Europe, Africa, the Middle East, and Asia. And the Company has enlarged the sales team of railway division.
4. Through the integration of logistics supply-chain management which included international logistics, customs, warehousing and transportation, the Company’s gross margin has grew. For the above strategic adjustments such as multiple market developing, the integration of
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supply-chain management, and investment in Southeast Asia, the Company has enlarged in investing business teams of Southeast Asia, has built the team of supply-chain finance, and others investment on operating human resources, which caused the NTD$130 million of increase of operating expense in 2019 compared to 2018. Besides, the income tax ratio of 2018 was 10% because of recognizing NTD$45 million of income tax profit. Without recognition income tax profit in 2019, the Company’s income tax ratio was increased 12% year over year. In 2019, the Company’s EPS was dropped 30% year over year.
2020 Outlook:
The COVID-19 broke out in China this Feb., Chinese government has contracted the virus via locking cities, shutting down harbours, and suspending the resumption of work, which has resulted in the shortage of labors, material, resources and the obstruction of cross-city transportation, so most Chinese industries couldn’t produce and deliver products, and the global supply-chain was cut off. Until mid-March, China has obviously contracted the virus, many factories have resumed to work and deliver, the inland logistics and harbours have started operation. But simultaneously, the virus have been raging from Japan, Korea, Europe to United States, the virus pandemic is outbreak around the globe. Till now, the government of Europe, USA, and East-Asia have mandated the lockdown policies such as forbidding foreigner’s entry, unnecessary industry shutdown, enterprises work from home, and the remote learning and teaching of schools to curb disease spreading that caused a huge revolution for logistics industries.
International Ocean Freight Market Outlook:
In mid-March, the Chinese factories have sped up producing products to export, the space of containerships were full. In April, a lot of enterprises which belong to unnecessary customer goods have shut down, and have suspended the import from Asian manufactures. So, we predict the booing volume of containerships would become slow, the shippers would blank ships to control the capacity for maintaining the ratio of booking and the freight. If the virus will be contracted effectively in Europe and USA, there could emerge hunger booking trends because of shortage inventories since Chinese supply-chain block in this February.
International Air Freight Market Outlook:
In this March, the air cargos have surged hugely, because of the suspension resumption of work in China, the shortage of inventories in Europe and USA, and the emergency import needs for medical suppliers around the globe. As the lockdown policy implement all over the world, the airlines have downsized over 60% passenger flights that caused a serious shortage of air cargo spaces, the air freight has been soaring over historic new price. Under this condition, forwarders who get more air cargo spaces for customers can take more advantages. T3EX Group has solid relations with many airlines, the Company has provided customers sufficient air cargo spaces. In future, if the virus has been serious, the air cargo space would been keeping shortage by the huge needs of medical suppliers. If the mitigation of virus, there could emerge hunger booking trends because of shortage inventories. China-Europe Railway Market Outlook:
The decrease of China-Europe railway trains as the suspension resumption of work and the shortages of air cargo spaces which resulted in the logistics transfer from air flights to railway, the rail cargo spaces of China-Europe railway are full. T3EX Group has a long-term contracts with Chinese rail companies which committed plentiful rail cargo spaces, the railway business of this year has great
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increase comparing last year.
Chinese Domestic Market Outlook:
After overcoming virus epidemic in China, consumer desire is surging which can stimulate growth of domestic consumption market and logistics in domestic market. T3EX Group has plentiful of warehousing and transportation network in China nationwide, we built warehouses in strategic cities such as Shanghai, Hong Kong, Suzhou, Guangdong, and Kunshan, our inland transportation covered nearly 400 tier 1, 2 and 3 cities.
Future Strategy Plan:
This year, T3EX Group has built two operating management centers in China and Taiwan. The tasks of Chinese operating management center are searching the 3PL logistics partners in China for constituting import total solution service, developing the railway business in China-Europe, and China-Russia, enlarging the collaboration with overseas agent in Africa and Central and South America, expanding supply chain finance business. For embracing the manufacture outflow from China to Taiwan, and Southeast Asia, the tasks of Taiwan operating management center are investing non-China regions such as developing the opportunities from Taiwan factories backing and enlarging the investment in Southeast Asia.
A. Enlarge Investment in Southeast Asia:
Since 2009, the Company has been investing in Southeast Asia. We have 13 locations in Vietnam, Thailand, Singapore, Malaysia, Cambodia, Philippian, and Indonesia. In this year, we have expanded the sales teams, and develop the southeast Asia-Europe, America routes business for enlarging the business percentage in Southeast Asia.
B. Develop the Import Total Solution Supply-chain Management Service in China:
In the beginning of 2020, China signed phase one trade deal with USA, China committed USA to purchase US$200 billion products within two years. USA cut duties on US$120 billion in product from 15% to 7.5% on 14, February, 2020. China also cut duties on US$75 billion products from 5%~10% to 2.5% to 5%. The Company expected the volume of cargos in export and import in China would back and rebound after the mitigation of virus pandemic, because China-USA trade war has curbed trade activities in the globe and enterprise kept low inventory policy in 2019.
T3EX Group has comprehensive warehousing and transportation network in China, the Company has been searching the merger target of Chinese 3PL companies, expanding the teams of warehousing and transportation, and integrating the group’s resources to build a comprehensive import supply-chain logistics services( international logistics+ customs+ warehousing+ transportation+ supply chain finance)
We will continue to strengthen our expertise and create greater values for our shareholders.
Chairman& General Manger: David Yen Accounting Management: Allen Hou
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Attachment 2: Audit Committee’s Review Report
T3EX Global Holdings Corp. Audit Committee’s Review Report
Date: March 6, 2020
The Board reports the financial statement, business report, and earnings distribution proposal of 2019, and financial statement have been audited by KPMG Taiwan. The financial statements, business report and earnings distribution proposal have been reviewed and determined to correct and accurate by the Audit Committee members of T3EX Global Holdings Corp. According to relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.
Submitted to:
2020 Regular Shareholders’ Meeting of the Company
Chairman of the Audit Committee
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Attachment 4: Financial Statement
Independent Auditors’ Audit Report
To the Board of Directors of T3ex Global Holdings Corp.
Opinion
We have audited the consolidated financial statements of T3EX Global Holdings Corp. (“the Company”) and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2019 and 2018,and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effects by the Financial Supervisory Commission of the Republic of China.
Basis for Opinion
We conducted our audit of the Consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2018 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
1. Revenue recognition
Please refer to Note 4(m) "Revenue recognition" of consolidated financial statements and Note 6(t) "Revenue from contracts with customers" for the details of operating revenues of consolidated financial statements.
Description of key audit matter:
The Group mainly engages in sea and air freight forwarding, and total logistics solution. Therefore, the revenue
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is a matter to the users of the consolidated financial statements. Consequently, this is one of the key assessment areas in our audit.
How the matter was addressed in our audit:
Understanding the internal control on revenue recognition applied by the management and assessing whether appropriate accounting policy is applied; performing the analysis on revenue from the top ten customers to verify whether or not any unusual transaction has incurred; performing the sampling procedures to verify records and supporting document of the transactions; selecting a period before and after the reporting date to assess whether revenue recognized in the correct period.
2. Goodwill and other intangible assets impairment assessment
Please refer to Notes 4(l) “Impairment of non financial assets” of the consolidated financial statements, Note 5 for assumptions on the accounting estimates and assumptions on the impairment of goodwill and other intangible assets of the consolidated financial statements, and Note 6(i) for the details of the intangible assets in consolidated financial statements.
Description of key audit matter:
The accounting policy applying to the goodwill and other intangible assets arising from acquisition transactions is with the uncertainty estimation. Consequently, this is one of the key assessment areas in our audit.
How the matter was addressed in our audit:
Understanding the internal control on the impairment assessment of the goodwill and other intangible assets; selecting significant goodwill and other intangible assets; obtaining impairment assessment reports issued by an external expert engaged by the management; assessing model, parameters and assumptions applying to the financial information forecast; and evaluating whether the assessment for goodwill and other intangible assets was based on the accounting policies.
3. Accounts receivable evaluation
Please refer to Note 4(g) “impairment of financial assets” of consolidated financial statements, Note 5 “Estimation uncertainty of the impairment of the receivable” of consolidated financial statements and Note 6(d) “impairment of the receivables” of consolidated financial statements.
Description of key audit matter:
The Group deal with its main customers on credit, so Group's receivables are exposed to the credit risk. When the customer defaults, the receivables may be impaired. Since the collectability assessment of receivables depends on management's judgment. Consequently, this is one of the key assessment areas in our audit.
How the matter was addressed in our audit:
Understanding impairment policy applied to the receivables by the management; assessing whether it is based on appropriate accounting policies. Inquiring the management whether there was any receivable with difficulty to collect; performing a sampling procedure to check the correctness of the aging of receivables and to review the collection of receivables in the subsequent period to understand if there were any significant overdue receivables to evaluate the provisions for impairment of receivables are adequate.
Other Matter
T3EX Global Holdings Corp. has prepared its parent company only financial statements as of and for the years then ended December 31, 2019 and 2018, on which we have expressed an unqualified opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
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accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.
Auditor’s 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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
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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.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conduct that a material uncertainty exists, we are required to draw attention in our auditor’s 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.
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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.
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Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’ report are Chi Lung Yu and Mei Pin Wu.
KPMG
Taipei, Taiwan (Republic of China) March 6, 2020
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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars)
| Assets Current assets: 1100 Cash and cash equivalents (notes 6(a) & (x)) 1110 Current financial assets at fair value through profit or loss (notes 6(b) & (x)) 1120 Current financial assets at fair value through other comprehensive income (notes 6(c) & (x)) 1150 Notes receivable, net (notes 6(d) & (x)) 1170 Accounts receivable, net (notes 6(d) & (x)) 1180 Accounts receivable due from related parties, net (note 6(d), (x) & 7) 1470 Other current assets (notes 6(x) & 8) Current assets Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (notes 6(c) & (x)) 1550 Investments accounted for using equity method, net (note 6(e)) 1600 Property, plant and equipment (notes 6(g) & 8) 1755 Right-of-use assets (note 6(h)) 1805 Goodwill (notes 6(f) &(i)) 1821 Other intangible assets, net (notes 6(f) & (i)) 1840 Deferred tax assets (note 6(p)) 1920 Guarantee deposits paid (note 6(x) & 8) 1995 Other non-current assets, others (note 8) Non-current assets Total assets |
December 31, 2019 Amount % $ 2,216,962 37 55,196 1 69,451 1 36,110 - 1,735,434 29 1,811 - 232,986 4 |
December 31, 2018 Amount % 1,726,979 31 28,925 1 75,897 1 42,442 1 1,919,529 34 1,216 - 393,899 7 4,188,887 75 165,407 3 49,288 1 282,104 5 - - 531,504 10 124,347 2 47,474 1 146,958 2 52,237 1 1,399,319 25 5,588,206 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(j) & (x)) 2150 Notes payable (note 6(x)) 2170 Accounts payable (note 6(x)) 2180 Accounts payable to related parties (notes 6(x) & 7) 2219 Other payables, others (note 6(x)) 2230 Current tax liabilities 2280 Current lease liabilities (notes 6(m) & (x)) 2322 Long-term borrowings, current portion (notes 6(k) & (aa)) 2399 Other current liabilities, others (notes 6(f)(o) & (x)) Total current liabilities Non-Current liabilities: 2540 Total long-term borrowings (notes 6(k) & (x)) 2570 Total deferred tax liabilities (note 6(p)) 2580 Non-current lease liabilities (notes 6(m) & (x)) 2640 Net defined benefit liability, non-current (note 6(o)) Non-current liabilities Total liabilities Equity attributable to owners of parent (notes 6(c), (f) & (q)) : 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity 3500 Treasury shares Equity attributable to owners of the Company 36xx Non-controlling interests Total equity Total liabilities and equity |
December 31, 2019 | December 31, 2019 | December 31, 2019 |
|---|---|---|---|---|---|
| Amount | % | Amount | |||
4,347,950 72 |
|||||
| 184,676 3 55,246 1 277,603 5 321,920 5 529,589 9 109,182 2 47,729 - 114,159 2 61,066 1 |
2,957,688 48 2,654,564 47 |
||||
303,861 5 205,564 4 123 - - 1 151,938 4 - - 82,723 1 79,216 - |
|||||
538,645 10 284,780 5 |
|||||
3,496,333 58 2,939,344 52 |
|||||
1,171,575 19 1,183,455 21 798,811 13 808,958 15 653,539 11 676,879 12 (186,054) (3) (125,430) (2) (27,797) - (60,643) (1) |
|||||
1,701,170 28 |
|||||
2,410,074 40 2,483,219 45 |
|||||
142,713 2 165,643 3 |
|||||
2,552,787 42 2,648,862 48 |
|||||
$ 6,049,120 100 5,588,206 100 |
|||||
| $ 6,049,120 100 |
|||||
17
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)
| 4000 Operating revenue (notes 6(t) &7) 5000 Operating costs (notes 6(h), (m), (n) (o), 7 & 12) Gross profit from operations Operating expenses (notes 6(h), (m), (n), (o), (s) & 12) 6100 Selling expenses 6200 Administrative expenses 6450 Expected credit loss (note 6(d)) Total operating expenses Net operating income Non-operating income and expenses: 7010 Other income (note 6(u)) 7020 Other gains and losses, net (notes 6(b), (f) & (v)) 7060 Share of profit of associates and joint ventures accounted for using equity method, net (note 6(e)) 7510 Finance cost (notes 6(l), (m) & (w)) Total non-operating income and cost Profit from continuing operations before tax 7950 Less: Income tax expenses (note 6(p)) Profit 8300 Other comprehensive income: 8310 Item that may not be subsequently reclassified to profit or loss 8311 Remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Profit attributable to: Owners of parent Non-controlling interests Comprehensive income attributable to: Owners of parent company Non-controlling interests Earnings per share (note 6(r)) Basic earnings per share (NT Dollars) Diluted earnings per share (NT Dollars) |
2019 | % 100 82 |
2018 | % 100 83 17 10 4 - 14 3 - - - - - 3 - 3 - - - - - - - - 3 3 - 3 3 - 3 3.07 2.96 |
|---|---|---|---|---|
| Amount $ 11,258,071 9,243,842 |
Amount 11,536,269 9,573,033 |
|||
2,014,229 1,253,809 459,534 4,226 |
18 11 4 - |
1,963,236 1,164,830 418,529 3,679 |
||
1,717,569 |
15 | 1,587,038 |
||
296,660 |
3 | 376,198 |
||
41,230 9,421 1,851 (38,347) |
- - - - |
26,751 25,609 900 (22,433) |
||
14,155 |
- | 30,827 |
||
310,815 69,452 |
3 1 |
407,025 40,427 |
||
241,363 |
2 | 366,598 |
||
(6,816) 12,656 - |
- - - |
675 (28,590) - |
||
| 5,840 | - | (27,915) | ||
(88,526) - |
(1) - |
(2,788) - |
||
| (88,526) | (1) | (2,788) | ||
(82,686) |
(1) |
(30,703) |
||
$ 158,677 |
1 |
335,895 |
||
$ 249,047 (7,684) |
2 - |
354,930 11,668 |
||
$ 241,363 |
2 | 366,598 |
||
$ 181,607 (22,930) |
1 - |
325,147 10,748 |
||
$ 158,677 |
1 | 335,895 |
||
$ |
2.15 | |||
| $ | 2.15 |
18
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)
| Balance on January 1, 2018 Effects of retrospective application Equity at beginning of period after adjustments Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends on ordinary share Other changes in capital surplus: Cash dividends from capital surplus Retirement of treasury stock Disposal of investments in equity instruments designated at fair value through other comprehensive income Changes in non-controlling interests Balance on December 31, 2018 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Reversal of special reserve Retirement of treasury stock Balance on December 31, 2019 |
Equity attributable to owners of parent | Equity attributable to owners of parent | Equity attributable to owners of parent | Equity attributable to owners of parent | Equity attributable to owners of parent | Equity attributable to owners of parent | Non-contro lling interests |
Total equity 2,392,607 43,106 |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ordinary shares |
Capital surplus |
Retained earnings | Total other equity interest | Treasury shares |
Total equity attributable to owners of parent |
|||||||||
| Exchange differences on translation of foreign financial statements |
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income |
Unrealized gains (losses) on available-for- sale financial assets |
Total other equity interest |
|||||||||||
| Legal reserve |
Special reserve |
Unappropriated retained earnings |
Total retained earnings |
|||||||||||
| $ 1,185,655 - |
872,754 - |
151,624 - |
25,556 - |
247,752 490 |
424,932 490 |
(118,509) - |
- 23,606 |
(19,010) 19,010 |
(137,519) 42,616 |
(66,349) - |
2,279,473 43,106 |
113,134 - |
||
| 1,185,655 | 872,754 |
151,624 |
25,556 |
248,242 |
425,422 |
(118,509) |
23,606 |
- |
(94,903) |
(66,349) |
2,322,579 |
113,134 |
2,435,713 |
|
- - |
- - |
- - |
- - |
354,930 675 |
354,930 675 |
- (1,868) |
- (28,590) |
- - |
- (30,458) |
- - |
354,930 (29,783) |
11,668 (920) |
366,598 (30,703) |
|
| - | - | - | - | 355,605 | 355,605 |
(1,868) |
(28,590) |
- |
(30,458) |
- |
325,147 |
10,748 |
335,895 |
|
| - - - - (2,200) - - |
- - - (46,318) (3,506) - (13,972) |
24,011 - - - - - - |
- 111,961 - - - - - |
(24,011) (111,961) (104,217) - - 69 - |
- - (104,217) - - 69 - |
- - - - - - - |
- - - - - (69) - |
- - - - - - - |
- - - - - (69) - |
- - - - 5,706 - - |
- - (104,217) (46,318) - - (13,972) |
- - - - - - 41,761 |
- - (104,217) (46,318) - - 27,789 |
|
| 1,183,455 - - |
808,958 - - |
175,635 - - |
137,517 - - |
363,727 249,047 (6,816) |
676,879 249,047 (6,816) |
(120,377) - (73,280) |
(5,053) - 12,656 |
- - - |
(125,430) - (60,624) |
(60,643) - - |
2,483,219 249,047 (67,440) |
165,643 (7,684) (15,246) |
2,648,862 241,363 (82,686) |
|
| - | - | - | - | 242,231 |
242,231 |
(73,280) |
12,656 |
- |
(60,624) |
- |
181,607 |
(22,930) |
158,677 |
|
| - - - (11,880) |
- - - (10,147) |
35,493 - - - |
- - (12,087) - |
(35,493) (254,752) 12,087 (10,819) |
- (254,752) - (10,819) |
- - - - |
- - - - |
- - - - |
- - - - |
- - - 32,846 |
- (254,752) - - |
- - - - |
- (254,752) - - |
|
$ 1,171,575 |
798,811 |
211,128 |
125,430 |
316,981 |
653,539 |
(193,657) |
7,603 |
- |
(186,054) | (27,797) |
2,410,074 |
142,713 |
2,552,787 |
19
(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)
| Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss / Provision for bad debt expense Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Share of profit of associates accounted for using equity method (Gain) loss from disposal of property, plant and equipment Gain from disposal of investments Loss from disposal of investments accounted for using equity method Gain on evaluation of investments payable Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable due from related parties Decrease in other current assets Increase in other operating assets Total changes in operating assets Changes in operating liabilities: Decrease in notes payable Decrease in accounts payable Increase (decrease) in accounts payable to related parties Decrease in other payables Decrease in other current liabilities Decrease in net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Net cash flows used in acquisition of subsidiaries (deduct purchasing cash amount) Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Decrease in investments payable Dividends received Net cash flows used in investing activities Cash flows from financing activities: Increase in short-term loans Repayments of bonds Proceeds from long-term loans Repayments of long-term debt Payment of lease liabilities Cash dividends paid Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
2019 $ 310,815 289,661 23,588 4,226 (2,108) 38,347 (35,495) (1,851) (1,793) (1,050) - - |
2018 407,025 39,030 18,984 3,679 370 22,433 (23,095) (900) 2,697 (2,900) 4,117 (1,431) |
|---|---|---|
| 313,525 | 62,984 |
|
6,332 179,869 (595) 155,178 (9,381) |
23,457 (126,827) 2,841 51,033 (1,163) |
|
331,403 |
(50,659) |
|
(12,187) (38,907) (880) (11,660) (1,976) (3,308) |
(10,576) (15,289) 921 (220) (11,666) (4,768) |
|
(68,918) |
(41,598) |
|
262,485 |
(92,257) |
|
576,010 |
(29,273) |
|
886,825 35,495 (38,347) (81,600) |
377,752 23,095 (19,714) (61,979) |
|
802,373 |
319,154 |
|
(164) - (55,837) 32,726 - (37,070) 2,810 32,799 (8,616) - 8,574 |
- 6,898 (68,222) 73,291 (57,387) (22,876) 1,338 (9,805) (3,827) (6,265) 3,485 |
|
(24,778) |
(83,370) |
|
207,216 - 300,000 (201,656) (246,276) (254,752) |
243,920 (299,500) 208,265 (1,114) - (150,535) |
|
(195,468) |
1,036 |
|
(92,144) 489,983 1,726,979 |
(1,373) 235,447 1,491,532 |
|
$ 2,216,962 |
1,726,979 |
20
Independent Auditors’ Audit Report
To the Board of Directors of T3EX Global Holdings Corp.:
Opinion
We have audited the financial statements of T3EX Global Holdings Corp. (“the Company”), which comprise the balance sheets as of December 31, 2019 and 2018, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audit of the financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2018 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. Revenue recognition
Please refer to Note 4(m) "Revenue recognition" of financial statement and Note 6(q) "Revenue from contracts with customers" for the details of operating revenues of financial statements.
Description of key audit matter:
T3EX Global Holdings Corp. is an industrial holding company. Its main operating revenue is from the share of profit of associates accounted for using equity method and the services revenue from subsidiaries by providing management services. We expect that its revenue recognition is the matter to the users of the financial statements. Consequently, this is one of the key assessment areas in our audit on parent-company-only financial statements of T3EX Global Holding Corp.
How the matter was addressed in our audit:
Understanding the internal control on revenue recognition applied by the management and assessing whether its revenue recognition had been carried out in accordance with the established accounting policy; checking whether T3EX Global Holdings Corp. had calculated and recognized the share of profits and losses of its
21
subsidiaries and associates by using the equity method; comparing the differences between the investment cost and the net equity of its subsidiaries and associates, to ensure that they had been properly handled. Issuing confirmation letter to T3EX Global Holdings Corp.’s subsidiaries to inquire the amount of the management services fee.
- Equity method investees impairment assessment
Please refer to Note 4(l) "Impairment of non-financial assets" for accounting policies, Note 5 "assumptions on the accounting estimates and assumptions of the impairment of Equity method investees" and Note 6 (e) for the details of Equity method investees in the financial statements.
Description of key audit matter:
The goodwill and other intangible assets arising from acquisition transactions booked as the investment under the equity method of parent-company-only financial statements. The accounting policy applying to the goodwill and other intangible assets arising from acquisition transactions is with the uncertainty estimation. Consequently, this is one of the key assessment areas in our audit on parent-company-only financial statements of T3EX Global Holding Corp.
How the matter was addressed in our audit:
Understanding the internal control on the impairment assessment of the goodwill and other intangible assets; selecting significant goodwill and other intangible assets and obtaining impairment assessment reports issued by the external experts engaged by the management; assessing model, parameters and assumptions applying to the financial information forecast; and evaluating whether the assessment for goodwill and other intangible assets was based on the accounting policies.
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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’ s financial reporting process.
Auditor ’ s Responsibilities for the Audit of the Parent-company-only 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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- 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
22
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
-
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.
-
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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 Chi-Lung Yu and Mei-Pin Wu.
KPMG
Taipei, Taiwan (Republic of China) March 6, 2020
23
(English Translation of Financial Statements Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP.
Balance Sheets December 31, 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)
| Assets Current assets: 1100 Cash and cash equivalents (notes 6(a)&(s)) 1110 Current financial assets at fair value through profit or loss (notes 6(b)&(s)) 1120 Current financial assets at fair value through other comprehensive income (notes6 (c)&(s)) 1180 Accounts receivable due from related parties, net (notes 6(d),(s),&7) 1210 Other receivables due from related parties, net (notes 6(s)&7) 1470 Other current assets Current assets Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (notes 6(c)&(s)) 1550 Investments accounted for using equity method, net (note 6(e)&(f)) 1600 Property, plant and equipment (notes 6(g)&8) 1821 Intangible assets, net (note 6(h)) 1840 Deferred tax assets (note 6(m)) 1920 Guarantee deposits paid (notes 6(s)&8) Non-current assets Total assets |
December 31, 2019 Amount % $ 37,989 1 55,196 1 69,447 2 43,227 1 200,000 5 41,552 1 |
December 31, 2018 Amount % 44,807 1 28,925 1 75,894 2 41,148 1 120,000 3 10,400 - 321,174 8 76,400 2 3,302,557 84 183,946 5 21,776 1 6,549 - 336 - 3,591,564 92 3912738 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(i)(s)&(v)) 2150 Notes payable (note 6(s)) 2200 Other payables (notes 6(l)&(s)) 2220 Other payables to related parties (notes 6(s)&7) 2230 Current tax liabilities 2399 Other current liabilities, others (notes 6(s)) Current liabilities Non-Current liabilities: 2540 Long-term borrowings (notes 6(j)(s)&(v)) 2640 Net defined benefit liability, non-current (note 6(l)) Non-current liabilities Total liabilities Equity attributable to owners of parent (notes 6(f)&(n)): 3110 Ordinary share 3200 Capital surplus 3300 Retained earnings 3400 Other equity 3500 Treasury shares Total equity (note 6(u)) Total liabilities and equity |
December 31, 2019 | December 31, 2019 | December 31, 2019 |
|---|---|---|---|---|---|
| Amount | % | Amount | |||
| 1,464,482 35 1,216,902 32 |
|||||
| 447,411 11 |
300,000 7 200,000 5 14,924 - 12,617 - |
||||
70,100 2 3,455,418 82 184,965 4 24,508 1 6,742 - 336 - |
|||||
314,924 7 212,617 5 |
|||||
1,779,406 42 1,429,519 37 |
|||||
1,171,575 28 1,183,455 30 798,811 19 808,958 21 653,539 16 676,879 17 (186,054) (4) (125,430) (3) (27,797) (1) (60,643) (2) |
|||||
| 3,742,069 89 |
|||||
2,410,074 58 2,483,219 63 |
|||||
$ 4,189,480 100 3,912,738 100 |
|||||
| $ 4189480 100 |
24
(English Translation of Financial Statements Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP.
Statements of Comprehensive Income
For the years ended December 31, 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)
| 4000 Operating revenue (notes 6(q)&7) 5000 Operating costs (notes 6(l)&(p)) Gross profit from operations Net operating income Non-operating income and expenses: 7010 Other income (notes 6(r)&7) 7020 Other gains and losses, net (notes 6(b)(f)&(r)) 7510 Interest expense (note 6(k)&(r)) Profit before income tax 7950 Less: Income tax expenses(note 6(m)) Profit 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss 8311 Remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Comprehensive income Earnings per share (note 6(o))(NT Dollars) Basic earnings per share Diluted earnings per share |
2019 | % 100 23 |
% 100 23 |
2018 | % 100 18 |
|---|---|---|---|---|---|
| Amount $ 334,862 75,580 |
Amount 435,491 76,747 |
||||
259,282 |
77 | 358,744 |
82 | ||
259,282 |
77 | 358,744 |
82 | ||
5,779 3,611 (15,105) |
2 1 (5) |
6,028 5,542 (14,673) |
1 1 (2) |
||
253,567 4,520 |
75 1 |
355,641 711 |
82 - |
||
249,047 |
74 | 354,930 |
82 | ||
(2,181) 12,656 (4,635) - |
(1) 4 (1) - |
1,196 (28,590) (521) - |
- (7) - - |
||
| 5,840 | 2 | (27,915) |
(7) | ||
(73,280) - |
(22) - |
(1,868) - |
- - |
||
| (73,280) | (22) | (1,868) |
- | ||
(67,440) |
(20) |
(29,783) |
(7) | ||
$ 181,607 |
54 |
325,147 |
75 |
||
$ 2.15 |
3.07 |
||||
| $ 2.15 |
2.96 |
25
(English Translation of Financial Statements Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.
Statements of Changes in Equity
For the years ended December 31, 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)
| Balance on January 1, 2017 Effects of retrospective application Equity at beginning of period after adjustments Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends on ordinary share Other changes in capital surplus: Cash dividends from capital surplus Retirement of treasury share Disposal of investments in equity instruments designated at fair value through other comprehensive income Changes in ownership interests in subsidiaries Balance on December 31, 2018 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserved Cash dividends on ordinary shares Reversal of special reserve Retirement of treasury share Balance at December 31, 2019 |
Ordinary shares Capital surplus |
Retained earnings |
|---|---|---|
| Legal reserve Special reserve Unappropriated retained earnings Total retained earnings |
26
(English Translation of Financial Statements Originally Issued in Chinese)
T3EX GLOBAL HOLDINGS CORP.
Statements of Cash Flows
For the years ended December 31, 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)
| Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Share of profit of associates accounted for using equity method Loss on disposal of property, plant and equipment Gain on disposal of investments Gain on evaluation of investments payable Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease (increase) in accounts receivable due from related parties Increase in other current assets Increase (decrease) in notes payable Increase (decrease) in other payables Decrease in other payables to related parties Decrease in other current liabilities Increase (decrease) in net defined benefit liability Total adjustments Cash outflow generated from operations Interest received Interest paid Income taxes paid Net cash flows used in operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Decrease in refundable deposits Increase in other receivables due from related parties Acquisition of intangible assets Acquisition of cash dividends Decrease in other current and non-current assets Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term loans Repayments of convertible bonds Proceeds from issuing long-term borrowings Repayments of long-term debt Cash dividends paid Net cash flows from (used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
2019 $ 253,567 5,808 5,771 (2,108) 15,105 (2,215) (279,652) 1 (1,050) - |
2018 355,641 5,307 4,640 370 14,673 (2,464) (382,802) - (2,900) (1,431) |
|---|---|---|
| (258,340) | (364,607) |
|
(2,079) (31,156) (1,007) (1,917) (42,919) (114) 126 |
4,578 - 26 8,384 (8,995) - (8,474) |
|
| (337,406) | (369,088) |
|
(83,839) 2,215 (15,105) (1,175) |
(13,447) 2,463 (11,873) (1,301) |
|
(97,904) |
(24,158) |
|
(164) (55,837) 32,726 (10,731) (6,828) - (80,000) (8,503) 85,175 - |
6,898 (68,222) 73,291 (24,578) (776) 90 (20,000) (3,802) 28,579 50,622 |
|
| (44,162) | 42,102 |
|
290,000 - 300,000 (200,000) (254,752) |
210,000 (299,500) 200,000 - (150,535) |
|
135,248 |
(40,035) |
|
(6,818) 44,807 |
(22,091) 66,898 |
|
$ 37,989 |
44,807 |
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Appendix 1: Articles of Incorporation
T3EX Global Holdings Corp Articles of Incorporation
Chapter I
General Provisions
- Article 1 The Company, organized under the Business Mergers And Acquisitions Act ,the Company Act and others relevant regulations as a Company limited by shares, and shall be named T3EX Global Holdings Corp (hereinafter, “the Company”).
Article 2 The Company’s scope of business is as follows:
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H201010 Investment
-
ZZ99999All business items that are not prohibited or restricted by law, except those that are subject to special approval.
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Article 2-1 The Company may provide endorsements and guarantees and act as a guarantor.
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Article 2-2 The Company’s main business is investment. The total amount of the Company’s reinvestment is not to be subject to the restriction of not more than 40% of the Company’s paid-up capital as provided in Article 13 of the Company Act.
-
Article 3 The Company is headquartered in Taipei City, Taiwan and when necessary may establish branches or subsidiaries at home and abroad according to resolutions by the board of directors.
-
Article 4 Public announcements of the Company shall be made in accordance with the provisions of Article 28 of the Companies Act.
Chapter II
Shares
-
Article 5 The authorized capital of the Company is NT$2 billion, consisting of 200 million shares, all of common stock, with a par value of NT$10 per share. The board of directors is authorized to issue the shares in separate installments as required, of which 10 million shares are reserved for stock options.
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Article 5-1 Resolutions by the shareholders meeting, the Company is authorized to issue share warrant to its employees, the exercise prices of such share warrants issued to the employees might be lower than net worth per share as shown in the CPA-audited and certified financial report for the most recent period.
Article 6 Deleted
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-
Article 7 The share certificates of the Company shall without exception be in registered form, signed by, or affixed with the seals of, at least three directors, and authenticated by the competent governmental authority or a registration institution authorized thereby before issuance. Shares issued by the Company need not be in certificate form, but shall be registered with a securities depository enterprise.
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Article 8 All entries in the shareholders register due to share transfers shall be suspended for 30 days prior to an ordinary shareholders meeting, or for 15 days prior to an extraordinary shareholders meeting (Public company shall be suspended for 60 days prior to an ordinary shareholders meeting, or for 30 days prior to an extraordinary shareholders meeting), or for 5 days prior to the record date fixed for distributing dividends, bonus, or any other benefit.
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Article 8-1 The Company shall propose to shareholders meetings when revoking public issuance of its shares. This regulation will continue to the Company listed trading on emerging stock or on the stock exchange or over-the-counter market.
Chapter III
Shareholders’ Meeting
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Article 9 Shareholders’ meetings of the Company are of two kinds: regular
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shareholders meetings and extraordinary shareholders meetings. The regular shareholders’ meeting is called once per year within six months of the close of the fiscal year. Extraordinary shareholders meetings may be called in accordance with applicable laws and regulations whenever necessary.
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Article 10 For any shareholders’ meeting, a shareholder may appoint a proxy to attend the meeting by using the proxy form issued by the Company and specifying the scope of proxy.
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Article 11 Except as provided in Article 179 of the Company Act, the shareholder shall have one voting right for each share owned in the Company.
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Article 12 Unless otherwise provided by the Company Act, a resolution of the shareholders’ meeting shall be adopted by the consent of a majority of the votes represented by those in attendance at the meeting, in person or by proxy, by shareholders who represent a majority of the total issued shares.
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Article 12-1 The Company limited by shares which is organized by a single juristic person shareholder shall be free from restrictive requirement set out in this Chapter. The functional duties and power of the shareholders' meeting of such company shall be exercised by its board of directors.
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Chapter IV
Board of Directors
-
Article 13 The Company shall have 7 to 13 directors, who shall hold the office for a term of three years and be elected from people with legal capacity at the shareholders’ meeting. Directors are eligible for reelection.
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Article 13-1 Pursuant to relevant regulations, the Company’s board of directors shall include 3 independent. The candidates for independent directors shall be nominated and shall be elected from the list of candidates during the shareholders’ meeting.
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Professional qualification , number of shareholdings, restrictions regarding holding other jobs, nomination and election of independent directors and others compliance matters shall be governed by relevant regulations set forth by the competent authority.
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Article 13-2 An independent director of the Company shall meet one of the following professional qualification requirements, together with at least seven years work experience:
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An instructor or higher 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.
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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.
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Have work experience in the area of commerce, law, finance, or accounting, or otherwise necessary for the business of the company.
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Have work experience in management.
- A person to whom any of the following circumstances applies may not serve as an independent director, or if already serving in such capacity, shall ipso facto be dismissed:
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Any of the circumstances in the subparagraphs of Article 30 of the Company Act.
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Elected in the capacity of the government, a juristic person, or a representative thereof, as provided in Article 27 of the Company Act.
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Any violation of the independent director qualification requirements set out in Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
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Article 13-3 In compliance with Articles 14-4 of the Securities and Exchange Law, the Corporation shall establish an Audit Committee, which shall consist of all
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independent directors. The Audit Committee or the members of Audit Committee shall be responsible for those responsibilities of Supervisors specified under the Company Law, the Securities and Exchange Law and other relevant regulations.
-
Article 13-4 The Company’s election for directors are adopting single registered and cumulative election. The candidates’ name can be represented as numbers on the ballot. Each share has same right to vote toward the numbers of directors. It is allowed to give all the votes to a single candidate or separate to several candidates. If the above Article shall be advised, except as provided in Article 172 of the Company Act, it shall be itemized the amendment comparison table in the notice to convene a meeting of shareholders.
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Article 14 The board of directors shall consist of the directors of the Company; the chairman and the vice president of the board of directors shall be elected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds of the directors. The chairman of the board of directors shall represent the Company in external matters.
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Article 15 If the chairman of the board of directors is on leave or cannot exercise powers or perform duties for any reason, an acting chairman shall be designated in accordance with Article 208 of the Company Act.
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Article 15-1 Directors shall attend meetings of the board of directors in the preceding paragraph in person. If a director is unavailable to attend a meeting in person, the director may issue a power of attorney for the given meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the director's behalf, provided that a director may represent only one other director at a meeting. In the event that a board of directors meeting is held through video conference, a director who participates in the meeting by means of video system shall be deemed to have attended in person.
-
Article 15-2 Seven days prior to the convening of a meeting of the board of directors, notice shall be sent to all directors, specifying the reasons for calling the meeting, though in emergency situations, a meeting may be called whenever necessary. Notice of the convening of a meeting described in the preceding paragraph may be in writing, by fax or by e-mail notification thereof.
-
Article 16 When the Company’s directors perform Company duties, the Company may pay remuneration regardless of whether the Company operates at a
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profit or loss. The board of directors is authorized with powers to resolve the rates of such remuneration based on the extent of their participation in the Company’s business operations or value of their contribution, at a level consistent with general practices in the industry.
The Company’s directors allowances are authorized the board of directors regardless of whether the Company operates at a profit or loss.
Chapter V
Managers
Article 17 The Company may appoint managers, whose commissioning,
decommissioning and pay rate shall be as pursuant to Article 29 of the Company Act.
Chapter VI
Finance
Article 18 After the close of each fiscal year (1/1~12/31), the following reports shall
be prepared by the board of directors and submitted to the regular
shareholders’ meeting by the supervisors for reviewing and for ratification.
-
Business Report.
-
Financial Statements.
-
Proposal Concerning Appropriation of Net Profits or Recovering of Losses.
Article 19 Deleted
Article 20 More than 0.5% of profit of the current year distributable as employees'
- compensation and less than 0.3% of the current year distributable as directors’ compensation shall be definitely specified in the Articles of Incorporation. However, the company's accumulated losses shall have been covered.
The profit in the preceding Paragraph shall be defined as the profit before tax which already deducted employees’ compensation and directors’ compensation.
-
Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements set by the board of directors.
-
Article 20-1 The Company, when allocating its surplus profits after having paid all taxes, recovering losses shall first set aside ten percent of said profits as legal reserve. Where such legal reserve amounts to the total authorized capital, this provision shall not apply. Appropriate or return to Special capital reserve pursuant to applicable law or operation need. As to the un-appropriated earnings and earnings available for appropriation of this
32
year, the board of directors is authorized to draft an appropriation plan in accordance with the dividend policy and submit the draft to the shareholder's meeting for approval.
Article 20-2 The distribution of the dividends of the Company will coordinate with the surplus of that year based on the principle of stabilization. The board of directors shall propose the allocation ratio and propose it at the shareholders’ meeting. The appropriated earnings shall more than 50% of the current year after tax profit. If the earnings available for appropriation less than the current year after tax profit, it shall be allocated in earnings available for appropriation. Cash dividends shall not be less 10% of total shareholder dividends.
Article 20-3 The Company’s major subsidies’ shall formulate dividend policy. The board of directors shall propose it when major subsidiaries have the un-appropriated earnings, and the independent directors must attend. The Company shall disclose the decision to Market Observation Post System and apply it to Taiwan Stock Exchange.
Article 21 Any matters not sufficiently provided for in these Articles of Incorporation shall be handled in accordance with the Company Act.
Article 22 These Articles of Incorporation were enacted on January 15, 1987. The 1st amendment was made on June 29, 1990.
The 2nd amendment was made on May 10, 1991. The 3rd amendment was made on October 15, 1991. The 4th amendment was made on December 13, 1991. The 5th amendment was made on January 16, 1992. The 6th amendment was made on May 7, 1996.
The 7th amendment was made on April 2, 2001. The 8th amendment was made on June 27, 2001. The 9th amendment was made on September 1, 2001. The 10th amendment was made on October 6, 2001. The 11th amendment was made on June 3, 2002. The 12th amendment was made on December 1, 2002. The 13th amendment was made on April 12, 2004. The 14th amendment was made on January 25, 2005. The 15th amendment was made on June 30, 2005. The 16th amendment was made on June 30, 2005. The 17th amendment was made on June 19, 2006. The 18th amendment was made on March 2, 2007. The 19th amendment was made on June 20, 2007.
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The 20th amendment was made on June 23, 2008. The 21st amendment was made on June 16, 2009. The 22nd amendment was made on June 9, 2010. The 23rd amendment was made on June 28, 2011. The 24th amendment was made on June 6, 2012. The 25th amendment was made on August 23, 2012. The 26th amendment was made on June 17, 2013. The 27th amendment was made on June 4, 2014. The 28th amendment was made on June 3, 2015. The 29th amendment was made on May 31, 2016. The 30th amendment was made on June 21, 2019.
T3EX Global Holdings Corp Chairman: David Yen
34
Appendix 2: Shareholding of Directors
T3EX Global Holdings Corp
Shareholding of Directors
- As of 03/29/2020, all directors minimum shareholding number and actually registered holding shares.
| Title | Title | Title | Minimum number of shares to be held |
Minimum number of shares to be held |
Minimum number of shares to be held |
Shares actually held in share register |
Shares actually held in share register |
Shares actually held in share register |
||
|---|---|---|---|---|---|---|---|---|---|---|
| Directors | 8,000,000 | 13,845,326 | ||||||||
| 2. As of 03/30/2020, table of shares held byall directors |
||||||||||
| Position | Name | Date elected |
Term (year) |
Shareholding while elected |
Current shareholding | Remarks | ||||
| Shares | Shares | Shareholding ratio |
||||||||
| President | David Yen | 2020.06.21 | 3 | 796,490 | 796,490 | 0.68% | ||||
| Director | Hope Ocean International Ltd Representative: TonyLin |
2020.06.21 | 3 | 3,339,143 | 3,339,143 | 2.85% | ||||
| Director | YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh |
2020.06.21 | 3 | 2,000,774 | 2,000,774 | 1.71% | ||||
| Director | Dynamic Ocean Group Limited Representative: Carl Wei |
2020.06.21 | 3 | 3,912,398 | 3,912,398 | 3.34% | ||||
| Director | Jack Lai | 2020.06.21 | 3 | 1,917,552 | 1,917,552 | 1.64% | ||||
| Director | CHANG-JIE International Representative: Benison Hsu |
2020.06.21 | 3 | 1,908,969 | 1,878,969 | 1.60% | ||||
| Independent Director |
Li-Chiu Chang | 2020.06.21 | 3 | － | － | － | ||||
| Independent Director |
Ming-Hsu Tsai | 2020.06.21 | 3 | － | － | － | ||||
| Independent Director |
Jeff Lin | 2020.06.21 | 3 | 61,000 | － | － | ||||
| Total | 13,936,326 | 13,845,326 | 11.82% | － |
35
Appendix 3: Directors’ Compensation and Employees’ Profit Sharing
| Item | Approved in Board of Directors Meeting（A） |
2019 Income Statement （B） |
Variation （A-B） |
Resolution |
|---|---|---|---|---|
| Employee Bonus – in Stock |
0 | 0 | 0 | None |
| Employee Bonus – in Cash |
1,320,000 | 1,312,644 | 7,356 | The variation was caused by changes in accounting estimates. The Company will recognize the variation in income statements of year 2020. |
| Directors' and Supervisors' Remuneration |
7,350,000 | 7,649,535 | -299,535 |
Appendix 4: The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate:
Pursuant to Regulations Governing the Publication of Financial Forecasts of Public Companies, the Company don’t disclose financial forecast. It does not apply.
36