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TEX YEAR Interim / Quarterly Report 2021

Nov 15, 2021

52420_rns_2021-11-15_f0485e77-9d1a-4d11-99bc-1e585ca5b075.pdf

Interim / Quarterly Report

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Stock code: 4720

Tex Year Industries Inc. and Subsidiaries

Consolidated Financial Report and Independent Auditor’s Review Report Second Quarter of 2021 and 2020

Address: No. 9, Wuquan 6th Road, Wugu District, New Taipei City Telephone: (02)22992121

  • 1 -

Independent Auditor’s Review Report

To: Tex Year Industries Inc.

Foreword

The consolidated balance sheet of Tex Year Industries Inc. and its subsidiaries as of June 30, 2021 and 2020, the consolidated comprehensive income statement from April 1 to June 30, 2021 and 2020, consolidated statement of changes in equity and consolidated cash flow statement from January 1 to June 30, 2021 and 2020, and notes to the consolidated financial statements (including the summary of significant accounting policies) have been duly verified by us. The management shall be responsible for preparing the financial statements fairly presented based on the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standards No. 34 “Interim Financial Reporting,” recognized and released by the Financial Supervisory Commission. We are only responsible for concluding the financial statements based on the result of the review.

Scope

Except retaining the statement in the basic paragraph of the conclusion, we conducted the review in accordance with the "Review of Financial Statements" of the Auditing Standards Bulletin No. 65. The procedures to review the consolidated financial statements include inquiry (mainly with the person in charge of financial and accounting affairs), analytical procedures, and other review procedures. The scope of the review work is significantly smaller than that of the audit work, so we may not be able to detect all significant matters that can be identified through the audit work. Therefore, we cannot express an audit opinion.

  • 2 -

Basis of Reserved Opinion

As stated in notes 12 and 13 to the consolidated financial statements, the financial statements of the subsidiaries and investees are included in the consolidated financial statements mentioned above, and some of the non-significant subsidiaries and the investment under the equity method during the same period have not been verified by us. The total assets of the non-significant subsidiaries above as of June 30, 2021 and 2020 were NT$959,755 thousand and NT$922,315 thousand, accounting for 30.45% and 31.74% of the total consolidated assets; the total liabilities were NT$222,267 thousand and NT$193,222 thousand, accounting for 12.16%% and 11.23% of the total consolidated liabilities; The total comprehensive income from April 1 to June 30, 2021 and 2020, and from January 1 to June 30, 2021 and 2020 were respectively NT$(1,709) thousand, NT$(219) thousand, NT$6,758 thousand and NT$(1,244) thousand, respectively accounting for 22.49%, (1.02)%, 97.11% and 30.09% of the total comprehensive income. The above-mentioned investment balances using the equity method as of June 30, 2021 and 2020 were NT$88,845 thousand and NT$128,679 thousand, respectively, accounting for 2.82% and 4.43% of the total consolidated assets; from April 1st, 2021 and 2020, The comprehensive gains and losses recognized by the equity method on June 30 and from January 1 to June 30 in 2021 and 2020 were NT$(5,023) thousand, NT$1,202 thousand, NT$(3,378) thousand and NT$(75) thousand, respectively, accounting for 66.10%, 5.63%, (48.54)% and 1.81% of the total consolidated comprehensive income.

  • 3 -

Reserved Conclusion

According to our review results, except that the financial statements of some non-important subsidiaries and investees under the equity method mentioned in the basic paragraph of the reserved conclusion, if audited by us, may lead to adjustments to the consolidated financial statements, it is not found that the consolidated financial statements above have not been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and promulgated by the Financial Supervisory Commission which may lead to the inability to properly express the consolidated financial status of Tex Year Industries Inc. and its subsidiaries as of June 30, and the consolidated financial performance of April 1 to June 30, 2021 and 2020, and the consolidated financial performance and consolidated cash flow from January 1 to June 30, 2021 and 2020.

The engagement partners on the reviews resulting in this independent auditor’s review report are Ming-Yen Chien and Pi-Yu Chuang.

Deloitte & Touche Taipei, Taiwan Republic of China

August 13, 2021

Notice to Readers

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

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

  • 4 -

Unit: NT$1,000

Tex Year Industries Inc. and Subsidiaries Consolidated Balance Sheet

June 30, 2021 and December 31 and June 30, 2020

Code

1100
1110
1150
1170
1180
1200
1210
130X
1470
11XX

1517
1540
1550
1600
1755
1821
1840
1915
1990
15XX
1XXX

Code

2100
2120
2170
2180
2200
2220
2230
2250
2280
2320
2399
21XX

2530
2540
2570
2580
2630
2640
2670
25XX
2XXX

3110
3130
3100
3200
3310
3320
3350
3300
3410
3420
3400
31XX
36XX

3XXX
 Asset
Current Asset
Cash and cash equivalents (note 6)
Financial assets measured at fair value through income statement -
current (note 7 and 19)
Notes receivable (note 10)
Accounts receivable (note 10)
Accounts receivable - related parties (notes 10 and 32)
Other receivables (note 10)
Other receivables - related parties (notes 10 and 32)
Inventory (notes 11 and 33)
Other current assets (note 17)
Total Current Assets
Non-current Assets
Financial assets measured at fair value through other comprehensive
income - non-current (note 8)
Financial assets measured at cost after amortization – non-current
(notes 9 and 33)
Investment under the equity method (note 13)
Property, plant and equipment (notes 14, 18, and 33)
Right-of-use assets (note 15)
Intangible assets (note 16)
Deferred income tax assets (notes 4 and 27)
Advance payment for equipment
Other non-current assets (note 10 and 17)
Total Non-current Assets
Total Assets
Liabilities and Equity
Current Liabilities
Short term borrowings (note 18)
Financial liabilities measured at fair value through income statement -
current (note 7)
Accounts payable (note 20)
Accounts payable - related parties (notes 20 and 32)
Other payables (note 21)
Other payables - related parties (note 32)
Current income tax liabilities (notes 4 and 27)
Provision for liabilities - current (note 22)
Lease liabilities - current (note 15)
Long term loans due within one year (notes 18 and 33)
Other current liabilities (notes 21 and 29)
Total Current Liabilities
Non-current Liabilities
Corporate bonds payable (note 19)
Long term borrowings (notes 18 and 33)
Deferred income tax liabilities (notes 4 and 27)
Lease liabilities – non-current (note 15)
Deferred income – non-current (note 29)
Net defined benefit liabilities – non-current (notes 4 and 23)
Other non-current liabilities (note 21)
Total Non-current Liabilities
Total Liabilities
Equity attributable to owners of the Company (notes 8, 12, 13, 19, 24, 27,
and 31)
Share capital
Common stock
Certificates of rights to exchange bonds for shares
Total share capital
Capital from retained earnings
Retained earnings
Legal reserve
Special reserve
Undistributed earnings
Total retained earnings
Other equity
Exchange differences on the translation of financial statements of
foreign operating organizations
Unrealized profit or loss of financial assets measured at fair value
through other comprehensive income
Total other equity
Total owner's equity of the Company
Non-controlling interests
Total Equity
Total Liabilities and Equity		 June 30,2021(Reviewed)
Amount
%
$ 388,432
12
53,998
2
23,589
1
569,550
18
35,092
1
15,317
1
685
-
693,842
22
99,451

3
1,879,956
60
-
-
15,441
-
88,845
3
982,829
31
71,913
2
17,258
1
39,635
1
36,634
1
19,895

1
1,272,450
40
$ 3,152,406
100
$ 497,075
16
-
-
440,360
14
-
-
117,815
4
-
-
7,832
-
1,026
-
2,762
-
112,083
3
55,214

2
1,234,167
39
224,896
7
250,802
8
67,754
2
1,497
-
5,269
-
40,785
2
3,079

-
594,082
19
1,828,249
58
909,786
29
24,071

1
933,857
30
58,583

2
125,834
4
95,226
3
84,610

3
305,670
10

101,761 )
(
3 )

12,586)
(
1)

114,347)
(
4)
1,183,763
38
140,394

4
1,324,157
42
$ 3,152,406
100		 December 31,2020(Audited)
Amount
%
$ 420,381
14
60,078
2
24,148
1
597,994
19
37,681
1
22,277
1
1,433
-
541,905
18

70,813

2

1,776,710
58
-
-
76
-
124,574
4
1,006,358
33
72,943
2
20,385
1
37,428
1
3,854
-

13,659

1

1,279,277
42
$ 3,055,987
100
$ 356,408
12
4,102
-
392,391
13
26,942
1
154,551
5
-
-
12,408
-
1,046
-
2,848
-
115,384
4

33,365

1

1,099,445
36
261,082
9
284,372
9
79,806
3
1,496
-
6,852
-
42,491
1

1,115

-

677,214
22

1,776,659
58
893,857
29

12,143

1

906,000
30

48,570

1
125,834
4
95,226
3

75,916

3

296,976
10

(
98,193 )
(
3 )
(
12,586)
(
1)
(
110,779)
(
4)
1,140,767
37

138,561

5

1,279,328
42
$ 3,055,987
100		 December 31,2020(Audited)
Amount
%
$ 420,381
14
60,078
2
24,148
1
597,994
19
37,681
1
22,277
1
1,433
-
541,905
18

70,813

2

1,776,710
58
-
-
76
-
124,574
4
1,006,358
33
72,943
2
20,385
1
37,428
1
3,854
-

13,659

1

1,279,277
42
$ 3,055,987
100
$ 356,408
12
4,102
-
392,391
13
26,942
1
154,551
5
-
-
12,408
-
1,046
-
2,848
-
115,384
4

33,365

1

1,099,445
36
261,082
9
284,372
9
79,806
3
1,496
-
6,852
-
42,491
1

1,115

-

677,214
22

1,776,659
58
893,857
29

12,143

1

906,000
30

48,570

1
125,834
4
95,226
3

75,916

3

296,976
10

(
98,193 )
(
3 )
(
12,586)
(
1)
(
110,779)
(
4)
1,140,767
37

138,561

5

1,279,328
42
$ 3,055,987
100		 June 30,2020(Reviewed) June 30,2020(Reviewed)
Amount
$ 388,432

53,998
23,589
569,550

35,092
15,317
685
693,842

99,451

1,879,956

-
15,441
88,845
982,829

71,913
17,258
39,635
36,634
19,895

1,272,450

$ 3,152,406

$ 497,075

-
440,360

-
117,815
-
7,832
1,026
2,762
112,083
55,214

1,234,167

224,896
250,802
67,754
1,497
5,269
40,785
3,079

594,082

1,828,249

909,786

24,071

933,857

58,583

125,834
95,226
84,610

305,670


101,761 )


12,586)


114,347)

1,183,763

140,394

1,324,157

$ 3,152,406
 Amount
$ 420,381

60,078
24,148
597,994

37,681
22,277
1,433
541,905

70,813

1,776,710

-
76
124,574
1,006,358

72,943
20,385
37,428
3,854
13,659

1,279,277

$ 3,055,987

$ 356,408

4,102
392,391

26,942
154,551
-
12,408
1,046
2,848
115,384
33,365

1,099,445

261,082
284,372
79,806
1,496
6,852
42,491
1,115

677,214

1,776,659

893,857

12,143

906,000

48,570

125,834
95,226
75,916

296,976


98,193 )


12,586)


110,779)

1,140,767

138,561

1,279,328

$ 3,055,987
 Amount
$ 362,326

71,711
18,106
492,883

30,606
10,588
4,623
513,306

73,154

1,577,303

3,586
32,488
128,679
1,000,745

73,269
19,418
44,799
11,182
14,181

1,328,347

$ 2,905,650

$ 414,085

4,273
240,470
41,557
132,756
65
17,693
1,114
3,742
60,789
47,616

964,160

275,482

363,250

65,498
2,091
8,186
40,541
1,290

756,338

1,720,498

891,759

2,098

893,857

44,301

125,834
95,226
15,056

236,116


113,089 )


9,000)


122,089)

1,052,185

132,967

1,185,152

$ 2,905,650
 %

















(
(
(

















(
(
(

















(
(
(


 12
2
1
17
1
-
-
18

3
54
-
1
4
34
3
1
2
-

1
46
100
14
-
8
1
5
-
1
-
-
2

2
33
10
13
2
-
-
1

-
26
59
31

-
31

1
4
3

1

8
(
4 )

-
(
4)
36

5
41
100

The attached notes are part of the consolidated financial statements.

(please refer to the Independent Auditor’s Review Report of Deloitte & Touche on August 13, 2021)

Manager: Hsiang-Chih Hsiao

Chairman: Hsiang-Chih Hsiao

Accounting Supervisor: Chih-Wen Kao

  • 5 -

Tex Year Industries Inc. and Subsidiaries

Consolidated Statement of Comprehensive Income

April 1 to June 30, 2021 and 2020 and January 1 to June 30, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$1,000, but earnings per share is NT$1

April 1 to June 30, April 1 to June 30, January 1 to June 30, January 1 to June 30, January 1 to June 30, January 1 to June 30, January 1 to June 30,
2021 2020 2021 2020
Code Amount % Amount % Amount % Amount %
Operating income (notes
25, 32 and 37)
4110 Total operating income $ 867,159 101 $ 769,759 100 $1,703,344 101 $1,386,228 100
4170 Less: sales return
4,614
1
3,479
-
9,044
1
6,153
-
4190 Less: sales discount
 855
 - 543
 - 845
-
468
-
4000 Net operating
income 861,690 100 765,737 100 1,693,455 100 1,379,607 100


Operating costs (notes 11,
22, 23, 26 and 32)
5110 Cost of goods sold
 712,421
 83 579,001
 76 1,388,161
 82
 1,075,966
 78
5900

Operating margin

149,269		 17 186,736 24 305,294 18 303,641 22
5910

Realized gain from
investments and joint
ventures
 68
 - ( 41)
 - 115
-
54
-
5950 Realized gross profit
 149,337
 17 186,695
 24 305,409
 18
 303,695
 22
Operating expenses (notes
10, 15, 23, 26 and 32)
6100 Selling expenses
85,368		 10
68,201
9		 169,805 10 142,361 10
6200 Administrative expenses
33,794
4
34,291
4
68,802
4
68,008
5
6300 Research and
development expenses 22,009
 2 36,920
 5 44,894
3
60,629
4
6000 Total operating expenses
 141,171
 16 139,412
 18 283,501
 17
 270,998
 19
6900

Net-operating income

8,166
 1 47,283
 6 21,908
1
32,697
3

Non-operating income and
expenditure
7060 Share of joint venture
income recognized by
equity method (note 13) (
1,758 )
-
1,457
-		 (
3,195 )
-
1,998
-
7100

Interest income (note 26)


239
-
446
-
506
-
1,095
-

(To be continued)

  • 6 -

(Continued)

Code
7010
Other income (notes
26, 29 and 32)
7230
Foreign exchange gain
(loss) - net (note 35)
7020
Other interests and
losses (note 26)
7510
Financial cost (notes
18, 19 and 26)
7590
Miscellaneous
disbursements
7000
Total
non-operating
income and
expenditure


7900
Net profit (loss) before tax


7950
Income tax benefit
(expense) (notes 4 and
27)


8200
Net profit (loss) of the
current period
Other comprehensive
income (notes 4, 8, 12,
13 and 27)
Items that may be
reclassified to
income in the future
8361
Exchange
differences on
the translation
of financial
statements of
foreign
operating
organizations
8370
Share of other
comprehensive
income of joint
venture under
the equity
method		 April 1 to June 30,
2021
Amount
%
3,866
-
(
3,997 ) (
1 )
958
-
(
3,563 )
-
(
2,373)

-

(
6,628)
(
1)



1,538
-


1,553

-



3,091

-

( $ 9,012 ) (
1 )
(
4,081 )
-		 April 1 to June 30,
2020
Amount
%

9,416
1
(
5,067 )
-

1,491
-
(
4,049 )
-
(
1,300)

-


2,394

1


49,677
7
(
15,009)
(
2)


34,668

5

( $ 16,076 ) (
2 )
(
319 )
-		 January 1 to June 30,
2021
Amount
%

12,924
1
(
6,381 ) (
1 )
(
1,188 )
-
(
6,053 )
-
(
4,046)

-

(
7,433)

-


14,475
1
(
3,426)

-


11,049

1

( $ 4,753 )
-
(
229 )
-		 January 1 to June 30,
2020		 January 1 to June 30,
2020
Amount
3,866
(
3,997 )
958
(
3,563 )
(
2,373)

(
6,628)



1,538


1,553



3,091

( $ 9,012 )
(
4,081 )		 Amount

9,416
(
5,067 )

1,491
(
4,049 )
(
1,300)


2,394


49,677
(
15,009)


34,668

( $ 16,076 )
(
319 )		 Amount

12,924
(
6,381 )
(
1,188 )
(
6,053 )
(
4,046)

(
7,433)


14,475
(
3,426)


11,049

( $ 4,753 )
(
229 )		 Amount

18,151
(
4,405 )
(
1,982 )
(
8,278 )
(
2,885)


3,694


36,391
(
9,786)


26,605

( $ 34,864 )
(
2,591 )		 %

1

-

-
(
1 )

-

-

3
(
1)

2
(
3 )

-

(To be continued)

  • 7 -

(Continued)

April 1 to June April 1 to June April 1 to June 30, April 1 to June April 1 to June April 1 to June 30, January 1 to June January 1 to June 30, January 1 to June January 1 to June January 1 to June 30,
2021 2020 2021 2020
Code Amount % Amount % Amount % Amount %
8399 Income tax related
to items that
may be
reclassified 2,403
 -
 3,093
 -
 892
 -
 6,716
 1
8360 ( 10,690)
 ( 1)
 ( 13,302)
 ( 2)
 ( 4,090)
 -
 ( 30,739)
 ( 2)
8300 Other
comprehensive
income (net of
tax) ( 10,690)
 ( 1)
 ( 13,302)
 ( 2)
 ( 4,090)
 -
 ( 30,739)
 ( 2)
8500

Total comprehensive
income of the current
period ($ 7,599)
 ( 1)
 $ 21,366
 3
 $ 6,959
 -
 ($ 4,134)
 -
Net profit (loss)
attributable to
8610 owners of the
Company $ 2,466
-		 $ 17,172
2		 $ 8,694 1 $ 5,801 -
8620 Non-controlling
interests 625
 -
 17,496
 3
 2,355
 -
 20,804
 2
8600 $ 3,091
 -
 $ 34,668
 5
 $ 11,049
 1
 $ 26,605
 2
Total comprehensive
income attributable to
8710 owners of the
Company ( $ 7,144 ) (
1 )		 $ 4,799
1		 $ 5,126 - ( $ 21,062 ) ( 1 )
8720 Non-controlling
interests ( 455)
 -
 16,567
 2
 1,833
 -
 16,928
 1
8700 ($ 7,599)
 ( 1)
 $ 21,366
 3
 $ 6,959
 -
 ($ 4,134)
 -
Earnings per share
(note 28)
9710 Basic
 $ 0.03 $ 0.19 $ 0.09 $ 0.07
9810 Diluted
 $ 0.03 $ 0.17 $ 0.09 $ 0.07

The attached notes are part of the consolidated financial statements.

(please refer to the Independent Auditor’s Review Report of Deloitte & Touche on August 13,

2021)

Chairman: Hsiang-Chih Hsiao

Manager: Hsiang-Chih Hsiao

Supervisor: Chih-Wen Kao

  • 8 -

Tex Year Industries Inc. and Subsidiaries

Consolidated Statement of Changes in Equity January 1 to June 30, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$1,000

Unit: NT$1,000
Code
A1
Balance on January 1, 2020

Allocation and distribution of 2019 earnings
B1
Legal reserve appropriated
B3
Special reserve appropriated
B5
Cash dividends of ordinary share
I1
Common shares converted from convertible
corporate bonds
I3
Share capital converted from certificates of rights
to exchange bonds for shares
D1
Net profit from January 1 to June 30, 2020
D3
Other comprehensive income after tax from
January 1 to June 30, 2020
D5
Total comprehensive income from January 1 to
June 30, 2020
Z1
Balance on June 30, 2020

A1
Balance on January 1, 2021

I1
Common shares converted from convertible
corporate bonds
I3
Share capital converted from certificates of rights
to exchange bonds for shares
D1
Net profit from January 1 to June 30, 2021
D3
Other comprehensive income after tax from
January 1 to June 30, 2021
D5
Total comprehensive income from January 1 to
June 30, 2021

Z1
Balance on June 30, 2021
 Equityattributable to owners of the Company (notes 8,12,13,19, 24,27,and 31) Other equityitems
Exchange
differences on the
translation of
financial statements
of foreign operating
organizations
Unrealized profit or
loss of financial
assets measured at
fair value through
other
comprehensive
income
( $ 86,226 ) ( $ 9,000 )

-
-

-
-
-
-
-
-
-
-
-
-
(
26,863)

-

(
26,863)

-

($ 113,089)
($ 9,000)

( $ 98,193 ) ( $ 12,586 )
-
-
-
-
-
-
(
3,568)

-

(
3,568)

-

($ 101,761)
($ 12,586)
 Non-controlling
interests
(note 12)
$ 116,039

-
-
-

-
-
20,804

3,876)

16,928

$ 132,967

$ 138,561

-
-
2,355

522)

1,833

$ 140,394
 Total equity
Share capital
Common stock
Certificates of rights
to exchange bonds
for shares
$ 885,767
$ 1,027

-
-
-
-
-
-

4,965
2,098
1,027
(
1,027 )
-
-
-

-

-

-

$ 891,759
$ 2,098

$ 893,857
$ 12,143

12,143
(
12,143 )
3,786
24,071
-
-
-

-

-

-


$ 909,786
$ 24,071
 Capital from
retained earnings
$ 68,494

-
-
(
26,753 )
2,560

-
-

-


-

$ 44,301

$ 48,570


-
10,013
-

-


-

$ 58,583
 Retained earnings Undistributed
earnings
$ 54,068


4,418 )

40,395 )
-
-
-
5,801
-

5,801

$ 15,056

$ 75,916

-
-
8,694
-

8,694

$ 84,610
Exchange
differences on the
translation of
financial statements
of foreign operating
organizations

( $ 86,226 )

-

-
-
-
-
-
(
26,863)

(
26,863)

($ 113,089)

( $ 98,193 )
-
-
-
(
3,568)

(
3,568)

($ 101,761)
Common stock
$ 885,767

-
-
-
4,965
1,027

-
-

-

$ 891,759

$ 893,857

12,143

3,786
-
-

-


$ 909,786
Legal reserve
$ 121,416

4,418
-

-
-
-
-
-

-

$ 125,834

$ 125,834

-
-
-
-

-

$ 125,834
 Special reserve
$ 54,831

-

40,395

-
-
-
-
-

-

$ 95,226

$ 95,226

-
-
-
-

-

$ 95,226









(




(
(















(
(






 (


(
(
(
(
(
(
(		 (


(
(


(
(



(
(
(
(


(

 $ 1,206,416
-
-

26,753 )
9,623
-
26,605

30,739)

4,134)
$ 1,185,152
$ 1,279,328
-
37,870
11,049

4,090)
6,959
$ 1,324,157

The attached notes are part of the consolidated financial statements.

(please refer to the Independent Auditor’s Review Report of Deloitte & Touche on August 13, 2021)

Chairman: Hsiang-Chih Hsiao

Manager: Hsiang-Chih Hsiao Accounting Supervisor: Chih-Wen Kao

  • 9 -

Tex Year Industries Inc. and Subsidiaries

Consolidated Cash Flow Statement

January 1 to June 30, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$1,000

Code
Net Cash flow from business activities
A00010
Net profit before tax

A20010
Income expense loss item
A20100
Depreciation expense
A20200
Amortization expenses
A20300
Expected credit impairment loss
A20400
Loss on financial instruments
measured at fair value through
the income statement
A20900
Financial cost
A21200
Interest income

A22300
Share of profit of joint venture
under the equity method
A22500
Loss from disposal of property,
plant and equipment
A23800
Loss from falling inventory price
and dead stock
A23900
Realized gain from joint ventures
A24100
Unrealized foreign currency
exchange loss
A29900
Reversal of refund liabilities

A29900
Reversal of deferred income

A30000
Net change in operating assets and
liabilities
A31115
Financial instruments measured
at fair value through the
income statement
A31130
Notes receivable
A31150
Accounts receivable
A31160
Accounts receivable - related
parties
A31180
Other receivables
A31190
Other receivables - related
parties
A31200
Inventory

A31240
Other current assets

A32150
Accounts payable
A32160
Accounts payable - related
parties
A32180
Other payables
 January 1 to June
30, 2021
$ 14,475

43,892
4,187

1,164
1,188
6,053
(
506 )
3,195

-
45
(
115 )
1,198
(
20 )
(
7,223 )
797

559
26,181
1,950

6,618
678
(
151,983 )
(
28,582 )
48,169

(
26,883 )
(
35,487 )		 January 1 to June
30, 2020
$ 36,391
45,058
5,054
8,259
1,954
8,278
(
1,095 )
(
1,998 )
28
4,074
(
54 )
6,526
(
551 )
(
2,395 )
(
55,781 )
5,442
41,292
(
11,650 )
177
2,883
(
63,149 )
(
6,891 )
(
52,005 )
(
12,292 )
(
30,099 )

(To be continued)

  • 10 -

(Continued)

(Continued)
Code
A32190
Other payables - related parties
A32230
Other current liabilities

A32240
Net defined benefit liabilities –
non-current
A33000
Cash outflow generated from
operations
A33100
Interest received
A33300
Interest paid

A33500
Income tax paid

AAAA
Net cash flows from used in
poerating activities
Cash flow from investment activities
B00040
Acquisition of financial assets
measured at cost after
amortization
B00050
Disposal of financial assets measured
at cost after amortization
B02700
Acquisition of property, plant and
equipment
B02800
Disposal of property, plant and
equipment
B04500
Acquisition of intangible assets

B06700
Increase in other non-current assets

B07100
Increase in advance payment for
equipment
B07600
Dividends received

BBBB
Net cash outflow from
investment activities
Cash flow from financing activities
C00200
Increase in short-term borrowings
C01600
Long-term loans
C01700
Repayment of long-term loans

C04020
Repayment of lease principal

C04400
Increase in other non-current
liabilities
CCCC
Net cash inflow from financing
activities
DDDD
Effect of exchange rate changes on cash
and cash equivalents
EEEE
Net decrease in cash and cash equivalents
E00100 Beginning cash and cash equivalent
balance
E00200 Ending cash and cash equivalent balance
 January 1 to June
30, 2021
(
39 )

27,263
(
1,706)

( $ 64,932 )
506
(
5,185 )
(
21,298)

(
90,909)

(
15,365 )
-
(
19,836 )
895
(
210 )
(
7,089 )
(
34,968 )

32,419

(
44,154)

141,329
-
(
35,778 )
(
2,041 )

2,175


105,685

(
2,571)

(
31,949 )

420,381

$ 388,432
 January 1 to June
30, 2020
(

(
(
(
(
(
(
(
(
(
(

(
(
(


(
(

 (
(
(
(
(
(

(
(
(
(

(
(
(


(
(
4 )
12,088
1,195)
$ 61,655 )
1,237

5,948 )
476)
66,842)

-
23,799

17,944 )
-

374 )

3,839 )

7,944 )
-
6,302)
31,709
60,000

30,048 )

2,792 )
398
59,267
13,068)

26,945 )
389,271
$ 362,326

(To be continued)

  • 11 -

(Continued)

The attached notes are part of the consolidated financial statements. (please refer to the Independent Auditor’s Review Report of Deloitte Taiwan on August 13, 2021)

Chairman: Hsiang-Chih Hsiao

Manager: Hsiang-Chih Hsiao

Accounting Supervisor: Chih-Wen Kao

  • 12 -

Tex Year Industries Inc. and Subsidiaries

Notes to consolidated financial statements

January 1 to June 30, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

(unless otherwise specified, the amount unit is in NT$1,000)

1. Company History and Business Scope

Tex Year Industries Inc. (hereinafter referred to as the “Company”) was established on June 28, 1976 with the approval of the Ministry of Economic Affairs. The main business items are the manufacturing and trading of glues, adhesives, hot-melt glues and medical equipment.

The Company's shares were listed and traded on the GreTai Securities Market of the Republic of China on March 16, 2001, and delisted on the GreTai Securities Market on June 24, 2015 and listed and traded on the Taiwan Stock Exchange on the same day.

The consolidated financial statements are expressed in NT$, the functional currency of the Company.

2. Date and Procedure of Adoption of Financial Statements

The consolidated financial statements were adopted and issued by the board meeting on August 11, 2021.

3. Application of New and Revised Standards and Interpretations

(I) The International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations (IFRIC) and Interpretations (SIC) (hereinafter referred to as "IFRSs") recognized and issued by the Financial Supervisory Commission (hereinafter referred to as the "FSC") is applied for the first time.

The application of the revised IFRSs approved and issued by the FSC will not result in significant changes in the accounting policies of the consolidated Company.

(II) IFRSs approved by the FSC and applicable in 2022

Newly Issued/ Amended/ Revised Standards and

The effective date promulgated by IASB January 1, 2022 (note 1) January 1, 2022 (note 2)

Interpretations promulgated by IASB "IFRSs 2018~2020 Annual Improvements" January 1, 2022 (note 1) Amendment to IFRS 3 "Quotation of Conceptual January 1, 2022 (note 2) Framework" Amendments to IAS 16 “Property, Plant and January 1, 2022 (note 3) Equipment: Price before Intended Use” Amendment to IAS 37 "Loss Contracts - Cost of January 1, 2022 (note 4) Performing Contracts"

  • 13 -

  • Note 1: The amendment to IFRS 9 is applicable to the exchange of financial liabilities or revision of terms during annual reporting periods beginning after January 1, 2022; the amendment to IAS 41 "Agriculture" is applicable to fair value measurements in annual reporting periods after January 1, 2022; the amendment to IFRS 1 "First Adoption of IFRSs" is retrospectively applied to annual reporting periods beginning after January 1, 2022.

  • Note 2: The amendment is applicable to the merges of enterprises whose offer dates fall in annual reporting periods beginning after January 1, 2022.

  • Note 3: The amendment is applicable to the plant, property and equipment which reach the location and condition in the operation manner intended by the management as of January 1, 2021.

  • Note 4: The amendment is applicable to the contracts where not all obligations have been fulfilled by January 1, 2022.

As of the date of approval of this consolidated financial report, the consolidated company continues to evaluate the impact of amendments to the other standards and interpretations on the financial status and financial performance, and the relevant impact will be disclosed when the evaluation is completed.

  • (III) IFRSs issued by IASB but not approved and effective by the FSC
IFRSs issued by IASB but not approved and effective by the FSC
Newly Issued/ Amended/ Revised Standards and
Interpretations
The amendments to IFRS 10 and IAS 28, “Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture”
IFRS 17, “Insurance Contracts”
Amendments to IFRS 17
Amendment to IAS 1 "Classification of Liabilities as
Current or Non-current"
Amendment to IAS 1 "Disclosure of Accounting
Policies"
Amendment to IAS 8 "Definition of Accounting
Estimates"
Amendment to IAS 12 "Deferred Income Tax
Related to Assets and Liabilities Arising from a
Single Transaction”		 The effective date
promulgated by IASB
(note 1)
Undetermined
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (note 2)
January 1, 2023 (note 3)
January 1, 2023 (note 4)

  • Note 1: Unless otherwise expressly remarked, the aforementioned newly promulgated/Amendment/Amended Rules or Interpretation come into effect in the reporting year starting from the respective specified effective dates.

  • 14 -

  • Note 2: The application of this amendment will be postponed till the annual reporting period beginning after January 1, 2023.

  • Note 3: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in the annual reporting period beginning after January 1, 2023.

  • Note4: Except for the recognition of deferred income tax on temporary differences between a lease and decommissioning obligations on January 1, 2022, the amendment applies to transactions that occur after January 1, 2022.

If the consolidated Company continues to evaluate the impact of other standards and amendments to the interpretation on the financial status and financial performance as of the date of approval of the consolidated financial statements for publication, the relevant impacts shall be disclosed when the evaluation is completed.

4. Summary of Significant Accounting Policies

  • (I) Declaration of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and issued by the FSC. The consolidated financial statements do not contain all IFRSs disclosures required by the entire annual financial statements.

  • (II) Basis of Preparation

In addition to financial instruments measured at fair value and net defined benefit liabilities recognized at the present value of defined benefit obligations less the fair value of planned assets, the consolidated financial statements are prepared based on historical cost.

Fair value measurement is divided into levels 1 to 3 according to the observability and importance of relevant input values:

  1. Level 1 input value: refers to the quoted price (unadjusted) of the same assets or liabilities available in the active market on the measurement date.

  2. Level 2 input value: refers to direct (i.e., price) or indirect (i.e., derived from price) observable input value of assets or liabilities other than the quotation of level 1.

  3. Level 3 input value: refers to the unobservable input value of assets or liabilities.

(III) Basis of Consolidation

  • 15 -

The consolidated financial statements include the financial statements of the Company and the entities (subsidiaries) controlled by the Company. In the consolidated statement of comprehensive income, the operating income of the acquired or affiliated subsidiaries since the acquisition date or until the disposal date has been included. The financial statements of the subsidiaries have been adjusted so that their accounting policies are consistent with those of the consolidated Company. In the preparation of the consolidated financial statements, all transactions, account balances, gains and expense losses among the entities have been eliminated. The total comprehensive income of the subsidiaries is attributable to the owners and is the non-controlling interest of the Company, even if the non-controlling interest becomes a loss.

Where the change of ownership rights of the subsidiaries of the consolidated Company does not result in a loss of control, it shall be treated as an equity transaction. The book amounts of the consolidated Company and non-controlling interests have been adjusted to reflect the change in the relative interests in subsidiaries. The difference between the adjusted amount of non-controlling interests and the fair value of the consideration paid or received is directly recognized as equity and belongs to the owners of the Company.

For details of subsidiaries, shareholding ratio and business items, please refer to note 12, schedule 5 and schedule 6.

  • (IV) Other Significant Accounting Policies

Except for the following notes, please refer to the Summary of Significant Accounting Policies in the consolidated financial report of 2020.

1. Defined benefits and post-retirement benefits

The pension cost of the interim period is calculated based on the

pension cost rate determined by actuarial calculation from the end of the previous year to the end of the current period, and adjusted for major market fluctuations of the current period, as well as major plan amendments, repayments or other major one-off events.

2. Income tax

  • 16 -

Income tax expense is the sum of current income tax and deferred income tax. The income tax of the interim period is assessed on an annual basis, and the profit before tax of the interim period is calculated at the tax rate applicable to the expected annual total earnings.

5. Main Sources of Uncertainty in Significant Accounting Judgments, Estimates and Assumptions

Please refer to the consolidated financial statements of 2020 for the main sources of significant accounting judgments, estimates and assumptions used in the consolidated financial statements.

6. Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand and working
capital

Bank checks and demand
deposits

Cash equivalents

Bank time deposits with
original maturity in 3
months

 June 30, 2021 December 31,2020
$ 1,783

414,282



4,316

$ 420,381
 June 30, 2020




$ 954

383,163


4,315

$ 388,432






$ 1,803
311,937
48,586
$ 362,326

The interest rate ranges of demand deposits and time deposits on the balance sheet date are as follows:

date are as follows:
Demand deposits
Time deposit		 June 30, 2021 December 31,2020

0.01%～0.6%
1.35%		 June 30, 2020
0.01%～0.6%
1.9575%		 0.01%～0.6%
0.6%～1.95%

7. Financial Instruments Measured at Fair Value through Income Statement

June 30, 2021 December 31,2020 June 30, 2020

Financial assets - current Non-derivative financial assets mandatorily measured at fair value through income statement - Wealth management products (1) $ 53,808 $ 59,518 $ 71,371 Derivatives (not for specified hedging) (To be continued)

  • 17 -
(Continued)
June 30, 2021 December 31,2020 June 30, 2020
- Put and call rights of
convertible corporate bonds
(note 19) 190 560 340
$ 53,998 $ 60,078 $ 71,711
Financial liabilities-current
Held for trading
Derivatives (not for
specified hedging)
- Currency and interest
swap contracts (2) $ - $ 4,102 $
4,273
  • (I) Wealth management products are investment products undertaken by subsidiaries and banks. The details on the balance sheet date are as follows:
Expected annual rate of
return
 June 30, 2021 December 31,2020
2.6%～2.97%		 June 30, 2020
2.55%～3.05% 2.47%～3.4%
  • (II) On the balance sheet date, the currency and interest swap contracts not covered by hedge accounting and not yet due are as follows: June 30, 2021: None.

December 31, 2020

December 31, 2020
Contract amount ($1,000)
EUR 1,481/PLN 6,293

June 30, 2020
Contract amount ($1,000)
EUR 1,552/PLN 6,595		 Due date
January 10, 2021 ~
August 9, 2023
Due date
July 10, 2020 ~
August 9, 2023		 Range of interest
rate paid
3.45%
Range of interest
rate paid
3.45%		 Range of interest
rate received
WIBOR3M+3%
Range of interest
rate received
WIBOR3M+3%
  • 18 -

8. Financial assets measured at fair value through other comprehensive income Equity instrument investment

June 30, 2021 December 31,2020 June 30, 2020

Non-current Domestic investment Unlisted (OTC) stocks Common shares of Acute Touch - - Technology Co., Ltd $ $ $ 3,586

The consolidated Company invests in the common shares of Acute Touch Technology Co., Ltd. for medium and long-term strategic purposes and expects to make profits through long-term investment. In the opinion of the management of the consolidated Company, if the short-term fair value fluctuation of such investment is included in the income, it is not consistent with the aforesaid long-term investment plan, so they chose to designate such investment as measured at fair value through other comprehensive income.

Considering the operation and net equity value of Acute Touch Technology Co., Ltd, the consolidated Company may have a significant impairment in the recoverable amount of its relevant investment, and after evaluation, it recognized the impairment loss of NT$3,586 thousand in 2020.

  1. Financial assets measured at cost after amortization

June 30, 2021 December 31,2020 June 30, 2020 Non-current Restricted bank deposits $ 15,441 $ 76 $ 32,488

The restricted bank deposits are the collaterals of the convertible corporate bonds issued by the Company and the foreign exchange deposits to which the special act on the repatriation of foreign funds is applicable. Please refer to note 33. 10. Notes receivable, accounts receivable and other receivables (including those of related parties)

parties)
Notes receivable
Measured at cost after
amortization
Total book value


Accounts receivable

Measured at cost after
amortization

Total book value

Less: provision for loss

 June 30,2021
$ 23,589




$ 593,232

(
23,682)

$ 569,550
 December 31,2020
$ 24,148

$ 620,953

(
22,959)

$ 597,994
June 30,2020





(

(

(
 $ 18,106
$ 516,778
23,895)
$ 492,883

(To be continued)

  • 19 -

June 30, 2020

(Continued)

June 30, 2021 December 31,2020

Accounts receivable-related
parties
Measured at cost after
amortization
Total book value

Less: provision for loss
(

Other receivables
Tax refund receivable

Others
Less: provision for loss
(

Other receivables - related
parties

Less: provision for loss
(
 $ 35,094

2)

$ 35,092

$ 10,804

4,517
4)

$ 15,317

$ 686

1)

$ 685
 $ 37,681

-
(
$ 37,681

$ 10,852

11,425
-
(
$ 22,277

$ 1,433

-
(
$ 1,433
 $ 30,637
31)
$ 30,606
$ 6,404
4,198
14)
$ 10,588
$ 4,625
2)
$ 4,623

(I) Accounts receivable

The average credit period of the consolidated Company for commodity sales is 60 days, and the accounts receivable are not subject to interest.

In order to reduce credit risk, the management of the consolidated Company has assigned a special team to be responsible for the decision of credit facilities, credit approval and other monitoring procedures to ensure that appropriate actions have been taken for the recovery of overdue receivables. In addition, the consolidated Company will review the recoverable amounts of the receivables one by one on the balance sheet date to ensure that appropriate impairment loss has been provided for the receivables that cannot be recovered. Therefore, the management of the consolidated Company thinks that the credit risk of the consolidated Company has been significantly reduced.

The consolidated Company shall recognize the provision for loss of accounts receivable according to the expected credit loss during the period of existence. The expected credit loss during the existence period is calculated by the preparation matrix, which considers the past default records of customers and their current financial situation, the industrial economic situation, as well as the GDP forecast

  • 20 -

and industrial outlook. As the historical experience of credit loss of the consolidated Company shows that there is no significant difference in the loss pattern of different customer groups, the preparation matrix does not further distinguish customer groups. It only uses the overdue days of accounts receivable to determine the expected credit loss rate.

If there is evidence that the counterparty is facing serious financial difficulties and the consolidated Company cannot reasonably expect the recoverable amount, for example, if the transaction counterparty is in liquidation, the consolidated Company will directly write off the relevant receivables. Still, it will continue the recourse activities, and the amount recovered due to recourse will be recognized as income.

The consolidated Company measures the provision for loss of accounts receivable (including those of related parties) according to the preparation matrix as follows:

June 30, 2021

Not overdue
Expected credit
loss rate
0%
Total book value
$ 544,716
Provision for loss
(expected
credit loss
during the
period of
existence)

-

Cost after
amortization
$ 544,716

December 31, 2020
Not overdue
Expected credit
loss rate
0%
Total book value
$ 600,991
Provision for loss
(expected
credit loss
during the
period of
existence)

-
Cost after
amortization
$ 600,991		 N ot overdue 1 ~ 60 days
overdue		 61 ~ 120
days
overdue		 121 ~ 150
days
overdue		 151 ~ 180
days
overdue		 181 ~ 365
days
overdue		 More than
366 days
overdue		 Total

(

 0%～10%
$ 54,398

1,128)

$ 53,270

1 ~ 60 days
overdue
(
 5%～30%
$ 7,831

1,837)

$ 5,994

61 ~ 120
days
overdue
(
 20%～40%
$ 1,267

613)

$ 654

121 ~ 150
days
overdue		 5

(
 0%～100%
$ 428

420)

$ 8

151 ~ 180
days
overdue
(
 100%
$ 2,357

2,357)

$ -

181 ~ 365
days
overdue
(

 100%
$ 17,329

17,329)

$ -

More than
366 days
overdue
(
 $ 628,326

23,684)
$ 604,642
Total
Expected credit
loss rate
Total book value

Provision for loss
(expected
credit loss
during the
period of
existence)
Cost after
amortization		 N


0%
$ 600,991
-
$ 600,991
(
 0%～10%
$ 31,650

490)
$ 31,160
(
 5%～30%
$ 2,414

637)
$ 1,777
(
 20%～40%
$ 2,283

543)
$ 1,740		 5

(
 0%～100%
$ 111

104)
$ 7
(
 100%
$ 3,633

3,633)
$ -
(
 100%
$ 17,552

17,552)
$ -
(
 $ 658,634

22,959)
$ 635,675
  • 21 -

June 30, 2020

Expected credit
loss rate
Total book value

Provision for loss
(expected
credit loss
during the
period of
existence)
Cost after
amortization		 N ot overdue 1 ~ 60 days
overdue		 61 ~ 120
days
overdue		 121 ~ 150
days
overdue		 151 ~ 180
days
overdue		 181 ~ 365
days
overdue		 More than
366 days
overdue		 Total


0%
$ 482,387
-

$ 482,387
(
 0%～10%
$ 36,830

876)

$ 35,954

(
 5%～30%
$ 5,154

1,216)

$ 3,938
(
 20%～40%
$ 1,345

390)

$ 955
 5

(
 0%～100%
$ 1,046

791)

$ 255
(
 100%
$ 14,303

14,303)

$ -
(
 100%
$ 6,350

6,350)

$ -

(
 $ 547,415

23,926)
$ 523,489

Information on changes in provision for losses of accounts receivable (including those of related parties) is as follows:

Beginning balance
Add: impairment loss in the
current period
Less: actual write off in the
current period
Foreign currency translation
difference
Ending balance		 January 1 to June
30, 2021
$ 22,959
1,159
(
37 )
(
397)
$ 23,684		 January 1 to June
30, 2020		 January 1 to June
30, 2020

(
(
(
(
 $ 16,126
8,291

410 )

81)
$ 23,926

Compared with the balance at the beginning of the year, the total book value of accounts receivable as of June 30, 2021 and 2020 decreased by NT$30,308 thousand and NT$31,571 thousand, and the loss provision increased by NT$725 thousand and NT$7,800 thousand.

  • 22 -

(II) Collection

The information about the change of provision for collection loss is as follows:

Beginning balance
Foreign currency translation
difference
Ending balance		 January 1 to June
30,2021
$ 2,900

336
$ 3,236		 January 1 to June
30,2020		 January 1 to June
30,2020



(
 $ 3,381
9)
$ 3,372

The collection amount is included in other assets and the provision for impairment losses has been made in full.

(III) Other receivables

Information about the change of provision for losses of other receivables (including those of related parties) is as follows:

Beginning balance
Add: impairment loss in the
current period
Less: impairment loss
provision (reversals) in
the current period
Foreign currency translation
difference
Ending balance		 January 1 to June
30,2021
$ -
5
-

-
$ 5		 January 1 to June
30,2020		 January 1 to June
30,2020



(
(
 $ 49
-

32 )

1)
$ 16

11. Inventory

Inventory
Finished products

Semi-finished products
Raw materials

Merchandise inventory

 June 30,2021 December 31,2020
$ 210,963

26,367
248,374


56,201

$ 541,905
 June 30,2020



$ 260,496

25,595
320,793

86,958

$ 693,842





$ 204,233
32,016
210,755
66,302
$ 513,306

The inventory-related cost of goods sold from April 1 to June 30, 2021 and 2020, and from January 1 to June 30, 2021 and 2020 were NT$712,421 thousand, NT$579,001 thousand, NT$1,388,161 thousand and NT$1,075,966 thousand, respectively. The cost of goods sold includes the loss of inventory depreciation (recovery benefit), which is a profit of NT$872 thousand, a loss of NT$2,867 thousand, a loss of NT$45 thousand, and a loss of NT$4,074 thousand.

  • 23 -

12. Subsidiaries

(I) Subsidiaries included in the consolidated financial statements

The consolidated financial statements are prepared by:

Name of
investment
company

The Company

The Company

The Company

The Company

Tex Year
International
(Samoa) Corp.

Tex Year (Hong
Kong) Ltd.

Tex Year
Technology
(Samoa) Corp.

Tex Year
Technology
(Samoa) Corp.

Tex Year Fine
Chemical
(Guangzhou)
Co., Ltd.

Tex Year Fine
Chemical
(Guangzhou)
Co., Ltd.

Shanghai C&M
Filtration
Solutions
Limited
 Name of subsidiary
Tex Year
International
(Samoa) Corp.

Tex Year (Hong
Kong) Ltd.

Tex Year Vietnam
Co., Ltd.

Tex Year Europe Sp.
z o. o.

Tex Year Technology
(Samoa) Corp.

Tex Year Technology
(Samoa) Corp.

Tex Year Fine
Chemical
(Guangzhou) Co.,
Ltd.

Tex Year Technology
(Jiangsu) Co.,
Ltd.

Wuxi Tex Year
International
Trading Co., Ltd.

Shanghai C&M
Filtration
Solutions Limited

Jiangsu C&M
Filtration
Solutions Limited
 Nature of business
Holding company
Sales of hot melt
adhesive,
adhesive and
various
appliances
Manufacturing and
trading of hot
melt adhesives
and water
adhesives
R&D, production,
and sales of hot
melt adhesives
Holding company
Holding company
R&D, production,
and sales of hot
melt adhesives
R&D, production,
and sales of hot
melt adhesives
Sales of chemical
products and
adhesives
Wholesale, import,
and export of
environmental
filter materials,
chemical
products,
and
accessories
R&D
and
manufacturing
of
filter
materials		 Percentage of equityheld

June 30,
2021
December
31,2020
June 30,
2020

100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
80%
80%
96.08%
96.08%
96.08%
3.92%
3.92%
3.92%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50.10%
50.10%
50.10%
100%
100%
100%		 Percentage of equityheld

June 30,
2021
December
31,2020
June 30,
2020

100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
80%
80%
96.08%
96.08%
96.08%
3.92%
3.92%
3.92%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50.10%
50.10%
50.10%
100%
100%
100%		 Explanation

June 30,
2021
100%
100%
80%
80%
96.08%
3.92%
100%
100%
100%
50.10%
100%		 December
31,2020
100%
100%
80%
80%
96.08%
3.92%
100%
100%
100%
50.10%
100%
-
note
note
note
-
-
-
note
-
note
note

Note: It is a non-important subsidiary and its financial statements have not been reviewed by a certified public accountant.

  • 24 -

(II) Information of subsidiaries with significant non-controlling interests

Name of subsidiary
Tex Year Vietnam Co., Ltd.

Tex Year Europe Sp. z o. o.

Shanghai C&M Filtration
Solutions Limited
 Main business
premises
Pingyang
Province,
Vietnam
Poland
Shanghai
 Proportion of shares and voting rights
held bynon-controllinginterests
June 30,
2021
December
31,2020
June 30,
2020
20%
20%
20%
20%
20%
20%
49.9% 49.9% 49.9%		 Proportion of shares and voting rights
held bynon-controllinginterests
June 30,
2021
December
31,2020
June 30,
2020
20%
20%
20%
20%
20%
20%
49.9% 49.9% 49.9%
June 30,
2020

20%

20%
49.9%

Profit (loss) distributed to non-controlling interests Non-controlling interests

Name of subsidiary
 April 1 to June
30,2021		 April 1 to June
30,2021		 April 1 to June
30,2020		 April 1 to June
30,2020		 J January 1 to
une 30,2021

J		 January 1 to
une 30,2020		 J une 30,2021
D		 ecember 31,
2020		 J une 30,2020
Tex Year Vietnam
Co., Ltd.
Tex Year Europe
Sp. z o. o.
Shanghai C&M
Filtration
Solutions
Limited
Total
(

 $ 285

344 )
684
$ 625

$ 116
639
16,741
$ 17,496
(

 $ 349

196 )
2,202
$ 2,355

$ 663
738
19,403
$ 20,804

$ 17,811
33,315
89,268
$ 140,394

$ 17,462
34,379
86,720
$ 138,561

$ 17,275
32,714
82,978
$ 132,967

The aggregate financial information of the following subsidiaries is based on the amounts before inter-company transaction cancellation:

Tex Year Vietnam Co., Ltd.

Tex Year Vietnam Co., Ltd.
Current Assets

Non-current Assets
Current Liabilities

Equity

Equity attributable to:
owners of the
Company

Non-controlling
interests

 June 30,2021 December 31,2020
$ 116,701

14,373
(
43,765)

$ 87,309

$ 69,847


17,462

$ 87,309
June 30,2020

(



 $ 138,146

12,429
61,521)

$ 89,054

$ 71,243

17,811

$ 89,054
(
(



 $ 105,531
14,634
33,790)
$ 86,375
$ 69,100
17,275
$ 86,375
  • 25 -
April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit of the
current period
$ 1,427
$ 580
$ 1,745
$ 3,313
attributable to:
owners of the
Company
$ 1,142
$ 464
$ 1,396
$ 2,650
Non-controlling
interests

285

116

349

663
$ 1,427
$ 580
$ 1,745
$ 3,313
Tex Year Europe Sp. z o. o.
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 149,505
$ 129,821
$ 139,582
Non-current Assets
120,970
129,888
132,809
Current Liabilities
(
64,626 )
(
47,066 )
(
66,435 )
Non-current Liabilities
(
39,275)
(
40,745)
(
42,385)
Equity
$ 166,574
$ 171,898
$ 163,571

Equity attributable to:

owners of the
Company
$ 133,259
$ 137,519
$ 130,857
Non-controlling
interests

33,315

34,379

32,714
$ 166,574
$ 171,898
$ 163,571
April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit (loss) of the
current period
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Net (loss) profit
attributable to:
owners of the
Company
( $ 1,379 )
$ 2,557
( $ 785 )
$ 2,954
Non-controlling
interests
(
344)

639
(
196)

738
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Shanghai C&M Filtration Solutions Limited and its subsidiaries
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 135,163
$ 146,596
$ 125,726
Non-current Assets

81,118
81,685
81,024
Current Liabilities
(
36,676)
(
53,096)
(
39,454)
Equity
$ 179,605
$ 175,185
$ 167,296

Equity attributable to:

owners of the
Company
$ 90,337
$ 88,465
$ 84,318
Non-controlling
interests

89,268

86,720

82,978
$ 179,605
$ 175,185
$ 167,296		 April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit of the
current period
$ 1,427
$ 580
$ 1,745
$ 3,313
attributable to:
owners of the
Company
$ 1,142
$ 464
$ 1,396
$ 2,650
Non-controlling
interests

285

116

349

663
$ 1,427
$ 580
$ 1,745
$ 3,313
Tex Year Europe Sp. z o. o.
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 149,505
$ 129,821
$ 139,582
Non-current Assets
120,970
129,888
132,809
Current Liabilities
(
64,626 )
(
47,066 )
(
66,435 )
Non-current Liabilities
(
39,275)
(
40,745)
(
42,385)
Equity
$ 166,574
$ 171,898
$ 163,571

Equity attributable to:

owners of the
Company
$ 133,259
$ 137,519
$ 130,857
Non-controlling
interests

33,315

34,379

32,714
$ 166,574
$ 171,898
$ 163,571
April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit (loss) of the
current period
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Net (loss) profit
attributable to:
owners of the
Company
( $ 1,379 )
$ 2,557
( $ 785 )
$ 2,954
Non-controlling
interests
(
344)

639
(
196)

738
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Shanghai C&M Filtration Solutions Limited and its subsidiaries
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 135,163
$ 146,596
$ 125,726
Non-current Assets

81,118
81,685
81,024
Current Liabilities
(
36,676)
(
53,096)
(
39,454)
Equity
$ 179,605
$ 175,185
$ 167,296

Equity attributable to:

owners of the
Company
$ 90,337
$ 88,465
$ 84,318
Non-controlling
interests

89,268

86,720

82,978
$ 179,605
$ 175,185
$ 167,296		 April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit of the
current period
$ 1,427
$ 580
$ 1,745
$ 3,313
attributable to:
owners of the
Company
$ 1,142
$ 464
$ 1,396
$ 2,650
Non-controlling
interests

285

116

349

663
$ 1,427
$ 580
$ 1,745
$ 3,313
Tex Year Europe Sp. z o. o.
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 149,505
$ 129,821
$ 139,582
Non-current Assets
120,970
129,888
132,809
Current Liabilities
(
64,626 )
(
47,066 )
(
66,435 )
Non-current Liabilities
(
39,275)
(
40,745)
(
42,385)
Equity
$ 166,574
$ 171,898
$ 163,571

Equity attributable to:

owners of the
Company
$ 133,259
$ 137,519
$ 130,857
Non-controlling
interests

33,315

34,379

32,714
$ 166,574
$ 171,898
$ 163,571
April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit (loss) of the
current period
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Net (loss) profit
attributable to:
owners of the
Company
( $ 1,379 )
$ 2,557
( $ 785 )
$ 2,954
Non-controlling
interests
(
344)

639
(
196)

738
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Shanghai C&M Filtration Solutions Limited and its subsidiaries
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 135,163
$ 146,596
$ 125,726
Non-current Assets

81,118
81,685
81,024
Current Liabilities
(
36,676)
(
53,096)
(
39,454)
Equity
$ 179,605
$ 175,185
$ 167,296

Equity attributable to:

owners of the
Company
$ 90,337
$ 88,465
$ 84,318
Non-controlling
interests

89,268

86,720

82,978
$ 179,605
$ 175,185
$ 167,296		 April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit of the
current period
$ 1,427
$ 580
$ 1,745
$ 3,313
attributable to:
owners of the
Company
$ 1,142
$ 464
$ 1,396
$ 2,650
Non-controlling
interests

285

116

349

663
$ 1,427
$ 580
$ 1,745
$ 3,313
Tex Year Europe Sp. z o. o.
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 149,505
$ 129,821
$ 139,582
Non-current Assets
120,970
129,888
132,809
Current Liabilities
(
64,626 )
(
47,066 )
(
66,435 )
Non-current Liabilities
(
39,275)
(
40,745)
(
42,385)
Equity
$ 166,574
$ 171,898
$ 163,571

Equity attributable to:

owners of the
Company
$ 133,259
$ 137,519
$ 130,857
Non-controlling
interests

33,315

34,379

32,714
$ 166,574
$ 171,898
$ 163,571
April 1 to
June 30, 2021
April 1 to
June 30, 2020
January 1 to
June 30, 2021
January 1 to
June 30, 2020
Net profit (loss) of the
current period
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Net (loss) profit
attributable to:
owners of the
Company
( $ 1,379 )
$ 2,557
( $ 785 )
$ 2,954
Non-controlling
interests
(
344)

639
(
196)

738
($ 1,723)
$ 3,196
($ 981)
$ 3,692
Shanghai C&M Filtration Solutions Limited and its subsidiaries
June 30, 2021 December 31,2020
June 30, 2020
Current Assets
$ 135,163
$ 146,596
$ 125,726
Non-current Assets

81,118
81,685
81,024
Current Liabilities
(
36,676)
(
53,096)
(
39,454)
Equity
$ 179,605
$ 175,185
$ 167,296

Equity attributable to:

owners of the
Company
$ 90,337
$ 88,465
$ 84,318
Non-controlling
interests

89,268

86,720

82,978
$ 179,605
$ 175,185
$ 167,296

Current Assets

Non-current Assets

Current Liabilities

Equity


Equity attributable to:

owners of the
Company

Non-controlling
interests
June 30, 2021


(





 $ 135,163


81,118
36,676)

$ 179,605

$ 90,337

89,268

$ 179,605
(
  • 26 -
Net profit of the
current period
attributable to:
owners of the
Company
Non-controlling
interests
 April 1 to
June 30,2021
$ 1,192
$ 508

684
$ 1,192
April 1 to
June 30,2020

$ 32,461
$ 15,720

16,741
$ 32,461
 January 1 to
June 30, 2021
$ 4,055
$ 1,853

2,202
$ 4,055
 January 1 to
June 30, 2020		 January 1 to
June 30, 2020












$ 38,525
$ 19,122
19,403
$ 38,525

13. Investment under the equity method

Investments and joint ventures

Investments and joint ventures
Significant joint ventures
Wuxi More Tex Technology
Co., Ltd.

Individual non-significant joint
ventures
Tex Year Industrial
Adhesives Pvt. Ltd.

 June 30,2021 December 31,2020
$ 102,214


22,360

$ 124,574
June 30,2020


$ 65,184

23,661

$ 88,845



$ 107,608
21,071
$ 128,679

The percentage of shares and voting rights held by the consolidated company in the joint venture on the balance sheet date is as follows:

Significant joint ventures
Wuxi More Tex Technology
Co., Ltd.
Individual non-significant joint
ventures
Tex Year Industrial
Adhesives Pvt. Ltd.		 June 30,2021

50%
50%		 December 31,2020
50%
50%
June 30,2020
50%
50%
  • 27 -

(I) Significant joint ventures Wuxi More Tex Technology Co., Ltd.

Wuxi More Tex Technology Co., Ltd. Wuxi More Tex Technology Co., Ltd. Wuxi More Tex Technology Co., Ltd. Wuxi More Tex Technology Co., Ltd.
(II) June 30,2021
December 31,2020
Current Assets
$ 152,690
$ 200,430

Non-current Assets
44,998
47,504
Current Liabilities
(
43,747)
(
23,818)

Equity
$ 153,941
$ 224,116

Shareholding ratio of a
consolidated company
50%
50%
Rights and interests
enjoyed by the
consolidated company $ 76,971
$ 112,058

Provision of impairment
loss
(
11,787 )
(
9,522 )
Unrealized profit and loss
of side flow
transactions
-
(
322 )

Unrealized profit and loss
of downstream
transactions

-

-

Book value of investment$ 65,184
$ 102,214

April 1 to June
30,2021
April 1 to June
30,2020
January 1 to
June 30,2021
Operating revenue
$ 41,958
$ 98,802
$ 82,636
Net (loss) profit for
the year
($ 3,258)
$ 3,515
($ 5,864)
Total comprehensive
income
($ 2,587)
$ 398
($ 5,336)
Summary information of individual unimportant joint ventures
Tex Year Industrial Adhesives Ltd.
April 1 to June
30,2021
April 1 to June
30,2020
January 1 to
June 30,2021
Share of a consolidated
company
Net profit (loss) of
continuing
business units of
the current year
$ 841
( $ 303 )
$ 1,680
Other
comprehensive
income
(
3,745)
(
320)
(
493)
Total
comprehensive
income
($ 2,904)
($ 623)
$ 1,187		 June 30,2020







$ 218,081
50,219
(
52,729)
$ 215,571
50%
$ 107,786
-
(
172 )
(
6)
$ 107,608
January 1 to
June 30,2020
$ 176,436
$ 4,080
($ 1,362)
January 1 to
June 30,2020
( $ 42 )
(
1,429)
($ 1,471)
$ 82,636
($ 5,864)
($ 5,336)
ventures
January 1 to
June 30,2021
$ 1,680
(
493)
$ 1,187

(
(
(
(
Share of a consolidated
company
Net profit (loss) of
continuing
business units of
the current year
Other
comprehensive
income
Total
comprehensive
income
$ 303 )

320)
$ 623)		 $ 1,680

493)
$ 1,187
  • 28 -

The end date of the annual financial statements of Tex Year Industrial Adhesives Pvt. Ltd. is June 30. As it is difficult in practice to require the Company to prepare additional financial statements covering the period from January 1 to June 30, the consolidated company uses the financial statements of the Company covering the balance sheet dates of June 30, 2021 and June 30, 2020. It adjusts the significant transactions between April 1, 2021 and June 30, 2021 and between April 1, 2020 and June 30, 2020.

The share of income and other comprehensive income enjoyed by the joint venture or consolidated company under the equity method are calculated based on the financial statements that a certified public accountant has not audited.

Please refer to Schedule 5 "Name, location, …. of the investee company" for the business nature, main business premises and country of incorporation of the joint ventures above, and Schedule 6 "Mainland China investment information”.

14. Property, plant and equipment


Cost
Balance on January 1, 2020

Addition
Disposal
Reclassification
Net exchange differences

Balance on June 30, 2020

Accumulated depreciation
and impairment
Balance on January 1, 2020

Disposal
Depreciation expense
Net exchange differences

Balance on June 30, 2020

Net amount on June 30, 2020
Cost
Balance on January 1, 2021

Addition
Disposal
Reclassification
Net exchange differences

Balance on June 30, 2021

Accumulated depreciation
and impairment
Balance on January 1, 2021

Disposal
Depreciation expense
Net exchange differences

Balance on June 30, 2021

Net amount on June 30, 2021		 Self-own land
a		 Revaluation
and
ppreciation of
land		 Houses and
buildings		 Machinery and
equipment		 Office
equipment		 Other
equipment		 Unfinished
project		 Total













$ 56,524

-
-
-
(
673)

$ 55,851

$ -

-
-

-

$ -

$ 55,851

$ 56,024

-
-
-
(
261)

$ 55,763

$ -

-
-

-

$ -

$ 55,763












$ 45,324

-
-

-

-

$ 45,324

$ -

-

-

-

$ -

$ 45,324

$ 45,324

-
-
-

-

$ 45,324

$ -

-
-

-

$ -

$ 45,324
 $ 824,287

1,541
(
400 )
9,748

(
12,842)

$ 822,334

$ 259,330

(
372 )
13,680
(
2,789)

$ 269,849

$ 552,485

$ 842,002

154
-

73
(
2,260)

$ 839,969

$ 287,172

-

14,456
(
159)

$ 301,469

$ 538,500
 $ 549,820

8,089
(
178 )
(
464 )
(
12,065)

$ 545,202

$ 219,543

(
178 )
22,799
(
4,107)

$ 238,057

$ 307,145

$ 579,579

11,713
(
2,536 )
2,476
(
1,594)

$ 589,638

$ 263,397

(
1,748 )
22,071
(
729)

$ 282,991

$ 306,647
 $ 24,500

844
(
259 )

-
(
251)

$ 24,834

$ 18,302

(
259 )
1,457
(
214)

$ 19,286

$ 5,548

$ 26,135

1,204
(
49 )

586
(
6)

$ 27,870

$ 20,317

(
49 )
1,195
(
4)

$ 21,459

$ 6,411
 $ 96,104

2,817

-
1,184

(
1,856)

$ 98,249

$ 68,502


-
3,418
(
1,377)

$ 70,543

$ 27,706

$ 102,553

2,608
(
230 )
126

(
141)

$ 104,916

$ 74,846

(
123 )
3,198
(
94)

$ 77,827

$ 27,089
 $ 14,061

2,380
-

(
9,748 )
(
7)

$ 6,686

$ -

-

-

-

$ -

$ 6,686

$ 473

2,695

-

(
73 )

-

$ 3,095

$ -


-

-

-

$ -

$ 3,095
 $ 1,610,620
15,671
(
837 )

720
(
27,694)
$ 1,598,480
$ 565,677
(
809 )
41,354
(
8,487)
$ 597,735
$ 1,000,745
$ 1,652,090
18,374
(
2,815 )

3,188
(
4,262)
$ 1,666,575
$ 645,732
(
1,920 )
40,920
(
986)
$ 683,746
$ 982,829

There is no sign of impairment in the assessment of the consolidated companies from January 1 to June 30 in 2021 and 2020, so no impairment loss is provided.

  • 29 -

Depreciation expenses are accrued on a straight-line basis based on the following number of years of service life:

rs of service life:
Houses and buildings
Main building of the plant 5 to 40 years
Electromechanical and other
equipment 3 to 15 years
Machinery and equipment 2 to 15 years
Office equipment 3 to 6 years
Other equipment 4 to 15 years

Please refer to note 33 for the amount of property, plant and equipment pledged by the consolidated company as collateral for loans and letters of credit.

15. Lease agreement

(I) Right-of-use assets

Right-of-use assets
Book amount of
right-of-use assets
Land

Buildings
Transportation
equipment
Other equipment

 June 30,2021 December 31,2020
$ 68,206

1,668
2,550

519

$ 72,943
June 30,2020


$ 67,306

2,615
1,561
431

$ 71,913



$ 67,009
1,717
3,935
608
$ 73,269
April 1 to June April 1 to June April 1 to June January 1 to January 1 to January 1 to January 1 to
30,2021 30,2020 June 30,2021 June 30,2020
Addition of right-of-use
assets $ 1,968 $ 785
Depreciation expense of
right-of-use assets
Land use rights
 $
444		 $ 432 $ 887 $ 874
Buildings 490 421 1,005 1,106
Transportation
equipment 371 802 991 1,633
Other equipment
 44 45 89 91
$
1,349		 $ 1,700 $ 2,972 $ 3,704
Lease liabilities
June 30,2021 December 31,2020 June 30,2020
Book value of lease
liabilities
Current $ 2,762 $ 2,848
$ 3,742
Non-current $ 1,497 $ 1,496
$ 2,091

(II) Lease liabilities

  • 30 -

The range of discount rate of lease liabilities is as follows:

Buildings
Transportation
equipment
Other equipment		 June 30, 2021 December 31,2020

1.55%~3.08%
1.55%~3.08%
1.45%		 June 30, 2020
1.55%~3.08%
1.55%~3.08%
1.45%		 1.55%~3.08%
1.55%~3.08%
1.45%

(III) Other lease information

Short term rental
expenses
Total cash (outflow) from
lease		 April 1 to June
30,2021
$ 3,622		 April 1 to June
30,2020
$ 3,743

 January 1 to
June 30,2021
$ 7,772

($ 9,974)
 January 1 to
June 30,2020		 January 1 to
June 30,2020

(
(		 $ 6,607
$ 9,484)

The consolidated company chooses to exempt the recognition of buildings, office equipment and transportation equipment conforming to the short-term lease. It does not recognize the relevant right-of-use assets and lease liabilities.

16. Intangible assets

Intangible assets

Cost
Balance on January 1, 2020

Acquisition

Net exchange differences

Balance on June 30, 2020


Accumulated depreciation and
impairment

Balance on January 1, 2020

Amortization expenses

Net exchange differences

Balance on June 30, 2020


Net amount on June 30, 2020


Cost

Balance on January 1, 2021

Acquisition

Net exchange differences

Balance on June 30, 2021
 Patent rights

$ 29,201

-
(
725)
$ 28,476


$ 11,928

2,212
(
307)
$ 13,833

$ 14,643


$ 29,238

-
(
6)
$ 29,232		 Computer software
$ 26,318

374
(
116)

$ 26,576

$ 21,040

876
(
115)

$ 21,801

$ 4,775

$ 30,291

210
(
42)

$ 30,459
 Total


(





(







(
(


(



(
(


(



(
 $ 55,519
374
841)
$ 55,052
$ 32,968
3,088
422)
$ 35,634
$ 19,418
$ 59,529
210
48)
$ 59,691

(To be continued)

  • 31 -

(Continued)


Accumulated depreciation and
impairment
Balance on January 1, 2021

Amortization expenses

Net exchange differences

Balance on June 30, 2021


Net amount on June 30, 2021
 Patent rights
$ 16,382

2,246
(
11)

$ 18,617


$ 10,615
 Computer software
$ 22,762


1,096
(
42)

$ 23,816

$ 6,643
 Total


(

(
(

 $ 39,144
3,342

53)
$ 42,433
$ 17,258

Amortization expenses are accrued on a straight-line basis based on the following years of service life:

e life:
Patent rights 5 to 20 years
Computer software 2 to 8 years

As of June 30, 2021, the net value of the patent for manufacturing filter materials held by the consolidated company is NT$3,460 thousand, which will be amortized within 1 year.

17. Other assets

Other assets
Advance payment for goods

Other prepaid expenses
Tax credit
Refundable deposit
Prepayments for investments
Provisional payment
Long-term prepaid expenses
Others


Current

Non-current

 June 30,2021

$ 33,548

31,951
21,088
9,006
5,757
5,600
5,132

7,264

$ 119,346

$ 99,451


19,895

$ 119,346
 December 31,2020
$ 16,548

17,799
28,949
5,296
-
2,736
8,363

4,781

$ 84,472

$ 70,813


13,659

$ 84,472
 June 30,2020















$ 9,432
16,528
33,070
7,857
-
2,636
6,324
11,488
$ 87,335
$ 73,154
14,181
$ 87,335
  • 32 -

18. Borrowings

(I) Short-term borrowings

Short-term borrowings

Secured loans(note 33)
Bank loans


Unsecured loans

Credit loans


Borrowing rates

Long-term loans
Secured borrowings (note
33)
The Export-Import
Bank of the
Republic of China
(1)

Taiwan Cooperative
Bank (2)

Taiwan Business Bank
(3)

Taiwan Cooperative
Bank (4)

Taiwan Business Bank
(5)

Taiwan Business Bank
(6)

Taiwan Business Bank
(7)

ALIOR Bank (8)

Taiwan Business Bank
(9)

Taiwan Cooperative
Bank (10)

Subtotal

Unsecured loans

Export-Import Bank
of the Republic of
China (11)

Hua Nan Bank credit
loan (12)

Subtotal


Less: due within one year
Long-term loan
 June 30, 2021
$ 30,888



466,187

$ 497,075

1.00%~4.72%
June 30, 2021		 December 31,2020
$ -


356,408

$ 356,408

0.98%~4.385%

December 31,2020
$ 14,250

31,908
10,000
18,807
60,000
$ 40,000

40,000
44,303
18,000

60,000


337,268

22,488

40,000


62,488

399,756

(115,384)

$ 284,372
 June 30, 2020












$ -

414,085
$ 414,085
0.98%~4.635%
June 30, 2020
$ 21,375
39,009
10,000
24,165
60,000
$ 40,000
40,000
45,790
18,000

60,000
358,339
25,700

40,000

65,700
424,039
(
60,789)
$ 363,250







(
 $ 7,125
24,756
9,584
13,412
57,500
$ 38,333
38,333
40,972
17,250
56,345
303,610
19,275
40,000
59,275
362,885
112,083)
$ 250,802






(






(

(II) Long-term loans

  • 33 -

  • (1) The period is from September 29, 2016 to September 28, 2021. From March 2018, every six months is one period, for a total of eight periods. The principal and interest are amortized according to the average method. As of June 30, 2021, and December 31 and June 30, 2020, the effective annual interest rates were 1.2356%, 1.2386%, and 1.2386%.

  • (2) The period is from December 28, 2017 to December 28, 2022. From January 2019, each month is one period, for a total of 48 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were 1.3%, 1.4% and 1.4%.

  • (3) The period is from December 28, 2017 to December 28, 2032. From January 2021, each month is one period, for a total of 144 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were all 1.25%.

  • (4) The period is from June 28, 2018 to December 28, 2022. From January 2019, each month is one period, for a total of 48 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were 1.3%, 1.4% and 1.4%.

  • (5) The period is from September 14, 2018 to December 28, 2032. From January 2021, each month is one period, for a total of 144 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were all 1.25%.

  • (6) The period is from October 8, 2018 to December 28, 2032. From January 2021, each month is one period, for a total of 144 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were all 1.25%.

  • (7) The period is from November 6, 2018 to December 28, 2032. From January 2021, each month is one period, for a total of 144 periods. The principal and

  • 34 -

interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were all 1.25%.

  • (8) The period is from November 6, 2018 to June 10, 2031. From November 2018, each month is one period, for a total of 128 periods. The interest is amortized according to the average method. As of June 30, 2021, and December 31 and June 30, 2020, the effective annual interest rates were 4.72%, 4.7% and 4.35%.

  • (9) The period is from December 31, 2019 to December 28, 2032. From January 2021, each month is one period, for a total of 144 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were all 1.25%.

  • (10) The period is from March 30, 2020 to March 30, 2025. From April 2020, each month is one period, for a total of 48 periods. The principal and interest are amortized according to the average method. As of June 30, 2021 and December 31 and June 30, 2020, the effective annual interest rates were 1.3%, 1.4% and 1.4%.

  • (11) The period is from February 26, 2019 to February 25, 2024. From August 2020, every six months is one period, for a total of 8 periods. The principal and interest are amortized according to the average method. As of June 30, 2021, and December 31 and June 30, 2020, the effective annual interest rates were 1.2355%, 1.2356% and 1.4725%.

  • (12) The period is from December 31, 2019 to December 29, 2021. From January 2020, each month is one period, for a total of 24 periods. The interest is paid in each period, and the principal is repaid at one time when due. As of June 30, 2021, and December 31 and June 30, 2020, the effective annual interest rate was all 1.12%

The consolidated company has provided part of the land, houses, buildings and inventories as collateral. Please refer to Notes 14 and 33.

  • 35 -

19. Corporate bonds payable

rporate bonds payable
Domestic secured convertible
corporate bonds
Domestic unsecured
convertible corporate
bonds
Less: convertible bond
discounts
 June 30,2021 December 31,2020
$ 200,000


72,900

272,900
(
11,818)

$ 261,082
June 30,2020


(
 $ 200,000
33,900
233,900
9,004)
$ 224,896

(

(
 $ 200,000
89,900
289,900
14,418)
$ 275,482

The relevant information of domestic convertible corporate bonds issued by the Company is as follows:

  • (I) The conditions for the issuance of the Company's second domestic secured convertible corporate bond are as follows: the Company has been approved by the competent authority to raise and issue the second domestic secured convertible corporate bond, with a total issuance amount of NT$200,000 thousand and a coupon rate of 0%. The term is five years, and the circulation period is from October 23, 2019 to October 23, 2024. It was listed on the GreTai Securities Exchange of the Republic of China on October 23, 2019. When the convertible bond is due, it shall be paid in cash at one time according to the face value of the bonds. The holders of the convertible bond may, from three months after the day following the issuance date of this bond to the maturity date, request conversion into the common shares of the Company at any time, except for the period during which the transfer of ownership shall be suspended in accordance with the relevant measures or laws and regulations. After the conversion, the rights and obligations of the common shares are the same as those of the common shares originally issued. The conversion price of the convertible corporate bond is set in accordance with the pricing model prescribed in the conversion method, with the conversion price of NT$15.7 per share. In case of any anti-dilution provisions of the Company, the subsequent conversion price shall be adjusted in accordance with the pricing model prescribed in the conversion method.

From three months after the day following the issuance date of this bond to 40 days before the maturity date, if the closing price of the common shares of the Company exceeds 30% (inclusive) of the conversion price at that time for 30 consecutive business days, or if the outstanding balance of the convertible

  • 36 -

corporate bond is less than 10% of the original issuance amount, the Company may recall all the bond certificates in cash according to the face value of the bond.

The consolidated company provides a demand deposit of NT$20,000 thousand as a guarantee for the issuance of corporate bonds. The guarantee is exempted after the agreement with Taiwan Business Bank on July 7, 2020. Please refer to note 33.

(II) The issuance conditions of the Companys’ third domestic unsecured convertible corporate bond are as follows: the Company has been approved by the competent authority to raise and issue the third domestic unsecured convertible corporate bond, with a total issuance amount of NT$100,000 thousand and a coupon rate of 0%. The term is three years, and the circulation period is from October 24, 2019 to October 24, 2022. It was listed on the GreTai Securities Exchange of the Republic of China on October 24, 2019. When the convertible bond is due, it shall be paid in cash at one time according to the face value of the bonds. The holders of the convertible bond may, from three months after the day following the issuance date of this bond to the maturity date, request conversion into the common shares of the Company at any time, except for the period during which the transfer of ownership shall be suspended in accordance with the relevant measures or laws and regulations. After the conversion, the rights and obligations of the common shares are the same as those of the common shares originally issued. The conversion price of this convertible corporate bond is set in accordance with the pricing model prescribed in the conversion method, with the conversion price of NT$14.3 per share. In case of any anti-dilution provisions of the Company, the subsequent conversion price shall be adjusted in accordance with the pricing model prescribed in the conversion method.

From three months after the day following the issuance date of this bond to 40 days before the maturity date, if the closing price of the common shares of the Company exceeds 30% (inclusive) of the conversion price at that time for 30 consecutive business days, or if the outstanding balance of the convertible corporate bond is less than 10% of the original issuance amount, the Company may recall all the bond certificates in cash according to the face value of the bond.

Due to the Companys’ stock ex-dividend operation in 2020, the conversion prices of the second and third secured convertible bonds have been adjusted to N

  • 37 -

T$15.4 and NT$14 from the ex-dividend date July 27, 2020, in accordance with the issuance regulations.

The above-mentioned convertible corporate bonds include the conversion right of the main contractual debt instrument, the sale/redemption derivative instrument and the equity component, which are expressed under the equity by additional capital from retained earnings - conversion rights. The effective interest rate originally recognized for the liability component is 1.26% ~ 1.89%.

The changes in the main contractual debt instrument are as follows:

The changes in the main contractual debt instrument are as follows: as follows:
January 1 to June
30,2021
Component of liabilities at
the beginning of the period
$ 261,082
Interest calculated at an
effective interest rate in
the current period
1,684
Conversion of corporate bond
payable into common
shares
(
37,870)
Component of liabilities at
the end of the period
$ 224,896
The changes in the put/call derivatives are as follows:
January 1 to June
30,2021
Beginning balance
$ 560
Gain (loss) from changes in
fair value
(
370)
Ending balance
$ 190		 January 1 to June
30,2020
$ 283,058
2,047
(
9,623)
$ 275,482
January 1 to June
30,2020


$ -
340
$ 340

The change of conversion right (under additional capital from retained earnings) of the equity component is as follows:

Beginning balance
Conversion of corporate bond
payable into common
shares
Ending balance		 January 1 to June
30,2021
$ 11,661
(
1,571)
$ 10,090		 January 1 to June
30,2020		 January 1 to June
30,2020

(
(
 $ 12,753
407)
$ 12,346
  • 38 -

As of June 30, 2021, the total face value of the third domestic unsecured convertible corporate bond that the holders have exercised the conversion right is NT$66,100 thousand. 4,706,271 shares of common stock of the Company were converted into, and NT$16,842 thousand of the capital reserve was recognized.

20. Notes payable and accounts payable

21. Accounts payable
Arising from business

Accounts payable-related
parties
Arising from business

Other liabilities
Current
Other payables
Estimated expenses
payable

Salary payable
Bonus payable
Leave payment payable
Remuneration payable
to employees,
directors and
supervisors
Payables on equipment
Share capital payable
Other expenses payable

Other liabilities
Contractual liabilities

Receipts under custody
Deferred government
subsidy income
Others


Non-current
Other liabilities
Deposits received

Others

 June 30,2021 June 30,2021 December 31,2020
$ 392,391

$ 26,942

December 31,2020
$ 27,655
29,986
37,081
6,737
6,673
4,018
1,996

40,405
$ 154,551
$ 22,963
724
-

9,678
$ 33,365
$ 240

875
$ 1,115		 June 30,2020
$ 240,470
$ 41,557
June 30,2020		 June 30,2020
$ 240,470
$ 41,557
June 30,2020
$ 440,360

$ -

June 30,2021












$ 25,562

23,485
14,254

8,480
7,208

3,553
1,996
33,277

$ 117,815

$ 40,511


1,015
675
13,013

$ 55,214

$ 455

2,624

$ 3,079















$ 19,516
25,407
8,027
7,326
3,499
9,116
26,753
33,112
$ 132,756
$ 32,192
737
2,306
12,381
$ 47,616
$ 238
1,052
$ 1,290
  • 39 -

22. Provision for liabilities - current

June 30,2021 December 31,2020 December 31,2020 December 31,2020 June 30,2020
Warranty $ 1,026
 $ 1,046 $ 1,114
January 1 to June January 1 to June
30, 2021 30,2020
Beginning balance $ 1,046 $
1,665
Reversal in the period ( 20) ( 551)
Ending balance $ 1,026 $
1,114

The provision for warranty liabilities is the present value of the best estimate of the outflow of future economic benefits caused by the warranty obligation from the management of the consolidated company in accordance with the contract for the sale of goods. This estimate is based on historical warranty experience, taking into account the adjustment for new raw materials, process changes or other factors affecting product quality.

23. Post-retirement benefit plans

(I) Defined contribution plans

The pension system of the “Labor Pension Act” is applicable to the Company of the consolidated company, and is a defined contribution plan managed by the government. The pension is allocated to the individual account of the Labor Insurance Bureau at 6% of the employee’s monthly salary.

The employees of the subsidiaries of the consolidated company in China and Vietnam are members of the local government operated retirement benefit plan. The subsidiary is required to allocate a specific proportion of the cost of salaries to the retirement benefit plan to fund the plan. The obligation of the consolidated company to the retirement benefit plan operated by the government is only the allocation of a specific amount.

(II) Defined benefit plan

The pension system implemented by the Company, among the consolidated companies, based on the “Labor Standards Act,” is a defined benefit plan managed by the Government. The cost of pensions related to defined benefit plans recognized from April 1 to June 30, 2021 and 2020 from January 1 to June 30, 2021 and 2020 are based on the pension cost rate by actuarial calculation on December

  • 40 -

31, 2020 and 2019, and the amounts were NT$202 thousand, NT$283 thousand, NT$404 thousand and NT$565 thousand, respectively.

24. Equity

(I) Share capital

  1. Common stock
Common stock
Authorized number
of shares (1000
shares)

Authorized share
capital

Number of issued
shares fully paid
for (1000 shares)
Capital of issued
shares
 June 30,2021 December 31,2020

150,000

$ 1,500,000


89,386

$ 893,857
 June 30,2020



150,000

$ 1,500,000

90,979

$ 909,786





150,000
$ 1,500,000
89,176
$ 891,759

The par value of each issued common share is NT$10. Each share has one voting right and the right to receive dividends.

  1. Certificate of right to convert bonds into shares
Number of shares
converted but
not yet
registered for
change (1000
shares)

Share capital
converted but
not yet
registered for
change
 June 30,2021 June 30,2021 December 31,2020

1,214

$ 12,143
 June 30,2020 June 30,2020


2,407

$ 24,071


210
$ 2,098
  • 41 -

(II) Additional capital from retained earnings

Can be used to cover
losses, issue cash or
supplement share
capital (1)
Premium from share
issuance

Premium from
convertible bond
conversion
can only be used to cover
losses(2)
Changes in net equity of
subsidiaries and joint
ventures recognized
under the equity
method
The conversion right shall
be paid off at maturity
and cannot be used for
any other purpose.
Conversion right

 June 30,2021

$ 22,142

20,015
29

6,307

10,090

$ 58,583
 December 31,2020
$ 22,142

8,431
29
6,307

11,661

$ 48,570
 June 30,2020 June 30,2020







$ 22,142
3,477
29
6,307
12,346
$ 44,301

  1. Capital reserve - Premiums from share issuance and convertible bond conversion may be used to make up for losses, or may be used to distribute cash dividend or be allocated as the capital when the Company has no loss, provided that the allocation to capital is limited to a certain ratio of paid-in capital each year.

  2. For the investment under the equity method, the capital reserve due to the change of the Companys’ equity in subsidiaries and payoff of conversion rights when due shall not be used for any purpose except for making up losses.

(III) Retained earnings and dividend policy

According to the provisions of the earnings distribution policy of the Articles

of Association of the Company, if there are any earnings in the final annual accounts, tax shall be paid according to law. After making up the accumulated loss, 10% shall be set aside as the legal reserve, and the rest shall be set aside or

  • 42 -

reversed as the special additional capital from retained earnings according to the provisions of laws and regulations; if there is any remaining balance and the accumulated undistributed earnings, the board of directors shall prepare an earnings distribution proposal and submit it to the shareholders’ meeting for resolution on dividend distribution. Please refer to note 26(7) on employee’s remuneration and directors’ and supervisors’ remuneration for the distribution policy of employee’s remuneration and directors’ and supervisors’ remuneration as stipulated in the Articles of Association.

The companys’ products are diversified, its profits are stable, and its financial structure is sound. The dividend policy is based on the consideration of significant expansion plans and capital expenditures in the next few years. The board of directors shall propose the actual distribution to the shareholders’ meeting according to the companys’ operating conditions. The distribution of dividends to shareholders shall be at least 50% of the distributable earnings of the current year after deducting the legal reserve and special reserve. The cash dividend shall account for more than 20% of the total amount of dividends, but if the cash dividend per share is less than NT$0.5 (inclusive), it may be distributed in the form of a stock dividend instead.

The legal reserve shall be allocated until its balance reaches the total paid-in share capital of the Company. The legal reserve may be used to make up for losses. When the Company has no loss, the part of the legal reserve exceeding 25% of the total paid-in share capital may be distributed in cash in addition to being appropriated as share capital.

In response to the "Relevant Measures for Postponing the shareholders’ Meeting of Public Offering Companies in Response to the Pandemic" announced by the FSC, the company ceased to hold the shareholders’ meeting scheduled on June 18, 2021, and instead held it on July 26, 2021.

The company held general shareholders’ meetings on July 26, 2021 and June 16, 2020, and passed the 2020 and 2019 earnings distribution proposals respectively as follows:

  • 43 -
Legal reserve
Special reserve
Stock dividend
Dividend per share (NT$)		 2020
$ 6,666
$ 15,554
$ 45,321
$ 0.5		 2019






$ 4,418
$ 40,395
$ -
$ -

The companys’ general shareholders’ meeting on July 26, 2021 passed the resolution of 4,532,144 new shares for free allotment, which became effective on July 30, 2021 through public announcement and reported to the FSC. It was approved by the board meeting on August 11, 2021. The ex-date of the resolution

is September 15, 2021, and the registration of the change is pending completion. The rights and obligations of this issuance of new shares are the same as those of the original common shares.

25. Revenue

venue
Revenue from goods sold
 April 1 to June
30,2021		 April 1 to June
30,2020
$ 765,737
 January 1 to
June 30,2021
$ 1,693,455
 January 1 to
June 30,2020
$ 861,690
 $ 1,379,607

Please refer to notes 10 and 21 for the contract balance.

26. Net profit and other comprehensive income

(I) Interest income

Interest income
Bank deposits and
wealth management
products

Others

Total
 April 1 to June
30,2021
$ 238


1

$ 239
 April 1 to June
30,2020
$ 174


272

$ 446
 January 1 to
June 30,2021
$ 471


35

$ 506
 January 1 to
June 30,2020








$ 789
306
$ 1,095
  • 44 -

(II) Other income

Other income
Rental income

Management and
technical service fee
income
Government subsidy
income
Incentive income
Others

Total
 April 1 to June
30,2021
$ 21

293
2,599
-

953

$ 3,866
 April 1 to June
30,2020
$ 190
2,386
5,597
236

1,007

$ 9,416
 January 1 to
June 30,2021
$ 53

623
8,822

1,775

1,651

$ 12,924
 January 1 to
June 30,2020









$ 330
4,448
7,886
3,078
2,409
$ 18,151

(III) Other benefits and (loss)

Profit (loss) on financial
assets/liabilities
measured at fair value
through income
statement
Loss
from
disposal
of
property,
plant
and
equipment
Total

(IV)
Financial cost
Interest on bank loans

Interest on lease
liabilities
Interest on convertible
bonds (note 19)

Total
 Profit (loss) on financial
assets/liabilities
measured at fair value
through income
statement
Loss
from
disposal
of
property,
plant
and
equipment
Total

(IV)
Financial cost
Interest on bank loans

Interest on lease
liabilities
Interest on convertible
bonds (note 19)

Total
 April 1 to June
30,2021		 April 1 to June
30,2020		 January 1 to
June 30,2021
( $ 1,188 )

-
($ 1,188)
January 1 to
June 30,2021
$ 4,208

161

1,684

$ 6,053
January 1 to
June 30,2020
January 1 to
June 30,2020
$ 958

-
$ 958
April 1 to June
30,2021
$ 2,762

32

769

$ 3,563
$ 1,491

-
$ 1,491
April 1 to June
30,2020
$ 3,001
40

1,008

$ 4,049
 ( $ 1,954 )
(
28)
($ 1,982)
January 1 to
June 30,2020














$ 6,146

85
2,047
$ 8,278
  • 45 -

(V) Depreciation and amortization

Property, plant and
equipment

Intangible assets
Long-term prepaid
expenses
Right-of-use assets

Total

Depreciation expenses
summary by function
Operating costs

Operating
expenses


Amortized expenses
summary by function
Operating costs

Operating
expenses


(VI)
Employee benefits
Short-term employee
benefits
Salary expense

Labor and health
insurance
expenses

Post-retirement benefits
(note 23)
Defined
contribution
plans
Defined benefit
plan

Other employee benefits
Total employee benefits
Summary by function
Operating costs

Operating
expenses
 April 1 to June
30,2021
$ 20,461

1,703
414

1,349

$ 23,927


$ 16,337


5,473

$ 21,810


$ 324


1,793

$ 2,117

April 1 to June
30,2021
$ 79,410


9,297

88,707

5,430

202

5,632


5,260

$ 99,599

$ 33,892


65,707
$ 99,599
 April 1 to June
30,2020
$ 20,622
1,527
1,092

1,700

$ 24,941

$ 16,596

5,726

$ 22,322

$ 656

1,963

$ 2,619

April 1 to June
30,2020
$ 79,401

4,525

83,926

2,406

283

2,689


4,033

$ 90,648

$ 30,782

59,866
$ 90,648
 January 1 to
June 30,2021
$ 40,920

3,342

845

2,972

$ 48,079

$ 32,755

11,137

$ 43,892

$ 904

3,283

$ 4,187

January 1 to
June 30,2021
$ 166,832


19,962

186,794

11,214

404

11,618


10,129

$ 208,541

$ 68,977


139,564
$ 208,541
 January 1 to
June 30,2020		 January 1 to
June 30,2020
$ 41,354

3,088

1,966

3,704
$ 50,112
$ 33,120

11,938
$ 45,058
$ 1,128

3,926
$ 5,054
January 1 to
June 30,2020




































$ 154,857
12,239
167,096
6,685
565
7,250
8,615
$ 182,961
$ 61,073
121,888
$ 182,961
  • 46 -

(VII) Employee’s remuneration and directors’ and supervisors’ remuneration

In accordance with the Articles of Association, based on the net profit before tax of the current year minus the benefits before the distribution of the employee’s remuneration and the directors’ and supervisors’ remuneration, the Company allocates 1% to 10% as the employee’s remuneration and no more than 3% as the directors’ and supervisors’ remuneration after making up the losses. From April 1 to June 30, 2021 and from January 1 to June 30, 2020, the remuneration of employees and the remuneration of directors and supervisors were not estimated

due to the company’s loss. The remuneration of employees and the remuneration of directors and supervisors estimated from January 1 to June 30, 2021 are as follows:

Estimated proportion

Estimated proportion
Employees’ remuneration
Directors’ and supervisors’
remuneration
Amount
Employees’ remuneration
Directors’ and supervisor’s
remuneration		 January 1 to June
30,2021
6%
2%
January 1 to June
30,2021

$ 401
$ 134
  • 47 -

If there is any change in the amount of the annual consolidated financial statements after the date of issuance, it shall be handled according to the change in accounting estimates and recorded in the next year.

The board meetings of the Company were held on March 26, 2021 and March 27, 2020, and the following resolutions on employees’ remuneration and directors’ and supervisors’ remuneration for 2020 and 2019 were passed:

Employees’ remuneration
Directors’ and supervisors’
remuneration		 Cash
2020
$ 5,005
1,668		 2019
$ 3,499
1,166

There is no difference between the actual distribution amount of employees’ remuneration and directors’ and supervisors’ remuneration in 2020 and 2019 and the amount recognized in the consolidated financial statements of 2020 and 2019.

For information on the employees’ remuneration and directors’ and supervisors’ remuneration resolved by the board of directors’ meetings, please visit “MOPS” of the Taiwan Stock Exchange.

27. Income tax

(I) Income tax recognized in income

The major components of income tax expenses (gains) are as follows:

Income tax of the
current period
Generated in the
current period
Levy on
undistributed
earnings
Adjustment for
previous years

Deferred income tax
Generated in the
current period
Adjustment for
previous years

Income tax expenses
(gains) recognized in
income		 April 1 to June
30,2021		 April 1 to June
30,2021		 April 1 to June
30,2020
$ 15,485
-
(
7,230)


8,255


6,949
(
195)


6,754

$ 15,009
 January 1 to
June 30,2021
$ 17,051


44
(
196)


16,899

(
12,703 )
(
770)

(
13,473)

$ 3,426
 January 1 to
June 30,2020		 January 1 to
June 30,2020

(

(
(
(
(		 $ 7,779

-

496)

7,283


8,066 )

770)


8,836)

$ 1,553)

(

(
(
(
(


(

 $ 15,940
-

8,737)
7,203

5,343

2,760)
2,583
$ 9,786
  • 48 -

(II) Income tax recognized in other comprehensive income

Deferred income tax
Generated in the current
period
- Conversion of foreign
operating
organizations		 April 1 to June
30,2021
($ 2,403)
 April 1 to June
30,2020
($ 3,093)
 January 1 to
June 30,2021
($ 892)
 January 1 to
June 30,2020		 January 1 to
June 30,2020
( ( ( ( $ 6,716)

(III) Verification of income tax

The companys’ declared cases up to 2018 have been approved by the tax collection authority.

28. Earnings per share

Unit: NT$ per share

Basic earnings per share
From continuing
operations
The ex-date of free
share allotment:
(September 15,
2021) The earnings
per share will be
retrospectively
adjusted after the
date of passing the
financial report.

Diluted earnings per share
From continuing
operations

The ex-date of free
share allotment:
The earnings per
share will be
retrospectively
adjusted after the
date of passing the
financial report.
 April 1 to June
30,2021
$ 0.03
$ 0.03
$ 0.03
$ 0.03		 April 1 to June
30,2020
$ 0.19
$ 0.18

$ 0.17
$ 0.16
 January 1 to
June 30,2021
$ 0.09
$ 0.09
$ 0.09
$ 0.09		 January 1 to
June 30,2020		 January 1 to
June 30,2020












$ 0.07
$ 0.06
$ 0.07
$ 0.06

The earnings used for calculating earnings per share and weighted average number of common shares are as follows:

  • 49 -

Net profit of the current period

April 1 to June April 1 to June April 1 to June April 1 to June April 1 to June April 1 to June January 1 to January 1 to January 1 to January 1 to
30,2021 30,2020 June 30,2021
June 30,2020
Net profit attributable to
owners of the Company $
2,466
 $
17,172
 $ 8,694 $ 5,801
Net profit used to calculate
basic earnings per share $
2,466
 $
17,172		 $ 8,694 $ 5,801
After-tax interest of
convertible bonds - 807 1,348 -
After-tax evaluation loss of
convertible bond put/call
rights -
 -
 296 -
Net profit used to calculate
diluted earnings per
share $
2,466
 $
17,979
 $ 10,338 $ 5,801
Number of shares unit: 1000 shares
Number of shares unit: 1000 shares
April 1 to June April 1 to June January 1 to January 1 to
30,2021 30,2020 June 30,2021
June 30,2020
Weighted average number
of common shares used
to calculate basic
earnings per share 93,160 89,208
91,952		 89,023
Effect of potential common
shares with dilution
effect:
Convertible bonds - 19,203
17,967		 -
Employees’
remuneration
 -
 -

173
148
Weighted average number
of common shares used
to calculate diluted
earnings per share
93,160
108,411
110,092
89,171

Suppose the consolidated company has the option to pay employees’ remuneration in shares or cash. In that case, the calculation of diluted earnings per share is based on the assumption that the employees’ remuneration will be issued in shares. The weighted average number of outstanding shares will be included in the calculation of diluted earnings per share when the potential common shares are diluted. When calculating the diluted earnings per share before the issuance of employees’ remuneration shares in the next annual resolution, the dilution effect of such potential common shares shall also be considered.

  • 50 -

The outstanding convertible corporate bonds of the consolidated company from April 1 to June 30, 2021 and from January 1 to June 30, 2020 will have an anti-dilution effect if converted, and are therefore not included in the calculation of diluted earnings per share.

29. Government subsidy

In May 2020 and April 2021, due to the implementation of the R&D and innovation projects commissioned by the Ministry of Economic Affairs, the company received subsidies of NT$5,900 thousand and NT$13,720 thousand respectively based on the subsidy approval letters of the Taiwan Small and Medium Enterprise Counseling Foundation referenced Ji No. 1070001330B and the Institute for Information Industry referenced Zi-Chi No. 1090006916. The amounts have been classified as deferred government subsidy income, and the income is recognized according to the actual progress of the plan. From January 1 to June 30, 2021 and 2020, the subsidy income was NT$6,711 thousand and NT$6,489 thousand, respectively.

30. Capital risk management

The purpose of the companys’ capital management policy is to protect the companys’ ability to continue as a going concern in order to provide returns to shareholders and benefits to other equity holders as much as possible. To ensure that the above objectives are achieved, the consolidated company must maintain a large amount of capital to meet the needs of the expansion and upgrading of plants and equipment. Therefore, the capital management of the consolidated company is to ensure that necessary financial resources and operation plans are available to meet the needs of working capital, capital expenditure, research and development costs, debt repayment and dividend expenditure in the next 12 months. The consolidated company is not subject to other external capital requirements.

  • 51 -

31. Financial instruments

(I) Fair value information - financial instruments not measured at fair value

June 30, 2021

June 30, 2021
Financial liability
Financial liabilities measured at cost
after amortization
-
Second
domestic
secured
convertible corporate bond

- Third domestic unsecured
convertible corporate bond


December 31, 2020
Financial liability
Financial liabilities measured at cost
after amortization
- Second domestic secured
convertible corporate bond

- Third domestic unsecured
convertible corporate bond


June 30, 2020
Financial liability
Financial liabilities measured at cost after
amortization
- Second domestic secured
convertible corporate bond

- Third domestic unsecured
convertible corporate bond

 Carrying
amount		 Fair value
Level 1 Level 2 Level 3 Total


$ 191,830

33,066

$ 224,896

Carrying
amount

$ -


-

$ -





$ 223,835
36,086
$ 259,921
Level 1 Level 2 Level 3 Total
$ 190,638

70,444

$ 261,082

Carrying
amount




$ -


-

$ -



$ 223,629

85,243

$ 308,872

Fair		 $ -


-

$ -

value

$ 223,629
85,243
$ 308,872
Level 1 Level 2

Level 3 Total


$ 189,434
86,048
$ 275,482

$ -
-
$ -





$ 207,342
88,664
$ 296,006		 $ -

-
$ -

$ 207,342

88,664
$ 296,006

In addition to the above, the management of the consolidated company believes that the book value of financial assets and financial liabilities not measured at fair value approaches their fair value or their fair value cannot be reliably measured.

  • 52 -

(II) Fair value information - financial instruments measured at fair value on a recurring basis

1. Fair value hierarchy

June 30, 2021

June 30, 2021
Financial assets measured at fair
value through the income
statement
Wealth management products

Derivatives


December 31, 2020		 Level 1
$

$		 Level 2
$ 53,808

$ 53,808
 Level3
$
190

$ 190
 Total








$ 53,808
190
$ 53,998
December 31, 2020
Financial assets measured at fair
value through the income
statement
Wealth management products

Derivatives


Financial liabilities measured at fair
value through the income statement
Derivatives

June 30, 2020
Financial assets measured at fair
value through the income
statement
Wealth management products

Derivatives


Financial assets measured at fair
value through other
comprehensive income

Equity instrument investment

- Domestic unlisted (non-OTC)
shares


Financial liabilities measured at fair
value through the income
statement

Derivatives

 Level 1
$ -
-

$ -

$ -

Level 1
$

$
$
$		 Level 2
$ 59,518
-

$ 59,518

$ 4,102

Level 2
$ 71,371

$ 71,371

$
$ 4,273
 Level3
$ -
560

$ 560

$ -

Level3
$
340

$ 340

$ 3,586

$		 Total












$ 59,518
560
$ 60,078
$ 4,102
Total





















$ 71,371
340
$ 71,711
$ 3,586
$ 4,273

June 30, 2020

There was no transfer between level 1 and level 2 fair value measurements from January 1 to June 30 in 2021 and 2020.

  • 53 -

  • Adjustment of financial instruments measured at level 3 fair value

  • January 1 to June 30, 2021

January 1 to June 30, 2021
Financial asset
Beginning balance
Recognized in income
Ending balance		 Measured at fair
value through the
income statement
Derivatives
$ 560
(
370)
$ 190		 Financial assets
measured at fair
value
through other
comprehensive
income
Equity instrument

(

$ -
-
$ -

January 1 to June 30, 2020

January 1 to June 30, 2020
Financial asset
Beginning balance
Recognized in income
Ending balance		 Measured at fair
value through the
income statement
Derivatives
$ -

340
$ 340		 Financial assets
measured at fair
value
through other
comprehensive
income
Equity instrument




$ 3,586
-
$ 3,586
  1. The evaluation skills and inputs for Level 2 fair value measurement
Types of financial
instruments
Wealth management
products

Derivatives - exchange
rate and interest rate
swap contracts
 Evaluation technologyand input value
Cash flow discount method: discount according
to the discount rate reflecting the final
return rate of the financial product issuer.
Cash flow discount method: estimate the
future cash flow according to the observable
forward exchange rate and interest rate at
the end of the period, as well as the
exchange rate and interest rate stipulated in
the contract, and discount at the discount
rate that can reflect the credit risk of each
counterparty.

  1. The evaluation skills and inputs for Level 3 fair value measurement

  2. (1) Derivative instrument-Redemption, for which the fair value is measured under the Binomial Tree Model and the important unobservable inputs as adopted serve as the stock price volatility.

  3. 54 -

When the stock price volatility increases, the fair value of such derivative instrument increases relatively.

(2) The non-TWSE/TPEx-listed stocks are measured under the worth method. The fair value thereof is determined based on the most recent net worth of a comparable investee and financial position & overview of the business of any observable company. When the liquidity discount decreases, the fair value of such investment increases relatively.

(III) Types of financial instruments

Financial asset
Measured at fair value
through the income
statement

Financial assets
measured at cost after
amortization (note 1)
Financial assets - equity
instrument investment
measured at fair value
through other
comprehensive
income
Financial liability
Measured at fair value
through the income
statement
Measured at cost after
amortization (note 2)		 June 30,2021 December 31,2020
$ 60,078

110,501
-
4,102
1,591,130
June 30,2020
$ 53,998

1,046,364
-
-
1,643,031
 $ 71,711
953,073
3,586
4,273
1,528,454

Note 1: Balance refers to financial assets measured at cost after amortization, including cash and cash equivalents, financial assets measured at cost after amortization, notes receivable, accounts receivable (including those of related parties), other receivables (including those of related parties, excluding tax refunds receivable) and refundable deposits.

Note 2: The balance includes short-term loans, notes payable, accounts payable (including those of related parties), other payables (including those of related parties), corporate bonds payable and long-term loans (including

  • 55 -

the part due within one year) and other financial liabilities measured at cost after amortization.

(IV) Purpose and policy of financial risk management

The main financial instruments of the consolidated company include equity investment, accounts receivable, accounts payable, corporate bonds payable, loans and lease liabilities. The financial management department of the consolidated company provides services for all business units, coordinates the entry into domestic and international financial markets, and supervises and manages the financial risks related to the operation of the consolidated company by analyzing the internal risk report of the exposure according to the risk level and breadth. These risks include market risk (including exchange rate risk and interest rate risk), credit risk and liquidity risk.

1. Market risk

The main financial risk caused by the operating activities of the consolidated company to the consolidated company is the foreign currency exchange rate change risk (refer to (1) below) and the interest rate change risk (refer to (2) below). The consolidated company is engaged in various derivative financial instruments to manage the foreign currency exchange rate and interest rate risk, including:

  • A. Using foreign exchange forward contracts to avoid the exchange rate risk caused by foreign currency borrowing;

  • B. Using interest rate swap to reduce the risk of an interest rate rise.

There is no change in the exposure of the consolidated company to the market risk of financial instruments and the management and measurement of such exposure.

(1) Exchange rate risk

Part of the cash inflow and outflow of the consolidated company is in foreign currency, so it has the effect of natural hedging; the exchange rate risk management of the consolidated company is for hedging, not for profit.

Please refer to note 35 for the book value of monetary assets and monetary liabilities (including monetary items written off

  • 56 -

under non-functional currency in the consolidated financial statements) of the consolidated company denominated in non-functional currency on the balance sheet date.

Sensitivity analysis

The consolidated company is mainly affected by the exchange rate fluctuations of the US dollar and RMB.

The table below details the sensitivity analysis of the consolidated company when the exchange rate of the New Taiwan dollar (functional currency) changes 1% against relevant foreign currencies. The sensitivity analysis only includes the monetary items that are in circulation, and the conversion at the end of the period is adjusted by 1% of the exchange rate change. The positive number in the Table below refers to the amount that will reduce the pre-tax net increase the pre-tax net profit when the New Taiwan dollar depreciates by 1% relative to each related foreign currency; when the New Taiwan dollar appreciates by 1% relative to each related foreign currency, its impact on the pre-tax net profit will be a negative number of the same amount.

Profit and loss Impact of USD/RMB/Euro(note) Impact of USD/RMB/Euro(note)
January 1 to June
30,2021
$ 3,238		 January 1 to June
30,2020
$ 2,383

Note: It mainly comes from the consolidated company’s cash and

cash equivalents, accounts receivable, other receivables, short-term loans, accounts payable and other payables denominated in foreign currencies that are still outstanding on the balance sheet date without cash flow hedging.

The management believes that the sensitivity analysis cannot represent the inherent risk of the exchange rate, because the foreign currency exposure on the balance sheet date cannot reflect the medium-term exposure. Therefore, the management will still

  • 57 -

conduct exchange rate risk management according to the consolidated company’s policies.

(2) Interest rate risk

Interest rate exposure is caused by the fact that entities in the consolidated company borrow funds at fixed and floating rates and hold current and foreign currency bank deposits. The management of the consolidated company shall regularly monitor the interest rate risk. If required, necessary measures shall be taken for significant interest rate risks to control risks arising from the change of market interest rate.

The carrying amounts of the financial assets and financial liabilities of the consolidated company subject to interest rate exposure on the balance sheet date are as follows:


Interest rate
risks with fair
value
- Financial
assets

- Financial
liabilities
Interest rate
risks with cash
flow
- Financial
assets
- Financial
liabilities		 June 30,2021
$ 4,315


633,909
397,335

455,206		 December 31,2020
$ 4,316

588,436
413,299
463,164
June 30,2020
$ 48,586
618,538
273,535
500,901

Sensitivity analysis

The following sensitivity analysis is based on the interest rate exposure of non-derivative instruments on the balance sheet date. For floating rate assets and liabilities, it is assumed that the amount in assets and liabilities outstanding on the balance sheet date are also outstanding during the reporting period.

If the interest rate increases/decreases by 0.1%, and all other variables remain unchanged, the pre-tax net loss of the consolidated company from January 1 to June 30, 2021 will

  • 58 -

decrease/increase by NT$29 thousand; the pre-tax net profit from January 1 to June 30, 2020 will increase/decrease by NT$114 thousand, mainly due to the interest rate risk of floating interest assets and liabilities of the consolidated company.

2. Credit risk

Credit risk refers to the risk of financial loss caused by the default of contractual obligations of the counterparty. As of the balance sheet date, the maximum credit risk exposures (excluding collateral or other credit enhancement tools and the maximum amount of irrevocable exposure) of the consolidated company that may cause financial losses due to the failure of the counterparty and the financial guarantee provided by the consolidated company mainly come from:

  • (1) Book value of financial assets recognized in the consolidated balance sheet.

  • (2) The amount in contingent liabilities arising from the financial guarantee provided by the consolidated company.

Operation related credit risk and financial risk are managed separately.

Operation related credit risk

In order to maintain the quality of accounts receivable, the consolidated company has established operations-related procedures for credit risk management.

The risk assessment of an individual customer is to consider many factors that may affect the customer’s ability to pay, including the customer’s financial status, the credit rating by credit rating agencies, the consolidated company’s internal credit rating, the historical transaction records, and current economic conditions. The consolidated company will also use certain credit enhancement tools, such as advance payment, at the appropriate time to reduce the credit risk of specific customers.

Financial credit risk

The credit risk of bank deposits, fixed income investments and other financial instruments are measured and monitored by the financial department of the consolidated company. Since the trading partners and

  • 59 -

performing parties of the consolidated company are all banks and financial institutions with good credit, company organizations and government agencies with no significant performance concern, there is no significant credit risk.

Liquidity risk

The objective of the consolidated company on the management of the liquidity risk is to maintain the cash and cash equivalents, high liquidity securities, and sufficient bank credit facilities required for operation to ensure that the consolidated company has sufficient financial flexibility.

The consolidated company shall regularly review the inventory level, the turnover rate of various types of inventory, credit conditions of customers and turnover rate of accounts receivable to control the size of working capital. The cash and cash equivalent level of the group remains moderately loose, and funds are raised in advance according to capital demand. A low debt ratio and financial flexibility are maintained to effectively control the liquidity risk.

  • (1) Statement of liquidity and interest rate risk of non-derivative financial liabilities

The maturity analysis of the remaining contracts of non-derivative financial liabilities is based on the undiscounted cash flow (including principal and estimated interest) of financial liabilities on the earliest possible repayment date of the consolidated company. Therefore, the series of bank loans that the consolidated company may be required to repay immediately shall not take into account the probability of the bank executing the right immediately in the earliest period in the table below; the maturity analysis of other non-derivative financial liabilities shall be prepared according to the agreed repayment date.

June 30, 2021

Non-derivative
financial liabilities
No-interest
bearing
liabilities

Lease liabilities
Floating rate
liabilities
Fixed rate
liabilities

 Less than 1
month		 1 ~ 3 months 3 months ~ 1
year		 1 ~ 5years More than 5
years		 Total


$ 282,530

311
-
410,583

$ 693,424

$ 211,315

566
75,193
-

$ 287,074

$ 71,549

2,068
98,754
-

$ 172,371

$ 613

1,518
215,955
267,600

$ 485,686

$ -
-
95,297
-
$ 95,297

$ 566,007
4,463
485,199
678,183
$ 1,733,852
  • 60 -

December 31, 2020

Less than 1
month
Non-derivative
financial liabilities
No-interest
bearing
liabilities
$ 333,987

Lease liabilities
660
Floating rate
liabilities
-
Fixed rate
liabilities

120,067

$ 454,714

June 30, 2020
Less than 1
month
Non-derivative
financial liabilities
No-interest
bearing
liabilities
$ 229,453

Lease liabilities
414
Floating rate
liabilities
-
Fixed rate
liabilities

320,117

$ 549,984
 Less than 1
month		 1 ~ 3 months 3 months ~ 1
year		 1 ~ 5years More than 5
years		 Total


$ 180,843

628
23,055
120,186

$ 324,712

1 ~ 3 months

$ 71,462

1,837
121,955
53,191

$ 248,445

3 months ~ 1
year

$ -

1,523
226,828
272,900

$ 501,251

1 ~ 5years

$ -
-
105,858
-
$ 105,858

More than 5
years

$ 586,292
4,648
477,696
566,344
$ 1,634,980
Total
Non-derivative
financial liabilities
No-interest
bearing
liabilities

Lease liabilities
Floating rate
liabilities
Fixed rate
liabilities


$ 229,453

414
-
320,117

$ 549,984

$ 159,379

826
3,127
-

$ 163,332

$ 41,861

2,685
141,042
18,461

$ 204,049

$ 1,848

2,138
278,250
289,900

$ 572,136

$ -
-
105,601
-
$ 105,601

$ 432,541
6,063
528,020
628,478
$ 1,595,102

June 30, 2020

(2) Table of liquidity and interest rate risk of derivative financial liabilities

On the analysis of the liquidity of derivative financial instruments, for the derivative instruments adopting net settlement, it is prepared on the basis of the net cash inflow and outflow of undiscounted contracts. (June 30, 2021: None)

December 31, 2020

==> picture [345 x 65] intentionally omitted <==

June 30, 2020

==> picture [345 x 65] intentionally omitted <==

  • 61 -

(3) Credit facilities

Credit facilities

Short-term bank
credit facilities
- Amount used
- Amount
unused

 June 30,2021
$ 814,319


220,475

$ 1,034,794
 December 31,2020
$ 628,271


368,810

$ 997,081
 June 30,2020






$ 569,881
451,549
$ 1,021,430

32. Related party transactions

Transactions, account balances, gains and expenses between the Company and its subsidiaries (which are related parties of the Company) are eliminated in full at the time of consolidation, so they are not disclosed in this note. The transactions between the consolidated company and other related parties are as follows:

(I) Name and relationship of related parties

Relationship with the consolidated

Name of related party company Adhesive Technologies, Inc. Corporate director of the Company (Adhesive Technologies) Wuxi More Tex Technology Co., Ltd. Joint venture (Wuxi More Tex) Tex Year Industrial Adhesives Pvt. Joint venture Ltd. (Tex Year Industrial Adhesives) Wood Glue Industrial Co., Ltd. The chairman of the company is a director (Wood Glue) of this company. Huihong Petrochemical Co., Ltd The chairman of this company is the spouse of a director of the Company JPT Cooperation (JPT) The chairman of this company was a director of the Company (but a non-related party since July 1, 2020) Tex Year Social Welfare Associat Other related parties Taicera Enterprise Company Corporate director of the Company (Taicera)

  • 62 -

(II) Operating income

Account items
Sales revenue




 Category/name of
relatedparty
Corporate director of
the Company
Adhesive
Technologies

Joint venture
Tex Year Industrial
Adhesives
Wuxi More Tex
Technology Co.,
Ltd.
Corporate director of
the Company

Other related parties
The chairman of this
company is the
spouse of a director
of the Company

 April 1 to
June 30,
2021
$ 22,885
3,212
-
$ 150
1

-

$ 26,248
 April 1 to
June 30,
2020

$ 24,493

2,255

224
$ -

-
-

$ 26,972
 January 1 to
June 30,
2021		 January 1 to
June 30,
2021		 January 1 to
June 30,
2020
$ 42,175

6,636

964
$ -

-

-
$ 49,775		 January 1 to
June 30,
2020
$ 42,175

6,636

964
$ -

-

-
$ 49,775















$ 38,413

7,566

-
$ 150

1
6
$ 46,136		 $ 42,175

6,636

964
$ -

-
-
$ 49,775

The selling price of related parties is equal to that of general customers. In addition to the individual credit conditions, the remaining selling price is increased by a certain proportion according to the product type and cost.

(III) Purchase

Purchase
Category/name of
relatedparty
Joint venture
Wuxi More Tex
Technology Co.,
Ltd.
The chairman of the
company is a director
of this company.

Wood Glue
Industrial Co.,
Ltd.
JPT Cooperation

 April 1 to June
30,2021
$ -

-

-

$ -
April 1 to June
30,2020
$ 54,929


37

-

$ 54,966
 January 1 to
June 30,2021
$ -

74

-

$ 74
January 1 to
June 30,2020










$ 98,605
37
4
$ 98,646

The purchase price of related parties is equal to that of general manufacturers, and a certain proportion increases the remaining purchase price.

  • 63 -

(IV) Receivables from related parties

Account
items		 Category/name of related
party
Corporate director of the
Company
Adhesive Technologies
Joint venture
Tex Year Industrial
Adhesives
Wuxi More Tex
Technology Co., Ltd.
The chairman of the
company is a director of
this company.

 June 30,2021
$ 30,483

4,487
-

122

$ 35,092
 June 30,2021
$ 30,483

4,487
-

122

$ 35,092
 December 31,2020
$ 29,838

7,843
-

-

$ 37,681
June 30,2020
June 30,2020
Accounts
receivable

- Related
parties

 $ 30,483

4,487
-
122

$ 35,092

$ 24,237
6,270
99
-
$ 30,606

The consolidated company sells goods to the corporate director of the Company, and the term of collection is 75-day T/T remittance upon arrival of goods; the consolidated company sells goods to the joint venture partner, and the term of collection is 90-day T/T remittance upon arrival of goods.

Guarantees for the outstanding receivables from related parties are not collected.

(V) Payables to related parties

Account
items
Accounts
payable

- Related
parties		 Category/name of related
party
Joint venture
Wuxi More Tex
Technology Co., Ltd.

The chairman of the
company is a
director of this
company.

 June 30,2021
$ -


-

$ -
 December 31,2020
$ 26,942


-

$ 26,942
June 30,2020
June 30,2020






$ 41,518
39
$ 41,557

The consolidated company purchases goods from the joint venture partner on the term of 90-day T/T remittance upon arrival of the goods. The consolidated company purchases goods from the chairman of that company, who is a director of the company, and the payment term is 40 days net.

Guarantees for the balance of outstanding payables to related parties are not collected.

  • 64 -

(VI) Others

The balance of other receivables from related parties on the balance sheet

date is as follows:

date is as follows:
Category/name of related
party		 June 30, 2021

$ -


685

$ 685
 December 31,2020
$ 703


730

$ 1,433
 June 30, 2020
$ 4,052

571
$ 4,623
Joint venture
Wuxi More Tex
Technology Co.,
Ltd.

Tex Year Industrial
Adhesives



$ 4,052
571
$ 4,623

Other receivables refer to the funds and advances for dividends receivable and technical management services provided by the consolidated company.

The balance of other payables to related parties on the balance sheet date is as follows:

as follows:
Category/name of
related party
The chairman of the
company is a director
of this company.
JPT Cooperation

Joint venture

 June 30, 2021

$ -


-

$ -
 December 31,2020
$ -


-

$ -
 June 30, 2020






$ 59
6
$ 65

Income from management and technical service fees (listed under other income):

income):
Category/name of
relatedparty
April 1 to June
30,2021
Joint venture
Wuxi More Tex
Technology Co.,
Ltd.
$ -

Tex Year Industrial
Adhesives

300

$ 300

Operating expenses:
Category/name of
relatedparty
April 1 to June
30,2021
Joint venture


Wuxi More Tex
Technology Co.,
Ltd.
$ 171		 April 1 to June
30,2020
$ 1,616

266

$ 1,882

April 1 to June
30,2020


$ 153		 January 1 to
June 30,2021
$ -


630

$ 630

January 1 to
June 30,2021

$ 322		 January 1 to
June 30,2020
$ 2,938

490
$ 3,428
January 1 to
June 30,2020

$ 296
  • 65 -

(VII) Rewards to key management

Short-term employee
benefits
Post-employment
benefits
 April 1 to June
30,2021
$ 3,142

353
$ 3,495
 April 1 to June
30,2020
$ 3,926

346
$ 4,272
 January 1 to
June 30,2021
$ 8,582

706
$ 9,288
 January 1 to
June 30,2020		 January 1 to
June 30,2020








$ 7,785
693
$ 8,478

The Compensation Committee determines the compensation of directors and other key management in accordance with individual performance and market trends.

33. Pledged assets

The following assets of the consolidated company are provided as collateral for bank loans, letters of credit and convertible corporate bonds:

Land

Buildings and construction - net
Inventory
Demand deposits (financial
assets measured at cost after
amortization – non-current)

 June 30,2021
$ 101,086

470,516

54,522

-

$ 626,124
 December 31,2020
$ 101,348

391,793

39,510

-

$ 532,651
June 30,2020
June 30,2020









$ 91,041
399,602
-
20,000
$ 510,643

34. Significant contingent liabilities and unrecognized contractual commitments

Except as stated in other notes, the consolidated company has the following major commitments and contingencies on the balance sheet date:

  • (I) Amount of unused letter of credit opened:
Amount of unused letter of credit opened:
NTD

USD
JPY
EUR		 June 30,2021

$ 39,498

840
-
-		 December 31,2020
$ 41,249

7,131
254
-
June 30,2020
$ 13,011
47
6,600
52

(II) The consolidated company appoints banks as the guarantors for contract performance, customs duty and goods tax bookkeeping. The guaranteed amount on June 30, 2021 and June 30 and December 31, 2020 and are NT$25,720 thousand, NT$29,620 thousand and NT$15,900 thousand.

  • 66 -

  • Information on foreign currency financial assets and liabilities with significant impact

The following information is summarized and expressed in foreign currencies other than the functional currencies of each entity of the consolidated company. The disclosed exchange rate refers to the exchange rate converted from such foreign currencies to functional currencies. Foreign currency assets and liabilities with significant impact are as follows:

June 30, 2021

June 30, 2021
Foreign currency
assets
Monetary items
USD

USD
USD
USD
EUR
EUR
JPY
JPY
RMB
Non-monetary
items
Equity based
joint venture
RMB
RP
Foreign currency
liabilities
Monetary items
USD
USD
USD
USD
EUR
JPY
JPY
JPY
HKD
RMB
RMB		 Foreign
currency
$ 9,770

1,435
242

1,555
1,824
2,341
3,976
2,970
48,527
15,106
62,962
2,756

769
1,871

6,471
1,554
14,428
2,973

20,326
690
683
246		 Exchange rate
27.8900 (USD: NTD)

7.7580 (USD: HKD)
23,241.67 (USD: VND)

6.4601 (USD: RMB)
33.22 (EUR: NTD)
4.5109 (EUR: PLN)
0.2524 (JPY: NTD)
0.0584 (JPY: RMB)
4.3150 (RMB: NTD)
4.3150 (RMB: NTD)
0.3758 (INR: NTD)
27.8900 (USD: NTD)
7.7580 (USD: HKD)
23,241.67 (USD: VND)

6.4601 (USD: RMB)
4.5109 (EUR: PLN)
0.2524 (JPY: NTD)
210.3333 (JPY: VND)
0.0584 (JPY: RMB)
0.8321 (HKD: RMB)
4.3150 (RMB: NTD)
1.2018 (RMB: HKD)		 Functional
currency
$ 272,475

11,134
5,628,974
10,046
60,590
10,560
1,004
174
209,394


65,184

23,661


76,856

5,969
43,478,935
41,806
7,011
3,642
625,294
1,188
574
2,948
296

 NTD








$ 272,475
40,026
6,755
43,347
60,590
77,765
1,004
749
209,394
$ 712,105
$ 65,184
23,661
$ 88,845
$ 76,856
21,458
52,175
180,391
51,629
3,642
750
5,125
2,478
2,948
1,064
$ 398,516
  • 67 -

December 31, 2020

Foreign currency
assets
Monetary items
USD

USD
USD
USD
EUR
EUR
JPY
JPY
JPY
RMB
Non-monetary
items
Equity based joint
venture
RMB
RP
Foreign currency
liabilities
Monetary items
USD
USD
USD
USD
EUR
JPY
JPY
RMB
RMB		 Foreign
currency
$ 8,857
1,396
206
1,883
1,543
2,811
9,735
4,388
6,843
12,191
23,683
58,274
1,058
451
1,141
4,692
2,831
25,387
2,973
317
149		 Exchange rate
28.0900 (USD: NTD)


7.7526 (USD: HKD)
23,408.33 (USD: VND)

6.5249 (USD: RMB)
34.5600 (EUR: NTD)

4.5268 (EUR: PLN)

0.2725 (JPY: NTD)
227.0833 (JPY: VND)

0.0632 (JPY: RMB)

4.3160 (RMB: NTD)

4.3160 (RMB: NTD)

0.3837 (INR: NTD)
28.0900 (USD: NTD)

7.7526 (USD: HKD)
23,408.33 (USD: VND)


6.5249 (USD: RMB)

4.5268 (EUR: PLN)

0.2725 (JPY: NTD)
227.0833 (JPY: VND)

4.3160 (RMB: NTD)

1.1888 (RMB: HKD)		 Functional
currency
$ 248,802
10,826
4,816,423
12,290
53,317
12,723
2,653
996,442
433
52,618

102,214
22,360

29,715
3,499
26,703,420
30,614
12,815
6,918
675,089
1,366
177
 NTD























$ 248,802

39,235

5,780

53,042

53,317

96,131

2,653

1,196

1,868
52,618
$ 554,642
$ 102,214
22,360
$ 124,574
$ 29,715

12,679

32,044

132,131

96,826

6,918

810

1,366
642
$ 313,131

June 30, 2020

June 30, 2020
Foreign currency
assets
Monetary items
USD

USD

USD

USD

EUR

EUR

JPY

JPY

RMB

 Foreign
currency
$ 8,477

1,435

191


1,576

1,740

2,720

25,019

13,568

12,166
 Exchangerate
29.60 (USD: NTD)

7.7446 (USD: HKD)
22,769.23 (USD: VND)

7.0795 (USD: RMB)
33.39 (EUR: NTD)
4.49 (EUR: PLN)
0.2765 (JPY: NTD)
0.0658 (JPY: RMB)
4.1860 (RMB: NTD)		 Functional
currency
$ 250,918

11,113
4,357,078
11,154
58,087
12,223
6,918
893
50,926

 NTD


$ 250,918
42,473
5,664
46,691
58,087
90,809
6,918
3,738

50,926
$ 556,224

(To be continued)(Continued)

  • 68 -
Non-monetary
items
Equity based joint
venture
RMB

RP
Foreign currency
liabilities
Monetary items
USD
USD
USD
USD
EUR
EUR
JPY
JPY
JPY
HKD
RMB
RMB		 Foreign
currency
$ 25,707
52,494
619
352
920

4,924
88
2,836
85
2,973

12,334
525
1,053
205		 Exchange rate
4.1860 (RMB: NTD)

0.4014 (INR: NTD)
29.60 (USD: NTD)
7.7446 (USD: HKD)
22,769.23 (USD: VND)

7.0795 (USD: RMB)
3.9842 (USD: PLN)
4.4944 (EUR: PLN)
33.39 (EUR: NTD)
212.6923 (JPY: VND)
0.0658 (JPY: RMB)
0.9134 (HKD: RMB)
4.1860 (RMB: NTD)
1.0948 (RMB: HKD)		 Functional
currency
$ 107,608

21,071


18,329

2,723
20,938,320
34,857
351
12,745
2,825
632,307
812
479
4,407
225

 NTD





$ 107,608
21,071
$ 128,679
$ 18,329
10,406
27,220
145,910
2,608
94,684
2,825
822
3,398
2,006
4,407
860
$ 313,475

The foreign currency exchange losses (realized and unrealized) of the consolidated company from April 1 to June 30, 2021 and 2020, and from January 1 to June 30, 2021 and 2020 were respectively NT$3,997 thousand, NT$5,067 thousand, NT$6,381 thousand and NT$4,405 thousand. Due to the wide variety of foreign currency transactions and functional currencies of the group entities, it is impossible to disclose the exchange gains and losses according to the foreign currencies that have a significant impact.

Please refer to note 7 for the foreign exchange forward and interest swap contracts which the consolidated company has entered into as of December 31 and June 30, 2020.

  • 69 -

36. Disclosure and notes

  • (I) Major transactions and (2) related information on reinvested enterprises:

  • Loan of funds to others (Schedule 1).

  • Endorsements/guarantees for others (Schedule 2).

  • Securities held at the end of the period (excluding investment in subsidiaries and affiliated enterprises and equity of joint ventures) (Schedule 3).

  • The accumulated amount of buying or selling the same securities amounts to NT$300 million or more than 20% of the paid-in capital: None.

  • The amount of property acquired reaches NT$300 million or more than 20% of the paid-in capital: None.

  • The amount of property disposed of reaches NT$300 million or more than 20% of the paid-in capital: None.

  • The amount of goods purchased or sold with related parties is NT$100 million or more than 20% of the paid-in capital: None.

  • Receivables from related parties reach NT$100 million or more than 20% of paid-in capital: None.

  • Engagement in derivatives transactions (notes 7).

  • Others: business relationship between parent and subsidiary companies and among subsidiaries, as well as important transactions and amounts (Schedule 4).

  • Information of invested company (Schedule 5).

  • (III) Mainland China investment information:

  • Name of the invested company in mainland China, main business items, paid-in capital, investment method, capital emitted in and out, shareholding ratio, investment profit and loss, period-end investment book amount, repatriated investment profit or loss and investment limit in mainland China (Schedule 6).

  • Major transactions with the mainland China invested company directly or indirectly through a third region, and their prices, payment terms, unrealized profits and losses: (Schedule 1, Schedule 2, and Schedule 4)

    • (1) Purchase amount and percentage, and period-end balance and percentage of related payables.

  • 70 -

  • (2) Amount and percentage of goods sold, and period-end balance and percentage of related receivables.

  • (3) The amount of asset transaction and the profit or loss arising therefrom.

  • (4) The period-end balance and the purpose of bill endorsement/ guarantee or provision of collateral.

  • (5) The maximum balance of financing, the period-end balance, the interest rate range and the total interest of the current period.

  • (6) Other transactions that have a significant impact on the current income or financial position.

  • (IV) Information of major shareholders: names of shareholders with a shareholding ratio of more than 5%, the number of shares held and the percentage (Schedule 7).

37. Segment information

In accordance with the provisions of IFRS 8 "Operating segments," the reporting segments of the Company and its subsidiaries shall include the three segments including the chemical business in Taiwan, the mainland China business and others.

  • (I) Segment revenue and operating results

The revenue and operating results of the consolidated company are analyzed according to the reporting segment as follows:

January 1 to June 30, 2021

Revenue from
external
customers

Intersegmental
revenue

Segment revenue
Internal write-off

Consolidated
income

Segment income

Share of joint
venture income
under the equity
method
Profit before tax		 Chemical
business in
Taiwan
$ 596,225

204,417

801,642

205,417)

$ 596,225

$ 6,172
 Mainland China
business
$ 708,190


337,481

1,045,671
(
337,481)

$ 708,190

($ 6,154)
 Others
$ 389,040

6,018

395,058

6,018)

$ 389,040

$ 17,652


 Total


(

(

(

(

(


(
 $ 1,693,455
548,916
2,242,371

548,916)
$ 1,693,455
$ 17,670

3,195)
$ 14,475
  • 71 -

January 1 to June 30, 2020

Revenue from
external
customers

Intersegmental
revenue

Segment revenue
Internal write-off

Consolidated
income

Segment income

Share of joint
venture income
under the equity
method
Net loss before tax		 Chemical
business in
Taiwan
$ 559,437

107,058

666,495

107,058)

$ 559,437

$ 10,422
 Mainland China
business
$ 550,037


190,612

740,649
(
190,612)

$ 550,037

$ 37,689
 Others
$ 270,133

1,195

271,328

1,195)

$ 270,133

$ 13,718)


 Total


(

(

(

(

(



 $ 1,379,607
298,865
1,678,472

298,865)
$ 1,379,607
$ 34,393
1,998
$ 36,391

Segment income refers to the profit earned by each segment, excluding the share of joint venture income recognized by equity method and income tax expense which are to be apportioned. This measured amount is to serve as a reference to key operational decision makers to allocate resources to segments and assess their performance.

(II)

Total segment assets

Total segment assets

Segment assets
Segments with continuing
business
Notes receivable
- Chemical
business in
Taiwan

- Mainland China
business
- Others


Accounts receivable
- Chemical
business in
Taiwan

- Mainland China
business
- Others

 June 30,2021
$ 10,307
7,074

6,208

23,589
$ 156,540
352,226

60,784

569,550		 December 31,2020
$ 10,195
5,745

8,208

24,148
$ 153,514
385,754

58,726

597,994		 June 30,2020















$ 8,029
4,483
5,594
18,106
$ 137,650
300,783
54,450
492,883
  • 72 -

June 30, 2021 December 31,2020 June 30, 2020

Accounts receivable -
related parties
- Chemical
business in
Taiwan
- Mainland China
business
- Others


Inventory
- Chemical
business in
Taiwan
- Mainland China
business
- Others


Property, plant and
equipment
- Chemical
business in
Taiwan
- Mainland China
business
- Others


Total unamortized assets

Total assets
 33,293
1,677
122

35,092

209,884
332,501
151,457

693,842

493,752
356,414
132,663

982,829

847,504

$ 3,152,406
 32,334
5,347
-

37,681

142,666
297,107
102,132

541,905

496,302
366,798
143,258

1,006,358

847,901

$ 3,055,987
 25,841
4,765
-
30,606
176,624
214,096
122,586
513,306
487,727
366,500
146,518
1,000,745
850,004
$ 2,905,650

For the purposes of the performance of the supervisory authority and the allocation of resources to segments, except for cash and cash equivalents, financial assets measured at fair value through income statement - current, financial assets measured at cost after amortization - current and non-current, other receivables (including those of related parties), other current assets, financial assets measured at fair value through other comprehensive income – non-current, investment under the equity method, intangible assets, right-of-use assets, deferred income tax assets, equipment prepayment, lease prepayment and other non-current assets, all other assets shall be allocated to the respective segment to be reported. The assets shared by the reporting segments are to be shared based on the income earned by each reporting segment.

  • 73 -

Tex Year Industries Inc. and Subsidiaries

Loans to others

January 1 to June 30, 2021

Schedule I

Unit: NT$1000 unless otherwise noted

Serial
No.
(note 1)		 Lending company Loan recipient Transaction item
(note 2)		 Related
party
or not		 Maximum
balance of the
current period
(note 3)		 Ending balance
(note 8)		 Actual drawdown
amount
(note 9)		 Interest
rate range		 Loan nature
(note 4)		 Business
transaction
amount
(note 5)		 Reason for
short-term
financing
(note 6)		 Provision for bad
debts		 Collateral Collateral Loans and limits
to individual
objects
(note 7)		 Loans and total
limit
(note 7)		 Remarks

Name		 Value
0
0
0
1
2		 Tex Year Industries
Inc.
Tex Year Industries
Inc.
Tex Year Industries
Inc.
Tex Year Technology
Corp.
Tex Year (Hong
Kong) Ltd.		 Tex Year
Technology
(Jiangsu) Co.,
Ltd.
Tex Year Fine
Chemical
(Guangzhou)
Co., Ltd.
Tex Year
Technology
(Jiangsu) Co.,
Ltd.
Tex Year
Technology
(Jiangsu) Co.,
Ltd.
Tex Year Fine
Chemical
(Guangzhou)
Co.,Ltd.		 Other receivables
- related
parties - other
Other receivables
- related
parties - other
Other receivables
- related
parties - other
Other receivables
- related
parties - other
Other receivables
- related
parties - other		 Yes
Yes
Yes
Yes
Yes		 $ 34,000
50,000
34,000
20,000
43,000		 $ 34,000

50,000

34,000

20,000

43,000		 $ -

-

30,205
(RMB 7,000 thousand)

15,103
(RMB 3,500 thousand)

36,257
(USD 1,300 thousand)		 2.5%~3%
2.5%~3%
3%

2.5%~3%

2.5%~3%		 Short term
financing
funds
Short term
financing
funds
Short term
financing
funds
Short term
financing
funds
Short term
financing
funds		 $ -
-
-
-
-
Operation
turnover

Operation
turnover

Operation
turnover

Operation
turnover

Operation
turnover		 $ -
-
-
-
-
-

-

-

-

-		 -
-
-
-
-		 $ 236,752
236,752
236,752
920,396
78,609		 $ 473,505

473,505

473,505

920,396
78,609

Note 1: The description of the number column is as follows:

  • (1) Fill in 0 for the issuer.

  • (2) Investee companies are numbered in sequence in each company type starting from Arabic numeral 1.

Note 2: This field must be filled in for accounts receivable from affiliated enterprises, receivables from related parties, transactions with shareholders, prepayments, provisional payments, etc. if the nature is loan to others. Note 3: The maximum balance of loans to others in the current year.

Note 4: The loan nature of the fund shall be filled in if it is a business transaction or if there is a need for short-term financing.

Note 5: Where the nature of the loan is a business transaction, the amount of the business transaction shall be filled in. The business transaction amount refers to the amount of business transactions between the lending company and the borrowing object in the most recent year Note 6: If the nature of the loan is necessary for short-term financing, the reason for the loan and the purpose of the loan borrower shall be specified, such as loan repayment, purchase of equipment, business turnover, etc.

  • Note 7: In accordance with the Procedures of Loans to Others, the total amount of loans shall not exceed 50% of the Companys’ net worth. Still, the total amount of loans to others due to the necessity of short-term financing between companies or between firms shall not exceed 40% of the Companys’ net worth; the amount of loans to each individual company or firm necessary for short-term financing shall not exceed 20% of the Companys’ net worth. When it is necessary for a foreign company directly or indirectly holding 100% of the Companys’ voting shares to engage in short-term financing of funds, the amount is not subject to the restrictions above. Still, the maximum amount shall not exceed the net value of the lending company. Tex Year Industries Inc. has a net loan amount of NT$920,396 thousand, which is NT$3,546 thousand different from the book amount of NT$916,850 thousand held by the Company in Schedule 5; the difference is the unrealized gross profit on sales; Tex Year (Hong Kong) Ltd. has a net loan amount of NT$78,609 thousand, which is NT$898 thousand different from the book amount of NT$77,711 thousand held by the Company in Schedule 5; the difference is the unrealized gross sales profit.

  • Note 8: If a public company submits its lending to the board of directors’ meeting for resolution one by one in accordance with paragraph 1, Article 14 of the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies, the amount of the resolution of the board of directors’ meeting shall be included in the announced balance to disclose the risks it bears before the funds are lent out; if the funds are repaid later, the balance after repayment shall be disclosed to reflect the adjustment of risks. If the board of directors’ meeting of a public company authorizes the chairman of the board to extend loans in several trenches or recycle the loan balance within a certain limit in a year in accordance with paragraph 2, Article 14 of the Regulations, the loan limit approved by the board of directors’ meeting shall still be used as the balance for the public announcement and declaration. Although the funds will be repaid later, other loans may still be extended again, so the loan limit approved by the board of directors’ meeting shall still be used as the balance for the public announcement and declaration.

Note 9: It was converted at the exchange rates of RMB and USD on June 30, 2021.

  • 74 -

Tex Year Industries Inc. and Subsidiaries

Endorsements/guarantees for others

January 1 to June 30, 2021

Schedule 2

Unit: NT$1,000 unless otherwise specified

Serial No.
(note 1)		 Endorsement guarantor company
name		 Endorsement/guarantee object Endorsement/guarantee object Limit of endorsements/
guarantees for
a single enterprise
(note 3)		 Maximum balance of
endorsements/guarantees in
the current period
(note 4)
Ending balance of
endorsements and
guarantees
(note 5)		 Actual drawdown amount
(note 6)		 Endorsement/
guarantee amount
secured by property		 Ratio of
accumulated
endorsements/
guarantees
amount to net
value in the latest
financial
statements(%)		 Maximum
endorsement/
guarantee
amount
(note 3)		 Endorsements
/guarantees of
parent
company to
subsidiaries
(note 7)		 Endorsements/
guarantees of
subsidiaries to
parent
company
(note 7)		 Endorsements/
guarantees for
mainland
China
(note 7)		 Remarks
Company name Relationship
(note 2)
0
0
0
0
0
0		 Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.		 Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Fine Chemical (Guangzhou)
Co., Ltd.
Tex Year Fine Chemical (Guangzhou)
Co., Ltd.
Shanghai Chuangzhi
Environmental Tech Co., Ltd.
Tex Year Europe Sp. z o. o.
Tex Year Vietnam Co., Ltd.		 2
2
2
2
2
2		 $ 355,128
355,128
355,128
236,752
236,752
236,752		 $ 28,500
( USD 1,000 thousand )

85,500
( USD 3,000 thousand )

86,680
( RMB 20,000 thousand )

1,744
( RMB
400 thousand )

67,860
( EUR
1,800 thousand )

75,525
(USD 2,650 thousand)		 $ 27,890
( USD 1,000 thousand )
83,670
( USD 3,000 thousand )
86,300
( RMB 20,000 thousand )
1,726
( RMB
400 thousand )
59,796
( EUR
1,800 thousand )
73,909
(USD 2,650 thousand)		 $ 1,644
( USD
59 thousand )
55,780
( USD 2,000 thousand )
57,140
( RMB 13,242 thousand )
1,726
( RMB
400 thousand )
59,796
( EUR
1,800 thousand )
39,093
(USD 1,402 thousand)		 $ 2.41%
7.22%
7.32%
0.15%
5.73%
6.38%		 $ 591,881
591,881
591,881
591,881
591,881
591,881
Y

Y

Y

Y

Y

Y		 N
N
N
N
N
N		 Y
Y
Y
Y
N
N		 note 8
note 8
note 8

  • Note 1: The description of the number column is as follows:

  • (1) Fill in 0 for the issuer.

  • (2) Investee companies are numbered in sequence in each company type starting from Arabic numeral 1.

  • Note 2: There are 7 kinds of relations between the endorsement guarantor and the endorsed/guaranteed indicated as follows:

  • (1) A company with business contacts.

  • (2) A company with more than 50% of its voting shares held by the Company.

  • (3) A company directly or indirectly holding more than 50% of the voting shares of the Company.

  • (4) Companies directly or indirectly holding more than 90% of the voting shares of each other.

  • (5) A company with mutual guarantees in accordance with the contract which is in the same industry or a joint producer for the purpose of contracting the project.

  • (6) A company that has been endorsed/guaranteed by all the contributing shareholders in accordance with their shareholding ratios due to a joint investment relationship.

  • (7) Joint and several guarantees for the performance of a contract for the sale of pre-sold houses among companies in the same industry in accordance with the provisions of the Consumer Protection Act.

  • Note 3: According to the Company’s "Measures on Endorsements/guarantees," the total amount of external endorsements/guarantees shall not exceed 50% of the Companys’ net value, and the limit of endorsements/guarantees for a single enterprise shall not exceed 20% of the Company’s net value. However, for subsidiaries directly or indirectly owned by the Company, the limit shall not exceed 30% of the Companys’ net value.

  • Note 4: The maximum balance of endorsements/guarantees for others in the current year.

  • Note 5: The amount approved by the board of director’s meeting shall be filled in. However, if the board of director’s meeting authorizes the chairman of the board to make a decision in accordance with paragraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies, it refers to the amount decided by the chairman of the board.

  • Note 6: The actual amount of the Company’s disbursement within the range of using the balance of the endorsements/ guarantees shall be entered.

  • Note 7: Y is required only for those which are endorsements/guarantees of a listed parent company to subsidiaries, endorsements/guarantees of subsidiaries to a listed parent company, and endorsements/guarantees in mainland China.

  • Note 8: Among them, RMB20,000 thousand is the bank credit line of E.Sun Bank shared by Tex Year Fine Chemical (Guangzhou) Co., Ltd. and Tex Year Technology (Jiangsu) Co., Ltd.

  • 75 -

Tex Year Industries Inc. and Subsidiaries

Securities held at the end of the period

June 30, 2021

Schedule 3

Unit: NT$1000 unless otherwise noted

Holding company Types and names of securities
(note 1)		 Relationship with the
securities issuer
(note 2)		 Ledger account End ofperiod End ofperiod Remarks
Unit/share
(1000 shares)		 Carrying amount
(note 3)		 Shareholding
ratio(%)		 Fair value
Tex Year Industries Inc. Acute Touch Technology Co., Ltd - Financial assets measured at fair
value through other
comprehensive income –
non-current		 1,500 $ - 3 $ - note 4

Note 1: The term “securities” in this table refers to the stocks, bonds, beneficiary certificates and securities derived from the above items within the scope of IFRS 9 “Financial instruments.” Note 2: If the issuer of securities is not a related party, this column is not required to be filled in.

Note 3: If measured at fair value, the book amount is the book balance after adjustment of fair value evaluation and deduction of loss provision; if not measured at fair value, the book amount is the book balance of cost after amortization (after deduction of loss provision).

Note 4: There is no pledge.

Note 5: Please refer to attached Schedules 5 and 6 for information on investment in subsidiaries, affiliated enterprises and equity joint ventures.

  • 76 -

Tex Year Industries Inc. and Subsidiaries

Business relations and important transactions between the parent company and the subsidiaries and the amounts

January 1 to June 30, 2021

Schedule 4

Unit: NT$1,000 unless otherwise specified

Transaction situation

Transaction situation Transaction situation Transaction situation Transaction situation
Serial No.
(note 1)		 Name of transaction party Transaction counterparty Relationship with the
counterparty (note 2)		 Accounting subject Amount
(note 4)		 Terms of transaction Ratio to total
consolidated
revenue or total
assets
(notes 3 and 5)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
1
1		 Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Industries Inc.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical(Guangzhou)Co.,Ltd.		 Tex Year (Hong Kong) Ltd.
Tex Year (Hong Kong) Ltd.
Tex Year (Hong Kong) Ltd.
Tex Year Vietnam Co., Ltd.
Tex Year Vietnam Co., Ltd.
Tex Year Vietnam Co., Ltd.
Tex Year Vietnam Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Tex Year Europe Sp. z o. o.
Tex Year Europe Sp. z o. o.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year (Hong Kong) Ltd.
Tex Year (Hong Kong) Ltd.
Tex Year (Hong Kong) Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Vietnam Co.,Ltd.		 1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
3
3
3
3
3
3
3
3
3
3
3		 Accounts receivable
Operating revenue
Management service
fee
Accounts receivable
Operating revenue
Accounts payable
Purchase
Accounts receivable
Operating revenue
Accounts payable
Accounts receivable
Operating revenue
Purchase
Accounts receivable
Operating revenue
Accounts receivable
Operating revenue
Other receivables
Accounts payable
Purchase
Other payables
Accounts receivable
Operating revenue
Purchase
Accounts receivable
Accounts payable
Purchase
Operating revenue
Operatingrevenue		 $ 20,705
23,710
962
10,538
7,597
11,829
19,538
4,076
19,293
4,821
31,191
65,289
8,868
32,476
37,973
20,003
20,120
30,205
1,638
1,636
36,257
21,504
103,888
1,162
5,552
17,521
52,865
7,981
1,932		 -
Cost markup
Cost markup
-
Cost markup
-
Cost markup
-
Cost markup
-
-
Cost markup
Cost markup
-
Cost markup
-
Cost markup
-
-
Cost markup
-
-
Cost markup
-
-
Cost markup
Cost markup
Cost markup		 0.7%
1.4%
0.1%
0.3%
0.4%
0.4%
1.1%
0.1%
1.1%
0.2%
1.0%
3.8%
0.5%
1.0%
2.2%
0.6%
1.2%
1.0%
0.1%
0.1%
1.2%
0.7%
6.1%
0.1%
0.2%
0.6%
3.1%
0.5%
0.1%

(To be continued)

  • 77 -

(Continued)

Serial No.
(note 1)		 Name of transaction party Transaction counterparty Relationship with the
counterparty (note 2)		 Transaction situation Transaction situation
Accounting subject Amount
(note 4)		 Terms of transaction Ratio to total
consolidated
revenue or total
assets
(notes 3 and 5)
1
2
2
2
2
3
3
3
3
4		 Tex Year Fine Chemical (Guangzhou) Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Wuxi Tex Year International Trading Co., Ltd.
Shanghai C&M Filtration Solutions Limited
Shanghai C&M Filtration Solutions Limited
Shanghai C&M Filtration Solutions Limited
Shanghai C&M Filtration Solutions Limited
Tex Year Technology (Jiangsu)Co.,Ltd.		 Tex Year Europe Sp. z o. o.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Tex Year Vietnam Co., Ltd.
Tex Year Vietnam Co., Ltd.
Tex Year Technology (Jiangsu) Co., Ltd.
Jiangsu C&M Filtration Solutions Limited
Jiangsu C&M Filtration Solutions Limited
Jiangsu C&M Filtration Solutions Limited
Tex Year TechnologyCorp.		 3
3
3
3
3
3
3
3
3
3		 Operating revenue
Accounts payable
Purchase
Accounts payable
Purchase
Purchase
Accounts payable
Operating revenue
Purchase
Otherpayables		 $ 1,859
43,413
135,972
4,066
4,142
6,445
33,848
4,229
20,301
15,103		 Cost markup
-
Cost markup
-
Cost markup
Cost markup
-
Cost markup
Cost markup
-		 0.1%
1.4%
8.0%
0.1%
0.2%
0.4%
1.1%
0.2%
1.2%
0.5%

Note 1: The business information between the parent company and the subsidiaries shall be indicated in the number column, and the number shall be filled in as follows:

  1. Fill in 0 for the parent company.

  2. Subsidiaries are numbered in sequence in each company type starting from Arabic numeral 1.

Note 2: There are three types of relationship between transaction parties, which can be indicated as follows:

  1. Parent company and subsidiary company.

  2. Subsidiary company and parent company.

  3. Subsidiary company and subsidiary company.

  4. Note 3: For the calculation of the ratio of the transaction amount to the total consolidated revenue or total assets, if it belongs to the account of assets and liabilities, it shall be calculated in the way that the ending balance accounts for the total consolidated assets; if it belongs to the account of income, it shall be calculated in the way that the accumulated amount in the period accounts for the total consolidated revenue.

  5. Note 4: The related transactions have been written off in the consolidated financial statements.

Note 5: Other transactions account for less than 0.1% of the total assets or consolidated revenue, and are therefore not disclosed.

  • 78 -

Tex Year Industries Inc. and Subsidiaries

Related information such as name of investee company, location, etc.

January 1 to June 30, 2021

Schedule 5

Unit: NT$1000 unless otherwise noted

Name of investment
company		 Name of investee Location Main business items Original investment amount(note 1) Original investment amount(note 1) Holding at the end of theperiod at the end of theperiod Current profit (loss) of
the investee company		 Investment profit (loss)
recognized
in the current period		 Remarks
End of the period End of last year Number of
shares (1000
shares)		 Percentage
%		 Carrying
amount
(note 2)
Tex Year Industries Inc.
Tex Year International
(Samoa) Corp.
Tex Year (Hong Kong) Ltd.		 Tex Year International
(Samoa) Corp.
Tex Year (Hong Kong)
Ltd.
Tex Year Vietnam Co.,
Ltd.
Tex Year Industrial
Adhesives Pvt. Ltd.
Tex Year Europe Sp. z o.
o.
Tex Year Technology
(Samoa) Corp.
Tex Year Technology
(Samoa) Corp.		 Samoa
Hong Kong
Vietnam
India
Poland
Samoa
Samoa		 Holding company
Sales
of
hot
melt
adhesive, adhesive and
various appliances
Manufacturing
and
trading of hot melt
adhesives and water
adhesives
Hot
melt
adhesive
manufacturing
and
trading;
trading
of
adhesives and various
equipment
R&D,
production,
and
sales
of
hot
melt
adhesives
Holding company
Holding company		 $ 782,923
(USD 24,500 thousand)


33,735
(USD 1,000 thousand)



44,920
(USD 1,440 thousand)




15,029
(USD500 thousand)


145,537
(PLN 17,600 thousand)
782,923
(USD 24,800 thousand)
34,501
(USD 1,000 thousand)
$ 782,923
(USD24,500 thousand)

33,735
(USD 1,000 thousand)

44,920
(USD 1,440 thousand)

15,029
(USD 500 thousand)

145,537
(PLN 17,600 thousand)

782,923
(USD 24,800 thousand)

34,501
(USD 1,000 thousand)
-

8,010

-

72

17.6

-

-		 100.00
100.00
80.00
50.00
80.00
96.08
3.92		 $ 879,820
77,711
70,443
23,661
132,451
916,850
37,034		 $ 8,568
(
1,343 )
( HKD
(372) thousand )

1,745
( VND1,454,018 thousand )

3,360
( INR
8,795 thousand )
(
981 )
( PLN
(132) thousand )

8,568

8,568		 $ 8,568
(
1,343 )
( HKD
(372) thousand )
1,396
( VND1,163,215 thousand )
1,680
( INR
4,397 thousand )
(
785 )
( PLN
(105) thousand )

8,568

-		 (note 3)
(note 3)

Note 1: It is calculated according to the original investment cost.

Note 2: The unrealized gross profit of goods sold has been deducted.

Note 3: The total net profit of this period of Tex Year Technology (Samoa) Co., Ltd. is recognized under Tex Year International (Samoa) Co., Ltd.

Note 4: Please refer to Schedule 6 for information about reinvested companies in mainland China.

  • 79 -

Tex Year Industries Inc. and Subsidiaries

Information about investment in mainland China.

January 1 to June 30, 2021

Schedule 6

Unit: NT$1,000 unless otherwise specified

Name of reinvested
company in mainland
China		 Main business items Paid-in capital
(note 1)		 Paid-in capital
(note 1)		 Investment
mode		 Accumulated
investment amount
remitted from Taiwan at
the beginning of the
period		 Accumulated
investment amount
remitted from Taiwan at
the beginning of the
period
Amount of investment
repatriated or recovered in
the currentperiod
Amount of investment
repatriated or recovered in
the currentperiod		 Accumulated
investment amount
remitted from Taiwan at
the end of the period		 Current profit or loss of
the investee company		 Shareholding
ratio of direct or
indirect
investment of
the Company
Investment profit or loss
recognized in the
current period (note 10)		 Investment
book amount at
the end of the
period		 Investment income
repatriated as of the
current period
Remarks
Repatriation Recovery
Wuxi More Tex
Technology Co., Ltd.
Deyuan Chemical
Technology
(Shenzhen) Co., Ltd.
Deyuan Business
Machine (Shenzhen)
Co., Ltd.
Tex Year Fine Chemical
(Guangzhou) Co., Ltd.
Wuxi Tex Year
International Trading
Co., Ltd.
Tex Year Technology
(Jiangsu) Co., Ltd.
Shanghai C&M Filtration
Solutions Limited
Jiangsu C&M Filtration
Solutions Limited		 Development,
production and
sales of hot melt
adhesives and
lubricants
Development,
production and
sales of hot melt
adhesives and
lubricants
Development and
production of
laminators,
shredders, and
manufacturing and
trading of various
appliances.

R&D, production, and
sales of hot melt
adhesives
Sales of chemical
products and
adhesives
R&D, production, and
sales of hot melt
adhesives

R&D and sales of
environmental
protection
materials

R&D and
manufacturing of
non-gauze filter
materials		 $ 100,581
(USD 3,000 thousand)
-
-
389,798
(USD 12,000 thousand)
14,265
(RMB 3,000 thousand)
308,108
(USD 10,000 thousand)
124,839
(RMB 27,298 thousand)
107,160
(RMB 23,340 thousand)
note 4
-
-

note 5

note 6

note 7

note 6

note 12		 $ 50,291
(USD1,500 thousand)
34,507
(USD1,000 thousand)
34,726
(USD1,000 thousand)
389,798
(USD12,000 thousand)
-
308,108
(USD10,000 thousand)
-
-
$ -

-

-

-

-

-

-

-		 $ -

-

-

-

-

-

-

-		 $ 50,291
(USD1,500 thousand)

34,507
(USD1,000 thousand)

34,726
(USD1,000 thousand)

389,798
(USD12,000 thousand)

-

308,108
(USD10,000 thousand)

-

-
( $ 5,864 )
( RMB
(1,354)
thousand
)

-

-

10,056
( RMB2,322 thousand
)
(
977 )
( RMB(266) thousand
)

2,299
( RMB 531 thousand )
5,869
( RMB1,355 thousand
)
3,402
( RMB 786 thousand )
50%
-
-

100%

100%


100%
50.10%


100%		 ( $ 4,875 )
( RMB
(1,126)
thousand
)
-
-
10,016
( RMB2,313 thousand
)
(
977 )
( RMB(226) thousand)
3,591
( RMB 829 thousand )
1,853
( RMB 439 thousand )
3,402
( RMB 786 thousand )		 $ 65,184
-
-
548,309

59,826
284,920
90,337
114,972		 $ 108,323 (Note 2)
None.
None.
None.
None.
None.
None.
None.		 notes 9 and
10
note 8
note 8
note 10 and
note 13
note 10
note 10 and
note 14
notes 10
and 11
note 10
Accumulated amount of investment remitted from
Taiwan to mainland China at the end of the period		 Investment amount approved by the Investment
Commission of the Ministry of Economic Affairs		 In compliance with the mainland China investment
limit set by the Investment Commission of the
Ministryof Economic Affairs
NTD817,430 thousand(USD25,500 thousand) NTD894,394 thousand(USD27,500 thousand) (note 3)

Note 1: It is calculated based on the original investment cost.

Note 2: As of March 23, 2021, the board meeting of Wuxi MoreTex Technology Co., Ltd. passed the resolution to distribute a cash dividend of NT$64,839 thousand (RMB14,899 thousand), and then repatriate it to the Company through Tex Year Technology; and a total of NT$108,323 thousand has already been repatriated.

Note 3: In accordance with the provisions of the letter of the Ministry of Economic Affairs referenced Jing-Shen Zi No. 09704604680, the value is calculated on the basis of 60% of the net value of the Company as of June 30, 2020, except for the Taiwan subsidiary of an enterprise or multinational enterprise which is approved by the Industrial Development Bureau of the Ministry of Economic Affairs and a certificate of compliance on the headquarters’ operation scope issued. The Company obtained the certificate of compliance on the headquarters’ operation scope (letter referenced Jing-Shou-Gong Zi No. 10820409330) issued by the Industrial Development Bureau of the Ministry of Economic Affairs on April 17, 2019. The period of validity is from April 11, 2019 to April 10, 2022, so it is not subject to the limit.

  • 80 -

  • Note 4: The Company invested NT$50,291 thousand through Tex Year International (Samoa) Co., Ltd., a third-region investment enterprise, and then indirectly invested in Wuxi MoreTex Technology Co., Ltd. through Tex Year Technology (Samoa) Co., Ltd.

  • Note 5: The Company invested NT$389,798 thousand through Tex Year International (Samoa) Co., Ltd., a third-region investment enterprise, and then indirectly invested in Tex Year Fine Chemical (Guangzhou) Co. through Tex Year Technology (Samoa) Co., Ltd.

  • Note 6: Tex Year Fine Chemical (Guangzhou) Co., Ltd. directly invested in Wuxi Tex Year International Trading Co., Ltd. and Shanghai C&M Filtration Solutions Limited, for NT$14,265 thousand and NT$80,975 thousand.

  • Note 7: The Company invested NT$308,108 thousand through Tex Year International (Samoa) Co., Ltd., a third-region investment enterprise, and then indirectly invested in Tex Year Technology (Jiangsu) Co., Ltd. through Tex Year Technology (Samoa) Co., Ltd.

  • Note 8: As the operation of Deyuan Chemical Technology (Shenzhen) Co., Ltd. was incorporated into Tex Year Fine Chemical (Guangzhou) Co., Ltd. and the liquidation was completed in December 2012; Deyuan Business Machine (Shenzhen) Co., Ltd. completed the liquidation in September 2014.

  • Note 9: The remaining balance after the NT$322 thousand (RMB74 thousand) unrealized net loss of the adjusted side-flow transactions recognized and the NT$2,265 thousand (RMB523 thousand) impairment loss in the current period).

  • Note 10: For the investment profit or loss, except Wuxi MoreTex Technology Co., Ltd., Tex Year Technology (Jiangsu) Co., Ltd., Shanghai C&M Filtration Solutions Limited and Jiangsu C&M Filtration Solutions Limited, which are calculated according to the financial statements that independent auditors have not verified, the rest are calculated according to the financial statements that have been verified by independent auditors.

  • Note 11: According to the shareholding ratio, the investment gains recognized in the current period are the balance after deducting NT$1,087 thousand (RMB240 thousand) of investment premium amortization.

  • Note 12: Tex Year Fine Chemical (Guangzhou) Co., Ltd. directly invests in Shanghai C&M Filtration Solutions Limited and indirectly invests in Jiangsu C&M Filtration Solutions Limited through Shanghai C&M Filtration Solutions Limited

  • Note 13: The unrealized net loss of the adjusted side-flow transaction recognized in the current period is NT$140 thousand (RMB9 thousand). The book value of the investment at the end of the period is the balance after deducting the unrealized side-flow transactions and downstream transactions at the end of the period.

  • Note 14: The realized net profit of the adjusted side-flow transactions recognized in the current period is NT$1,292 thousand (RMB298 thousand). The book value of the investment at the end of the period is the balance after deducting the unrealized side-flow transactions and downstream flow transactions at the end of the period.

  • 81 -

Tex Year Industries Inc. and Subsidiaries Information of major shareholders

June 30, 2021

Schedule 7

Name of major shareholders Equity Equity
Number of shares
held		 Shareholding ratio
Chin-Tsung Hsiao
Tex Yard Investment Co., Ltd.
Tex Yuan Investment Co., Ltd.		 15,646,012
7,482,215
7,235,987		 16.75%
8.01%
7.74%

Note: The major shareholder information in this schedule is based on the Central Depository’s record of common shares and special shares of the Company (including treasury shares) held by shareholders, which reached 5% or more on the last business day at the end of the quarter. There may be a difference between the number of shares recorded in the Company’s consolidated financial statements and the number of shares actually delivered for scripless registration due to a different calculation basis.

  • 82 -

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