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T3EX Annual Report 2020

Aug 18, 2021

52176_rns_2021-08-18_ee35263a-7f2c-4146-b303-29ec12740e7e.pdf

Annual Report

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20 17 20 Annual Report Printed on 05 30, 20183 1 21

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

0

Spokesperson

Name: Linda Hsu Title: Manager of Investor Relations Manager Tel: 886-2-2753-2093 E-mail:[email protected]

Headquarters, Branches and Plant

Headquarters Address: 12F., No.563, Sec.4, Zhongxiao E. Rd., Xinyi District, Taipei 11072, Taiwan Tel: 886-2- 2753-2093

Deputy Spokesperson

Name: Callie Wang Title: Chairman Secretary Tel: 886-2-2753-2093 E-mail:[email protected]

Stock Transfer Agent

CAPITAL SECURITIES CORP. Address: Capital Center, No.101, Songren Rd., Xinyi Dist., Taipei City 11073, Taiwan, R.O.C. Tel: 886-2-2703-5000 Website: http://www.capital.com.tw

Auditors

KPMG Accounting Firm Auditors: CHI-LUNG YU, MEI-PIN WU Address: 68F, TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei, 11049, Taiwan, R.O.C. Tel.: 886-2-8101-6666 Website: http://www.kpmg.com.tw

Overseas Securities Exchange: None

Corporate Website

http://www.t3ec-group.com

1

Contents

I. Letter to Shareholders ............................................................................................ 3 II. Company Profile 2.1 Date of Incorporation.............................................................................................. 7 2.2 Company History ……........................................................................................ 7 III. Corporate Governance Report 3.1 Organization............................................................................................................ 8 3.2 Directors and Management Team………………..…………………………11 3.3 Implementation of Corporate Governance .......................................................... 26 3.4 Information Regarding the Company’s Audit Fee and Independence.................. 67 3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders……………………………………………………………………..69 3.6 Relationship among the Top Ten Shareholders……..……...………...……70 3.7 Ownership of Shares in Affiliated Enterprises…………………………………71 IV. Capital Overview 4.1 Capital and Shares………………………………………………………….……73 4.2 Bonds…………….………………………………………………………….……77 4.3 Global Depository Receipts ….…………………………………………….……79 4.4 Employee Stock Options…………………………………………………………79 4.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions…79 4.6 Financing Plans and Implementation………………...………………………..79 V. Operational Highlights 5.1 Business Activities……………………………………………………………….79 5.2 Market and Sales Overview………….…………………….………….………88 5.3 Human Resources……….……………………………………………………….94 5.4 Environmental Protection Expenditure………….……………………………….94 5.5 Employee Relations………………………………………………………………95 5.6 Important Contracts……………………………………………………………100 VI. Financial Information 6.1 Five-Year Financial Summary………………………………………….…….102 6.2 Five-Year Financial Analysis…………………………………………….…106 6.3 Audit Committee’ Report in the Most Recent Year……………………….…110 6.4 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report……………………….…………… ...110 6.5 Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report………………...………………….110

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VII. Review of Financial Conditions, Operating Results, and Risk Management 7.1 Analysis of Financial Status……………………………………………………111 7.2 Analysis of Financial Performance………………………………………..…112 7.3 Analysis of Cash Flow………………………………………..……………112 7.4 Major Capital Expenditure Items…………………………………………113 7.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year……….113 7.6 Analysis of Risk Management…………………………………………………113 VIII. Special Disclosure 8.1 Summary of Affiliated Companies……………………………………..….…118 8.2 Private Placement Securities in the Most Recent Years………………………128 8.3 Any Events in 2020 and as of the Date of this Annual Report that had Significant Impacts on Shareholders ‘Right or Security Prices as Stated in Item 2 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan……………………...128

2

Letter to Shareholders

Now, I hereby thanks to every shareholders on behalf of T3EX Holdings for your cares and supports. T3EX Holdings has been keeping work hard to be the provider of total solution of logistics supply chain management.

2020 Performance Review: From Deep Downturn to Big Rebound, T3EX’s Performance Breakthroughs a Record High.

erformance Review: From Deep Downturn to Big Rebound, T3EX’s
mance Breakthroughs a Record High.		 erformance Review: From Deep Downturn to Big Rebound, T3EX’s
mance Breakthroughs a Record High.		 erformance Review: From Deep Downturn to Big Rebound, T3EX’s
mance Breakthroughs a Record High.		 erformance Review: From Deep Downturn to Big Rebound, T3EX’s
mance Breakthroughs a Record High.
Unit：NTD thousands
2020 2019 YoY
Reveune 15,160,243 11,258,071 34.66%
Gross Profit 2,467,887 2,014,229 22.52%
OperatingExpense 1,771,981 1,717,569 3.17%
OperatingProfit 695,906 296,660 134.58%
Income Profit after Tax 570,727 241,363 136.46%
EPS(dollars) 4.72 2.15 119.53%
Gross Margin 16.28% 17.89% -1.61%
OpeartingProfit Margin 11.69% 15.26% -3.57%
Net Income Margin 3.76% 2.14% 1.62%

Owing to the full products layout, which includes ocean freight, air freight, rail transport and domestic logistics, even under the severe impact of Covid-19, T3EX still performed well and enjoyed tremendous growth despite adversity in 2020. Last year, the company’s consolidated revenue reached NTD$ 15.16 billion with a 34.66% YOY growth; the gross margin reached NTD$ 2.47 billion with a 22.52% YOY growth; the income profit after tax reached NTD$570 million with a 136.46% YOY growth and EPS reached NTD$ 4.72 dollar with a 119.53% YOY growth.

In the analysis of business breakdown, the revenue of ocean freight takes up 52% of the total revenue, while Europe and the US long-haul constitute over 70%. Since the second half of 2020, the freight rate of US route started to rebound, after that, owing to the severe lack of container, space and labor, the freight rate of all routes increased dramatically, thus making T3EX’s ocean freight gross profit reaching NTD$1.34 billion with a 22% YOY growth.

With regard to air freight, due to the influence of Covid-19, passenger flights decreased drastically as well as belly cargo capacity. However, thanks to the strong and urgent cargo demand for medical supplies in the second quarter of 2020, both cargo volume and freight rate increased dramatically. In the second half of 2020, led by the strong demand of supply chain for electronic industry, the demand for space booking enjoyed huge increase, which sustained the freight rate at a high level. The overall 2020 gross profit reached NTD$706 million with a 33% YOY growth.

As for China-Europe/ China-Russia railway transport, due to the severe space

3

shortage of ocean and air, large amount of cargoes that intended to be transported by ocean and air, tend to railway. In the year 2020, the freight rate of China-Europe railway rose by 80%~100%. Moreover, T3EX`s year-round volume increased four times compared with last year, while the gross profit enjoyed a 88% YOY growth.

For the domestic logistics, China’s domestic market began to recover in Q2, 2020 and strongly rebound since Q3, 2020, which propelled the growth of import, customs, warehousing and transportation. T-Cube Logistics, the Company’s domestic logistics subsidiary, began to gain profit in Q3, 2020 and achieved its annual profit goal.

Last but not least is the revenue breakdown by region. Owing to the strong demand of medical supplies and inventory supplement from China to Europe and the US, the Company’s 2020 China revenue enjoyed a 39% YOY growth; in favor of the supply chain transfer & import and export demand increase caused by the China-US trade war, along with the global freight rates surge caused by the imbalance of ship and space, the Company’s Southeast Asia revenue enjoyed a 36% YOY growth; due to the manufacturing return and increase of supply chain logistics activities in intra-Asia, the Company’s Taiwan revenue grew by 23% compared with last year.

2021 Outlook: Riding the Winds and Waves to Embrace a Bright Future.

In the post-pandemic era, enterprises` mentality for supply chain will change from “just-in-time inventory” to “safe inventory”, which will make factories build their safe inventories in a vigorous way. Also, the ease of Covid-19, increase of vaccination rate and the government’s poverty alleviation grants have triggered the expenditure growth in US, thus making the export demand from Asia to Europe and the US remain strong.

About ocean freight market, as port congestion and container shortage of the US caused by the pandemic remain unsettled, large amount of vessels are waiting on sea, thus unloading time is greatly postponed. As the export demand from Asia continues to grow, causing the scarcity of ship and space, the long-haul rate will sustain at high level. But it is predicted that the container and space shortage will alleviate in the second half of the year. But only if the business structure of ocean industry could transform, high freight rate will become normal. What`s more, as worldwide Covid-19 vaccination rate increases, global economy may gradually recover from H2, 2021, at that time, we will enter the traditional booming season in Q3, so shipping industry will remain prosperous this year. However, we should still observe three indexes: container turnover rate, GCSP (Global Carrier Schedule Performance) and global Covid-19 vaccination rate.

For air freight market, remote communication become the new normal, E-vehicle, 5G, and AI are carried forward in succession, thus the demand for semi-conductor and related electronic components increases. In addition,

4

manufacturers have enhanced their inventory storage, thus we predict the certain cargo demand will keep growing. On the other hand, as more and more Covid-19 vaccines acquired permission to go on the market, they will demand and consume most of the air capacity. Before the cancellation of international travel restrictions, almost 50% of the passenger and cargo flights are grounded, so air freight rates will remain at a high level owing to the 20%~30% capacity gap.

Since the cost of China-Europe/China-Russia rail transport being much lower than air and close to ocean, while, its transportation time is one third of ocean, railway becomes the main transportation method for many customers after the pandemic. So far, China has become the EU’s largest bilateral trade partner. In 2020, China-EU bilateral trade amount reaching EUR 586 billion, surpassing the US-EU bilateral trade amount of USD 555 billion. Due to the rapid growth of demand, trains and containers become tight, thus we could positively foresee an increase for this year.

About China domestic logistics market, as the domestic spending continues to grow, plus the supply chain restructuring caused by China-US trade war, China forms the “dual circulation economy” with both manufacturing and consumption, so, it is foreseeable that demand for domestic warehousing and transportation will also increase.

For Southeast Asia market, the China-US trade war resulted in a restructuring of the global supply chain with Taiwan and Southeast Asia produce for the US consumer economy. In addition, with the benefits of demographic dividend, land, and tax advantages, there is a chance for the Southeast Asia market to boom.

Generally speaking, the global pandemic is slowing down. With the increase of Covid-19 vaccination rate, global economy will recover gradually at a stable pace. Thus, the overall logistics market will enjoy a further increase, the 2021 outlook is still optimistic.

Future Strategy Plan: Raising Sufficient Capital to Expand Market Share in the Post-Covid-19 Era to Create a New Milestone.

T3EX’s 2020 performance showed the gain of integrated logistics. We will continue to play effectiveness of holding platform via the duo-headquarter module as well as NTD$615 million capital raised from capital market this January. With healthier and more competent financial structure and sufficient cash flow to ally with strategic partners, by merge or joint-venture strategy to integrate vertical industry and expand market, the Company will keep the growing momentum and open a new chapter. The Operating Strategy of Duo Headquarters is as follows:

  • Taipei Headquarter (Non-China Market):

  • Capture the opportunity of returning Taiwanese manufacturers from China and increase investment in Taiwan.

  • Increase investment in Southeast Asia market.

  • Strengthen long haul route business from Asia to Europe and the US.

  • Expand network locations within Asia.

  • Deepen collaborations with WPG Holdings.

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Shanghai Headquarter(China Market):

  1. Enhance one-stop logistics service in China (Import + Custom Clearance+ Warehousing + Transportation + Supply Chain Finance), increase investment in import logistics business.

  2. Develop Africa and Latin America market via JV and closer partnerships with overseas agents.

  3. Develop comprehensive China-Europe/China-Russia/China-Central Asia railway and China-Central Asia transportation businesses.

  4. Expand supply chain finance business.

  5. Establish B2B2C warehousing digital services.

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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I. Company Profile

2.1 Date of Incorporation : 02 04, 1987

The date of foundation ： T.H.I. Group was set up on 02 04, 1987. In August 2012,

the Company changed its name- T3EX Global Holdings Corp.

2.2 Company History

MM, Year Milestones
08, 2012 The Company transformed into holdings company and changed its company
name- T3EX Global Holdings Corpthrough Special Shareholders’ Meeting.
02, 2013 The Company invested 30% shares of Joint venture in Indonesia-PT. Dexter
Eurekatama.
10, 2013 The Companyset upT.H.I. Online, enteringinto e-commerce business.
01, 2014 The logistics e-commerce platform T.H.I. Online was built by adopting an
O2O logistics business model.
01, 2014 The Companyissued NTD 300,000,000 convertible bond to reimburse debts.
03,2014 The Company finished par value NTD 100,000,000 fundraising to increase
operatingcapital.
01,2015 The company established T.H.I. GROUP SINGAPORE PTE LTD, the
operatingheadquarters in Southeast Asia.
03,2015 The companyraised our shareholdings in THI & Maruzen Inc. to 51%.
08,2015 To reinforce ASEAN plus three regional deployment, the company acquired a
30% stake in Korean logistics company- LOGI International Co., Ltd.
11,2015 To step into e-commerce logistics, the Company acquired 68% shares of
Shanghai EXer Logistics Co.,Ltd.
12,2015 To deeply develop warehousing and transportation services in China, we
acquired 60% shares of T-Cube Global Logistics Co., Ltd.
04,2016 The company established THI Logistics (Malaysia) SDN BHD, the operating
headquarters in Southeast Asia.
12,2016 The company changed its listing from GreTai Securities Market to the Taiwan
Stock Exchange.
6,2017 To expand New Zealand and Australia business, the company invested
Shanghai Moorluk International ShippingCo.,Ltd.
10,2018 To expand Air cargos and cross border e-commerce business in Southern Asia
market , the company invested AIRTROPOLIS EXPRESS(S) PTE LTD.
(ATP)in Singapore
1,2019 To develop supply chain finance business, the company established subsidiary
- T-SC FactoringCo., Ltd.

7

7,2019 THI Logistics Philippines Corp. was established, representing further
broadeningof the business coverage in Southeast Asia.
2,2020 To expand the air forwarder and warehousing business in Vietnam, the
Companyset upTEC LOGISTICS VIET NAM COMPANY LIMITED.
12,2020 The Company issued total par value NT$ 300,000,000 convertible bond to
reimburse debts.
1,2021 The Company finished NT$ 300,000,000 fundraising to increase operating
capital.

II. Corporate Governance Report

3.1 Organization

3.1.1 Organizational Chart

8

==> picture [492 x 552] intentionally omitted <==

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

General Shareholders Meeting
Board of Directors
Remuneration Committee
Audit Committee
Corporate Governance and
Sustainability Committee
Internal Audit Department
Operating Management Committee
Chairman
& General
Manager
Secretary Office of Chairman
Human Resource Information Technology Financial Management
Department
Department
Department
Risk Management Committee
----- End of picture text -----

9

3.1.2 Major Corporate Functions

Department Functions
Remuneration Committee To make recommendations to the Board on the Company’s policy
and structure for all Directors, and senior management remuneration
and on the establishment of a formal and transparent procedure for
developingremunerationpolicy.
Audit Committee The Audit Committee is responsible for overseeing the fair
presentation of the Company’s fnancial statements, the hiring
(dismissal), independence and performance of its certifed public
accountants, and the effectiveness of the Company’s internal
controls.
Other
key
functions
include
supervising
the
appropriateness of internal compliance procedures and plans and
overseeingthe management of existingorpotential risk.
Corporate Governance and
SustainabilityCommittee		 To assist the board to supervises the progress of corporate
governance and CSR and to report regularly.
Operating Management Committee The board of directors holds ultimate responsibility. It major goal is
assisting group to deal with the big issue and reporting to president
and the Board.
Internal Audit Department To identify deficiencies in the internal control system, assess the
effectiveness and efficiency of operations, and provide appropriate
improvement suggestions to ensure the effectiveness of the internal
control system as well as for continuous improvement.
Financial Management Department Responsible for the summarization and supply of accounting
information, management and operation of finance and investment,
annual budgeting, credit control.
Human Resource Department Responsible for the planning and execution of human resource
management, andplanningand execution ofgeneral affairs.
Information Technology
Department		 Responsible
for
the
planning,
controlling,
design,
and
implementation of the dataprocessing.
Secretary Office of Chairman Responsible for holding the board of meetings, shareholders
meetings and others functional meeting, maintaining the public
relations, investor relations, company branding and stock affairs,
executing the corporate governance, CSR, and Group’s project
management.
Risk Management Committee Responsible for creating the Group's risk management target and
control plan for the year as well as presenting the company’s
achievements to the Board of Directors, Audit Committee and the
Chairman.

10

3.2 Directors and Management Team

3.2.1 Directors

3.2 Directors and Management Team
3.2.1 Directors		 3.2 Directors and Management Team
3.2.1 Directors		 3.2 Directors and Management Team
3.2.1 Directors		 3.2 Directors and Management Team
3.2.1 Directors		 3.2 Directors and Management Team
3.2.1 Directors		 3.2 Directors and Management Team
3.2.1 Directors		 3.2 Directors and Management Team
3.2.1 Directors
03 27, 2021
Title Nationality/
Country of
Origin
Name		 Sex Date
Elected		 Term
(Years)
Date
First
Elected		 Shareholding
when Elected		 Current
Shareholding		 Spouse &
Minor
Shareholding
Shareholding
by Nominee
Arrangement
Experience
（Education）		 Other Position Executives,
Directors or
Supervisors who are
spouses or within
two degrees of
kinship
Shares ％ Shares ％ Shares ％ Shares ％ Title Name Relation
Director R.O.C. David Yen Male 06.21
2019		 3 01.16
1993		 796,490
0.68
848,780
0.67
0
0
0
0
 The founder of
T3EX group
 Shipping &
Transportation
Management in
NTOU









  Group chairman of T3EX
 Board director:
Dynamic Ocean Group, T-Cube
logistics, T-Cube (Suzhou) logistics ,
T.H.I. & Maruzen, Hope Ocean,
Greatline international, Taiwan
Express, Moorluk International
Shipping., T-SC Factoring Co., Ltd.,,
THI LOGISTICS PHILIPPINES
 Chairman:
THI Logistics, THI group
(Shanghai), and YHI International,
THI logistics,.		 None None None

11

Director R.O.C. Jack Lai Male 06.21
2019		 3 05.31.
2016		 1,917,552
1.64		 2,066,441
1.62		 362,392 0.28
0		 0  The associate vice
president of T3EX
 DBA in National
Taipei University.










  The CEO of THI Group
ocean business.
 Board director:
THI group (Shanghai), THI
Logistics,YHI International, THI
Malaysia, T.H.I. Singapore.,
LOGI International, THI HK ,
EXer logistics, . T-SC Factoring
Co., Ltd. AIRTROPOLIS
EXPRESS(S) PTE LTD.
(ATP), Eastern Union Holdings,
Fresh Beauty enterprises.,THI
LOGISTICS PHILIPPINES,
T.H.I. & Maruzen Co., Ltd..
 Chairman :
T-Cube logistics:,T-Cube
(Suzhou) logistics ,Moorluk
International Shipping
 General Manager:
 T.H.I. Vietnam, T.H.I.
CAMBODIA, T.H.I.
Bangkok



None		 None None
Director BVI Hope Ocean
International
Ltd		 06.21
2019		 3 06.17.
2013		 3,339,143 2.85 3,339,143
2.62
0		 0 0 0 - - None None None
R.O.C. Representativ
e:
Tony Lin		 Male 1,290,728
1.10		 1,361,465
1.07
0		 0 0 0  EMBA in NUS
 DBA in TIAS
 The GM of
DIMERCO		  The CEO of THI Group
Air business.
 The Chairman of T-SC
Factoring Co., Ltd..
 Board director:
T-Cube logistics, T.H.I. &
Maruzen, LOGI International.,
THI Singapore, THI Group
(Shanghai), Taiwan Express.,
EXer Logistics., THI Logistics,
YHI International, Fresh beauty
enterprise, PT. Dexter
Eurekatama,,THI LOGISTICS
PHILIPPINES, T-Cube (Suzhou)
logistics,		 None None None

12

Director R.O.C. YI-WEI
INVESTMEN
T		 06.21
2019		 3 06.21
2019		 2,000,774
1.71		 2,000,774
1.57
0		 0 0 0 - - None None None
R.O.C. Representativ
e:
Ji-Zhi Hsieh		 Male 0 0 0 0 0 0 0 0 Major in CCU
Natural
Resource.		  The GM and board of director of
Mei-Ton Rubber.
 The president of CHIEF
OVERSEA Trading.
 The board of director of
Cambodia Asia Flour Mill Corp.		 None None None
Director Samoa Dynamic
Ocean Group
Limited		 06.21
2019		 3 06.20
2007		 3,912,398 3.34 3,912,398
3.07		 0
0		 0
0		 - - None None None
R.O.C. Representativ
e:
Carl Wei		 Male 143,347 0.12 121,000
0.10		 0
0		 0 0  DBA in Fu Jen
Catholic University
 The CEO of THI
Logistics Sea
business..
 Manager of JI YE
Shipping
 Manager of
Taiming Shipping
Agent
 The vice president
of Kuang Ming
Shipping Corp.
 The senior vice
president of
YANG MING
MARINE
TRANSPORT
CORP.		 The director of Moorluk
International Shipping.		 None None None
Director R.O.C. CHANG-JIE
International
Ltd.		 06.21
2019		 3 06.21
2019		 1,908,969 1.63 1,897,073
1.49		 0
0		 0 0 - - None None None

13

R.O.C. Representativ
e:
Benison Hsu
Male		 1,191,762 1.02 1,330,002
1.05		 30,000 0.02
0		 0  MBA in Tulane
University.
 The founder of
Taiwan Express		  Chairman:
Taiwan Express, TEC logistics.
 Board director:
THI logistics, TEC logistics
(Shenzhen), TEC logistics
(Hong Kong) , TEC logistics
(USA) , Taiwan Express
(USA) , Hiview Logistics,
AIRTROPOLIS EXPRESS(S)
PTE LTD. (ATP). , CAR
QUALITY AUTOMOTIVE
CO., LTD.
 The supervisor :
Orient Air General Sales
Agent, Central Taiwan
Science Park Logistics.
 Independent director:
San Far Property Ltd..,
FocalTech Systems Co., Ltd.
 The Legal Representative of
TEC LOGISTICS VIET
NAM COMPANY
LIMITED

None		 None None
Director R.O.C. Li-Chiu
Chang		 Male 06.21
2019		 3 06.17.
2013		 0 0 0 0 0 0 0 0  Master of insurance
in NCU.
 Financial
Supervisory
Commission
 The president of
Yuanta Securities.
 The GM of Dahwa
Securities.
 The auditor, chief,
and leader of
Financial
Supervisory
Commission
 The auditor of
National Taxation
Bureau of Taipei

 Chairman:
FOCI Fiber Optic Communications,
Panion & BF Biotec Inc.,
Herbiotek Co., Ltd, CHENG
FONG CHEMICAL CO., LTD..
 Independent Director :
TA YA ELECTRIC WIRE &
CABLE, ACME Electronics,
Tanvex BioPharma, Inc..
 The CEO of Sun Ten Group.
 Director: of SHI DING Venture
Capital., PHYTOHEALTH
CORPORATION.
None		 None None

14

Director R.O.C. Ming-Hsu
Tsai		 Male 06.21
2019		 3 05.31.
2016		 0 0 0 0 0 0 0 0  Master of Public
Administration in
NCU.
 The senior vice
president of
YANG MING
MARINE
TRANSPORT
CORP.
 The chairman of
Kuang Ming
Shipping Corp.
 The highest
consultant of
Yuanta Securities
 Sun Ten
International,
directorr		 The independent
director of YANG
MING MARINE
TRANSPORT CORP.		 None None None
Director R.O.C. Jeff Lin Male 06.21
2019		 2 06.21
2019		 61,000 0.05 0 0 0 0 0 0  Chinese Literature
in NCU.
 The lecturer of
Mingdao High
School
 The teacher of
Tamkang High
School.
 The manager of
HR and
Administrative
Department of
KPMG
AccountingFirm.		 None None None None

15

03,27,2021

Major shareholders of the institutional shareholders

Name of Institutional
Shareholders		 Major Shareholders
DYNAMIC OCEAN GROUP
LIMITED
David Yen (33.43%), Mark Richard Laufer (66.57%)
Hope Ocean International Ltd David Yen (100%)
YI-WEI INVESTMENT Ltd JIN-CIN YANG (31.70%), HUA-MEI HUNG HSU (23.05%)
SHU- HUA YANG (6.92%), JIN-YI YANG (6.92%), SHU-HUEI PEN (6.92%), SHU- FEN YAN (6.92%), YONG-
CHANGLI(6.92%), CHUN-CHIEHCHANG (10.66%)
CHANG-JIE International Ltd. PEI SI Ltd (78%), HAO BO International Ltd (22%)

Major shareholders of the Company’s major institutional shareholders:

Name of Institutional Shareholders
Major Shareholders
PEI SI Ltd TSAI -CHUAN LIU (40%), CHIH PEI HSU (20%), CHIH-HAN HSU (20%), SHAO-GUANG HSU (20%)
HAO BO International Ltd TSAI -TI LIU (45%), SHAO-GUANG HSU (35%), CHIH PEI HSU (10%), CHIH-HAN HSU (10%)

16

03 31, 2021

Professional qualifications and independence analysis of directors

03 31, 2021
Criteria
Name		 Meet One of the Following Professional Qualification Requirements,
Together with at Least Five Years Work Experience		 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
David Yen - - V V V V V V V V None
Jack Lai - - V V V V V V V V V V None
Hope Ocean
International
Ltd
Representative:
TonyLin
-		 - V V V V V V V V V None
Dynamic
Ocean Group
Limited
Representative:
Carl Wei
-		 - V V V V V V V V V V V None
YI-WEI
INVESTMENT
Representative:
Ji-Zhi Hsieh
-		 - V V V V V V V V V V V V None

17

CHANG-JIE
International
Ltd.
Representative:
Benison Hsu
-		 - V V V V V V V V V V 1
Li-Chiu Chang - - V V V V V V V V V V V V V 3
Ming-Hsu Tsai - - V V V V V V V V V V V V V None
Jeff Lin - - V V V V V V V V V V V V V None

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.

  2. 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.

  3. 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.

  4. 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.

  5. Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company or of a corporate shareholder that ranks among the top five in shareholdings.

  6. Not directors or shareholders holding 50% voting shares are the same directors, supervisors or employee of a company or person.

  7. Not a chairman, general manager or the same ranked position are the same person or spouse of director, supervisor, employee of company or institution,

  8. 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.

  9. Not a professional individual provides audit or service for company or any affiliate of the company, and that accumulated commission are under NTS$500,000 in recently two years, as well as 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

18

Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the TPEx“.

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

  2. Not been a person of any conditions defined in Article 30 of the Company Law.

  3. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

3.2.2 Management Team

03,27,2021 Unit:shares 03,27,2021 Unit:shares 03,27,2021 Unit:shares
Title Nationality/
Country of
Origin		 Name Sex Date
Effective
Shareholding		 Spouse & Minor
Shareholding
Shareholding
by Nominee
Arrangement

Experience（Education）		 Other Position Managers who are Spouses
or Within Two Degrees of
Kinship
Shares ％ Shares ％ Shares ％ Title Name Relation
General
Manager		 R.O.C. David
Yen
Male		 11,04
2019		 848,780 0.67 0 0 0 0  The founder of T3EX group
 Shipping & Transportation
Management in NTOU		  Group chairman of
T3EX
 Board director:
Dynamic Ocean Group,
T-Cube logistics, T-Cube
(Suzhou) logistics , T.H.I. &
Maruzen, Hope Ocean,
Greatline international, Taiwan
Express, Moorluk
International Shipping., T-SC
Factoring Co., Ltd.,, THI
LOGISTICS PHILIPPINES
 Chairman:
THI Logistics, THI group
(Shanghai), and YHI
International,THI logistics,.
None		 None None
Vice
President		 R.O.C. Allen
Hou		 Male 03,26,
2013		 15,760 0.01 0 0 0 0  The CFO of massage chairs group
of Johnson Health Tech.
 The CFO of GRAND HALL
ENTERPRISE.		  The Senior CFO of
T3EX Global Holdings
and Taiwan Express.
 The board of directors of		 None None None

19

 The CFO of Avalue Technology.
 Major in NTU Economics.
 MBA inCUNY		 THI logistics, Taiwan
Express,.
General
Manager &
Spokesman		 R.O.C. Echo
Wan		 Female 05,31
2016		 110,000 0.09 576 0 0 0  The CAO of T3EX.
 Senior manager of SinoPac
securities underwriting department.
 MBA of NCU
 Major Accounting in Fu Jen
Catholic		  The CEO’s special
assistant of T3EX
 The audit manager of
T3EX		 None None None
Vice
President		 R.O.C. Melonie
Lin
Female		 03,14,
2016		 141,608 0.11 0 0 0 0  National Taipei University of
Business
 Manager of Operator Department
of THI Logistics.
 Manager of Administrative
Department of THI		  Manager of Internal IT
Department
 The supervisor of THI
logistics, Taiwan Express,
and Hiview logistics		 None None None

Note: The chairperson to also act as the general manager or other equivalent position (highest managerial position). If the chairperson also acts as the general manager or other equivalent position (highest managerial position) or the chairperson and general manager or other equivalent position (highest managerial position) are spouses or relatives within one degree of consanguinity, Please detail the reasons, necessities and the response measures:

The reasons and necessities:

To enhance the communication between the company and its subsidiaries, the company appointed Mr. David Yen, the group chairman of T3EX Group, to be the company’s general manager. The assignment could improve the integration of the business development of the company and its subsidiaries, and lift the back-up efficient of the company’s supportive units such as finance Dept., IT Dept., and administration Dept.

The response measures:

The company has set over 50% directors who are not an employee of the Company or any of its affiliates. To meet the spirit of the blueprint of corporate governance which is mandated by Financial Supervisory Commission, the company would to increase the number of independent directors in future.

20

Year 2020 Unit: NT$ thousands

3.2.3 Remuneration of Directors, President, and Vice President

Remuneration of Directors and Independent Directors

Title
Name		 Remuneration Remuneration Remuneration Remuneration Remuneration Remuneration Remuneration Remuneration Ratio of Total
Remuneration
(A+B+C+D) to Net
Income (%)		 Ratio of Total
Remuneration
(A+B+C+D) to Net
Income (%)		 Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total
Compensation
(A+B+C+D+E+F
+G) to Net Income
(%)		 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)
Severance Pay (B)
Bonus to
Directors(C)		 Allowances (D)
Salary, Bonuses, and
Allowances (E)		 Severance Pay (F) Profit Sharing- Employee Bonus (G)
The
com
pan
y
All
companies
in the
consolidate
d financial
statements		 The
company
Companies
in the
consolidate
d financial
statements
The
company
Companies in
the consolidated
financial
statements
The
company		 Companies
in the
consolidate
d financial
statements
The
compa
ny		 Companies in
the
consolidated
financial
statements
The
company		 Companies in
the
consolidated
financial
statements
The
company
Companies
in the
consolidate
d financial
statements
The company		 Companies in the
consolidated financial
statements		 The
compa
ny		 Companies in
the
consolidated
financial
statements
Cash Stock Cash Stock
Presi
dent
David
Yen		 0
 0 0 0 7,756 7,756 840 840 1.59 1.59 0 32,554 0 1,946 600 0 600 0 1.70 8.06 0
Dire
ctors
Hope Ocean
International Ltd
Representative:
TonyLin
Dire
ctors
Jack Lai
Dire
ctor		 YI-WEI
INVESTMENT
Representative:
Ji-Zhi Hsieh
Dire
ctor		 Dynamic Ocean Group
Limited
Representative:
Carl Wei
Dire
ctor		 CHANG-JIE
International Ltd.
Representative:
Benison Hsu
Dire
ctor		 Li-Chiu Chang 0 0 0 0 3,324 3,324 360 360 0.68 0.68 0 0 0 0 0 0 0 0 0.68 0.68 0
Dire
ctor		 Ming-Hsu Tsai
Dire
ctor		 Jeff Lin

21

Range of Remuneration Name of Directors Name of Directors Name of Directors Name of Directors
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
The company Companies in the consolidated
financial statements		 The company Companies in the
consolidated financial
statements
Under NT$ 1,000,000 Jack Lai, CHANG-JIE Internati
Ltd. Representative: Benison Hs
Hope Ocean International
Ltd Representative
Tony Lin, DYNAMIC OCEAN
GROUP Representative :
Carl Wei, Li-ChiuChang,
Ming-Hsu Tsai, YI-WEI
INVESTMENTRepresentative:
Ji-Zhi Hsieh
u
Jack Lai, CHANG-JIE Internati
Ltd. Representative: Benison Hs
Hope Ocean International
Ltd Representative
Tony Lin, DYNAMIC OCEAN
GROUP Representative :
Carl Wei, Li-ChiuChang,
Ming-Hsu Tsai, YI-WEI
INVESTMENTRepresentative:
Ji-Zhi Hsieh



Jack Lai, CHANG-JIE
International Ltd.
Representative:
Benison Hsu, Hope Ocean
International Ltd
Representative Tony Lin,
DYNAMIC OCEAN GROUP
Representative : Carl Wei,
Li-ChiuChang, Ming-Hsu
Tsai, YI-WEI INVESTMENT
Representative: Ji-Zhi Hsieh		 DYNAMIC OCEAN
GROUP Representative :
Carl Wei, Li-ChiuChang,
Ming-Hsu Tsai, YI-WEI
INVESTMENT
Representative:
Ji-Zhi Hsieh
NT$1,000,001 ~NT$2,000,000 David Yen David Yen David Yen 0
NT$2,000,001 ~ NT$3,500,000 0 0 0
NT$3,500,001 ~ NT$5,000,000 0 0 0
NT$5,000,001 ~ NT$10,000,000 0 0 0 Jack Lai, Hope Ocean
International Ltd
Representative: TonyLin
NT$10,000,001~ NT$15,000,000 0 0 0 David Yen、CHANG-JIE
International Ltd.
Representative:
Benison Hsu

22

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
OverNT$100,000,000 0 0 0 0
Total 9 9 9 9

Remuneration of the President and Vice President

Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None		 Year 2020 Unit: NT$ thousands
Salary(A)
Severance Pay (B)
Bonuses and
Allowances (C)
Profit Sharing- Employee
Bonus (D)
Ratio of total
compensation
(A+B+C+D) to net
income (%)
Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The
company
Companies in
the
consolidated
financial
statements
The company
Companies in the
consolidated
financial
statements
The
company
Companies
in the
consolidated
financial
statements
Cash Stock
Cash
Stock
6,256
17,494
318
1,308
1,318
3,368
964
0
964
0
1.63
4.27
None
Title Name Salary(A) Severance Pay (B) Bonuses and
Allowances (C)		 Profit Sharing- Employee
Bonus (D)		 Ratio of total
compensation
(A+B+C+D) to net
income (%)		 Compensation paid to
the President and
Vice President from
an Invested Company
Other Than the
Company’s
Subsidiary
The
company		 Companies in
the
consolidated
financial
statements
The
company		 Companies in
the
consolidated
financial
statements
The
company		 Companies in
the
consolidated
financial
statements
The company		 Companies in the
consolidated
financial
statements

The
company		 Companies
in the
consolidated
financial
statements
Cash Stock Cash Stock
General
Manager		 David Yen 6,256 17,494 318 1,308 1,318 3,368 964 0 964 0 1.63 4.27 None
Senior Vice
President
Allen Hou
Senior Vice
President
Echo Wan
Senior Vice
President
Melonie
Lin

Name of President and Vice President

Range of Remuneration

The company

Companies in the consolidated financial statements (A+B+C+D)

23

Under NT$ 1,000,000 David Yen 0
NT$1,000,001 ~NT$2,000,000 EchoWan EchoWan
NT$2,000,001 ~ NT$3,500,000 Melonie Lin Melonie Lin
NT$3,500,001 ~NT$5,000,000 Allen Hou Allen Hou
NT$5,000,001 ~ NT$10,000,000 0 0
NT$10,000,001~NT$15,000,000 0 David Yen
NT$15,000,001 ~NT$30,000,000 0 0
NT$30,000,001 ~ NT$50,000,000 0 0
NT$50,000,001 ~NT$100,000,000 0 0
Over NT$100,000,000 0 0
Total 4 4

24

Unit: NT$ thousands

Title Name Employee
Bonus
- in Stock
(Fair Market
Value)		 Employee
Bonus
- in Cash		 Total
Ratio of Total
Amount to Net
Income (%)
Executive
Officers		 General
Manager		 David
Yen		 0 530 530 0.17
Senior Vice
President		 Allen
Hou
Senior Vice
President		 Melonie
Lin
Senior Vice
President		 Echo
Wan

3.2.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Vice Presidents

  • A. The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, supervisors, presidents and vice presidents of the Company, to the net income.
the net income.
Year 2020 2019
The
company		 Companies in the
consolidated
financial statements
The
company		 Companies in the
consolidated
financial
statements
Total remuneration paid to
directors and supervisors.		 12,880 47,380 8,930 46,327
Ratio of total remuneration paid
to directors and supervisors to
net income(%).		 2.38 8.74 3.59 18.60
Total remuneration paid to
presidents and vicepresidents.		 8,856 23,134 8,963 23,401
Ratio of total remuneration paid
to presidents and vice
presidents to net income(%).		 1.63 4.27 3.60 9.40

25

  • A. Comparing to 2019, the decrease of the ratio of total remuneration paid to directors, supervisors, president, and vice president to net income in 2020 was caused by of increasing income profit of 2020.

  • B. According to the Company’s Article of Incorporation, 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.

  • C. The remuneration of presidents and vice presidents shall be propose by the Remuneration Committee which evaluated and determined in accordance with the individual performance, achievements and the market trends, and submitted to Board of Directors for discussion before sent to the shareholders’ meeting for resolution.

3.3 Implementation of Corporate Governance

3.3.1 Board of Directors

A total of 9(A) meetings of the Board of Directors were held in 1/1/2020 to 3/31/2021. The attendance of directors were as follows:

Title Name Attendance in
Person (B)
By Proxy		 Attendance
Rate (%)
【Ｂ/Ａ】		 Remarks
Chairman David Yen 9 0 100.00 None
Director Hope Ocean International
Ltd Representative:
TonyLin		 9 0 100.00 None
Director CHANG-JIE International Ltd
Representative: Benison
Hsu		 9 0 100.00 None
Director Dynamic Ocean Group
Limited Representative:
Carl Wei		 9 0 100.00 None
Director Jack Lai 9 0 100.00 None
Director YI-WEI INVESTMENT
Representative: Ji-Zhi Hsieh		 9 0 100.00 None
Independent
director		 Li-Chiu Chang 9 0 100.00 None
Independent
director		 Ming-Hsu Tsai 7 2 77.78 None
Independent
director		 Jeff Lin 9 0 100.00 None

26

Other mentionable items:

  1. If there are circumstances referred to in Article 14-3 of the Securities and Exchange Act and resolutions of the directors’ meetings objected to by independent directors or subject to qualified opinion and recorded or declared in writing, the dates of the meetings, sessions, contents of motion, all independent

directors’ opinions and the company’s response should be specified:

Board Meeting Date Contents of Motion Independent
director’s opinions
and company’s
response		 Resolution Article
14-3 of
Securities
2020/03/06
(First Meeting in 2020)		 Amendment to the
Operational Procedures for
Loaningof CompanyFunds.		 No opinion Pass V
2019 Employees' and
Directors' Compensation.		 No opinion Pass V
Approval of evaluation of
directors and manager’s
performance.		 No opinion Pass V
Evaluation of 2020 the
Company’s audit fee and
independence.		 No opinion Pass V
Approval of the Company’s
2019 Assessment of the
effectiveness of internal
control system and 2019
Internal Control System
Statement.		 No opinion Pass V
Approval of loaning funds to
the Company’s subsidiaries.		 No opinion Pass V
2020/05/07
(Second Meeting in
2020)		 Approval of loaning funds to
the Company’s
subsidiary-Taiwan Express.		 No opinion Pass V
Approval of endorsement and
guarantee to the bank loan
contracts for the Company’s
subsidiary.		 No opinion Pass V
2020/06/24
(Second Extraordinary
Meeting in 2020)		 The Company's external
declaration upon receipt of
documents pertaining to
WPG Holdings Corp.’s
declaration and
announcement of public
subscription of the
Company's common stock
should be done within 15
days.		 No opinion Pass V
2020/07/31
(Third Meeting in 2020)		 Assigned to the Company’s
spokesperson.		 No opinion Pass V
Assigned to the Company’s
actingspokesperson.		 No opinion Pass V
Assigned to the Company’s No opinion Pass V

27

Chief Corporate Governance
Officer.
Approval of Functions of
Directors’ and Officers’ (D＆
O)LiabilityInsurance.		 No opinion Pass V
Amendment to the “Internal
Control System” and the
“Implementation Rules of
Internal Control.		 No opinion Pass V
Approval of THI group (HK)
loaning funds to the
Company’s subsidiary-
Taiwan Express(HK).		 No opinion Pass V
Approval of endorsement and
guarantee to the bank loan
contracts for the Company’s
subsidiary.		 No opinion Pass V
2020/10/14
(Third Extraordinary
Meeting in 2020)		 Approval of the Company’s
fundraising.		 No opinion Pass V
Approval of the Company’s
issuing the 4th domestic
Unsecured Convertible Bond.		 No opinion Pass V
2020/11/04
(Fourth Meeting in
2020)		 Assigned to the Company’s
audit manager.		 No opinion Pass V
Approval of endorsement and
guarantee to the bank loan
contracts for the Company’s
subsidiary.		 No opinion Pass V
Approval of loaning funds to
the Company’s
subsidiary-Taiwan Express.		 No opinion Pass V
Approval of evaluation of
directors and manager’s
performance.		 No opinion Pass V
Amendment to the “ Rules of
Self-Evaluation of Board of
Directors.		 No opinion Pass V
2020/12/28
(Four Extraordinary
Meeting in 2020)		 Amendment to the
Operational Procedures for
Acquisition and Disposal of
Assets.		 No opinion Pass V
2021/03/09
(First Meeting in 2021)		 2020 Employees' and
Directors' Compensation.		 No opinion Pass V
Amendment to the
Procedures for Election of
Directors.		 No opinion Pass V
Amendment to the Rules of
Procedure for Audit
Committee.		 No opinion Pass V
Amendment to the Rules of
Procedure for Board of
Director Meetings		 No opinion Pass V

28

Amendment to the Rules of
Procedure for Remuneration
Committee.		 No opinion Pass V
Amendment to the Rules
Governing the Scope of
Powers of Independent
Directors.		 No opinion Pass V
Approval of the Company’s
2020 Assessment of the
effectiveness of internal
control system and 2020
Internal Control System
Statement.		 No opinion Pass V
Election of One Additional
Director		 No opinion Pass V
Evaluation of 2021 the
Company’s audit fee and
independence.		 No opinion Pass V
Approval of evaluation of
directors and manager’s
performance.		 No opinion Pass V
Approval of loaning funds to
the Company’s
subsidiary-THI Group (HK).		 No opinion Pass V
Cancellation for the approval
of endorsement and
guarantee to the bank loan
contracts for the Company’s
subsidiary on November 4,
2020 board of director
meeting.		 No opinion Pass V
Approval of endorsement and
guarantee to the bank loan
contracts for the Company’s
subsidiary.		 No opinion Pass V

  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: None.

  2. The execution of the Board’s self-evaluation of 2020:

Term Once in ayear
Period 2020/1/1-2020/12/31
Scope The board,board members,and functional committees
Method Internal boardperformance evaluation
Content Board Performance：
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 continuingeducation of the directors.

29

  1. Internal control. Member Performance ： 1. Alignment of the goals and missions of the company. 2. Awareness of the duties of a director. 3. Participation in the operation of the company. 4. Management of internal relationship and communication. 5. The director's professionalism and continuing education. 6. Internal control. Functional Committees Performance: 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. Makeup of the functional committee and election of its members. 5. Internal control. The Score of Internal Board Performance Evaluation: The score is 99.56. (Full score is 100) The Score of Board Members Self-Evaluation: The Score of Internal Board Conclusion performance Evaluation: The score is 96.44. (Full score is 100) The Score of Internal Functional Committee Performance Evaluation: The score is 108.33. (Full score is 120)

  2. Measures taken to strengthen the functionality of the board: The Company has followed the“ Rules and Procedures of Board of Directors ” , disclosed the related information at website and established the IR Contact institute to maintain shareholders’ relations. Besides, the Board of Directors also has established Remuneration Committee and Audit Committee to assist the board in carrying out its various duties.

3.3.2 Attendance of Independent Directors at Audit Committee Meetings

A total of 8 (A) meetings of the audit committee were held in 1/1/2020 to 3/31/2021. The attendance of independent directors were as follows:

Title Name Attendance in
Person (B)		 By
Proxy		 Attendance Rate
(%)
【Ｂ/Ａ】		 Remarks
Independent Director Li-Chiu Chang 8 0 100 None
Independent Director Ming-Hsu Tsai 6 2 75 None
Independent Director Jeff Lin 8 0 100 None

Other mentionable items:

30

1. Annual Highlights:

The Audit Committee is responsible for assisting the Board of Directors in monitoring the Company's performance quality and integrity in terms of accounting, audit, financial reporting process and financial control, focused on the following:

  1. Audit of Financial Statements, accounting policy and programs 2. Internal control system and related policy and program 3. Significant transactions in assets or derivatives 4. Endorsement or guarantee on significant loan 5. Placement or issuance of securities 6. Investment status of derivatives and cash 7. Legal compliance 8. Involvement of Company Managers and Directors in transactions with related parties and any potential conflict of interest 9. Complaint report 10. Embezzlement prevention plan and investigation report 11. Information security 12. Corporate risk management 13. CPA background, independency and performance assessment 14. CPA appointment, dismissal or remuneration 15. Appointment/dismissal of Financial Supervisor, Accounting Supervisor or Internal Audit Supervisor 16. Duty performance of Audit Committee 17. Audit Committee's Performance Self-assessment Questionnaire

  2. Audit Financial Report: The Board of Directors prepared the Company's 2020 Business report, financial statements and earnings distribution proposal etc., where financial statements have been audited by KPMG Taiwan with supporting audit report. The abovementioned business report, financial statements and earnings distribution proposal have been audited by the Audit Committee, along with its unqualified opinion.

  3. Internal control system's effect was evaluated: Not only the performance was assessed in terms of the policy and programs for internal control system by Audit Committee in the Company (included but not limited to measures taken to control finance, operations, risk management, information security, subcontracting, law compliance), but also those regular reports made by the Audit Department, CPA and Top Management including risk management and law compliance. Audit Committee deems such parts as above effective and the Company has taken all necessary countermeasures to control, monitor and correct act of default.

2. Resolutions related to Security and Exchange Article14-5:

Meeting Date Contents and Resolutions Security
and
Exchange
Article14-5		 Resolutions which
were not approved
by the Audit
Committee but was
approved by two
thirds or more of all
directors.
2020/03/06
(First
meeting in
2020)		 Adoption of the 2019 business report and financial
statements.		 V
2019 Employees' and Directors' Compensation. V
Adoption of the proposal for distribution of 2019

31

profits.
Amendment to the Company’s Articles of
Incorporation.
Amendment to the Operational Procedures for
Loaningof CompanyFunds.		 V
Amendment to the Rules of Procedure for
Shareholder Meetings.
Amendment to the Rules of Procedure for Board of
Director Meetings.		 V
Amendment to the Rules of Procedure for
Remuneration Committee.		 V
Approval of the Company’s 2019 Assessment of
the effectiveness of internal control system and
2019 Internal Control System Statement.		 V
Evaluation of 2020 the Company’s audit fee and
independence.		 V
Approval of evaluation of directors and manager’s
performance.		 V
Approval of loaning funds to the Company’s
subsidiaries.		 V
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.
2020/03/19
(First
Extraordinary
Meeting in
2020)		 8thShare Buyback Program. V
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.
2020/05/07
(Second
meeting in
2020)		 2020 first quarter consolidated financial
statements.
Approval of loaning funds to the Company’s
subsidiary-Taiwan Express.		 V
Approval of endorsement and guarantee to the
bank loan contracts for the Company’s subsidiary.		 V
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.
2020/07/31
(Third
meeting in
2020)		 2020 second quarter consolidated financial
statements.		 V
Assigned to the Company’s spokesperson. V
Assigned to the Company’s acting spokesperson. V
Assigned to the Company’s Chief Corporate
Governance Officer.		 V
Approval of Functions of Directors’ and Officers’
(D＆O)LiabilityInsurance.		 V
Amendment to the “Internal Control System” and
the “Implementation Rules of Internal Control.		 V
Approval of THI group (HK) loaning funds to the
Company’s subsidiary- Taiwan Express(HK).		 V
Approval of endorsement and guarantee to the
bank loan contracts for the Company’s subsidiary.		 V
Deliberations on any disguised financing
transaction in the secondquarter of 2020.
Audit committee resolutions: Approved.

32

The Company’s settlement of the opinions of audit committee: Approved. The Company’s settlement of the opinions of audit committee: Approved. The Company’s settlement of the opinions of audit committee: Approved.
2020/10/14
(Second
Extraordinary
Meeting in
2020)		 Approval of the Company’s fundraising. V
Approval of the Company’s issuing the 4th
domestic Unsecured Convertible Bond.		 V
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.
2020/11/04
(Fourth
meeting in
2020)		 2020 third quarter consolidated financial
statements.
Assigned to the Company’s audit manager. V
Approval of the Company’s 2021 important risk
managementplan.
Approval of the Year 2021 internal audit plan. V
Amendment to the “ Rules of Self-Evaluation of
Board of Directors.		 V
Approval of evaluation of directors and manager’s
performance.		 V
Approval of endorsement and guarantee to the
bank loan contracts for the Company’s subsidiary.		 V
Approval of loaning funds to the Company’s
subsidiary-Taiwan Express.		 V
Deliberations on any disguised financing
transaction in the thirdquarter of 2020.
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.
2020/12/28
(Third
Extraordinary
Meeting in
2020)		 Amendment to the Operational Procedures for
Acquisition and Disposal of Assets.		 V
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.
2021/03/09
(First
Meeting in
2021)		 Adoption of the 2020 business report and financial
statements.		 V
2020 Employees' and Directors' Compensation. V
Adoption of the proposal for distribution of 2020
profits.
Amendment to the Rules of Procedure for
Shareholder Meetings.
Amendment to the Procedures for Election of
Directors.		 V
Amendment to the Rules of Procedure for Audit
Committee.		 V
Amendment to the Rules of Procedure for Board of
Director Meetings		 V
Amendment to the Rules of Procedure for
Remuneration Committee.		 V
Amendment to the Rules Governing the Scope of
Powers of Independent Directors.		 V
Approval of the Company’s 2020 Assessment of
the effectiveness of internal control system and
2020 Internal Control System Statement.		 V
Evaluation of 2021 the Company’s audit fee and
independence.		 V

33

Approval of evaluation of directors and manager’s
performance.		 V
Election of One Additional Director. V
List of candidates nominated for election of
additional Director in 2021.
Proposal of Release the Prohibition on Directors
from Participation in Competitive Business.
Deliberations on any disguised financing
transaction in the fourthquarter of 2020.
Approval of loaning funds to the Company’s
subsidiary-THI Group (HK).		 V
Cancellation for the approval of endorsement and
guarantee to the bank loan contracts for the
Company’s subsidiary on November 4, 2020 board
of director meeting.		 V
Approval of endorsement and guarantee to the
bank loan contracts for the Company’s subsidiary.		 V
Audit committee resolutions: Approved.
The Company’s settlement of the opinions of audit committee: Approved.

  1. There were no recusals of independent directors due to conflicts of interests in 2020.

  2. Descriptions of the communications between the independent directors, the internal

auditors, and the independent auditors:

auditors, and the independent auditors:
Meeting Date Communications between the independent
directors and the internal auditors.		 Communications between the independent
directors and the independent auditors.
2020/03/06
(First meeting in
2020)		 Reporting the execution of 2019 fourth quarter
internal audit.
Reviewing report on self-evaluation of internal
control.
Approving 2019 statements of Internal Control
System.		 Reporting the conclusions of auditing 2019
fourth quarter consolidated financial
statements.
Reporting the impact of the audit and
financial statements from COVID-19.
Discussing the self-edited financial
statements.
Reporting the update of regulations.
Evaluation of 2020 the Company’s audit fee
and independence.
2020/05/07
(Second meeting
in 2020)		 Reporting the execution of 2020 first quarter
internal audit.		 None.
2020/07/31
(Third meeting in
2020)		 Reporting the execution of 2020 second quarter
internal audit.
Approving the amendments to the Company’s
Internal Control System.		 Reporting the conclusions of reviewing
2020 second quarter financial statements.
Reporting the update of regulations.
2020/11/04
(Fourth meeting
in 2020)		 Reporting the execution of 2020 third quarter
internal audit.
Approved the assignment of audit manager.
Approved the Company’s 2021 auditplan.		 None.
2021/3/09
(First meeting in
2021)		 Reporting the execution of 2020 fourth quarter
internal audit.
Reviewing report on self-evaluation of internal
control.
Approving2020 statements of Internal Control		 Reporting the conclusions of auditing 2020
fourth quarter consolidated financial
statements.
Discussing the self-edited financial
statements.

34

System. Reporting the update of regulations.
Evaluation of 2021 the Company’s audit fee
and independence.

35

3.3.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
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 established the Corporate Governance Best-Practice
Principles based on “Corporate Governance Best-Practice Principles
for TWSE/TPEx Listed Companies”. The information has been
disclosed on the Company’s website.		 None
2. Shareholding structure & shareholders’
rights
(1) Does the company establish an internal
operating procedure to deal with
shareholders’ suggestions, doubts,
disputes and litigations, and implement
based on the procedure?		 V
V		 In addition to the existing hotline and email channels, the Company has
established an internal operating procedure, and has designated
appropriate departments, such as Investor Relations, Public Relations,
and stock affairs to handle shareholders’ suggestions, doubts, disputes
and litigation.
The chairman’s secretary office is responsible for collecting the
None

36

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
(2) Does the company possess the list of its
major shareholders as well as the
ultimate owners of those shares?
(3) Does the company establish and
execute the risk management and
firewall system within its conglomerate
structure?
(4) Does the company establish internal
rules against insiders trading with
undisclosed information?
V
V		 updated information of major shareholders and the list of ultimate
owners of those shares.
Rules are made to strictly regulate the activities of trading,
endorsement and loans between the Company and its affiliates. In
addition, the “Criteria of Internal Control Mechanism for a Public
Company”, outlined by the Financial Supervisory Commission when
drafting the guidelines for the “Supervision and Governance of
Subsidiaries”, was followed in order to implement total risk control
with respect to subsidiaries.
To protect shareholders’ rights and fairly treat shareholders, the
Company has established the internal rules to forbid insiders trading on
undisclosed information. The Company has also strongly advocated
these rules in order to prevent any violations.

37

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
3. Composition and Responsibilities of the
Board of Directors
(1) Does the Board develop and implement
a diversified policy for the composition
of its members?
(2) Does the company voluntarily establish
other functional committees in addition		 V
V		 Member diversification is considered by the Board members. Factors
taken into account include, but are not limited to gender, age, cultures,
educational background, race, professional experience, skills,
knowledge and terms of service. The Board objectively chooses
candidates to meet the goal of member diversification.
Among Company Directors, the following have experience in
leadership, operations management and decision-making, and risk
management as well as industry knowledge: David Yen (director),
Benison Hsu (director), Jack Lai (director), Tony Lin (director), Carl
Wei (director), Ming-Hsu Tsai (independent director)；Independent
Director Li Chiu Chang has knowledge and experience in securities,
finance and capital market while Director Ji-Zhi Hsieh has background
in resource management.
The Company established the Corporate Governance & Sustainability
Committee in 2018 to strengthen its capabilities and performance. Its
Risk Management Committee was approved and established in 2012,








None

38

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
to the Remuneration Committee and the
Audit Committee?
(3) Does the company establish a standard
to measure the performance of the
Board, and implement it annually?
V		 with operations beginning in 2020 aimed at achieving the Company’s
four goals, which include risk control and management related to
information security, finance, corporate governance and operations;
supervisors of related sectors serving as Committee members convene
seasonal meetings to assess performance and report achievements to
the Chairman of the Group. Company achievements are presented to
the Committee and the Board of Directors every year.
The board of directors shall have the knowledge, skills, and experience
necessary to perform their duties. To achieve the ideal goal of corporate
governance, the board of directors shall possess the following abilities:
1. Ability to make operational judgments.
2. Ability to perform accounting and financial analysis.
3. Ability to conduct management administration.
4. Ability to conduct crisis management.
5. Knowledge of the industry.
6. An international market perspective.
7. Ability to lead.





39

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
(4) Does the company regularly evaluate
the independence of CPAs?		 8. Ability to make policy decisions.
The directors measure their performance in board annually. The
Company has reported the outcome of self-evaluation on 2021/3/9
board meeting.
The Company evaluates the independence of CPAs annually, ensuring
that that they are not stakeholders such as a Board member, supervisor,
shareholder or person paid by the Company. In latest two years, the
directors evaluated the independence of CPAs annually in board
meeting on March 6, 2020 and March 9, 2021.
4. Does the Company established a full- (or
part-) time corporate governance unit or
personnel to be in charge of corporate
governance affairs (including but not
limited to furnish information required for
business execution by directors, handle
matters relating to board meetings and
shareholders’ meetings accordingto laws,		 V
On 2020/7/31, the company’s board of meeting has assigned Allen
Hou, the senior vice president and CFO of the company who has over 3
years finance management experience, to be the Chief Corporate
Governance Officer. The corporate governance of dedicated office is
the chairman’s secretary office. The main duties of the Chief Corporate
Governance officer and dedicated office are handling matters for board
meetings and shareholders meetings, and assisting directors with legal
compliance.
None

40

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
handle corporate registration and
amendment registration, record minutes of
board meetings and shareholders meetings,
etc.)?		 The execution of 2019-2020 as below:
1. Producing minutes of board meetings and shareholders meetings,
and assisting in onboarding and continuous development of
directors.
2. Assisting directors with legal compliance.
3. Maintaining investor relationship: In order to protect shareholder’s
rights, we have arranged communications between directors and
main shareholders, institutional investors, as well as provided
sufficient information which can evaluate the company’s truly value
for investors when necessary.
4. Producing minutes of board meetings and noticing directors before 7
days before the meetings is convened. If a director or a juristic
person that the director represents is an interested party in relation to
an agenda item, we have reminded the director shall state the
important aspects of the interested party relationship at the
respective meeting. And we have sent the minutes of a board
meetingwithin 20 days after the meeting.

41

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
5. Registering shareholders meetings, producing notices, agendas, and
minutes of shareholders meetings within legal deadline, and
applying for alteration of the registered corporation articles or new
directors.
The training of the Chief Corporate Governance Officer in 2020 as
below:
below:
Date
of
Training		 Organizer Class Name Training
Hour		 Total
Training
Hour
2020/12/8 SECURITIES
& FUTURES
INSTITUTE		 The duty of board
of meeting from
prevention of the
behavior of internal
fraud		 3 hours 18 hours
2020/12/8 The trend and
challenge of IT
safety governance		 3 hours
2020/11/24 Thepractice class 12

42

Evaluation Item Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
of the directors,
supervisors,
independent
directors, and Chief
Corporate
Governance		 hours
6. Does the company establish a
communication channel and build a
designated section on its website for
stakeholders, as well as handle all the
issues they care for in terms of corporate
social responsibilities?		 V
The Company provides detailed contact information, including
telephone numbers and email addresses in the “IR Relations” section of
the corporate website. In addition, personnel are in place to exclusively
deal with issues of social responsibility, ensuring that various interested
parties have channels to communicate with the Company.

None
7. Does the company appoint a professional
shareholder service agency to deal with
shareholder affairs?		 V
The Company designates CAPITAL SECURITIES CORP. to deal with
shareholder affairs.		 None
8. Information Disclosure
(1) Does the company have a corporate		 V The Company has set up a Chinese/English website None

43

Evaluation Item Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
website to disclose both financial
standings and the status of corporate
governance?
(2) Does the company have other
information disclosure channels (e.g.
building an English website, appointing
designated people to handle
information collection and disclosure,
creating a spokesman system,
webcasting investor conferences)?
V		 (www.t3ex-group.com.tw) to disclose information regarding the
Company’s financials, business and corporate governance status.
The Company has assigned an appropriate person to handle
information collection and disclosure. Contact person: Linda Hsu, TEL:
+886-2-2753-2093
The Company has established a spokesman system. Investor
conference information is disclosed on the corporate website.
V Employee rights and wellness are stated in internal policies as required
by relevant laws and regulations. The Company maintains good
relationship with customers and suppliers and fulfills its duties as a
responsible corporate citizen. Internal control, auditing and
self-evaluation procedures are in place, while the Company also		 None

44

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
purchases insurance coverage for its directors.
9. Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to
employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the
implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for
directors and supervisors)?
9.1 The institutions and implementations of employee wellness and rights, investor relations, supplier relations, rights of stakeholders, please refer the
Company’s 2019 CSR report.
9.2 The implementations of risk management were followed the Company’s internal regulations and procedures.
9.3 The directors training records:
Title
Name
Class Name
TrainingTimes
TrainingDate
Chairman
David Yen
Discussion on company's response to information security governance
3
2020/11/12
Trends and challenges in information security governance
3
2020/11/05
Director
Hope Ocean International Ltd
Representative: Tony Lin
New corporate governance regulations in 2020 for the information of Directors
and Supervisors
3
2020/08/26
Companyoperations and media relations strategy
3
2020/08/12
Director
Jack Lai
New corporate governance regulations in 2020 for the information of Directors
and Supervisors
3
2020/08/26

45

Evaluation Item Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons		 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons		 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
Common issues in corporate governance and interpretation, analysis of relevant
laws and regulations		 3 2020/08/20
Director YI-WEI INVESTMENT
Representative: Ji-Zhi Hsieh		 Analysis of supporting policies for improving the Company’s preparation of
financial reports and internal control managementpractices		 3 2020/10/27
Director Dynamic Ocean Group Limited
Representative: Carl Wei		 5G core technologyand application across different business opportunities 3 2020/11/26
The effect of the latest revised Tax Act on company operations and
countermeasures		 3 2020/11/17
Director CHANG-JIE International
Representative: Benison Hsu		 Legal compliance and auditpractices relevant to "Shareholders' Meeting" 3 2020/11/03
Common issues in corporate governance and interpretation, analysis of relevant
laws and regulations		 3 2020/10/13
Independent
Director
Li-Chiu Chang		 Securities Act and Global Trend Analysis - Risk and Opportunity 3 2020/11/12
Prevention,control and countermeasures related to insider trading 3 2020/08/11
Independent
Director
Ming-Hsu Tsai		 Case studyon suspicious international investment and securities fraud 3 2020/12/03
Case studyon material misstatement in financial statements 3 2020/11/24
Independent
Director
Jeff Lin		 2020 Beneficial OwnershipLegal System Seminar 3 2020/09/24
Improvement in risk management and corporategovernance 3 2020/09/22
10. The improvement status for the result of Corporate Governance Evaluation announced by Taiwan Stock Exchange.
The Company’s 2020 Corporate Governance Review score was 77.78,with a rankingrange of 21% to 35% amonglisted companies. The followingtable

46

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
shows the unscored items and the improvement situation:
Pointless Items Improvement
Has the Company developed a diversification policy on membership of the Board of Directors and disclosed the status of
implementation on its corporate website and annual report?		 The members of the Board of Directors
are requested to cooperate with regard to
the Company operations.
Is the number of Company Directors working as employees of the Company, parent company, subsidiary or affiliated companies
occupyless than one third of directorships(included)?
Does the Company’s Board of Directors Company have at least one female Director?
Are the chairman of the board of directors and the general manager or other equivalent (top manager) of the company not the
same oneperson or theyare in martial relationshipor are relatives with one another?
Has the Company formulated a succession plan for members of the Board and core management, and disclosed the status of
implementation on its corporate website and annual report?		 Under planning.
Do members of the company's Compensation Committee attend at least twice a year and disclose information about the policies,
systems, standards and structures for performance evaluation and compensation of directors, supervisors and managers on a
regular basis?		 Improve in this year.
Does the company have an intellectual property management plan that is linked to its operational objectives, and does the
companydisclose its implementation on its website or in its annual report and report to the board of directors at least once ayear?		 The Company don’t have an intellectual
propertybecause of the industryfeature.
Whether the Company established functional committee other than those required by law and the number of members in the
committee thereof is less than three and there are over half of the members in the committee are independent directors? And if so,		 Under planning.

47

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
did the Companydisclose its composition,duties and operational situation?
Does the company have an internal auditor whose appointment, evaluation, salary and compensation are submitted to the board of
directors or signed bythe auditor to the chairman of the board for approval and disclosed on the company's website?		 Under planning.
Is the companyreportingsignificant messages in English simultaneously? Execution from thisyear.
Did the Company announce the annual financial statement within two months after the accounting year ends? It should depends on the actual operating
conditions.
Are the Company's financial reports approved by the Board of Directors or submitted to the Board of Directors 7 days before the
announcement deadline andpublished within 1 dayafter the approval date or submission date?		 Execution from 1Q2021.
Does the company voluntarily publish its financial forecasts for the four seasons without any deficiencies corrected by the
competent authorities or noted bythe Stock Exchange or the OTC?		 It should depends on the actual operating
conditions.
Does the company’s annual report disclose the individual remuneration of directors and supervisors? Underplanning.
Does the company's annual report disclose the link between the performance evaluation and remuneration of directors and
managers?		 Under planning.
Does the company’s annual report disclose the individual compensation of thegeneral manager and deputy general manager? Underplanning.
Does the company set up a dedicated (concurrent) unit to promote corporate social responsibility, conduct risk assessment on
environmental, social or corporate governance issues related to the company’s operation according to the principle of materiality,
formulate relevant risk managementpolicies or strategies,and disclose them on the company’s website and annual report?		 Under planning.
Are the reports prepared by the company, such as CSR reports, that disclose non-financial information about the company
verified bya thirdparty?		 Under planning.

48

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Governance
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
Does the company enter into a group agreement with the union in accordance with the Group Agreement Act? The Company don’t have labor union
because of the industryfeature.
Does the company disclose its annual greenhouse gas emissions, water consumption and total weight of waste for the past two
years?		 Under planning.
Has the Company developed policies for energy-saving, reduction on greenhouse gas, water consumption volume or management
of other wastes?		 Under planning.
Does the company have a supplier management policy that requires cooperation with suppliers to comply with relevant
regulations on environmental protection, safety or health issues, and to work together to improve corporate social responsibility,
which is disclosed on the company’s website or in the CSR report?		 Under planning.

49

3.3.4 Composition, Responsibilities and Operations of the Remuneration Committee

The Remuneration Committee assists the Board in discharging its responsibilities relating to the Company’s compensation and benefits policies, plans and programs, and the evaluation of the directors’ and executives’ compensation.

The Chairman of the Remuneration Committee convened four regular meetings in 2015. The Remuneration Committee Charter is available on the Company’s corporate website.

A. Professional Qualifications and Independence Analysis of Remuneration

Committee Members

Title Criteria
Name
Meets One of the Following Professional Qualification
Requirements, Together with at Least Five Years’ Work
Experience
Meets One of the Following Professional Qualification
Requirements, Together with at Least Five Years’ Work
Experience
Meets 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) Number of
Other Public
Companies in
Which the
Individual is
Concurrently
Serving as an
Remuneration
Committee
Member

Remarks
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		 Has 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
Independent
director		 Li-Chiu
Chang		 V V V V V V V V V V V 3

Independent
director		 Ming-Hsu
Tsai		 V V V V V V V V V V V None
Independent
director		 Jeff Lin V V V V V V V V V V V None

Note: Please tick the corresponding boxes that apply to a member during the two years prior to being

elected or during the term(s) of office.

  1. Not an employee of the Company or any of its affiliates.

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

  3. 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.

  4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third

50

degree of kinship, of any of the persons in the preceding three sub-paragraphs.

  1. 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.

  2. Not directors or shareholders holding 50% voting shares are the same directors, supervisors or employee of a company or person.

  3. Not a chairman, general manager or the same ranked position are the same person or spouse of director, supervisor, employee of company or institution,

  4. 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 .

  5. Not a professional individual provides audit or service for company or any affiliate of the company, and that accumulated commission are under NTS$500,000 in recently two years, as well as 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.

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

B. Attendance of Members at Remuneration Committee Meetings

There are 3 members in the Remuneration Committee.

A total of 3 (A) meetings of the Remuneration Committee were held in 2019/6/21 to

2020/3/31. The attendance of directors were as follows:

Title Name Attendance in
Person (B)
By Proxy		 Attendance
Rate (%)
【Ｂ/Ａ】		 Remarks
Convener Li-Chiu Chang 3 0 100 None
Committee
Member		 Ming-Hsu Tsai 3 0 100 None
Committee
Member		 Jeff Lin 3 0 100 None

Other mentionable items:

1. Periodically reviewing Compensation:

The function of the Company's Salary/Remuneration Committee is evaluated professionally and objectively based on the remuneration policy and system for Company’s Directors and Managers; meeting is organized at least twice a year and proposals are presented during the special meeting of the Board of Directors where they are deemed necessary as reference for decision-making. The main duties include: (1) Periodically reviewing this Charter and the main duties include: (1) Periodically reviewing this Charter and making recommendations for

51

amendments. (2) Establishing and periodically reviewing the performance assessment standards, annual and long-term performance goals, and the policies, systems, standards, and structure for the compensation of the directors, and managerial officers. (3)Periodically evaluation and reviewing the compensations of directors and managerial officers.

  1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration

committee, the circumstances and cause for the difference shall be specified):

Meeting Date of
Remunerationcommittee		 Content of Motion Resolution Company’s response
2020.03.06
(First meeting in 2020)		 Approval amending the regulation
to remuneration committee.		 Pass Approved by board
of director meeting.
Approval of the distribution of the
Company’s material subsidiaries
2019 employee compensation.
Approval of the distribution of
2019 employee compensation to
employees of the company’s
subsidiaries.
Approval of the distribution of
2019 director and employee
compensation.
2020.11.04
(Second meeting in 2020)		 Developing the Company Proposal
for "Cash Capital Increase and
EmployeeShareSubscription"		 Pass Approved by board
of director meeting.
Approval of amendment to the
“ Rules of Self-Evaluation of Board
of Directors.
2020 Proposal Review of Cash
Capital Increase and Management
Engagement in Employee Share
Subscription		 Implementation of
procedures for
employee share
subscription
2021.03.06
(First meeting in 2021)		 Approval amending the regulation
toremunerationcommittee.		 Pass Approved by board
of director meeting.
Approval of the distribution of the
Company’s material subsidiaries
2020 employee compensation.
Approval of the distribution of
2020 employee compensation to
employees of the company’s
subsidiaries.
Approval of the distribution of
2020 director and employee
compensation.
  1. Resolutions of the remuneration committee objected to by members or subject to a

52

qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

53

3.3.5 Corporate Social Responsibility

Evaluation Item Implementation Status1 Deviations from “the
Corporate Social
Responsibility
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons
Yes No Abstract Explanation2
1. Does the Company follow materiality
principle to conduct risk assessment for
environmental, social and corporate
governance topics related to company
operation, and establish risk management
related policy or strategy?		 V The Company has followed materiality principle to conduct
governance topics related to stakeholders. Please refer the
chapter 3-stakeholders of the Company’s CSR report.
(Page9-Page15)		 None
2. Does the Company have a dedicated (or
ad-hoc) CSR organization with Board of
Directors authorization for senior
management, which reports to the Board of
Directors?		 V The Company has set the Corporate Governance and
Sustainability Committee to supervise the execution of corporate
governance and report to board meeting quarterly. Holding’s
Chairman secretary office is responsible for planning and
executing.		 None
3. Environmental Topic
(1) Has the Company set an environmental
management system designed to industry
characteristics?
(2) Is the Company committed to improving
resource efficiency and to the use of
renewable materials with low environmental
impact?
(3) Does the Company evaluate current and
future climate change potential risks and
opportunities and take measures related to
climate related topics?
(4) Does the Company collect data for
greenhousegas emissions,water usage and
V		 The Company has invented smart logistics for increasing the
efficient of warehousing and delivery as well as decrease the
discharge of CO2.
The main business of the Company is international logistics
forwarder, which is low-burden of environment. The Company
has been focusing the usage of resource, increasing the efficient
of warehousing and delivery, developing smart logistics.
The Company is logistics industry. The climate change has
lower impact on us, but we have focusing on energy
conservation.
Please refer the chapter 6-energy conservation and social caring
of the Company’s CSR report. (Page 39)		 None

54

Evaluation Item Implementation Status1 Deviations from “the
Corporate Social
Responsibility
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons
Yes No
Abstract Explanation2
waste quantity in the past two years, and set
energy conservation, greenhouse gas
emissions reduction, water usage reduction
and other waste managementpolicies?
4. Social Topic
(1) Does the Company set policies and
procedures in compliance with regulations
and internationally recognized human rights
principles?
(2) Has the Company established appropriately
managed employee welfare measures
(include salary and compensation, leave
and others), and link operational
performance or achievements with
employee salary and compensation? (3)
Does the Company provide employees with
a safe and healthy working environment,
with regular safety and health training?
(4) Has the Company established effective
career development training plans?
(5) Does the Company ’s product and service
comply with related regulations and
international rules for customers ’ health
and safety, privacy, sales, labelling and set
polices to protect consumers ’ rights and
consumer appeal procedures?
(6) Does the Company set supplier management
policyand request suppliers to complywith



V		 The Company set policies and procedures in compliance with
regulations and internationally recognized human rights principles.
Please refer the chapter 5-Human Resource Developing of the
Company’s CSR report.(Page 31-Page 37)
Please refer the chapter 5-Human Resource Developing of the
Company’s CSR report.(Page 31-Page 37)
Please refer the chapter 5-Human Resource Developing of the
Company’s CSR report.(Page 31-Page 37)
The Company is B2B industry, so this item is not related.		 None

55

Evaluation Item Implementation Status1 Implementation Status1 Implementation Status1 Implementation Status1 Implementation Status1 Implementation Status1 Deviations from “the
Corporate Social
Responsibility
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons		 Deviations from “the
Corporate Social
Responsibility
Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons
Yes No Abstract Explanation2
related standards on the topics of
environmental, occupational safety and
health or labor right, and their
implementation status?
5. Does the Company refer to international
reporting rules or guidelines to publish CSR
Report to disclose non-financial information
of the Company? Has the said Report acquire
3rd certification party verification or
statement of assurance?		 V The Company has reported CSR report since 2018. None
5. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles
for TWSE/TPEx Listed Companies”, please describe anydiscrepancybetween the Principles and their implementation: None
6. Other important information to facilitate better understanding of the company’s corporate social responsibility practices：
http://www.t3ex-group.com/c/ir_csr.php
3.3.6 Ethical Corporate Management Implementation Status1
Deviations from
“the Ethical
Corporate
Management
Best-Practice
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
Abstract Illustration
The Company’sEthicalCorporateManagement Best-Practice
None
Evaluation Item Implementation Status1 Deviations from
“the Ethical
Corporate
Management
Best-Practice
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
Yes No Abstract Illustration
1. Establishment of ethical corporate management policies
and programs
(1) Does the companydeclare its ethical corporate		 V The Company’sEthicalCorporateManagement Best-Practice None

56

Evaluation Item ImplementationStatus1 ImplementationStatus1 ImplementationStatus1 Deviations from
“the Ethical
Corporate
Management
Best-Practice
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
Yes No Abstract Illustration
management policies and procedures in its guidelines
and external documents, as well as the commitment
from its board to implement the policies?
(2) Does the company establish policies to prevent
unethical conduct with clear statements regarding
relevant procedures, guidelines of conduct,
punishment for violation, rules of appeal, and the
commitment to implement the policies?
(3) Does the company establish appropriate precautions
against high-potential unethical conducts or listed
activities stated in Article 2, Paragraph 7 of the
Ethical Corporate Management Best-Practice
Principles for TWSE/TPEx ListedCompanies?		 Principles is a guideline to provide high ethical standards for all
employees. The principles are disclosed in the annual report
and on the company website. The Board of Directors and the
management place the greatest importance in adopting the
highest standards of integrity and ethics in corporate
management and employee work conduct. Bribery, corruption,
deception, and all other forms of improper conduct are
prohibited.
The Company’s Ethical Corporate Management Best-Practice
Principles have established preventive measures against the
following:
(a) offering and accepting bribes;
(b) illegal political donations;
(c) improper charitable donations or sponsorship;
(d) Offering or accepting unreasonable gifts or hospitality,
or other inappropriate benefits.
The aforementioned principles and related regulations were
announced and disseminated to employees, managers and
Board of Directors to enhance integrity and self-discipline.
In order to prevent any unethical conduct, all employees must
disclose any matters that have or may have the appearance of
undermining the Principle, such as any actual or potential
conflict of interest.
2. Fulfill operations integrity policy
(1) Does the company evaluate business partners’ ethical
records and include ethics-related clauses in business
contracts?

V		 The Company holds annual business meetings, conveying our
integrity requirements to all our business partners. In addition,
an ethic-related clause is included in everybusiness contract. If		 None

57

Evaluation Item ImplementationStatus1 ImplementationStatus1 ImplementationStatus1 Deviations from
“the Ethical
Corporate
Management
Best-Practice
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
Yes No Abstract Illustration
(2) Does the company establish an exclusively (or
concurrently) dedicated unit supervised by the Board
to be in charge of corporate integrity?		 there is any breach of the clause, the Company may terminate
the partnership at any time without any further obligation or
compensation.
The Company assigned Chairman secretary office under the
Board’s supervision and submits reports to the Board of
Directors. The Company’s 2020 implementations of ethical
management were reported to March 9, 2021 board meeting.
The main duties as follow:
1. Assisting in incorporating ethics and moral values into this
Corporation's business strategy and adopting appropriate
prevention measures against corruption and malfeasance to
ensure ethical management in compliance with the
requirements of laws and regulations.
2. Analyzing and assessing the risks of unethical conduct
within the business scope on a regular basis and accordingly
adopting programs to prevent unethical conduct and setting
out in each program the standard operating procedures and
conduct guidelines with respect to this Corporation's
operations and business.
3. Planning the internal organization, structure, and allocation
of responsibilities and setting up check-and-balance
mechanisms for mutual supervision of the business activities
within the business scope which are possibly at a higher risk
for unethical conduct.
4. Promoting and coordinating awareness and educational
activities with respect to ethics policy.
5. Developinga whistle-blowingsystem and ensuringits

58

Evaluation Item ImplementationStatus1 ImplementationStatus1 ImplementationStatus1 Deviations from
“the Ethical
Corporate
Management
Best-Practice
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
Yes No Abstract Illustration
(3) Does the company establish policies to prevent
conflicts of interest and provide appropriate
communication channels, and implement it?
(4) Has the company established effective systems for
both accounting and internal control to facilitate
ethical corporate management, and are they audited
by either internal auditors or CPAs on a regular
basis?
(5) Does the company regularly hold internal and
external educational trainings on operational
integrity?		 operating effectiveness.
6. Assisting the board of directors and management in auditing
and assessing whether the prevention measures taken for the
purpose of implementing ethical management are effectively
operating, and preparing reports on the regular assessment of
compliance with ethical management in operating
procedures.
The Company follows relevant regulations for listed
companies. The Company also conducts due diligence before
trading with upstream and downstream companies to minimize
the risks. At the same time, the Company has made a hotline
available for submissions of regarding conflicts of interest.
The Company has established accounting and internal control
systems to ensure integrity in our operations. After internal
auditors have analyzed and reviewed the annual audit program
according to the risk evaluation results, the Company will
compiles them into an audit report.
The Company's relevant trainings for current Directors and
Managers since January 8, 2020 have contained notices for
internal system and laws, regulations that Directors should pay
more attention to etc. For employees, the Human Resource
Department will launch orientation trainings for new hires and
topics will include, but not limited to, value of integrity, sharing
cases of dishonest behavior, focus point on risk control in 2021
and reporting system, which will take up an average of 3 hours
and which eachperson willgo through.
3. Operation of the integrity channel V None

59

Evaluation Item ImplementationStatus1 ImplementationStatus1 ImplementationStatus1 Deviations from
“the Ethical
Corporate
Management
Best-Practice
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
Yes No Abstract Illustration
(1) Does the company establish both a
reward/punishment system and an integrity hotline?
Can the accused be reached by an appropriate person
for follow-up?
(2) Does the company establish standard operating
procedures for confidential reporting on investigating
accusation cases?
(3) Does the company provide proper whistleblower
protection?		 T3EX has established whistleblower protection, and the
chairman’s secretary office is the dedicated office which is the
independent convey entrance for reporting staff’s illegal or
unethical behavior. Employees can report unethical message via
email or letter, and the dedicated office has duty of
confidentiality to protect message and reporters for preventing
unfair reactions or revenge.
The Report Unit of Unethical Behavior :
Letter: chairman’s secretary office, 12F., No.563, Sec.4,
Zhongxiao E. Rd., Xinyi District, Taipei 11072, Taiwan.
Email： [email protected]
Once the message was confirmed, the dedicated office will
report to chairman as well as give whistleblower rewards. In
addition, the Company will execute punishments which follows
the Company’s principle of reward and punishment. Especially
for big unethical cases, the Company will do joint punishment
toward the related mangers for the duty of supervision. Illegal
matters, the Company will transfer illegal documents to court
ofjustice or report to the Competent Authority.
4. Strengthening information disclosure
(1) Does the company disclose its ethical corporate
management policies and the results of its
implementation on the company’s website and
MOPS?		 V The Company’s Ethical Corporate Management Best-Practice
Principles and the results of our implementation have been
posted on the Company’s Chinese / English website and
MOPS.		 None
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for
TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation.
There have been no differences.

60

==> picture [704 x 142] intentionally omitted <==

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

Implementation Status [1] Deviations from
“the Ethical
Corporate
Management
Evaluation Item Best-Practice
Yes No Abstract Illustration
Principles for
TWSE/TPEx
Listed Companies”
and Reasons
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its
policies).None.
----- End of picture text -----

Note: Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation.

3.3.7 Corporate Governance Guidelines and Regulations:

Please refer to the Company’s website at www. t3ex-group.com.

Other Important Information Regarding Corporate Governance

  1. The company set Corporate Governance and Sustainability Committee on March 26, 2018.

  2. (1)The structure of Corporate Governance and Sustainability Committee:

==> picture [299 x 198] intentionally omitted <==

  • (2)The Institution of Corporate Governance and Sustainability Committee:

61

Main Duties:

  • a. To assist board to supervise the execution of corporate governance, ethical corporate management, and corporate social responsibility.

  • b. To regularly report to board for important corporate social responsibility issues and stakeholders communication outcome.

  • c. The execution of Corporate Governance and Sustainability Committee:

c. The execution of Corporate Governance and SustainabilityCommittee:
Work Plan Actual Execution
Institute Corporate Governance and Sustainability Committee and the year 2017 work
plan of Corporate Social Responsibility.		 Approved by BOD meeting on March 26, 2018.
Edit the Year 2019 CSR report- the chapter of stakeholder communications. Approved byBOD meetingon March 6,2020.
Edit the Year 2019 CSR report- the chapter of management letter and corporate
governance.		 Approved by BOD meeting on May 7, 2020.
Edit the final version of Year 2019 CSR report Filed in public to MOPS website and the company’s website
on June 29,2020.
Institute theyear 2020 workplan of Corporate Social Responsibility. Approved byBOD meetingon July31,2020.
Edit the Year 2020 CSR report- the chapter of main scope. Approved byBOD meetingon November 4,2020.
Edit the Year 2021 CSR report- the chapter of stakeholder communications. Approved byBOD meetingon March 9,2021.
  1. The Company instituted the Procedures for Handling Material Inside Information.

62

3.3.9 Internal Control Systems

 Statement of Internal Control System:

T3EX Global Holdings Corp

Statement of Internal Control System

Date: March 9, 2021

Based on the findings of self-assessment, T3EX Global Holding Corp states the following with regard to its internal control system in 2020:

  1. T3EX is fully aware that establishing, operating and maintaining an internal control system are the responsibilities of its Board of Directors and management. The aim of the internal control system is to provide reasonable assurance to operating effectiveness and efficiency (including profitability, performance and safeguarding of assets), reliability of financial reporting and compliance of applicable laws and regulations.

  2. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only provide reasonable assurance of accomplishing the aforementioned three objectives. Moreover, the effectiveness of an internal control system may be subject to changes of environmental or circumstances. Nevertheless, the internal control system of T3EX contains self-monitoring mechanism and T3EX takes corrective actions whenever a deficiency is identified.

  3. T3EX evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal

Control System by Public Companies (herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal control based on the process of management control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Each component further contains several items. Please refer to the Regulations for details.

  1. T3EX has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.

  2. Based on the findings of the evaluation mentioned in the preceding paragraph, T3EX believes that, as of December 31, 2020, its internal control system (including its supervision and management of subsidiaries), as well as its internal controls to monitor the achievement of its objectives concerning operational effectiveness and efficiency, reliability of financial reporting, and compliance with the applicable laws and regulations, were effective in design and operation, and reasonably assured the achievement of the above-stated objectives.

  3. This Statement will be integral part of T3EX’s Annual Report for the year 2020, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Law.

  4. This Statement has been passed by the Board of Directors in their meeting held on March 9, 2021 with zero of night attending directors expressing dissenting opinions, and the remainder all

63

==> picture [106 x 101] intentionally omitted <==

affirming the content of this Statement.

T3EX Global Holdings Corp.

David Yen Chairman & General Manager

  • If the Company is requested by the SEC to retain CPA’s service for examining internal control system, the Independent Auditor’s Report must be disclosed: None

3.3.10 If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: None.

3.3.11 Major Resolutions of Shareholders’ Meeting and Board Meetings

 Shareholders’ meeting:

Shareholders’ meeting:
Date Major resolutions Implementation of Resolutions
2020/05/27 Approval of the 2019 business report and financial
statements.		 Pass
Approval of the proposal for distribution of 2020 profits. Pass, the implementation as
follow:
Ex-dividend base date: 2020/8/9
Distribution date: 2020/9/4
Cash dividend per share:
NT$1.31770652.
Amendment to the Company’s Articles of Incorporation Pass. Registered in Ministry of
Economic Affairs, and
announced on the Company’s
website.
Amendment to the Rules of Procedure for Shareholder
Meetings		 Pass. Announced on website at
2020/5/27, and implemented by
following the new procedures.
Amendment to the Operational Procedures for Loaning of
Company Funds		 Pass. Announced on website at
2020/5/27, and implemented by
following the new procedures.
Board meeting:
Date: Major resolutions Resolution
March,06,2020
(First meeting in 2020)		 1. Approval of the 2019 financial statements.
2. Approval of the 2019 audited financial statements.
3. Approval of the distribution of 2019 compensation of directors,
supervisors and employees.
4. Approval of the distribution of 2019employee compensation to		 Pass.

64

employees of the Company’s subsidiary.
5. Approval of the distribution of 2019 retained earnings.
6. Approval of the distribution of 2019 subsidiaries’ retained earnings.
7. Approval for 0 payout ratio of major subsidiaries’ 2019 earnings.
8. Amendment to the Company’s Articles of Incorporation.
9. Amendment to the Rules of Operational Procedures for Loaning of
Company Funds.
10. Amendment to the “Rules of Procedure for Shareholders Meetings.”
11. Amendment to the “Rules of Procedure for Board of Directors
Meetings.”
12. Amendment to the “Rules of Remuneration Committee Charter.”
13. Approval of the Company’s 2020 Assessment of the effectiveness of
internal control system and 2020 Internal Control System Statement.
14. Proposal of the scheduling of 2020 annual general shareholders’
meeting.
15. Proposal by shareholders who have owned over 1% shares.
16. Approval of evaluation of 2020 audit fee and independence.
17. Proposal of the edition of stakeholder communications chapter of 2019
CSR report.
18. Approval of evaluation of directors and manager’s performance.
19. Bank financial contracts.
20. Proposal of loaningfunds to the Company’s subsidiaries.
March,19,2020
(First Extraordinary
Meetingin 2020)		 Proposal of implementation of the 8thShare Repurchase Program.
May 7, 2020
(Second Meeting in 2020)		 1. Proposal of edition of management letter and corporate governance
chapter of 2019 CSR report.
2. Bank financial contracts.
3. Proposal of loaning funds to the Company’s subsidiary-Taiwan Express.
4. Proposal of endorsement and guarantee to the bank loan contracts.
5. Approval of the undersigned proposal for subsidiary's shareholder
claims taking the second place.
6. Amendment tothe“Rules of AccountingPolicy”.		 Pass.
June,24,2020
(Second Extraordinary
Meetingin 2020)		 The Company's external declaration upon receipt of documents pertaining to
WPG Holdings Corp.’s declaration and announcement of public subscription
of the Company's common stock should be done within 15 days.		 Pass.
July 31, 2020
(Third Meeting in 2020)		 1. Assigned to the Company’s spokesperson.
2. Assigned to the Company’s acting spokesperson.
3. Assigned to the Company’s Chief Corporate Governance Officer.
4. Approval of Functions of Directors’ and Officers’ (D＆O) Liability
Insurance.
5. Amendment to the “Internal Control System” and the “Implementation
Rules of Internal Control.
6. The 8th Regulations of Company's Shares Buyback and Transfer to
Employees.
7. Amendment to the subsidiaries’ Operational Procedures for Loaning of
Company Funds and the authorization chart of subsidiaries reporting to
the Company.
8. Institution to the subsidiaries’ Operational Procedures for Loaning of
Company Funds, the Operational Procedures for Acquisition and
Disposal of Assets, and the Operational Procedures for endorsement
andguarantee.

65

9. Approval of the year 2020 work plan of Corporate Social Responsibility
institution.
10. Bank financial contracts.
11. Approval of THI group (HK) loaning funds to the Company’s
subsidiary- Taiwan Express (HK).
12. Approval of endorsement and guarantee to the bank loan contracts for
the Company’s subsidiary.
13. Deliberations on any disguised financing transaction in the second
quarter of 2020.
October,14,2020
(Third Extraordinary
Meetingin 2020)		 1. Approval of the Company’s fundraising.
2. Approval of the Company’s issuing the 4th domestic Unsecured
Convertible Bond.		 Pass.
November 4, 2020
(Forth Meeting in 2020)		 1. Assigned to the Company’s audit manager.
2. Assigned to subsidiaries’ supervisors.
3. Approval of the Year 2021 business plan and financial budget.
4. Approval of the Company’s 2021 important risk management plan.
5. Approval of the Year 2021 internal audit plan.
6. Approval of the scope and outline of 2020 CSR report.
7. Amendment to the “ Rules of Self-Evaluation of Board of Directors.
8. Developing the Company Proposal for "Cash Capital Increase and
Employee Share Subscription".
9. Approval of evaluation of directors and manager’s performance.
10. Bank financial contracts.
11. Proposal of endorsement and guarantee to the bank loan contracts for the
Company’s subsidiary.
12. Proposal of loaning funds to the Company’s subsidiary-Taiwan Express.
13. Deliberations on any disguised financing transaction in the third quarter
of 2020.
Pass.
December,28,2020
(Forth Extraordinary
Meeting in 2020)		 1. Amendment to the authorization chart of subsidiaries reporting to the
Company.
2. Amendment to the Operational Procedures for Acquisition and Disposal
of Assets.		 Pass.
March 9, 2021
(First Meeting in 2021)		 1. Approval of the 2020 financial statements.
2. Approval of the 2020 audited financial statements.
3. 2020 Employees' and Directors' Compensation.
4. Approval of the distribution of 2020 employee compensation to
employees of the Company’s subsidiary.
5. Approval of the distribution of 2020 retained earnings.
6. Approval of the distribution of 2020 subsidiaries’ retained earnings.
7. Approval for 0 payout ratio of major subsidiaries’ 2020 earnings.
8. Amendment to the Rules of Procedure for Shareholder Meetings
9. Amendment to the Procedures for Election of Directors.
10. Amendment to the Rules of Procedure for Audit Committee.
11. Amendment to the Rules of Procedure for Board of Director Meetings
12. Amendment to the Rules of Procedure for Remuneration Committee.
13. Amendment to the Rules Governing the Scope of Powers of Independent
Directors.
14. Approval of the Company’s 2020 Assessment of the effectiveness of
internal control system and 2020 Internal Control System Statement.
15. Election of one additional director.
16. Nomination the candidate of election of one additional director.
17. Proposal of release theprohibition on directors fromparticipation in
Pass.

66

competitive business.

  1. Proposal of the scheduling of 2021 annual general shareholders’ meeting.

  2. Proposal by shareholders who have owned over 1% shares.

  3. Nomination the candidate by shareholders who have owned over 1% shares.

  4. Evaluation of 2021 the Company’s audit fee and independence.

  5. Proposal of the edition of stakeholder communications chapter of 2020 CSR report.

  6. Approval of evaluation of directors and manager’s performance.

  7. Deliberations on any disguised financing transaction in the fourth quarter of 2020.

  8. Amendment to the subsidiaries’ Operational Procedures for Loaning of Company Funds.

  9. Bank financial contracts.

  10. Approval of loaning funds to the Company’s subsidiary-THI Group (HK).

  11. Cancellation for the approval of endorsement and guarantee to the bank loan contracts for the Company’s subsidiary on November 4, 2020 board of director meeting.

  12. Approval of endorsement and guarantee to the bank loan contracts for the Company’s subsidiary.

3.3.12 Major Issues of Record or Written Statements Made by Any Director or

Supervisor Dissenting to Important Resolutions Passed by the Board of Directors: None.

3.3.13Resignation or Dismissal of the Company’s Key Individuals, Including the

Chairman, CEO, Chief Corporate Governance Officer, and Heads of

Accounting, Finance, Internal Audit, R&D:

Title Name Date Effective Dismissal Date Reason
Chief Corporate
Governance Officer		 Echo Wan 2018.11.04 2020.07.31 The company’s
actualplanning
Internal Audit Anya Chang
Chien		 2018.03.26 2020.11.04 The company’s
actualplanning

3.4 Information Regarding the Company’s Audit Fee and Independence 3.4.1 Audit Fee

Accounting Firm Name of CPA Period Covered by CPA’s
Audit		 Remarks
KPMG
Accounting Firm		 CHI-LUNG YU &
MEI-PIN WU		 2020.01.01~2020
.12.31

Note: If the Company has changed CPA or Accounting Firm during the current fiscal year, the company shall report the information regarding the audit period covered by each CPA and the

67

replacement reason. Unit: NT$ thousands

Fee Items
Fee Range		 Fee Items
Fee Range		 Audit Fee Non-audit Fee Total
1 Under NT$ 2,000,000 461 461
2 NT$2,000,001 ~ NT$4,000,000
3 NT$4,000,001 ~ NT$6,000,000 5,070 5,070
4 NT$6,000,001 ~ NT$8,000,000
5 NT$8,000,001 ~ NT$10,000,000
6 Over NT$100,000,000

Unit: NT$ thousands

Accounting
Firm
Name of
CPA		 Audit
Fee		 Non-audit Fee Non-audit Fee Period Covered by
CPA’s Audit
 Remarks

System
of
Design
Company
Registration		 Human
Resource
Other		 s Subtotal
KPMG
Accounting
Firm
CHI-LUNG
YU
MEI-PIN
WU
5,070
-		 - 20 441
461		 2020/01/01~
2020/12/31		 None-Audit Fee
Others: TP Fee,
Fund Raising Fee,
Translation Fee, and
others.

3.4.2 Replacement of CPA: A. Regarding the former CPA

Replacement Date May 7, 2018 May 7, 2018 May 7, 2018 May 7, 2018 May 7, 2018
Replacement
reasons
and
explanations
KPMG Accounting Firm internal rotation.
Describe whether the Company
terminated or the CPA did not
accept the appointment
Parties
Status
CPA		 The Company
Termination
of
appointment
None		 None
No
longer
accepted
(continued)
appointment
None		 None
Other
issues
(except
for
unqualified issues) in the audit
reports within the last twoyears

None
Differences with the company Yes - Accounting principles or practices
- Disclosure of Financial Statements
- Audit scope or steps

68

- Others
None
Remarks/specifydetails:
Other Revealed Matters None

B. Regarding the successor CPA

Name of accounting firm KPMG Accounting Firm Name of CPA WistonYu and MeganWu May 07, 2018 Date of appointment Consultation results and opinions on None accounting treatments or principles with respect to specified transactions and the company's financial reports that the CPA might issue prior to the engagement. Succeeding CPA’s written opinion of None disagreement toward the former CPA

3.4.3 Audit Independence

The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates during 2019.

3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Unit: Shares

Title Name 2020 2020 As of March,31, 2021 As of March,31, 2021
Holding
Increase
(Decrease)		 Pledged
Holding
Increase
(Decrease)		 Holding
Increase
(Decrease)		 Pledged
Holding
Increase
(Decrease)
Chairman David Yen -
-
52,290
-
Director Hope Ocean International Ltd -
-
-
-
TonyLin -
-
65,737
-
Director Jack Lai (27,000) -
175,889
-
Director YI-WEI INVESTMENT -
600,000
-
-
Representative: Ji-Zhi Hsieh -
-
-
-
Director Dynamic Ocean GroupLimited -
-
-
-
Representative: Carl Wei (30,000) -
7,653
-
Independent Director Li-Chiu Chang -
-
-
-
Independent Director Ming-Hsu Tsai -
-
-
-
Independent Director Jeff Lin -
-		 -

69

Title Name 2020 2020 As of March,31, 2021 As of March,31, 2021
Holding
Increase
(Decrease)		 Pledged
Holding
Increase
(Decrease)		 Holding
Increase
(Decrease)		 Pledged
Holding
Increase
(Decrease)
Director CHANG-JIE International Ltd. (100,000) 1,728,000
118,104
-
Benison Hsu -
-
138,240
-
Vice President Allen Hou -
-
970
-
Vice President Echo Wan -
-
35,000
-
Vice President Melonie Lin (14,000) -
5,463
-

3.5.1 Shares Trading with Related Parties: None.

3.5.2 Shares Pledge with Related Parties: None. 3.6 Relationship among the Top Ten Shareholders

As of 03/27/2021 Unit: shares/ % As of 03/27/2021 Unit: shares/ % As of 03/27/2021 Unit: shares/ % As of 03/27/2021 Unit: shares/ % As of 03/27/2021 Unit: shares/ % As of 03/27/2021 Unit: shares/ % As of 03/27/2021 Unit: shares/ %
Name Current
Shareholding		 Spouse’s/minor’s
Shareholding		 Shareholding
by Nominee
Arrangement		 Name and Relationship
Between the Company’s Top
Ten Shareholders, or Spouses
or Relatives Within Two
Degrees		 Remarks
Shares % Shares % Shares % Name Relations
hip
WPG
HOLDINGS		 10,925,904 8.59 - - - - None None -
Representative:
Simon Huang		 - - - - - - None None -
Jin-Hua
Investment Ltd		 6,576,013 5.17 - - - - Dynamic Ocean
Group Limited,
Hope Ocean
International Ltd,
and PIN GUAN
Investment Ltd.		 Same
Representa
tive		 -
Representative:
David Yen		 848,780 0.67 - - - -
Dynamic Ocean
GroupLimited		 3,912,398 3.08 - - - - Hope Ocean
International Ltd ,
Jin-Hua
Investment Ltd,
and PIN GUAN
Investment Ltd.		 Same
Representa
tive		 -
Representative:
David Yen		 848,780 0.67 - - - -
Hope Ocean
International Ltd		 3,339,143 2.62 - - - - Dynamic Ocean
Group Limited、
Jin-Hua
Investment Ltd,
and PIN GUAN
Investment Ltd.		 Same
Representa
tive		 -
Representative:
David Yen		 848,780 0.67 - - - -
PIN GUAN
Investment Ltd.		 2,817,000 2.21 - - - - Dynamic Ocean
Group Limited,
Jin-Hua
Investment Ltd,
and Hope Ocean
International Ltd		 Same
Representa
tive		 -
Representative:
David Yen		 848,780 0.67 - - - -
Custodian Bank
of HSBC
Account of		 2,809,023 2.21 - - - - None None -

70

Name Current
Shareholding		 Current
Shareholding		 Spouse’s/minor’s
Shareholding		 Spouse’s/minor’s
Shareholding		 Shareholding
by Nominee
Arrangement		 Shareholding
by Nominee
Arrangement		 Name and Relationship
Between the Company’s Top
Ten Shareholders, or Spouses
or Relatives Within Two
Degrees		 Name and Relationship
Between the Company’s Top
Ten Shareholders, or Spouses
or Relatives Within Two
Degrees		 Remarks
Shares % Shares % Shares % Name Relations
hip
Morgan stanley
International
YOU-YI Ltd 2,444,000 1.92 - - - - GUO-YAN LIAO The person
himself
-
Representative:
GUO-YAN
LIAO		 2,289,797 1.80 - - - -
GUO-YAN
LIAO		 2,289,797 1.80 - - - - Representative:
GUO-YAN LIAO		 The person
himself is
representati
ve

-
Bao Hung
Investment Ltd		 2,193,533 1.72 - - - - None None -
Representative:
Bao-TangZeng		 - - - - - - None None -
Jack Lai 2,066,441 1.62 362,392 0.28 None None -

3.7 Ownership of Shares in Affiliated Enterprises

Unit: shares/ %

Affiliated
Enterprises		 Ownership by the Company Ownership by the Company Direct or Indirect
Ownership by
Directors,
Supervisors,
Managers		 Direct or Indirect
Ownership by
Directors,
Supervisors,
Managers		 Total Ownership Total Ownership
Shares % Shares
%		 Shares %
T.H.I. GroupLtd(in BVI) 1,000,000 100 0
0		 1,000,000 100
Greatline International
Limited		 4,050,000 100 0
0		 4,050,000 100
T.H.I. GROUP VIETNAM
CO.,LTD		 4,950,000,000 99 0
0		 4,950,000,000 99
T.H.I. GROUP (BANGKOK)
CO., LTD.
0		 49 0
0		 0 49
THI & Maruzen Co.,Ltd. 3,060 51 0
0		 3,060 51
T.H.I. GROUP
SINGAPORE PTE. LTD.		 850,000 91.40 0
0		 850,000 91.40
THI Logistics (Malaysia)
SDN BHD		 180,000 90 0
0		 180,000 90
Fresh BeautyEnterprise Ltd. 419,750 99.94 0
0		 419,750 99.94
Eastern union holdings
limited		 66 66 0
0		 66 66
LOGI International Co.,Ltd. 0 66 0
0		 0 66

71

Taiwan Express
Logistic Co.,Ltd.		 16,285 30 0
0		 16,285 30
T.H.I. Logistics
Ltd		 35,958,400 100 0
0		 35,958,400 100
T.H.I. GROUP
(CAMBODIA)CO.,LTD.		 13,000,000 100 0
0		 13,000,000 100
PT. Dexter Eurekatama 0 100 0
0		 0 100
T.H.I. GroupLtd(in HK) 12,000 30 0
0		 12,000 30
T.H.I. Group
(Shanghai)Ltd.		 12,480,000 100 0
0		 12,480,000 100
Shanghai Yaohwa
International Forwarder Co.,
Ltd.		 0 100 0
0		 0 100
Shanghai Moorluk
International Shipping
Co.,Ltd.		 0 65 0
0		 0 65
Taiwan Express
(HK)Co.,Ltd.		 0 100 0
0		 0 100
EXer Logistics Co.,Ltd. 0 100 0
0		 0 100
T-Cube Global Logistics Co.,
Ltd		 0 93.51 0
0		 0 93.51
T-Cube (Suzhou) Global
Logistics Co.,Ltd		 0 66 0
0		 0 66
TEC Logistics
Co.,Ltd		 0 66 0
0		 0 66
Orient Air General Sales
Agent Co.,		 1,000,000 100 0
0		 1,000,000 100
Hiview Logistics
Co.,Ltd		 60,000 30 0
0		 60,000 30
Taiwan Express(USA)INC. 5,000,000 97.51 0
0		 5,000,000 97.51
TEC LOGISTICS(USA),
INC		 100,000 100 0
0		 100,000 100
TEC Logistics
(Shenzhen)Co.,Ltd.		 200 100 0
0		 200 100
Air Tropolis Express (S) Pte
Ltd.(ATP)		 0 100 0
0		 0 100
T-SC FactoringCo.,Ltd. 553 65 0
0		 553 65
T-SC TradingCo.,Ltd. 0 100 0
0		 0 100
TEC LOGISTICS
VIETNAM COMPANY
LIMITED		 0 100 0
0		 0 100

72

IV. Capital Overview 4.1 Capital and Shares 4.1.1 Source of Capital

A. Issued Shares

As of 03/29/2021 As of 03/29/2021 As of 03/29/2021
Month/
Year		 Par
Value
(NT$)		 Authorized Capital Paid-in Capital Remark
Shares Amount
(NT$ thousands)		 Shares Amount
(NT$ thousands)		 Sources of Capital Capital
Increased
by
Assets
Other
than Cash
Other
04,2015 10 120,000 1,200,000 101,477 1,014,755 Issuing new shares for
conversion of Convertible
bond NT$74,310 thousand
and issuing employee stock
option NT$300thousand.		 none 04/02/2015
Jin So Son Tzi
No.10401056120
08,2015 10 120,000 1,200,000 111,478 1,114,776 Issuing new shares for
capital fundraising
NT$100,000 thousand.		 none 08/19/2015
Jin So Son Tzi
No.10401172110
09,2015 10 120,000 1,200,000 115,107 1,151,067 Issuing new shares for
earnings capitalization
NT$36,291 thousand.		 none 09/25/2015
Jin So Son Tzi
No.10401199780
12,2015 10 120,000 1,200,000 116,042 1,160,421 Issuing new shares for
conversion of Convertible
bond NT$6,049 thousand
and issuing employee stock
option NT$3,305thousand.		 none 12/01/2015
NO.10401250280
08,2016 10 120,000 1,200,000 118,335 1,183,347 Issuing new shares for
earnings capitalization
NT$22,927 thousand.		 none 08/17/2016
Jin So Son Tz
No.10501198620
11,2016 10 120,000 1,200,000 118,972 1,189,723 Issuing new shares for
conversion of Convertible
bond NT$2,296 thousand
and issuing employee stock
option NT$4,080thousand.		 none 11/25/2016
Jin So Son Tz
NO.10501272680
04,2017 10 120,000 1,200,000 118,565 1,185,654 Issuing new shares for
conversion of Convertible
bond NT$19,296 thousand,
issuing employee stock
option NT$275thousand,
and cancelling buy back
shares NT$23,640thousand.		 none 04/17/2017
Jin So Son Tz
No.10601043760
10,2018 10 120,000 1,200,000 118,345 1,183,454 Cancelling buy back shares
NT$2,2000thousand.		 none 10/11/2018
Jin So Son Tz
No.10701130560
03,2019 10 120,000 1,200,000 117,157 1,171,574 Cancelling buy back shares
NT$11,880thousand.		 none 03/05/2018
Jin So Son Tz
No.10801022240
02,2021 10 200,000 2,000,000 127,157 1,271,574 Issuing new shares for
capital fundraising
NT$100,000 thousand.		 none 02/05/2021
Jin So Son Tz
No.11001018690

73

B. Type of Stock

As of 03/27/2021
Share Type Authorized Capital Remarks
Issued Shares Un-issued Shares Total Shares
Public Shares Private Shares
Note1
Common Share
127,157,402		 0 72,842,598 200,000,000 Note1

Note 1: 78,480 common shares are unauthorized capital, so the total issued shares are 127,235,882 shares.

C. Information for Shelf Registration: None.

4.1.2 Status of Shareholders

4.1.2 Status of Shareholders
As of 03/27/2021
Item Government
Agencies		 Financial
Institutions		 Other
Juridical
Persons		 Domestic
Natural
Persons		 Foreign
Institutions &
Natural Persons		 Total
Number of
Shareholders		 0 0 267 25,412 98 25,777
Shareholding
(shares)		 0 0 40,107,801 60,807,861 26,320,220 127,235,882
Percentage (%) 0 0 31.52 47.79 20.69 100.00

4.1.3 Shareholding Distribution Status

A. Common Shares

A. Common Shares
As of 03/27/2021
Class of Shareholding
(Unit: Share)		 Number of
Shareholders		 Shareholding (Shares) Percentage (%)
1 ~ 999 17,548 595,241 0.47
1,000 ~ 5,000 6,355 12,096,732 9.51
5,001 ~ 10,000 924 7,008,682 5.51
10,001 ~ 15,000 311 3,766,185 2.96
15,001 ~ 20,000 164 3,009,139 2.37
20,001 ~ 30,000 174 4,366,343 3.43
30,001 ~ 40,000 62 2,223,485 1.75
40,001~50,000 55 2,536,634 1.99
50,001 ~ 100,000 78 5,336,620 4.19
100,001 ~ 200,000 42 6,006,543 4.72
200,001 ~ 400,000 21 5,881,247 4.62
400,001 ~ 600,000 8 3,905,416 3.07
600,001 ~ 800,000 8 5,756,039 4.52
800,001 ~ 1,000,000 3 2,678,673 2.11
1,000,001 or over 24 62,068,903 48.78
Total 25,777 127,235,882 100

74

B. Preferred Shares: The Company did not issue any preferred shares.

4.1.4 List of Major Shareholders

.1.4 List of Major Shareholders .1.4 List of Major Shareholders .1.4 List of Major Shareholders
As of 3/27/2021
Shareholder's Name Shares Percentage
WPG HOLDINGS 10,925,904 8.59
Jin-Hua Investment Ltd 6,576,013 5.17
Dynamic Ocean GroupLimited 3,912,398 3.08
Hope Ocean International Ltd 3,339,143 2.62
PIN GUAN Investment Ltd. 2,817,000 2.21
Custodian Bank of HSBC Account of Morgan
StanleyInternational		 2,809,023 2.21
YOU-YI Ltd 2,444,000 1.92
GUO-YAN LIAO 2,289,797 1.80
Bao Hung Investment Ltd 2,193,533 1.72
Jack Lai 2,066,441 1.62

4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share

Unit: NT$ Unit: NT$
Items 2019 2020 01/01/2021-03/31/2021
Market Price per Share
Highest Market Price 29.05 45.00 56.60
Lowest Market Price 22.80 17.4 36.80
Average Market Price 24.94 29.30 46.23
Net Worth per Share
Before Distribution 20.57 26.79 －
After Distribution 19.29 － －
Earnings per Share
Weighted Average Shares
(thousand shares)		 115,797 115,797 122,690
Diluted Earnings Per Share 2.15 4.72 3.16
Adjusted Diluted Earnings Per Share － － －
Dividends per Share
Cash Dividends 1.3 3.2（Note4） －
Stock Dividends
 Dividends from Retained Earnings － － －
 Dividends from Capital Surplus － － －
Accumulated Undistributed Dividends － － －
Return on Investment
Price / Earnings Ratio (Note 1) 11.6 6.21 －

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Price / Dividend Ratio (Note 2) 19.18 9.16 －
Cash Dividend Yield Rate (Note 3) 5.21% 10.92% －

Note 1: Price / Earnings Ratio = Average Market Price / Earnings per Share

Note 2: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share

Note 3: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price

Note 4: Earning Distribution was already approved by the Company’s board of director on 03/9/2021 but not be approved by shareholders’ meeting.

4.1.6 Dividend Policy and Implementation Status

A. Dividend Policy

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.

B. Proposed Distribution of Dividend

The proposal for the distribution of 2020 profits was passed at the meeting of the board of directors on March 9, 2021. The Company had a proposal for withdrawing NT$397,569,286 from distributable earnings for cash dividends. It will be discussed at the annual shareholders’ meeting.

4.1.7The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate:

The Company don’t issue stock dividend, so it does not apply.

4.1.8 Employee and Directors' Remuneration ：

  • A. Information Relating to Employee Bonus and Directors’ Remuneration in the Articles of Incorporation:

  • 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.

  • B. The Estimated Basis for Calculating the Employee and Directors’ Remuneration

  • I. 0.5% of profit before tax for employees’ compensation and 2% of profit before tax for directors’ compensation.

  • II. Shall there be any difference between the actual amount of dividend approved by Board of Directors Meeting and that of the estimation, it will be deemed as the changes in accounting estimates and will be recognized in the profit and loss account of the distributing year.

  • C. Profit Distribution for Employee and Directors’ Remuneration for 2020 Approved in Board of Directors Meeting:

  • I. Proposed distribution of cash dividend to employees and remuneration to directors.

  • The proposal for the distribution of 2020 remuneration was passed at the meeting of the board of directors on March 9, 2021. Unit: NT$

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Item Actual
Distribution		 Income
Statement		 Variation Resolution
Employee Remuneration – in
Cash		 2,795,640 2,795,640 0 None
Directors' Remuneration 11,080,000 11,080,000 0
  • II.Proposed stock dividend to employees and its ratio to total net income and total dividend to employees: None.

1.1.8 The Actual Distribution of the Employee and Directors' and Supervisors' Remuneration in Last Year ： Unit: NT$

Item Actual
Distribution		 Actual
Distribution		 2019
Income
Statement		 Variation Variation Resolution
Employee
Remuneration – in
Cash		 1,320,000 1,312,644 7,356 It will be deemed as the
changes in accounting
estimates and will be
recognized in the profit and
loss account of the
distributing year.
Directors' and
Supervisors'
Remuneration		 7,350,000 7,649,535 -299,535
4.1.9 Buyback of Treasury Stock
Treasury stocks: Batch Order 7~~th~~Batch 8~~th~~Batch
Purpose of buyback Transfer to employee Transfer to employee
Timeframe of buyback 2017/01/23~2017/02/10 2020/3/20~2020/5/18
Price range 15.00~25.00per share 12.32~25.00per share
Type of shares Common stock Common stock
Quantityof shares buyback 1,361,000 shares 1,556,000 shares
Value of shares buyback NT$28,785,357 NT$32,762,643
The ratio of the number of
shares that were repurchased to
the planned number of shares
to be repurchased
68.05%		 15.56%
Shares sold/transferred 0 share 0 share
Accumulated number of
company shares held		 1,361,000 shares 2,917,000 shares
Percentage of total company
shares held (%)		 1.07% 2.29%

4.2 Bonds

4.2.1 Corporate Bonds:

4.2 Bonds
4.2.1 Corporate Bonds:
Corporate Bond Type 4th DomesticUnsecuredConvertible Bond
Issue date December 2,2020
Denomination NT$100,000
Issuing and transaction
location		 Taipei Exchange
Issueprice Issue by105.09% of denomination
Totalprice NT$315,269,730
Coupon rate 0%
Tenor 3 years Maturity: December 9, 2023
Guarantee agency None

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Consignee Consignee Taishin Bank
Underwriting institution KGI SECURITIES
Certified lawyer Handsome Attomeys-at-law, YA-WEN CHIU
CPA KPMG Accounting Firm: CHI-LUNG YU, MEI-PIN WU
Repayment method Unless previously redeemed, repurchased and cancelled or
converted, the bonds will be repay in lump sum upon
maturity with cash.
Outstanding principal NT$296,900,000
Terms of redemption or
advance repayment		 Pursuant on the Rules of 4th Domestic Unsecured
Convertible Bond
Restrictive clause Pursuant on the Rules of 4th Domestic Unsecured
Convertible Bond
Name of credit rating agency,
rating date, rating of corporate
bonds		 None
Other
rights
attached		 As of the printing
date of this annual
report, converted
amount of
(exchanged or
subscribed)
ordinary shares,
GDRs or other
securities		 The bond has converted 78,480 shares.
Issuance and
conversion
(exchange or
subscription)
method		 Pursuant on the Rules of 4th Domestic Unsecured
Convertible Bond
Issuance and conversion,
exchange or subscription
method, issuing condition
dilution, and impact on
existing shareholders’ equity		 I.
The funding is used to support the company’s
operation and business development, which shall
benefit shareholders’ equity in the long term.
II.
The convertible price of 4thDomestic Unsecured
Convertible is 39.5. If bondholders execute their right
to convert the whole bonds, which would increase
7,516,455 common shares.(NT$296,900,000/NT$39.5)
III. As of the printing date of this annual report, the
Company’s outstanding shares are 127,235,882. If
adding the un-convertible shares, the dilution extent of
existing shareholders’ equity may reach 5.58%.
Transfer agent None

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4.2.2 Convertible Bonds:

4.2.2 Convertible Bonds: 4.2.2 Convertible Bonds:
Corporate bond type 4th Domestic Unsecured Convertible Bond

Item		 Year
 2020 As of the printing date of
this annual report
Market price of the
convertible bond		 Highest 121.55 142
Lowest 106.20 113.50
Average 111.10 122.95
Convertible Price
per share		 NT$40 NT$39.5
Issue date and conversion price at
issuance		 Issue Date: 2020/12/9
Conversion price at issuance: NT$40/share
Conversion methods Issuing of new stocks

4.2.3 Exchangeable Bonds: None.

4.2.4 Shelf Registration for Issuing Bonds: None.

4.2.5 Corporate Bonds with Warrants: None.

4.3 Global Depository Receipts: None.

  • 4.4 Employee Stock Options: None.

4.4.1 Issuance of Employee Stock Options: None.

4.4.2 List of Executives Receiving Employee Stock Options and the Top Ten Employees with Stock Options: None.

4.4.4 List of Executives Receiving New Restricted Employee Shares and the Top Ten Employees with New Restricted Employee Shares: None.

4.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.

4.6 Financing Plans and Implementation:

The Company's approved cash capital increase by issuing new shares of 10,000,000 and 3000 sets of domestic non-guaranteed convertible corporate bond for the 4th time by the Special BOD Meeting dated October 14, 2020 have been reported, archived and put in effect by FSC-2020-11-10-Jin-Guang-Cheng-Fa Tzi No. 1090372375 and 10903723751 respectively; they also have fulfilled placement and listed on stock market, and the Company has achieved the efficiency in Q1 of 2021. Please visit the website of Market Observation Post System (MOPS).

IV. Operational Highlights

5.1 Business Activities

With the fast pace of development, today the business scope of the Company and its subsidiaries includes ocean freight, air freight, customs declaration, warehousing, inland transportation, supply chain management, e-commerce, logistics, supply chain finance and other integrated logistics services. There are global operating locations throughout Taiwan, China, Northeast Asia, Southeast Asia and other areas. As a professional integrated logistics service provider, in addition to actively expand overseas strongholds, it works with strategic alliance

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partners both at home and abroad to enhance its competitive advantage. Internally the Company adopts professional information management and strictly requires the operation norm of staff and services to provide customers with a full range of logistic services.

5.1.1 Business Scope

  • (1)The main content of business:

  • A. International freight:

  • a. Ocean freight.

  • b. Air freight.

  • c. China-Europe/ China-Russia/ China-Central Asia railway.

  • B. Domestic logistics:

  • a. Customs declaration.

  • b. Warehousing.

  • c. Inland transportation.

  • C. Supply chain management and customize services.

  • D.E-commerce logistics.

  • E. Supply chain finance.

  • F. The design and plan of logistics

  • G. The logistics related investments.

  • (2) Revenue breakdown by business:

Unit ； NT$ thousands

Main Business 2018 2018 2019 2019 2020 2020
Sales % Sales % Sales %
International Ocean Freight 6,508,940 56.42 6,401,751 56.86 8,623,090 56.88
International Air Freight 3,464,954 30.04 3,332,255 29.60 5,018,571 33.10
Logistics 1,562,375 13.54 1,524,065 13.54 1,518,582 10.02
Total 11,536,269 100.00 11,258,071 100.00 15,160,243 100.00
  • (3) Main products:

A. International Freight Forwarder:

  • a. Ocean freight:

The Company and its subsidiaries have flexible price and cargo space abilities and decades of stable cooperation with shipping companies and agents with a NVOCC business certificate. The Company has cargo space contracts with 2M Alliance、Ocean Alliance and THE Alliance. The focus is mainly the USA, Canada, and Europe long haul routes, and it constantly opens up new lines in Middle East, South America, Eastern Mediterranean and Southeast Asia. Based on its dense service locations in Greater China and the Asia Pacific region, combined

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with cooperative agencies throughout the world, the Company provides customers with Less than full container load (LCL) single container order services, Full container load (FCL) services, Special container transport, Door-to-door services, Sea-air transport service , and Sea-air-land transport services.

b. Air freight:

The Company and its subsidiaries provide transnational corporate service and customized cargo transportation planning capability, are issued Class I and II air accreditation certificates by Civil Aviation Administration of China. The Company’s subsidiary-Taiwan Express acquired “HALAL Certification” which issued by JAKIM. The Company’s subsidiaries also received customer sales agents from major global airlines such as EVA(BR), China Airlines (CI), Cathay Pacific (CX), China Southern Airlines(CZ), China Eastern Airlines (MU), Air China(CA), XIAMEN Airlines (MF), Hong Kong Aviation (HX), Air Canada(AC), ANA(NH), Turkish Airlines(TK), Thai Airways(TG), British Airways(BA), LATAM Chile(LA), Air Asia(D7), Qatar Airways(QR), KLM Royal Dutch Airlines(KLM), Korean Air(KE),Vietnam Airlines(VN), Emirates(EY),LOT Polish Airlines(LO),Gulf Air(GF),Czech Airlines(OK), Emirates(EK), Singapore Airlines(SQ), Lufthansa Cargo(LH), Asiana Airlines, etc., as well as the general sales agents in Taiwan area from Air New Zealand (NZ), Russian Aviation (RU), and Avianca Airlines (TA). The Company cooperates with global agents to provide global transportation arrangements, Less than full container load (LCL) services, combined land, sea and air multimodal transport, import transportation, bill of lading production and goods packaging services, special cargo export arrangements, commodity inspection, sanitation inspection and animal and plant quarantine service.

c. Cross Border China-Europe Rail Transport:

To provide export and import China-Europe, China-Russia, and China-Central Asia railway services as well as China-Central Asia transportation, the company established teams in 18 cities including Harbin, Changchun, Shenyang, Dailan, Tianjin, Zhengzhou, Hefei, Yiwu, Wuhan, Chengdu, Chongqing, Changsha, Shilong (Dongguan),Guangzhou, Xiamen, X’ian, Nanjing, and Suzhou and the company collaborated with overseas agencies in Europe and Russia.

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B. Domestic logistics:

  • a. Customs declaration: The Company is the top 5 customs broker in Taiwan and also an A grade customs broker in China with locations in major ports and airports. It has set up customs departments to provide enterprises of all types with inspection, customs clearance/declaration, customs inspection, checking and other services, and according to the customer’s business nature customizes logistic solutions in special customs-supervised areas.

  • b. Warehousing services: With the support of advanced WMS system, the Company’s warehousing management team has advanced management and application equipment, is equipped with an upscale safety control system and obtained ISO9001 and ISO14001 international quality management system certification to provide versatile storage management services. The Company has its own warehouses in major locations, and cooperates with local warehousing and storage vendors in other service locations to provide customers with a base for transit.

  • c. Inland transportation: The Company’s customized delivery team is supported with a TMS system and full cargo transportation tracking mechanism (GPS), has formed vehicle fleets in the operations locations in Taiwan, Hong Kong, Shenzhen, Guangzhou and Shanghai, and cooperates with local transportation vendors in other locations. The modes of transportation include roads and railways, and the distribution objects cover factories, dealers, shopping malls and supermarkets.

  • C. Cross-border e-commerce logistics:

The Company combines with completely locations in Asia and overseas agent networks in global to develop cross-border ecommerce logistics from Asia to USA /Europe or Intra-Asia trade.

  • D.Supply chain finance:

The Company provides funds to the upstream and downstream of the supply chain by taking its own credit as the guarantee in the bank. This may create more logistics businesses, and improve the market competitiveness. Moreover, it may break through the current situation of freight forwarding price competition and establish strategic partnership with the customer in the long term. The logistics plays the main role, while finance plays a supplementary role, so as to realize integration services of logistics, information flow, capital flow and business flow.

  • E. Supply chain management and customized services ：

  • a. Supply chain management:

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The Company uses the Group’s sea, air and land resources and global cooperative agents to provide customers with services for procurement of raw materials, warehousing management of raw materials and finished products in the production process, packaging, sorting, labeling, inspection, transit and distribution, as well as helping customers in marketing channel establishment and maintenance. The Company provides a full range of logistics management services for customer relationship management and maintenance and information feedback.

  • b. Customized services ：

  • (A) Multimodal transportation:

With the customized sea and air transport, sea and river transport, sea and railway transport and joint sea transport, the Company provides cross-border logistic services via sea, air, road and rail transport to connect Chinese inland with Southeast Asia, Central Asia and European inland.

  • (B) Reverse logistic services:

  • After delivering customer goods to the destination, the Company provides disposal, recycling and recovery related transport services for second-hand assets to save operating expenses for customers.

  • (C) Cold chain logistics:

The Company develops specialized logistic transport of chemicals, agricultural and marine products and biotechnological products to provide consumers, suppliers and retailers with a cold chain logistics model for integrated demands.

  • (D) Cargo insurance broker:

The Company is awarded a license for the cargo insurance brokerage business by the China Insurance Regulatory Commission, and provides customer cargo insurance, acts as an agent for customers to make claims to insurance companies, and acts on behalf of insurance companies to issue original insurance certificates.

(4) Plans to develop new products (services):

Construction of business to business (B2B2C) digital warehousing services:

To improve the logistics efficiency for the customer effectively, it plans to integrate the B2B warehousing management ability of Shanghai T-cube logistics Co., Ltd, the sub-subsidiary of the Company, and the B2C warehousing management ability of Shanghai EXer Logistics Co., Ltd., so as to link up with the B2B and B2C warehousing systems through the information system. In this way, it achieves the inventory sharing model, and performs distribution and delivery operations under the same warehousing system. Then the products are delivered

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through the collaborative warehouse model of “ professional warehouse+ express service ” . It aims to link up with the online and offline inventories to reduce the overall stock and the second transportation cost effectively, improve the turnover efficiency of the supply chain, increase the turnover rate of the inventory, and even help the operators obtain more complete data in the entire supply chain.

5.1.2 Industry Overview

(1) Current Industry Status and Development

Affected by the interruption in the supply chain due to the COVID-19 pandemic and the 2021 Suez Canal obstruction, the corporate way of thinking on supply chains shifts to "safe inventory" from "immediate inventory"; besides, the US Government's economic stimulus package would likely lead to strong consumer needs and rising vaccination rate (please see the chart below) boosts up the global economy where overall demand for logistics remains high. Under the situation that the booking space for sea, air and railway shipments is still tight, indicating positive times ahead. However, we still need to observe the newly emerged cases of the virus in some countries and such effect on the global economy.

==> picture [455 x 197] intentionally omitted <==

Data source: IATA

A. Ocean Freight Market Overview

The Company's first quarter sea shipment income in 2021 accounted for 66% of the gross revenue. As of now, there is an increasing number of European and American people diagnosed with COVID-19, strong demand for shopping ,and inventory refill causing port congestion, shortage of manpower and related logistics facilities, indicating swamped on all routes and this has never happened over the past four decades. In second quarter, tighter supply chain of ships and container forced airfares to increase and flights to cancel as remedies, plus that the inventory level of end-brand retailers remaining low, the US government's relief subsidies stimulate shopping, and vaccination rates rising across European and American countries that global economy is expected to recover. Sea shipment business is expected to prosper continuously by strong demand.

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B. Air Freight Market Overview

The Company's first quarter air shipment business in 2021 accounted for 22% of the gross revenue. Constant hot demand for delivery of semiconductor, 5G, mobile cars, etc. and container space by air remaining tight before international travel restrictions are adjusted will increase the cargo volume transiting from sea to air. In second quarter, cargo volume increased from sea to air under tighter shortage of ship and container, and airline companies also raise long-range airfares across European and American countries leading to hot sales even during off-season period and airfares remain high.

C. International Railway Market Overview

The first quarter sales revenue of China-Europe/ China-Russia railyway transportation in 2021 accounted for 4% of gross revenue. They have become the primary means for many customers in the post-pandemic time because of much lower freight than that by air (almost the same as that by sea) but lasting for only 1/3 of sea shipment, especially during the period desiring for sea/air shipment space that customers transfer cargo to here which highlight advantages after 2021 Suez Canal obstruction, only the supply space being much less than sea shipment showing "One Container that Millions of Forwarders Seek For". T3EX builds a long-term strategic relationship with railway companies to strive for more stable supply of container space, while reinforcing effort of developing railway import business to China with European agents to profit it more with limited resources.

D. Logistics Market Overview

The logistics business in 1Q2021 accounted for 8% of the total gross revenue. China's growth rate for first quarter GDP this year reached 18%, which breaks the record since 1992. China's strong energy recovering economy is also witnessed by all and it is caused by some reasons other than low-baseline factor. What is more, the China Government develops solid strategy for domestic market and Chinese consumers could not go shopping abroad due to the COVIC-19 pandemic among countries currently which indirectly promote constant growth in import business, representing to pay more attention to Chinese consumers' shopping power. T3EX has a complete set of warehouses and logistics network like logistics warehouses built across Shanghai, Hong Kong, Suzhou, Guangdong and other big cities in China; inland transportation routes covering China's Level 1, 2 and 3 totaled to nearly 400 cities expect to be benefited therein.

(2)Relationship with Up-, Middle- and Downstream Companies

International Logistics supply chain- Export to USA, Canada and Europe: T3EX group is an international forwarder. The below content is an example of export procedure. After receiving cargos, the company collaborated with truck companies, warehouse suppliers, customs agencies, container shipping companies, railway companies, airplane companies and overseas agents to deliver the cargos to receivers.

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==> picture [441 x 142] intentionally omitted <==

  • (3) Macro Economic, Product Trends and Competition

  • A. Logistics industry shuffles the deck in post-epidemic time embodying scale economy efficiency:

Logistics industry had have small-scale, regional alliance for a long time. Rapidly developed information technology is helpful to the corporate integration of supply chains, where a wide range of industries including but not limited to Hi-Tec industry, retail industry, sea forwarder industry improved their competitiveness through M&A plans. Lots of small-scale logistics providers exit from market due to shortage of operating capital and talents due to COVID-19 pandemic and logistics industry will shuffle the deck in post-epidemic time; large-scale logistics service providers with sufficient capital and diversified product lines will embody scale economy efficiency.

  • B. The China-US trade war as well as the Covid-19 pandemic resulted in a restructuring of the global supply chain, shaping China’s “dual circulation economy” with domestic manufacturing for domestic consumption, while Taiwan and Southeast Asia produce for the US consumer economy:

The Chinese government regarded the dual circulation economy as the main plan of the 14th Five-Year Plan and the 2035 Future Prospectus, pushing to expand domestic demand as the main pivot; T3EX's complete warehouse & logistics network in China will keep developing business opportunity domestically in China.

The continuing China-US trade war sees of the gradual transfer of the supply chain to the Southeast Asian Region. The population expansion and tax advantages will boost up business in this region in the upcoming years. Since 2009, the Company has been investing in Southeast Asia. We have 14 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.

  • C. China import one stop shopping service will be the next blue ocean for logistics industry.

China, the global factories, has manufacturing from importing the original materials and has exporting products to globe. Recently, Chinese government has mandating the restructuring of economics. For the policy of foreign trade, the government has transforming to import orientation from export orientation as well as has spurring domestic consumer activities.

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As the wide area in China, the export-orientation trade, the import supply chain of logistics are incomplete, partial, single, sole…etc. that means every part of logistics services such as import, customs clearance, warehousing, transportation are different logistics companies which caused higher logistics cost and low efficiency compared to others countries. We expect import business and domestic business will increase because of the import spurring policy of Chinese government such as increasing domestic consumer activities. A company whose provide import one stop shopping logistics service will embrace huge opportunities.

T3EX Group has been developing import one stop shopping logistics service, and the Company has plentiful of warehousing and transportation network in China nationwide, we built warehouses in strategic cities such as Shanghai, Hong Kong, Suzhou, and Guangdong, our inland transportation covered nearly 400 tier 1, 2 and 3 cities.

5.1.3 Research and Development

The Company is in the logistics industry, and the key in enhancing the quality of logistics technology is the logistics system. The company has set up an IT software development department responsible for the integration of sea and air import and export, customs declaration, warehousing and other front-end operation and sales systems, and connected them with the back-end accounting management operating system in order to provide customers with the support systems required for a one-stop logistics service.

5.1.3.1 Research and Development Expense in Recent Year:

Not applicable as the development costs of the logistics system are the salaries of the IT staff and the purchase costs for the software; the costs are included in the management fee and no R&D department is set up.

5.1.3.2 Research and Development Accomplishments in the Recent Year:

Not applicable as the development costs of the Company's logistics system are those expenses entailed for the integration of front-end and back-end information.

5.1.4 Long Term and Short Term Business Development Plans

5.1.4.1 Short Term Business Development Plan

A. Raising Sufficient Capital to Expand Market Share in the Post-Covid-19 Era.

In the post-Covid era, many forwarders and logistics companies that lacked cash or human resources will be bankrupt or close down. The Company has raised NTD$615 million capital from capital market, with much health and completed financial structure and sufficient cash flow to ally with strategic partners to merge or joint-venture strategy for integrating vertical industry as well as expanding market share in order to achieve the purpose of keeping the T3EX’s profit growing.

B. The Operating Strategy of Duo Headquarters.

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5.1.4.2 Long Term Business Development Plan

5.2 Market and Sales Overview

5.2.1 Market Analysis

5.2.1.1 Sales (Service) Regions

arket Analysis
Sales(Service) Regions
Year
Area		 2020 2019
Amount (%) Amount (%)
China and HongKong 10,875,512 71.74 7,806,804 69.34
Taiwan 2,677,877 17.66 2,169,206 19.27
Eastern Asia 1,606,854 10.60 1,282,061 11.39
Total 15,160,243 100.00 11,258,071 100.00

The Company and its subsidiaries are logistic service providers, and the main service targets are importers and exporters around the world. The current main business contents are import and export shipping contracts, import and export air cargo contracts and customs clearance, warehousing and land transport services, and the business pattern is mainly export-oriented freight services with export to markets mainly in North America, Europe, Asia, Japan and other advanced countries.

5.2.1.2 Market Share

Among the world’s top ten container ports in 2020, Asia ports accounted for 94%. In the Group's shipping business, 90% is export business, and nearly 70% is export from Asia to Europe, the United States and Canada. The Group has set up its own locations or has agents in the world's top ten container ports, and in the total throughput of the world's top ten container ports in 2020, in the unit of TEU for export, the Group's export and import was 332,086 TEU in 2020, representing about 0.13% of the world's top ten container ports’ throughput.

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The world’s top ten container ports in 2019:

2019 2018 10 Thousand
Port Country
Ranking Ranking TEU
1 1 Port of Shanghai China 4,350
2 2 Port of Singapore Singapore 3,687
3 3 Port of China 2,872
Ningbo-Zhoushan
4 4 Port of Shenzhen China 2,655
5 5 Port of Guangzhou China 2,317
6 7 Port of Qingdao Korea 2,201
7 6 Port of Busan China 2,181
8 9 Port of Tianjin China 1,835
9 8 Port of Hong Kong China 1,796
10 11 Port of Rotterdam Netherlands 1,434
Total 25,328

Source: Shanghai International Shipping Institute

About the Company’s air cargo market share, Asia-USA, Asia-Europe, and Asia-Asia are the main routes. According to the data of IATA, the world cargo volume airports in 2020 was 54,200 thousand tons, the company’s total air cargo volume was 66,949 tons, accounting for about 0.12% of the world cargo volume airports in 2020.

5.2.1.3 Market Demand, Supply and Growth

A. Ocean Freight Market:

From the demand side, U.S. retail inventories are still at historically low levels (see chart below). With the release of the U.S. government's epidemic relief funds, the implementation of the expanded infrastructure policy, and the increase in the global vaccination rate driving the global economic recovery and growth, demand in the maritime market continues to be strong this year.

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Retailers Inventories to Sales Ratio in USA

==> picture [328 x 115] intentionally omitted <==

Data source: FRED economic data.

From the supply side, the scarcity of supply will continue into the second half of the year due to the unresolved problem of lack of cabinets and shelters. According to Alphaliner, a French maritime consultancy, only 2.8% of the world’s container ships are currently idle because they are intercepted by pirates, in urgent need of repair or just in the waiting period for the next voyage. In addition, the third quarter is the traditional peak season for sea freight, sea freight prices will remain at a high level.

B. Air Freight Market:

From the demand side, as follows factors, the air freight market will continue growing:

  • Remote communication and new electrical products such as electric vehicles, 5G, and AI will continue to be launched, fueling a tremendous growth in the demands of the semi-conductor industry and related electronic components.

  • Covid-19 vaccines are transported globally via chartered flights and dedicated freighters that meet the requirements for temperature control, which will occupy a lot of air freight capacity.

  • Ocean space and container shortage that resulted in the increase of ocean to air needs.

From the supply side, before the cancellation of international travel restrictions, a shortage of air space will remain. The below chart 1 shows that there are over 20% capacity shortage in globe, and the below chart 2 shows that the current global air capacity decreased 14% compared with year 2019, but the dynamic load factor grew more than year 2019 and 2020. The above information could implied that the air demand has been recovering but the air capacity is still keeping shortage, so the air market will continue to be over-demand and freight will remain at high level.

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Chart 1. Global Airline Capacity

==> picture [370 x 181] intentionally omitted <==

Chart 2.

C. China-Europe Railway Market:

China was the EU’s largest bilateral trade partner in 2020, the bilateral trade amount reaching EUR 586 billion and surpassing the US-EU bilateral trade amount of EUR 555 billion. Besides, the freight cost of China-Europe/China-Russia rail transport is much lower than air freight and close to ocean, while, its transportation time is one third of ocean freight, so rail transport has already become the main tool for many customers since the pandemic. In the ocean and air space shortages, large amount of cargoes that intended to be transported by ocean and air, tend to railway, especially in the 2021 Suez Canal obstruction. However, the railway capacity is lower than ocean, so the spaces are tight now.

==> picture [373 x 105] intentionally omitted <==

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D. Logistics Market:

The logistics business of the Company is mainly oriented towards the Chinese market, the ratio below showed the increase of cargo volume and retail sales growth rate pf social consumer goods, however, the Covid-19 virus resulted in the decreased of year 2020. For long-term perspectives, China domestic market has been growing as the domestic economic is the import development goal for China government.

1Q2021 2020 2019 2018
Retail sales growth rate of social
consumergoods		 34% -4% 8% 4%
Cargo Volume 42% -2% 6% 7%

Source: National Bureau of Statistics of the People’s Republic of China

5.2.1.4 Competitive Advantages

  • A. Synergy Created via Holding Structure:

  • Front End:

  • (1)Diversified products, comprehensive market coverage.

  • (2)Diluted the risk of having only single product.

  • (3)Increased service scope for customers.

  • Middle Platform:

  • (1)Increased economies of scale, as well as bargaining power.

  • (2)Product mix synergy.

  • (3)Integrated backend support that results in cost saving of customs,

warehousing, and transportation personnel.

  1. Back End:

    • (1)Enhanced financial structure.

    • (2)Decreased financing costs.

    • (3)Minimized operating risk.

    • (4)Employee career development & reward system.

  2. B. Long-term agreements with ocean, air, rail suppliers.

  3. C. Long-term and stable cooperative relations with global agents for stable customers and inland import logistics services of Europe and US.

  4. D. China import total solution service (import + customs clearance + warehousing + transportation + supply chain finance).

5.2.1.5 Disadvantages and Responsive Strategies

The main targets of international freight services are importers and exporters. The current rapid development of liberalization and globalization of international trade has provided a good niche for the development of the logistics industry. Presently the Company and its subsidiaries have the following advantages to move towards a large-scale professional logistic group.

92

Advantage ：

  • Brand: A Taiwanese brand, acting as a platform for integrated services in Taiwan, Hong Kong and China, has the advantage of bridging localization and internationalization.

  • Distribution: The Company has a complete network of location in Asia and a global network of agents.

  • Product: The Company offers sea, land, air, river, railway transport, warehousing, supply chain finance and a full range of supply chain logistics management services.

  • Stable cooperative relations: The Company has established long-term and close business relationships with a number of suppliers.

  • Human: The Company has a team of professional, innovative and dedicated logistics specialists.

  • Information: T3EX’s advanced ERP system, WMS, SCM and e-commerce management enable us to provide customized information management services.

  • Disadvantage:

  • Risk of variation in currency exchange rate.

  • Inflation: The cost increase and the consumption decline.

  • Unstable reginal political and economic circumstance.

  • Unstable international freight.

Responsive Strategies

For external market changes, immediate react and adjust the business strategy; adjust business and route configuration, and continue to expand cooperation with the industry as well as upstream and downstream manufacturers through acquisitions and strategic alliances to reduce operational risks.

5.2.2 Application of Major Products

Services of the Company and its subsidiaries are mainly integrated international logistics services, which cover comprehensive supply chain management services from the procurement of goods and raw materials and sea, air or land freight transport services for raw materials used in the production process to the packaging, sorting, storage, transit, distribution of semi-finished products and finished products as well as the final document production and management services for customers, the establishment of marketing channels and information feedback.

5.2.3 Supply of Major Material: It not apply.

5.2.4 M Major Suppliers in the Last Two Calendar Years: It not apply.

5.2.4.1 Major Clients in the Last Two Calendar Years: It not apply.

5.2.5 Production in the Last Two Years (Group)

Unit: NT$ thousands

93

Year 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020
Quantity/
Amount		 Quantity Amount
 Quantity
TEU CBM TON Shipment		 Amount
Major
Products		 TEU CBM TON Shipment CBM TON Shipment
Sea Export 263,825 430,987
-		 - 4,593,647 298,517 400,865
-		 - 6,581,312
Sea Import 36,182 61,243 - - 669,170 42,108 120,273
-		 - 627,397
Air Export - - 47,502
-		 2,284,257
-		 - 44,814
-		 3,655,346
Air Import - - 22,048
-		 517,995 - - 22,135
-		 657,477
Logistics - - - 191,483 1,178,773
-		 - - 199,788 1,170,824
Total 300,006 492,230 69,550 191,483 9,243,842 340,624 521,138 66,949 199,788 12,692,356

Variation: The volume and freight rate of ocean, rail, and air business increased. 5.2.6 Shipments and Sales in the Last Two Years (Group)

Unit: NT$ thousands

Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands
Year 2019 2020
Quantity/
Amount		 Quantity Amount
 Quantity Amount
Major
Products		 TEU CBM TON Shipment TEU CBM TON Shipment
Sea Export 263,825 430,987
-		 - 5,619,481 298,517 400,865
-		 - 7,878,609
Sea Import 36,182 61,243 - - 782,270 42,108 120,273
-		 - 744,481
Air Export - - 47,502
-		 2,649,454 - - 44,814
-		 4,166,957
Air Import - - 22,048
-		 682,801 - - 22,135
-		 851,614
Logistics - - - 191,483 1,524,065 - - - 199,788 1,518,582
Total
 300,006 492,230 69,550 191,483 11,258,071 340,624 521,138 66,949 199,788 15,160,243

Variation ： The volume and freight rate of ocean, rail, and air business increased.

5.3 Human Resources

I. T3EX Global Holdings Corp.

Year 2019 2020 Data as of ending data
in the currentyear
Number of
Employees
Sales		 0 0 0


Administrative Person		 29 30 31

Total		 29 30 31
Average Age 39.9 41.7 41.1
Average Years of Service 6.17 6.94 6.7
Education Ph.D. 0.00% 0.00% 0.00%

94

Masters 13.79% 20.00% 19.35%
Bachelor’s Degree 86.21% 80.00% 80.65%
Senior High School 0.00% 0.00% 0.00%
Below Senior High School 0.00% 0.00% 0.00%

II. T3EX Group

Year 2019 2020 Data as of ending data in
the currentyear
Number of
Employees		 Sales 1,346 1,398 1,375
Administrative Person 374 338 367
Total 1,720 1,736 1,742
Average Age 35.72 36.64 36.38
Average Years of Service 6.19 7.62 8.19
Education Ph.D. 0.0% 0.06% 0.06%
Masters 2.27% 2.32% 2.70%

Bachelor’s Degree		 72.03% 74.53% 74.40%
Senior High School 20.64% 15.78% 16.99%
Below Senior High School 5.06% 7.32% 5.86%

5.4 Environmental Protection Expenditure

In 2020 and as of the date of this annual report, the Company did not incur any loss or receive any penalty for major environmental pollution. There are designated personnel within the company who are in charge of environmental protection in compliance with the legal requirements. Waste clearance and disposal, emission discharge and environmental measurement have been conducted and controlled by management procedures.

5.5 Employee Re lations

5.5.1 Employee’s Welfare and Benefit

a. Employee welfare and benefit

Employee welfare and benefit are provided by both the Company and the Company’s Employee Welfare Committee. Corporate benefit program offered to employees include group insurance, travel insurance on business trips, meal subsidies, year-end bonus, performance bonus, etc. The details of welfare as bellows:

  • 1) Bonus: overtime pay, perfect attendance bonus, birthday bonus.

  • 2) Off-day: weekend, paternity leave.

  • 3) Insurance: Labor insurance, health insurance, health examination, maternity leave.

  • 4) Entertainment: Domestic travel, overseas travel.

95

  • 5) Compensation: wedding compensation, maternity compensation, on-job training, domestic and overseas continuous education, retirement plan (pension and benefits after retirement), funeral compensation for employees and family members.

  • b. Professional training program

  • We place great emphasis on career planning and talent development for employees by encouraging employees to attend internal and external training programs. Internal training programs include courses for core competence and professional development to enhance employees’ capabilities, while external training programs include seminars or conferences organized by external parties that provide excellent training opportunities for employees.

Internal Program ：

Internal Program：
Internal Training Times Training Expense
3150 classes 4600 hours NT$ 550,000
AEO Compliance and Supply
Chain Security Training		 EXCEL report tool
operation		 ISO9001(2015) Internal
Quality Audit Training		 COVID-19
Prevention Course
Information Security Education
Training		 European Line
Export/U.S./Canada
Line/Offshore Line Import
Contract Interpretation		 Introduction to the sea
freight export process		 Earthquake/Disaster
Prevention Drill
Program Training
Suspicious Cargo and Person
Identification Training		 Mail Package Inspection
and Burst Identification
Training		 Financial Risk
Management Case
Practice Course		 FMC Filing
(System) Training
Fraud cases and related internal
control procedures		 Taiwan Accounting
Operation Related Skills -
Initial Training		 Agent Pad (Sea Freight) Risk Assessment
Training
Maintenance of cargo security
training		 Ethical management Successful experience
of digital
transformation of
Systex Solutions
Corporation		 Group agency
development and
operation practices
Standard procedure of import
and export operation of railroad
business department		 Railroad Division Sales
Team Course		 Middle Class Factoring
Sales Case Sharing /
Risk Management
Practice		 PMO Project
Management Course

External Program ：

96

External Training Times Training Expense
150 classes 1200 hours NT$ 620,000
Insight into types of
workplace fraud,
penalties, behavior
patterns and red flags		 How internal auditors
interpret operating
performance and risks from
IFRS financial statements		 How to Use Excel Functions
to Improve Auditing and
Financial Efficiency Practice
Workshop		 Pre-employment Training
Course for Corporate
Internal Auditors
Angular Advanced
Development Workshop		 How auditors detect fraud in
financial statements		 Security control and
dangerous goods awareness
training		 How to Detect Hidden
Fraud Signs and Case
Studies
Quality Enterprise
Supply Chain Security
Specialists Training		 Continuing Education
Course for Accounting
Supervisors of Issuers,
Securities Dealers and Stock
Exchanges		 Enhancement of
self-reporting capability:
internal control and
information technology		 Financial misstatement
case study and how to see
the key information of
financial report
.NET Conf 2020 Project Management
Practice Application Class		 Corporate Governance Angular Practice and
Development Workshop
Dangerous Goods Rules
Training Refresher		 Safe Handling of Dangerous
Goods Class (IATA) Initial
Training		 Air transport dangerous
goods management rules		 Road Transport
Management
International Domestic
Air Transport
Qualification Course		 Customs Officer Training New Trends in Indonesian
E-Commerce		 GDP Certification for
Medical Drug
Distribution Manager and
Cold Chain Distribution
Manager
The impact of the
U.S.-China trade war and
the new coronary
pneumonia on the global
economy.		 The Ministry of Health and
Welfare's cosmetic hygiene
and safety management
regulations and related
sub-law education training.		 Executive Top 10 Job Skills
Certification Course
(Admin/CS)
Insight into types of
workplace fraud,
penalties, behavior
patterns and red flags		 How internal auditors
interpret operating
performance and risks from
IFRS financial statements		 How to Use Excel Functions
to Improve Auditing and
Financial Efficiency Practice
Workshop		 Pre-employment Training
Course for Corporate
Internal Auditors

c. The retirement policy:

97

  • (1) Monthly Contribution to Retirement Pension:

  • For employees in Taiwan who choose the old pension plan and those who choose the new pension plan, the Company contributes 2% of monthly wages to the retirement reserve in accordance with the Labor Standards Law, which is supervised by the Labor Retirement Reserve Supervisory Committee and deposited in the name of the Committee in the Bank of Taiwan, which is responsible for the receipt, custody and utilization of the funds. For employees who are assigned by the organization to transfer to affiliated companies, their seniority is renewed to provide them with more protection to achieve the purpose of talent circulation of the Group.

  • (2) Individual Labor Pension Account:

  • In accordance with the Labor Pension Act, new employees in Taiwan and existing employees who choose to apply the new pension system shall be required to pay a monthly contribution rate of not less than 6% to the Labor Pension Fund, which shall be deposited in the employee's personal pension account with the Bureau of Labor Insurance in accordance with the monthly contribution scale approved by the Executive Yuan.

  • (3) Overseas Regional Retirement System:

  • The pensions of overseas subsidiaries are based on a defined contribution system, and monthly contributions are made in accordance with the local government's regulations for various types of social security benefits, such as pension and medical benefits.

  • d. The Company's employees have not established a labor union, and their rights and benefits are governed by the Labor Standards Law.

  • e. Work environment and employee protection measures for employees:

  • We have established quality management procedures for work environment and equipment maintenance in Taiwan, and have obtained ISO9001 international quality management system certification after annual verification by external experts. In other overseas regions, we also focus on office safety through regular maintenance of the environment and equipment to ensure a safe working environment for our employees, and through public safety awareness programs such as new employee education and training, and related safety awareness programs to strengthen employees' concepts and abilities of safety management. They are summarized as follows:

Workplace safety
projects:		 Company’s action:
Environmental
inspection and		  From time to time, we conduct public environmental
inspections to ensure environmental safety.

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maintenance
management		  Perform regular environmental cleaning, maintenance and
inspection (carpet cleaning / air conditioning maintenance /
water dispenser maintenance, etc.).
 Regular fire safety inspections.
 Centralized management of equipment, such as electrical
equipment, IT equipment, etc.
 The machine room and office lobby are equipped with
surveillance system, and staffs wear identification cards when
entering and leaving to ensure the safety of employees and
assets.
Regular public security
advocacy		  All new employees will first participate in employee education
and training to learn about the work environment and promote
employee safety at work.
 1 staff fire safety and labor safety briefing per year
 Annual regular fire equipment safety inspection declaration
 Two-year periodic building facilities and equipment security
inspection declaration
Warehouse
environmental safety
maintenance		 The subsidiary's warehouse is equipped with fire safety measures
and CCTV system, and has obtained ISO9001 and ISO14001 and
Green Credit certification, and regularly inspects the warehouse
environment for safety.

f. Employees code of conduct

The Company and its subsidiaries attach great importance to the ethics of employee conduct and serve as a model for the ethical regulation of employee conduct, and have taken the following measures.

(1)Promote and implement the management philosophy of T3EX Global Holdings

Corp.

With the vision of “becoming the most competitive and complete logistics group in Asia” and the mission to provide “services beyond customer’s imagination”, the management philosophy of “Carry on the trust & Pass on the future” is implemented comprehensively, which not only can build a team consensus and set the code of conduct for employees, but also serves as a standard for all employees to follow. Employees can experience the true meaning of the management philosophy in their daily life and work through continuous promotion and annual activities.

(2) Strictly enforce the auditing system:

The Company has established an audit office under the Board of Directors to conduct comprehensive audits of each department, subsidiary and region based

99

on the Company's policies and regulations. This allows the Company to understand the compliance and implementation status of each unit's policies and regulations, and also to prevent and stop possible employee misconduct.

(3) Establishment of Employee Code of Conduct or Ethics Principle:

The Company has established Ethics Principles for employees to regulate the ethical behavior of all employees. Please refer to the Company’s website at www.t3ex-group.com.tw for the important company Code of Ethical Behavior in the Corporate Governance section.

5.5.2 Any current or potential loss resulting from labor disputes and prevention

actions for the past two years and as of the date of this annual report.

There have not been any material losses resulting from major labor disputes for the past two years and as of the date of this annual report.

5.6 Important Contracts

A. Transportation:

Item Counterparty Period Major Contents Restrictions
1 Yang Ming Marine Transport
Corp.		 2020.05.01~2021.04.30 Sea Transportation None
2. Evergreen Marine Corp. 2020.05.01~2021.04.30 Sea Transportation None
3 China Airline 2018.10.23~2021.10.22 Air Transportation None
4 Zhengzhou JU TONG
International Forwarder Corp.		 2021.04.01-2023.03.31 International
Forwarder		 None
7 COSCO SHIPPING LINES Co.,
LTD		 2021.01.01~2021.12.31 International
Forwarder		 None

B. Agency:

Item Counterparty Period Major Contents Restrictions
1 A Company 2010.10.25~2011.10.24
(AutomaticallyRenew One Year)		 Agency Agreement Privacy
2 B Company 2014.12.15~2015.12.14
(AutomaticallyRenew One Year)		 Agency Agreement Privacy
3 C Company 2020.09.25~2021.09.24
(AutomaticallyRenew One Year)		 Agency Agreement Privacy
4 D Company 2020.06.05~2021.06.04
(AutomaticallyRenew One Year)		 Agency Agreement Privacy
5 E Company 2014.11.18~2015.11.17
(AutomaticallyRenew One Year)		 Agency Agreement Privacy
6 F Company 2015.01.05~2016.01.04
(AutomaticallyRenew One Year)		 Agency Agreement Privacy

100

C. Sales:

Item Counterparty Period Major Contents Restrictions
1 A Company Warehouse：2012.01.01 -2021.05.15
Transpiration：2012.01.01-2021.6.30		 Warehouse and transportation Privacy
2 B Company 2019.10.01-2021.09.30 Airfreight forwarding import &
export, local deliveries and
export customs declaration for
all FCA shipments.
Privacy
3 C Company 2019.06.27~2021.12.31 Forwarder Agreement Privacy
4 D Company 2021.01.01~2021.12.31 Space BookingAgreement Privacy
5 E Company 2021.04.01~2022.03.31 DeliveryService Privacy

D. Others:

Item
Counterparty		 Period Major Contents Restrictions
1 Cathay Century Insurance 2020.09.11~2021.09.11 Directors and
Officers Liability
Insurance		 The Coverage
Limit is
US$4,000,000
2 CTBC Bank 2020.09.30-2021.09.30 Financial loan None

101

VI. Financial Information 6.1 Five-Year Financial Summary 6.1.1 Condensed Balance Sheet

Consolidated Condensed Balance Sheet – Based on IFRS

Unit: NT$ thousands

Unit: NT$ Unit: NT$ Unit: NT$ Unit: NT$ thousands
Year
Item		 Financial Summary for The Last Five Years 1Q2021
2016 2017 2018 2019 2020
Current assets 3,481,349 3,824,345 4,188,887 4,347,950 5,887,390 NA
Property, Plant and
Equipment		 314,067 301,090 282,104 277,603 285,706
Intangible assets 658,732 630,309 655,851 638,771 611,897
Other assets 359,297 421,807 461,364 784,796 929,369
Total assets 4,813,445 5,177,551 5,588,206 6,049,120 7,714,362
Current
liabilities		 Before
distribution		 2,013,714 2,700,287 2,654,564 2,957,688 3,691,675
After
distribution		 2,106,351 2,804,504 2,909,316 3,108,223 -
Non-current
liabilities		 414,237 84,657 284,780 538,645 719,697
Total
liabilities		 Before
distribution		 2,427,951 2,784,944 2,939,344 3,496,333 4,411,372
After
distribution		 2,520,588 2,889,161 3,194,096 3,646,868 -
Equity attributable to
shareholders of the
parent		 2,259,199 2,279,473 2,483,219 2,410,074 3,138,727
Capital stock 1,195,264 1,185,655 1,183,455 1,171,575 1,257,683
Capital surplus 865,337 872,754 808,958 798,811 830,563
Retained
earnings		 Before
distribution		 285,955 424,932 676,879 653,539 1,066,722
After
distribution		 193,318 320,715 422,127 503,004 -
Other equity interest (25,556) (137,519) (125,430) (186,054) 44,319
Treasury stock (61,801) (66,349) (60,643) (27,797) (60,560)
Non-controlling
interest		 126,295 113,134 165,643 142,713 164,263
Total
equity		 Before
distribution		 2,385,494 2,392,607 2,648,862 2,552,787 3,302,990
After
distribution		 2,292,857 2,288,390 2,394,110 2,402,252 -

102

6.1.2 Condensed Individual Balance Sheet Condensed Individual Balance Sheet- Based on IFRS

Unit: NT$ thousands

Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands
Year
Item		 Financial Summary for The Last Five Years
2016 2017 2018 2019 2020
Current assets 375,269 411,485 321,174 447,411 660,475
Property, Plant and
Equipment		 192,995 188,478 183,946 184,965 180,214
Intangible assets 8,151 22,614 21,776 24,508 20,002
Other assets 2,779,735 2,989,286 3,385,842 3,532,596 4,123,999
Total assets 3,556,150 3,611,863 3,912,738 4,189,480 4,984,690
Current
liabilities		 Before
distribution		 743,136 1,310,103 1,216,902 1,464,482 1,343,927
After
distribution		 835,773 1,414,320 1,471,654 1,615,017 -
Non-current liabilities 353,815 22,287 212,617 314,924 502,036
Total
liabilities		 Before
distribution		 1,096,951 1,332,390 1,429,519 1,779,406 1,845,963
After
distribution		 1,189,588 1,436,607 1,684,271 1,929,941 -
Capital stock 1,195,264 1,185,655 1,183,455 1,171,575 1,257,683
Capital surplus 865,337 872,754 808,958 798,811 830,563
Retained
earnings		 Before
distribution		 285,955 424,932 676,879 653,539 1,066,722
After
distribution		 193,318 320,715 422,127 503,004 -
Other equity interest (25,556) (137,519) (125,430) (186,054) 44,319
Treasury stock (61,801) (66,349) (60,643) (27,797) (60,560)
Total Before
distribution		 2,259,199 2,279,473 2,483,219 2,410,074 3,138,727
equity After
distribution		 2,166,562 2,175,256 2,228,467 2,259,539 -

103

6.1.3 Condensed Statement of Comprehensive Income/Condensed Statement of Income

Consolidated Condensed Statement of Comprehensive Income – Based on IFRS

Unit: NT$ thousands

Year
Item		 Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years 1Q2021
2016 2017 2018 2019 2020
Operatingrevenue 9,744,113 10,537,008 11,536,269 11,258,071 15,160,243
NA
Grossprofit 1,794,218 1,924,035 1,963,236 2,014,229 2,467,887
Income from
operations		 193,165 396,445 376,198 296,660 695,906
Non-operating
income and expenses		 33,439 (42,416) 30,827 14,155 5,104
Income before tax 226,604 354,029 407,025 310,815 701,010
Net income (Loss) 121,176 252,737 366,598 241,363 570,727
Other comprehensive
income
(income after tax)		 (137,465) (118,393) (30,703) (82,686) 245,575
Total comprehensive
income		 (16,289) 134,344 335,895 158,677 816,302
Net income
attributable to
shareholders of the
parent		 130,487 240,110 354,930 249,047 541,992
Net income
attributable to
non-controlling
interest		 (9,311) 12,627 11,668 (7,684) 28,735
Comprehensive
income attributable to
Shareholders of the
parent		 248 125,685 325,147 181,607 794,091
Comprehensive
income attributable to
non-controlling
interest		 (16,537) 8,659 10,748 (22,930) 22,211
Earningsper share 1.11 2.07 3.07 2.15 4.72

104

6.1.3 Condensed Individual Statement of Income Condensed Individual Statement of Income- Based on IFRS

Unit: NT$ thousands

Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands Unit: NT$ thousands
Year
Item		 Financial Summary for The Last Five Years
2016 2017 2018 2019 2020
Operatingrevenue 230,812 289,873 435,491 334,862 593,438
Grossprofit 140,614 207,935 358,744 259,282 506,248
Income from operations 140,614 207,935 358,744 259,282 506,248
Non-operating income and
expenses		 (7,096) 34,037 (3,103) (5,715) 33,790
Income before tax 133,518 241,972 355,641 253,567 540,038
Net income(Loss) 130,487 240,110 354,930 249,047 541,992
Other comprehensive income
(income after tax)		 (130,239) (114,425) (29,783) (67,440) 252,099
Total comprehensive income 248 125,685 325,147 181,607 794,091
Net income attributable to
shareholders of theparent		 130,487 240,110 354,930 249,047 541,992
Net income attributable to
non-controllinginterest		 - - - - -
Comprehensive income
attributable to Shareholders of
theparent		 248 125,685 325,147 181,607 794,091
Comprehensive income
attributable to non-controlling
interest		 - - - - -
Earningsper share 1.11 2.07 3.07 2.15 4.72

6.1.4 Auditors’ Opinions from 2016 to 2020

Year CPA’s Name CPA Firm Auditing Opinion
2016 PeggyChen & HENG- SHENG LIN KPMG Unqualified
2017 PeggyChen & HENG- SHENG LIN KPMG Unqualified
2018 CHI-LUNG YU&MEI-PIN WU KPMG Unqualified
2019 CHI-LUNG YU&MEI-PIN WU KPMG Unqualified
2020 CHI-LUNG YU&MEI-PIN WU KPMG Unqualified

105

6.2 Five-Year Financial Analysis 6.2.1 Consolidated Financial Analysis

Consolidated Financial Analysis – Based on IFRS


Item		 Year Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years 1Q2
021
2016 2017 2018 2019 2020
Financial
structure (%)		 Debt Ratio 50.44 53.79 52.60 57.80 57.18 NA
Ratio of long-term capital to
property, plant and equipment		 891.44 822.77 1,039.92 1,113.62 1407.98
Solvency (%) Current ratio 172.88 141.63 157.8 147.01 159.48

Quick ratio		 170.82 139.88 156.16 145.45 157.46
Interest earned ratio(times) 9.67 13.85 19.14 9.11 18.15
Operating
performance		 Accounts receivable turnover
(times)		 6.22 6.14 6.18 6.03 6.68
Average collectionperiod 58.68 59.44 59.06 60.53 54.64
Inventoryturnover(times) - - - - -
Accounts payable turnover
(times)		 10.14 10.22 11.30 11.06 12.35
Average days in sales - - - - -
Property, plant and
equipment turnover(times)		 29.92 34.26 39.56 40.23 53.83
Total assets turnover(times) 2.04 2.11 2.14 1.93 2.20
Profitability Return on total assets(%) 3.18 5.26 6.94 4.79 8.36
Return on stockholders'
equity (%)		 5.48 10.58 14.90 10.18 19.54
Pre-tax income to paid-in
capital(%)		 18.96 29.86 34.39 26.53 59.83
Profit ratio(%) 1.24 2.40 3.18 2.14 3.76
Earningsper share(NT$) 1.11 2.07 3.07 2.15 4.72
Cash flow Cash flow ratio (%) 0.43 5.68 12.02 27.13 9.12
Cash flow adequacy ratio (%) 104.00 93.04 100.26 126.79 121.46
Cash reinvestment ratio (%) Note 2 3.12 7.10 24.53 6.16
Leverage Operating leverage 3.70 2.14 2.41 2.90 1.57
Financial leverage 1.16 1.07 1.06 1.15 1.06
Analysis of financial ratio differences for the last two years.
1.
Ratio of long-term capital to property, plant and equipment: The increase of equity caused the
growth ratio.
2.
Interest earned ratio (times): The ratio grew because of the increase of income tax and interest

106

expense.
3. Property, plant and equipment turnover (times): the ratio grew resulted from sales increasing.
4. Profitability: the increase of return on total assets, return on stockholders' equity, pre-tax
income to paid-in capital, profit ratio, and earnings per share resulted from the profit increasing
year over year.
5. Cash flow ratio & Cash reinvestment ratio: the ratio declined because of the decrease of
operating cash inflow.
6. Operating leverage: The decrease of operating leverage resulted from the operating profit
increasing.

Note 1: Equations:

  1. Capital Structure

  2. (1) Debt ratio = Total liability / Total assets

  3. (2) Ratio of long-term capital to property, plant and equipment = (Net shareholders’ equity + Long-term liability) / Net

property, plant and equipment

  1. Solvency

  2. (1) Current ratio: Current assets / current liability

  3. (2) Quick ratio = (Current assets – Inventory – Prepaid expense) / current liability

  4. (3) Times interest earned = Net income before tax and interest expense / Interest expense of the year

  5. Operating ability

  6. (1) Account receivable turnover (including accounts receivable and notes receivable derived from business operations) =

Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business

operation)

  • (2) Days sales in accounts receivable = 365 / Account receivable turnover

  • (3) Inventory turnover = Cost of goods sold / Average inventory amount

  • (4)Account payable turnover (including accounts payable and notes payable derived from business operation) = Cost of

goods sold / Average accounts payable (including accounts payable and notes payable derived from business operation)

  • (5) Average days in sales = 365 / Inventory turnover

  • (6) Fixed assets turnover = Net sales / Net fixed assets

  • (7) Total assets turnover = Net sales / Total assets

  • Profitability

  • (1) Return on assets = (Net income (loss) + interest expense x (1-tax rate)) / Average total assets

  • (2) Return on shareholders’ equity = Net income (loss) / Net average shareholders’ equity

  • (3) Return to issued capital stock = Net income before tax / Issued capital stock

  • (4) Profit ratio = Net income (loss) / Net sales

  • (5) Basic earnings per share = (Net income – preferred stock dividend) / Weighted average stock shares issued

  • Cash flow

  • (1) Cash flow ratio = Bet cash flow from operating activity / Current liability

  • (2) Cash flow adequacy ratio = Net cash flow from operating activity in the past 5 years / (Capital expenditure + Inventory

interest + Cash dividend) in the past 5 years

107

(3) Cash + reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Fixed assets + Long term investment + Other assets + Working capital)

  1. Balance

(1) Degree of operating leverage = (Net operating income – Variable operating cost and expense) / Operating income)

(2) Degree of financial leverage = Operating income / (Operating income – interest expense)

Note 2: The net cash flow in operating activity is negative, it not apply.

6.2.2 Individual Financial Analysis

Individual Financial Analysis- Based on IFRS


Item		 Year Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years Financial Analysis for the Last Five Years
2016 2017 2018 2019 2020
Financial structure (%) Debt Ratio 32.68 36.89 36.54 42.47 37.03

Ratio of long-term capital to
property, plant and
equipment		 1,353.93 1,221.24 1,465.56 1473.25 2020.24
Solvency (%) Current ratio 50.50 31.41 26.39 30.55 49.15
Quick ratio 49.02 30.81 25.77 30.50 49.13
Interest earned ratio(times) 6.37 12.52 25.24 17.79 33.54
Operating
performance		 Accounts receivable
turnover(times)		 4.81 6.28 10.03 7.94 13.36
Average collectionperiod 76 58 36 45.97 27.32
Inventoryturnover(times) - - - - -
Accounts payable turnover
(times)		 50.59 60.14 77.21 150.11 -
Average days in sales - - - - -
Property, plant and
equipment turnover(times)		 1.18 1.52 2.34 1.82 3.25
Total assets turnover(times) 0.07 0.08 0.12 0.08 0.13
Profitability Return on total assets(%) 4.53 7.39 9.75 6.51 12.17
Return on stockholders'
equity (%)		 5.48 10.58 14.90 10.18 19.54
Pre-tax income to paid-in
capital(%)		 11.17 20.41 30.05 21.64 46.10
Profit ratio(%) 56.53 82.83 81.50 74.37 91.33
Earningsper share(NT$) 1.11 2.07 3.07 2.15 4.72
Cash flow Cash flow ratio (%) Note 1 Note 1 Note 1 Note 1 Note 1
Cash flow adequacy ratio
(%)		 0.03 - - - -
Cash reinvestment ratio (%) Note 1 Note 1 Note 1 Note 1 Note 1
Leverage Operating leverage 1.00 1.00 1.00 1.00 1.00
Financial leverage 1.21 1.11 1.04 1.06 1.03

108

Analysis of financial ratio differences for the last two years.

  1. Ratio of long-term capital to property, plant and equipment: The increase of equity caused the growth ratio.

  2. Current ratio &quick ratio: The ratio grew because of the increase of liquid assets.

  3. Interest earned ratio (times): The ratio grew because of the increase of income tax and interest expense.

  4. Accounts receivable turnover & average collection period: the increase of accounts receivable turnover and the decrease of average collection period were caused by the increase of profit which were investments accounted for using equity method.

  5. Property, plant and equipment turnover (times): the ratio grew resulted from sales increasing.

  6. Operating leverage: The decrease of operating leverage resulted from the operating profit increasing.

Note1: it was negative.

Note2:

  1. Capital Structure

  2. (1) Debt ratio = Total liability / Total assets

  3. (2) Ratio of long-term capital to property, plant and equipment = (Net shareholders ’ equity + Long-term liability)

  4. / Net property, plant and equipment

  5. Solvency

  6. (1) Current ratio: Current assets / current liability

  7. –

  8. (2) Quick ratio = (Current assets Inventory Prepaid expense) / current liability

  9. (3) Times interest earned = Net income before tax and interest expense / Interest expense of the year

  10. Operating ability

  11. (1) Account receivable turnover (including accounts receivable and notes receivable derived from business

operations) =

Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business operation)

  • (2) Days sales in accounts receivable = 365 / Account receivable turnover

  • (3) Inventory turnover = Cost of goods sold / Average inventory amount

(4)Account payable turnover (including accounts payable and notes payable derived from business operation) = Cost of goods sold / Average accounts payable (including accounts payable and notes payable derived from business operation)

  • (5) Average days in sales = 365 / Inventory turnover

  • (6) Fixed assets turnover = Net sales / Net fixed assets

  • (7) Total assets turnover = Net sales / Total assets

  • Profitability

  • (1) Return on assets = (Net income (loss) + interest expense x (1-tax rate)) / Average total assets

  • (2) Return on shareholders ’ equity = Net income (loss) / Net average shareholders ’ equity

  • (3) Return to issued capital stock = Net income before tax / Issued capital stock

  • (4) Profit ratio = Net income (loss) / Net sales

– (5) Basic earnings per share = (Net income preferred stock dividend) / Weighted average stock shares

109

issued

5. Cash flow

(1) Cash flow ratio = Bet cash flow from operating activity / Current liability

(2) Cash flow adequacy ratio = Net cash flow from operating activity in the past 5 years / (Capital expenditure + Inventory interest + Cash dividend) in the past 5 years

– (3) Cash + reinvestment ratio = (Net cash flow from operating activity Cash dividend) / (Fixed assets + Long term investment + Other assets + Working capital)

6. Balance

– (1) Degree of operating leverage = (Net operating income Variable operating cost and expense) / Operating income)

– (2) Degree of financial leverage = Operating income / (Operating income interest expense)

6.3 Audit Committee’s Review Report in the Most Recent Year

T3EX Global Holdings Corp. Audit Committee’s Review Report

Date: March 9, 2021

The Board reports the financial statement, business report, and earnings distribution proposal of 2020, 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:

2021 Regular Shareholders’ Meeting of the Company

Chairman of the Audit Committee Li-Chiu Chang

6.4 Consolidated Financial Statements of the Parent Company and Subsidiary in

the Most Recent Year: Please refer page 129-199

6.5 Non-Consolidated Financial Statements of the Most Recent Year:

Please refer page 200-256

6.6 Financial Difficulties Encountered By the Company and the Related Party in

the Most Recent Year and Up to the Date of the Annual Report: None.

110

VII. Review of Financial Position, Management Performance and Risk

Management.

7.1 Analysis of Financial Status

Unit: NT$ thousands

Unit: NT$ thousands Unit: NT$ thousands
Year
Item		 2019 2020 Difference
Amount %
Current Assets 4,347,950
5,887,390
1,539,440
35.41
Fixed Assets 277,603
285,706
8,103
2.92
Intangible Assets 638,771
611,897
(26,874)
(4.21)
Other Assets 784,796
929,369
144,573
18.42
Total Assets 6,049,120
7,714,362
1,665,242
27.53
Current Liabilities 2,957,688
3,691,675
733,987
24.82
Long-term Liabilities 538,645
719,697
181,052
33.61
Total Liabilities 3,496,333
4,411,372
915,039
26.17
Capital stock 1,171,575
1,257,683
86,108
7.35
Capital surplus 798,811
830,563
31,752
3.97
Retained Earnings 653,539
1,066,722
413,183
63.22
Other Equity (186,054)
44,319
230,373
123.82
Treasury Stock (27,797)
(60,560)
(32,763)
(117.87)
Non-controlling interests 142,713
164,263
21,550
15.10
Total Stockholders' Equity
2,552,787
3,302,990
750,203
29.39
Analysis of changes in financial ratios:
Current Assets: The increase of operating activities and revenue caused the growth of account
receivable.
Current Liabilities: The growth of operating activities and cost caused the increase of account
payable.
Long-term Liabilities: Issuing the convetible bond.
Retained Earnings: The increase of profit caused the retain earning grew.
Other Equity: The variation of unrealized gains (losses) from investments in equity
instruments measured at fair value through other comprehensive income.
Treasury Stock: Increased share buy-back.

Effect of changes on the company’s future business and Future response

action:

The unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income was an unrealized

111

gain or loss, so it doesn’t have big effect on the Company.

7.2 Analysis of Financial Performance

Unit: NT$ thousands

Unit: NT$ thousands Unit: NT$ thousands
Year
Item		 2019 2020 Difference
Amount %
Sales 11,258,071 15,160,243
3,902,172
34.66
Cost of Sales 9,243,842 12,692,356
3,448,514
37.31
Gross Profit 2,014,229 2,467,887
453,658
22.52
OperatingExpenses 1,717,569 1,771,981
54,412
3.17
OperatingIncome 296,660
695,906
399,246
134.58
Non-operatingIncome and Expenses 14,155
5,104
(9,051)		 (63.94)
Income Before Tax 310,815
701,010
390,195
125.54
Tax Expense 69,452
130,283
60,831
87.59
Net Income 241,363
570,727
329,364
136.46
Analysis of changes in financial ratios:
Sales: The operating activities increasing caused the sales grew.
Cost of sales: The operating activities increasing caused the cost grew.
Gross profit: The operating activities increasing caused the gross profit grew.
Operating income & income before tax: The operating activities increasing caused the
operating income and income before tax grew.
Tax expense: The income before tax increased that resulted in the tax expense grew.
Net income: The operatingactivities increasingcaused the net incomegrew.

Effect of changes on the company’s future business and Future response action: The Company will continue to develop international logistics business with oversea, expand new locations, and deeply develop warehousing, customs declaration, and inland transport to become a total solution logistics company.

7.3 Analysis of Cash Flow

7.3.1 Cash Flow Analysis for the Current Year

Unit: NT$ thousands

Year
Item		 2019 2020 Variance Variance
Amount (%)
Cash flows from operatingactives 802,373
336,628
(465,745)		 (58.05)
Cash flows from investingactives (24,778) 75,609
100,387
(405.15)
Cash flows from financingactives (195,468) (126,232) 69,236
(35.42)
Net cash flows 582,127
286,005
(296,122)		 (50.87)
Analysis of financial ratio change:
Cash inflows from operating actives: The decrease because of the increase of account receivable.
Cash outflows from investing actives: The decrease because proceeded the disposal of financial
assets at fair value.
Cash inflows from financingactives: Issuingconvertible bond.

Cash inflows from operating actives: The decrease because of the increase of account receivable. Cash outflows from investing actives: The decrease because proceeded the disposal of financial assets at fair value.

7.3.2 Remedy for Cash Deficit and Liquidity Analysis:

112

In light of positive cash flows, remedial actions are not required. 7.3.3 Cash Flow Analysis for the Coming Year

Unit: NT$ thousands

Estimated Cash
and Cash
Equivalents,
Beginning of
Year
(1)		 Estimated
Net Cash
Flow from
Operating
Activities
(2)		 Estimated Net
Cash Flow from
Investing
Activities
(3)		 Estimated Net
Cash Flow
from
Financing
Activities
(4)
Cash Surplus
(Deficit)
(1)+(2)+(3)+(4)
2,429,343
600,000
(150,000)		 50,000
2,929,343
Analysis of 2021 cash flow:
Cash flows from operating actives: The Company will continue to develop business
to bring more cash flows.
Cash flows from investing actives: The Company is planning to purchase IT
equipment for integrating logistics and financial information system.
Cash flows from financing actives: The Company will continue to do some financial
plans for developingbusiness.

7.4 Major Capital Expenditure Items: None.

7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses,

Improvement Plans and Investment Plans for the Coming Year

7.5.1 Investment policy:

The policy is pursuant on the “Procedures of Acquisition and Disposal of Assets” and Internal Control System.

7.5.2 The reason of profits or Losses:

The Company and its subsidiaries’ investment profit in 2020 were mainly due to the profits of THI Logistics, THI Group (Shanghai) Ltd, and THI Group (HK) Ltd., and Taiwan Express. Due to the business volume and freight rate increasing, as well as expense well-controlled, the subsidiaries created great operating performance.

7.5.3 Investment plans for the coming year:

The Company will continue to invest locations in China and Southern Asia.

7.6 Analysis of Risk Management

7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures

(1)Interest rate

Unit: NT$ thousands

Unit: NT$
Item\Year 2020
Interest Expenses (A) 40,865
Revenue(B) 15,160,243
Operating Profit(C) 695,906

113

(A)/(B) 0.27%
(A)/(C) 5.87%

Going forward, the Company will continue to carefully monitor interest rate movements, adopt proper hedging strategies, and make use of capital markets financing instruments to ensure that our financing costs are at a comparatively low level.

(2) Foreign exchange rates

ange rates ange rates
Unit: NT$ thousands
Item\Year
2020
Foreign Exchange (A)
(67,130)
Revenue (B)
15,160,243
(A) / (B)
-0.44%
Item\Year 2020
Foreign Exchange (A) (67,130)
Revenue (B) 15,160,243
(A) / (B) -0.44%

The Company has a clear operating strategy and risk control procedure to respond to changes in the spot exchange rate, stays in close contact with financial institutions, and adjusts its foreign exchange strategy to minimize the risk of exchange rate accordingly.

(3) Inflation

The impact of inflation does not currently have a significant impact on the Company’s profits and business operations. The Company will continue to maintain a good relations with shipping companies, airline companies, and overseas agencies to decrease the risk of inflation or deflation.

7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with

Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions

  • (1) High-Risk, High-Leverage Investment:

In 2020 and as of the date of this annual report, the Company has not conducted any high-risk and/or high-leverage investment.

  • (2) Loaning or Endorsement Guarantees:

The Company and its subsidiaries conduct loaning or endorsement guarantees according to the internal policy “Operational Procedures for Endorsements and Guarantees” and the “Procedures for Loaning of Funds.”. Procedures and risk evaluation are conducted in accordance with this policy. As of the date of this annual report, the Company has conducted loaning and endorsement guarantees as bellows:

114

(2-1)Loans to otherparties: (2-1)Loans to otherparties: (2-1)Loans to otherparties: (2-1)Loans to otherparties: Unit: NTD thousands Unit: NTD thousands
Name of lender Name of borrower Ending
balance		 Actual
usage amount during
the period
The Company Taiwan Express Logistic
Co., Ltd		 270,000
200,000
The Company THI Group Limited
(H.K.)		 85,500
0
THI Group Limited (H.K.) Taiwan Express (HK)
Co.,		 57,000
57,000
T.H.I. Group (Shanghai) Ltd. Shanghai Moorluk
International Shipping
Co., Ltd.		 8,674
0
T.H.I. Group (Shanghai) Ltd. T-SC Factoring Co., Ltd. 43,370
0
T.H.I. Group (Shanghai) Ltd. T-Cube Logistics Co.,Ltd 21,685
0
Shanghai Yaohwa
International Forwarder Co.,
Ltd.		 Shanghai Moorluk
International Shipping
Co., Ltd.		 4,337
2,169
Shanghai Yaohwa
International Forwarder Co.,
Ltd.		 T-SC Factoring Co., Ltd. 17,348
0
(2-2)Guarantees and endorsements for otherparties: Unit: NTD thousands
Name of guarantor Counter-party of guarantee and
endorsement		 Ending
balance		 Actual
usage amount during
the period
The Company Shanghai Yaohwa International
Forwarder Co., Ltd.		 13,011
0
The Company T.H.I. Group (Shanghai) Ltd. 136,925
12,864
The Company T-Cube Logistics Co.,Ltd 82,403
31,231
The Company Taiwan Express (HK) Co., 99,750
0

115

The Company THI Group Limited (H.K.) 28,500
10,456
The Company T-SC Factoring Co., Ltd. 288,100
0
Shanghai Yaohwa
International
Forwarder Co., Ltd.		 T.H.I. Group (Shanghai) Ltd. 3,036
2,003

(3) Derivatives Transactions:

The Company and its subsidiaries conduct derivatives transactions according to the internal policy “the Operational procedures for Acquisition and Disposal of Assets” As of the date of this annual report, the Company has

conducted derivatives transactions as bellows: Unit: NTD thousands

Company Category Contract
amounts which
are not write-off
Margins
Contract
amounts which
are write-off
Unrealized
Gain or
Loss
Realized
Gain or
Loss
T.H.I. Group
(Shanghai)
Ltd.		 Forward
Exchange
Transaction		 31,350
0
168,150
(607)
2,054
THI Group
Limited
(H.K.)		 Forward
Exchange
Transaction		 361,950
0
42,750
(3,995)
460

7.6.3 Future Research & Development Projects and Corresponding Budget

The Company did not conduct any research & development projects.

7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales

The Company consistently pays close attention to any changes in local and

foreign policies and makes appropriate amendments to our systems when necessary. During 2020 and as of the date of publication of this annual report,

changes in related laws have not had a significant impact on our operations.

  • 7.6.5 Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Sales

The Company attaches great importance to improvements in technology and carefully monitors market trends and assesses the impact they may have on the company’s operations.

  • 7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures

  • Since its inception, the Company has consistently maintained an ethical business philosophy and fulfilled its social responsibilities. Aside from working

  • to strengthen internal management and conforming to all relevant corporate

116

governance requirements, the Company has also organized numerous public welfare activities.

7.6.7 Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans

The Company has no ongoing merger and acquisition activities. In considering future M&A activities, the Company will evaluate their efficiency, risks, vertical integration and other factors in accordance with its internal control system.

7.6.8 Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans

The Company has no factory expansion plans.

7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration

The Company has consistently focused on identifying alternative sources for purchasing, and has worked to diversify its customer base in order to reduce the concentration of sales.

7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, Supervisors, or Shareholders with Shareholdings of over 10%

  • The shareholdings of the Company’s directors and shareholders with shareholdings of over 10% have been stable during the last few years.

7.6.11 Effects of, Risks Relating to and Response to the Changes in Management Rights

  • The structure of our principal shareholders is solid. A strong professional management team is in place to maximize both shareholders and the Company’s best interest. Accordingly, we believe that the risk of changing in management rights that would cause damage to the Company is mitigated. In addition, our risk management department is responsible to monitor any related risks and report to the Board. Our policy is to maintain a steady ownership and management structure. As of the date of this Annual Report, such risks were not identified by the Company.

7.6.12 Litigation or Non-litigation Matters

  • (1) Major ongoing lawsuits, non-lawsuits or administrative lawsuit: None.

  • (2) Major ongoing lawsuits, non-lawsuits or administrative lawsuits caused by directors, supervisors or shareholders with over 10% shareholdings: None.

7.6.13 Other Major Risks: None.

  • (1) IT security risks: The Company has listed IT security risks as annual important audit plan, as of date of this Annual Report, such risks were not identified by the Company.

  • (2) The Covid-19 virus risks: The Company has held the project team for the impact of covid-19 virus at the beginning of pandemic. As of date of this Annual Report, such risks were not identified by the Company.

117

VIII. Special Disclosure

8.1 Summary of Affiliated Companies: 8.1.1 Affiliated Companies Cha

118

March 31, 2020

==> picture [677 x 410] intentionally omitted <==

119

8.1.2 The Detail Information of Affiliated Companies

Unit: thousands

Unit: thousands
Name of Subisidary Foundation
Date
Address		 Share Capital
Major Business
Greatline International Limited 2001.06.08 P.O.Box 438, Road Town, Tortola, British Virgin islands. USD4,050 Offshore holdings company
T.H.I. Group Ltd (BVI) 2001.03.22 P.O.Box 3444, Road Town, Tortola, British Virgin Islands. USD1,000 Offshore settlement
company
T.H.I. Group Limited (HK) 1988.04.29 Rm601-7,Prosperity Millennia Plaza, 663 King's Rd.,Quarry
Bay,HK.		 HKD12,480 Air & sea freight forwarding
T.H.I. Group (Shanghai) Ltd. 2001.03.05 10F, Kaikai Plaza, No 888 Wanhangdu Road, Jinan District,
Shanghai,200042		 USD3,060 Air & sea freight forwarding
and customs clearance
Shanghai Yaohwa International
Forwarder Co.,Ltd		 2004.07.28 Room 5F/Room F2, No.61 YangShuPu Road, Shanghai, P.R.
China		 USD1,700 Air & sea freight forwarding
and customs clearance
T.H.I. Logistics Ltd 2012.06.21 12F. , No. 563 , Sec . 4, Zhongxiao E. Rd . Xinyi District ,
Taipei City11072,Taiwan		 NTD130,000 Air & sea freight forwarding
T.H.I. Group Vietnam Co., Ltd 2007.12.24 Floor 7, No 09 Dinh Tien Hoang, Dakao, Ward,Dist 1, ,
Hochiminh city		 VND5,000,000 Air & sea freight forwarding
and packaging
T.H.I. GROUP (BANGKOK)
COMPANY LIMITED		 2009.04.07 2/22 Iyara Tower, 6th Fl., Unit 603,Chan Rd., Thungwatdon,
Sathorn,Bangkok		 THB5,000 Air & sea freight forwarding
andpackaging
T.H.I. GROUP (CAMBODIA) Co.,
Ltd.		 2012.03.19 5th Floor, #66 SSN Building, Norodom Bvld, Phnom Penh,
Cambodia		 USD150 Air & sea freight forwarding
T.H.I.GROUP SINGAPORE PTE
LTD		 2014.11.06 115 AIRPORT CARGO ROAD#06-19 CARGO AGENTS
BUILDING C SINGAPORE (819466)		 SGD930,000 Air & sea freight forwarding
T H I LOGISTICS PHILIPPINES
CORP.		 108.07.23 Unit 1605 AYALA Triangle, Tower 1 Plaza, AYALA Avenue,
BEL-AIR MAKATI CITY.		 PHP27,801,750 Air & sea freight forwarding
THI & Maruzen Co.,Ltd 2010.07.14 7F,Shinsendo BLDG 2-15-15,Nihonbashi Ningyocho, JPY60,000,000 Air & sea freight forwarding

120

Chuo-ku, Tokyo Japan 103-0013
Taiwan Express Logistic Co., Ltd. 1992.09.04 3F, No. 16, Section 1, Nánjīng East Rd, Jhongshan District
Taipei City,Taiwan		 NTD359,584 Air & sea freight forwarding
and customs clearance
Taiwan Express (HK) Co., Ltd. 1997.11.17 13005E-13006E,13/F., ATL Logistics Centre B, Berth 3, Kwai
ChungContainer Terminal,Kwai Chung,N.T.		 HKD70,550 Freight forwarding, customs
clearance,and distribution
TEC Logistics Co., Ltd 2003.10.13 3F, No. 16, Section 1, Nánjīng East Rd, Jhongshan District
Taipei City,Taiwan		 NTD10,000 Freight forwarding, customs
clearance,and distribution
Taiwan Express (USA) INC. 2010.02.18 409 N. OAK STREET, INGLEWOOD, CA 90302 USD1,000 Freight forwarding, customs
clearance,and distribution
Hiview Logistics Co., Ltd 1970.01.20 802, 8F, No. 6, Lìxíng 6th Rd, Dong District Hsinchu City,
Taiwan		 NTD68,000 Freight forwarding, customs
clearance,and distribution
TEC Logistics (Shenzhen) Co., Ltd. 2005.02.06 Room28B-C, Office Building, Wan Chen Square,
Wong-KwongPort Shenzhen,China		 HKD48,550 Freight forwarding, customs
clearance,and distribution
TEC LOGISTICS(USA), INC 2010.08.04 167-16 146th Ave. Jamaica, NY11434, USA USD290 Freight forwarding, customs
clearance,and distribution
AIRTROPOLIS EXPRESS(S) PTE
LTD.(ATP)		 1991.01.02 119 Airport Cargo Road#01-01/02 changi Cargo Agents
Megaplex 1 Singapore		 SGD 851 Air Freight forwarding
Fresh Beauty enterprises LTD. 2014.08.21 Level 5,Development Bank of Samoa Building, Beach
Road,Apia,Samoa		 USD1,751 Offshore holdings company
Eastern union holdings limited 2014.08.15 Room 7C WORLD TRUST TOWER 50 STANLEY STREET
CENTRAL,HK.		 USD1,751 Offshore holdings company
T-Cube Global Logistics Co., Ltd 2015.08.07 Rm.803,8F, Changhui building.,No.799,yin xiang
road,Shanghai,P.R.China 201802		 RMB11,000 Warehousing and
Transportation
T-Cube (Suzhou) Global Logistics
Co.,Ltd		 2019.07.03 No.122, Yongan Roas, Gaosin District, Suzhou. RMB10 Warehousing and
Transportation
EXer Logistics Co.,Ltd. 2015.08.12 No.536, ShenglongRoad, SongjiangDistrict, Shanghai RMB12,438 Express
THI LOGISTICS (MALAYSIA)
SDN.BHD		 2016.01.26 13-2, Jalan Mahogani 5/KS7,Bandar Botanic, 41200 Selangor
Darul Ehsan Malaysia		 HYR200 Air & sea freight forwarding
andpackaging

121

Shanghai Moorluk International
ShippingCo.,Ltd		 2012.02.14 203 Room, 4F, No.37, 685 Alley, Chang Jhong Road, Hongkou
District,Shanghai,China
RMB5,000		 Freight forwarding
T-SC FactoringCo., Ltd. 2018.03.01 No.106, FungZe East Road, Nansha District, Guangzhou RMB50,000 Supplychain finance.
T-SC TradingCo., Ltd. 2019.07.17 C Room, 9F, No.8, East Road, Free trade zone, Shanghai. RMB 50 Supplychain finance, trade
TEC LOGISTICS VIETNAM
COMPANY LIMITED		 109.02.06 9th Floor, Detech Tower II, No 107 Nguyen Phong Sac Street,
Dich Vong Hau Ward, Cau Giay District, Ha Noi City, Viet
Nam		 USD350 Air & sea freight forwarding

122

8.1.3: Shareholding of Directors, Supervisors, Managers of Affiliated Companies

Affiliated
Companies		 Position Name Current shareholding Current shareholding
Shares Shareholdin
gratio
GREATLINE
INTERNATIONA
L LIMITED		 Investor T3EX Global Holdings Corp. 4,050,000 100%
Representative David Yen - -
THI GROUP
LIMITED(H.K)		 Investor GREATLINE INTERNATIONAL
LIMITED		 12,480,000 100%
Director Jack Lai - -
Director & GM Billy Yuen - -
T.H.I GroupLtd Investor T3EX Global Holdings Corp. 1,000,000 100%
T.H.I. Group
(Shanghai) Ltd.		 Investor THI GROUP LIMITED(H.K) - 100%
Chairman David Yen - -
Representative Jack Lai - -
Director & GM
Director TonyLin - -
Supervisor Irene Lee - -
Shanghai Yaohwa
International
Forwarder Co., Ltd		 Investor THI GROUP LIMITED(H.K) - 100%
Chairman David Yen - -
Representative Tony Lin - -
Director & GM
Director Jack Lai - -
Supervisor Melonie Lin - -
Shanghai Moorluk
International
Shipping Co., Ltd		 Investor T.H.I. Group(Shanghai) Ltd. - 65%
Investor Lin Chang - 5%
Director & GM Vivian Chang - 30%
Director David Yen - -
Director Jack Lai - -
Director Carl Wei - -
Supervisor Melonie Lin - -
T-Cube Global
Logistics Co., Ltd		 Investor Eastern union holdings limited - 100%
Chairman Jack Lai - -
Representative Peter Liu - -
Director & GM
Director David Yen - -
Director TonyLin - -
Director HUI- CHAO HU - -
Supervisor Melonie Lin - -
T-Cube (Suzhou)
Global Logistics		 Investor T-Cube Global Logistics Co., Ltd - 100%
Chairman Jack Lai - -

123

Co., Ltd Representative Peter Liu - -
Director & GM
Director David Yen - -
Director TonyLin - -
Supervisor Melonie Lin - -
EXer Logistics
Co.,Ltd.		 Investor T.H.I. Group(Shanghai) Ltd. - 93.5069%
Investor CHUN-TSANG Investment 2.3734%
Investor LE-HUA LIU - 4.1197%
Chairman Yi-Ying - -
Representative
Director & GM
Director Jack Lai - -
Director TonyLin - -
Supervisor Hong-Ji Ruan - -
T-SC Factoring
Co., Ltd.		 Investor T.H.I. Group(Shanghai) Ltd. - 100%
Chairmen TonyLin - -
Director Jack Lai - -
Director David Yen - -
Representative Ryan Chen - -
General Manager
Supervisor Melonie Lin - -
T-SC Trading Co.,
Ltd.		 Investor Shanghai Yaohwa International
Forwarder Co.,Ltd		 - 100%
Executive Director Ryan Chen - -
Supervisor Melonie Lin - -
Eastern union
holdings limited		 Investor Fresh Beautyenterprises LTD. - 100%
Representative Jack Lai - -
Director
Fresh Beauty
enterprises LTD.		 Investor T3EX Global Holdings Corp. 66 66%
NEW CONCEPT INVESTMENT
LIMITED		 34 34%
Director Jack Lai - -
Director TonyLin - -
Director Liu Chuandong
T.H.I. Group
Vietnam Co., Ltd		 Investor T3EX Global Holdings Corp. 4,950,000,000 99%
DAI HOA INTERNATIONAL
TRANSPORTATION CO., LTD		 50,000,000 1%
Representative Jeff Chen - -
General Manager
T.H.I. GROUP
(BANGKOK)		 Investor T3EX Global Holdings Corp. - 49%
Boonpen Chuparkpien - 30%

124

COMPANY
LIMITED		 Parnurut Punputtapong - 20%
Representative Jack Lai - 1%
T.H.I. GROUP
(CAMBODIA)
Co., Ltd.		 Investor T3EX Global Holdings Corp. - 100%
Director Jeff Chen - -
Representative
General Manager
T.H.I.GROUP
SINGAPORE PTE
LTD		 Investor T3EX Global Holdings Corp. 850,000 91.39%
Investor KANG LEE CHING SHAREEN 80,000 8.61%

Director		 Jack Lai - -
Director TonyLin - -
Director KANG LEE CHING SHAREEN - -
THI LOGISTICS
(MALAYSIA)
SDN.BHD		 Investor T3EX Global Holdings Corp. 1,350,000 90%
CindyThongLAI YOONG 75,000 5%
ChangKOK KEONG 75,000 5%
Director Jack Lai - -
Director CindyThongLAI YOONG - -
Director ChangKOK KEONG - -
THI LOGISTICS
PHILIPPINES
CORP.		 Investor T3EX Global Holdings Corp. 419,750 99.94%
Director David Yen 110 0.026%
Director Jack Lai 110 0.026%
Director Geraldine O. Morales 10 0.0023%
Director Marie Salcedo 10 0.0023%
Director Marcibelle Chen Manahan 10 0.0023%
THI & Maruzen
Co., Ltd		 Investor T3EX Global Holdings Corp. 3,060 51%
Satoshi Ikeda 2,000 33.33%
Maruzen Showa Co.,ltd 940 15.67%
Representative Satoshi Ikeda - -
Director
Director TonyLin - -
Director Jack Lai
Director David Yen - -
Director Suzuki Hideaki - -
Taiwan Express
Logistic Co., Ltd.		 Investor T3EX Global Holdings Corp. 35,958,400 100%
Chairman/GM Benison Hsu - -
Director AndyWan - -
Director Allen Hou - -
Director David Yen - -
Director TonyLin - -
Supervisor Melonie Lin - -
T.H.I. Logistics
Ltd		 Investor T3EX Global Holdings Corp. 13,000,000 100%
Chairman &GM David Yen - -
Director Jack Lai - -
Director TonyLin - -
Director Benison Hsu
Director Allen Hou
Supervisor Melonie Lin - -

125

Taiwan Express
(USA) INC.		 Investor Taiwan Express Logistic Co., Ltd. 100,000 100%
Director Benison Hsu - -
Director TSAI- CHUAN Liu - -
TEC Logistics
(USA) INC.		 Investor Taiwan Express Logistic Co., Ltd. 200 100%
Director Benison Hsu - -
Director TSAI- CHUAN Liu - -
TEC Logistics Co.,
Ltd		 Investor Taiwan Express Logistic Co., Ltd. 1,000,000 100%
Chairman Benison Hsu - -
Director AndyWan - -
Director Julie Chen - -
Supervisor Melonie Lin - -
Hiview Logistics
Co., Ltd		 Investor Taiwan Express Logistic Co., Ltd. 5,000,000 97.51%
Chairman Julie Chen - -
Director Benison Hsu - -
Supervisor Melonie Lin - -
Taiwan Express
(HK) Co., Ltd.		 Investor Taiwan Express Logistic Co., Ltd. - 100%
Director Benison Hsu - -
TEC Logistics
(Shenzhen) Co.,
Ltd.		 Investor Taiwan Express (HK) Co., Ltd. - 100%
Director Benison Hsu - -
Director Allen Chiu - -
Director MING-SHIN JOU - -
AIRTROPOLIS
EXPRESS(S) PTE
LTD. (ATP)		 Investor Taiwan Express (HK) Co., Ltd. 553 65%
Director LAU SEOH CHENG 195 23%
Director CHNG LOO SENG 102 12%
Director Benison Hsu - -
Director AndyWan - -
Director Jack Lai - -
TEC LOGISTICS
VIETNAM
COMPANY
LIMITED		 Investor Taiwan Express Logistic Co., Ltd. - 100%
Representative Benison Hsu - -

126

8.1.4 The Operating Condition of Affiliated Companies ：

Unit: NT$ thousands

Affiliated Companies Share
Capital		 Total
Assets		 Total
liabilities		 Total equity Revenue Operating
Income
Net
Income		 EPS
Amount
Amount
T.H.I. Group Ltd 35,000
120,781
6,321
114,460
0
(138)
3,918
0
GREATLINE INTERNATIONAL
LIMITED		 134,428
2,248,016
0
2,248,016
0
(86)
375,608
0
T.H.I. Logistics Ltd 130,000
269,124
106,631
162,493
1,239,940
29,559
18,521
0
THI GROUP LIMITED(H.K) 48,448
3,382,147		 1,139,020
2,243,127
1,303,178
115,284
375,774
0
T.H.I. Group (Shanghai) Ltd. 92,883
2,613,876		 1,267,087
1,346,789
8,392,514
318,406
240,082
0
Shanghai Yaohwa International
ForwarderCo.,Ltd
55,031
150,935
27,525
123,410
101,001
4,490
5,069
0
T.H.I. Group Vietnam Co.,LTD 9,534
131,291
64,606
66,685
550,847
24,006
18,230
0
T.H.I. GROUP (BANGKOK)
CO.,LTD.		 4,841
55,800
26,305
29,495
149,730
15,048
10,973
0
T.H.I. GROUP (CAMBODIA)
Co.,Ltd.		 4,462
25,998
11,522
14,476
54,227
5,287
5,132
0
T.H.I. Group Singapore PTE.
LTD.		 20,939
5,793
302
5,491
8
422
639
0
T.H.I. Logistics (Malaysia) SDN.
BHD		 11,535
22,928
10,960
11,968
95,525
4,263
3,310
0
T.H.I. LOGISTICS PHILIPPINES
CORP.
16,444
13,122
5,238
7,884
13,337
(4,014)
(4,294)
0
T.H.I. & Maruzen Co. Ltd. 15,660
105,318
50,854
54,464
290,296
17,662
11,194
0
Fresh Beauty Enterprises Ltd. 57,411
108,363
1
108,362
0
0
6,571
0
Eastern union holdings limited 57,411
123,340
1
123,339
0
0
6,571
0
T-Cube Global Logistics Co.,
Ltd		 54,610
421,915
314,454
107,461
438,698
6,543
6,531
0
T-Cube (Suzhou) Global
LogisticsCo.,Ltd		 43
753
674
79
3,953
40
40
0
EXer Logistics Co.,Ltd. 58,023
120,942
45,101
75,841
572,898
38,111
35,572
0
Shanghai Moorluk
International		 22,460
98,821
75,009
23,812
369,755
2,692
1,917
0
T-SC FactoringCo., Ltd. 215,680
219,315
1,385
217,930
6,932
(317)
2,155
0
T-SC TradingCo., Ltd. 213
191
54
137
0
(67)
(77)
0
Taiwan Express Logistic Co.,
Ltd.		 359,584
1,288,376
646,244
642,132
1,628,847
20,984
108,850
0
Taiwan Express (USA) INC. 31,629
32,583
961
31,622
0
0
0
0
TEC Logistics Co., Ltd 10,000
32
195
(163)
0
0
0
0
Hiview Logistics Co., Ltd 68,000
141,783
38,805
102,978
236,990
31,852
25,853
0
Taiwan Express (HK) Co., Ltd. 266,807
591,344
171,206
420,138
632,599		 (12,896)
66,107
0
TEC Logistics (Shenzhen) Co.,
Ltd.
183,901
332,803
110,057
222,746
785,188
54,886
41,020
0
TEC LOGISTICS(USA), INC 8,549
12,981
782
12,199
0
0
0
0
TEC LOGISTICS VIETNAM
COMPANY LIMITED		 10,577
9,835
0
9,835
0
0
0
0
Air Tropolis Express (S) Pte Ltd. 19,026
248,779
115,612
133,167
711,322
35,678
40,196
0

127

8.2 Private Placement Securities in the Most Recent Years: None.

8.3 Any Events in 2020 and as of the Date of this Annual Report that had Significant Impacts on Shareholders ’ Right or Security Prices as Stated in Item 2 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan: None.

128

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, 2020 and 2019, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into 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, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the Consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the 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 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:

129

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 our audit focus on.

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 evaluated 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 ended December 31, 2020 and 2019, 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 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

130

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:

  1. Identify and assets 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 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.

  5. 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.

  6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and

131

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 9, 2021

132

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets
December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets
Current assets:
1100
Cash and cash equivalents (notes 6(a) & (y))
1110
Current financial assets at fair value through profit or loss (notes 6(b), (l) &
(y))
1120
Current financial assets at fair value through other comprehensive income
(notes 6(c) & (y))
1150
Notes receivable, net (notes 6(d), (t) & (y))
1170
Accounts receivable, net (notes 6(d), (t) & (y))
1180
Accounts receivable due from related parties, net (notes 6(d), (t), (y) & 7)
1220
Current tax assets
1470
Other current assets (notes 6(a), (y) & 8)
Current assets
Non-current assets:
1517
Non-current financial assets at fair value through other comprehensive
income (notes 6(c) & (y))
1550
Investments accounted for using equity method (note 6(e))
1600
Property, plant and equipment (notes 6(g) & 8)
1755
Right-of-use assets (note 6(h))
1805
Goodwill (note 6(i))
1821
Other intangible assets, net (note 6(i))
1840
Deferred tax assets (note 6(o))
1920
Refundable deposits (notes 6(y) & 8)
1995
Other non-current assets, others (notes 6(y) & 8)
Non-current assets
Total assets		 December 31, 2020
Amount
%
$ 2,429,343
31
77,584
1
203,773
3
42,708
1
2,713,915
35
7,319 -
2,854 -
409,894
5		 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
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
1,701,170
28
6,049,120
100
Liabilities and Equity
Current liabilities:
2100
Short-term borrowings (notes 6(j), (y) & (ab))
2150
Notes payable (note 6(y))
2170
Accounts payable (note 6(y))
2180
Accounts payable to related parties (notes 6(y) & 7)
2219
Other payables (note 6(y))
2230
Current tax liabilities
2280
Current lease liabilities (notes 6(m), (y) &(ab))
2322
Current portion of long-term borrowings (notes 6(k), (y) & (ab))
2399
Other current liabilities, others (note 6(n))
Current liabilities
Non-Current liabilities:
2530
Bonds payable (note 6(l))
2540
Long-term borrowings (note 6(k), (y) & (ab))
2570
Total deferred tax liabilities (note 6(o))
2580
Non-current lease liabilities (note 6(m), (y) & (ab))
2640
Net defined benefit liability, non-current (note 6(n))
Non-current liabilities
Total liabilities
Equity attributable to owners of parent (notes 6(c), (f), (l), (p) &(q)):
3110
Ordinary shares
3140
Capital collected in advance
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, 2020 December 31, 2020 December 31, 2020
Amount % Amount


3,691,675
47
2,957,688
48

5,887,390
76


287,611
4
-
-
202,180
3
303,861
5
123 -
123 -
144,856
2
151,938
4
84,927
1
82,723
1

337,407
4
47,908
1
285,706
4
315,069
4
527,795
7
84,102
1
52,600
1
103,728
1
72,657
1


719,697
10
538,645
10


4,411,372
57
3,496,333
58


1,171,575
15
1,171,575
19
86,108
1
-
-
830,563
11
798,811
13
1,066,722
14
653,539
11
44,319
1
(186,054)
(3)
(60,560)
(1)
(27,797)
-

1,826,972
24



3,138,727
41
2,410,074
40


164,263
2
142,713
2


3,302,990
43
2,552,787
42
$
7,714,362
100		 $
7,714,362
100
6,049,120
100

133

(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, 2020 and 2019 (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(m), (n), 7 & 12)
Gross profit from operations
Operating expenses (notes 6(m), (n), (q), (s) & 12)
6100
Selling expenses
6200
Administrative expenses
6450
Impairment 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 (notes 6(b), (v))
7060
Share of profit of associates and joint ventures accounted for using equity method, net
(note 6(e))
7100
Interest income (notes 6(w))
7510
Financial costs (notes 6(m), (x))
Total non-operating income and cost
Profit before tax
7950
Less: Income tax expenses (note 6(o))
Profit
8300
Other comprehensive income:
8310
Items that may not be reclassified subsequently to profit or loss
8311
Remeasurements of defined benefit plans
8316
Unrealized 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 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
Total comprehensive income
Profit attributable to:
Owners of parent company
8620
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)		 2020 %

100

84		 2019 %

100

82
Amount
$ 15,160,243
12,692,356		 Amount
11,258,071
9,243,842

2,467,887

16
2,014,229

18

1,295,526
474,319
2,136

8

3

-
1,253,809
459,534
4,226

11

4

-

1,771,981

11
1,717,569

15

695,906

5
296,660

3

6,804
21,164
812
17,189
(40,865)

-

-

-

-

-
5,735
9,421
1,851
35,495
(38,347)

-

-

-

-

-

5,104

-
14,155

-

701,010
130,283

5

1
310,815
69,452

3

1

570,727

4
241,363

2

(2,420)

325,906
-

-
2
-
(6,816)
12,656
-

-
-
-
323,486
2		 5,840
-

(77,911)
-

(1)
-
(88,526)
-

(1)
-
(77,911)
(1)		 (88,526)
(1)

245,575


1
(82,686)


(1)

$
816,302
5
158,677

1

$ 541,992
28,735
4

-
249,047
(7,684)
2

-

$
570,727
4
241,363
2

$ 794,091
22,211
5

-
181,607
(22,930)
1

-

$
816,302
5
158,677
1

$		 4.72 2.15
$ 4.70 2.15

134

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2019
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
Profit
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve appropriated
Special reserve appropriated
Cash dividends of ordinary share
Other changes in capital surplus:
Recognition of equity component of convertible bonds
issued
Capital increase by cash
Purchase of treasury share
Changes in ownership interests in subsidiaries
Share-based payment transactions
Disposal of investments in equity instruments designated at
fair value through other comprehensive income
Balance at December 31, 2020		 Equity attributable to Equity attributable to owners of parent company owners of parent company owners of parent company owners of parent company Non-contro
lling
interests		 Total equity
Share capital Capital
surplus		 Retained earnings Total other equity interest Treasury
shares		 Total equity
attributable
to owners of
parent
company
Exchange
differences
on
translation of
foreign
financial
statements		 Unrealized gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income		 Total other
equity
interest
Ordinary
shares
Capital
collected in
advance		 Legal
reserve		 Special
reserve		 Unappropriated
retained
earnings		 Total
retained
earnings
$ 1,183,455
-		 808,958
175,635
137,517
363,727
676,879
(120,377)
(5,053)
(125,430)
(60,643)
2,483,219
165,643
2,648,862

-
-
-
-
-
-

-
-

-
-

249,047
(6,816)


249,047

(6,816)


-

(73,280)

-

12,656

-

(60,624)

-

-

249,047
(67,440)


(7,684)

(15,246)


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
541,992
(2,420)


653,539

541,992

(2,420)

(193,657)

-

(71,387)
7,603
-

325,906
(186,054)
-

254,519

(27,797)
-

-

2,410,074
541,992
252,099
142,713

28,735

(6,524)
2,552,787

570,727

245,575
-
-		 - - -
539,572


539,572


(71,387)


325,906


254,519

-
794,091


22,211


816,302
-
-
-
-
-
-
-
-
-
86,108
-
-
-
-
-
-
-
-		 -
-
-
25,138

-
-
661
5,953
-		 23,141
-
-

-
-
-

-

-
-
-
60,624
-
-
-
-
-
-
-
(23,141)

(60,624)
(150,535)
-
-
-
-
-
24,146


-

-

(150,535)
-
-
-
-
-

24,146

-
-

-
-
-
-
-
-

-

-
-
-
-
-
-
-
-
(24,146)

-
-
-
-
-
-
-
-

(24,146)
-
-
-
-
-
(32,763)
-
-

-
-
-
(150,535)
25,138
86,108

(32,763)
661
5,953
-

-
-

-

-

-

-

(661)

-
-

-
-
(150,535)
25,138
86,108
(32,763)

-
5,953
-
$
1,171,575
86,108
830,563
234,269
186,054

646,399


1,066,722

(265,044)

309,363


44,319

(60,560)
3,138,727
164,263
3,302,990

135

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Expected credit loss
Net gain on financial assets or liabilities at fair value through profit or loss
Interest expense
Interest income
Share-based payments transactions
Share of profit of associates and joint ventures accounted for using equity method
Loss (gain) on disposal of property, plant and equipment
Gain on disposal of investments
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
(Increase) decrease in notes receivable
(Increase) decrease in accounts receivable
Increase in accounts receivable due from related parties
(Increase) decrease in other current assets
Increase in other operating assets
Total changes in operating assets
Changes in operating liabilities:
Increase (decrease) in notes payable
Increase (decrease) in accounts payable
Decrease in accounts payable to related parties
Increase (decrease) in other payables
Increase (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 (used in) 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
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in refundable deposits
Acquisition of intangible assets
Dividends received
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term loans
Proceeds from issuance of convertible bonds
Proceeds from long-term loans
Repayments of long-term borrowings
Payment of lease liabilities
Cash dividends paid
Capital increase by cash
Cost of increase in treasury stock
Net cash flows used in 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		 2020
$ 701,010
250,807
24,620
2,136
(40,533)
40,865
(17,189)
5,953
(812)
1,265
(4,601)		 2019

310,815

289,661

23,588

4,226

(2,108)

38,347

(35,495)

-

(1,851)

(1,793)

(1,050)

262,511


313,525

(6,598)
(980,617)
(5,508)
(224,674)
(12,388)


6,332

179,869

(595)

155,178

(9,381)

(1,229,785)


331,403

1,388
435,716
(196)
275,572
11,231
(216)


(12,187)

(38,907)

(880)

(11,660)

(1,976)

(3,308)

723,495


(68,918)

(506,290)


262,485

(243,779)


576,010

457,231
17,189
(40,534)
(97,258)


886,825

35,495

(38,347)

(81,600)

336,628


802,373

(16,601)
55,454
(44,246)
105,028
(52,153)
3,746
10,431
(1,677)
15,627


(164)

-

(55,837)

32,726

(37,070)

2,810

32,799

(8,616)

8,574

75,609


(24,778)

(29,568)
312,269
200,000
(301,660)
(210,083)
(150,535)
86,108
(32,763)


207,216

-

300,000

(201,656)

(246,276)

(254,752)

-

-

(126,232)

(195,468)

(73,624)
212,381
2,216,962


(92,144)

489,983

1,726,979

$
2,429,343

2,216,962

136

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 

T3EX GLOBAL HOLDINGS CORP.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

T3EX Global Holdings Corp. (the “Company”) was incorporated on February 4, 1987, as a company registered with the Ministry of Economic Affairs, R.O.C. The address of the Company’s registered office is 12F, No. 563, Sec. 4, Zhongxiao E. Rd., Xinyi Dist., Taipei City, R.O.C. The Company and its subsidiaries (the Group) mainly engage in sea and air freight forwarding, distribution, packing, warehousing, logistics, and customs clearance.

(2) Approval date and procedures of the consolidated financial statements:

The consolidated financial statements were authorized for issuance by the board of directors on March 9, 2021.

(3) New standards, amendments and interpretations adopted:

  • (a) The impact of the International Financial Reporting Standards ( “IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:

  • Amendments to IFRS 3 “Definition of a Business”

  • Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”

  • Amendments to IAS 1 and IAS 8 “Definition of Material”

  • Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

  • (b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its financial statements:

  • Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

  • Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform － ” Phase 2

  • (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Group is evaluating the impact of its initial adoption of the standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

137

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below, except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

  • (a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Goverming the Preparation of Financial Report by Securities Issuers (“the Regulation”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretaions endorsed and issued into effect by the Financial Supervisory Commission R.O.C..

  • (b) Basis of preparation

  • (i) Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

  • 1) Financial instruments fair value through profit or loss are measured at fair value;

  • 2) Financial assets at fair value through other comprehensive income are measured at fair value;

  • 3) The defined benefit liability (asset) are measured at fair value of the plan assets less the present value of the defined benefit obligation.

  • (ii) Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan dollars, which is the Company ’ s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

  • (c) Basis of consolidation

  • (i) Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners

138

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

  • (ii) List of subsidiaries included in the consolidated financial statements
Name of
investor
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
Fresh Beauty
Eastern Union
T-Cube Global
Logistics Co.,
Ltd.
GREATLINE
T.H.I. GROUP
LIMITED (in
HK)
T.H.I. GROUP
LIMITED (in
HK)
T.H.I.
Shanghai
T.H.I.
Shanghai
T.H.I.
Shanghai
Shanghai
Yaohwa
Taiwan
Express		 Name of subsidiary
T.H.I Group Ltd. (in B.V.I.)
GREATLINE INTERNATIONAL
LIMITED (GREATLINE)
T.H.I GROUP VIETNAM CO., LTD.
T.H.I. GROUP (BANGKOK)
COMPANY LIMITED
Taiwan Express Logistics Co., Ltd.
(TEC)
T.H.I. Logistics Ltd.
T.H.I. GROUP (CAMBODIA) Co., Ltd.
T.H.I. GROUP SINGAPORE PTE. LTD.
T.H.I. & Maruzen Co. Ltd.
T.H.I. Logistic (Malaysia) SDN. BHD
Fresh Beauty Enterprise Ltd. (Fresh
Beauty)
T.H.I. LOGISTIC PHILIPPINES CORP.
Eastern Union Holdings Limited
(Eastern Union)
T-Cube Global Logistics Co., Ltd.
T-Cube (suzhou) Global Logistic Co.,
Ltd.
T.H.I. GROUP LIMITED (in HK)
T.H.I. Group (Shanghai) Ltd. (T.H.I.
Shanghai)
Shanghai Yaohwa International
Forwarder Co., Ltd. (Shanghai Yaohwa)
EXer Logistics Co., Ltd.
Shanghai Moorluk International
Shipping Co., Ltd.
T-SC Factoring Co., Ltd.
T-SC Trading Co., Ltd.
Taiwan Express (HK) Co., Ltd.		 Principal activity
Offshore settlement center
Offshore holding company
Air & sea freight forwarding and
packaging
Air & sea freight forwarding and
packaging
Air & sea freight forwarding and customs
clearance
Air & sea freight forwarding
Air & sea freight forwarding
Air & sea freight forwarding
Air & sea freight forwarding
Air & sea freight forwarding
Offshore holding company
Air & Sea freight forwarding
Offshore holding company
Warehousing and distribution
Warehousing and distribution
Air & sea freight forwarding
Air & sea freight forwarding and customs
clearance
Air & sea freight forwarding and customs
clearance
Express logistics company
Freight forwarding, customs clearance, and
distribution
Commercial service
Supply Chain management, import export
Trade
Freight forwarding, customs clearance, and
distribution		 Percentage of shares held
December
31, 2020
December
31, 2019
100%
100%
100%
100%
99%
99%
49%
49%
100%
100%
100%
100%
100%
100%
91.4%
91.4%
51%
51%
90%
90%
66%
66%
99.94%
99.94%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
93.51%
93.51%
65%
60%
100%
100%
100%
100%
100%
100%		 Remark
December
31, 2020
100%
100%
99%
49%
100%
100%
100%
91.4%
51%
90%
66%
99.94%
100%
100%
100%
100%
100%
100%
93.51%
65%
100%
100%
100%
Note (b)
Note (c)

139

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of
investor
Taiwan
Express
Taiwan
Express
Taiwan
Express
Taiwan
Express
Taiwan
Express
Taiwan
Express (HK)
Taiwan
Express (HK)		 Name of subsidiary
Taiwan Express (USA) INC.
TEC Logistic Co., Ltd.
TEC LOGISTICS (USA), INC.
Hiview Logistics Co., Ltd.
TEC LOGISTICS VIETNAM
COMPANY LIMITED
TEC Logistics (Shenzhen) Co., Ltd.
Air Tropolis Express (S) Pte Ltd.		 Principal activity
Freight forwarding, customs clearance, and
distribution
Freight forwarding, customs clearance, and
distribution
Freight forwarding, customs clearance, and
distribution
Freight forwarding, customs clearance, and
distribution
Freight forwarding and Warehousing
Freight forwarding, customs clearance, and
distribution
Freight forwarding		 Percentage of shares held
December
31, 2020
December
31, 2019
100%
100%
100%
100%
100%
100%
97.51%
97.51%
100%
-
%
100%
100%
65%
65%		 Remark
December
31, 2020
100%
100%
100%
97.51%
100%
100%
65%
Note (a)

Note (a) In order to expand its air logistic business and warehousing service in Southeast Asia, the Group established and held the entire ownership of TEC LOGISTICS VIETNAM COMPANY LIMITED, who mainly engages in air logistic business, in February 2020. The parent company has invested in its operating activities USD$350,000 as of December 31, 2020.

  • Note (b) In order to establish overall service network in Southeast Asia, the Group has increased its investment by USD200,000 on November 13, 2020, and the percentage of shares held remains 99.94%.

  • Note (c) The Group aquired shares of non-controlling interests on November 2, 2020, and the percentage of shares held increased to 65%.

  • (iii) Subsidiaries which are not included in the consolidated financial statements: None.

  • (d) Foreign currency

  • (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

  • 1) an investment in equity securities designated as at fair value through other comprehensive income;

  • 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

  • 3) qualifying cash flow hedges to the extent that the hedges are effective.

140

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the reporting currency at exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated at the average exchange rate. Translation differences are recognized in other comprehensive income, and presented in the foreign currency translation reserve in equity.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

  • (e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

  • (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

  • (ii) It is held primarily for the purpose of trading;

  • (iii) It is expected to be realized within twelve months after the Balance sheet date;

  • (iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

  • (i) It is expected to be settled in the normal operating cycle;

  • (ii) It is held primarily for the purpose of trading;

  • (iii) It is due to be settled within twelve months after the Balance sheet date;

  • (iv) The Group have not have an unconditional right to defer settlement of the liability for at least twelve months after the Balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

141

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

(g) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value – – through other comprehensive income (FVOCI) debt investment; FVOCI equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

  • 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

  • ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

  • ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

142

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • 2) Fair value through other comprehensive income (FVOCI )

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

  • ‧ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

  • ‧i ts contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Some accounts receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Group, therefore, those receivables are measured at FVOCI. However, they are included in the ‘ trade receivables’ line item.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

  • 3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Trade receivables that the Group intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘trade receivables’ line item. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • 4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Group measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

  • ‧ debt securities that are determined to have low credit risk at the reporting date; and

  • ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’ s historical experience and informed credit assessment as well as forward-looking information.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧ significant financial difficulty of the borrower or issuer;

‧ a breach of contract such as a default or being more than 90 days past due;

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

  • ‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or

  • ‧ the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

  • (ii) Financial liabilities and equity instruments

  • 1) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital suplus is not sufficient to be written down).

4) Compound financial instruments

Compound financial instruments issued by the Group comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

5) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

6) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

  • 7) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

When the Group’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

  • (i) Property, plant and equipment

  • (i) Recognition and measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group.

  • (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straightline basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) buildings 5～50 years
2) plant and equipment 5～7 years
3) fixtures and fittings 2～6 years

Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(j) Leases

  • (i) Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

  • 1) the contract involves the use of an identified asset this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

  • 2) the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

  • 3) the Group has the right to direct the use of the asset throughout the period of use only if either:

  • the Group has the right to direct how and for what purpose the asset is used throughout the period of use; or

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • the relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the Group has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • － the Group designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use

(ii) As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

  • －

  • fixed payments, including in-substance fixed payments

  • － variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date

  • －

  • －

  • amounts expected to be payable under a residual value guarantee; and

  • payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

  • － there is a change in future lease payments arising from the change in an index or rate; or

  • － ’ there is a change in the Group s estimate of the amount expected to be payable under a residual value guarantee; or

  • － there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

  • － there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • － there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

If an arrangement contains lease and non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of office equipment that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(k) Intangible assets

  • (i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated usefal lives for the current and comparative periods are 3~10 years.

The residual value, amortization period, and amortization method are reviewed at each reporting date adjusted if appraise.

(l) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than contract assets, deferred tax assets and assets that provide benefits to employees) to determine ’ whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

  • (m) Revenue recognition

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring services to customers. The Group recognizes revenue when it satisfies a performance obligation by transferring control of services to customers. The accounting policies for the Group’s main types of revenue are explained below.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • (i) Sea & air freight forwarding service, customs clearance and delivery service

The Group provides Sea & air freight forwarding service, customs clearance and delivery service. Revenue of the Group is mainly generated from providing logistic services. Revenue is recognized when service is rendered. Cost are recognized with revenue when they occur. Expenses are recognized as incurred on an accrual basis.

(ii) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, the group does not adjust any of the transaction prices for the time value of money

  • (iii) Incremental costs of obtaining a contract

The Group recognizes as an asset the incremental costs of obtaining a contract with a customer if the Group expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Group applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

  • (iv) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all the following criteria:

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Group cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Group recognizes these costs as expenses when incurred.

  • (n) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined benefit plans

The Group’s net obligation in respect of the defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods; discounting that amount and deducting the fair value of any plan assets.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability (asset), which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefit is expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(o) Shart-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share appreciation rights. Any changes in the liability are recognized in profit or loss.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Grant date of a share-based payment award is the date which the Group and employees reach consensus on the price and number of a new award.

  • (p) Income tax

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Group has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

  • (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

  • (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

  • (iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates, enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

  • (i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

  • (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

  • 1) the same taxable entity; or

  • 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(q) Earnings per share

The Group discloses the Group’s basic and diluted earnings per share attributable to ordinary shareholders of the Group. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Group divided by the weighted-average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Group divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as convertible bonds, employee stock scheme and employee compensation estimation.

(r) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs endorsed by the FSC requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period. Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year, please refer to note 6(d) Note and accounts receivable (including amount due from related parties)and note 6 (i) Intangible assets.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is as follows:

  • (a) Judgment of whether the Group has substantive control over its investees

The Group holds 30% of the outstanding voting shares of PT. Dexter Eurekatama and is the single ’ largest shareholder of the investee. Although the remaining 70% of PT. Dexter Eurekatama s shares are not concentrated within specific shareholders, the Group still cannot obtain more than half of the total number of PT. Dexter Eurekatama’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has significant influence on PT. Dexter Eurekatama.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand
Demand deposits
Time deposits		 December 31,
2020
$ 25,321
1,968,964
435,058		 December 31,
2019

44,811

1,923,462

248,689

$
2,429,343


2,216,962

The Group's time deposit, maturing over three months, amounting to $247,102 thousand and $85,567 thousand as of December 31, 2020 and 2019, respectively, were recognized as other current assets.

Refer to note 6(y) for the sensitivity analysis of the financial assets and liabilities of the Group.

  • (b) Financial assets/liabilities at fair value through profit or loss

  • (i)

Mandatorily measured at fair value through profit or
loss:
Derivative instruments not used for hedging
Forward exchange contracts
Right of redemption of convertible bonds
Non-derivative financial assets
Fund
Stock listed on domestic market
Corporate bonds
Total		 December 31,
2020
$ 639
328
7,223
69,394
-		 December 31,
2019

-

-

7,198

32,728
15,270
$
77,584

55,196

For the years ended December 31, 2020 and 2019, the investment gain from disposal of financial assets at fair value through profit or loss is $4,601 thousand and $1,050 thousand, recorded as other gains and losses.

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T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • (ii) Derivative financial instruments not designated as hedging instruments:

The Group uses derivative financial instruments to hedge the certain foreign exchange and interest risk the Group is exposed to, arising from its operating activities. The following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss financial assets:

Forward exchange
Forward exchange		 December 31, 2020 Maturity dates
Amount
(thousands)
USD
9,400		 Currency

USD to CNY

December 31, 2019
2021.2.9~2021.4.12
Maturity dates
Amount
(thousands)
$ -		 Currency
-
-

For the years ended December 31, 2020, the evaluation gain (loss) of derivative financial instruments at fair value through profit or loss is $634 thousand.

  • (c) Financial assets at fair value through other comprehensive income
Equity investments at fair value through other
comprehensive income
Current
Domestic Company-Soonest express Co., Ltd.
Domestic Company-Yang Ming Marine Transport Corp.
Total
Non-current
Domestic Company Private placement stocks-Yang Ming
Marine Transport Corp.
Domestic Non-public stocks-Central Taiwan Science Park
Logistics Co.,
Total		 December 31,
2020
$ 42,881
160,892		 December 31,
2019

18,216

51,235

$
203,773


69,451

$ 229,000
108,407


70,100

114,576

$
337,407


184,676

The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes.

In June, August and December 2020, the Group has sold its partial shares held in Soonest express Co., Ltd. and Yang Ming Marine Transport Corp. in order to adjust its investment strategy. The shares sold had a fair value of $21,782 thousand and $33,672 thousand, respectively. The Group realized a gain of $24,146 thousand, which was reclassified from other comprehensive income to retained earnings.

As of December 31, 2020 and 2019, the financial assets at fair value through other comprehensive

157

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

income of the Group had not been pledged as collateral for borrowing.

  • (d) Note and accounts receivable due from related parties
Note receivable from operating activities
Accounts receivable due from related parties–measured at
amortized cost
Less: Loss allowance		 December 31,
2020
$ 42,708
2,731,966
(10,732)		 December 31,
2019

36,110

1,760,614

(23,369)

$
2,763,942

1,773,355

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, inducing macroeconomic and relevant industry information. The loss allowance provision in Taiwan were determined as follows:

Current
Less than 60 day past due
61~90 days past due
More than 90 days past due		 December 31, 2020 December 31, 2020 December 31, 2020 Loss allowance
provision
2,103
630
33
7,966
Gross carrying
amount
$ 2,102,728
629,679
33,454
8,813		 Weighted-avera
ge loss rate

0.1%

0.1%

0.1%
90%-100%

$
2,774,674
10,732
Current
Less than 60 days past due
61~90 days past due
More than 90 days past due		 December 31, 2019 December 31, 2019 December 31, 2019 Loss allowance
provision
1,644
92
37
21,596
Gross carrying
amount
$ 1,643,784
92,387
36,936
23,617		 Weighted-avera
ge loss rate

0.1%

0.1%

0.1%
90%-100%

$
1,796,724
23,369

158

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The movement in the allowance for notes and trade receivable was as follows:

Balance at January 1, 2020 and 2019
Impairment losses recognized
Amounts written off
Exchange rate effects and others
Balance at December 31, 2020 and 2019		 2020


$
10,732
23,369

The aforementioned notes and accounts receivable of the Group were not pledged as collateral.

  • (e) Investments accounted for using equity method

  • (i) A summary of the Group’s financial information for equity-accounted investees at the reporting date is as follows:

Associates December 31,
2020
$
47,908		 December 31,
2019

46,872

No publicly quoted prices available for the above associates.

The Group’s share of profit of associaes in 2020 and 2019 is summarized as follows:

The Group’s share of profit of associates
The equity of the non-significant associates		 2020
$
812		 2019
1,851
December 31,
2020
$
47,908
December 31,
2019
55,246

The Group does not share any contingent liabilities of an associate incurred jointly with other investors. The Group also does not have any contingent liabilities because the Group is severally liable for all or part of the liabilities of the associate.

There are no significant restrictions on the ability of associates to transfer funds to the Group.

(ii) Guarantees

As of December 31, 2020 and 2019, there was no equity-accounted investment had been pledged as collateral.

  • (f) Changes in a parent's ownership interest in a subsidiary

On November 2, 2020, the Group acquired an additional 5% interest in Shanghai Moorluk International Shipping Co. in cash, increasing its ownership from 60% to 65%. The capital surplus of the Group increased $661 thousand after this transaction.

The Group has increased its investment in T.H.I LOGISTICS PHILIPPINES for USD 200 thousand in cash , and the percentage of shares held remains 99.94%.

159

Notes to the Consolidated Financial Statements

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

(g) Property, plant and equipment

The costs, amortization, and impairment loss of the property, plant and equipment of the Group for the years ended December 31, 2020 and 2019, were as follows:

Cost or deemed cost：
Balance on January 1, 2020
Additions
Disposals
Effect of movement in exchange rates and
others
Balance on December 31, 2020
Balance on January 1, 2019
Additions
Disposals
Effect of movement in exchange rates and
others
Balance on January 1, 2019
Depreciation and impairment loss：
Balance on January 1, 2020
Depreciation
Disposals
Effect of movement in exchange rates and
others
Balance on December 31, 2020
Balance on January 1, 2019
Depreciation
Disposals
Effect of movement in exchange rates and
others
Balance on December 31, 2019
Net book value:：
At December 31, 2020
At December 31, 2019
At January 1, 2019		 Land
$ 132,594
-
-

-
$
132,594		 Land
$ 132,594
-
-

-
$
132,594		 Buildings
69,299
686
(15,060)
-
54,925		 Transportation
Equipment
143,126
27,687
(5,965)
(1,123)
163,725		 Office and
Other
Equipment
218,580
23,780
(41,605)
(3,126)
197,629		 Total
563,599
52,153
(62,630)
(4,249)
548,873

$ 132,594
-
-

-
$
132,594
69,299
-
-
-
69,299
145,566
6,636
(7,638)
(1,438)
143,126
197,577
30,434
(5,019)
(4,412)
218,580
545,036
37,070
(12,657)
(5,850)
563,599

$ -
-
-

-
$
-
28,531
1,098
(15,060)
-
14,569
115,558
8,026
(5,509)
(1,030)
117,045
141,907
28,979
(37,050)
(2,283)
131,553
285,996
38,103
(57,619)
(3,313)
263,167
$ -
-
-

-
$
-
27,467
1,064
-
-
28,531
112,523
11,337
(7,124)
(1,178)
115,558
122,942
26,024
(4,516)
(2,543)
141,907
262,932
38,425
(11,640)
(3,721)
285,996
$
132,594
40,356
46,680
66,076
285,706

$
132,594
40,768
27,568
76,673
277,603

$
132,594
41,832
33,043
74,635
282,104

A summary of pledged assets as of December 31, 2020 and 2019, please refer to note 8.

160

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(h) Right-of-use assets

The Group leases many assets including buildings and vehicles. Information about leases for which the Group as a lessee is presented below:

Cost:
Balance at January 1, 2020
Additions
Disposal/write-off
Effect of changes in foreign exchange rates
Balance at December 31, 2020
Balance at January 1, 2019
Additions
Effect of changes in foreign exchange rates
Balance at December 31, 2019
Accumulated deprecitaion:
Balance at January 1, 2020
Depreciation
Disposal/write-off
Effect of changes in foreign exchange rates
Balance at December 31, 2020
Balance at January 1, 2019
Depreciation
Effect of changes in foreign exchange rates
Balance at December 31, 2019
Carrying amount:
Balance at December 31, 2020
Balance at December 31, 2019
Balance at January 1, 2019		 Buildings
$ 555,739
199,823
(2,028)
(4,590)		 Vehicles

8,487

9,417

(2,313)

(11)		 Total
564,226
209,240
(4,341)
(4,601)
764,524
329,334
244,316
(9,424)
564,226
242,306
212,704
(3,039)
(2,516)
449,455
-
251,236
(8,930)
242,306
315,069
321,920
329,334

$
748,944

15,580

$ 321,711
243,418
(9,390)

7,623

898

(34)

$
555,739

8,487

$ 236,824
208,024
(871)
(2,519)

5,482

4,680

(2,168)

3

$
441,458
7,997

$ -
245,714
(8,890)
-

5,522

(40)

$
236,824

5,482

$
307,486
7,583

$
318,915
3,005

$
321,711
7,623

161

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(i) Intangible assets

The costs, amortization, and impairment of the intangible assets of the Group for the years ended December 31, 2020 and 2019, were as follows:

Cost:
Balance on January 1, 2020
Additions
Effect of movement in exchange rates
Balance on December 31, 2020
Balance on January 1, 2019
Additions
Effect of movement in exchange rates
Balance on January 1, 2019
Amortization and impairment loss:
Balance on January 1, 2020
Amortization
Effect of movement in exchange rates
Balance on December 31, 2020
Balance on January 1, 2019
Amortization
Effect of movement in exchange rates
Balance on December 31, 2019
Carrying amount:
Balance on December 31, 2020
Balance on December 31, 2019
Balance on January 1, 2019		 Goodwill
$ 591,498
-
(1,683)		 Other
intangible
assets

247,524
1,677

(2,658)		 Total

839,022

1,677

(4,341)

$
589,815

246,543

836,358

$ 595,941
-
(4,443)

240,394
8,616

(1,486)

836,335

8,616

(5,929)

$
591,498

247,524

839,022

$ 61,909
-
111

138,342
23,823

276

200,251

23,823

387
$
62,020		 162,441 224,461

$ 64,437
-
(2,528)

116,047
23,036

(741)

180,484

23,036

(3,269)

$
61,909

138,342

200,251

$
527,795
84,102
611,897

$
529,589
109,182
638,771

$
531,504
124,347
655,851

Amortization of intangible assets of the Group for the years ended December 31, 2020 and 2019, were recognized as operating expenses and costs in the consolidated profit and loss.

As of December 31, 2020 and 2019, the group assessed the provision of the impairment, and no impairment loss were recognized.

162

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(j) Short-term borrowing

Short-term borrowing
Unsecured bank loans
Secured bank loans
Unused short-term credit lines
Interest rate		 December 31,
2020
$ 1,288,400
$ 200,000		 December 31,
2019
1,518,040
-

$
1,875,795		 1,691,628

0.80%~1.20%
0.80%~1.25%

Please refer to note 8 for further information on assets pledged as collateral.

  • (k) Long-term borrowing

Long-term borrowings were as follows:

Unsecured bank loans
Less: current portion
Total
Unused long-term credit lines
Interest rate		 December 31,
2020
$ 203,815
(1,635)		 December 31,
2020
$ 203,815
(1,635)		 December 31,
2019
305,520
(1,659)

$
202,180
303,861

$
-
-
0.80%~1.05% 0.80%~1.15%
  • (i) Issuance and repayment of borrowings

For the years ended December 31, 2020, the Group's proceeds from long-term borrowings amounted to $200,000 thousand with an interest rate of 1.05%. The long-term borrowings are due in August, 2022.

For the years ended December 31, 2019, the Group's proceeds from long-term borrowings amounted to $100,000 thousand and $200,000 thousand both with interest rate of 1.15%. The long-term borrowings are due in July and December, 2021, respectively.

For the years ended December 31, 2020 and 2019, the repayment amounted to $301,660 thousand and $201,656 thousand, respectively.

  • (ii) Collaterals of bank loans

Please refer to note 8 for further information on assests pledged as collateral.

163

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(l) Bonds payable

The details of unsecured convertible bonds were as follows:

Total convertible corporate bonds issued
Unamortized disourted corporate bonds payable
Corporate bonds issued balance at year-end
Embedded derivative－redemption options, included in financial assets at fair
value through profit or loss
Equity component－conversion options, included in capital surplus－stock
options		 December 31,
2020
$ 287,611
12,389

$
300,000

$ 328
$ 25,138

The Group issued the 4th domestic unsecured convertible bond and recognized conversion options and the liability component as equity and liability, respectively. The detailed information was as follows:

The present value of the convertible corporate bonds at the time of
issuance
The embedded derivative instrument—redemption options at the time of
issuance
The equity component at the time of issuance
Total amount of the convertible corporate bonds at the time of issuance		 4th domestic
unsecured convertible
bonds
$ 287,280

(149)
25,138
$
312,269

The Company issued the 4th domestic unsecured convertible bonds on December 2, 2020, with face value amounting to $300,000. The terms and conditions of the bonds were as follows:

  • (i) Issuance price: 105.09% of the par value

  • (ii) Coupon rate: 0%.

  • (iii) Issuance period: 3 years (December 2, 2020 to December 2, 2023)

  • (iv) The Group’s right of redemption:

At any time during the period from March 3, 2021 to October 23, 2023, when the closing price of the Company's common shares is equal to or greater than the conversion price by 30% for 30 consecutive trading days, or the outstanding balance of the bonds is less than 10% of total initial issue amount, the Company may redeem the bonds in cash at face value.

164

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • (v) Bondholders' put option

The holders' of the No.4 domestic unsecured convertible bonds have no right to request the Company to repurchase the convertible bond.

  • (vi) Terms of conversion:

  • 1) The bondholders may request conversion of the bond to the Company's common stock at any time during the period from March 3, 2021 to December 2,2023.

  • 2) Terms of conversion price:

The conversion price was set at $39.5 at the time of issue. When the number of common shares of the Company changes, or other convertible bonds are issued with a conversion price lower than the market price, the conversion price will be adjusted based on a formula in accordance with the terms of issue.

(m) Lease liabilities

The Group’s lease liabilities were as follows:

Current
Non-current		 December 31,
2020
$
178,096		 December 31,
2019
174,773

$
144,856
151,938

For the maturity analysis, please refer to note 6(y).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities
Expenses relating to short-term leases
Expenses relating to leases of low-value assets, excluding
short-term leases of low-value assets		 For the years ended
December 31,
2020
2019
$
16,390
14,834


23,036
24,339


$ 3,742
4,680

The amounts recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases For the years ended
December 31,
2020
2019
$
253,251
290,129
2020
$
253,251

165

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Real estate leases

The Group leases buildings for its office and warehouse as of December 31, 2020. The leases of office and warehouse typically run from 1 to 3 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

(ii) Other leases

The Group leases office equipments with lease terms of one to three years. The leases are short-term and leases of low-value items. The Group has elected not to recongnized right-of-use assets and leasing liabilities for these leases.

(n) Employee benefits

(i) Defined benefit plan

The Group determined the movement in the present value of defined benefit obligations and the fair value of plan assets as follows:

Total present value of defined benefit obligations
Fair value of plan assets
Net defined benefit (liability) asset
The Group employee benefits liabilities:
Paid vacationliabilities-current(recorded as other
current liabilities-others)		 December 31,
2020
$ (133,039)
48,112		 December 31,
2019

(126,544)

43,821

$
(84,927)

(82,723)

December 31,
2020
$
2,936
December 31,
2019
2,936

The Group makes defined benefit plan contributions to the pension fund account at Bank of Taiwan and to the manager pension fund account that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

166

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of December 31, 2020, the pension fund account balance at Bank of Taiwan and the manager pension fund balance amounted to $28,216 thousands and $19,896 thousands, respectively. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

  • 2) Movements in the present value of defined benefit obligation

The movements in present value of the defined benefit obligations for the Group were as follows:

Defined benefit obligation on January 1
Current service costs and interest cost
Remeasurements loss
Benefits paid
Defined benefit obligation onDecember 31		 2020
$ 126,544
3,438
3,057
-		 2019
122,467
3,268
7,586
(6,777)
$
133,039
126,544
  • 3) Movements in the fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2020 and 2019 were as follows:

Fair value of plan assets on January 1
Net remeasurements of defined benefit liabilities
－Return on plan assets excluding interest
income
Contribution to the plan
Remeasurement gain
Benefits paid
Fair value of plan assets on December 31		 2020
$ 43,821
357
3,297
637
-
$
48,112		 2019

43,251

423

6,154

770
(6,777)


43,251
  • 4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs
Net interest of net liabilities for defined benefit
obligations
Others		 2020
$ 2,338
324
419		 2019
1,990
310
545
$
3,081		 2,845

167

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • 5) Remeasurement of net defined benefit liability recognized in other comprehensive income

The Group’s remeasurement of the net defined benefit liability recognized in other comprehensive income for the years ended December 31, 2020 and 2019 were as follows:

Cumulative amount, January 1
Recognized during the year
Cumulative amount, December 31		 2020
$ (20,813)
(2,420)		 2019

(13,997)
(6,816)

$
(23,233)
(20,813)
  • 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate
Future salary increasing rate		 December 31,
2020
0.375%~0.625%
2.5%~3%		 December 31,
2019
0.75%~1.00%
2.5%~3%

The expected allocation payment to be made by the Group to the defined benefit plans for the one-year period after the reporting date is $2,497 thousand.

The weighted average lifetime of the defined benefit plans is 8.1~17.6 years.

  • 7) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2020
Discount rate
Future salary increasing rate
December 31, 2019
Discount rate
Future salary increasing rate		 Effects to the defined benefit obligation Effects to the defined benefit obligation
Increase by 0.25%
$ (2,806)
2,801
(907)
2,838		 Decrease by0.25%

2,913

(2,715)

955

(2,748)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets

168

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

(ii) Defined contribution plan

The Group’s expenses under the pension plan had already been contributed to the Bureau of Labor Insurance. Other subsidiaries contributed their pension expense according to the labor law of their registered countries.

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $27,564 and $86,195 for the years ended December 31, 2020 and 2019, respectively.

(o) Income tax

  • (i) Income tax expense

The detail of the Group’s income tax expense were as follows:

Current income tas expense
Deferred income tax benefit		 2020
135,154
(4,871)		 2019

69,584

(132)

130,283


69,452

Reconciliation of income tax expense and profit before tax for the years ended December 31, 2020 and 2019 were as follows:

Profit before income tax
Income tax using the Company’s tax rate
Effect of domestic tax rate in foreign jurisdiction
Changes in unrecognized temporary differences
Tax free income tax impact and others		 2020
$ 701,010		 2019
310,815
62,163
5,431
12,092
(10,234)
69,452

140,202
11,366
9,286
(30,571)

$
130,283

169

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • (ii) Deferred tax assets and liabilities

  • 1) Unrecognized deferred tax assets and liabilities

The Company is able to control the timing of the reversal of the temporary differences associated with investments in subsidiaries as of December 31, 2020 and 2019. Also, management considers it probable that the temporary differences will not reverse in the foreseeable future. Hence, such temporary differences are not recognized as deferred tax assets and liabilities. Details are as follows:

Unrecognized deferred tax assets

December 31,
2020
Aggregate amount of temporary differences related
to investments in subsidiaries
$ 5,581
Unrecognized deferred tax liabilities
December 31,
2020
Aggregate temporary differences associated with
investments in subsidiaries
$ 536,402		 December 31,
2020		 December 31,
2019
4,639
December 31,
2019
$ 536,402 436,324
  • 2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Deferred tax assets:
Balance, January 1, 2019
Credited (debited) to profit or loss
Balance, December 31, 2019
Balance, January 1, 2020
Credited (debited) to profit or loss
Balance, December 31, 2020		 Defined
benefit plans		 Accrued
expense		 Others Total

47,474
255
$ 6,915
-
36,302
255
4,257

-
$
6,915
36,557
4,257
47,729

$ 6,915
-


36,557
4,871


4,257

-


47,729
4,871
$
6,915

41,428

4,257

52,600

170

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Deferred tax liabilities:
Balance at January 1, 2020
Balance at December 31, 2020
Balance at January 1, 2019
Debited (credited) to profit or loss
Balance at December 31, 2019		 Unrealized
exchange
gains (losses)
and others
$ 123
$
123
$ -
123
$
123

(iii) Examination and approval

The Company's tax returns for the years through 2018 were assessed by the Taipei National Tax administration.

(p) Share capital and other equity

As of December 31, 2020 and 2019, the authorized capital of the Company consisted of 2,000,000 thousand shares, of which 80,000 thousand shares were reserved for employee share options, with a par value of $10 dollars per share, and the issued capital was 117,158 thousand shares. All issued ordinary were paid up upon issuance.

The Group had passed the resolution on the Board of Directors on October 14, 2020, which increased cash capital and issued of new shares of $10,000 thousand shares, each of par value of $10 dollars, and the total amount is $100,000 thousand. The aforementioned cash increase was issued at a premium of $30 per share. As of December 31, 2020, the total proceeds new issued is $86,108 thousand. As of the issue date of the financial statements, all funds for the issued shares have been collected, and the relevant legal registration procedures have been completed.

Reconciliation of shares outstanding for the years ended December 31, 2020 and 2019, were as follows:

Beginning balance, January 1
Treasury stock retirement
Ending balance, December 31		 Ordinary shares
2020
2019
117,158
118,346
-
(1,188)		 Ordinary shares
2020
2019
117,158
118,346
-
(1,188)
2020
117,158
-
117,158

117,158

171

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Capital surplus

The components of capital surplus were as follows:

Paid-in capital derived from premium on issuance of
common shares
Surplus arising from bond conversion option
Equity component of convertible bonds
Surplus arising from long-term equity investments－
donated surplus and others
Surplus arising from premium from merger
Surplus arising from stock options		 December 31,
2020
$ 497,991
245,665
25,138
12,392
2,912
46,465		 December 31,
2019
497,991

245,665

-
11,731

2,912

40,512

$
830,563

798,811

In accordance with the R.O.C. Company Act realized capital reserve can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned realized capital reserve includes share premiums and donation. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserve to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount. (ii) Retained earnings

According to the Company’s articles of incorporation, 10% of annual net earnings (net of income taxes), after deducting accumulated deficits, must be set aside 10% as legal reserve. Unless and until the accumulated legal reserve equals the Company’s total capital, the Company may set aside a special reserve in accordance to Article 41 of the Securities and Exchange Act. After the board of directors considers the Company’s budget for funding needs, financial structures, current period earnings, and steady profit distribution when proposing the distribution of earnings, the proposal should be resolved during the stockholders’ meeting.

  • 1) Legal reserve

  • When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

  • 2) Special reserve By choosing to apply exemptions granted under IFRS 1 “First-time Adoption of International Financial Reporting Standards ” during the Company ’ s first-time adoption of the International Financial Reporting Standards (IFRSs) endorsed by the Financial Supervisory Commission, cumulative translation adjustments (gains) shall be reclassified as retained earnings. The net increase in retained earnings due to the first-time adoption of IFRSs amounted to $7,116 thousands. In accordance with Ruling No. 1010012865 issued by the Financial Supervisory Commission on April 6, 2012, an increase in retained earnings due to the first-time adoption of IFRSs shall be reclassified as special earnings reserve during earnings distribution, and when the relevant asset is used,

172

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

disposed of, or reclassified, this special earnings reserve shall be reversed as distributable earnings proportionately. The carrying amount of special earnings reserve was $7,116 thousands on December 31, 2020 and 2019.

In accordance with the guidelines of the above Ruling, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current-period reduction of special earnings reserve resulting from the first-time adoption of IFRSs and the carrying amount of other shareholders’ equity as stated above. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods due to the first-time adoption of IFRSs. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

  • 3) Earnings distribution

On May 27, 2020, the shareholder’s meetings resolved to distribute the 2019 earnings. On June 21, 2019, the shareholder’s meetings resolved to distribute the 2018 earnings. The earnings were distributed as follow:

Dividends distributed to common
shareholders:
Cash		 2019 2019 2019 2018
Amount per
share (NT
dollars)
Total
amount

2.20
254,752		 2018
Amount per
share (NT
dollars)
Total
amount

2.20
254,752
Amount per
share (NT
dollars)		 Total
amount		 Amount per
share (NT
dollars)
$ 1.31 150,535
2.20

(iii) Treasury stock

For the years ended December 31, 2020 and 2019 the movements of the treasury stock were as below.

below.
Item 2019 Increase

1,556

32,763
Increase
-
-		 Decrease

-

-
Decrease
(1,188)
(32,846)		 December 31, 2020
2,917
60,560
December 31, 2019
1,361
27,797
Treasury stock acquired－shares (in
thousands)
Treasury stock acquired－amount
Item		 1,361
$ 27,797
January 1, 2019		 $ 1,361

27,797
Treasury stock acquired－shares (in
thousands)
Treasury stock acquired－amount		 $ 2,549

60,643
27,797

As of December 31, 2020 and 2019, a total of $2,917 thousand shares and $1,361 thousand shares, respectively have not yet to be cancelled.

173

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

In accordance with the Securities and Exchange Act requirements, the humbler of shares repurchased shares should not exceed 10 percent of all shares outstanding. Also, the value of the repurchased share should not exceed the sum of the Group’s retained earnings, share premium, and realized capital reserves. As of December 31, 2020, the balance of treasury stock was in compliance with the requirement.

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company cannot be pledged and do not have any shareholders’ rights before their transfer.

  • (q) Share-based payment

As of December 31, 2020, the Group's share-based payment arrangements were as follows:

Grant date
Number of shares granted
Recipients
Vesting conditions		 Cash capital increase reserved for
employee subscription
December 2, 2020
845 thousand shares
Employees of the Group
Immediately vested

For the year ended December 31, 2020, the number of shares granted for employees of the Group was 845 thousand shares. The cost of the above share-based payments transactions amounting to $5,953 thousand was recorded as operating expenses.

  • (r) Earnings per share

  • (i) Basic earnings per share

Earnings per share for the years ended December 31, 2020 and 2019, were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares. Calculations were as follows:

  • 1) Profit attributable to ordinary shareholders of the Company
Profit attributable to ordinary sharholders of the
Company
2)
Weighted-average number of outstanding common
Common shares as of January 1
Effect of treasury stock
Weighted-average number of outstanding common
shares on December 31		 2020 2019

-
$
541,992

shares (thousand shares)
2020
2019
$ 117,157
118,346
(2,423)
(2,549)
$ 117,157
(2,423)


$ 114,734

115,797

174

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • (i) Diluted earnings per share

The diluted earnings per share for the years ended December 31, 2020 and 2019 were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares, with all potential common shares retroactively adjusted. Calculations were as follows:

  • 1) Profit attributable to common shareholders (diluted)
Profit attributable to common shareholders
(basic)
Interest on convertible bonds
Gains on revaluation of put and call options of
convertible bonds measured at fair value		 2020
$ 541,992
331
(180)
$
542,143		 2019
249,047

-
-

249,047
  • 2) Weighted-average number of outstanding common shares (diluted) (thousand shares)
Weighted-average number of outstanding
common shares (basic)
Effect of conversion of convertible bonds
Effect of employee stock dividends
Weighted-average number of outstanding
common shares on December 31 (diluted)		 2020 2019
115,797

-

69
$ 114,734
602
79
$ 115,415
115,866
  • (s) Employees compensation and director’s remuneration

Pursuant to the Company’s articles of incorporation, states if the Company profits this period they will set aside no less than 0.5% towards employee compensation and no more than 3% towards remuneration to directors and supervisors. If the Company has accumulated loss, they must first reserve to cover the loss amount. The compensations mentioned afore include persons who meet the preset conditions of employees of the affiliate Company.

The Company accrued and recognized the employee compensation by to $2,796 thousands and $1,313 thousands for the years ended December 31, 2020 and 2019, respectively. And the directors’ and supervisors’ compensation is accrued and recognized amounting to $11,080 thousands and $7,650 thousands for the years ended December 31, 2020 and 2019, respectively. These amounts are calculated by using the Company’s pre-tax net profit for the before deducting the amount of the remuneration to the employees and directors, multiplied by the distribution ratio of remuneration to the employee and directors under the Company’s articles of association, and reporting date in the following year, the change of the amount would be treated as changes after the accounting estimates and recognized as profit or loss in next year.

175

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the year ended December 31, 2020 and 2019, , the difference between the actual compensation and the recognized amount in the financial report of the employees’ bonus and the board of directors remuneration are as follow:

Employees’remuneration
Directors’remuneration
Employees’remuneration
Directors’remuneration		 2019
Board of Directors
resolution on
actual
compensation
Recognized
amount in
financial report
Difference
$ 1,320
1,313
7
7,350
7,650
(300)
2018
Board of Directors
resolution on
actual
compensation
Recognized
amount in
financial report
Difference
$ 1,850
1,843
7
9,230
11,056
(1,826)

The information can be assessed on the “Market Observation Post System” website.

  • (t) Revenue from contracts with customers

  • (i) Disaggregation of revenue

Primary geographical markets:
Hong Kong and China
Taiwan
Eastern Asia and others
Primary service:
Export forwarding
Import forwarding
Warehouse and declaration		 2020 2020 Total

10,875,512

2,677,877

1,606,854
Sea
forwarding
$ 6,186,899
1,522,574
913,617		 Air
forwarding

3,599,447

886,926

532,198		 Freight and
other
segments

1,089,166

268,377

161,039

$
8,623,090


5,018,571


1,518,582


15,160,243

$ 7,878,609
744,481
-


4,166,957

851,614
-


-

-
1,518,582

12,045,566
1,596,095

1,518,582
$
8,623,090
5,018,571

1,518,582


15,160,243

176

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2019
Sea
forwarding
Air
forwarding
Freight and
other
segments
Total
Primary geographical markets:
Hong Kong and China
$ 4,442,940
2,308,178
1,055,686
7,806,804
Taiwan
1,236,381
640,075
292,750
2,169,206
Eastern Asia and others
722,430
384,002
175,629
1,282,061
$
6,401,751
3,332,255
1,524,065
11,258,071
Primary service:
Export forwarding
$ 5,619,481
2,649,454
-
8,268,935
Import forwarding
782,270
682,801
-
1,465,071
Warehouse and declaration
-
-
1,524,065
1,524,065
$
6,401,751
3,332,255
1,524,065
11,258,071
(ii)
Contract balances
December 31
2020
December
31, 2019
January 1,
2019
Notes receivable
$ 42,708
36,110
42,442
Accounts receivable (including
amount due frome related
parties) measured at amortized
cost
2,731,966
1,760,614
1,940,618
Less: allowance for impairment
(10,732)
(23,369)
(19,873)
Total
$
2,763,942
1,773,355
1,963,187		 2019 2019 2019 2019 Total

7,806,804

2,169,206

1,282,061
Sea
forwarding
$ 4,442,940
1,236,381
722,430		 Air
forwarding

2,308,178

640,075

384,002		 Freight and
other
segments

1,055,686

292,750

175,629
$
$
6,401,751


3,332,255


1,524,065


11,258,071

$
5,619,481
782,270
-


2,649,454

682,801
-


-

-
1,524,065

8,268,935
1,465,071

1,524,065
$
 6,401,751
3,332,255

1,524,065


11,258,071


December 31
2020
$ 42,708
2,731,966
(10,732)

December
31, 2019

36,110
1,760,614

(23,369)

January 1,
2019

42,442
1,940,618

(19,873)

$
2,763,942


1,773,355


1,963,187

For details of notes receivable, accounts receivable and allowance for impairment, please refer to note 6(d).

  • (u) Other income

The detail of the Group’s other income were as follows:

Dividends income

==> picture [173 x 25] intentionally omitted <==

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

2020 2019
$ 6,804 5,735
----- End of picture text -----

177

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • (v) Other gains and losses

The detail of the Group’s other gains or losses were as follows:

Foreign exchange gain (loss)
Gains on financial assets and liabilities at fair value through
profit or loss
Gains (losses) on disposals of property, plant and equipment
Gains on disposals of investments
Government subsidy
Other
(w) Interese income
Interest income from bank deposits
(x)
Finance costs
The detail of the Group’s finance costs were as follows:
Interest expense
Bank borrowings
Amortization of convertible bonds discount
Amortization of lease liabilities
(y)
Financial instruments		 2020
$ (67,130)
40,533
(1,265)
4,601
29,899
14,526		 2019

11,692

2,146

1,793

1,050

-

(7,260)

$
21,164

9,421

2020
$
17,189
2019
35,495

2020
$ 24,144
331
16,390
2019

23,513

-

14,834

$
40,865

38,347

  • (i) Credit risk

  • 1) Exposure to credit risk

The carrying amount of financial assets represents the Group’s maximum credit exposure.

  • 2) Concentration of credit risk

Based on the characteristic of the industry, the Group has no significant transactions with any single customer.

For the years ended December 31, 2020 and 2019, there was no significant concentration of credit risk from the sales of the Group.

178

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the import of netting agreements.

December 31, 2020
Non-derivative financial liabilities
Bank borrowings (including
long-term loans and long-term
loans due within one year)
Trade and other payable
Lease liabilities
Bonds payable
December 31, 2019
Non-derivative financial liabilities
Bank borrowings (including
long-term loans and long-term
loans due within one year)
Trade and other payable
Lease liabilities		 Carrying
amount		 Contractual
cash flow
Within 6
months
6~12
months		 1~2years 2~5years Over 5
years
$ 1,692,215
1,905,825
322,952
287,611
(1,697,787) (1,484,836)
(6,280)

(1,905,825) (1,905,825)
-

(338,201)
(102,317)
(163,257)

(300,000)
-
-
(206,125)
-

(72,588)
-
(546)
-

(39)
(300,000)
-
-

-

-

$ 4,208,603


(4,241,813)
(3,492,978)
(169,537)
(278,713)

(300,585)

-

$ 1,823,560
1,193,345
326,711




(1,894,895) (1,584,201)
(830)

(1,193,345) (1,193,345)
-

(356,868)
(116,752)
(76,071)


(307,652)
-

(164,045)


(2,212)
-

-

-
-
-

$ 3,343,616




(3,445,108)
(2,894,298)
(76,901)


(471,697)

(2,212)
-

The Group does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

  • (iii) Currency risk

  • 1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follows:

Unit: thousand

Financial assets
Monetary items
USD



HKD


CNY		 December 31, 2020 TWD
101,582
16,888
310,533
1,896,610
5,382
181
11,439
40,426
Foreign currency
$ 3,615
601
11,051
67,495
1,485
50
3,156
9,387		 Exchange rate
USD：TWD 28.10
USD：VND 23,417
USD：HKD 7.7530
USD：CNY 6.5249
HKD：TWD 3.6244
HKD：USD 0.1290
HKD：CNY 0.8416
CNY：TWD 4.3066







179

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TWD
Non-Monetary items
IDR
Financial liabilities
Monetary items
USD


HKD
CNY
TWD
Financial assets
Monetary items
USD



HKD


CNY
TWD
Non-Monetary items
IDR		 December 31, 2020 TWD
9,419
34,625
3,996
652
36,908
12,336
6,997
2,389
657,681
7,738
60
314
853
371
TWD
144,282
42,676
154,478
1,132,242
5,388
193
12,697
29,069
33,987
39,077
12,271
43,760
Foreign currency
2,187
8,040
3,996
652
18,181,142
439
249
85
23,405
2,135
14
73
853
371		 Exchange rate
CNY：HKD 1.1882
CNY：USD 0.1533
TWD：HKD 0.2760
TWD：CNY 0.2320
IDR：TWD 0.00203
USD：TWD 28.10
USD：VND
USD：HKD 7.7500
USD：CNY 6.5249
HKD：CNY 0.8416
CNY：HKD 1.1880
CNY：TWD 4.3066
TWD：CNY 0.2320
TWD：HKD 0.2760
December 31, 2019
Foreign currency
$ 4,811
1,423
5,151
37,754
1,399
50
3,297
6,762
7,906
9,090
12,271
20,073,398		 Exchange rate
USD：TWD 29.99
USD：VND 23,069
USD：HKD 7.7876
USD：CNY 6.9762
HKD：TWD 3.8510
HKD：USD 0.1284
HKD：CNY 0.8958
CNY：TWD 4.2989
CNY：USD 0.1433
CNY：HKD 1.1163
TWD：HKD 0.2597
IDR：TWD 0.00218










180

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Financial liabilities
Monetary items
USD


HKD
CNY

TWD		 December 31, 2019 TWD
18,894
6,028
3,029
376,434
11,106
13
834
668
Foreign currency
630
201
101
12,552
2,884
3
194
668		 Exchange rate
USD：TWD 29.99
USD：VND 23,069
USD：HKD 7.7876
USD：CNY 6.9762
HKD：CNY 0.8958
CNY：TWD 4.2989
CNY：HKD 1.1163
TWD：HKD 0.2597







2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the foreign currency exchange gains and losses on the translation of cash and cash equivalents, accounts receivable, other receivables, loans, accounts payable, and other payables that are denominated in foreign currency. A 1% depreciation or appreciation of the functional currency against the foreign currency as of December 31, 2020 and 2019 would increase or decrease the net income before tax by $17,430 thousand and $11,892 thousand, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for both periods.

Due to the variety of the Group’s functional currency, the Group discloses its exchange gains and losses of monetary items collectively. For the years ended December 31, 2020 and 2019, the Group’s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $(67,130) thousand, and $11,692 thousand, respectively.

  • (iv) Interest rate analysis

The following sensitivity analysis is based on the exposure to interest rate risk for derivative and non-derivative financial instruments on the reporting date.

For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year.

If the interest rate had increased/decreased by 1%, the Group’s net income before tax would have decreased/increased by $16,922 thousand and $18,236 thousand for the years ended December 31, 2020 and 2019, respectively, assuming all other variable factors had remained constant. This is mainly due to the Group’s variable-rate borrowing.

181

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  • (v) Fair value of financial instruments

  • 1) Fair value hierarchy

    • a) Categories and fair value of financial instruments

The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, lease liabilities disclosure of fair value information is not required:

Financial assets at fair value through profit or loss:
Financial assets designated at fair value
through profit or loss
Financial assets at fair value through other
comprehensive income:
Stock of listed companies
Stock of private companies
Subtotal
Financial assets measured at amortized cost
(receivables):
Cash and cash equivalent
Notes and accounts receivable (including
related parties)
Other financial assets (account as other current
assets and other non-current assets)
Subtotal
Refundable deposits
Financial liabilities at amortized cost:
Short term borrowings
Notes and accounts payable (including related
parties)
Other payable
Lease liabilities current
Convertible bonds - debt component
Long term borrowing (including current
portion)
Lease liabilities (non-current)
Subtotal		 December 31, 2020 December 31, 2020 December 31, 2020 December 31, 2020 December 31, 2020 Total
77,584
432,773
108,407
Book value
$ 77,584		 Fair value
Level 1 Level 2 Level 3
76,617

$ 432,773
108,407

203,773

-

541,180

203,773		 229,000
108,407
541,180

$ 2,429,343
2,763,942
294,186


-
-

-
-
-
-
-
-
-
-
-
-

5,487,471

-		 - - -

103,728
-		 - - -

$ 1,488,400
1,246,516
659,309
178,096
287,611
203,815
144,856
-

-

-

-

-

-

-		 -
-
-
-
-
-
-		 -
-
-
-
-
-
-		 -
-
-
-
-
-
-

4,208,603

-		 - - -

182

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Financial assets at fair value through profit or loss:
Financial assets designated as fair value through
profit or loss
Financial assets at fair value through other
comprehensive income:
Stock of listed companies
Stock of private companies
Subtotal
Financial assets measured at amortized cost (loans
and receivables):
Cash and cash equivalent
Notes and accounts receivable
Other financial assets (account as other current
assets and other non-current assets)
Subtotal
Refundable deposits
Financial liabilities at amortized cost:
Short term borrowings
Notes and accounts receivable (including
related parties)
Other payable
Lease liabilities (current)
Long term borrowing (including current
portion)
Lease liabilities (non-current)
Subtotal		 December 31, 2019 December 31, 2019 December 31, 2019 December 31, 2019 December 31, 2019 Total
55,196
139,551
114,576
Book value
$ 55,196		 Fair value
Level 1 Level 2 Level 3
55,196

$ 139,551
114,576

69,451

-

254,127

69,451		 70,100
114,576
254,127

$ 2,216,962
1,773,355
133,907


-

-

-
-
-
-
-
-
-
-
-
-

4,124,224

-		 - - -

$ 114,159
-		 - - -

$ 1,518,040
809,608
383,737
174,773
305,520
151,938
-

-

-

-

-

-		 -
-
-
-
-
-		 -
-
-
-
-
-		 -
-
-
-
-
-

3,343,616

-		 - - -
  • 2) Valuation techniques to measure fair value of financial instruments not measured at fair value

Financial instruments of the Group not measured at fair value are financial assets and liabilities valued at amortized cost. Measurement of fair value of these financial instruments is based on recent transaction prices. When market price is unavailable, valuation is based on discounted cash flow.

  • 3) Valuation techniques for financial instruments measured at fair value

  • a) Non-derivative financial instruments

Fair value measurement of financial instruments is based on quoted market prices if these prices are available in an active market. Quoted prices on stock exchanges are regarded as the fair value of equity instruments in a listed market.

183

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A financial instrument is regarded as being quoted in an active market if quoted market prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. If these conditions cannot be met, then the market is considered as non-active. In general, a market with low trading volume or high bid-ask spreads is an indication of a non-active market.

The fair value of financial assets and liabilities with standard terms and conditions and trading in active markets is based on quoted market prices. These include investments in stocks of listed entities.

The measurements of fair value of equity instruments without an active market are based on the market comparable listed company approach, which assumes that the fair value is measured by the book value per share of the investee and the price-book ratio of market comparable listed companies. The estimation of the fair value of equity instruments has been adjusted due to the effect of the discount arising from the lack of marketability.

b) Derivative financial instruments

The fair value is based on quoted prices. When quoted prices are unavailable, the fair value is in accordance with third-party pricing information.

The Group’s convertible bonds adopted the binomial three model to evaluate the fair value.

  • 4) Movement between Level l and Level 2

There were no movement between Level 1 and Level 2 for the years ended December 31,2020 and 2019.

  • 5) Changes in Level 3
Balance on January 1, 2020
Recognized in profit or loss
Balance on December 31, 2020
Balance on January 1, 2019
Recognized in profit or loss
Balance on December 31, 2019		 Financial assets
designed as fair
value through other
comprehensive
income
$ 114,576
(6,169)
$
108,407
$ 89,007
25,569
$
114,576

184

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • (z) Financial risk management

  • (i) Overview

The Group have exposure to the following risks from its financial instruments.

  • 1) Credit risk

  • 2) Liquidity risk

  • 3) Market risk

The following likewise discusses the Group ’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risk's exposures, please refer to the respective notes in the accompanying consolidated financial statements

  • (ii) Structure of risk-management

The board of directors has overall responsibility for the establishment and oversight of the risk management framework.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group ’ s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The board of directors oversees how management monitors the risks, which should be in compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation of the risks faced by the Group. Internal Audit undertakes regular reviews of the risk management controls and procedures and exception management, the results of which are reported to the Board of Directors.

  • (iii) Credit risk

Credit risk means the potential loss to the Group if the client or the counterparty involved in a financial instrument transaction defaults. The primary potential credit risk is from the accounts receivable and investments of the Group.

  • 1) Accounts receivable and other receivables

The Group has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available, and in some cases bank references. These limits are reviewed periodically.

185

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

To monitor credit risk, clients are grouped by their credit characteristics, including the amounts of accounts receivable, the period of aging, and the margin contribution for the Group. The major customers of the Group are concentrated in overseas agencies and large clients. Clients with high credit risk after evaluation would be placed on the restricted client list and be monitored by the board. Transactions with such clients would only be in cash in the future.

The Group establishes an impairment allowance that represents its estimate of incurred losses in respect of trade receivables, other receivables, and investment. The components of this impairment allowance are a specific loss component that relates to individually significant exposure and a collective loss component for which a loss was incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

2)

Investments

The credit risk exposure of the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Group’s finance department. As the Group deals with banks and other external parties with good credit standing and financial institutions, corporate organizations, and government agencies which are graded above investment level, the management believes that the Group does not have any compliance issues, and therefore, there is no significant credit risk.

  • 3) Guarantees

The Group has determined that financial guarantees can only be provided to the following companies:

  • a) Companies with a transaction relationship with the Group.

  • b) Companies in which the Group has more than 50% of the voting shares.

  • c) Companies which directly or indirectly hold more than 50% of the voting shares of T3EX Global Holdings Corp.

  • 4)

Liquidity risk

Liquidity risk is a risk that the Group is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as much as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed ’ conditions, without incurring unacceptable losses or risking damage to the Group s reputation.

186

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group actively expands its business to generate operating cash flow while it simultaneously manages the accounts receivable in a strict manner and controls its expenditure. In addition, the Group keeps good relationships with banks to obtain a sufficient credit limit for necessary cash demands in the operating cycle. Generally, the Group ensures that there is sufficient cash to cover expected operating expenditure, but excluding the potential influence of unexpected extreme conditions (i.e. nature disasters). The total amount of unused credit as of December 31, 2020 and 2019, were $1,875,795 thousand and $1,691,628 thousand, respectively.

5)

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The types of financial assets at fair value through profit or loss held by the Group are open-end funds and convertible bonds which are measured at fair value. Therefore, the Group is exposed to the risk of price changes in the beneficiary certificate market. The Group engages a professional agent to manage its financial assets. Parts of bank deposits, accounts receivable, and accounts payable are evaluated for foreign currency exposure. To manage the currency risk, the Group maintains its foreign currency net position within a certain limit. The convertible bonds held and issued by the Group are measured at fair value. This results in exposure to the risk of price changes in the equity and bond markets.

a) Currency risk

The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily the New Taiwan Dollar (TWD), Chinese Yuan (CNY), US Dollar (USD), Hong Kong Dollar (HKD), Vietnam Dong (VND), and Thai Baht (THB).

The Group designates the spot element of forward foreign exchange contracts to hedge its currency risk and applies a hedge ratio of 1:1. Most of these contracts have a maturity of less than one year from the reporting date. The forward elements of forward exchange contracts are excluded from designation as the hedging instrument and are separately accounted for as a cost of hedging, which is recognized in equity in a cost of hedging reserve. The Group’s policy is for the critical terms of the forward exchange contracts to align with the hedged item.

187

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, the main sources of ineffectiveness are:

  • ’

  • the effect of the counterparty and the Group s own credit risk on the fair value of the forward foreign exchange contracts, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange rates; and

  • changes in the timing of the hedged transactions.

  • b) Interest rate risk

Except for bank loans, there are no financial assets or financial liabilities with floating interest rates. The Group negotiates the price case by case to control the interest rate risk.

  • c) Other market risk

The Group signs contracts with large customers and vendors to keep sales and sources of supply stable. To maintain stable sales prices, the contents of contracts are reviewed every year in light of international economic conditions and market change.

  • (aa) Capital management

The board’s policy is to maintain a strong capital base in order to maintain investor, creditor, and market confidence and to sustain future development of the business. Capital consists of common shares, capital surplus, retained earnings, and non-controlling interests of the Group. The board of directors monitors the level of dividends to common shareholders.

The distribution of dividends of the Group follows the earnings of the year and is on a sustainable basis. When the board of directors drafts a proposal on appropriation and distribution of retained earnings, the dividend distribution shall not be lower than 50% of current earnings or unappropriated earnings, whichever is lower. However, the cash dividend shall not be lower than 10% of the total distribution of dividends.

188

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s debt-to-equity ratios at the end of the reporting periods were as follows.

Total liabilities
Less: cash and cash equivalents
Net debt
Total equity
Less: amounts accumulated in equity relating to cash flow
hedges
Adjusted capital
Debt-to-equity ratio		 December 31,
2020
$ 4,411,372
(2,429,343)		 December 31,
2020
$ 4,411,372
(2,429,343)		 December 31,
2019

3,496,333

(2,216,962)
5,713,295
2,552,787
-

2,648,862
50.12%

$
6,840,715

$ 3,302,990
-
$
3,302,990

60.01%

From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares are intended to be used for issuing shares under the Group’s share option scheme for employees. The purchase of treasury stock did not impact the Group’s capital management.

There were no changes in the Group’s approach to capital management during the years ended December 31, 2020.

  • (ab) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

  • (i) For acquisition of right-to-use assets, please refer to note 6(m).

  • (ii) Reconciliation of liabilities arising from financing activities were as follows:

Long-term borrowings
(including current portion)
Short-term borrowings
Lease liabilities
Total liabilities from financing
activities		 January 1,
2020
Cash flows
$ 305,520
(101,660)
1,518,040
(29,568)
326,711
(226,473)
Note
$
2,150,271
(357,701)		 Non-cash
changes
December
31,
2020
(45)
203,815
(72)
1,488,400

222,714
322,952
222,597
2,015,167

189

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Long-term borrowings
(including current portion)
Short-term borrowings
Lease liabilities
Total liabilities from financing
activities		 January 1,
2019
Cash flows
$ 207,238
98,344
1,310,920
207,216
329,334
(261,110)
Note
$
1,847,492
44,450		 Non-cash
changes
December
31, 2019
(62)
305,520
(96)
1,518,040
258,487
326,711


258,329
2,150,271

Note: Interest expense were accounted as operating activities.

  • (7) Related-party transactions:

  • (a) Name of related-party and relationship:

There are relationships between related-party and the Group in the consolidated interim financial statement:

Name of related-party Relationship to the Group
Investment under equity method
Investment under equity method
Investment under equity method
PT. Dexter Eurekatama
LOGI International Co., Ltd.
Orient Air General Sales Agent Co., LTD.

  • (b) Other related-party transactions

  • (i) Revenue

The amounts of revenue and accounts receivable by the Group to related parties were as follow:

Associates Revenue
2020
2019
$
25,834
18,255		 Accounts receivable
December 31,
2020
December 31
2019
7,319
1,811
2020
$
25,834		 December 31,
2020
7,319

Trading terms of the above transactions require payments within 30 to 60 days or depending on the funding needs.

(ii) Cost

The amounts of cost and account payable by the Group to related parties were as follow:

Associates Cost
2020
2019
11,755
18,717		 Accounts payable
December 31,
2020
December 31,
2019
439
635
2020
11,755		 December 31,
2020
439

Trading terms of the above transactions require payment within 30 to 60 days or depending on funding needs.

190

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  • (c) Transactions with key management personnel

  • (i) Key management personnel compensation comprised:

Short-term employee benefits
Post-employment benefits		 2020
$ 48,679
2,265		 2019
47,237
5,181
52,418

$
50,944

(8) Pledged assets:

Pledged assets Object December 31,
2020
$ 172,950
17,359
103,728
29,725
$
323,762		 December 31,
2019

173,363

16,922

114,159

31,418
335,862
Property, plant, and
equipment
Other financial assets－
current (account as other
current assets)
Refundable deposits
Other financial assets－
non-current (account as
other non-current assets)		 Credit facility
Forward exchange guarantees and credit
facility/logistics-related guarantees
Logistics-related guarantees
Logistics-related guarantees

(9) Commitments and contingencies:

(a) Guarantees issued by financial institutions for the Group for freight forwarding services were as follows:

HKD (unit: thousand)
TWD		 December 31,
2020
$ 7,600
52,300		 December 31,
2019

7,600

54,800

  • (b) In order to improve the quality of customer service, decrease operating costs, and to stay competitive in the industry, the Group entered into separate annual agreements with different American-line sea cargo companies based on their required volume of containers.

  • (c) Promissory notes issued to the bank as collateral for short-term bank borrowings, logistics business, etc., were as follows.

Promissory notes December 31,
2020
$
1,316,194		 December 31,
2019
1,402,965

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

191

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(12) Other:

The personnel cost and depreciation and amortization expenses, categorized by function, were as follows.

2020 2020 2020 2019 2019 2019
Operating
costs		 Operating
expenses		 Total Operating
costs		 Operating
expenses		 Total
Personnel cost
Salaries
Labor and health insurance
Pension
Others
Depreciation expenses
Amortization expenses		 122,947
11,669
6,044
7,737
128,106
366
1,191,876

57,073

24,601

99,611

122,701

24,254
1,314,823

68,742

30,645

107,348

250,807

24,620
138,276

14,931

10,010

6,254

154,327

6,098
916,897

70,485

79,030

87,479

135,334

17,490
1,055,173

85,416

89,040

93,733

289,661

23,588

192

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(13) Other disclosures:

  • (a) Information on significant transactions:

The following were the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group For the years ended December 31 December 31, 2020:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

==> picture [601 x 292] intentionally omitted <==

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

Highest
balance Collateral
of
financing Actual Purposes Transaction Reasons
to other usage Range of of fund amount for for
parties amount interest financing business short-ter Individual Maximum
Name of Name of Related during the Ending during the rates during for the between two m Allowance funding limit of fund
Number lender borrower Account name party period balance period the period borrower parties financing for bad debt Item Value loan limits financing
0 The Taiwan Express Other Yes 270,000 270,000 200,000 Monthly 2 - Trading - - 627,745 1,255,490
Company Logistic Co., receivables- rel changing turnover
Ltd ated parties interest rate
2 T.H.I. Group Taiwan Express Other Yes 117,160 56,200 56,200 Monthly 2 - Trading - - 448,625 897,250
Limited (HK) Co., receivables- rel changing turnover
(HK) ated patties interest rate
4 T.H.I. Group Shanghai Other Yes 8,665 8,613 4,307 4.35% 2 - Trading - - 269,357 538,715
(Shanghai) Moorluk receivables- rel turnover
Ltd. International ated parties
Shipping Co.,
Ltd.
4 T.H.I. Group T-SC Factoring Other Yes 85,048 43,066 - 4.35%~4.7% 2 - Trading - - 269,357 538,715
(Shanghai) Co., Ltd. receivables- rel turnover
Ltd. ated parties
4 T.H.I. Group T Cube Global Other Yes 21,663 21,533 - 4.35% 2 - Trading - - 269,357 538,715
(Shanghai) Logistics Co., receivables- rel turnover
Ltd. Ltd. ated patties
5 Shanghai Shanghai Other Yes 8,665 8,613 - 4.35% 2 - Trading - - 24,682 49,365
Yaohwa Moorluk receivables- rel turnover
International International ated parties
Forwarder Shipping Co.,
Co., Ltd. Ltd.
5 Shanghai T-SC Factoring Other Yes 17,544 17,226 - 4.35%~4.7% 2 - Trading - - 24,682 49,365
Yaohwa Co., Ltd. receivables- rel turnover
International ated parties
Forwarder
Co., Ltd.
----- End of picture text -----

Note 1: The numbers indicated above represent the following: 0 for investor, Subsidiaries are numbered sequentially starting from 1.

Note 2: Nature of lending: 1 for counterparties with transactions, and 2 for short-term operating capital.

Note 3: The ceiling on total loans granted by the Company to all parties is 40% of the net assets in the financial statements; the ceiling on total loans granted by the Company to each entity is 20% of the net assets in the financial statements.

Note 4: Ending facility balance approved by BOD.

Note 5: The above transactions have been reversed in this financial report.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No. Name of
guarantor		 Counter-party of
guarantee and
endorsement		 Counter-party of
guarantee and
endorsement		 Limitation on
amount of
guarantees and
endorsements for
a specific
enterprise		 Highest
balance for
guarantees and
endorsements
during
theperiod		 Balance of
guarantees
and
endorsements
as of
reporting date

Actual usage
amount
during the
period		 Property
pledged for
guarantees and
endorsements
(Amount)		 Ratio of
accumulated
amounts of
guarantees and

endorsements to
net worth of the
latest
financial
statements		 Maximum
amount for
guarantees and
endorsements		 Parent
company
endorsements/
guarantees to
third parties on
behalf of
subsidiary		 Subsidiary
endorsements/

guarantees
to third parties
on behalf of
parent company		 Endorsements/
guarantees to
third parties
on behalf of
companies in
Mainland China
Name Relationship
with the
Company
0
0
0
0
0
2		 The Company
The Company
The Company
The Company
The Company
The Company
Shanghai
Yaohwa
International
Forwarder Co.,
Ltd.

T.H.I. Group
(Shanghai) Ltd.
(T.H.I.
Shanghai)
T Cube Global
Logistics Co.,
Ltd.
Taiwan Express
(HK) Co.,

T.H.I. Group
Limited (H.K.)
T-SC Factoring
Co., Ltd.



2



2


2

2

2

2		 627,745
627,745
627,745
627,745
627,745
627,745
13,158

208,365

136,854

205,030

58,680

294,830
12,920

135,765

81,825

98,350

28,100

285,580
-

14,431

31,012

-

2,442

-		 -

-

-
-

-
-		 0.41%
4.33%
2.61%
3.13%
0.90%
9.10%
1,255,490

1,255,490

1,255,490

1,255,490

1,255,490

1,255,490		 Y
Y
Y
Y
Y
Y		 N
N
N
N
N
N		 Y
Y
Y
Y
N
N

193

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

No. Name of
**guarantor **		 Counter-party of
guarantee and
endorsement		 Counter-party of
guarantee and
endorsement		 Limitation on

amount of
guarantees and
endorsements for
a specific
enterprise		 Highest
balance for
guarantees and
endorsements
during
the period		 Balance of
guarantees
and
endorsements
as of
reporting date

Actual usage
amount
during the
period		 Property

pledged for
guarantees and
endorsements
(Amount)		 Ratio of
accumulated
amounts of
guarantees and

endorsements to
net worth of the
latest
financial
statements		 Maximum
amount for
guarantees and
endorsements		 Parent
company
endorsements/
guarantees to
third parties on
behalf of
subsidiary		 Subsidiary
endorsements/

guarantees
to third parties
on behalf of
parent company
Endorsements/
guarantees to
third parties
on behalf of
companies in
Mainland China
Name Relationship
with the
Company
2 Shanghai
Yaohwa
International
Forwarder
Co.,Ltd.



T.H.I. Group
(Shanghai) Ltd.

4		 12,341
3,070
3,015
3,015
-		 2.44%
49,365
N		 N Y

Note 1: The numbers indicated above represent the following: 0 for investor, Subsidiaries are numbered sequentially starting from 1.

Note 2: The relationship between the guarantee provider and the receiver is as follows:

  • (1) The Company has transactions with its counterparties.

  • (2) The Company holds more than 50% of common shares of its subsidiary.

  • (3) The Company and its subsidiaries hold more than 50% of common shares of the investee company.

  • (4) The parent company holds more than 90% of its outstanding common shares (directly or indirectly) through a subsidiary.

  • (5) Companies within the same architectural field have signed a contractual agreement to provide mutual endorsements/ guarantees for the need of a specific construction project.

  • (6) The shareholders provide endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.

  • (7) Within the trade performance guarantees for preconstruction-sales contract in accordance with the Consumer Protection Law is jointly guaranteed.

  • Note 3: (1)Total guarantees amount should not exceed 40% of the Company’s net assets in the financial statements if the following conditions are met: Ownership of the Company should exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

Ownership of the Company should not exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

The net assets stated above refer to the net assets from the Company’s most recently audited financial statements.

  • (2) Apart from the conditions listed above, guarantees for the purpose of business relations should not exceed the total amount of business transactions between the two parties, whichever is lower. The definition of business transactions could either be purchases or sales, whichever is higher.

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars/thousand shares)

Name of holder Category and
name of
security		 Relationship
with company		 Account
title		 Ending balance Ending balance Ending balance Ending balance Highest Note
Shares/Units
**(thousands) **		 Carrying value Percentage of
ownership (%)		 Fair value Percentage of
ownership
The Company
The Company

The Company
The Company
The Company
Taiwan Express
Logistic Co., Ltd.		 Fund
Yuanta Wan Tai
Fund
Stock Yang Ming
Marine Transport
Corp.
Stock
Soonest Express
Co., Ltd.
Stock
Yang Ming Marine
Transport Corp.
Stock
Yang Ming Marine
Corporation
Stock
Central Taiwan
Science Park
Logisties Co., Ltd.		 -
-
-
-
-
-		 Financial assets at
fair value through
profit or loss－
current
Financial assets at
fair value through
profit or loss－
current
Financial assets at
fair value through
other
comprehensive
income－current
Financial assets at
fair value through
other
comprehensive
income-current
Financial assets at
fair value through
other
comprehensive
income-non-curren
t
Financial assets at
fair value through
other
comprehensive
income-non-curren
t		 473,454
1,705,000
609,972
5,500,577
10,000,000
3,880,000
7,223

69,394

42,881

160,892

229,000

108,407
-

0.04%

2.03%

0.21%

0.38%

12.90%		 7,223

69,394

42,881

160,892

229,000

108,407
473,454

1,705,000

879,972

7,605,577

10,000,000

3,880,000




(note 1)

Note 1: Acquire by private placement.

  • (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

  • (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

194

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

  • (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

  • (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of
company		 Counter-party Nature of
relationship		 Ending balance
(Note 1)		 Turnover
rate		 Overdue Overdue Amounts received in
subsequent period
(Note 2)		 Allowance
for bad debts
Amount Action taken
T.H.I. Group
(Shanghai) Ltd.
The Company
T.H.I. Group Limited
(HK)
Taiwan Express
Logistic Co.,Ltd.
Affiliates


Affiliates
 Other receivables
575,457
Other receivables
200,000
-

-		 -
-		 170,073
-
-
-

Note 1: The aforementioned transactions have been reversed in this financial report.

Note 2: Amounts collected as of February 19, 2021.

  • (ix) Trading in derivative instruments:Please refer to notes

Please refer to Note 6(b)(l).

  • (i) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

==> picture [558 x 122] intentionally omitted <==

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

Nature of Intercompany transactions
Percentage of the consolidated
No. Name of company Name of counter-party relationship Account name Amount Trading terms net revenue or total assets
0 The Company Taiwan Express Logistic 1 Other receivables 200,000 The sales prices 2.59%
Co., Ltd. and payment terms
of intercompany
sales are not
significantly
different from
those of the third
parties.
1 T.H.I. Group T.H.I. Group Limited (in 2 Other receivables 575,457 " 7.46%
(Shanghai) Ltd. HK)
----- End of picture text -----

Note 1: The numbers indicated above represent the following: 0 for the Parent company, Subsidiaries are numbered sequentially starting from 1.

Note 2: The relations of the transactions represent the following:

  1. The Parent company to its subsidiaries.

  2. Subsidiaries to the Parent company.

  3. Subsidiaries to subsidiaries.

Note 3: This chart will disclose sales, accounts and notes receivable, other receivables, purchases, accounts and notes payable, and other payables. Note 4: The above transactions have been reversed in this financial report.

  • (b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

(Foreign currency express in thousands dollars)

(In Thousands of New Taiwan Dollars)

==> picture [598 x 140] intentionally omitted <==

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

Original investment amount Balance as of December 31, 2020
Main Highest Net income Share of
Name of businesses and December 31, Shares percentage of Carrying Percentage (losses) profits/losses of
investor Name of investee Location products 2020 December 31, 2019 (thousands) ownership value of ownership of investee investee Note
The Company T.H.I. Group Ltd.(in British Virgin Offshore 35,000 35,000 1,000,000 100.00% 114,460 100.00% 3,918 3,918 Subsidiaries
B.V.I.) Islands settlement (1,000USD) (1,000USD)
center
The Company GREATLINE British Virgin Offshore 134,428 134,428 4,050,000 100.00% 2,248,016 100.00% 375,608 375,608 Subsidiaries
INTERNATIONAL Islands holding (4,050USD) (4,050USD)
LIMITED(GREATLI company
NE)
The Company T.H.I GROUP Vietnam Air & sea 8,362 8,362 4,950,000,000 99.00% 66,018 99.00% 18,230 18,048 Subsidiaries
VIETNAM CO., LTD. freight (275USD) (275USD)
forwarding and
packaging
The Company T.H.I GROUP Thailand Air & sea 2,372 2,372 - 49.00% 14,453 49.00% 10,973 5,377 Subsidiaries
(BANGKOK) freight (72USD) (72USD)
COMPANY LIMITED forwarding and
packaging
----- End of picture text -----

195

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Name of
**investor **		 Name of investee **Location ** Main
businesses and
products		 Original inves tment amount Balance as of D ecember 31, 202 0 Net income
(losses)
of investee		 Share of
profits/losses of
investee		 Note

December 31,
2020		 December 31, 2019 Shares
(thousands)		 Highest
percentage of
ownership		 Carrying
value		 Percentage
of ownership
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
GREATLINE
INTERNATION
AL LIMITED
Fresh Beauty
Enterprises Ltd.
TEC
TEC
TEC
TEC
TEC
TEC
TEC
TEC HK		 THI & Maruzen Co.,
Ltd
Taiwan Express
Logistic Co., Ltd.
(TEC)
T.H.I. Logistics Co.
Ltd.
T.H.I. GROUP
(CAMBODIA)
Co., Ltd.
PT. Dexter
Eurekatama
T.H.I. GROUP
SINGAPORE PTE.
LTD
LOGI International
Co., Ltd.
Fresh Beauty
Enterprises Ltd. (Fresh
Beauty)
T.H.I. Logistics
(Malaysia) SDN. BHD
T.H.I. LOGISTICS
PHILIPPINES CORP.

T.H.I. GROUP
LIMITED (in HK)

Eastern Union
Holdings Limited
Taiwan Express (HK)
Co.,Ltd (TEC HK)
TEC Logistic Co., Ltd.
Orient Air General
Sales Agent Co., Ltd.
Hiview Logistics Co.,
Ltd.
Taiwan Express (USA)
INC.
TEC LOGISTICS
(USA) INC.
TEC LOGISTICS
VIETNAM
COMPANY LIMITED
Airtropolis Express(s)
Pte. Ltd.
Japan


Taiwan

Taiwan


Cambodia

Indonesia


Singapore

Korea


Samoa


Malaysia

Philippines

Hong Kong

Hong Kong

Hong Kong
Taiwan

Taiwan

Taiwan

United States

United States



Vietnam

Singapore		 Air & sea
freight
forwarding
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Offshore
holding
company
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Air & sea
freight
forwarding
Offshore
holding
Company
Freight
forwarding,
customs
clearance, and
distribution
Freight
forwarding,
customs
clearance, and
delivery
services
Freight
forwarding,
customs
clearance, and
delivery
services
Freight
forwarding,
customs
clearance, and
distribution
Freight
forwarding,
customs
clearance, and
distribution
Freight
forwarding,
customs
clearance, and
distribution
Sea freight
forwarding
Air freight
forwarding

10,365
(31,130JPY)


704,200


130,000


4,462
(150USD)


47,381
(1,598USD)


19,032
(850SGD)


9,666
(300USD)


307,353
(60,979CNY)


10,381
(315USD)


16,467
(551USD)


139,948
(4,314USD)


57,411
(1,751USD)




266,807
(70,550HKD





6,000





600




76,590




31,629
(1,000USD)




8,549
(290SGD)

10,577
(350USD)

76,640
(3,413SGD)

10,365
(31,130JPY)

704,200

130,000


4,462
(150USD)


47,381
(1,598USD)


19,032
(850SGD)


9,666
(300USD)


307,353
(60,979CNY)


10,381
(315USD)


10,761
(551USD)


139,948
(4,314USD)


57,411
(1,751USD)


266,807
(70,550HKD

6,000

600

76,590


31,629
(1,000USD)


8,549
(290SGD)


-

76,640
(3,413SGD)

3,060

35,958,400

13,000,000


-


12,000


850,000


16,285


66


180,000


419,750


12,480,000


-


-

1,000,000

60,000

5,000,000


100,000


200
-

533
51.00%

100.00%

100.00%
100.00%

30.00%

91.40%

30.00%

66.00%

90.00%

99.94%

100.00%
100.00%
100.00%

100.00%

30.00%

97.51%

100.00%

100.00%
100.00%

65.00%
27,777

870,113

162,493

14,476

36,908

5,018

5,911

299,686

10,771

7,879

2,246,915

123,339

420,138

-

5,089

112,610

31,622

12,199

9,835

106,472
51.00%

100.00%

100.00%

100.00%

30.00%

91.40%

30.00%

66.00%

90.00%

99.94%

100.00%

100.00%

100.00%
100.00%

30.00%

97.51%

100.00%

100.00%

100.00%

65.00%
11,194

108,850

18,521

5,132

4,967

639

(1,675)

6,571

3,310

(4,294)

375,774

6,571

66,107

-

9,826

25,853

-

-

-

40,196
5,709

102,850

18,521

5,132

(1,634)

584

(503)

2,029

2,979

(4,291)

375,774

6,571

66,107
-


2,948

25,210
-

-

-


24,424		 Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Investment under
equity method
Subsidiaries
Investment under
equity method
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries

196

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

  • (c) Information on overseas branches and representative offices:

  • (i) The names of investees in Mainland China, the main businesses and products, and other information:

(Foreign currency express in thousands dollars)

(In Thousands of New Taiwan Dollars)

Name of
investee		 Main
businesses
and
products		 Total
amount
of paid-in
capital		 Method
of
investment
(Note 1)		 Accumulated
outflow of
investment from
Taiwan as of
January 1, 2020		 Investment flows Investment flows Accumulated
outflow of
investment from
Taiwan as of
December 31, 2020		 Net
income

(losses)
of the
investee		 Percentage
of ownership
Highest
Percentage of
ownership		 Investment
income
(losses)		 book
value		 Accumulated
remittance of
earnings in
current period
Outflow Inflow
Shanghai Yaohwa
International
Forwarder Co., Ltd.
T.H.I. Group
(Shanghai) Ltd.
T-SC Factoring Co.,
Ltd.
Shanghai Moorluk
International Shipping
Co., Ltd.
T-Cube Global
Logistics Co., Ltd.
EXer Logistics Co.,
Ltd.
TEC Logistics
(Shenzhen) Co., Ltd.
T-Cube (Suzhou)
Global Logistic Co.,
Ltd.
T-SC Trading Co.,
Ltd.

Air & sea freight
forwarding and
customs clearance

Air & sea freight
forwarding and
customs clearance

Commercial service


Air & sea freight
forwarding and
customs clearance

Warehousing and
company

Express logistics
company

Freight forwarding,
customs clearance,
and distribution


Warehousing

Supply chain
management and
import and export
trade

55,031
(1,700USD)


92,883
(3,060USD)

215,680
(50,000CNY)


22,460
(5,000CNY)

54,610
(11,000CNY)

58,023
(12,438CNY)


183,901
(48,550HKD)
43
(10CNY)



213
(50CNY)		 Note 1(2)
Note 1(2)
Note 2
Note 2
Note 1(2)
Note 2
Note 3
Note 4
Note 5		 55,031
(1,700USD)
89,165
(3,060USD)
-
-
274,589
(8,391USD)
-
183,901
(48,550HKD)
-
-

-


-
-
-


-
-


-
-
-		 -
-
-
-
-
-
-
-
-		 55,031
(1,700USD)
89,165
(3,060USD)
-
-
274,589
(8,391USD)
-
183,901
(48,550HKD)
-
-		 5,069
240,082
2,155
1,917
6,531
35,572
41,020
40
(77)		 100.00%
100.00%
100.00%
65.00%
66.00%
93.51%
100.00%
66.00%
100.00%		 100%
100%
100%
65%
66.00%
94%
100%
66%
100%
5,069

240,082

2,155

964

4,310

31,546

41,020

26

(77)
123,410
1,372,650

217,930

16,988

107,461

112,574

222,746

79

137
-

-

-

-

21,140

-

-

-

-

Note: The above investments were eliminated in the preparation of consolidated financial statements.

Note 1: The method of investment in Mainland China is as follows:

  • (1) Invested directly in Mainland China.

  • (2) Invested in Mainland China Via remittance through a third region.

  • (3) Others.

  • Note 2: T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) directly invested in Exer Logistics Co., Ltd., 、Shanghai Moorluk International Shipping Co., Ltd and T-SC Factoring Co., Ltd.

  • Note 3: TEC Logistics Co., Ltd is invested by the Company’s subsidiary, Taiwan Express Logistic Co., Ltd., that invested in Mainland China via remittance through a third region. The upper limit of the investments is 60% of Taiwan Express Logistic Co., Ltd.’s net assets in the financial statements based on the “REGULATIONS GOVERNING THE APPROVAL OFINVESTMENT OR TECHNICAL COOPERATION INMAINLAND CHINA” and have been approved by the Investment Commission Ministry of Economic Affairs amounting to $183,901 thousand (HKD48,550 thousand).

Note 4: T-Cube Global Logistics Co., Ltd. directly invested in T-Cube (Suzhou) Global Logistic Co., Ltd.

Note 5: Shanghai Yaohwa International Forwarder Co., Ltd. directly invested in T-SC Trading Co., Ltd.

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as
of December 31,2020(Note 1)
Investment Amounts Authorized by
Investment Commission,MOEA(Note 2)		 Upper Limit on Investment
385,476
( 13,718USD thousand)		 457,440
( 16,279USD thousand)		 1,883,236

Note 1: Calculated by accumulated investment in Main land China as of December 31, 2020, including $6,530 thousand (USD $200 thousand) remitted to THI Group (Shanghai) Logistic Ltd. and USD $367 thousand remitted to Shanghai Huiyou Yuanhua Trade Co., Ltd..

Note 2: As the reporting date, the exchange between USD and TWD was 1:28.10.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of “ ” consolidated financial statements, are disclosed in Information on significant transactions .

197

(d) Major shareholders:

(d)
Major shareholders:
Shareholding
Shareholder’s Name		 Shares Percentage
WPG HOLDINGS LIMITED 10,112,039
8.63%
GDLDEN HORSE INVESTMENTS CORP 6,349,013
5.41%

  • (14) Disclosures required for securities firm investing in countries or regions without securities authority:

  • (a) General information

The Group’s reportable operating segments are the sea export and air export segments.

  • (b) Information about reportable segments and thier measurement and reconciliations

The Group have two reportable segments, as described below. These two segments are strategic business units of the Group. Each strategic business unit povides dieeerect services and a managed separately on account of different professional knowledge and marketing tactics. The Group’s chief ’ operating decision markers review the internal managment report on a monthly basis. The Group s operating segment information and reconciliation were as follows:

Segment
revenue
Segment gross
profit
Segment
revenue
Segment
gross profit		 2020 Total
15,160,243
2,467,887
Total
11,258,071
2,014,229
Sea export
$ 8,623,090

1,414,381		 Airexport

5,018,571

705,748		 Others

1,518,582

347,758
2019		 Adjustment/
elimination

-

-
Sea export
6,401,751
1,138,934		 Airexport

3,332,255

530,003
Others

1,524,065

345,292		 Adjustment/
elimination

-

-
  • (c) Products and services information

Please refer to note 14(b).

  • (d) Geographic information

In presenting information on the basis of geography, segment assets are based on the geographical location of the assets. Segment revenue is based on the geographical location of customers, please refer to note 6(t).

Non-current assets:

2020
Taiwan
$ 733,460
China and Hong Kong
456,412		 2019

744,217

465,513

198

Others 22,800 28,564 $ 1,212,672 1,238,294

  • (e) Major customers

The Group has no single customer that exceeds 10% of its sales.

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

199

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, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the 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. 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 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 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

200

services fee.

  1. 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:

  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

201

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

  2. 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.

  3. 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.

  4. 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 9, 2021

202

(English Translation of Financial Statements Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP.

Balance Sheets
December 31, 2020 and 2019

(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)(j)&(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),(q),(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)&(n))
1600
Property, plant and equipment (notes 6(f)&8)
1780
Intangible assets (note 6(g))
1840
Deferred tax assets (note 6(l))
1920
Guarantee deposits paid (notes 6(s)&8)
Non-current assets
Total assets		 December 31, 2020
Amount
%
$ 131,102
3
76,945
1
203,773 4
45,593
1
200,000
4
3,062
-		 December 31, 2019
Amount
%
37,989
1
55,196
1
69,447 2
43,227
1
200,000
5
41,552
1
447,411
11
70,100 2
3,455,418
82
184,965
4
24,508
1
6,742
-
336
-
3,742,069
89
4,189,480
100
Liabilities and Equity
Current liabilities:
2100
Short-term borrowings (notes 6(h)(s)&(v))
2200
Other payables (notes 6(k)&(s))
2220
Other payables to related parties (notes 6(s)&7)
2230
Current tax liabilities
2399
Other current liabilities, others
Current liabilities
Non-Current liabilities:
2530
Bonds payable (notes 6(j) & (s))
2540
Long-term borrowings (notes 6(i)(s)&(v))
2640
Net defined benefit liability, non-current (note 6(k))
Non-current liabilities
Total liabilities
Equity attributable to owners of parent (notes 6(j)(m)&(n)):
3110
Ordinary share
3140
Capital collected in advance
3200
Capital surplus
3300
Retained earnings
3400
Other equity
3500
Treasury shares
Total equity
Total liabilities and equity		 December 31, 2020 December 31, 2020 December 31, 2020
Amount % Amount
1,343,927
27
1,464,482
35


287,611
6
-
-
200,000
4
300,000
7
14,425
-
14,924
-

660,475
13

229,000 5
3,883,979
78
180,214
4
20,002
-
10,684
-
336
-


502,036
10
314,924
7


1,845,963
37
1,779,406
42


1,171,575
23
1,171,575
28
86,108
2
-
-
830,563
17
798,811
19
1,066,722
21
653,539
16
44,319
1
(186,054)
(4)
(60,560)
(1)
(27,797)
(1)
4,324,215
87




3,138,727
63
2,410,074
58
$
4,984,690
100

$
4,984,690
100
4,189,480
100

203

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars, except for earnings per common share)

4000
Operating revenue (notes 6(q)&7)
5000
Operating costs (notes 6(k)(n)(p)&12)
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)&(r))
7100
Interest income (notes 6(r)&7)
7510
Interest expense (note 6(r))
Profit before income tax
7950
Less: Income tax (benefit) expenses(note 6(l))
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		 2020 %
100
15		 %
100
15		 2019 %

100

23
Amount
$ 593,438
87,190		 Amount
334,862
75,580

506,248		 85
259,282

77

506,248		 85
259,282

77

5,324
43,091
1,971
(16,596)		 1
8
-
(3)
5,419
1,756
2,215
(15,105)

2

1

1

(5)

540,038
(1,954)
91
-
253,567
4,520


76

1

541,992		 91
249,047

75

706
325,906
(3,126)
-		 -
55
(1)
-
(2,181)
12,656
(4,635)
-

(1)

4

(1)
-
323,486 54 5,840
2

(71,387)
-		 (12)
-
(73,280)
-

(22)
-
(71,387) (12) (73,280)
(22)

252,099
42
(67,440)


(20)

$
794,091		 133
181,607

55

$
4.72
2.15
$
4.70		 2.15

204

(English Translation of Financial Statements Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Balance on January 1, 2019
Profit
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserve
Cash dividends on ordinary share
Reversal of special reserve
Retirement of treasury share
Balance on December 31, 2019
Profit
Other comprehensive income
Total comprehensive income
Appropriation and distribution of retained earnings:
Legal reserved
Special reserve appropriated
Cash dividends on ordinary shares
Other changes in capital surplus:
Recognition of equity component of convertible bonds
issued
Capital increase by cash
Purchase of treasury share
Changes in ownership interests in subsidiaries
Share-based payment transactions
Disposal of investments in equity instruments designated at
fair value through other comprehensive income
Balance at December 31, 2020		 Share capital
Ordinary
shares
Capital
collected in
advance
Capital
surplus		 Retained earnings
Legal
reserve
Special
reserve
Unappropriated
retained earnings
Total retained
earnings

205

(English Translation of Financial Statements Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP.

Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Net gain on financial assets or liabilities at fair value through profit
Interest expense
Interest income
Share-based payment transactions
Share of profit of associates accounted for using equity method
Loss on disposal of property, plant and equipment
Gain on disposal of investments
Total adjustments to reconcile loss
Changes in operating assets and liabilities:
Changes in operating assets:
Increase in accounts receivable due from related parties
Decrease (increase) in other current assets
Decrease in notes payable
Increase (decrease) in other payables
Decrease in other payables to related parties
Increase (decrease) in other current liabilities
Increase 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
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
Acquisition of investments accounted for using equity method
Acquisition of property, plant and equipment
Increase in other receivables due from related parties
Acquisition of intangible assets
Dividends received
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase in short-term loans
Decrease in short-term loans
Proceeds from issuance of convertible bonds
Proceeds from issuance of long-term borrowings
Repayments of long-term borrowings
Cash dividends paid
Capital increase by cash
Cost of increase in treasury stock
Net cash flows from financing activities
Net decrease (increase) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period		 2020
$ 540,038
6,192
6,182
(39,894)
16,596
(1,971)
881
(534,327)
-
(4,601)		 2019
253,567
5,808
5,771
(2,108)
15,105
(2,215)
-
(279,652)
1
(1,050)

(550,942)
(258,340)

(2,366)
600
-
10,181
(47,490)
17
207
(2,079)
(31,156)
(1,007)
(1,917)
(42,919)
(114)
126
(589,793) (337,406)

(49,755)
1,971
(16,265)
(5,248)
(83,839)
2,215
(15,105)
(1,175)

(69,297)
(97,904)

(16,601)
55,452
(44,246)
105,028
(5,706)
(1,441)
-
(1,676)
36,521
(164)
-
(55,837)
32,726
(10,731)
(6,828)
(80,000)
(8,503)
85,175

127,331
(44,162)

-
(80,000)
312,269
200,000
(300,000)
(150,535)
86,108
(32,763)
290,000
-
-
300,000
(200,000)
(254,752)
-
-

35,079		 135,248

93,113
37,989
(6,818)
44,807

$
131,102
37,989

206

(English Translation of Financial Statements and Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

T3EX GLOBAL HOLDINGS CORP. (the “Company”) was incorporated on February 4, 1987, as a company limited by shares, and registered with the Ministry of Economic Affairs, R.O.C. The address of the Company’s registered office is 12F, No. 563, Sec. 4, Zhongxiao E. Rd., Xinyi Dist., Taipei City, R.O.C. The Company mainly engages in industrial investment holdings.

(2) Approval date and procedures of the financial statements:

The parent-company-only financial statements were authorized for issue by the board of directors on March 9, 2021.

(3) New standards, amendments and interpretations adopted:

  • (a) The impact of the International Financial Reporting Standards ( “IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2020:

  • Amendments to IFRS 3 “Definition of a Business”

  • Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”

  • Amendments to IAS 1 and IAS 8 “Definition of Material”

  • Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

  • (b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its financial statements:

  • Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

  • Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform － ” Phase 2

  • (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Company is evaluating the impact of its initial adoption of the standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

207

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(4) Summary of significant accounting policies:

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

  • (a) Statement of compliance

These parent-company-only financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the Regulations).

  • (b) Basis of preparation

  • (i) Basis of measurement

The parent-company-only financial statements have been prepared on a historical cost basis except for the following material items in the balance sheets:

  • 1) Financial instruments at fair value through profit or loss are measured at fair value;

  • 2) Financial assets at fair value through other comprehensive income are measured at fair value;

  • 3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation.

(ii) Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The Company’s parent-company-only financial statements are presented in New Taiwan dollar, which is the Company’s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(c) Foreign currency

  • (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income.

208

  • 1) an investment in equity securities designated as at fair value through other comprehensive income.

  • 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

  • 3) qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Company disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

  • (d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

  • (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

  • (ii) It is held primarily for the purpose of trading;

  • (iii) It is expected to be realized within twelve months after the reporting period; or

  • (iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

  • (i) It is expected to be settled in the entity’s normal operating cycle;

  • (ii) It is held primarily for the purpose of trading;

209

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • (iii) It is due to be settled within twelve months after the reporting period; or

  • (iv) The Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

  • (f) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value – – through other comprehensive income (FVOCI) debt investment; FVOCI equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

  • 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

  • ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

  • ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

210

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

  • 2) Fair value through other comprehensive income (FVOCI )

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

  • ‧ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

  • ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

’ Dividend income is recognized in profit or loss on the date on which the Company s right to receive payment is established.

  • 3)

  • Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

211

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • 4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, other receivable, guarantee deposit paid and other financial assets).

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

  • ‧ debt securities that are determined to have low credit risk at the ended of reporting period; and

  • ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company ’ s historical experience and informed credit assessment as well as forward-looking information.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

212

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirely or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

  • 5)

Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet but retains either all or substantially all the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

  • (ii) Financial liabilities and equity instruments

  • 1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual agreements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Compound financial instruments

Compound financial instruments issued by the Company comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

213

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

5) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

  • 6) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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

  • 7)

Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

214

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(g) Investment in associates

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of investment includes transaction costs. The carrying amount of investment in associates includes goodwill arising from the acquisition, less any accumulated impairment losses.

The parent-company-only financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes and changes of its proportionate share in the investee within capital surplus, when an associate's equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interest in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(h) Investment in subsidiaries

The subsidiaries, which are controlled by the Company, are evaluated using the equity method when preparing their financial statements. Under the equity method, the net income, other comprehensive income and equity of parent-company-only financial statements are the same as those of the net income, other comprehensive income and equity in the equity attributable to the owners of the parent company in the consolidated financial statements.

The Company has recognized the changes in equity of its subsidiaries under shareholder’s equity.

(i) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

215

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(ii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to the Company.

  • (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) buildings 5~50 years
2) plant and equipment 3~7 years
3) fixtures and fittings 5 years

Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

  • (j) Leased assets

  • (i) Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

  • 1) the contract involves the use of an identified asset this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

  • 2) the customer has the right to obtain substantially all the economic benefits from use of the asset throughout the period of use; and

  • 3) the customer has the right to direct the use of the asset throughout the period of use only if either:

  • the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or

  • the relevant decisions about how and for what purpose the asset is used are predetermined and:

216

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • －

  • the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

(ii) As a lease

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of fixtures and fittings that have a lease term of 12 months or less and leases of low-value assets, including IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

  • (iii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

  • (k) Intangible assets

  • (i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures, including expenditure on internally generated goodwill and brands, are recognized in profit or loss as incurred.

217

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • (iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

  • 1) Computer Software

7 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(l) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

  • (m) Revenue recognition

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring services to customers. The Company recognizes revenue when it satisfies a performance obligation by transferring control of services to customers.

218

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, the group does not adjust any of the transaction prices for the time value of money.

  • (n) Employee benefits

  • (i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

  • (ii) Defined benefit plans

The Company’s net obligation in respect of the defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods; discounting that amount and deducting the fair value of any plan assets.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability (asset), which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employees are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

219

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(o) Share-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share appreciation rights. Any changes in the liability are recognized in profit or loss.

Grant date of a share-based payment award is the date which the Company and employees reach consensus on the price and number of a new award.

(p) Income tax

Income taxes comprise current taxes and deferred taxes. Except for expenses that are related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

  • (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

  • (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

  • (iii) taxable temporary differences arising on the initial recognition of goodwill.

220

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Deferred taxes are measured at tax rates that are expected to be applied to temporary difference when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

  • (i) The Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

  • (ii) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

  • 1) the same taxable entity; or

  • 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(q) Earnings per share

The Company discloses the Company's basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as convertible bonds, employee stock options and employee compensation estimation.

  • (r) Operating segments

An operating segment is disclosed on the Consolidated Financial Statement of the Group, therefore this statement will not include the operating segments.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the parent-company-only financial statements in conformity with the IFRSs endorsed by the FSC requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

221

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year, please refer to note 6(e) Investments accounted for using the equity method.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is as follows:

  • (a) Judgment of whether the Company has substantive control over its investees

The Company holds 30% of the outstanding voting shares of PT. Dexter Eurekatama and is the ’ single largest shareholder of the investee. Although the remaining 70% of PT. Dexter Eurekatama s shares are not concentrated within specific shareholders, the Company still cannot obtain more than half of the total number of PT. Dexter Eurekatama’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Company has significant influence on PT. Dexter Eurekatama.

(6) Explanation of significant accounts:

  • (a) Cash and cash equivalents
Checking accounts
Demand deposits-foreign currency
Demand deposits
 December 31,
2020
$ 41
773
130,288		 December 31,
2019

47

851

37,091

$
131,102


37,989

Refer to note 6(s) for the sensitivity analysis of the financial assets and liabilities of the Company.

  • (b) Financial assets/liabilities at fair value through profit or loss
Mandatorily measured at fair value through profit or loss:
Derivative instruments not used for hedging
Right of redemption of convertible bonds
Non-derivative financial assets
Funds
Stocks listed on domestic markets
Corporate bonds
Total		 December 31,
2020
$ 328
7,223
69,394
-		 December 31,
2019


7,198

32,728
15,270
$
76,945

55,196

For the years ended December 31, 2020 and 2019, the investment income from disposal of financial assets at fair value through profit or loss is $4,601 thousand and $1,050 thousand, recorded as other gains and losses.

222

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(c) Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive
income
Current
Domestic Company-Soonest express Co., Ltd.
Domestic Company-Yang Ming Marine Transport Corp.
Total
Non-current
Domestic Company Private placement stocks-Yang Ming
Marine Transport Corp.		 December 31,
2020
$ 42,881
160,892		 December 31
2019

18,216

51,231

$
203,773


69,447

$
229,000

70,100

The Company designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term for strategic purposes.

In June, August and December 2020, the Company has sold its partial shares held in Soonest express Co., Ltd. and Yang Ming Marine Transport Corp. in order to adjust its investment strategy. The shares sold had a fair value of $21,782 thousand and $33,670 thousand, respectively. The Company realized a gain of $24,149 thousand, which was reclassified from other comprehensive income to retained earnings.

The above financial assets were not provided as collateral guarantees.

  • (d) Accounts receivable due from related parties
Accounts receivable due from related parties -measured at
amortized cost		 December 31,
2020
$
45,593		 December 31,
2019
43,227

As of December 31, 2020 and 2019, the Company does not have any over-due accounts receivable.

There were no movements in the allowance of doubtful receivables with respect to accounts receivable for the Company during the fiscal years 2020 and 2019.

As of December 31, 2020 and 2019, no receivables were pledged as collateral.

223

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • (e) Investments accounted for using equity method

A summary of the Company’s financial information for investments accounted for using the equity method at the reporting date is as follows:

method at the reporting date is as follows:
Subsidiary
Associates		 December 31,
2020
$ 3,841,160
42,819
$
3,883,979		 December 31,
2019

3,405,228

50,190



3,455,418

(i) Subsidiary

Please refer to the consolidated financial statements for the years ended December 31, 2020.

  • (ii) Associates

No publicly quoted prices were available for the above associates.

The financial information on associates of the Company is as follows:

Carrying amount of individual insignificant associates
equity		 December 31,
2020
$
47,908		 December 31,
2019
55,246

The Company does not share any contingent liabilities of an associate incurred jointly with other investors. The Company also does not have any contingent liabilities because the Company is severally liable for all or part of the liabilities of the associate.

There are no significant restrictions on the ability of associates to transfer funds to the Company.

  • (iii) Guarantees

As of December 31, 2020 and 2019, the Company did not provide any investments accounted for using the equity method as collateral for its loans.

224

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(f) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2020 and 2019, were as follows:

Cost or deemed cost:
Balance on January 1, 2020
Additions
Disposal
Balance on December 31, 2020
Balance on January 1, 2019
Additions
Disposal
Balance on December 31, 2019
Depreciation and impairment loss:
Balance on January 1, 2020
Depreciation
Disposal
Balance on December 31, 2020
Balance on January 1, 2019
Depreciation
Disposal
Balance on December 31, 2019
Carrying amounts:
Balance on December 31, 2020
Balance on December 31, 2019
Balance on January 1, 2019		 Land
$ 132,594
-
-		 Buildings Office and
Other
Equipment		 Total

241,927

1,441

(22,997)
220,371

235,302

6,828

(203)
241,927

56,962

6,192

(22,997)
40,157

51,356

5,808

(202)
56,962
180,214
184,965
183,946
69,299
40,034
686
755
(15,060)
(7,937)
$
132,594

54,925
32,852

$ 132,594
-
-

69,299
33,409
-
6,828
-
(203)
$
132,594
69,299
40,034

$ -
-
-

28,531
28,431
1,098
5,094
(15,060)
(7,937)
$
-

14,569
25,588
$ -
-
-

27,467
23,889
1,064
4,744
-
(202)
$
-
28,531
28,431
$
132,594

40,356
7,264

$
132,594

40,768
11,603

$
132,594

41,832
9,520

A summary of pledged assets as of December 31, 2020 and 2019 is found in note 8.

(g) Intangible assets

The costs, amortization, and impairment of the intangible assets of the Company for the years ended December 31, 2020 and 2019, were as follows:

Cost:
Balance on January 1, 2020
Additions
Balance on December 31, 2020
Balance on January 1, 2019
Additions
Balance on December 31, 2019		 Intangible Assets
$ 60,365
1,676
$
62,041
$ 51,862
8,503
$
60,365

225

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Amortization and impairment loss:
Balance on January 1, 2020
Amortization
Balance on December 31, 2020
Balance on January 1, 2019
Amortization
Balance on December 31, 2019
Carrying value:
Balance on December 31, 2020
Balance on January 1, 2019
Balance on December 31, 2019		 Intangible Assets
$ 35,857
6,182
$
42,039
$ 30,086
5,771
$
35,857
$
20,002
$
21,776
$
24,508

Amortization of intangible assets of the Company for the years ended December 31, 2020 and 2019, were recognized as operating expenses in the individual profit and loss.

(h) Short-term borrowing

Unsecured bank loans
Secured bank loans
Total
Unused short-term credit lines
Interest rate		 December 31,
2020
$ 1,100,000
200,000		 December 31,
2020
$ 1,100,000
200,000		 December 31,
2019
1,380,000
-

$
1,300,000		 1,380,000

$
1,110,000
1,030,000

0.86%~1.02%
1.00%~1.15%

Refer to note 8 for details of the related assets pledged as collateral.

  • (i) Long-term borrowing

Long-term borrowings were as follows:

Unsecured bank loans
Less: current portion
Total
Unused long-term credit lines
Interest rate		 December 31,
2020
$ 200,000
-		 December 31,
2020
$ 200,000
-		 December 31,
2019
300,000
-
$
200,000		 300,000

$
-
-
1.05% 1.15%

For the year ended December 31, 2020, the Company's proceeds from long-term borrowings amounted to $200,000 thousand with an interest rate of 1.05%. The long-term borrowings are due in August 2022.

226

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

For the year ended December 31, 2019, the Company's proceeds from long-term borrowings amounted to $100,000 thousand and $200,000 thousand both with interest rate of 1.15%. The long-term borrowings are due in July and December 2021, respectively.

For the years ended December 31, 2020 and 2019, the repayment amounted to $300,000 thousand and $200,000 thousand, respectively.

Refer to note 8 for details of the related assets pledged as collateral.

  • (j) Bonds payable

The details of unsecured convertible bonds were as follows:

Total convertible corporate bonds issued
Unamortized discounted corporate bonds payable
Corporate bonds issued balance at year-end
Embedded derivative－redemption options, included in
financial assets at fair value through profit or loss
Equity component－conversion options, included in capital
surplus－stock options		 December 31,
2020
$ 287,611
12,389
$
300,000
$ 328
$ 25,138

The Company issued the 4th domestic unsecured convertible bonds and recognized conversion options and the liability component as equity and liability, respectively. The detailed information was as follows:

The present value of the convertible corporate bonds at the
time of issuance
The embedded derivative instrument－redemption options at
the time of issuance
The equity component at the time of issuance
Total amount of the convertible corporate bonds at the time of
issuance		 4th
domestic unsecured
convertible bonds
$ 287,280
(149)
25,138
$
312,269

The Company issued the 4th domestic unsecured convertible bonds on December 2, 2020, with face value amounting to $300,000. The terms and conditions of the bonds were as follows:

  • (i) Issuance price: 105.09% of the par value

  • (ii) Coupon rate: 0%

  • (iii) Issuance period: 3 years (December 2, 2020 to December 2, 2023)

227

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • (iv) The Company’s right of redemption:

At any time during the period from March 3, 2021 to October 23, 2023, when the closing price of the Company’s common shares is equal to or greater than the conversion price by 30% for 30 consecutive trading days, or the outstanding balance of the bonds is less than 10% of total initial issue amount, the Company may redeem the bonds in cash at face value.

(v) Bondholders' put option:

The holders of the 4th domestic unsecured convertible bonds have no right to request the Company to repurchase the convertible bond.

  • (vi) Terms of conversion:

  • 1) The bondholders may request conversion of the bond to the Company's common stock at any time during the period from March 3, 2021 to December 2, 2023.

  • 2) Terms of conversion price:

The conversion price was set at $39.5 at the time of issue. When the numbers of common shares of the Company changes, or other convertible bonds are issued with a conversion price lower than the market price, the conversion price will be adjusted based on a formula in accordance with the terms of issue.

(k) Employee benefits

(i) Defined benefit plan

The Company determined the movement in the present value of defined benefit obligations and the fair value of plan assets as follows:

Total present value of defined benefit obligations
Fair value of plan assets
Net defined benefit (liability) asset		 December 31,
2020
$ (31,454)
17,029		 December 31,
2019

(30,816)

15,892

$
(14,425)

(14,924)

The Company's employee benefit liabilities were as follows:

Paid vacation liability-current (recorded in other
payables)		 December 31,
2020
$
229		 December 31,
2019
229

The Company makes defined benefit plan contributions to the pension fund account at Bank of Taiwan and to the manager pension fund account that provide pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

228

T3EX GLOBAL HOLDINGS CORP. Notes to the Financial Statements

  • 1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Fund, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

As of December 31, 2020, the pension fund account balance at Bank of Taiwan and the manager pension fund balance amounted to $2,035 thousands and $14,994 thousands, respectively. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

  • 2) Movements in the present value of defined benefit obligation

The movements in present value of the defined benefit obligations for the Company were as follows:

Defined benefit obligations on January 1
Current service costs and interest cost
Remeasurements loss (gain)
Defined benefit obligations on December 31		 2020
$ 30,816
1,354
(716)		 2019

27,362

1,272

2,182

$
31,454

30,816
  • 3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the years ended December 31, 2020 and 2019 were as follows:

Fair value of plan assets on January 1
Expected return on plan assets
Contribution to the plan
Remeasurements loss (gain)
Fair value of plan assets on December 31		 2020
$ 15,892
145
1,002
(10)		 2019

14,745

149

997

1

$
17,029
15,892

229

Notes to the Financial Statements

T3EX GLOBAL HOLDINGS CORP.

  • 4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

Current service costs
Net interest of net liabilities for defined benefit
obligations		 2020
$ 1,064
145		 2019

983

140
$
1,209		 1,123

The above net pension gains and losses are recognized as operating cost.

  • 5) Remeasurement of net defined benefit liability recognized in other comprehensive income

The Company’s remeasurement of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2020 and 2019 was as follows:

Accumulated amount at January 1
Recognized during the period
Accumulated amount at December 31		 2020
$ (1,921)
(706)		 2019
(4,102)
2,181

$
(2,627)
(1,921)
  • 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate
Future salary increasing rate		 December 31,
2020
0.625%
3.000%		 December 31,
2019
1.000%
3.000%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $1,008 thousand dollar.

The weighted average lifetime of the defined benefit plans is 17.60 years.

  • 7) Sensitivity analysis

When calculating the present value of the defined benefit obligations, the Company uses judgments and estimations to determine the actuarial assumptions, including the discount rates and future salary changes, as of the end of the reporting period. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligations.

230

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The changes in the main actuarial assumptions might have an impact on the present value of the defined benefit obligation:

of the defined benefit obligation:
December 31, 2020
Discount rate
Future salary increasing rate
December 31, 2019
Discount rate
Future salary increasing rate		 Effects to the defined benefit
obligation
Increase by
0.25%
$ (81)
82
(160)
155		 Decrease
by0.25%
85
(79)
165
(152)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

(ii) Defined contribution plan

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $1,512 thousand and $1,499 thousand for the years ended December 31, 2020 and 2019, respectively.

(l) Income tax

(i) The components of income tax in the years 2020 and 2019 were as follows:

Current income tax expense
Deferred income tax benefit
Income tax (profit) expense		 2020
$ 1,988
(3,942)		 2019

4,713

(193)

$
(1,954)

4,520

231

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Reconciliation of income tax expense and profit before tax for the years ended December 31, 2020 and 2019 were as follows:

Profit before income tax
Income tax using the Company’s domestic tax rate
Domestic investment income using equity method
Changes in unrecognized temporary differences
Gains that does not affect income tax expense
Prior year income tax underestimation (overestimation)
Undistributed earnings additional tax
Others		 2020
$ 540,038		 2019

253,567

108,008
(24,274)
(82,591)
(5,921)
(159)
275
2,708


50,713

(13,022)

(42,909)

(4,083)

-

3,540

10,281

$
(1,954)

4,520

  • (ii) Deferred tax assets and liabilities

  • 1) Unrecognized deferred tax assets and liabilities

The Company is able to control the timing of the reversal of the temporary differences associated with investments in subsidiaries as of December 31, 2020 and 2019 . Also, management considers it probable that the temporary differences will not reverse in the foreseeable future. Hence, such temporary differences are not recognized as deferred tax assets and liabilities. Details are as follows:

Unrecognized deferred tax liabilities
Unrecognized deferred tax assets		 December 31,
2020
$
500,455		 December 31,
2019
417,007

$
5,581
4,639
  • 2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Deferred tax assets:
Balance at January 1, 2019
Recognized in profit or loss
Balance at December 31, 2019
Balance at January 1, 2020
Recognized in profit or loss
Balance at December 31, 2020		 Defined benefit
plans		 Others

2,648
3,942		 Total

6,742

3,942
$ 4,094
-
$
4,094

6,590

10,684

$ 4,094
-


2,455
193

6,549

193
$
4,094
2,648		 6,742

232

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

3) Assessment of tax

The Company’s tax returns for the years through 2018 were assessed by the Taipei National Tax Administration.

  • (m) Capital and other equity

(i) Ordinary shares

As of December 31, 2020 and 2019, the authorized capital of the Company consisted of $2,000,000 thousand shares, of which $80,000 thousand shares were reserved for employee share options, with a par value of $10 dollars per share, and the issued capital was 117,158 thousand shares. All issued ordinary shares were paid up upon issuance.

The Company had passed the resolution on the Board of Directors on October 14, 2020, which increased cash capital and issued new shares of 10,000 thousand shares, each of par value of $10 dollars, and the total issue amount is $100,000 thousand. The aforementioned cash increase was issued at a premium of $30 per share. As of December 31, 2020, the total proceeds new issued is $86,108 thousand. As of the issue date of the financial statements, all funds for the issued shares have been collected, and the relevant legal registration procedures have been completed.

Reconciliation of shares outstanding shares for the years ended December 31, 2020 and 2019 were as follows:

Beginning balance, January 1
Treasury stock retirement
Ending balance, December 31		 Unit: thousand share
2020
2019
$ 117,158
118,346
-
(1,188)		 Unit: thousand share
2020
2019
$ 117,158
118,346
-
(1,188)
$
117,158

117,158
  • (ii) Capital surplus

The components of capital surplus were as follows:

Capital surplus
The components of capital surplus were as follows:
Paid-in capital derived from premium on issuance of
common shares
Surplus arising from bond conversion option
Equity component of convertible bonds
Surplus arising from long-term equity investments－
donated surplus and others
Surplus arising from premium from merger
Surplus arising from stock options		 December 31,
2020
$ 497,991
245,665
25,138
12,392
2,912
46,465		 December 31,
2019
497,991

245,665

-

11,731

2,912

40,512

$
830,563


798,811

233

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

In accordance with the R.O.C. Company Act realized capital reserve can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned realized capital reserve includes share premiums and donation. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserve to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

(iii) Retained earnings

According to the Company’s articles of incorporation, 10% of annual net earnings (net of income taxes), after deducting accumulated deficits, must be set aside 10% as legal reserve. Unless and until the accumulated legal reserve equals the Company’s total capital, the Company may set aside a special reserve in accordance to Article 41 of the Securities and Exchange Act. After the board of directors considers the Company’s budget for funding needs, financial structures, current period earnings, and steady profit distribution when proposing the distribution of earnings, the proposal should be resolved during the stockholders’ meeting.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders' meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2)

Special reserve

By choosing to apply exemptions granted under IFRS 1 “First-time Adoption of International Financial Reporting Standards ” during the Company ’ s first-time adoption of the International Financial Reporting Standards (IFRSs) endorsed by the Financial Supervisory Commission, cumulative translation adjustments (gains) shall be reclassified as retained earnings. The net increase in retained earnings due to the first-time adoption of IFRSs amounted to $7,116 thousands. In accordance with Ruling No. 1010012865 issued by the Financial Supervisory Commission on April 6, 2012, an increase in retained earnings due to the first-time adoption of IFRSs shall be reclassified as special earnings reserve during earnings distribution, and when the relevant asset is used, disposed of, or reclassified, this special earnings reserve shall be reversed as distributable earnings proportionately. The carrying amount of special earnings reserve was $7,116 thousands on December 31, 2020 and 2019.

In accordance with the guidelines of the above Ruling, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current-period reduction of special earnings reserve resulting from the first-time adoption of IFRSs and the carrying amount of other shareholders’ equity as stated above. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods due to the first-time adoption of IFRSs. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

234

Notes to the Financial Statements

T3EX GLOBAL HOLDINGS CORP.

  • 3) Earnings distribution

Earnings distribution for 2019 and 2018 was decided by the resolution adopted, at the general meeting of the shareholders held on May 27, 2020 and June 21, 2019, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary
shareholders:
Cash		 2019
Amount per
share(dollars)
Total
amount
$ 1.31
150,535		 2019
Amount per
share(dollars)
Total
amount
$ 1.31
150,535		 2018
Amount per
share(dollars)
Total
amount
2.2
254,752		 2018
Amount per
share(dollars)
Total
amount
2.2
254,752
Amount per
share(dollars)		 Amount per
share(dollars)
$ 1.31 2.2

There is no difference between the actual amount of earning distribution and the resolution of the Board of Directors of the Company, information is available on the "Market Observation Post System" of the TWSE.

  • (iv) Treasury stock

For the years ended December 31, 2020 and 2019 the movements of the treasury stock were as below.

**Item ** January 1,
2020		 January 1,
2020		 Increase
1,556
32,763		 Increase
1,556
32,763		 Decrease

-
-		 December
31, 2020
2,917
60,560
December
31, 2019
1,361
27,797
Treasury stock acquired－shares (in
thousand shares)
Treasury stock acquired－amount
**Item **		 $ $ 1,361

27,797
32,763

January 1,
2019
Increase
-
-		 Decrease
1,188
32,846
Treasury stock acquired－shares (in
thousand shares)
Treasury stock acquired－amount		 $ $ 2,549

60,643

As of December 31, 2020 and 2019, a total of $2,917 thousands and $1,361 thousands shares, respectively, were not yet cancelled.

In accordance with the Securities and Exchange Act requirements, the number of shares repurchased should not exceed 10 percent of all shares outstanding. Also, the value of the repurchased shares should not exceed the sum of the Company’s retained earnings, share premium, and realized capital reserves. As of December 31, 2020, the balance of treasury stock was in compliance with the requirement.

In accordance with the Securities and Exchange Act requirements, treasury shares held by the Company cannot be pledged and do not have any shareholders’ rights before their transfer.

235

Notes to the Financial Statements

T3EX GLOBAL HOLDINGS CORP.

(n) Share-based payment

As of December 31, 2020, the Company's share-based payment arrangements were as follows:

Grant date
Number of shares granted
Recipients
Vesting conditions		 Cash capital increase reserved for employee
**subscription **
December 2, 2020
845 thousand shares
Employees of the Company and its subsidiaries
Immediately vested

For the year ended December 31, 2020, the number of shares granted for employees of the Company and subsidiaries was 845 thousand shares. The cost of the above share-based payments transactions amounting to $5,953 thousand was recorded as operating expenses and investments accounted for using the equity method.

  • (o) Earnings per share (EPS)

  • (i) Basic earnings per share

The basic earnings per share for the years ended December 31, 2020 and 2019, were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares. Calculations were as follows:

  • 1) Profit attributable to common shareholders
Profit attributable to common shareholders 2020 2019

249,047
$
541,992
  • 2) Weighted-average number of outstanding common shares (thousand shares)
Common shares at January 1
Effect of treasury stock
Weighted-average number of outstanding common
shares at December 31		 2020 2019

118,346

(2,549)
$ 117,158
(2,423)


$ 114,735

115,797
  • (ii) Diluted earnings per share

The diluted earnings per share for the years ended December 31, 2020 and 2019 were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares, with all potential common shares retroactively adjusted. Calculations were as follows:

236

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • 1) Profit attributable to common shareholders (diluted)
Profit attributable to common shareholders (basic)
Interest on convertible bonds
Gains on revaluation of put and call options of
convertible bonds measured at fair value
Profit attributable to common shareholders (diluted		 2020
$ 541,992
331
(180)
$
542,143		 2019

249,047

-
-

249,047
  • 2) Weighted-average number of outstanding common shares (diluted) (thousand shares)
Weighted-average number of outstanding
common shares (basic)
Effect of conversion of convertible bonds
Effect of employee stock dividends
Weighted-average number of outstanding
common shares at December 31 (diluted)		 2020
$ 114,734
602
79		 2020
$ 114,734
602
79		 2019
115,797

-

69
$ 115,415 115,866
  • (p) Employees and directors, supervisors reward

Pursuant to the Company’s articles of incorporation, states if the Company profits this period they will set aside no less than 0.5% towards employee compensation and no more than 3% towards remuneration to directors and supervisors. If the Company has accumulated loss they must first reserve to cover the loss amount. The compensations mentioned afore include persons who meet the preset conditions of employees of the affiliate Company.

The Company accrued and recognized the employee compensation amounting to $2,796 thousand and $1,313 thousand for the years ended December 31, 2020 and 2019, respectively. And the directors’ and supervisors’ compensation is accrued and recognized amounting to $11,080 thousand and $7,650 thousand for the years ended December 31, 2020 and 2019, respectively. These amounts are calculated by using the Company’s pre-tax net profit for the period before deducting the amount of the remuneration to the employees and directors, multiplied by the distribution ratio of remuneration to the employees and directors under the Company’s articles of association, and expensed under operating costs or expenses for the year. If there would be any changes after the reporting date in the following year, the change of the amount would be treated as changes in accounting estimates and recognized as profit or loss in next year.

237

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The information of compensation of relevant distribution and recognition on 2019 and 2018 were as below:

Employee compensation
Directors compensation
Employee compensation
Directors compensation		 2019 Difference

7

(300)
Difference

7

1,826
Actual
Distribution
$ 1,320
7,350		 Recognized
on financial
statements

1,313

7,650
2018
Actual
Distribution
$ 1,850
9,230		 Recognized
on financial
statements

1,843

11,056

The relevant information of employee and director compensations decided by the Board of Directors of the Company can be found at the public information station.

  • (q) Revenue from contracts with customers

  • (i) Disaggregation of revenue

Primary geographical markets:
Hong Kong and China area
Taiwan
Eastern Asia and other area
Primary service:
Profits of investing subsidiaries
Management income		 2020
$ 421,020
137,099
35,319		 2019

251,477

79,158

4,227

$
593,438


334,862

$ 534,327
59,111


279,652

55,210

$
593,438


334,862

(ii) Contract balances

Accounts receivable (including
related-parties)-measured at
amortized cost		 December 31,
2020
$
45,593		 December 31,
2019
41,148		 January 1, 2019
41,148

For details on accounts receivable and allowance for impairment, please refer to note 6(d).

238

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(r) Non-operation income and expenses

(i) Other gains and losses

The Company’s other gains and losses for the years ended December 31, 2020 and 2019 were as follows:

Foreign exchange loss
Gains on valuation of fair value of financial assets and
liabilities through profit or loss
Gain on disposal of investments
Other		 2020
$ (1,564)
39,894
4,601
160		 2019

(1,473)

2,108

1,050

71
1,756
$
43,091

(ii) Other income

The Company’s other income for the years ended December 31, 2020 and 2019 were as follows:

Rental income
Other income		 2020
$ 3,564
1,760		 2019

3,564

1,855
5,419

$
5,324
  • (iii) Interest income

The Company’s interest income for the years ended December 31, 2020 and 2019 were as follows:

Interest income from bank desposits

2020
$
1,971		 2019
2,215
  • (iv) Finance costs

The Company’s financial costs for the years ended December 31, 2020 and 2019 were as follows:

Interest costs
Bank borrowings
Amortization of convertible bonds discount		 2020
$ 16,265
331		 2019

15,105

-
15,105
$
16,596

239

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

  • (s) Financial instruments

  • (i) Credit risk

    • 1) Exposure to credit risk

The carrying amount of financial assets represents the Company’s maximum credit exposure.

  • 2) Concentration of credit risk

Based on the characteristic of the industry, the Company has no significant transactions with any single customer.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2020
Non-derivative financial liabilities
Bank borrowings
Trade and other payable
Bonds payable
December 31, 2019
Non-derivative financial liabilities
Bank borrowings
Trade and other payables		 Carrying
amount		 Contractual
cash flow
Within 6
months
6~12
months		 1~2years 2~5years Over 5
years
$ 1,500,000
43,553
287,611
(1,505,274)
(1,300,787)
-

(43,553)
(43,553)
-

(300,000)
-
-		 (204,487)
-
-
-
-
(300,000)		 -
-

-

$
1,831,164


(1,848,827)
(1,344,340)
-		 (204,487)

(300,000)

-

$ 1,680,000
80,862



(1,687,181)
(1,381,188)
-

(80,862)
(80,862)
-
(305,993)
-


-
-
-
-

$
1,760,862



(1,768,043)
(1,462,050)
-		 (305,993)
-		 -

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

240

T3EX GLOBAL HOLDINGS CORP. Notes to the Financial Statements

(iii) Currency risk

  • 1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Unit: thousand

Financial assets
Monetary item
USD
Non-monetary item
IDR
Financial liabilities
Monetary item
USD		 December 31, 2020 December 31, 2020 December 31, 2020 December 31, 2019
Foreign
currency
Exchange
rate
TWD

837
29.99
25,102

20,073,397
0.00218
43,760
526
29.99
15,775		 December 31, 2019
Foreign
currency
Exchange
rate
TWD

837
29.99
25,102

20,073,397
0.00218
43,760
526
29.99
15,775
Foreign
currency		 Exchange
rate		 TWD Foreign
currency		 Exchange
rate
$ 1,343
18,181,142
-
28.10

0.00203
28.10
37,738

36,908

-
837

20,073,397
526
29.99

0.00218

29.99

  • 2) Sensitivity analysis

The Company’s exposure to foreign currency risk arises from the foreign currency exchange gains and losses on the translation of cash and cash equivalents, accounts receivable and other receivables, that are denominated in foreign currency. A 1% depreciation/appreciation of USD against TWD as of December 31, 2020 and 2019 would have increased/decreased the net income before tax by $377 thousand and $93 thousand, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for both periods.

  • 3) Exchange gains and losses on monetary items

The currency of the Company has a wide range of foreign currency items, so that the exchange of information on monetary items are disclosed. For the years ended December 31, 2020 and 2019, foreign exchange gains and losses (including realized and unrealized) are (1,564) thousand and (1,473) thousand.

  • (iv) Interest rate analysis

The following sensitivity analysis is based on the exposure to interest rate risk for derivative and non-derivative financial instruments on the reporting date.

For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year.

241

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

If the interest rate had increased/decreased by 1%, the Company’s net income before tax would have decreased/increased by $15,000 thousand and $16,800 thousand for the years ended December 31, 2020 and 2019, respectively, assuming all other variable factors had remained constant. This is mainly due to the Company’s variable-rate borrowing.

  • (v) Fair value of financial instruments

  • 1) Fair value hierarchy

    • a) Categories and fair value of financial instruments

The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities disclosure of fair value information is not required:

Financial assets at fair value through profit or loss:
Financial assets designated as fair value through
profit or loss
Financial assets as fair value through other
comprehensive income:
Stock in listed companies
Financial assets measured at amortized cost (loans
and receivables):
Cash and cash equivalent
Account receivables, and other receivables
Subtotal
Refundable deposits
Financial liabilities at amortized cost:
Short term borrowings
Other payables
Convertible bonds-debt component
Long term borrowings
Subtotal		 December 31, 2020 December 31, 2020 December 31, 2020 December 31, 2020 December 31, 2020 Total
76,945
432,773
Book value
$ 76,945		 Fair value
Level 1 Level 2 Level 3
76,617 -
-

432,773

203,773

131,102
245,593


-

-
-
-		 -
-
-
-

376,695

-		 - - -

336
-		 - - -
$ 1,300,000
43,553
287,611
200,000
-

-


-		 -
-
-		 -
-
-		 -
-
-

1,831,164

287,611		 - - 287,611

242

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Financial assets at fair value through profit or loss:
Non-Derivative financial assets
Available-for-sale financial assets:
Stock in listed companies
Financial assets measured at amortized cost (loans
and receivables):
Cash and cash equivalent
Accounts receivables, and other receivables
Subtotal
Refundable deposits
Financial liabilities at amortized cost:
Short term borrowings
Long term borrowings
Other payable
Subtotal		 December 31, 2019 December 31, 2019 December 31, 2019 Total
55,196
Book value
$ 55,196		 Fair value
Level 1

55,196		 Level 2
-		 Level 3
-

$ 139,547


69,447		 70,100 -
139,547

$ 37,989
243,227


-

-
-
-		 -
-
-
-

281,216

-		 - - -

$ 336
-		 - - -
$ 1,380,000
80,862
300,000
-

-

-		 -
-
-		 -
-
-		 -
-
-

1,760,862

-		 - - -
  • 2) Valuation techniques to measure fair value of financial instruments not measured at fair value

Financial instruments of the Group not measured at fair value are financial assets and liabilities valued at amortized cost. Measurement of fair value of these financial instruments is based on recent transaction prices. When market price are unavailable, valuation is based on discounted cash flow.

  • 3) Valuation techniques for financial instruments measured at fair value

  • a) Non-derivative financial instruments

Fair value measurement of financial instruments is based on quoted market prices if these prices are available in an active market. Quoted prices on stock exchanges are regarded as the fair value of equity instruments in a listed market.

A financial instrument is regarded as being quoted in an active market if quoted market prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. If these conditions cannot be met, then the market is considered as non-active. In general, a market with low trading volume or high bid-ask spreads is an indication of a non-active market.

The fair value of financial assets and liabilities with standard terms and conditions and trading in active markets is based on quoted market prices. These include investments in stocks of listed entities.

243

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The measurements of fair value of equity instruments without an active market are based on the market comparable listed company approach, which assumes that the fair value is measured by the book value per share of the investee and the price-book ratio of market comparable listed companies. The estimation of the fair value of equity instruments has been adjusted due to the effect of the discount arising from the lack of marketability.

  • b) Derivative financial instruments

The fair value is based on quoted prices. When quoted prices are unavailable, the fair value is in accordance with third-party pricing information.

The Company’s convertible bonds adopted the binomial tree model to evaluate the fair value.

  • 4) Movement between Level l and Level 2

There were no movement between Level 1 and Level 2 for the years ended December 31, 2020 and 2019.

  • (t) Financial risk management

  • (i) Overview

The nature and the extent of the Company’s risks arising from financial instruments, which ’ include credit risk, liquidity risk, and market risk, are discussed below. Also, the Company s objectives, policies, and procedures for measuring and managing risks are discussed below.

  • 1) Credit risk

  • 2) Liquidity risk

  • 3) Market risk

For more quantitative information about financial instruments, please refer to related notes to the financial statements.

  • (ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

244

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

The Board of Directors oversees how management monitors the risks, which should be in compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation of the risks faced by the Company. Internal Audit undertakes regular reviews of the risk management controls and procedures and exception management, the results of which are reported to the Board of Directors.

  • (iii) Credit risk

Credit risk means the potential loss to the Company if the client or the counterparty involved in a financial instrument transaction default. The primary potential credit risk is from the accounts receivable and investments of the Company.

  • 1) Accounts receivable and other receivables

For the years ended December 31, 2020 and 2019, there was no significant concentration of credit risk from the sales of the Group.

The source of revenue of the Company is from the Group and its subsidiaries, as such, there is no credit risk.

The Company establishes an impairment allowance that represents its estimate of incurred losses in respect of trade receivables, other receivables, and investment. The components of this impairment allowance are a specific loss component that relates to individually significant exposure and a collective loss component for which a loss was incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

2)

Investments

The credit risk exposure of the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. As the Company deals with banks and other external parties with good credit standing and financial institutions, corporate organizations, and government agencies which are graded above investment level, the management believes that the Company does not have any compliance issues, and therefore, there is no significant credit risk.

  • 3) Guarantees

The Company has determined that financial guarantees can only be provided to the following companies:

  • a) Companies with a transaction relationship with the Company.

  • b) Companies in which the Company has more than 50% of the voting shares.

  • c) Companies which directly or indirectly hold more than 50% of the voting shares of T3EX Global Holdings Corp.

245

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

4) Liquidity risk

Liquidity risk is a risk that the Company is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as much as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Company actively expands its business to generate operating cash flow while it simultaneously manages the accounts receivable in a strict manner and controls its expenditure. In addition, the Company keeps good relationships with banks to obtain a sufficient credit limit for necessary cash demands in the operating cycle. Generally, the Company ensures that there is sufficient cash to cover expected operating expenditure but excluding the potential influence of unexpected extreme conditions (i.e. nature disasters). The total amount of unused credit as of December 31, 2020 and 2019, were $1,110,000 thousand and $1,030,000 thousand, respectively.

5) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The types of financial assets at fair value through profit or loss held by the Company are open-end funds and convertible bonds which are measured at fair value. Therefore, the Company is exposed to the risk of price changes in the beneficiary certificate market. The Company engages a professional agent to manage its financial assets. Parts of bank deposits, accounts receivable, and accounts payable are evaluated for foreign currency exposure. To manage the currency risk, the Company maintains its foreign currency net position within a certain limit. The convertible bonds held and issued by the Company are measured at fair value. This results in exposure to the risk of price changes in the equity and bond markets.

a) Currency risk

Interest is denominated in the same currency as borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Company, which mainly uses the TWD.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates.

246

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

b) Interest rate risk

Except for bank loans, there are no financial assets or financial liabilities with floating interest rates. The Company negotiates the price case by case to control the interest rate risk.

(u) Capital management

The board’s policy is to maintain a strong capital base in order to maintain investor, creditor, and market confidence and to sustain future development of the business. Capital consists of common shares, capital surplus, retained earnings, and non-controlling interests of the Company. The board of directors monitors the level of dividends to common shareholders.

The distribution of dividends of the Company follows the earnings of the year and is on a sustainable basis. When the board of directors drafts a proposal on appropriation and distribution of retained earnings, the dividend distribution shall not be lower than 50% of current earnings or unappropriated earnings, whichever is lower. However, the cash dividend shall not be lower than 10% of the total distribution of dividends.

The Company’s debt-to-equity ratios at the end of the reporting periods were as follows.

Total liabilities
Less: cash and cash equivalents
Net debt
Total equity
Less: amounts accumulated in equity relating to cash flow
hedges
Adjusted capital
Debt-to-equity ratio		 December 31,
2020		 December 31,
2019

1,779,406

37,989

1,741,417

2,410,074
-

2,410,074
72.26%
$ 1,845,963
131,102

$
1,714,861

$ 3,138,727
-
$
3,138,727

54.64%

From time to time, the Company purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares are intended to be used for issuing shares under the Company’s share option scheme for employees. The purchase of treasury stock did not impact the Company’s capital management.

There were no changes in the Company’s approach to capital management during the year.

(v) Investing and financing activities not affecting current cash flow

The Company's investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

247

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Reconciliation of liabilities arising from financing activities were as follows:

Long-term borrowings (including current
portion)
Short-term borrowings
Total liabilities from financing activities
Long-term borrowings (including current
portion)
Short-term borrowings
Total liabilities from financing activities		 January 1,
2020
Cash flows
Foreign
exchange
movement
December
31, 2020
$ 300,000
(100,000)
-
200,000
1,380,000
(80,000)
-
1,300,000



$
1,680,000
(180,000)
-
1,500,000



January 1,
2019
Cash flows
Foreign
exchange
movement
December
31, 2019
$ 200,000
100,000
-
300,000
1,090,000
290,000
-
1,380,000



$
1,290,000
390,000
-
1,680,000

(7) Related-party transactions:

  • (a) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Company and its subsidiaries.

  • (b) Name and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name of subsidiary Relationship to the Group
T.H.I Group Ltd. (in B.V.I.) Subsidiary company
GREATLINE INTERNATIONAL LIMITED Subsidiary company
(GREATLINE)
T.H.I GROUP VIETNAM CO., LTD. Subsidiary company
T.H.I. GROUP (BANGKOK) COMPANY LIMITED Subsidiary company
Taiwan Express Logistics Co., Ltd. (TEC) Subsidiary company
T.H.I Logistics Co., Ltd. Subsidiary company
T.H.I. GROUP (CAMBODIA) Co., Ltd. Subsidiary company
T.H.I. GROUP SINGAPORE PTE. LTD. Subsidiary company
(SINGAPORE)
T.H.I. & Maruzen Co. Ltd. Subsidiary company
Fresh Beauty Enterprises Ltd. Subsidiary company
Eastern Union Holdings Limited Subsidiary company
T-Cube Global Logistics Co., Ltd. Subsidiary company
T.H.I. GROUP LIMITED (in HK) (T.H.I. HK) Subsidiary company
T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) Subsidiary company
Exer Logistics Co., Ltd. Subsidiary company
Shanghai Yaohwa International Forwarder Co., Ltd. Subsidiary company
(Shanghai Yaohwa)

248

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Name of subsidiary Relationship to the Group
Taiwan Express (HK) Co., Ltd. (TEC HK) Subsidiary company
Taiwan Express (USA) INC. Subsidiary company
TEC Logistics Co., Ltd. Subsidiary company
TEC LOGISTICS (USA), INC Subsidiary company
Hiview Logistics Co., Ltd. Subsidiary company
TEC Logistics (Shenzhen) Co., Ltd. Subsidiary company
T.H.I. LOGISTICS (Malaysia) SDN. BHD Subsidiary company
T.H.I. LOGISTICS PHILIPPINES CORP. Subsidiary company
Air Tropolis Express (s) Pte Ltd. Subsidiary company
T-Cube (Suzhou) Global Logisties Co., Ltd. Subsidiary company
T-SC Factoring Co., Ltd. Subsidiary company
Shanghai Moorluk International Shipping Co.,Ltd. Subsidiary company
T-SC Trading Co., Ltd. Subsidiary company
TEC LOGISTICS VIETNAM COMPANY LIMITED Subsidiary company
PT. Dexter Eurekatama Investment under equity method
LOGI International Co., Ltd. Investment under equity method
Orient Air General Sales Agent Co., Ltd. Investment under equity method
  • (c) Transactions with key management personnel

Key management personnel compensation comprised:

Short-term employee benefits
Post-employment benefits		 2020
$ 16,125
1,709		 2019

14,810

1,129

$
17,834

15,939

  • (d) Other related-party transactions

  • (i) Sales

The amount of significant sales by Company to related parties and its outstanding balance are as follows:

T.H.I. Group (Shanghai) Ltd. (T.H.I.
Shanghai)
Taiwan Express Logistics Co., Ltd.
(TEC)
Other subsidiaries		 Sales
2020
2019
$ 35,108
33,098
10,683
9,204
13,320
12,908		 Sales
2020
2019
$ 35,108
33,098
10,683
9,204
13,320
12,908		 Accounts receivable Accounts receivable
2020
$ 35,108
10,683
13,320		 December
31, 2020
33,457
5,501
6,635		 December
31, 2019

31,703

4,840

6,684

$
59,111


55,210
45,593


43,227

Trading terms of the above transactions require payments within 30 to 60 days or depending on the funding needs.

249

T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(ii) Other payables

December 31,
2020
T.H.I. Group (Shanghai) Ltd. (T.H.I Shanghai)
$ -
Other subsidiaries
-
Subsidiary
$
-
Amounts received and are payables to subsidiaries.
(iii) Loans to subsidiary (recorded in other receivables due from related parties)
The Company’s loans to subsidiary and interest income are as follows:
December 31,
2020
Taiwan Express Logistics Co., Ltd. (TEC)
$
200,000
2020
Interest income
$
1,957		 December 31,
2020
$ -
-		 December 31,
2019
36,016
11,474
$
-
47,490

December 31,
2019

200,000

2020
$
1,957

2019

2,110

The interest of the Company’s loan to related parties are accrued by the average interest rate of the financial institution's short-term borrowings in the current year. All loans are unsecured and no impairment are required after assessment.

  • (iv) Leases (recorded in other income)

T.H.I. Logistics Co., Ltd.

2020
$
3,564		 2019

3,564

The Company rented out an office to its subsidiary, the rental fee is determined based on nearby office rental rates and collected by monthly.

(8) Pledged assets:

Pledged assets:
Pledged assets Object December 31,
2020		 December 31,
2019

173,362

336
Property, plant, and equipment
Refundable deposits		 Credit facility
Office car deposit		 $ 172,950
336
$
173,286

173,698

(9) Commitments and contingencies:

(a) Promissory notes issued to the bank as collateral for short-term bank borrowings, logistics business, etc., were as follows.

Promissory notes December 31,
2020
$
1,300,000		 December 31,
2019
1,380,000

250

T3EX GLOBAL HOLDINGS CORP. Notes to the Financial Statements

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

(12) Other:

  • (a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:
By function
By item
2020
2020
2020		 2019 2019 2019
Operating
costs		 Operating
expenses		 Total Operating
costs		 Operating
expenses		 Total
Employee benefit
Salaries
Labor and health insurance
Pension
Remuneration of directors
Others
Depreciation
Amortization		 37,906
2,664
2,721
11,080
1,207
6,192
6,182
-

-

-

-

-

-

-		 37,906
2,664
2,721
11,080
1,207
6,192
6,182
31,360

2,760

2,622

7,650

1,461

5,808

5,771
-

-

-

-

-

-

-		 31,360
2,760
2,622
7,650
1,461
5,808
5,771

The Company’s headcount and employees benefit expenses for the years 2020 and 2019 were as follows:

Number of employees
Number of non-employee directors
The average employee benefits
The average salary
Change in the average salary
Compensation to the supervisor		 2020
38		 2019
38
9
1,317
1,081
(30.21)%
-
9
$
1,534

$
1,307

20.91%
$
-

The Company’s salaries and wages policy for directors, supervisors, management, and employees is as follows:

  • (i) Remuneration to directors and supervisors shall be no more than 0.3% of the annual profits as stated in the Company’s Articles of Incorporation. If the Company has the accumulated loss, the profit should be reserved to cover the loss amount.

  • (ii) Compensation of management is determined by the compensation committee and resolved by the Board of Directors, taking into account the work results and the extent of contribution to the Company.

  • (iii) Compensation of employees is determined by the position, performance, and seniority, taking into account the work results and the extent of contribution to the Company.

251

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

(13) Other disclosures:

  • (a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties:

No
(Note 1)		 **Name of lender **
Name of
**borrower **		 Account
name		 Related
party		 Highest balance
of financing to
other parties
during the
period
Ending
balance		 Actual
usage amount
during the
period		 Range of
interest rates
during the
period		 Purposes of
fund
financing
for the
**borrower **		 Transaction
amount for
business
between two
parties		 Reasons
for
short-term
financing		 Allowance
for bad debt		 Collateral Collateral Individual
funding loan
limits		 Maximum
limit of fund
financing

**Item **		 Value
0
2
4
4
4
5
5		 The Company
T.H.I. Group
Limited (in HK)
T.H.I. Group
(Shanghai) Ltd.
(T.H.I.
Shanghai)
T.H.I. Group
(Shanghai) Ltd.
(T.H.I.
Shanghai)
T.H.I. Group
(Shanghai) Ltd.
(T.H.I.
Shanghai)
Shanghai
Yahohwa
International
Forwarder Co.,
Ltd.
Shanghai
Yahohwa
International
Forwarder Co.,
Ltd.		 Taiwan Express
Logistic Co.,
Ltd.


Taiwan Express
(HK) Co., Ltd.



Shanghai
Moorluk
International
Shipping Co.,
Ltd.



T-SC Factoring
Co., Ltd.



T-Cube Global
Logistics Co.,
Ltd.




Shanghai
Moorluk
International
Shipping Co.,
Ltd.




T-SC Factoring
Co., Ltd.

Other
receivables-
related
patties

Other
receivables-
related
patties




Other
receivables-
related
patties

Other
receivables-
related
patties


Other
receivables-
related
patties




Other
receivables-
related
parties

Other
receivables-
related
patties

Yes


Yes


Yes


Yes


Yes


Yes


Yes		 270,000
117,160
8,665
85,048
21,663
8,665
17,544
270,000

56,200

8,613

43,066

21,533

8,613

17,226
200,000

56,200

4,307

-


-


-


-
Monthly
changes in
interest rates

Monthly
changes in
interest rates
4.35%
4.35%-4.7%
4.35%
4.35%
4.35%-4.7%

2


2
2
2
2
2
2		 -
-
-
-
-
-
-		 Trading
turnover
Trading
turnover
Trading
turnover
Trading
turnover
Trading
turnover
Trading
turnover
Trading
turnover
-

-

-

-

-

-

-		 -
-
-
-
-
-
-		 627,745
448,625
269,357
269,357
269,357
24,682
24,682		 1,255,490

897,250

538,715

538,715

538,715

49,365

49,365

Note 1: The numbers indicated above represent the following: 0 for investor, 1 to 4 for investee.

Note 2: Nature of lending: 1 for counterparties with transactions, and 2 for short-term operating capital.

Note 3: The ceiling on total loans granted by the Company to all parties is 40% of the net assets in the financial statements; the ceiling on total loans granted by the Company to each entity is 20% of the net assets in the financial statements.

Note 4: Ending facility balance approved by BOD.

(ii) Guarantees and endorsements for other parties:

==> picture [605 x 195] intentionally omitted <==

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

Ratio of
Counter-party of accumulated
guarantee and amounts of Parent Subsidiary Endorsements/
endorsement Limitation on Highest Balance of Property guarantees and company endorsements/ guarantees to
amount of balance for guarantees pledged for endorsements endorsements/ guarantees third parties
guarantees and guarantees and Actual guarantees to net worth of Maximum guarantees to to third on behalf of
Relationship endorsements and endorsements usage and the latest amount for third parties on parties on companies in
Name of with the for a specific endorsements as of amount endorsements financial guarantees behalf of behalf of Mainland
No. guarantor Name Company enterprise during reporting date during the (Amount) statements and subsidiary parent China
the period period endorsements company
[ 0 ] The Shanghai 2 627,745 13,158 12,920 - - 0.41% 1,255,490 Y N Y
Company Yaohwa
International
Forwarder Co.,
Ltd.
[ 0 ] The T.H.I. Group 2 627,745 208,365 135,765 14,431 - 4.33% 1,255,490 Y N Y
Company (Shanghai) Ltd.
[ 0 ] The T-Cube Global 2 627,745 136,854 81,825 31,012 - 2.61% 1,255,490 Y N Y
Company Logistics Co.,
Ltd.
[ 0 ] The Taiwan Express 2 627,745 205,030 98,350 - - 3.13% 1,255,490 Y N N
Company (HK) Co., Ltd.
(TEC HK)
----- End of picture text -----

252

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

==> picture [605 x 114] intentionally omitted <==

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

Ratio of
Counter-party of accumulated
guarantee and amounts of Parent Subsidiary Endorsements/
endorsement Limitation on Highest Balance of Property guarantees and company endorsements/ guarantees to
[ 0 ] The T.H.I. Group 2 627,745 58,680 28,100 2,442 - 0.90% 1,255,490 Y N N
Company Limited (in
H.K.)
[ 2 ] The T-SC Factoring 3 627,745 294,830 285,580 - - 9.10% 1,255,490 Y N Y
Company Co., Ltd.
[ 2 ] Shanghai T.H.I. Group 4 12,341 3,070 3,015 3,015 - 2.44% 49,365 N N Y
Yaohwa (Shanghai) Ltd.
International
Forwarder
Co., Ltd.
----- End of picture text -----

Note 1: The numbers indicated above represent the following: 0 for investor, 1 onwards for investee

Note 2: The relationship between the guarantee provider and the receiver is as follows:

  • (1)The Company has transactions with its counterparties.

  • (2)The Company holds more than 50% of common shares of its subsidiary.

  • (3)The Company and its subsidiaries hold more than 50% of common shares of the investee company.

  • (4)The parent company holds more than 90% of its outstanding common shares (directly or indirectly) through a subsidiary.

  • (5)Companies within the same architectural field have signed a contractual agreement to provide mutual endorsements/ guarantees for the need of a specific construction project.

  • (6)The shareholders provide endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.

  • (7)Within the trade performance guarantees for preconstruction-sales contract in accordance with the Consumer Protection Law is jointly guaranteed.

Note 3: (1)Total guarantees amount should not exceed 40% of the Company’s net assets in the financial statements if the following conditions are met:

Ownership of the Company should exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

Ownership of the Company should not exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

The net assets stated above refer to the net assets from the Company’s most recently audited financial statements.

  • (2) Apart from the conditions listed above, guarantees for the purpose of business relations should not exceed the total amount of business transactions between the two parties, whichever is lower. The definition of business transactions could either be purchases or sales, whichever is higher.

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars/thousand shares)

Name of holder Category and
name of
security		 Relationship
with company		 Account
title		 Ending balance Ending balance Ending balance Ending balance Note
Shares/Units
(thousands)		 Carrying value Percentage of
ownership (%)		 Fair value
The Company
The Company
The Company
The Company
The Company
Taiwan Express
Logistic Co., Ltd.		 Fund
Yuanta Wan Tai
Fund
Stock
Evergreen Marine
Corporation
Stock
Soonest Express Co.,
Ltd.
Stock
Yang Ming Marine
Transport Corp.
Stock
Yang Ming Marine
Transport Corp.
Stock
Central Taiwan
Science Park
Logistics Co.,Ltd.		 -

-


-

-

-

-
 Financial assets at
fair value through
profit or loss－
current
Financial assets at
fair value through
profit or loss－
current
Financial assets at
fair value through
other comprehensive
income－current
Financial assets at
fair value through
other comprehensive
income－current
Financial assets at
fair value through
other comprehensive
income-non-current
Financial assets at
fair value through
other comprehensive
income-non-current		 473,454
1,705,000

609,972

5,500,577

10,000,000

3,880,000
7,223

69,394

42,881

160,892

229,000

108,407
-

0.040

2.03

0.21

0.38

12.90		 7,223

69,394

42,881

160,892

229,000

108,407



Note(1)

253

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

Note 1: Private placement stock.

  • (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:None

  • (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None

  • (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None

  • (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:None

  • (viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars/thousand shares)

Name of
company		 Counter-party Nature of
relationship		 Ending
balance		 Turnover
rate		 Overdue Overdue Amounts received in
subsequent period
(Note 1)		 Allowance
for bad debts
Amount Action taken
T.H.I. Group (Shanghai)
Ltd
The Company
T.H.I. Group
Limited(in H.K.)
Taiwan Express
Logistic Co.,Ltd.
Associates


Associates
 Other receivables
575,457
Other receivables
200,000
-

-		 -
-		 170,073
-
-
-

Note 1: Amounts collected as of February 19, 2021.

  • (ix) Trading in derivative instruments: Please refer to Notes 6(b)(j).

  • (b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Investor Investee Location Main Businesses and
Products		 Investment Amount Investment Amount Balance as of December 31, 2020 Balance as of December 31, 2020 Balance as of December 31, 2020 Net income
(loss)
of the Investee		 Share of

profit loss
of invest		 Note
December 31, 2020 December 31, 2019 Shares Percentage of
Ownership		 Carrying
value
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
The Company
GREATLINE
INTERNATIO
NAL LIMITED
Fresh Beauty
Enterprises Ltd.
TEC
TEC		 T.H.I. Group Ltd.(in B.V.I)
GREATLINE
INTERNATIONAL
LIMITED
T.H.I Group VIETNAM
CO., LTD.
T.H.I GROUP
(BANGKOK) COMPANY
LIMITED
THI & Maruzen Co., Ltd
Taiwan Express Logistic
Co., Ltd.
T.H.I. Logistics Co. Ltd.
T.H.I. GROUP
(CAMBODIA)
Co., Ltd.
PT. Dexter Eurekatama
T.H.I. GROUP
SINGAPORE PTE. LTD
LOGI International Co.,
Ltd.
Fresh Beauty Enterprises
Ltd.
T.H.I. Logistics (Malaysia)
SDN. BHD
T.H.I. LOGISTICS
PHILIPPINES CORP.


T.H.I. GROUP LIMITED
(in HK)


Eastern Union Holdings
Limited.
Taiwan Express (HK) Co.,
Ltd.
TEC Logistic Co., Ltd.		 British Virgin Islands


British Virgin Islands

Vietnam


Thailand
Japan

Taiwan
Taiwan


Cambodia
Indonesia

Singapore

Korea

Samoa

Malaysia

Philippines

Hong Kong

Hong Kong

Hong Kong
Taiwan		 Offshore settlement
center
Offshore holding
company
Air & sea freight
forwarding and
packaging
Air & sea freight
forwarding and
packaging
Air & sea freight
forwarding
Air & sea freight
forwarding
Air & sea freight
forwarding
Air & sea freight
forwarding
Air & sea freight
forwarding
Air & sea freight
forwarding
Air & sea freight
forwarding
Offshore holding
company
Air & sea freight
forwarding
Air & sea freight
forwarding
Air & sea freight
forwarding
Offshore holding
company
Freight forwarding,
customs clearance, and
distribution
Freight forwarding,
customs clearance, and
delivery services
35,000
(USD1,000)

134,428
(USD4,050)


8,362
(USD275)


2,372
(USD72)

10,365
(JPY31,130)

704,200

130,000

4,462
(USD150)

47,381
(USD1,598)

19,032
(SGD850)

9,666
(USD300)

307,353
(CNY60,979)

10,381
(USD315)

16,467
(USD4,314)

139,948
(USD4,314)

57,411
(USD1,751)


266,807
(HKD70,550)


6,000

35,000
(USD1,000)


134,428
(USD4,050)


8,362
(USD275)


2,372
(USD72)


10,365
(JPY31,130)

704,200

130,000


4,462
(USD150)


47,381
(USD1,598)


19,032
(SGD850)


9,666
(USD300


307,353
(CNY60,979)


10,381
(USD315)


10,761


139,948
(USD4,314)


57,411
(HKD1,751)


266,807
HKD70,550

6,000

1,000,000


4,050,000


4,950,000,000


-


3,060

35,958,400

13,000,000


-


12,000


850,000


16,285


66


180,000

419,750


12,480,000


-


-

1,000,000
100.00%

100.00%

99.00%
49.00%

51.00%

100.00%

100.00%
100.00%

30.00%

91.40%

30.00%

66.00%

90.00%

99.94%

100.00%
100.00%
100.00%

100.00%
114,460

2,248,016

66,018

14,453

27,777

870,113

162,493

14,476

36,908

5,018

5,911

299,686

10,771

7,879

2,246,915

123,339

420,138

-
3,918

375,608

18,230

10,973

11,194

108,850

18,521

5,132

4,967

639

(1,675)

6,571

3,310

(4,294)

375,774

6,571

66,107
-
3,918

375,608

18,048

5,377

5,709

102,850

18,521

5,132

(1,634)

584

(503)

2,029

2,979

(4,291)

375,774

6,571

66,107
-		 Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Investment
under equity
method
Subsidiaries
Investment
under equity
method
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries

254

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

Notes to the Financial Statements

==> picture [567 x 161] intentionally omitted <==

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

Investment Amount Balance as of December 31, 2020 Net income Share of
Main Businesses and Percentage of Carrying (loss) profit loss
Investor Investee Location Products December 31, 2020 December 31, 2019 Shares Ownership value of the Investee of invest Note
TEC Orient Air General Sales Taiwan Freight forwarding, 600 600 60,000 30.00% 5,089 9,826 2,948 The Group
Agent Co., Ltd. customs clearance, and invested in
delivery services which the
subsidiary
holds 30% of
the shares
TEC Hiview Logistics Co., Ltd. Taiwan Freight forwarding, 76,590 76,590 5,000,000 97.51% 112,610 25,853 25,210 Subsidiaries
customs clearance, and
distribution
TEC Taiwan Express (USA), United States Freight forwarding, 31,629 31,629 100,000 100.00% 31,622 - - Subsidiaries
INC. customs clearance, and (USD1,000) (USD1,000)
distribution
TEC TEC LOGISTICS (USA), United States Freight forwarding, 8,549 8,549 200 100.00% 12,199 - - Subsidiaries
INC. customs clearance, and (USD290) (USD290)
distribution
TEC TEC LDGISTICS Vietnam Air & Sea freight 10,577 - - 100.00% 9,835 - - Subsidiaries
VIETNAM COMPANY forwarding (USD350)
LIMITED
TEC HK Airtropolis Express(s) Pte. Singapore Air freight forwarding 76,640 76,640 533 65.00% 106,472 40,196 24,424 Subsidiaries
Ltd. (SGD3,413) (SGD3,413)
----- End of picture text -----

  • (c) Information on investment in mainland China

  • (i) Name, major operations and related information of investee in Mainland China:

(In Thousands of New Taiwan Dollars)

Name of
investee		 Main
businesses
and
products		 Total
amount
of paid-in
capital
(in thousand)		 Method
of
investment
(note 1)		 Accumulated
outflow of
investment from
Taiwan as of
January 1, 2020		 Investment flows Investment flows Accumulated
outflow of
investment from
Taiwan as of
December 31, 2020		 Net
income

(losses)
of the
investee		 Percentage
of
ownership		 Investment
income
(losses)		 book
value		 Accumulated
remittance of
earnings in
current period
Outflow Inflow
Shanghai Yaohwa
International
Forwarder Co., Ltd.
T.H.I. Group
(Shanghai) Ltd.
T-SC Factoring Co.,
Ltd.
Shanghai Shangijun
International Logistic
Co., Ltd.
T-Cube Global
Logistics Co., Ltd.
EXer Logistics Co.,
Ltd.
TEC Logistics
(Shenzhen) Co., Ltd.
T-Cube (Suzhou)
Global Logistic
T-SC Trading Co.,
Ltd.

Air & sea freight
forwarding and
customs clearance

Air & sea freight
forwarding and
customs clearance

Commercial service
industry


Air & sea freight
forwarding and
customs clearance

Warehousing

Express logistics

Freight forwarding,
customs clearance,
and distribution

Express logistics

Supply chain
management, import
and export trading

55,031
(1,700USD)


92,883
(3,060USD)

215,680
(50,000CNY)


22,460
(5,000CNY)
54,610
(11,000CNY)
58,023
(12,438CNY)


183,901
(48,550HKD)
43
(10CNY)


213
(50CNY)		 Note 1(2)
Note 1(2)
Note 2
Note 2
Note1(2)
Note 2
Note3
Note 4
Note 5		 55,031
(1,700USD)
89,165
(3,060USD)
-
-
274,589
(8,391USD)
-
183,901
(48,550HKD)
-
-

-


-
-
-


-
-

-
-
-		 -
-
-
-
-
-
-
-
-		 55,031
(1,700USD)
89,165
(3,060USD)
-
-
274,589
(8,391USD)
-
183,901
(48,550HKD)
-
-

5,069


240,082
2,155
1,917


6,531
35,572
41,020
40
(77)		 100.00%
100.00%
100.00%
65.00%
66.00%
93.51%
100.00%
66.00%
100.00%		 5,069
240,082
2,155
964
4,310
31,546
41,020
26
(77)
123,410

1,372,650

217,930

16,988

107,461

112,574

222,746

79

137
-

-

-

-

21,140

-

-

-

-

Note : The above investments were eliminated in the preparation of consolidated financial statements.

Note 1: The method of investment in Mainland China is as follows:

  • (1) Invested directly in Mainland China.

  • (2) Invested in Mainland China Via remittance through a third region.

  • (3) Others

  • Note 2: T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) directly invested in Exer Logistice Co., Ltd., Shanghai Moorluk International Shipping Co., Ltd and T-SC Factoring Co., Ltd.

  • Note 3: TEC Logistics (Shenzhen) Co., Ltd is invested by the Company’s subsidiary, Taiwan Express Logistic Co., Ltd., that invested in Mainland China via remittance through a third region. The upper limit of the investments is 60% of Taiwan Express Logistic Co., Ltd.’s net assets amounting to $183,901 thousand (HKD48,550 thousand) in the financial statements based on the “REGULATIONS GOVERNING THE APPROVAL OF INVESTMENT OR TECHNICAL COOPERATION IN MAINLAND CHINA” and have been approved by the Investment Commission Ministry of Economic Affairs.

Note 4: T-Cube Global Logistics Co., Ltd. directly invested in T-Cube (Suzhou) Global Logistic Co., Ltd.

Note 5: Shanghai Yaohwa International Forwarder Co., Ltd. directly invested in T-SC Trading Co., Ltd. but has yet to invest in its operating activity.

255

  • (ii) Limitation on investment in Mainland China:
Company Name Accumulated Investment in Mainland
China as of December 31,2020(Note 1)		 Investment Amounts Authorized by
Investment Commission,MOEA(Note 2)		 Upper Limit on Investment
The Company
385,476
( 13,718USD thousand)		 457,440
( 16,279USD thousand)		 1,883,236

Note 1: Calculated by accumulated investment in Mainland China as of December 31, 2020 including 6,530 thousand (USD 200 thousand) remitted to T.H.I. Group (Shanghai) Logistic Ltd. and including USD 367 thousand remitted to Shanghai Huiyou Yuanhua trade Co., Ltd..

Note 2: At the reporting date, the exchange between USD and TWD rate was 1:28.1.

The investment income (losses) of the investee in mainland china are calculated based on the financial statement audit by the Company’s CPA.

  • (iii) Significant transactions: None

  • (d) Major shareholders:

Major shareholders:
Shareholding
Shareholder’s Name		 Shares Percentage
WPG HOLDINGS LIMITED 10,112,039
8.63%
GOLDEN HORSE INVESTMENTS CORP. 6,349,013
5.41%

(14) Segment information:

Please refer to the consolidated financial statements for the years ended December 31, 2020.

256

Representation Letter

The entities that are required to be included in the combined financial statements of T3EX Global Holdings Corp. as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, T3EX Global Holdings Corp. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: T3EX Global Holdings Corp. Chairman: David Yen Date: March 9, 2021

257

T3EX GLOBAL HOLDINGS CORP.

Chairman:David Yen

258

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