TYCOONS — Audit Report / Information 2020

Nov 16, 2020

TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY

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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NO.11351090EA

INDEPENDENT AUDITORS' REPORT

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

Opinion

We have audited the accompanying parent company only financial statements of Tycoons Group Enterprise Co., Ltd. (“the Company”), which comprise the parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2020 and 2019, and notes to the parent company only 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 parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and 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 Parent Company Only Financial Statements section of our report. We are independent of the Company 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 parent company only financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the parent company only 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(5) and 6(6) to the parent company only financial statements for the accounting policies and the details of the information about inventories.

Description of the key audit matter

In the parent company only financial report, the inventory is measured at the lower of cost or net realizable value. The Company 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. Impairment of Investment accounted for using the equity method

Refer to Note 4(6) and 6(7) to the parent company only financial statements for the accounting policies and the details of the information about the impairment of Investment accounted for using the equity method.

Description of the key audit matter

Due to the consideration of business strategy, the Company has invested in Thailand, Vietnam, China and other countries. These investments accounted for using the equity method are important assets for the Company. So, we focus on the evaluation of the impairment of these investments.

How the matter was addressed in our audits

• Review the identification of cash-generating units and whether there is an indication exist by the management.

• Review the important assumptions that have been used by the management, Such as the expected future cash flows, discount rate and, etc.

• Querying the management, whether there is a significant matter after the date of the balance sheet, that affected the result of the evaluation.

• Evaluate the fairness of the disclosure of these investments.

3. Revenue recognition

Refer to Note 4(11) and 6(17) to the parent company only 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 affect the annual profit and loss of the Company. The Company 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.

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How the matter was addressed in our audits

• Understand and test the Company’s internal control related to revenue recognition.

• Understand the income type and trading conditions of the Company, to assess whether the accounting policy 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 subsidiaries, associates and joint ventures accounted for using the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinion expressed herein are based solely on the reports of other auditors. The subsidiaries, associates and joint ventures accounted for under the equity method amounted to $427,701 thousand and $701,179 thousand, representing 8% and 13% of total assets as of December 31, 2020 and 2019, respectively. And the related share of profit from the subsidiaries, associates and joint ventures accounted for under the equity method amounted to $(321,118) thousand and $(47,420) thousand, representing 166% and 6% of the loss before income tax of the Company for the year ended December 31, 2020 and 2019, respectively.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

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

3. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only 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 Company to cease to continue as a going concern.

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

5. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the Company 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.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only 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 financial statements are intended only to present the financial position, financial performance and its cash flow 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 financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying 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 financial statements, the Chinese version shall prevail.

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TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY 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 the equity method Property, plant and equipment Right-of-use asset Guarantee deposits paid Other non-current financial assets Total non-current assets	6(1) 6(2) 6(3),8 6(5) 6(5),7 7 6(21) 6(6) 7 8 6(4) 6(7) 6(8),8 6(9)	$ 53,222 2 170,880 15,264 59,995 178,362 114 108,131 831,945 2,525 10,036	1 － 3 － 1 3 － 2 16 － －	$ 94,362 － － 16,279 64,671 4,151 266 347,206 25,249 2,146 －	2 － － － 1 － － 7 － － －
		1,430,476	26	554,330	10
		7,745 3,324,143 521,210 － 234 18,792	－ 63 10 － － 1	4,694 4,142,776 530,327 4,886 483 18,792	－ 79 11 － － －
		3,872,124	74	4,701,958	90
TOTAL		$ 5,302,600	100	$ 5,256,288	100

(Continued)

The accompanying notes are an integral part of the parent company only financial statements.

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TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY 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 Contract liabilities, current Notes payable Accounts payable Other payables 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 Long-term accounts payable Guarantee deposits received Total non-current liabilities Total liabilities EQUITY Share capital Capital surplus Retained earnings Legal reserve Accumulated deficit Other equity interest Total equity	6(10),8 6(11) 7 6(9) 6(12) 6(13),8 6(12) 6(13),8 6(21) 6(9) 7 6(15) 6(15) 6(15) 6(15)	$ 410,000 49,951 130,104 58,830 28,975 41,762 － 200,000 12,500 609	8 1 2 1 1 1 － 4 － －	$ 110,000 49,965 90,205 49,162 45,505 24,648 3,738 － － 681	2 1 2 1 1 － － － － －
		932,731	18	373,904	7
		－ 37,500 80,987 － 165,178 104	－ 1 2 － 3 －	200,000 200,000 136,752 1,210 23,361 104	4 4 2 － － －
		283,769	6	561,427	10
		1,216,500	24	935,331	17
		4,797,520 340,560 16,248 (1,484,846) 416,618	90 6 － (28) 8	4,797,520 206,365 16,248 (1,270,414) 571,238	91 5 － (24) 11
		4,086,100	76	4,320,957	83
TOTAL		$ 5,302,600	100	$ 5,256,288	100

The accompanying notes are an integral part of the parent company only financial statements.

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TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

ITEMS	NOTE	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020		2019
		Amount	％	Amount	％
OPERATING REVENUES OPERATING COSTS GROSS PROFIT FROM OPERATIONS Unrealized loss from sales Realized profit on from sales Gross profit from operations OPERATING EXPENSES Selling expenses Administrative expenses Impairment loss determined in accordance with IFRS 9 Total operating expenses NET OPERATIONS LOSS NON-OPERATING INCOME AND EXPENSES Other income Other gains and losses Finance costs Share of the loss of associated and joint ventures accounted for using the equity method Total non-operating income and expenses LOSS BEFORE INCOME TAX TAX EXPENSE LOSS OTHER COMPREHENSIVE INCOME (LOSS) Components of other comprehensive income that will not be reclassified to profit or loss Gains on remeasurements of defined benefit plans Unrealized gain from investments in equity instruments measured at fair value through other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translation Share of the other comprehensive (loss) income of subsidiaries and associates Income tax related to components of other comprehensive loss that will be reclassified to profit or loss Other comprehensive income TOTAL COMPREHENSIVE LOSS LOSS PER SHARE BASIC EARNINGS PER SHARE	6(16),7 6(22),7 6(22) 6(5) 6(18) 6(19) 6(20) 6(7) 6(21) 6(21) 6(16)	$ 1,178,471 (1,028,609)	100 (87)	$ 1,431,635 (1,387,582)	100 (97)
		149,862 (2,920) 2,922	13 － －	44,053 (3,548) 4,146	3 － －
		149,864	13	44,651	3
		(35,870) (68,600) －	(3) (6) －	(35,514) (81,024) (109)	(2) (6) －
		(104,470)	(9)	(116,647)	(8)
		45,394	4	(71,996)	(5)
		15,064 (2,964) (10,500) (240,937)	1 － (1) (20)	1,709 (14,156) (24,191) (656,536)	－ (1) (2) (46)
		(239,337)	(20)	(693,174)	(49)
		(193,943) 8,303	(16) －	(765,170) (20,935)	(54) (1)
		(185,640)	(16)	(786,105)	(55)
		62 3,051 (222,886) 5,747 47,462	－ － (19) 1 4	－ 15,047 282,667 (8,226) (39,995)	－ 1 14 5 (2)
		(166,564)	(14)	249,493	18
		$ (352,204)	(30)	$ (536,612)	(37)
		$ (0.39)		$ (1.64)

The accompanying notes are an integral part of the parent company only financial statements.

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TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

DESCRIPTION	Common Stock	Capital Surplus	Retained earnings	Retained earnings	Otherequityinterests	Otherequityinterests	Total equity
			Legal reserve	Accumulated deficits	Exchange differences on translation of foreign financial statements	Unrealized (losses) gains on financial assets measured at fair value through other comprehensive income
BALANCE, JANUARY 1,2019	$ 4,797,520	$ 154,337	$ 16,248	$ (541,080)	$ 430,861	$ 13,809	$ 4,871,695
Net loss 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)	－ 226,134	－ 24,637	(786,105) 249,493
Totalcomprehensive (loss)income	－	－	－	(787,383)	226,134	24,637	(536,612)
Recognitionofthe changeinthe equity ofthe subsidiary	－	18,289	－		(66,154)	－	(47,865)
Difference between consideration and the carrying amount of subsidiaries acquired ordisposed	－	33,739	－	－	－	－	33,739
Disposal of investments in equity instruments designated at fair value through othercomprehensiveincome	－	－	－	58,049	－	(58,049)	－
BALANCE,DECEMBER 31,2019	4,797,520	206,365	16,248	(1,270,414)	590,841	(19,603)	4,320,957
BALANCE, JANUARY 1,2020	4,797,520	206,365	16,248	(1,270,414)	590,841	(19,603)	4,320,957
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)
Totalcomprehensive (loss)income	－	－	－	(185,578)	(175,424)	8,798	(352,204)
Difference between consideration and the carrying amount of subsidiaries acquired ordisposed	－	134,195	－	－	(14,425)	(441)	119,329
Disposal of investments in equity instruments designated at fair value through other comprehensive income	－	－	－	(28,854)	－	26,872	(1,982)
BALANCE,DECEMBER31,2020	$ 4,797,520	$ 340,560	$ 16,248	$ (1,484,846)	$ 400,992	$ 15,626	$ 4,086,100

The accompanying notes are an integral part of the parent company only financial statements.

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TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY 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 before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense Expected credit loss Net (gain) 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 Gain on disposal and write-off of property, plant and equipment Gain on disposal of investments Gain on lease modification Impairment loss Realized gain on the transactions with subsidiaries and associates 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 Other current liabilities, other Net defined benefit liabilities, non-current	$ (193,943) 24,747 － (2) 7,296 (3,384) (118) 240,937 (1,883) (522) (41) － (2) － 1,015 4,676 4,106 239,075 (806,696) (379) 39,899 9,668 (16,530) 17,181 (72) －	$ (765,170) 30,611 109 879 18,417 (989) (720) 656,536 (150) － － 20,020 (598) (853) 23,370 3,778 937 364,885 5,761 364 (140,662) (34,817) (271,186) (5,296) 569 (8,531)

(Continued)

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TYCOONS GROUP ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

DESCRIPTION	2020	2019
Cash outflow generated from by operations Interest received Interest paid Income taxes refund (paid) Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceed from the disposal of financial assets at fair value through profit or loss (Increase) decrease in financial assets measured at amortized cost Acquisition of investments accounted for the using equity method Proceeds from disposal of investments accounted for using the equity method Proceeds from the capital reduction of investment accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits (Increase) decrease in other financial assets Dividend received Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings (Decrease) increase in short-term notes and bills payable Decrease in long-term borrowings Decrease in guarantee deposits received Increase (decrease) in long-term accounts payables Payment of lease liabilities Net cash flow from (used in) financing activities 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	$ (434,972) 66 (7,004) 152	$ (102,736) 1,323 (19,715) (114)
	(441,758)	(121,242)
	－ (15,052) 15,574 (170,880) (113,526) 155,943 260,552 (12,926) 2,060 249 (10,036) 118	63,938 － － 60,725 (2,464) 13 929,491 (14,527) 305 13 69,422 11,029
	112,076	1,117,945
	300,000 (373) (150,000) － 141,817 (2,902)	(490,000) 49,965 (678,000) (16) (9,171) (3,645)
	288,542	(1,130,867)
	(41,140) 94,362	(134,164) 228,526
	$ 53,222	$ 94,362

The accompanying notes are an integral part of the parent company only financial statements.

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TYCOONS GROUP ENTERPRISE CO., LTD.

NOTES TO PARENT COMPANY ONLY 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 Enterprises 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 is to produce, process, commerce, export or lease 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.

In 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 parent company only financial statements are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

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

3. APPLICATION OF NEW 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:

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

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The above standards and interpretations have no significant impact on the Company’s 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 Company’s 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 its 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

(1) Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of Preparation

The parent company only 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 subsidiaries, associates and jointly controlled entities are incorporated in the parent company only financial statements under the equity method. To make a net profit for the year, other comprehensive income and equity in the parent company only financial statements equal to those attributed to owners of the Company on consolidated financial statements, the effect of the differences between the basis of the parent company only and basis of consolidation are adjusted in the investments accounted for using the equity method, the related share of the profit or loss, the related share of other comprehensive income of subsidiaries and associates and related equity.

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

(3) 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:

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

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

• C. The Company 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.

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

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

• B. The Company 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 Company 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.

• (4) Foreign Currencies

In preparing the financial statements, 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.

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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 nonmonetary 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.

For the purposes of presenting the parent company only financial statements, the assets and liabilities of the Company’s foreign operations 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.

(5) 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.

(6) Investment in subsidiaries and associates

Investments in subsidiaries and associates are recognized under the equity method.

A. Investment in subsidiaries

A subsidiary is an entity that is controlled by the Company. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

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Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company loses the control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of 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 investments in such subsidiary. In addition, the Company shall account for all amounts previously 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.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

B. Investment in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

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The operating results and assets and liabilities of associates are incorporated in these parent company only financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized in the statement of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. The Company also recognized its share in the changes in the equity of associates.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate or jointly controlled entity had directly disposed of the related assets or liabilities.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

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When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with the carrying amount. Any 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 subsequently increases.

The Company discontinues the use of the equity method and measures the retained interest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing of, and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Company accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities.

When the Company transacts with an associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate that are not owned by the Company.

(7) 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.

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

Buildings	3～45	years
Machinery and equipment	2～15	years
Transportation equipment	5	years
Furniture and fixtures	3～15	years
Miscellaneous equipment	2～20	years
Leasehold improvements	3	years

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.

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

At each balance sheet date, the Company 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 Company 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.

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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 cashgenerating unit is reduced to its recoverable amount.

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.

(9) Financial Instruments

Financial assets and financial liabilities are recognized when the Company 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).

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The Company 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:

• ・ 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.

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• (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.

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

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 Company’s right to receive payment is established, which in the case of quoted securities is normally the dividend date.

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

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

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.

b. Impairment of financial assets

The Company 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 Company 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.

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

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

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

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

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. 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.

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• ・ 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 Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

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 Company 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 Company’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 Company transfers substantially all the risks and rewards of ownership of the financial assets.

• (10) 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.

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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.

(11) Revenue recognition

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

A. Sale of goods

The Company 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 Company has objective evidence that all criteria for acceptance have been satisfied.

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

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

• b. 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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(12) Leasing

A. Identifying of lease

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

• (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 Company 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 thoughout 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.

At inception or on the reassessment of a contract that contains a lease component, the Company 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 Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

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B. As a lease

The Company 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 Company’s incremental borrowing rate. Generally, the Company 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.

• (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.

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• (B) There is a change in the Company’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 options.

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

C. As a lessor

When the Company acts as a lessor, it determines, at lease commencement, whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all 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 Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

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When the Company 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 shortterm lease to which the Company 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 Company applies IFRS15 to allocate the consideration in the contract.

(13) Government grant

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

A government grant that 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.

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

(14) 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 standalone 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.

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B. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the 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.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company 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 Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

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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.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

AND UNCERTAINTY

In the application of the Company’s accounting policies, which are described in Note 4, the Company 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 Company has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the parent company only financial statements.

(1) Revenue Recognition

The Company recognizes revenue when the conditions described in Note 4 are satisfied. The Company 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.

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• (2) Valuation of Inventory

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

Due to the rapid industrial changes, the Company 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 Company 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 Company 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 Company 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 the 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) 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.

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6. EXPLANATION TO SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Bank deposits Total	December 31, 2020 $ 164 53,058 $ 53,222	December 31, 2019
		$ 162 94,200
		$ 94,362

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

Financial assets, current Financial assets mandatorily classified as at FVTPL Derivative financial assets Forward exchange contracts	December 31, 2020 $ 2	December 31, 2019
		$ －

The main purpose for the Company 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:

Contracted December 31, 2020 Currency Maturity Period Amount (in thousands) Sell forward exchange United States dollars 2020.12.18 ～ 2021.04.29 USD 1,350

(3) Financial assets at amortized cost

Financial assets at amortized cost
Pledge time deposits Non-pledge time deposits Total Current Rate	December 31, 2020 $ 170,880 － $ 170,880 $ 170,880 2.15%	December 31, 2019
		$ － －
		$ －
		$ －
		－

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

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

Equity investments at fair value through other comprehensive income Listed shares	December 31, 2020 $ 7,745	December 31, 2019
		$ 4,694

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

(5) Notes and accounts receivable, net

Notes and accounts receivable, net
Notes and accounts receivable Less: Loss allowance Net	December 31,2020 $ 75,996 (737) $ 75,259	December 31,2019
		$ 81,707 (757)
		$ 80,950

A. The Company’s sale agreements typically provide that the payment is due 30 days from the invoice date for a majority of the customers and 30 to 45 days after the end of the month in which sales occur for some customers. The allowance for doubtful receivables is assessed by reference to the collectability of receivables by performing the account aging analysis, historical experience and current financial condition of customers.

• B. The aging of notes and accounts receivables was as follows:

Neither past due nor impaired Past due within 90 days Total	December 31, 2020 $ 63,307 11,952 $ 75,259	December 31, 2019
		$ 69,825 11,125
		$ 80,950

The above table was based on the past due date.

• C. The movements in the allowance for notes and accounts receivables were as

follows:

Balance on January 1 Impairment loss recognized Write off Balance, end of the period	For the Year Ended December 31, 2020 $ 757 － (20) $ 737	For the Year Ended December 31, 2019 $ 648 109 － $ 757

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(6) Inventories

Inventories
Finished goods Work in process Raw materials Supplies Goods in transit Total	December 31, 2020 $ 47,994 38,541 － 3,331 18,265 $ 108,131	December 31, 2019
		$ 51,171 49,374 224,575 3,861 18,225
		$ 347,206

• A. The operating cost of the Company includes unallocated overhead amounted to $1,414 thousand and $14,899 thousand for the years ended December 31, 2020 and 2019, respectively.

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

operating cost, which was as follows:

For the Years Ended December 31

For the Years Ended December 31	ed December 31
2020 2019 The gain (loss) of inventory valuation $ 30,269 $ (30,813) B. The insurance coverage as of December 31, 2020 and 2019, were $500,000 thousand and $430,000 thousand, respectively. Investments accounted for using the equity method December 31, 2020 December 31, 2019 Investments in subsidiaries $ 3,192,177 $ 4,012,252 Investments in associates $ 131,966 $ 130,524 A. Investments in subsidiaries December 31, 2020 December 31, 2019 Tycoons Group International Co., Ltd. $ 3,188,454 $ 3,860,321 Yuan Zhen Investment Co., Ltd. 5,489 49,820 Tycoons Worldwide Group (Thailand) Public Co., Ltd. (1,766) 102,111 $ 3,192,177 $ 4,012,252	2019
	$ (30,813)
Investments in subsidiaries Investments in associates A. Investments in subsidiaries Tycoons Group International Co., Ltd. Yuan Zhen Investment Co., Ltd. Tycoons Worldwide Group (Thailand) Public Co., Ltd.
	$ 4,012,252
	$ 130,524
	December 31, 2019
	$ 3,860,321 49,820 102,111
	$ 4,012,252

(7) Investments accounted for using the equity method

40

The holding percentage of ownership and voting rights held by the Company were as follows.

were as follows.
Tycoons Group International Co., Ltd. Yuan Zhen Investment Co., Ltd. Tycoons Worldwide Group (Thailand) Public Co., Ltd.	December 31, 2020 100% 100% －%	December 31, 2019
		100% 100% 3.87%

For the details of the investment subsidiaries indirectly held by the company, please refer to Note 13.

The Company did not directly invest in Tycoons Worldwide Group (Thailand) Public Co., Ltd. On December 31, 2020, but because it is a consolidated entity of the group, there is still an unrealized transaction amount (1,766) thousand.

B. Investments in associates

Investments in associates
Unlisted companies Hurco Automation Co., Ltd.	December 31, 2020 $ 131,966	December 31, 2019
		$ 130,524

The holding percentage of ownership and voting rights held by the Company were as follows.

were as follows.
Hurco Automation Co., Ltd.	December 31, 2020 35%	December 31, 2019
		35%

Financial information of the Company’s associates was summarized as follows:

follows:
Total assets Total liabilities Net assets The Company’s share of net assets of associates	December 31, 2020 $ 541,426 (164,381) $ 377,045 $ 131,966	December 31, 2019
		$ 486,920 (113,994)
		$ 372,926
		$ 130,524

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For the Years Ended December 31

Net revenue Net income The Company’s share of the profit of associate	2020 $ 310,965 $ 3,645 $ 1,276	2019
		$ 462,074
		$ 37,755
		$ 13,214

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, which have been audited by another auditor.

(8) Property, plant and equipment

Items		For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	Balance, Beginning of Year	Additions	Disposals	Reclassification	Balance, End of Year
	$ 340,788 312,318 122,368 37,732 9,894 248 74,881	$ － － 5,229 1,134 420 － 6,143	$ － － (5,229) (3,989) (253) － (17,885)	$ － － － － － － －	$ 340,788 312,318 122,368 34,877 10,061 248 63,139
	898,229	12,926	(27,356)	－	883,799
			－ (5,102) (3,955) (244) － (17,878)	－ － － － － －	186,389 88,151 29,511 8,344 247 49,947
Buildings Machinery and equipment Transportation equipment Furniture and fixtures Leasehold improvements Other equipment Total Net	179,081 86,761 30,983 8,407 247 62,423
	367,902	21,866	(27,179)	－	362,589
	$ 530,327	$ (8,940)	$ (177)	$ －	$ 521,210

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For the Year Ended December 31, 2019

Items	Balance, Beginning of Year	Additions	Disposals	Reclassification	Balance, End of Year
	$ 339,728 312,318 121,359 34,929 10,534 248 73,822	$ 1,060 － 5,389 4,335 － － 3,743	$ － － (4,380) (1,532) (640) － (2,684)	$ － － － － － － －	$ 340,788 312,318 122,368 37,732 9,894 248 74,881
	892,938	14,527	(9,236)	－	898,229
			－ (4,230) (1,501) (615) － (2,684)	－ － － － － －	179,081 86,761 30,983 8,407 247 62,423
Buildings Machinery and equipment Transportation equipment Furniture and fixtures Leasehold improvements Other equipment Total Net	162,377 76,558 29,948 8,782 247 52,095
	330,007	46,925	(9,030)	－	367,902
	$ 562,931	$ (32,398)	$ (206)	$ －	$ 530,327

• A. The significant part of the Company’s buildings includes main plants and affiliated equipment and the related depreciation is calculated using the estimated useful lives of 15 to 45 years, and 3 to 15 years, respectively.

• B. In 2019, the Company recognized the impairment loss for the property, plant, and equipment, the amount was $20,020 thousand.

• C. The insurance coverage as of December 31, 2020 and 2019 were $218,727 thousand and $238,608 thousand, respectively.

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

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(9) Lease agreement

• A. Right-to-use assets

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

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

• (C) The cost and depreciation charge for right-of-use asset information

For the Year Ended December 31, 2020

Buildings Net Items	Buildings Net Items	Buildings Net Items	Buildings Net Items	Buildings Net Items
	Balance, Beginning of Year	Additions	Disposals	Balance, End of Year
	$ 8,592	$ －	$ －	$ 8,592
		$ 3,706	$ －	3,706
Buildings Net
	$ 8,592			$ 4,886

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B. Lease liability

Lease liability
Less than 1 year 2 years to 5 years Total Current Non-current	December 31, 2019
	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

C. Other lease information
Interest expense of lease liability Expenses related to low-value asset leases Total cash outflow from the leases Current borrowings Bank loans Rate	For the Year Ended December 31, 2020 $ 52 $ 24 $ 2,978 December 31, 2020 $ 410,000 0.88％～1.28％		For the Year Ended December 31, 2019 $ 159 $ 24 $ 3,828 December 31, 2019 $ 110,000 1.69％～1.77％
		$ 410,000
		0.88％～1.28％

(10) Current borrowings

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

(11) Short-term notes and bills payable

Commercial paper payable Less: Discount on short-term bills payable Net Interest Rate Period	December 31, 2020 $ 50,000 (49) $ 49,951 1.24％ 2020.12.22～2021.01.29	December 31, 2019
		$ 50,000 (35)
		$ 49,965
		1.59％
		2019.11.20～2020.01.17

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(12) Bonds payable

On November 14, 2018, the Company issued secured, domestic bonds with the

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.

• 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.

(13) Long-term bank loans

Creditors	December 31, 2020	December 31, 2020	December 31, 2020
		Amount	Payable Within One Year	Description No.
		$ 50,000	$ 12,500	B
		50,000 (12,500)	$ 12,500
		$ 37,500
		Amount	Payable Within One Year	Description No.
		$ 200,000	$ －	A
		200,000 －	$ －
		$ 200,000

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Description of long-term bank borrowings:

• A. Repayable starting on the 30[th] month after the date of credit drawing in sixmonthly installments for a total of 6 installments, repayments NT$10,000 thousand are due on the first to the five installments and NT$150,000 thousand for the final installment.

• B. Repayable starting on the 12[th] month after the date of credit drawing in threemonthly installments for a total of 8 installments, repayments NT$6,250 thousand are due on every installment.

• C. Mortgaged or pledged assets for the long-term loan, see Note 8.

(14) 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 Corporation 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 statements of comprehensive income 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. The Company is no longer applicable to December 31, 2019 defined benefit plans.

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

follows:
BALANCE, JANUARY 1, 2019 Service cost Current service cost Settlement BALANCE, DECEMBER 31, 2019	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability
	$ (8,531) (619) 9,150	$ － － －	$ (8,531) (619) 9,150
	$ －	$ －	$ －

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(15) 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

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 Effect of the disposal of the subsidiary December 31, 2020	Numbers of shares issued (in thousands)	Capital	Capital surplus
	479,752 － －	$ 4,797,520 － －	$ 206,365 134,195 －
	479,752	$ 4,797,520	$ 340,560

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 － －	$ 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 for one or more times.

48

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

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

January 1, 2020 Net loss attributable to the owners of the Company Actuarial gain on defined benefit plans Disposal of investments in equity instruments at FVTOCI December 31, 2020 January 1, 2019 Net loss attributable to the owners of the Company Actuarial gain on defined benefit plans Disposal of investments in equity instruments at FVTOCI December 31, 2019	Legal reserve	Accumulated deficits	Total
	$ 16,248 － － －	$ (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
	$ 16,248 － － －	$ (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 Board of Directors’ meeting held on March 25, 2021 has been approved to offset a deficit. Information on the Board of Directors’ recommendations and shareholders’ approval can be obtained from the Market Observation Post System website of the TSE.

• (D) The general shareholders’ meeting held on May 28, 2020 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) The general shareholders’ meeting held on June 27, 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. 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 subsidiaries and associates Disposal of investments in equity instruments at FVTOCI Effect of the disposal of the subsidiary Income tax effects December 31, 2020	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 26,872 (441) －	$ 571,238 (222,886) 3,051 5,747 26,872 (14,866) 47,462
	$ 400,992	$ 15,626	$ 416,618

January 1, 2019 Exchange differences on translating foreign operations Unrealized gain on financial assets at FVTOCI Share of other comprehensive income of subsidiaries and associates Disposal of investments in equity instruments at FVTOCI Effect of the disposal of the subsidiary Income tax effects December 31, 2019	Exchange differences arising from the translation of the foreign operations	Unrealized (loss) gain on financial assets at FVTOCI	Total
	$ 430,861 266,129 － － － (66,154) (39,995)	$ 13,809 － 15,047 9,590 (58,049) － －	$ 444,670 266,129 15,047 9,590 (58,049) (66,154) (39,995)
	$ 590,841	$ (19,603)	$ 571,238

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The exchange differences arising on translation of foreign operation’s net assets from its functional currency to Company’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.

(16) Loss per share

For the Years Ended December 31

Loss for the years attributable to owners of the Company Weighted average number of ordinary shares outstanding (in thousands shares) Basic EPS	2020 $ (185,640) 479,752 $ (0.39)	2019
		$ (786,105)
		479,752
		$ (1.64)

(17) Operating revenues

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

For the Years Ended December 31

Revenue from the sale of goods Revenue form processing Total	2020 $ 1,057,848 120,623 $ 1,178,471	2019
		$ 1,351,262 80,373
		$ 1,431,635

(18) Other income

For the Years Ended December 31

Interest income Dividend income Government grant Total	2020 $ 3,384 118 11,562 $ 15,064	2019
		$ 989 720 －
		$ 1,709

52

(19) Other gains and losses

For the Years Ended December 31

Gain (loss) on disposal of property, plant and equipment Foreign exchange gain (loss) (Loss) gain on financial assets and liabilities at fair value through profit or loss Gain on disposal of investments Impairment loss Others Total	2020 $ 1,883 (7,690) 2 522 － 2,319 $ (2,964)	2019
		$ 150 3,020 (879) － (20,020) 3,573
		$ (14,156)

(20) Finance costs

Finance costs
Interest expense Other finance expense Total	For the Years Ended December 31
	2020 $ 7,296 3,204 $ 10,500	2019
		$ 18,417 5,774
		$ 24,191

(21) Income tax

• A. The components of income tax expense for the years ended December 31,

2020 and 2019 were as follows:

2020 and 2019 were as follows:
Current tax expenses Current period Adjustment for the prior period Deferred tax expenses Origination and reversal of temporary differences Recognition of previously unrecognized tax losses Income tax expense	For the Years Ended December 31
	2020 $ － － － (1,789) (6,514) (8,303) $ (8,303)	2019
		$ － －
		－
		(277) 21,212
		20,935
		$ 20,935

53

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

follows:
Loss before tax Income tax using the statutory rate Loss carryforwards Other Income tax expense	For the Years Ended December 31
	2020 $ (193,943) － (6,514) (1,789) $ (8,303)	2019
		$ (765,170)
		－ 21,212 (277)
		$ 20,935

B. Income tax recognized in other comprehensive income

Exchange differences arising from the translation of the foreign operations	For the Years Ended December 31	For the Years Ended December 31
	2020 $ 47,462	2019
		$ (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

Temporary differences Exchange difference on foreign operations Exchange (gain) loss Unrealized gain on the transactions with subsidiaries and associates Cost of goods sold-unallocated overhead Unrealized loss on inventories Loss carryforwards Total Deferred tax assets Deferred tax liabilities	Balance, beginning of year	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Balance, end of year
	$ (147,710) 122 356 (431) 988 9,923	$ － 1,910 (3) 487 (605) 6,514	$ 47,462 － － － － －	$ (100,248) 2,032 353 56 383 16,347
	$ (136,752)	$ 8,303	$ 47,462	$ (80,987)
	$ －	$ －	$ －	$ －
	$ (136,752)	$ 8,303	$ 47,462	$ (80,987)

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For the year ended December 31, 2019

Temporary differences Exchange difference on foreign operations Exchange (gain) loss Unrealized gain on the transactions with subsidiaries and associates Unrealized loss (gain) on financial assets and liabilities Cost of goods sold-unallocated overhead Unrealized loss on inventories Loss carryforwards Total Deferred tax assets Deferred tax liabilities	Balance, beginning of year	Recognized in Profit or Loss $ － 325 (128) 5 (541) 616 (21,212) $ (20,935) $ (32,101) $ 11,166	Recognized in Other Comprehensive Income	Balance, end of year
	$ (107,715) (203) 484 (5) 110 372 31,135		$ (39,995) － － － － － －	$ (147,710) 122 356 － (431) 988 9,923
	$ (75,822)		$ (39,995)	$ (136,752)
	$ 32,101		$ －	$ －
	$ (107,923)		$ (39,995)	$ (136,752)

D. The information of unrecognized deferred income tax

The information of unrecognized	deferred income tax
Loss carryforwards Deductible temporary differences	December 31, 2020 $ － $ 17,219	December 31, 2019
		$ 85,402
		$ 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 Company are as follows:

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

F. Income tax approved status

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

55

(22) The personnel, depreciation and amortization expenses of the Company

• A. A summary of current-period employee benefits, depreciation and amortization by function is as follows:

Personnel expenses Payroll expense Insurance expense Pension Remuneration to Directors Others Depreciation	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	Classified as operating cost $ 46,308 4,198 1,552 － 2,571 16,990	Classified as operating expenses $ 49,163 4,829 2,496 1,460 1,689 7,757	Total
			$ 95,471 9,027 4,048 1,460 4,260 24,747

Personnel expenses Payroll expense Insurance expense Pension Remuneration to Directors Others Depreciation	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 $ 45,429 4,647 1,816 － 2,562 21,174	Classified as operating expenses $ 56,317 5,643 3,520 1,438 1,802 9,437	Total
			$ 101,746 10,290 5,336 1,438 4,364 30,611

• (A) The number of the Company’s employees were 167 and 192, including 3 and 4 non-employee directors as of December 31, 2020 and 2019.

• (B) The Company’s average employee benefit expenses for the year ended December 31, 2020 and 2019 were 688 thousand and 647 thousand, respectively. The Company’s average salary expenses for the years ended December 31, 2020 and 2019 were 582 thousand and 541 thousand. The Company’s average salary expenses adjustment for the year ended December 31, 2020 increased by 8%.

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• (C) The Company has established the Audit committee to replace supervisors and therefore the supervisiors remuneration for the years ended December 31, 2020 and 2019 were both nils.

• (D) The company’s policy for compensation of directors, managers and employees are as follows: The Company set the policy for directors’ and employees’ compensation to evaluate and monitor the Company’s remuneration system for its directors and executive officers. The Company shall assess the performance of directors and executive officers according to the policy. In order to determine their compensation. An adequate compensation scheme will be calculated by referencing the Company’s operating results, future risks, corporate strategies, industry trends and also individual contributions.

• B. Employee compensation

• (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 years ended December 31, 2019.

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

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(23) Non-cash transactions

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

following non-cash investing and financing activities:

Unrealized gain/loss on financial instrument Exchange differences arising from the translation of the foreign operations	For the Year Ended December 31, 2020 $ 3,051 $ (175,755)	For the Year Ended December 31, 2019
		$ 15,047
		$ 242,672

(24) Capital management

The Company’s capital is based on the industrial characteristics, development of the Company and the operating environment to manage the capital to operate the business. The Company’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.

(25) 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 (including related parties) Other financial assets Financial assets at fair value through other comprehensive income, non-current Guarantee deposits paid Total	December 31, 2020 $ 53,222 2 170,880 75,259 178,362 28,828 7,745 234 $ 514,532	December 31, 2019
		$ 94,362 － － 80,950 4,151 18,792 4,694 483
		$ 203,432

58

Financial liabilities Current borrowings Short-term notes and bills payable Notes and accounts payable (including related parties) Other payables and Long-term accounts payable Bonds payable (including current portion) Long-term bank loans (including current portion) Guarantee deposits received Lease liabilities Total	December 31, 2020 $ 410,000 49,951 87,805 206,940 200,000 50,000 104 － $ 1,004,800	December 31, 2019
		$ 110,000 49,965 94,667 48,009 200,000 200,000 104 4,948
		$ 707,693

B. Financial risk management objectives

The Company seeks to ensure sufficient cost-efficient funding readily available when needed. The Company 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 Company is exposed to financial market risks, primarily changes in foreign currency exchange rates and interest rates. The Company uses some derivative financial instruments to manage those risks.

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(A) Foreign currency risk

Most of the Company’s revenues and expenditures are denominated in foreign currencies. Consequently, the Company 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 Company 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 Company’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 Company 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 Financial liabilities Foreign currency USD Financial assets Foreign currency USD Financial liabilities Foreign currency USD	December 31,2020
	Foreign currency Rate NTD (in thousands) 8,244,286 28.48 234,797 5,624,230 28.48 160,178 December 31,2019		NTD (in thousands)
	Foreign currency 1,140,159 1,607,017	Rate 29.98 29.98	NTD (in thousands)
			34,182 48,178

60

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 Company recognized foreign exchange (losses) gains were (7,690) thousand and 3,020 thousand, respectively.

The Company’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 746 thousand and 140 thousand, respectively. The equity of the Company would have increased or decreased by 597 thousand and 112 thousand, respectively.

(B) Interest rate risk

The Company is exposed to interest rate risk arising from borrowing at floating interest rates. As the interest rates of the Company’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 1,150 thousand and 775 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 Company. The Company is exposed to credit risks from operating activities, primarily trade receivables. Credit risk is managed separately for business-related and financial-related exposures.

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(A) Business related credit risk

The majority of the Company’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 Company uses other methods to manage this risk, like prepaid from the client, insurance and so on. The Company 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 Company. The Company 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 Company’s exposure to credit risk arising from the default of counter-parties is limited to the carrying amount of these instruments. The Company believes the concentration of this risk is not material.

E. Liquidity risk management

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

The table below summarizes the maturity profile of the Company’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		December 31,2020
	Less than 1 Year	2～3 Years	4～5 Years	5+ Years	Total
	$ 414,329 50,000 87,805 41,762 200,000 13,033 －	$ － － － 165,178 － 37,861 104	$ － － － － － － －	$ － － － － － － －	$ 414,329 50,000 87,805 206,940 200,000 50,894 104
	$806,929	$203,143	$ －	$ －	$1,010,072

62

	December 31, 2019	December 31, 2019	December 31, 2019
Less than 1 Year	2～3 Years	4～5 Years	5+ Years	Total
$ 110,276 50,000 94,667 24,648 3,804 － 4,000 －	$ － － － 23,361 1,260 200,000 31,800 104	$ － － － － － － 193,200 －	$ － － － － － － － －	$ 110,276 50,000 94,667 48,009 5,064 200,000 229,000 104

• 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 parent company only 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

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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 Company’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 Financial assets at FVTOCI Investment in publicly trade stocks		December 31, 2020	December 31, 2020
	Level 1	Level 2	Level 3	Total
	$ －	$ 2	$ －	$ 2
	$ 7,745	$ －	$ －	$ 7,745
	Level 1	Level 2	Level 3	Total
	$ 4,694	$	$ －	$ 4,694

Valuation techniques and assumptions are as followed,

a. Level 1

Level 1
Market value Level 2 Item	Investment in publicly trade stocks Funds Closing price Net value 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.		Funds
Derivative financial instruments－Forward exchange contracts		Forward exchange contracts are measured using forward exchange rates and the discounted yield curves that are derived from quoted market prices.

b.Level 2

c. Level 3

The fair values of non-publicly traded equity investments are mainly

determined by using the asset approach.

During the years ended December 31, 2020 and 2019, there were no significant transfers between Level 1 and Level 2 fair value measurements.

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7. RELATED-PARTY TRANSACTIONS

• (1) Name and relationship with related parties

Name and relationship with related parties
Name Tycoons Group International Co., Ltd. (TGI) Tycoons Worldwide Group (Thailand) Public Co., Ltd. (TYCN) Tycoons Vietnam Co., Ltd. Yuan Zhen Investment Co., Ltd.(Yuan Zhen) TY Steel Co., Ltd. (TY)	Relationship
	Subsidiary Subsidiary Subsidiary Subsidiary An associate

• (2) Significant transactions with related parties

A. Sales

Sales
Subsidiaries TYCN TY Associate TY Total	For the Year Ended December 31, 2020		For the Year Ended December 31, 2019
	Amount	%	Amount	%
	$ 109,944 － 493	9 － －	$ 73,827 4,245 3,636	5 － －
	$ 110,437	9	$ 81,708	5

There is no significant difference between the Company’s trading conditions with related parties and non-related parties.

B. Purchases

Purchases
Subsidiaries TYCN	For the Year Ended December 31, 2020		For the Year Ended December 31, 2019
	Amount	%	Amount	%
	$ 269,597	49	$ 670,287	48

There is no significant difference between the Company’s trading conditions with related parties and non-related parties.

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C. Accounts Receivables

C.	Accounts Receivables
D. E. F. G.	December 31, 2020 December 31, 2019 Amount % Amount % Subsidiaries TYCN $ 50,115 84 $ 10,909 17 Associate TY － － 809 1 Total $ 50,115 84 $ 11,718 18 Advance Payment December 31, 2020 December 31, 2019 Amount % Amount % Subsidiaries TYCN $ 821,654 99 $ － － Accounts Payables December 31, 2020 December 31, 2019 Amount % Amount % Subsidiaries TYCN $ － － $ 24,817 55 Other Receivables–Financing provided to related parties December 31, 2020 December 31, 2019 Amount % Amount % Subsidiaries TYCN $ 45 － $ 45 1 Other Receivables–Refund of capital reduction December 31, 2020 December 31, 2019 Amount % Amount % Subsidiaries TGI $ 174,998 98 $ － －	December 31, 2020		December 31, 2019
		Amount	%	Amount	%
		$ 50,115 －	84 －	$ 10,909 809	17 1
		$ 50,115	84	$ 11,718	18
		December 31, 2020
		Amount	%	Amount	%
		$ 821,654	99	$ －	－
		December 31, 2020
		Amount	%	Amount	%
		$ －	－	$ 24,817	55
	December 31, 2020 Amount % Subsidiaries TYCN $ 45 － Other Receivables–Refund of capital reduction December 31, 2020 Amount % Subsidiaries TGI $ 174,998 98	December 31, 2020
		Amount	%	Amount	%
		$ 45	－	$ 45	1
	Subsidiaries TGI
		Amount	%	Amount	%
		$ 174,998	98	$ －	－

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H. Long-term account payable-Financing provide by related parties

Subsidiaries TGI Yuan Zhen Total	December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
	Amount	%	Amount	%
	$ 160,178 5,000	97 3	$ 23,361 －	100 －
	$ 165,178	100	$ 23,361	100

As of December 31, 2020 and 2019, none of the receivables from related parties was interest-bearing.

I. Endorsement and guarantees

Related party	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
	Maximum balance	Ending Balance	Maximum balance	Ending Balance
Subsidiaries 〃 〃 Associate 〃	USD 36,520 THB 2,367,500 NTD － THB 850,000 USD 61,200	USD 36,520 THB 2,367,500 NTD － THB 850,000 USD 61,200	USD 53,920 THB 2,367,500 NTD 82,500 THB 850,000 USD 83,200	USD 36,520 THB 2,367,500 NTD － THB 850,000 USD 61,200

(3) Compensation of key management

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

follows:
Short-term employee benefits	For the Year Ended December 31, 2020 For the Year Ended December 31, 2019
	$ 7,285 $ 8,810

8. MORTGAGED OR PLEDGED ASSETS

The Company’s assets mortgaged or pledged as collateral for short-term and longterm borrowings were as follows (listed based on their carrying amounts):

Financial assets at amortized cost Other financial assets Property, plant and equipment	December 31, 2020 $ 170,880 $ 10,036 $ 475,045	December 31, 2019
		$ －
		$ －
		$ 233,358

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9. COMMITMENTS AND CONTINGENT LIABILITIES

• (1) As of December 31, 2020 and 2019 unused balance of the Company’s letter of credit were USD$13,074 thousand and USD$266 thousand.

• (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.

10. SUBSEQUENT LOSSES: None.

11. SUBSEQUENT EVENTS: None.

12. 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 individual real 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.

• 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.

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(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.

14. OPERATING SEGMENT INFORMATION

Please refer to the consolidated financial statements of Tycoons Group Enterprise

Co., Ltd. And subsidiaries for operating segment information.

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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- relatedparties	Yes	429	74,048	－	－	2	－	Advance payment and business turnover	－	None	None	1,634,440	1,634,440
		TY Steel Co.,Ltd.	Other receivables- related parties	Yes	－	1,000	－	－	2	－	Advance payment	－	None	None	1,634,440	1,634,440
		Tycoons Vietnam Co.,Ltd.	Other receivables- related parties	Yes	－	1,000	－	－	2	－	Advance payment	－	None	None	1,634,440	1,634,440
		Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	Other receivables- related 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- relatedparties	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- related 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- related 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- relatedparties	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 individually 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

8. / 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.

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

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

• 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.

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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.

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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 Ne	Amounts in Thousands of Ne	w Taiwan Do	llars and Foreign Cu	rrencies in Dollars
Company Name	Marketable Securities Type and Name	Financial Statement Account	Counter- party	Nature of Relationship	Beginning Balance		Acquisition			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.

75

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

76

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.

77

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.

78

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.

79

TYCOONS GROUP ENTERPRISE CO.,LTD.

THE CONTENTS OF STATEMENTS OF MAJOR

ACCOUNTING ITEMS

FOR THE YEARS ENDED DECEMBER 31, 2020

( In Thousand of New Taiwan Dollars, Unless Specified Otherwise )

ITEM	INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT OR LOSS, CURRENT	Note 6(2)
STATEMENT OF NOTES RECEIVABLE	2
STATEMENT OF ACCOUNTS RECEIVABLE	3
STATEMENT OF OTHER RECEIVABLES	4
STATEMENT OF INVENTORIES	5
STATEMENT OF PREPAYMENTS	6
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH
OTHER COMPREHENSIVE INCOME, NON-CURRENT	7
STATEMENT OF INVESTMENTS ACCOUNTED FOR USING
EQUITY METHOD	8
STATEMENT OF PROPERTY, PLANT AND EQUIPMENT	Note 6(8)
STATEMENT OF ACCUMULATED DEPERCIATION AND
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT	Note 6(8)
STATEMENT OF CURRENT BORROWINGS	9
STATEMENT OF NOTES PAYABLE	10
STATEMENT OF ACCOUNTS PAYABLE	11
STATEMENT OF OTHER PAYABLES	12
STATEMENT OF BONDS PAYABLE	Note 6(12)
STATEMENT OF LONG-TERM BANK LOANS	13
STATEMENT OF OPERATING REVENUES	14
STATEMENT OF OPERATING COSTS	15
STATEMENT OF SELLING EXPENSES	16
STATEMENT OF ADMINISTRATIVE EXPENSES	17

80

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

		STATEMENT 1
Item	Description	Amount
Cash on hand Bank deposits Checking and Saving accounts Foreign currency deposits Total	Including HKD, RMB and other foreign currencies USD 66,312.48 EUR 4,255.71 CNY 0.04	164 51,021 2,037 53,222

Exchange rate ： USD 28.48

EUR 35.02

CNY 4.377

81

STATEMENT OF NOTES RECEIVABLE

DECEMBER 31, 2020

			STATEMENT 2
Client Name	Description	Amount	Note
Third Parties Client A Client B Client C Client D Client E Client F Others Total Less：Loss allowance	Payments	4,116 2,320 2,181 1,500 1,041 1,021 3,501	The amount of individual clients in others does not exceed 5% of this account balance
		15,680 (416)
Net		15,264

82

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2020

			STATEMENT 3
Client Name	Description	Amount	Note
Related Parties TYCN Third Parties Client A Others Subtotal Total Less：Loss allowance	Payments Payments	50,115 6,998 3,203	The amount of individual clients in others does not exceed 5% of the account balance.
		10,201
		60,316 (321)
Net		59,995

83

STATEMENT OF OTHER RECEIVABLES

DECEMBER 31, 2020

	DECEMBER 31, 2020
		STATEMENT 4
Item	Description	Amount	Note
Other receivables： Others Other receivables-Related parties	Fixed deposit interest Financing provided Refund of capital reduction	3,319 45 174,998
Total		178,362

STATEMENT OF INVENTORIES

DECEMBER 31, 2020

		STATEMENT 5	STATEMENT 5	STATEMENT 5
Item	Description	Amount		Note
		Cost	Net Realizable Value
Supplies Work in process Finished goods Goods in transit Total Less：Allowance for loss		3,331 40,527 65,140 18,265	3,331 38,541 47,994 18,265
		127,263 (19,132)	108,131
Net		108,131

84

STATEMENT OF PREPAYMENTS

DECEMBER 31, 2020

	DECEMBER 31, 2020
		STATEMENT 6
Item	Description	Amount	Note
Prepayment for purchases- Related parties Prepayment for purchases- Third parties Prepaid expense Supplies	Payments Mainly prepaid insurance premiums and financial expenses	821,654 2,043 2,901 5,347
Net		831,945

85

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME, NON-CURRENT

DECEMBER 31, 2020

							STATEMENT 7 Fair Value Note Unit Price ( Dollars ) Amount 11.5 7,745	STATEMENT 7 Fair Value Note Unit Price ( Dollars ) Amount 11.5 7,745	STATEMENT 7 Fair Value Note Unit Price ( Dollars ) Amount 11.5 7,745
Item	Description	Shares / Units	Par Value ( Dollars )	Amount	Rate	Acquisition cost	Fair Value		Note
							Unit Price ( Dollars )	Amount
Financial assets at fair value through other comprehensive income Common stock of Horizon Securities Co.,Ltd.		673,469	10	－	－	－	11.5	7,745

86

STATEMENT OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 8

Name of Securities	As of January 1, 2020	As of January 1, 2020	Additions	Additions	Decrease	Decrease	As of December 31, 2020	As of December 31, 2020	As of December 31, 2020	Fair Value / Net Assets Value	Fair Value / Net Assets Value	Collateral
	Shares (in thousand)	Amount	Shares (in thousand)	Amount	Shares	Amount	Shares (in thousand)	Amount	Amount	UnitPrice	Total Amount
Tycoons Group International Co.,Ltd. Hurco Automation,Ltd. Yuan Zhen Investment Co.,Ltd. Tycoons Worldwide Group (Thailand) Public Co.,Ltd.	192,650 4,208 8,285 23,104	3,860,321 130,524 49,820 102,111	－ － 10,000 2,466	56,024 1,442 108,651 15,399	(10,000) － (15,100) (25,570)	(727,891) － (152,982) (119,276)	182,650 4,208 3,185 －	100% 35% 100% －	3,188,454 131,966 5,489 (1,766)	－ － － －	3,188,454 131,966 5,489 －	None None None None
Total		4,142,776		192,515		(1,000,149)			3,335,142		3,336,908

• Note 1 ： The increase of Tycoons Group International Co., Ltd. in the current period is due to the recognition of capital surplus of $ 54,080 thousand and the other comprehensive income share of $ 1,944 thousand according to the equity method; The decrease is the reduction of the investment amounted $284,550 thousand, the share of the loss of the investment amounted $238,101 thousand and a exchange differences on translation of $ 205,240 thousand (including the amount arising from the recognition of the change in the equity of the subsidiary).

• Note 2：The increase of Hurco Automation,Ltd. in the current period is based on the share of the loss of investment interests amounted $ 1,276 thousand, other comprehensive income shares of $ 62 thousand and the conversion difference of the foreign operation agency's financial statements of $ 104 thousand.

• Note 3：Yuan Zhen Investment Co., Ltd.'s increase in the current period is due to the current investment of $ 100,000 thousand, $ 4,434 thousand of investment interest recognized by the equity method and $ 4,217 thousand of other comprehensive income; the current decrease is due to the reduction of investment of $ 151,000 thousand and the adjustment of countercurrent transactions $ 1,982 thousand.

• Note 4：The increase of Tycoons Worldwide Group (Thailand) Public Co., Ltd. in the current period is due to the current investment of $ 13,526 thousand, the adjustment of downstream transactions of $ 2 thousand and the net value change of $ 1,871 thousand; the decrease in this period is the sale of the investment of $ 92,566 thousand in the current period, recognizes the investment loss of $ 8,546 thousand and the conversion difference of $ 18,164 thousand in the financial statements of foreign operation.

• Note 5：At the end of the period, the company did not hold the shares of Tycoons Worldwide Group (Thailand) Public Co., Ltd., but because it is a consolidated entity of the group, there is still an unrealized transaction amount of $ (1,766) thousand.

87

STATEMENT OF CURRENT BORROWINGS

DECEMBER 31, 2020

STATEMENT 9

Type of loan	Creditor	Ending balance	Contract period	Rate %	Financing amount	Mortgage or guarantee	Note
Credit loan Credit loan Credit loan Credit loan	EnTie Commercial Bank First Commercial Bank Co.,Ltd. Taiwan Business Bank Chang Hwa Commercial Bank	90,000 150,000 20,000 150,000	2020.09.30～2021.09.30 2020.11.25～2021.11.10 2020.12.21～2021.12.21 2020.12.31～2021.12.31	1.1% 0.88% 1.275% 1.1%	150,000 150,000 300,000 150,000	None Time deposit None None
Total		410,000

88

STATEMENT OF NOTES PAYABLE

DECEMBER 31, 2020

STATEMENT 10

Client Name	Description	Amount	Note
Third Parties Client A Client B Client C Others	Payments The amount of individual item in others does not exceed 5% of the account balance	7,680 3,325 2,705 45,120
Total		58,830

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2020

STATEMENT 11

Client Name	Description	Amount	Note
Third Parties Client A Client B Client C Client D Others	The amount of individual item in others does not exceed 5% of the account balance	4,452 2,715 1,504 1,482 18,822
Total		28,975

89

STATEMENT OF OTHER PAYABLES

DECEMBER 31, 2020

		STATEMENT 12	STATEMENT 12
Client Name	Description	Amount	Note
Wages、salaries and bonuses payable Interest payable Utility payable Insurance expense payable Pension expense payable Shipping payable Professional service payable Value-Add Tax payable Others		14,948 458 3,921 1,663 1,214 3,068 1,280 10,793 4,417
Total		41,762

90

STATEMENT OF LONG-TERM BANK LOANS

DECEMBER 31, 2020

STATEMENT 13

Creditor	Description	Ending balance	Contract period	Rate %	Mortgage or guarantee	Note
EnTie Commercial Bank Less：Amount due within one year	Medium and long-term loans	50,000 (12,500)	2020.06.24～2023.06.24	1.1%	None
Net		37,500

STATEMENT OF OPERATING REVENUES

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 14

			STATEMENT 14
Item	Description	Amount	Note
Sales revenue Less：Sales return and discount Subtotal Processing revenue Less：Processing return and discount Subtotal		1,063,336 (5,488)
		1,057,848
		121,843 (1,220)
		120,623
Total		1,178,471

91

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2020

	STATEMENT 15 Amount Subtotal Total 238,551 304,281 － (154,800) (8,813) 379,219 3,861 47,599 (3,331) (216) (119) 47,794 27,705 220,029 674,747 59,308 2,514 (40,527) (163) 21,132 695,879 76,661 85,667 2,691 (65,140) (2) 99,877 795,756 － 110,020 (1,159) 108,861 154,800 (539) (30,269) 1,028,609	STATEMENT 15 Amount Subtotal Total 238,551 304,281 － (154,800) (8,813) 379,219 3,861 47,599 (3,331) (216) (119) 47,794 27,705 220,029 674,747 59,308 2,514 (40,527) (163) 21,132 695,879 76,661 85,667 2,691 (65,140) (2) 99,877 795,756 － 110,020 (1,159) 108,861 154,800 (539) (30,269) 1,028,609
Item	Amount
	Subtotal	Total
Raw material Balance, beginning of the year Add：Raw material purchased Less：Balance, ending of the year Raw material sold Scrapped Supplies Balance, beginning of the year Add：Supplies purchased Less：Balance, ending of the year Transferred to operating expenses Others Direct labor Manufacturing expenses Manufacturing cost Add：Work-in-process, beginning of the year Others Less：Work-in-process, ending of the year Transferred to operating expenses Cost of finished goods Add：Finished goods, beginning of the year Purchases of the period Others Less：Finished goods, ending of the year Transferred to operating expenses Cost of goods sold-Production Cost of goods sold-Merchandise Balance, beginning of the year Add：Purchases of the period Less：Others Cost of raw material sold Others Reversal of inventoryto net realizable value	238,551 304,281 － (154,800) (8,813)	379,219 47,794 27,705 220,029
	3,861 47,599 (3,331) (216) (119)
	59,308 2,514 (40,527) (163)
		674,747 21,132
	76,661 85,667 2,691 (65,140) (2)	695,879 99,877
	－ 110,020 (1,159)	795,756 108,861 154,800 (539) (30,269)
Total operatingcosts		1,028,609

92

STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

			STATEMENT 16 Note
Item	Description	Amount	Note
Payroll Supplies Travelling Shipping Postage Repair and maintenance Advertisement Utilities Insurance Entertainment Taxes Depreciation Pension Meal Employee welfare Commission Traning Others		5,642 9 52 15,753 266 305 170 15 696 314 24 3,987 296 200 68 258 1 7,814
Total		35,870

93

STATEMENT OF ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 17

Item	Description	Amount	Note
Payroll Rent Supplies Travelling Shipping Postage Repair and maintenance Advertisement Utilities Insurance Entertainment Donation Taxes Depreciation Pension Meal Employee welfare Traning Others		44,841 24 18 186 20 562 1,004 178 652 4,966 1,543 129 288 3,770 2,200 667 418 34 7,100
Total		68,600

94