TYCOONS — Annual Report 2020

Nov 16, 2020

TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

ADD: No.79-1, Sinle St., Gangshan Dist., Kaohsiung City 820, Taiwan (R.O.C.)

TEL: (07) 621-2191

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or a difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

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INDEPENDENT AUDITORS' REPORT

NO.11351090ECA

To the Board of Directors of Tycoons Group Enterprise Co., Ltd.,

Opinion

We have audited the accompanying consolidated financial statements of Tycoons Group Enterprise Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2020 and 2019, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

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Key Audit Matters

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

1. Inventories Valuation

Refer to Note 4(6) and 6(6) to the consolidated financial statements for the accounting policies and the details of the information about inventories.

Description of the key audit matter

In the consolidated financial report, the inventory is measured at the lower of cost or net realizable value. The Group is principally engaged in the production of metal products such as screws, nuts and wales. The value of inventories is susceptible to fluctuations in the price of the demand market and the speed of change of the respective industries. The sales of products may fluctuate violently, resulting in inventory obsolescence losses and expired losses, there is a risk that inventory costs may exceed the net realizable value.

How the matter was addressed in our audits

• Review the aging schedule of inventories and analysis the changes.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management.

• Obtain the quantity data of inventory at the end of the period and compare it with the inventory and actually observe the inventory to verify the existence and completeness of inventory.

• By understanding the sale price made by management and the situation of market price after the accounting period to evaluate the reasonableness of inventory net realizable value and compare the recent sales price or purchase cost of the inventories with the cost of the book to confirm that the inventories have been evaluated at the lower of cost or realizable value.

• Evaluate the fairness of the disclosure of allowance for inventories valuation.

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2. Revenue recognition

Refer to Note 4(15) and 6(19) to the consolidated financial statements for the accounting policies and the details of information about revenue recognition.

Description of the key audit matter

Revenue recognition when the risks and rewards of product transfer of and recorded amount directly affects the annual profit and loss of the Group. The Group and its clients have different trading conditions, we should identify the transfer of risks and rewards in accordance with trading conditions to recognize revenue. Therefore, there is a risk of revenue being recognized at an inappropriate amount or earlier than appropriate.

How the matter was addressed in our audits

• Understand and test the Group’s internal control related of revenue recognition.

• Understand the income types and trading conditions of the Group, to assess whether the accounting policies of revenue being recognized at the time is appropriate.

• By the sampling method, examine supporting documents for actual sales transactions occurring during the year and near the end of the accounting period.

Other Matter

Making reference to the audits of component auditors

We did not audit the financial statements of certain consolidated subsidiaries of the Group. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements relative to these consolidated subsidiaries was based solely on the reports of other auditors. The total assets of the subsidiaries amounted to NT$74,979 thousand and NT$97,431 thousand, both representing 1% of total consolidated assets as of December 31, 2020 and 2019, respectively. And the total revenues of the subsidiaries amounted to NT$44,707 thousand and NT$72,962 thousand, both representing 1% of total consolidated revenues for the years ended December 31, 2020 and 2019, respectively.

4

We did not audit the financial statements of associates and joint ventures accounted for under the equity method. These financial statements were audited by other auditors, the associates and joint ventures accounted for under the equity method amounted to $366,085 thousand and $631,467 thousand, representing 4% and 7% of total consolidated assets as of December 31, 2020 and 2019, respectively. And the related share of profit from the associates and joint ventures accounted for under the equity method amounted to $(315,660) thousand and $(38,036) thousand, representing 80% and 6% of the consolidated comprehensive loss for the years ended December 31, 2020 and 2019, respectively.

Parent company only financial statements

We have also audited the parent company only financial statements of Tycoons Group Enterprise Co., Ltd. as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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Those charged with governance, including members of the Audit Committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

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

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Baker Tilly Clock & Co Yung-Chi Lai, CPA Hung-Hsun Ting, CPA March 25,2021

The accompanying consolidated financial statements are intended only to present the financial position, financial performance and its cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China. The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

ASSETS	NOTES	December 31,2020	December 31,2020	December 31,2019	December 31,2019
		Amount	％	Amount	％
CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss, current Financial assets at amortized cost, current Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Prepayments Other current assets Other financial assets, current Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income, non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Intangible assets Deferred tax assets Guarantee deposits paid Other non-current financial assets Other non-current assets, other Total non-current assets	6(1) 6(2) 6(4),8 6(5) 6(5),7 7 6(23) 6(6),8 8 6(3) 6(8),8 6(9),8 6(10),8 6(23)	$ 252,026 2 240,698 58,174 602,340 46,538 2,149 2,387,923 285,250 2,525 10,036	3 － 3 1 7 1 － 29 3 － －	$ 621,921 643 60,668 36,844 855,803 14,012 2,025 2,224,525 172,337 2,146 －	7 － 1 － 10 － － 25 2 － －
		3,887,661	47	3,990,924	45
		114,780 366,085 3,694,924 45,212 10,518 17,365 1,091 18,792 5,780	2 5 45 1 － － － － －	159,836 631,467 3,952,038 51,778 11,763 25,890 1,151 18,792 10,398	2 7 45 1 － － － － －
		4,274,547	53	4,863,113	55
TOTAL		$ 8,162,208	100	$ 8,854,037	100

(Continued)

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

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY	NOTES	December 31,2020	December 31,2020	December 31,2019	December 31,2019
		Amount	％	Amount	％
CURRENT LIABILITIES Current borrowings Short-term notes and bills payable Financial liabilities at fair value through profit or loss, current Contract liabilities, current Notes payable Accounts payable Accounts payable-related parties Other payables Current tax liabilities Lease liabilities, current Bonds payable, current portion Long-term borrowings, current portion Other current liabilities, other Total current liabilities NON-CURRENT LIABILITIES Bonds payable Long-term bank loans Deferred tax liabilities Lease liabilities, non-current Net defined benefit liabilities, non-current Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF PARENT Share capital Capital surplus Retained earnings Legal reserve Accumulated deficit Other equity interests Total equity attributable to owners of the parent NON-CONTROLLING INTERESTS Total equity	6(12),8 6(13) 6(2) 7 7 6(23) 6(10) 6(14) 6(15),8 6(14) 6(15),8 6(23) 6(10) 6(16) 6(17) 6(17) 6(17) 6(17)	$ 1,540,242 49,951 10,077 206,056 109,776 188,425 5,836 155,181 8,756 － 200,000 52,165 25,497	19 1 － 3 1 2 － 2 － － 2 1 －	$ 1,783,570 49,965 1,464 169,241 93,941 123,273 307,444 186,690 2,625 3,738 － 56,938 1,295	20 － － 2 1 1 4 2 － － － 1 －
		2,551,962	31	2,780,184	31
		－ 37,500 80,987 － 38,380 2,181	－ － 1 － 1 －	200,000 242,232 136,752 1,210 37,469 6,454	2 3 2 － － －
		159,048	2	624,117	7
		2,711,010	33	3,404,301	38
		4,797,520 340,560 16,248 (1,484,846) 416,618	59 4 － (18) 5	4,797,520 206,365 16,248 (1,270,414) 571,238	54 2 － (14) 7
		4,086,100	50	4,320,957	49
		1,365,098	17	1,128,779	13
		5,451,198	67	5,449,736	62
TOTAL		$ 8,162,208	100	$ 8,854,037	100

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

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED ON DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

ITEMS	NOTE	FortheYearsEndedDecember31	FortheYearsEndedDecember31	FortheYearsEndedDecember31
		2020		2019
		Amount	％	Amount	％
OPERATING REVENUES OPERATING COSTS GROSS PROFIT FROM OPERATIONS OPERATING EXPENSES Selling expenses Administrative expenses Research and development expenses Impairment gain determined in accordance with IFRS 9 Total operating expenses NET OPERATIONS INCOME NON-OPERATING INCOME AND EXPENSES Other income Other gains and losses Finance costs Share of the profit of associates and joint ventures accounted for using the equity method Total non-operating income and expenses PROFIT FROM CONTINUING OPERATION BEFORE TAX TAX EXPENSE LOSS FROM CONTINUING OPERATION LOSS FROM DISCONTINUED OPERATIONS LOSS OTHER COMPREHENSIVE INCOME (LOSS) Components of other comprehensive income that will not be reclassified to profit or loss Gain on remeasurement of defined benefit pension plans Unrealized gain from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translation Equity related to non-current asset or disposal groups classified as held for sale Income tax relate to components of other comprehensive loss that will be reclassified to profit or loss Other comprehensive income TOTAL COMPREHENSIVE LOSS LOSS ATTRIBUTABLE TO : Owners of parent Non-controlling interests TOTAL LOSS COMPREHENSIVE LOSS ATTRIBUTABLE TO： Owners of parent Non-controlling interests TOTAL COMPREHENSIVE LOSS BASIC EARNINGS PER SHARE Continuing operations Discontinued operations TOTAL BASICEARNINGSPERSHARE	6(19),7 6(24),7 6(24) 6(5) 6(20) 6(21) 6(22) 6(8) 6(23) 6(7) 6(23) 6(18)	$ 7,930,384 (7,397,427)	100 (93)	$ 11,519,202 (11,268,848)	100 (98)
		532,957	7	250,354	2
		(145,389) (246,321) (9,082) (14,483)	(2) (3) － －	(220,754) (296,191) (10,549) 13,929	(2) (2) － －
		(415,275)	(5)	513,565	(4)
		117,682	2	(263,211)	(2)
		20,107 37,444 (65,489) (315,826)	－ 1 (1) (4)	4,079 (426,419) (104,190) (36,956)	－ (4) (1) －
		(323,764)	(4)	(563,486)	(5)
		(206,082) (13,741)	(2) －	(826,697) (66,668)	(7) (1)
		(219,823) －	(2) －	(893,365) (114,061)	(8) (1)
		(219,823)	(2)	(1,007,426)	(9)
		62 8,798 － (228,855) － 47,462	－ － － (3) － 1	(2,192) 16,146 410 273,739 71,367 (39,995)	－ － － 3 － －
		(172,533)	(2)	319,475	3
		$ (392,356)	(4)	$ (687,951)	(6)
		$ (185,640) (34,183)	(2) －	$ (786,105) (221,321)	(7) (2)
		$ (219,823)	(2)	$ (1,007,426)	(9)
		$ (352,204) (40,152)	(4) －	$ (536,612) (151,339)	(5) (1)
		$ (392,356)	(4)	$ (687,951)	(6)
		$ (0.39) $－		$ (1.42) $ (0.22)
		$ (0.39)		$ (1.64)

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

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

DESCRIPTION			Total equityattributable to owners ofparent	Total equityattributable to owners ofparent	Total equityattributable to owners ofparent	Total equityattributable to owners ofparent	Total equityattributable to owners ofparent		Non-controlling interests	Total equity
	Common stock	Capital surplus	Retained earnings		Other equityinterests			Subtotal
			Legal reserve	Accumulated deficit	Exchange differences on translation of foreign financial statements	Unrealized (losses) gains on financial assets measured at fair value through other comprehensive income	Equity related to non-current assets or disposal groups classified as held for sale
BALANCE,JANUARY 1,2019	$4,797,520	$ 154,337	$ 16,248	$ (541,080)	$ 421,543	$ 13,809	$ 9,318	$4,871,695	$1,379,875	$6,251,570
Net (loss) income for the year ended December 31, 2019 Other comprehensive income for the year ended December 31,2019,net of income tax	－ －	－ －	－ －	(786,105) (1,278)	－ 159,756	－ 24,637	－ 66,378	(786,105) 249,493	(221,321) 69,982	(1,007,426) 319,475
Total comprehensive(loss)income	－	－	－	(787,383)	159,756	24,637	66,378	(536,612)	(151,339)	(687,951)
Difference between consideration and the carrying amount of subsidiaries acquired or disposed	－	33,739	－	－	－	－	－	33,739	－	33,739
Disposal of investments in equity instruments designated at fair value through other comprehensive income	－	－	－	58,049	－	(58,049)	－	－	－	－
Effect of the disposal of the subsidiary	－	18,289	－	－	9,542	－	(75,696)	(47,865)	(99,757)	(147,622)
BALANCE,DECEMBER 31,2019	4,797,520	206,365	16,248	(1,270,414)	590,841	(19,603)	－	4,320,957	1,128,779	5,449,736
BALANCE,JANUARY 1,2020	4,797,520	206,365	16,248	(1,270,414)	590,841	(19,603)	－	4,320,957	1,128,779	5,449,736
Net loss for the year ended December 31, 2020 Other comprehensive income for the year ended December 31,2020,net of income tax	－ －	－ －	－ －	(185,640) 62	－ (175,424)	－ 8,798	－ －	(185,640) (166,564)	(34,183) (5,969)	(219,823) (172,533)
Total comprehensive(loss)income	－	－	－	(185,578)	(175,424)	8,798	－	(352,204)	(40,152)	(392,356)
Difference between consideration and the carrying amount of subsidiaries acquired or disposed	－	134,195	－	－	(14,425)	(441)	－	119,329	－	119,329
Disposal of investments in equity instruments designated at fair value through other comprehensive income	－	－	－	(28,854)	－	26,872	－	(1,982)	－	(1,982)
Changes in non-controllinginterests	－	－	－	－	－	－	－	－	276,471	276,471
BALANCE,DECEMBER 31,2020	$4,797,520	$ 340,560	$ 16,248	$ (1,484,846)	$ 400,992	$ 15,626	$ －	$4,086,100	$1,365,098	$5,451,198

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

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

DESCRIPTION	2020	2019
CASH FLOWS FROM OPERATING ACTIVITIES Loss from continuing operations before tax Loss from discontinued operations before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss (gain) Impairment loss Net loss on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of the loss of associates and joint ventures Loss on disposal and write-off of property, plant and equipment Gain on lease modification Gain on disposal of investments Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Contract liabilities Notes payable Accounts payable Other payables Advance receipts Other current liabilities, other Net defined benefit liabilities, non-current	$ (206,082) － 318,209 16,957 14,483 320 19,717 62,001 (4,611) (3,934) 315,826 262 (41) (522) (19,197) (20,669) 224,313 (29,146) (261,571) (112,924) (379) 37,532 18,518 (177,787) (21,324) － 24,132 3,175	$ (826,697) (101,653) 517,879 22,157 (13,929) 430,144 1,414 185,625 (3,835) (720) 36,956 97,718 － (48,495) 19,125 72,617 (112,741) 8,420 763,519 93,962 (1,130) (168,835) (42,360) 55,009 (12,577) (82,034) (3,752) 8,778

(Continued)

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

DESCRIPTION	2020	2019
Cash generated from operations Interest received Interest paid Income taxes (paid) refund Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through other comprehensive income (Increase) decrease in financial assets measured at amortized cost Proceeds from disposal of the subsidiary Acquisition of investment accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets (Increase) decrease in other financial assets Increase in other non-current assets Dividend received Net cash (used in) generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase in short-term notes and bills payable Decrease in long-term borrowings (Decrease) increase in guarantee deposits received Repayment of the principal portion of the lease liability Acquisition of ownership interest in subsidiaries Disposal of ownership interest in subsidiaries Changes in non-controlling interests Net cash (used in) generated from financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT END OF THE PERIOD ADDITIONAL DISCLOSURE OF CASH FLOW INFORMATION Non-cash transaction Unpaid amount for purchases of property plant and equipment	$ 197,258 1,441 (62,523) (8,201)	$ 894,565 4,240 (195,229) 3,017
	127,975	706,593
	48,753 (184,128) － (64,266) (150,123) 3,867 21 － (10,035) 19,722 3,934	63,938 77,574 790,178 － (498,025) 7,591 (1,522) (12,718) 81,750 (1,324) 720
	(332,255)	508,162
	(152,634) 14 (203,236) (4,285) (2,954) (35,069) 357,694 (86,306)	(679,531) 49,965 (655,682) 1,008 (5,267) (10,099) － 56,122
	(126,776)	(1,243,484)
	(38,839)	(269,640)
	(369,895) 621,921	(298,369) 920,290
	$ 252,026	$ 621,921
	$ 538	$ 1,690

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

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TYCOONS GROUP ENTERPRISE CO., LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Amounts in thousands of New Taiwan dollars, unless otherwise stated)

1. HISTORY AND ORGANIZATION

Tycoons Group Enterprise Co., Ltd. (the “Company”) was incorporated under the Company Law in November, 1980. The address of its registered office and principal place of business is No. 79-1, Sinle St., Gangshan Dist., Kaohsiung City, Taiwan. The main business of the Company and its subsidiaries (the “Group”) is to produce, process, commerce, export screws, screw nuts, washer, steel thread, heat-processing of metal-blazed, mechanical parts, press-modeling machines as well as heat-processing equipment, and to manufacture, process and export various metal-models, and general international trade business excluding futures transactions.

On March 27, 1995, the Company’s stocks were approved by the Financial Supervisory Commission, Executive Yuan, R.O.C for listing on the Taiwan Stock Exchange.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the board of directors and authorized for issue on March 25, 2021.

3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

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New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3, “Definition of a business” Amendments to IFRS 9, IAS 39 and IFRS 7, “Interest rate benchmark reform” Amendments to IAS 1 and IAS 8, “Disclosure initiative-definition of material” Amendment to IFRS 16, “Covid-19-related rent concessions”	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020

The above standards and interpretations have no significant impact on the consolidated financial condition and financial performance based on the Company’s assessment.

• (2) Effect of new issuances of or amendments to International Financial Reporting Standards as endorsed by the FSC but not yet adopted by the Company New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

2021 are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, “Extension of the temporary exemption from applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, “ Interest Rate Benchmark Reform - Phase 2”	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact on the consolidated financial condition and financial performance based on the Company’s assessment.

• (3) International Financial Reporting Standards issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by

IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments

Effective date by International Accounting Standards Board

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 IAS 1, “Classification of liabilities as current or noncurrent” Amendments to IAS 16, “Property, plant and equipment: proceeds before intended use” Amendments to IAS 37, “Onerous contracts - cost of fulfilling a contract” Annual improvements to IFRS Standards 2018 - 2020 Amendments to IFRS 3, “Reference to the conceptual framework” Amendments to IAS 1, “Disclosure of accounting policies” Amendments to IAS 8, “Definition of accounting estimates”

To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2023 January 1, 2023

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the Group are summarized as follows. Unless otherwise stated, the following accounting policies have been consistently applied to all presentation periods in this consolidated financial report.

(1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issues” (the “Regulations”) and the IFRSs, IASs, and interpretations as well as related guidance endorsed by the FSC.

(2) Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The financial statements in the Chinese language are the official statutory financial statements of the Group. The financial statements in the English language have been translated from the Chinese language financial statements.

(3) Basis of Consolidation

A. The basis for the consolidated financial statements

The consolidated financial statements incorporated the financial statements of Tycoons Group Enterprise Co., Ltd. and its controlled entities (the subsidiaries).

Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

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

All intra-company transactions, balances, income and expenses are eliminated in full on consolidation.

Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Company ownership interest in a subsidiary that do not result in the Company losing control over the subsidiary are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the Company.

When the Company losses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between:

• (A) the aggregate of the fair value of the consideration received and the fair

value of any retained interest at the date when control is lost; and

• (B) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interest.

The Company shall account for all amounts recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the Company had directly disposed of the related assets and liabilities.

The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the cost of initial recognition of an investment in an associate.

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B. Subsidiaries included in the consolidated financial statements:

Investing Company	The name of subsidiary		Nature of operations	Location	Location
Tycoons Group	Tycoons Group		Investing	British
Enterprise Co., Ltd.	International Co., Ltd.			Cayman
				Island
〃	Yuan Zhen Investment	Co., Ltd.	Investing	Taiwan
〃	Tycoons Worldwide Group		Manufacturing	Thailand
	(Thailand) Public Co., Ltd.		industry
Tycoons Group	Tycoons Worldwide Group		Manufacturing	Thailand
International Co., Ltd.	(Thailand) Public Co., Ltd.		industry
〃	Viettycoons Steel Co., Ltd.		Manufacturing	Vietnam
			industry
〃	Kingford		Investing	Samoa
	International Limited
〃	Tycoons Group (Samoa) Holding		Investing	Samoa
	Ltd.
Kingford	Huanghua Jujin Hardware		Manufacturing	China
International Limited	Products Co., Ltd.		industry
Huanghua Jujin	Huanghua Jujin Trading Co., Ltd.		Trade	China
Hardware Products Co.,
Ltd.
Tycoons Group	Tycoons Vietnam Co., Ltd.		Manufacturing	Vietnam
(Samoa) Holding Ltd.			industry
		Shareholding %
The name of subsidiaries					Note
	December 31, 2020 December 31,			2019
Tycoons Group		100%	100%
International Co., Ltd.
Yuan Zhen Investment Co., Ltd.		100%	100%
Tycoons Worldwide Group (Thailand)		－%	3.87%		1
Public Co., Ltd.
〃		70.30%	73.39%		2
Viettycoons Steel Co., Ltd.		100%	100%		3
Kingford International Limited		100%	100%
TY Steel Co., Ltd.		31.11%	33.05%		4
Huanghua Jujin Hardware Products Co.,		60%	60%
Ltd.
Huanghua Jujin Trading	Co., Ltd.	60%	60%
Tycoons Vietnam Co., Ltd.		100%	100%		3
Tycoons Group (Samoa)	Holding Ltd.	100%	100%

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• Note 1: The Company holding.

• Note 2: Holding by the subsidiary of the Company, Tycoons Group International Co., Ltd..

• Note 3: These subsidiaries for which the financial statements are audited by other auditors.

• Note 4: On December 13, 2018, the Company’s Board of Directors approved that the Company sells 60% of TY Steel Co., Ltd.’s shares. Therefore, the assets and liabilities related to TY Steel Co., Ltd. have been reclassified as held for sale and presented as discontinued operations.

The Group completed the equity transfer in June, 2019, and the shareholding ratio decreased to 33.01%. Also, after TY Steel Co., Ltd. re-elected its directors on July 3, 2019, the Group no longer occupies most of its board of directors. The assessment has lost control of the Company and is excluded from consolidated financial statements from the date of lost control.

• C. Details of subsidiaries that have material non-controlling interests:

Name of subsidiary		Principal place of business	Principal place of business	Proportion of Ownership Interests and Voting Rights Held by Non-controlling Interests	Proportion of Ownership Interests and Voting Rights Held by Non-controlling Interests	Proportion of Ownership Interests and Voting Rights Held by Non-controlling Interests	Proportion of Ownership Interests and Voting Rights Held by Non-controlling Interests
				December 31,2020		December 31,2019
Tycoons Worldwide Group (Thailand) Public Co., Ltd. Name of subsidiary
	For the Year Ended December 31, 2020		For the Year Ended December 31, 2019		December 31,2020		December 31,2019
Tycoons Worldwide Group (Thailand) Public Co., Ltd. TY Steel Co., Ltd.	$ (90,325)		$ (229,141)		$ 1,133,853		$ 987,233
	Not applicable		$ 3,529		Not applicable		Not applicable

The summarized financial information below represents amounts before intracompany eliminations.

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Tycoons Worldwide Group (Thailand) Public Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to: Shareholders of the parent company Non-controlling interests Operating Revenues Net loss Other comprehensive loss Total comprehensive loss Loss attributable to: Shareholders of the parent company Non-controlling interests Total comprehensive loss attributable to： Shareholders of the parent company Non-controlling interests Cash flow Operation activities Investing activities Financing activities Net decrease in cash and cash equivalents	December 31,2020 December 31,2019 $ 2,783,562 $ 2,776,698 3,292,842 3,809,474 (2,219,918) (2,165,164) (38,799) (79,612) $ 3,817,687 $ 4,341,396 $ 2,683,834 $ 3,354,163 1,133,853 987,233 $ 3,817,687 $ 4,341,396 For the Years Ended December 31	December 31,2019
		$ 2,776,698 3,809,474 (2,165,164) (79,612)
		$ 4,341,396
		$ 3,354,163 987,233
		$ 4,341,396
	2020 2019 $ 5,747,942 $ 9,658,017 (304,125) (1,007,660) 663 4,582 $ (303,462) $ (1,003,078) $ (213,780) $ (778,519) (90,325) (229,141) $ (304,105) $ (1,007,660) $ (213,334) $ (774,978) (90,128) (228,100) $ (303,462) $ (1,003,078) For the Years Ended December 31	2019
		$ 9,658,017
		(1,007,660) 4,582
		$ (1,003,078)
		$ (778,519) (229,141)
		$ (1,007,660)
		$ (774,978) (228,100)
		$ (1,003,078)
	2020 $ 546,090 (196,856) (602,035) $ (252,801)	2019
		$ 220,871 (158,153) (224,759)
		$ (162,041)

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TY Steel Co., Ltd.

TY Steel Co., Ltd.
Operating Revenues Net loss Other comprehensive income Total comprehensive loss Loss attributable to: Shareholders of the parent company Non-controlling interests Total comprehensive loss attributable to: Shareholders of the parent company Non-controlling interests	For the Years Ended December 31
	2019 (Note)
	$ 2,865,560
	50,493 －
	$ 50,493
	$ 46,964 3,529
	$ 50,493
	$ 46,964 3,529
	$ 50,493

Note: The amounts were from Jan. 1, 2019 to the date of loss control.

• (4) Classification of Current and Noncurrent Assets and Liabilities

An asset is classified as current under one of the following criteria, and all other

assets are classified as noncurrent:

• A. The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.

• B. The Group holds the asset primarily for the purpose of trading.

• C. The Group expects to realize the asset within twelve months after the reporting period.

• D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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A liability is classified as current under one of the following criteria, and all other liabilities are classified as noncurrent:

• A. The Group expects to settle the liability in its normal operating cycle.

• B. The Group holds the liability primarily for the purpose of trading.

• C. The liability is due to be settled within twelve months after the reporting period.

• D. The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

• (5) Foreign Currencies

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

At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the closing rates. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise except for exchange differences on transactions entered into in order to hedge certain foreign currency risks.

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

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

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For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including of the subsidiaries, associates and joint ventures operating in other countries or using currencies different from the Company’s) are translated into New Taiwan Dollars using exchange rates prevailing at each balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income (attributed to the shareholders of the Company and non-controlling interests as appropriate).

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

(6) Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at weighted-average cost. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

• (7) Noncurrent Assets Held for Sale and Discontinued operations

• A. Non-current assets held for sale

Noncurrent assets or disposal groups are classified as noncurrent assets held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the noncurrent asset held for sale is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

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Noncurrent assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation would cease. When the assets classified as held for sale or held for distribution to owners are intangible assets or property, plant and equipment, they are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted, except for investment subsidiaries.

B. Discontinued operations

An operation will be classified as a discontinued operation upon disposal or when the operation meets the criteria to be classified as held for sale or held for distribution to owners, whichever comes first. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the beginning of the comparative year.

(8) Investments accounted for under the equity method

An associate is an entity over which the Company and its subsidiaries have significant influence and that is neither a subsidiary nor an interest in a joint venture.

The operating results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the share of the equity of associates.

When the Group subscribes to additional new shares of the associate, at a percentage different from their existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate. The Group record such a difference as an adjustment to investments with the corresponding amount charged or credited to

25

capital surplus. If the Group’s ownership interest is reduced due to non-subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate equal or exceed their interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, from part of the Group’s net investment in the associate), the Group discontinue recognizing their share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss in the current year.

When impairment loss is evaluated, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with the carrying amount. An impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment has subsequently increased.

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When the Group ceases to have significant influence over the associate, the Group will measure the retained investment at fair value at that date. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.

When the Group transacts with their associates, profits and losses on these transactions are recognized in the consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

(9) Property, Plant and Equipment

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

Properties in the course of construction for production, supply or administrative purposes are carried at cost. Cost includes professional fees and borrowing costs eligible for capitalization. Such properties are classified into the appropriate categories of property, plant and equipment when completed and ready for the intended use and depreciated accordingly.

Depreciation is computed by the straight-line method over the estimated useful lives. The estimated useful lives are as follows:

Land improvement	30	years
Buildings	1～50	years
Machinery and equipment	1～25	years
Transportation equipment	5～10	years
Furniture and fixtures	2～15	years
Miscellaneous equipment	2～25	years
Leasehold improvements	3	years

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If each component of property, plant and equipment is significant, it is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis. Any gain or loss arising from the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss in the current year.

(10) Leasing

A. Identifying of lease

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

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

• (B) The Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use.

• (C) The customer has the right to direct the use of the asset throughout the period of use only if either:

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

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

  • (a) the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • (b) the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

28

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

B. As a lease

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

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

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

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

(A) Fixed payments.

• (B) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date.

• (C) Amounts expected to be payable under a residual value guarantee.

29

• (D) Payments for purchase or termination options that are reasonably certain to be exercised.

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

• (A) There is a change in future lease payments arising from the change in an index or rate.

• (B) There is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee.

• (C) There is a change of its assessment on whether it will exercise a purchase, extension or termination option.

• (D) There is a change of its assessment on whether it will exercise an extension or termination options.

• (E) There are any lease modifications.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero. When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease. The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

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

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C. As a lessor

When the Group acts as a lessor, it determines, at lease commencement, whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Group applies IFRS15 to allocate the consideration in the contract.

(11) Impairment of Tangible and Intangible Assets Other than Goodwill

At each balance sheet date, the Group reviews the carrying amounts of their tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.

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

(12) Financial instruments

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

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

A. Financial assets

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

• a. Measurement category

Financial assets are classified into the following categories: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL).

The Group shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

• (a) Financial assets measured at amortized cost

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

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• ・ It is held within a business model whose objective is to hold assets to collect contractual cash flows.

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

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, notes and accounts receivable, other receivables and other financial assets, are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Cash equivalents include time deposits that are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

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

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

• ・ It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

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

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

A financial asset measured at FVOCI is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment losses, deriving from debt investments are recognized in profit or loss; whereas dividends deriving from equity investments are recognized as income in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses of financial assets measured at FVOCI are recognized in OCI. On derecognition, gains and losses accumulated in OCI of debt investments are reclassified to profit or loss. However, gains and losses accumulated in OCI of equity investments are reclassified to retain earnings instead of profit or loss.

Dividend income derived from equity investments is recognized on the date that the Group’s right to receive payment is established, which in the case of quoted securities is normally the dividend date.

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

All financial assets not classified as amortized cost or FVOCI described above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, which take into account any dividend and interest income, are recognized in profit or loss.

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• b. Impairment of financial assets

The Group recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, other receivable, refundable deposits and other financial assets).

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

• ・ Debt securities that are determined to have low credit risk at the reporting date.

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

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

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

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

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

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

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

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

• ・ Significant financial difficulty of the borrower or issuer.

• ・ A breach of contract such as a default.

• ・ The lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider.

• ・ It is probable that the borrower will enter bankruptcy or other financial reorganization.

• ・ The disappearance of an active market for security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Group recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

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The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

• c. Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial assets.

B. Equity Instruments

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

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

C. Financial liabilities

• a. Subsequent measurement

Except for the following situation, all the financial liabilities are measured at amortized cost using the effective interest method.

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or it is designated as at fair value through profit or loss.

Financial liabilities held for trading are stated at fair value, with any gain or loss arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest or dividend paid on the financial liability.

37

b. Derecognition of financial liabilities

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

(13) Provision

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

(14) Employee benefits

A. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

B. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

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

38

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Corporation and its subsidiaries’ defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

(15) Revenue recognition

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

A. Sale of goods

The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• B. Rent income, dividend income and interest income are recognized when it is probable that the economic benefits will flow to the Group and the amount of revenue can be reliably measured, recognized as follows:

• (a) Rent income is recognized during the rental period at the straight method.

• (b) Dividend income is recognized when the shareholder’s right to receive payment has been established.

• (c) Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

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(16) Government grant

A government grant is recognized in profit or loss only when there is reasonable assurance that the Group will comply with the conditions attached to it and that the grant will be received.

A government grant becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs is recognized in profit or loss in the period in which it becomes receivable.

The government grant is recognized in other operating income and expenses.

(17) Taxation

The income tax expense represents the sum of the tax currently payable and deferred tax.

A. Current tax

Income tax on unappropriated earnings (excluding earnings from foreign consolidated subsidiaries) at a rate of 5% is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

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

B. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

40

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

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized are also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

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

C. Current and deferred tax for the year

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

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5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF

ESTIMATION AND UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 4, the Group is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

The following are the critical judgments, apart from those involving estimations, that the Group has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.

(1) Revenue Recognition

The Group recognizes revenue when the conditions described in Note 4 are satisfied. The Group also records a provision for estimated future returns and other allowances in the same period the related revenue is recorded. Provision for estimated sales returns and other allowances is generally made and adjusted at a specific percentage based on historical experience and any known factors that would significantly affect the allowance, and our management periodically reviews the adequacy of the estimation used.

(2) Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value, and the Group uses judgment and estimate to determine the net realizable value of inventory at the end of each reporting period.

42

Due to the rapid industrial changes, the Group estimates the net realizable value of inventory for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions of future demand within a specific time horizon.

(3) Estimated impairment of financial assets

The Group has estimated the loss allowance of trade receivable that is based on the risk of a default occurring and the rate of expected credit loss. The Group has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs.

(4) Impairment assessment of tangible and intangible assets other than goodwill

In the process of evaluating the potential impairment of tangible and intangible assets other than goodwill, the Group is required to make subjective judgments in determining the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups with the consideration of the nature of semiconductor industry. Any changes in these estimates based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.

(5) Recognition and measurement of defined benefit plans

Net defined benefit liability and the resulting defined benefit costs under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, and future salary increase rate. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.

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(6) Realization of deferred income tax assets

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. Assessment of the realization of deferred income tax assets involves critical accounting judgments and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax-exempt duration, available tax credits, tax planning, etc. Any variations in the global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred income tax assets.

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents	Cash and cash equivalents
December 31, 2020 December 31, 2019 Cash on hand $ 734 $ 509 Bank deposits 251,292 621,412 Total $ 252,026 $ 621,921 Financial assets and liabilities at fair value through profit or loss, current December 31, 2020 December 31, 2019 Financial assets-current Financial assets mandatorily classified as at FVTPL Derivative financial assets Forward exchange contracts $ 2 $ 643 December 31, 2020 December 31, 2019 Financial liabilities-current Financial liabilities mandatorily classified as at FVTPL Derivative financial liabilities Forward exchange contracts $ 10,077 $ 1,464		December 31, 2019
		$ 509 621,412
		$ 621,921
Financial assets-current Financial assets mandatorily classified as at FVTPL Derivative financial assets Forward exchange contracts Financial liabilities-current Financial liabilities mandatorily classified as at FVTPL Derivative financial liabilities Forward exchange contracts	December 31, 2020 $ 2 December 31, 2020 $ 10,077
		$ 643
		December 31, 2019
		$ 1,464

(2) Financial assets and liabilities at fair value through profit or loss, current

44

The main purpose for the Group to engage in forwarding exchange contract transactions is to evade the risk resulting from the fluctuation of the currency exchange rate. However, those derivative assets and liabilities did not meet the criteria of hedge effectiveness and therefore were not accounted for by using hedge accounting.

The undue derivative financial products were as follows:

December 31, 2020	Currency	Maturity Period	Contracted Amount (in thousands)
Buy forward exchange 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 Sell forward exchange	United States dollars 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	2020.11.02～2021.05.05 2020.11.05～2021.05.10 2020.12.08～2021.06.14 2020.12.09～2021.06.15 2020.12.29～2021.07.06 2020.11.10～2021.05.07 2020.11.26～2021.05.25 2020.12.24～2021.06.22 2020.11.03～2021.05.05 2020.11.05～2021.05.10 2020.11.05～2021.05.10 2020.11.09～2021.05.12 2020.11.19～2021.05.24 2020.12.01～2021.06.04 2020.12.04～2021.06.09 2020.12.23～2021.06.28 2020.12.22～2021.06.24 2020.12.18～2021.04.29	USD 352 USD 500 USD 1,742 USD 350 USD 855 USD 142 USD 530 USD 4,500 USD 1,785 USD 1,000 USD 1,000 USD 1,000 USD 980 USD 530 USD 5,550 USD 6,750 USD 1,677 USD 1,350

45

December 31, 2019	Currency	Maturity Period	Contracted Amount (in thousands)
Buy forward exchange 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	United States dollars 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	2019.09.11～2020.03.13 2019.09.13～2020.03.17 2019.10.09～2020.04.16 2019.10.24～2020.04.28 2019.11.20～2020.05.22 2019.12.25～2020.06.29 2019.12.30～2020.07.03 2019.08.26～2020.02.21 2019.09.13～2020.03.11 2019.09.25～2020.03.23 2019.10.04～2020.04.01 2019.10.09～2020.04.03 2019.10.17～2020.04.09 2019.10.25～2020.04.22 2019.10.25～2020.04.22 2019.10.29～2020.04.24 2019.11.06～2020.05.08 2019.11.15～2020.05.13 2019.12.12～2020.06.09 2019.12.12～2020.06.09 2019.12.12～2020.06.09 2019.12.17～2020.06.12 2019.12.20～2020.06.17 2019.12.25～2020.06.22 2019.12.30～2020.06.26 2019.11.26～2020.05.29 2019.12.03～2020.06.08 2019.12.12～2020.06.16 2019.12.12～2020.06.16	USD 491 USD 500 USD 500 USD 700 USD 600 USD 450 USD 500 USD 163 USD 500 USD 750 USD 500 USD 500 USD 500 USD 500 USD 500 USD 650 USD 500 USD 500 USD 500 USD 500 USD 500 USD 500 USD 500 USD 500 USD 500 USD 768 USD 500 USD 500 USD 500

46

December 31, 2019	Currency	Maturity Period	Contracted Amount (in thousands)
Buy forward exchange 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	United States dollars 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	2019.12.20～2020.06.24 2019.12.25～2020.06.29 2019.12.26～2020.06.30 2019.12.26～2020.06.30 2019.12.27～2020.07.02 2019.12.30～2020.07.03 2019.12.30～2020.07.03 2019.12.13～2020.06.16 2019.12.25～2020.06.29 2019.12.30～2020.07.03 2019.12.30～2020.07.03 2019.12.24～2020.06.26 2019.12.26～2020.06.26	USD 500 USD 500 USD 3,500 USD 500 USD 500 USD 500 USD 500 USD 69 USD 184 USD 500 USD 500 USD 500 USD 1,475

(3) Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income Listed shares Unlisted shares Total Financial assets at amortized cost Pledge time deposits Non-pledge time deposits Total Current Non-current Rate	December 31, 2020 $ 7,745 107,035 $ 114,780 December 31, 2020 $ 227,859 12,839 $ 240,698 $ 240,698 $ － 0.15％～4.10％	December 31, 2019
		$ 49,438 110,398
		$ 159,836
		December 31, 2019
		$ 60,668 －
		$ 60,668
		$ 60,668
		$ －
		0.55％～1.25％

(4) Financial assets at amortized cost

Refer to note 8 for information relating to financial assets measured at amortized cost pledged as security.

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(5) Notes and accounts receivable

Notes and accounts receivable
Notes and accounts receivable Less: Loss allowance Net	December 31, 2020 $ 709,751 (49,237) $ 660,514	December 31, 2019
		$ 929,433 (36,786)
		$ 892,647

The Group applies the simplified approach to provide for its expected losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporate forward-looking information, including macroeconomic and relevant industry information.

The loss allowance provision was determined as follows ：

December 31, 2020	Collective A	Collective B	Collective C	Total
Notes and accounts receivable Loss allowance Net December 31, 2019	$ 25,881 (737)	$ 515,459 (46,663)	$ 168,411 (1,837)	$ 709,751 (49,237)
	$ 25,144	$ 468,796	$ 166,574	$ 660,514
	Collective A	Collective B	Collective C	Total
Notes and accounts receivable Loss allowance Net	$ 70,798 (757)	$ 663,854 (34,193)	$ 194,781 (1,836)	$ 929,433 (36,786)
	$ 70,041	$ 629,661	$ 192,945	$ 892,647

The expected credit loss rate of the above is that collective A of the clients in Taiwan is evaluated at 0.5% to 3.5%; collective B of the clients in Thailand is evaluated at 0.5% to 100%; and collective C of the other clients is evaluated at 1% to 85%.

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The aging of notes and accounts receivables was as follows:

Not past due Past due within 90 days Past due 91-180 days Past due 181-365 days Total	December 31, 2020 $ 362,861 264,519 13,864 19,270 $ 660,514	December 31, 2019
		$ 482,033 397,182 13,428 4
		$ 892,647

The above table was based on the past due date.

The movements in the allowance for notes and accounts receivables were as follows:

	follows:
(6)	Balance on January 1 Impairment losses in the current period Reversal of the impairment losses Write-off Effect of exchange rate changes Balance, end of the period Inventories Finished goods Work in process Raw materials Supplies Goods in transit Total	For the Year Ended December 31, 2020 $ 36,786 14,483 － (20) (2,012) $ 49,237 December 31, 2020 $ 561,950 204,677 1,100,289 326,812 194,195 $ 2,387,923	For the Year Ended December 31, 2019
			$ 47,998 － (13,929) － 2,717
			$ 36,786
			December 31, 2019 $ 533,774 211,962 811,242 307,855 359,692 $ 2,224,525

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• A. The operating cost of the Group includes unallocated overhead amounted to

• $1,414 thousand and $14,883 thousand for the years ended December 31, 2020 and 2019, respectively.

Write-down of inventories to net realizable value was included in operating

cost, which was as follows:

cost, which was as follows:
Reversal (loss) of inventory valuation	For the Years Ended December 31
	2020 $ 68,195	2019
		$ (40,925)

• B. The insurance coverage as of December 31, 2020 and 2019, were $500,000 thousand and $430,000 thousand, respectively.

• C. Refer to note 8 for information relating to inventories as security.

(7) Non-current assets held for sale

On December 13, 2018, the Company’s Board of Directors had made a resolution, that the subsidiary, TY Steel Co., Ltd., will be sold 60% of the shares to third parties. Therefore, the assets and liabilities regarding the company are reclassified as held for sale. The transaction was completed in June, 2019 and the control was transferred to the acquirer. For the calculation of the profit and loss, please refer to note 6(25).

The result of discontinued operations is as follows:

The result of discontinued operations is as follows:
OPERATING REVENUES OPERATING COST GROSS PROFIT FROM OPERATION OPERATING EXPENSES NET OPERATING LOSS NON-OPERATING INCOME AND EXPENSES Other income Other gains and losses Financial costs TOTAL NON-OPERATING LOSS AND EXPENSES LOSS BEFORE INCOME TAX INCOME TAX (ESPENSE) BENEFIT LOSS	For the Year Ended December 31,2019
	$ 27,808 (26,165)
	1,643
	(40,677)
	(39,034)
	476 37,235 (100,330)
	(62,619)
	(101,653) (12,408)
	$ (114,061)

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The cash flow information of the discontinued operations is as follows:

The cash flow information of the discontinued operations is	as follows:
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net (decrease) increase in cash and cash equivalents	For the Year Ended December 31, 2019
	$ (1,356) (25,643) 30,028
	$ 3,029

Note: The amounts were from Jan. 1, 2019 to the date of loss control.

(8) Investments accounted for using the equity method

A. Investments in associates consisted of the following:

Investor	Carrying	Amount	Percentage of Ownership and Voting Rights Held by the Group
	December 31, 2020	December 31, 2019	December 31, 2020 December 31, 2019
Hurco Automation Co., Ltd. TY Steel Co., Ltd.	$ 131,966 234,119	$ 130,524 500,943	35％ 35％ 31.11％ 33.05％
	$ 366,085	$ 631,467

B. Financial information of the Group’s associates was summarized as follows:

Total assets Total liabilities Net assets The Group’s share of net assets of the associate Net revenue Net loss The Group’s share of the profit of the associate	December 31, 2020 December 31, 2019 $ 6,106,285 $ 7,025,021 (5,191,551) (5,386,474) $ 914,734 $ 1,638,547 $ 366,085 $ 631,467 For the Years Ended December 31	December 31, 2019
		$ 7,025,021 (5,386,474)
		$ 1,638,547
		$ 631,467
	2020 $ 5,641,957 $ (833,505) $ (315,826)	2019
		$ 5,593,571
		$ (68,481)
		$ (36,956)

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The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of investment in Hurco Automation Co., Ltd. was calculated based on the financial statements for the year ended Oct. 31, that have been audited by another auditor; In 2020, the investments accounted for using the equity method and the share of profit or loss and other comprehensive income of investment in TY Steel Co., Ltd. was calculated based on the financial statements that have audited by another auditor.

Refer to note 8 for information relating to investments accounted for using the equity method.

(9) Property, plant and equipment

Item		F	or the Year Ended	December 31, 202	0
	Balance, Beginning of Year	Additions	Disposals	Reclassification	Effect of Exchange Rate changes	Balance, End of Year
	$ 729,200 146,929 2,242,566 5,492,549 346,311 132,442 248 408,871 154,525	$ － － 4,267 6,739 3,110 1,018 － 11,894 123,632	$ － － (2,341) (15,047) (8,499) (5,017) － (42,308) －	$ 37,955 － 14,859 86,192 3,307 1,046 － 3,325 (147,893)	$ (6,761) (7,546) (90,754) (366,018) (17,494) (2,110) － (12,323) 51,223	$ 760,394 139,383 2,168,597 5,204,415 326,735 127,379 248 369,459 181,487
	9,653,641	150,660	(73,212)	(1,209)	(451,783)	9,278,097
		5,188 70,738 207,040 8,878 7,623 － 15,321	－ (1,735) (13,515) (8,297) (4,896) － (41,932)	－ － － － － － －	(5,250) (73,578) (244,399) (17,273) (3,197) － (19,146)	86,659 1,466,052 3,285,397 307,195 104,321 249 333,300
Land improvements Buildings Machinery and equipment Transportation equipment Furniture and fixtures Leasehold improvements Other equipment Total Net
	5,701,603	314,788	(70,375)	－	(362,843)	5,583,173
	$ 3,952,038	$ (164,128)	$ (2,837)	$ (1,209)	$ (88,940)	$ 3,694,924

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For the Year Ended December 31, 2019

Item	Balance, Beginning of Year	Additions	Disposals	Reclassification	Effect of the disposal of the subsidiary	Effect of Exchange Rate changes	Balance, End of Year
Cost Land Land improvements Buildings Machinery and equipment Transportation equipment Furniture and fixtures Leasehold improvements Other equipment Construction in progress Total Accumulated depreciation a	$ 857,868 180,246 3,330,098 9,003,249 333,360 145,356 80,019 467,659 234,867	$ 1,060 1,642 10,224 57,059 7,467 5,820 － 4,732 316,497	$ － (9,535) (30,027) (226,048) (11,549) (6,986) － (11,741) －	$ － － 7,137 102,966 584 10,551 － － (346,585)	$ (164,052) (36,734) (1,253,390) (3,993,254) (1,305) (25,109) (84,981) (68,791) (60,986)	$ 34,324 11,310 178,524 548,577 17,754 2,810 5,210 17,012 10,732	$ 729,200 146,929 2,242,566 5,492,549 346,311 132,442 248 408,871 154,525
	14,632,722	404,501	(295,886)	(225,347)	(5,688,602)	826,253	9,653,641
	nd impairment 82,907 1,413,250 3,213,536 307,980 114,087 12,062 360,801	6,083 158,972 738,889 10,809 10,055 1,365 16,752	(3,317) (27,802) (120,570) (10,730) (6,555) － (2,745)	－ － － － － － －	(4,350) (149,759) (695,452) (1,236) (16,064) (13,978) (14,918)	5,398 75,966 199,868 17,064 3,268 800 19,167	86,721 1,470,627 3,336,271 323,887 104,791 249 379,057
Land improvements Buildings Machinery and equipment Transportation equipment Furniture and fixtures Leasehold improvements Other equipment Total Net
	5,504,623	942,925	(171,719)	－	(895,757)	321,531	5,701,603
	$ 9,128,099	$ (538,424)	$ (124,167)	$ (225,347)	$ (4,792,845)	$ 504,722	$ 3,952,038

• A. The significant part of the Group’s buildings includes main plants and affiliated equipment and the related depreciation is calculated using the estimated useful lives of 15 to 50 years, and 1 to 15 years, respectively.

• B. The insurance coverage as of December 31, 2020 and 2019 were $5,061,941 thousand and $5,395,370 thousand, respectively.

• C. In 2020 and 2019, the Group recognized the impairment loss for the property, plant, and equipment, that the amount was $320 thousand and $430,144 thousand.

• D. Mortgaged or pledged property, plant and equipment, see Note 8.

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(10) Lease agreement

• A. Right-to-use assets

• (A) The Group leases land and buildings for the use of plants with lease terms of 2 to 30 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

• (B) The group leases certain parts of the equipment which qualifies as short-term leases and low-value asset leases. The Group has elected to apply for the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

• (C) The carrying amounts and depreciation charge for right-of-use asset information recognized as follows:

information recognized as follows:
December 31, 2020 Carrying amount Land(including land access) $ 45,212 Buildings － Total $ 45,212 For the Years Ended December 31, 2020 Depreciation Land(including land access) $ 1,682 Buildings 2,059 Subtotal 3,741 Less: loss from discontinued operations － Net $ 3,741	December 31, 2019
	Carrying amount
	$ 47,713 4,065
	$ 51,778
	For the Years Ended December 31, 2019
	Depreciation
	$ 2,213 2,885
	5,098 (472)
	$ 4,626

(D) The addition to the right-of-use assets for the period ended December 31,

2020 and 2019 was $53 thousand and $1,265 thousand.

54

B. Lease liability

December 31, 2019

Less than 1 year 2 years to 5 years Total Current Non-current	Future minimum lease payment	Interest	Minimum lease payment present value
	$ 3,804 1,260	$ 66 50	$ 3,738 1,210
	$ 5,064	$ 116	$ 4,948
	$ 3,804	$ 66	$ 3,738
	$ 1,260	$ 50	$ 1,210

The discount rate for lease liabilities is 2.532%.

C. Other lease information

Other lease information
Interest expense of lease liability Expenses related to low-value asset leases Total cash outflow from the leases	For the Years Ended December 31, 2020 $ 52 $ 4,267 $ 7,273	For the Years Ended December 31, 2019
		$ 1,216
		$ 4,416
		$ 10,899

D. Refer to note 8 for information relating to right-of-use assets pledged as

security.

- (11) Long term lease prepayments

Movements of the long-term prepayments for lease was as follows:

Balance, the beginning of the year (IAS 17) Effects of retrospective application (IFRS 16) Balance, the beginning of the year (IFRS 16) Balance, the end of the year	For the Years Ended December 31, 2019
	$ 48,776 (48,776)
	－
	$ －

55

(12) Current borrowings

Current borrowings
Bank loans for purchasing materials Unsecured loans Mortgage loans Total Rate	December 31, 2020 $ 917,269 425,840 197,133 $ 1,540,242 0.72％～5.50％	December 31, 2019
		$ 1,518,546 110,000 155,024
		$ 1,783,570
		1.69％～6.09％

Mortgaged or pledged assets for current borrowings, see Note 8.

(13) Short-term notes and bills payable

Commercial paper Less: Discount on short-term bills payable Net Interest Rate Period	December 31, 2020 $ 50,000 (49) $ 49,951 1.24％ Dec.22, 2020～Jan.29, 2021	December 31, 2019
		$ 50,000 (35)
		$ 49,965
		1.59％
		Nov.20, 2019～Jan.17, 2020

(14) Bonds payable

On November 14, 2018, the Company issued secured, domestic bonds with a face value of $200,000 thousand. The details of the convertible bonds payable

are as follows:

are as follows:
Bonds payable Less: due within one year	December 31, 2020 $ 200,000 (200,000) $ －	December 31, 2019
		$ 200,000 －
		$ 200,000

On November 14, 2018 the Company issued secured domestic bonds are as follow:

• a. Total price: $ 200,000 thousand.

• b. Face value: $1,000 thousand.

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c. Issue price: Issue at 100% of the principal amount.

d. Issue period: Three years.

• e. Coupon interest rate: 0.79%.

• f. Payment of interest and principal:

The interest is paid once a year and the principal is paid on Maturity day.

g. Secured:

The bonds were secured by First Commercial Bank.

(15) Long-term bank loans

Creditors		December 31, 2020	December 31, 2020	December 31, 2020
	Due Date	Interest Rate (%)	Amount	Payable Within One Year	Description No.
		1.1 4.72 6.50	$ 50,000 20,892 18,773	$ 12,500 20,892 18,773	D A B
			89,665 (52,165)	$ 52,165
			$ 37,500

Creditors		December 31, 2019	December 31, 2019	December 31, 2019
	Due Date	Interest Rate (%)	Amount	Payable Within One Year	Description No.
		2.00 5.50 6.50	$ 200,000 46,512 52,658	$ － 24,267 32,671	C A B
			299,170 (56,938)	$ 56,938
			$ 242,232

Description of bank borrowings:

• A. 60 annual repayments started from 31 Oct., 2016. Repayments of THB 1,000

thousand per month of the principal are due on the first two years, THB 2,000 thousand per month on the third year until to the last two months pay THB 4,000 thousand per month.

57

• B. 30 annual repayments started from 25 Feb., 2019. Repayments of THB 2,896,399 per month of the principal - A syndication loan arranged by Bangkok Grand Pacific Lease Public Company Limited for Tycoons Worldwide Group (Thailand) Public Company Limited, a consolidated subsidiary.

• C. Repayable starting on the 2 years and six months after the date of credit drawing in six-monthly installments for a total of 6 installments. Repayment of $10,000 thousand of the principal is due on the first to five installments, and repayments of $150,000 thousand of the principal are due on the sixth installments.

• D. Repayable starting on the 1 year after the date of credit drawing in three-monthly installments for a total of 8 installments. Repayment of $6,250 thousand are due on every installments.

• E. Mortgaged or pledged property, plant and equipment, see Note 8.

(16) Employee benefits

• A. Defined contribution plans

The Company adopted a pension plan according to the Labor Pension Act (the “LPA”), which is a defined contribution plan. Based on the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. Accordingly, the Company recognized expenses of NT$4,048 thousand and NT$4,717 thousand in the consolidated statements of comprehensive income for the years ended December 31, 2020 and 2019, respectively.

B. Defined benefit plans

The Company adopted the defined benefit plan under the Labor Standards Law, under which pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. As of December 31, 2019, the Company is no employee who is eligible for the plan.

58

Tycoons Worldwide Group (Thailand) Public Company Limited adopted the defined benefit plans.

The amount arising from the defined benefit obligations of the Group in the consolidated balance sheets were as follows:

December 31, 2020 December 31, 2019 Present value of defined benefit obligation (Net defined $ (38,380) $ (37,469) benefit liability)

Movements in the present value of the defined benefit obligations were as follows:

follows:
BALANCE, JANUARY 1, 2020 Service cost Current service cost Interest expense Recognized in profit or loss Effect of exchange rate changes BALANCE, DECEMBER 31, 2020 BALANCE, JANUARY 1, 2019 Service cost Current service cost Past service cost Interest expense Recognized in profit or loss Actuarial losses Settlement of the obligations Effect of exchange rate changes BALANCE, DECEMBER 31, 2019	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability
	$ (37,469) (2,562) (614)	$ － － －	$ (37,469) (2,562) (614)
	(3,176)	－	(3,176)
	2,265	－	2,265
	$ (38,380)	$ －	$ (38,380)
	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability
	$ (30,056) (2,757) (8,795) (630)	$ － － － －	$ (30,056) (2,757) (8,795) (630)
	(12,182)	－	(12,182)
	(2,792)	－	(2,792)
	9,150	－	9,150
	(1,589)	－	(1,589)
	$ (37,469)	$ －	$ (37,469)

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The principal assumptions used for the purposes of the actuarial valuations were as follows:

were as follows:
Discount rate Expected rate of salary increase	December 31, 2020 1.80％ 3.00％～4.50％	December 31, 2019
		1.80％ 3.00％～4.50％

If the possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

follows:
December 31, 2020	Effect of the present value of the defined benefit obligation
	Actual assumptions Increase 0.50%	Actual assumptions Decrease 0.50%
Discount rate Expected rate of salary increase	$ (2,849)	$ 2,849
	$ 2,849	$ (2,849)

December 31, 2019	Effect of the present value of the defined benefit obligation	Effect of the present value of the defined benefit obligation
	Actual assumptions Increase 0.50%	Actual assumptions Decrease 0.50%
Discount rate Expected rate of salary increase	$ (3,033)	$ 3,033
	$ 3,033	$ (3,033)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

(17) Equity

A. Capital stock

Capital stock
Numbers of shares authorized (in thousands) Shares issued (in thousands)	December 31, 2020 640,000 479,752	December 31, 2019
		640,000
		479,752

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The movement of shares for the years ended December 31, 2020 and 2019 were as follows:

were as follows:
January 1, 2020 Actual disposal or acquisition of an interest in subsidiaries December 31, 2020 January 1, 2019 Actual disposal or acquisition of an interest in subsidiaries Effect of the disposal of the subsidiary December 31, 2019	Numbers of shares issued (in thousands)	Capital	Capital surplus
	479,752 －	$ 4,797,520 －	$ 206,365 134,195
	489,752	$ 4,797,520	$ 340,560
	Numbers of shares issued (in thousands)	Capital	Capital surplus
	479,752 － －	$ 4,797,520 － －	$ 154,337 33,739 18,289
	479,752	$ 4,797,520	$ 206,365

B. Employee Restricted Shares

The general shareholders’ meeting held on June 27, 2019 has approved a restricted share plan for employees. The limitation of the issued shares is not more than 20,000 thousand shares. The face value of each share is $10, which is $200,000 thousand. The Company will apply to the authority. After the authority approves, the Company will issue the share one or more times.

C. Capital surplus

Capital surplus
Adjusting of reselling bonds Actual disposal or acquisition of interest in subsidiaries Total	December 31, 2020 $ 7,722 332,838 $ 340,560	December 31, 2019
		$ 7,722 198,643
		$ 206,365

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The capital surplus from share issued in excess of par(additional paid-in capital from the issuance of common shares etc.) and the part of the accepted donation is able to offset the deficit; in addition, when the company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain percentage of Company’s paid-in capital.

D. Retained earnings and dividend policy

Retained earnings and dividend policy	dividend policy
Legal reserve January 1, 2020 $ 16,248 Net income attributable to shareholders of the Company － Actuarial loss on defined benefit plans － Disposal of investments in equity instruments at FVTOCI － December 31, 2020 $ 16,248 Legal reserve January 1, 2019 $ 16,248 Net income attributable to shareholders of the Company － Actuarial loss on defined benefit plans － Disposal of investments in equity instruments at FVTOCI － December 31, 2019 $ 16,248	Legal reserve	Accumulated deficits	Total
		$ (1,270,414) (185,640) 62 (28,854)	$ (1,254,166) (185,640) 62 (28,854)
	$ 16,248	$ (1,484,846)	$ (1,468,598)
	Legal reserve	Accumulated deficits	Total
		$ (541,080) (786,105) (1,278) 58,049	$ (524,832) (786,105) (1,278) 58,049
	$ 16,248	$ (1,270,414)	$ (1,254,166)

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• (A) The Company’s article of incorporation stipulates that Company’s net earnings should first be used to offset the prior years’ deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as a legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

Before the distribution of dividends, the Company shall first take into consideration its operating environment, industry developments, and the long-term interests of stockholders, as well as its programs to maintain operating efficiency and meet its capital expenditure budget and financial goals in determining the stock or cash dividends to be paid. After the above appropriations, current and prior-period earnings that remain undistributed will be proposed for distribution by the Board of Directors, and a meeting of shareholders will be held to decide on this matter.

According to the Company's Articles of Incorporation, 50% ～ 100% of the distributable retained earnings shall be distributed as stockholders' bonus, of which at most 10% is payable by cash.

• (B) The Company appropriates and reverses special reserves under Rule No. 1010012865 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”. Distributions can be made out of any subsequent reversal of the debit to other equity items.

• (C) The general shareholders’ meeting held on May 28, 2019 has been approved to offset a deficit. Information about the meeting is available on the Market Observation Post System website of the TSE.

• (D) The general shareholders’ meeting held on June 27, 2018 has been approved to offset a deficit. Information about the meeting is available on the Market Observation Post System website of the TSE.

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E. Other equity items

Other equity items	Other equity items
January 1, 2020 Exchange differences on translating foreign operations Unrealized gain on financial assets at FVTOCI Share of other comprehensive income of associates and joint ventures Difference between consideration and the carrying amount of subsidiaries acquired or disposed Disposal of investments in equity instruments at FVTOCI Income tax effects December 31, 2020 Exchange differences arising from the translation of the foreign operations January 1, 2019 $ 421,543 Exchange differences on translating foreign operations 199,751 Unrealized gain on financial assets at FVTOCI － Share of other comprehensive income of associates and joint ventures － Disposal of investments in equity instruments at FVTOCI － Effect of the disposal of the subsidiary 9,542 Income tax effects (39,995) December 31, 2019 $ 590,841		Exchange differences arising from the translation of the foreign operations	Unrealized (loss) gain on financial assets at FVTOCI	Total
		$ 590,841 (222,886) － － (14,425) － 47,462	$ (19,603) － 3,051 5,747 (441) 26,872 －	$ 571,238 (222,886) 3,051 5,747 (14,866) 26,872 47,462
		$ 400,992	$ 15,626	$ 416,618
		Unrealized (loss) gain on financial assets at FVTOCI	Equity related to non-current assets or disposal groups classified as held for sale	Total
	$ 421,543 199,751 － － － 9,542 (39,995)	$ 13,809 － 15,047 9,590 (58,049) － －	$ 9,318 66,378 － － － (75,696) －	$ 444,670 266,129 15,047 9,590 (58,049) (66,154) (39,995)
	$ 590,841	$(19,603)	$ －	$ 571,238

The exchange differences arising from the translation of foreign operation’s net assets from its functional currency to Group’s presentation currency are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve.

Unrealized gain/loss on FVTOCI represents the cumulative gains or losses arising from the fair value measurement on FVTOCI that are recognized in other comprehensive income.

64

F. Non-controlling interests

F. Non-controlling interests
Balance, the beginning of the period Attributable to non-controlling interests： Share of profit for the period Remeasurement of defined benefit pension plan Unrealized gain on financial assets at FVTOCI Effect of the disposal of the subsidiary Exchange differences arising from the translation of the translating foreign operations Changes in non-controlling interests Balance, end of year (Loss) Earnings per share Loss for the years attributable to shareholders of the Company-continuing operations Loss for the years attributable to shareholders of the Company-discontinued operations Loss for the years attributable to shareholders of the Company Weighted average number of ordinary shares outstanding (in thousands shares) Basic EPS-continuing operations Basic EPS-discontinued operations Basic EPS	For the Years Ended December 31
	2020 2019 $ 1,128,779 $ 1,379,875 (34,183) (221,321) － (498) 830 1,489 － (99,757) (6,799) 68,991 276,471 － $ 1,365,098 $ 1,128,779 For the Years Ended December 31	2019
		$ 1,379,875 (221,321) (498) 1,489 (99,757) 68,991 －
		$ 1,128,779
	2020 $ (185,640) － $ (185,640) 479,752 $ (0.39) － $ (0.39)	2019
		$ (680,017) (106,088)
		$ (786,105)
		479,752
		$ (1.42) (0.22)
		$ (1.64)

(18) (Loss) Earnings per share

65

(19) Operating revenues

The analysis of the Group’s operating revenues was as follows:

For the Years Ended December 31

Revenue from the sale of goods Revenue form processing Less: operating revenue discontinued operation Total	2020 $ 7,809,761 120,623 － $ 7,930,384	2019
		$ 11,466,636 80,374 27,808
		$ 11,519,202

(20) Other income

Other income
Interest income Dividends Government grant Less: other income-discontinued operations Total Other gains and losses Loss on disposal of property, plant and equipment Foreign exchange gain Loss on financial assets and liabilities at fair value through profit or loss Gain on disposal financial asset Impairment loss Others Less: other gains and losses-discontinued operations Total	For the Years Ended December 31
	2020 2019 $ 4,611 $ 3,835 3,934 720 11,562 － － 476 $ 20,107 $ 4,079 For the Years Ended December 31	2019
		$ 3,835 720 － 476
		$ 4,079
	2020 $ (262) 30,883 (19,717) 522 (320) 26,338 － $ 37,444	2019
		$ (97,718) 67,371 (1,414) 48,495 (430,144) 24,226 37,235
		$ (426,419)

(21) Other gains and losses

66

(22) Finance costs

Finance costs
Interest expense Other finance expense Less: finance costs losses-discontinued operations Total	For the Years Ended December 31
	2020 $ 62,001 3,488 － $ 65,489	2019
		$ 185,625 18,895 100,330
		$ 104,190

(23) Income tax

A. The components of income tax benefit (expense) for the years ended

December 31, 2020 and 2019 were as follows:

Current tax expenses Current period Deferred tax expenses (benefit) Origination and reversal of temporary differences Recognition of previously unrecognized tax losses Less: income tax-discontinued operations Income tax expense	For the Years Ended December 31	For the Years Ended December 31
	2020 $ 16,515 3,740 (6,514) (2,774) － $ 13,741	2019
		$ 14,995 4,707 59,374
		64,081
		12,408
		$ 66,668

Reconciliation of income tax and profit before tax for 2020 and 2019 were as follows:

follows:
Profit from continuing operations before tax Loss from discontinued operations before tax Loss before tax Income tax using the statutory rate Loss carryforwards Other Less：income tax-discontinued operations Income tax expense	For the Years Ended December 31
	2020 $ (206,082) － $ (206,082) 16,515 (6,514) 3,740 － $ 13,741	2019
		$ (826,697) (101,653)
		$ (928,350)
		4,872 59,374 14,830 12,408
		$ 66,668

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B. Income tax recognized in other comprehensive income

Exchange differences arising from the translation of the foreign operations Unrealized loss on investments in equity instruments at FVTOCI Total	For the Years Ended December 31	For the Years Ended December 31
	2020 $ 47,462 (1,389) $ 46,073	2019
		$ (39,995) －
		$ (39,995)

C. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as

follows:

For the year ended December 31, 2020

Deferred Tax Assets	Balance, beginning ofyear	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Effect of foreign currency exchange differences	Balance, end ofyear
Temporary differences Exchange difference on foreign operations Unrealized loss on investments in equity instruments at FVTOCI Other Loss carryforwards Total Deferred tax assets Deferred tax liabilities	$ (147,710) － 26,925 9,923	$ － － (3,740) 6,514	$ 47,462 (1,389) － －	$ － (7) (1,600) －	$ (100,248) (1,396) 21,585 16,437
	$ (110,862)	$ 2,774	$ 46,073	$ (1,607)	$ (63,622)
	$ 25,890	$ (5,529)	$ (1,389)	$ (1,607)	$ 17,365
	$ (136,752)	$ 8,303	$ 47,462	$ －	$ (80,987)

For the year ended December 31, 2019

Deferred Tax Assets	Balance, beginning ofyear	Effect of the disposal of the subsidiary	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Effect of foreign currency exchange differences	Balance, end ofyear
Temporary differences Exchange difference on foreign operations Other Loss carryforwards Reclassification as held for sale Total Deferred tax assets Deferred tax liabilities	$ (107,715) 25,812 89,686 (30,486)	$ － (8,982) (21,259) 30,241	$ － (4,707) (59,374) －	$ (39,995) － － －	$ － 14,802 870 245	$ (147,710) 26,925 9,923 －
	$ (22,703)	$ －	$ (64,081)	$ (39,995)	$ 15,917	$ (110,862)
	$ 85,220	$ －	$ (75,247)	$ －	$ －	$ 25,890
	$ 107,923	$ －	$ (11,166)	$ (39,995)	$ －	$ 136,752

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D. The information of unrecognized deferred income tax

Loss carryforwards Deductible temporary differences	December 31, 2020 $ 587,931 $ 17,219	December 31, 2019
		$ 1,549,219
		$ 49,402

• E. As of December 31, 2020, the balances of income tax-deductible from the losses carried forward from previous operating years for the Group are as follows:

(A) The Company:

December 31, 2020

Loss-making year 2014 2015 2017 2019 Total	Declared/Approved Approved Approved Approved Declared	Loss carryforwards $ 2,851 47,048 2,144 30,141 $ 82,184	Expiry year
			2024 2025 2027 2029

(B) The subsidiaries in Thailand:

December 31, 2020

	December 31, 2020
Loss making year 2016 2018 2019 2020 Total	Loss carry forwards $ 16,032 112,620 347,757 111,522 $ 587,931	Expiry year
		2021 2023 2024 2025

• F. The Tycoons Group International Co., Ltd. a consolidated subsidiary of the Company, is registered in British Cayman Islands. Foreign source income is exempt from income tax in British Cayman Islands. The Company has no business activities in British Cayman Island.

Tycoons Worldwide Group (Thailand) Public Co., Ltd. a consolidated subsidiary of the Company, the tax rate is 20%. And the Company can have various tax credits.

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Tycoons Vietnam Co., Ltd., a subsidiary of the Company, has received a promotional privilege from the local government. Under such privilege, the subsidiary would be exempt from certain taxes and duties, including 20% corporate income tax for 10 years from the year when the company has profit, exemption of corporate income tax for 2 years from the first profitable year and 50% exemption for the 4 years after. The above description is not applicable, the tax rate is used the general corporate income tax.

Viettycoons Steel Co., Ltd., a subsidiary of the Company, has received a promotional privilege from the local government. Under such privilege, the subsidiary would be exempt from certain taxes and duties, including 20% corporate income tax for 10 years from the year when the company has profit, exemption of corporate income tax for 2 years from the first profitable year and 50% exemption for the 4 years after. The above description is not applicable, the tax rate is used the general corporate income tax.

TY Steel Company Limited, a subsidiary of the Company, has received promotional privileges on June 6, 2011. From the first revenue-making year, the company is exempted from corporate income tax for a period of 3 years and 50% exemption for the 5 years after. The upper limit for exemption is 100% of the investments, but not including land and liquidity. The year 2014 is the first year that the subsidiary began business.

Huanghua Jujin Hardware Products Co., Ltd., a subsidiary of the Parent Company, has received a high-tech enterprise certificate (certificate number: GR20113001296) on November 30, 2017. According to the applicable tax rate document (No.2009-203) the company tax rate is 15% for 3 years.

G. Income tax assessments

The Company’s income tax returns through 2018 have been assessed by the tax authorities.

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(24) The personnel, depreciation and amortization expenses of the group

• A. A summary of current-period employee benefits, depreciation and

• amortization by function is as follows (continuing operations):

For the Year Ended December 31, 2020 Classified as operating cost Classified as operating expenses Total Personnel expenses Payroll expense $ 265,270 $ 143,659 $ 408,929 Insurance expense 6,402 11,039 17,441 Pension 3,511 3,713 7,224 Remuneration to Directors － 1,460 1,460 Others 4,280 2,196 6,476 Depreciation $ 290,828 $ 27,381 $ 318,209 Amortization $ 16,957 $ －$ 16,957	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	Classified as operating cost	Classified as operating expenses	Total	Classified as operating cost	Classified as operating expenses	Total
		$ 143,659 11,039 3,713 1,460 2,196 $ 27,381 $ －	$ 408,929 17,441 7,224 1,460 6,476 $ 318,209 $ 16,957	$ 275,159 10,093 5,285 － 4,477 $ 334,768 $ 20,132	$ 160,527 14,010 11,614 2,095 2,546 $ 42,323 $ －	$ 435,686 24,103 16,899 2,095 7,023 $ 337,091 $ 20,132

• B. Employee benefits

• (A) In accordance with the articles of incorporation the Company should contribute 2% to 5% of the profit as employee compensation and less than 1% as directors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The amount of remuneration of each director and of compensation for employees entitled to receive the abovementioned employee compensation is approved by the Board of Directors. The recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

• (B) Due to the accumulation deficit, there is no allocation as employees’ compensation and remuneration to directors for the year ended December 31, 2020.

• (C) Due to the accumulation deficit, there is no allocation as employees’ compensation and remuneration to directors for the year ended December 31, 2019.

Related information would be available on the Market Observation Post System website.

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(25) Proceeds from disposal of the subsidiary

The Group completed proceeds from the disposal of the subsidiary a 60% equity interest in TY Steel Co., Ltd., which was held by the board company Tycoons Group International Co., Ltd. on December 13, 2018, and completed the transaction in June, 2020. And lose control on TY Steel Co., Ltd., and the shares held by it are accounted for according to the fair value of the date of loss of control.

A. Received from the disposal

Received from the disposal
Received in cash and cash equivalents	Amount
	$ 857,756

The above-mentioned disposal of investments receivable was recovered as of December 31, 2019.

B. Analysis of assets, liabilities and equity on the date control was lost

ASSETS Cash and cash equivalents Financial assets at amortized cost, current Accounts receivable, net Other receivables Current tax assets Inventories Prepayments Other current assets Financial assets at amortized cost, non-current Property, plant and equipment Right-of-use assets Intangible assets Deferred tax assets Other non-current assets, others Total	June 30, 2019
	$ 67,578 5,726 513,458 151,802 35 673,880 75,938 22,690 104,607 4,792,845 51,587 2,915 19,662 2,316
	$ 6,485,039

72

LIABILITIES AND EQUITY Current borrowings Financial liabilities at fair value through profit or loss, current Contract liabilities, current Notes payable Accounts payable Other payables Lease liabilities, current Long-term borrowings, current portion Other current liabilities, other Long-term bank loans Lease liabilities, non-current Long-term accounts payable Net defined benefit liabilities, non-current Guarantee deposits received Total liabilities Equity C. Gain on disposal of the subsidiary Consideration received The fair value of the remaining investment of proceeds from the disposal of the subsidiary Net assets of the subsidiary Reclassification of equity to profit and loss the date control was lost Effect of exchange rate changes Gain on disposal D. Net cash inflow on disposal of the subsidiary Received in cash and cash equivalents Less: Cash and cash equivalent balances disposed of	June 30, 2019
	$ 1,846,237 61,559 264 18,718 303,989 106,724 1,007 288,629 14 2,371,782 50,580 2,411 4,730 228
	$ 5,056,872
	$ 1,428,167
	Amount
	$ 857,756 571,267 (1,428,167) 47,865 (125)
	$ 48,596
	For the Six-month Ended June 30, 2019
	$ 857,756 67,578
	$ 790,178

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(26) Non-cash transactions

For the years ended December 31, 2020 and 2019, the Group entered into the

following non-cash investing and financing activities:

Unrealized gain/loss on financial instrument Exchange difference arising from the translation of the foreign operations	For the Year Ended December 31,2020 $ 8,798 $ (181,393)	For the Year Ended December 31,2019
		$ 16,146
		$ 205,354

(27) Capital management

The Group’s capital is based on the industrial characteristics, development of

the Group and the operating environment to manage the capital to operate the business. The Group’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

(28) Financial instruments

A. categories of financial instruments

Financial assets Cash and cash equivalents Financial assets at fair value through profit or loss Financial assets at amortized cost, current Notes and accounts receivable, including related-parties Other receivables Other financial assets Financial assets at fair value through other comprehensive income, non-current Guarantee deposits paid Total	December 31, 2020 $ 252,026 2 240,698 660,514 46,538 28,828 114,780 1,091 $ 1,344,477	December 31, 2019
		$ 621,921 643 60,668 892,647 14,012 18,792 159,836 1,151
		$ 1,769,670

74

December 31, 2020 Financial liabilities Current borrowings $ 1,540,242 Short-term notes and bills payable 49,951 Financial liabilities at fair value through profit or loss 10,077 Notes and accounts payable 304,037 Other payables and Long-term accounts payable 155,181 Bonds payable (including current portion) 20,0000 Long-term bank loans (including current portion) 89,665 Guarantee deposits received 2,181 Lease liabilities (current and non-current) － Total $ 2,351,334	December 31, 2019
	$ 1,783,570 49,965 1,464 524,658 186,690 200,000 299,170 6,454 4,948
	$ 3,056,919

B. Financial risk management objectives

The Group seeks to ensure sufficient cost-efficient funding readily available when needed. The Group manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

The plans for material treasury activities are reviewed by the Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, corporate Treasury function must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

C. Market risk

The Group is exposed to financial market risks, primarily changes in foreign currency exchange rates and interest rates. The Group uses some derivative financial instruments to manage those risks.

75

(A) Foreign currency risk

Most of the Group’s revenues and expenditures are denominated in foreign currencies. Consequently, the Group is exposed to foreign currency risk. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Group uses derivative financial instruments, such as forward exchange contracts and cross-currency swaps, and non-derivative financial instruments, such as foreign currency-denominated debt, to partially hedge the Group’s existing and certain forecasted currency exposure. These hedges will offset only a portion of, but do not eliminate, the financial impact from movements in foreign currency exchange rates.

The Group uses derivative financial instruments short less than six months, and that doesn’t meet the condition of hedge accounting.

Because of the strategic investment, the Company doesn't use any method to manage the risk in the invest foreign operating agencies.

The following was the summary of significant foreign currency assets and liabilities.

and liabilities.
Financial assets Foreign currency USD EUR THB RMB Financial liabilities Foreign currency USD EUR RMB SEK	December 31, 2020
	Foreign currency 8,822,185 825,258 853,616 36,488 53,053,658 96,549 7,750 10,150	Rate 28.48 35.02 0.96 4.38 28.48 35.02 4.38 3.48	NTD (in thousands)
			251,256 28,901 819 160 1,510,968 3,381 34 35

76

December 31, 2019

Financial assets Foreign currency USD EUR THB RMB Financial liabilities Foreign currency USD EUR SEK	Foreign currency 6,384,709 2,868,771 835,616 36,488 46,239,071 35,383 7,750	Rate 29.98 33.59 1.01 4.31 29.98 33.59 4.31	NTD (in thousands)
			191,414 96,362 844 157 1,386,247 1,189 33

The above information is based on the carrying amount and translated to the functional currency.

For the years ended December 31,2020 and 2019, the Group recognized

foreign exchange gains were 30,883 thousand and 67,317 thousand, respectively.

The Group’s sensitivity analysis of foreign currency risk mainly focuses on the foreign currency monetary items and the derivatives financial instruments at the end of the reporting period. Assuming favorable or unfavorable 1% movement in the levels of foreign exchanges relative to the New Taiwan dollar, the net income for the years ended December 31, 2020 and 2019 would have increased or decreased by 12,597 thousand and 11,948 thousand, respectively. The equity of the Group would have increased or decreased by 10,078 thousand and 9,558 thousand, respectively.

77

(B) Interest rate risk

The Group is exposed to interest rate risk arising from borrowing at floating interest rates. As the interest rates of the Group’s short-term and long-term bank loans are floating, changes in interest rates would affect the future cash flows but not the fair value.

At the reporting dates, a change of 1% of interest rate in a reporting period could cause the profit for the years ended December 31, 2020 and 2019 to decrease/increase by 4,070 thousand and 5,208 thousand, respectively.

D. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Group. The Group is exposed to credit risks from operating activities, primarily trade receivables. Credit risk is managed separately for business-related and financial-related exposures.

(A) Business related credit risk

The majority of the Group’s outstanding trade receivables are not covered by collaterals or guarantees. While the Company has procedures to monitor and manage credit risk exposure on trade receivables, there is no assurance such procedures will effectively eliminate losses resulting from its credit risk. The Group uses other methods to manage this risk, like prepaid from the client, insurance, and so on. The Group believes the concentration of credit risk is not material for the remaining accounts receivable.

(B) Financial credit risk

This risk of the bank deposit and investment in financial instruments are managed by the financial department of the Group. The Group mitigates the credit risks from financial institutions by limiting its counterparties to only reputable domestic or international financial institutions with good credit standing and spreading its holdings among various financial institutions. The Group’s exposure to credit risk arising from the default of counter-parties is limited to the carrying amount of these instruments. The Group believes the concentration of this risk is not material.

78

E. Liquidity risk management

The objective of liquidity risk management is to ensure the Group has sufficient liquidity to fund its business operations.

The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments, including principal and interest.

and interest.
Non-derivative financial liabilities Current borrowings Short-term notes and bills payable Notes and accounts payable Other payables Bonds payable Long-term bank loans Guarantee deposits received Total Derivative financial instruments Forward exchange contracts Non-derivative financial liabilities Current borrowings Short-term notes and bills payable Notes and accounts payable Other payables Lease liabilities Bonds payable Long-term bank loans Guarantee deposits received Total Derivative financial instruments Forward exchange contracts		December 31,2020
	Less than 1 Year	2～3 Years	4～5 Years	5+ Years	Total
	$ 1,577,908 50,00 304,037 155,181 200,000 53,564 －	$ － － － － － 37,861 2,181	$ － － － － － － －	$ － － － － － － －	$ 1,577,908 50,00 304,037 155,181 200,000 91,425 2,181
	$ 2,340,690	$ 40,042	$ －	$ －	$ 2,380,732
	$ 10,077	$ －	$ －	$ －	$ 10,077
	Less than 1 Year	2～3 Years	4～5 Years	5+ Years	Total
	$ 1,801,406 50,00 524,658 186,690 3,804 － 67,488 －	$ － － － － 1,260 200,000 76,909 6,454	$ － － － － － － 193,200 －	$ － － － － － － － －	$ 1,801,406 50,00 524,658 186,690 5,064 200,000 337,597 6,454
	$ 2,634,046	$ 284,623	$ 193,200	$ －	$ 3,111,869
	$ 1,464	$ －	$ －	$ －	$ 1,464

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• F. Fair value of financial instruments

• (A) The evaluated fair value of financial instruments doesn’t include cash and cash equivalents, accounts receivable, other financial assets, current borrowings and accounts payable. The carrying amount and fair value of those financial assets and liabilities for financial instruments are not measured at fair value whose carrying amount is reasonably close to the fair value. We cannot confirm when we can receive or pay the guarantee deposits received and paid, so the fair value was the carrying amount.

• (B) Fair value measurements recognized in the consolidated balance sheets Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

  • Level 1 ： fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

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

  • Level 3 ： fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table presents the Group’s financial assets and liabilities

measured at fair value on a recurring basis:

Financial assets at FVTPL Derivative financial instruments Financial assets at FVTOCI Investment in publicly trade stocks Investment in non-publicly trade stocks Total Financial liabilities at FVTPL Derivative financial instruments		December 31, 2020	December 31, 2020
	Level 1	Level 2	Level 3	Total
	$ －	$ 2	$ －	$ 2
	$ 7,745 －	$ － －	$ － 107,035	$ 7,745 107,035
	$ 7,745	$ －	$ 107,035	$ 114,780
	$ －	$ 10,077	$ －	$ 10,077

80

Financial assets at FVTPL Derivative financial instruments Financial assets at FVTOCI Investment in publicly trade stocks Investment in non-publicly trade stocks Total Financial liabilities at FVTPL Derivative financial instruments		December 31,2019	December 31,2019
	Level 1	Level 2	Level 3	Total
	$ －	$ 643	$ －	$ 643
	$ 49,438 －	$ － －	$ － 110,398	$ 49,438 110,398
	$ 49,438	$ －	$ 110,398	$ 159,836
	$ －	$ 1,464	$ －	$ 1,464

Valuation techniques and assumptions are as followed,

a. Level 1

Level 1
Market value	Investment in publicly trade stocks Closing price	Funds
		Net value

b.Level 2

Level 2
Item Derivative financial instruments－Forward exchange contracts	Valuation techniques and assumptions
	Forward exchange contracts are measured using forward exchange rates and the discounted yield curves that are derived from quoted market prices.

c. Level 3

The fair values of non-publicly traded equity investments are mainly determined by using the asset approach or dividend recovery.

During the years ended December 31, 2020 and 2019, there were no significant transfers between Level 1 and Level 2 fair value measurements. Reconciliations for fair value measurement in Level 3 fair value hierarchy were as follows:

Balance at Jan.1 Recognized in other comprehensive income Addition Exchange effect As of Dec.31	For the Years Ended December 31	For the Years Ended December 31
	2020 $ 110,398 1,530 － (4,893) $ 107,035	2019
		$ 42,842 6,880 60,600 76
		$ 110,398

81

7. RELATED-PARTY TRANSACTIONS

• (1) Name and relationship with related parties

The following are entities that have had transactions with the related party during the periods covered in the consolidated financial statements.

Related parties Relationships Joint Force International Co., Ltd. (JF) An associate Jin Hai Hardware Co., Ltd. (Jin Hai) An associate TY Steel Co., Ltd. (TY) An associate Huang Hwa Hai Xin Hardware Products An associate Co., Ltd. (Hai Xin) Hurco Automation Co., Ltd. (Hurco) An associate Huang Wen Sung The other related party

All directors and the main management

• (2) Significant transactions with related parties

A. Sales

Sales
Associates TY Others Total	For the Year Ended December 31,2020		For the Year Ended December 31,2019
	Amount	%	Amount	%
	$ 920,187 118,715	12 1	$ 136,721 101,516	1 1
	$ 1,038,902	13	$ 238,237	2

The items of the trade to related parties were not significantly different from those of sales to third parties.

B. Purchases

Purchases
Associates TY Others Total	For the Year Ended December 31,2020		For the Year Ended December 31,2019
	Amount	%	Amount	%
	$ 2,406,754 1,128	33 －	$ 2,260,735 1,108	20 －
	$ 2,407,882	33	$ 2,261,843	20

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No significant difference in terms of trade with the non-human relationships between the associates.

C. Account Received

Account Received
Associates TY Others Total	December 31,2020		December 31,2019
	Amount	%	Amount	%
	$ 76,105 29,959	13 5	$ 95,109 4,831	11 1
	$ 106,064	18	$ 99,940	12

• D. Account payable

Account payable
Associates TY	December 31,2020		December 31,2019
	Amount	%	Amount	%
	$ 5,836	3	$ 307,444	71

• E. Other receivables

Other receivables
Associates TY Others Total Other payables Associates Others	December 31,2020		December 31,2019
	Amount	%	Amount	%
	$ 4,725 30,665	10 66	$ 1,877 －	13 －
	$ 35,390	76	$ 1,877	13
	December 31,2020
	Amount	%	Amount	%
	$ 726	－	$ －	－

F. Other payables

83

• G. Tycoons Worldwide Group (Thailand) Public Co., Ltd. Acquired 8.70% of the shares of Thai Union Fasteners Company Ltd. From the other related party. The acquired amount was THB 60,000 (NTYD$60,668 thousand). It was recognized as Financial assets at FVTOCI.

• H. As of December 31, 2020, the Group provided an endorsement guarantee for the associate TY Steel Co., Ltd. and used its equity holdings as a guarantee. Please refer to note 13, table 2 for details.

(3) Compensation of key management

The compensation to directors and other key management personnel were as follows:

follows:
Short-term employee benefits Post-employment benefits Total	For the Year Ended December 31, 2020	For the Year Ended December 31, 2019
	$ 28,153 1,228 $ 29,381	$ 27,625 7,048
		$ 34,673

8. MORTGAGED OR PLEDGED ASSETS

The Group’s assets mortgaged or pledged as collateral for long-term borrowings

and short-term borrowings were as follows:

Item Financial assets amortized cost Inventories Other financial assets Property, plant and equipment Right-of-use assets Investment accounted for using the equity method	Guarantee purpose Long-term and short-term loan － － － － －	December 31, 2020 $ 227,859 183,991 10,036 2,472,182 20,163 234,119	December 31, 2019
			$ 60,668 107,656 － 2,360,676 19,820 500,943

The Group provided 319,700 thousand shares of Tycoons Worldwide Group (Thailand) Public Co., Ltd., as a guarantee due to long-term borrowings. The Group has settled this loan on June 10, 2019 and in October 2019, the pledge removal procedure was completed.

84

9. COMMITMENTS AND CONTINGENT LIABILITIES

• (1) As of December 31, 2020 and 2019, the balances of unused letters of credit for the Company were USD 13,074 and USD 266 thousand, respectively.

• (2) As of December 31, 2020 and 2019, the Company provided guarantee note deposits were $372,200 thousand and $207,200 thousand, to the banks as securities against credit facilities, respectively.

• (3) As of December 31, 2020 and 2019, Tycoons Worldwide Group (Thailand) Public Co., Ltd. had raw material purchase commitments amounting to USD 38 million and USD 13 million. The materials will be shipped to the company within 67 ～ 122 days from the contract date.

• (4) As of December 31, 2020 and 2019, Tycoons Worldwide Group (Thailand) Public Co., Ltd. had outstanding bank guarantees amounted to all Baht 57 million, issued by banks on behalf of the company in respect of certain performance bonds for electricity and others.

• SUBSEQUENT LOSSES: None.

11. SUBSEQUENT EVENTS: None.

1. OTHER: None.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Financings provided: Please refer to table 1.

• B. Endorsements and guarantees provided: Please refer to table 2.

• C. Marketable securities held at the ended of period (excluding investments in subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Marketable securities acquired and disposed of at costs or prices of at least $300 million or 20% of the paid-in capital: Please refer to table 4.

• E. Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None.

• F. Disposal of real individual estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None.

• G. Total purchases from or sales to related parties of at least $100 million or 20% of the paid-in capital: Please refer to table 5.

• H. Receivables from related parties amounting to at least $100 million or 20% of the paid-in capital: None.

85

• I. Information about the derivative financial instruments transaction: Please refer to 6(2).

• J. The business relationship between the parent and subsidiaries and significant

transactions between them: Please refer to table 6.

(2) Information on investees

Names, locations, and related information of investees over which the company exercises significant influence (excluding information on investment in mainland China): Please refer to table 7.

(3) Information on investments in mainland China: Please refer to table 8.

• (4) Major shareholders information: Please refer to table 9.

86

TABLE 1

FINANCING PROVIDED

														Amou	nts in thousands of	New Taiwan dollars
No. (Note 1)	Financing Company	Counter-party	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 5)	Ending Balance (Note 4)	Amount Actually Drawn	Interest Rate (%)	Nature for Financing (Note 2)	Transaction Amounts (Note 7)	Reason for Financing	Loss allowance	Colla	teral	Financing Limits for Each Borrowing Company (Note 3)	Financing Company's Total Financing Amount Limits (Note 3)
													Item	Value
0	Tycoons Group Enterprise Co.,Ltd.	Tycoons Group International Co.,Ltd.	Other receivables-rela tedparties	Yes	429	74,048	－	－	2	－	Advance payment and business turnover	－	None	None	1,634,440	1,634,440
		TY Steel Co.,Ltd.	Other receivables-rela ted parties	Yes	－	1,000	－	－	2	－	Advance payment	－	None	None	1,634,440	1,634,440
		Tycoons Vietnam Co.,Ltd.	Other receivables-rela ted parties	Yes	－	1,000	－	－	2	－	Advance payment	－	None	None	1,634,440	1,634,440
		Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Other receivables-rela ted parties	Yes	260	1,000	45	－	2	－	Advance payment	－	None	None	1,634,440	1,634,440
1	Tycoons Group International Co.,Ltd.	Viettycoons Steel Co.,Ltd.	Other receivables-rela tedparties	Yes	12,092	5,696	5,696	－	2	－	Short－term financing	－	None	None	1,276,610	1,276,610
		Tycoons Group Enterprise Co.,Ltd.	Other receivables-rela ted parties	Yes	170,476	341,760	160,178	－	2	－	Short－term financing	－	None	None	1,276,610	1,276,610
2	Huanghua Jujin Hardware Products Co.,Ltd.	Huanghua Haixin Hardware Products Co., Ltd.	Other receivables-rela ted parties	Yes	30,665	30,665	30,665	5.79	2	－	Short－term financing	－	None	None	243,468	243,468
3	Yuan Zhen Investment Co.,Ltd.	Tycoons Group Enterprise Co.,Ltd.	Other receivables-rela tedparties	Yes	58,000	5,000	5,000	－	2	－	Short－term financing	－	None	None	2,196	2,196

Note 1 ： The Company and its subsidiaries are coded as follows:

1. The Company is coded “0”.

2. The subsidiaries are coded consecutively beginning from ”1” in the order presented in the table above.

3. Note 2：Nature for financing is coded as follows:

4. Bussiness transactions.

5. Short-term financing .

6. Note 3：The company's financing provided limit for individually objects is the individual specified percentage of the net assets value of the latest financial statement (2020.12.31). The total financing provided limit is 40% of the net assets value of the latest financial statement (2020.12.31).

7. Note 4：If a public company makes a loan to the board of directors on a case-by-case basis in accordance with Article 14 (1) of the Regulations Governing Loaning of Funds and Making of Endorsements / Guarantees by Public Companies, even though it has not yet allocated funds, the amount of the board resolutions shall be included in the announcement balance to reveal its bear the risk; but after the fund is repaid, the balance after the repayment should be disclosed to reflect the adjustment of risk. If the public offering company authorizes the chairman of the board of directors to approve the loan in a certain amount and within one year in accordance with Article 14 (2) of the Regulations Governing Loaning of Funds and Making of Endorsements / Guarantees by Public Companies, the fund loan and the amount approved by the board of directors shall still be used as the announced balance. Although the funds will be repaid thereafter, it is still possible to allocate the loan again, so the fund loan and quota approved by the board of directors should still be used as the announced balance.

8. Note 5：The maximum balance is the maximum amount spent in the current period .

9. Note 6：When preparing this consolidated financial statement, it has been written off.

10. Note 7：If the nature of financing provided is a business transaction, the amount of the business transaction should be entered. The amount of business transactions refers to the amount of business transactions between the company that lends funds and the loanee in the latest year.

87

TABLE 2

ENDORSEMENTS / GUARANTEES PROVIDED

									Amounts in Thou	sands of New Taiwan	Dollars and Foreign Currencies in Dollars	Dollars and Foreign Currencies in Dollars	Dollars and Foreign Currencies in Dollars
No. (Note 1)	Endorsement / Guarantee Provider	Guaranteed Party		Limits on Endorsement / Guarantee Amount Provided to Each Guaranteed Party (Note 3)	Maximum Balance for the Period (Note 4)	Ending Balance (Note 4、Note 5)	Amount Actually Draw (Note 6)	Amount of Endorsement / Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement / Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement / Guarantee Amount Allowable (Note 3)	Guarantee Provided by Parent Company (Note 7)	Guarantee Provided by A Subsidiary (Note 7)	Guarantee Provided to Subsidiaries in Mainland China (Note 7)
		Name	Nature of Relationship (Note 2)
0	Tycoons Group Enterprise Co.,Ltd.	Tycoons Group International Co.,Ltd.	2	8,172,200	USD －	USD －	NTD －	－	－	10,215,250	Y	－	－
		Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	3	8,172,200	THB 2,367,500,000 USD 36,520,000 NTD －	THB 2,367,500,000 USD 36,520,000 NTD －	NTD 934,131	－	22.86%	10,215,250	Y	－	－
		TY Steel Co.,Ltd.	Note8	8,172,200	USD 61,200,000 THB 850,000,000	USD 61,200,000 THB 850,000,000	NTD 2,128,415	－	52.09%	10,215,250	－	－	－
1	Tycoons Group International Co.,Ltd.	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	2	4,787,290	THB 880,000,000	THB 880,000,000	NTD －	－	－	6,383,054	－	－	－
		Tycoons Group Enterprise Co.,Ltd.	4	4,787,290	NTD －	NTD －	NTD －	－	－	6,383,054	－	Y	－
		TY Steel Co.,Ltd.	6,Note8	4,787,290	THB 244,193,650	THB 244,193,650	NTD 231,535	NTD 231,535	7.25%	6,383,054	－	－	－
2	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	TY Steel Co.,Ltd.	6	3,776,527	THB 891,010,320	THB 891,010,320	NTD 844,821	NTD 844,821	22.37%	5,664,790	－	－	－

• Note 1 ： The Company and its subsidiaries are coded as follows:

• The Company is coded “0”.

• The subsidiaries are coded consecutively beginning from ”1” in the order presented in the table above.

• Note 2：According to the “Guidelines Governing the Preparation of Financial Reports by Securities Issuers” issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:

• A company with which it does business.

• A company in which the public company directly hold more than 50% of the voting shares.

• A company in which the public company and its subsidiaries directly holds more than 50% of the voting shares.

• A company that directly and indirectly holds more than 50 % of the voting shares in the public company.

• A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

• A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages.

• Note 3：1. The company's endorsements / guarantees limit for individual objects is the individually specified percentage of the net value of the latest financial statement (2020.12.31). (Tycoons Group Enterprise Co.,Ltd.:200% ， Tycoons Group International Co.,Ltd.:150% ， Tycoons Worldwide Group (Thailand) Public Co.,Ltd.:100% ， TY Steel Co.,Ltd.:100%)

• The maximum of the company's endorsements / guarantees limit is the individually specified percentage of the net value of the latest financial statement (2020.12.31). (Tycoons Group Enterprise Co.,Ltd.:250% ， Tycoons Group International Co.,Ltd.:200% ， Tycoons Worldwide Group (Thailand) Public Co.,Ltd.:150% ， TY Steel Co.,Ltd.:150%)

• Note 4：The maximum endorsement guarantee balance for the current period and the end endorsement guarantee balance at the end of the period are the quota, not the actual transfer amount .

• Note 5：As of the end of the year, every company that has signed an endorsement guarantee contract or bill to the bank for approval, shall assume the responsibility of endorsement or guarantee; in addition, other related endorsement guarantees shall be included in the balance of the endorsement guarantee .

• Note 6：It should enter the actual amount spent by the endorsed company within the range of the endorsed guarantee balance.

• Note 7：Under the circumstance where the TSE or OTC listed parent company endorses or guarantees its subsidiaries, the subsidiary endorses or guarantees its TSE or OTC listed parent company or the endorsement and guarantee is made in mainland China, “Y” shall be filled in.

• Note 8：Tycoons Group International Co., Ltd. completed the equity transfer in June of 2019, resulting in the reduction of the combined shareholding ratio to 33.05%. In addition, after the election of directors of TY Steel Co.,Ltd. on July 3, 2019. the group no longer holds a majority of its board of directors, and it is assessed that it has lost control of the company.

88

TABLE 3

MARKETABLE SECURITIES HELD

Amounts in Thousands of New Taiwan Dollars and Foreign Currencies in Dollars

Held Company Name	Marketable Securities Type and Name (Note 1)	Marketable Securities Type and Name (Note 1)	Relationship with the Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note (Note 3)
					Shares / Units	Carrying Value (Note 2)	Percentage of Ownership	Fair Value
Tycoons Group Enterprise Co.,Ltd.	Common stock	Horizon Securities Co.,Ltd.	－	Financial assets at fair value through other comprehensive income, non-current	673,469	7,745	0.2%	7,745	Note 5
Tycoons Group International Co.,Ltd.	Common stock	JinHai Hardware Company Limited	－	Financial assets at fair value through other comprehensive income, non-current	4,354,875	43,076	18.19%	THB 45,360,201	Note 4
Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Common stock	Thai Union Fastener Co.,Ltd.	－	Financial assets at fair value through other comprehensive income, non-current	6,000,000	63,959	8.7%	THB 67,349,506	Note 4

Note 1 ： The securities mentioned in this table refer to stocks, bonds, beneficiary certificates and securities derived from the above items that fall within the scope of International Financial Reporting Standard No. 9 "Financial Instruments".

Note 2：If measured by fair value, please fill in the book value after the fair value evaluation adjustments and deduct the allowance loss; if it is not measured by fair value, please fill in the amortized cost (after deducting the allowance loss) ) of the book balance.

Note 3：The listed securities have users who are restricted due to the provision of guarantees, pledged loans, or other agreed-upon agreements. The remarks column should indicate the number of guarantees or pledged shares, the amount of guarantees or pledges, and the circumstances of restricted use.

Note 4：There is no public market price, which is determined by the net equity value or by evaluation.

Note 5：The market price is the closing price on December 31, 2020.

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TABLE 4

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

Amounts in Thousands of New Taiwan Dollars and Foreign Currencies in Dollars

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counter-par ty	Nature of Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Shares / Units	Amount	Shares / Units	Amount	Shares / Units	Amount	Carrying Value (Note)	Gain / Loss on Disposal	Shares / Units	Amount (Note)
Tycoons Group Enterprise Co.,Ltd.	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Investments accounted for using equity method	Public Exchange Market	Subsidiary	23,104,000	102,111	2,466,000	13,526	25,570,000	155,943	87,217	－	－	－
Tycoons Group Internationa l Co.,Ltd.	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Investments accounted for using equity method	Public Exchange Market	Subsidiary	438,019,692	USD106,398,277	11,760,000	USD 729,054	30,256,000	USD 6,852,017	USD 6,744,028	－	419,523,692	USD 93,219,761

Note: Including various adjustments such as the use of the equity method to recognize the share of the profit and loss of the subsidiary and the conversion difference of the foreign operating agency's financial statements.

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TABLE 5

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$ 100 MILLION OR 20% OF THE PAID-IN CAPITAL

							Amounts in Thousands of New Taiwan Dollars	Amounts in Thousands of New Taiwan Dollars	Amounts in Thousands of New Taiwan Dollars	Amounts in Thousands of New Taiwan Dollars
Company Name	Related Party	Nature of Relationships		Transaction Details			Details of non-arm's length transaction		Notes and Accounts receivable (payable)
			Purchases / Sales	Amount	Percentage of total purchases (sales)	Payment Terms	Unit Price	Payment Terms	Ending Balance	Percentage of total receivables (payable)
Tycoons Group Enterprise Co.,Ltd.	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Subsidiary	Sales Purchases	109,944 269,597	9% 49%	30~120days 30~120days	No significant difference	No significant difference	50,115 －	84% －
Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	TY Steel Co.,Ltd.	Associate	Sales Purchases	906,768 2,406,754	16% 44%	30~120days 30~120days	No significant difference	No significant difference	66,000 5,836	17% 2%
	JinHai Hardware Company Limited	Associate	Sales	117,098	2%	30~120days	No significant difference	No significant difference	29,959	8%
HuangHua Jujin Hardware Products Co.,Ltd.	HuangHua Jujin Import & Export Trading Co.,Ltd.	Subsidiary	Sales	123,808	10%	30~120days	No significant difference	No significant difference	－	－

Note 1 ： It has been written off when preparing the consolidated financial statements.

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TABLE 6

THE BUSSINESS RELATIONSHIP BETWEEN THE PARENT AND SUBSIDIARIES AND SIGNIFICANT TRANSACTIONS BETWEEN THEM

					Amounts in Thousands of New Taiwan Dollars	Amounts in Thousands of New Taiwan Dollars	Amounts in Thousands of New Taiwan Dollars
No. (Note 1)	Company Name	Counter-party	Nature of Relationships (Note 2)		Transaction Details
				Financial Statement item	Amount	Transaction Terms	Percentage of consolidated revenue or assets % (Note 3)
0	Tycoons Group Enterprise Co.,Ltd.	Tycoons Group International Co.,Ltd.	1	Other receivables Other payables	174,998 160,178	Refer to the transaction conditions of other customers . Interest-free borrowing	2 2
		Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	1	Sales Accounts receivables Advance payment Purchases	109,944 50,115 821,654 269,597	Refer to the transaction conditions of other customers . Payment terms is about 30~120 days. Refer to the transaction conditions of other customers . Refer to the transaction conditions of other customers .	1 1 10 3
1	Tycoons Group International Co.,Ltd.	Viettycoons Steel Co.,Ltd.	3	Other receivables	5,696	Interest-free borrowing	－
2	HuangHua Jujin Hardware Products Co.,Ltd.	HuangHua Jujin Import & Export Trading Co.,Ltd.	3	Sales Contract liabilities	123,808 16,177	Refer to the transaction conditions of other customers . Refer to the transaction conditions of other customers .	2 －

Note 1 ： The Company and its subsidiaries are coded as follows:

1. The Company is coded “0”.

2. The subsidiaries are coded consecutively beginning from ”1” in the order presented in the table above.

3. Note 2：The relationship with the trader has the following three types:

4. Parent company to a subsidiary.

5. Subsidiary to the parent company .

6. Subsidiary to subsidiary.

7. Note 3：For the calculation of the ratio of the transaction amount to consolidated revenue or assets, if it is an asset-liability item, it is calculated by the balance at the end of the period in the consolidated assets; if it is a profit and loss item, it is calculated by the cumulative amount in the period as a share of the consolidated revenue.

8. Note 4：It has been written off when preparing the consolidated financial statements.

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TABLE 7

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE

						Amounts in Thousands of New Taiwan Dollars and	Amounts in Thousands of New Taiwan Dollars and	Amounts in Thousands of New Taiwan Dollars and	Amounts in Thousands of New Taiwan Dollars and	Foreign Currencies in Dollars	Foreign Currencies in Dollars
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment		Balance as of December 31, 2020			Net Income (Losses) of the Investee	Shares of Profits / Losses of Investee	Notes
				December 31, 2020	December 31, 2019	Shares	Percentage of Ownership	Carrying value
Tycoons Group Enterprise Co.,Ltd.	Tycoons Group International Co.,Ltd.	Cayman	Holding	5,467,641	5,752,191	182,650,140	100.00%	3,188,454	USD(7,972,283)	(238,101)	Subsidiary
	Yuan Zhen Investment Co.,Ltd.	Taiwan	Investing	31,850	82,850	3,185,000	100.00%	5,489	4,434	4,434	Subsidiary
	Hurco Automation, Ltd.	Taiwan	Design, manufacture, sale and distribution of industrial controllers	42,077	42,077	4,207,707	35.00%	131,966	3,645	1,276	Associate
	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Thailand	Production, processing and sales of wire rod, wires, screws, bolts and other related products	－	144,882	－	－	(1,766)	THB (321,048,881)	(8,546)	Subsidiary
Tycoons Group International Co.,Ltd.	Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Thailand	Production, processing and sales of wire rod, wires, screws, bolts and other related products	THB 3,964,750,128	THB 4,257,684,147	419,523,692	70.3%	USD93,219,761	THB (321,048,881)	THB (234,943,571)	Subsidiary
	Kingford International Limited	Samoa	Holding	USD 5,931,051	USD 5,938,051	5,938,051	100.00%	USD12,823,784	USD 1,860,103	USD 1,860,103	Subsidiary
	Viettycoons Steel Co.,Ltd.	Vietnam	Production and sales of cold-rolled steel products, pickled steel coils, galvanized hot-rolled steel coils, various steel meshes, wire meshes, bolts, screws, rivets, screws, nuts, and scissors	USD 6,000,000	USD 6,000,000	USD 6,000,000 (investment amount)	100.00%	USD1,069,147	VND (2,770,615,167)	VND (2,770,615,167)	Subsidiary
	TY Steel Co.,Ltd.	Thailand	Steel billet production and sales	USD 4,928,790	USD 4,336,000	24,419,365	9.43%	USD1,920,324	THB (885,492,724)	THB (77,756,414)	Associate
	Tycoons Group (Samoa) Holding Ltd.	Samoa	Holding	USD 700,000	USD 700,000	700,000	100.00%	USD1,094,387	USD (59,677)	USD (59,677)	Subsidiary
Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	TY Steel Co.,Ltd.	Thailand	Steel billet production and sales	THB798,806,320	THB730,662,970	79,880,632	30.84%	THB188,942,279	THB (885,492,724)	THB (257,656,435)	Associate
Tycoons Group (Samoa) Holding Ltd.	Tycoons Vietnam Co.,Ltd.	Vietnam	Wire production and sales business	USD 699,800	USD 699,800	USD 699,800 (investment amount)	100.00%	USD1,094,324	VND (1,384,382,688)	VND (1,384,382,688)	Subsidiary

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TABLE 8

INFORMATION ON INVESTMENT IN MAINLAND CHINA

1.The detail of the investment in mainland China: Amounts in Thousands of New Taiwan Dollars and Foreign Currencies in Dollars

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2020	Net Income (Loss) of Investee Company	Percentage of Ownership	Shares of Profits / Losses (Note 2)	Carrying Amount as of December 31, 2020	Accumulated Inward Remittance of Earnings as of December 31, 2020
					Outflow	Inflow
HuangHua Jujin Hardware Products Co.,Ltd.	Production, processing and sales of wires, screws, bolts and other related products	$ 357,456 (CNY 81,667,000)	Note1	$ 168,916 (USD 5,931,028)	－	－	$ 168,916 (USD 5,931,028)	$ 98,805 (CNY 22,573,612)	60.00%	$ 55,911 (USD 1,963,150)	$ 365,203 (USD 12,823,150)	$ 177,347 (USD 6,227,069)

2.Limit of the investment in mainland China:

2.Limit of the investment in mainland	China:
Accumulated Investment in Mainland China as of December 31, 2020 (Note 3)	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
$ 168,916 ( USD 5,931,028 )	$ 168,916 ( USD 5,931,028 )	2,451,660

Note 1 ： Indirectly investment in Mainland China through the Kingford International Limited registered in a third region.

Note 2：The investment profit / loss column recognized in the current period is based on the company's audited financial statements. Note 3：Accumulated investment amounts denominated in foreign currencies are translated into New Taiwan Dollars using the spot rates at the financial report date. ( USD 1 ： 28.48 , CNY 1 ： 4.377 ) Note 4：According to the regulations of the Investment Commission of the Ministry of Economic Affairs, the upper limit of the cumulative amount of its investment in the mainland is 60% of the net value.

3.Significant direct or indirect transactions with investee companies, the prices and terms of payment, unrealized gain or loss, and other related

information which is helpful to understand the impact of investment in Mainland China on financial reports: None.Limit of the investment in mainland China: None.

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4. Note:

In order to meet actual business needs, the Company plans to invest in mainland China. It was approved by the shareholders' meeting on May 16, 2003, and the board of directors was authorized to decide on investment matters within the scope of the competent authority and relevant laws and regulations. The Company's board of directors resolved on October 22, 2003, that TYCOONS GROUP INTERNATIONAL CO., LTD., a subsidiary in the British Cayman Islands, would invest USD 2,180,000 in KINGFORD INTERNATIONAL LIMITED, Western Samoa, and then indirectly invest USD 2,180,000 in mainland China. Huanghua Jujin Hardware Products Co., Ltd. is engaged in the processing, production and sales of spherical wires, screws and other products. This investment case was approved by the Investment Review Committee of the Ministry of Economic Affairs on November 20, 2003. Letter No. 092035790 Approved. The Company's board of directors decided on November 21, 2003, to increase its investment in Western Samoa KINGFORD INTERNATIONAL LIMITED with its own funds of US$2,305,266 of TYCOONS GROUP INTERNATIONAL CO., LTD. in the third region investment business British Cayman Islands, and indirectly with US$2,300,000. Invested in Huanghua Jujin Hardware Products Co., Ltd., an investment enterprise in mainland China. This investment case was approved by the Investment Review Committee of the Ministry of Economic Affairs by letter No. 092040150 on December 26, 2003. In addition, the Company makes the resolution of the board of directors on January 6, 2005, to increase its investment in Western Samoa KINGFORD INTERNATIONAL LIMITED with its own funds of 1,452,785 U.S. dollars in the third region investment business British Cayman Islands, and at 1,451,028 U.S. dollars indirect investment in Huanghua Jujin Hardware Products Co., Ltd., an investment enterprise in the mainland China, was approved by the Investment Review Committee of the Ministry of Economic Affairs by letter No. 094001032 on January 19, 2005. Huanghua Jujin Hardware Products Co., Ltd. remitted the 2017 cash dividend of US$1,204,908.89 yuan by the 2018 board of directors. This case was approved by the Investment Review Committee of the Ministry of Economic Affairs on August 8, 2018, with Shen Er Zi No. 10700173720. Huanghua Jujin Hardware Products Co., Ltd. resolved the 2017 board of directors to repatriate the 2016 cash dividend amounting to US$ 793,522.51. The case was approved by the Investment Review Committee of the Ministry of Economic Affairs on July 4, 2017, with the letter No. 10600139400. Huanghua Jujin Hardware Products Co., Ltd. was resolved by the board of directors in 2015 to repatriate the cash dividends of US$2,528,804.84 from 2003 to 2015. This case was approved by the Investment Review Committee of the Ministry of Economic Affairs on March 15, 2016, with No. 10500047010 . Huanghua Jujin Hardware Products Co., Ltd. was approved by the board of directors in 2019 to distribute cash dividends totaling USD 767,981.38. The case was approved by the Investment Review Committee of the Ministry of Economic Affairs on September 17, 2019, with the letter No. 10800233150. Huanghua Jujin Hardware Products Co., Ltd. was approved by the board of directors in 2020 to distribute cash dividends totaling US$931,851.19. This case was approved by the Investment Review Committee of the Ministry of Economic Affairs on March 18, 2020, with the letter No. 10900072630.

95

TABLE 9

MAJOR SHAREHOLDERS INFORMATION

December 31, 2020

Names	Number of Shares held	Percentage of shareholding
Yisheng Investment Co.,Ltd.	39,583,165	8.25%
Hengsha Investment Co.,Ltd.	36,111,846	7.52%
Soufu Investment Co.,Ltd.	31,535,285	6.57%

Note 1 ： This table is based on the last business day at the end of each quarter and calculates that shareholders hold more than 5% of the Company's ordinary shares and special shares that have completed unregistered delivery (including treasury shares). As for the share capital recorded in the company's financial report and the company's actual number of shares delivered without physical registration, there may be differences or differences due to different calculation bases.

Note 2 ： In the case of the above information, if the shareholders’ shares are in the trust, it is disclosed in individual accounts by the trustee who opened the trust account by the trustee. As for the shareholder’s declaration of insider’s equity in accordance with the Securities and Exchange Act, the shareholding includes his own shareholding plus the trust shares and the right to use the trust property. For information on insider’s equity declaration, please refer to the public information observatory.

96

14. OPERATING SEGMENTS INFORMATION

(1) Segment revenue and result

The Group determined its operating segments based on business activities with discrete financial information regularly reported through the Group’s internal reporting protocols to the Group’s chief operating decision-maker. The Group have two reportable segments, the Company and subsidiaries in Thailand (Tycoons Worldwide Group (Thailand) Public Co., Ltd. and TY Steel Co., Ltd.). Reportable segment information for the years ended December 31, 2020 and 2019 were as follows,

Item		For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	The Company	Subsidiaries in Thailand	Other	Adjustment and Elimination	Consolidated
Net revenue from external customers Net revenue from sales among intersegments Net revenue Segment operating (Loss)Gain Other income Other gains and losses Finance costs Share of the profit of associates and joint ventures accounted for using the equity method Profit before tax Identifiable net assets	$ 1,068,528 109,944	$ 5,390,966 269,597	$ 1,495,849 －	$ (24,959) (379,541)	$ 7,930,384 －
	$ 1,178,472	$ 5,660,563	$ 1,495,849	$ (404,500)	$ 7,930,384
	$ 45,394	$ (43,310)	$ 118,116	$ (2,518)	$ 117,682 20,107 37,444 (65,489) (315,826)
	$ 2,110,422	$ 6,236,722	$ 1,037,783	$ (1,222,719)
					(206,082)
					$ 8,162,208

Item			For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	The Company	Subsidiaries in Thailand	Other	Adjustment and Elimination	Consolidated	Discontinued operation	Continued operation
Net revenue from external customers Net revenue from sales among intersegment Net revenue Segment operating (Loss)Gain Other income Other gains and losses Finance costs Share of the profit of associates and joint ventures accounted for using the equity method Profit before tax Identifiable net assets	$ 1,355,536 76,099	$ 8,790,469 670,287	$ 1,496,272 49,444	$ (95,267) (795,830)	$ 11,547,010 －	$ 27,808 －	$ 11,519,202 －
	$ 1,431,635	$ 9,460,756	$ 1,545,716	$ (891,097)	$ 11,547,010	$ 27,808	$ 11,519,202
	$ (71,996)	$ (298,285)	$ 61,170	$ 6,866	$ (302,245) 4,555 (389,183) (204,520) (36,956)	$ (39,034) 476 37,235 (100,330) －	$ (263,211) 4,079 (426,418) (104,190) (36,956)
	$ 1,740,166	$ 6,740,678	$ 1,014,825	$ (145,502)
					(928,349)	(101,653)	(862,696)
					$ 8,854,037		$ 8,854,037

97

(2) Product information

Product information
Products	For the Year Ended December 31, 2020		For the Year Ended December 31, 2019
	Amount	％	Amount	％
Coil Wire Screws Others Total	$ 2,764,679 2,490,594 1,252,211 1,422,900	35 31 16 18	$ 4,358,210 2,231,502 2,051,714 2,877,776	38 19 18 25
	$ 7,930,384	100	$ 11,519,202	100

(3) Geographic information

The net revenue from external customers of the Group is as follows,

Area	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	Amount	％	Amount	％
America Asia Europe Others Total	$ 243,172 6,698,757 871,255 117,200	3 84 11 2	$ 296,672 9,708,324 1,398,121 116,085	3 84 12 1
	$ 7,930,384	100	$ 11,519,202	100

(4) Major customers

For the years ended December 31,2020 and 2019, no revenue from a signal customer exceeds 10% of the total consolidated revenue.

98